Services Agreement - American Software Inc. and Logility Inc.
SERVICES AGREEMENT
THIS SERVICES AGREEMENT is made and entered into as of the 1st day of
August, 1997, by and between AMERICAN SOFTWARE, INC., a Georgia corporation
("ASI"), and LOGILITY, INC., a Georgia corporation ("Logility").
WITNESSETH:
WHEREAS, Logility and certain ASI Entities (as defined below) have entered
into that certain Subsidiary Formation Agreement, dated of even date herewith,
pursuant to which those ASI Entities have agreed to transfer and assign to
Logility, and Logility has agreed to acquire and assume from those ASI Entities,
certain tangible and intangible property and assets of those ASI Entities
relating to the Business of Logility (as such term is defined in the Subsidiary
Formation Agreement);
WHEREAS, the ASI Entities have the resources, staff, and expertise to
support Logility in the Business of Logility until such time as Logility has the
internal staff and expertise necessary to operate independently; and
WHEREAS, on the terms and subject to the conditions set forth herein,
Logility desires to retain the ASI Entities as independent contractors to
provide, directly or indirectly, certain administrative, financial, management,
and other services to Logility and the Logility Subsidiaries (as defined below);
and
WHEREAS, on the terms and subject to the conditions set forth herein, ASI
desires to provide, directly or indirectly, such services to Logility and its
Subsidiaries.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, ASI and Logility, for themselves,
and their respective successors and assigns, hereby agree as follows:
ARTICLE I
DEFINITIONS
1.01. Definitions. As used in this Agreement, the following terms will have
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the following meanings:
(a) "Actions" has the meaning ascribed thereto in Section 4.04.
(b) "Agreement" means this Services Agreement as it may be amended and
supplemented from time to time in accordance with the terms hereof.
(c) "ASI" has the meaning ascribed thereto in the preamble hereto.
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(d) "ASI Entities" means ASI and its Subsidiaries (excluding the Logility
Entities, unless otherwise required by the context), and an "ASI Entity" shall
mean any of the ASI Entities.
(e) "ASI Indemnified Person" has the meaning ascribed thereto in Section
4.03.
(f) "ASI Plans" has the meaning ascribed thereto in Section 3.05.
(g) "Benefit Billing" has the meaning ascribed thereto in Section 3.01.
(h) "Benefits Services" has the meaning ascribed thereto in Section 3.05.
(i) "Closing Date" means the date of the closing of the initial sale of
Common Stock in the Initial Public Offering.
(j) "Common Stock" means the issued and outstanding shares of Common Stock,
having no par value, of Logility, and any other class of Logility capital stock
representing the right to vote generally for the election of directors.
(k) "Confidential Information" has the meaning ascribed thereto in Section
7.08.
(l) "Cost Plus Billing" has the meaning ascribed thereto in Section 3.01.
(m) "Customary Billing" has the meaning ascribed thereto in Section 3.01.
(n) "Employee Welfare Plans" has the meaning ascribed thereto in Section
4.02.
(o) "ERISA" means the Employee Retirement Income Security Act of 1974 and
the regulations promulgated and rulings issued thereunder, as amended from time
to time.
(p) "Initial Public Offering" means the issuance of shares of Common Stock
to the public in an offering registered under the Securities Act of 1933, as
amended.
(q) "Logility" has the meaning ascribed thereto in the preamble hereto.
(r) "Logility Entities" means Logility and its Subsidiaries (if and when
any), and a "Logility Entity" shall mean any of the Logility Entities.
(s) "Logility Indemnified Person" has the meaning ascribed thereto in
Section 4.05.
(t) "Pass-Through Billing" has the meaning ascribed thereto in Section
3.01.
(u) "Payment Date" has the meaning ascribed thereto in Section 3.06(b).
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(v) "Person" means any individual, partnership, limited liability company,
joint venture, corporation, trust, unincorporated organization, government (and
any department or agency thereof), or other entity.
(w) "Schedule I" means the first schedule attached hereto which lists the
Services (other than Services relating to certain commercial services and to
employee plan and benefit matters) to be provided by ASI to Logility and sets
forth the related billing methodology.
(x) "Schedule II" means the second schedule attached hereto which describes
certain commercial services that may be provided by ASI to Logility and sets
forth the related billing methodology.
