SEC Filing | Manhattan Associates

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 2, 1998

REGISTRATION NO. 333-47095

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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PRE-EFFECTIVE AMENDMENT NO. 1

TO
FORM S-1
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933

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MANHATTAN ASSOCIATES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

GEORGIA 7372
(STATE OR OTHER (PRIMARY STANDARD INDUSTRIAL 58-2373424
JURISDICTION OF (I.R.S. EMPLOYER
CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
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INCORPORATION OR 2300 WINDY RIDGE PARKWAY, SUITE 700
ORGANIZATION) ATLANTA, GEORGIA 30339
(770) 955-7070
(ADDRESS, INCLUDING ZIP CODE AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)

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ALAN J. DABBIERE

CHAIRMAN OF THE BOARD, CHIEF EXECUTIVE OFFICER AND PRESIDENT
MANHATTAN ASSOCIATES, INC.
2300 WINDY RIDGE PARKWAY, SUITE 700
ATLANTA, GEORGIA 30339
(770) 955-7070
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)

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COPIES TO:
JOHN C. YATES WILLIAM J. SCHNOOR, JR.
LARRY W. SHACKELFORD TESTA, HURWITZ & THIBEAULT, LLP
MORRIS, MANNING & MARTIN, L.L.P. 125 HIGH STREET
1600 ATLANTA FINANCIAL CENTER HIGH STREET TOWER
3343 PEACHTREE ROAD, N.E. BOSTON, MASSACHUSETTS 02110
ATLANTA, GEORGIA 30326 TELEPHONE: (617) 248-7000
TELEPHONE: (404) 233-7000 FACSIMILE: (617) 248-7100
FACSIMILE: (404) 365-9532

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement is declared effective.
If any of the securities being registered on this Form are offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended (the "Securities Act") please check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, please check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(A), MAY
DETERMINE.

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SUBJECT TO COMPLETION, DATED APRIL 2, 1998
LOGO
[OF MANHATTAN ASSOCIATES APPEARS HERE]

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3,000,000 SHARES

COMMON STOCK

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All of the 3,000,000 shares of Common Stock, $.01 par value per share
("Common Stock"), are being sold by Manhattan Associates, Inc. ("Manhattan"
or the "Company"). Prior to this offering (the "Offering"), there has been no
public market for the Common Stock. It is currently estimated that the
initial public offering price will be between $10.00 and $12.00 per share.
See "Underwriting" for a discussion of the factors considered in determining
the initial public offering price. The Company has applied to have the Common
Stock approved for listing on the Nasdaq National Market under the symbol
"MANH."

FOR INFORMATION CONCERNING CERTAIN RISK FACTORS WHICH SHOULD BE CONSIDERED BY
PROSPECTIVE INVESTORS, SEE "RISK FACTORS" COMMENCING ON PAGE 5.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.

PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC DISCOUNT(1) COMPANY(2)

Per Share $ $ $
Total(3) $ $ $

(1) The Company and certain stockholders of the Company (the "Selling
Stockholders") have agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended. See "Underwriting."
(2) Before deducting expenses estimated at $1,200,000, payable by the
Company.

(3) The Selling Stockholders have granted to the Underwriters a 30-day option
to purchase up to an additional 450,000 shares of Common Stock solely to
cover over-allotments. If such option is exercised in full, the total
Price to Public, Underwriting Discount, Proceeds to Company and Proceeds
to Selling Stockholders will be $ , $ , $ and $ , respectively. See
"Underwriting."

The shares of Common Stock are offered by the Underwriters, subject to prior
sale, when, as and if delivered to and accepted by them, and subject to
approval of certain legal matters by counsel and certain other conditions.
The Underwriters reserve the right to withdraw, cancel or modify such offer
and to reject orders in whole or in part. Delivery of the shares of Common
Stock offered hereby to the Underwriters is expected to be made in New York,
New York on or about , 1998.

DEUTSCHE MORGAN GRENFELL

HAMBRECHT & QUIST

SOUNDVIEW FINANCIAL GROUP, INC.

The date of this Prospectus is , 1998
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

TITLE:

Manhattan Manages Complex Distribution Center Functions

GRAPHIC:

At the top at the left is a graphic of a spreadsheet and on the right
is the Manhattan Associates logo.

Underneath those two graphics is text reading "Manhattan Manages
Complex Distribution Center Functions."

Beneath the text is a stylized diagram of a cross section of a
warehouse with the following labels:

1. Inbound shipment tracking

2. Yard management

3. Receipt of inbound goods

4. Storage of goods

5. Pick orders from storage racks

6. Value-added services such as labeling and sorting products

7. Custom order packing

8. Pack and hold for later shipment

9. Outbound customer compliant shipments

[INSIDE COVER]

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK
AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

EXCEPT AS OTHERWISE NOTED, ALL INFORMATION IN THIS PROSPECTUS, INCLUDING
SHARE AND PER SHARE INFORMATION, (I) GIVES EFFECT TO THE CONTRIBUTION OF THE
ASSETS AND LIABILITIES OF MANHATTAN ASSOCIATES SOFTWARE, LLC TO THE COMPANY AS
OF THE DATE OF THIS PROSPECTUS IN EXCHANGE FOR COMMON STOCK OF THE COMPANY,
AND (II) ASSUMES NO EXERCISE OF THE UNDERWRITERS' OVER-ALLOTMENT OPTION.

PROSPECTUS SUMMARY

The following summary should be read in conjunction with, and is qualified
by, the more detailed information and financial statements and notes thereto
appearing elsewhere in this Prospectus.

THE COMPANY

Manhattan provides information technology solutions for distribution centers
that are designed to enable the efficient movement of goods through the supply
chain. The Company's solutions are designed to optimize the receipt, storage
and distribution of inventory and the management of equipment and personnel
within a distribution center, and to meet the increasingly complex information
requirements of manufacturers, distributors and retailers. The Company's
solutions consist of software, including PkMS, a comprehensive and modular
software system; services, including design, configuration, implementation,
training and support; and hardware. The Company's objective is to be the
leading provider of information technology solutions to distribution centers by
enhancing its core product functionality, targeting new vertical markets and
expanding its sales and marketing organization. PkMS allows organizations to
manage the receiving, stock locating, stock picking, order verification, order
packing and shipment of products in complex distribution centers. PkMS is
designed to optimize the operation of a distribution center by increasing
inventory turnover, improving inventory accuracy, reducing response times,
reducing inventory levels, improving customer service and increasing the
productivity of labor, facilities and materials handling equipment. The Company
currently provides solutions to manufacturers, distributors and retailers
primarily in the apparel, consumer products, food service and grocery markets.
As of December 31, 1997, PkMS was licensed for use by more than 250 customers
including Calvin Klein, Dean Foods, Jockey International, Mikasa, Nordstrom,
Patagonia, Playtex Apparel, SEIKO Corporation of America, The Sports Authority,
Timberland and Warnaco.

THE OFFERING

Common Stock offered................ 3,000,000 shares
Common Stock to be outstanding 23,206,674 shares(1)
after the Offering.................
Use of Proceeds.....................
To (i) repay the Company's line of
credit; (ii) repay a note to the
Company's Chief Executive Officer; (iii)
fund new product development; (iv)
finance potential future acquisitions;
and (v) provide for other general
Proposed Nasdaq National corporate purposes.
Market symbol...................... MANH

SUMMARY FINANCIAL DATA
(In thousands, except per share data)

YEAR ENDED DECEMBER 31,
---------------------------------------
1993 1994 1995 1996 1997
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STATEMENT OF INCOME DATA:
Revenue................................ $ 3,309 $ 6,512 $11,221 $14,400 $32,457
Gross margin........................... 1,298 2,760 5,484 8,463 17,848
Income from operations................. 421 1,492 1,541 3,873 8,278
Historical income...................... 423 1,497 1,581 3,976 8,334
Historical diluted net income per
share.................................. $ 0.02 $ 0.08 $ 0.08 $ 0.20 $ 0.40
Shares used in computing historical
diluted net income per share........... 20,000 20,000 20,010 20,308 20,761
Pro forma net income(2)................ $ 261 $ 933 $ 1,001 $ 2,490 $ 5,311
Pro forma diluted net income per
share(2).............................. $ 0.25
Shares used in computing pro forma
diluted net income per share(3)....... 20,951

DECEMBER 31, 1997
-----------------------------------
PRO FORMA
ACTUAL PRO FORMA(4) AS ADJUSTED(5)
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BALANCE SHEET DATA:
Working capital (deficit)................... $ 6,268 $(3,553) $25,937
Total assets................................ 15,006 13,409 34,937
Stockholders' equity (deficit).............. 8,454 (585) 28,905

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(1) Based on the number of shares outstanding at February 28, 1998. Excludes
(i) 3,355,716 shares of Common Stock issuable upon the exercise of options
outstanding at February 28, 1998 under the Manhattan Associates, LLC Option
Plan (the "LLC Option Plan") at a weighted average exercise price of $4.66
per share, (ii) 729,784 shares of Common Stock issuable upon the exercise
of options outstanding at February 28, 1998 issued outside of the LLC
Option Plan at a weighted average exercise price of $1.20 per share, and
(iii) 1,644,284 shares of Common Stock reserved for future issuance under
the Company's 1998 Stock Incentive Plan (the "Stock Incentive Plan"). See
"Management-Stock Option Plans" and Note 6 of Notes to Financial
Statements.

(2) In connection with the contribution of the assets and liabilities of
Manhattan Associates Software, LLC ("Manhattan LLC") to the Company as of
the date of this Prospectus in exchange for Common Stock of the Company
(the "Restructuring"), the Company will be subject to federal and state
corporate income taxes. Pro forma net income is presented as if the Company
had been subject to corporate income taxes for all periods presented. See
'"Conversion from Limited Liability Company Status and Related
Distributions" and Notes 3 and 9 of Notes to Financial Statements.

(3) See Note 1 of Notes to Financial Statements.

(4) Pro forma to reflect (i) the acquisition (the "PAC Acquisition") of
Performance Analysis Corporation ("PAC") as if it had occurred on December
31, 1997 for $2.2 million in cash and 106,666 shares of Common Stock valued
at $10.00 per share, (ii) the purchase of 100,000 shares of Common Stock by
a stockholder of the Company for $1.0 million (the "Stockholder
Investment"), (iii) the establishment of net deferred tax assets of
$365,000 in connection with the Restructuring, and (iv) the payment of the
undistributed income, calculated on a tax basis, of Manhattan LLC of $8.7
million at December 31, 1997 (the "LLC Distribution"). Pro forma
adjustments for the PAC Acquisition include (i) the establishment of
purchased software and other intangible assets of $500,000 and $300,000,
respectively, (ii) the payment of cash of $2.2 million and the issuance of
106,666 shares of Common Stock and (iii) the charge to income for acquired
research and development of $2.1 million. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and Note 9 of
Notes to Financial Statements.

(5) Pro forma as adjusted to reflect the sale by the Company of the 3,000,000
shares of Common Stock offered hereby at an assumed initial public offering
price of $11.00 per share and the receipt of the estimated net proceeds
therefrom. See "Use of Proceeds" and "Capitalization."

THE COMPANY

In order to remain competitive in a changing retail landscape, many
retailers have demanded that manufacturers and distributors employ industry
initiatives such as "Quick Response," which use technology to improve the flow
of information among manufacturers, distributors and retailers. As a result of
these retailer demands, distribution centers have increased in size,
complexity and cost. The efficient management of a distribution center
operation now requires collecting information regarding customer orders,
inbound shipments of products, products available on-site, product storage
locations, weights and sizes, and outbound shipping data (including customer-
or store-specific shipping requirements, routing data and carrier
requirements). This information must be analyzed dynamically to determine the
most efficient use of the distribution center's labor, materials handling
equipment, packaging equipment and shipping and receiving areas. Additionally,
manufacturers, distributors and retailers must exchange information with other
participants in the supply chain in order to effectively integrate the
operation of their distribution centers with the entire supply chain.

PkMS allows organizations to manage the receiving, stock locating, stock
picking, order verification, order packing and shipment of products in complex
distribution centers. PkMS is designed to optimize the operation of a
distribution center by increasing inventory turnover, improving inventory
accuracy, reducing response times, reducing inventory levels, improving
customer service and increasing the productivity of labor, facilities and
materials handling equipment. In addition, through its recent acquisition of
Performance Analysis Corporation ("PAC"), the Company offers slotting
functionality, which helps determine the optimal storage location for
inventory within a distribution center.

The Company currently provides solutions to manufacturers, distributors and
retailers primarily in the apparel, consumer products, food service and
grocery markets. As of December 31, 1997, PkMS was licensed for use by more
than 250 customers including Calvin Klein, Dean Foods, Jockey International,
Mikasa, Nordstrom, Patagonia, Playtex Apparel, SEIKO Corporation of America,
The Sports Authority, Timberland and Warnaco.

The Company is a Georgia corporation formed to own all of the assets and
liabilities of Manhattan Associates Software, LLC, a Georgia limited liability
company ("Manhattan LLC"). Manhattan LLC was formed in 1995 by the
contribution of the assets, liabilities and intellectual property rights of
Pegasys Systems Incorporated ("Pegasys") and the contribution of certain
intellectual property rights from the other founders of Manhattan LLC. Pegasys
is controlled by Alan J. Dabbiere, the Company's Chairman of the Board, Chief
Executive Officer and President. After the Restructuring, Pegasys will be a
stockholder of the Company. See "Principal and Selling Stockholders." Unless
the context otherwise requires, references in this Prospectus to "Manhattan"
or the "Company" refer to Manhattan Associates, Inc., and its consolidated
subsidiary, PAC, acquired on February 16, 1998. The Company's principal
executive offices are located at 2300 Windy Ridge Parkway, Suite 700, Atlanta,
Georgia 30339 and its telephone number is (770) 955-7070.

RISK FACTORS

An investment in the shares of Common Stock offered hereby involves a high
degree of risk. In addition to the other information in this Prospectus, the
following risk factors should be considered carefully in evaluating an
investment in the Common Stock offered by this Prospectus. When used in this
Prospectus, the words "expects," "anticipates," "estimates" and similar
expressions are intended to identify forward-looking statements. Such
statements are subject to risks and uncertainties that could cause actual
results to differ materially from those projected. These risks and
uncertainties include, but are not limited to, those risks discussed below and
elsewhere in this Prospectus. Actual results could differ materially from
those projected in the forward-looking statements as a result of the risk
factors discussed below and elsewhere in this Prospectus.

LIMITED OPERATING HISTORY. The Company was founded and shipped its first
version of PkMS in 1990. The Company and its operations are subject to all of
the risks inherent in the establishment of a new business enterprise. The
Company's prospects must be considered in light of the risks, expenses and
difficulties frequently encountered by companies in their early stage of
development, particularly companies in new and rapidly evolving markets.
Although the Company has experienced significant growth during the past five
years, the Company does not believe that prior growth rates are sustainable or
indicative of future operating results. There can be no assurance that the
Company will be able to increase its level of revenue or maintain
profitability in the future. Increases in operating expenses are expected to
continue and, together with pricing pressures, may result in a decrease in
operating income and operating margin percentage. The Company's limited
operating history makes the prediction of future operating results difficult
or impossible. Future operating results will depend on many factors,
including, without limitation, the degree and rate of growth of the markets in
which the Company competes and the accompanying demand for the Company's
software products, the level of product and price competition, the ability of
the Company to establish strategic marketing relationships and develop and
market new and enhanced products and to control costs, the ability of the
Company to expand its direct sales force and indirect distribution channels
both domestically and internationally, the ability of the Company to integrate
acquired businesses, and the ability of the Company to attract, train and
retain consulting, technical and other key personnel. See "Selected Financial
Data" and "Management's Discussion and Analysis of Financial Condition and
Results of Operations."

POTENTIAL VARIABILITY OF QUARTERLY OPERATIONS AND FINANCIAL RESULTS. The
Company's operations and related revenue and operating results could vary
substantially from quarter to quarter. Among the factors causing these
potential variations are fluctuations in the demand for the Company's
products, the level of product and price competition in the Company's markets,
the length of the Company's sales process, the size and timing of individual
transactions, the mix of products and services sold, delays in, or
cancellations of, customer implementations, the Company's success in expanding
its services and customer support organizations as well as its direct sales
force and indirect distribution channels, the timing of new product
introductions and enhancements by the Company or its competitors, commercial
strategies adopted by competitors, changes in foreign currency exchange rates,
customers' budget constraints, the Company's ability to control costs and
general economic conditions. A substantial portion of the Company's operating
expenses, particularly personnel and facilities costs, are relatively fixed in
advance of any particular quarter. As a result, any delay in the recognition
of revenue may cause significant variations in operating results in any
particular quarter. In addition, an increase or decrease in hardware sales,
which provide the Company with lower gross margins than sales of software
licenses or services, may contribute to the variability of the Company's
operating results in any particular quarter. As a result of the foregoing
factors, the Company's operating results for a future quarter may be above or
below the expectations of public market analysts

and investors. Should the Company's revenue and operating results fall below
expectations, the price of the Company's Common Stock would be materially
adversely affected. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations."

DEPENDENCE ON SINGLE PRODUCT. The Company currently derives substantially
all of its revenue from sales of its PkMS software and related services and
hardware. The Company expects to continue to focus on distribution center
management systems as its primary line of business, and any factor adversely
affecting the market for distribution center management systems in general, or
the Company's products in particular, could adversely affect the Company's
business, financial condition and results of operations. The Company's future
financial performance will depend in large part on the successful development,
introduction and customer acceptance of new and enhanced versions of PkMS.
There can be no assurance that the Company will continue to be successful in
marketing PkMS or any new or enhanced versions of PkMS. The market for
distribution center management systems is intensely competitive, highly
fragmented and subject to rapid technological change. The Company's future
success will depend on continued growth in the market for distribution center
management systems. There can be no assurance that the market for distribution
center management systems will continue to grow. If this market fails to grow
or grows more slowly than the Company currently anticipates, the Company's
business, financial condition and results of operations would be materially
adversely affected. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations," "Business--Strategy" and "--Products and
Services."

ABILITY TO MANAGE GROWTH. The Company has rapidly and significantly expanded
its operations and anticipates that significant expansion will continue to be
required in order to address potential market opportunities. The Company
anticipates significantly increasing the size of its sales, support, services,
marketing and research and development operations following the completion of
the Offering. There can be no assurance that such expansion will be
successfully completed or that it will generate sufficient revenue to cover
the Company's expenses. The Company has only recently begun the process of
developing the management and operational capabilities and financial and
accounting systems and controls necessary to support anticipated growth. For
example, the Company hired its current Chief Financial Officer, Michael J.
Casey, in November 1997. The Company did not previously have a Chief Financial
Officer. In January 1998, the Company upgraded certain of its management
information and accounting systems and the Company will need to continue to
upgrade these and other systems to accommodate its expanding operations. There
can be no assurance that the Company's expanded management information and
accounting systems will be sufficient to support the Company's continued
growth, if any. Similarly, the Company hired its Executive Vice President--
Sales and Marketing, Gregory Cronin, in December 1997, and he is responsible
for expanding the Company's sales and marketing operations. The ability of the
Company to manage its growth, if any, will depend in large part on its ability
to build effective management information and accounting systems, to generally
improve and expand its operational and sales and marketing capabilities, to
develop the management skills of its managers and supervisors, and to train,
motivate and manage both its existing employees and the additional employees
that will be required if the Company is to achieve its business objectives.
There can be no assurance that the Company will succeed in developing all or
any of these capabilities, and any failure to do so would have a material
adverse effect on the Company's business, financial condition and results of
operations. See "Business--Strategy," "--Sales and Marketing" and
"Management."

NEW MANAGEMENT TEAM; DEPENDENCE ON KEY PERSONNEL. The Company's future
success will depend to a significant extent on its Chairman of the Board,
Chief Executive Officer and

President, Alan J. Dabbiere, as well as the Company's other executive officers
and technical, managerial and marketing personnel. A significant portion of
the Company's senior management team has been in place for only a relatively
short period of time. Oliver M. Cooper, Michael J. Casey, Gregory Cronin, Neil
Thall, and David K. Dabbiere, the Company's Chief Operating Officer, Chief
Financial Officer, Executive Vice President--Sales and Marketing, Vice
President--Supply Chain Strategy and Vice President, General Counsel and
Secretary, respectively, joined the Company full-time in August 1997, November
1997, December 1997, January 1998 and March 1998, respectively. Accordingly,
each of these individuals has been involved with only the most recent
operating activity of the Company. The Company's success will depend to a
significant extent on the ability of its new executive officers to integrate
themselves into the Company's daily operations, to gain the trust and
confidence of the Company's other employees and to work effectively as a team.
The loss of the services of any of the Company's executive officers could have
a material adverse effect on the Company's business, financial condition and
results of operations. There can be no assurance that any of these individuals
or any other key employee will not voluntarily terminate his employment with
the Company. The Company does not maintain key man life insurance on any of
its executive officers. The failure of the Company to maintain key man life
insurance on its executive officers could have a material adverse effect on
the Company's business, financial condition and results of operation. The
Company believes that its future success will also depend significantly on its
ability to attract, motivate and retain additional highly skilled technical,
managerial, consulting, sales and marketing personnel. Competition for such
personnel is intense, and there can be no assurance that the Company will be
successful in attracting, motivating and retaining the personnel required to
grow and operate profitably. Failure to attract, motivate and retain such
highly skilled personnel could have a material adverse effect on the Company's
business, financial condition and results of operations. See "Business--
Employees" and "Management."

LIMITED PREDICTABILITY OF SALES DUE TO LENGTH OF SALES PROCESS. The sale of
PkMS generally requires the Company to provide a significant level of
education to prospective customers regarding the use and benefits of the
product. Implementation of the Company's products involves a significant
commitment of resources by prospective customers and is commonly associated
with substantial integration efforts which must be performed by the Company
and/or the customer. For these and other reasons, the length of time between
the date of initial contact with the potential customer and execution of a
software license agreement typically ranges from three to six months, and is
subject to delays over which the Company may have little or no control. In
addition, as the average dollar size of the sale of the Company's products and
services increases, the Company expects the sales cycle to lengthen as a
result of a more time-consuming approval process typically required by its
potential customers. The Company's implementation cycle could also be
lengthened by increases in the size and complexity of its implementations. In
addition, the Company will need to continue hiring qualified personnel to
complete such installations. The failure of the Company to attract and retain
such personnel or the delay in, or cancellation of, sales or implementations
of PkMS could have a material adverse effect on the Company's business,
financial condition and results of operations and could cause the Company's
operating results to vary significantly from quarter to quarter. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and "Business--Sales and Marketing."

DEPENDENCE ON HARDWARE REVENUE. In conjunction with the licensing of PkMS,
the Company resells a variety of hardware products, developed and manufactured
by third parties, in order to provide the Company's customers with an
integrated distribution center management solution. Revenue from such hardware
sales can amount to a significant portion of the Company's total revenue in
any period. As the market for the distribution of hardware products becomes
more competitive, the Company's customers may choose to purchase such

hardware directly from the manufacturers or distributors of such products,
with a resultant decrease to the Company in such ancillary revenue and related
contribution to income. Hardware sales revenue as a percentage of total
revenue decreased in 1996 and 1997 and, as a result, the Company's
profitability is increasingly dependent upon growth in its software licenses
and services revenue. The failure of the Company to maintain or increase
hardware revenues may have a material adverse effect on the Company's
business, financial condition and results of operations. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
"Business--Products and Services."

IMMIGRATION ISSUES. The Company believes that its success in part has
resulted from its ability to attract and retain persons with technical and
project management skills, some of whom are citizens of other countries,
principally India. Many of the Company's employees are employed by the Company
pursuant to the United States Immigration and Naturalization Service ("INS")
H-1(B), non-immigrant work-permitted visa classification. There is a limit on
the number of new H-1(B) petitions that the INS may approve in any year, and
in years in which this limit is reached, the Company may be unable to obtain
H-1(B) visas necessary to bring additional foreign employees to the U.S.
Compliance with existing U.S. immigration laws, or changes in such laws making
it more difficult to hire foreign nationals or limiting the ability of the
Company to retain H-1(B) employees in the U.S., could require the Company to
incur additional unexpected labor costs and expenses. Any such restrictions or
limitations on the Company's hiring practices could have a material adverse
effect on the Company's business, financial condition and results of
operations. Furthermore, Congress and administrative agencies with
jurisdiction over immigration matters have periodically expressed concerns
over the levels of immigration into the United States. These concerns have
often resulted in proposed legislation, rules and regulations aimed at
reducing the number of employment-based visas and permanent resident visas
that may be issued. Any changes in such laws making it more difficult to hire
foreign nationals or limiting the ability of the Company to retain foreign
employees could require the Company to incur additional unexpected labor costs
and expenses or result in the Company having insufficient qualified personnel
to carry on the business of the Company.

The Company's Chief Technology Officer, Deepak Raghavan, is presently
employed pursuant to an H-1(B) non-immigrant work-permitted visa that may be
extended only through April 30, 2000. Mr. Raghavan's application for an EB-3
permanent immigrant visa is currently subject to a processing backlog which
may or may not be alleviated in time for his EB-3 permanent immigrant visa to
be issued before April 30, 2000. In the event that Mr. Raghavan's permanent
work permit is not issued prior to such date, he may be required to leave the
United States. In February 1998, Mr. Raghavan made a cash investment in the
Company which allows him to qualify for an EB-5 permanent immigrant investor
visa which may be granted sooner than the EB-3 permanent immigrant visa under
his current application. While Mr. Raghavan has applied for the immigrant
investor visa and the Company expects that such visa will be issued prior to
April 30, 2000, there can be no assurance that any visa permitting Mr.
Raghavan to remain in the United States will be issued prior to such date. In
the event Mr. Raghavan is required to leave the United States, the Company's
software development efforts, and thus its business, financial condition and
results of operations, may be materially adversely affected. See "Business--
Employees," "Management" and "Certain Transactions."

COMPETITION. The market for the Company's products is intensely competitive,
highly fragmented and subject to rapid technological change. The Company's
competitors are diverse and offer a variety of solutions directed at various
aspects of the supply chain, as well as the enterprise as a whole. The
Company's existing competitors include distribution center management software
vendors, the corporate information technology departments of potential

customers capable of internally developing solutions, and smaller independent
companies that have developed or are attempting to develop distribution center
management software that competes with the Company's software solution.

The Company may face competition in the future from business application
software vendors that may broaden their product offerings by internally
developing, or by acquiring or partnering with independent developers of,
distribution center management software, and Enterprise Resource Planning
("ERP") and Supply Chain Management ("SCM") applications vendors. To the
extent such ERP and SCM vendors develop or acquire systems with functionality
comparable or superior to the Company's products, their significant installed
customer bases, long-standing customer relationships and ability to offer a
broad solution could provide a significant competitive advantage over the
Company. In addition, it is possible that new competitors or alliances among
current and new competitors may emerge and rapidly gain significant market
share. Many of the Company's competitors and potential competitors have longer
operating histories, significantly greater financial, technical, marketing and
other resources, greater name recognition and a larger installed base of
customers than the Company. In order to be successful in the future, the
Company must continue to respond promptly and effectively to technological
change and competitors' innovations. There can be no assurance that current or
potential competitors of the Company will not develop products comparable or
superior in terms of price and performance features to those developed by the
Company. In addition, no assurance can be given that the Company will not be
required to make substantial additional investments in connection with its
research, development, marketing, sales and customer service efforts in order
to meet any competitive threat, or that the Company will be able to compete
successfully in the future. Increased competition will result in reductions in
market share, pressure for price reductions and related reductions in gross
margins, any of which could materially and adversely affect the Company's
ability to achieve its financial and business goals. There can be no assurance
that in the future the Company will be able to successfully compete against
current and future competitors. See "Business--Competition."

RISKS ASSOCIATED WITH RECENT ACQUISITION AND POSSIBLE ACQUISITIONS. The
Company has recently completed the PAC Acquisition and may in the future
engage in selective acquisitions of other businesses that are complementary to
those of the Company, including other providers of distribution center
management solutions or technology. There can be no assurance that the Company
will be able to identify additional suitable acquisition candidates available
for sale at reasonable prices, consummate any acquisition or successfully
integrate any acquired business (including the PAC business) into the
Company's operations. Further, acquisitions may involve a number of special
risks, including diversion of management's attention, failure to retain key
acquired personnel, unanticipated events or circumstances, legal liabilities
and amortization of acquired intangible assets, some or all of which could
have a material adverse effect on the Company's business, results of
operations and financial condition. Problems with an acquired business could
have a material adverse effect on the performance of the Company as a whole.
The Company expects to finance any future acquisitions with the proceeds of
the Offering as well as with possible debt financing, the issuance of equity
securities (common or preferred stock) or combinations of the foregoing. There
can be no assurance that the Company will be able to arrange adequate
financing on acceptable terms. If the Company were to proceed with one or more
significant future acquisitions in which the consideration consisted of cash,
a substantial portion of the Company's available cash (possibly a portion of
the proceeds of the Offering) could be used to consummate the acquisitions. If
the Company were to consummate one or more significant acquisitions in which
the consideration consisted of stock, shareholders of the Company could suffer
dilution of their interests in the Company. Many business acquisitions must be
accounted for using the purchase method of accounting. Most of the businesses
that might become attractive acquisition candidates for the Company are likely
to

have significant intangible assets, and acquisition of these businesses, if
accounted for as a purchase, would typically result in substantial goodwill
amortization charges to the Company, reducing future earnings. In addition,
such acquisitions could involve acquisition-related charges, such as one-time
acquired research and development charges. For example, the Company intends,
in the first quarter of 1998, to record an acquired research and development
expense of approximately $2.1 million in connection with the PAC Acquisition.
See "Business--Strategy," "--Recent Developments" and Financial Statements.

ESTABLISHMENT OF INDIRECT CHANNELS; POTENTIAL FOR CHANNEL CONFLICT. Although
the Company has historically focused its efforts on marketing through its
direct sales force, the Company is increasing resources dedicated to
developing indirect marketing channels such as systems integrators. There can
be no assurance that the Company will be able to attract and retain a
sufficient number of systems integrators to market successfully the Company's
PkMS product. In addition, there can be no assurance that the Company's
potential systems integrators will not develop, acquire or market products
competitive with the Company's PkMS product. In addition, sales of PkMS
through its indirect channels are also likely to reduce the Company's gross
profits from its consulting services as the Company's third party systems
integrators provide these services. Selling through indirect channels may
limit the Company's contact with its customers. As a result, the Company's
ability to accurately forecast sales, evaluate customer satisfaction and
recognize emerging customer requirements may be hindered. The Company's
strategy of marketing its PkMS product directly to customers and indirectly
through systems integrators may result in distribution channel conflicts. The
Company's direct sales efforts may compete with those of its indirect channels
and, to the extent different systems integrators target the same customers,
systems integrators may also come into conflict with each other. As the
Company strives to expand its indirect distribution channels, there can be no
assurance that emerging channel conflicts will not have a material adverse
effect on its relationships with potential systems integrators or adversely
affect its ability to attract new systems integrators. See "Business--
Strategy" and "--Sales and Marketing."

RISKS ASSOCIATED WITH INTERNATIONAL EXPANSION. Revenue outside of North
America has not been significant to date; however, a key element of the
Company's strategy is to increase its international sales. The Company expects
to face competition from foreign distribution center management system
providers in their respective native countries. To successfully expand
international sales, the Company will need to recruit and retain international
systems integrators. There can be no assurance that the Company will be able
to maintain or increase international sales of its products or that the
Company's international distribution channels will be able to adequately
market, service and support the Company's products. International operations
generally are subject to certain risks, including dependence on independent
resellers, fluctuations in foreign currency exchange rates, compliance with
foreign regulatory and market requirements, variability of foreign economic
conditions and changing restrictions imposed by United States export laws.
Additional risks inherent in the Company's international business activities
generally include unexpected changes in regulatory requirements, tariffs and
other trade barriers, costs of localizing products for foreign countries, lack
of acceptance of localized products in foreign countries, longer accounts
receivable payment cycles, difficulties in managing international operations,
difficulties in enforcing intellectual property rights and the burdens of
complying with a wide variety of foreign laws. Currently, the Company does not
operate sales offices outside of the United States. The Company intends to
establish international sales offices, and such operations will be subject to
certain additional risks, including difficulties in staffing and managing such
operations and potentially adverse tax consequences including restrictions on
the repatriation of earnings. There can be no assurance that such factors will
not have a material adverse effect on the Company's future international sales
and, consequently, the Company's business, financial condition and results of
operations.

To date, all of the Company's sales have been made in United States dollars
and the Company has not engaged in any hedging transactions through the
purchase of derivative securities or otherwise. However, should the Company's
revenue from international sales increase as intended, and should such sales
be denominated in foreign currencies, the failure of the Company to adopt an
adequate hedging strategy to guard against foreign currency fluctuations could
have a material adverse effect on the Company's business, financial condition
and results of operations. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations," "Business--Strategy" and "--
Sales and Marketing."

CONCENTRATION OF CONTROL. Upon completion of the Offering, the Company's
directors, officers and their affiliates will beneficially own approximately
85.1% of the Company's outstanding Common Stock. In particular, Alan J.
Dabbiere, the Chairman of the Board, Chief Executive Officer and President of
the Company, will beneficially own approximately 47.9% of the Company's
outstanding Common Stock. As a result, these stockholders will have the
ability to elect the Company's directors and to determine the outcome of
corporate actions requiring stockholder approval. This concentration of
ownership may have the effect of delaying or preventing a change of control of
the Company. See "Management" and "Principal and Selling Stockholders."

RISKS ASSOCIATED WITH RAPID TECHNOLOGICAL ADVANCES; NECESSITY OF DEVELOPING
NEW PRODUCTS. The market for distribution center management systems is subject
to rapid technological change, changing customer needs, frequent new product
introductions and evolving industry standards that may render existing
products and services obsolete. As a result, the Company's position in this
market could be eroded rapidly by unforeseen changes in customer requirements
for application features, functions and technologies. The Company's growth and
future operating results will depend in part upon its ability to enhance
existing applications and develop and introduce new applications that meet or
exceed technological advances in the marketplace, that meet changing customer
requirements, that respond to competitive products and that achieve market
acceptance. Although the Company is presently developing a client/server
version of its PkMS product, there can be no assurance that this product will
be completed to meet potential customer demands, if any, on a timely basis.
The Company's product development and testing efforts have required, and are
expected to continue to require, substantial investments by the Company. There
can be no assurance that the Company will continue to possess sufficient
resources to make necessary investments in technology. In addition, there can
be no assurance that the Company's products will meet the requirements of the
marketplace and achieve market acceptance, or that the Company's current or
future products will conform to industry standards in the markets they serve.
If the Company is unable, for technological or other reasons, to develop and
introduce new and enhanced products in a timely manner, the Company's
business, financial condition and results of operations could be materially
adversely affected. See "Business--Product Development."

POTENTIAL LIABILITY TO CLIENTS. Many of the Company's installations involve
products that are critical to the operations of its clients' businesses and
provide benefits that may be difficult to quantify. Any failure in a client's
system could result in a claim for substantial damages against the Company,
regardless of the Company's responsibility for such failure. Although the
Company attempts to limit contractually its liability for damages arising from
negligent acts, errors, mistakes or omissions, there can be no assurance the
limitations of liability set forth in its contracts will be enforceable in all
instances or would otherwise protect the Company from liability for damages.
Although the Company maintains general liability insurance coverage, including
coverage for errors or omissions, there can be no assurance that such coverage
will continue to be available on reasonable terms or will be available in
sufficient amounts to cover one or more large claims, or that the insurer will
not disclaim coverage as to any future claim.

The successful assertion of one or more large claims against the Company that
exceed available insurance coverage or changes in the Company's insurance
policies, including premium increases or the imposition of large deductible or
co-insurance requirements, could adversely affect the Company's business,
financial condition and results of operations.

CONVERSION FROM LIMITED LIABILITY COMPANY ("LLC") STATUS AND UTILIZATION OF
SIGNIFICANT PORTION OF THE OFFERING PROCEEDS TO SATISFY INDEBTEDNESS INCURRED
TO FUND DISTRIBUTIONS TO CURRENT STOCKHOLDERS. Manhattan LLC was formed by the
contribution of the assets, liabilities and intellectual property rights of
Pegasys and the contribution of certain intellectual property rights from the
other founders of Manhattan LLC. Manhattan LLC has operated as an LLC, taxable
as a partnership under the provisions of the Internal Revenue Code of 1986, as
amended (the "Code") and generally taxable as a partnership under comparable
provisions of state income tax laws. An LLC which is taxable as a partnership
generally is not subject to income tax at the entity level. Instead, an LLC's
taxable income generally passes through to its owners and is taxed to such
owners as personal income. Historically, Manhattan LLC has distributed its
earnings to its owners as the Company's working capital needs permitted. Since
the Company's working capital needs are anticipated to be satisfied for at
least the next twelve months by the proceeds of this Offering, prior to this
Offering Manhattan LLC will disburse its accumulated undistributed earnings to
its owners.

As of the date of this Prospectus, the assets and liabilities of Manhattan
LLC will be contributed to the Company in exchange for Common Stock of the
Company in a transaction intended to be non-taxable under Section 351 of the
Code (the "Restructuring"). Manhattan LLC will then distribute the Common
Stock of the Company received to its stockholders as of the date of this
Prospectus and Manhattan LLC will subsequently be dissolved. Purchasers of the
Common Stock in the Offering will not receive any portion of the Common Stock
distributed to the stockholders of Manhattan LLC in connection with the
Restructuring. After the Restructuring, the Company will be taxable for
federal and state income tax purposes as a "C" corporation.

Manhattan LLC has entered into a line of credit for working capital purposes
and to fund the disbursement of the undistributed earnings to the stockholders
of Manhattan LLC that will be made prior to the completion of the Offering.
Prior to the Offering, this distribution will cause the Company to sustain, on
a pro forma basis as of December 31, 1997, a working capital deficit of $3.6
million and stockholders' deficit of $585,000. The Company will use a portion
of the proceeds of the Offering to fund the repayment of amounts owed under
the line of credit and to repay indebtedness under a note to the Company's
Chief Executive Officer. There can be no assurance that the remaining net
proceeds of the Offering will be sufficient to pay for future acquisitions,
planned research and development projects and other growth-oriented
activities, which could require the Company to incur additional debt or other
financing that could impose restrictive covenants and other terms having a
material adverse effect on the Company's business, financial condition and
results of operations. Purchasers of Common Stock in the Offering will not
receive any portion of the distributions to the stockholders of Manhattan LLC
prior to the Restructuring. See "Conversion from Limited Liability Company
Status and Related Distributions," "Use of Proceeds," "Certain Transactions"
and Notes 1 and 9 of Notes to Financial Statements.

INTELLECTUAL PROPERTY RIGHTS. The Company relies on a combination of
copyright, trade secret, trademark, service mark and trade dress laws,
confidentiality procedures and contractual provisions to protect its
proprietary rights in its products and technology. There can be no assurance,
however, that the confidentiality agreements on which the Company relies to
protect

its trade secrets and proprietary technology will be adequate. Further, the
Company may be subject to additional risks as it enters into transactions in
countries where intellectual property laws are not well developed or are
poorly enforced. Legal protections of the Company's rights may be ineffective
in such countries. Litigation to defend and enforce the Company's intellectual
property rights could result in substantial costs and diversion of resources
and could have a material adverse effect on the Company's business, financial
condition and results of operations, regardless of the final outcome of such
litigation. Despite the Company's efforts to safeguard and maintain its
proprietary rights both in the United States and abroad, there can be no
assurance that the Company will be successful in doing so, or that the steps
taken by the Company in this regard will be adequate to deter misappropriation
or independent third party development of the Company's technology or to
prevent an unauthorized third party from copying or otherwise obtaining and
using the Company's products or technology. Any such events could have a
material adverse effect on the Company's business, financial condition and
results of operations.

As the number of supply chain management applications in the industry
increases and the functionality of these products further overlaps, software
development companies like the Company may increasingly become subject to
claims of infringement or misappropriation of the intellectual property rights
of others. There can be no assurance that third parties will not assert
infringement or misappropriation claims against the Company in the future with
respect to current or future products. Any claims or litigation, with or
without merit, could be time-consuming, result in costly litigation, diversion
of management's attention and cause product shipment delays or require the
Company to enter into royalty or licensing arrangements. Such royalty or
licensing arrangements, if required, may not be available on terms acceptable
to the Company, if at all, which could have a material adverse effect on the
Company's business, financial condition and results of operations. Adverse
determinations in such claims or litigation could also have a material adverse
effect on the Company's business, financial condition and results of
operations. See "Business--Proprietary Rights."

BROAD MANAGEMENT DISCRETION AS TO USE OF PROCEEDS. A substantial portion of
the net proceeds to be received by the Company in connection with the Offering
is allocated to working capital and general corporate purposes. Accordingly,
management will have broad discretion with respect to the expenditure of such
proceeds. Purchasers of shares of Common Stock offered hereby will be
entrusting their funds to the Company's management, upon whose judgment they
must depend, with limited information concerning the specific working capital
requirements and general corporate purposes to which the funds will ultimately
be applied. See "Use of Proceeds."

CERTAIN ANTI-TAKEOVER PROVISIONS. The Board of Directors has authority to
issue up to 20,000,000 shares of preferred stock and to fix the rights,
preferences, privileges and restrictions, including voting rights, of the
preferred stock without further vote or action by the Company's stockholders.
The rights of the holders of the Common Stock will be subject to, and may be
adversely affected by, the rights of the holders of a preferred stock that may
be issued in the future. While the Company has no present intention to issue
shares of preferred stock, such issuance, while providing desired flexibility
in connection with possible acquisitions and other corporate purposes, could
have the effect of making it more difficult for a third party to acquire a
majority of the outstanding voting stock of the Company. In addition, the
Company's Articles of Incorporation and Bylaws contain provisions that may
discourage proposals or bids to acquire the Company. These provisions could
have the effect of making it more difficult for a third party to acquire
control of the Company. See "Description of Capital Stock--Certain Articles of
Incorporation and Bylaw Provisions."

SHARES ELIGIBLE FOR FUTURE SALE. Sales of a substantial number of shares of
Common Stock in the public market following the Offering could adversely
affect the market price of the Common Stock prevailing from time to time. The
number of shares of Common Stock available for sale in the public market is
limited by restrictions under the Securities Act of 1933, as amended (the
"Securities Act"), and lock-up agreements executed by officers, directors,
optionholders and all stockholders of the Company under which such security
holders have agreed not to sell or otherwise dispose of any of their shares
for a period of 180 days after the date of this Prospectus without the prior
written consent of Deutsche Morgan Grenfell Inc. In addition to the 3,000,000
shares of Common Stock offered hereby (assuming no exercise of the
Underwriters' over-allotment option), there will be 20,206,674 shares of
Common Stock outstanding as of the date of this Prospectus, all of which are
"restricted" shares under the Securities Act. As a result of the lock-up
agreements described above and the provisions of Rules 144(k), 144 and 701
promulgated under the Securities Act ("Rule 144(k)," "Rule 144" and "Rule
701," respectively), the restricted shares will be available for sale in the
public market as follows: (i) no shares will be eligible for immediate sale on
the date of this Prospectus, (ii) approximately 19,870,008 shares will become
eligible for sale 180 days after the date of this Prospectus (assuming no
release from the lock-up agreements) upon expiration of lock-up agreements and
(iii) approximately 336,666 shares will become eligible for sale in February
1999. In addition, the Company intends to register for offer and sale under
the Securities Act 5,729,784 shares of Common Stock issued or issuable under
the Company's stock option plans and other stock options. See "Shares Eligible
for Future Sale" and "Underwriting."

NO PRIOR PUBLIC MARKET FOR COMMON STOCK; POSSIBLE VOLATILITY OF STOCK
PRICE. Prior to the Offering, there has been no public market for the Common
Stock. Although the Company has made application for the quotation of the
Common Stock on the Nasdaq National Market, there can be no assurance that an
active trading market will develop or be sustained after the Offering. In the
event that the Company fails to appoint two independent Directors within 90
days after the Offering, Nasdaq could terminate the listing of the Common
Stock on the Nasdaq National Market, which would have a material adverse
effect on the liquidity and trading price of the Common Stock. The initial
public offering price of the Common Stock offered hereby will be determined by
negotiation between the Company, the Selling Stockholders and the Underwriters
and may bear no relationship to the market price of the Common Stock after the
Offering. The market price of the Common Stock could be subject to significant
fluctuations in response to variations in quarterly operating results and
other factors. In addition, the securities markets and, in particular the high
technology stock market sector, have experienced significant price and volume
fluctuations from time to time that have often been unrelated or
disproportionate to the operating performance of particular companies. These
broad fluctuations may adversely affect the market price of the Common Stock.
See "Underwriting."

DILUTION. The purchasers of the Common Stock offered hereby will experience
immediate and significant dilution in the pro forma net tangible book value of
the Common Stock from the initial pubic offering price. See "Dilution."

YEAR 2000 COMPLIANCE. Many currently installed computer systems and software
products are coded to accept only two digit entries in the date code field.
Beginning in the year 2000, these date code fields will need to accept four
digit entries to distinguish twenty-first century dates from twentieth century
dates. As a result, over the next two years, computer systems and/or software
used by many companies may need to be upgraded to comply with such "Year 2000"
requirements. Significant uncertainty exists in the software industry
concerning the potential effects associated with such compliance. The latest
versions of the Company's products are designed to be Year 2000 compliant. The
Company is in the process of determining

the extent to which its earlier software products as implemented in the
Company's installed customer base are Year 2000 compliant, as well as the
impact of any non-compliance on the Company and its customers. The Company
does not currently believe that the effects of any Year 2000 non-compliance in
the Company's installed base of software will result in a material adverse
effect on the Company's business, financial condition or results of
operations. However, the Company's investigation is in its preliminary stages,
and no assurance can be given that the Company will not be exposed to
potential claims resulting from system problems associated with the century
change. There can also be no assurance that the Company's software products
that are designed to be Year 2000 compliant contain all necessary date code
changes.

The Company believes that the purchasing patterns of customers and potential
customers may be affected by Year 2000 issues in a variety of ways. Many
companies are expending significant resources to correct or patch their
current software systems for Year 2000 compliance. These expenditures may
result in reduced funds available to purchase software products such as those
offered by the Company. Potential customers may also choose to defer
purchasing Year 2000 compliant products until they believe it is absolutely
necessary, thus potentially resulting in stalled market sales within the
industry. Conversely, Year 2000 issues may cause other companies to accelerate
purchases, thereby causing an increase in short-term demand and a consequent
decrease in long-term demand for software products. Additionally, Year 2000
issues could cause a significant number of companies, including current
Company customers, to reevaluate their current software needs and as a result
switch to other systems or suppliers. Any of the foregoing could result in a
material adverse effect on the Company's business, financial condition and
results of operations.

CONVERSION FROM LIMITED LIABILITY COMPANY STATUS AND RELATED DISTRIBUTIONS

Manhattan LLC was formed by the contribution of the assets, liabilities and
intellectual property rights of Pegasys and the contribution of certain
intellectual property rights of the other founders of Manhattan LLC. Manhattan
LLC has operated as a limited liability company ("LLC") taxable as a
partnership under the provisions of the Internal Revenue Code of 1986, as
amended (the "Code") and comparable provisions of state income tax laws. An
LLC which is taxable as a partnership under the Code is generally not subject
to income tax at the entity level. Instead, an LLC's taxable income generally
passes through to its owners and is taxed to such owners as personal income.
Historically, Manhattan LLC has distributed its earnings to its owners as the
Company's working capital needs permitted. Since the Company's working capital
needs are anticipated to be satisfied for at least the next twelve months by
the proceeds of this Offering, prior to this Offering Manhattan LLC will
disburse its accumulated earnings to its owners.

As of the date of this Prospectus, the assets and liabilities of Manhattan
LLC will be contributed to the Company in exchange for Common Stock of the
Company in a transaction intended to be non-taxable under Section 351 of the
Code. Manhattan LLC will then distribute the Common Stock of the Company
received to its stockholders as of the date of this Prospectus and Manhattan
LLC will subsequently be dissolved. After the Restructuring, the Company will
be taxable for federal and state income tax purposes as a "C" corporation.
Purchasers of the Common Stock in the Offering will not receive any portion of
the Common Stock distributed to the stockholders of Manhattan LLC in
connection with the Restructuring.

Prior to the completion of the Offering, the Company intends to distribute
all undistributed earnings, calculated on a tax basis, to the stockholders of
Manhattan LLC. As of December 31, 1997, the undistributed earnings, calculated
on a tax basis, of the Company was $8.7 million and the Company expects to
accumulate additional undistributed earnings from January 1, 1998 through the
date of the Restructuring. These distributions will be funded through a series
of payments from available Company cash and from the proceeds of a line of
credit the Company has established. It is anticipated that any such advances
or balance on the line of credit incurred to fund these distributions will be
repaid using a portion of the net proceeds of the Offering. Purchasers of the
Common Stock in the Offering will not receive any portion of the distributions
to the stockholders of Manhattan LLC prior to the Restructuring. See "Risk
Factors--Conversion from Limited Liability Company ("LLC") Status and
Utilization of Significant Portion of the Offering Proceeds to Satisfy
Indebtedness Incurred to Fund Distributions to Current Stockholders" and "Use
of Proceeds."

USE OF PROCEEDS

The net proceeds to the Company from the sale of the 3,000,000 shares of
Common Stock offered by the Company hereby are estimated to be approximately
$29.5 million, assuming an initial public offering price of $11.00 per share
and after deducting estimated underwriting discounts and estimated expenses
payable by the Company in connection with the Offering.

From the net proceeds of the Offering, the Company will repay any amounts
outstanding under its line of credit. The line of credit provides for the
Company to borrow, subject to certain conditions, up to $8,000,000, secured by
certain of the assets of the Company, at an interest rate of the commercial
lender's prime rate plus one-half percent per year. As of March 31, 1998, the
Company had no advances outstanding under this line of credit. This line of
credit, in part, will be used to fund the LLC Distribution and to make
additional distributions to the stockholders of Manhattan LLC based on income
earned from January 1, 1998 through the date of the Restructuring. See "Risk
Factors--Conversion from Limited Liability Company ("LLC") Status and
Utilization of Significant Portion of the Offering Proceeds to Satisfy
Indebtedness Incurred to Fund Distributions to Current Stockholders,"
"Conversion from Limited Liability Company Status and Related Distributions"
and "Certain Transactions."

In addition, the Company will use a portion of the net proceeds of the
Offering to repay a Grid Promissory Note (the "1995 Note") payable to its
Chairman of the Board, Chief Executive Officer and President, Alan J.
Dabbiere. The 1995 Note is payable on demand and bears interest at a rate of
5% per year. As of February 28, 1998, the balance of the 1995 Note (including
accrued interest) was $1,937,000.

The remaining net proceeds will be used for working capital and other
general corporate purposes. Such purposes may include the funding of new
product development efforts and possible acquisitions of, or investments in,
businesses and technologies that are complementary to those of the Company.
The Company has no specific agreements, commitments or understandings with
respect to any such acquisitions or investments. The amounts actually expended
for each purpose may vary significantly and are subject to change at the
Company's discretion depending upon certain factors, including economic or
industry conditions, changes in the competitive environment and strategic
opportunities that may arise. Pending application of the net proceeds as
described above, the Company intends to invest the net proceeds of the
Offering in interest-bearing securities. See "Risk Factors--Broad Management
Discretion as to Use of Proceeds" and "Business--Strategy."

DIVIDEND POLICY

The Company historically has made distributions to its stockholders related
to its limited liability company status and the resulting tax payment
obligations imposed on its stockholders. Other than the distributions to be
made as described under "Conversion from Limited Liability Company Status and
Related Distributions," the Company does not intend to declare or pay cash
dividends in the foreseeable future. Management anticipates that all earnings
and other cash resources of the Company, if any, will be retained by the
Company for investment in its business. The Company is prevented by its line
of credit agreement from paying cash dividends without the consent of its
commercial lender.

CAPITALIZATION

The following table sets forth at December 31, 1997, the short-term
obligations and capitalization of the Company on an actual, pro forma and pro
forma as adjusted basis. This table should be read in conjunction with the
Company's Financial Statements and Notes thereto, appearing elsewhere in this
Prospectus.

DECEMBER 31, 1997
---------------------------------
PRO FORMA AS
ACTUAL PRO FORMA(1) ADJUSTED(2)
------ ------------ ------------
(IN THOUSANDS, EXCEPT SHARE
DATA)

Note payable to stockholder, current portion. $1,019 $1,019 $ --
====== ====== =======
Stockholders' equity:
Preferred stock, no par value; 20,000,000
shares authorized; no shares issued or
outstanding actual, pro forma and pro
forma as adjusted......................... -- -- --
Common stock, $.01 par value; 100,000,000
shares authorized actual, pro forma and
pro forma as adjusted, 20,000,008 shares
issued and outstanding, actual, 20,206,674
shares issued and outstanding, pro forma;
23,206,674 shares issued and outstanding,
pro forma as adjusted(3).................. 200 202 232
Additional paid-in capital................. 1,929 2,830 32,290
Retained earnings.......................... 6,858 (3,084) (3,084)
Deferred compensation...................... (533) (533) (533)
------ ------ -------
Total stockholders' equity............... 8,454 (585) 28,905
------ ------ -------
Total capitalization................... $8,454 $ (585) $28,905
====== ====== =======

- --------
(1) Pro forma to reflect (i) the payment of cash of $2.2 million and the
issuance of 106,666 shares of Common Stock valued at $10.00 per share in
connection with the PAC Acquisition, (ii) the charge to income for
acquired research and development of $2.1 million in connection with the
PAC Acquisition, (iii) the Stockholder Investment, (iv) the establishment
of net deferred tax assets in connection with the Restructuring, and (v)
the payment of the LLC Distribution. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations", "Conversion
from Limited Liability Company Status and Related Distribution" and Notes
3 and 9 of Notes to Financial Statements.

(2) Pro forma as adjusted to reflect the sale by the Company of the 3,000,000
shares of Common Stock offered hereby at an assumed initial public
offering price of $11.00 per share and the receipt of the estimated net
proceeds therefrom. See "Use of Proceeds."

(3) Excludes (i) 3,355,716 shares of Common Stock issuable upon the exercise
of options outstanding at February 28, 1998 under the LLC Option Plan at a
weighted average exercise price of $4.66 per share, (ii) 729,784 shares of
Common Stock issuable upon the exercise of options outstanding at February
28, 1998 issued outside of the LLC Option Plan at a weighted average
exercise price of $1.20 per share, and (iii) 1,644,284 reserved for future
issuance under the Company's Stock Incentive Plan (the "Stock Incentive
Plan"). See "Management-Stock Option Plans" and Note 6 of Notes to
Financial Statements.

DILUTION

As of December 31, 1997, the net tangible book value of the Company was
approximately $8.3 million, or $0.42 per share of Common Stock. The pro forma
net tangible book deficit as of December 31, 1997 was approximately $1.5
million or $0.08 per share. Pro forma net tangible book value (deficit) per
share represents the amount of the Company's total tangible assets less total
liabilities, divided by the number of shares of Common Stock outstanding after
giving effect to the PAC Acquisition, the Stockholder Investment, the
establishment of the deferred tax assets in connection with the
Recapitalization and the payments of the LLC Distribution. After giving effect
to the sale by the Company of the 3,000,000 shares of Common Stock offered
hereby at an assumed initial public offering price of $11.00 per share and the
application of the estimated net proceeds therefrom after deducting the
estimated underwriting discount and estimated offering expenses, the pro forma
net tangible book value of the Company at December 31, 1997 would have been
approximately $28.0 million, or $1.21 per share of Common Stock. This
represents an immediate increase in net tangible book value of $1.29 per share
to existing stockholders and an immediate decrease in net tangible book value
of $9.79 per share to new investors. The following table illustrates this
unaudited per share dilution to new investors:

Assumed initial public offering price per share.............. $11.00
Net book value per share as of December 31, 1997........... $ 0.42
Decrease per share attributable to pro forma adjustments... (0.50)
------
Pro forma net tangible book deficit per share as of
December 31, 1997......................................... (0.08)
Increase in net book value per share attributable to new
investors................................................. 1.29
------
Pro forma net tangible book value per share as of December
31, 1997 after the Offering................................. 1.21
------
Dilution per share to new investors.......................... $ 9.79
======

The following table sets forth, as of December 31, 1997, on a pro forma
basis, after giving effect to the number of shares issued in the PAC
Acquisition and the Stockholder Investment, the number of shares of Common
Stock previously issued by the Company, the total consideration reflected in
the accounts of the Company and the average price per share to the existing
stockholders and new investors, assuming the sale by the Company of 3,000,000
shares of Common Stock at an assumed initial public offering price of $11.00
per share, and before deducting the estimated underwriting discounts and
estimated offering expenses:

SHARES PURCHASED TOTAL CONSIDERATION
------------------ ------------------- AVERAGE PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
---------- ------- ----------- ------- -------------

Existing stockholders...... 20,206,674 87.1% $ 2,830,000 7.9% $ 0.14
New investors.............. 3,000,000 12.9 33,000,000 92.1 11.00
---------- ----- ----------- -----
Total.................... 23,206,674 100.0% $35,830,000 100.0%
========== ===== =========== =====

Assuming full exercise of the Underwriters' over-allotment option, the
percentage of shares held by existing stockholders would be 85.1% of the total
number of shares of Common Stock to be outstanding after the Offering, and the
number of shares held by new stockholders would be increased to 3,450,000
shares, or 14.9% of the total number of shares of Common Stock to be
outstanding after the Offering. See "Risk Factors--Dilution," "Management" and
"Principal and Selling Stockholders."

The calculation of net tangible book value and the other computations above
assume no exercise of outstanding options. The Company has options outstanding
at February 28, 1998 to acquire 4,085,500 shares at exercise prices ranging
from $0.24 to $10.00 per share and a weighted average exercise price of $4.02
per share. The exercise of these options will have the effect of increasing
the net tangible book value dilution of new investors in the Offering.

SELECTED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)

The selected financial data of the Company set forth below should be read in
conjunction with the financial statements of the Company, including the Notes
thereto, and "Management's Discussion and Analysis of Financial Condition and
Results of Operations" included elsewhere herein. The statement of income data
for the years ended December 31, 1995, 1996, and 1997, and the balance sheet
data as of December 31, 1996, and 1997, are derived from, and are qualified by
reference to, the audited financial statements included elsewhere in this
Prospectus. The balance sheet data as of December 31, 1995 is derived from the
audited balance sheet not included herein. The statement of income data for
the years ended December 31, 1993 and 1994, and the balance sheet data as of
December 31, 1993 and 1994 are derived from the Company's unaudited financial
statements not included herein. In the opinion of management, the unaudited
financial statements have been prepared on a basis consistent with the
financial statements which appear elsewhere in the Prospectus, and include all
adjustments, consisting only of normal recurring adjustments necessary for a
fair statement of the financial position and results of operations for these
unaudited years. Historical and pro forma results are not necessarily
indicative of results to be expected in the future.

YEAR ENDED DECEMBER 31,
---------------------------------------
1993 1994 1995 1996 1997
------- ------- ------- ------- -------

STATEMENT OF INCOME DATA:
Revenue:
Software license...................... $ 1,018 $ 1,781 $ 2,463 $ 3,354 $ 7,160
Services.............................. 814 1,587 3,503 6,236 14,411
Hardware.............................. 1,477 3,144 5,255 4,810 10,886
------- ------- ------- ------- -------
Total revenue........................ 3,309 6,512 11,221 14,400 32,457
Cost of revenue:
Software license...................... 2 2 6 177 461
Services.............................. 731 1,293 1,740 2,026 6,147
Hardware.............................. 1,278 2,457 3,991 3,734 8,001
------- ------- ------- ------- -------
Total cost of revenue................ 2,011 3,752 5,737 5,937 14,609
------- ------- ------- ------- -------
Gross margin.......................... 1,298 2,760 5,484 8,463 17,848
Operating expenses:
Research and development.............. 168 328 1,138 1,236 3,025
Acquired research and development..... -- -- 600 -- --
Sales and marketing................... 368 526 1,147 1,900 3,570
General and administrative............ 341 414 1,058 1,454 2,975
------- ------- ------- ------- -------
Total operating expenses............. 877 1,268 3,943 4,590 9,570
------- ------- ------- ------- -------
Income from operations................ 421 1,492 1,541 3,873 8,278
Other income, net..................... 2 5 40 103 56
------- ------- ------- ------- -------
Income before pro forma income taxes.. 423 1,497 1,581 3,976 8,334
Pro forma income taxes................ 162 564 580 1,486 3,023
------- ------- ------- ------- -------
Pro forma net income(1)............... $ 261 $ 933 $ 1,001 $ 2,490 $ 5,311
======= ======= ======= ======= =======
Historical diluted net income per
share................................ $ 0.02 $ 0.08 $ 0.08 $ 0.20 $ 0.40
Shares used in computing historical
net income per share................. 20,000 20,000 20,010 20,308 20,761
Pro forma diluted net income per
share(2)............................. $ 0.25
Shares used in computing pro forma
diluted net income per share(2)...... 20,951

DECEMBER 31, PRO FORMA
--------------------------------- DECEMBER 31,
1993 1994 1995 1996 1997 1997(3)
---- ------ ------ ------ ------- ------------

BALANCE SHEET DATA:
Working capital (deficit)....... $470 $1,974 $3,199 $4,116 $ 6,268 $(3,553)
Total assets.................... 747 2,949 5,332 7,276 15,006 13,409
Total Stockholders' equity
(deficit)...................... 500 1,997 3,755 4,882 8,454 (585)

- --------

(1) In connection with the Restructuring, the Company will be subject to
federal and state corporate income taxes. Pro forma net income is
presented as if the Company had been subject to corporate income taxes for
all periods presented. See "Conversion From Limited Liability Company
Status and Related Distributions" and Notes 3 and 9 of Notes to Financial
Statements.

(2) See Note 1 of Notes to Financial Statements.

(3) Pro forma to reflect the PAC Acquisition as if it had occurred on January
1, 1997 for $2.2 million in cash and 106,666 shares of Common Stock valued
at $10.00 per share. Pro forma includes the historical results for the
Company and PAC adjusted for (i) the charge to income for acquired
research and development of $2.1 million and (ii) increased amortization
of $210,000 for purchased software and intangible assets amortized over a
three and seven year life, respectively. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and Note 9 of
Notes to Financial Statements.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the Selected
Financial Data and the Financial Statements and Notes thereto included
elsewhere in this Prospectus. Certain statements in this "Management's
Discussion and Analysis of Financial Condition and Results of Operations" are
forward-looking statements. The forward-looking statements contained herein
are based on current expectations and entail various risks and uncertainties
that could cause actual results to differ materially from those expressed in
such forward-looking statements. For a more detailed discussion of these and
other business risks, see "Risk Factors."

OVERVIEW

The Company's revenue consists of revenue from the licensing of PkMS; fees
for consulting, implementation, training and maintenance services; and revenue
from the resale of complementary radio frequency and computer equipment. In
recent years, the Company has experienced an increase in services revenue and
a decrease in hardware revenue as a percentage of total revenue. Services
revenue generally provides the Company with greater profit margins than
hardware revenue. The change in the composition of the Company's total revenue
has resulted in an increase in the Company's gross margin resulting in
increased net income.

The Company recognizes software license revenue in accordance with the
provisions of American Institute of Certified Public Accountants Statement of
Position No. 91-1, SOFTWARE REVENUE RECOGNITION. Accordingly, software license
revenue is recognized upon shipment of the software following execution of a
contract, provided that no significant vendor obligations remain outstanding,
amounts are due within one year, and collection is considered probable by
management. If significant post-delivery obligations exist, the software
license revenue, as well as other components of the contract, are recognized
using contract accounting.

The Company's services revenue consists of revenue generated from services
and maintenance related to the Company's software solutions. Services revenue
is derived from fees based on consulting, implementation and training services
contracted under separate service agreements. Revenue related to consulting,
implementation and training services performed by the Company are recognized
as the services are performed. Maintenance revenue represents amounts paid,
generally in advance, by users for the support and enhancements to the
software. Maintenance revenue is recognized ratably over the term of the
maintenance agreement, typically 12 months.

conjunction with the licensing of PkMS. These products include computer
hardware, radio frequency terminal networks, bar code printers and scanners
and other peripherals. Hardware revenue is recognized upon shipment. The
Company generally purchases hardware from its vendors only after receiving an
order from a customer. As a result, the Company does not maintain hardware
inventory in any significant amounts.

As a result of the election to report as a limited liability company that is
treated as a partnership for income tax purposes, the Company has not been
subject to federal and state income taxes. Pro forma net income amounts
discussed herein include additional provisions for income taxes on a pro forma
basis as if the Company were liable for federal and state income taxes as a
taxable corporate entity throughout the years presented. The pro forma tax
provision is calculated by applying the Company's statutory tax rate to pretax
income, adjusted for permanent tax differences. The Company's status as a
limited liability company will terminate immediately prior to the
effectiveness of the Offering and the Company will thereafter be taxed as a
business corporation.

On February 16, 1998, the Company purchased all of the outstanding stock of
Performance Analysis Corporation ("PAC") for approximately $2.2 million in
cash and 106,666 shares of the Company's Common Stock valued at $10.00 per
share. PAC is a developer of distribution center slotting software. The
acquisition will be accounted for as a purchase. The purchase price of
approximately $3.3 million has been allocated to the assets acquired and
liabilities assumed, including acquired research and development of
approximately $2.1 million, purchased software of $500,000, and other
intangible assets of $300,000. Purchased software will be amortized over an
estimated three-year useful life and other intangible assets will be amortized
over a seven-year period. In connection with the PAC Acquisition, the Company
will record a charge to income of $2.1 million in the first quarter of 1998
for acquired research and development. The financial results referred to
herein reflect the historical results of the Company. The results have not
been adjusted on a pro forma basis to reflect the acquisition of PAC. The
Company does not expect the acquisition of PAC to have a material effect on
the financial position or results of operations for 1998. PAC is currently in
the process of developing a Windows-NT version of its existing product, SLOT-
IT. In addition, the Company plans to focus development efforts on integrating
the SLOT-IT application into a future product. There are no assurances that
the Company will be able to successfully complete these projects or that such
products, if completed, will achieve market acceptance. If such projects are
unsuccessful, the Company's business, financial condition and results of
operations would likely be materially adversely affected.

In addition, on February 16, 1998, the Company received an investment of
$1.0 million by Deepak Raghavan, the Chief Technology Officer and a Director
of the Company. This investment provided the Company with additional working
capital. In exchange for his investment, Mr. Raghavan received 100,000 shares
of the Common Stock of the Company.

RESULTS OF OPERATIONS

The following table sets forth certain operating data as a percentage of
total revenue for the years indicated:

YEAR ENDED DECEMBER 31,
-------------------------
1995 1996 1997
------- ------- -------

STATEMENT OF INCOME DATA:
Revenue:
Software license.................................... 22.0% 23.3% 22.1%
Services............................................ 31.2 43.3 44.4
Hardware............................................ 46.8 33.4 33.5
------- ------- -------
Total revenue...................................... 100.0 100.0 100.0
------- ------- -------
Cost of revenue:
Software license.................................... -- 1.2 1.4
Services............................................ 15.5 14.1 18.9
Hardware............................................ 35.6 25.9 24.7
------- ------- -------
Total cost of revenue.............................. 51.1 41.2 45.0
------- ------- -------
Gross margin......................................... 48.9 58.8 55.0
Operating expenses:
Research and development............................ 10.1 8.6 9.3
Acquired research and development................... 5.4 -- --
Sales and marketing................................. 10.2 13.2 11.0
General and administrative.......................... 9.4 10.1 9.2
------- ------- -------
Total operating expenses........................... 35.1 31.9 29.5
------- ------- -------
Income from operations............................... 13.8 26.9 25.5
Other income, net.................................... 0.3 0.7 0.2
------- ------- -------
Income before pro forma income taxes................. 14.1 27.6 25.7
Pro forma income taxes.............................. 5.2 10.3 9.3
------- ------- -------
Pro forma net income................................. 8.9% 17.3% 16.4%
======= ======= =======

YEARS ENDED DECEMBER 31, 1997 AND 1996

REVENUE

Total revenue increased 125.4% to $32.5 million in 1997 from $14.4 million
in 1996. Total revenue consists of software license revenue, revenue derived
from consulting, maintenance and other services and revenue from the sale of
hardware.

Software License. Software license revenue increased 113.5% to $7.2
million in 1997 from $3.4 million in 1996. The increase in revenue from
software licenses was primarily due to an increase in the number of
licenses of the Company's PkMS product and an increase in the average price
of software licenses. The increase in the average price of software
licenses is primarily due to increased product functionality and market
acceptance of PkMS.

Services. Services revenue increased 131.1% to $14.4 million in 1997 from
$6.2 million in 1996. The increase in revenue from services was principally
due to the increased demand for these services resulting from the increased
demand for the Company's PkMS product.

Hardware. Hardware revenue increased 126.3% to $10.9 million in 1997 from
$4.8 million in 1996. The increase in revenue from hardware was principally
due to the increased demand for the Company's PkMS product.

Cost of Revenue

COST OF SOFTWARE LICENSE. Cost of software license revenue consists of
the costs of software reproduction and delivery, media, packaging,
documentation and other related costs and the amortization of capitalized
software. Cost of software license revenue increased to $461,000, or 6.4%
of software license revenue, in 1997 from $177,000, or 5.3% of software
license revenue, in 1996. As a percentage of software license revenue, cost
of software license revenue remained relatively constant in 1997 as
compared to 1996.

COST OF SERVICES. Cost of services revenue consists primarily of
consultant salaries and other personnel-related expenses incurred in system
implementation projects and software support services. Cost of services
revenue increased to $6.2 million, or 42.7% of services revenue, in 1997
from $2.0 million, or 32.5% of services revenue, in 1996. The increase in
cost of services revenue as a percentage of services revenue is principally
due to an increase in services personnel, which resulted in an initial
increase in non-billable time incurred for training of these new personnel.

COST OF HARDWARE. Cost of hardware revenue increased to $8.0 million, or
73.5% of hardware revenue, in 1997 from $3.7 million, or 77.6% of hardware
revenue, in 1996. The decrease in the cost of hardware as a percentage of
hardware revenue is principally due to an increase in sales of hardware
products with higher gross margins as compared to the prior year.

Operating Expenses

RESEARCH AND DEVELOPMENT. Research and development expenses principally
consist of salaries and other personnel-related costs for personnel
involved in the Company's product development efforts. The Company's
research and development expenses increased by 144.7% to $3.0 million in
1997, or 9.3% of total revenue, from $1.2 million in 1996, or 8.6% of total
revenue. The increase in research and development expenses resulted from
the addition of research and development personnel in 1997. Significant
product development efforts include the continued development of PkMS and
the development of a client/server version of PkMS. The Company believes
that a continued commitment to product development will be required for the
Company to remain competitive and expects the dollar amount of research and
development expenses to increase in the near future.

SALES AND MARKETING. Sales and marketing expenses include salaries,
commissions and other personnel-related costs, travel expenses, advertising
programs and other promotional activities. Sales and marketing expenses
increased by 87.9% to $3.6 million in 1997, or 11.0% of total revenue, from
$1.9 million in 1996, or 13.2% of total revenue. The increase in sales and
marketing expenses was the result of additional sales and marketing
personnel, an increase in sales commissions and expanded marketing program
activities.

GENERAL AND ADMINISTRATIVE. General and administrative expenses consist
primarily of salaries and other personnel-related costs of executive and
financial personnel, as well as facilities, legal, insurance, accounting
and other administrative expenses. General and administrative expenses
increased by 104.6% to $3.0 million in 1997, or 9.2% of total revenue, from
$1.5 million in 1996, or 10.1% of total revenue. The increase in general
and administrative expenses was principally due to increased staffing and
other administrative expenses necessary to support the Company's growth.

Income Taxes

PRO FORMA PROVISION FOR INCOME TAXES. The pro forma provision for income
taxes was $3.0 million in 1997, as compared to $1.5 million in 1996, as a
result of the Company's substantially increased income in 1997.

YEARS ENDED DECEMBER 31, 1996 AND 1995

REVENUE

Total revenue increased 28.3% to $14.4 million in 1996 from $11.2 million in
1995. The increase in total revenue was primarily due to an increase in
revenue from services and an increase in revenue from software licenses.

Software License. Software license revenue increased 36.2% to $3.4
million in 1996 from $2.5 million in 1995. The increase in revenue from
software licenses was due to increased acceptance of the Company's products
and an increase in the average price of software licenses. The increase in
the average price of software licenses is primarily due to increased
product functionality and market acceptance of PkMS.

Services. Services revenue increased 78.0% to $6.2 million in 1996 from
$3.5 million in 1995. The increase in revenue from services was primarily
due to the increased demand for these services resulting from the increase
in the number of PkMS licenses in 1996.

Hardware. Hardware revenue decreased 8.5% to $4.8 million in 1996 from
$5.3 million in 1995. The decrease in revenue from hardware was due to
higher proportional demand for hardware products in 1995 as compared to
1996.

COST OF REVENUE

Cost of Software License. Cost of software license revenue increased to
$177,000, or 5.3% of software license revenue, in 1996 from $6,000, or 0.2%
of software license revenue, in 1995. The increase in cost of software
license revenue as a percentage of software license revenue was principally
due to an increase in the amortization expense of capitalized software.

Cost of Services. Cost of services revenue increased to $2.0 million, or
32.5% of services revenue, in 1996 from $1.7 million, or 49.7% of services
revenue, in 1995. The decrease in cost of services revenue as a percentage
of services revenue was principally due to improved utilization of services
employees as the Company realized increased operating leverage from its
services.

Cost of Hardware. Cost of hardware revenue decreased to $3.7 million, or
77.6% of hardware revenue, in 1996 from $4.0 million, or 75.9% of hardware
revenue, in 1995. The increase in the cost of hardware revenue as a
percentage of hardware revenue in 1996 as compared to 1995 was attributable
to an increase in the volume of sales of hardware products with lower gross
margins as compared to the prior year.

OPERATING EXPENSES

Research and Development. The Company's research and development expenses
increased by 8.6% to $1.2 million in 1996, or 8.6% of total revenue, from
$1.1 million in 1995, or 10.1% of total revenue. The increase in research
and development expenses was principally due to the addition of development
personnel to enhance existing products and for new product development
efforts.

Sales and Marketing. Sales and marketing expenses increased by 65.7% to
$1.9 million in 1996, or 13.2% of total revenue, from $1.2 million in 1995,
or 10.2% of total revenue. The increase in sales and marketing expenses was
principally due to the addition of sales and marketing personnel, an
increase in sales commissions associated with increased revenue and to
increased marketing program activities.

GENERAL AND ADMINISTRATIVE. General and administrative expenses increased
by 37.4% to $1.5 million in 1996, or 10.1% of total revenue, from $1.1
million in 1995, or 9.4% of total revenue. The increase in general and
administrative expenses was principally due to an increase in financial and
administrative personnel and legal and accounting fees necessary to support
the Company's growth.

Income Taxes

PRO FORMA PROVISION FOR INCOME TAXES. The pro forma provision for income
taxes was $1.5 million in 1996 as compared to $580,000 in 1995, as a result
of the Company's substantially increased income in 1996.

YEARS ENDED DECEMBER 31, 1995 AND 1994

Revenue

Total revenue increased 72.3% to $11.2 million in 1995 from $6.5 million in
1994. The increase in total revenue was due to an increase in all areas of the
Company's business.

SOFTWARE LICENSE. Software license revenue increased 38.3% to $2.5
million in 1995 from $1.8 million in 1994. The increase in revenue from
software licenses was due to increased acceptance of the Company's PkMS
product and an increase in the average price of software licenses. The
increase in the average price of software licenses is primarily due to
increased product functionality and market acceptance of PkMS.

SERVICES. Services revenue increased 120.7% to $3.5 million in 1995 from
$1.6 million in 1994. The increase in revenue from services was principally
attributable to an increased demand for these services resulting from the
increase in the number of PkMS licenses in 1995.

HARDWARE. Hardware revenue increased 67.1% to $5.3 million in 1995 from
$3.1 million in 1994. The increase in revenue from hardware was due to an
increased demand for the Company's PkMS product.

Cost of Revenue

COST OF SOFTWARE LICENSE. Cost of software license revenue increased to
$6,000, or 0.2% of software license revenue, in 1995 from $2,000, or 0.1%
of software license revenue, in 1994.

COST OF SERVICES. Cost of services revenue increased to $1.7 million, or
49.7% of services revenue, in 1995 from $1.3 million, or 81.5% of services
revenue, in 1994. The decrease in cost of services revenue as a percentage
of revenue is principally due to improved utilization of employees as the
Company realized increased operating leverage from its services
infrastructure.

COST OF HARDWARE. Cost of hardware revenue increased to $4.0 million, or
75.9% of hardware revenue, in 1995 from $2.5 million, or 78.1% of hardware
revenue, in 1994. The decrease in the cost of hardware revenue as a
percentage of hardware revenue is principally due to a decrease in the
volume of sales of hardware products with lower margins as compared to the
prior year.

Operating Expenses

RESEARCH AND DEVELOPMENT. The Company's research and development expenses
increased by 247.0% to $1.1 million in 1995, or 10.1% of total revenue,
from $328,000 in

1994, or 5.0% of total revenue. The increase in research and development
resulted from the addition of development personnel to enhance its products
and for new product development efforts.

ACQUIRED RESEARCH AND DEVELOPMENT. The Company recorded an expense for
acquired research and development of $600,000 in 1995 in connection with
the purchase of certain rights to technology which was ultimately
incorporated into PkMS.

SALES AND MARKETING. Sales and marketing expenses increased by 118.1% to
$1.2 million in 1995, or 10.2% of total revenue, from $526,000 in 1994, or
8.1% of total revenue. The increase in sales and marketing expenses was due
to the addition of sales and marketing personnel and increased marketing
expenses.

GENERAL AND ADMINISTRATIVE. General and administrative expenses increased
by 155.6% to $1.1 million in 1995, or 9.4% of total revenue, from $414,000
in 1994, or 6.4% of total revenue. The increase in general and
administrative expenses was due to an increase in legal and accounting fees
as well as other administrative expenses necessary to support the Company's
growth.

Income Taxes

PRO FORMA PROVISION FOR INCOME TAXES. The pro forma provision for income
taxes was $580,000 in 1995, as compared to $564,000 in 1994, as a result of
the Company's increased income in 1995.

QUARTERLY RESULTS OF OPERATIONS

The following table presents certain unaudited quarterly statements of
income data for each of the Company's last eight quarters in the period ended
December 31, 1997, as well as the percentage of the Company's total revenue
represented by each item. The information has been derived from the Company's
audited Financial Statements. The unaudited quarterly Financial Statements
have been prepared on substantially the same basis as the audited Financial
Statements contained herein. In the opinion of management, the unaudited
quarterly Financial Statements include all adjustments, consisting only of
normal recurring adjustments that the Company considers to be necessary to
present fairly this information when read in conjunction with the Company's
Financial Statements and notes thereto appearing elsewhere herein. The results
of operations for any quarter are not necessarily indicative of the results to
be expected for any future period.

QUARTER ENDED
-------------------------------------------------------------------------
MAR. 31, JUNE 30, SEPT. 30, DEC. 31, MAR. 31, JUNE 30, SEPT. 30, DEC. 31,
1996 1996 1996 1996 1997 1997 1997 1997
-------- -------- --------- -------- -------- -------- --------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA)

STATEMENT OF INCOME
DATA:
Revenue:
Software license....... $1,120 $ 520 $ 705 $1,009 $1,494 $1,833 $1,981 $1,852
Services............... 1,301 1,489 1,808 1,638 2,509 3,466 3,820 4,616
Hardware............... 963 1,453 878 1,516 2,241 2,469 3,081 3,095
------ ------ ------ ------ ------ ------ ------ ------
Total revenue.......... 3,384 3,462 3,391 4,163 6,244 7,768 8,882 9,563
Cost of revenue:
Software license....... 51 40 42 44 89 105 122 145
Services............... 289 421 591 725 983 1,326 1,691 2,147
Hardware............... 807 1,031 672 1,224 1,644 1,953 2,230 2,174
------ ------ ------ ------ ------ ------ ------ ------
Total cost of revenue.. 1,147 1,492 1,305 1,993 2,716 3,384 4,043 4,466
------ ------ ------ ------ ------ ------ ------ ------
Gross margin............ 2,237 1,970 2,086 2,170 3,528 4,384 4,839 5,097
Operating expenses:
Research and
development........... 210 248 352 426 428 662 791 1,144
Sales and marketing.... 434 468 493 505 507 913 989 1,161
General and
administrative........ 303 317 376 458 398 589 981 1,007
------ ------ ------ ------ ------ ------ ------ ------
Total operating
expenses.............. 947 1,033 1,221 1,389 1,333 2,164 2,761 3,312
------ ------ ------ ------ ------ ------ ------ ------
Income from operations.. 1,290 937 865 781 2,195 2,220 2,078 1,785
Other income, net....... 22 25 33 23 23 16 9 8
------ ------ ------ ------ ------ ------ ------ ------
Income before pro forma
income taxes........... 1,312 962 898 804 2,218 2,236 2,087 1,793
Pro forma income taxes.. 491 359 336 300 804 811 757 651
------ ------ ------ ------ ------ ------ ------ ------
Pro forma net income.... $ 821 $ 603 $ 562 $ 504 $1,414 $1,425 $1,330 $1,142
====== ====== ====== ====== ====== ====== ====== ======
Pro forma diluted net
income per share....... $ 0.04 $ 0.03 $ 0.03 $ 0.02 $ 0.07 $ 0.07 $ 0.06 $ 0.05
====== ====== ====== ====== ====== ====== ====== ======
Shares used in pro forma
diluted net income per
share ................. 20,397 20,397 20,397 20,397 20,397 20,673 20,673 21,661
====== ====== ====== ====== ====== ====== ====== ======

AS A PERCENTAGE OF TOTAL REVENUE
-------------------------------------------------------------------------
MAR. 31, JUNE 30, SEPT. 30, DEC. 31, MAR. 31, JUNE 30, SEPT. 30, DEC. 31,
1996 1996 1996 1996 1997 1997 1997 1997
-------- -------- --------- -------- -------- -------- --------- --------

Revenue:
Software license....... 33.1% 15.0% 20.8% 24.2% 23.9% 23.6% 22.3% 19.4%
Services............... 38.4 43.0 53.3 39.4 40.2 44.6 43.0 48.3
Hardware............... 28.5 42.0 25.9 36.4 35.9 31.8 34.7 32.3
----- ----- ----- ----- ----- ----- ----- -----
Total revenue.......... 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Cost of revenue:
Software license....... 1.5 1.2 1.3 1.1 1.4 1.4 1.4 1.5
Services............... 8.6 12.2 17.4 17.4 15.7 17.1 19.0 22.4
Hardware............... 23.8 29.7 19.8 29.4 26.3 25.1 25.1 22.7
----- ----- ----- ----- ----- ----- ----- -----
Total cost of revenue.. 33.9 43.1 38.5 47.9 43.4 43.6 45.5 46.6
----- ----- ----- ----- ----- ----- ----- -----
Gross margin............ 66.1 56.9 61.5 52.1 56.6 56.4 54.5 53.4
Operating expenses:
Research and
development........... 6.2 7.2 10.4 10.2 6.9 8.5 8.9 12.0
Sales and marketing.... 12.9 13.5 14.5 12.1 8.1 11.7 11.1 12.1
General and
administrative........ 8.9 9.2 11.1 11.1 6.4 7.6 11.0 10.5
----- ----- ----- ----- ----- ----- ----- -----
Total operating
expenses.............. 28.0 29.9 36.0 33.4 21.4 27.8 31.0 34.6
----- ----- ----- ----- ----- ----- ----- -----
Income from operations.. 38.1 27.0 25.5 18.7 35.2 28.6 23.5 18.8
Other income, net....... 0.7 0.7 1.0 0.6 0.3 0.2 0.1 0.1
----- ----- ----- ----- ----- ----- ----- -----
Income before pro forma
income taxes........... 38.8% 27.7% 26.5% 19.3% 35.5% 28.8% 23.6% 18.9%
===== ===== ===== ===== ===== ===== ===== =====

The Company's operations and related revenue and operating results could
vary substantially from quarter to quarter. Among the factors causing these
potential variations are fluctuations in the demand for the Company's
products, the level of product and price competition in the Company's markets,
the length of the Company's sales process, the size and timing of individual
transactions, the mix of products and services sold, delays in, or
cancellations of, customer implementations, the Company's success in expanding
its services and customer support organizations as well as its direct sales
force and indirect distribution channels, the timing of new product
introductions and enhancements by the Company or its competitors, commercial
strategies adopted by competitors, changes in foreign currency exchange rates,
customers' budget constraints, the Company's ability to control costs and
general economic conditions. A substantial portion of the Company's operating
expenses, particularly personnel and facilities costs, are relatively fixed in
advance of any particular quarter. As a result, any delay in the recognition
of revenue may cause significant variations in operating results in any
particular quarter. In addition, an increase or decrease in hardware sales,
which provide the Company with lower gross margins than sales of software
licenses or services, may contribute to the variability of the Company's
operational results in any particular quarter. As a result of the foregoing
factors, the Company's operating results for a future quarter may be above or
below the expectations of public market analysts and investors. Should the
Company's revenue and operating results fall below expectations, the price of
the Company's Common Stock would be materially adversely affected. See "Risk
Factors--Potential Variability of Quarterly Operations and Financial Results."

The Company's ability to undertake new projects and increase revenue is
substantially dependent on the availability of the Company's consulting
services personnel to assist in the implementation of the Company's software
solution. The Company believes that supporting greater-than-anticipated growth
in revenue would require the Company to rapidly hire additional skilled
personnel for the Company's consulting services group, and there can be no
assurance that qualified personnel could be located, trained or retained in a
timely and cost-effective manner.

As a result of the foregoing and other factors, the Company believes that
quarter-to-quarter comparisons of results are not necessarily meaningful, and
such comparisons should not be relied upon as indications of future
performance. Fluctuations in operating results may also result in volatility
in the price of the shares of the Company's Common Stock. See "Risk Factors--
Potential Variability of Quarterly Operations and Financial Results," "--
Ability to Manage Growth" and "--New Management Team; Dependence on Key
Personnel."

LIQUIDITY AND CAPITAL RESOURCES

Since inception, the Company has funded its operations to date primarily
through cash generated from operations. In addition, the Company has also
borrowed money from its majority shareholder. As of December 31, 1997, the
Company had $3.2 million in cash and cash equivalents.

The Company's operating activities provided cash of $7.0 million in 1997,
$4.0 million in 1996 and $3.1 million in 1995. Cash from operating activities
arose principally from the Company's profitable operations and was utilized
for working capital purposes, principally increases in accounts receivable.
The increase in accounts receivable primarily reflected the Company's
continued revenue growth.

Cash used for investing activities was approximately $1.8 million in 1997,
$485,000 in 1996 and $418,000 in 1995. The Company's use of cash was primarily
for the purchase of capital equipment, such as computer equipment and
furniture and fixtures, to support the Company's growth.

Cash used for financing activities was approximately $5.1 million in 1997,
$2.9 million in 1996 and $273,000 in 1995. The principal use of cash was
distributions to the Company's stockholders, partially reduced by borrowings
from the Company's majority stockholder. See "Use of Proceeds" and "Certain
Transactions."

The Company has entered into a line of credit with a commercial bank to fund
its proposed distribution to the Manhattan LLC stockholders and to fund its
continuing working capital needs. Prior to the Offering, this distribution
will cause the Company to sustain, on a pro forma basis as of December 31,
1997, a working capital deficit of $3.6 million and a stockholders' deficit of
$585,000. There can be no assurance that the remaining net proceeds from the
Offering will be sufficient to pay for future acquisitions, planned research
and development projects and other growth-oriented activities, which could
require the Company to incur additional debt or other financing that could
impose restrictive covenants and other terms having a material adverse effect
on the Company's business, financial condition and results of operations. See
"Risk Factors--Conversion From Limited Liability Company ("LLC") Status and
Utilization of Significant Portion of the Offering Proceeds to Satisfy
Indebtedness Incurred to Fund Distributions to Current Stockholders."

NEW ACCOUNTING PRONOUNCEMENTS

In June 1997, the Financial Accounting Standards Board issued Statement No.
130 ("SFAS 130"), "Reporting Comprehensive Income." SFAS No. 130 is designed
to improve the reporting of changes in equity from period to period. The
Company will adopt SFAS No. 130 effective with its fiscal year ending December
31, 1998.

In June 1997, the Financial Accounting Standards Board issued Statement No.
131 ("SFAS 131"), "Disclosures About Segments of an Enterprise and Related
Information." SFAS No. 131 requires that an enterprise disclose certain
information about operating segments. The Company will adopt SFAS No. 131
effective with its fiscal year ending December 31, 1998.

In October 1997, the American Institute of Certified Public Accountants
issued Statement of Position 97-2 ("SOP 97-2"), "Software Revenue
Recognition." SOP 97-2 supersedes SOP 91-1, and is effective for the Company
beginning after December 15, 1997. SOP 97-2 provides further guidance on
recognizing revenue on software transactions.

The Company's management does not believe that the adoption of these
pronouncements will have a material impact on the Company's financial position
or results of operations.

BUSINESS

OVERVIEW

INDUSTRY BACKGROUND

Over the past two decades, the flow of goods through the supply chain from
manufacturers to consumers has undergone significant changes. These changes
began in the United States textile industry, which, faced with increased
global competition, implemented an industry-wide initiative in the 1980s to
lower the cost of goods sold through more efficient inventory management. This
initiative, which became known as "Quick Response," uses technology to improve
the flow of information among manufacturers, distributors and retailers. Quick
Response has allowed retailers to more rapidly advise manufacturers and
distributors of their inventory replenishment needs and has allowed
manufacturers and distributors to more efficiently restock retailers. As a
result, textile product retailers have been able not only to reduce their idle
inventory and cost of goods sold, but also to offer a broader range of
products.

More recently, the consumer products industry experienced a similar supply
chain re-engineering, driven primarily by the emergence of national superstore
chains and category stores. The business model of these stores, which promotes
wider product offerings, lower gross profit margins and a higher rate of
inventory turnover than traditional stores, represented a competitive threat
to retailers of similar products.

In order to remain competitive in this changing retail landscape, many
retailers have demanded that manufacturers and distributors apply Quick
Response principles to their supply chain operations to achieve lower costs
and higher levels of service. Retailers' demands include more sophisticated
distribution services, such as more frequent store-specific inventory
replenishments, more customized packing of goods within each delivery to
reduce in-store unpacking times, more sophisticated packaging and labeling of
goods to meet merchandising strategies, and the exchange of trading
information in compliance with electronic data interchange ("EDI") standards.
Demand for these more sophisticated distribution services requires significant
modification of distribution center operations for manufacturers and
distributors. For example, a manufacturer that previously may have made one
bulk shipment to each of six customer distribution centers each month may now
be required to ship more than 10,000 custom-packed and labeled orders per
month directly to multiple customers' stores or to the customers' distribution
centers for immediate reshipment to stores.

As a result of these retailer demands, distribution centers have increased
in size, complexity and cost. Distribution centers today can comprise one
million square feet or more with thousands of stock keeping units ("SKUs") and
multi-million dollar investments in automated materials handling equipment.
The efficient management of a distribution center operation now

requires collecting information regarding customer orders, inbound shipments
of products, products available on-site, product storage locations, weights
and sizes, and outbound shipping data (including customer- or store-specific
shipping requirements, routing data and carrier requirements). This
information must be analyzed dynamically to determine the most efficient use
of the distribution center's labor, materials handling equipment, packaging
equipment and shipping and receiving areas. Additionally, manufacturers,
distributors and retailers must exchange information with other participants
in the supply chain in order to effectively integrate the operation of their
distribution centers with the entire supply chain.

In response to these new distribution center challenges, companies have
implemented information technology systems designed to manage this new
distribution environment. Gartner Group, an independent industry analysis and
research firm, estimates that the distribution center management systems
market totaled more than $900 million in revenue in 1997, and that the market
is currently growing at 35% annually. Furthermore, Gartner Group projects that
the majority of the current installed base of largely internally developed
software will be replaced by 2001. An effective distribution center management
system must have the ability to integrate with: (i) enterprise resource
planning ("ERP") systems; (ii) supply chain management ("SCM") systems such as
transportation, order management and demand planning; and (iii) the existing
distribution center equipment, including related radio frequency ("RF")
equipment and automated materials handling equipment. In addition, customers
frequently require their distribution center management systems to incorporate
customer-driven modifications to their packaging, information and
transportation services, new technologies and newly-defined best practices in
their industry. Distribution center management systems also must operate with
high reliability and efficiency while supporting very high transaction volumes
and multiple users, and therefore are almost exclusively deployed on UNIX or
large-scale enterprise servers.

Traditionally, distribution center management systems have been highly
customized, difficult to upgrade and have required costly and lengthy
implementations. Furthermore, these systems have not readily supported the
increased volumes and complexities associated with recent advances in supply
chain re-engineering initiatives. Most providers of these systems have not
focused on specific vertical markets but rather have attempted to customize
their solutions to differing vertical market demands with each implementation.
As a result, many of these providers have been unable to effectively leverage
industry-specific expertise for use in future implementations.

THE MANHATTAN SOLUTION

customer service and increasing the productivity of labor, facilities and
materials handling equipment. The Company has developed robust, high volume
systems for manufacturers, distributors and retailers of consumer products to
support Quick Response and other industry and supply chain initiatives. PkMS
employs leading relational database technology and can be easily integrated
with third party software applications, including the ERP and SCM systems of
its customers.

The Manhattan solutions feature PkMS, a modular software system that,
together with the Company's consulting, implementation and maintenance
services, provides:

. COMPREHENSIVE FUNCTIONALITY--PkMS addresses a full range of requirements
of modern, complex distribution centers with an existing product rather
than custom-designed and developed applications. PkMS provides
comprehensive functionality for specific vertical markets incorporating
industry-wide initiatives.

. EASE OF IMPLEMENTATION--PkMS' modular design, along with the Company's
knowledge of specific vertical markets and expertise in planning and
installation, allows the Company's solutions to be implemented more
rapidly than highly-customized distribution center management systems. A
typical implementation can often be completed within six months. Because
of its modular design, PkMS can be implemented in phases to meet
specific customer demands.

. TIMELY RESPONSE TO INDUSTRY INITIATIVES--PkMS features a comprehensive
maintenance program to provide its customers with timely software
upgrades offering increased functionality and technological advances
which address emerging supply chain and other industry initiatives.

. FLEXIBILITY AND CONFIGURABILITY--PkMS is designed to be easily
configured to meet a distribution center's specific requirements and
reconfigured to meet changing customer requirements.

. SCALEABILITY--PkMS is designed to facilitate the management of evolving
distribution center systems to accommodate increases in the number of
system users, complexity and distribution volume.

In addition, through its recent acquisition of PAC, the Company offers
slotting functionality, which helps determine the optimal storage location for
inventory within a distribution center. See "--Recent Developments."

STRATEGY

The Company's objective is to be the leading provider of information
technology solutions that enable distribution centers to more efficiently
manage the movement of goods through the supply chain. The Company will
continue to provide solutions to targeted vertical markets by offering
advanced, highly functional, highly scaleable applications that allow
customers to leverage their investment in distribution centers and meet
frequently-changing customer requirements. The Company's strategy to achieve
this objective includes the following key elements:

Enhance Core Product Functionality. The Company intends to continue to focus
its product development resources on the development and enhancement of PkMS
to extend its functionality and enable its operation on client/server
platforms. The Company identifies further enhancements to PkMS through on-
going customer consulting engagements and implementations, interactions with
its user groups and participation in industry standards and research
committees. The Company intends to continue to achieve these development
objectives through both its internal research and development activities and
selected acquisitions of complementary products and technologies.

Target New Vertical Markets. The Company to date has focused its marketing,
sales and product development efforts on specific vertical markets,
particularly in the apparel manufacturing industry. The Company is
increasingly targeting additional vertical markets, including food service,
grocery and other retailers. In addition, the Company plans to target other
vertical markets that adopt Quick Response, Efficient Consumer Response and
similar industry initiatives.

Expand Sales, Services and Marketing Organizations. Manhattan currently
sells and supports PkMS through its direct sales and services personnel. The
Company plans to invest significantly in expanding its sales, services and
marketing organizations and to pursue strategic marketing partnerships with
systems integrators and third party software application providers.

Develop International Sales. The Company has historically focused its sales
efforts on customers in the United States. The Company intends to add sales
personnel and establish offices focused on international opportunities and
pursue strategic marketing partnerships with international systems integrators
and third party software application providers.

Expand Integration with Complementary Products. The Company believes that
the ability to offer a software solution that can extend integration with
leading third party software applications will continue to provide a
significant competitive advantage. The Company intends to continue to develop
PkMS to integrate with complementary SCM, ERP and other business applications.

PRODUCTS AND SERVICES

Software. PkMS, the Company's principal software product, features a modular
design which permits customers to selectively implement specific functionality
depending on the needs of each distribution facility or operation.

The following table describes the functions of the PkMS modules:

MODULE DESCRIPTION
INVENTORY MANAGEMENT MANAGES THE RECEIPT, PUT-AWAY AND MOVEMENT OF ALL
SYSTEM ("IMS") INVENTORY THROUGHOUT THE DISTRIBUTION CENTER

Receiving . Verifies the accuracy of incoming shipments against
the advanced shipping notice
. Designates incoming inventory for quality audit and
immediate out-going shipment (cross-docking)
. Manages receiving yard by scheduling time, dock
location and priority of shipments
- -------------------------------------------------------------------------------
Stock Locator . Enhances inventory movement efficiency by directing
put-away, minimizing travel distances and optimizing
storage capacity
. Tracks movement of inventory by allowing real-time
inquiries by location, SKU and other criteria
- -------------------------------------------------------------------------------
Cycle Count . Enables more efficient inventory counts by
permitting specific zones of a distribution center
to be "frozen" without interrupting ongoing
operations
. Automatically generates cycle count tasks for
specific SKUs, locations or other user-designated
criteria
- -------------------------------------------------------------------------------
Work Order Management . Directs the assembly of finished goods within a
distribution center to match customer demands
- -------------------------------------------------------------------------------
Radio Frequency . Allows the real-time collection of inventory product
Functions for the IMS information and location with remote, hand-held
mobile devices for integration with the IMS
. Communicates real-time task assignments to workers
in remote locations of the distribution center
- -------------------------------------------------------------------------------
Task Management . Coordinates the sequence of distribution center
System for the IMS tasks to optimize labor efficiency

OUTBOUND DISTRIBUTION MANAGES THE PICKING, PACKING AND SHIPPING OF ORDERS IN
SYSTEM ("ODS") EFFICIENT RELEASE WAVES

Wave Management . Selects, prioritizes and groups outgoing orders in manageable increments based upon user-defined
criteria
. Routes picktickets based upon retailer requirements and pre-determines carton contents to minimize
the number of outgoing cartons
. Facilitates stock replenishment for active picking and packing locations
- ------------------------------------------------------------------------------------------------------------------------------
Verification . Provides automatic verification of orders and identifies order shortages and overages to maximize
shipping accuracy at several different points within the order fulfillment process
- ------------------------------------------------------------------------------------------------------------------------------
Radio Frequency . Allows the real-time collection of shipment information and location with remote, hand-held mobile
Functions for the ODS devices
. Communicates real-time task assignments to workers in remote locations of the distribution center
- ------------------------------------------------------------------------------------------------------------------------------
Freight Management . Sorts orders by specific freight carriers, calculates shipping charges and controls load
System sequencing based upon truck routes
. Generates all documentation required for shipping such as bills of lading and retailer-compliant
required manifests
- ------------------------------------------------------------------------------------------------------------------------------
Parcel Shipping . Calculates all shipping charges for parcel shipments, generates tracking numbers and provides
System appropriate documentation for parcel carriers
- ------------------------------------------------------------------------------------------------------------------------------
Order Allocation . Prioritizes and allocates orders based on current aggregate inventory levels for customers whose
System host system is unable to perform this function
ADVANCE SHIP NOTICE ENABLES A CUSTOMER'S SUPPLIERS IN REMOTE LOCATIONS TO CREATE ADVANCED SHIP NOTICES FOR THE
ENABLER SYSTEM CUSTOMER'S RECEIVING DISTRIBUTION CENTER

Through its recent acquisition of PAC, the Company offers SLOT-IT, a
software application with "slotting" functionality. Slotting is the process by
which inventory items are stored in the optimal physical location within a
distribution center. By using decision-support algorithms, SLOT-IT helps
determine the optimal location based upon such factors as historical shipment
volumes, seasonal demands, location of related products, and physical size and
stacking characteristics of a product. Historically, distribution centers
using SLOT-IT have realized increased efficiency in managing stock locating,
stock picking, order packing and shipment of products.

Consulting Services. The Company's consulting services provide its customers
with expertise and assistance in planning and implementing the Company's
solutions. To ensure a successful product implementation, consultants assist
customers with the initial installation of a system, the conversion and
transfer of the customer's historical data onto the Company's system, and
ongoing training, education and upgrades. The Company believes that its
consulting services enable the customer to implement PkMS rapidly, ensure the
customer's success with the Company's solution, strengthen the relationship
with the customer, and add to the Company's industry-specific knowledge base
for use in future implementations and product development efforts.

Although the Company's consulting services are optional, substantially all
of its customers utilize these services for the implementation and ongoing
support of the Company's software products. Consulting services are billed on
an hourly basis. The Company believes that the complexity of platforms on
which the current products operate and the increased complexity of its planned
client/server product will result in an increased demand for consulting
services. Accordingly, the Company plans to substantially increase the number
of consultants to support anticipated growth in product implementations and
upgrades. To the extent the Company is unable to attract, train and retain
qualified consulting personnel, the Company's operating results may be
adversely affected. See "Risk Factors--Ability to Manage Growth" and "--New
Management Team; Dependence on Key Personnel."

The Company's consulting services group consists of business consultants,
systems analysts and technical personnel devoted to assisting customers in all
phases of systems implementation including planning and design, customer-
specific configuring of modules, and on-site implementation or conversion from
existing systems. The Company's consulting personnel undergo training on
distribution center operations and the Company's products. The Company
believes that this training, together with the ease of implementation of its
products, enables it to productively utilize newly-hired consulting personnel
more rapidly than its competitors. The Company may increasingly utilize third
party consultants, such as those from major systems integrators, to assist in
certain implementations.

Maintenance. PkMS features a comprehensive maintenance program which
provides its customers with timely software upgrades offering increased
functionality and technological advances which incorporate emerging supply
chain and other industry initiatives. As of December 31, 1997, a majority of
the Company's customers had subscribed to the Company's comprehensive
maintenance support program. The Company has the ability to remotely access
the customer's system in order to perform diagnostics, on-line assistance and
software upgrades. All of the Company's annual maintenance agreements entitle
customers to software product upgrades. The Company offers a standard annual
maintenance option providing for customer telephone support during normal
business hours for 15% of the current software license fee and 24 hour
maintenance for 20% percent of the current software license fee.

Hardware. The Company's products operate on multiple hardware platforms
utilizing various hardware systems and interoperate with many third party
software applications and legacy systems. This open system capability enables
customers to continue using their existing computer resources and to choose
among a wide variety of existing and emerging computer hardware and peripheral
technologies.

In conjunction with the licensing of PkMS, the Company resells a variety of
hardware products developed and manufactured by third parties in order to
provide the Company's customers with an integrated distribution center
management solution. These products include computer hardware, radio frequency
terminal networks, bar code printers and scanners, and other peripherals. The
Company resells all third party hardware products pursuant to agreements with
manufacturers or through distributor authorized reseller agreements pursuant
to which the Company is entitled to purchase hardware products at discount
prices and to receive technical support in connection with product
installations and any subsequent product malfunctions. The Company generally
purchases hardware from its vendors only after receiving an order from a
customer. As a result, the Company does not maintain hardware inventory in any
significant amounts.

SALES AND MARKETING

To date, substantially all of the Company's revenue has been generated
through its direct sales force. The Company plans to continue to invest
significantly in expanding its sales, support, services and marketing
organizations within the United States, and to pursue strategic marketing
partnerships. The Company conducts comprehensive marketing programs that
include advertising, public relations, trade shows, joint programs with
vendors and consultants and ongoing customer communication programs. The sales
cycle typically begins with the generation of a sales lead or the receipt of a
request for proposal from a prospective customer. The sales lead or request
for proposal is followed by the qualification of the lead or prospect, an
assessment of the customer's requirements, a formal response to the request
for proposal, presentations and product demonstrations, site visits to an
existing customer utilizing the Company's distribution center management
system and contract negotiation. The sales cycle can vary substantially from
customer to customer but typically requires three to six months.

CUSTOMERS

To date, the Company's customers have been primarily manufacturers,
distributors and retailers in the apparel, consumer products, food service and
grocery market segments. The Company plans to expand its presence in the
health and beauty products, industrial products and automotive products
markets. As of December 31, 1997, PkMS was licensed for use by more than 250
customers including Calvin Klein, Dean Foods, Jockey International, Mikasa,
Nordstrom, Patagonia, Playtex Apparel, SEIKO Corporation of America, The
Sports Authority, Timberland and Warnaco. The following table sets forth a
representative list of the Company's customers as of December 31, 1997, that
have purchased at least $100,000 in products and services from the Company.

APPAREL MANUFACTURERS FOOD SERVICE AND DISTRIBUTIONHEALTH AND BEAUTY
Aris Isotoner Abbott Food Services PRODUCTS
ASICS Tiger Arrow Industries Andrew Jergens
Authentic Fitness Austin Quality Foods Beiersdorf USA
Calvin Klein Burns Philp Food Bonne Bell

Duck Head Apparel Canned Foods
Espirit Dean Foods INDUSTRIAL PRODUCTS
Farah (U.S.A.) Maines Paper and Food ServiceAmerican Tack & Hardware
Garan Manufacturing Zacky Farms Delta International
Machinery

Hugo Boss
Jockey International CONSUMER PRODUCTS Familian Pipe & Supply
London Fog Brother International Liberty Hardware
Oxford Industries Bulova PPG Architectural
Patagonia Conair Group Coatings
Playtex Apparel Hunter Fan Rain Bird Sales

Stride Rite Lenox
Timberland Mikasa RETAILERS
Warnaco Remington Products Edison Brothers
SEIKO Corp. of America Holiday Stores
Tandy Brands Accessories Nordstrom
The Sports Authority

The Company's top five customers in aggregate accounted for 22% and 26% of
the Company's total revenue in 1997 and 1996, respectively. No single customer
accounted for 10% or more of the Company's total revenue during any of the
three years ended December 31, 1997.

Customers of PAC, which the Company recently acquired, operate primarily in
the grocery market segment. PAC customers include Associated Wholesale
Grocers, Food Lion, Nautica, Stop & Shop and SUPERVALU. See "--Recent
Developments."

PRODUCT DEVELOPMENT

The Company's development efforts are focused on adding new functionality to
existing products and enhancing the operability of its products across
distributed and changing heterogeneous hardware platforms, operating systems
and relational database systems. The Company believes that its future success
depends in part upon its ability to continue to enhance existing products,
respond to changing customer requirements and develop and introduce new or
enhanced products that incorporate new technological developments and emerging
industry standards. To that end, the Company's development efforts frequently
focus on base system enhancements incorporating new user requirements and
potential features identified through customer interaction and systems
implementations. As a result, the Company is able to continue to offer its
customers a highly configurable product with increasing functionality rather
than a custom-developed software program.

The Company is currently devoting a significant portion of its research and
development efforts to the development of a client/server version of PkMS
which will operate using the Windows 95 operating system and the Windows NT,
UNIX and AS/400 server operating environments. As part of this development
effort, the Company is employing a multi-tiered architecture based on a CORBA
interface that facilitates scaleability and standardizes interfaces to other
enterprise software applications. The Company is also employing object-
oriented design frameworks which may require less code and may simplify future
maintenance and upgrades. The Company intends to employ a more intuitive
graphical user interface in the client/server version of PkMS and to employ
installation "wizards" designed to ease the installation and configuration of
the product.

The Company is also currently developing new functionality for PkMS, such as
features designed to enhance worker productivity, improve yard management and
schedule inbound shipment receiving appointments. The Company also plans to
focus development efforts on integrating the SLOT-IT application, which was
recently acquired in connection with the PAC acquisition, into future releases
of PkMS. The Company plans to continue to conduct its development efforts
internally in order to retain development knowledge and promote the continuity
of programming standards.

The Company's research and development expenditures for the years ended
December 31, 1997, 1996 and 1995 were $3.0 million, $1.2 million and $1.1
million, respectively. The Company intends to continue to increase its
investment in product development in the future.

COMPETITION

The Company's products are targeted at the distribution center management
systems market, which is intensely competitive and characterized by rapid
technological change. The principal competitive factors affecting the market
for the Company's products include vendor and product reputation; product
architecture, functionality and features; ease and speed of implementation;
return on investment; product quality, price and performance; and level of
support. The Company's competitors are diverse and offer a variety of
solutions directed at various aspects of the supply chain, as well as the
enterprise as a whole. The Company's existing competitors include: (i)
distribution center management software vendors including Catalyst
International, Inc., EXE Technologies, Inc., Haushahn Systems & Engineers and
McHugh Software International, Inc.; (ii) the corporate information technology
departments of potential customers capable of internally developing solutions;
and (iii) smaller independent companies that have developed or are attempting
to develop distribution center management software that competes with the
Company's software solution.

The Company may face competition in the future from (i) business application
software vendors that may broaden their product offerings by internally
developing, or by acquiring or partnering with independent developers of,
distribution center management software; and (ii) ERP and SCM applications
vendors. To the extent such ERP and SCM vendors develop or acquire systems
with functionality comparable or superior to the Company's products, their
significant installed customer bases, long-standing customer relationships and
ability to offer a broad solution could provide a significant competitive
advantage over the Company. In addition, it is possible that new competitors
or alliances among current and new competitors may emerge and rapidly gain
significant market share. Increased competition could result in price
reductions, fewer customer orders, reduced gross margins and loss of market
share.

Many of the Company's competitors and potential competitors have longer
operating histories, significantly greater financial, technical, marketing and
other resources, greater name

recognition and a larger installed base of customers than the Company. In
order to be successful in the future, the Company must continue to respond
promptly and effectively to technological change and competitors' innovations.
There can be no assurance that current or potential competitors of the Company
will not develop products comparable or superior in terms of price and
performance features to those developed by the Company. In addition, no
assurance can be given that the Company will not be required to make
substantial additional investments in connection with its research,
development, marketing, sales and customer service efforts in order to meet
any competitive threat, or that the Company will be able to compete
successfully in the future. Increased competition will result in reductions in
market share, pressure for price reductions and related reductions in gross
margins, any of which could materially and adversely affect the Company's
ability to achieve its financial and business goals. There can be no assurance
that in the future the Company will be able to successfully compete against
current and future competitors. See "Risk Factors--Competition."

PROPRIETARY RIGHTS

The Company relies on a combination of copyright, trade secret, trademark,
service mark and trade dress laws, confidentiality procedures and contractual
provisions to protect its proprietary rights in its PkMS product and
technology. The Company has registered trademarks in "PkMS" and the Manhattan
Associates, Inc. logo. The Company has no registered copyrights. The Company
generally enters into confidentiality agreements with its employees,
consultants, clients and potential clients and limits access to, and
distribution of, its proprietary information. The Company licenses PkMS to its
customers in source code format and restricts the customer's use for internal
purposes without the right to sublicense the PkMS product. However, the
Company believes that the foregoing measures afford only limited protection.
Despite the Company's efforts to safeguard and maintain its proprietary rights
both in the United States and abroad, there can be no assurance that the
Company will be successful in doing so or that the steps taken by the Company
in this regard will be adequate to deter misappropriation or independent third
party development of the Company's technology or to prevent an unauthorized
third party from copying or otherwise obtaining and using the Company's
products or technology. In addition, policing unauthorized use of the
Company's products is difficult, and while the Company is unable to determine
the extent to which piracy of its software products exist, software piracy
could become a problem.

As the number of supply chain management applications in the industry
increases and the functionality of these products further overlaps, companies
that develop software, like Manhattan, may increasingly become subject to
claims of infringement or misappropriation of the intellectual property rights
of others. There can be no assurance that third parties will not assert
infringement or misappropriation claims against the Company in the future with
respect to current or future products. Any claims or litigation, with or
without merit, could be time-consuming, result in costly litigation, diversion
of management's attention and cause product shipment delays or require the
Company to enter into royalty or licensing arrangements. Such royalty or
licensing arrangements, if required, may not be available on terms acceptable
to the Company, if at all, which could have a material adverse effect on the
Company's business, financial condition and results of operations. Adverse
determinations in such claims or litigation could also have a material adverse
effect on the Company's business, financial condition and results of
operations.

The Company may be subject to additional risks as it enters into
transactions in countries where intellectual property laws are not well
developed or are poorly enforced. Legal protections of the Company's rights
may be ineffective in such countries. Litigation to defend and enforce the
Company's intellectual property rights could result in substantial costs and

diversion of resources and could have a material adverse effect on the
Company's business, financial condition and results of operations, regardless
of the final outcome of such litigation. Despite the Company's efforts to
safeguard and maintain its proprietary rights both in the United States and
abroad, there can be no assurance that the Company will be successful in doing
so, or that the steps taken by the Company in this regard will be adequate to
deter misappropriation or independent third party development of the Company's
technology or to prevent an unauthorized third party from copying or otherwise
obtaining and using the Company's products or technology. Any such events
could have a material adverse effect on the Company's business, financial
condition and results of operations. See "Risk Factors--Intellectual Property
Rights."

EMPLOYEES

As of December 31, 1997, the Company had 191 full-time employees. None of
the employees of the Company is covered by a collective bargaining agreement.
The Company considers its relations with its employees to be good. As of
February 28, 1998, certain of the Company's employees were employed pursuant
to the H-1(B), non-immigrant work-permitted visa classification. See "Risk
Factors--Immigration Issues."

The Company believes its future success will depend in large part on its
ability to recruit and retain qualified employees, especially experienced
software engineering personnel. The competition for such personnel is intense,
and there can be no assurance that the Company will be successful in retaining
or recruiting key personnel. See "Risk Factors--Ability to Manage Growth" and
"--New Management Team; Dependence on Key Personnel."

PROPERTIES

The Company's principal administrative, sales, marketing, support, and
research and development facility is located in approximately 63,000 square
feet of modern office space in Atlanta, Georgia. This facility is leased to
the Company through December 31, 2002. Management believes its current
facilities are adequate for its present requirements. However, the Company
expects in the future to expand into additional facilities.

COMPANY HISTORY

The Company is a Georgia corporation formed to own all of the assets and
liabilities of Manhattan LLC. Manhattan LLC was formed in 1995 by the
contribution of the assets, liabilities and intellectual property rights of
Pegasys Systems Incorporated ("Pegasys") and the contribution of certain
intellectual property rights from the other founders of Manhattan LLC. Pegasys
is controlled by Alan J. Dabbiere, the Company's Chairman of the Board, Chief
Executive Officer and President. After the Restructuring, Pegasys will be a
stockholder of the Company. See "Principal and Selling Stockholders."

RECENT DEVELOPMENTS

On February 16, 1998, the Company purchased all of the outstanding stock of
Performance Analysis Corporation for $2.2 million in cash and 106,666 shares
of the Company's Common Stock valued at $10.00 per share. PAC is a developer
of distribution center slotting software. The PAC acquisition will be
accounted for as a purchase. The purchase price of approximately $3.3 million
has been allocated to the assets acquired and liabilities assumed including
acquired research and development of $2.1 million, purchased software of
$500,000, and other intangible

assets of $300,000. Purchased software will be amortized over an estimated
three-year useful life and other intangible assets will be amortized over a
seven-year period. In connection with the PAC Acquisition, the Company will
record a charge to income of approximately $2.1 million in the first quarter
of 1998 for acquired research and development.

In the past year, the Company has appointed five persons as executive
officers to fill new positions created to allow the Company to execute its
growth strategy and to provide the infrastructure necessary for a public
company. In addition, the Company intends to add Brian J. Cassidy and Charles
W. McCall as members of its Board of Directors within 90 days after the date
of this Prospectus. See "Risk Factors--New Management Team; Dependence on Key
Personnel" and "Management."

LEGAL PROCEEDINGS

The Company is not a party to any material legal proceedings.

MANAGEMENT

DIRECTORS, EXECUTIVE OFFICERS AND OTHER KEY EMPLOYEES

The directors and executive officers of the Company and their ages as of
February 26, 1998, are as follows:

NAME AGE POSITION
---- --- --------

Alan J. Dabbiere............. 36 Chairman of the Board of Directors, Chief
Executive Officer and President(1)
Deepak Raghavan.............. 32 Chief Technology Officer and Director
Gregory Cronin............... 50 Executive Vice President--Sales and Marketing
Oliver M. Cooper............. 41 Chief Operating Officer
David K. Dabbiere............ 39 Vice President, General Counsel and Secretary
Michael J. Casey............. 34 Chief Financial Officer and Treasurer
Neil Thall................... 51 Vice President--Supply Chain Strategy

- --------
(1) Member of the Executive Committee.

Directors and Executive Officers

ALAN J. DABBIERE, a founder of the Company, has served as Chief Executive
Officer and President of the Company since its inception in 1990 and Chairman
of the Board since February 1998. From 1986 until 1990, Mr. Dabbiere was
employed by Kurt Salmon Associates, a management consulting firm specializing
in consumer products manufacturing and retailing, where he specialized in
consulting for the retail and consumer products manufacturing industries. At
Kurt Salmon Associates, Mr. Dabbiere participated in Quick Response pilot
projects focused on the value of an integrated supply-chain initiative. Mr.
Dabbiere serves on the American Apparel Manufacturer Association's Management
Systems Committee.

DEEPAK RAGHAVAN, a founder of the Company, has served as Chief Technology
Officer of the Company since its inception in 1990 and as a Director of the
Company since February 1998. From 1987 until 1990, Mr. Raghavan was a Senior
Software Engineer for Infosys Technologies Limited, a software development
company, where he specialized in the design and implementation of information
systems for the apparel manufacturing industry.

GREGORY CRONIN has served as Executive Vice President--Sales and Marketing
of the Company since December 1997. Prior to joining the Company, Mr. Cronin
served as President and Chief Operating Officer of McHugh Software
International, Inc., a competing developer of distribution center management
and transportation management software, from 1992 until December 1997. Before
he was appointed as President and Chief Operating Officer of McHugh Software
International, Inc., Mr. Cronin served in several other capacities with that
company, including Senior Vice President--Sales and Marketing.

OLIVER M. COOPER has served as Chief Operating Officer of the Company since
August 1997. Prior to joining the Company, Mr. Cooper served as Vice
President--Sales and New Business Development for Compression Labs, Inc., a
publicly traded developer of video conferencing and compression products from
October 1995 until July 1997. Prior to joining Compression Labs, Inc., Mr.
Cooper served in several capacities from October 1988 to September 1995 with
Scientific-Atlanta, Inc., most recently as Vice President and General
Manager--Broadband Communications Group.

DAVID K. DABBIERE has served as Vice President, General Counsel and
Secretary of the Company since March 1998. From 1984 to 1998, Mr. Dabbiere was
employed by The Procter &

Gamble Company most recently as Associate General Counsel. Mr. Dabbiere was
responsible for, among other duties, the intellectual property matters for
Procter & Gamble's Beauty Care & Cosmetic and Fragrances sectors.

MICHAEL J. CASEY has served as Chief Financial Officer of the Company since
November 1997. Prior to joining the Company, Mr. Casey served as Chief
Financial Officer of Intellivoice Communications, Inc., a developer of voice
recognition software applications from April 1997 until November 1997. From
February 1996 to February 1997, Mr. Casey was Chief Financial Officer,
Treasurer and Secretary of Colorocs Information Technologies, Inc., a publicly
traded information technology company. From 1992 to 1996, Mr. Casey served as
Vice President--Finance for IQ Software Corporation, a publicly traded
software developer. Prior to 1992, Mr. Casey was employed by Arthur Andersen
LLP, where he served the technology and communications industries. Mr. Casey
is a member of the American Institute of Certified Public Accountants and is a
Certified Public Accountant in the State of Georgia.

NEIL THALL has served as Vice President--Supply Chain Strategy of the
Company since January 1998. From 1992 to 1997, Mr. Thall served as President
of Neil Thall Associates, a software development and management consulting
subsidiary of HNC Software, Inc. that specialized in inventory management,
Quick Response and vendor managed inventory initiatives. Prior to 1992, Mr.
Thall was employed by Kurt Salmon Associates as National Service Director--
Retail Consulting, where he specialized in the development and implementation
of information systems for major department stores, specialty and mass
merchant chains.

Other Key Employees

DEEPAK M.J. RAO, a founder of the Company, has served as a Vice President of
the Company since its inception in 1990. From 1987 until 1990, Mr. Rao was an
Assistant Project Manager for Infosys Technologies Limited, a software
development company, where he specialized in the design and implementation of
information systems for the banking industry.

PONNAMBALAM MUTHIAH, a founder of the Company, has served as a Vice
President of the Company since its inception in 1990. From 1987 until 1990,
Mr. Muthiah was a Senior Software Engineer for Infosys Technologies Limited, a
software development company, where he specialized in the design and
implementation of information systems for the apparel manufacturing industry.

ZACHARY TODARO has been employed by the Company since April 1993 and has
served as Director of Consulting Services of the Company since August 1997.
Prior to serving as Director of Consulting Services, Mr. Todaro served in
several capacities with the Company including sales, product development and
consulting.

JEFFRY W. BAUM joined the Company in February 1998 as Vice President--
International Business Development. From January 1997 until February 1998, Mr.
Baum served as Vice President--Sales and Marketing of Haushahn Systems &
Engineers, a warehouse management systems and material handling automation
provider. From March 1, 1992 until December 1996, Mr. Baum served as Senior
Account Manager at Haushahn. Prior to that, he served in a variety of business
development, account management and marketing positions with Logisticon, Inc.
and Hewlett-Packard.

DANIEL BASMAJIAN, SR. Mr. Basmajian has served as President of Performance
Analysis Corporation since 1987. Performance Analysis Corporation became a
wholly-owned subsidiary of the Company in February 1998, when the Company
acquired all of its issued and outstanding shares.

Election of Directors

The Company intends to add Brian J. Cassidy and Charles W. McCall as members
of its Board of Directors within 90 days after the date of this Prospectus. It
will be necessary for the Company to appoint these or two other independent
directors within the 90 day time period in order to maintain its Nasdaq
National Market listing. Failure to appoint two such directors could result in
a delisting of the Common Stock from the Nasdaq National Market.

BRIAN J. CASSIDY has served as the Vice-Chairman and Co-Founder of
LiveContent Inc., a developer and supplier of research tools for the Internet,
since April 1996. Prior to joining LiveContent Inc., Mr. Cassidy served as
Vice President of Business Development of Saros Corporation, a developer of
document management software, from January 1993 to March 1996. Prior to
joining Saros Corporation, Mr. Cassidy was employed by Oracle Corporation, as
Joint Management Director of European Operations and a member of the Executive
Management Board from 1983 to 1988 and as Worldwide Vice President of Business
Development from 1988 to 1990.

CHARLES W. MCCALL has served as President and Chief Executive Officer of HBO
& Company, a developer and supplier of software for the healthcare industry,
since 1991. Mr. McCall has been a member of the Board of Directors of HBO &
Company since 1991 and has served as Chairman of the Board of Directors since
February 1998. Prior to joining HBO & Company, Mr. McCall served as President
and Chief Executive Officer of CompuServe, Inc., a computer communications and
information services company. Mr. McCall also serves on the Board of Directors
of EIS International, Inc., WestPoint Stevens, Inc. and AMERIGROUP Inc.

The Board of Directors is divided into three classes, each of whose members
serve for a staggered three-year term. The Board is currently comprised of one
Class I director (Mr. Dabbiere), one Class II director (Mr. Raghavan) and no
Class III directors. Following the proposed election of Messrs. Cassidy and
McCall to the Board of Directors, Mr. Cassidy is expected to be a Class I
director and Mr. McCall is expected to be a Class III director. At each annual
meeting of shareholders, a class of directors will be elected for a three-year
term to succeed the directors of the same class whose terms are then expiring.
The terms of the initial Class I directors, Class II directors and Class III
directors will expire upon the election and qualification of successor
directors at the 1999, 2000 and 2001 annual meetings of stockholders,
respectively. There are no family relationships between any of the directors
or executive officers of the Company, except that Alan J. Dabbiere is the
brother of David K. Dabbiere. See "Risk Factors--No Prior Public Market for
Common Stock; Possible Volatility of Stock Price" and "Description of Capital
Stock--Certain Articles of Incorporation and Bylaw Provisions."

EMPLOYMENT AGREEMENTS

Mr. Cronin has entered into an employment agreement with the Company
effective as of November 15, 1997. Pursuant to this agreement, Mr. Cronin is
entitled to receive an annual base salary of $200,000 and is entitled to a
performance-related bonus of up to $100,000 per year. In addition, Mr. Cronin
received a signing bonus of $100,000 and an option to purchase 350,000 shares
of the Company's Common Stock which shall vest in equal annual installments
beginning November 14, 1998. Under the terms of the agreement, Mr. Cronin has
agreed to assign to the Company all patents, copyrights and other intellectual
property developed by him during the course of his employment with the
Company. In addition, Mr. Cronin has agreed not to solicit customers of the
Company for a period of one year following the termination of his employment
with the Company. In connection with any termination of Mr. Cronin's
employment, other than for cause or voluntarily by Mr. Cronin, Mr. Cronin will
be entitled to receive a severance payment within 30 days of termination equal
to the amount of his annual base salary.

Mr. Cooper has entered into an employment agreement with the Company
effective as of August 11, 1997. Pursuant to this agreement, Mr. Cooper is
entitled to receive an annual base salary of $175,000 and is entitled to a
performance-related bonus of up to $75,000 per year. In addition, Mr. Cooper
received an option to purchase 200,000 shares of the Company's Common Stock of
which 60,000 shares vest over the first six months of the option term
beginning on August 11, 1997, 40,000 shares vest on each of August 11, 1998
and August 11, 1999, and 60,000 shares vest on August 11, 2000. Under the
terms of the agreement, Mr. Cooper has agreed to assign to the Company all
patents, copyrights and other intellectual property developed by him during
the course of his employment with the Company. In addition, Mr. Cooper has
agreed not to solicit customers of the Company for a period of one year
following his voluntary termination or termination without cause from the
Company.

Mr. Casey has entered into an employment agreement with the Company
effective as of November 10, 1997. Pursuant to this agreement, Mr. Casey is
entitled to receive an annual base salary of $120,000 and is entitled to a
performance-related bonus of up to $25,000 per year. In addition, Mr. Casey
received a signing bonus of $20,000 and an option to purchase 100,000 shares
of the Company's Common Stock of which 20,000 shares vest over the first six
months of the option term beginning on November 10, 1997, 26,668 shares vest
on November 10, 1998, and 26,668 shares vest on each of November 10, 1999 and
November 10, 2000. Under the terms of the agreement, Mr. Casey has agreed to
assign to the Company all patents, copyrights and other intellectual property
developed by him during the course of his employment with the Company. In
addition, Mr. Casey has agreed not to solicit customers of the Company for a
period of one year following the termination of his employment with the
Company. In connection with any termination of Mr. Casey's employment during
the first two years of his employment, other than a termination based on gross
negligence or willful misconduct, Mr. Casey will be entitled to receive a
severance payment within 30 days of termination equal to fifty percent of his
base salary.

Mr. Thall has entered into an employment agreement with the Company
effective as of November 25, 1997. Pursuant to this agreement, Mr. Thall is
entitled to receive an annual base salary of $200,000 and is entitled to a
performance-related bonus of up to $40,000 per year. In addition, Mr. Thall
received an option to purchase 150,000 shares of the Company's Common Stock of
which 40,000 shares vested as of November 25, 1997, 40,000 shares vest on each
of November 25, 1998 and November 25, 1999, and 30,000 shares vest on
November 25, 2000. Under the terms of the agreement, Mr. Thall has agreed to
assign to the Company all patents, copyrights and other intellectual property
developed by him during the course of his employment with the Company. In
addition, Mr. Thall has agreed not to solicit customers of the Company for a
period of one year following his voluntary termination or termination without
cause from the Company.

BOARD COMMITTEES

The Board of Directors has established an Executive Committee comprised of
Messrs. Dabbiere and Raghavan. The Executive Committee is empowered to
exercise all authority of the Board of Directors of the Company, except as
limited by the Georgia Business Corporation Code ("GBCC"). Under Georgia law,
an Executive Committee may not, among other things, approve or propose to
stockholders actions required to be approved by stockholders, fill vacancies
on the Board of Directors or any of its committees, amend or repeal the bylaws
of the Company or approve a plan of merger not requiring stockholder approval.
Upon the addition of the two or more outside directors, the Company will name
directors to serve on the Compensation and Audit Committees. The Compensation
Committee will be responsible for reviewing and recommending salaries, bonuses
and other compensation for the Company's officers. The Compensation Committee
will also be responsible for administering the Company's stock

option plans and for establishing the terms and conditions of all stock
options granted under these plans. The Audit Committee will be responsible for
recommending independent auditors, reviewing with the independent auditors the
scope and results of the audit engagement, monitoring the Company's financial
policies and internal control procedures and reviewing and monitoring the
provisions of non-audit services by the Company's auditors. The full Board of
Directors will perform the functions of the Compensation and Audit Committees
until the election of outside directors.

DIRECTOR COMPENSATION

Following the consummation of the Offering, the non-employee members of the
Board of Directors will receive fees of $1,000 for each board meeting attended
and $500 for each committee meeting attended which is held independently of a
board meeting. The Company may grant stock options to the non-employee members
of the Board of Directors.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

During 1997, compensation of executive officers of the Company was
determined by Alan J. Dabbiere, Chairman of the Board, Chief Executive Officer
and President of the Company. After completion of the Offering and appointment
of outside directors, the Company will establish a Compensation Committee to
review the performance of executive officers, establish overall employee
compensation policies and recommend to the Board of Directors major
compensation programs. No member of the Compensation Committee will be an
executive officer of the Company.

EXECUTIVE COMPENSATION

Summary Compensation Table. The following table sets forth the total
compensation paid or accrued by the Company in 1997 for its Chief Executive
Officer and each executive officer of the Company whose total annual salary
and bonuses determined at December 31, 1997 exceeded $100,000 (collectively,
the "Named Executive Officers").

LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
------------------------------------ ------------
NUMBER OF
SECURITIES
ALL OTHER UNDERLYING
NAME AND PRINCIPAL POSITION SALARY BONUS COMPENSATION(1) OPTIONS
--------------------------- -------- -------- --------------- ------------

Alan J. Dabbiere............. $250,000 $406,170(2) -- --
Chairman of the Board, Chief
Executive Officer and
President
Deepak Raghavan.............. 175,525 -- -- --
Chief Technology Officer
Gregory Cronin .............. 17,692 100,000(3) -- 350,000
Executive Vice President--
Sales and Marketing
Oliver M. Cooper............. 69,327 70,000(3) -- 200,000
Chief Operating Officer

- --------
(1) In accordance with the rules of the Securities and Exchange Commission
(the "Commission"), other compensation in the form of perquisites and
other personal benefits has been omitted because such perquisites and
other personal benefits constituted less than the lesser of $50,000 or 10%
of the total annual salary and bonus for the Named Executive Officer for
such year.
(2) Represents bonuses and sales commissions. Bonuses awarded and paid in 1997
were based upon 1997 performance.
(3) Represents a bonus paid to Messrs. Cronin and Cooper in December 1997 and
August 1997, respectively, upon joining the Company.

OPTION GRANTS IN LAST FISCAL YEAR

The following table sets forth all individual grants of stock options during
the year ended December 31, 1997, to each of the Named Executive Officers:

POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF STOCK
PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM(1)
------------------------------------------------------- ---------------------
NUMBER OF PERCENT OF TOTAL
SECURITIES OPTIONS GRANTED EXERCISE OR
UNDERLYING TO EMPLOYEES IN BASE PRICE EXPIRATION
NAME OPTIONS GRANTED FISCAL YEAR PER SHARE DATE 5% 10%
---- --------------- ---------------- ----------- ---------- ---------------------

Alan J. Dabbiere........ -- -- -- -- -- --
Deepak Raghavan......... -- -- -- -- -- --
Gregory Cronin(2)....... 350,000 14.0% $3.50 11/14/07 $ 770,396 $ 1,952,335
Oliver M. Cooper(3)..... 200,000 8.0% $2.50 8/11/07 $ 314,447 $ 796,871

- --------

(1) Amounts represent hypothetical gains that could be achieved for the
respective options if exercised at the end of the option term. These gains
are based on the fair market value per share on the date of grant ($2.50
in the case of Mr. Cooper and $5.00 in the case of Mr. Cronin) and assumed
rates of stock price appreciation of 5% and 10% compounded annually from
the date the respective options were granted to their expiration date.
These assumptions are mandated by the rules of the Securities and Exchange
Commission and are not intended to forecast future appreciation of the
Company's stock price. The potential realizable value computation is net
of the applicable exercise price, but does not take into account federal
or state income tax consequences and other expenses of option exercises or
sales of appreciated stock. Actual gains, if any, are dependent upon the
timing of such exercise and the future performance of the Company's Common
Stock. There can be no assurance that the rates of appreciation in this
table can be achieved. This table does not take into account any
appreciation in the price of the Common Stock to date.
(2) This option was granted on November 14, 1997 with an exercise price below
the fair market value of the Common Stock on the date of grant as
determined by the Board of Directors. The option is a nonqualified stock
option which vests beginning November 14, 1998 in equal annual
installments over three years and has a ten year term.

(3) This option was granted on August 11, 1997 with an exercise price equal to
the fair market value of the Common Stock on the date of grant as
determined by the Board of Directors. The Board of Directors determined
the fair market value based on various factors including independent
appraisals, the illiquidity of the Common Stock representing a minority
interest in the Company, values of similarly situated companies and the
Company's future prospects. The option is a nonqualified stock option, and
60,000 shares vest over the first six months of the option term in equal
monthly installments, 40,000 shares vest on each of August 11, 1998 and
August 11, 1999 and the remaining 60,000 shares vest on August 11, 2000.
The option has a ten year term.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND YEAR-END OPTION VALUES

No Named Executive Officer exercised any stock option during 1997. The
following table summarizes the value of the outstanding options held by the
Named Executive Officers at December 31, 1997:

VALUE OF UNEXERCISED
NUMBER OF SECURITIES UNDERLYING IN-THE-MONEY
UNEXERCISED OPTIONS OPTIONS AT FISCAL YEAR-
AT FISCAL YEAR-END END(1)
----------------------------------- -------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- -------------- ----------------- ----------- -------------

Alan J. Dabbiere........ -- -- -- --
Deepak Raghavan......... -- -- -- --
Gregory Cronin.......... -- 350,000 -- $1,400,000
Oliver M. Cooper........ -- 200,000 -- 1,000,000

- --------

(1) Based on the estimated fair market value of the Company's Common Stock as
of December 31, 1997 of $7.50 per share, less the exercise price payable
upon exercise of such options. The Board of Directors determined the fair
market value based on various factors including independent appraisals,
the illiquidity of the Common Stock representing a minority interest in
the Company, values of similarly situated companies and the Company's
future prospects.

STOCK OPTION PLANS

Manhattan Associates, LLC Option Plan. The Manhattan Associates, LLC Option
Plan (the "LLC Option Plan") became effective on January 1, 1997. The
aggregate number of shares reserved for issuance under the LLC Option Plan was
5,000,000 shares. The purpose of the LLC Option Plan was to provide incentives
for key employees, officers, consultants and directors to promote the success
of the Company and to enhance the Company's ability to attract and retain the
services of such persons. Options granted under the LLC Option Plan were not
options

intended to qualify as "incentive stock options" under Section 422 of the
Code. As of February 28, 1998, no additional options may be granted pursuant
to the LLC Option Plan.

As of February 28, 1998, options to purchase 3,355,716 shares of Common
Stock were outstanding under the LLC Option Plan at a weighted average
exercise price of $4.66 per share, and no shares of Common Stock have been
issued upon exercise of options granted under the LLC Option Plan.

STOCK INCENTIVE PLAN. The Company's 1998 Stock Incentive Plan (the "Stock
Incentive Plan") was adopted by the Board of Directors and approved by the
shareholders of the Company in February 1998. Up to 5,000,000 shares of Common
Stock (subject to adjustment in the event of stock splits and other similar
events), less the number of shares issued under the LLC Option Plan, may be
issued pursuant to stock options and other stock incentives granted under the
Stock Incentive Plan. As of February 28, 1998, no options to purchase shares
of Common Stock or other stock incentives were outstanding under the Stock
Incentive Plan and no shares of Common Stock had been issued pursuant to or
upon the exercise of options or other stock incentives granted under the Stock
Incentive Plan.

The Stock Incentive Plan provides for the grant of incentive stock options
intended to qualify under Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code"), nonstatutory stock options, restricted stock awards and
stock appreciation rights ("SARs", and, together with the other options and
incentives, "Awards"). Officers, employees, directors, advisors and
consultants of the Company and any subsidiaries of the Company are eligible to
be granted Awards under the Stock Incentive Plan. Under present law, however,
incentive stock options may be granted only to employees. The granting of
Awards under the Stock Incentive Plan is discretionary. The Company will be
required to recognize compensation expense over the vesting period of any SARs
granted.

Optionees receive the right to purchase a specified number of shares of
Common Stock at a specified option price and subject to such other terms and
conditions as are specified in connection with the option grant. Options may
be granted at an exercise price that may be less than, equal to or greater
than the fair market value of the Common Stock on the date of grant. Under
present law, incentive stock options may not be granted at an exercise price
less than the fair market value of the Common Stock on the date of grant (or
less than 110% of the fair market value in the case of incentive stock options
granted to optionees holding more than 10% of the voting power of the
Company). The Stock Incentive Plan permits the payment of the exercise price
of options to be in the form of cash, or if the individual option agreement so
provides, by surrender to the Company of shares of Common Stock or by a
cashless exercise through a brokerage transaction.

The Stock Incentive Plan will be administered by the Board of Directors. The
Board may appoint a committee consisting of at least two nonemployee
directors, which may be the Compensation Committee, to administer the Stock
Incentive Plan. To date, no such committee has been formed pending the
election of nonemployee directors to the Board of Directors. The Board and any
such committee will have the authority to adopt, amend and repeal the
administrative rules, guidelines and practices relating to the Stock Incentive
Plan generally and to interpret the provisions thereof. The Board of Directors
and any such committee may amend, modify or terminate any outstanding Award
and with respect to new Awards will determine (i) the number of shares of
Common Stock covered by options, restricted stock awards or SARs, the dates
upon which such options or SARs become exercisable and the restrictions on
restricted stock lapse, (ii) the exercise price of options and SARs and the
purchase price, if any, of restricted stock, (iii) the duration of options and
SARs and (iv) conditions and duration of restrictions on restricted stock.

No Award may be made under the Stock Incentive Plan after February 2008, but
Awards previously granted may extend beyond that time. The Board of Directors
may at any time

terminate the Stock Incentive Plan. Any such termination will not affect
outstanding options, restricted stock or SARs.

OTHER OPTIONS. In addition to options issued under the LLC Option Plan, as
of February 28, 1998, the Company has outstanding options to purchase an
aggregate of 729,784 shares of Common Stock to employees outside of the LLC
Option Plan and the Stock Incentive Plan at weighted average exercise price of
$1.20 per share.

DEFERRED COMPENSATION PLANS

401(k) Profit Sharing Plan. The Company maintains a 401(k) Plan (the "401(k)
Plan") which is intended to be a tax-qualified contribution plan under Section
401(k) of the Code. Pursuant to the 401(k) Plan, participants may contribute,
subject to certain Code limitations, up to 10% of eligible compensation, as
defined, to the 401(k) Plan. Employees are eligible for this arrangement upon
completion of their first calendar month of employment. The Company will
match contributions made by employees pursuant to the 401(k) Plan at a rate of
50% of the participant's contributions, up to 6% of the eligible compensation
being contributed after the participant's first year of employment, subject to
certain Code limitations. All employees of the Company who have completed one
year of service with the Company consisting of at least 1,000 hours of
employment are eligible for the matching contribution. The Company may make an
additional contribution to participants' 401(k) Plans each year at the
discretion of the Board of Directors. The portion of a participant's account
attributable to his or her own contributions is 100% vested. The portion of
the account attributable to Company contributions (including matching
contributions) vests over 5 to 7 years of service with the Company.
Distributions from the 401(k) Plan may be made in the form of a lump-sum cash
payment or in installment payments.

Defined Contribution Plan. The Company sponsors a defined contribution
pension plan (the "Pension Plan") covering substantially all employees of the
Company. Under the Pension Plan, the Company contributes up to 8% of a
participant's eligible compensation, as defined, to the Pension Plan after the
participant's first year of employment.

PAC 401(K) PROFIT SHARING PLAN. Performance Analysis Corporation, which was
acquired by the Company on February 16, 1998, sponsors a 401(k) Profit Sharing
Plan (the "PAC 401(k) Plan"), covering substantially all employees of PAC.
Under the PAC 401(k) Plan's deferred compensation arrangement, eligible
employees who elect to participate in the PAC 401(k) Plan may contribute up to
15% of eligible compensation, as defined, to the PAC 401(k) Plan. The PAC
401(k) Plan may allow for a matching contribution which is determined by the
PAC each plan year.

LIMITATION OF LIABILITY AND INDEMNIFICATION OF OFFICERS AND DIRECTORS

The Company's Articles of Incorporation provide that the liability of the
directors for monetary damages shall be limited to the fullest extent
permissible under Georgia law. This limitation of liability does not affect
the availability of injunctive relief or other equitable remedies.

The Company's Bylaws provide that the Company will indemnify each of its
officers, directors, employees and agents to the extent that he or she is or
was a party, or is threatened to be made a party, to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative because he or she is or was a director,
officer, employee or agent of the Company, against reasonable expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
in connection with such action, suit or

proceeding; provided, however, that no indemnification shall be made for (i)
any appropriation, in violation of his or her duties, of any business
opportunity of the Company, (ii) acts or omissions which involve intentional
misconduct or a knowing violation of law, (iii) any liability under Section
14-2-832 of the Georgia Business Corporation Code ("GBCC"), which relates to
unlawful payments of dividends and unlawful stock repurchases and redemptions
or (iv) any transaction from which he or she derived an improper personal
benefit. The Company has entered into indemnification agreements with certain
officers and directors providing indemnification similar to that provided in
the Bylaws.

CERTAIN TRANSACTIONS

LLC DISTRIBUTION AND RESTRUCTURING

As of the date of this Prospectus, Manhattan LLC will contribute all of its
assets and liabilities, including the stock of PAC, to the Company in exchange
for Common Stock of the Company (the "Restructuring"). Prior to the
Restructuring, an amount equal to all undistributed earnings, calculated on a
tax basis, will be distributed to Manhattan LLC's stockholders through a
combination of distributions from internally generated cash and from proceeds
from borrowings under the Company's line of credit. As of December 31, 1997,
the Company's undistributed earnings, calculated on a tax basis, was $8.7
million, and the Company expects to accumulate additional undistributed income
from January 1, 1998 through the date of the Restructuring. A portion of the
net proceeds of the Offering will be used to repay balances incurred under the
Company's line of credit. The stockholders of the Company who will receive
funds through the distribution include Alan J. Dabbiere, Deepak Raghavan,
David K. Dabbiere, Joel D. Dabbiere and Peter V. Dabbiere. See "Conversion
From Limited Liability Company Status and Related Distributions" and Notes 1
and 9 of Notes to Financial Statements.

TAX INDEMNIFICATION AGREEMENTS

The Company has entered into tax indemnification agreements (the "Tax
Indemnification Agreements") with Pegasys, Alan J. Dabbiere, Deepak Raghavan,
the Company's Chief Technology Officer, and two other founders of the Company,
Deepak Rao and Ponnambalam Muthiah, and certain entities affiliated with such
individuals. Each of the Tax Indemnity Agreements provide for, among other
things, the indemnification of the Company by these persons for any federal
and state income taxes (including interest and penalties) incurred by the
Company if for any reason Manhattan LLC were to be taxable as a "C"
corporation during the period prior to the Restructuring and for any tax
liabilities incurred by the Company by reason of the Restructuring. The
liability of each of such persons to the Company may not exceed the amount of
any distributions received (directly or indirectly) by such persons from
Manhattan LLC, net of any taxes attributable to his distributed share of
Manhattan LLC's income. The Tax Indemnification Agreements also provide for
the indemnification by the Company of each party for certain additional taxes,
interest and penalties resulting from Manhattan LLC being taxed as a
partnership.

RELATED PARTY TRANSACTIONS

On December 31, 1995, the Company entered into a Grid Promissory Note (the
"1995 Note") with Alan J. Dabbiere. Pursuant to the 1995 Note, Mr. Dabbiere
loaned the Company $1,000,000 on December 31, 1995 at an interest rate of 5%
per year, payable on demand. The balance of the 1995 Note, including accrued
interest, was $1,019,000 as of December 31, 1997. On February 6, 1998, the
Company borrowed an additional $900,000 under the 1995 Note. The balance of
the 1995 Note at February 28, 1998 (including accrued interest) was
$1,937,000. The proceeds of the 1995 Note were used for working capital. The
Company intends to repay the 1995 Note with the proceeds of the Offering.

On February 16, 1998, Deepak Raghavan, the Chief Technology Officer of the
Company, invested $1,000,000 in the Company to purchase 100,000 shares of
Common Stock. The proceeds of Mr. Raghavan's investment were used for working
capital.