(y) "Schedule III" means the third schedule attached hereto which lists the
Services relating to employee plans and benefit arrangements to be provided by
ASI to Logility and sets forth the related billing methodology.
(z) "Schedules" has the meaning ascribed thereto in Section 3.01.
(aa) "Service Costs" has the meaning ascribed thereto in Section 3.01.
(bb) "Services" has the meaning ascribed thereto in Section 2.01.
(cc) "Subsidiary" means, as to any Person, any corporation, association,
partnership, joint venture, or other business entity of which more than 50% of
the voting capital stock or other voting ownership interests is owned or
controlled directly or indirectly by such Person or by one or more of the
Subsidiaries of such Person or by a combination thereof. Subsidiary, when used
with respect to ASI or Logility, shall also include any other entity affiliated
with ASI and Logility, as the case may be, that ASI and Logility may hereafter
agree in writing shall be treated as a "Subsidiary" for the purposes of this
Agreement.
1.02. Internal References. Unless the context indicates otherwise, references
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to Articles, Sections, and paragraphs shall refer to the corresponding
articles, sections, and paragraphs in this Agreement, and references to the
parties shall mean the parties to this Agreement.
ARTICLE II
PURCHASE AND SALE OF SERVICES
Section 2.01. Purchase and Sale of Services.
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(a) On the terms and subject to the conditions of this Agreement and in
consideration of the Service Costs, ASI agrees to provide to Logility, or to
procure for the provision to Logility, and Logility agrees to purchase from ASI,
the services described in Schedules I, II, and III (the "Services"). Unless
otherwise specifically agreed by ASI and Logility, the Services to be provided
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or procured by ASI hereunder shall be substantially similar in scope, quality,
and nature to those provided to, or procured on behalf of, Logility prior to the
Closing Date.
(b) It is understood that (i) the Services to be provided to Logility under
this Agreement will, at Logility's request, be provided to Subsidiaries of
Logility, and (ii) ASI may satisfy its obligation to provide or procure Services
hereunder by causing one or more of its Subsidiaries to provide or procure such
Services. With respect to Services provided to, or procured on behalf of, any
Subsidiary of Logility, Logility agrees to pay on behalf of such Subsidiary all
amounts payable by or in respect of such Services.
Section 2.02. Additional Services. In addition to the Services to be provided
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or procured by ASI pursuant to Section 2.01, ASI from time to time may provide
additional services (including services not provided by ASI to Logility prior to
the Closing Date) to Logility; provided that the scope of any such services, as
well as the term, costs, and other terms and conditions applicable to such
services, shall be as mutually agreed in writing by ASI and Logility. Upon such
agreement, all such services shall be included in the term "Services" for
purposes of this Agreement.
ARTICLE III
SERVICE COSTS; OTHER CHARGES
Section 3.01. Service Costs Generally.
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(a) Schedules I, II, and III hereto (collectively, the "Schedules")
indicate, with respect to each Service listed therein, whether the costs to be
charged to Logility for such Service or program are determined by (i) the
customary billing method ("Customary Billing"), (ii) the pass-through billing
method ("Pass-Through Billing"), (iii) the cost-plus-fixed-fee billing method
("Cost Plus Billing"), or (iv) a calculation of certain costs relating to
employee benefit plans and benefit arrangements ("Benefit Billing"). The
Customary Billing, Pass-Through Billing, Cost Plus Billing, and Benefit Billing
methods applicable to the Services provided to Logility are collectively
referred to herein as the "Service Costs". Logility agrees to pay to ASI in the
manner set forth in Section 3.06 the Service Costs applicable to each of the
Services provided by ASI.
(b) As provided herein, ASI shall permit eligible Logility employees to
participate in certain of the ASI Plans. In addition to reimbursing ASI for the
Services as set forth herein, Logility shall reimburse ASI for ASI's costs
(including any contributions and premium costs and including certain third-party
expenses and allocations of certain ASI personnel expenses), subject to Section
3.05 hereof, relating to participation by Logility employees in the ASI Plans.
It is the express intent of the parties that Service Costs relating to the
administration of Logility employee plans and the performance of related
Services will not exceed reasonable compensation for such Services as defined in
29 CFR (S) 2550.408c-2.
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Section 3.02. Customary Billing. The costs of Services determined by the
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Customary Billing method shall be comparable to the costs for comparable
services charged from time to time to other businesses and Subsidiaries operated
by an ASI Entity.
Section 3.03. Pass-Through Billing. The costs of Services determined by the
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Pass-Through Billing method shall be equal to the third-party costs and expenses
incurred by any ASI Entity on behalf of any Logility Entity. If an ASI Entity
incurs costs or expenses on behalf of any Logility Entity as well as other
businesses operated by such ASI Entity, the ASI Entity will allocate any such
costs or expenses in good faith between the various businesses on behalf of
which such costs or expenses were incurred as such ASI Entity shall determine in
the exercise of its reasonable judgment. ASI shall apply usual and customary
accounting conventions in making such allocations, and ASI or its agents shall
keep and maintain such books and records as may be reasonably necessary to make
such allocations. ASI shall make copies of such books and records available to
Logility upon request and with reasonable notice.
Section 3.04. Cost Plus Billing. The costs of Services determined by the Cost
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Plus Billing method, as set forth on Schedule II, shall be equal to the costs
and expenses incurred by any ASI Entity on behalf of any Logility Entity, plus a
fixed percentage of such costs and expenses to be negotiated by the parties in
good faith. If an ASI Entity incurs costs or expenses on behalf of any Logility
Entity as well as other businesses operated by such ASI Entity, the ASI Entity
will allocate any such costs or expenses in good faith between the various
businesses on behalf of which such costs or expenses were incurred as the ASI
Entity shall determine in the exercise of its reasonable judgment. ASI shall
apply usual and customary accounting conventions in making such allocations, and
ASI or its agents shall keep and maintain such books and records as may be
reasonably necessary to make such allocations. ASI shall make copies of such
books and records available to Logility upon request and with reasonable notice.
Section 3.05. Benefit Billing.
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(a) Prior to the Closing Date, certain employees of Logility participated
in certain benefit plans sponsored by ASI. On and after the Closing Date,
Logility employees shall continue to be eligible to participate in certain ASI
Plans, as specified by ASI prior to the Closing Date ("ASI Plans"), subject to
the terms of the governing plan documents as interpreted by the appropriate plan
fiduciaries. On and after the Closing Date, subject to regulatory requirements
and the provisions of Section 4.01 hereof, ASI will continue to provide Benefits
Services to and in respect of Logility employees with reference to such ASI
Plans as it administered them prior to the Closing Date.
(b) The costs payable by Logility for Services relating to employee plans
and benefit arrangements ("Benefits Services") may be charged on the basis of
Customary Billing, Pass-Through Billing, or Benefit Billing. In addition, the
costs associated with certain plans and programs identified in Schedule III will
be paid principally through employee payroll deductions for such plans and
programs. Benefit Services consist of those categories of Services which are
more fully described on Schedule III attached hereto.
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(c) Each party to this Agreement may request changes in the applicable
terms of, or services relating to, ASI Plans. approval of which shall not be
unreasonably withheld; provided, however, that approval of changes in the terms
of any ASI Plans shall be in the sole discretion of ASI.
(d) ASI and Logility agree to cooperate fully with each other in the
administration and coordination of regulatory and administrative requirements
associated with ASI Plans. Such coordination, upon request, will include,
without limitation, the following: sharing payroll data for determination of
highly compensated employees, providing census information (including accrued
benefits) for purposes of running discrimination tests, providing actuarial
reports for purposes of determining the funded status of any plan, review and
coordination of insurance and other independent third party contracts, and
providing for review of all summary plan descriptions, requests for
determination letters, insurance contracts, Forms 5500, financial statement
disclosures and plan documents.
Section 3.06. Invoicing and Settlement of Costs.
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(a) ASI will invoice Logility for the Service Costs on a monthly basis, in
arrears, either directly or through an intracompany billing system, in a manner
substantially consistent with the billing practices used in connection with
services provided to the Logility Entities prior to the Closing Date (except as
otherwise agreed). In connection with the invoicing described in this Section
3.06(a), ASI will provide to Logility the same billing data and level of detail
as it customarily provides to other businesses and Subsidiaries operated by ASI
and such other data as may be reasonably requested by Logility.