During 1995, 1996 and 1997, Peter V. Dabbiere, a brother of Alan J.
Dabbiere, was employed by the Company as director of the Company's hardware
sales, and received aggregate payments of $63,667, $75,536 and $100,942,
respectively. Peter Dabbiere was granted an option on January 1, 1997,
pursuant to the LLC Option Plan, to purchase 25,000 shares of the

Company's Common Stock at $2.50 per share. Peter Dabbiere was also granted an
option by Pegasys on May 5, 1997 to purchase 50,000 shares of Common Stock at
$2.50 per share from Pegasys. This option was exercised on May 5, 1997.

During 1995, 1996 and 1997, Joel D. Dabbiere, a brother of Alan J. Dabbiere,
was employed by the Company as a senior account executive, and received
aggregate payments of $119,109, $175,494 and $254,104, respectively. Joel
Dabbiere was granted an option on July 1, 1997, pursuant to the LLC Option
Plan, to purchase 80,000 shares of the Company's Common Stock at $2.50 per
share. Joel Dabbiere was also granted an option by Pegasys on May 5, 1997 to
purchase 80,000 shares of Common Stock at $2.50 per share from Pegasys. This
option was exercised on May 5, 1997.

During 1995, 1996 and 1997, David K. Dabbiere, a brother of Alan J.
Dabbiere, provided legal and management consulting services to the Company,
and received aggregate payments of $25,733, $38,126, and $53,767,
respectively. David Dabbiere was granted an option on February 28, 1998,
pursuant to the LLC Option Plan, to purchase 160,000 shares of the Company's
Common Stock at $10.00 per share, respectively. David Dabbiere was also
granted an option by Pegasys on May 5, 1997 and February 28, 1998 to purchase
50,000 and 130,000 shares, respectively, of the Company's Common Stock at
$2.50 and $9.50 per share, respectively, from Pegasys. These options were
exercised on May 5, 1997 and February 28, 1998, respectively.

All cash compensation paid to Alan Dabbiere's brothers was comparable to
compensation that would have been paid to unaffiliated persons. All options
were granted with an exercise price equal to fair market value as determined
by the Company's Board of Directors. As of December 31, 1997, there were no
fees outstanding for the services provided by these individuals.

The Board of Directors of the Company has adopted a resolution whereby all
future transactions, including any loans from the Company to its officers,
directors, principal stockholders or affiliates, will be approved by a
majority of the Board of Directors, including a majority of the independent
and disinterested members of the Board of Directors, if required by law, or a
majority of the disinterested stockholders and will be on terms no less
favorable to the Company than could be obtained from unaffiliated third
parties.

PRINCIPAL AND SELLING STOCKHOLDERS

The following table sets forth certain information with respect to the
beneficial ownership of the Company's Common Stock as of February 28, 1998,
and as adjusted to reflect the sale by the Company of the shares offered
hereby with respect to: (i) each director of the Company; (ii) each of the
Named Executive Officers; (iii) each stockholder known by the Company to be
the beneficial owner of more than 5% of the Company's Common Stock; and (iv)
all executive officers and directors as a group. Except as otherwise noted,
the persons or entities named in the table have sole voting and investment
power with respect to all the shares of Common Stock beneficially owned by
them.

BENEFICIAL OWNERSHIP BENEFICIAL OWNERSHIP
PRIOR TO THE OFFERING(2) AFTER THE OFFERING(2)(3)
NAMED EXECUTIVE OFFICERS ------------------------------------------------------------
AND DIRECTORS(1) SHARES PERCENTAGE SHARES PERCENTAGE
- ------------------------ --------------- ----------------------------- --------------

Alan J. Dabbiere(4)..... 11,118,576 55.0% 11,118,576 47.9%
Deepak Raghavan(5)...... 2,809,944 13.9% 2,809,944 12.1%
Gregory Cronin.......... -- -- -- --
Oliver M. Cooper(6)..... 60,000 * 60,000 *
Deepak Rao(7)........... 2,777,944 13.7% 2,777,944 12.0%
Ponnambalam Muthiah(8).. 2,816,644 13.9% 2,816,644 12.1%
All directors and
executive officers as a
group (7 persons)(9)... 14,385,186 70.2% 14,385,186 61.3%

- --------
* Less than 1% of the outstanding Common Stock.
(1) Except as set forth herein, the street address of the named beneficial
owner is c/o Manhattan Associates, Inc., 2300 Windy Ridge Parkway, Suite
700, Atlanta, Georgia 30339.

(2) For purposes of calculating the percentage beneficially owned, the number
of shares of Common Stock deemed outstanding prior to the Offering
includes (i) 20,206,674 shares outstanding as of February 28, 1998 and
(ii) shares issuable by the Company pursuant to options held by the
respective person or group which may be exercised within 60 days following
February 28, 1998 ("Presently Exercisable Options"). The number of shares
of Common Stock deemed outstanding after this offering includes an
additional 3,000,000 shares that are being offered for sale by the Company
in this offering. Beneficial ownership is determined in accordance with
the rules of the Securities and Exchange Commission that deem shares to be
beneficially owned by any person or group who has or shares voting and
investment power with respect to such shares. Presently Exercisable
Options are deemed to be outstanding and to be beneficially owned by the
person or group holding such options for the purpose of computing the
percentage ownership of such person or group but are not treated as
outstanding for the purpose of computing the percentage ownership of any
other person or group.
(3) If the Underwriters exercise their over-allotment option to purchase up to
450,000 shares, then the following stockholders named in the table above
will sell up to the following number of additional shares: Alan J.
Dabbiere, 87,500 shares; Deepak Raghavan, 187,500 shares; Deepak Rao,
87,500 shares; and Ponnambalam Muthiah, 87,500 shares.

(4) Consists of 11,118,576 shares held by Pegasys, a corporation controlled by
Mr. Dabbiere, 80% of the equity interest of which is held by a trust for
the benefit of Mr. Dabbiere's siblings, certain extended relatives and any
future descendants. Mr. Dabbiere disclaims beneficial ownership of the
shares held by Pegasys which are allocable to the interest held by the
trust.

(5) Includes 2,703,944 shares held by a limited partnership controlled by Mr.
Raghavan, the 99% limited partnership interest of which is owned by a
trust for the benefit of his descendants, and 6,000 shares held by
Mr. Raghavan for the benefit of his minor child. Mr. Raghavan disclaims
beneficial ownership of the shares held by the limited partnership which
are allocable to the interest held by the trust and the shares held for
the benefit of his child.
(6) Consists of 60,000 shares issuable pursuant to Presently Exercisable
Options.

(7) Includes 2,471,544 shares held by a limited partnership controlled by Mr.
Rao, the 99% limited partnership interest of which is held by a trust for
the benefit of his descendants, and 6,400 shares held by Mr. Rao for the
benefit of his minor children. Mr. Rao disclaims beneficial ownership of
the shares held by the limited partnership which are allocable to the
interest held by the trust and the shares held for the benefit of his
children.

(8) Includes 2,000,000 shares held by a limited partnership controlled by
Ponnambalam Muthiah, the 99% limited partnership interest of which is held
by a trust for the benefit of his descendants, and 12,000 shares held by
him for the benefit of his minor children. Ponnambalam Muthiah disclaims
beneficial ownership of the shares held by the limited partnership which
are allocable to the interest held by the trust and the shares held for
the benefit of his children.

(9) Includes 11,118,576 shares held by a corporation controlled by Mr.
Dabbiere; 2,703,944 shares held by a limited partnership controlled by Mr.
Raghavan; 6,000 shares held by Mr. Raghavan's child, who is a minor; and
276,666 shares issuable pursuant to Presently Exercisable Options.

DESCRIPTION OF CAPITAL STOCK

Upon completion of the Offering, the Company's authorized capital stock will
consist of 100,000,000 shares of Common Stock, $.01 par value per share, and
20,000,000 shares of preferred stock, no par value per share. As of February
28, 1998, the Company had issued and outstanding 20,206,674 shares of Common
Stock. The following description of the capital stock of the Company is a
summary and is qualified in its entirety by the provisions of the Company's
Articles of Incorporation and Bylaws, copies of which have been filed as
exhibits to the Registration Statement of which this Prospectus is a part.

COMMON STOCK

Holders of shares of Common Stock are entitled to one vote per share for the
election of directors and all matters to be submitted to a vote of the
Company's stockholders. Subject to the rights of any holders of preferred
stock which may be issued in the future, the holders of shares of Common Stock
are entitled to share ratably in such dividends as may be declared by the
Board of Directors and paid by the Company out of funds legally available
therefore. In the event of dissolution, liquidation or winding up of the
Company, holders of shares of Common Stock are entitled to share ratably in
all assets remaining after payment of all liabilities and liquidation
preferences, if any. Holders of shares of Common Stock have no preemptive,
subscription, redemption or conversion rights. The outstanding shares of
Common Stock are, and the shares of Common Stock to be issued by the Company
in connection with the Offering will be, duly authorized, validly issued,
fully paid and nonassessable.

PREFERRED STOCK

The Board of Directors is authorized, subject to certain limitations
prescribed by laws, without further stockholder approval, to issue from time
to time up to an aggregate of 20,000,000 shares of preferred stock in one or
more series and to fix or alter the designations, preferences, rights and any
qualifications, limitations or restrictions on the shares of each such series
thereof, including the dividend rights, dividend rates, conversion rights,
voting rights, terms of redemption (including sinking fund provisions),
redemption price or prices, liquidation preferences and the number of shares
constituting any series or designations of such series. The issuance of
preferred stock may have the effect of delaying, deferring or preventing a
change of control of the Company. There are no outstanding shares of Preferred
Stock and no series have been designated.

CERTAIN ARTICLES OF INCORPORATION AND BYLAW PROVISIONS

The Bylaws of the Company provide that special meetings of stockholders may
be called only by: (i) the Board of Directors; (ii) the Chairman of the Board
of Directors (if any); (iii) the Chief Executive Officer; (iv) the President
of the Company; or (v) holders of not less than 35% of all votes entitled to
be cast on any issued proposed to be considered at the proposed special
meeting. The Bylaws and Articles of Incorporation also provide for a staggered
Board of Directors and permit removal of directors with or without cause. See
"Management--Directors, Executive Officers and Other Key Employees."

The Company's Bylaws establish an advance notice procedure for the
nomination, other than by or at the direction of the Board of Directors or a
committee thereof, of candidates for election as directors, as well as for
other stockholder proposals to be considered at shareholders meetings. Notice
of stockholder proposals and directors nominations must be given timely in
writing to the Secretary of the Company before the meeting at which such
matters are to be acted upon or directors are to be elected. Such notice, to
be timely, must be

received at the principal executive offices of the Company with respect to
stockholder proposals and elections to be held at the annual meeting, not less
than 60 days before the date of the meeting at which the director(s) are to be
elected or the proposal is to be considered, however if less than 70 days
notice or prior public disclosure of the date of the scheduled meeting is
given or made, notice by the stockholder, to be timely, must be delivered or
received not later than the close of business on the tenth day following the
earlier of the day on which notice of the date of the meeting is mailed to
stockholders or public disclosure of the date of such meeting is made.

Notice to the Company from a stockholder who intends to present a proposal
or to nominate a person for election as a director at a stockholders' meeting
must contain certain information about the stockholder giving such notice and,
in the case of director nominations, all information that would be required to
be included in a proxy statement soliciting proxies for the election of the
proposed nominee (including such person's written consent to serve as a
director if so elected). If the presiding officer at the meeting of
stockholders determines that a stockholder's proposal or nomination is not
made in accordance with the procedures set forth in the Bylaws, such proposal
or nomination, at the direction of such presiding officer, may be disregarded.
The notice requirement for stockholder proposals contained in the Bylaws does
not restrict a stockholder's right to include proposals in the Company's
annual proxy materials pursuant to rules promulgated under the Securities
Exchange Act of 1934, as amended.

The Bylaws provide that directors may be removed with or without cause by
the affirmative vote, at any annual or special meeting of the stockholders,
but only if notice of such proposed removal was contained in the notice of
such meeting. The Board of Directors and the stockholders shall both have the
power to increase or decrease the authorized number of directors. Newly
created directorships resulting from any increase in the number of directors
or any vacancy of the Board of Directors may be filled by the affirmative vote
of a majority of the remaining directors then in office or, if not filled by
the directors, by the stockholders.

The Articles of Incorporation provide that in discharging the duties of
their respective positions and in determining what is believed to be in the
best interest of the Company, the Board of Directors, any committee of the
Board of Directors and any individual director, in addition to considering the
effects of any action on the Company or is stockholders, may, to the extent
permitted by applicable Georgia law, in his or her sole discretion, consider
the interests of the employees, customers, suppliers and creditors of the
Company and its subsidiaries, the communities in which offices or other
establishments of the Company and its subsidiaries are located and all other
factors such director(s) may consider pertinent; provided, however, that this
provision of the Company's Articles of Incorporation solely grants
discretionary authority to the directors, and no constituency shall be deemed
to have been given any right to consideration thereby.

The preceding provisions of the Articles of Incorporation may be changed
only upon the affirmative vote of holders of at least a 66 2/3% of the total
number of the then outstanding shares of capital stock of the Company that are
entitled to vote generally in the election of directors, voting together as a
single class.

The provisions of the Articles of Incorporation and Bylaws summarized in the
preceding six paragraphs contain provisions that may have the effect of
delaying, deferring or preventing a non-negotiated merger or other business
combination involving the Company. These provisions are intended to encourage
any person interested in acquiring the Company to negotiate with and obtain
the approval of the Board of Directors in connection with the transaction.
Certain of these provisions may, however, discourage a future acquisition of
the Company not approved

by the Board of Directors in which stockholders might receive an attractive
value for their shares or that a substantial number or even a majority of the
Company's stockholders might believe to be in their best interest. As a
result, stockholders who desire to participate in such a transaction may not
have the opportunity to do so. Such provisions could also discourage bids for
the Common Stock at a premium, as well as create a depressive effect on the
market price of the Common Stock.

LISTING

Application has been made to include the Company's Common Stock on the
Nasdaq National Market under the trading symbol "MANH."

TRANSFER AGENT AND REGISTRAR

The transfer agent for the Company's Common Stock is ChaseMellon Shareholder
Services.

SHARES ELIGIBLE FOR FUTURE SALE

Prior to the Offering, there has been no public market for the securities of
the Company. Upon completion of the Offering, the Company will have
outstanding 23,206,674 shares of Common Stock (assuming no exercise of the
underwriters' over-allotment option or options outstanding under the Company's
stock option plans). Of these shares, the 3,000,000 shares sold in the
Offering will be freely tradable without restriction or further registration
under the Securities Act of 1933, as amended (the "Securities Act"), unless
they are purchased by "affiliates" of the Company as that term is defined in
Rule 144 under the Securities Act (which sales would be subject to certain
limitations and restrictions described below). The remaining 20,206,674 shares
are "restricted shares" under Rule 144 (the "Restricted Shares"). Restricted
Shares may be sold in the public market only if registered under the
Securities Act or if they qualify for an exemption from registration under
Rule 144, Rule 144(k) or Rule 701 promulgated under the Securities Act. The
holders of all remaining 20,206,674 shares have agreed not to offer, pledge,
sell, offer to sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right or
warrant to purchase or otherwise transfer or dispose of, directly or
indirectly any shares of Common Stock or any securities convertible into or
exercisable or exchangeable for shares of Common Stock (other than gifts)
until 180 days after the date of this Prospectus without the prior written
consent of Deutsche Morgan Grenfell Inc. As a result of the contractual
restrictions described herein and the provisions of Rule 144, Rule 144(k) and
Rule 701, the Restricted Shares will be available for sale in the public
market as follows: (i) no shares will be available for immediate sale on the
date of this Prospectus, (ii) approximately 19,870,008 shares will become
eligible for sale 180 days after the date of this Prospectus (assuming no
release from the lock-up agreements) upon expiration of lock-up agreements,
and (iii) approximately 206,666 shares will become eligible for sale February
16, 1999 and 130,000 shares will become eligible for sale February 28, 1999.
See "Underwriting." Deutsche Morgan Grenfell Inc. in its sole discretion and
without notice may earlier release for sale in the public market all or any
portion of the shares subject to the lock-up agreement.

In general, under Rule 144 as currently in effect, beginning 90 days after
the date of this Prospectus, a person (or persons whose shares are aggregated)
who has beneficially owned shares for a least one year (including the holding
period of any prior owner except an affiliate) is entitled to sell in
"brokers' transactions" or to market makers, within any three-month period a
number of shares that does not exceed the greater of: (i) one percent of the
number of shares of Common Stock then outstanding (approximately 232,067
shares immediately after the Offering) or (ii) the average weekly trading
volume in the Common Stock during the four calendar weeks preceding the
required filing of a Form 144 with respect to such sale. Sales under Rule 144
are subject to the availability of current public information about the
Company. Under Rule 144(k), a person who is not deemed to have been an
affiliate of the Company at any time during the 90 days preceding a sale, and
who has beneficially owned the shares proposed to be sold for at least two
years, is entitled to sell such shares without having to comply with the
manner of sale, public information, volume limitation or notice filing
provisions of Rule 144. Unless otherwise restricted, "144(k) shares" may
therefore be sold immediately upon the completion of the Offering. Under Rule
701 under the Securities Act, persons who purchase shares upon exercise of
options granted prior to the Offering are entitled to sell such shares 90 days
after the Offering in reliance on Rule 144, without having to comply with the
holding period requirements of Rule 144 and, in the case of non-affiliates,
without having to comply with the volume limitation or notice filing
provisions of Rule 144.

After the completion of this offering, the Company intends to file a
Registration Statement on Form S-8 (the "Form S-8") under the Securities Act
to register the 5,729,784 shares of Common Stock reserved for issuance under
the Stock Incentive Plan, the LLC Option Plan and

other options. The Company has agreed with the Underwriters not to file a Form
S-8 until at least 90 days after the date of this Prospectus. After the date
of such filing, if not otherwise subject to a lock-up agreement, shares
purchased pursuant to such plans and options generally would be available for
resale in the public market. See "Management--Stock Option Plans."

UNDERWRITING

The Underwriters named below, for whom Deutsche Morgan Grenfell Inc.,
Hambrecht & Quist LLC and SoundView Financial Group, Inc. are acting as
Representatives (the "Representatives"), have severally agreed, subject to the
terms and subject to the conditions in the Underwriting Agreement (the form of
which will be filed as an exhibit to the Company's Registration Statement of
which this Prospectus is a part), to purchase from the Company the respective
number of shares of Common Stock indicated opposite their respective names.
The Underwriters are committed to purchase all of the shares, if they purchase
any.

NUMBER OF
UNDERWRITER SHARES
----------- ---------

Deutsche Morgan Grenfell Inc.......................................
Hambrecht & Quist LLC..............................................
SoundView Financial Group, Inc.....................................
---------
Total............................................................ 3,000,000
=========

The Underwriting Agreement provides that the obligations of the several
Underwriters thereunder are subject to the approval of certain legal matters
by counsel and to various other conditions.

The Representatives have advised the Company that the Underwriters initially
propose to offer the Common Stock to the public on the terms set forth on the
cover page of this Prospectus. The Underwriters may allow selected dealers
(who may include the Underwriters) a concession not in excess of $ a share
under the initial public offering price. The selected dealers may reallow a
concession not in excess of $ a share to other dealers and other selling
terms may be changed by the Representatives. The Common Stock is offered
subject to receipt and acceptance by the Underwriters, and to certain other
conditions, including the right to reject orders in whole or in part. The
Underwriters do not intend to sell any of the shares of Common Stock offered
hereby to accounts for which they exercise discretionary authority.

Pursuant to the Underwriting Agreement, the Selling Stockholders have
granted to the Underwriters an option to purchase up to 450,000 additional
shares of Common Stock, respectively, to cover over-allotments, if any, at the
initial public offering price, less the underwriting discount set forth on the
cover page of this Prospectus. Such option is exercisable for 30 days from the
date of this Prospectus. To the extent such option is exercised, each
Underwriter will be committed, subject to certain conditions, to purchase
approximately the same percentage of such additional shares of Common Stock as
the number set forth next to such Underwriter's name in the preceding table
bears to the total number of shares of Common Stock offered hereby. The
Selling Stockholders will be obligated, pursuant to the option, to sell such
shares to the Underwriters.

See "Shares Eligible for Future Sale" for a description of certain
arrangements by which all officers, directors and all stockholders of the
Company have agreed not to sell or otherwise

dispose of Common Stock or convertible securities of the Company for up to 180
days after the date of the final Prospectus without the prior consent of
Deutsche Morgan Grenfell Inc. The Company has agreed in the Underwriting
Agreement that it will not, directly or indirectly, without the prior written
consent of Deutsche Morgan Grenfell Inc., contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase, or otherwise transfer or dispose of any
shares of Common Stock or any securities convertible into or exchangeable for
Common Stock, for a period of 180 days after the date of the final Prospectus
without the consent of Deutsche Morgan Grenfell Inc., except under certain
circumstances.

The Underwriting Agreement provides that the Company, and the Selling
Stockholders in the event the over-allotment option is exercised, will
indemnify the several Underwriters against certain liabilities, including
civil liabilities under the Securities Act, or will contribute to payments the
Underwriters may be required to make in respect thereof.

Prior to this Offering, there has been no public market for the Common
Stock. The initial public offering price will be determined by negotiation
between the Company, the Selling Stockholders and the Representatives. The
principal factors to be considered in determining the initial public offering
price include the information set forth in this Prospectus and otherwise
available to the Representatives; the history and the prospects for the
industry in which the Company competes; the ability of the Company's
management; the prospects for future earnings of the Company; the present
state of the Company's development and its current financial condition; the
general condition of the securities markets at the time of this Offering; and
the recent market prices of, and the demand for, publicly traded common stock
of generally comparable companies. Each of the Representatives has informed
the Company that it currently intends to make a market in the shares
subsequent to the effectiveness of this Offering, but there can be no
assurance that the Representatives will take any action to make a market in
any securities of the Company.

Certain persons participating in this Offering may over-allot or effect
transactions which stabilize, maintain or otherwise affect the market price of
the Common Stock at levels above those which might otherwise prevail in the
open market, including by entering stabilizing bids, effecting syndicate
covering transactions or imposing penalty bids. A stabilizing bid means the
placing of any bid or effecting of any purchase for the purpose of pegging,
fixing or maintaining the price of the Common Stock. A syndicate covering
transaction means the placing of any bid on behalf of the underwriting
syndicate or the effecting of any purchase to reduce a short position created
in connection with this Offering. A penalty bid means an arrangement that
permits the Underwriters to reclaim a selling concession from a syndicate
member in connection with this Offering when shares of Common Stock sold by
the syndicate member are purchased in syndicate covering transactions. Such
transactions may be effected on the Nasdaq National Market, in the over-the-
counter market or otherwise. Such stabilizing, if commenced, may be
discontinued at any time.

LEGAL MATTERS

The validity of the issuance of the shares of the Common Stock offered
hereby will be passed upon for the Company and the Selling Stockholders by
Morris, Manning & Martin, L.L.P., Atlanta, Georgia. Certain legal matters in
connection with this Offering will be passed upon for the Underwriters by
Testa, Hurwitz & Thibeault, LLP, Boston, Massachusetts.

EXPERTS

The financial statements and schedule included in this Prospectus have been
audited by Arthur Andersen LLP, independent public accountants, as indicated
in their reports with respect thereto, and are included herein in reliance
upon the authority of said firm as experts in giving said reports.

ADDITIONAL INFORMATION

The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-1 (together with all
amendments, schedules and exhibits thereto, the "Registration Statement")
under the Securities Act with respect to the shares of Common Stock offered
hereby. This Prospectus, which constitutes a part of the registration
Statement, does not contain all of the information set forth in the
Registration Statement, certain parts of which are omitted in accordance with
the rules and regulations of the Commission. For further information with
respect to the Company and the Common Stock offered hereby, reference is made
to the Registration Statement. Statements made in this Prospectus as to the
contents of any contract, agreement or other document are not necessarily
complete, and in each instance, reference is made to the copy of such contract
or other document filed as an exhibit to the Registration Statement, each such
statement being qualified in all respects by such reference. The Registration
Statement and the exhibits and schedules thereto may be inspected without
charge at the public reference facilities maintained by the Commission in Room
1024, 450 Fifth Street, N. W., Washington, D.C. 20549, and at the following
regional offices of the Commission: Seven World Trade Center, Room 1400, New
York, New York 10048 and Northwestern Atrium Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661. Copies of such material can be obtained
from the Public Reference Section of the Commission at 450 Fifth Street, N.
W., Washington, D.C. 20549, Room 1024, at prescribed rates. In addition, the
Company is required to file electronic versions of these documents with the
Commission through the Commissions Electronic Data Gathering, Analysis, and
Retrieval (EDGAR) system. The Commission maintains a World Wide Web Site at
http://www.sec.gov that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the
Commission. Information concerning the Company is also available for
inspection at the offices of the Nasdaq National Market, Reports Section, 1735
K Street, N.W., Washington, D.C. 20006.

The Company intends to furnish to its stockholders annual reports containing
financial statements audited by an independent public accounting firm and
quarterly reports for the first three quarters of each fiscal year containing
unaudited financial information.

INDEX TO FINANCIAL STATEMENTS

PAGE
----

MANHATTAN ASSOCIATES, INC. FINANCIAL STATEMENTS:
Report of Independent Public Accountants.................................. F-2
Balance Sheets as of December 31, 1996 and 1997........................... F-3
Statements of Income for the Years Ended December 31, 1995, 1996 and 1997. F-4
Statements of Stockholders' Equity for the Years Ended December 31, 1995,
1996 and 1997............................................................ F-5
Statements of Cash Flows for the Years Ended December 31, 1995, 1996 and
1997..................................................................... F-6
Notes to Financial Statements............................................. F-7
PERFORMANCE ANALYSIS CORPORATION FINANCIAL STATEMENTS:
Report of Independent Public Accountants.................................. F-20
Balance Sheet as of December 31, 1997..................................... F-21
Statement of Income and Retained Earnings for the Year Ended December 31,
1997..................................................................... F-22
Statement of Cash Flows for the Year Ended December 31, 1997.............. F-23
Notes to Financial Statements............................................. F-24

F-1

After the restructuring discussed in Note 10 to the financial statements of
Manhattan Associates, Inc. is effected, we expect to be in a position to
render the following audit report.

ARTHUR ANDERSEN LLP

Atlanta, Georgia
February 16, 1998

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Manhattan Associates, Inc.:

We have audited the accompanying balance sheets of MANHATTAN ASSOCIATES,
INC. (a Georgia corporation, formerly Manhattan Associates, LLC) as of
December 31, 1996 and 1997 and the related statements of income, stockholders'
equity, and cash flows for each of the three years in the period ended
December 31, 1997. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Manhattan Associates, Inc.
as of December 31, 1996 and 1997 and the results of its operations and its
cash flows for each of the three years in the period ended December 31, 1997
in conformity with generally accepted accounting principles.

Atlanta, Georgia

F-2

MANHATTAN ASSOCIATES, INC.

BALANCE SHEETS

(IN THOUSANDS, EXCEPT SHARE AND PER DATA)

PRO FORMA
DECEMBER 31, DECEMBER 31,
--------------- 1997
1996 1997 (NOTE 9)
------ ------- ------------
ASSETS (UNAUDITED)

Current assets:
Cash and cash equivalents...................... $3,199 $ 3,194 $ --
Accounts receivable, net of a $325 and $970
allowance for doubtful accounts, in 1996 and
1997, respectively, and $992 in 1997, pro
forma......................................... 3,311 9,242 9,579
Deferred income taxes.......................... -- -- 427
Other current assets........................... -- 384 384
------ ------- -------
Total current assets......................... 6,510 12,820 10,390
------ ------- -------
Property and equipment:
Property and equipment......................... 792 2,605 2,730
Less accumulated depreciation................ (313) (662) (756)
------ ------- -------
Property and equipment, net.................... 479 1,943 1,974
------ ------- -------
Intangible assets, net of accumulated
amortization of $133
and $266 in 1996 and 1997, respectively and $266
in 1997,
pro forma....................................... 267 133 933
Other assets..................................... 20 110 112
------ ------- -------
Total assets................................. $7,276 $15,006 $13,409
====== ======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Cash overdraft................................. $ -- $ -- $ 6,943
Accounts payable............................... 422 2,479 2,545
Accrued compensation and benefits.............. 151 753 753
Accrued liabilities............................ 253 455 579
Notes payable to stockholders.................. 969 1,019 1,019
Deferred revenue............................... 599 1,846 2,030
Deferred income taxes.......................... -- -- 74
------ ------- -------
Total current liabilities.................... 2,394 6,552 13,943
------ ------- -------
Deferred income taxes............................ -- -- 51
Commitments and contingencies
Stockholders' equity:
Preferred stock, no par value; 20,000,000
shares authorized, no shares issued or
outstanding in 1996 and 1997 and in 1997 pro
forma......................................... -- -- --
Common stock, $.01 par value; 100,000,000
shares authorized, 20,000,008 shares issued
and outstanding in 1996 and 1997 and
20,206,674 shares issued and outstanding in
1997, pro forma............................... 200 200 202
Additional paid-in-capital..................... 1,014 1,929 2,830
Retained earnings (deficit).................... 3,668 6,858 (3,084)
Deferred compensation.......................... -- (533) (533)
------ ------- -------
Total stockholders' equity (deficit)......... 4,882 8,454 (585)
------ ------- -------
Total liabilities and stockholders' equity... $7,276 $15,006 $13,409
====== ======= =======

The accompanying notes are an integral part of these balance sheets.

F-3

MANHATTAN ASSOCIATES, INC.

STATEMENTS OF INCOME

(IN THOUSANDS, EXCEPT PER SHARE DATA)

YEAR ENDED DECEMBER 31,
-----------------------
1995 1996 1997
------- ------- -------

Revenue:
Software license..................................... $ 2,463 $ 3,354 $ 7,160
Services............................................. 3,503 6,236 14,411
Hardware............................................. 5,255 4,810 10,886
------- ------- -------
Total revenue...................................... 11,221 14,400 32,457
------- ------- -------
Cost of revenue:
Software license..................................... 6 177 461
Services............................................. 1,740 2,026 6,147
Hardware............................................. 3,991 3,734 8,001
------- ------- -------
Total cost of revenue.............................. 5,737 5,937 14,609
------- ------- -------
Gross margin .......................................... 5,484 8,463 17,848
Operating expenses:
Research and development............................. 1,138 1,236 3,025
Acquired research and development.................... 600 -- --
Sales and marketing.................................. 1,147 1,900 3,570
General and administrative........................... 1,058 1,454 2,975
------- ------- -------
Total operating expenses........................... 3,943 4,590 9,570
------- ------- -------
Income from operations................................. 1,541 3,873 8,278
Other income, net...................................... 40 103 56
------- ------- -------
Historical income...................................... $ 1,581 $ 3,976 $ 8,334
======= ======= =======
Historical basic net income per share.................. $ 0.07 $ 0.20 $ 0.42
======= ======= =======
Historical diluted net income per share................ $ 0.08 $ 0.20 $ 0.40
======= ======= =======
Income before pro forma income taxes................... $ 1,581 $ 3,976 $ 8,334
Pro forma income taxes................................. 580 1,486 3,023
------- ------- -------
Pro forma net income................................... $ 1,001 $ 2,490 $ 5,311
======= ======= =======
Pro forma basic net income per share................... $ 0.26
=======
Pro forma diluted net income per share................. $ 0.25
=======

The accompanying notes are an integral part of these statements.

F-4

MANHATTAN ASSOCIATES, INC.

STATEMENTS OF STOCKHOLDERS' EQUITY

(IN THOUSANDS, EXCEPT SHARE DATA)

COMMON STOCK ADDITIONAL TOTAL
----------------- PAID-IN RETAINED DEFERRED STOCKHOLDERS'
SHARES AMOUNT CAPITAL EARNINGS COMPENSATION EQUITY
---------- ------ ---------- -------- ------------ -------------

Balance, December 31,
1994................... 200 $-- $ -- $ 1,997 $ -- $ 1,997
Stock issued upon
formation of
Manhattan Associates,
LLC.................. 11,428,376 114 -- (114) -- --
Distributions to
stockholders......... -- -- -- (923) -- (923)
Issuance of common
stock and repurchase
of option (Note 1)... 8,571,432 86 1,014 -- -- 1,100
Income before pro
forma income taxes... -- -- -- 1,581 -- 1,581
---------- ---- ------ ------- ----- -------
Balance, December 31,
1995................... 20,000,008 200 1,014 2,541 -- 3,755
Distributions to
stockholders......... -- -- -- (2,849) -- (2,849)
Income before pro
forma income taxes... -- -- -- 3,976 -- 3,976
---------- ---- ------ ------- ----- -------
Balance, December 31,
1996................... 20,000,008 200 1,014 3,668 -- 4,882
Issuance of stock
options.............. -- -- 840 -- (840) --
Issuance of stock
options to consultant
(Note 7)............. -- -- 75 -- -- 75
Distributions to
stockholders......... -- -- -- (5,144) -- (5,144)
Amortization of
deferred
compensation......... -- -- -- -- 307 307
Income before pro
forma income taxes... -- -- -- 8,334 -- 8,334
---------- ---- ------ ------- ----- -------
Balance, December 31,
1997................... 20,000,008 $200 $1,929 $ 6,858 $(533) $ 8,454
========== ==== ====== ======= ===== =======

The accompanying notes are an integral part of these statements.

F-5

MANHATTAN ASSOCIATES, INC.

STATEMENTS OF CASH FLOWS

(IN THOUSANDS)

YEAR ENDED DECEMBER 31,
---------------------------
1995 1996 1997
------- -------- --------

Cash flows from operating activities:
Pro forma net income............................ $ 1,001 $ 2,490 $ 5,311
------- -------- --------
Adjustments to reconcile pro forma net income to
net cash provided by operating activities:
Pro forma income taxes........................ 580 1,486 3,023
Depreciation and amortization................. 55 276 483
Stock compensation............................ -- -- 382
Acquired research and development............. 600 -- --
Accrued interest on note payable to
stockholder.................................. 35 33 50
Changes in operating assets and liabilities:
Accounts receivable, net.................... 524 (1,114) (5,931)
Other assets................................ (5) (1) (474)
Accounts payable............................ 222 26 2,057
Accrued liabilities......................... 51 324 804
Deferred revenue............................ 17 434 1,247
------- -------- --------
Total adjustments......................... 2,079 1,464 1,641
------- -------- --------
Net cash provided by operating activities. 3,080 3,954 6,952
------- -------- --------
Cash flows from investing activities:
Purchases of property and equipment............. (168) (485) (1,813)
Purchased software.............................. (250) -- --
------- -------- --------
Net cash used in investing activities..... (418) (485) (1,813)
------- -------- --------
Cash flows from financing activities:
Distributions to stockholders................... (923) (2,849) (5,144)
Repurchase of option (Note 1)................... (250) -- --
Borrowings under note payable to stockholder ... 900 -- --
------- -------- --------
Net cash used in financing activities..... (273) (2,849) (5,144)
------- -------- --------
Increase (decrease) in cash and cash equivalents.. 2,389 620 (5)
Cash and cash equivalents, beginning of year...... 190 2,579 3,199
------- -------- --------
Cash and cash equivalents, end of year............ $2,579 $3,199 $3,194
======= ======== ========
Supplemental cash flow disclosure:
Purchase of technology through issuance of
common stock
(Note 1)....................................... $ 750 $ -- $ --
======= ======== ========
Purchase of minority ownership through the
forgiveness of a payable (Note 1).............. $ 600 $ -- $ --
======= ======== ========

The accompanying notes are an integral part of these statements.

F-6

MANHATTAN ASSOCIATES, INC.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1995, 1996 AND 1997

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION AND BUSINESS

Manhattan Associates, Inc. ("Manhattan" or the "Company") develops, markets,
and supports supply chain execution systems primarily focused on distribution
center management. The Company's primary product, PkMS, is a comprehensive and
modular designed software system that assists in the management of inventory,
storage, distribution, equipment, and personnel within a distribution center.
The Company also provides professional services including design,
configuration, implementation, training, and support.

BASIS OF PRESENTATION

In connection with the Company's anticipated initial public offering (the
"Offering") Manhattan Associates, Inc., a Georgia corporation, was formed. The
attached financial statements include the accounts of Manhattan Associates,
LLC ("Manhattan LLC") from January 1, 1996 to December 31, 1997 and include
the accounts of Pegasys Systems Incorporated ("Pegasys") prior to January 1,
1996. Prior to December 31, 1995, Manhattan operated as Pegasys which was, at
the time, 100% owned by Manhattan LLC's current majority shareholder
("Majority Holder"). As of the effective date of the Offering Manhattan LLC
will contribute its assets and liabilities to the Company in exchange for
common stock of the Company (the "Restructuring"). Unless otherwise indicated,
all references to the Company or Manhattan assume the completion of the
Restructuring and include Manhattan LLC and Pegasys.

RECAPITALIZATION AND ACQUISITION

Pegasys co-developed certain technology, which was ultimately incorporated
into PkMS, with certain of Manhattan LLC's minority shareholders ("Minority
Holders") and a consultant (the "Consultant"). The Minority Holders and the
Consultant each held an option that was granted in 1993 before the technology
was developed to purchase a percentage of Manhattan LLC upon its formation.
The option contained no expiration date and was fully vested at the date of
grant. On December 31, 1995, Manhattan LLC was formed as a 100% wholly-owned
subsidiary of Pegasys, and Pegasys transferred all of its assets, liabilities,
and intellectual property rights to Manhattan LLC.

Subsequent to the formation of Manhattan LLC, the Minority Holders exercised
their option to purchase 8,571,432 shares, which at the time represented 42.9%
of Manhattan LLC's stock, and the Company purchased the rights to certain
technology, which was ultimately incorporated into PkMS and valued at $750,000
and the Minority Holder also forgave certain receivables from Pegasys in the
amount of $600,000. The Company repurchased the option from the Consultant for
$250,000 which was recorded as a treasury stock transaction and the
Consultant's rights to the technology were repurchased for $250,000. In
connection with the exercise of the option by the Minority Holders and the
payment to the Consultant, Manhattan LLC recorded the acquisition of the
technology under the purchase method of accounting at a value of $1,000,000
(the "1995 Acquisition"). In connection with the 1995 Acquisition, the Company
recorded a $600,000 charge to income for acquired research and development and
$400,000 to purchased software. These transactions are included in the line
item "issuance of common stock and repurchase of option" in the accompanying
statements of stockholders' equity.

F-7

MANHATTAN ASSOCIATES, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

DECEMBER 31, 1995, 1996 AND 1997

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with
original maturities of three months or less to be cash or cash equivalents.

Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements. Estimates also affect the reported amounts of
revenues and expenses during the reporting period. Actual results could
differ from those estimates.

Fair Value of Financial Instruments

The carrying values of cash, trade accounts receivable, trade accounts
payable, and other financial instruments included in the accompanying
balance sheets approximate their fair values principally due to the short-
term maturities of these instruments.

Risks Associated with Single Product Line, Technological Advances, and
Hardware Revenue

The Company currently derives substantially all its revenues from sales
of its PkMS software and related services and hardware. Any factor
adversely affecting the distribution center market could have an adverse
effect on the Company's business, financial condition, and results of
operations.

The market for distribution center management systems is subject to rapid
technological change, changing customer needs, frequent new product
introductions, and evolving industry standards that may render existing
products and services obsolete. As a result, the Company's position in this
market could be eroded rapidly by unforeseen changes in customer
requirements for application features, functions, and technologies. The
Company's growth and future operating results will depend, in part, upon
its ability to enhance existing applications and develop and introduce new
applications that meet changing customer requirements, that respond to
competitive products and that achieve market acceptance.

The Company resells a variety of hardware products developed and
manufactured by third parties. Revenue from such hardware sales can amount
to a significant portion of the Company's total revenue in any period. As
the market for distribution of hardware products becomes more competitive,
the Company's customers may find it attractive to purchase such hardware
directly from the manufacturer of such products, with a resultant decrease
in the Company's revenues from hardware.

Revenue Recognition

The Company's revenue consists of revenues from the licensing of PkMS;
fees from consulting, implementation, training, and maintenance services;
and revenue from the sale of complementary radio frequency and computer
equipment. The Company recognizes

F-8

MANHATTAN ASSOCIATES, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

DECEMBER 31, 1995, 1996 AND 1997
software license revenue in accordance with the provisions of American
Institute of Certified Public Accountants Statement of Position ("SOP") No.
91-1, "Software Revenue Recognition." Accordingly, software license revenue
is recognized upon shipment of the software following execution of a
contract, provided that no significant vendor obligations remain
outstanding, amounts are due within one year, and collection is considered
probable by management. If significant post-delivery obligations exist, the
revenue from the sale of the software license, as well as other components
of the contract, is recognized using percentage of completion accounting.

The Company's services revenue consists of revenue generated from
consulting and maintenance related to the Company's software product.
Services revenue is derived from fees based on consulting, implementation,
and training services contracted under separate service agreements. Revenue
related to consulting, implementation, and training services performed by
the Company are recognized as the services are performed. Maintenance
revenue represents amounts paid, generally in advance, by users for the
support and enhancements to the software. Maintenance revenue is recognized
ratably over the term of the maintenance agreement, typically 12 months.

Hardware revenue is generated from the resale of a variety of hardware
products, developed and manufactured by third parties, that are integrated
with and complementary to the Company's software solution. As part of a
complete distribution center management system solution the Company's
customers frequently purchase hardware from the Company in conjunction with
the licensing of PkMS. These products include computer hardware, radio
frequency terminals networks, bar code printers and scanners, and other
peripherals. Hardware revenue is recognized upon shipment. The Company
generally purchases hardware from its vendors only after receiving an order
from a customer. As a result, the Company does not maintain hardware
inventory.

Deferred Revenue

Deferred revenue primarily represents amounts collected prior to complete
performance of maintenance services. Revenue may also be deferred prior to
the delivery of software.

Returns and Allowances

The Company provides for the costs of returns and product and warranty
claims when specific problems are identified. The Company has not
experienced significant returns or warranty claims to date.

Property and Equipment

Property and equipment consists of furniture, computers, other office
equipment, purchased software, and leasehold improvements. The Company
depreciates the cost of furniture, computers, other office equipment and
purchased software on a straight-line basis over their estimated useful
lives (three years for computer equipment and software,

F-9

MANHATTAN ASSOCIATES, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

DECEMBER 31, 1995, 1996 AND 1997

five years for office equipment, seven years for furniture). Leasehold
improvements are amortized over the term of the lease. Depreciation and
amortization expense for property and equipment for the years ended
December 31, 1995, 1996, and 1997 was $55,000, $143,000, and $349,000,
respectively.

Property and equipment, at cost, consist of the following:

DECEMBER 31,
--------------
1996 1997
------ -------

Computer equipment and software.............................. $ 534 $ 1,547
Furniture and office equipment............................... 258 1,055
Leasehold improvements....................................... -- 3
----- -------
792 2,605
Less accumulated depreciation and amortization............... (313) (662)
----- -------
$ 479 $ 1,943
===== =======

Intangible Assets

Intangible assets include purchased software recorded in connection with
the 1995 Acquisition. The asset is being amortized on a straight-line basis
over a period of 3 years. Total amortization expense relating to the
purchased software was $133,000 in each of the years ended December 31,
1996 and 1997, and is included in cost of software licenses in the
accompanying statements of income.

Income Taxes

Manhattan LLC was treated as a partnership, and Pegasys was an S
Corporation under the provisions of the Internal Revenue Code of 1986, as
amended; therefore, neither company was subject to federal income taxes.
The income or loss of Manhattan LLC and Pegasys was included in the owners'
individual federal and state tax returns, and as such, no provision for
income taxes is recorded in the accompanying statements of income. The
Company and Pegasys have historically made distributions on behalf of the
owners to pay anticipated tax liability.

The accompanying statements of income reflect a provision for income
taxes on a pro forma basis as if the Company were liable for federal and
state income taxes as a taxable corporate entity for the years presented.
The pro forma income tax provision has been computed by applying the
Company's anticipated statutory tax rate to pretax income, adjusted for
permanent tax differences (Note 3).

Capitalized Software Development Costs

Research and development expenses are charged to expense as incurred.
Computer software development costs are charged to research and development
expense until technological feasibility is established, after which
remaining software production costs are capitalized in accordance with
Statement of Financial Accounting Standards ("SFAS") No. 86, "Accounting
for Costs of Computer Software to Be Sold, Leased, or Otherwise

F-10

MANHATTAN ASSOCIATES, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

DECEMBER 31, 1995, 1996 AND 1997
Marketed." The Company has defined technological feasibility as the point
in time at which the Company has a working model of the related product.
Historically, the development costs incurred during the period between the
achievement of technological feasibility and the point at which the product
is available for general release to customers have not been material.
Accordingly, the Company has concluded that the amount of development costs
capitalizable under the provisions of SFAS No. 86 was not material to the
financial statements for the years ended December 31, 1995, 1996, and 1997.
Therefore, the Company has expensed all internal software development costs
as incurred for the years ended December 31, 1995, 1996, and 1997.

Impairment of Long-Lived and Intangible Assets

The Company periodically reviews the values assigned to long-lived
assets, including property and intangible assets, to determine whether any
impairments are other than temporary. Management believes the long-lived
assets in the accompanying balance sheets are appropriately valued.

Basic and Diluted Net Income Per Share

Basic net income per share is computed using historical or pro forma net
income divided by the weighted average number of shares of common stock
outstanding ("Weighted Shares") for the period presented.

Diluted net income per share is computed using historical or pro forma
net income divided by (i) Weighted Shares, and (ii) the treasury stock
method effect of common equivalent shares ("CES's") outstanding for each
period presented. Pro forma basic and diluted net income per share also
includes the number of shares pursuant to the Securities and Exchange
Commission Staff Accounting Bulletin 1B.3, that at the assumed public
offering price would yield proceeds in the amount necessary to pay the
stockholder distribution discussed in Note 9 that is not covered by the
earnings for the year ("Distribution Shares").

No adjustment is necessary for historical and pro forma net income for
net income per share presentation. The following is a reconciliation of the
shares used in the computation of net income per share:

1995 1996 1997
--------------------- --------------------- ---------------------
BASIC DILUTED BASIC DILUTED BASIC DILUTED
---------- ---------- ---------- ---------- ---------- ----------

Weighted shares......... 20,000,008 20,000,008 20,000,008 20,000,008 20,000,008 20,000,008
Effect of CES's......... -- 10,033 -- 307,503 -- 761,300
---------- ---------- ---------- ---------- ---------- ----------
20,000,008 20,010,041 20,000,008 20,307,511 20,000,008 20,761,308
========== ========== ========== ========== ========== ==========

PRO FORMA
---------------------
BASIC DILUTED
---------- ----------

Weighted Shares........................................ 20,000,008 20,000,008
Shares sold to Minority Holder (Note 9)................ 100,000 100,000
Distribution Shares.................................... 89,788 89,788
Effect of CES's........................................ -- 761,300
---------- ----------
20,189,796 20,951,096
========== ==========

F-11

MANHATTAN ASSOCIATES, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

DECEMBER 31, 1995, 1996 AND 1997

Basic and diluted net income per share for the year ended December 31,
1995 has been adjusted to reflect the shares issued in the 1995 Acquisition
as if these shares were outstanding for the entire year.

Stock-Based Compensation Plan

The Company accounts for its stock-based compensation plan for stock
issued to employees under Accounting Principles Board ("APB") Opinion No.
25, "Accounting for Stock Issued to Employees," and, accordingly, records
deferred compensation for options granted at an exercise price below the
fair value of the underlying stock. The deferred compensation is presented
as a component of equity in the accompanying balance sheets and is
amortized over the periods to be benefited, generally the vesting period of
the options. Effective in fiscal year 1996, the Company adopted the pro
forma disclosure option for stock-based compensation issued to employees of
Statement of Financial Accounting Standards ("SFAS") No. 123, "Accounting
for Stock-Based Compensation."

New Accounting Pronouncements

In June 1997, the Financial Accounting Standards Board issued SFAS No.
130, "Reporting Comprehensive Income." SFAS No. 130 is designed to improve
the reporting of changes in equity from period to period. The Company will
adopt SFAS No. 130 effective with its fiscal year ending December 31, 1998.
Management does not expect SFAS No. 130 to have a significant impact on the
Company's financial statements.

In June 1997, the Financial Accounting Standards Board issued SFAS No.
131, "Disclosures About Segments of an Enterprise and Related Information."
SFAS No. 131 requires that an enterprise disclose certain information about
operating segments. The Company will adopt SFAS No. 131 effective with its
fiscal year ending December 31, 1998. The Company does not expect that SFAS
No. 131 will require significant revision of prior disclosures.

The American Institute of Certified Public Accountants has issued SOP 97-
2, "Software Revenue Recognition." This SOP is effective for the Company
for transactions entered into after December 31, 1997. The Company will
adopt the SOP in the first quarter of 1998. The adoption of the standard is
not expected to have a significant impact on the Company's financial
statements.

2. RELATED PARTY TRANSACTIONS

During the years ended December 31, 1995, 1996, and 1997, the Company
contracted with parties related to the Majority Holder for marketing and legal
services for an aggregate amount of $209,000, $289,000, and $389,000
respectively. In the opinion of management, the rates, terms, and
considerations of the transactions with related parties approximate those with
unrelated entities. At December 31, 1996 and 1997, there were no fees
outstanding for the services provided.

3. INCOME TAXES

After the Restructuring, the Company will be subject to future federal and
state income taxes and will record net deferred tax assets. The assets and
liabilities below will be reflected on the balance sheet of the Company with a
corresponding non-recurring income amount in the

F-12

MANHATTAN ASSOCIATES, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

DECEMBER 31, 1995, 1996 AND 1997
statement of income at the completion of the Offering. Deferred tax assets and
liabilities are determined based on the difference between the financial
accounting and the tax bases of assets and liabilities. Significant components
of the Company's pro forma deferred tax assets and liabilities as of December
31, 1997 are as follows:

Deferred tax assets:
Accounts receivable.................................................. $366,000
Accrued liabilities.................................................. 41,000
Other................................................................ 3,000
--------
410,000
--------
Deferred tax liabilities:
Depreciation......................................................... 45,000
--------
Net deferred tax assets................................................ $365,000
========

The components of the pro forma income tax provision for the years ended
December 31, 1995, 1996, and 1997 are as follows:

1995 1996 1997
--------- ---------- ----------

Current:
Federal...................................... $ 635,000 $1,272,000 $2,565,000
State........................................ 75,000 150,000 303,000
--------- ---------- ----------
710,000 1,422,000 2,868,000
--------- ---------- ----------
Deferred:
Federal...................................... (116,000) 57,000 138,000
State........................................ (14,000) 7,000 17,000
--------- ---------- ----------
(130,000) 64,000 155,000
--------- ---------- ----------
Total...................................... $ 580,000 $1,486,000 $3,023,000
========= ========== ==========

The following is a summary of the items which resulted in recorded pro forma
income taxes to differ from taxes computed using the statutory federal income
tax rate for the years ended December 31, 1995, 1996, and 1997:

1995 1996 1997
---- ---- ----

Tax provision at federal statutory rate....................... 34.0% 34.0% 34.0%
Effect of:
State income tax, net of federal benefit.................... 3.9 3.9 3.9
Research and development credits............................ (1.9) (.9) (1.9)
Other....................................................... 0.7 0.4 0.3
---- ---- ----
Pro forma income taxes........................................ 36.7% 37.4% 36.3%
==== ==== ====

4. NOTE PAYABLE TO STOCKHOLDER

The Company's short-term debt consists of a note payable (the "Stockholder
Note") to the Majority Holder, bearing interest at 5%. The Stockholder Note is
due on demand and unpaid interest accrues to the principle balance. The
balance of the Stockholder Note including accrued interest was $969,000 and
$1,019,000 as of December 31, 1996 and 1997, respectively. Subsequent to
December 31, 1997, the Company borrowed additional amounts under the
Stockholder Note. See Note 9.

F-13

MANHATTAN ASSOCIATES, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

DECEMBER 31, 1995, 1996 AND 1997

5. EMPLOYEE BENEFIT PLAN

The Company sponsors the Manhattan Associates 401(k) Plan and Trust (the
"401(k) Plan"), a qualified profit sharing plan with a 401(k) feature covering
substantially all employees of the Company. Under the 401(k) Plan's deferred
compensation arrangement, eligible employees who elect to participate in the
401(k) Plan may contribute up to 10% of eligible compensation, as defined, to
the 401(k) Plan. The Company provides for a 50% matching contribution up to 6%
of eligible compensation being contributed after the participant's first year
of employment. During the years ended December 31, 1995, 1996, and 1997, the
Company made matching contributions to the 401(k) Plan of $0, $48,000, and
$53,000, respectively.

The Company also has a defined contribution pension plan (the "Pension
Plan") covering substantially all employees of the Company.
The Company provides up to 8% of the participant's yearly compensation after
the participant's first year of employment. During the years ended December
31, 1995, 1996, and 1997, the Company made matching contributions to the
Pension Plan of $148,000, $162,000, and $224,000, respectively.

6. STOCK OPTION PLAN

The Company has a stock option plan, the Manhattan Associates LLC Option
Plan (the "Plan"). The Plan is administered by a committee appointed by the
Board of Directors. The total number of shares to be purchased under the Plan
may not exceed 5,000,000 shares. The options are granted at terms determined
by the committee; however, the option cannot have a term exceeding ten years.
The options are exercisable only upon the occurrence of an exercise event
which is the earlier of (1) a change in control, as defined, at which time all
options are fully vested, (2) the date which is nine years and six months
following option grant, or (3) to the extent vested, upon the occurrence of an
initial public offering or whenever more than 50% of the issued and
outstanding shares are acquired by persons who are not shareholders or
affiliates. The agreement provides the Company with the right to repurchase
the options at fair market value prior to an initial public offering. The
Company has 2,368,166 options outstanding under the Plan at December 31, 1997
and has 2,631,834 available for future grants.

Prior to the establishment of the Plan, the Company issued options to
purchase 661,784 shares of common stock to certain employees. These grants
contain provisions similar to options issued under the Plan.

F-14

MANHATTAN ASSOCIATES, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

DECEMBER 31, 1995, 1996 AND 1997

A summary of changes in outstanding options during the years ended December
31, 1995, 1996, and 1997 is as follows:

WEIGHTED
AVERAGE
EXERCISE
OPTIONS PRICE PRICE
--------- --------- --------

December 31, 1994................................. -- $ -- $ --
Granted......................................... 533,326 0.24 0.24
Canceled........................................ -- -- --
Exercised....................................... -- -- --
---------
December 31, 1995................................. 533,326 0.24 0.24
Granted......................................... 128,458 0.56 0.56
Canceled........................................ -- -- --
Exercised....................................... -- -- --
---------
December 31, 1996................................. 661,784 0.24-0.56 0.30
Granted......................................... 2,495,166 2.50-7.50 2.99
Canceled........................................ (127,000) 2.50 2.50
Exercised....................................... -- -- --
---------
December 31, 1997................................. 3,029,950 0.24-7.50 2.42
=========

None of the options are exercisable at December 31, 1997. Upon completion of
the Offering 612,765 options outstanding at December 31, 1997 will become
exercisable.

The Company recorded deferred compensation of $840,000 on options granted
during 1997 as the exercise price was less than the deemed fair value of the
underlying common stock. The Company amortizes deferred compensation over a
period not to exceed six years. The Company recognized compensation expense of
$307,000 for the year ended December 31, 1997 and had deferred compensation
expense of $533,000 at December 31, 1997.

Subsequent to year-end, the Company granted 761,500 options at exercise
prices ranging from $7.50 to $10.00 to employees under the Plan. The Company
recorded deferred compensation on these options of $679,500.

STATEMENT OF FINANCIAL ACCOUNTING STANDARDS NO. 123

Pro forma information regarding net income and net income per share is
required by SFAS No. 123, which also requires that the information be
determined as if the Company had accounted for its employee stock option
grants under the fair value method required by SFAS No. 123. The fair value of
each option grant has been estimated as of the date of grant using the Black-
Scholes option pricing model with the following assumptions:

1995 1996 1997
--------- --------- ---------

Dividend yield.................................... -- -- --
Expected volatility............................... 65% 65% 65%
Risk-free interest rate at the date of grant...... 5.8%-6.3% 5.8%-6.3% 5.7%-6.3%
Expected life..................................... 4-6 years 4-6 years 1-6 years

F-15

MANHATTAN ASSOCIATES, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

DECEMBER 31, 1995, 1996 AND 1997

Using these assumptions, the fair values of the stock options granted during
the years ended December 31, 1995, 1996 and 1997 are $64,882, $34,629 and
$3,625,313, respectively, which would be amortized over the vesting period of
the options.

The weighted average fair market value of options at the date of grant for
the years ended December 31, 1995, 1996 and 1997 was $0.14, $0.30 and $1.67,
respectively.

The following pro forma information adjusts the pro forma net income and pro
forma net income per share of common stock for the impact of SFAS No. 123:

1995 1996 1997
------ ------ ------

Pro forma net income:
As reported............................................. $1,001 $2,490 $5,311
Pro forma in accordance with SFAS No. 123............... $ 998 $2,474 $4,842
Pro forma basic net income per share:
As reported............................................. $ 0.05 $ 0.12 $ 0.26
Pro forma in accordance with SFAS No. 123............... $ 0.05 $ 0.12 $ 0.24
Pro forma diluted net income per share:
As reported............................................. $ 0.05 $ 0.12 $ 0.25
Pro forma in accordance with SFAS No. 123............... $ 0.05 $ 0.12 $ 0.23

The following table summarizes the range of exercise price, weighted average
exercise price, and weighted average remaining contractual lives for the
options outstanding as of December 31, 1997:

WEIGHTED
AVERAGE
WEIGHTED WEIGHTED REMAINING
RANGE OF AVERAGE AVERAGE CONTRACTUAL
NUMBER OF EXERCISE FAIR EXERCISE LIFE
YEAR OF GRANT SHARES PRICE VALUE PRICE (YEARS)
------------- --------- --------- -------- -------- -----------

1995
Options granted at fair
market value 533,326 $ 0.24 $0.24 $0.24 7.81
1996
Options granted at fair
market value 128,458 0.56 0.56 0.56 8.64
1997
Options granted at fair
market value 1,650,166 2.50 2.50 2.50 9.24
Options granted at less than
fair market value 650,000 3.50-4.25 5.25 3.85 9.90
Options granted at fair
market value 68,000 7.50 7.50 7.50 9.96
---------
3,029,950
=========

7. STOCKHOLDERS' EQUITY

OPERATING AGREEMENT

All owners of the Company's common stock are parties to the Company's
operating agreement (the "Operating Agreement"). This Operating Agreement
provides, among other things, the right of first refusal to the Company and
then to all other stockholders of the Company to purchase any selling
stockholders' shares at a price equal to that offered to outside third
parties. Upon completion of the Offering, these provisions of the Operating
Agreement will terminate.

F-16

MANHATTAN ASSOCIATES, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

DECEMBER 31, 1995, 1996 AND 1997

ISSUANCE OF STOCK

On May 5, 1997, the Majority Holder granted to two employees and a
consultant, all of whom are related to the Majority Holder, options to
purchase shares of the Company's stock from the Majority Holder. This grant
did not result in additional shares being outstanding as the shares under
option were currently outstanding and held by the Majority Holder. This grant
included a grant of an option to purchase 80,000 and 50,000 shares of the
Company's stock held by the Majority Holder to two employees of the Company
and a grant of an option to purchase 50,000 shares of the Company's stock held
by the Majority Holder to a consultant of the Company. The stock options were
then exercised by the employees and the consultant of the Company for a
nonrecourse, noninterest-bearing note to the Majority Holder with a term equal
to the contractual term of the option. The exercise price was equal to the
fair value of the Company' s stock at the date of grant of $2.50 per share.
The Company recorded the grant to the employees of the Company under APB
Opinion No. 25 and recorded no compensation expense on the date of grant as
the grant was issued at fair value and due to the nonvariable nature of the
nonrecourse note. The Company recorded $75,000 of compensation expense in the
year ended December 31, 1997 for the option granted to the consultant.

8. COMMITMENTS AND CONTINGENCIES

LEASES

On September 24, 1997, the Company entered into a 62-month lease for office
space beginning on November 1, 1997. The lease requires monthly payments of
$90,000 for the 14-month period ended December 31, 1998 subject to annual
increases as defined. Prior to the lease entered into on September 24, 1997,
the Company was party to a lease agreement ending in 2001. The agreement
required monthly payments of approximately $20,000 subject to an increase of
3% in each 12-month period after the first year. Additionally, the Company
received the first month's rent free. The 3% escalation and the first month's
free rent were recognized on a straight-line basis over the life of the lease.
Accordingly, as of December 31, 1996 and 1997, the Company has recorded a
liability for deferred rent in the amount of $122,000 and $108,000,
respectively, included in accrued liabilities in the accompanying balance
sheets.

The Company terminated their occupancy under the previous lease, and is
still bound by the terms of the lease. Management believes that the Company
has adequately accrued for the estimated costs exceeding future estimated
sublease rental receipts.

Rents charged to expense were approximately $130,000, $257,000, and $466,000
for the years ended December 31, 1995, 1996, and 1997, respectively. Aggregate
future minimum lease payments under noncancellable operating leases as of
December 31, 1997 are as follows (in thousands):

December 31:
1998............................................................. $1,361
1999............................................................. 1,369
2000............................................................. 1,380
2001............................................................. 1,234
2002 and thereafter.............................................. 1,084
------
$6,428
======

F-17

MANHATTAN ASSOCIATES, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

DECEMBER 31, 1995, 1996 AND 1997

LEGAL MATTERS

Many of the Company's installations involve products that are critical to
the operations of its clients' businesses. Any failure in a Company product
could result in a claim for substantial damages against the Company,
regardless of the Company's responsibility for such failure. Although the
Company attempts to limit contractually its liability for damages arising from
product failures or negligent acts or omissions, there can be no assurance the
limitations of liability set forth in its contracts will be enforceable in all
instances.

The Company is subject to legal proceedings and claims which have arisen in
the ordinary course of business. In the opinion of management, the amount of
potential liability with respect to these actions will not materially affect
the financial position or results of operations of the Company.

9.SUBSEQUENT EVENTS

DISTRIBUTION

Prior to the completion of the Offering, the Company intends to distribute
all undistributed income, calculated on a tax basis, to the shareholders of
Manhattan LLC. As of December 31, 1997, the undistributed income, calculated
on a tax basis, of the Company was $8,704,000 and the Company expects to
accumulate additional undistributed income from January 1, 1998 through the
date of the Restructuring. These distributions will be funded through a series
of payments from available Company cash and from the proceeds of the Company's
line of credit. It is anticipated that any such advances or balance on the
line of credit incurred to fund these distributions will be repaid using a
portion of the net proceeds of the Offering.

STOCKHOLDER NOTE

Subsequent to December 31, 1997, the Company borrowed an additional $900,000
from the Majority Holder under the Stockholder Note. The balance of the
Stockholder Note will be repaid with the proceeds of the Offering.

SALE OF STOCK TO MINORITY HOLDER

One of the Company's Minority Holders purchased 100,000 shares of the
Company's common stock for $1,000,000 on February 16, 1998.

ACQUISITION

On February 16, 1998, the Company purchased all of the outstanding stock of
Performance Analysis Corporation ("PAC") for $2,200,000 in cash and 106,666
shares of the Company's common stock valued at $10.00 per share (the "PAC
Acquisition"). PAC is a developer of distribution center slotting software.
The PAC Acquisition will be accounted for as a purchase.

The purchase price of approximately $3,300,000, has been allocated to the
assets acquired and liabilities assumed of $464,000, including acquired
research and development of $2,067,000, purchased software of $500,000, and
other intangible assets of $300,000. Purchased software will be amortized over
an estimated three-year useful life and other intangible assets will be
amortized over a seven-year useful life. In connection with the PAC
Acquisition, the Company plans to record a charge to income of $2,067,000 in
the first quarter of 1998 for acquired research and development.

F-18

MANHATTAN ASSOCIATES, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

DECEMBER 31, 1995, 1996 AND 1997

UNAUDITED PRO FORMA INFORMATION

The accompanying unaudited pro forma balance sheet as of December 31, 1997
is adjusted to reflect (i) the PAC Acquisition by including the historical
balance sheet of PAC and the Company as of December 31, 1997 adjusted to
reflect the payment of cash of $2,200,000 for the purchase of PAC, $65,000 in
transaction costs, the issuance of 106,666 shares of common stock valued at
$10.00 per share, the establishment of the purchased software of $500,000 and
other intangible assets of $300,000 and the charge to income of $2,067,000 for
acquired research and development (ii) the establishment of net deferred
income tax assets of $365,000 in connection with the Restructuring, (iii) the
payment of the undistributed income, calculated on a tax basis, approximately
$8,704,000 as of December 31, 1997 and (iv) the purchase of 100,000 shares by
the Minority Holder for $1,000,000.

The following is a rollforward of retained earnings on a pro forma basis
assuming the PAC Acquisition occurred on December 31, 1997:

TOTAL
-----------

Historical retained earnings...................................... $ 6,858,000
Establishment of net deferred tax assets.......................... 365,000
Acquired research and development................................. (2,067,000)
Acquisition of PAC net assets..................................... 464,000
Distribution of accumulated undistributed earnings................ (8,704,000)
-----------
Pro forma retained earnings....................................... $(3,084,000)
===========

In the opinion of management, all adjustments necessary to present fairly
such unaudited pro forma balance sheet and statements of income have been
made. The pro forma information does not give effect to the proceeds to the
Company of the Offering.

10.RESTRUCTURING

On , to effect the Restructuring, Manhattan LLC contributed all of its
assets and liabilities to the Company in exchange for common stock of the
Company. Manhattan LLC then distributed the common stock of the Company
received to its stockholders and Manhattan LLC was dissolved. All share and
per share data in the accompanying financial statements have been adjusted to
reflect the Restructuring.

F-19

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Performance Analysis Corporation:

We have audited the accompanying balance sheet of PERFORMANCE ANALYSIS
CORPORATION (a North Carolina corporation) as of December 31, 1997 and the
related statement of income and retained earnings and cash flows for the year
then ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Performance Analysis
Corporation as of December 31, 1997 and the results of its operations and its
cash flows for the year then ended in conformity with generally accepted
accounting principles.

ARTHUR ANDERSEN LLP

Atlanta, Georgia
February 16, 1998

F-20

PERFORMANCE ANALYSIS CORPORATION

BALANCE SHEET

DECEMBER 31, 1997

ASSETS
Current assets:
Cash and cash equivalents.......................................... $467,000
Accounts receivable, net of a $22,400 allowance for doubtful
accounts.......................................................... 337,200
Deferred income taxes.............................................. 16,400
--------
Total current assets............................................. 820,600
--------
Furniture and equipment:
Furniture and equipment............................................ 125,500
Less accumulated depreciation...................................... (94,600)
--------
Furniture and equipment, net..................................... 30,900
--------
Other assets:
Deposits........................................................... 1,600
--------
Total assets..................................................... $853,100
========
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Accrued liabilities................................................ $124,800
Income taxes payable............................................... 74,100
Deferred revenue................................................... 130,300
Customer deposits.................................................. 53,400
--------
Total current liabilities........................................ 382,600
--------
Deferred income taxes................................................ 6,000
--------
Commitments and contingencies
Stockholder's equity:
Common stock, $1.00 par value; 10,000 shares authorized, 1,000
issued and outstanding............................................ 1,000
Retained earnings.................................................. 463,500
--------
Total stockholder's equity....................................... 464,500
--------
Total liabilities and stockholder's equity....................... $853,100
========

The accompanying notes are an integral part of this balance sheet.

F-21

PERFORMANCE ANALYSIS CORPORATION

STATEMENT OF INCOME AND RETAINED EARNINGS

YEAR ENDED DECEMBER 31, 1997

Revenue:
Software license.................................................. $ 737,600
Services.......................................................... 599,900
----------
Total revenue................................................... 1,337,500
----------
Cost of services revenue............................................ 253,500
----------
Gross margin........................................................ 1,084,000
Operating expenses:
Research and development.......................................... 363,800
Sales and marketing............................................... 322,900
General and administrative........................................ 144,000
----------
Total operating expenses........................................ 830,700
----------
Income from operations.............................................. 253,300
Other income, net................................................... 24,700
----------
Income before provision for income taxes............................ 278,000
Provision for income taxes.......................................... 88,900
----------
Net income.......................................................... 189,100
Retained earnings, balance December 31, 1996........................ 274,400
----------
Retained earnings, balance December 31, 1997........................ $ 463,500
==========

The accompanying notes are an integral part of this statement.

F-22

PERFORMANCE ANALYSIS CORPORATION

STATEMENT OF CASH FLOWS

YEAR ENDED DECEMBER 31, 1997

Cash flows from operating activities:
Net income........................................................ $ 189,100
---------
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation.................................................... 17,800
Changes in operating assets and liabilities:
Accounts receivable, net...................................... (253,500)
Deposits...................................................... 5,000
Accrued liabilities........................................... 55,100
Deferred income taxes......................................... 33,700
Income taxes payable.......................................... 16,600
Deferred revenue.............................................. 84,800
Customer deposits............................................. (41,500)
Deferred taxes, noncurrent.................................... 1,700
---------
Total adjustments........................................... (80,300)
---------
Net cash provided by operating activities................... 108,800
---------
Cash flows from investing activities:
Purchases of furniture and equipment.............................. (12,200)
---------
Increase in cash and cash equivalents............................... 96,600
Cash and cash equivalents, beginning of year........................ 370,400
---------
Cash and cash equivalents, end of year.............................. $ 467,000
=========
Supplemental cash flow disclosure:
Cash paid for interest............................................ $ --
=========
Income taxes paid................................................. $ 24,100
=========

The accompanying notes are an integral part of this statement.

F-23

PERFORMANCE ANALYSIS CORPORATION

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31,1997

1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNT POLICIES

Organization

Performance Analysis Corporation ("the "Company") was established in 1983 in
the state of North Carolina. The Company is a developer of distribution center
slotting software. The Company offers periodic ongoing maintenance support of
its products. The Company also offers fee-based installation and training. The
Company markets its products throughout the southeastern United States and
Canada.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with original
maturities of three months or less to be cash or cash equivalents.

Furniture and Equipment

Furniture and equipment are recorded at cost and are depreciated primarily
using straight line depreciation over three to seven years.

Income Taxes

The provision for income taxes is based on income recognized for financial
statement purposes and includes the effects of temporary differences between
such income and that recognized for tax return purposes.

Revenue Recognition

The Company's revenue consists of software license revenue and fees for
services complementary to its software products, including installation,
training, and maintenance.

Revenue from software license is recognized upon signing of a contract and
delivery of the product, if there are no significant vendor obligations and
provided that amounts are due within one year and collection is considered
probable. If significant postdelivery obligations exist, the revenue from the
sale of the software license as well as other components of the contract is
recognized using contract accounting. Maintenance and support revenue
represent amounts paid by users for the support and enhancements of the
software. Revenues from these support services are recognized ratably over the
term of the software support services agreement, typically 12 months. If
maintenance is included in the original license contract, such amounts are
unbundled from the license fee and recognized over the free contracted support
period. Revenues and expenses relating to implementation and training
performed by the Company are recognized as the services are performed.

Deferred Revenues

Revenue may be deferred due to installation, training and support services
not yet performed.

Customer Deposits

Amounts collected prior to the delivery of software products represent a
customer deposit.

Capitalized Software Development Costs

Research and development expenses are charged to expense as incurred.
Computer software development costs are charged to research and development
expense until

F-24

PERFORMANCE ANALYSIS CORPORATION

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

DECEMBER 31, 1997

technological feasibility is established, after which remaining software
production costs are capitalized in accordance with Statement of Financial
Accounting Standards ("SFAS") No. 86, "Accounting for Costs of Computer
Software to Be Sold, Leased, or Otherwise Marketed." The Company has defined
technological feasibility as the point in time at which the Company has a
working model of the related product. Historically, the development costs
incurred during the period between the achievement of technological
feasibility and the point at which the product is available for general
release to customers have not been material. Accordingly, the Company has
concluded that the amount of development costs capitalizable under the
provisions of SFAS No. 86 was not material to the financial statements for the
year ended December 31, 1997. Therefore, the Company has charged all software
development costs to expense as incurred for the years ended December 31,
1997.

Warranty Costs

The Company generally warranties its products for 30 to 90 days and provides
for estimated warranty costs upon delivery of such products. Warranty cost
have not been and are not anticipated to be significant.

Concentrations of Credit Risk

Concentrations of credit risk with respect to accounts receivable are
limited due to the wide variety of customers and markets for which the
Company's services are provided. As a result, as of December 31, 1997, the
Company did not consider itself to have any significant concentrations of
credit risk. During 1997, the Company's five largest customers accounted for
approximately 37% of the Company's total revenues. Although the particular
customers may change from period to period, the Company expects that large
sales to a limited number of customers will continue to account for a
significant percentage of its revenues in any particular period for the
foreseeable future.

Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities, the
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expense during the
reporting period. Actual results could differ from those estimates.

Fair Value of Financial Instruments

The book values of accounts receivable, accrued liabilities and other
financial instruments approximate their fair values principally because of the
short-term maturities of these instruments.