(b) Logility agrees to pay within thirty (30) days after each date on which
ASI invoices Logility for the Service Costs (each, a "Payment Date"), at ASI's
option upon reasonable notice to Logility, through ASI's intracompany billing
system, cash management systems, or, if requested by ASI, by wire transfer of
immediately available funds payable to the order of ASI, and in any event
without set off, defense, or demand, all amounts invoiced by ASI pursuant to
paragraph (a) above during the preceding calendar month (or since the Closing
Date. in the case of the first Payment Date). If Logility fails to pay any
monthly payment within thirty (30) days of the relevant Payment Date, Logility
shall be obligated to pay, in addition to the amount due on such Payment Date,
simple interest on such amount at a rate of one percent (1%) per month.
(c) Except as otherwise provided in the Schedules or agreed in writing by
the parties, Logility shall take such action as is necessary to establish bank
accounts (to be funded by Logility) or to otherwise fund all wage and salary
payments to Logility employees and to fund all medical, retirement, and other
benefit claims payable to or on behalf of Logility employees and their
dependents to the extent not covered by third party insurance. Payroll services
and benefit claims processing activities performed by ASI or ASI's
subcontractors shall be coordinated to facilitate payments. Following prior
written notice of not less than fifteen (15) business days, ASI shall be
relieved of any obligation to deliver benefit and payroll services under this
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Agreement to the extent that such bank accounts or other funding arrangements
are not established at the time drafts are presented for payment, or at any time
when there are insufficient funds in the relevant account or such other
arrangements fail to satisfy a properly presented claim.
Section 3.07. Amended Schedules. ASI may, from time to time, prepare and
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deliver to Logility revised versions of any or all Schedules, setting forth with
respect to the Services described in such Schedules, any proposed changes in
billing methodology and, to the extent available, the Service Costs estimated to
be payable for such Services pursuant to such revised Schedules. Except as
otherwise provided in Article V, or as Logility and ASI may otherwise agree, and
except as specifically described in this Agreement (including the Schedules),
ASI may not change the method of allocating and charging the Service Cost of any
Service provided to Logility unless Logility is notified in writing not less
than ninety (90) days in advance of implementing such revised method.
ARTICLE IV
THE SERVICES
Section 4.01. Standard of Care. Except as otherwise agreed with Logility or as
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described in this Agreement, and provided that ASI is not restricted by contract
with third parties or by applicable law, ASI agrees that the nature, quality,
and standard of care applicable to the delivery of the Services hereunder will
be substantially the same as that of the Services which ASI provides from time
to time throughout its businesses; provided that in no event shall such standard
of care be less than the standard of care that ASI has customarily provided to
Logility with respect to the relevant Service prior to the Closing Date. ASI
shall use its reasonable efforts to ensure that the nature and quality of
Services provided to Logility employees, either by ASI directly or through
administrators under contract, shall be undifferentiated as compared with the
same services provided to or on behalf of ASI employees under ASI Plans.
Section 4.02. Delegation. Subject to Section 4.01 above, Logility hereby
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delegates to ASI final, binding, and exclusive authority, responsibility, and
discretion to interpret and construe the provisions of employee welfare benefit
plans in which Logility has elected to participate and which are administered by
ASI under this Agreement (collectively, the "Employee Welfare Plans"). ASI may
further delegate such authority to plan administrators to:
(i)provide administrative and other services;
(ii)reach factually supported conclusions consistent with the terms of the
Employee Welfare Plans;
(iii)make a full and fair review of each claim, denial, and decision
related to the provision of benefits provided or arranged for under the Employee
Welfare Plans, pursuant to the requirements of ERISA, if within sixty (60) days
after receipt of the notice of denial, a claimant requests in writing a review
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for reconsideration of such decisions. The administrator shall notify the
claimant in writing of its decision on review. Such notice shall satisfy all
ERISA requirements relating thereto; and
(iv)notify the claimant in writing of its decision on review.
Section 4.03. Limitation of Liability. Logility agrees that none of the ASI
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Entities and their respective directors, officers, agents, and employees (each,
an "ASI Indemnified Person") shall have any liability, whether direct or
indirect, in contract or tort or otherwise, to any Logility Entity for or in
connection with the Services rendered or to be rendered by any ASI Indemnified
Person pursuant to this Agreement, the transactions contemplated hereby, or any
ASI Indemnified Person's actions or inactions in connection with any such
Services or transactions, except for damages which have resulted from such ASI
Indemnified Person's gross negligence or willful misconduct in connection with
any such Services, actions, or inactions.
Section 4.04. Indemnification of ASI Indemnified Persons by Logility. Logility
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agrees to indemnify and hold harmless each ASI Indemnified Person from and
against any damages, and to reimburse each ASI Indemnified Person for all
reasonable expenses as they are incurred in investigating, preparing, pursuing,
or defending any claim, action, proceeding, or investigation, whether or not in
connection with pending or threatened litigation and whether or not any ASI
Indemnified Person is a party (collectively, "Actions"), arising out of or in
connection with Services rendered or to be rendered by any ASI Indemnified
Person pursuant to this Agreement, the transactions contemplated hereby, or any
ASI Indemnified Person's actions or inactions in connection with any such
Services or transactions; provided that Logility will not be responsible for any
damages of any ASI Indemnified Person that have resulted from such ASI
Indemnified Person's gross negligence or willful misconduct in connection with
any of the Services, actions, or inactions referred to above.
Section 4.05. Indemnification of Logility Indemnified Persons by ASI. ASI
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agrees to indemnify and hold harmless each Logility Entity and its respective
directors, officers, agents, and employees (each, a "Logility Indemnified
Person") from and against any damages, and will reimburse each Logility
Indemnified Person for all reasonable expenses as they are incurred in
investigating, preparing, pursuing, or defending any Action, arising out of the
gross negligence or willful misconduct of any ASI Indemnified Person in
connection with the Services rendered or to be rendered pursuant to this
Agreement.
Section 4.06. Further Indemnification. To the extent that any other Person has
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agreed to indemnify any ASI Indemnified Person or to hold an ASI Indemnified
Person harmless and such Person provides services to ASI or any affiliate of ASI
relating directly or indirectly to any employee plan or benefit arrangement for
which Benefit Services are provided under this Agreement, ASI will exercise
reasonable efforts to (i) make such agreement applicable to any Logility
Indemnified Person so that each Logility Indemnified Person is held harmless or
indemnified to the same extent as any ASI Indemnified Person, or (ii) otherwise
make available to each Logility Indemnified Person the benefits of such
agreement.
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Section 4.07. Reports. ASI shall provide or shall cause to be provided to
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Logility with data or reports requested by Logility relating to (i) benefits
paid to or on behalf of Logility employees under ASI Plans, including but not
limited to financial statements, claims history, and census information, and
(ii) other information relating to the Services that is required to satisfy any
reporting or disclosure requirement of ERISA or the Code. ASI will provide such
information within a reasonable period of time after it is requested. The costs
for reports which are substantially similar to reports prepared by ASI or on
behalf of ASI generally for its businesses shall be billed as part of the
Benefit Costs. The cost for additional reports shall be billed as incremental
costs in accordance with Section 3.06.
ARTICLE V
ADDITIONAL AGREEMENT
Section 5.01. Notice. Unless otherwise agreed in writing by the parties,
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Logility agrees to provide ASI with at least sixty (60) days prior written
notice of any material change in the eligible Logility employees and retirees
covered by ASI Plans, and any change in the scope of Services to be provided by
ASI with respect thereto. Notwithstanding the preceding sentence, if Logility
provides ASI with less than sixty (60) days notice of any such change and ASI is
nonetheless able, with reasonable efforts, to effectuate such change with such
shorter notice, than ASI shall implement the requested change.
ARTICLE VI
TERM AND TERMINATION
Section 6.01. Term. Except as otherwise provided in this Article VI or in
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Section 7.05, or as otherwise agreed in writing by the parties, this Agreement
shall have an initial term of three years from the Closing Date, and will be
renewed automatically thereafter for successive one-year terms unless either
Logility or ASI elects not to renew this Agreement upon not less than one
hundred and eighty (180) days' written notice.
Section 6.02. Termination.
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(a) Logility may from time to time terminate this Agreement with respect to
one or more of the Services upon giving at least sixty (60) days' prior notice
to ASI.
(b) ASI may from time to time terminate this Agreement with respect to one
or more of the Services upon giving at least one hundred twenty (120) days'
prior notice to Logility.
(c) This Agreement will be subject to termination by either Logility or ASI
upon ninety (90) days' written notice if ASI ceases to own shares of Common
Stock representing more than fifty (50%) of the voting power of the Common Stock
of Logility.