F-25

PERFORMANCE ANALYSIS CORPORATION

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

DECEMBER 31, 1997

In June 1997, the Financial Accounting Standards Board issued SFAS No. 130,
"Reporting Comprehensive Income." SFAS No. 130 is designed to improve the
reporting of changes in equity from period to period. SFAS No. 130 is
effective for the Company's fiscal year ending December 31, 1998. Management
does not expect SFAS No. 130 to have a significant impact on the Company's
financial statements.

In June 1997, the Financial Accounting Standards Board issued SFAS No. 131,
"Disclosures About Segments of an Enterprise and Related Information." SFAS
No. 131 requires that an enterprise disclose certain information about
operating segments. SFAS No. 131 is effective for financial statements for the
Company's fiscal year ending December 31, 1998. The Company does not expect
that SFAS No. 131 will require significant revision of prior disclosures.

The American Institute of Certified Public Accountants has issued SOP 97-2,
"Software Revenue Recognition." The adoption of the standard is not expected
to have a significant impact on the Company's financial statements.

2. INCOME TAXES

Deferred tax assets and liabilities are determined based on the difference
between the financial accounting and tax bases of assets and liabilities.
Significant components of the Company's deferred tax assets and liabilities as
of December 31, 1997 are a follows:

Deferred tax assets:
Accrued liabilities........................................... $ 72,000
Deferred revenue.............................................. 85,500
Allowance for doubtful accounts............................... 9,200
--------
166,700
--------
Deferred tax liabilities:
Receivables................................................... 150,300
Depreciation.................................................. 6,000
--------
156,300
--------
Net deferred tax asset.......................................... $ 10,400
========

F-26

PERFORMANCE ANALYSIS CORPORATION

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

DECEMBER 31, 1997

The components of the income tax provision for the years ended December 31,
1997 are as follows:

Current:
Federal........................................................ $47,400
State.......................................................... 5,600
Deferred
Federal........................................................ 32,100
State.......................................................... 3,800
-------
Provision for income taxes................................... $88,900
=======

The following is a summary of the items which caused recorded income taxes
to differ from taxes computed using the statutory federal income tax rate for
the year ended December 31, 1997:

Tax provision at statutory rate:
Federal........................................................... 34.0%
State............................................................. 4.0
----
38.0
State income tax benefit.......................................... (1.2)
Research and development credits.................................. (6.2)
Other............................................................. 1.4
----
Provision for income taxes.......................................... 32.0%
====

4. EMPLOYEE BENEFIT PLAN

The Company sponsors the 401(k) Profit Sharing Plan (the "Plan"), covering
substantially all employees of the Company. Under the Plan's deferred
compensation arrangement, eligible employees who elect to participate in the
Plan may contribute up to 15% of eligible compensation, as defined, to the
Plan. The Company may provide for a matching contribution which is determined
by the Company each plan year. During the year ended December 31, 1997, the
Company made matching contributions to the Plan of $11,000.

5. COMMITMENTS AND CONTINGENCIES

LEASE COMMITMENTS

At December 31, 1997, the future minimum operating lease payments under
noncancelable operating leases were as follows:

1998.............................................................. $52,250
1999.............................................................. 53,590
2000.............................................................. 3,921

The Company's operating leases are primarily for office space and other
equipment. Total rental expense for operating leases was $51,700 in 1997.

F-27

PERFORMANCE ANALYSIS CORPORATION

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

DECEMBER 31, 1997
LEGAL PROCEEDINGS

The Company is subject to legal proceedings and claims which arise in the
ordinary course of business. In the opinion of management, the amount of
potential liability with respect to these potential actions would not
materially affect the financial position or results of operations of the
Company.

6. SUBSEQUENT EVENT

SALE OF THE COMPANY

On February 16, 1998, the Company was acquired by Manhattan Associates, LLC
("Manhattan"), pursuant to which the Company became a 100% wholly owned
subsidiary of Manhattan Associates, LLC. The Company exchanged all of the
Company's outstanding common stock for cash of $2,200,000 and 106,666 shares
of Manhattan common stock.

F-28

TITLE: Manhattan Associates' Blue Chip Customer Base
GRAPHIC: In the top left corner is text reading: "Manhattan Associates' Blue
Chip Customer Base" and "250 Customers". To the right of the text is
the Manhattan Associates logo. The body of the page consists of the
Logos of the following Manhattan customers: Conair, Nordstrom,
Patagonia, Duck Head, Playtex, Remington, Seiko, Delta, Mikasa, Dean
Foods, Rain Bird, PPG, Familian and Brother.

[INSIDE BACK COVER]

PkMS(R) and the Manhattan Associates, Inc. logo are registered trademarks of
the Company. This Prospectus also includes trademarks, service marks and trade
names of other companies.

NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY IN-
FORMATION OR MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS, IN
CONNECTION WITH THE OFFERING COVERED BY THIS PROSPECTUS. IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AU-
THORIZED BY THE COMPANY OR THE UNDERWRITERS. THIS PROSPECTUS DOES NOT CONSTI-
TUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, THE COMMON STOCK
IN ANY JURISDICTION WHERE, OR TO ANY PERSON TO WHOM, IT IS UNLAWFUL TO MAKE
SUCH AN OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY
SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THERE HAS NOT BEEN ANY CHANGE IN THE FACTS SET FORTH IN THIS PROSPECTUS
OR IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.

TABLE OF CONTENTS

PAGE
----

Prospectus Summary........................................................ 3
The Company............................................................... 4
Risk Factors.............................................................. 5
Conversion from Limited Liability Company Status and Related
Distributions............................................................ 16
Use of Proceeds........................................................... 17
Dividend Policy........................................................... 17
Capitalization............................................................ 18
Dilution.................................................................. 19
Selected Financial Data................................................... 20
Management's Discussion and Analysis of Financial Condition and Results of
Operations............................................................... 21
Business.................................................................. 31
Management................................................................ 43
Certain Transactions...................................................... 52
Principal and Selling Stockholders........................................ 54
Description of Capital Stock.............................................. 55
Shares Eligible for Future Sale........................................... 58
Underwriting.............................................................. 60
Legal Matters............................................................. 62
Experts................................................................... 62
Additional Information.................................................... 62
Index to Financial Statements............................................. F-1

UNTIL , 1998 (25 DAYS FROM THE DATE OF THIS PROSPECTUS), ALL DEALERS EF-
FECTING TRANSACTIONS IN THE REGISTERED SECURITIES, WHETHER OR NOT PARTICIPAT-
ING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN
ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS
UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
- -------------------------------------------------------------------------------

LOGO
[OF MANHATTAN ASSOCIATES APPEARS HERE]

3,000,000 SHARES

COMMON STOCK

DEUTSCHE MORGAN GRENFELL

HAMBRECHT & QUIST

SOUNDVIEW FINANCIAL GROUP, INC.

PROSPECTUS

, 1998

PART II

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

Securities and Exchange Commission registration fee.............. $ 12,213
NASD and Blue Sky fees and expenses.............................. $ 20,000
Nasdaq National Market listing fee............................... $ 112,795
Accountants' fees and expenses................................... $ 300,000
Legal fees and expenses.......................................... $ 300,000
Transfer Agent's fees and expenses............................... $ 15,000
Printing and engraving expenses.................................. $ 200,000
Miscellaneous.................................................... $ 239,992
Total Expenses................................................. $1,200,000

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS

The Company's Bylaws provide that the Company shall indemnify each of its
officers, directors, employees and agents to the extent that he or she is or
was a party, or is threatened to be made a party, to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative because he or she is or was a director,
officer, employee or agent of the Company, against reasonable expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
in connection with such action, suit or proceeding; provided, however, that no
indemnification shall be made for (i) any appropriation, in violation of his
duties, of any business opportunity of the Company, (ii) acts or omissions
which involve intentional misconduct or a knowing violation of law, (iii) any
liability under Section 14-2-832 of the GBCC, which relates to unlawful
payments of dividends and unlawful stock repurchases and redemptions, or (iv)
any transaction from which he derived an improper personal benefit.

Section 6(b) of the Underwriting Agreement filed as Exhibit 1.1 hereto also
contains certain provisions pursuant to which certain officers, directors and
controlling persons of the Company may be entitled to be indemnified by the
underwriters named therein.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES

During the past three years, the Registrant has sold the securities set
forth below which were not registered under the Securities Act.

In connection with the restructuring of Company from a limited liability
company to a business corporation, Manhattan Associates, Inc. will issue
20,206,674 shares of Common Stock to stockholders of Manhattan Associates
Software, LLC ("Manhattan LLC") on the date of the Prospectus in consideration
for their contribution of all of the assets and liabilities of Manhattan LLC
to the Company in a transaction exempt under Sections 4(2) of the Securities
Act.

In connection with the organization of the Company, in January 1998, the
Company issued an aggregate of 100 shares of its Common Stock to Alan J.
Dabbiere, Deepak Raghavan, Deepak M.J. Rao and Ponnambalam Muthiah at a price
of $1.00 per share in a transaction exempt under Section 4(2) of the
Securities Act. These shares will be redeemed simultaneously with the
consummation of the Restructuring at their original purchase price.

In connection with an investment by Deepak Raghavan, the Chief Technology
Officer of the Company, of $1,000,000 in Manhattan LLC on February 16, 1998,
Manhattan LLC issued 100,000 of its shares to Mr. Raghavan in a transaction
exempt under Section 4(2) of the Securities Act.

II-1

In connection with the acquisition of all of the outstanding shares of
Performance Analysis Corporation ("PAC") on February 16, 1998, Manhattan LLC
issued 106,666 of its shares valued at an aggregate value of $1,066,660, to
Daniel Basmajian, Sr., the sole stockholder of Performance Analysis
Corporation, a North Carolina corporation, in a transaction exempt from
registration under Rules 505 and 506 of Regulation D and Section 4(2) of the
Securities Act.

In connection with the initial formation of Manhattan LLC, Manhattan LLC
issued 875,000 of its shares to Alan J. Dabbiere, Deepak Raghavan, Deepak M.J.
Rao and Ponnambalam Muthiah, who are also the members of the Board of Managers
of Manhattan LLC, in a transaction exempt from registration under Section 4(2)
of the Securities Act.

Giving effect to the Restructuring, the Company has issued options to
purchase the following shares of its Common Stock on the dates indicated
pursuant to Section 4(2) and Rule 701:

NUMBER OF
DATE OF GRANT SHARES PURCHASABLE
------------- ------------------

April 8, 1997............................................ 80,000
April 28, 1997........................................... 120,000
July 1, 1997............................................. 197,000
August 1, 1997........................................... 22,000
August 11, 1997.......................................... 200,000
September 24, 1997....................................... 130,000
November 14, 1997........................................ 350,000
November 25, 1997........................................ 150,000
December 1, 1997......................................... 120,000
December 2, 1997......................................... 5,000
December 9, 1997......................................... 15,000
December 15, 1997........................................ 68,000
December 22, 1997........................................ 10,000
January 2, 1998.......................................... 441,500
January 12, 1998......................................... 16,000
January 15, 1998......................................... 220,000
January 23, 1998......................................... 4,000
January 26, 1998......................................... 1,000
February 2, 1998......................................... 69,000
February 4, 1998......................................... 3,000
February 6, 1998......................................... 36,000
February 16, 1998........................................ 174,000
February 18, 1998........................................ 2,000
February 19, 1998........................................ 11,000
February 28, 1998........................................ 160,000
March 2, 1998............................................ 5,500
March 9, 1998............................................ 6,000
March 16, 1998........................................... 4,000

II-2

ITEM 16. EXHIBITS

EXHIBIT
NUMBER DESCRIPTION
------- -----------

1.1 Form of Underwriting Agreement.
2.1 Amended and Restated Subscription and Contribution Agreement between
Manhattan Associates Software, LLC, the direct and indirect
stockholders of Manhattan Associates Software, LLC and the Registrant
dated March 31, 1998.
3.1* Articles of Incorporation of the Registrant.
3.2* Bylaws of the Registrant.
4.1* Provisions of the Articles of Incorporation and Bylaws of the
Registrant defining rights of the holders of Common Stock of the
Registrant.
4.2 Specimen Stock Certificate.
5.1 Opinion of Morris, Manning & Martin, L.L.P., Counsel to the
Registrant, as to the legality of the shares being registered.
10.1* Lease Agreement by and between Wildwood Associates, a Georgia general
partnership, and the Registrant dated September 24, 1997.
10.2* First Amendment to Lease between Wildwood Associates, a Georgia
general partnership, and the Registrant, dated October 31, 1997.
10.3* Summary Plan Description of the Registrant's Money Purchase Plan &
Trust, effective January 1, 1997.
10.4* Summary Plan Description of the Registrant's 401(k) Plan and Trust,
effective January 1, 1995.
10.5* Form of Indemnification Agreement with certain directors and officers
of the Registrant.
10.6* Contribution Agreement between the Registrant and Daniel Basmajian,
Sr.
10.7 Form of Tax Indemnification Agreement for direct and indirect
stockholders of Manhattan Associates Software, LLC.
10.8 Second Amendment to Lease between Wildwood Associates, a Georgia
general partnership, and the Registrant, dated February 27, 1998.
10.9* Share Purchase Agreement between Deepak Raghavan and the Registrant
effective as of February 16, 1998.
10.10* Manhattan Associates, Inc. Stock Incentive Plan.
10.11* Manhattan Associates, LLC Option Plan.
10.12* Grid Promissory Note of the Registrant in favor of Alan J. Dabbiere.
10.13 Loan and Security Agreement by and between Silicon Valley Bank and the
Registrant, dated March 30, 1998.
10.14 Executive Employment Agreement executed by Neil Thall.
10.15 Executive Employment Agreement executed by Michael Casey.
10.16 Executive Employment Agreement executed by Greg Cronin.
10.17 Employment Agreement executed by Oliver Cooper.
10.18 Form of License Agreement, Software Maintenance Agreement and
Consulting Agreement.
21.1 List of Subsidiaries.
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Morris, Manning & Martin, L.L.P. (included in Exhibit 5.1).
24.1* Powers of Attorney (included on signature page).
27.1* Financial Data Schedule.
99.1* Report of Independent Public Accountants.
99.2 Consents of Independent Directors to be Named in the Registration
Statement.

- --------

* Previously Filed.

II-3

ITEM 17. UNDERTAKINGS

(a) The undersigned Registrant hereby undertakes to provide to the
Underwriters at the closing specified in the Underwriting Agreement
certificates in such denominations and registered in such names as required by
the Underwriters to permit prompt delivery to each purchaser.

(b) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that, in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.

(i) For purposes of determining any liability under the Securities Act,
the information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in the form
of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of the
Registration Statement as of the time it was declared effective.

(ii) For purposes of determining any liability under the Securities Act,
each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.

II-4

SIGNATURES

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT, THE REGISTRANT HAS DULY
CAUSED THIS AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT TO BE SIGNED ON ITS
BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF ATLANTA,
STATE OF GEORGIA ON THE 2ND DAY OF APRIL, 1998.

Manhattan Associates, Inc.

/s/ Alan J. Dabbiere
By: ___________________________________
ALAN J. DABBIERE
CHAIRMAN OF THE BOARD,
CHIEF EXECUTIVE OFFICER AND
PRESIDENT

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT, THIS REGISTRATION
STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE
DATES INDICATED.

SIGNATURE TITLE DATE

/s/ Alan J. Dabbiere
- ------------------------------------ Chairman of the April 2, 1998
ALAN J. DABBIERE Board, Chief
Executive Officer
and President
(Principal
Executive Officer)

/s/ Michael J. Casey
- ------------------------------------ Chief Financial April 2, 1998
MICHAEL J. CASEY Officer and
Treasurer
(Principal
Financial and
Accounting
Officer)

/s/ Deepak Raghavan Director
- ------------------------------------ April 2, 1998
DEEPAK RAGHAVAN

II-5

SCHEDULE II

MANHATTAN ASSOCIATES, INC.
VALUATION AND QUALIFYING ACCOUNTS
ALLOWANCE FOR DOUBTFUL ACCOUNTS

BALANCE AT CHARGED TO BALANCE AT
BEGINNING COSTS AND CHARGED TO END OF THE
OF THE PERIOD EXPENSES OTHER ACCTS DEDUCTIONS PERIOD
------------- ---------- ----------- ---------- ----------

1995 $ -- $242,780 $ -- $142,780 b $100,000
1996 100,000 225,000 -- -- 325,000
1997 325,000 395,000 250,000 a -- 970,000

- --------
a Charged to services revenue
b Represents the write-off of accounts previously reserved


                                                                     EXHIBIT 1.1




                              DATED APRIL __, 1998
                              --------------------

                                        

                           MANHATTAN ASSOCIATES, INC.

                                3,000,000 shares
                                  COMMON STOCK
                                        


                             ----------------------

                             UNDERWRITING AGREEMENT

                             ----------------------



                                                                                

 
                           MANHATTAN ASSOCIATES, INC.

                                  Common Stock
                                  ------------


                             UNDERWRITING AGREEMENT
                             ----------------------
                                        


                                        
                                                                  April __, 1998

DEUTSCHE MORGAN GRENFELL INC.
HAMBRECHT & QUIST LLC
SOUNDVIEW FINANCIAL GROUP, INC.
As Representatives of the several Underwriters

c/o Deutsche Morgan Grenfell Inc.
31 West 52nd Street
New York, New York 10019


Dear Sirs:

          Manhattan Associates, Inc. (the "Company"), a Georgia corporation and
the successor to Manhattan Associates Software, LLC, formerly known as Manhattan
Associates, LLC, a Georgia limited liability company ("Manhattan LLC"), and the
persons named in Schedule 2 hereto (the "Selling Stockholders") hereby confirm
their agreement with the several underwriters named in Schedule 1 hereto (the
"Underwriters"), for whom you have been duly authorized to act as
representatives (the one or more firms acting in such capacities, the
"Representatives"), as set forth below.  If you are the only Underwriters, all
references herein to the Representatives shall be deemed to be references to the
Underwriters.

Section 1.  Underwriting.  Subject to the terms and conditions contained herein:
- ----------  ------------                                                        

          (a) The Company proposes to issue and sell 3,000,000 shares of common
stock, par value $.01 per share (the "Common Stock"), of the Company, (the "Firm
Shares") to the several Underwriters.  The Selling Stockholders propose to sell
not more than 450,000 shares of Common Stock (the "Option Shares" and, together
with the Firm Shares, the "Shares") to the several Underwriters if requested by
the Representatives as provided in Section 2(b) hereof.

                                       1

 
          (b) Upon your authorization of the release of the Firm Shares, the
Underwriters propose to make a public offering (the "Offering") of the Firm
Shares upon the terms set forth in the Prospectus (as defined below) as soon
after the Registration Statement (as defined below) and this Agreement have
become effective as in the Representatives' sole judgment is advisable.  As used
in this Agreement, the term "Original Registration Statement" means the
registration statement (File No. 333-47095) initially filed with the Securities
and Exchange Commission (the "Commission") relating to the Shares, as amended
through the time when it was or is declared effective, including all financial
schedules and exhibits thereto and including any information omitted therefrom
pursuant to Rule 430A under the Securities Act of 1933, as amended (the
"Securities Act"), and included in the Prospectus; the term "Rule 462(b)
Registration Statement" means any registration statement filed with the
Commission pursuant to Rule 462(b) under the Securities Act (including the
Registration Statement and any Preliminary Prospectus (as defined below) or
Prospectus incorporated therein at the time such Registration Statement becomes
effective); the term "Registration Statement" includes both the Original
Registration Statement and any Rule 462(b) Registration Statement; the term
"Preliminary Prospectus" means each prospectus subject to completion filed with
the Original Registration Statement or any amendment thereto (including the
prospectus subject to completion, if any, included in the Original Registration
Statement or any amendment thereto at the time it was or is declared effective);
the term "Prospectus" means:

               (i) if the Company relies on Rule 434 under the Securities Act,
               the Term Sheet (as defined below) relating to the Shares that is
               first filed pursuant to Rule 424(b)(7) under the Securities Act,
               together with the Preliminary Prospectus identified therein that
               such Term Sheet supplements;

               (ii) if the Company does not rely on Rule 434 under the
               Securities Act, the prospectus first filed with the Commission
               pursuant to Rule 424(b) under the Securities Act;

               (iii)  if the Company does not rely on Rule 434 under the
               Securities Act and if no prospectus is required to be filed
               pursuant to Rule 424(b) under the Securities Act, the prospectus
               included in the Registration Statement; or

               (iv) for purposes of the representations and warranties contained
               in Section 5 hereof, if the prospectus is not in existence, the
               most recent Preliminary Prospectus;

     and the term "Term Sheet" means any term sheet that satisfies the
     requirements of Rule 434 under the Securities Act.  Any reference herein to
     the "date" of a Prospectus that includes a Term Sheet shall mean the date
     of such Term Sheet.


Section 2.  Purchase and Closing.
- ----------  -------------------- 

          (a) On the basis of the representations, warranties, agreements and
covenants

                                       2

 
herein contained and subject to the terms and conditions herein set forth, the
Company agrees to issue and sell to each of the Underwriters, and each of the
Underwriters, severally and not jointly, agrees to purchase from the Company at
a purchase price of $___ per Share (the "Purchase Price"), the number of Firm
Shares set forth opposite the name of such Underwriter in Schedule 1 hereto.
Firm Shares shall be registered by Chase Mellon Shareholder Services in the name
of the nominee of the Depository Trust Company ("DTC"), Cede & Co. ("Cede &
Co."), and credited to the accounts of such of its participants as the
Representatives shall request, upon notice to the Company at least 48 hours
prior to the First Closing Date (as defined below), with any transfer taxes
payable in connection with the transfer of the Firm Shares to the Underwriters
duly paid, against payment by or on behalf of the Underwriters to the account of
the Company of the aggregate Purchase Price therefor by wire transfer in
immediately available funds.  Delivery or registry of and payment for the Firm
Shares shall be made at the offices of Morris, Manning & Martin, L.L.P., 1600
Atlanta Financial Center, 3343 Peachtree Road, N.E., Atlanta, GA  30326 at 9:30
A.M., New York City time, on April ___, 1998 on the [third] [fourth] full
business day following the date of this Agreement, or at such other place, time
or date as the Representatives and the Company may agree upon. Such time and
date of delivery against payment are herein referred to as the "First Closing
Date", and the implementation of all the actions described in this Section 2(a)
is herein referred to as the "First Closing".

          (b) For the purpose of covering any over-allotments in connection with
the distribution and sale of the Firm Shares as contemplated by the Prospectus,
the Selling Stockholders hereby grant to the several Underwriters an option to
purchase, severally and not jointly, the Option Shares.  The purchase price to
be paid for any Option Shares shall be the same as the Purchase Price for the
Firm Shares set forth above in paragraph (a) of this Section 2.  The option
granted hereby may be exercised as to all or any part of the Option Shares from
time to time within thirty days after the date of the Prospectus (or, if such
30th day shall be a Saturday or Sunday or a holiday, on the next business day
thereafter when the New York Stock Exchange and the Nasdaq Stock Market's
National Market (the "Nasdaq National Market") are open for trading).  The
Underwriters shall not be under any obligation to purchase any of the Option
Shares prior to the exercise of such option.  The Representatives may from time
to time exercise the option granted hereby by giving notice in writing or by
telephone (confirmed in writing) to the Selling Stockholders setting forth the
aggregate number of Option Shares as to which the several Underwriters are then
exercising the option and the date and time for delivery or registry of and
payment for such Option Shares.  Any such date of delivery or registry shall be
determined by the Representatives but shall not be earlier than two business
days or later than five business days after such exercise of the option and, in
any event, shall not be earlier than the First Closing Date.  The time and date
set forth in such notice, or such other time or date as the Representatives and
the Selling Stockholders may agree upon or as the Representatives may determine
pursuant to Section 2(a) hereof, is herein called an "Option Closing Date" with
respect to such Option Shares, and the implementation of all the actions
described in this Section 2(b) is herein referred to as the "Option Closing".
As used in this Agreement, the term "Closing Date" means either the First
Closing Date or any Option Closing Date, as applicable, and the term "Closing"
means either the First Closing or any Option Closing, as applicable.  If the
option is exercised as to all or any portion of the Option
Shares, then either one or more certificates in definitive form for such Option
Shares shall be delivered or, if such 

                                       3

 
Option Shares are to be held through DTC, such Option Shares shall be registered
and credited, on the related Option Closing Date in the same manner, and upon
the same terms and conditions, set forth in paragraph (a) of this Section 2,
except that reference therein to the Firm Shares and the First Closing Date
shall be deemed, for purposes of this paragraph (b), to refer to such Option
Shares and Option Closing Date, respectively. Upon exercise of the option as
provided herein, the Selling Stockholders shall become obligated to sell to each
of the several Underwriters, and, on the basis of the representations,
warranties, agreements and covenants herein contained and subject to the terms
and conditions herein set forth, each of the Underwriters (severally and not
jointly) shall become obligated to purchase from the Selling Stockholders the
same percentage of the total number of the Option Shares as to which the several
Underwriters are then exercising the option as such Underwriter is obligated to
purchase of the aggregate number of Firm Shares, as adjusted by the
Representatives in such manner as they deem advisable to avoid fractional
shares. If the option granted hereby is exercised for less than the maximum
number of Option Shares, the respective number of Option Shares to be sold by
each of the Selling Stockholders listed on Schedule 2 hereto shall be determined
on a pro rata basis in accordance with the number of shares set forth opposite
their names on Schedule 2 hereto, as adjusted by the Representatives in such
manner as they deem advisable to avoid fractional shares.

          (c) The Company and the Selling Stockholders hereby acknowledge that
the payment of monies pursuant to Section 2(a) hereof (a "Payment") by or on
behalf of the Underwriters of the aggregate Purchase Price for any Shares does
not constitute closing of a purchase and sale of the Shares.  Only execution and
delivery, by facsimile or otherwise, of a receipt for Shares by the Underwriters
indicates completion of the closing of a purchase of the Shares from the Company
and the Selling Stockholders.  Furthermore, in the event that the Underwriters
make a Payment to the Company and the Selling Stockholders prior to the
completion of the closing of a purchase of Shares, the Company and the Selling
Stockholders hereby acknowledge that until the Underwriters execute and deliver
such receipt for the Shares, the Company and the Selling Stockholders will not
be entitled to the Payment and shall return the Payment to the Underwriters as
soon as practicable (by wire transfer of same-day funds) upon demand.  In the
event that the closing of a purchase of Shares is not completed and the Payment
is not returned by the Company and the Selling Stockholders to the Underwriters
on the same day the Payment was received by the Company and the Selling
Stockholders, the Company and the Selling Stockholders agree to pay to the
Underwriters in respect of each day the Payment is not returned by them, in
same-day funds, interest on the amount of such Payment in an amount representing
the Underwriters' cost of financing as reasonably determined by the
Representatives, pro rata in proportion to the percentage of such Payment
                 --------                                                
received by each.

          (d) It is understood that any of you, individually and not as one of
the Representatives, may (but shall not be obligated to) make Payment on behalf
of any Underwriter or Underwriters for any of the Shares to be purchased by such
Underwriter or Underwriters. No

                                       4

 
such Payment shall relieve such Underwriter or Underwriters from any of its or
their obligations hereunder.


Section 3.  Covenants.
- ----------  --------- 


          (a) The Company covenants and agrees with the several Underwriters
that:


               (i)  The Company will:


                    (x) use its best efforts to cause the Registration
                    Statement, if not effective at the time of execution of this
                    Agreement, and any amendments thereto to become effective as
                    promptly as possible.  If required, the Company will file
                    the Prospectus or any Term Sheet that constitutes a part
                    thereof and any amendment or supplement thereto with the
                    Commission in the manner and within the time period required
                    by Rules 434 and 424(b) under the Securities Act.  During
                    any time when a prospectus relating to the Shares is
                    required to be delivered under the Securities Act, the
                    Company (I) will comply with all requirements imposed upon
                    it by the Securities Act and the rules and regulations of
                    the Commission thereunder to the extent necessary to permit
                    the continuance of sales of or dealings in the Shares in
                    accordance with the provisions hereof and of the Prospectus,
                    as then amended or supplemented, and (II) will not file with
                    the Commission the Prospectus, Term Sheet, any amendment or
                    supplement to such Prospectus or Term Sheet, any amendment
                    to the Registration Statement (including the amendment
                    referred to in the second sentence of Section 5(a)(i)
                    hereof) or any Rule 462(b) Registration Statement unless the
                    Representatives previously have been advised of, and
                    furnished with a copy within a reasonable period of time
                    prior to, the proposed filing and the Representatives shall
                    have given their consent to such filing.  The Company will
                    prepare and file with the Commission, in accordance with the
                    rules and regulations of the Commission, promptly upon
                    request by the Representatives or counsel for the
                    Underwriters, any amendments to the Registration Statement
                    or amendments or supplements to the Prospectus that may be
                    necessary or advisable in connection with the distribution
                    of the Shares by the several Underwriters.  The Company will
                    advise the Representatives, promptly after receiving notice
                    thereof, of the time when the Registration Statement or any
                    amendment thereto has been filed or declared effective or
                    the Prospectus or Term Sheet or any amendment or supplement
                    thereto has been filed and will provide evidence
                    satisfactory to the Representatives of each such filing or
                    effectiveness.

                                       5

 
                    (y) without charge, provide (I) to the Representatives and
                    to counsel for the Underwriters, an executed and a conformed
                    copy of the Original Registration Statement and each
                    amendment thereto or any Rule 462(b) Registration Statement
                    (in each case including exhibits thereto), (II) to each
                    other Underwriter, a conformed copy of the Original
                    Registration Statement and each amendment thereto or any
                    Rule 462(b) Registration Statement (in each case without
                    exhibits thereto), and (III) so long as a prospectus
                    relating to the Shares is required to be delivered under the
                    Securities Act, as many copies of each Preliminary
                    Prospectus or the Prospectus or any amendment or supplement
                    thereto as the Representatives may reasonably request.
                    Without limiting the application of clause (III) of the
                    preceding sentence, the Company, not later than (A) 9:00
                    A.M., New York City time, on the business day following the
                    date of determination of the public offering price, if such
                    determination occurred at or prior to 12:00 noon, New York
                    City time, on such date or (B) 6:00 P.M., New York City
                    time, on the business day following the date of
                    determination of the public offering price, if such
                    determination occurred after 12:00 noon, New York City time,
                    on such date, will deliver to the Underwriters, without
                    charge, as many copies of the Prospectus and any amendment
                    or supplement thereto as the Representatives may reasonably
                    request for purposes of confirming orders that are expected
                    to settle on the First Closing Date.

                    (z) advise the Representatives, promptly after receiving
                    notice or obtaining knowledge thereof, of (I) the issuance
                    by the Commission of any stop order suspending the
                    effectiveness of the Original Registration Statement or any
                    amendment thereto or any Rule 462(b) Registration Statement
                    or any order preventing or suspending the use of any
                    Preliminary Prospectus or the Prospectus or any amendment or
                    supplement thereto, (II) the suspension of the qualification
                    of the Shares for offering or sale in any jurisdiction,
                    (III) the institution, threatening or contemplation of any
                    proceeding for any purpose identified in the preceding
                    clause (I) or (II), or (IV) any request made by the
                    Commission for amending the Original Registration Statement
                    or any Rule 462(b) Registration Statement, for amending or
                    supplementing the Prospectus or for additional information.
                    The Company will use its best efforts to prevent the
                    issuance of any such stop order and, if any such stop order
                    is issued, to obtain the withdrawal thereof as promptly as
                    possible.


               (ii) The Company will arrange for the qualification of the Shares
               for offering and sale in each jurisdiction as the Representatives
               shall designate including, but not limited to, pursuant to
               applicable state securities ("Blue Sky") laws of certain states
               of the United States of America or other U.S.
               jurisdictions, and the Company shall maintain such qualifications
               in effect 

                                       6

 
               for so long as may be necessary in order to complete the
               placement of the Shares; provided, however, that the Company
               shall not be obliged to file any general consent to service of
               process or to qualify as a foreign corporation or as a securities
               dealer in any jurisdiction or to subject itself to taxation in
               respect of doing business in any jurisdiction in which it is not
               otherwise so subject.

               (iii)  If, at any time prior to the final date when a prospectus
               relating to the Shares is required to be delivered under the
               Securities Act, any event occurs as a result of which the
               Prospectus, as then amended or supplemented, would include any
               untrue statement of a material fact or omit to state any material
               fact necessary in order to make the statements therein, in the
               light of the circumstances under which they were made, not
               misleading, or if for any other reason it shall be necessary at
               any time to amend the Registration Statement or amend or
               supplement the Prospectus to comply with the Securities Act or
               the rules or regulations of the Commission thereunder or
               applicable law, the Company will promptly notify the
               Representatives thereof and will promptly, at its own expense,
               but subject to the second sentence of Section 3(a)(i)(x) hereof:
               (x) prepare and file with the Commission an amendment to the
               Registration Statement or amendment or supplement to the
               Prospectus which will correct such statement or omission or
               effect such compliance; and (y) supply any amended Registration
               Statement or amended or supplemented Prospectus to the
               Underwriters in such quantities as the Underwriters may
               reasonably request.

               (iv) The Company will make generally available to the Company's
               securityholders and to the Representatives as soon as practicable
               an earnings statement that satisfies the provisions of Section
               11(a) of the Securities Act, including Rule 158 thereunder.

               (v) The Company will apply the net proceeds from the sale of the
               Shares as set forth under "Use of Proceeds" in the Prospectus.

               (vi) The Company will not, and will not allow any subsidiary to,
               publicly announce any intention to, and will not itself, and will
               not allow any subsidiary to, without the prior written consent of
               the Representatives, on behalf of the Underwriters, (x) offer,
               pledge, sell, offer to sell, contract to sell, sell any option or
               contract to purchase, purchase any option to sell, grant any
               option, right or warrant to purchase, or otherwise transfer or
               dispose of, directly or indirectly, any shares of Common Stock or
               any securities convertible into, or exercisable or exchangeable
               for, Common Stock, or (y) enter into any swap or other agreement
               that transfers, in whole or in part, any of the economic
               consequences of ownership of the shares of Common Stock or
               securities convertible into, or exercisable or
               exchangeable for, shares of Common Stock (whether any such
               transaction 

                                       7

 
               described in clause (x) or (y) above is to be settled by delivery
               of shares of Common Stock or such other securities, in cash or
               otherwise), for a period beginning from the date hereof and
               continuing to and including the date 180 days after the date
               hereof, except pursuant to this Agreement and other than with
               respect to shares of Common Stock (or any securities convertible
               into or exchangeable for shares of Common Stock) issued pursuant
               to any employee benefit plans, qualified stock option plans or
               other employee compensation plans which are disclosed in the
               Prospectus.

               (vii)  Neither the Company nor any of its affiliates, nor any
               person acting on behalf of any of them will, directly or
               indirectly, (x) take any action designed to cause or to result
               in, or that has constituted or which might reasonably be expected
               to constitute, the stabilization or manipulation of the price of
               any security of the Company to facilitate the sale or resale of
               the Shares or (y) (I) sell, bid for, purchase, or pay anyone any
               compensation for soliciting purchases of, the Shares or (II) pay
               or agree to pay to any person any compensation for soliciting
               another to purchase any other securities of the Company.

               (viii)  During a period of ninety (90) days after the date
               hereof, the Company will not file a registration statement
               registering shares under any employee benefit plans, qualified
               stock option plans or other employee compensation plans.

               (ix) The Company will obtain the agreements described in Section
               7(i) hereof prior to the First Closing Date.

               (x) If at any time during the 25-day period after the
               Registration Statement becomes effective or during the period
               prior to any Closing Date, any rumor, publication or event
               relating to or affecting the Company shall occur as a result of
               which in the Representatives' sole judgment the market price of
               the Shares has been or is likely to be materially affected
               (regardless of whether such rumor, publication or event
               necessitates a supplement to or amendment of the Prospectus), the
               Company will, after notice from the Representatives advising the
               Company to the effect set forth above, forthwith prepare, consult
               with the Representatives concerning the substance of, and
               disseminate a press release or other public statement reasonably
               satisfactory to the Representatives, responding to or commenting
               on such rumor, publication or event.

               (xi) If the Company elects to rely on Rule 462(b), the Company
               shall both file the Rule 462(b) Registration Statement with the
               Commission in compliance with Rule 462(b) and pay the applicable
               fees in accordance with Rule 111 promulgated under the Securities
               Act by the earlier of (x) 10:00 P.M. New York City time on the
               date of this Agreement and (y) the time confirmations are sent or
               given, as specified by Rule 462(b)(2) under the Securities Act.

                                       8

 
               (xii)  The Company will cause the Shares to be duly included for
               quotation on the Nasdaq National Market prior to the First
               Closing Date.  The Company will ensure that the Shares remain
               included for quotation on the Nasdaq National Market following
               the First Closing Date.

               (xiii)  In connection with the transfer of all assets and
               liabilities of Manhattan LLC to the Company, the Company will
               amend the existing, or obtain a new, INS Form I-9 for each alien
               employee working for the Company pursuant to a H-1B, non-
               immigrant work permitted visa within the time requirements of all
               applicable immigration laws.


          (b)  Each Selling Stockholder covenants and agrees with the several
               Underwriters that:


               (i) It will not, and no person acting on behalf of such Selling
               Stockholder will, directly or indirectly, (x) take any action
               designed to cause or to result in, or that has constituted or
               which might reasonably be expected to constitute, the
               stabilization or manipulation of the price of any security of the
               Company to facilitate the sale or resale of the Shares or (y) (I)
               sell, bid for, purchase, or pay anyone any compensation for
               soliciting purchases of, the Shares or (II) pay or agree to pay
               to any person any compensation for soliciting another to purchase
               any other securities of the Company (except for the sale of
               Shares by the Selling Stockholders under this Agreement).

               (ii) It will not, and will not allow any subsidiary to, publicly
               announce any intention to, and will not itself, and will not
               allow any subsidiary to, without the prior written consent of
               Deutsche Morgan Grenfell Inc. ("DMG") on behalf of the
               Underwriters, (x) offer, pledge, sell, offer to sell, contract to
               sell, sell any option or contract to purchase, purchase any
               option or contract to sell, grant any option, right or warrant to
               purchase, or otherwise transfer or dispose of, directly or
               indirectly, any of the shares of Common Stock or any securities
               convertible into, or exercisable or exchangeable for, Common
               Stock, or (y) enter into any swap or other agreement or any
               transaction that transfers, in whole or in part, any of the
               economic consequences of ownership of the shares of Common Stock
               or any securities convertible into, or exercisable or
               exchangeable for, shares of Common Stock (whether any such
               transaction described in clause (x) or (y) above is to be settled
               by delivery of shares of Common Stock or such other securities,
               in cash or otherwise), in each case, beneficially owned (within
               the meaning of Rule 13d-3 under the Exchange Act) or otherwise
               controlled by such person on the date hereof or hereafter
               acquired, for a period beginning from the date hereof and
               continuing to and including the
               date 180 days after the date hereof; provided, however, that such
               Selling 

                                       9

 
               Stockholder may, without the prior written consent of DMG on
               behalf of the Underwriters, transfer shares of Common Stock or
               such other securities to one or more members of such Selling
               Stockholder's immediate family or to trusts for the benefit of
               members of such Selling Stockholder's immediate family or in
               connection with bona fide gifts, provided that any transferee
               agrees in writing as a condition precedent to such transfer to be
               bound by the transfer restrictions described above, and there
               shall be no further transfer of any shares of Common Stock or
               such other securities, except in accordance with this Agreement.


Section 4.  Expenses.
- ----------  -------- 


          (a) The Company shall bear and pay all costs and expenses incurred
incident to the performance of its obligations under this Agreement, whether or
not the transactions contemplated herein are consummated or this Agreement is
terminated pursuant to Section 9 hereof, including: (i) fees and expenses of
preparation, issuance and delivery of this Agreement to the Underwriters; (ii)
the fees and expenses of its counsel, accountants and any other experts or
advisors retained by the Company; (iii) the costs of delivering and distributing
the Power of Attorney and Custody Agreements (as defined below) and the fees and
expenses of the Custodian (as defined below) (and any other Attorney-in-Fact (as
defined below)); (iv) fees and expenses incurred in connection with the
registration of the Shares under the Securities Act and the preparation and
filing of the Registration Statement, the Prospectus and all amendments and
supplements thereto; (v) the printing and distribution of the Prospectus and any
Preliminary Prospectus and the printing and production of all other documents
connected with the Offering (including this Agreement and any other related
agreements); (vi) expenses related to the qualification of the Shares under the
state securities or Blue Sky laws, including filing fees and the fees and
disbursements of counsel for the Underwriters in connection therewith and in
connection with the preparation of any Blue Sky memoranda; (vii) the filing fees
and expenses, if any, incurred with respect to any filing with the National
Association of Securities Dealers, Inc. (the "NASD"), including the fees and
disbursements of counsel for the Underwriters in connection therewith; (viii)
all expenses arising from the quoting of the Shares on the Nasdaq National
Market; (ix) all arrangements relating to the preparation, issuance and delivery
to the Underwriters of any certificates evidencing the Shares, including
transfer agent's and registrar's fees; (x) the costs and expenses of the
"roadshow" and any other meetings with prospective investors in the Shares
(other than as shall have been specifically approved by the Representatives to
be paid for by the Underwriters); and (xi) the costs and expenses of advertising
relating to the Offering (other than as shall have been specifically approved by
the Representatives to be paid for by the Underwriters).

          (b) The Selling Stockholders shall bear and pay all costs and expenses
incurred incident to the performance of their respective obligations under this
Agreement, whether or not the transactions contemplated herein are consummated
or this Agreement is terminated pursuant to Section 9 hereof, including: (i) any
stamp duties, capital duties and stock transfer taxes, if any, payable upon the
sale of the Shares of such Selling Stockholders to the Underwriters and (ii) the
fees and disbursements of their respective counsel, accountants and other
advisors.

                                       10

 
Section 5.  Representations and Warranties.
- ----------  ------------------------------ 


          (a) As a condition of the obligation of the Underwriters to underwrite
and pay for the Shares, the Company and the Selling Stockholders jointly and
severally represent and warrant to, and agree with, each of the several
Underwriters as follows:


          Registration Statement and Prospectus


               (i) The Original Registration Statement, including the
          Preliminary Prospectus, has been filed by the Company with the
          Commission under the Securities Act, and one or more amendments to
          such Registration Statement may have been so filed.  After the
          execution of this Agreement, the Company will file with the Commission
          either (x) if such Registration Statement, as it may have been
          amended, has been declared by the Commission to be effective under the
          Securities Act, either (I) if the Company relies on Rule 434 under the
          Securities Act, a Term Sheet relating to the Shares that shall
          identify the Preliminary Prospectus that it supplements containing
          such information as is required or permitted by Rules 434, 430A and
          424(b) under the Securities Act or (II) if the Company does not rely
          on Rule 434 under the Securities Act, a prospectus in the form most
          recently included in an amendment to such Registration Statement (or,
          if no such amendment shall have been filed, in such Registration
          Statement), with such changes or insertions as are required by Rule
          430A under the Securities Act or permitted by Rule 424(b) under the
          Securities Act, and in the case of either clause (I) or (II) of this
          sentence, as have been provided to and approved by the Representatives
          prior to the execution of this Agreement, or (y) if such Registration
          Statement, as it may have been amended, has not been declared by the
          Commission to be effective under the Securities Act, an amendment to
          such Registration Statement, including a form of prospectus, a copy of
          which amendment has been furnished to and approved by the
          Representatives prior to the execution of this Agreement.  The Company
          may also file a Rule 462(b) Registration Statement with the Commission
          for the purpose of registering certain additional Shares, which
          registration shall be effective upon filing with the Commission.

               (ii) The Commission has not issued any order preventing or
          suspending the use of any Preliminary Prospectus.  When any
          Preliminary Prospectus was filed with the Commission, it (x) contained
          all statements required to be stated therein in accordance with, and
          complied in all material respects with the requirements of, the
          Securities Act and the rules and regulations of the Commission
          thereunder and (y) did not include any untrue statement of a material
          fact or omit to state any material fact necessary in order to make the
          statements therein, in the light of the circumstances under which they
          were made, not misleading.  When the Registration Statement or any
          amendment thereto was or is declared effective, it (I) contained or
          will contain all statements required to be stated therein in
          accordance with, and complied or will comply in all material respects
          with the requirements of, the Securities Act and the rules and
          regulations of the Commission thereunder and (II) did not or will not
          contain any untrue

                                       11

 
          statement of a material fact or omit to state any material fact
          required to be stated therein or necessary to make the statements
          therein not misleading. When the Prospectus or any Term Sheet that is
          a part thereof or any amendment or supplement to the Prospectus is
          filed with the Commission pursuant to Rule 424(b) (or, if the
          Prospectus or such amendment or supplement is not required to be so
          filed, when the Registration Statement or the amendment thereto
          containing the Prospectus or such amendment or supplement to the
          Prospectus was or is declared effective) and on the Closing Date, the
          Prospectus, as amended or supplemented at any such time, (A) contained
          or will contain all statements required to be stated therein in
          accordance with, and complied or will comply in all material respects
          with the requirements of, the Securities Act and the rules and
          regulations of the Commission thereunder and (B) did not or will not
          include any untrue statement of a material fact or omit to state any
          material fact necessary in order to make the statements therein, in
          the light of the circumstances under which they were made, not
          misleading. The foregoing provisions of this paragraph (ii) do not
          apply to (x) statements or omissions made in any Preliminary
          Prospectus, the Registration Statement or any amendment thereto or the
          Prospectus or any amendment or supplement thereto in reliance upon and
          in conformity with written information furnished to the Company by any
          Underwriter through the Representatives specifically for use therein
          and (y) statements or omissions made in any Preliminary Prospectus,
          the Registration Statement or any amendment thereto that is corrected
          in the Prospectus (or any amendment or supplement thereto) where
          delivery of the Prospectus (as amended or supplemented) was required
          by the Securities Act.

               (iii)  If the Company has elected to rely on Rule 462(b) and the
          Rule 462(b) Registration Statement is not effective, (x) the Company
          will file a Rule 462(b) Registration Statement in compliance with, and
          that is effective upon filing pursuant to, Rule 462(b) and (y) the
          Company has given irrevocable instructions for transmission of the
          applicable filing fee in connection with the filing of the Rule 462(b)
          Registration Statement, in compliance with Rule 111 under the
          Securities Act, or the Commission has received payment of such filing
          fee.

               (iv) If the Company has elected to rely on Rule 434 under the
          Securities Act, the Prospectus is not "materially different", as such
          term is used in Rule 434, from the prospectus included in the
          Registration Statement at the time of its effectiveness or an
          effective post-effective amendment thereto (including such information
          that is permitted to be omitted pursuant to Rule 430A under the
          Securities Act).

               (v) The Company has not distributed and, prior to the later of
          (x) any Closing Date and (y) the completion of the distribution of the
          Shares, will not distribute any offering material in connection with
          the Offering other than the Registration Statement or any amendment
          thereto, any Preliminary Prospectus or the Prospectus or any amendment
          or supplement thereto.

               (vi) Subsequent to the respective dates as of which information

                                       12

 
          is given in the Registration Statement and the Prospectus, (x) the
          Company and its subsidiaries, taken as a whole, have not incurred any
          material liability or obligation, direct or contingent, nor entered
          into any material transaction not in the ordinary course of business;
          (y) the Company has not purchased any of its outstanding capital
          stock, nor declared, paid or otherwise made any dividend or
          distribution of any kind on its capital stock; and (z) there has not
          been any material change in the capital stock, short-term or long-term
          debt of the Company and its subsidiaries, taken as a whole, except in
          each case as described in or contemplated by the Prospectus.


          The Shares


               (vii)  The Company has an authorized, issued and outstanding
          capitalization as set forth in the Prospectus.  All of the issued
          shares of capital stock of the Company have been duly authorized and
          validly issued and are fully paid and nonassessable, have been issued
          in compliance with all applicable federal, state and other applicable
          securities laws and were not issued in violation of or subject to any
          preemptive rights or other rights to subscribe for or purchase such
          securities.  The Shares have been duly authorized by all necessary
          corporate action of the Company and, after payment therefor in
          accordance herewith, will be validly issued, fully paid and
          nonassessable at the Closing Date.  No holders of outstanding shares
          of capital stock of the Company are entitled as such to any preemptive
          or other rights to subscribe for any of the Shares, and no holder of
          securities of the Company has any right which has not been fully
          exercised or waived to require the Company to register the offer or
          sale of any securities owned by such holder under the Securities Act
          in the Offering contemplated by this Agreement.

               (viii)  Except as disclosed in the Prospectus, there are no
          outstanding (x) securities or obligations of the Company or any of its
          subsidiaries convertible into or exchangeable for any capital stock of
          the Company or any such subsidiary, (y) warrants, rights or options to
          subscribe for or purchase from the Company or any such subsidiary any
          such capital stock or any such convertible or exchangeable securities
          or obligations, or (z) contracts, arrangements, commitments or other
          obligations of the Company or any such subsidiary to issue any shares
          of capital stock, any such convertible or exchangeable securities or
          obligations, or any such warrants, rights or options.  Without
          limiting the generality of the foregoing, except as disclosed in the
          Prospectus, there is no basis upon which any person (except as
          disclosed to the Underwriters as shareholders of the Company) may
          claim to be in any way the record or beneficial owner of, or to be
          entitled to acquire (of record or beneficially), any shares of capital
          stock or other equity securities of the Company, and no person has
          made or threatened to make, or, to the Company's and Selling
          Stockholders' knowledge, will in the future make, any such claim. In
          addition, except as disclosed in the Prospectus, the Company has no
          obligation (contingent or otherwise) to purchase, redeem or otherwise
          acquire any of its shares of capital stock or any interests therein or
          to pay any dividend or

                                       13

 
          make any distribution in respect thereof.

               (ix) Except for the shares of capital stock of each of the
          subsidiaries owned by the Company and such subsidiaries, neither the
          Company nor any such subsidiary owns any shares of stock or any other
          equity securities of any corporation or has any equity interest in any
          firm, partnership, association or other entity, except as described in
          or contemplated by the Prospectus.


          Listing


               (x) All of the Shares have been duly authorized and accepted for
          quotation on the Nasdaq National Market, subject to official notice of
          issuance.


          Market manipulation


               (xi) Neither the Company nor any of its affiliates, nor any
          person acting on behalf of any of them has, directly or indirectly,
          (x) taken any action designed to cause or to result in, or that has
          constituted or which might reasonably be expected to constitute, the
          stabilization or manipulation of the price of any security of the
          Company to facilitate the sale or resale of the Shares, or (y) since
          the filing of the Original Registration Statement (I) sold, bid for,
          purchased, or paid anyone any compensation for soliciting purchases
          of, the Shares or (II) paid or agreed to pay to any person any
          compensation for soliciting another to purchase any other securities
          of the Company.


          Corporate power and authority


               (xii)  The Company has been duly incorporated and is validly
          existing as a corporation in good standing under the law of its
          jurisdiction of incorporation with full power and authority to own,
          lease and operate its properties and assets and conduct its business
          as described in the Prospectus, is duly qualified to transact business
          and is in good standing in each jurisdiction in which its ownership,
          leasing or operation of its properties or assets or the conduct of its
          business requires such qualification, except where the failure to be
          so qualified does not amount to a material liability or disability to
          the Company and its subsidiaries, taken as a whole, and has full power
          and authority to execute and perform its obligations under this
          Agreement; each subsidiary of the Company is a corporation duly
          incorporated and validly existing as a corporation in good standing
          under the laws of its jurisdiction of incorporation and is duly
          qualified to transact business and is in good standing in each
          jurisdiction in which its
          ownership, leasing or operation of its properties or assets or the
          conduct of its business requires such qualification, except where the
          failure to be so qualified does not amount to a material liability or
          disability to the Company and its subsidiaries, taken as a whole, and
          each has full power and authority to own, lease and operate its
          properties and assets and conduct its 

                                       14

 
          business as described in the Registration Statement and the
          Prospectus; all of the issued and outstanding shares of capital stock
          of each of the Company's subsidiaries have been duly authorized and
          are fully paid and nonassessable and are owned beneficially by the
          Company free and clear of any security interests, liens, encumbrances,
          equities or claims.

               (xiii)  The execution and delivery of this Agreement and the
          issuance and sale of the Shares have been duly authorized by all
          necessary corporate action of the Company, and this Agreement has been
          duly executed and delivered by the Company and is the legal, valid and
          binding agreement of the Company, enforceable against the Company in
          accordance with its terms.

               (xiv)  The issuance, offering and sale of the Shares to the
          Underwriters by the Company pursuant to this Agreement, the compliance
          by the Company with the other provisions of this Agreement and the
          consummation of the other transactions herein contemplated do not (x)
          require the consent, approval, authorization, registration or
          qualification of or with any governmental authority, except such as
          have been obtained or made or such as may be required by the state
          securities or Blue Sky laws of the various states of the United States
          of America or other U.S. jurisdictions in connection with the offer
          and sale of the Shares by the Underwriters, or (y) conflict with or
          result in a breach or violation of any of the terms and provisions of,
          or constitute a default under, any indenture, mortgage, deed of trust,
          lease or other agreement or instrument to which the Company or any of
          its subsidiaries is a party or by which the Company or any of its
          subsidiaries or any of their respective properties are bound, or the
          charter documents, limited liability company operating agreements or
          by-laws of the Company or any of its subsidiaries, or any statute or
          any judgment, decree, order, rule or regulation of any court or other
          governmental authority or any arbitrator applicable to the Company or
          any of its subsidiaries.

               (xv) The Company is not, and will conduct its operations in a
          manner so that it continues not to be, an "investment company" and,
          after giving effect to the Offering and the application of the
          proceeds therefrom, will not be an "investment company", as such term
          is defined in the Investment Company Act of 1940, as amended (the
          "1940 Act").


          Title, licenses and consents


               (xvi)  The Company and each of its subsidiaries have good and
          marketable title in fee simple to all items of real property and
          marketable title to all personal property owned by each of them, in
          each case free and clear of any security interests, liens,
          encumbrances, equities, claims and other defects, except such as do
          not materially and adversely affect the value of such property and do
          not interfere with the use made or proposed to be made of such
          property by the Company or such subsidiary, and any real property and
          buildings held under lease by the Company or any such subsidiary are
          held under valid, subsisting

                                       15

 
          and enforceable leases, with such exceptions as are not material and
          do not interfere with the use made or proposed to be made of such
          property and buildings by the Company or such subsidiary, in each case
          except as described in or contemplated by the Prospectus.

               (xvii)  Except as disclosed in the Prospectus, the Company and
          each of its subsidiaries have the right to use all trademarks, trade
          names, trade secrets, servicemarks, inventions, patent rights, mask
          works, copyrights, licenses, software code, audiovisual works,
          formats, algorithms and underlying data, and the Company and each of
          its subsidiaries have all required approvals and governmental
          authorizations now used in, or which are necessary for fulfillment of
          their respective obligations or the conduct of their respective
          businesses as now conducted or proposed to be conducted as described
          in the Prospectus; the expiration of any trademarks, trade names,
          trade secrets, servicemarks, inventions, patent rights, mask works,
          copyrights, licenses, approvals or governmental authorizations would
          not have a material adverse effect on the condition (financial or
          otherwise), earnings, properties, business affairs or business
          prospects, stockholders' equity, net worth or results of operations of
          the Company; and neither the Company nor any of its subsidiaries is
          infringing any trademark, trade name rights, patent rights, mask
          works, copyrights, licenses, trade secret, servicemarks or other
          similar rights of others, and there is no claim being made against the
          Company or any of its subsidiaries regarding trademark, trade name,
          patent, mask work, copyright, license, trade secret or other
          infringement or assertion of intellectual property rights which could
          have a material adverse effect on the earnings, properties, business
          affairs or business prospects, stockholders' equity, net worth or
          results of operations of the Company.  The Company has agreements in
          place with each employee, consultant or other person or party engaged
          by the Company or any subsidiary sufficient to enable the Company and
          any subsidiary to fulfill their contractual and regulatory obligations
          and to conduct their respective businesses as now conducted or
          proposed to be conducted as described in the Prospectus and providing
          for the assignment to the Company of all intellectual property and
          exploitation rights in the work performed and the protection of the
          trade secrets and confidential information of the Company, each of its
          subsidiaries and of third parties.  Except as disclosed in the
          Prospectus, the terms and conditions in the Company's standard form
          end-user License Agreement attached as Exhibit [___] to the
          Registration Statement represent all of the material terms and
          conditions under which the Company or its subsidiaries license their
          computer software to end-users.  The Company's and its subsidiaries'
          computer software (the "Software") is "Millennium Compliant".  For the
          purposes of this Agreement "Millennium Compliant" means:  (a) the
          functions, calculations, and other computing processes of the Software
          (collectively, "Processes") perform in an accurate manner regardless
          of the date in time on which the Processes are actually performed and
          regardless of the date input to the Software, and whether or not the
          dates are affected by leap years; (b) the Software can accept, store,
          sort, extract, sequence, and otherwise manipulate date inputs and date

                                       16

 
          values, and return and display date values, in an accurate manner
          regardless of the dates used or format of the date input; (c) the
          Software will function without interruptions caused by the date in
          time on which the Processes are actually performed or by the date
          input to the Software; (d) the Software accepts and responds to four
          (4) digit year date input in a manner that resolves any ambiguities as
          to the century in an accurate manner; and (e) the Software displays,
          prints and provides electronic output of date information in ways that
          are unambiguous as to the determination of the century.

               (xviii)  The Company and its subsidiaries possess all consents,
          licenses, certificates, authorizations and permits issued by the
          appropriate federal, state or foreign regulatory authorities necessary
          to conduct their respective businesses, and neither the Company nor
          any such subsidiary has received any notice of proceedings relating to
          the revocation or modification of any such certificate, authorization
          or permit which, singly or in the aggregate, if the subject of an
          unfavorable decision, ruling or finding, would have a materially
          adverse effect on or constitute a materially adverse change in, or
          constitute a development involving a prospective materially adverse
          effect on or change in, the condition (financial or otherwise),
          earnings, properties, business affairs or business prospects, net
          worth or results of operations of the Company or any of its
          subsidiaries, taken as a whole, except as described in or contemplated
          by the Prospectus.


          Financial statements


               (xix)  Arthur Andersen, LLP, who have certified certain financial
          statements of the Company and its subsidiaries and delivered their
          report with respect to the audited financial statements and schedules
          included in the Registration Statement and the Prospectus, are
          independent public accountants as required by the Securities Act and
          the applicable rules and regulations thereunder.

               (xx) The financial statements and schedules of the Company and
          its subsidiaries included in the Registration Statement and the
          Prospectus were prepared in accordance with generally accepted
          accounting principles ("GAAP") consistently applied throughout the
          periods involved (except as otherwise noted therein) and they present
          fairly the financial condition of the Company as at the dates at which
          they were prepared and the results of operations of the Company in
          respect of the periods for which they were prepared.


          Internal Accounting Controls


               (xxi)  The Company and each of its subsidiaries maintain a system
          of internal accounting controls sufficient to provide reasonable
          assurance that (w) transactions are executed in accordance with
          management's general or specific authorizations; (x) transactions are
          recorded as necessary to permit preparation of financial statements in

                                       17

 
          conformity with GAAP and to maintain asset accountability; (y) access
          to assets is permitted only in accordance with management's general or
          specific authorization; and (z) the recorded accountability for assets
          is compared with the existing assets at reasonable intervals and
          appropriate action is taken with respect to any differences.


          Litigation


               (xxii)  No legal or governmental proceedings or investigations
          are pending or threatened to which the Company or any of its
          subsidiaries is a party or to which the property of the Company or any
          of its subsidiaries is subject that are required to be described in
          the Registration Statement or the Prospectus and are not described
          therein; and no statutes, regulations, contracts or other documents
          that are required to be described in the Registration Statement or the
          Prospectus or to be filed as exhibits to the Registration Statement
          that are not described therein or filed as required.


          Dividends and Distributions


               (xxiii)  No subsidiary of the Company is currently prohibited,
          directly or indirectly, from paying any dividends to the Company,
          making any other distribution on such subsidiary's capital stock,
          repaying to the Company any loans or advances to such subsidiary from
          the Company or transferring any of such subsidiary's property or
          assets to the Company or any other subsidiary of the Company, and the
          Company is not currently prohibited, directly or indirectly, from
          paying any dividends or making any other distribution on its capital
          stock, in each case except as described in or contemplated by the
          Prospectus.


          Taxes


               (xxiv)  The Company and each of its subsidiaries has filed all
          foreign, federal, state and local tax returns that are required to be
          filed or has requested extensions thereof (except in any case in which
          the failure so to file would not have a materially adverse effect on
          the Company and its subsidiaries, taken as a whole) and the Company
          and each of its subsidiaries has paid all taxes required to be paid by
          it and any other assessment, fine or penalty levied against it, to the
          extent that any of the foregoing is due and payable, except for any
          such assessment, fine or penalty that is currently being contested in
          good faith or as described in or contemplated by the Prospectus.

               (xxv)  All of the assets and liabilities of the Company (other
          than the proceeds of the sale of securities by the underwriters
          pursuant to this Agreement) were transferred to the Company by
          Manhattan LLC.  The assets and liabilities so transferred (the
          "Transferred Property") consist solely of all of the assets and

                                       18

 
          liabilities of Manhattan LLC.  The transfer of the Transferred
          Property to the Company will qualify as a tax-free incorporation under
          Section 351 of the Code; and as a result thereof and of the subsequent
          liquidation of Manhattan LLC and its wholly-owned subsidiary
          Performance Analysis Corporation ("PAC"), except as described in the
          Prospectus, the Company will neither (a) recognize income for federal,
          foreign, state or local tax purposes, nor (b) succeed to any federal,
          foreign, state or local tax liability of any other entity or person
          other than Manhattan LLC and PAC, whether by reason of transferee
          liability or otherwise.  Under no circumstances will the Company
          succeed to any federal, foreign, state or local tax liability of
          Pegasys Systems Incorporated, whether by reason of transferee
          liability or otherwise.


          Insurance


               (xxvi)  The Company and each of its subsidiaries are insured by
          insurers of recognized financial responsibility against such losses
          and risks and in such amounts as are prudent and customary in the
          businesses in which they are engaged; neither the Company nor any such
          subsidiary has been refused any insurance coverage sought or applied
          for; and neither the Company nor any such subsidiary has any reason to
          believe that it will not be able to renew its existing insurance
          coverage as and when such coverage expires or to obtain similar
          coverage from similar insurers as may be necessary to continue its
          business at a cost that would not materially and adversely affect the
          condition (financial or otherwise), earnings, properties, business
          affairs or business prospects, net worth or results of operations of
          the Company or any of its subsidiaries, taken as a whole, except as
          described in or contemplated by the Prospectus.


          Pension and Labor


               (xxvii)  The Company and each of its subsidiaries is in
          compliance in all material respects with all presently applicable
          provisions of the Employee Retirement Income Security Act of 1974, as
          amended, including the regulations and published interpretations
          thereunder ("ERISA"); no "reportable event" (as defined in ERISA) has
          occurred with respect to any "pension plan" (as defined in ERISA) for
          which the Company would have any liability; the Company and each of
          its subsidiaries has not incurred and does not expect to incur
          liability under (x) Title IV of ERISA with respect to termination of,
          or withdrawal from, any "pension plan" or (y) Sections 412 or 4971 of
          the Internal Revenue Code of 1986, as amended, including the
          regulations and published interpretations thereunder (the "Code"); and
          each "pension plan" for which the Company or any of its subsidiaries
          would have any liability that is intended to be qualified under
          Section 401(a) of the Code is so qualified in all material respects
          and nothing has occurred, whether by action or by failure to act,
          which would cause the loss of such qualification.

                                       19

 
               (xxviii)  The Company is in compliance with all applicable
          provisions of the Immigration and Nationality Act of 1990, as amended
          (the "INA"), and regulations published pursuant thereto by the
          Immigration and Naturalization Service (the "INS"), the United States
          Departments of Justice, Labor, State and Health and Human Services,
          and the United States Information Agency (collectively, the
          "Immigration Laws"); the Company:  (a) employs only aliens who are
          properly authorized to be employed in the United States pursuant to
          the Immigration Laws, (b) completes and maintains a valid INS Form I-9
          for each alien employee working for the Company pursuant to a H-1B,
          non-immigrant work permitted visa (a "H-1B Employee"), (c) maintains a
          complete "Public Access" folder for each H-1B Employee, (d) pays the
          proper wage for each H-1B Employee under the Immigration Laws and
          certifies such information to the Department of Labor as required
          pursuant to the Immigration Laws, (e) complies with the requirements
          of the Immigration Laws in all respects in order to maintain the
          lawful status and employability of all alien employees of the Company,
          including, but not limited to, the filing all required INS forms and
          complying with the verification and recordkeeping requirements, (f)
          terminates immediately any employee who is not properly authorized to
          reside and/or be employed in the United States pursuant to the
          Immigration Laws, and (g) maintains copies of all INS and Department
          of Labor decisions, correspondence, notices and other official
          releases relating to the Immigration Laws as necessary to ensure
          compliance of the Company with the Immigration Laws; and there have
          not been any discrimination complaints filed against the Company
          pursuant to the Immigration Laws.

               (xxix)  In connection with the undertaking of Deepak Raghavan,
          employee and stockholder of the Company (the "Investor"), to obtain
          Lawful Permanent Resident status in the United States as an immigrant
          investor pursuant to the Immigration Laws, including, but limited to,
          INA Section 203(b)(5) and Title 8 Code of Federal Regulations - Aliens
          and Nationality, Subchapter B, Section 204.6 (collectively, the
          "Immigrant Investor Laws"), the Company is in compliance with the
          terms and conditions of the Immigrant Investor Laws and, in connection
          therewith, the Company:  (a) was formed or significantly reorganized
          after November 29, 1990, (b) received an investment of one million
          dollars ($1,000,000) in the Company (the "Investment") from the
          Investor in a form that conforms and complies with the requirements of
          the Immigrant Investor Laws and will maintain the Investment in the
          Company until the removal of the conditional status of the Investor's
          Lawful Permanent Resident visa, (c) is a "qualifying enterprise" as
          that term is defined under the Immigrant Investor Laws, (d) used the
          Investment to create at least ten full-time positions within the
          Company with respect to employees who are not members of the
          Investor's immediate family, (e) employs, and will employ, the
          Investor in a position with specific management duties or policy
          formulation authority until the removal of the conditional status of
          the Investor's Lawful Permanent Resident visa, and (f) is in
          compliance, and will maintain compliance, with the Immigration Laws
          and Immigrant Investor Laws in connection with the Investor's lawful

                                       20

 
          immigration and employment status with the Company and his application
          for Lawful Permanent Resident of the United States pursuant to the
          Immigrant Investor Laws.

               (xxx)  No labor dispute with the employees of the Company or any
          of its subsidiaries exists or is threatened or imminent that could
          have a materially adverse effect on or constitute a materially adverse
          change in, or constitute a development involving a prospective
          materially adverse effect on or change in, the condition (financial or
          otherwise), properties, management, earnings, business affairs or
          business prospects, net worth or results of operations of the Company
          or any of its subsidiaries, taken as a whole, except as described in
          or contemplated by the Prospectus.


          Environmental


               (xxxi)  Neither the Company nor any of its subsidiaries is in
          violation of any federal or state law or regulation relating to
          occupational safety and health or to the storage, handling or
          transportation of hazardous or toxic materials and the Company and its
          subsidiaries have received all permits, licenses or other approvals
          required of them under applicable federal and state occupational
          safety and health and environmental laws and regulations to conduct
          their respective businesses, and the Company and each such subsidiary
          is in compliance with all terms and conditions of any such permit,
          license or approval, except any such violation of law or regulation,
          failure to receive required permits, licenses or other approvals or
          failure to comply with the terms and conditions of such permits,
          licenses or approvals which would not, singly or in the aggregate,
          have a materially adverse effect on or constitute a materially adverse
          change in, or constitute a development involving a prospective
          materially adverse effect on or change in, the condition (financial or
          otherwise), earnings, properties, business affairs or business
          prospects, net worth or results of operations of the Company or any of
          its subsidiaries, taken as a whole, except as described in or
          contemplated by the Prospectus.


          Other Agreements


               (xxxii)  No default exists, and no event has occurred which, with
          notice or lapse of time or both, would constitute a default in the due
          performance and observance of any term, covenant or condition of any
          indenture, mortgage, deed of trust, lease or other agreement or
          instrument to which the Company or any of its subsidiaries is a party
          or by which the Company or any of its subsidiaries or any of their
          respective properties is bound.


          Absence of Materially Adverse Change


               (xxxiii)  Subsequent to the respective dates as of which
          information is given in the Registration Statement and the Prospectus,
          neither the Company nor any of its subsidiaries has sustained any
          material loss or interference with their respective businesses or

                                       21

 
          properties from fire, flood, hurricane, accident or other calamity,
          whether or not covered by insurance, or from any labor dispute or any
          legal or governmental proceeding, and there has been no materially
          adverse change (including, without limitation, a change in management
          or control), or development involving a prospective materially adverse
          change, in the condition (financial or otherwise), management,
          earnings, property, business affairs or business prospects,
          stockholders' equity, net worth or results of operations of the
          Company or any of its subsidiaries, taken as a whole, other than as
          described in or contemplated by the Prospectus (exclusive of any
          amendments or supplements thereto).

               (xxxiv)  No receiver or liquidator (or similar person) has been
          appointed in respect of the Company or any subsidiary of the Company
          or in respect of any part of the assets of the Company or any
          subsidiary of the Company; no resolution, order of any court,
          regulatory body, governmental body or otherwise, or petition or
          application for an order, has been passed, made or presented for the
          winding up of the Company or any subsidiary of the Company or for the
          protection of the Company or any such subsidiary from its creditors;
          and the Company has not, and no subsidiary of the Company has, stopped
          or suspended payments of its debts, become unable to pay its debts or
          otherwise become insolvent.


          (b) As a further condition of the obligation of the Underwriters to
underwrite and pay for the Shares, each Selling Stockholder represents and
warrants to, and agrees with, each of the several Underwriters that:


               (i) Such Selling Stockholder has full power (corporate and other)
          to enter into this Agreement and to sell, assign, transfer and deliver
          to the Underwriters the Shares to be sold by such Selling Stockholder
          hereunder in accordance with the terms of this Agreement; the
          execution and delivery of this Agreement have been duly authorized by
          all necessary corporate action of such Selling Stockholder; and this
          Agreement has been duly executed and delivered by such Selling
          Stockholder.

               (ii) Such Selling Stockholder has duly executed and delivered a
          power of attorney and custody agreement (with respect to such Selling
          Stockholder, the "Power of Attorney and Custody Agreement"), each in
          the form heretofore delivered to the Representatives, appointing Alan
          J. Dabbiere and Michael J. Casey as such Selling Stockholder's
          attorney-in-fact (each an "Attorney-in-Fact" and together, the
          "Attorneys-in-Fact") with authority to execute, deliver and perform
          this Agreement on behalf of such Selling Stockholder and appointing
          Manhattan LLC, as custodian thereunder (the "Custodian"). Certificates
          representing shares of Manhattan LLC (the "LLC Shares") in negotiable
          form, endorsed in blank or accompanied by blank stock powers duly
          executed, with signatures appropriately guaranteed, aggregating at
          least the number of Option Shares (on an as-converted basis as if the
          LLC Shares had been exchanged for the Option Shares) to be sold by
          such Selling

                                       22

 
          Stockholder hereunder have been deposited with the Custodian pursuant
          to the Power of Attorney and Custody Agreement for the purpose of
          delivery of the Option Shares pursuant to this Agreement.  Such
          Selling Stockholder has full power (corporate and other) to enter into
          the Power of Attorney and Custody Agreement and to perform its
          obligations under the Power of Attorney and Custody Agreement.  The
          execution and delivery of the Power of Attorney and Custody Agreement
          has been duly authorized by all necessary corporate action of such
          Selling Stockholder; the Power of Attorney and Custody Agreement has
          been duly executed and delivered by such Selling Stockholder and,
          assuming due authorization, execution and delivery by the Custodian,
          is the legal, valid, binding and enforceable instrument of such
          Selling Stockholder.  Such Selling Stockholder agrees that each of the
          Option Shares represented by the certificates on deposit with the
          Custodian is subject to the interests of the Underwriters hereunder,
          that the arrangements made for such custody, the appointment of the
          Attorneys-in-Fact and the right, power and authority of each Attorney-
          in-Fact to execute and deliver this Agreement, to agree on the price
          at which the Shares (including such Selling Stockholder's Option
          Shares) are to be sold to the Underwriters, and to carry out the terms
          of this Agreement, are to that extent irrevocable and that the
          obligations of such Selling Stockholder hereunder shall not be
          terminated, except as provided in this Agreement or the Power of
          Attorney and Custody Agreement, by any act of such Selling
          Stockholder, by operation of law or otherwise, whether in the case of
          any individual Selling Stockholder by the death or incapacity of such
          Selling Stockholder, in the case of a trust or estate by the death of
          the trustee or trustees or the executor or executors or the
          termination of such trust or estate, or in the case of a corporate,
          limited liability company or partnership Selling Stockholder by its
          liquidation or dissolution or by the occurrence of any other event or
          events.  If any individual Selling Stockholder, trustee or executor
          should die or become incapacitated or any such trust should be
          terminated, or if any corporate, limited liability company or
          partnership Selling Stockholder shall liquidate or dissolve, or if any
          other event or events should occur before the delivery of such Option
          Shares hereunder, the certificates for such Option Shares deposited
          with the Custodian shall be delivered by the Custodian in accordance
          with the respective terms and conditions of this Agreement as if such
          death, incapacity, termination, liquidation or dissolution or other
          event or events had not occurred, regardless of whether or not the
          Custodian or the Attorneys-in-Fact shall have received notice thereof.