(d) Notwithstanding anything to the contrary in this Section 6.02, ASI may,
at its option, immediately terminate this Agreement as it relates to any given
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Service if ASI would otherwise not be required to provide such Service with
respect to any employee benefit plan or program that is substantially similar to
a corresponding plan or program of ASI (as such plans and programs of ASI exist
from time to time) or if the method of delivering such Service would no longer
be substantially similar to the manner in which such Service was delivered to
the Logility Entities, as such delivery may change from time to time. ASI shall
give Logility as much advance notice as is reasonably possible in connection
with any planned early termination of a Service with respect to any employee
benefit plan or program.
(e) Notwithstanding anything to the contrary in this Schedule 6.02, ASI may
terminate any affected Service at any time if Logility shall have failed to
perform any of its material obligations under this Agreement relating to any
such Service, ASI has notified Logility in writing of such failure, and such
failure shall have continued for a period of sixty (60) days after receipt of
Logility of notice of such failure.
(f) Notwithstanding anything to the contrary in this Section 6.02, Logility
may terminate any affected Service at any time if ASI shall have failed to
perform any of its material obligations under this Agreement relating to any
such Service, Logility has notified ASI in writing of such failure, and such
failure shall have continued for a period of sixty (60) days after receipt by
ASI of notice of such failure.
(g) Notwithstanding anything to the contrary in this Section 6.02, either
ASI or Logility may terminate coverage of Logility under ASI's umbrella
liability, property, casualty or fiduciary insurance policies (as more fully
described in Schedule I) at any time on ninety (90) days written notice prior to
the anniversary day of the policy; provided that a replacement policy,
acceptable to ASI, is entered into by Logility.
Section 6.03. Effect of Termination.
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(a) Other than as required by law, upon termination of any Service pursuant
to Section 6.02, and upon expiration of the term of this Agreement, without
renewal, in accordance with Section 6.01, ASI will have no further obligation to
provide the terminated Service (or any Service, in the case of termination of
this Agreement), and Logility will have no obligation to pay any fees relating
to such Services or make any other payments hereunder; provided that
notwithstanding such termination, (i) Logility shall remain liable to ASI for
fees owed and payable in respect of Services provided prior to the effective
date of the termination; (ii) ASI shall continue to charge Logility for
administrative and program costs relating to benefits paid after but incurred
prior to the termination of any Service and other services required to be
provided after the termination of such Service and Logility shall be obligated
to pay such expenses in accordance with the terms of this Agreement, and (iii)
the provisions of Articles IV, V, VI and VII shall survive any such termination.
All program and administrative costs attributable to Logility employees for ASI
Plans that relate to any period after the effective date of any such termination
shall be for the account of Logility.
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(b) Following termination of this Agreement with respect to any Service,
ASI and Logility agree to cooperate in providing for an orderly transition of
such Service to Logility or to a successor service provider. Without limiting
the foregoing, ASI agrees to (i) provide, within ninety (90) days of the
termination, copies in a format designated by ASI of all records relating
directly or indirectly to benefit determinations of Logility employees,
including but not limited to compensation and service records, correspondence,
plan interpretive policies, plan procedures, administration guidelines, minutes,
or any data or records required to be maintained by law, and (ii) work with
Logility in developing a transition schedule.
ARTICLE VII
MISCELLANEOUS
Section 7.01. Other Agreements. In addition to the services described herein,
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ASI is providing Logility with certain additional services pursuant to a
Facilities Agreement and a Tax Sharing Agreement.
Section 7.02. Future Litigation and Other Proceedings. In the event that a
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Logility Entity (or any of its officers or directors) or an ASI Entity (or any
of its officers or directors) at any time after the date hereof initiates or
becomes subject to any litigation or other proceedings before any governmental
authority or arbitration panel with respect to which the parties have no prior
agreements (as to indemnification or otherwise), the party (and its officers and
directors) that has not initiated and is not subject to such litigation or other
proceedings shall comply, at the other party's expense, with any reasonable
requests by the other party for assistance in connection with such litigation or
other proceedings (including by way of provision of information and making
available of employees as witnesses). In the event that a Logility Entity (or
any of its officers or directors) and an ASI Entity (or any of its officers and
directors) at any time after the date hereof initiate or become subject to any
litigation or other proceedings before any governmental authority or arbitration
panel with respect to which the parties have no prior agreements (as to
indemnification or otherwise), each party (and its officers and directors)
shall, at its own expense, coordinate its strategies and actions with respect to
such litigation or other proceedings to the extent such coordination would not
be detrimental to its respective interests and shall comply, at the expense of
the requesting party, with any reasonable requests of the other party for
assistance in connection therewith (including by way of provision of information
and making available of employees as witnesses).