               (iii)  Such Selling Stockholder is the lawful owner of the Option
          Shares to be sold by such Selling Stockholder hereunder and upon sale
          and delivery of, and payment for, such Option Shares, as provided
          herein, such Selling Stockholder will convey good and marketable title
          to such Option Shares, free and clear of any security interests,
          liens, encumbrances, equities, claims or other defects.

               (iv) Neither such Selling Stockholder nor any person acting on
          behalf of it has, directly or indirectly, (x) taken any action
          designed to cause or to result in, or that has constituted or which
          might reasonably be expected to constitute, the stabilization or

                                       23

 
          manipulation of the price of any security of the Company to facilitate
          the sale or resale of the Shares or (y) since the filing of the
          Original Registration Statement (I) sold, bid for, purchased, or paid
          anyone any compensation for soliciting purchases of, the Shares or
          (II) paid or agreed to pay to any person any compensation for
          soliciting another to purchase any other securities of the Company
          (except for the sale of Option Shares by the Selling Stockholders
          under this Agreement).

               (v) Such Selling Stockholder has reviewed the Prospectus and the
          Registration Statement, and the information regarding such Selling
          Stockholder set forth therein under the caption "Selling Stockholders"
          is complete and accurate.

               (vi) Such Selling Stockholder has reviewed and is familiar with
          the Registration Statement and the Prospectus and neither the
          Prospectus nor any amendments or supplements thereto includes any
          untrue statement of a material fact or omits to state a material fact
          necessary in order to make the statements therein, in light of the
          circumstances under which they were made, not misleading.  Such
          Selling Stockholder is not prompted to sell its Option Shares to be
          sold by such Selling Stockholder hereunder by any adverse information
          concerning the Company or any subsidiary of the Company which is not
          set forth in the Prospectus or the Registration Statement.


               (vii)  Neither such Selling Stockholder nor any of its affiliates
          directly, or indirectly through one or more intermediaries, controls,
          or is controlled by, or is under common control with, or has any other
          association with (within the meaning of Article I, Section (m) of the
          By-laws of the NASD), any member firm of the NASD.

               (viii)  The sale of the Option Shares to the Underwriters by such
          Selling Stockholder pursuant to this Agreement, the compliance by such
          Selling Stockholder with the other provisions of this Agreement, the
          Power of Attorney and Custody Agreement and the consummation of the
          other transactions herein contemplated do not (i) require the consent,
          approval, authorization, registration or qualification of or with any
          governmental authority, except such as have been obtained, such as may
          be required under state securities or blue sky laws and, if the
          registration statement filed with respect to the Shares (as amended)
          is not effective under the Securities Act as of the time of execution
          hereof, such as may be required (and shall be obtained as provided in
          this Agreement) under the Securities Act, or (ii) conflict with or
          result in a breach or violation of any of the terms and provisions of,
          or constitute a default under any indenture, mortgage, deed of trust,
          lease or other agreement or instrument to which such Selling
          Stockholder or any of its subsidiaries is a party or by which such
          Selling Stockholder or any of its subsidiaries or any of their
          respective properties are bound, or the charter documents or by-laws
          of such Selling Stockholder or any of its subsidiaries or any statute
          or any judgment, decree, order, rule or regulation of any court or
          other governmental authority or any arbitrator applicable to such
          Selling Stockholder or any of its subsidiaries.

                                       24

 
          (c) The above representations and warranties with respect to the
Company shall be deemed to be repeated at each Closing and with respect to each
Selling Stockholder at each Closing where such Selling Stockholder is selling
shares to the Underwriters, and all references therein to the Shares and the
Closing Date shall be deemed to refer to the Firm Shares or the Option Shares
and the First Closing Date or the applicable Option Closing Date, each as
applicable.


Section 6.  Indemnity.
- ----------  --------- 


          (a) The Company and each Selling Stockholder jointly and severally
agree to indemnify and hold harmless each Underwriter and each person, if any,
who controls any Underwriter within the meaning of Section 15 of the Securities
Act or Section 20 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), against any and all losses, claims, damages or liabilities,
joint or several, to which such Underwriter or such controlling person may
become subject under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon:


               (i) any untrue statement or alleged untrue statement made by the
               Company or such Selling Stockholder in Section 5 hereof,

               (ii) any untrue statement or alleged untrue statement of any
               material fact contained in the Registration Statement or any
               amendment thereto, any Preliminary Prospectus or the Prospectus
               or any amendment or supplement thereto, or

               (iii)  the omission or alleged omission to state in the
               Registration Statement or any amendment thereto, any Preliminary
               Prospectus or the Prospectus or any amendment or supplement
               thereto a material fact required to be stated therein or
               necessary to make the statements therein not misleading,


and will reimburse, as incurred, each Underwriter and each such controlling
person for any legal or other costs or expenses reasonably incurred by such
Underwriter or such controlling person in connection with investigating,
defending against or appearing as a third-party witness in connection with any
such loss, claim, damage, liability or action; provided, however, that the
Company and such Selling Stockholder will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon any untrue statement or alleged untrue statement or omission or alleged
omission made in the Registration Statement or any amendment thereto, any
Preliminary Prospectus, the Prospectus or any amendment or supplement thereto in
reliance upon and in conformity with written information furnished to the
Company by such Underwriter through the Representatives specifically for use
therein.  The indemnity provided for in this Section 6 shall be in addition to
any liability which the Company and such Selling Stockholder may otherwise have.
Neither the Company nor any Selling Stockholder will, without the prior written
consent of the Representatives, settle or compromise or consent to the entry of

                                       25

 
any judgment in any pending or threatened claim, action, suit or proceeding in
respect of which indemnification may be sought hereunder (whether or not any
such Representatives or any person who controls any such Representatives is a
party to such claim, action, suit or proceeding), unless such settlement,
compromise or consent includes an unconditional release of all of the
Underwriters and such controlling persons from all liability arising out of such
claim, action, suit or proceeding.  Notwithstanding any other provision of this
paragraph (a), no Selling Stockholder shall be required to provide
indemnification hereunder as to any amount in excess of the amount by which the
proceeds (after deducting underwriting discounts or commissions) received by
such Selling Stockholder exceed the amount of any damages which such Selling
Stockholder has otherwise been required to pay in respect of the same or any
substantially similar claim.


          (b) Each Underwriter, severally and not jointly, will indemnify and
hold harmless the Company, each of its directors, each of its officers who
signed the Registration Statement, each Selling Stockholder and each person, if
any, who controls the Company or such Selling Stockholder within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act against any
losses, claims, damages or liabilities to which the Company or any such director
or officer of the Company, such Selling Stockholder or any such controlling
person of the Company or such Selling Stockholder may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon (i)
any untrue statement or alleged untrue statement of any material fact contained
in the Registration Statement or any amendment thereto, any Preliminary
Prospectus or the Prospectus or any amendment or supplement thereto or (ii) the
omission or the alleged omission to state in the Registration Statement or any
amendment thereto, any Preliminary Prospectus or the Prospectus or any amendment
or supplement thereto a material fact required to be stated therein or necessary
to make the statements therein not misleading, in each case to the extent, but
only to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity with
written information furnished to the Company by such Underwriter through the
Representatives specifically for use therein, and, subject to the limitation set
forth immediately preceding this clause, will reimburse, as incurred, any legal
or other expenses reasonably incurred by the Company or any such director,
officer or controlling person of the Company or such Selling Stockholder or
controlling person of such Selling Stockholder in connection with investigating,
defending against or appearing as a third-party witness in connection with any
such loss, claim, damage, liability or any action in respect thereof.
Notwithstanding any other provision of this paragraph (b), no Underwriter shall
be obligated to provide indemnification hereunder as to any amount that in the
aggregate exceeds the total public offering price of the Shares purchased by
such Underwriter under this Agreement, less the aggregate amount of any damages
that such Underwriter has otherwise been required to pay in respect of the same
or any substantially similar claim. The remedies provided for in this Section 6
are not exclusive and shall not limit any rights or remedies which may otherwise
be available to any indemnified party at law or in equity.

          (c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to paragraph (a) or (b) of this Section 6, such person (for
purposes of this paragraph (c), the "indemnified party") shall, promptly after
receipt by such party of notice of the commencement of such action, notify the
person against whom such indemnity may be sought (for purposes of this paragraph

                                       26

 
(c), the "indemnifying party"), but the omission so to notify the indemnifying
party will not relieve it from any liability which it may have to any
indemnified party otherwise than under this Section 6.  In case any such action
is brought against any indemnified party, and it notifies the indemnifying party
of the commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party; provided, however, that if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be one or more legal defenses available to it and/or other
indemnified parties which are different from or additional to those available to
the indemnifying party, the indemnifying party shall not have the right to
direct the defense of such action on behalf of such indemnified party or parties
and such indemnified party or parties shall have the right to select separate
counsel to defend such action on behalf of such indemnified party or parties.
After notice from the indemnifying party to such indemnified party of its
election so to assume the defense of any such action and approval by such
indemnified party of counsel appointed to defend such action, the indemnifying
party will not be liable to such indemnified party under this Section 6 for any
legal or other expenses, other than reasonable costs of investigation,
subsequently incurred by such indemnified party in connection with the defense
thereof, unless (i) the indemnified party shall have employed separate counsel
in accordance with the proviso to the next preceding sentence (it being
understood, however, that in connection with such action the indemnifying party
shall not be liable for the expenses of more than one separate counsel (in
addition to local counsel) in any one action or separate but substantially
similar actions in the same jurisdiction arising out of the same general
allegations or circumstances, designated in writing by the Representatives in
the case of paragraph (a) of this Section 6, representing the indemnified
parties under such paragraph (a) who are parties to such action or actions), or
(ii) the indemnifying party does not promptly retain counsel satisfactory to the
indemnified party, or (iii) the indemnifying party has authorized the employment
of counsel for the indemnified party at the expense of the indemnifying party.
All fees and expenses reimbursed pursuant to this paragraph (c) shall be
reimbursed as they are incurred.  After such notice from the indemnifying party
to such indemnified party, the indemnifying party will not be liable for the
costs and expenses of any settlement of such action effected by such indemnified
party without the consent of the indemnifying party.

          (d) In circumstances in which the indemnity agreement provided for in
the preceding paragraphs of this Section 6 is unavailable or insufficient, for
any reason, to hold harmless an indemnified party in respect of any losses,
claims, damages or liabilities (or actions in respect thereof), each
indemnifying party, in order to provide for just and equitable contribution,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (or actions in respect
thereof) in such proportion as is appropriate to reflect (i) the relative
benefits received by the indemnifying party or parties on the one hand and the
indemnified party on the other from the Offering or (ii) if the allocation
provided by the foregoing clause (i) is not permitted by applicable law, not
only such relative benefits but also the relative fault of the indemnifying
party or parties on the one hand and the indemnified party on the other in
connection with the statements or omissions or alleged statements or omissions
that resulted in such losses, claims, damages or liabilities (or actions in
respect thereof), as well as any other relevant equitable considerations.  The
relative benefits received by the Company and the Selling Stockholders on the

                                       27

 
one hand and the Underwriters on the other shall be deemed to be in the same
proportion as the total proceeds from the Offering (before deducting expenses)
received by the Company and the Selling Stockholders bear to the total
underwriting discounts and commissions received by the Underwriters.  The
relative fault of the parties shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company, the Selling Stockholders or the Underwriters, the
parties' relative intents, knowledge, access to information and opportunity to
correct or prevent such statement or omission, and any other equitable
considerations appropriate in the circumstances.  The Company, the Selling
Stockholders and the Underwriters agree that it would not be equitable if the
amount of such contribution were determined by pro rata or per capita allocation
(even if the Underwriters were treated as one entity for such purpose) or by any
other method of allocation that does not take into account the equitable
considerations referred to above in this paragraph (d).  Notwithstanding any
other provision of this paragraph (d), no Underwriter shall be obligated to make
contributions hereunder that in the aggregate exceed the total public offering
price of the Shares purchased by such Underwriter under this Agreement, less the
aggregate amount of any damages that such Underwriter has otherwise been
required to pay in respect of the same or any substantially similar claim and no
Selling Stockholder shall be required to contribute any amount in excess of the
amount by which the proceeds (after deducting underwriting discounts or
commissions) received by such Selling Stockholder exceed the amount of any
damages which such Selling Stockholder has otherwise been required to pay in
respect of the same or any substantially similar claim.  No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.  The Underwriters' obligations to
contribute hereunder are several in proportion to their respective underwriting
obligations and not joint, and contributions among Underwriters shall be
governed by the provisions of the Deutsche Morgan Grenfell Inc. Master Agreement
Among Underwriters.  For purposes of this paragraph (d), each person, if any,
who controls an Underwriter within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act shall have the same rights to contribution
as such Underwriter, and each director of the Company, each officer of the
Company who signed the Registration Statement and each person, if any, who
controls the Company or any Selling Stockholder within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act, shall have the same
rights to contribution as the Company or such Selling Stockholder, as the case
may be.


Section 7.  Conditions Precedent.   The obligations of the several Underwriters
- ----------  --------------------                                               
to purchase and pay for the Shares shall be subject, in the Representatives'
sole discretion, to (i) the accuracy of the representations and warranties of
the Company and the Selling Stockholders contained herein as of the date hereof
and as of each Closing Date on which the Company or the Selling Stockholders, as
the case may be, proposes to sell Shares to the Underwriter, in each case, as if
made on and as of each such Closing Date, (ii) the accuracy of the statements of
the Company's officers and the officers of the Selling Stockholders made
pursuant to the provisions hereof, (iii)  the performance by the Company and the
Selling Stockholders of their respective covenants and agreements hereunder and
(iv) the following additional conditions:


          (a) (i)  If the Original Registration Statement or any amendment
thereto filed prior to the First Closing Date has not been declared effective as

                                       28

 
of the time of execution hereof, the Original Registration Statement or such
amendment shall have been declared effective not later than 6:00 P.M. New York
City time on the date of determination of the public offering price, if such
determination occurred at or prior to 4:30 P.M. New York City time on such date,
or 12:00 Noon New York City time on the business day following the day on which
the public offering price was determined, if such determination occurred after
4:30 P.M. New York City time on such date, and (ii) if the Company has elected
to rely upon Rule 462(b), the Rule 462(b) Registration Statement shall have been
declared effective not later than the time confirmations are sent or given as
specified by Rule 462(b)(2), or such later time and date as shall have been
consented to by the Representatives; if required, the Prospectus or any Term
Sheet that constitutes a part thereof and any amendment or supplement thereto
shall have been filed with the Commission in the manner and within the time
period required by Rules 434 and 424(b) under the Securities Act; no stop order
suspending the effectiveness of the Registration Statement or any amendment
thereto shall have been issued, and no proceedings for that purpose shall have
been instituted or threatened or, to the knowledge of the Company or the
Representatives, shall be contemplated by the Commission; and the Company shall
have complied with any request of the Commission for additional information (to
be included in the Registration Statement or the Prospectus or otherwise).

          (b) The Representatives shall have received a legal opinion from
Morris, Manning & Martin, L.L.P., counsel for the Company, dated the Closing
Date, to the effect that:


               (i) the Registration Statement is effective under the Securities
               Act; any required filing of the Prospectus, or any Term Sheet
               that constitutes a part thereof, pursuant to Rules 434 and 424(b)
               has been made in the manner and within the time period required
               by Rules 434 and 424(b); and no stop order suspending the
               effectiveness of the Registration Statement or any amendment
               thereto has been issued and, to the best knowledge of such
               counsel, no proceedings for that purpose are pending or
               threatened by the Commission;

               (ii) the Original Registration Statement and each amendment
               thereto, any Rule 462(b) Registration Statement and the
               Prospectus (in each case, other than the financial statements and
               other financial information contained therein, as to which such
               counsel need express no opinion) comply as to form in all
               material respects with the applicable requirements of the
               Securities Act and the rules and regulations of the Commission
               thereunder;

               (iii)  such counsel has no reason to believe that (in each case,
               other than the financial statements and other financial
               information contained therein, as to which such counsel need
               express no opinion) (x) the Registration Statement, as of its
               effective date, contained any untrue statement of a material fact
               or omitted to state a material fact required to be stated therein
               or necessary to make the statements therein not misleading or (y)
               the Prospectus, as of its date or the date of such opinion,
               included or includes any untrue statement of a material fact or
               omitted or omits to state any material fact necessary in order to
               make the statements therein, in the light of the circumstances
               under which they were made, not misleading.

                                       29

 
               (iv) if the Company elects to rely on Rule 434 under the
               Securities Act, the Prospectus is not "materially different", as
               such term is used in Rule 434, from the prospectus included in
               the Registration Statement at the time of its effectiveness or an
               effective post-effective amendment thereto (including such
               information that is permitted to be omitted pursuant to Rule 430A
               under the Securities Act);

               (v) the Company has an authorized, issued and outstanding
               capitalization as set forth in the Prospectus; all of the issued
               shares of capital stock of the Company have been duly authorized
               and validly issued and are fully paid and nonassessable, have
               been issued in compliance with all applicable federal and state
               securities laws and were not issued in violation of or subject to
               any preemptive rights or other rights to subscribe for or
               purchase securities; the Shares have been duly authorized by all
               necessary corporate action of the Company and, when issued and
               delivered to and paid for by the Underwriters pursuant to this
               Agreement, will be validly issued, fully paid and nonassessable;
               no holders of outstanding shares of capital stock of the Company
               are entitled as such to any preemptive or other rights to
               subscribe for any of the Shares; and no holder of securities of
               the Company has any right which has not been fully exercised or
               waived to require the Company to register the offer or sale of
               any securities owned by such holder under the Securities Act in
               the Offering contemplated by this Agreement;

               (vi) all of the Shares have been duly authorized and accepted for
               quotation on the Nasdaq National Market, subject to official
               notice of issuance;

               (vii)  the Company and each of its subsidiaries have been duly
               organized and are validly existing as corporations in good
               standing under the laws of their respective jurisdictions of
               incorporation and are duly qualified to transact business as
               foreign corporations and are in good standing under the laws of
               each jurisdiction in which its ownership, leasing or operation of
               its properties or assets or the conduct of its business requires
               such qualification, except where the failure to be so qualified
               does not amount to a material liability or disability to the
               Company and its subsidiaries, taken as a whole; the Company and
               each of its subsidiaries have full power and authority to own,
               lease and operate their respective properties and assets and
               conduct their respective businesses as described in the
               Registration Statement and the Prospectus, and the Company has
               corporate power to enter into this Agreement and to carry out all
               the terms and provisions hereof to be carried out by it; all of

                                       30

 
               the issued and outstanding shares of capital stock of each of the
               Company's subsidiaries have been duly authorized and validly
               issued, are fully paid and nonassessable and are owned
               beneficially by the Company free and clear of any perfected
               security interests or, to the best knowledge of such counsel, any
               other security interests, liens, encumbrances, equities or
               claims;

               (viii)  to the best knowledge of such counsel, there are not
               statutes or regulations that are required to be described in the
               Prospectus that are not described as required;

               (ix) all descriptions in the Registration Statement of contracts
               and other documents to which the Company or its subsidiaries are
               a party are accurate in all material respects; to the best
               knowledge of such counsel, there are no franchises, contracts,
               indentures, mortgages, loan agreements, notes, leases or other
               instruments required to be described or referred to in the
               Registration Statement or to be filed as exhibits thereto other
               than those described or referred to therein or filed or
               incorporated by reference as exhibits thereto, and the
               descriptions thereof or references thereto are correct in all
               material respects;

               (x) the statements set forth under the heading "Description of
               Capital Stock" in the Prospectus, insofar as such statements
               purport to summarize certain provisions of the capital stock of
               the Company, provide a fair summary of such provisions; and the
               statements set forth under the headings "Principal and Selling
               Shareholders", "Shares Eligible for Future Sale", "Business -
               Employees", "Conversion from Limited Liability Company Status and
               Related Distributions" in the Prospectus, insofar as such
               statements constitute a summary of the legal matters, documents
               or proceedings referred to therein, have been reviewed by such
               counsel and fairly present the information called for with
               respect to such legal matters, documents and proceedings in all
               material respects as required by the Securities Act and the rules
               and regulations thereunder;

               (xi) to the best knowledge of such counsel, the Company is not in
               violation of its charter or by-laws and no default by the Company
               or any subsidiary exists in the due performance or observance of
               any material obligation, agreement, covenant or condition
               contained in any contract, indenture, mortgage, loan agreement,
               note, lease or other agreement or instrument that is described or
               referred to in the Registration Statement or the Prospectus or
               filed as an exhibit to the Registration Statement;

               (xii)  the execution and delivery of this Agreement have been
               duly authorized by all necessary corporate action of the Company
               and this Agreement has been duly executed and delivered by the
               Company;

               (xiii)  the issuance, offering and sale of the Shares to the

                                       31

 
               Underwriters by the Company pursuant to this Agreement, the
               compliance by the Company with the other provisions of this
               Agreement, the consummation of the transactions contemplated in
               this Agreement and in the Registration Statement (including the
               issuance and sale of the Shares and the use of proceeds from the
               sale of the Shares as described in the Prospectus under the
               caption "Use of Proceeds") do not (x) require the consent,
               approval, authorization, registration or qualification of or with
               any governmental authority, except such as have been obtained or
               made (and specified in such opinion) or such as may be required
               by the securities or Blue Sky laws of the various states of the
               United States of America and other U.S. jurisdictions in
               connection with the offer and sale of the Shares by the
               Underwriters, or (y) conflict with or result in a breach or
               violation of any of the terms and provisions of, or constitute a
               default under, any indenture, mortgage, deed of trust, lease or
               other agreement or instrument, known to such counsel, to which
               the Company or any of its subsidiaries is a party or by which the
               Company or any of its subsidiaries or any of their respective
               properties are bound, or the charter documents, limited liability
               company operating agreements or by-laws of the Company or any of
               its subsidiaries, or any statute or any judgment, decree, order,
               rule or regulation of any court or other governmental authority
               or any arbitrator known to such counsel and applicable to the
               Company or its subsidiaries;

               (xiv)  the Company is not an "investment company" and, after
               giving effect to the Offering and the application of the proceeds
               therefrom, will not be an "investment company", as such term is
               defined in the 1940 Act;

               (xv) such counsel does not know of any legal or governmental
               proceedings or investigations pending or threatened to which the
               Company or any of its subsidiaries is a party or to which the
               property of the Company or any of its subsidiaries is subject
               that are required to be described in the Registration Statement
               or the Prospectus and are not described therein or any statutes,
               regulations, contracts or other documents that are required to be
               described in the Registration Statement or the Prospectus or to
               be filed as exhibits to the Registration Statement that are not
               described therein or filed as required; and

               (xvi)  all of the assets and liabilities of the Company (other
               than the proceeds of the sale of securities by the underwriters
               pursuant to this Agreement) were transferred to the Company by
               Manhattan LLC other than Pegasys.  The Transferred Property
               consist solely of all of the assets and liabilities of Manhattan
               LLC.  The transfer of the Transferred Property to the Company
               will qualify as a tax-free incorporation under Section 351 of the
               Code; and as a result thereof and of the subsequent liquidation

                                       32

 
               of Manhattan LLC and its wholly-owned subsidiary Performance
               Analysis Corporation ("PAC"), except as described in the
               Prospectus, the Company will neither (a) recognize income for
               federal, foreign, state or local tax purposes, nor (b) succeed to
               any federal, foreign, state or local tax liability of any other
               entity or person other than Manhattan LLC and PAC, whether by
               reason of transferee liability or otherwise.  Under no
               circumstances will the Company succeed to any federal, foreign,
               state or local tax liability of Pegasys Systems Incorporated,
               whether by reason of transferee liability or otherwise.


          In rendering any such opinion, such counsel may rely, as to matters of
fact, to the extent such counsel deems proper, on certificates of responsible
officers of the Company and public officials.  The foregoing opinion shall also
state that the Underwriters are justified in relying upon such opinion of and
copies of such opinion shall be delivered to the Representatives and counsel for
the Underwriters.

          References to the Registration Statement and the Prospectus in this
paragraph (b) shall include any amendment or supplement thereto at the date of
such opinion.  The opinions of issuer's counsel described herein shall be
rendered to the Underwriters at the request of the Company and shall so state
therein.


          (c) The Representatives shall have received a legal opinion from
Morris, Manning & Martin, L.L.P., counsel for the Selling Stockholders, dated
the Closing Date, to the effect that:


               (i) such Selling Stockholder has full power (corporate and other)
               to enter into this Agreement, the Power of Attorney and Custody
               Agreement and to sell, assign, transfer and deliver the Shares
               being sold by such Selling Stockholder hereunder in the manner
               provided in this Agreement and to perform its obligations under
               the Power of Attorney and Custody Agreement; the execution and
               delivery of this Agreement, the Power of Attorney and Custody
               Agreement have been duly authorized by all necessary corporate
               action of each Selling Stockholder; this Agreement and the Power
               of Attorney and Custody Agreement have been duly executed and
               delivered by each Selling Stockholder; assuming due
               authorization, execution and delivery by the Custodian, the Power
               of Attorney and Custody Agreement is the legal, valid, binding
               and enforceable instrument of such Selling Stockholder, subject
               to applicable bankruptcy, insolvency and similar laws affecting
               creditors' rights generally and subject, as to enforceability, to
               general principles of equity (regardless of whether enforcement
               is sought in a proceeding in equity or at law);

               (ii) the delivery by each Selling Stockholder to the several

                                       33

 
               Underwriters of certificates for the Shares being sold hereunder
               by such Selling Stockholder against payment therefor as provided
               herein, will convey good and marketable title to such Shares to
               the several Underwriters, free and clear of all security
               interests, liens, encumbrances, equities, claims or other
               defects; and

               (iii)  the sale of the Shares to the Underwriters by such Selling
               Stockholder pursuant to this Agreement, the compliance by such
               Selling Stockholder with the other provisions of this Agreement
               and the Power of Attorney and Custody Agreement and the
               consummation of the other transactions herein contemplated do not
               (x) require the consent, approval, authorization, registration or
               qualification of or with any governmental authority, except such
               as have been obtained and such as may be required under state
               securities or blue sky laws, or (y) conflict with or result in a
               breach or violation of any of the terms and provisions of, or
               constitute a default under any indenture, mortgage, deed of
               trust, lease or other agreement or instrument to which such
               Selling Stockholder or any of its subsidiaries is a party or by
               which such Selling Stockholder or any of its subsidiaries or any
               of their respective properties are bound, or the charter
               documents or by-laws of such Selling Stockholder or any of its
               subsidiaries or any statute or any judgment, decree, order, rule
               or regulation of any court or other governmental authority or any
               arbitrator applicable to such Selling Stockholder or any of its
               subsidiaries.


          In rendering such opinion, such counsel may rely, as to matters of
fact, to the extent such counsel deems proper, on certificates of responsible
officers of the Selling Stockholders and public officials.

          References to the Registration Statement and the Prospectus in this
paragraph (c) shall include any amendment or supplement thereto at the date of
such opinion.

          (d) The Representatives shall have received a legal opinion from
Frazier, Soloway & Poorak, P.C., immigration counsel for the Company, dated the
Closing Date, to the effect that:

               (i) the statements in the Registration Statement and Prospectus
               under the captions "Risk Factors - Immigration Issues" and
               "Business - Employees" insofar as such statements constitute
               summaries of matters of law, are accurate and complete statements
               or summaries of the matters set forth therein;

               (ii) to such counsel's knowledge, the Registration Statement and
               the Prospectus do not contain any untrue statement of a material
               fact with respect to the immigration status of the Company or its
               employees, or omit to state any material fact relating to the
               immigration status of the Company or its employees which is
               required to be stated in the Registration Statement and the
               Prospectus or is necessary to make the statements therein not
               misleading; and

                                       34

 
               (iii)  in connection with the undertaking of the Investor to
               obtain Lawful Permanent Resident status in the United States as
               an immigrant investor pursuant to the Immigrant Investor Laws,
               the Company is in compliance with the terms and conditions of the
               Immigrant Investor Laws and, in connection therewith, the
               Company:  (a) was formed or significantly reorganized after
               November 29, 1990, (b) received the Investment in the Company
               from the Investor in a form that conforms and complies with the
               requirements of the Immigrant Investor Laws, (c) is a "qualifying
               enterprise" as that term is defined under the Immigrant Investor
               Laws, (d) used the Investment to create at least ten full-time
               positions within the Company with respect to employees who are
               not members of the Investor's immediate family, (e) employs the
               Investor in a position with specific management duties or policy
               formulation authority, and (f) is in compliance with the
               Immigration Laws and Immigrant Investor Laws in connection with
               the Investor's lawful immigration and employment status with the
               Company and his application for Lawful Permanent Resident of the
               United States pursuant to the Immigrant Investor Laws.


          (e) The Representatives shall have received a legal opinion from Jay
I. Solomon, Esq., immigration counsel for the Company, dated the Closing Date,
to the effect that:


          (i) the statements in the Registration Statement and Prospectus under

                                       35

 
          the captions "Risk Factors - Immigration Issues" and "Business -
          Employees" insofar as such statements constitute summaries of matters
          of law, are accurate and complete statements or summaries of the
          matters set forth therein;

          (ii) to such counsel's knowledge, the Registration Statement and the
          Prospectus do not contain any untrue statement of a material fact with
          respect to the immigration status of the Company or its employees, or
          omit to state any material fact relating to the immigration status of
          the Company or its employees which is required to be stated in the
          Registration Statement and the Prospectus or is necessary to make the
          statements therein not misleading; and

          (iii)  the Company is in compliance with all applicable provisions of
          the Immigration Laws; the Company:  (a) employs only aliens who are
          properly authorized to be employed in the United States pursuant to
          the Immigration Laws, (b) completes and maintains a valid INS Form I-9
          for each H-1B Employee, (c) maintains a complete "Public Access"
          folder for each H-1B Employee, (d) pays the proper wage for each H-1B
          Employee under the Immigration Laws and certifies such information to
          the Department of Labor as required pursuant to the Immigration Laws,
          (e) complies with the requirements of the Immigration Laws in all
          respects in order to maintain the lawful status and employability of
          all alien employees of the Company, including, but not limited to, the
          filing all required INS forms and complying with the verification and
          recordkeeping requirements, (f) terminates immediately any employee
          who is not properly authorized to reside and/or be employed in the
          United States pursuant to the Immigration Laws, and (g) maintains
          copies of all INS and Department of Labor decisions, correspondence,
          notices and other official releases relating to the Immigration Laws
          as necessary to ensure compliance of the Company with the Immigration
          Laws; and there have not been any discrimination complaints filed
          against the Company pursuant to the Immigration Laws.


          (f) The Representatives shall have received a legal opinion from
Testa, Hurwitz & Thibeault, LLP, counsel for the Underwriters, dated the Closing
Date, covering the issuance and sale of the Shares, the Registration Statement
and the Prospectus, and such other related matters as the Representatives may
reasonably require, and the Company shall have furnished to such counsel such
documents as they may reasonably request for the purpose of enabling them to
pass upon such matters.


          (g) The Representatives shall have received from Arthur Andersen, LLP
a letter or letters dated, respectively, the date hereof and the Closing Date,
in form and substance satisfactory to the Representatives, together with signed
or reproduced copies of such letter for each of the Underwriters containing
statements and information of the type ordinarily included in accountants'
"comfort letters" to underwriters with respect to the financial statements and
certain information contained in the Registration Statement and the Prospectus.

          In the event that the letters referred to above set forth any such
changes, decreases or increases, it shall be a further condition to the

                                       36

 
obligations of the Underwriters that (I) such letters shall be accompanied by a
written explanation of the Company as to the significance thereof, unless the
Representatives deem such explanation unnecessary, and (II) such changes,
decreases or increases do not, in the sole judgment of the Representatives, make
it impractical or inadvisable to proceed with the purchase and delivery of the
Shares as contemplated by the Registration Statement, as amended as of the date
hereof.  References to the Registration Statement and the Prospectus in this
paragraph (f) with respect to either letter referred to above shall include any
amendment or supplement thereto at the date of such letter.


          (h) The Company shall have furnished or caused to be furnished to the
Underwriters at the Closing a certificate of its Chairman of the Board, its
President and Chief Executive Officer and its Chief Financial Officer
satisfactory to the Underwriters to the effect that:


               (i) the representations and warranties of the Company in this
               Agreement are true and correct as if made on and as of the
               Closing Date; the Registration Statement, as amended as of the
               Closing Date, does not include any untrue statement of a material
               fact or omit to state any material fact necessary to make the
               statements therein not misleading, and the Prospectus, as amended
               or supplemented as of the Closing Date, does not include any
               untrue statement of a material fact or omit to state any material
               fact necessary in order to make the statements therein, in the
               light of the circumstances under which they were made, not
               misleading; and the Company has performed all covenants and
               agreements and satisfied all conditions on its part to be
               performed or satisfied at or prior to the Closing Date;

               (ii) no stop order suspending the effectiveness of the
               Registration Statement or any amendment thereto has been issued,
               and no proceedings for that purpose have been instituted or
               threatened or, to the best of the Company's knowledge, are
               contemplated by the Commission; and

               (iii)  subsequent to the respective dates as of which information
               is given in the Registration Statement and the Prospectus,
               neither the Company nor any of its subsidiaries has sustained any
               material loss or interference with their respective businesses or
               properties from fire, flood, hurricane, accident or other
               calamity, whether or not covered by insurance, or from any labor
               dispute or any legal or governmental proceeding, and there has
               not been any materially adverse change (including, without
               limitation, a change in management or control), or development
               involving a prospective materially adverse change, in the
               condition (financial or otherwise), management, earnings,
               properties, business affairs or business prospects, stockholders'
               equity, net worth or results of operations of the Company or any
               of its subsidiaries, except in each case as described in or
               contemplated by the Prospectus (exclusive of any amendment or
               supplement thereto).


          (i) The Representatives shall have received a certificate from each

                                       37

 
Selling Stockholder dated each Option Closing Date, signed by an Attorney-in-
Fact on behalf of such Selling Stockholder to the effect that:


               (i) the representations and warranties of such Selling
               Stockholder in this Agreement are true and correct as if made on
               and as of such Option Closing Date;

               (ii) the Registration Statement, as amended as of such Option
               Closing Date, does not include any untrue statement of a material
               fact or omit to state any material fact necessary to make the
               statements therein not misleading, and the Prospectus, as amended
               or supplemented as of such Option Closing Date, does not include
               any untrue statement of a material fact or omit to state any
               material fact necessary in order to make the statements therein,
               in the light of the circumstances under which they were made, not
               misleading; and

               (iii)  such Selling Stockholder has performed all covenants and
               agreements on its part to be performed or satisfied at or prior
               to such Option Closing Date.


          (j) The Representatives shall have received from each person who is a
director or officer of the Company or who owns more than 5% of the outstanding
shares of Common Stock an agreement dated on or before the date of this
Agreement to the effect that such person will not publicly announce any
intention to and will not, without the prior written consent of DMG on behalf of
the Underwriters, (i) offer, pledge, sell, offer to sell, contract to sell, sell
any option or contract to purchase, purchase any option or contract to sell,
grant any option, right or warrant to purchase, or otherwise transfer or dispose
of, directly or indirectly, any of the shares of Common Stock or any securities
convertible into, or exercisable or exchangeable for, Common Stock, or (ii)
enter into any swap or other agreement or any transaction that transfers, in
whole or in part, any of the economic consequences of ownership of the shares of
Common Stock or any securities convertible into, or exercisable or exchangeable
for, shares of Common Stock (whether any such transaction described in clause
(i) or (ii) above is to be settled by delivery of shares of Common Stock or such
other securities, in cash or otherwise), in each case, beneficially owned
(within the meaning of Rule 13d-3 under the Exchange Act) or otherwise
controlled by such person on the date hereof or hereafter acquired, for a period
beginning from the date hereof and continuing to and including the date 180 days
after the date hereof; provided, however, that such person may, without the
prior written consent of DMG on behalf of the Underwriters, transfer shares of
Common Stock or such other securities to one or more members of such person's
immediate family or to trusts for the benefit of members of such person's
immediate family or in connection with bona fide gifts, provided that any
transferee agrees in writing as a condition precedent to such transfer to be
bound by the transfer restrictions described above, and there shall be no
further transfer of any shares of Common Stock or such other securities, except
in accordance with this Agreement.

          (k) Prior to the commencement of the Offering, the Company shall have
made an application for the quotation of the Shares on the Nasdaq National

                                       38

 
Market and the Shares shall have been included for trading on the Nasdaq
National Market, subject to official notice of issuance.

          (l) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date, there shall not have occurred any downgrading, nor
shall any notice have been given of any intended or potential downgrading or of
any review for a possible change that does not indicate the direction of the
possible change, in the rating accorded any of the Company's securities by any
"nationally recognized statistical rating organization", as such term is defined
for purposes of Rule 436(g)(2) under the Securities Act.

          (m) On or before the Closing Date, the Representatives and counsel for
the Underwriters shall have received such further certificates, documents or
other information as they may have reasonably requested from the Company and the
Selling Stockholders.


          All opinions, certificates, letters and documents delivered pursuant
to this Agreement will comply with the provisions hereof only if they are
satisfactory in all material respects to the Representatives and counsel for the
Underwriters.  The Company and the Selling Stockholders shall furnish to the
Representatives such conformed copies of such opinions, certificates, letters
and documents in such quantities as the Representatives and counsel for the
Underwriters shall reasonably request.

          The respective obligations of the several Underwriters to purchase and
pay for any Shares shall be subject, in their discretion, to each of the
foregoing conditions to purchase the Shares, except that all references therein
to the Shares and the Closing Date shall be deemed to refer to the Firm Shares
or the Option Shares and the First Closing Date or the related Option Closing
Date, each as applicable.


Section 8.  Default of Underwriters.  If, at the First Closing, any one or more
- ----------  -----------------------                                            
of the Underwriters shall fail or refuse to purchase Shares that it has or they
have agreed to purchase hereunder on such date, and the aggregate number of
Shares which such defaulting Underwriter or Underwriters agreed but failed or
refused to purchase is ten percent or less of the aggregate number of the Shares
to be purchased on such date, the other Underwriters may make arrangements
satisfactory to the Representatives for the purchase of such Shares by other
persons (who may include one or more of the non-defaulting Underwriters,
including the Representatives), but if no such arrangements are made by the
First Closing Date, the other Underwriters shall be obligated severally in the
proportions that the number of Firm Shares set forth opposite their respective
names in Schedule 1 hereto bears to the aggregate number of Firm Shares set
forth opposite the names of all such non-defaulting Underwriters, or in such
other proportions as the Representatives may specify, to purchase the Shares
which such defaulting Underwriter or Underwriters agreed but failed or refused
to purchase on such date.  If, at the First Closing, any Underwriter or
Underwriters shall fail or refuse to purchase Firm Shares and the aggregate
number of Firm Shares with respect to which such default occurs is more than ten
per cent of the aggregate number of Firm Shares to be purchased, and
arrangements satisfactory to the Representatives and the Company for the

                                       39

 
purchase of such Firm Shares are not made within 36 hours after such default,
this Agreement shall terminate without liability on the part of any non-
defaulting Underwriter, the Company or any Selling Stockholder.  In any such
case either the Representatives or the Company shall have the right to postpone
the Closing, but in no event for longer than seven days, in order that the
required changes, if any, in the Registration Statement and in the Prospectus or
in any other documents or arrangements may be effected.  If, at any Option
Closing, any Underwriter or Underwriters shall fail or refuse to purchase Option
Shares, the non-defaulting Underwriters shall have the option to (i) terminate
their obligation hereunder to purchase Option Shares or (ii) purchase not less
than the number of Option Shares that such non-defaulting Underwriters would
have been obligated to purchase in the absence of such default.  As used in this
Agreement, the term "Underwriter" includes any person substituted for an
Underwriter under this Section 8.  Any action taken under this Section 8 shall
not relieve any defaulting Underwriter from liability in respect of any default
of such Underwriter under this Agreement.

Section 9.  Termination.  This Agreement shall be subject to termination in the
- ----------  -----------                                                        
sole discretion of the Representatives by notice to the Company and the Selling
Stockholders given prior to any Closing Date in the event that the Company or
any Selling Stockholder shall have failed, refused or been unable to perform all
obligations and satisfy all conditions on its part to be performed or satisfied
hereunder at or prior thereto or, if at or prior to any Closing Date, (a)
trading in securities generally on the New York Stock Exchange or the Nasdaq
National Market shall have been suspended or materially limited or minimum or
maximum prices shall have been established by or on, as the case may be, the
Commission or the New York Stock Exchange or the Nasdaq National Market; (b)
trading of any securities of the Company shall have been suspended on any
exchange or in any over-the-counter market; (c) a general moratorium on
commercial banking activities shall have been declared by either Federal or New
York State authorities; (d) there shall have occurred (i) an outbreak or
escalation of hostilities between the United States and any foreign power, (ii)
an outbreak or escalation of any other insurrection or armed conflict involving
the United States, or (iii) any other calamity or crisis or materially adverse
change in general economic, political or financial conditions having an effect
on the U.S. financial markets that, in the sole judgment of the Representatives,
makes it impractical or inadvisable to proceed with the public offering or the
delivery of the Shares as contemplated by the Registration Statement, as amended
as of the date hereof; or (e) the Company or any of its subsidiaries shall have,
in the sole judgment of the Representatives, sustained any material loss or
interference with their respective businesses or properties from fire, flood,
hurricane, accident or other calamity, whether or not covered by insurance, or
from any labor dispute or any legal or governmental proceeding, or there shall
have been any materially adverse change (including, without limitation, a change
in management or control), or constitute a development involving a prospective
materially adverse change, in the condition (financial or otherwise),
management, earnings, properties, business affairs or business prospects,
stockholders' equity, net worth or results of operations of the Company or any
of its subsidiaries, except in each case as described in or contemplated by the
Prospectus (exclusive of any amendment or supplement thereto). Termination of
this Agreement pursuant to this Section 9 shall be without liability of any
party to any other party except for the liability of the Company in relation to
expenses as provided in Sections 4 and 10 hereof, the liability of the Selling
Stockholders in relation to expenses as provided in Sections 4 and 10 hereof,
the indemnity provided in Section 6 hereof and any liability arising before or
in relation to such termination.

                                       40

 
Section 10.  Reimbursement of Expenses.  If the sale of the Shares provided for
- -----------  -------------------------                                         
herein is not consummated because any condition to the obligations of the
Underwriters set forth in Section 7 hereof is not satisfied or because of any
termination pursuant to Section 9 hereof (other than by reason of a default by
any of the Underwriters), the Company shall reimburse the Underwriters,
severally upon demand, for all out-of-pocket expenses (including, without
limitation, the fees and disbursements of counsel) that shall have been incurred
by them in connection with the proposed purchase and sale of the Shares.  If the
Company is required to make any payments to the Underwriters under this Section
10 because of any Selling Stockholder's refusal, inability or failure to satisfy
any condition to the obligations of the Underwriters set forth in Section 7
hereof, such defaulting Selling Stockholder, pro rata in proportion to the
                                             --------                     
percentage of Shares to be sold by each, shall reimburse the Company on demand
for all amounts so paid.

Section 11.  Information Supplied by Underwriters.  The statements set forth in
- -----------  ------------------------------------                              
the last paragraph on the front cover page and under the heading "Underwriting"
in any Preliminary Prospectus or the Prospectus (to the extent such statements
relate to the Underwriters) constitute the only information furnished by any
Underwriter through the Representatives to the Company for the purposes of
Section 5(a)(ii) and Section 6 hereof.  The Underwriters confirm that such
statements (to such extent) are correct.

Section 12.  Notices.  In all dealings hereunder, you shall act on behalf of
- -----------  -------                                                        
each of the Underwriters, and the parties hereto shall be entitled to act and
rely upon any statement, request, notice or agreement on behalf of any
Underwriter made or given by the Representatives. Any notice or notification in
any form to be given under this Agreement may be delivered in person or sent by
telex, facsimile or telephone (subject in the case of a communication by
telephone to confirmation by telex or facsimile) addressed to:


          in the case of the Company:


          Manhattan Associates, Inc.
          2300 Windy Ridge Parkway, Suite 700
          Atlanta, Georgia 30339

          Telephone:  (770) 955-7070
          Facsimile:  (770) 955-0302
          Attention:  President
 
          in the case of the Underwriters:
 
          Deutsche Morgan Grenfell Inc.
          31 West 52nd Street
          New York, New York 10019
 
          Telephone:  (212) 469-5000
          Facsimile:  (212) 469-5995
          Attention:  Equity Syndicate Desk

                                       41

 
In the case of the Selling Stockholders, any such notice shall be addressed to
the Selling Stockholders at the addresses set forth in Schedule 2 hereto.  Any
notice under this Section 12 shall take effect, in the case of delivery, at the
time of delivery and, in the case of telex or facsimile, at the time of
dispatch.


Section 13.  Miscellaneous.
- -----------  ------------- 


          (a) Time shall be of the essence of this Agreement.

          (b) The headings herein are inserted for convenience of reference only
and are not intended to be part of, or to affect, the meaning or interpretation
of this Agreement.

          (c) For purposes of this Agreement, (a) "business day" means any day
on which the New York Stock Exchange is open for trading, and (b) "subsidiary"
has the meaning set forth in Rule 405 under the Securities Act.

          (d) This Agreement may be executed in any number of counterparts, all
of which, taken together, shall constitute one and the same Agreement and any
party may enter into this Agreement by executing a counterpart.

          (e) This Agreement shall inure to the benefit of and shall be binding
upon the several Underwriters, the Company, the Selling Stockholders and their
respective successors and legal representatives, and nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any other
person any legal or equitable right, remedy or claim under or in respect of this
Agreement, or any provisions herein contained, this Agreement and all conditions
and provisions hereof being intended to be and being for the sole and exclusive
benefit of such persons and for the benefit of no other person, except that (i)
the indemnities of the Company and the Selling Stockholders contained in Section
6 hereof shall also be for the benefit of any person or persons who control any
Underwriter within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act and (ii) the indemnities of the Underwriters contained in
Section 6 hereof shall also be for the benefit of the directors of the Company,
the officers of the Company who have signed the Registration Statement, each
Selling Stockholder and any person or persons who control the Company or such
Selling Stockholder within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act. No purchaser of Shares from any Underwriter
shall be deemed a successor because of such purchase.

          (f) The respective representations, warranties, agreements, covenants,
indemnities and other statements of the Company, its officers, the Selling
Stockholders and the several Underwriters set forth in this Agreement or made by
or on behalf of them, respectively, pursuant to this Agreement shall remain in
full force and effect, regardless of (i) any investigation made by or on behalf
of the Company, any of its officers or directors, the Selling Stockholders, any
Underwriter or any controlling person referred to in Section 6 hereof and (ii)
delivery of and payment for the Shares.  The respective agreements, covenants,
indemnities and other statements set forth in Sections 4, 6 and 10 hereof shall
remain in full force and effect, regardless of any termination or cancellation
of this Agreement.

                                       42

 
Section 14.  Severability.  It is the desire and intent of the parties that the
- -----------  ------------                                                      
provisions of this Agreement be enforced to the fullest extent permissible under
the law and public policies applied in each jurisdiction in which enforcement is
sought.  Accordingly, in the event that any provision of this Agreement would be
held in any jurisdiction to be invalid, prohibited or unenforceable for any
reason, such provision, as to such jurisdiction, shall be ineffective, without
invalidating the remaining provisions of this Agreement or affecting the
validity or enforceability of such provision in any other jurisdiction.


Section 15.  Governing Law.  The validity and interpretation of this Agreement,
- -----------  -------------                                                     
and the terms and conditions set forth herein, shall be governed by and
construed in accordance with the laws of the State of New York, without giving
effect to any provisions relating to conflicts of laws.

                                       43

 
If the foregoing is in accordance with your understanding, please sign and
return to us six counterparts hereof, and upon the acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof shall
constitute a binding agreement among each of the Underwriters and the Company.
It is understood that your acceptance of this letter on behalf of each of the
Underwriters is pursuant to the authority set forth in the Deutsche Morgan
Grenfell Inc. Master Agreement Among Underwriters, the form of which shall be
submitted to the Company for examination upon request, but without warranty on
your part as to the authority of the signers thereof.


                                 Very truly yours,

                                 MANHATTAN ASSOCIATES, INC.


                                 By _____________________________________
                                    President and Chief Executive Officer



                                 SELLING STOCKHOLDER


                                 By _____________________________________
                                    Attorney-in-Fact


The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.


DEUTSCHE MORGAN GRENFELL INC.
HAMBRECHT & QUIST LLC
SOUNDVIEW FINANCIAL GROUP, INC.

By:  DEUTSCHE MORGAN GRENFELL INC.


By __________________________________
Name:
Title:


By __________________________________
Name:
Title:

For itself and on behalf of the Representatives.

                                       44

 
                                   SCHEDULE 1
                                   ----------


                                The Underwriters


Underwriter                                    Underwriting commitment
- -----------                                    -----------------------


[name]................................         [number of Firm Shares]
 
 
 
                                               ____________________

Total.................................         [aggregate number of Firm Shares]

                                       45

 
                                   SCHEDULE 2
                                   ----------


                            The Selling Stockholders


 
                                               Number Of Shares
Selling Stockholders                             To Be Sold
- --------------------                           ----------------

[name and address]........................     [number of Firm Shares]
 
 
 
 
 
                                              
Total.....................................     ____________________             
                                              
                                               [aggregate number of Firm Shares]
                                       46


 
                                                                     EXHIBIT 2.1

                              AMENDED AND RESTATED
                    SUBSCRIPTION AND CONTRIBUTION AGREEMENT

     THIS AMENDED AND RESTATED SUBSCRIPTION AND CONTRIBUTION AGREEMENT (the
"Agreement") is made and entered into as of this 31st day of March, 1998 by and
between MANHATTAN ASSOCIATES SOFTWARE, LLC, a Georgia limited liability company
("Manhattan LLC"), Alan J. Dabbiere, Ponnambalam Muthiah, Deepak Raghavan,
Deepak Rao, The Alan J. Dabbiere Trust, The Ponnambalam Muthiah Trust, The
Deepak Raghavan Trust, The Deepak Rao Trust, AD Investment Management Limited
Partnership, UM Investment Management Limited Partnership, SR Investment
Management Limited Partnership, SV Investment Management Limited Partnership,
Daniel Basmajian, Sr., Peter V. Dabbiere, Joel D. Dabbiere, David K. Dabbiere,
Pegasys Systems Incorporated and the minority shareholders of Manhattan LLC
listed on EXHIBIT A hereto (collectively, the "LLC Shareholders") and MANHATTAN
ASSOCIATES, INC., a Georgia corporation ("Manhattan Inc.").


                                R E C I T A L S:
                                --------------- 

     WHEREAS, upon the terms hereinafter set forth, Manhattan LLC desires to
sell, and Manhattan Inc. desires to acquire all of the assets and liabilities of
Manhattan LLC; and

     WHEREAS, the LLC Shareholders wish to approve the sale of all of the Assets
of Manhattan LLC and the dissolution of Manhattan LLC; and

     WHEREAS, the LLC Shareholders acknowledge that Manhattan LLC will cause the
retained earnings of Manhattan LLC to be distributed to the LLC Shareholders
immediately prior to the effective time of this Agreement as provided in Section
1.3 hereto;

     NOW, THEREFORE, in consideration of the mutual agreements, covenants,
representations and warranties contained herein, the parties hereby agree as
follows:

                                  ARTICLE I.

                    Contribution of Assets and Liabilities
                    --------------------------------------

     1.1.  Contribution of Assets and Liabilities by Manhattan LLC to Manhattan 
     --------------------------------------------------------------------------
Inc.  Upon the terms of this Agreement, Manhattan LLC shall contribute, sell,
- ----
transfer, assign, convey and deliver all of its Assets and Liabilities (as
defined herein) to Manhattan Inc., and Manhattan Inc. shall purchase all of the
Assets and Liabilities of Manhattan LLC, free and clear of all security
interests, liens, pledges, claims, charges, escrows, encumbrances,
encroachments, rights of first refusal, mortgages, indentures, easements,
licenses, restrictions or other covenants, agreements, understandings,
obligations, defects or irregularities affecting title to any of such Assets,
for the consideration set forth in Section 1.2 of this Agreement.

     1.2.  Consideration to and Subscription by Manhattan LLC.  Pursuant to the
           ---------------------------------------------------
sale by Manhattan LLC of all of the Assets and Liabilities of Manhattan LLC to
Manhattan Inc., Manhattan Inc. will issue to Manhattan LLC 20,206,674 shares of

 
the $.01 par value per share common stock of Manhattan Inc. (the "Common
Stock").

     1.3.  Effective Time.  The contribution contemplated in this Agreement 
           -------------- 
shall be effective and automatically closed without any further action on the
part of the parties hereto on the earlier of: (i) a time determined by the Board
of Managers of Manhattan LLC or (ii) 9:30 a.m. on the day which the Company and
its underwriters have requested the effectiveness of the Registration Statement
to be filed by Manhattan Inc. in connection with the initial public offering of
Manhattan Inc. (such earlier time being the "Contribution Date").

                                  ARTICLE II.

                Representations and Warranties of Manhattan LLC
                -----------------------------------------------

     To induce Manhattan Inc. to issue the Common Stock to Manhattan LLC,
Manhattan LLC represents, warrants and covenants to Manhattan Inc. as follows:

     2.1  Due Organization.  Manhattan LLC is a limited liability company duly
          ----------------- 
organized, validly existing and in good standing under the laws of the State of
Georgia with full power and authority to own, lease and operate its properties
and assets and is duly authorized and qualified to do business under all
applicable laws, regulations, ordinances and orders of public authorities to
carry on its businesses in the places and in the manner as now conducted except
where the failure to be so authorized or qualified would not have a material
adverse effect on the business, operations, properties, assets, condition
(financial or other), results of operations or prospects of Manhattan LLC.
Schedule 2.1 contains a list of all jurisdictions in which Manhattan LLC is
- ------------
authorized or qualified to do business. True, complete and correct copies of the
Articles of Organization and Operating Agreement, as amended, of Manhattan LLC
are attached hereto as Schedule 2.1.
                       ------------ 


     2.2.  Capitalization.  The authorized capital stock of Manhattan LLC 
           --------------- 
consists solely of 12,603,337 Shares (as defined in the Operating Agreement, as
amended, of Manhattan LLC) (the "LLC Shares") of which 10,103,337 Shares are
issued and outstanding. All of the issued and outstanding capital stock of
Manhattan LLC is owned beneficially and of record as set forth on Schedule 2.2.
                                                                  ------------ 
All of the issued and outstanding capital stock of Manhattan LLC has been duly
authorized and validly issued and is fully paid and nonassessable, has been
issued in compliance with all applicable federal, state and other applicable
securities laws and was not issued in violation of or subject to any preemptive
rights or other rights to subscribe for or purchase such securities. Except as
set forth in Schedule 2.2, no subscription, option, warrant, call, convertible
             ------------ 
or exchangeable security, other conversion right or commitment of any kind
exists which obligates Manhattan LLC to issue any of its capital stock.

     2.3.  Subsidiaries.  Except as set forth in Schedule 2.3, Manhattan LLC 
           -------------                         ------------ 
does not presently own, of record or beneficially, or control, directly or
indirectly, any capital stock, securities convertible into or exchangeable for
capital stock or any other equity or participating interest in any corporation,
association or business entity. Manhattan LLC is not directly or indirectly, a
participant in any joint venture, partnership or other noncorporate entity.

                                       2

 
     2.4.  Liabilities and Obligations.  Schedule 2.4 sets forth an accurate 
           ----------------------------  ------------
list of all Liabilities of Manhattan LLC as of the date hereof.

     2.5.  Accounts and Notes Receivable.  Schedule 2.5 sets forth an accurate 
           ------------------------------  ------------ 
list of the accounts and notes receivable of Manhattan LLC as of the date
hereof.

     2.6.  Assets.  Schedule 2.6 sets forth an accurate list of all Assets of 
           -------  ------------
Manhattan LLC with a value in excess of $5,000 as of the date hereof.

     2.7.  Litigation.  No legal or governmental proceedings or investigations 
           ----------- 
are pending or threatened to which Manhattan LLC is a party or to which the
property or capital stock of Manhattan LLC is subject.

     2.8.  Validity.  Manhattan LLC has full power to enter into this Agreement
           --------- 
and to contribute, sell, transfer, assign, convey and deliver to Manhattan Inc.
all of the Assets and Liabilities of Manhattan LLC to be transferred hereunder
in accordance with the terms of this Agreement.

     2.9.  No Conflict.  The transfer of all of the Assets and Liabilities of 
           ------------ 
Manhattan LLC to Manhattan Inc. pursuant to this Agreement does not (i) require
the consent, approval, authorization, registration or qualification of or with
any governmental authority, except such as have been obtained or such as may be
required under state securities or blue sky laws, or (ii) conflict with or
result in a breach or violation of any of the terms and provisions of, or
constitute a default under any indenture, mortgage, deed of trust, lease or
other agreement or instrument to which Manhattan LLC is a party or any statute
or any judgment, decree, order, rule or regulation of any court or other
governmental authority or any arbitrator applicable to Manhattan LLC.

     The above representations, warranties and covenants of Manhattan LLC shall
be deemed to be repeated at the Contribution Date and Manhattan LLC shall take
no action that would result in a violation of any of the above representations,
warranties and covenants between the date hereof and the Contribution Date.
Notwithstanding the foregoing, Manhattan LLC may make one or more distributions
of its aggregate net retained earnings through the Contribution Date to the LLC
Shareholders, and the making of such distributions shall not be deemed to be a
breach of the foregoing representations, warranties and covenants.

                                 ARTICLE III.

               Representations and Warranties of Manhattan Inc.
               ------------------------------------------------

     To induce Manhattan LLC to acquire the Common Stock from Manhattan Inc.,
Manhattan Inc. represents, warrants and covenants to Manhattan LLC as follows:

     3.1.  Due Organization.  Manhattan Inc. is a corporation duly organized, 
           -----------------
validly existing and in good standing under the laws of the State of Georgia
with full power and authority to own, lease and operate its properties and
assets and is duly authorized and qualified to do business under all applicable
laws, regulations, ordinances and orders of public authorities to carry on its
businesses in the places and in the manner as now conducted except where the
failure to be so authorized or qualified would not have a material adverse

                                       3

 
effect on the business, operations, properties, assets, condition (financial or
other), results of operations or prospects of Manhattan LLC. Schedule 3.1
                                                             ------------
contains a list of all jurisdictions in which Manhattan Inc. is authorized or
qualified to do business.  True, complete and correct copies of the Articles of
Incorporation of Manhattan Inc. are attached hereto as Schedule 3.1.
                                                       ------------ 

     3.2  Capitalization.  The authorized capital stock of Manhattan Inc.
          --------------                                                 
consists solely of 100,000,000 shares of Common Stock, of which 100 shares are
issued and outstanding, and 20,000,000 shares of preferred stock, no par value
per share.  All of the issued and outstanding capital stock of Manhattan Inc. is
owned beneficially and of record as set forth on Schedule 3.2.  All of the
                                                 ------------             
issued and outstanding capital stock of Manhattan Inc. has been duly authorized
and validly issued and is fully paid and nonassessable, has been issued in
compliance with all applicable federal, state and other applicable securities
laws and was not issued in violation of or subject to any preemptive rights or
other rights to subscribe for or purchase such securities.  Except as set forth
in Schedule 3.2, no subscription, option, warrant, call, convertible or
   ------------                                                        
exchangeable security, other conversion right or commitment of any kind exists
which obligates Manhattan Inc. to issue any of its capital stock.

                                  ARTICLE IV.

                           Miscellaneous Provisions
                           ------------------------

     4.1.  Approval by LLC Shareholders of Sale of Assets.  Pursuant to Section
           -----------------------------------------------                
8.9(a) of the Operating Agreement of Manhattan LLC, as amended, the LLC
Shareholders approve of the sale of all of the assets of Manhattan LLC to
Manhattan Inc.

     4.2.  Approval by LLC Shareholders of Dissolution.  Pursuant to Section 
           --------------------------------------------                    
15.1 of the Operating Agreement, as amended, the LLC Shareholders approve of the
dissolution of Manhattan LLC upon the sale of all or substantially all of the
assets of Manhattan LLC.


     4.3.  Dissolution of Manhattan LLC.  Immediately upon the sale of all or
           -----------------------------                                     
substantially all of the assets of Manhattan LLC, Manhattan LLC will be
dissolved and shall cease to exist as a limited liability company in the State
of Georgia. A pro rata distribution, based on each LLC Shareholders' ownership
of the Member Interests of Manhattan LLC, of the Common Stock shall be made to
the LLC Shareholders immediately prior to the dissolution of Manhattan LLC.

     4.4.  Entire Agreement.  This Agreement and the Exhibits and other 
           -----------------
documents delivered pursuant hereto or incorporated herein by reference, contain
and constitute the entire agreement among the parties and supersede and cancel
any prior agreements, representations, warranties or communications, whether
oral or written, among the parties relating to the transactions contemplated by
this Agreement, including but not limited to that certain Subscription and
Contribution Agreement dated February 26, 1998 by and between the parties
hereto. Neither this Agreement nor any provision hereof may be changed, waived,
discharged or terminated orally, but only by an agreement in writing signed by
the party against whom or which the enforcement of such change, waiver,
discharge or termination is sought.

                                       4

 
     4.5.  Governing Law; Severability.  This Agreement shall be governed by and
           ----------------------------                                         
construed in accordance with the laws of the State of Georgia, but excluding the
conflicts laws of the State of Georgia.  The provisions of this Agreement are
severable, and the invalidity of one or more of the provisions herein shall not
have any effect upon the validity or enforceability of any other provision.

     4.6.  Headings.  The headings contained in this Agreement are for reference
           ---------                                                            
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.

     4.7.  No Third Party Beneficiaries.  Nothing contained in this Agreement
           -----------------------------                                    
(express or implied) is intended or shall be construed to confer upon or give to
any person, corporation or other entity, other than the parties hereto and their
permitted successors or assigns, any rights or remedies under or by reason of
this Agreement.

     IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
day and year first written above.

                        [SIGNATURES ON FOLLOWING PAGES]

                                       5

                                           MANHATTAN ASSOCIATES SOFTWARE, LLC
 
 
                                           By: /s/ Alan J. Dabbiere
                                              -------------------------------
                                                ALAN J. DABBIERE, PRESIDENT
  

 
                                           /s/ Alan J. Dabbiere
                                           ----------------------------------
                                           Alan J. Dabbiere


                                           /s/ Ponnambalam Muthiah
                                           ----------------------------------
                                           Ponnambalam Muthiah


                                           /s/ Deepak Raghavan
                                           ----------------------------------
                                           Deepak Raghavan


                                           PEGASYS SYSTEMS INCORPORATED
 
 
                                           By:  
                                              -------------------------------
                                                ALAN J. DABBIERE, PRESIDENT


                                           MANHATTAN ASSOCIATES, INC.
 
 
                                           By: 
                                              -------------------------------
                                                ALAN J. DABBIERE, PRESIDENT
 
 



                 [Additional Signatures Intentionally Omitted]



                                       6


 
                                                                     EXHIBIT 4.2

[BLUE BORDER DESIGN]


                            [FRONT OF CERTIFICATE]


              INCORPORATED UNDER THE LAWS OF THE STATE OF GEORGIA


 NUMBER                  [MANHATTAN ASSOCIATES LOGO]                      SHARES
MA

COMMON STOCK                                                 SEE REVERSE FOR
PAR VALUE $.01                                               CERTAIN DEFINITIONS

                           MANHATTAN ASSOCIATES, INC.

                                                               CUSIP 562750 10 9

          THIS CERTIFIES THAT                  [SPECIMEN]                 IS THE
                              -------------------------------------------       
OWNER OF ________________________________________________ FULLY-PAID AND NON-
ASSESSABLE SHARES OF THE COMMON STOCK OF Manhattan Associates, Inc. transferable
on the books of the Corporation by the holder hereof in person or by duly
authorized Attorney, upon surrender of this Certificate properly endorsed.  This
Certificate is not valid unless countersigned by the Transfer Agent and
registered by the Registrar.  Witness the facsimile seal of the Corporation and
the facsimile signatures of its duly authorized officers.

Dated:


/S/ Michael J. Casey    [MANHATTAN ASSOCIATES, INC.    /S/Alan J. Dabbiere
- --------------------      CORPORATE SEAL GEORGIA]      -------------------
TREASURER                                              [PRESIDENT AND CHIEF
                                                        EXECUTIVE OFFICER]

COUNTERSIGNED AND REGISTERED:

CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
TRANSFER AGENT AND REGISTRAR

BY
AUTHORIZED SIGNATURE

 
                             [BACK OF CERTIFICATE]


                           MANHATTAN ASSOCIATES, INC.
                                        
        The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM - as tenants in common     UNIF GIFT MIN ACT -     CUSTODIAN
                                                      -------------------
TEN ENT - as tenants by the                           (CUST)      (MINOR) 
          entireties                                  under the Uniform Gifts to
                                                      Minors Act 
JT TEN  - as joint tenants with the                              --------------
          right of survivorship and                                  (State)
          not as tenants in common                    
                                                                  
    Additional abbreviations may also be used though not in the above list.

        For value received,                                          hereby
                            ----------------------------------------
sell, assign and transfer unto                           [PLEASE INSERT SOCIAL
                               -------------------------
SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE]

- --------------------------------------------------------------------------------
Please print or typewrite name and address including postal zip code of assignee

                                                                          Shares
- -------------------------------------------------------------------------
of the capital stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint

- --------------------------------------------------------------------------------
Attorney to transfer the said stock on the books of the within-named Corporation
with the full power of substitution in the premises.

Dated, 
       ----------------                ----------------------------------------
                                       NOTICE: The signature of this assignment
                                       must correspond with the name as written
                                       upon the face of the certificate in every
                                       particular, without alteration or
                                       enlargement, or any change whatever.



              SIGNATURE(S) GUARANTEED:
                                       ----------------------------------------
                                       THE SIGNATURE(S) SHOULD BE GUARANTEED BY
                                       AN ELIGIBLE GUARANTOR INSTITUTION (BANKS,
                                       STOCKBROKERS, SAVINGS AND LOAN
                                       ASSOCIATIONS AND CREDIT UNIONS WITH
                                       MEMBERSHIP IN AN APPROVED SIGNATURE
                                       GUARANTEE MEDALLION PROGRAM), PURSUANT TO
                                       S.E.C. RULE 17A-15.


                                      -2-


 
                                                                     EXHIBIT 5.1

                                 [Letterhead of
                            MORRIS, MANNING & MARTIN
                        A Limited Liability Partnership

                                Attorneys At Law
                         1600 Atlanta Financial Center
                           3343 Peachtree Road, N.E.
                          Atlanta, Georgia  30326-1044
                             Telephone 404-233-7000
                             Facsimile 404-365-9532

                                    Member,
                           Commercial Law Affiliates
                             With Independent Firms
                         In Principal Cities Worldwide]


                                 April 2, 1998



Manhattan Associates, Inc.
2300 Windy Ridge Parkway
Suite 700
Atlanta, Georgia  30339

     Re:  Registration Statement on Form S-1:  Registration No. 333-47095
          ---------------------------------------------------------------

Ladies and Gentlemen:

     We have served as counsel for Manhattan Associates, Inc., a Georgia
corporation (the "Company"), in connection with the registration under the
Securities Act of 1933, as amended, pursuant to the Company's Registration
Statement on Form S-1 (No. 333-47095) (the "Registration Statement"), of a
proposed public offering of 3,000,000 shares (the "Shares") of the Company's
authorized common stock, $.01 par value (the "Common Stock"), all of which are
to be sold by the Company. In addition, certain selling stockholders (the
"Selling Stockholders") have granted to the underwriters an option to purchase
450,000 shares of Common Stock to cover over-allotments, if any (the "Over-
Allotment Shares").

     We have examined and are familiar with originals or copies (certified or
otherwise identified to our satisfaction) of such documents, corporate records
and other instruments relating to the incorporation of the Company and to the
authorization and issuance of the outstanding shares of Common Stock and the
Shares and the Over-Allotment Shares to be sold by the Company and the Selling
Stockholders, respectively, as we have deemed necessary and advisable.

     Based upon the foregoing and having regard for such legal considerations
that we have deemed relevant, it is our opinion that:

 
Morris, Manning & Martin
April 2, 1998
Page 2

          1.  The 3,000,000 Shares to be issued and sold by the Company will be,
     upon issuance, sale and delivery as contemplated in the Registration
     Statement, legally and validly issued, fully paid and nonassessable.

          2.  The Over-Allotment Shares to be sold by the Selling Stockholders,
     upon the exercise of the over-allotment option by the Underwriters, will be
     legally and validly issued, fully paid and nonassessable.

     We do hereby consent to the reference to our firm under the heading "Legal
Matters" in the Prospectus contained in the Registration Statement and to the
filing of this Opinion as Exhibit 5.1 thereto.


                                    Respectfully,

                                    MORRIS, MANNING & MARTIN, L.L.P.


                                    /s/ Morris, Manning & Martin, L.L.P.


 
                                                                   EXHIBIT 10.7

               MANHATTAN ASSOCIATES, INC./_____________________


                         TAX INDEMNIFICATION AGREEMENT

     This TAX INDEMNIFICATION AGREEMENT, dated as of the 27th day of February,
1998, is entered into by MANHATTAN ASSOCIATES, INC., a Georgia corporation (the
"Company") and ____________________________________________ ("Shareholder").

                                    RECITALS

     WHEREAS, the Shareholder holds (directly or indirectly) outstanding 
     interests in Manhattan Associates, LLC, a Georgia limited liability
     company ("Manhattan LLC"), as such term is defined in the Operating
     Agreement of the Company, as amended (the "Interests"); and

     WHEREAS, Manhattan LLC is now contemplating restructuring from a limited
     liability company into a C corporation by the transfer of all of its
     business and assets to the Company in exchange for Voting Common Stock, no
     par value (the "Common Stock") of the Company pursuant to a Subscription
     and Contribution Agreement (the "Contribution Agreement") and immediately
     thereafter the dissolution and liquidation of Manhattan LLC and the
     distribution of all shares in the Company so received to the shareholders
     of Manhattan LLC, including the Shareholder; and

     WHEREAS, after the restructuring, the Company is contemplating offering and
     selling shares of such Common Stock to the public (the "Public Offering");
     and

     WHEREAS, the parties hereto wish to set forth their agreement with respect
     to certain adjustments to the federal and state income tax liability of the
     Shareholder and the Company attributable to Tax Items of Manhattan LLC that
     pass through to the Shareholder under the provisions of federal or state
     law for the period during which Manhattan LLC is a limited liability
     company;

     NOW, THEREFORE, for value received, the parties agree as follows:

                                   ARTICLE I

                                  DEFINITIONS

     For purposes of this Agreement the following definitions shall apply:

     (a) "Adjustment" shall mean any proposed or final change in any Tax
          ----------                                                    
liability initiated by any of the Shareholders, the Company, Manhattan LLC, or
the IRS, state or local taxing authority, or any other relevant taxing
authority.

 
     (b) "Code" shall mean the Internal Revenue Code of 1986, as amended and in
          ----                                                                 
effect for the taxable period in question.

     (c) "Company Tax Benefit" shall mean a reduction in the Income Tax
          -------------------                                          
liability of the Company for any taxable period beginning after the date of the
Transaction.  The Company shall be deemed to have received or realized a Company
Tax Benefit from a Tax Item in a taxable period only if and to the extent that
the Company's Income Tax liability for such period is less than it would have
been if such liability were determined without regard to such Tax Item.  The
Company shall be deemed to have realized or received a Company Tax Benefit with
respect to a carryover is used to produce a Company Tax Benefit.

     (d) "Final Determination" shall mean the final resolution of any Tax
          -------------------                                            
liability (including all related interest and penalties) for a taxable period.
A Final Determination shall result from the first to occur of:

          (i) the expiration of 30 days after IRS acceptance of a Waiver of
Restrictions on Assessment and Collection of Deficiency in Tax and Acceptance of
Overassessment on Federal Revenue Form 870 or 870-AD (or any successor
comparable form or the expiration of a comparable period with respect to any
comparable agreement or form under the laws of other jurisdictions), unless,
within such period, the taxpayer gives notice to the other party of the
taxpayer's intention to attempt to recover all or part of any amount paid
pursuant to the Waiver by the filing of a timely claim for refund;

          (ii) a decision, judgment, decree, or other order by a court of
competent jurisdiction that is not subject to further judicial review (by appeal
or otherwise) and has become final;

          (iii)  the execution of a closing agreement under section 7121 of the
Code or the acceptance by the IRS or its counsel of an offer in compromise under
section 7122 of the Code, or comparable agreements under the laws of other
jurisdictions;

          (iv) the expiration of the time for filing a claim for refund or for
instituting suit in respect of a claim for refund disallowed in whole or part by
the IRS or other relevant taxing authority;

          (v) any other final disposition of the tax liability for such period
by reason of the expiration of the applicable statute of limitations; or

          (vi) any other event that the parties agree is a final and irrevocable
determination of the liability at issue.

     (e) "Income Tax" shall mean federal income taxes and state and local taxes
          ----------                                                           
imposed upon, or measured by, income.  Income Tax includes interest, penalties,
and other additions to tax.

     (f) "IRS" shall mean the United States Internal Revenue Service or any
          ---                                                              
successor, including, but not limited to, its agents, representatives, and
attorneys.

                                      -2-

 
     (g) "Tax" shall mean any federal, state, local or foreign income, gross
          ---                                                               
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental (including taxes under Code (S) 59A),
customs duties, capital stock, franchise, profits, withholding, social security
(or similar), unemployment, disability, real property, personal property, sales,
use, transfer, registration, value added, alternative or add-on minimum,
estimated, or other tax of any kind whatsoever, including any interest, penalty
or addition thereto, whether disputed or not.

     (h) "Tax Benefit" shall mean a reduction in the personal Income Tax
          -----------                                                   
liability of the Shareholder (as a result of Tax Items of Manhattan LLC and all
other Tax Items reflected on the Shareholder's tax return) for any taxable
period.  The Shareholder shall be deemed to have realized or received a Tax
Benefit from a Tax Item in a taxable period only if and to the extent that the
Shareholder's personal Income Tax liability for such period is less than it
would have been if such liability were determined without regard to such Tax
Item.  The Shareholder shall be deemed to have realized or received a Tax
Benefit with respect to a carryover only if, when, and to the extent the
carryover is used to produce a Tax Benefit.

     (i) "Tax Item" shall mean any item of income, gain, loss, deduction,
          --------                                                       
credit, recapture of credit, or any other item which increases or decreases
Income Taxes paid or payable by the Shareholder or by the Company.

     (j) "Transaction" shall mean the transactions contemplated by and described
          -----------                                                           
in the Contribution Agreement.

                                   ARTICLE II

                       INDEMNIFICATION FOR CERTAIN TAXES

     (a) The Shareholder shall pay to the Company an amount equal to any Tax
Benefit actually realized or received arising from an Adjustment with respect to
a Tax Item of the Company for any taxable period in which Manhattan LLC was
taxable as a limited liability company.

     (b) The Shareholder represents and warrants to the Company that:

          (i) The Company will not incur any Taxes as a result of the
Transaction;

          (ii) If subsequent to the Transaction one or more of Manhattan LLC,
and/or PAC is liquidated or otherwise ceases to exist for tax purposes, neither
the Company nor PAC will incur any Taxes as a result of any such entity
liquidating or otherwise ceasing to exist (other than any Taxes that would be
imposed without regard to the Transaction or such liquidation or such entity
ceasing to exist);

          (iii)  Since its inception through the date of the Transaction,
Manhattan LLC has been an association taxable as a partnership for all federal
and applicable state income tax purposes.

                                      -3-

 
     With respect to representations and warranties (i) and (ii) above, the
Shareholder will indemnify and hold harmless the Company from any liability for
Taxes, costs and expenses, including reasonable attorneys fees, arising from any
breach of the Shareholder's representations and warranties set forth therein.
With respect to representation and warranty (iii) above, the Shareholder will
indemnify and hold harmless the Company from any liability for Income Taxes,
costs and expenses including reasonable attorney fees, arising from any breach
of the Shareholder's representations and warranties.

     The Shareholder's obligation under this subsection (b) shall be limited to
the total distributions from Manhattan LLC received by Shareholder (directly or
indirectly) at any time prior to or in connection with the Transaction, reduced
by any taxes (net of any refunds) imposed on the Shareholder with respect to his
distributive share of income and gains of Manhattan LLC.  A Shareholder is
deemed to have received a distribution indirectly if the distribution was made
by the LLC to an entity in which the Shareholder holds a beneficial interest.

     (c) The Company shall pay and indemnify the Shareholder for any limited
liability company Tax Liability arising from an Adjustment with respect to a Tax
Item of Manhattan LLC (other than an Adjustment arising from a breach of any
representation or warranty contained in paragraph (b) above).

     (d) Any payment required under this Article shall be made by the earliest
of (1) 20 days after the Shareholder receives a refund or credit, (2) 20 days
after a Final Determination with respect to such tax, (3) with respect to a
carryover, 20 days after the Shareholder files a tax return on which the
carryover produces a Tax Benefit, or (4) 20 days after the determination by the
parties or pursuant to Article IV that such payment is due.  All obligations of
indemnification hereunder shall be net of any Tax Benefit realized by the
Shareholder or Company Tax Benefit realized by the Company, as appropriate.

                                  ARTICLE III

                    COOPERATION AND EXCHANGE OF INFORMATION

     Whenever the Shareholder or the Company becomes aware of an issue which
either party believes could give rise to payment or indemnification from the
other party under Article II, the Shareholder or the Company (as the case may
be) shall promptly give notice of the issue to the other party.  The indemnitor
and its representatives, at the indemnitor's expense, shall be entitled to
participate in all conferences, meetings or proceedings with the IRS or other
taxing authority with respect to the issue.

     The parties agree to consult and cooperate with each other in the
negotiation and settlement or litigation of any Adjustment that may give rise to
any payment or an indemnification payment under this Agreement. All decisions
with respect to such negotiation and settlement or litigation shall be made by
the parties after full and good faith consultation.

     If a party who will be required to make an indemnification payment (the
"Indemnifying Party") proposes to accept a settlement offered by the relevant
taxing authority with respect to an issue for one or more taxable years, but the

                                      -4-

 
party who will be entitled to receive the payment (the "Indemnified Party")
disagrees with the proposed settlement, then the Indemnifying Party may pay to
the Indemnified Party the amount that would be due under this Agreement pursuant
to such settlement and, in that event, the Indemnifying Party shall have no
further responsibility for amounts attributable to that issue for the taxable
years involved.

                                   ARTICLE IV

                                    DISPUTES

     If the parties are, after negotiation in good faith, unable to agree upon
the appropriate calculation of amounts due under this Agreement, the controversy
shall be settled by Arthur Andersen, LLP (the "Accounting Firm").

     The decision of the Accounting Firm shall be final, and each of the Company
and the Shareholder agree immediately to pay to the other any amount due under
this Agreement pursuant to such decision.  The expenses of the Accounting Firm
shall be borne one-half by the Company and one-half by the Shareholder unless
the parties agree otherwise.

     Any dispute arising between the parties with reference to the legal
interpretation of this Agreement or their rights hereunder shall, upon written
request of either party, be submitted to three arbitrators, one to be chosen by
each party, and the third by the two so chosen.  Each party shall submit its
case to its arbitrator within thirty days of the appointment of the third
arbitrator.  The decision in writing of any two arbitrators, when filed with the
parties hereto, shall be final and binding on both parties.  Judgment may be
entered upon the final decision of the arbitrators in any court having
jurisdiction.  Each party shall bear the expense of its own arbitrator and shall
jointly and equally bear with the other party the expense of the third
arbitrator and of the arbitration.

                                   ARTICLE V

                                 MISCELLANEOUS

     Section 5.1  Term of Agreement.  This Agreement shall become effective as
                  -----------------                                           
of the date of its execution and shall continue in full force and effect
indefinitely, except that this Agreement shall be void and of no effect if the
Transaction is not consummated before September 1, 1998.

     Section 5.2  Severability.  If any term of this Agreement is held by a
                  ------------                                             
court of competent jurisdiction to be unenforceable, the remainder of the terms
set forth herein shall remain in full force and effect and shall in no way be
impaired.  In the event that any term is held to be unenforceable, the parties
shall use their best efforts to find an alternative means to achieve the same or
substantially the same result as that contemplated by such term.

     Section 5.3  Assignment.  Except by operation of law or in connection with
                  ----------                                                   
the sale of all or substantially all the assets of the Company, this Agreement
shall not be assignable, in whole or in part, directly or indirectly, by the
Shareholder without the written consent of the Company or by the Company without
the written consent of the Shareholder.  Any attempt to assign any right or

                                      -5-

 
obligations arising under this Agreement without such consent shall be void.
The provisions of this Agreement shall be binding upon inure to the benefit of,
and be enforceable by the parties and their respective heirs, successors and
permitted assigns, including, but not limited to, Manhattan Associates, Inc., a
Georgia corporation as the successor of Manhattan LLC.

     Section 5.4  Further Assurances.  Subject to the provisions of this
                  ------------------                                    
Agreement, the parties shall acknowledge such other instruments and documents,
and take all other actions, as may be reasonably required in order to effectuate
the purposes of this Agreement.

     Section 5.5  Parties in Interest.  Except as herein otherwise specifically
                  -------------------                                          
provided, nothing in this Agreement expressed or implied is intended to confer
any right or benefit upon any person, firm, or corporation other than the
parties and their respective successors and permitted assigns.

     Section 5.6  Waivers, Etc.  No failure or delay on the part of the parties
                  ------------                                                 
in exercising any power or right under this Agreement shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power, or
any abandonment or discontinuance of steps to enforce such right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power.  No modification or waiver of any provision of this Agreement
nor consent to any departure by the parties therefrom shall in any event be
effective unless it shall be in writing, and then such waiver or consent shall
be effective only in the specific instance and for the purpose which given.

     Section 5.7  Set-off.  All payments to be made by any party under this
                  -------                                                  
Agreement shall be made without set-off, counterclaim, or withholding, all of
which are expressly waived.

     Section 5.8  Change of Law.  If, due to any change in applicable law or
                  -------------                                             
regulations or the interpretation thereof by any court or other governing body
having jurisdiction subsequent to the date of this Agreement, performance of any
provision of this Agreement shall be impracticable or impossible, the parties
shall use their best efforts to find an alternative means to achieve the same or
substantially the same results as are contemplated by such provision.

     Section 5.9.  Headings.  Descriptive headings are for convenience only and
                   --------                                                    
shall not control or affect the meaning of any provision of this Agreement.

     Section 5.10  Counterparts.  For the convenience of the parties, any number
                   ------------                                                 
of counterparts of this Agreement may be executed by the parties and each
executed counterpart shall be an original instrument.

     Section 5.11  Notices.  All notices provided for in this Agreement shall be
                   -------                                                      
validly given if in writing and delivered personally or sent by registered mail,
postage prepaid

                                      -6-

 
     if to the Company, at

             Manhattan Associates, Inc.
             2300 Windy Ridge Parkway
             Suite 700
             Atlanta, Georgia  30339
             Attn:  President

     copy to:

             David K. Dabbiere, Esq.
             General Counsel
             Manhattan Associates, Inc.
             2300 Windy Ridge Parkway
             Suite 700
             Atlanta, Georgia  30339

     if to the Shareholder, to:

             _______________________________________       

             _______________________________________       

             _______________________________________       

             _______________________________________       

             _______________________________________       

             _______________________________________       


or to such other addresses as any party may, from time to time, designate in a
written notice given in a like manner.  Notice given by mail shall be deemed
delivered five calendar days after the date mailed.

     Section 5.12  Governing Law.  This Agreement shall be governed by the
                   -------------                                          
domestic substantive laws of Georgia without regard to any choice or conflict of
laws rule or provision that would cause the application of the domestic
substantive laws of any other jurisdiction.

     Section 5.13  No Double Recovery.  The total recovery received by the
                   ------------------                                     
Company pursuant to this Agreement and any of the other Tax Indemnification
Agreements between the Company and any former, present or future shareholder of
Manhattan LLC with respect to a Final Determination shall not exceed the total
Taxes, costs and expenses arising from such Final Determination.

                                      -7-

 
     IN WITNESS WHEREOF, the undersigned have caused this Agreement to be duly
executed as of the day and year first written above.


MANHATTAN ASSOCIATES, INC.:            SHAREHOLDER:               
                       


By:                                                                     (SEAL) 
    -------------------------------    ---------------------------------
     Alan J. Dabbiere, President      

                                      -8-


                                                                    EXHIBIT 10.8

                             WILDWOOD OFFICE PARK
                           MANHATTAN ASSOCIATES, LLC
                           SECOND AMENDMENT TO LEASE

     THIS SECOND AMENDMENT TO LEASE ("Amendment"), is made the 27th day of 
February, 1998, between Wildwood Associates, a Georgia General Partnership 
comprised of International Business Machines Corporation, a New York 
Corporation, and Cousins Properties Incorporated, a Georgia Corporation, having
an office at Suite 1600, 2500 Windy Ridge Parkway, Atlanta, Georgia 30339-5683, 
hereinafter called "Landlord", and Manhattan Associates, LLC having its 
principal office at Suite 700, 2300 Windy Ridge Parkway, Atlanta, Georgia 
30339, hereinafter called "Tenant".

                             W I T N E S S E T H:
                             --------------------

     WHEREAS Landlord and Tenant entered into that certain Lease dated September
24, 1997 as amended October 31, 1997 (herein called the "Lease") with respect to
the Demised Premises (as defined in the Lease) located in Suite 700 of the 
Building at 2300 Windy Ridge Parkway, Atlanta, Georgia; and

     WHEREAS Tenant and Landlord have mutually agreed to expand the Demised 
Premises.

    NOW, THEREFORE, for and in consideration of the Demised Premises, the 
mutual promises contained in this Amendment, and other good and valuable 
consideration, the receipt, adequacy and sufficiency of which are hereby 
acknowledged by the parties hereto, Landlord and Tenant do hereby agree as 
follows:

1.  All terms and words of art used herein, as indicated by the initial 
capitalization thereof, shall have the same respective meaning designated for 
such terms and words of art in the Lease.

2.  Certain Definitions. Article 1 is hereby amended as follows:
    -------------------

    (g) Rentable Floor Area of Demised Premises: shall be amended as of the
        ---------------------------------------
        Second Expansion Area Rental Commencement Date by deleting "51,442
        square feet" and inserting "63,296 square feet".

    (j) Base Rental Rate: Shall be amended by adding the following new
        ----------------
        subparagraph at the end thereof. "The Base Rental Rate for the Second
        Expansion Area shall be $16.00 per square foot of Rentable Floor Area
        per year.

                                       1


 
     (k)  Rental Commencement Date shall be amended by adding the following new
          ------------------------
          subparagraph "as to the Second Expansion Area the Rental Commencement
          Date shall be the earlier of July 1, 1998 or the date Tenant takes
          possession of the Demised Premises for the purpose of conducting
          business."

     (m)  Construction Allowance, shall be amended by adding the following new
          ----------------------
          subparagraph "as to the Second Expansion Area an allowance of $15.00
          per square foot of Rentable Floor Area shall be provided."

     (p)  A new subparagraph entitled (s) Second Expansion Area shall be added
                                          ---------------------              
          as follows:

          "The Second Expansion Area shall be defined as the additional 11,854
          square feet of Rentable Floor Area being leased by Tenant on the
          (seventh) 7th floor of the Building, which when added to the existing
          Demised Premises of 51,442 square feet of Rentable Floor Area
          represents the full floor rentable floor area as more fully set forth
          on Exhibit "B" of the Lease. The Second Expansion Area shall be
          included in the definition of Demised Premises for all purposes of
          this Lease including the requirement to pay Additional Rental. Tenant
          to lease the Second Expansion Area in it "as is" condition and Tenant
          and Tenant's contractor shall have access to the Second Expansion Area
          upon execution of this Second Amendment for the start of construction.
          All costs and expenses of renovating the Second Expansion Area shall
          be at the sole cost and expense of Tenant except that Landlord shall
          contribute the Construction Allowance as set forth in 1 (m) above."

3.  Except as expressly modified herein, the Lease Agreement shall remain in 
    full force and effect and, as hereby modified, is expressly ratified and
    confirmed by the parties hereto. This Amendment shall be binding upon and
    shall inure to the benefit of Landlord and Tenant and their representatives,
    permitted legal representatives, successors and assigns.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be signed 
and their respective seals to be affixed as of the date and year first above 
written.




                           [SIGNATURES ON NEXT PAGE]







 
"LANDLORD"

WILDWOOD ASSOCIATES,
a Georgia general partnership

BY:     Cousins Properties Incorporated
        Managing General Partner

By:      /s/ Jack S. LaHue
        ----------------------------
Its:    Senior Vice President

                        [CORPORATE SEAL]


"TENANT"

MANHATTAN ASSOCIATES, LLC

By:      /s/ Oliver M. Cooper
        ----------------------------
Its:    Chief Operating Officer

                        [CORPORATE SEAL]






                                       3


                                                                   EXHIBIT 10.13

                          LOAN AND SECURITY AGREEMENT
                                        
                                    BETWEEN

                       MANHATTAN ASSOCIATES SOFTWARE, LLC

                                      AND

                              SILICON VALLEY BANK


                                        

 
                               TABLE OF CONTENTS

                                                            Page
                                                            ----

1.   DEFINITIONS AND CONSTRUCTION....................................1
     1.1 Definitions.................................................1
     1.2 Accounting and Other Terms..................................7

2.   LOAN AND TERMS OF PAYMENT.......................................7
     2.1 Advances....................................................7
     2.2 Overadvances................................................7
     2.3 Interest Rates, Payments, and Calculations..................8
     2.4 Crediting Payments..........................................8
     2.5 Fees........................................................8
     2.6 Additional Costs............................................9
     2.7 Term........................................................9

3.   CONDITIONS OF LOANS.............................................9
     3.1 Conditions Precedent to Initial Advance.....................9
     3.2 Conditions Precedent to all Advances........................10

4.   CREATION OF SECURITY INTEREST...................................10
     4.1 Grant of Security Interest..................................10
     4.2 Delivery of Additional Documentation Required...............10
     4.3 Right to Inspect............................................11

5.   REPRESENTATIONS AND WARRANTIES..................................11
     5.1 Due Organization and Qualification..........................11
     5.2 Due Authorization; No Conflict..............................11
     5.3 No Prior Encumbrances.......................................11
     5.4 Bona Fide Eligible Accounts.................................11
     5.5 Merchantable Inventory......................................11
     5.6 Intellectual Property.......................................11
     5.7 Name; Location of Chief Executive Office....................12
     5.8 Litigation..................................................12
     5.9 No Material Adverse Change in Financial Statements..........12
     5.10 Solvency...................................................12
     5.11 Regulatory Compliance......................................12
     5.12 Environmental Condition....................................12
     5.13 Taxes......................................................12
     5.14 Subsidiaries...............................................13
     5.15 Government Consents........................................13
     5.16 Full Disclosure............................................13

6.   AFFIRMATIVE COVENANTS...........................................13
     6.1 Good Standing...............................................13

 
     6.2 Government Compliance.......................................13
     6.3 Financial Statements, Reports, Certificates.................13
     6.4 Inventory; Returns..........................................14
     6.5 Taxes.......................................................14
     6.6 Insurance...................................................14
     6.7 Principal Depository........................................14
     6.8 Adjusted Quick Ratio........................................14
     6.9 Profitability...............................................15
     6.10 Further Assurances.........................................15

7.   NEGATIVE COVENANTS..............................................15
     7.1 Dispositions................................................15
     7.2 Changes in Business, Ownership, or Management, Business 
         Locations...................................................15
     7.3 Mergers or Acquisitions.....................................15
     7.4 Indebtedness................................................15
     7.5 Encumbrances................................................15
     7.6 Distributions...............................................16
     7.7 Investments.................................................16
     7.8 Transactions with Affiliates................................16
     7.9 Subordinated Debt...........................................16
     7.10 Inventory..................................................16
     7.11 Compliance.................................................16

8.   EVENTS OF DEFAULT...............................................16
     8.1 Payment Default.............................................16
     8.2 Covenant Default............................................16
     8.3 Material Adverse Change.....................................17
     8.4 Attachment..................................................17
     8.5 Insolvency..................................................17
     8.6 Other Agreements............................................17
     8.7 Subordinated Debt...........................................17
     8.8 Judgments...................................................17
     8.9 Misrepresentations..........................................17
     8.10 Guaranty...................................................17

9.   BANK'S RIGHTS AND REMEDIES......................................18
     9.1 Rights and Remedies.........................................18
     9.2 Power of Attorney...........................................19
     9.3 Accounts Collection.........................................19
     9.4 Bank Expenses...............................................19
     9.5 Bank's Liability for Collateral.............................19
     9.6 Remedies Cumulative.........................................19
     9.7 Demand; Protest.............................................20

10. NOTICES..........................................................20

11. CHOICE OF LAW AND VENUE..........................................20

                                      -ii-

 
12. GENERAL PROVISIONS...............................................21
     12.1 Successors and Assigns.....................................21
     12.2 Indemnification............................................21
     12.3 Time of Essence............................................21
     12.4 Severability of Provisions.................................21
     12.5 Amendments in Writing, Integration.........................21
     12.6 Counterparts...............................................21
     12.7 Survival...................................................21

                                     -iii-

 
     This LOAN AND SECURITY AGREEMENT is entered into as of March 30, 1998, by
and between SILICON VALLEY BANK, a California-chartered bank ("BANK"), with a
loan production office at 3343 Peachtree Road, N.E., East Tower, Suite 312,
Atlanta, Georgia 30326, and MANHATTAN ASSOCIATES SOFTWARE, LLC, a Georgia
limited liability company ("BORROWER"), with its principal place of business and
chief executive office at 2300 Windy Ridge Parkway, Suite 700, Atlanta, Georgia
30339.

                                   RECITALS
                                   --------
                                        
     Borrower wishes to obtain credit from time to time from Bank, and Bank
desires to extend credit to Borrower.  This Agreement sets forth the terms on
which Bank will advance credit to Borrower, and Borrower will repay the amounts
owing to Bank.

                                   AGREEMENT
                                   ---------
                                        
     The parties agree as follows:

     1.   DEFINITIONS AND CONSTRUCTION
          ----------------------------

          1.1  DEFINITIONS.  As used in this Agreement, the following terms
               -----------                                                   
shall have the following definitions:

          "ACCOUNTS" means all presently existing and hereafter arising
accounts, contract rights, and all other forms of obligations owing to Borrower
arising out of the sale or lease of goods (including, without limitation, the
licensing of software and other technology) or the rendering of services by
Borrower, whether or not earned by performance, and any and all credit
insurance, guaranties, and other security therefor, as well as all merchandise
returned to or reclaimed by Borrower and Borrower's Books relating to any of the
foregoing.

          "ADVANCE" or "ADVANCES" means a loan advance under the Committed
Revolving Line.

          "AFFILIATE" means, with respect to any Person, any Person that owns or
controls directly or indirectly such Person, any Person that controls or is
controlled by or is under common control with such Person, and each of such
Person's senior executive officers, directors, partners and, for any Person that
is a limited liability company, such Persons, managers and members.


          "BANK EXPENSES" means all reasonable costs or expenses (including
reasonable attorneys' fees and expenses) incurred in connection with the
preparation, negotiation, administration, and enforcement of the Loan Documents;
and Bank's reasonable attorneys' fees and expenses incurred in amending,
enforcing or defending the Loan Documents, (including fees and expenses of
appeal or review, or those incurred in any Insolvency Proceeding) whether or not
suit is brought.

          "BORROWER'S BOOKS" means all of Borrower's books and records
including, without limitation: ledgers; records concerning Borrower's assets or
liabilities, the Collateral, business operations or financial condition; and all
computer programs, or tape files, and the equipment, containing such
information.

          "BORROWING BASE" means an amount equal to seventy-five percent (75%)
of Eligible Accounts, as determined by Bank with reference to the most recent
Borrowing Base Certificate delivered by Borrower.

 
          "BUSINESS DAY" means any day that is not a Saturday, Sunday, or other
day on which banks in the State of Georgia are authorized or required to close.

          "CLOSING DATE" means the date of this Agreement.

          "CODE" means the Georgia Uniform Commercial Code.

          "COLLATERAL" means the property described on Exhibit A attached
                                                       ---------         
hereto.

          "COMMITTED REVOLVING LINE" means a credit extension of up to Eight
Million Dollars ($8,000,000.00).

          "CONTINGENT OBLIGATION" means, as applied to any Person, any direct or
indirect liability, contingent or otherwise, of that Person with respect to (i)
any indebtedness, lease, dividend, letter of credit or other obligation of
another, including, without limitation, any such obligation directly or
indirectly guaranteed, endorsed, co-made or discounted or sold with recourse by
that Person, or in respect of which that Person is otherwise directly or
indirectly liable; (ii) any obligations with respect to undrawn letters of
credit issued for the account of that Person; and (iii) all obligations arising
under any interest rate, currency or commodity swap agreement, interest rate cap
agreement, interest rate collar agreement, or other agreement or arrangement
designated to protect a Person against fluctuation in interest rates, currency
exchange rates or commodity prices; provided, however, that the term "Contingent
Obligation" shall not include endorsements for collection or deposit in the
ordinary course of business.  The amount of any Contingent Obligation shall be
deemed to be an amount equal to the stated or determined amount of the primary
obligation in respect of which such Contingent Obligation is made or, if not
stated or determinable, the maximum reasonably anticipated liability in respect
thereof as determined by such Person in good faith; provided, however, that such
amount shall not in any event exceed the maximum amount of the obligations under
the guarantee or other support arrangement.

          "CONVERSION" as defined in Section 7.2 hereof.

          "COPYRIGHTS" means any and all copyright rights, copyright
applications, copyright registrations and like protections in each work or
authorship and derivative work thereof, whether published or unpublished and
whether or not the same also constitutes a trade secret, now or hereafter
existing, created, acquired or held.
 
          "CREDIT EXTENSION" means each Advance or any other extension of credit
by Bank for the benefit of Borrower hereunder.

          "CURRENT ASSETS" means, as of any applicable date, all amounts that
should, in accordance with GAAP, be included as current assets on the
consolidated balance sheet of Borrower and its Subsidiaries as at such date.

          "CURRENT LIABILITIES" means, as of any applicable date, all amounts
that should, in accordance with GAAP, be included as current liabilities on the
consolidated balance sheet of Borrower and its Subsidiaries, as at such date,
plus, to the extent not already included therein, all outstanding Credit
Extensions made under this Agreement, including all Indebtedness that is payable
upon demand or within one year from the date of determination thereof unless
such Indebtedness is renewable or extendable at the option of Borrower or any
Subsidiary to a date more than one year from the date of determination, but
excluding Subordinated Debt.

          "ELIGIBLE ACCOUNTS" means those Accounts that arise in the ordinary
course of Borrower's business that comply with all of Borrower's representations
and warranties to Bank set forth in Section 5.4.  Unless otherwise agreed to by
Bank in writing, Eligible Accounts shall not include the following:

                                      -2-

 
          (a) Accounts that the account debtor has failed to pay within ninety
(90) days of invoice date;

          (b) Accounts with respect to an account debtor, fifty percent (50%) of
whose Accounts the account debtor has failed to pay within ninety (90) days of
invoice date;

          (c) Accounts with respect to an account debtor, including Affiliates,
whose total obligations to Borrower exceed twenty-five percent (25%) of all
Accounts, to the extent such obligations exceed the aforementioned percentage,
except as approved in writing by Bank;

          (d) Accounts with respect to which the account debtor does not have
its principal place of business in the United States;

          (e) Accounts with respect to which the account debtor is a federal,
state, or local governmental entity or any department, agency, or
instrumentality thereof;

          (f) Accounts with respect to which Borrower is liable to the account
debtor, but only to the extent of any amounts owing to the account debtor
(sometimes referred to as "contra" accounts, e.g. accounts payable, customer
deposits, credit accounts etc.);

          (g) Accounts generated by demonstration or promotional equipment, or
with respect to which goods are placed on consignment, guaranteed sale, sale or
return, sale on approval, bill and hold, or other terms by reason of which the
payment by the account debtor may be conditional;

          (h) Accounts with respect to which the account debtor is an Affiliate,
officer, employee, or agent of Borrower;

          (i) Accounts with respect to which the account debtor disputes
liability or makes any claim with respect thereto as to which Bank believes, in
its sole discretion, that there may be a basis for dispute (but only to the
extent of the amount subject to such dispute or claim), or is subject to any
Insolvency Proceeding, or becomes insolvent, or goes out of business; and

          (j) Accounts the collection of which Bank reasonably determines to be
doubtful.

          "EQUIPMENT" means all present and future machinery, equipment, tenant
improvements, furniture, fixtures, vehicles, tools, parts and attachments in
which Borrower has any interest.

          "ERISA" means the Employment Retirement Income Security Act of 1974,
as amended, and the regulations thereunder.

          "GAAP" means generally accepted accounting principles as in effect in
the United States from time to time.

          "GUARANTOR" means any present or future guarantor of the Obligations.
As of the Closing Date there are no Guarantors.

          "INDEBTEDNESS" means (a) all indebtedness for borrowed money or the
deferred purchase price of property or services, including without limitation
reimbursement and other obligations with respect to surety bonds and letters of
credit, (b) all obligations evidenced by notes, bonds, debentures or similar
instruments, (c) all capital lease obligations and (d) all Contingent
Obligations.

                                      -3-

 
          "INSOLVENCY PROCEEDING" means any proceeding commenced by or against
any person or entity under any provision of the United States Bankruptcy Code,
as amended, or under any other bankruptcy or insolvency law, including
assignments for the benefit of creditors, formal or informal moratoria,
compositions, extension generally with its creditors, or proceedings seeking
reorganization, arrangement, or other relief.

          "INTELLECTUAL PROPERTY" means

          (a) Copyrights, Trademarks, Patents, and Mask Works;

          (b) Any and all trade secrets, and any and all intellectual property
rights in computer software and computer software products now or hereafter
existing, created, acquired or held;

          (c) Any and all design rights which may be available to Borrower now
or hereafter existing, created, acquired or held;

          (d) Any and all claims for damages by way of past, present and future
infringement of any of the rights included above, with the right, but not the
obligation, to sue for and collect such damages for said use or infringement of
the intellectual property rights identified above;

          (e) All licenses or other rights to use any of the Copyrights,
Patents, Trademarks, or Mask Works, and all license fees and royalties arising
from such use to the extent permitted by such license or rights;

          (f) All amendments, renewals and extensions of any of the Copyrights,
Trademarks, Patents, or Mask Works; and

          (g) All proceeds and products of the foregoing, including without
limitation all payments under insurance or any indemnity or warranty payable in
respect of any of the foregoing.

          "INVENTORY" means all present and future inventory in which Borrower
has any interest, including merchandise, raw materials, parts, supplies, packing
and shipping materials, work in process and finished products intended for sale
or lease or to be furnished under a contract of service, of every kind and
description now or at any time hereafter owned by or in the custody or
possession, actual or constructive, of Borrower, including such inventory as is
temporarily out of its custody or possession or in transit and including any
returns upon any accounts or other proceeds, including insurance proceeds,
resulting from the sale or disposition of any of the foregoing and any documents
of title representing any of the above.

          "INVESTMENT" means any beneficial ownership of (including stock,
partnership interest or other securities) any Person, or any loan, advance or
capital contribution to any Person.

          "IRC" means the Internal Revenue Code of 1986, as amended, and the
regulations thereunder.

          "LIEN" means any mortgage, lien, deed of trust, charge, pledge,
security interest or other encumbrance.

          "LOAN DOCUMENTS" means, collectively, this Agreement, any note or
notes executed by Borrower, and any other present or future agreement entered
into between Borrower and/or for the benefit of Bank in connection with this
Agreement, all as amended, extended or restated from time to time.

          "MASK WORKS" means all mask work or similar rights available for the
protection of semiconductor chips, now owned or hereafter acquired;

                                      -4-

 
          "MATERIAL ADVERSE EFFECT" means a material adverse effect on (i) the
business operations or condition (financial or otherwise) of Borrower and its
Subsidiaries taken as a whole or (ii) the ability of Borrower to repay the
Obligations or otherwise perform its obligations under the Loan Documents.

          "MATURITY DATE" means the Revolving Maturity Date.

          "NEGOTIABLE COLLATERAL" means all of Borrower's present and future
letters of credit of which it is a beneficiary, notes, drafts, instruments,
securities, documents of title, and chattel paper.

          "NET INCOME (LOSS)" shall mean, for any fiscal period of any Person,
the net income (or loss) of such Person after taxes on a consolidated basis for
such period (taken as a single accounting period) determined in conformity with
GAAP, but excluding therefrom (to the extent otherwise included therein and
without duplication) (i) any gains or losses, together with any related
provisions for taxes, realized by such Person upon any sale of its assets other
than in the ordinary course of business, (ii) any other non-recurring gains or
losses, and (iii) any income or loss of any other Person acquired prior to the
date such other Person becomes a Subsidiary of the Person whose Net Income
(Loss) is being measured or is merged into or consolidated with the Person whose
Net Income (Loss) is being measured or all or substantially all of such other
Person's assets are acquired by the Person whose Net Income (Loss) is being
measured.

          "OBLIGATIONS" means all debt, principal, interest, Bank Expenses and
other amounts owed to Bank by Borrower pursuant to this Agreement or any other
agreement, whether absolute or contingent, due or to become due, now existing or
hereafter arising, including any interest that accrues after the commencement of
an Insolvency Proceeding and including any debt, liability, or obligation owing
from Borrower to others that Bank may have obtained by assignment or otherwise.

          "PATENTS" means all patents, patent applications and like protections
including without limitation improvements, divisions, continuations, renewals,
reissues, extensions and continuations-in-part of the same.

          "PAYMENT DATE" means the first calendar day of each month commencing
on the first such date after the Closing Date and ending on the Revolving
Maturity Date.

          "PERMITTED INDEBTEDNESS" means:

          (a) Indebtedness of Borrower in favor of Bank arising under this
Agreement or any other Loan Document;

          (b) Indebtedness existing on the Closing Date and disclosed in the
Schedule;

          (c)  Subordinated Debt;

          (d) Indebtedness to trade creditors incurred in the ordinary course of
business; and

          (e) Indebtedness secured by Permitted Liens.

          "PERMITTED INVESTMENT" means:

          (a) Investments existing on the Closing Date disclosed in the
Schedule; and

                                      -5-

 
          (b) (i) marketable direct obligations issued or unconditionally
guaranteed by the United States of America or any agency or any State thereof
maturing within one (1) year from the date of acquisition thereof, (ii)
commercial paper maturing no more than one (1) year from the date of creation
thereof and currently having the highest rating obtainable from either Standard
& Poor's Corporation or Moody's Investors Service, Inc., and (iii) certificates
of deposit maturing no more than one (1) year from the date of investment
therein issued by Bank.

          "PERMITTED LIENS" means the following:

          (a) Any Liens existing on the Closing Date and disclosed in the
Schedule or arising under this Agreement or the other Loan Documents;

          (b) Liens for taxes, fees, assessments or other governmental charges
or levies, either not delinquent or being contested in good faith by appropriate
proceedings and as to which adequate reserves are maintained on Borrower's Books
in accordance with GAAP, provided the same have no priority over any of Bank's
                         --------                                             
security interests;

          (c) Liens (i) upon or in any Equipment acquired or held by Borrower or
any of its Subsidiaries to secure the purchase price of such Equipment or
indebtedness incurred solely for the purpose of financing the acquisition of
such Equipment, or (ii) existing on such equipment at the time of its
acquisition, provided that the Lien is confined solely to the property so
             --------                                                    
acquired and improvements thereon, and the proceeds of such equipment;

          (d) Liens incurred in connection with the extension, renewal or
refinancing of the indebtedness secured by Liens of the type described in
clauses (a) through (c) above, provided that any extension, renewal or
                               --------                               
replacement Lien shall be limited to the property encumbered by the existing
Lien and the principal amount of the indebtedness being extended, renewed or
refinanced does not increase.

          "PERSON" means any individual, sole proprietorship, partnership,
limited liability company, joint venture, trust, unincorporated organization,
association, corporation, institution, public benefit corporation, firm, joint
stock company, estate, entity or governmental agency.

          "PRIME RATE" means the variable rate of interest, per annum, most
recently announced by Bank, as its "prime rate," whether or not such announced
rate is the lowest rate available from Bank.

          "QUICK ASSETS" means, as of any applicable date, the consolidated
cash, cash equivalents, accounts receivable and investments with maturities of
fewer than 90 days of Borrower determined in accordance with GAAP.

          "RESPONSIBLE OFFICER" means each of the Chief Executive Officer, the
President, the Chief Financial Officer and the Controller of Borrower.

          "REVOLVING MATURITY DATE" means March 29, 1999.

          "SCHEDULE" means the schedule of exceptions attached hereto, if any.

          "SUBORDINATED DEBT" means any debt incurred by Borrower that is
subordinated to the debt owing by Borrower to Bank on terms acceptable to Bank
(and identified as being such by Borrower and Bank).

          "SUBSIDIARY" means with respect to any Person, corporation,
partnership, company association, joint venture, or any other business entity of
which more than fifty percent (50%) of the voting stock or other equity

                                      -6-

 
interests is owned or controlled, directly or indirectly, by such Person or one
or more Affiliates of such Person.

          "TOTAL LIABILITIES" means as of any applicable date, any date as of
which the amount thereof shall be determined, all obligations that should, in
accordance with GAAP be classified as liabilities on the consolidated balance
sheet of Borrower, including in any event all Indebtedness, but specifically
excluding Subordinated Debt.

          "TRADEMARKS" means any trademark and servicemark rights, whether
registered or not, applications to register and registrations of the same and
like protections, and the entire goodwill of the business of Assignor connected
with and symbolized by such trademarks.

          1.2  ACCOUNTING AND OTHER TERMS.  All accounting terms not
               --------------------------                             
specifically defined herein shall be construed in accordance with GAAP and all
calculations and determinations made hereunder shall be made in accordance with
GAAP. When used herein, the term "financial statements" shall include the notes
and schedules thereto. The terms "including"/ "includes" shall always be read as
meaning "including (or includes) without limitation", when used herein or in any
other Loan Document.
 
     2.   LOAN AND TERMS OF PAYMENT
          -------------------------
 
          2.1  ADVANCES.  Borrower promises to pay to the order of Bank, in
               --------                                                      
lawful money of the United States of America, the aggregate unpaid principal
amount of all Advances made by Bank to Borrower hereunder.  Borrower shall also
pay interest on the unpaid principal amount of such Advances at rates in
accordance with the terms hereof.
 
          2.1.1  (a)  Subject to and upon the terms and conditions of this
Agreement, Bank agrees to make Advances to Borrower in an aggregate outstanding
amount not to exceed the Committed Revolving Line or the Borrowing Base,
whichever is less.  Subject to the terms and conditions of this Agreement,
amounts borrowed pursuant to this Section 2.1 may be repaid and reborrowed at
any time during the term of this Agreement.

                 (b) Whenever Borrower desires an Advance, Borrower will notify
Bank by facsimile transmission or telephone no later than 11:00 a.m. Eastern
time, on the Business Day that the Advance is to be made. Each such notification
shall be promptly confirmed by a Payment/Advance Form in substantially the form
of Exhibit B hereto.  Bank is authorized to make Advances under this Agreement,
   ---------                                                                   
based upon instructions received from a Responsible Officer or a designee of a
Responsible Officer, or without instructions if in Bank's discretion such
Advances are necessary to meet Obligations which have become due and remain
unpaid.  Bank shall be entitled to rely on any telephonic notice given by a
person who Bank reasonably believes to be a Responsible Officer or a designee
thereof, and Borrower shall indemnify and hold Bank harmless for any damages or
loss suffered by Bank as a result of such reliance.  Bank will credit the amount
of Advances made under this Section 2.1 to Borrower's deposit account.

                 (c) The Committed Revolving Line shall terminate on the
Revolving Maturity Date, at which time all Advances under this Section 2.1 and
other amounts due under this Agreement (except as otherwise expressly specified
herein) shall be immediately due and payable.

                 (d) The proceeds of the Advances shall be used (i) to finance
the working capital needs of the Borrower and (ii) to fund the distributions
contemplated by the Conversion on the Closing Date. No proceeds of any Advance
shall be made by Borrower to any subsidiary of Borrower or to any direct or
indirect parent company of Borrower except on the Closing Date in connection
with the Conversion.

          2.2  OVERADVANCES.  If, at any time or for any reason, the amount
               ------------                                                   
of Obligations owed by Borrower to Bank pursuant to Section 2.1.1 of this
Agreement is greater than the lesser of (i) the Committed Revolving Line or (ii)

                                      -7-

 
the Borrowing Base, Borrower shall immediately pay to Bank, in cash, the amount
of such excess.

          2.3  INTEREST RATES, PAYMENTS, AND CALCULATIONS.
               ------------------------------------------   
 
                 (a) Interest Rate.  Except as set forth in Section 2.3(b), any
                     -------------
Advances shall bear interest, on the average daily balance thereof, at a per
annum rate equal to the Prime Rate plus one-half percent (0.50%).
 
                 (b) Default Rate.  All Obligations shall bear interest, from 
                     ------------  
and after the occurrence of an Event of Default, at a rate equal to five (5)
percentage points above the interest rate applicable immediately prior to the
occurrence of the Event of Default.
 
                 (c) Payments.  Interest hereunder shall be due and payable 
                     --------                                               
on each Payment Date. Borrower hereby authorizes Bank to debit any accounts with
Bank for payments of principal and interest due on the Obligations and any other
amounts owing by Borrower to Bank. Bank will notify Borrower of all debits which
Bank has made against Borrower's accounts. Any such debits against Borrower's
accounts in no way shall be deemed a set-off.

                 (d) Computation.  In the event the Prime Rate is changed from 
                     -----------   
time to time hereafter, the applicable rate of interest hereunder shall be
increased or decreased effective as of 12:01 a.m. on the day the Prime Rate is
changed, by an amount equal to such change in the Prime Rate.

                 (e) Agreements Regarding Interest and Other Charges.  Borrower
                     -----------------------------------------------        
and the Bank hereby agree that the only charges imposed or to be imposed by the
Bank upon Borrower for the use of money in connection with the loans made
hereunder is and will be the interest required to be paid under the provisions
of this Agreement as well as the related provisions of the Loan Documents. In no
event shall the amount of interest due and payable under this Agreement or the
Loan Documents exceed the maximum rate of interest allowed by applicable law
and, in the event any such payment is made by the Borrower or received by the
Bank, such excess sum shall be credited as a payment of principal. It is the
express intent hereof that the Borrower not pay and the Bank not receive,
directly or indirectly or in any manner, interest in excess of that which may be
lawfully paid under applicable law. All interest and other charges, fees or
other amounts deemed to be interest which are paid or agreed to be paid to the
Bank under this Agreement or the Loan Documents shall, to the maximum extent
permitted by applicable law, be amortized, allocated and spread on a pro rata
                                                                     --- ----
basis throughout the entire actual term of the loans (including any extension or
renewal period).  Any and all fees payable hereunder are not intended, and shall
not be deemed, to be interest or a charge for the use of money, but rather shall
constitute an "other charge" within the meaning of O.C.G.A. (S) 7-4-2(a)(1).
                                                   --------                 

          2.4  CREDITING PAYMENTS.  Prior to the occurrence of an Event of
               ------------------                                            
Default, Bank shall credit a wire transfer of funds, check or other item of
payment to such deposit account or Obligation as Borrower specifies.  After the
occurrence of an Event of Default, the receipt by Bank of any wire transfer of
funds, check, or other item of payment, whether directed to Borrower's deposit
account with Bank or to the Obligations or otherwise, shall be immediately
applied to conditionally reduce Obligations, but shall not be considered a
payment in respect of the Obligations unless such payment is of immediately
available federal funds or unless and until such check or other item of payment
is honored when presented for payment.  Notwithstanding anything to the contrary
contained herein, any wire transfer or payment received by Bank after 12:00 noon
Atlanta, Georgia time shall be deemed to have been received by Bank as of the
opening of business on the immediately following Business Day.  Whenever any
payment to Bank under the Loan Documents would otherwise be due (except by
reason of acceleration) on a date that is not a Business Day, such payment shall
instead be due on the next Business Day, and additional fees or interest, as the
case may be, shall accrue and be payable for the period of such extension.

          2.5  FEES.  Borrower shall pay to Bank the following:
               ----                                             

                                      -8-

 
                 (a) Facility Fee.  A Facility Fee equal to Twenty Thousand 
                     ------------    
Dollars ($20,000.00), which fee shall be due on the Closing Date and shall be
fully earned and non-refundable;

                 (b) Financial Examination and Appraisal Fees.  Bank's 
                     ----------------------------------------               
customary fees and out-of-pocket expenses for Bank's audits of Borrower's
Accounts, and for each appraisal of Collateral and financial analysis and
examination of Borrower performed from time to time by Bank or its agents;
 
                 (c)  Bank Expenses.  Upon demand from Bank, including, without
                      -------------                                         
limitation, upon the date hereof, all Bank Expenses incurred through the date
hereof, including reasonable attorneys' fees (not to exceed $4,500) and
expenses, and, after the date hereof, all Bank Expenses, including reasonable
attorneys' fees and expenses, as and when they become due.
 
          2.6  ADDITIONAL COSTS.  In case any law, regulation, treaty or
               ----------------                                           
official directive or the interpretation or application thereof by any court or
any governmental authority charged with the administration thereof or the
compliance with any guideline or request of any central bank or other
governmental authority (whether or not having the force of law):
 
                 (a) subjects Bank to any tax with respect to payments of
principal or interest or any other amounts payable hereunder by Borrower or
otherwise with respect to the transactions contemplated hereby (except for taxes
on the overall net income of Bank imposed by the United States of America or any
political subdivision thereof);
 
                 (b) imposes, modifies or deems applicable any deposit
insurance, reserve, special deposit or similar requirement against assets held
by, or deposits in or for the account of, or loans by, Bank; or

                 (c) imposes upon Bank any other condition with respect to its
performance under this Agreement,

and the result of any of the foregoing is to increase the cost to Bank, reduce
the income receivable by Bank or impose any expense upon Bank with respect to
any loans, Bank shall notify Borrower thereof. Borrower agrees to pay to Bank
the amount of such increase in cost, reduction in income or additional expense
as and when such cost, reduction or expense is incurred or determined, upon
presentation by Bank of a statement of the amount and setting forth Bank's
calculation thereof, all in reasonable detail, which statement shall be deemed
true and correct absent manifest error.

          2.7  TERM.  Except as otherwise set forth herein, this Agreement
               -----                                                      
shall become effective on the Closing Date and, subject to Section 12.7, shall
continue in full force and effect for a term ending on the Revolving Maturity
Date.  Notwithstanding the foregoing, Bank shall have the right to terminate its
obligation to make Credit Extensions under this Agreement immediately and
without notice upon the occurrence and during the continuance of an Event of
Default.  Notwithstanding termination of this Agreement, Bank's lien on the
Collateral shall remain in effect for so long as any Obligations are
outstanding.

     3.  CONDITIONS OF LOANS
         -------------------
 
          3.1  CONDITIONS PRECEDENT TO INITIAL ADVANCE.  The obligation of
               ---------------------------------------                      
Bank to make the initial Advance is subject to the condition precedent that Bank
shall have received, in form and substance satisfactory to Bank, the following:

                 (a)  this Agreement;

                                      -9-

 
                 (b) a certificate of the Secretary of Borrower with respect to
the Articles of Organization, the Operating Agreement, incumbency and
resolutions authorizing the execution and delivery of this Agreement;

                 (c) a negative pledge agreement;

                 (d) a subordination agreement from Alan J. Dabbiere;

                 (e) financing statements (Forms UCC-1);
 
                 (f) insurance certificate;
 
                 (g) payment of the fees and Bank Expenses then due specified
in Section 2.5 hereof;
 
                 (h) a Solvency Certificate;
 
                 (i) an initial Borrowing Base Certificate;
 
                 (j) a satisfactory audit by Bank of the Borrower's Accounts;
and
 
                 (k) such other documents, and completion of such other matters,
as Bank may reasonably deem necessary or appropriate.
 
          3.2  CONDITIONS PRECEDENT TO ALL ADVANCES.  The obligation of Bank to
               ------------------------------------                       
make each Advance, including the initial Advance, is further subject to the
following conditions:
 
                 (a) timely receipt by Bank of the Payment/Advance Form as
provided in Section 2.1; and
 
                 (b) the representations and warranties contained in Section 5
shall be true and correct in all material respects on and as of the date of such
Payment/Advance Form and on the effective date of each Advance as though made at
and as of each such date, and no Event of Default shall have occurred and be
continuing, or would result from such Advance. The making of each Advance shall
be deemed to be a representation and warranty by Borrower on the date of such
Advance as to the accuracy of the facts referred to in this Section 3.2(b).
 
     4.  CREATION OF SECURITY INTEREST
         -----------------------------
 
          4.1  GRANT OF SECURITY INTEREST.  Borrower grants and pledges to Bank
               --------------------------                                   
a continuing security interest in all presently existing and hereafter acquired
or arising Collateral in order to secure prompt payment of any and all
Obligations and in order to secure prompt performance by Borrower of each of its
covenants and duties under the Loan Documents. Except as set forth in the
Schedule, such security interest constitutes a valid, first priority security
interest in the presently existing Collateral, and will constitute a valid,
first priority security interest in Collateral acquired after the date hereof.
Borrower acknowledges that Bank may place a "hold" on any Deposit Account
pledged as Collateral to secure the Obligations. Notwithstanding termination of
this Agreement, Bank's Lien on the Collateral shall remain in effect for so long
as any Obligations are outstanding.

          4.2  DELIVERY OF ADDITIONAL DOCUMENTATION REQUIRED.  Borrower shall
               ---------------------------------------------                   
from time to time execute and deliver to Bank, at the request of Bank, all
Negotiable Collateral, all financing statements and other documents that Bank
may reasonably request, in form satisfactory to Bank, to perfect and continue
perfected Bank's security interests in the Collateral and in order to fully
consummate all of the transactions contemplated under the Loan Documents.

                                      -10-

 
          4.3  RIGHT TO INSPECT.  Bank (through any of its officers, employees,
               ----------------                                       
or agents) shall have the right, upon reasonable prior notice, from time to time
during Borrower's usual business hours, to inspect Borrower's Books and to make
copies thereof and to check, test, and appraise the Collateral in order to
verify Borrower's financial condition or the amount, condition of, or any other
matter relating to, the Collateral.

     5.   REPRESENTATIONS AND WARRANTIES
          ------------------------------

          Borrower represents and warrants as follows:

          5.1  DUE ORGANIZATION AND QUALIFICATION.  Borrower is a limited
               ----------------------------------                          
liability company duly existing and in good standing under the laws of its state
of organization and qualified and licensed to do business in, and is in good
standing in, any state in which the conduct of its business or its ownership of
property requires that it be so qualified.  Each Subsidiary of Borrower is a
corporation, partnership or limited liability company, as the case may be, duly
existing and in good standing under the laws of its state of incorporation or
organization, as the case may be, and is in good standing in every state in
which the conduct of its business or its membership or property requires that it
be so granted.

          5.2  DUE AUTHORIZATION; NO CONFLICT.  The execution, delivery, and
               ------------------------------                                 
performance of the Loan Documents are within Borrower's powers, have been duly
authorized, and are not in conflict with nor constitute a breach of any
provision contained in Borrower's Articles of Organization or Operating
Agreement, nor will they constitute an event of default under any material
agreement to which Borrower is a party or by which Borrower is bound.  Borrower
is not in default under any agreement to which it is a party or by which it is
bound, which default could have a Material Adverse Effect.

          5.3  NO PRIOR ENCUMBRANCES.  Borrower has good and indefeasible
               ---------------------                                       
title to the Collateral, free and clear of Liens, except for Permitted Liens.

          5.4  BONA FIDE ELIGIBLE ACCOUNTS.  The Eligible Accounts are bona
               ---------------------------                                   
fide existing obligations.  The service or property giving rise to such Eligible
Accounts has been performed or delivered to the account debtor or to the account
debtor's agent for immediate shipment to and unconditional acceptance by the
account debtor.  Borrower has not received notice of actual or imminent
Insolvency Proceeding of any account debtor whose accounts are included in any
Borrowing Base Certificate as an Eligible Account.

          5.5  MERCHANTABLE INVENTORY.  All Inventory is in all material
               ----------------------                                     
respects of good and marketable quality, free from all material defects.

          5.6  INTELLECTUAL PROPERTY.  Borrower is the sole owner of the
               ---------------------                                      
Intellectual Property, except for non-exclusive licenses granted by Borrower to
its customers in the ordinary course of business.  Each of the Patents is valid
and enforceable, and no part of the Intellectual Property has been judged
invalid or unenforceable, in whole or in part, and no claim has been made that
any part of the Intellectual Property violates the rights of any third party.
Except for and upon the filing with the United States Patent and Trademark
Office with respect to the Patents and Trademarks and the Register of Copyrights
with respect to the Copyrights and Mask Works necessary to perfect the security
interests created hereunder, and except as has been already made or obtained, no
authorization, approval or other action by, and no notice to or filing with, any
United States governmental authority or United States regulatory body is
required either (i) for the grant by Borrower of the security interest granted
hereby or for the execution, delivery or performance of Loan Documents by
Borrower in the United States or (ii) for the perfection in the United States or
the exercise by Bank of its rights and remedies hereunder.

                                      -11-

 
          5.7  NAME; LOCATION OF CHIEF EXECUTIVE OFFICE.  Except as disclosed
               ----------------------------------------                        
in the Schedule, Borrower has not done business and will not without at least
thirty (30) days prior written notice to Bank do business under any name other
than that specified on the signature page hereof.  The chief executive office of
Borrower is located at the address indicated in Section 10 hereof.

          5.8  LITIGATION.  Except as set forth in the Schedule, there are no
               ----------                                                      
actions or proceedings pending, or, to Borrower's knowledge, threatened by or
against Borrower or any Subsidiary before any court or administrative agency in
which an adverse decision could have a Material Adverse Effect or a material
adverse effect on Borrower's interest or Bank's security interest in the
Collateral.

          5.9  NO MATERIAL ADVERSE CHANGE IN FINANCIAL STATEMENTS.  All
               --------------------------------------------------        
consolidated financial statements related to Borrower and any Subsidiary that
have been delivered by Borrower to Bank fairly present in all material respects
Borrower's consolidated financial condition as of the date thereof and
Borrower's consolidated results of operations for the period then ended.  There
has not been a material adverse change in the consolidated financial condition
of Borrower since the date of the most recent of such financial statements
submitted to Bank on or about the Closing Date.

          5.10  SOLVENCY.  The fair saleable value of Borrower's assets 
                --------                                                 
(including goodwill minus disposition costs) exceeds the fair value of its
liabilities; the Borrower is not left with unreasonably small capital after the
transactions contemplated by this Agreement; and Borrower is able to pay its
debts (including trade debts) as they mature.

          5.11  REGULATORY COMPLIANCE.  Borrower and each Subsidiary has met the
                ---------------------                                 
minimum funding requirements of ERISA with respect to any employee benefit plans
subject to ERISA. No event has occurred resulting from Borrower's failure to
comply with ERISA that is reasonably likely to result in Borrower's incurring
any liability that could have a Material Adverse Effect. Borrower is not an
"investment company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act of 1940. Borrower is not engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying margin stock (within the
meaning of Regulations G, T and U of the Board of Governors of the Federal
Reserve System). Borrower has complied with all the provisions of the Federal
Fair Labor Standards Act. Borrower has not violated any statutes, laws,
ordinances or rules applicable to it, violation of which could have a Material
Adverse Effect.

          5.12  ENVIRONMENTAL CONDITION.  None of Borrower's or any Subsidiary's
                -----------------------                              
properties or assets has ever been used by Borrower or any Subsidiary or, to the
best of Borrower's knowledge, by previous owners or operators, in the disposal
of, or to produce, store, handle, treat, release, or transport, any hazardous
waste or hazardous substance other than in accordance with applicable law; to
the best of Borrower's knowledge, none of Borrower's or any Subsidiary's
properties or assets has ever been designated or identified in any manner
pursuant to any environmental protection statute as a hazardous waste or
hazardous substance disposal site, or a candidate for closure pursuant to any
environmental protection statute; no lien arising under any environmental
protection statute has attached to any revenues or to any real or personal
property owned by Borrower or any Subsidiary; and neither Borrower nor any
Subsidiary has received a summons, citation, notice, or directive from the
Environmental Protection Agency or any other federal, state or other
governmental agency concerning any action or omission by Borrower or any
Subsidiary resulting in the release, or other disposition of hazardous waste or
hazardous substances into the environment.

          5.13  TAXES.  Borrower and each Subsidiary has filed or caused to be
                -----                                                
filed all tax returns required to be filed on a timely basis, and has paid, or
has made adequate provision for the payment of, all taxes reflected therein,
except those being contested in good faith by proper proceedings with adequate
reserves under GAAP or those which the failure to pay would not have a Material
Adverse Effect.

                                      -12-

 
          5.14  SUBSIDIARIES.  Borrower does not own any stock, partnership
                ------------                                     
interest or other equity securities of any Person, except for Permitted
Investments.
 
          5.15  GOVERNMENT CONSENTS.  Borrower and each Subsidiary has obtained
                -------------------                                     
all consents, approvals and authorizations of, made all declarations or filings
with, and given all notices to, all governmental authorities that are necessary
for the continued operation of Borrower's business as currently conducted.
 
          5.16  FULL DISCLOSURE.  No representation, warranty or other
                ---------------                                        
statement made by Borrower in any certificate or written statement furnished to
Bank contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements contained in such
certificates or statements not misleading.
 
     6.  AFFIRMATIVE COVENANTS
         ---------------------

         Borrower covenants and agrees that, until payment in full of all
outstanding Obligations, and for so long as Bank may have any commitment to make
a Credit Extension hereunder, Borrower shall do all of the following:

          6.1  GOOD STANDING.  Borrower shall maintain its and each of its
               -------------                                                
Subsidiaries' existence as a limited liability company or a corporation, as the
case may be, and good standing in its jurisdiction of incorporation or
organization, as the case may be, and maintain qualification in each
jurisdiction in which the failure to so qualify could have a Material Adverse
Effect.  Borrower shall maintain, and shall cause each of its Subsidiaries to
maintain, to the extent consistent with prudent management of Borrower's
business, in force all licenses, approvals and agreements, the loss of which
could have a Material Adverse Effect.
 
          6.2  GOVERNMENT COMPLIANCE.  Borrower shall meet, and shall cause each
               ---------------------                                   
Subsidiary to meet, the minimum funding requirements of ERISA with respect to
any employee benefit plans subject to ERISA. Borrower shall comply, and shall
cause each Subsidiary to comply, with all statutes, laws, ordinances and
government rules and regulations to which it is subject, noncompliance with
which could have a Material Adverse Effect or a material adverse effect on the
Collateral or the priority of Bank's Lien on the Collateral.
 
          6.3  FINANCIAL STATEMENTS, REPORTS, CERTIFICATES.  Borrower shall
               -------------------------------------------             
deliver to Bank:  (a) as soon as available, but in any event within thirty
(30) days after the end of each month, a company prepared consolidated balance
sheet and income statement covering Borrower's consolidated operations during
such period, in a form and certified by an officer of Borrower reasonably
acceptable to Bank; (b) as soon as available, but in any event within ninety
(90) days after the end of Borrower's fiscal year, audited consolidated
financial statements of Borrower prepared in accordance with GAAP, consistently
applied, together with an unqualified opinion on such financial statements of an
independent certified public accounting firm reasonably acceptable to Bank; (c)
within five (5) days of filing, copies of all statements, reports and notices
sent or made available generally by Borrower to its security holders or to any
holders of Subordinated Debt and all reports on Form 10-K, 10-Q and 8-K filed
with the Securities and Exchange Commission; (d) promptly upon receipt of notice
thereof, a report of any legal actions pending or threatened against Borrower or
any Subsidiary that could result in damages or costs to Borrower or any
Subsidiary of One Hundred Thousand Dollars ($100,000) or more; (e) prompt notice
of any material change in the composition of the Intellectual Property,
including, but not limited to, any subsequent ownership right of the Borrower in
or to any Copyright, Patent or Trademark not specified in any intellectual
property security agreement between Borrower and Bank or knowledge of an event
that materially adversely effects the value of the Intellectual Property; and
(f) such budgets, sales projections, operating plans or other financial
information as Bank may reasonably request from time to time.
 
           Within twenty (20) days after the last day of each month, Borrower
shall deliver to Bank a Borrowing Base Certificate signed by a Responsible
Officer in substantially the form of Exhibit C hereto (a "Borrowing Base
                                     ---------
Certificate"), together with aged listings of accounts receivable.

                                      -13-

 
          Within thirty (30) days after the last day of each month, Borrower
shall deliver to Bank with the monthly financial statements a Compliance
Certificate signed by a Responsible Officer in substantially the form of Exhibit
                                                                         -------
D hereto.
- -
          Bank shall have a right from time to time hereafter to audit
Borrower's Accounts at Borrower's expense, provided that such audits will be
conducted no more often than every six (6) months unless an Event of Default has
occurred and is continuing (or every twelve (12) months unless an Event of
Default has occurred and is continuing if the Borrower has consummated the
initial public offering of its stock).
 
          6.4  INVENTORY; RETURNS.  Borrower shall keep all Inventory in good
               ------------------                                         
and marketable condition, free from all material defects. Returns and
allowances, if any, as between Borrower and its account debtors shall be on the
same basis and in accordance with the usual customary practices of Borrower, as
they exist at the time of the execution and delivery of this Agreement. Borrower
shall promptly notify Bank of all returns and recoveries and of all disputes and
claims, where the return, recovery, dispute or claim involves more than Fifty
Thousand Dollars ($50,000).
 
          6.5  TAXES.  Borrower shall make, and shall cause each Subsidiary to
               -----                                              
make, due and timely payment or deposit of all material federal, state, and
local taxes, assessments, or contributions required of it by law, and will
execute and deliver to Bank, on demand, appropriate certificates attesting to
the payment or deposit thereof; and Borrower will make, and will cause each
Subsidiary to make, timely payment or deposit of all material tax payments and
withholding taxes required of it by applicable laws, including, but not limited
to, those laws concerning F.I.C.A., F.U.T.A., state disability, and local,
state, and federal income taxes, and will, upon request, furnish Bank with proof
satisfactory to Bank indicating that Borrower or a Subsidiary has made such
payments or deposits; provided that Borrower or a Subsidiary need not make any
payment if the amount or validity of such payment is (i) contested in good faith
by appropriate proceedings, (ii) is reserved against (to the extent required by
GAAP) by Borrower and (iii) no lien other than a Permitted Lien results.
 
          6.6  INSURANCE.
               ---------  
 
                 (a) Borrower, at its expense, shall keep the Collateral insured
against loss or damage by fire, theft, explosion, sprinklers, and all other
hazards and risks, and in such amounts, as ordinarily insured against by other
owners in similar businesses conducted in the locations where Borrower's
business is conducted on the date hereof. Borrower shall also maintain insurance
relating to Borrower's ownership and use of the Collateral in amounts and of a
type that are customary to businesses similar to Borrower's.

                 (b) All such policies of insurance shall be in such form, with
such companies, and in such amounts as are reasonably satisfactory to Bank. All
such policies of property insurance shall contain a lender's loss payable
endorsement, in a form satisfactory to Bank, showing Bank as an additional loss
payee thereof and all liability insurance policies shall show the Bank as an
additional insured, and shall specify that the insurer must give at least twenty
(20) days notice to Bank before canceling its policy for any reason. At Bank's
request, Borrower shall deliver to Bank certified copies of such policies of
insurance and evidence of the payments of all premiums therefor. All proceeds
payable under any such policy shall, at the option of Bank, be payable to Bank
to be applied on account of the Obligations.
 
          6.7  PRINCIPAL DEPOSITORY.  Within ninety (90) days of this           
               --------------------                                    
Agreement, Borrower shall maintain its principal depository and operating
accounts with Bank.
 
          6.8  ADJUSTED QUICK RATIO.  Borrower shall maintain, on the last day
               --------------------                                    
of each calendar month, a ratio of Quick Assets to Current Liabilities
minus Borrower's current deferred revenues as of such date of at least 1.0 to
- -----                                                                        
1.0 during the period from the Closing Date through June 30, 1998, and
thereafter, as of the last day of each month, a ratio of Quick Assets to Current

                                      -14-

 
Liabilities minus Borrower's current deferred revenues as of such date of at
            -----                                                           
least 1.75 to 1.0.
 
          6.9  PROFITABILITY.
               -------------   

                 (a) Borrower shall have a minimum Net Income less increases in
                                                              ----             
capitalized software development costs of not less than the amount shown below
as of the end of each of its fiscal quarters shown below:
 
Fiscal Quarter Ending       Minimum Net Income
- ---------------------       ------------------
March 31, 1998              $500,000 (excluding a one-time charge of $2,100,000)
June 30, 1998, and each     $500,000  
Fiscal Quarter ending               
thereafter

          6.10  FURTHER ASSURANCES.  At any time and from time to time Borrower
                ------------------  
shall execute and deliver such further instruments and take such further action
as may reasonably be requested by Bank to effect the purposes of this Agreement.

     7.   NEGATIVE COVENANTS
          ------------------

          Borrower covenants and agrees that, so long as any Credit Extension
hereunder shall be available and until payment in full of the outstanding
Obligations or for so long as Bank may have any commitment to make any Advances,
Borrower will not do any of the following:

          7.1  DISPOSITIONS.  Convey, sell, lease, transfer or otherwise        
               ------------                                               
dispose of (collectively, a "TRANSFER"), or permit any of its Subsidiaries to
Transfer, all or any part of its business or property, other than Transfers: (i)
of inventory in the ordinary course of business, (ii) of non-exclusive licenses
and similar arrangements for the use of the property of Borrower or its
Subsidiaries in the ordinary course of business; (iii) that constitute payment
of normal and usual operating expenses in the ordinary course of business; or
(iv) of worn-out or obsolete Equipment.

          7.2  CHANGES IN BUSINESS, OWNERSHIP, OR MANAGEMENT, BUSINESS 
               -------------------------------------------------------  
LOCATIONS.  Engage in any business, or permit any of its Subsidiaries to 
- ---------
engage in any business, other than the businesses currently engaged in by
Borrower and any business substantially similar or related thereto (or
incidental thereto), or, other than as a result of the consummation of the
transactions contemplated by that certain Subscription and Contribution
Agreement dated as of February 26, 1998 (the "CONVERSION"), suffer a material
change in Borrower's ownership or management. Borrower will not, without at
least thirty (30) days prior written notification to Bank, relocate its chief
executive office or add any new offices or business locations.

          7.3  MERGERS OR ACQUISITIONS.  Except in connection with the 
               ----------------------- 
Conversion, merge or consolidate, or permit any of its Subsidiaries to merge or
consolidate, with or into any other business organization, or acquire, or permit
any of its Subsidiaries to acquire, all or substantially all of the capital
stock or property of another Person.

          7.4  INDEBTEDNESS.  Create, incur, assume or be or remain liable with
               ------------  
respect to any Indebtedness, or permit any Subsidiary so to do, other than
Permitted Indebtedness.

          7.5  ENCUMBRANCES.  Create, incur, assume or suffer to exist any Lien
               ------------ 
with respect to any of its property, or assign or otherwise convey any right to
receive income, including the sale of any Accounts, or permit any of its
Subsidiaries so to do, except for Permitted Liens.

                                      -15-

 
          7.6  DISTRIBUTIONS.  Except in connection with the distribution of net
               -------------  
retained earnings of Borrower through the date of the Conversion in one or more
distributions, pay any dividends or make any other distribution or payment on
account of or in redemption, retirement or purchase of any capital stock
provided, however, so long as no Event of Default is then outstanding or would
- --------                                                                      
be caused thereby, Borrower may pay cash dividends to its members in an amount
sufficient to enable its members to pay those federal and state income taxes of
the members which are directly attributable to the Borrower's earnings.

          7.7  INVESTMENTS.  Except in connection with the Conversion, directly 
               ----------- 
or indirectly acquire or own, or make any Investment in or to any Person, or
permit any of its Subsidiaries so to do, other than Permitted Investments.

          7.8  TRANSACTIONS WITH AFFILIATES.  Except in connection with the
               ----------------------------                                  
Conversion, directly or indirectly enter into or permit to exist any material
transaction with any Affiliate of Borrower except for transactions that are in
the ordinary course of Borrower's business, upon fair and reasonable terms that
are no less favorable to Borrower than would be obtained in an arm's length
transaction with a nonaffiliated Person.

          7.9  SUBORDINATED DEBT.  Make any payment in respect of any 
               -----------------
Subordinated Debt, or permit any of its Subsidiaries to make any such payment,
except in compliance with the terms of such Subordinated Debt and the
Subordination Agreement governing such Subordinated Debt, or amend any provision
contained in any documentation relating to the Subordinated Debt without Bank's
prior written consent.

          7.10  INVENTORY.  Store the Inventory with a bailee, warehouseman, or
                --------- 
similar party unless Bank has received a pledge of any warehouse receipt
covering such Inventory.  Except for Inventory sold in the ordinary course of
business and except for such other locations as Bank may approve in writing,
Borrower shall keep the Inventory only at the location set forth in Section 10
hereof and such other locations of which Borrower gives Bank prior written
notice and as to which Borrower signs and files a financing statement where
needed to perfect Bank's security interest.

          7.11  COMPLIANCE.  Become an "investment company" or a company
                ---------- 
controlled by an "investment company," within the meaning of the Investment
Company Act of 1940, or become principally engaged in, or undertake as one of
its important activities, the business of extending credit for the purpose of
purchasing or carrying margin stock, or use the proceeds of any Advance for such
purpose; fail to meet the minimum funding requirements of ERISA; permit a
Reportable Event or Prohibited Transaction, as defined in ERISA, to occur; fail
to comply with the Federal Fair Labor Standards Act or violate any other law or
regulation, which violation could have a Material Adverse Effect or a material
adverse effect on the Collateral or the priority of Bank's Lien on the
Collateral; or permit any of its Subsidiaries to do any of the foregoing.

     8.   EVENTS OF DEFAULT
          -----------------

          Any one or more of the following events shall constitute an Event of
Default by Borrower under this Agreement:

          8.1  PAYMENT DEFAULT.  If Borrower fails to pay, when due, any of
               ---------------                                               
the Obligations.

          8.2  COVENANT DEFAULT.
               ----------------   

                 (a) If Borrower fails to perform any obligation under Sections
6.3, 6.6, 6.7, 6.8, 6.9 or 6.10 or violates any of the covenants contained in
Article 7 of this Agreement, or

                 (b) If Borrower fails or neglects to perform, keep, or observe
any other material term, provision, condition, covenant, or agreement contained
in this Agreement, in any of the Loan Documents, or in any other present or
future agreement between Borrower and Bank and as to any default under such
other term, provision, condition, covenant or agreement that can be cured, has

                                      -16-

 
failed to cure such default within ten (10) days after the occurrence thereof;
provided, however, that if the default cannot by its nature be cured within the
ten (10) day period or cannot after diligent attempts by Borrower be cured
within such ten (10) day period, and such default is likely to be cured within a
reasonable time, then Borrower shall have an additional reasonable period (which
shall not in any case exceed thirty (30) days) to attempt to cure such default,
and within such reasonable time period the failure to have cured such default
shall not be deemed an Event of Default (provided that no Advances will be
required to be made during such cure period);

          8.3  MATERIAL ADVERSE CHANGE.  If there (i) occurs a material adverse
               -----------------------                                   
change in the business, operations, or condition (financial or otherwise) of the
Borrower, or (ii) is a material impairment of the prospect of repayment of any
portion of the Obligations or (iii) is a material impairment of the value or
priority of Bank's security interests in the Collateral;

          8.4  ATTACHMENT.  If any material portion of Borrower's assets is
               ----------                                                    
attached, seized, subjected to a writ or distress warrant, or is levied upon, or
comes into the possession of any trustee, receiver or person acting in a similar
capacity and such attachment, seizure, writ or distress warrant or levy has not
been removed, discharged or rescinded within ten (10) days, or if Borrower is
enjoined, restrained, or in any way prevented by court order from continuing to
conduct all or any material part of its business affairs, or if a judgment or
other claim becomes a lien or encumbrance upon any material portion of
Borrower's assets, or if a notice of lien, levy, or assessment is filed of
record with respect to any of Borrower's assets by the United States Government,
or any department, agency, or instrumentality thereof, or by any state, county,
municipal, or governmental agency, and the same is not paid within ten (10) days
after Borrower receives notice thereof, provided that none of the foregoing
shall constitute an Event of Default where such action or event is stayed or an
adequate bond has been posted pending a good faith contest by Borrower (provided
that no Credit Extensions will be required to be made during such cure period);

          8.5  INSOLVENCY.  If Borrower becomes insolvent, or if an Insolvency
               ----------                                                       
Proceeding is commenced by Borrower, or if an Insolvency Proceeding is commenced
against Borrower and is not dismissed or stayed within 60 days (provided that no
Advances will be made prior to the dismissal of such Insolvency Proceeding);

          8.6  OTHER AGREEMENTS.  If there is a default in any agreement to
               ----------------                                                 
which Borrower is a party with a third party or parties resulting in a right by
such third party or parties, whether or not exercised, to accelerate the
maturity of any Indebtedness in an amount in excess of One Hundred Thousand
Dollars ($100,000) or that could have a Material Adverse Effect;

          8.7  SUBORDINATED DEBT.  If Borrower makes any payment on account of
               -----------------                                               
Subordinated Debt, except to the extent such payment is allowed under any
subordination agreement entered into with Bank;

          8.8  JUDGMENTS.  If a judgment or judgments for the payment of money
               ---------                                                       
in an amount, individually or in the aggregate, of at least Fifty Thousand
Dollars ($50,000) shall be rendered against Borrower and shall remain
unsatisfied and unstayed for a period of ten (10) days (provided that no Credit
Extensions will be made prior to the satisfaction or stay of such judgment); or

          8.9  MISREPRESENTATIONS.  If any material misrepresentation or
               ------------------                                          
material misstatement exists now or hereafter in any warranty or representation
set forth herein or in any certificate or writing delivered to Bank by Borrower
or any Person acting on Borrower's behalf pursuant to this Agreement or to
induce Bank to enter into this Agreement or any other Loan Document.

          8.10  GUARANTY.  Any guaranty of all or a portion of the Obligations
                --------                                            
ceases for any reason to be in full force and effect, or any Guarantor fails to
perform any obligation under any guaranty of all or a portion of the
Obligations, or any material misrepresentation or material misstatement exists
now or hereafter in any warranty or representation set forth in any guaranty of
all or a portion of the Obligations or in any certificate delivered to Bank in

                                      -17-

 
connection with such guaranty, or any of the circumstances described in Sections
8.4, 8.5 or 8.8 occur with respect to any Guarantor.
 
     9.  BANK'S RIGHTS AND REMEDIES
         --------------------------
 
          9.1  RIGHTS AND REMEDIES.  Upon the occurrence and during the
               -------------------                                       
continuance of an Event of Default, Bank may, at its election, without notice of
its election and without demand, do any one or more of the following, all of
which are authorized by Borrower:
 
                 (a) Declare all Obligations, whether evidenced by this
Agreement, by any of the other Loan Documents, or otherwise, immediately due and
payable (provided that upon the occurrence of an Event of Default described in
Section 8.5 all Obligations shall become immediately due and payable without any
action by Bank);
 
                 (b) Cease advancing money or extending credit to or for the
benefit of Borrower under this Agreement or under any other agreement between
Borrower and Bank;
 
                 (c) Demand that Borrower (i) deposit cash with Bank in an
amount equal to the amount of any letters of credit issued by the Bank for the
account of Borrower remaining undrawn, as collateral security for the repayment
of any future drawings under such letters of credit, and Borrower shall
forthwith deposit and pay such amounts, and (ii) pay in advance all letter of
credit fees scheduled to be paid or payable over the remaining term of such
letters of credit;
 
                 (d) Settle or adjust disputes and claims directly with account
debtors for amounts, upon terms and in whatever order that Bank reasonably
considers advisable;
 
                 (e) Without notice to or demand upon Borrower, make such
payments and do such acts as Bank considers necessary or reasonable to protect
its security interest in the Collateral. Borrower agrees to assemble the
Collateral if Bank so requires, and to make the Collateral available to Bank as
Bank may designate. Borrower authorizes Bank to enter the premises where the
Collateral is located, to take and maintain possession of the Collateral, or any
part of it, and to pay, purchase, contest, or compromise any encumbrance,
charge, or lien which in Bank's determination appears to be prior or superior to
its security interest and to pay all expenses incurred in connection therewith.
With respect to any of Borrower's premises, Borrower hereby grants Bank a
license to enter such premises and to occupy the same, without charge;
 
                 (f) Without notice to Borrower set off and apply to the
Obligations any and all (i) balances and deposits of Borrower held by Bank, or
(ii) indebtedness at any time owing to or for the credit or the account of
Borrower held by Bank;
 
                 (g) Ship, reclaim, recover, store, finish, maintain, repair,
prepare for sale, advertise for sale, and sell (in the manner provided for
herein) the Collateral. Bank is hereby granted a non-exclusive, royalty-free
license or other right, solely pursuant to the provisions of this Section 9.1,
to use, without charge, Borrower's labels, rights of use of any name, trade
names, trademarks, service marks, and advertising matter, or any property of a
similar nature, as it pertains to the Collateral, in completing production of,
advertising for sale, and selling any Collateral and, in connection with Bank's
exercise of its rights under this Section 9.1, Borrower's rights under all
licenses and all franchise agreements shall inure to Bank's benefit;
 
                 (h) Sell the Collateral at either a public or private sale, or
both, by way of one or more contracts or transactions, for cash or on terms, in
such manner and at such places (including Borrower's premises) as Bank
determines is commercially reasonable, and apply the proceeds thereof to the
Obligations in whatever manner or order it deems appropriate;
 

                                      -18-

 
                 (i) Bank may credit bid and purchase at any public sale, or
at any private sale as permitted by law; and
 
                 (j) Any deficiency that exists after disposition of the
Collateral as provided above will be paid immediately by Borrower.
 
                 (k) Bank shall have a non-exclusive, royalty-free license to
use the Intellectual Property (other than Patents, Copyrights, Mask Works and
trade secrets) to the extent reasonably necessary to permit Bank to exercise its
rights and remedies upon the occurrence of an Event of Default.
 
          9.2  POWER OF ATTORNEY.  Effective only upon the occurrence and       
               -----------------                                           
during the continuance of an Event of Default, Borrower hereby irrevocably
appoints Bank (and any of Bank's designated officers, or employees) as
Borrower's true and lawful attorney to:  (a) send requests for verification of
Accounts or notify account debtors of Bank's security interest in the Accounts;
(b) endorse Borrower's name on any checks or other forms of payment or security
that may come into Bank's possession; (c) sign Borrower's name on any invoice or
bill of lading relating to any Account, drafts against account debtors,
schedules and assignments of Accounts, verifications of Accounts, and notices to
account debtors; (d) make, settle, and adjust all claims under and decisions
with respect to Borrower's policies of insurance; (e) settle and adjust disputes
and claims respecting the accounts directly with account debtors, for amounts
and upon terms which Bank determines to be reasonable; and (f) to file, in its
sole discretion, one or more financing or continuation statements and amendments
thereto, relative to any of the Collateral without the signature of Borrower
where permitted by law.  The appointment of Bank as Borrower's attorney in fact,
and each and every one of Bank's rights and powers, being coupled with an
interest, is irrevocable until all of the Obligations have been fully repaid and
performed and Bank's obligation to provide advances hereunder is terminated.

          9.3  ACCOUNTS COLLECTION.  Upon the occurrence and during the
               -------------------                                       
continuance of an Event of Default, Bank may notify any Person owing funds to
Borrower of Bank's security interest in such funds and verify the amount of such
Account.  Borrower shall collect all amounts owing to Borrower for Bank, receive
in trust all payments as Bank's trustee, and if requested or required by Bank,
immediately deliver such payments to Bank in their original form as received
from the account debtor, with proper endorsements for deposit.

          9.4  BANK EXPENSES.  If Borrower fails to pay any amounts or furnish
               -------------                                                
any required proof of payment due to third persons or entities, as required
under the terms of this Agreement, then Bank may do any or all of the following:
(a) make payment of the same or any part thereof; (b) set up such reserves under
the Committed Revolving Line as Bank deems necessary to protect Bank from the
exposure created by such failure; or (c) obtain and maintain insurance policies
of the type discussed in Section 6.6 of this Agreement, and take any action with
respect to such policies as Bank deems prudent. Any amounts so paid or deposited
by Bank shall constitute Bank Expenses, shall be immediately due and payable,
and shall bear interest at the then applicable rate hereinabove provided, and
shall be secured by the Collateral. Any payments made by Bank shall not
constitute an agreement by Bank to make similar payments in the future or a
waiver by Bank of any Event of Default under this Agreement.

          9.5  BANK'S LIABILITY FOR COLLATERAL.  So long as Bank complies with
               -------------------------------
reasonable banking practices, Bank shall not in any way or manner be liable or
responsible for: (a) the safekeeping of the Collateral; (b) any loss or damage
thereto occurring or arising in any manner or fashion from any cause; (c) any
diminution in the value thereof; or (d) any act or default of any carrier,
warehouseman, bailee, forwarding agency, or other person whomsoever. Except as
provided in the foregoing sentence, all risk of loss, damage or destruction of
the Collateral shall be borne by Borrower.

          9.6  REMEDIES CUMULATIVE.  Bank's rights and remedies under this
               -------------------                                     
Agreement, the Loan Documents, and all other agreements shall be cumulative.
Bank shall have all other rights and remedies not expressly set forth herein as
provided under the Code, by law, or in equity. No exercise by Bank of one right
or remedy shall be deemed an election, and no waiver by Bank of any Event of
Default on Borrower's part shall be deemed a continuing waiver. No delay by Bank

                                      -19-

 
shall constitute a waiver, election, or acquiescence by it. No waiver by Bank
shall be effective unless made in a written document signed on behalf of Bank
and then shall be effective only in the specific instance and for the specific
purpose for which it was given.

          9.7  DEMAND; PROTEST.  Borrower waives demand, protest, notice of
               ---------------                                            
protest, notice of default or dishonor, notice of payment and nonpayment, notice
of any default, nonpayment at maturity, release, compromise, settlement,
extension, or renewal of accounts, documents, instruments, chattel paper, and
guarantees at any time held by Bank on which Borrower may in any way be liable.

     10.   NOTICES
           -------

           Unless otherwise provided in this Agreement, all notices or demands
by any party relating to this Agreement or any other agreement entered into in
connection herewith shall be in writing and (except for financial statements and
other informational documents which may be sent by first-class mail, postage
prepaid) shall be personally delivered or sent by a recognized overnight
delivery service, by certified mail, postage prepaid, return receipt requested,
or by telefacsimile to Borrower or to Bank, as the case may be, at its addresses
set forth below:

If to Borrower               Manhattan Associates Software, LLC
                             2300 Windy Ridge Parkway, Suite 700
                             Atlanta, Georgia 30339
                             Attn: Michael Casey
                             FAX: (770) 955-0302

with a copy to:              Morris Manning & Martin LLP
                             1600 Atlanta Financial Center
                             3343 Peachtree Road, N.E.
                             Atlanta, Georgia  30326
                             Attn:  John C. Yates
                             FAX: (404) 365-9532
 
If to Bank                   Silicon Valley Bank
                             3343 Peachtree Road, N.E.
                             East Tower, Suite 312
                             Atlanta, Georgia  30326
                             Attn: Tom Vertin
                             FAX: (404) 261-2202

     The parties hereto may change the address at which they are to receive
notices hereunder, by notice in writing in the foregoing manner given to the
other.

     11.  CHOICE OF LAW AND VENUE
          -----------------------

          The LOAN DOCUMENTS shall be governed by, and construed in accordance
with, the internal laws of the State of Georgia, without regard to principles of
conflicts of law.  TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, BORROWER
AND BANK EACH HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM
OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY
OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT
CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS.
EACH PARTY RECOGNIZES AND AGREES THAT THE FOREGOING WAIVER CONSTITUTES A
MATERIAL INDUCEMENT FOR IT TO ENTER INTO THIS AGREEMENT.  EACH PARTY REPRESENTS
AND WARRANTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT
KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION

                                      -20-

 
WITH LEGAL COUNSEL.  THE BORROWER AND THE BANK ALSO AGREE THAT ANY LEGAL ACTION
OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS
OR TO ENFORCE ANY JUDGMENT OBTAINED AGAINST THE BORROWER IN CONNECTION WITH THIS
AGREEMENT OR SUCH OTHER LOAN DOCUMENT, MAY BE BROUGHT BY THE BANK OR BORROWER IN
ANY STATE OR FEDERAL COURT SITTING IN THE COUNTY OF THE STATE IN WHICH BANK'S
ADDRESS SHOWN IN SECTION 10 ABOVE IS LOCATED, OR IN ANY OTHER COURT TO THE
JURISDICTION OF WHICH SUCH BORROWER OR ANY OF ITS PROPERTY IS OR MAY BE SUBJECT.
EACH OF THE BORROWER AND THE BANK IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE
AFORESAID STATE AND FEDERAL COURTS, AND IRREVOCABLY WAIVES ANY PRESENT OR FUTURE
OBJECTION TO VENUE IN ANY SUCH COURT, AND ANY PRESENT OR FUTURE CLAIM THAT ANY
SUCH COURT IS AN INCONVENIENT FORUM, IN CONNECTION WITH ANY ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS.

     12.  GENERAL PROVISIONS
          ------------------

          12.1  SUCCESSORS AND ASSIGNS.  This Agreement shall bind and inure to
                ----------------------
the benefit of the respective successors and permitted assigns of each of the
parties; provided, however, that neither this Agreement nor any rights hereunder
         --------  -------                                                      
may be assigned by Borrower without Bank's prior written consent, which consent
may be granted or withheld in Bank's sole discretion.  Bank shall have the right
without the consent of or notice to Borrower to sell, transfer, negotiate, or
grant participation in all or any part of, or any interest in, Bank's
obligations, rights and benefits hereunder.

          12.2  INDEMNIFICATION.  Borrower shall, indemnify, defend, protect
                ---------------                                               
and hold harmless Bank and its officers, employees, and agents against: (a) all
obligations, demands, claims, and liabilities claimed or asserted by any other
party in connection with the transactions contemplated by the LOAN DOCUMENTS;
and (b) all losses or Bank Expenses in any way suffered, incurred, or paid by
Bank as a result of or in any way arising out of, following, or consequential to
transactions between Bank and Borrower whether under the LOAN DOCUMENTS, or
otherwise (including without limitation reasonable attorneys fees and expenses),
except for losses caused by Bank's gross negligence or willful misconduct.

          12.3  TIME OF ESSENCE.  Time is of the essence for the performance of
                ---------------  
all obligations set forth in this Agreement.

          12.4  SEVERABILITY OF PROVISIONS.  Each provision of this Agreement
                --------------------------                                     
shall be severable from every other provision of this Agreement for the purpose
of determining the legal enforceability of any specific provision.

          12.5  AMENDMENTS IN WRITING, INTEGRATION.  This Agreement cannot be
                ----------------------------------                             
amended or terminated except by a writing signed by Borrower and Bank.  All
prior agreements, understandings, representations, warranties, and negotiations
between the parties hereto with respect to the subject matter of this Agreement,
if any, are merged into this Agreement and the Loan Documents.

          12.6  COUNTERPARTS.  This Agreement may be executed in any number of
                ------------ 
counterparts and by different parties on separate counterparts, each of which,
when executed and delivered, shall be deemed to be an original, and all of
which, when taken together, shall constitute but one and the same Agreement.

          12.7  SURVIVAL.  All covenants, representations and warranties made
                --------                                                       
in this Agreement shall continue in full force and effect so long as any
Obligations remain outstanding.  The obligations of Borrower to indemnify Bank
with respect to the expenses, damages, losses, costs and liabilities described
in Section 12.2 shall survive until all applicable statute of limitations
periods with respect to actions that may be brought against Bank have run.

                                      -21-

 
     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.

                                       MANHATTAN ASSOCIATES SOFTWARE,
                                       LLC
 
                                       By: /s/ Michael J. Casey
                                           ------------------------------------ 
                                       Title: Chief Financial Officer
                                              ---------------------------------
 
 
                                       SILICON VALLEY BANK
 
                                       By:  /s/ Gerard F. Benson
                                           ------------------------------------
                                       Title: Assistant Vice President 
                                              ---------------------------------

                                      -22-

 
                                   EXHIBIT A
                                   ---------
                                        

     The Collateral shall consist of all right, title and interest of Borrower
in and to the following:

     (a) All goods and equipment now owned or hereafter acquired, including,
without limitation, all machinery, fixtures, vehicles (including motor vehicles
and trailers), and any interest in any of the foregoing, and all attachments,
accessories, accessions, replacements, substitutions, additions, and
improvements to any of the foregoing, wherever located;

     (b) All inventory, now owned or hereafter acquired, including, without
limitation, all merchandise, raw materials, parts, supplies, packing and
shipping materials, work in process and finished products including such
inventory as is temporarily out of Borrower's custody or possession or in
transit and including any returns upon any accounts or other proceeds, including
insurance proceeds, resulting from the sale or disposition of any of the
foregoing and any documents of title representing any of the above;

     (c) All contract rights and general intangibles now owned or hereafter
acquired (other than Copyrights, Trademarks, Patents and Mask Works, each as
defined below), including, without limitation, goodwill, trade styles, trade
names, leases, license agreements, franchise agreements, blueprints, drawings,
purchase orders, customer lists, route lists, infringements, claims, computer
programs, computer discs, computer tapes, literature, reports, catalogs, design
rights, income tax refunds, payments of insurance and rights to payment of any
kind;

     (d) All now existing and hereafter arising accounts, contract rights,
royalties, license rights and all other forms of obligations owing to Borrower
arising out of the sale or lease of goods, the licensing of technology or the
rendering of services by Borrower, whether or not earned by performance, and any
and all credit insurance, guaranties, and other security therefor, as well as
all merchandise returned to or reclaimed by Borrower;

     (e) All documents, cash, deposit accounts, securities, investment property,
letters of credit, certificates of deposit, instruments and chattel paper now
owned or hereafter acquired and Borrower's Books relating to the foregoing;

     (f) All Borrower's Books relating to the foregoing and any and all claims,
rights and interests in any of the above and all substitutions for, additions
and accessions to and proceeds thereof.

     As used herein, the following terms shall have the following meanings:

     "COPYRIGHTS" means any and all copyright rights, copyright applications,
copyright registrations and like protections in each work or authorship and
derivative work thereof, whether published or unpublished and whether or not the
same also constitutes a trade secret, now or hereafter existing, created,
acquired or held.

     "MASK WORKS" means all mask work or similar rights available for the
protection of semiconductor chips, now owned or hereafter acquired;

     "PATENTS" means all patents, patent applications and like protections
including without limitation improvements, divisions, continuations, renewals,
reissues, extensions and continuations-in-part of the same.

     "TRADEMARKS" means any trademark and servicemark rights, whether registered
or not, applications to register and registrations of the same and like
protections, and the entire goodwill of the business of Assignor connected with
and symbolized by such trademarks.


 
                                   EXHIBIT B
                                   ---------
                                        
                  LOAN PAYMENT/ADVANCE TELEPHONE REQUEST FORM
             DEADLINE FOR SAME DAY PROCESSING IS 11:00 A.M., E.S.T.
                                        

TO:  CENTRAL CLIENT SERVICE DIVISION          DATE:
                                                    --------------------------

FAX#:  (408)                            TIME:
             -----------                      ----------------------------

FROM:
      ------------------------------------------------------------------------
          BORROWER'S NAME

FROM:
      ------------------------------------------------------------------------
          AUTHORIZED SIGNER'S NAME

      ------------------------------------------------------------------------ 
          AUTHORIZED SIGNATURE

PHONE:
       -----------------------------------------------------------------------

FROM ACCOUNT #                       TO ACCOUNT#
              ----------------------            ------------------------------

- ------------------------------------------------------------------------------
 REQUESTED TRANSACTION TYPE                        REQUEST DOLLAR AMOUNT
 --------------------------                        ---------------------

 PRINCIPAL INCREASE (ADVANCE)                      $
                                                   ---------------------------
 PRINCIPAL PAYMENT (ONLY)                          $
                                                   ---------------------------
 INTEREST PAYMENT (ONLY)                           $
                                                   ---------------------------
 PRINCIPAL AND INTEREST (PAYMENT)                  $
                                                   ---------------------------
 OTHER INSTRUCTIONS:
                     ---------------------------------------------------------
- ------------------------------------------------------------------------------

     All representations and warranties of Borrower stated in the Loan and
Security Agreement are true, correct and complete in all material respects as of
the date of the telephone request for an Advance confirmed by this Advance
Request; provided, however, that those representations and warranties expressly
referring to another date shall be true, correct and complete in all material
respects as of such date.

- ------------------------------------------------------------------------------
                                 BANK USE ONLY:
                               TELEPHONE REQUEST:
                               ----------------- 

The following person is authorized to request the loan payment transfer/loan
advance on the advance designated account and is known to me.

- ------------------------------
Authorized Requester

                         -----------------------------
                         Authorized Signature (Bank)
                         Phone #
                                ----------------------

- ------------------------------------------------------------------------------


 
                                    EXHIBIT C
                           BORROWING BASE CERTIFICATE
                                        
Borrower:  Manhattan Associates Software, LLC       Bank:  Silicon Valley Bank

Commitment Amount:  $8,000,000.00

- ------------------------------------------------------------------------------


 
 
                                                                       
ACCOUNTS RECEIVABLE
     1.     Accounts Receivable Book Value as of                                $
                                                 -------                          --------
     2.     Additions (please explain on reverse)                               $
                                                                                  --------
     3.     TOTAL ACCOUNTS RECEIVABLE                                           $
                                                                                  --------
 
ACCOUNTS RECEIVABLE DEDUCTIONS (without duplication)
     4.     Amounts over 90 days due  $
                                        ------- 
     5.     Balance of 50% over 90 day accounts              $
                                                               -------- 
     6.     Concentration Limits                             $
                                                               -------- 
            Foreign Accounts                                 $
                                                               -------- 
     7.     Governmental Accounts                            $
                                                               -------- 
     8.     Contra Accounts                                  $
                                                               -------- 
     9.     Promotion or Demo Accounts                       $
                                                               -------- 
     10.    Intercompany/Employee Accounts                   $
                                                               -------- 
     11.    Other (please explain on reverse)                $
                                                               -------- 
     12.    TOTAL ACCOUNTS RECEIVABLE DEDUCTIONS                                $  -
                                                                                  --------
     13.    Eligible Accounts (#3 minus #12)                 $
                                                               -------- 
     14.    LOAN VALUE OF ACCOUNTS (75% of #13)                                 $
                                                                                  --------
 
BALANCES
     15.    Maximum Loan Amount                              $ 8,000,000
                                                               ---------
     16.    Total Funds Available [Lesser of #14 or #15                         $
                                                                                  --------
     17.    Present balance owing on Line of Credit                             $
                                                                                  --------
     18.    Outstanding under Sublimits ( )                  $
                                                               -------- 
     19.    RESERVE POSITION (#16 minus #17 and #18)                            $
                                                                                  --------


The undersigned represents and warrants that the foregoing is true, complete and
correct, and that the information reflected in this Borrowing Base Certificate
complies with the representations and warranties set forth in the Loan and
Security Agreement between the undersigned and Silicon Valley Bank.

COMMENTS:

MANHATTAN ASSOCIATES SOFTWARE, LLC


By:
   ----------------------------------- 
      Authorized Signer


 
                                   EXHIBIT D
                             COMPLIANCE CERTIFICATE
                                        
TO:       SILICON VALLEY BANK

FROM:     MANHATTAN ASSOCIATES SOFTWARE, LLC

     The undersigned authorized officer of MANHATTAN ASSOCIATES SOFTWARE, LLC
hereby certifies that in accordance with the terms and conditions of the Loan
and Security Agreement between Borrower and Bank (the "Agreement"), (i) Borrower
is in complete compliance for the period ending         with all required 
                                                -------
covenants except as noted below and (ii) all representations and warranties of
Borrower stated in the Agreement are true and correct in all material respects
as of the date hereof. Attached herewith are the required documents supporting
the above certification. The Officer further certifies that these are prepared
in accordance with Generally Accepted Accounting Principles (GAAP) and are
consistently applied from one period to the next except as explained in an
accompanying letter or footnotes. The Officer expressly acknowledges that no
borrowings may be requested by the Borrower at any time or date of determination
that Borrower is not in compliance with any of the terms of the Agreement, and
that such compliance is determined not just at the date this certificate is
delivered.



            PLEASE INDICATE COMPLIANCE STATUS BY CIRCLING YES/NO UNDER "COMPLIES" COLUMN.
 
     Reporting Covenant                           REQUIRED                            COMPLIES
     ------------------                           --------                            --------
                                                                                   
 
     Monthly financial statements                 Monthly within 30 days              Yes     No
     Annual (CPA Audited)                         FYE within 90 days                  Yes     No
     A/R Agings                                   Monthly within 20 days              Yes     No
 
     FINANCIAL COVENANT                           REQUIRED                ACTUAL      COMPLIES
     ------------------                           --------                ------      --------
 
     Maintain on a Monthly Basis:
     Minimum Adjusted Quick Ratio                 [1.0: 1.0 from the      _____:1.0   Yes     No    
                                                  Closing Date through
                                                  6/30/98;1.75:1.0
                                                  thereafter]
 
     Maintain on a Quarterly Basis:
     Minimum Net Loss Income less increases in
     capitalized software development costs       $_______*               $________   Yes     No


                                 ============================================

                                                BANK USE ONLY
                                 
                                      RECEIVED BY:
                                                  -----------------------
                                      DATE:
                                           ----------------------
                                      REVIEWED BY:
                                                   ----------------------

                                      COMPLIANCE STATUS:  YES / NO

                                 ============================================

COMMENTS REGARDING EXCEPTIONS:

Sincerely,
                     Date:
- -----------------          -----------------
SIGNATURE

- ------------------
TITLE


 
* Min. Net Income less increases in  capitalized software development costs of
[$500,000 (excluding a one-time charge of $2,100,000) for FQE ending 3/31/98;
$500,000 for the FQE ending 6/30/98 and for each FQE ending thereafter].


 
                     DISBURSEMENT REQUEST AND AUTHORIZATION

Borrower:  Manhattan Associates Software, LLC     Bank:  Silicon Valley Bank

- --------------------------------------------------------------------------------
LOAN TYPE.  This is a Variable Rate, Revolving Line of Credit of a principal
amount up to $8,000,000.00.

PRIMARY PURPOSE OF LOAN.  The primary purpose of this loan is for business.

SPECIFIC PURPOSE.  The specific purpose of this loan is: Distribution of net
retained earnings as set forth in the Loan Agreement.

DISBURSEMENT INSTRUCTIONS.  Borrower understands that no loan proceeds will be
disbursed until all of Bank's conditions for making the loan have been
satisfied.  Please disburse the loan proceeds as follows:

        Revolving Line
        --------------
       
        Amount paid to Borrower directly:                      $
                                                                --------
        Undisbursed Funds                                      $
                                                                --------
 
        Principal                                              $
                                                                --------

CHARGES PAID IN CASH.  Borrower has paid or will pay in cash as agreed the
following charges:

        Prepaid Finance Charges Paid in Cash:                 $20,000.00
                 $20,000   Loan Fee
 
        Other Charges Paid in Cash:                            $4,596.00
                  $4,596.00 Outside Counsel Fees and Expenses 
 
        Total Charges Paid in Cash                            $24,596.00

AUTOMATIC PAYMENTS.  Borrower hereby authorizes Bank automatically to deduct
from Borrower's account numbered                the amount of any loan payment.
                                 --------------
If the funds in the account are insufficient to cover any payment, Bank shall
not be obligated to advance funds to cover the payment.

FINANCIAL CONDITION.  BY SIGNING THIS AUTHORIZATION, BORROWER REPRESENTS AND
WARRANTS TO BANK THAT THE INFORMATION PROVIDED ABOVE IS TRUE AND CORRECT AND
THAT THERE HAS BEEN NO ADVERSE CHANGE IN BORROWER'S FINANCIAL CONDITION AS
DISCLOSED IN BORROWER'S MOST RECENT FINANCIAL STATEMENT TO BANK.  THIS
AUTHORIZATION IS DATED AS OF MARCH 30, 1998.

BORROWER:


- ----------------------------
Authorized Officer


 
                        AGREEMENT TO PROVIDE INSURANCE
                                        
GRANTOR:  Manhattan Associates Software, LLC       BANK:  Silicon Valley Bank

- -------------------------------------------------------------------------------
     INSURANCE REQUIREMENTS.  MANHATTAN ASSOCIATES SOFTWARE, LLC ("GRANTOR")
understands that insurance coverage is required in connection with the extending
of a loan or the providing of other financial accommodations to Grantor by Bank.
These requirements are set forth in the Loan Documents.  The following minimum
insurance coverages must be provided on the following described collateral (the
"COLLATERAL"):

          Collateral:     All Inventory, Equipment and Fixtures.
          Type:           All risks, including fire, theft and liability.
          Amount:         Full insurable value.
          Basis:          Replacement value.
          Endorsements:   Loss payable clause to Bank with stipulation that
                          coverage will not be canceled or diminished without a
                          minimum of twenty (20) days' prior written notice to
                          Bank.

     INSURANCE COMPANY.  Grantor may obtain insurance from any insurance company
Grantor may choose that is reasonably acceptable to Bank.  Grantor understands
that credit may not be denied solely because insurance was not purchased through
Bank.

     FAILURE TO PROVIDE INSURANCE.  Grantor agrees to deliver to Bank, on or
before closing, evidence of the required insurance as provided above, with an
effective date of the Closing Date, or earlier.  Grantor acknowledges and agrees
that if Grantor fails to provide any required insurance or fails to continue
such insurance in force, Bank may do so at Grantor's expense as provided in the
Loan and Security Agreement.  The cost of such insurance, at the option of Bank,
shall be payable on demand or shall be added to the indebtedness as provided in
the security document.  GRANTOR ACKNOWLEDGES THAT IF BANK SO PURCHASES ANY SUCH
INSURANCE, THE INSURANCE WILL PROVIDE LIMITED PROTECTION AGAINST PHYSICAL DAMAGE
TO THE COLLATERAL, UP TO THE BALANCE OF THE LOAN; HOWEVER, GRANTOR'S EQUITY IN
THE COLLATERAL MAY NOT BE INSURED.  IN ADDITION, THE INSURANCE MAY NOT PROVIDE
ANY PUBLIC LIABILITY OR PROPERTY DAMAGE INDEMNIFICATION AND MAY NOT MEET THE
REQUIREMENTS OF ANY FINANCIAL RESPONSIBILITY LAWS.

     AUTHORIZATION.  For purposes of insurance coverage on the Collateral,
Grantor authorizes Bank to provide to any person (including any insurance agent
or company) all information Bank deems appropriate, whether regarding the
Collateral, the loan or other financial accommodations, or both.

     GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS AGREEMENT TO
PROVIDE INSURANCE AND AGREES TO ITS TERMS.  THIS AGREEMENT IS DATED MARCH 30,
                                                                    -------- 
1998.
GRANTOR: MANHATTAN ASSOCIATES SOFTWARE, LLC

x
 ----------------------------
 Authorized Officer

================================================================================
                                       FOR BANK USE ONLY
                                    INSURANCE VERIFICATION
   DATE:                                                         PHONE:
   AGENT'S NAME:
   INSURANCE COMPANY:
   POLICY NUMBER:
   EFFECTIVE DATES:
   COMMENTS:
================================================================================


 
                                    SCHEDULE
                                       TO
                          LOAN AND SECURITY AGREEMENT
                                    BETWEEN
           SILICON VALLEY BANK AND MANHATTAN ASSOCIATES SOFTWARE, LLC
                                        

A.   Section 1.1    Indebtedness Existing on Closing Date.

                    The Debtor owes $2,900,000 to Alan J. Dabbiere, the Debtor's
                    Chief Executive Officer and President, pursuant to that
                    certain Grid Promissory Note dated December 31, 1995.

B.   Section 1.1    Investments Existing on Closing Date.

                    The Debtor owns all of the issued and outstanding common
                    stock of Performance Analysis Corporation, a North Carolina
                    corporation.
 
C.   Section 4.1    Permitted Liens.
 
                    None.
 
D.   Section 5.7    Existing Tradenames.
 
                    Manhattan Associates, LLC
 
E.   Section 5.8    Litigation.

                    None.


                                                                   EXHIBIT 10.14

                         EXECUTIVE EMPLOYMENT AGREEMENT
                         ------------------------------
                                        

     THIS EXECUTIVE EMPLOYMENT AGREEMENT (the "Agreement") by and between
Manhattan Associates, LLC, a Georgia limited liability company ("Company"), and
Neil Thall ("Executive") is hereby entered into and effective as of the 25th day
of November, 1997 (the "Effective Date").

     WHEREAS, Company is engaged in the development, marketing, selling,
implementation and installation of computer software solutions specifically
designed for the management of warehouse and distribution centers for consumer
product manufacturers, retailers and retail and grocery suppliers and
distributors (the "Company Business");

     WHEREAS, Company desires to employ executive as Vice President, Supply
Chain Strategy, and Executive desires to accept said employment by Company; and

     WHEREAS, Company and Executive have agreed upon the terms and conditions of
Executive's employment with Company and the parties desire to express the terms
and conditions in this Agreement.

     NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein, it is hereby agreed as follows:


                             A G R E E M E N T S :
                             -------------------  

     1.  Employment and Duties.
         --------------------- 

          A.  Company shall employ Executive as Vice President, Supply Chain
Strategy, in accordance with the terms and conditions set forth in this
Agreement.  Executive hereby accepts employment on the terms set forth herein.
Executive shall report to the President and Chief Executive Officer of Company
or such other executive as may be designed by the Chief Executive Officer or the
Board of Managers.

          B.  Executive shall have such duties as are set forth on EXHIBIT A
                                                                   ---------
("Duties") and as may otherwise be assigned to him by the Chief Executive
Officer of Company or such other executive as may be designated by the Chief
Executive Officer or the Board of Managers of Company, from time to time.

          C.  Executive agrees that he shall at all times faithfully and to the
best of his ability and experience perform all of the duties that may be
required of him pursuant to the terms of this Agreement.  Executive shall devote
his full business time to the performance of his obligations hereunder, except
for such other obligations or activities as may be approved by the Chief
Executive Officer.

          D.  Neither the foregoing nor any other provision of this Agreement is
intended or shall be construed as preventing Executive from devoting his time
and effort to charitable and community activities substantially to the same
extent as he has devoted time and

 
effort prior to the effective date of this Agreement, provided that such
involvement with charitable and community activities does not materially
interfere with the performance of his duties under this Agreement.

     2.  Compensation.
         ------------ 

          A.  Base Salary.  During his employment hereunder, Company shall pay
              -----------                                                     
to Executive a base salary ("Base Salary") of $16,666.67 per month ($200,000
annualized), subject to all standard employment deductions.

          B.  Performance-Related Bonus.  Executive shall be eligible to receive
              -------------------------                                         
a performance-related bonus of up to $40,000 per year, subject to all standard
employment deductions, based on the criteria set forth on Exhibit A hereto.
                                                          ---------        

          C.  Stock Option.  Executive shall receive an option (the "Option") to
              ------------                                                      
purchase 75,000 shares of Company at an exercise price of $8.50 per share,
pursuant to the Manhattan Associates, LLC Option Plan (the "Option Plan").  The
Option shall vest according to the following schedule:

 .    As to 20,000 shares, the Option shall vest on Executive's first day of
employment.
 .    The Option shall vest as to an additional 20,000 shares on each of the
first and second anniversaries of Executive's first day of employment.
 .    As to the remaining 15,000 shares, the Option shall vest on the third
anniversary of Executive's first day of employment.

          D.  Employee Benefits.  Executive shall be entitled to participate in
              -----------------                                                
all employee benefit plans which Company provides for its employees at the
executive level.  As of the effective date of this Agreement, such benefits
include those described on EXHIBIT A.
                           --------- 

          E.  Expenses.  Executive shall be reimbursed for expenses reasonably
              --------                                                        
incurred in the performance of his duties hereunder in accordance with the
policies of Company then in effect.

          F.  Vacation.  Executive shall accrue one (1) day of paid vacation for
              --------                                                          
each calendar month worked and five (5) additional days after three (3) years of
employment.

     3.  Term.  This Agreement is effective when signed by both parties.  The
         ----                                                                
parties agree that Executive's employment may be terminated at any time, for any
reason or for no reason, for cause or not for cause, with or without notice, by
Company or Executive.  Upon any such termination, Executive shall return
immediately to Company all documents and other property of Company, together
with all copies thereof, including all Work Product and Proprietary Information,
within Executive's possession or control.

                                      -2-

 
          For purposes of this Agreement, Work Product shall mean the data,
materials, documentation, computer programs, inventions (whether or not
patentable), and all works of authorship, including all worldwide rights therein
under patent, copyright, trade secret, confidential information, or other
property right, created or developed in whole or in part by Executive while
performing services related to the Company Business.

          For purposes of this Agreement, Proprietary Information means all
Trade Secrets and Confidential Information of Company.

          For purposes of this Agreement, Trade Secrets shall mean information
of Company constituting a trade secret within the meaning of Section 10-1-761(4)
of the Georgia Trade Secrets Act of 1990, including all amendments hereafter
adopted.

          For purposes of this Agreement, Confidential Information shall mean
Company information in whatever form, other than Trade Secrets, that is of value
to its owner and is treated as confidential.

     4. Ownership.
        --------- 

          (a) All Work Product will be considered work made for hire by
Executive and owned by Company.  To the extent that any Work Product may not by
operation of law be considered work made for hire or if ownership of all rights
therein will not vest exclusively in Company, Executive assigns to Company, now
or upon its creation without further consideration, the ownership of all such
Work Product.  Company has the right to obtain and hold in its own name
copyrights, patents, registrations, and any other protection available in the
Work Product.  Executive agrees to perform any acts as may be reasonably
requested by Company to transfer, perfect, and defend Company's ownership of the
Work Product.

 
          (b) To the extent any materials other than Work Product are contained
in the materials Executive delivers to Company or its Customers, Executive
grants to Company an irrevocable, nonexclusive, worldwide, royalty-free license
to use and distribute (internally or externally) or authorize others to use and
distribute copies of, and prepare derivative works based upon, such materials
and derivative works thereof.  Executive agrees that during his or her
employment, any money or other remuneration received by Executive for services
rendered to a Customer belong to Company.

          For purposes of this Agreement, Customers shall mean any current
customer or prospective customer of Company.

     5.  Trade Secrets and Confidential Information.
         ------------------------------------------ 


          (a) Company may disclose to Executive certain Proprietary Information.
Executive agrees that the Proprietary Information is the exclusive property of
Company (or a third party providing such information to Company) and Company (or
such third party) owns all

                                      -3-

 
worldwide copyrights, trade secret rights, confidential information rights, and
all other property rights therein.

          (b) Company's disclosure of the Proprietary Information to Executive
does not confer upon Executive any license, interest or rights in or to the
Proprietary Information.  Except in the performance of services for Company,
Executive will hold in confidence and will not, without Company's prior written
consent, use, reproduce, distribute, transmit, reverse engineer, decompile,
disassemble, or transfer, directly or indirectly, in any form, or for any
purpose, any Proprietary Information communicated or made available by Company
to or received by Executive.  Executive agrees to notify Company immediately if
he discovers any unauthorized use or disclosure of the Proprietary Information.

          (c) To further protect Proprietary Information, Executive agrees that
if his or her employment with Company ends for any reason during the first three
(3) years after the initial date of employment, then for a period of six (6)
months after the end of Executive's employment he will not, without Company's
prior written consent, perform any of the Duties that he performed on behalf of
Company for the Executive's immediately prior employer if such prior employer
competes with the Company Business.

          (d) Executive's obligations under this Agreement with regard to (i)
Trade Secrets shall remain in effect for as long as such information remains a
trade secret under applicable law, and (ii) Confidential Information shall
remain in effect during Executive's employment with Company and for three years
thereafter.  These obligations will not apply to the extent that Executive
establishes that the information communicated  (1) was already known to
Executive, without an obligation to keep it confidential at the time of its
receipt from Company; (2) was received by Executive in good faith from a third
party lawfully in possession thereof and having no obligation to keep such
information confidential; or (3) was publicly known at the time of its receipt
by Executive or has become publicly known other than by a breach of this
Agreement or other action by Executive.

     6.  Non-Solicitation.
         ---------------- 

          A. Customers. The relationships made or enhanced during Executive's
             ---------
employment with Company belong to Company. During Executive's employment and the
one year period beginning immediately upon the termination of Executive's
employment with Company for any reason (the "One Year Limitation Period"),
Executive will not, without Company's prior written consent, contact, solicit or
attempt to solicit, on his own or another's behalf, any Customer with whom
Executive had contact in the two years prior to the end of Executive's
employment with Company for any reason (the "Two Year Restrictive Period") with
a view of offering, selling or licensing any program, product or service that is
materially competitive with the Company Business.


          B. Employees/Independent Contractors.  During Executive's employment
             ---------------------------------                                
and the One Year Limitation Period, Executive will not, without Company's prior
written consent, call upon, solicit, recruit, or assist others in calling upon,
soliciting or recruiting any person who is or was an employee of Company during
the Two Year Restrictive Period for the purpose of

                                      -4-

 
having such person work in any other corporation, entity, or business that is
competitive with the Company Business.

     7.   Non-Competition.  During the One Year Limitation Period, Executive
          ---------------                                                   
agrees that he  will not, without Company's prior written consent, perform his
or her Duties for any person or entity in the territory described on EXHIBIT A
                                                                     ---------
hereto (the "Territory") which competes directly with the Company Business if
Company is still engaged in the Company Business during such One Year Limitation
Period.  The parties agree and acknowledge that (i) the definitions of Duties
and Territory and period of restriction reasonably and fairly limit this
noncompete restriction and are reasonably required for Company's protection
because Executive must perform his or her Duties on behalf of Customers who are
located throughout the Territory; and (ii) by having access to information
concerning employees and Company's Customers, Executive shall obtain a
competitive advantage as to such parties.

     8.  Acknowledgments.  The parties hereto agree that:  (i) the periods of
         ---------------                                                     
restriction and Territory of restriction contained in this Agreement are fair
and reasonable in that they are reasonably required for the protection of
Company; (ii) by having access to information concerning employees and customers
of Company, Executive shall obtain a competitive advantage as to such parties;
(iii) the covenants and agreements of Executive contained in this Agreement are
reasonably necessary to protect the interests of Company in whose favor said
covenants and agreements are imposed in light of the nature of Company's
business and the involvement of Executive in such business; (iv) the
restrictions imposed by this Agreement are not greater than are necessary for
the protection of Company in light the substantial harm the Company will suffer
should Executive materially breach any of the provisions of said covenants or
agreements and (v) the covenants and agreements of Executive contained in this
Agreement form material consideration for this Agreement.

     9.  Remedy for Breach.  Executive agrees that the remedies at law of
         -----------------                                               
Company for any actual or threatened breach by Executive of the covenants
contained in Sections 4. through 7. of this Agreement would be inadequate and
that Company shall be entitled to specific performance of the covenants in such
paragraphs or injunctive relief against activities in violation of such
paragraphs, or both, by temporary or permanent injunction or other appropriate
judicial remedy, writ or order, in addition to any damages and legal expenses
(including attorney's fees) which Company may be legally entitled to recover.
Executive acknowledges and agrees that the covenants contained in Sections 4.
through 7. of this Agreement shall be construed as agreements independent of any
other provision of this or any other agreement between the parties hereto, and
that the existence of any claim or cause of action by Executive against Company,
whether predicated upon this or any other agreement, shall not constitute a
defense to the enforcement by Company of said covenants.

     10.  No Prior Agreements.  Executive hereby represents and warrants to
          -------------------                                              
Company that the execution of this Agreement by Executive and Executive's
employment by Company and the performance of Executive's duties hereunder shall
not violate or be a breach of any agreement with a former employer, client or
any other person or entity.

                                      -5-

 
     11.  Assignment; Binding Effect.  Executive understands that Executive has
          --------------------------                                           
been selected for employment by Company on the basis of Executive's personal
qualifications, experience and skills.  Executive agrees, therefore, that
Executive cannot assign all or any portion of Executive's performance under this
Agreement.  Subject to the preceding two (2) sentences and the express
provisions of Section 12. below, this Agreement shall be binding upon, inure to
the benefit of and be enforceable by the parties hereto and their respective
heirs, legal representatives, successors and assigns.  The rights and
obligations of Company hereunder shall be available to a successor in interest
of Company, including a successor established for the purpose of converting
Company to a corporation.

     12.  Complete Agreement.  This Agreement is not a promise of future
          ------------------                                            
employment.  Executive has no oral representations, understandings or agreements
with Company or any of its officers, directors or representatives covering the
same subject matter as this Agreement.  This Agreement hereby supersedes any
other employment agreements or understandings, written or oral, between Company
and Executive, including without limitation that certain Offer Letter from the
Company executed by Executive on December 22, 1997.  This written Agreement is
the final, complete and exclusive statement and expression of the agreement
between Company and Executive and of all the terms of this Agreement, and it
cannot be varied, contradicted or supplemented by evidence of any prior or
contemporaneous oral or written agreements.  This written Agreement may not be
later modified except by a further writing signed by a duly authorized officer
of Company and Executive, and no term of this Agreement may be waived except by
writing signed by the party waiving the benefit of such term.

     13.  Notice.  Whenever any notice is required hereunder, it shall be given
          ------                                                               
in writing addressed as follows:


     To Company:         Manhattan Associates, LLC
                         3101 Towercreek Parkway
                         Suite 300
                         Atlanta, Georgia  30339
                         Attention:  President

     With a copy to:     Morris, Manning & Martin, L.L.P.
                         1600 Atlanta Financial Center
                         3343 Peachtree Road, N.E.
                         Atlanta, Georgia 30326
                         Attention:  John C. Yates, Esq.

                                      -6-

 
     To Executive:       Neil Thall
                         Post Office Box 4872
                         Santa Rosa Beach, Florida 32459

     With a copy to:     Neil Thall
                         Suite 4830
                         75 Fourteenth Street
                         Atlanta, Georgia 30309

     Notice shall be deemed given and effective three (3) days after the deposit
in the U.S. mail of a writing addressed as above and sent first class mail,
certified, return receipt requested, or when actually received.  Either party
may change the address for notice by notifying the other party of such change in
accordance with this Section 13.

     14.  Severability; Headings.  If any portion of this Agreement is held
          ----------------------                                           
invalid or inoperative, the other portions of this Agreement shall be deemed
valid and operative and, so far as is reasonable and possible, effect shall be
given to the intent manifested by the portion held invalid or inoperative.  The
Section headings herein are for reference purposes only and are not intended in
any way to describe, interpret, define or limit the extent or intent of the
Agreement or of any part hereof.

     15.  Governing Law.  This Agreement shall in all respects be construed
          -------------                                                    
according to the laws of the State of Georgia.

     16.  Counterparts.  This Agreement may be executed simultaneously in two
          ------------                                                       
(2) or more counterparts, each of which shall be deemed an original and all of
which together shall constitute, but one and the same instrument.

                                      -7-

 
     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.

                              COMPANY:


                              Manhattan Associates, LLC



                              By: /s/ Alan J. Dabbiere   
                                 ---------------------------------------

                              Name:   Alan J. Dabbiere
                                   -------------------------------------

                              Title:  President
                                    ------------------------------------

                              Date:
                                   --------------------


                              EXECUTIVE:


                              /s/ Neil Thall
                              ------------------------------------------
                              Neil Thall

                              Date:
                                   -------------------------------------
 

                                      -8-

 
                                   EXHIBIT A

     The "Duties" of the Executive shall be those of the Vice President, Supply
Chain Strategy of the Company, who is responsible for coordinating sales and
marketing matters relating to the Company, to include the following:

 .    Promotion of Company's visibility to retailers as a resource based on our
relationship with retail suppliers.  Conception and promotion of ideas where
Company can create barriers of entry to the market through our unique products,
services, and relationships with retailers' supplier community.  This includes
new electronic commerce (EC) standards and integration with central
merchandising systems.

 .    Development of a compelling marketing campaign to market to retail
channels.  Increase of Company's visibility as a WMS provider servicing
retailers, as the only company with our economy of scale and understanding of
supplier, channel, transportation, ECR and QR integrated industry initiative.
Creation of a revenue generating market in providing WMS services to the retail
community.

 .    Development of add-on products and services that add value to retail
channels.

 .    Positioning the retail markets strategy to evolve into a strategic business
unit with specific independent business functions and independent P&L reporting.

 .    Assistance in overall growth, acquisition, marketing, sales and recruiting
for Company as a member of the executive committee.

 .    Such other Duties as may be agreed upon by Executive and Company's Chief
Executive Officer.


     Executive's performance-related bonus shall be structured as follows:

     One half is objective based on revenue and earnings growth (non-acquisition
related).  In the event of an acquisition, the most recent sales revenue and
earnings of the acquired company will be added to the base-line revenue.


0 - 25% revenue growth           Bonus is 0
25 - 75% revenue growth          Bonus is 2% of $10,000 for each 1% of growth




 
0 - 25% earnings growth          Bonus is 0
25 - 75% earnings growth         Bonus is 2% of $10,000 for each 1% of growth

     The other half ($20,000) is subjective based on Executive's performance of
the Duties set forth above.
 
     Current benefits offered to executive employees include the following:
 
     .   comprehensive medical insurance via either a Health
         Maintenance Organization (HMO) or Point of Service
         (POS) Plan through Blue Cross/Blue Shield with coverage
         effective on first day of employment and no
         premium costs for Executive or Executive's dependents;

     .   comprehensive dental insurance effective on first day of
         employment with a small employee contribution required;

     .   Company-paid life and accidental death and
         disability insurance effective on first day of employment;

     .   Company-paid short and long term disability coverages 
         effective on the first of the month following thirty (30)
         days of employment;
 
     .   401(k) Plan with employer match.  Eligibility for employee
         contributions begin on the first of the month following
         thirty (30) days of employment. Employer match beginning
         with 2nd  year of participation in the plan;

     .   Profit Sharing and Money Purchase Plan; eligibility begins
         with the first of the month following one (1)
         year of employment;

     .   vacation days (see Section 2F of the Agreement);

     .   nine (9) paid holidays per year after a fourteen-day waiting
         period;

     .   credit union and group banking with SunTrust Bank; and

     .   discounted health club membership.

                                      -10-

 
     The "Territory" is the Atlanta, Georgia metropolitan area, consisting of
the following counties:  Barrow, Bartow, Carroll, Cherokee, Clayton, Cobb,
Coweta, DeKalb, Douglas, Fayette, Forsyth, Fulton, Gwinnett, Henry, Newton,
Paulding, Pickens, Rockdale, Spalding and Walton.

                                      -11-


                                                                   EXHIBIT 10.15

                        EXECUTIVE EMPLOYMENT AGREEMENT
                        ------------------------------
                                        

     THIS EXECUTIVE EMPLOYMENT AGREEMENT (the "Agreement") by and between
Manhattan Associates, LLC, a Georgia limited liability company ("Company"), and
Michael Casey ("Executive") is hereby entered into and effective as of the 10th
day of November, 1997 (the "Effective Date").

     WHEREAS, Company is engaged in the development, marketing, selling,
implementation and installation of computer software solutions specifically
designed for the management of warehouse and distribution centers for consumer
product manufacturers, retailers and retail and grocery suppliers and
distributors (the "Company Business");

     WHEREAS, Company desires to employ executive as Chief Financial Officer and
Executive desires to accept said employment by Company; and

     WHEREAS, Company and Executive have agreed upon the terms and conditions of
Executive's employment with Company and the parties desire to express the terms
and conditions in this Agreement.

     NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein, it is hereby agreed as follows:


                             A G R E E M E N T S :
                             -------------------  

  1.  Employment and Duties.
      --------------------- 

     A.  Company shall employ Executive as Chief Financial Officer in accordance
with the terms and conditions set forth in this Agreement.  Executive hereby
accepts employment on the terms set forth herein.  Executive shall report to the
Chief Operating Officer of Company or such other executive as may be designed by
the Chief Executive Officer or the Board of Managers.

     B.  Executive shall have such duties as are set forth on EXHIBIT A
                                                              ---------
("Duties") and as may otherwise be assigned to him by the Chief Operating
Officer or such other executive as may be designated by the Chief Executive
Officer or Board of Managers of Company, from time to time.

     C.  Executive agrees that he shall at all times faithfully and to the best
of his ability and experience perform all of the duties that may be required of
him pursuant to the terms of this Agreement.  Executive shall devote his full
business time to the performance of his obligations hereunder.

     D.  Neither the foregoing nor any other provision of this Agreement is
intended or shall be construed as preventing Executive from devoting his time
and effort to charitable and community activities substantially to the same
extent as he has devoted time and effort prior to the 

 
effective date of this Agreement, provided that such involvement with charitable
and community activities does not materially interfere with the performance of
his duties under this Agreement.

  2.  Compensation.
      ------------ 

     A.  Base Salary.  During his employment hereunder, Company shall pay to
         -----------                                                        
Executive a base salary ("Base Salary") of $10,000 per month ($120,000
annualized), subject to all standard employment deductions, which amount may be
increased annually at the discretion of Company's Chief Operating Officer or
such other executive as may be designated by the Chief Executive Officer or
Board of Managers.

     B. Signing Bonus.  Company shall pay to Executive a one-time signing bonus
        -------------                                                          
of $20,000 (the "Signing Bonus"), subject to all standard employment deductions,
with Executive's first paycheck following the Executive's execution of this
Agreement.  In the event that Executive voluntarily leaves the employ of Company
within one year following the Effective Date, Executive agrees to repay Company
an amount equal to the Signing Bonus less the tax liability Executive incurs in
connection with Company's payment of the Signing Bonus.

     C. Performance-Related Bonus.  Executive shall be eligible to receive a
        -------------------------                                           
performance-related bonus of $25,000 per year, subject to all standard
employment deductions, based on criteria to be agreed upon between Executive and
an executive officer of Company.

     D.  Stock Option.  Executive shall receive an option (the "Option") to
         ------------                                                      
purchase 50,000 shares of Company at an exercise price of $5.00 per share
pursuant to the Manhattan Associates, LLC Option Plan (the "Option Plan").  The
Option shall vest as to 10,000 shares in equal portions over the first six (6)
months following November 10, 1997, as to 13,334 shares on November 10, 1998, as
to 13,333 shares on November 10, 1999, and as to the remaining 13,333 shares on
November 10, 2000, subject to the Option Plan provisions relating to
acceleration of vesting and exercisability.  In addition, all unvested shares
shall vest immediately upon the occurrence a transaction in which more than
fifty percent (50%) of the issued and outstanding shares of the Company are
acquired by persons who are not shareholders or affiliates in a single
transaction or a series of transactions occurring over a period of 30
consecutive days.

     E.  Employee Benefits.  Executive shall be entitled to participate in all
         -----------------                                                    
employee benefit plans which Company provides for its employees at the executive
level.  As of the effective date of this Agreement, such benefits include those
described on EXHIBIT A.
             --------- 

                                      -2-

 
     F.  Expenses.  Executive shall be reimbursed for expenses reasonably
         --------                                                        
incurred in the performance of his duties hereunder in accordance with the
policies of Company then in effect.

     G.  Vacation.  Executive shall accrue one vacation day for each complete
         --------                                                            
calendar month worked and five additional vacation days after three years
employment.

  3.  Term.  This Agreement is effective when signed by both parties.  The
      ----                                                                
parties agree that Executive's employment may be terminated at any time, for any
reason or for no reason, for cause or not for cause, with or without notice, by
Company or Executive.  Upon any such termination, Executive shall return
immediately to Company all documents and other property of Company, together
with all copies thereof, including all Work Product and Proprietary Information,
within Executive's possession or control.

     For purposes of this Agreement, Work Product shall mean the data,
materials, documentation, computer programs, inventions (whether or not
patentable), and all works of authorship, including all worldwide rights therein
under patent, copyright, trade secret, confidential information, or other
property right, created or developed in whole or in part by Executive while
performing services in furtherance of or related to the Company Business.

     For purposes of this Agreement, Proprietary Information means all Trade
Secrets and Confidential Information of Company.

     For purposes of this Agreement, Trade Secrets shall mean information of
Company constituting a trade secret within the meaning of Section 10-1-761(4) of
the Georgia Trade Secrets Act of 1990, including all amendments hereafter
adopted.

     For purposes of this Agreement, Confidential Information shall mean Company
information in whatever form, other than Trade Secrets, that is of value to its
owner and is treated as confidential.

  4.  Severance.  In the event of a termination of employment within the
      ---------                                                         
first two (2) years of employment, other than a Termination based on gross
negligence or willful misconduct, Executive shall receive a severance payment
equal to the amount of Executive's base salary (determined as of the date of his
termination) which he would normally receive during six (6) months of
employment, subject to all standard deductions, payable in full within thirty
(30) days of termination of employment.  Company's obligation to make the
severance payment shall be conditioned upon Executive's (i) execution of a
release agreement in a form reasonably acceptable to the Company, and consistent
with the terms of this Agreement, whereby Executive releases the Company from
any and all liability and claims of any kind, and (ii) compliance with the
restrictive covenants and all post-termination obligations contained in this
Agreement. Further, in the event of a termination, other than a termination
based on gross negligence or willful misconduct, Executive shall have thirty
(30) in which to exercise his vested options.

                                      -3-

 
  5. Ownership.
     --------- 

     (a) All Work Product will be considered work made for hire by Executive and
owned by Company.  To the extent that any Work Product may not by operation of
law be considered work made for hire or if ownership of all rights therein will
not vest exclusively in Company, Executive assigns to Company, now or upon its
creation without further consideration, the ownership of all such Work Product.
Company has the right to obtain and hold in its own name copyrights, patents,
registrations, and any other protection available in the Work Product.
Executive agrees to perform any acts as may be reasonably requested by Company
to transfer, perfect, and defend Company's ownership of the Work Product.
 
     (b) To the extent any materials other than Work Product are contained in
the materials Executive delivers to Company or its Customers, Executive grants
to Company an irrevocable, nonexclusive, worldwide, royalty-free license to use
and distribute (internally or externally) or authorize others to use and
distribute copies of, and prepare derivative works based upon, such materials
and derivative works thereof.  Executive agrees that during his or her
employment, any money or other remuneration received by Executive for services
rendered to a Customer belong to Company.

     For purposes of this Agreement, Customers shall mean any current customer
or prospective customer of Company.

  6.  Trade Secrets and Confidential Information.
      ------------------------------------------ 

     (a) Company may disclose to Executive certain Proprietary Information.
Executive agrees that the Proprietary Information is the exclusive property of
Company (or a third party providing such information to Company) and Company (or
such third party) owns all worldwide copyrights, trade secret rights,
confidential information rights, and all other property rights therein.

     (b) Company's disclosure of the Proprietary Information to Executive does
not confer upon Executive any license, interest or rights in or to the
Proprietary Information. Except in the performance of services for Company,
Executive will hold in confidence and will not, without Company's prior written
consent, use, reproduce, distribute, transmit, reverse engineer, decompile,
disassemble, or transfer, directly or indirectly, in any form, or for any
purpose, any Proprietary Information communicated or made available by Company
to or received by Executive. Executive agrees to notify Company immediately if
he discovers any unauthorized use or disclosure of the Proprietary Information.

     (c) To further protect Proprietary Information, Executive agrees that if
his or her employment with Company ends for any reason during the first three
(3) years after the initial date of employment, then for a period of six (6)
months after the end of Executive's employment he will not, without Company's
prior written consent, perform any of the Duties that he 

                                      -4-

 
performed on behalf of Company for the Executive's immediately prior employer if
such prior employer competes with the Company Business.

     (d) Executive's obligations under this Agreement with regard to (i) Trade
Secrets shall remain in effect for as long as such information remains a trade
secret under applicable law, and (ii) Confidential Information shall remain in
effect during Executive's employment with Company and for three years
thereafter. These obligations will not apply to the extent that Executive
establishes that the information communicated (1) was already known to
Executive, without an obligation to keep it confidential at the time of its
receipt from Company; (2) was received by Executive in good faith from a third
party lawfully in possession thereof and having no obligation to keep such
information confidential; or (3) was publicly known at the time of its receipt
by Executive or has become publicly known other than by a breach of this
Agreement or other action by Executive.

  7.  Non-Solicitation.
      ---------------- 

     A. Customers. The relationships made or enhanced during Executive's
        ---------
employment with Company belong to Company. During Executive's employment and the
one year period beginning immediately upon the termination of Executive's
employment with Company for any reason (the "One Year Limitation Period"),
Executive will not, without Company's prior written consent, contact, solicit or
attempt to solicit, on his own or another's behalf, any Customer with whom
Executive had contact in the two years prior to the end of Executive's
employment with Company for any reason (the "Two Year Restrictive Period") with
a view of offering, selling or licensing any program, product or service that is
competitive with the Company Business.

     B.  Employees/Independent Contractors.  During Executive's employment and
         ---------------------------------                                    
the One Year Limitation Period, Executive will not, without Company's prior
written consent, call upon, solicit, recruit, or assist others in calling upon,
soliciting or recruiting any person who is or was an employee of Company during
the Two Year Restrictive Period for the purpose of having such person work in
any other corporation, entity, or business that is competitive with the Company
Business.

  8.  Non-Competition.  During the One Year Limitation Period, Executive
      ---------------                                                   
agrees that he  will not, without Company's prior written consent, perform his
or her Duties for any person or entity in the territory described on EXHIBIT A
                                                                     ---------
hereto (the "Territory") which competes directly with the Company Business if
Company is still engaged in the Company Business during such One Year Limitation
Period.  The parties agree and acknowledge that (i) the definitions of Duties
and Territory and period of restriction reasonably and fairly limit this
noncompete restriction and are reasonably required for Company's protection
because Executive must perform his or her Duties on behalf of Customers who are
located throughout the Territory; and (ii) by having access to information
concerning employees and Company's Customers, Executive shall obtain a
competitive advantage as to such parties.

     9.  Acknowledgments.  The parties hereto agree that:  (i) the periods of
         ---------------                                                     
restriction and Territory of restriction contained in this Agreement are fair
and reasonable in that they are 

                                      -5-

 
reasonably required for the protection of Company; (ii) by having access to
information concerning employees and customers of Company, Executive shall
obtain a competitive advantage as to such parties; (iii) the covenants and
agreements of Executive contained in this Agreement are reasonably necessary to
protect the interests of Company in whose favor said covenants and agreements
are imposed in light of the nature of Company's business and the involvement of
Executive in such business; (iv) the restrictions imposed by this Agreement are
not greater than are necessary for the protection of Company in light of the
substantial harm that Company will suffer should Executive breach any of the
provisions of said covenants or agreements and (v) the covenants and agreements
of Executive contained in this Agreement form material consideration for this
Agreement.

  10.  Remedy for Breach.  Executive agrees that the remedies at law of
       -----------------                                               
Company for any actual or threatened breach by Executive of the covenants
contained in Sections 5. through 8. of this Agreement would be inadequate and
that Company shall be entitled to specific performance of the covenants in such
paragraphs or injunctive relief against activities in violation of such
paragraphs, or both, by temporary or permanent injunction or other appropriate
judicial remedy, writ or order, in addition to any damages and legal expenses
(including attorney's fees) which Company may be legally entitled to recover.
Executive acknowledges and agrees that the covenants contained in Sections 5.
through 8. of this Agreement shall be construed as agreements independent of any
other provision of this or any other agreement between the parties hereto, and
that the existence of any claim or cause of action by Executive against Company,
whether predicated upon this or any other agreement, shall not constitute a
defense to the enforcement by Company of said covenants.

  11.  No Prior Agreements.  Executive hereby represents and warrants to
       -------------------                                              
Company that the execution of this Agreement by Executive and Executive's
employment by Company and the performance of Executive's duties hereunder shall
not violate or be a breach of any agreement with a former employer, client or
any other person or entity.

  12.  Assignment; Binding Effect.  Executive understands that Executive has
       --------------------------                                           
been selected for employment by Company on the basis of Executive's personal
qualifications, experience and skills.  Executive agrees, therefore, that
Executive cannot assign all or any portion of Executive's performance under this
Agreement.  Subject to the preceding two (2) sentences and the express
provisions of Section 13. below, this Agreement shall be binding upon, inure to
the benefit of and be enforceable by the parties hereto and their respective
heirs, legal representatives, successors and assigns.  The rights and
obligations of Company hereunder shall be available to a successor in interest
of Company, including a successor established for the purpose of converting
Company to a corporation.

  13.  Complete Agreement.  This Agreement is not a promise of future
       ------------------                                            
employment. Executive has no oral representations, understandings or agreements
with Company or any of its officers, directors or representatives covering the
same subject matter as this Agreement. This Agreement hereby supersedes any
other employment agreements or understandings, written or oral, between Company
and Executive, including without limitation that certain Offer Letter from the
Company executed by Executive on October 16, 1997. This written Agreement is the
final, complete and exclusive statement and expression of the agreement between
Company and 

                                      -6-

 
Executive and of all the terms of this Agreement, and it cannot be varied,
contradicted or supplemented by evidence of any prior or contemporaneous oral or
written agreements. This written Agreement may not be later modified except by a
further writing signed by a duly authorized officer of Company and Executive,
and no term of this Agreement may be waived except by writing signed by the
party waiving the benefit of such term.

  14.  Notice.  Whenever any notice is required hereunder, it shall be given
       ------                                                               
in writing addressed as follows:

     To Company:         Manhattan Associates, LLC
                         3101 Towercreek Parkway
                         Suite 300
                         Atlanta, Georgia  30339
                         Attention:  President

     With a copy to:     Morris, Manning & Martin, L.L.P.
                         1600 Atlanta Financial Center
                         3343 Peachtree Road, N.E.
                         Atlanta, Georgia 30326
                         Attention:  John C. Yates, Esq.

     To Executive:       Michael Casey
                         331 Leeward Walk Lane
                         Alpharetta, Georgia  30202

     Notice shall be deemed given and effective three (3) days after the deposit
in the U.S. mail of a writing addressed as above and sent first class mail,
certified, return receipt requested, or when actually received.  Either party
may change the address for notice by notifying the other party of such change in
accordance with this Section 14.

  15.  Severability; Headings.  If any portion of this Agreement is held
       ----------------------                                           
invalid or inoperative, the other portions of this Agreement shall be deemed
valid and operative and, so far as is reasonable and possible, effect shall be
given to the intent manifested by the portion held invalid or inoperative.  The
Section headings herein are for reference purposes only and are not intended in
any way to describe, interpret, define or limit the extent or intent of the
Agreement or of any part hereof.

  17.  Governing Law.  This Agreement shall in all respects be construed
       -------------                                                    
according to the laws of the State of Georgia.


  18.  Counterparts.  This Agreement may be executed simultaneously in two
       ------------                                                       
(2) or more counterparts, each of which shall be deemed an original and all of
which together shall constitute, but one and the same instrument.

                                      -7-

 
     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.

                              COMPANY:

                              Manhattan Associates, LLC

                              By: /s/ Alan J. Dabbiere   
                                 ----------------------------------------------
                              Name:   Alan J. Dabbiere
                                   --------------------------------------------
                              Title:  President
                                    -------------------------------------------
                              Date:
                                    -------------------------------------------

                              EXECUTIVE:


                              /s/ Michael Casey
                              -------------------------------------------------
                              Michael Casey

                              Date:
                                    ------------------------------------------- 

                                      -8-

 
                                   EXHIBIT A

     The "Duties" of the Executive shall be those of the Chief Financial Officer
of the Company, who is responsible for coordinating financial matters relating
to the Company, to include the following:

     . maintain and prepare Company financial records and reports;

     . prepare internal financial statements;

     . coordinate audit of financial statements by auditors;

     . assist in preparing financial forecasts and business plans; and

     . provide financial direction on Company financings.


     Current benefits offered to executive employees include the following:

     . comprehensive medical insurance via either a Health Maintenance
       Organization (HMO) or Point of Service (POS) Plan through Blue Cross/Blue
       Shield with coverage effective on first day of employment and no premium
       costs for Executive or Executive's dependents;

     . comprehensive dental insurance effective on first day of employment with
       a small employee contribution required;

     . Company-paid life and accidental death and disability insurance effective
       on first day of employment;

     . Company-paid short and long term disability coverages effective on the
       first of the month following thirty (30) days of employment;

     . 401(k) Plan with employer match. Eligibility for employee contributions
       begin on the first of the month following thirty (30) days of employment.
       Employer match beginning with 2nd year of participation in the plan;

     . Profit Sharing and Money Purchase Plan; eligibility begins with the first
       of the month following one (1) year of employment;

     . vacation days (see Section 2G of the Agreement); and

     . nine (9) paid holidays per year after a fourteen-day waiting period.
 

 
     The "Territory" is the Atlanta, Georgia metropolitan area, consisting
of the following counties:  Barrow, Bartow, Carroll, Cherokee, Clayton, Cobb,
Coweta, DeKalb, Douglas, Fayette, Forsyth, Fulton, Gwinnett, Henry, Newton,
Paulding, Pickens, Rockdale, Spalding and Walton.


                                     -10-


                                                                   EXHIBIT 10.16

                         EXECUTIVE EMPLOYMENT AGREEMENT
                         ------------------------------
                                        

     THIS EXECUTIVE EMPLOYMENT AGREEMENT (the "Agreement") by and between
Manhattan Associates, LLC, a Georgia limited liability company ("Company"), and
Greg Cronin ("Executive") is hereby entered into and effective as of the 15th
day of November, 1997 (the "Effective Date").

     WHEREAS, Company is engaged in the development, marketing, selling,
implementation and installation of computer software solutions specifically
designed for the management of warehouse and distribution centers for consumer
product manufacturers, retailers and retail and grocery suppliers and
distributors (the "Company Business");

     WHEREAS, Company desires to employ executive as Executive Vice President,
Sales and Marketing and Executive desires to accept said employment by Company;
and

     WHEREAS, Company and Executive have agreed upon the terms and conditions of
Executive's employment with Company and the parties desire to express the terms
and conditions in this Agreement.

     NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein, it is hereby agreed as follows:


                             A G R E E M E N T S :
                             -------------------  

     1.  Employment and Duties.
         --------------------- 

          A.  Company shall employ Executive as Executive Vice President, Sales
and Marketing in accordance with the terms and conditions set forth in this
Agreement.  Executive hereby accepts employment on the terms set forth herein.
Executive shall report to the Chief Executive Officer of Company or such other 
executive as may be designated by the Chief Executive Officer or the Board of 
Managers.

          B.  Executive shall have such duties as are set forth on EXHIBIT A
                                                                   ---------
("Duties") and as may otherwise be assigned to him by the Chief Executive
Officer of Company or such other executive as may be designated by the Chief 
Executive Officer of Company, from time to time.

          C.  Executive agrees that he shall at all times faithfully and to the
best of his ability and experience perform all of the duties that may be
required of him pursuant to the terms of this Agreement.  Executive shall devote
his full business time to the performance of his obligations hereunder.

          D.  Neither the foregoing nor any other provision of this Agreement is
intended or shall be construed as preventing Executive from devoting his time
and effort to charitable and community activities substantially to the same
extent as he has devoted time and effort prior to the effective date of this
Agreement, provided that such involvement with charitable and community
activities does not materially interfere with the performance of his duties
under this Agreement.

 
     2.  Compensation.
         ------------ 

          A. Base Salary. During his employment hereunder, Company shall pay to
             -----------   
Executive an initial base salary ("Base Salary") of $16,667.67 per month
($200,000 annualized), subject to all standard employment deductions. Company
shall annually review Executive's base salary based on his performance.

          B.  Signing Bonus.  Company shall pay to Executive a one-time signing
              -------------                                                    
bonus of $100,000 (the "Signing Bonus"), subject to all standard employment
deductions, with Executive's first paycheck following the Executive's execution
of this Agreement.  In the event that Executive voluntarily leaves the employ of
Company within one year following the Effective Date, Executive agrees to repay
Company an amount equal to the Signing Bonus less the tax liability Executive
incurs in connection with Company's payment of the Signing Bonus.

          C.  Relocation Expenses.  Company shall provide Executive with
              -------------------                                       
relocation expenses in accordance with the terms set forth on Exhibit A hereto.
                                                              ---------        

          D.  Performance-Related Bonus.  Executive shall be eligible to receive
              -------------------------                                         
an initial performance-related bonus of up to $100,000 per year from the
Effective Date, subject to all standard employment deductions, based on the
criteria set forth on Exhibit A hereto.  Company will annually review the bonus
                      ---------                                                
based on Executive's performance.

          E.  Stock Option.  Executive shall receive an option (the "Option") to
              ------------                                                      
purchase 175,000 shares of Company at an exercise price not to exceed $7.00 per
share, pursuant to the Manhattan Associates, LLC Option Plan (the "Option
Plan").  The Option shall vest as to one-third of the underlying shares on each
of the first, second and third anniversaries of the Executive's date of hire.

          F.  Employee Benefits.  Executive shall be entitled to participate in
              -----------------                                                
all employee benefit plans which Company provides for its employees at the
executive level.  As of the effective date of this Agreement, such benefits
include those described on EXHIBIT A.
                           --------- 

          G.  Expenses.  Executive shall be reimbursed for expenses reasonably
              --------                                                        
incurred in the performance of his duties hereunder in accordance with the
policies of Company then in effect.

          H. Vacation. Executive shall be entitled to three (3) weeks of paid
             --------
vacation per calendar year in 1998, and Chief Executive Officer will consider
four (4) weeks per year thereafter.

     3.  Term.  This Agreement is effective when signed by both parties and will
         ----                                                                   
remain in effect for an indefinite period of time.  The parties agree that
Executive's employment may be terminated at any time, for any reason or for no
reason, for cause or not for cause, with or without notice, by Company or
Executive.  Upon any such termination, Executive shall return immediately to
Company all documents and other property of Company, together with all copies
thereof, including all Work Product and Proprietary Information, within
Executive's possession or control.

                                      -2-

 
          Executive may consider his employment terminated if his duties or
responsibilities are altered without his consent so as to diminish his Duties or
responsibilities as set forth on EXHIBIT A.
                                 --------- 

          For purposes of this Agreement, Work Product shall mean the data,
materials, documentation, computer programs, inventions (whether or not
patentable), and all works of authorship, including all worldwide rights therein
under patent, copyright, trade secret, confidential information, or other
property right, created or developed in whole or in part by Executive while
performing services in furtherance of or related to the Company Business.

          For purposes of this Agreement, Proprietary Information means all
Trade Secrets and Confidential Information of Company.

          For purposes of this Agreement, Trade Secrets shall mean information
of Company constituting a trade secret within the meaning of Section 10-1-761(4)
of the Georgia Trade Secrets Act of 1990, including all amendments hereafter
adopted.

          For purposes of this Agreement, Confidential Information shall mean
Company information in whatever form, other than Trade Secrets, that is of value
to its owner and is treated as confidential.

     4.  Severance.  In the event of any termination of employment, other than a
         ---------                                                              
Termination With Cause, as defined in the Option Plan, or voluntary termination,
Executive shall receive a severance payment equal to the amount of Executive's
base salary (determined as of the date of his termination) which he would
normally receive during twelve (12) months of employment, subject to all
standard deductions, payable in full within thirty (30) days of termination of
employment. Company's obligation to make the severance payment shall be
conditioned upon Executive's (i) execution of a release agreement in a form
reasonably acceptable to the Company, whereby Executive releases the Company
from any and all liability and claims of any kind, other than any benefits or
rights, including rights under this Agreement, to which Executive is already
entitled, and (ii) compliance with the restrictive covenants and all post-
termination obligations contained in this Agreement.

     5. Ownership.
        --------- 


          (a) All Work Product will be considered work made for hire by
Executive and owned by Company.  To the extent that any Work Product may not by
operation of law be considered work made for hire or if ownership of all rights
therein will not vest exclusively in Company, Executive assigns to Company, now
or upon its creation without further consideration, the ownership of all such
Work Product.  Company has the right to obtain and hold in its own name
copyrights, patents, registrations, and any other protection available in the
Work Product.  Executive agrees to perform any acts as may be reasonably
requested by Company to transfer, perfect, and defend Company's ownership of the
Work Product.

                                      -3-

 
          (b) To the extent any materials other than Work Product are contained
in the materials Executive delivers to Company or its Customers, Executive
grants to Company an irrevocable, nonexclusive, worldwide, royalty-free license
to use and distribute (internally or externally) or authorize others to use and
distribute copies of, and prepare derivative works based upon, such materials
and derivative works thereof.  Executive agrees that during his or her
employment, any money or other remuneration received by Executive for services
rendered to a Customer belong to Company.

          For purposes of this Agreement, Customers shall mean any current
customer or prospective customer of Company.

     6.  Trade Secrets and Confidential Information.
         ------------------------------------------ 


          (a) Company may disclose to Executive certain Proprietary Information.
Executive agrees that the Proprietary Information is the exclusive property of
Company (or a third party providing such information to Company) and Company (or
such third party) owns all worldwide copyrights, trade secret rights,
confidential information rights, and all other property rights therein.

          (b) Company's disclosure of the Proprietary Information to Executive
does not confer upon Executive any license, interest or rights in or to the
Proprietary Information.  Except in the performance of services for Company,
Executive will hold in confidence and will not, without Company's prior written
consent, use, reproduce, distribute, transmit, reverse engineer, decompile,
disassemble, or transfer, directly or indirectly, in any form, or for any
purpose, any Proprietary Information communicated or made available by Company
to or received by Executive.  Executive agrees to notify Company immediately if
he discovers any unauthorized use or disclosure of the Proprietary Information.

          (c) To further protect Proprietary Information, Executive agrees that
if his or her employment with Company during the first three (3) years after the
initial date of employment Effective Date, then for a period of six (6) months
after the end of Executive's employment he will not, without Company's prior
written consent, perform any of the Duties that he performed on behalf of
Company for the Executive's immediately prior employer if such prior employer
competes with the Company Business.

          (d) Executive's obligations under this Agreement with regard to (i)
Trade Secrets shall remain in effect for as long as such information remains a
trade secret under applicable law, and (ii) Confidential Information shall
remain in effect during Executive's employment with Company and for three years
thereafter.  These obligations will not apply to the extent that Executive
establishes that the information communicated (1) was already known to
Executive, without an obligation to keep it confidential at the time of its
receipt from Company; (2) was received by Executive in good faith from a third
party lawfully in possession thereof and having no obligation to keep such
information confidential; or (3) was publicly known at the time of its receipt
by Executive or has become publicly known other than by a breach of this
Agreement or other action by Executive.

                                      -4-

 
     7.  Non-Solicitation.
         ---------------- 

          A. Customers.  The Corporate relationships made or enhanced during
             ---------
Executive's employment with Company belong to Company. During Executive's
employment and the one year period beginning immediately upon the termination of
Executive's employment with Company for any reason (the "One Year Limitation
Period"), Executive will not, without Company's prior written consent, contact,
solicit or attempt to solicit, on his own or another's behalf, any Customer with
whom Executive had contact while employed by Company in the two years prior to
the end of Executive's employment with Company for any reason (the "Two Year
Restrictive Period") with a view of offering, selling or licensing any program,
product or service that is competitive with the Company Business.


          B.   Employees/Independent Contractors.  During Executive's employment
               ---------------------------------                                
and the One Year Limitation Period, Executive will not, without Company's prior
written consent, call upon, solicit, recruit, or assist others in calling upon,
soliciting or recruiting any person who is or was an employee of Company during
the Two Year Restrictive Period for the purpose of having such person work in
any other corporation, entity, or business that is competitive with the Company
Business.

     8.   Non-Competition.  During the One Year Limitation Period, Executive
          ---------------                                                   
agrees that he  will not, without Company's prior written consent, perform his
or her Duties for any person or entity in the territory described on EXHIBIT A
                                                                     ---------
hereto (the "Territory")which competes directly with the Company Business if
Company is still engaged in the Company Business during such One Year Limitation
Period.  The parties agree and acknowledge that (i) the definitions of Duties
and Territory and period of restriction reasonably and fairly limit this
noncompete restriction and are reasonably required for Company's protection
because Executive must perform his or her Duties on behalf of Customers who are
located throughout the Territory; and (ii) by having access to information
concerning employees and Company's Customers, Executive shall obtain a
competitive advantage as to such parties.

     9.  Acknowledgments.  The parties hereto agree that:  (i) the periods of
         ---------------                                                     
restriction and Territory of restriction contained in this Agreement are fair
and reasonable in that they are reasonably required for the protection of
Company; (ii) by having access to information concerning employees and customers
of Company, Executive shall obtain a competitive advantage as to such parties;
(iii) the covenants and agreements of Executive contained in this Agreement are
reasonably necessary to protect the interests of Company in whose favor said
covenants and agreements are imposed in light of the nature of Company's
business and the involvement of Executive in such business; (iv) the
restrictions imposed by this Agreement are not greater than are necessary for
the protection of Company in light of the substantial harm that Company will
suffer should Executive breach any of the provisions of said covenants or
agreements and (v) the covenants and agreements of Executive contained in this
Agreement form material consideration for this Agreement.

                                      -5-

 
     10.  Remedy for Breach.  Executive agrees that the remedies at law of
          -----------------                                               
Company for any actual or threatened breach by Executive of the covenants
contained in Sections 5. through 8. of this Agreement would be inadequate and
that Company shall be entitled to specific performance of the covenants in such
paragraphs or injunctive relief against activities in violation of such
paragraphs, or both, by temporary or permanent injunction or other appropriate
judicial remedy, writ or order, in addition to any damages and legal expenses
(including attorney's fees) which Company may be legally entitled to recover.
Executive acknowledges and agrees that the covenants contained in Sections 5.
through 8. of this Agreement shall be construed as agreements independent of any
other provision of this or any other agreement between the parties hereto, and
that the existence of any claim or cause of action by Executive against Company,
whether predicated upon this or any other agreement, shall not constitute a
defense to the enforcement by Company of said covenants.

     11.  No Prior Agreements.  Executive hereby represents and warrants to
          -------------------                                              
Company that the execution of this Agreement by Executive and Executive's
employment by Company and the performance of Executive's duties hereunder shall
not violate or be a breach of any agreement with a former employer, client or
any other person or entity.

     12.  Assignment; Binding Effect.  Executive understands that Executive has
          --------------------------                                           
been selected for employment by Company on the basis of Executive's personal
qualifications, experience and skills.  Executive agrees, therefore, that
Executive cannot assign all or any portion of Executive's performance under this
Agreement.  Subject to the preceding two (2) sentences and the express
provisions of Section 13. below, this Agreement shall be binding upon, inure to
the benefit of and be enforceable by the parties hereto and their respective
heirs, legal representatives, successors and assigns.  The rights and
obligations of Company hereunder shall be available to a successor in interest
of Company, including a successor established for the purpose of converting
Company to a corporation.

     13.  Complete Agreement.  This Agreement is not a promise of future
          ------------------                                            
employment.  Executive has no oral representations, understandings or agreements
with Company or any of its officers, directors or representatives covering the
same subject matter as this Agreement.  This Agreement hereby supersedes any
other employment agreements or understandings, written or oral, between Company
and Executive, including without limitation that certain Offer Letter from the
Company executed by Executive on November 15, 1997.  This written Agreement is
the final, complete and exclusive statement and expression of the agreement
between Company and Executive and of all the terms of this Agreement, and it
cannot be varied, contradicted or supplemented by evidence of any prior or
contemporaneous oral or written agreements.  This written Agreement may not be
later modified except by a further writing signed by a duly authorized officer
of Company and Executive, and no term of this Agreement may be waived except by
writing signed by the party waiving the benefit of such term.

     14.  Notice.  Whenever any notice is required hereunder, it shall be given
          ------                                                               
in writing addressed as follows:


     To Company:      Manhattan Associates, LLC
                      3101 Towercreek Parkway
                      Suite 300
                      Atlanta, Georgia  30339
                      Attention:  Chief Operating Officer

                                      -6-

 
     With a copy to:  Morris, Manning & Martin, L.L.P.
                      1600 Atlanta Financial Center
                      3343 Peachtree Road, N.E.
                      Atlanta, Georgia 30326
                      Attention:  John C. Yates, Esq.

     To Executive:    Greg Cronin
                      ______________________
                      ______________________

     Notice shall be deemed given and effective three (3) days after the deposit
in the U.S. mail of a writing addressed as above and sent first class mail,
certified, return receipt requested, or when actually received.  Either party
may change the address for notice by notifying the other party of such change in
accordance with this Section 14.

     15.  Severability; Headings.  If any portion of this Agreement is held
          ----------------------                                           
invalid or inoperative, the other portions of this Agreement shall be deemed
valid and operative and, so far as is reasonable and possible, effect shall be
given to the intent manifested by the portion held invalid or inoperative.  The
Section headings herein are for reference purposes only and are not intended in
any way to describe, interpret, define or limit the extent or intent of the
Agreement or of any part hereof.

     16.  Governing Law.  This Agreement shall in all respects be construed
          -------------                                                    
according to the laws of the State of Georgia.

     17.  Counterparts.  This Agreement may be executed simultaneously in two
          ------------                                                       
(2) or more counterparts, each of which shall be deemed an original and all of
which together shall constitute, but one and the same instrument.

                                      -7-

 
     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.

                              COMPANY:


                              Manhattan Associates, LLC



                              By: /s/ Alan J. Dabbiere
                                  -------------------------------

                              Name: Alan J. Dabbiere
                                    -----------------------------

                              Title: President
                                     ----------------------------

                              Date:
                                    ------------------


                              EXECUTIVE:

                              /s/ Greg Cronin
                              ----------------------------------- 
                              Greg Cronin

                              Date:
                                    ----------------------------- 

                                      -8-

 
                                   EXHIBIT A

     The "Duties" of the Executive shall be those of the Executive Vice
President, Sales and Marketing of the Company, who is responsible for
coordinating sales and marketing matters relating to the Company, to include the
following:

 .    All sales and marketing activities, subject to change upon mutual agreement


Company shall provide Executive with the following relocation expenses:

 .    Full cost of moving Executive's household goods and personal effects from
Oconomowoc, Wisconsin by a carrier approved by Company to include insurance
protection and up to ninety (90) days temporary storage.

 .    All reasonable expenses associated with up to four (4) trips for Executive
and Executive's family to Atlanta to locate suitable housing.

 .    For Executive's trip to Atlanta to report to work, Company will either (i)
pay the airfare for Executive and Executive's family, or (ii) automobile mileage
will be reimbursed at .29 cents per mile and Executive will receive an allowance
of $55.00 for each 450 miles traveled, or fraction thereof.

 .    If, after arriving in Atlanta, Executive is unable to move directly into
his new residence, Executive will receive a daily allowance of $150.00 for up to
sixty (60) days if necessary.  This temporary living allowance may be extended
or modified in the event Executive's home has not sold within the next sixty
(60) days.

 .    Company will pay for reasonable closing costs involved with the sale of
Executive's home in Oconomowoc, and will reimburse you for the real estate
commission incurred in that sale (at the locally prevailing rate but not to
exceed seven percent) if it is within one year of Executive's hire date.

 .    Company will reimburse Executive for the closing costs associated with the
purchase of a home in the Atlanta area (to include the number of points for a

                                      -9-

 
competitive loan by a large lending institution) if Executive purchases the home
within one year of his hire date.

 .    Executive will receive a miscellaneous relocation payment of $5,000
(taxable, 28% Federal, 7.65 FICA) to be paid within three weeks of Executive's
first day of employment.

 .    All taxable relocation expenses will be "grossed-up."



     Executive's performance-related bonus shall be structured as follows:

     One half is objective based on revenue and earnings growth (non-acquisition
related).  In the event of an acquisition, the most recent sales revenue and
earnings of the acquired company will be added to the base-line revenue.

0 - 25% revenue growth           Bonus is 0
25 - 75% revenue growth          Bonus is 2% of $25,000 for each 1% of growth
0 - 25% earnings growth          Bonus is 0
25 - 75% earnings growth         Bonus is 2% of $25,000 for each 1% of growth

     The other half of the bonus is subjective based on the following:

     (1)  Relationships
         -Big six consulting firms, distribution channel influencers
         -Research companies such as Gartner Group and AMR
         -Partners such as Oracle, SAP, etc.
     (2)  Recruitment & development of sales infrastructure
     (3)  Recruitment & development of marketing infrastructure
     (4)  Providing guidance for overall company strategic direction


     Current benefits offered to executive employees include the following:


 .  comprehensive medical insurance via either a Health Maintenance Organization
(HMO) or Point of Service (POS) Plan through Blue Cross/Blue Shield with

                                      -10-

 
coverage effective on first day of employment and no premium costs for Executive
or Executive's dependents;

 .  comprehensive dental insurance effective on first day of employment with a
small employee contribution required;

 .  Company-paid life and accidental death and disability insurance effective on
first day of employment;

 .  Company-paid short and long term disability coverages effective on the first
of the month following thirty (30) days of employment;

 .  401(k) Plan with employer match.  Eligibility for employee contributions
begin on the first of the month following thirty (30) days of employment.
Employer match beginning with 2nd  year of participation in the plan;

 .  Profit Sharing and Money Purchase Plan; eligibility begins with the first of
the month following one (1) year of employment; 

 .  vacation days (see Section 2H of the Agreement); and

 .  nine (9) paid holidays per year after a fourteen-day waiting period.

     The "Territory" is the Atlanta, Georgia metropolitan area, consisting of
the following counties:  Barrow, Bartow, Carroll, Cherokee, Clayton, Cobb,
Coweta, DeKalb, Douglas, Fayette, Forsyth, Fulton, Gwinnett, Henry, Newton,
Paulding, Pickens, Rockdale, Spalding and Walton.

                                      -11-


                                                                   EXHIBIT 10.17
 
                              EMPLOYMENT AGREEMENT


THIS EMPLOYMENT AGREEMENT ("Agreement") is effective as of date set forth below
("Effective Date"), by and between Manhattan Associates, LLC, a Georgia limited
liability company ("Company"), and the undersigned employee ("Employee"), an
individual.  This Agreement shall be construed in conjunction with that certain
letter dated August 6, 1997, executed by the Company and Employee (the "Offer
Letter").  For and in consideration of Employee's employment and continued
employment and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:


1.   DEFINITIONS.

  Defined terms used herein are defined in the recitals and at the end of this
Agreement.

2.   OWNERSHIP.

  (a) All Work Product will be considered work made for hire by Employee and
owned by Company.  To the extent that any Work Product may not by operation of
law be considered work made for hire or if ownership of all rights therein will
not vest exclusively in Company, Employee assigns to Company, now or upon its
creation without further consideration, the ownership of all such Work Product.
Company has the right to obtain and hold in its own name copyrights, patents,
registrations, and any other protection available in the Work Product.  Employee
agrees to perform any acts as may be reasonably requested by Company to
transfer, perfect, and defend Company's ownership of the Work Product.

  (b) To the extent any materials other than Work Product are contained in the
materials Employee delivers to Company or its Customers, Employee grants to
Company an irrevocable, nonexclusive, worldwide, royalty-free license to use and
distribute (internally or externally) or authorize others to use and distribute
copies of, and prepare derivative works based upon, such materials and
derivative works thereof.  Employee agrees that during his or her employment,
any money or other remuneration received by Employee for services rendered to a
Customer belong to Company.

3.   TRADE SECRETS AND CONFIDENTIAL INFORMATION.

  (a)  Company may disclose to Employee certain Proprietary Information.
Employee agrees that the Proprietary Information is the exclusive property of
Company (or a third party providing such information to Company) and Company (or
such third party) owns all worldwide copyrights, trade secret rights,
confidential information rights, and all other property rights therein.

  (b) Company's disclosure of the Proprietary Information to Employee does not
confer upon Employee any license, interest or rights in or to the Proprietary
Information.  Except in the performance of services for Company, Employee will
hold in confidence and will not, without Company's prior written consent, use,
reproduce, distribute, transmit, reverse engineer, decompile, disassemble, or
transfer, directly or indirectly, in any form, or for any purpose, any
Proprietary Information communicated or made available by Company to or received
by Employee.  Employee agrees to notify Company immediately if he or she
discovers any unauthorized use or disclosure of the Proprietary Information.

  (c)  To further protect Proprietary Information, Employee agrees that if his
or her employment with Company ends for any reason during the first three years
after the initial date of employment, then for a period six (6) months after the
end of Employee's employment he or she will not, without Company's prior written
consent, perform any of the Duties that he or she performed on behalf of Company
for the Employee's immediately prior employer if such prior employer competes
with the Company Business.

  (d) Employee's obligations under this Agreement with regard to (i) Trade
Secrets shall remain in effect for as long as such information remains a trade
secret under applicable law, and (ii) Confidential Information shall remain in
effect during Employee's employment with Company and for three years thereafter.
These obligations will not apply to the extent that Employee establishes that
the information communicated  (1) was already known to Employee, without an
obligation to keep it confidential at the time of its receipt from Company; (2)
was received by Employee in good faith from a third party lawfully in possession
thereof and having no obligation to keep such information confidential; or (3)
was publicly known at the time of its receipt by Employee or has become publicly
known other than by a breach of this Agreement or other action by Employee.

4.   CUSTOMER NON-SOLICITATION.

  The relationships made or enhanced during Employee's employment with Company
belong to Company.  During Employee's employment and the One Year Limitation
Period, Employee will not, without Company's prior written consent, contact,
solicit or attempt to solicit, on his or her own or another's behalf, any
Customer with whom Employee had contact in the Two Year Restrictive Period with
a view of offering, selling or licensing any program, product or service that is
competitive with the Company Business.

5.   EMPLOYEE NON-SOLICITATION.

  During Employee's employment and the One Year Limitation Period, Employee will
not, without Company's prior written consent, call upon, solicit, recruit, or
assist others in calling upon, soliciting or recruiting any person who is or was
an employee of Company during the Two Year Restrictive Period for the purpose of
having such person work in any other corporation, entity, or business that is
competitive with the Company Business.

6.   NONCOMPETE.

  During the One Year Limitation Period, Employee agrees that he or she will
not, without Company's prior written consent, perform his or her Duties for any
person or entity in the Territory which competes directly with the Company
Business if Company is still engaged in the Company Business during such One
Year Limitation Period.  The parties agree and acknowledge that (i) the
definitions of Duties and Territory and period of restriction reasonably and
fairly limit this noncompete restriction and are reasonably required for
Company's protection because Employee must perform his or her Duties on behalf
of Customers who are located throughout the Territory; and (ii) by having access
to information concerning employees and Company's Customers, Employee shall
obtain a competitive advantage as to such parties.

7.   WARRANTIES OF EMPLOYEE.

  Employee warrants that he or she is not presently under any agreement that
will prevent him or her from the performance of duties for Company, and is not
in breach of any agreement with respect to any trade secrets or confidential
information owned by any other party.

8.   INJUNCTIONS.

  Employee agrees that certain breaches by Employee of this Agreement will
result in irreparable harm to Company and that the remedies at law for such
breaches may not adequately compensate Company for its damages.  Employee agrees
that in the event of any such breaches, Company shall be entitled to an
injunction in addition to any other remedies at law.

 
9.   UNENFORCEABILITY.

  Any holding that a provision of this Agreement is invalid or unenforceable by
a court of competent jurisdiction shall not affect the enforceability of any
other provisions.  If for any reason the restrictions in Sections 3 through 6
are held to be invalid or unenforceable, then such restrictions shall be
interpreted or modified to include as much of the duration and scope as will
render such restrictions valid and enforceable.

10.  TERM.

  This Agreement is effective when signed by both parties and will remain in
effect for an indefinite period of time.  The parties agree that Employee's
employment may be terminated at any time, for any reason or for no reason, for
cause or not for cause, with or without notice, by Company or Employee.  Upon
any such termination, Employee shall return immediately to Company all documents
and other property of Company, together with all copies thereof, including all
Work Product and Proprietary Information, within Employee's possession or
control.

11.  MISCELLANEOUS.

  This Agreement may not be modified except by a writing signed by both parties,
except that it may be supplemented by rules and regulations described in Company
employee handbook and other documents provided to Employee from time to time,
and Employee agrees to follow such rules and regulations.  Due to the personal
nature of this Agreement, Employee may not assign his or her rights or
obligations under this Agreement without the prior written consent of Company.
This Agreement will be governed by the laws of the State of Georgia without
regard to its rules governing conflicts of law.  This Agreement represents the
entire understanding of the parties concerning its subject matter and supersedes
and terminates all prior communications, agreements and understandings relating
to the same except the Offer Letter.  In the case of any conflict or
inconsistency between this Agreement and the Offer Letter, the provisions of
this Agreement will control and govern.  All communications concerning or
required by this Agreement shall be in writing and shall be deemed given when
delivered to the address listed below (as may be amended by notice), by hand,
courier or express mail, or by registered or certified United States mail,
return receipt requested, postage prepaid.


The parties have executed this Agreement effective as of the 11th  day of
August, 1997 ("Effective Date").

COMPANY:                                  
Manhattan Associates, LLC                 
                                          
By: /s/  Alan J. Dabbiere                                      
   -------------------------------------
Title:   President                                 
      ----------------------------------
Date:                                     
      ----------------------------------
Address:  3101 Towercreek Parkway         
          Suite 300                                 
          Atlanta, Georgia  30339
          Attention:

EMPLOYEE:                                              
OLIVER M. COOPER, III                 

/s/ Oliver M. Cooper, III                                                       
- ----------------------------------------
Signature                       

Date:                                                   
     -----------------------------------
SSN:                                                   
    ------------------------------------
Address:    1086 Byrnwyck Trail, Atlanta, Georgia 30319

                                  DEFINITIONS

"Company Business" shall be the development, marketing, selling, implementation
and installation of computer software solutions specifically designed for the
management of warehouse and distribution centers for consumer product
manufacturers, retailers and retail and grocery suppliers and distributors.

"Confidential Information" means Company information in whatever form, other
 than Trade Secrets, that is of value to its owner and is treated as
 confidential.

"Customer" means any current customer or prospective customer of Company.

"Duties" shall mean those duties of the Employee as set forth on Exhibit A
 attached hereto.

"One Year Limitation Period" shall mean the twelve month period beginning
 immediately upon the termination of Employee's employment with Company for any
 reason.

"Proprietary Information" means all Trade Secrets and Confidential Information
 of Company.

"Territory" shall mean the territory in which the Employee shall perform his or
 her duties as set forth on Exhibit A attached hereto.

"Trade Secrets" means information of Company constituting a trade secret within
 the meaning of Section 10-1-761(4) of the Georgia Trade Secrets Act of 1990,
 including all amendments hereafter adopted.

"Two Year Restrictive Period" shall mean the two years prior to the end of
 Employee's employment with Company for any reason.

"Work Product" shall mean the data, materials, documentation, computer programs,
 inventions (whether or not patentable), and all works of authorship, including
 all worldwide rights therein under patent, copyright, trade secret,
 confidential information, or other property right, created or developed in
 whole or in part by Employee while performing services in furtherance of or
 related to the Company Business.

 
                                   EXHIBIT A
                                   ---------

                                        
The "Duties" of the Employee shall be those of the Chief Operating Officer of
the Company, as set forth in the Offer Letter, the terms of which are
incorporated herein by this reference.  Employee agrees to devote his full time
and energy to the furtherance of the business of Company and shall not during
the term hereof work or perform services in any advisory or other capacity for
an individual, firm, company or corporation other than the Company without the
Company's prior written consent.

The "Territory" is the Atlanta, Georgia metropolitan area, consisting of the
following counties:  Barrow, Bartow, Carroll, Cherokee, Clayton, Cobb, Coweta,
DeKalb, Douglas, Fayette, Forsyth, Fulton, Gwinnett, Henry, Newton, Paulding,
Pickens, Rockdale, Spalding and Walton.

 
CONFIDENTIAL
- ------------

August 6, 1997

Mr. Oliver M. Cooper, III
1086 Byrnwyck Trail
Atlanta, Georgia  30319

Dear Oliver:

     It is with pleasure that we offer you the position of Chief Operating
Officer (COO) with Manhattan Associates.  Below are the pertinent details
regarding our offer of employment.
 
AREAS OF RESPONSIBILITY:                   Sales and Marketing
                                           General Administration
 
DIRECT REPORTS:                            Sales, Marketing, Office
                                           Administration, Human Resources,
                                           Finance, General Administration
                                           
STARTING SALARY:                           $14,583.33 per month ($175,000
                                           annualized); salaried exempt
                                           $70,000.00 signing bonus payable with
                                           first paycheck after start date
                                           $75,000.00 performance-related bonus;
                                           details in paragraph below Standard
                                           employment deductions (eg. Taxes,
                                           FICA, FUCA)
 
START DATE:                                August 11, 1997


BENEFITS:                                  Current Benefit Programs-
                                           -Comprehensive health insurance via
                                           either a Health Maintenance
                                           Organization (HMO) or Point of
                                           Service (POS) plan through Blue
                                           Cross/Blue Shield; coverage becomes
                                           effective on employment start date;
                                           no premium costs for employee or
                                           dependents.

                                           -Life and AD&D insurance; effective
                                           date same as for medical

                                           -401K Program with employer match;
                                           eligibility for employee
                                           contributions begin on the first of
                                           the month following 30 days of
                                           employment; employer match begins
                                           with 2nd year of participation in the
                                           plan

                                           -Profit Sharing and Money Purchase
                                           Plan; eligibility begins with the
                                           first of the month following one year
                                           of employment

                                           -One vacation day per complete month
                                           worked during the first year, as per
                                           our vacation policy

                                           -One vacation day per complete month
                                           worked (up to 12) for the year
                                           thereafter; 5 additional days after
                                           third full year of employment

                                           -9 paid holidays per year, 14 day
                                           waiting period

 
Mr. Oliver Cooper, III
August 6, 1997
Page 2


        The performance-related bonus will be structured as follows:

        One half is objective based on revenue growth (non-acquisition related).
In the event of an acquisition, the most recent sales revenue of the company
acquisition will be added to the base-line revenue.

         0 - 25% growth        Bonus is 0
        25 - 75% growth        Bonus is 2% of $37,500 for each 1% of growth

        The other half is subjective based on the following:

        (1)    Relationships
               -Big six consulting firms, distribution channel influencers
               -Research companies such as Gartner Group and AMR
               -Partners such as Oracle, SAP, etc.
        (2)    Recruitment
        (3)    Employee morale, turnover rate
        (4)    Office administration

        This offer of employment also includes a grant of 100,000 options, as
per our Option Plan at an exercise price of $5.00 per share. The options will
vest based on employment as follows:

        .  30,000 options - at the rate of 5,000 options at the end of each
           month for the first 6 months from the date of hire.
        .  20,000 options one year from the date of hire.
        .  20,000 options two years from the date of hire.
        .  30,000 options three years from the date of hire.

        Manhattan Associates' corporate policy states that a salary offer is
considered confidential information and should not be discussed with other
Manhattan Associates employees and acquaintances. Also, we have a standard
employment agreement with general restrictive covenants which management is
asked to sign and we will provide to you. We would appreciate your compliance
with this policy.

        I know you will enjoy working with Manhattan Associates. We are an
aggressive, diverse company, and we are excited by the prospects of working with
you while growing Manhattan Associates. As a member of our team, you can help us
cement our position as the leader in helping retail suppliers achieve Quick
Response success.

 
Mr Oliver Cooper, III
August 6, 1997
Page 3

        In the event of a termination within the first two years of employment,
other than where you are Terminated With Cause (defined in the Option Plan), or
you voluntarily leave the company, six months severance pay will be provided.

        After this letter is signed by both of us, we will prepare and send to
you the Employment Agreement and Option Plan Agreement reflecting the terms of
this letter and our discussions. If you have any questions regarding these
documents when you receive them, please give me a call.

        Please sign the original letter and return it to me as soon as possible.
The remaining copy is for your records. If you have questions, please do not
hesitate to contact me at (770) 955-5533, extension 1110.

                                 Sincerely,

                                 /s/ Alan Dabbiere
                                 Alan Dabbiere
                                 President


My signature below acknowledges my acceptance of the offer as stated herein.
 

/s/ Oliver Cooper                6 Aug 1997
- -----------------------------   ------------
Oliver Cooper                       Date

cc:  Deepak Raghavan, Chief Technology Officer
     Brian Benson, Controller


 
                                                                 Exhibit 10.18

                               LICENSE AGREEMENT

                                      for

                               COMPUTER PROGRAMS


AGREEMENT made this _____day of _______________, 1997 by and between Manhattan
Associates, LLC ("LICENSOR"), and ______________________________with its
principal place of business located at _______________________________________
_____________________________________________ ("LICENSEE").


                                  WITNESSETH:

                                  ----------

BACKGROUND: LICENSOR is the owner of certain proprietary technical information
consisting of computer source programs and object code useful in performing
various business functions on a computer system, as described on Schedule "A"
hereto ("Programs"). LICENSEE is desirous of acquiring a non-exclusive license
to use the programs on one machine or a network of machines per site, under the
terms and conditions set forth hereinafter. The term "Machine" means the
individual specific machine specified in writing by LICENSEE to LICENSOR from
time to time, on which LICENSEE will use the Programs. The term "site" shall
mean the physical location where the distribution process is being performed.

  NOW THEREFORE, in consideration of the background, the covenants herein
contained and intending to be legally bound hereby, the parties agree as
follows:

  1. NON-EXCLUSIVE, NON-TRANSFERABLE LICENSE. LICENSOR hereby grants to LICENSEE
and LICENSEE hereby accepts from LICENSOR a non-exclusive license to use the
Programs (including source codes except security source codes) selected and
described in Schedule "A" at the site(s) described in Schedule "B", and LICENSEE
shall have no rights to assign or transfer its rights in such license to any
person or entity; provided, however, that LICENSEE may assign all its rights in
the license hereby granted to a subsidiary in which it owns a majority interest,
or to a purchaser of substantially all of the business and assets of LICENSEE on
the condition LICENSEE retains no rights to use the Programs and that such
subsidiary or purchaser agrees to be bound by the terms hereof as if it had
executed this Agreement as LICENSEE (such subsidiary or purchaser is hereinafter
referred to as a "Permitted Assignee"). Absent the express written consent of
LICENSOR, such an assignment by LICENSEE of its rights in the license to a
Permitted Assignee shall not release LICENSEE of its obligations and
responsibilities hereunder and any assignment permitted hereunder shall in no
event release LICENSEE of its confidentiality obligations hereunder. Permitted
Assignee is not permitted to relocate, transfer or otherwise use the Programs,
to a site other than those sites originally licensed by LICENSEE. Subject to
Paragraph two, LICENSEE only and not a Permitted Assignee may under the license
granted herein use Programs in connection with any existing or new computer
equipment at licensed sites if LICENSEE notifies LICENSOR of such replacement
prior thereto. No other uses are granted hereunder. All site transfers are
prohibited. LICENSEE may not use the Programs to provide data processing or
management information or services to any third party. LICENSEE further agrees
to notify LICENSOR within thirty (30) days of any change of any sites.

  2. LICENSE FEE. The license fee and payment schedule shall be in accordance
with Schedule "C" for the Pickticket Management System (referred to as PkMS)
Programs selected by the LICENSEE shall be as described in Schedule "A" (and
attached addendum(s) if any) for any machine or network of machines at the
site(s) detailed in Schedule "B". Any out of pocket expenses incurred by
LICENSOR in connection with said project will be reimbursed by LICENSEE under
the terms of the Authorization for Consulting Services

                                      -1-

 
Agreement herein attached and made a part of this Agreement. Invoices will be
submitted by LICENSOR every two (2) weeks.

  3. ENHANCEMENTS. Any enhancements, modifications, or substitutions to the
Programs made by LICENSEE are to be owned by LICENSOR and may not be sold,
assigned, licensed, sublicensed or otherwise transferred by LICENSEE except in
connection with an assignment of all rights to the Programs to a Permitted
Assignee (as defined paragraph 1 hereof). LICENSOR makes no warranty with
respect to such enhancements, modifications or substitutions and shall have no
responsibility or liability whatsoever with respect to any enhancements,
modifications, or substitutions to the Programs made by or at the direction of
LICENSEE and all such enhancements, modifications or substitutions shall, if
made, be made at the sole risk and expense of the LICENSEE.

  4. WARRANTIES. LICENSEE acknowledges that the Programs have been adequately
described to LICENSEE and that no claims may be asserted against LICENSOR on the
basis that the Programs are in any manner unsatisfactory except to the extent
expressly provided below. The only warranties provided hereunder by LICENSOR are
as follows: that the Programs substantially provide the functions listed on
Schedule "A" hereto and that the Programs are the property of the LICENSOR and
LICENSOR has the power to grant the license hereunder.  Otherwise the Programs
are licensed "AS IS."  This Warranty is for a period of One Hundred and Eighty
(180) days after the date hereof. THIS WARRANTY IS IN LIEU OF ALL OTHER
WARRANTIES, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO IMPLIED WARRANTIES
OF MERCHANTABILITY AND FITNESS OR ADEQUACY FOR A PARTICULAR PURPOSE.

  5. DAMAGES. LICENSOR'S liability hereunder for damages arising out of
LICENSOR'S inability to correct any failure of the Programs to substantially
provide the functions set forth on Schedule "A" hereto as set forth in paragraph
4 of this Agreement shall be limited to the fees that LICENSEE has paid for the
Program and/or service that failed to substantially provide such functions.
LICENSOR is not liable for lost profits, consequential, indirect or special
damages, or for any claim or demand against LICENSEE by any third party. No
action, other than actions pursuant to paragraphs 6 and 8 below, regardless of
form, arising out of the transactions under this Agreement, may be brought by
LICENSEE more than ninety (90) days after the date of first commercial use of
the Programs by LICENSEE. In no event shall LICENSOR be liable for any claim
based upon LICENSEE'S use of any third party software or otherwise, whether or
not such software was obtained from LICENSOR.

  6. CONFIDENTIALITY. LICENSEE acknowledges that LICENSEE'S right to the
Programs is strictly limited to the license hereunder to use the Programs and
the LICENSOR'S ownership of the Programs is a valuable property right. LICENSEE
will not provide, disclose or otherwise make available the Programs or any part
thereof or any related materials and information, in any form to any person,
firm or other entity, will keep the Programs and all related materials and
information confidential and will protect LICENSOR'S property rights therein.
Except for "back-up" duplicate copies, which will be LICENSOR'S property,
LICENSEE will not make any duplicate copy of the Programs or any part thereof.
If LICENSEE breaches any term hereof the license hereunder will immediately
terminate, the license fee will be forfeited and LICENSEE must immediately
return all copies of the Programs to the LICENSOR. LICENSEE agrees to inform
each of its employees of the confidential nature of the Programs and all related
materials and information and will use efforts to protect the confidentiality of
the Programs at least commensurate with those employed by LICENSEE for the
protection of LICENSEE'S own confidential information. References in this
paragraph 6 to Programs include any additions to, modifications to, or
substitutions for the Programs, or any part thereof.

                                      -2-

 
  7. NON-INTERFERENCE. LICENSEE will not interfere with LICENSOR'S business
particularly LICENSOR'S granting of other licenses for the Programs.

  8. ENTICEMENT OF EMPLOYEES. Neither LICENSEE nor LICENSOR shall solicit or
hire any of the other's employees (direct or indirect), former employees,
employees of affiliated companies, or agents assigned through contracted means
for the purpose of employment or independent consulting without the other
party's prior written consent, within thirty-six (36) months of the last date of
employment of such person by the other.

LICENSEE and LICENSOR acknowledge and agree that, by virtue of the nature of the
services to be performed by LICENSOR pursuant to this Agreement, LICENSOR will
have access to and special knowledge of LICENSEE'S business affairs and
customers, and LICENSEE will have access to and special knowledge of the
business and operations of LICENSOR. Accordingly, the parties acknowledge that
loss and irreparable damage would be suffered by either party hereto in the
event that the other party should breach or violate any of the solicitation or
hiring of employees provisions of this paragraph. It is further acknowledged
that any breach of such terms or provisions of this paragraph 8 would result in
injury to the non-breaching party that would be difficult or impossible to
accurately ascertain. Therefore, because of the impossibility of ascertaining
actual damages, it is agreed that in the event of a breach of any provision of
this paragraph by either party, the breaching party will pay to the other party
with respect to each such breach the sum of FIFTY THOUSAND AND NO/100 DOLLARS
($50,000.00) as liquidated damages and not as a penalty. The parties hereby
agree that the amount of liquidated damages specified herein represents a
reasonable approximation of the damages which would be incurred as a result of a
breach of this paragraph. The parties further agree that in the event of any
actual or threatened breach of any of the provisions of this paragraph, the
aggrieved party shall be entitled (in addition to any and all other rights and
remedies at law or in equity for damages or otherwise, which rights and remedies
are and shall be cumulative) to specific performance or to a temporary
restraining order or an injunction to prevent such breach or contemplated
breach.

  9. PUBLICITY RIGHTS. Manhattan Associates, LLC may include LICENSEE's name and
logo among its list of clients and may include a brief description of the
services furnished by Manhattan Associates, LLC and the functions performed
thereby.

  10. PAYMENTS. LICENSOR'S invoices for fees and expenses shall be due and
payable in full immediately upon receipt by LICENSEE. Invoices not paid within
thirty (30) days from the invoice date shall bear interest from the invoice date
until paid at a rate of one and one-half percent (1.5%) per month or the maximum
rate permitted by applicable law, whichever is less. Time is of the essence for
all payments due under this Agreement, and in the event any payment due to
LICENSOR is collected at law or through an attorney-at-law, or under advice
therefrom, or through a collection agency, LICENSEE agrees to pay all costs of
collection, including, without limitation, all court cost and reasonable
attorney's fees.

  11.  MISCELLANEOUS.

     A.   TAXES. LICENSEE will reimburse LICENSOR for any and all taxes
          assessed against LICENSOR resulting from this Agreement or the
          products or service provided hereunder except taxes based upon
          LICENSOR'S net income and LICENSOR'S payroll taxes. LICENSOR agrees to
          provide LICENSEE with any and all tax bills or receipt as evidence of
          any taxes assessed as provided herein.

     B.   NOTICES. Any notice or other communication pursuant to this
          Agreement must be in writing and will be deemed to have been duly
          given or made when personally delivered or when

                                      -3-

 
          mailed by registered mail, postage prepaid, return receipt requested,
          to the parties at the following addresses:


          If to LICENSOR:                      
                                               
          Manhattan Associates, LLC            
          2300 Windy Ridge Parkway, Suite 700  
          Atlanta, GA  30339                   
                                               
                                               
                                               
          If to LICENSEE:                      
                                               
          _______________________________      
                                               
          _______________________________      
                                               
          _______________________________       



          or to such other address as each party may hereinafter specify in
          writing to the other.

     C.   BINDING EFFECT. This Agreement is binding upon and inures to the
          benefit of the parties hereto, their heirs, successors, personal
          representatives and assigns.

     D.   ASSIGNMENT/SUBLICENSE. Except as provided in paragraph 1, this
          Agreement or any  of LICENSEE'S rights hereunder may not be assigned
          or sublicensed by LICENSEE.

     E.   THIRD PARTY SOFTWARE.  If equipment manufactured by a third party
          is sold by LICENSOR to LICENSEE ("Equipment") and the Equipment
          includes software which is licensed by the third party to LICENSOR
          ("Software"), the software is hereby sublicensed or assigned by
          LICENSOR to LICENSEE on a nonexclusive, nontransferable basis to be
          used exclusively with the Equipment to which it relates.  This third
          party software license will terminate when the Equipment is no longer
          being used by LICENSEE and LICENSEE shall not reverse engineer,
          modify, copy, distribute or otherwise disclose the Software.  IN NO
          EVENT WILL THE THIRD PARTY EQUIPMENT MANUFACTURER BE LIABLE FOR ANY
          SPECIAL, INCIDENTAL OR CONSEQUENTIAL LOSS OR DAMAGE, INCLUDING WITHOUT
          LIMITATION, ANY LOST PROFITS OR SAVINGS, AND ANY LOSS OR DAMAGE CAUSED
          BY THE LOSS OF USE OF ANY DATA OR INFORMATION OR ANY INACCURATE DATA
          OR INFORMATION.

     F.   ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
          between the parties and there are no representations, warranties,
          covenants or obligations except as set forth herein. This Agreement
          supersedes all prior and contemporaneous Agreements, proposals,
          understandings, negotiations and discussions, written or oral, of the
          parties hereto, relating to any transaction contemplated by this
          Agreement. This Agreement may be amended only in writing executed by
          the parties. Except as otherwise specifically provided herein, nothing
          in this Agreement is intended or shall be construed to confer upon or
          to give any person other than the parties hereto any rights or
          remedies under or by reason of this agreement.

     G.   ENUMERATION AND HEADINGS. The enumeration and headings contained in
          this Agreement are for convenience of the reference only.

                                      -4-

 
     H.   GOVERNING LAW. This Agreement will be governed by and construed and
          enforced in accordance with the laws of and under the jurisdiction of
          the State of Georgia.

     I.   SEVERABILITY. If any of the provisions of this Agreement or
          portions thereof are invalid under any applicable statute or rule of
          law, they are to that extent to be deemed omitted, but this will not
          affect enforceability of the remaining portion of this Agreement.

     J.   TERM. The term of this License will commence on the day hereof and
          will continue as long as the LICENSEE desires to use the Programs.

IN WITNESS WHEREOF, the parties have executed the License Agreement, the day and
year first above written.



  Manhattan Associates, LLC          ___________________________________
  (LICENSOR)                         (LICENSEE)


  By: ___________________________    By: _______________________________



  Date: __________________________   Date: _____________________________

                                      -5-

 
                                 SCHEDULE A



                               PROGRAM FUNCTIONS


STANDARD PICKTICKET MANAGEMENT SYSTEM (PkMS) FUNCTIONS
(OUTBOUND SYSTEM)


*    Ability to wand barcodes of items picked for an order during
     checking/packing procedures and obtain immediate information regarding the
     accuracy and completeness of the order.

*    Select priority picktickets from the picktickets generated by the order
     processing system.  Remaining low priority ones can be processed next day
     or later. The priority rules can be dynamically specified by the user
     (e.g.  Picktickets approaching Stop ship date).

*    Print quantity of picktickets according to the Distribution Center
     processing capacity requirements.  (e.g.  Number of units to be picked).

*    Provides flexible grouping of picktickets by user specified rules.  They
     can be specified from day to day or at one time.  This saves the time spent
     in manual searching for the picktickets which need special processing
     (e.g. Labeling, Call first, Particular customer).

*    The facility to print all the Single Style picktickets together and in the
     best picking sequence. By providing the best picking route through the
     Distribution Center, the picking efficiency is increased, and number of
     trips to a particular bin location is reduced. This printing can also be
     done on particular days of the week for better efficiency.

*    Facility to generate separate picktickets for Full Case and Unit picks.

*    The Styles within a pickticket are printed in the best picking sequence.
     This reduces the distance traveled in the Distribution Center while picking
     an order.

*    The facility to print all the orders for a customer.

*    The ability to summarize multiple picktickets onto a single document. Since
     this document summarizes all SKUs in the best pick sequence, warehouse
     personnel can pick multiple picktickets with one pass through the
     distribution center.

*    Access and inquiry of picktickets not yet printed.

*    Ability to route selected picktickets by customer, route type, consolidated
     shipment weight and destination zip code.

*    Ability to allocate SKUs defined based on a user-defined percentage.

*    Ability to predetermine shipping container increments during the pickticket
     selection (i.e. wave) process. This includes the ability to separate pre-
     packs and the ability to group SKUs based on retailer-defined criteria
     (e.g. "One SKU/carton," "No more than 4 SKUs/carton," "Mix colors but not
     styles").

*    Ability to track shipping containers into a pack and hold location. The
     ability to pull groups of

                                      -6-

 
     picktickets from pack and hold based on multiple criteria (e.g. by
     customer, carrier ship date, etc.).

*    Ability to identify picktickets to a manifest or bill of lading, and the
     ability to automate the generation of these standard forms.

*    Ability to track all shipping containers onto the shipping vehicle and
     assure that all containers for the pickticket are loaded on the truck.


STANDARD INVENTORY MANAGEMENT SYSTEM (IMS) FUNCTIONS
(INVENTORY MANAGEMENT SYSTEM - INBOUND SYSTEM)

*    Ability to receive finished and unfinished goods.

*    Verify shipment accuracy against carton/pallet or shipment/PO ASNs. Also,
     the ability to receive without ASN; user creates cases/pallets upon
     receipt.

*    Ability to load flexible immediate needs file before receipt begins to
     allow diversion for immediate processing (e.g.  Quality Control, Direct to
     Active, etc.). All immediate needs are user-defined and maintained.

*    Ability to receive against a pickticket and immediately print shipping
     labels for inbound cases as they are received (i.e. cross docking).

*    Provide a suggested put-away location for each case as it is received.

*    Automate replenishment of the active pick sites. For each release, or
     "wave" of picktickets, PkMS will calculate replenishment needs based on the
     specific maximums and minimums of each pick site. There are three types of
     replenishment calculations: pre-pick, during-pick, and post-pick.

*    Automate perpetual inventory maintenance through receipt of inventory
     updates from PkMS.

*    Perform case inquiries by case #, SKU, and location.

*    Track cartons by multiple statuses through the distribution center.

*    Perform cycle and physical counts. The system allows different locations to
     be locked for cycle counts. Options allow for one or more counts to
     complete a cycle.

                                      -7-

 
STANDARD FREIGHT MANAGEMENT SYSTEM FUNCTIONS

*    Manifest eligible picktickets to a manifest based on user defined selection
     criteria and generate standard manifest and bill of lading forms.

*    Combine several bills of lading to form a master bill of lading.

*    Load verification which requires users to scan cartons onto a shipping
     vehicle.

*    Perform routing for a consolidated group of picktickets based on a user
     definable routing guide.

*    Direct cartons to staging locations or pack and hold locations.

*    Generate pull lists for picktickets in pack and hold based on user
     definable selection criteria such as a particular ship date and carrier.

*    Pack and hold pull list verification which requires users to scan verify
     every carton on a pull list.

*    Perform trailer appointment scheduling based on user definable priorities.

*    Perform trailer dock door assignment based on prioritized trailer
     appointments.


STANDARD PARCEL SHIPPING SYSTEM FUNCTIONS
(MANIFEST SYSTEM)

*    Define parcel services to include the following: carrier, service, default
     carton value (for insurance calculation), and additional charges. This
     allows PkMS to auto-discriminate cartons as they are scanned to the
     manifest.

*    Automatically assign cartons to the open manifest. The system will create
     new manifests if needed. Also, the system can be set to assign certain
     services to separate manifests.

*    Calculate carton-level freight based on carton weight, carrier rates, and
     zip/zone tables.

*    Perform dimensional weight calculation for required services. Default the
     required weight value as the carton weight.

*    Perform a carton weight check against the estimated carton weight. The
     tolerance percentage is defined at the warehouse level.

*    Change the carrier to a truck carrier or a different parcel service.

*    Automatically assign tracking numbers to each carton and print the tracking
     number on certain generic shipping labels.

*    Create standard output files that can be used for EDI to UPS to eliminate
     paperwork at shipping.

                                      -8-

 
STANDARD ASN INTERFACE (PkMS) FUNCTIONS
(ASN SYSTEM)

*    Creates case level ASNs in the required format to send to PkMS.

*    Validates SKU entry into the ASN to ensure that once users begin receiving
     cases into PkMS, there will be no invalid SKU issues.

*    Contains a next up counter file to ensure that duplicate case records are
     not created from one ASN interface system.

*    Allows case inquiries by SKU and case number.

*    Prints labels for the case ASNs created that allows receiving at the DC to
     only scan a case number to receive a case.

*    Provides the ability to purge the case records or ASN records created using
     the ASN Interface.


STANDARD TASK MANAGEMENT FUNCTIONS
(TASK MANAGEMENT SYSTEM)

*    Controls the automated generation of case and pallet pulls for active
     replenishment, full case shipments and bulk pulls.

*    Allows the automated assignment of tasks to users based on vehicle type and
     location.

*    Creates and maintains event generated cycle count tasks.

*    Provides the ability to define task and vehicle specific paths of travel
     and drop zones.

*    Controls the automated guidance for directed putaway to reserve and pack
     and hold locations.

*    Provides system guidance to assign pallets and cases closest to their
     respective active pick locations.

                                      -9-

 
                                 SCHEDULE B



SITE LOCATION:



Site 1)   _________________________________

          _________________________________

          _________________________________



Site 2)   _________________________________

          _________________________________

          _________________________________



Site 3)   _________________________________

          _________________________________

          _________________________________

                                      -10-

 
                                 SCHEDULE C


                          PkMS Single Site License Fee



Program modules selected:                             Single Site
(Indicate number of sites)                            License Fee

_______      Outbound Distribution System (ODS)          $35,000      $_______
                                                                             
_______      Radio Frequency for ODS                     $10,000      $_______
                                                                             
_______      Inventory Management System (IMS)           $50,000      $_______
                                                                             
_______      Radio Frequency for IMS                     $15,000      $_______
                                                                             
_______      Freight Management System                   $10,000      $_______
                                                                             
_______      Parcel Shipping System                      $10,000      $_______
                                                                             
_______      Order Allocation System                     $15,000      $_______
                                                                             
_______      ASN Enabler System                          $20,000      $_______
                                                                             
_______      Task Management System                      $15,000      $_______
 
                                                           Total      $_______

Payment Schedule:  50% payable upon execution of this Agreement;
                   50% payable thirty days later



As an option available for 2 years from the execution date of this Agreement,
the following license fee schedule applies for additional sites where the sales
effort is billed at the consulting rate:  BETWEEN TWO AND FIVE SITES, 50% PER
SITE; ABOVE SIX SITES, 25% PER SITE. The fee is based on the license fee in
effect at the time the option is exercised and pertains to the Program modules
licensed with this Agreement. For other Program modules and for additional sites
when the sales effort is not billed at consulting rates, the then current
license fee applies.



                              ________________________________________
                              (LICENSEE)

                              By: _________________________________

                              Date: ________________________________



                     This offer is valid for thirty days.

                      Prices effective as of July 1, 1997

                                      -11-

 
                         SOFTWARE MAINTENANCE AGREEMENT


AGREEMENT made and between Manhattan Associates, LLC having its principal place
of business at 2300 Windy Ridge Parkway, Suite 700, Atlanta, GA 30339
(hereinafter "LICENSOR") and _________. with its principal place of business
located at ________________ hereinafter "LICENSEE").


  WHEREAS, LICENSOR has licensed to the LICENSEE certain systems as specified in
the LICENSOR License Agreement for Computer Programs (hereinafter License
Agreement) executed on or about ______________________ and as listed in the
Software Schedule annexed hereto and the LICENSEE wishes to have perform
software maintenance services on the licensed systems pursuant to the following
terms and conditions:


  1.  TERMS OF AGREEMENT.  The term of this Agreement shall commence upon first
commercial use and shall continue for a period of one year (such date and each
annual anniversary thereof, hereinafter called the "anniversary date"). During
the term of this Agreement LICENSOR shall provide Licensor Support to the
LICENSEE. At least thirty days prior to each anniversary date, LICENSOR shall
notify LICENSEE of the applicable fee to be charged by LICENSOR for the
succeeding year, whereupon, unless LICENSEE notifies LICENSOR in writing that
this agreement shall terminate on the anniversary date, this Agreement shall be
extended and renewed for an additional period of one year at the annual fee
specified by LICENSOR. This Agreement may be terminated by either party on sixty
(60) days prior written notice.


  2.  SOFTWARE SYSTEM COVERED.  The software covered in this Agreement is the
LICENSOR'S Software System, as more fully described in the LICENSOR License
Agreement and in the Software Schedule "A" annexed thereto, and as updated with
improvements or modifications furnished to the LICENSEE under the License
Agreement.  During the term of this Agreement, LICENSOR shall supply the
LICENSEE with any improvements or modifications to the Software System modules
for which the LICENSEE has purchased a license.


  3.  CORRECTION OR REPLACEMENT.  During the term of this Agreement, LICENSOR
shall use its reasonable best efforts to correct or replace the Software System,
or to provide the services necessary to remedy any programming error which is
attributed to LICENSOR and which significantly affects use of the Software
System.  Such correction, replacement, or services shall be undertaken promptly
after the LICENSEE has identified and notified LICENSOR of any such error in
accordance with the License Agreement.


  4.  LICENSOR SUPPORT.


  A.  LICENSOR shall provide all labor necessary to maintain the Software System
in good operating condition throughout the term of this Agreement and all travel
within a fifty mile radius of LICENSOR'S offices.  Reasonable expense for all
travel outside of this area will be at LICENSEE'S expense.


  B.  LICENSOR shall perform all maintenance provided pursuant to this Agreement
during the hours of 8:00 A.M. to 6:00 P.M. EST, Monday through Friday (excluding
holidays) hereinafter called Basic Coverage, and shall respond reasonably
promptly to requests for remedial maintenance made during these hours.
Optionally, at an additional fee, LICENSEE may select Extended Maintenance
Coverage, hereinafter called Extended Coverage, where LICENSOR shall perform
maintenance 24 hours each day, 7 days each week (excluding holidays).

                                      -1-

 
  C.  LICENSOR shall provide LICENSEE without charge:

       i)  Source code with new enhancements to Software System;

      ii)  Up to twenty (20) hours of telephone support during the hours
           of coverage;

     iii)  Any technical newsletters of LICENSOR; and

      iv)  Automatic transmittal of all LICENSOR fix announcements.


  5.  LICENSEE SUPPORT.  The LICENSEE agrees to maintain the Software System,
apply all appropriate fixes, provide LICENSOR appropriate access to the Software
System, provide appropriate workspace and supplies, and to provide LICENSOR with
all information including dumps, as requested, and with sufficient support and
test time on the LICENSEE'S computer system to duplicate the problem, certify
that the problem is with LICENSOR'S Software System, and certify that the
problem has been corrected.


  6.  LICENSEE RESPONSIBILITY.  The LICENSEE shall inform LICENSOR in writing of
any modifications made by the LICENSEE to the Software System, unless otherwise
agreed to in writing.  LICENSOR shall not be responsible for installing software
upgrades, maintaining LICENSEE modified portions of the Software System, or
maintaining portions of the Software System affected by LICENSEE modified
portions of the Software System.  Corrections for difficulties or defects
traceable to the LICENSEE'S errors or systems changes shall be billed at
LICENSOR'S standard time and material charges.


  7.  TELECOMMUNICATIONS.  If LICENSOR requests, the LICENSEE shall install and
maintain for the duration of this Agreement, a modem and associated dial-up
telephone line.  The LICENSEE shall pay for installation, maintenance and use of
such equipment and associated telephone line use charges.  LICENSOR, at its
option, shall use this modem and telephone line in connection with error
correction.  Such access by LICENSOR shall be subject to prior approval by the
LICENSEE in each instance.


  8.  PRICE AND PAYMENT.  LICENSEE shall pay to LICENSOR the annual maintenance
fee identified in paragraph 16 for the Maintenance Plan selected.  Renewal shall
be at 15% of the then current standard license fee for Basic Coverage and 20% of
the then current standard license fee for Extended Coverage for each Software
System in the License Agreement. For multiple sites, the maintenance fee is
calculated as the sum of the license fee percentages multiplied by the then
current license fee multiplied by the maintenance plan percentage for the
maintenance plan chosen. The LICENSOR maintenance fee shall be payable upon
execution of this Agreement.


For example:
                  Percent        Current    Maintenance   Maintenance
Site number   of License Fee   License Fee      Plan           Fee
- ----------    --------------   -----------  -----------   -----------
   1               100%
   2                50%
   3                50%
   4                50%                      Basic
               ------------
                   250%      X  $115,000   X     15%    =   $43,125


  9.  TRAVEL EXPENSES.  The LICENSEE shall reimburse LICENSOR for any out-of-
pocket expenses incurred at the LICENSEE'S request, including travel to and from
the LICENSEE site, lodging, meals, telephone, and shipping, as may be necessary
in connection with the duties performed under this Agreement by LICENSOR.

                                      -2-

 
  10.  ADJUSTMENTS TO TERMS AND CONDITIONS.  At any time after the expiration of
the initial one year term, LICENSOR may change its software maintenance fees,
terms and conditions upon 60 days written notice to the LICENSEE.


  11.  TITLE TO SOFTWARE SYSTEM AND CONFIDENTIALITY.  Any changes, additions,
and enhancements in the form of new or partial programs or documentation as may
be provided under this Agreement shall remain proprietary to LICENSOR. The
License Agreement referred to above shall include under its proprietary
restrictions any such additional programming and documentation provided under
this Agreement.


  The Software System or any improvements, modifications or changes to the
Software System provided hereunder and all copies thereof are proprietary to
LICENSOR and title thereto remains in LICENSOR.  All applicable rights to
patents, copyrights, trademarks, and trade secrets in the Software System and
the improvements, modifications, and changes thereto are and shall remain in
LICENSOR.  The LICENSEE shall not sell, transfer, publish, disclose, display, or
otherwise make available the Software System or improvements, modifications, or
changes thereto or copies thereof to others.  The LICENSEE agrees to secure and
protect each program, software product and copies thereof in a manner consistent
with the maintenance of LICENSOR'S rights therein and to take appropriate action
by instruction or agreement with its employees who are permitted access to each
program or software product to satisfy its obligations hereunder.  All copies of
the Software System, or improvements, modification or change thereto made by the
LICENSEE including translations, compilations, partial copies with modifications
and updated works are the property of LICENSOR.


  Violation of any provisions herein shall be the basis for immediate
termination of this Software Maintenance Agreement.  Termination of this
Agreement shall be in addition to and not in lieu of any equitable remedies
available to LICENSOR.


  12.  EXCLUSION OF LIABILITY.  LICENSOR MAKES AND LICENSEE RECEIVES NO
WARRANTY, EXPRESS OR IMPLIED AND THERE IS EXPRESSLY EXCLUDED ALL WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.  LICENSOR SHALL HAVE NO
LIABILITY WITH RESPECT TO ITS OBLIGATIONS UNDER THIS AGREEMENT FOR
CONSEQUENTIAL, EXEMPLARY, OR INCIDENTAL DAMAGES EVEN IF IT HAS BEEN ADVISED OF
THE POSSIBILITY OF SUCH DAMAGES.


  13.  TERMINATION.  In the event of termination of the permanent LICENSOR
License Agreement referred to above, all maintenance fees or charges payable for
the term of this Agreement shall become due and payable and LICENSOR'S
obligations under this Software Maintenance Agreement shall immediately end.
LICENSOR may terminate this Agreement in the event of default by the LICENSEE.


  14.  TAXES.  LICENSEE shall, in addition to the other amounts payable under
this Agreement, pay all sales and other taxes, federal, state, local or
otherwise, however designated, which are levied or imposed by reason of the
transactions contemplated by this Agreement. Without limiting the foregoing,
LICENSEE shall promptly pay to LICENSOR an amount equal to any such items
actually paid, or required to be collected and paid by LICENSOR.


  15.  GENERAL.


  A.  Each party acknowledges that it has read this Agreement, understands it,
and agrees to be bound by its terms and further agrees that it is the complete
and exclusive statement of the Agreement between the parties, which supersedes
and merges all prior proposals, understandings and all other agreements, oral

                                      -3-

 
and written, between the parties relating to this Agreement.  This Agreement may
not be modified or altered except by a written instrument duly executed by both
parties.


  B.  This Agreement and performance hereunder shall be governed by and
construed and enforced in accordance with the laws of the State of Georgia.


  C.  If any provision of this Agreement shall be held to be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall in no way be affected or impaired thereby.


  D.  The LICENSEE may not assign without the prior written consent of LICENSOR,
its rights, duties or obligations under this Agreement to any person or entity,
in whole or in part.


  E.  The waiver or failure of either party to exercise in any respect any right
provided for herein shall not be deemed a waiver of any further right hereunder.


       16. MAINTENANCE PLAN SELECTION. Coverage as priced below is for the
following modules: Inbound (IMS), RF for IMS, Outbound (ODS) and RF for ODS,
Freight, Parcel and Task Management.



          PLEASE MARK SELECTED COVERAGE BELOW:                Annual

                                                         Maintenance Fee

                __________ Basic Coverage for one site       

                __________ Extended Coverage for one site    



Manhattan Associates, LLC                _______________________________
(LICENSOR)                               (LICENSEE)

By:  ________________________________    By:  ________________________________

Date:  ______________________________    Date: _______________________________


                                      -4-

 
                     AUTHORIZATION FOR CONSULTING SERVICES



                           MANHATTAN ASSOCIATES, LLC



                      2300 Windy Ridge Parkway, Suite 700

                              Atlanta, GA  30339
                                (770) 955-7070



CLIENT:  ___________________________


ADDRESS: ___________________________

         ___________________________

         ___________________________
 



Task Description:



Consulting, Software Programming, Installation and Training


1.   Phase I - Outbound Distribution System

2.   Phase II - Inventory Management System



     Current billing rates are:  Programming                       $120 per Hour
                                 Consulting, Analysis, Training    $140 per Hour


                                        
Manhattan Associates, LLC                 Clinet: ______________________________
 
By: _______________________________       By: __________________________________

Title:  Director of Corporate Alliances   Title: _______________________________

Date:          , 1998                     Date: ________________________________
 


                    SIGNATURE ACCEPTS CONDITIONS ON REVERSE


                                      -1-

 
                             TERMS AND CONDITIONS

1.  Cooperation. Client agrees to fully cooperate with Consultant in connection
with Consultant's performance of services pursuant to this Authorization. Client
further agrees to take any and all actions necessary or convenient to enable
Consultant to perform the services contemplated herein in an effective and
efficient manner.

2.  Confidentiality. Consultant agrees to treat as confidential (i) all
proprietary information of Client submitted to Consultant by Client as
confidential; (ii) all proprietary information of Client acquired by Consultant
in the course of performing services hereunder regarding special process or
products developed by Client; and (iii) all proprietary data concerning Client's
equipment, wages, prices, price lists, discounts and similar matters; provided,
however, that Consultant will not be obligated to treat as confidential any
information acquired by it that is either known to the general public or to the
industry, or known to, or in the possession of Consultant prior to its entering
into this Authorization.

3.  Place of Performance. The services to be performed pursuant to this
Authorization may be rendered at any one or more suitable locations selected by
Consultant in its sole discretion.

4.  Enticement of Employees. Neither Consultant nor Client shall solicit or hire
any of the other's employees (direct or indirect), former employees, employees
of affiliated companies, or agents assigned through contracted means for the
purpose of employment or independent consulting without the other party's prior
written consent, within thirty-six (36) months of the last date of employment of
such person by the other during the term of this Authorization, and for twenty-
four (24) months after the termination of this Authorization.

  Consultant and Client acknowledge and agree that, by virtue of the nature of
the services to be performed by Consultant pursuant to this Authorization,
Consultant will have access to and special knowledge of Client's business
affairs and customers, and Client will have access to and special knowledge of
the business and operations of Consultant. Accordingly, the parties acknowledge
that loss and irreparable damage would be suffered by either party hereto in the
event that the other party should breach or violate any of the terms or
provisions of this paragraph 4. It is further acknowledged that any breach of
the terms or provisions of this paragraph 4 would result in injury to the non-
breaching party that would be difficult or impossible to accurately ascertain.
Therefore, because of the impossibility of ascertaining actual damages, it is
agreed that in the event of a breach of any provision of this paragraph 4 by
either party, the breaching party will pay to the other party with respect to
each such breach the sum of FIFTY THOUSAND AND NO/100 DOLLARS ($50000.00) as
liquidated damages and not as a penalty. The parties hereby agree that the
amount of liquidated damages specified herein represents a reasonable
approximation of the damages which would be incurred as a result of a breach of
this paragraph 4. The parties further agree that in the event of any actual or
threatened breach of any of the provisions of this paragraph 4, the aggrieved
party shall be entitled (in addition to any and all other rights and remedies at
law or in equity for damages or otherwise, which rights and remedies are and
shall be cumulative) to specific performance or to a temporary restraining order
or an injunction to prevent such breach or contemplated breach.

5.  Patents and Copyrights. Should Consultant during the term of this
Authorization conceive or invent, either on the basis of information provided by
or otherwise with or without the assistance of Client, any process, device or
other innovation subject to patent or copyright, Consultant shall own any patent
or copyright issued.

6.  Time Limitation. Consultant reserves the right to redefine the description
of services and estimated fees set forth on the front page hereof if this
Authorization is not executed by Client within sixty (60) days after the date of
Consultant's date of execution of this Authorization. Consultant also reserves
the right to revise the hourly billing rates upon which the estimated fees are
based in the event that the term of this Authorization exceeds one hundred
eighty (180) days.

7.  Fees/Expenses/Taxes. Client agrees to pay Consultant for all time incurred
by Consultant in connection with the performance of services pursuant to this
Authorization at Consultant's hourly billing rates in effect at the time the
services are rendered including travel time billed at one half the current
Billing Rate. Client further agrees to reimburse Consultant for all expenses
incurred by Consultant in connection with the performance of services pursuant
to this Authorization, including, without limitation, all travel expenses
(including transportation, meals, lodging, relocation and all other travel-
related expenses), technical support expenses, telephone expenses, and reporting
expenses. All payments by Client to Consultant hereunder for fees and expenses
shall be invoiced with any sales or service tax or any other tax of any kind
whatsoever imposed by any governmental authority with respect to the services
rendered or expenses incurred hereunder (other than a tax imposed upon the
income or profits of Consultant), and Client agrees to pay any such tax whenever
such tax shall be imposed by a governmental authority and to reimburse
Consultant for any future payments of such tax made by Consultant to a
governmental authority.

8.  Payment. Consultant's invoices for fees and expenses shall be due and
payable in full immediately upon receipt by Client. Invoices not paid within
thirty (30) days from the invoice date shall bear interest from the invoice date
until paid at a rate of one and one-half percent (1.5%) per month or the maximum
rate permitted by applicable law, whichever is less. Time is of the essence for
all payments due under this Authorization, and in the event any payment due to
Consultant is collected at law or through an attorney-at-law, or under advice
therefrom, or through a collection agency, Client agrees to pay all costs of
collection, including, without limitation, all court cost and reasonable
attorney's fees.

9.  Limitation of Liability. In no event shall Consultant be liable to Client
whether in contract or in tort or under any other legal theory for lost profits
or revenues, loss of use, or similar economic loss, or for any indirect,
special, incidental, consequential or similar damages, arising out of or in
connection with the performance or non-performance of this Authorization, or for
any claim made against Client by any other party, even if Consultant has been
advised of the possibility of such claim. In no event shall Consultant's
liability under any claim exceed the total amount of fees theretofore paid by
Client to Consultant under this Authorization. No action, regardless of form,
arising out of or in connection with this Authorization (other than an action by
Consultant) for any amount due to Consultant by Client may be brought more than
one (1) year after the cause of action has arisen other than pursuant to
paragraphs 2, 4, 5, and 6 above.

10.  Waiver. No failure on the part of Consultant to exercise, and no delay by
Consultant in exercising any right, power, or remedy hereunder shall operate as
a waiver thereof, nor shall any single or partial exercise of any right, power,
or remedy by Consultant preclude any other or further exercise thereof or the
exercise of any right, power, or remedy. No express waiver or assent by
Consultant of any breach of or default in any term or condition of this
Authorization shall constitute a waiver of or an assent to any succeeding breach
of or default in the same or any other term or condition hereof.

11.  Severability. All rights and restrictions contained herein may be exercised
and shall be applicable and binding only to the extent that they do not violate
any applicable laws and are intended to be limited to the extent necessary so
that they will not render this Authorization illegal, invalid or unenforceable.
If any term of this Authorization shall be held to be illegal, invalid or
unenforceable by a court of competent jurisdiction, it is the intention of the
parties that the remaining terms hereof shall constitute their agreement with
respect to the subject matter hereof and all such remaining terms shall remain
in full force and effect.

12.  Termination. Either party may, at its election, upon thirty (30) days of
prior written notice, terminate this Authorization, provided however, that the
termination of this Authorization shall not affect any right or claim of
Consultant incurred or accruing prior to the date of termination, including
without limitation, any right or claim of Consultant payable for services
rendered or reimbursable expenses incurred prior to such termination date.
Anything herein to the contrary notwithstanding, the provisions of sections
2,4,5,7,8,9,10,11, and 13 of this Authorization shall survive the termination of
this Authorization.

13.  Notices. All notices and communications required or contemplated hereunder
shall be in writing and shall be deemed to have been duly given upon delivery in
person or upon expiration of three (3) days after the date of posting, if mailed
by registered mail, postage prepaid, to the parties at the addresses appearing
at the front hereof.

14.  Governing Law. Regardless of the place of execution, place of performance
or otherwise, this Authorization and all amendments, modifications, alterations
or supplements hereto, and the rights of the parties hereunder shall be governed
by and construed and enforced in accordance with the laws of and under the
jurisdiction of the State of Georgia.

15.  Successors. This Authorization shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and assigns.

16.  Headings. The headings as to the contents of particular paragraphs are
inserted only for convenience and shall not be construed as a part of this
Authorization or as a limitation on the scope of any of the terms or provisions
of this Authorization.

17.  Entire Agreement. This Authorization supersedes all prior discussions and
agreements between the parties with respect to the subject matter hereof and
this Authorization contains the sole and entire agreement between the parties
with respect to the matters covered hereby. This Authorization shall not be
modified or amended except by an instrument in writing signed by or on behalf of
the parties hereto.


                                      -2-


 
                                                                   EXHIBIT 21.1


                             LIST OF SUBSIDIARIES
                             --------------------

        Upon the effectiveness of the transactions contemplated by the 
Contribution and Subscription Agreement, the Company's direct and indirect 
subsidiaries will consist of:


                       Performance Analysis Corporation


 
                                                                    EXHIBIT 23.1



                   CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS


As independent public accountants, we hereby consent to the use of our reports
(and to all references to our firm) included in or made part of this
Registration Statement.


ARTHUR ANDERSEN LLP
    
Atlanta, Georgia
March 31, 1998


                                                                    EXHIBIT 99.2

Manhattan Associates, Inc.
Seventh Floor
2300 Windy Ridge Parkway
Atlanta, Georgia 30339

        Re:  Consent to Be Named as Director

Ladies and Gentlemen,

        This will serve as my consent to my being named in the Registration 
Statement of Manhattan Associates, Inc. (No. 333-47095) and any amendment 
thereof or prospectus contained therein as a proposed director of Manhattan 
Associates, Inc.



March 31, 1998                                    /s/ Charles W. McCall
                                                -------------------------
                                                Charles W. McCall

 
Manhattan Associates, Inc.
Seventh Floor
2300 Windy Ridge Parkway
Atlanta, Georgia 30339

        Re: Consent to Be Named as Director

Ladies and Gentlemen:

        This will serve as my consent to my being named in the Registration 
Statement of Manhattan Associates, Inc. (No. 333-47095) and any amendment 
thereof or prospectus contained therein as a proposed director of Manhattan 
Associates, Inc.
                                        /s/ Brian J. Cassidy
        March 31, 1998                  --------------------------------
                                        Brian J. Cassidy