Section 7.03. No Agency. Nothing in this Agreement shall constitute or be
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deemed to constitute a partnership or joint venture between the parties hereto
or, except to the extent provided in Section 4.02, constitute or be deemed to
constitute any party as the agent or employee of the other party for any purpose
whatsoever and neither party shall have authority or power to bind the other or
to contract in the name of, or create a liability against, the other in any way
or for any purpose.
Section 7.04. Subcontractors. ASI may hire or engage one or more
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subcontractors to perform all or any of its obligations under this Agreement,
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provided that, subject to Section 4.03, ASI will in all cases remain primarily
responsible for all obligations undertaken by it in this Agreement with respect
to the scope, quality and nature of the Services provided to Logility.
Section 7.05. Force Majeure.
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(a) For purposes of this Section, "force majeure" means an event beyond the
control of either party, which by its nature could not have been foreseen by
such party, or, if it could have been foreseen, was unavoidable, and includes
without limitation, acts of God, storms, floods, riots, fires, sabotage, civil
commotion or civil unrest, interference by civil or military authorities, acts
of war (declared or undeclared) and failure of energy sources.
(b) Neither party shall be under any liability for failure to fulfill any
obligation under this Agreement, so long as and to the extent to which the
fulfillment of such obligation is prevented, frustrated, hindered, or delayed as
a consequence of circumstances of force majeure, provided always that such party
shall have exercised all due diligence to minimize to the greatest extent
possible the effect of force majeure on its obligations hereunder.
(c) Promptly on becoming aware of force majeure causing a delay in
performance or preventing performance of any obligations imposed by this
Agreement (and termination of such delay), the party affected shall give written
notice to the other party giving details of the same, including particulars of
the actual and, if applicable, any estimated continuing effects of such force
majeure on the obligations of the party whose performance is prevented or
delayed. If such notice shall have been duly given, and actual delay resulting
from such force majeure shall be deemed not to be a breach of this Agreement,
and the period for performance of the obligation to which it relates shall be
extended accordingly, provided that if force majeure results in the performance
of a party being delayed by more than sixty (60) days, the other party shall
have the right to terminate this Agreement with respect to any Service effected
by such delay forthwith by written notice.
Section 7.06. Entire Agreement. This Agreement (including the Schedules
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constituting a part of this Agreement) and any other writing signed by the
parties that specifically references this Agreement constitute the entire
agreement among the parties with respect to the subject matter hereof and
supersede all prior agreements, understandings and negotiations, both written
and oral, between the parties with respect to the subject matter hereof. This
Agreement is not intended to confer upon any Person other than the parties
hereto any rights or remedies hereunder.
Section 7.07. Information. Subject to applicable law and privileges, each
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party hereto covenants and agrees to provide the other party with all
information regarding itself and transactions under this Agreement that the
other party reasonably believes are required to comply with all applicable
federal, state, county and local laws, ordinances, regulations and codes,
including, but not limited to, securities laws and regulations.
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Section 7.08. Confidential Information. Logility and ASI hereby covenant and
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agree to hold in trust and confidence all Confidential Information relating to
the other party. "Confidential Information" shall mean all information disclosed
or obtained by either party to the other as a result of the relationship between
the parties existing by virtue of this or any other agreement of the parties,
whether orally, visually, in writing or in any other tangible form, and
includes, but is not limited to, economic and business data, business plans, and
the like, but shall not include (i) information which becomes generally
available other than by release in violation of the provisions of this Section
7.08, (ii) information which becomes available on a nonconfidential basis to a
party from a source other than the other party to this Agreement provided the
party in question reasonably believes that such source is not or was not bound
to hold such information confidential, (iii) information acquired or developed
independently by a party without violating this Section 7.08 or any other
confidentiality agreement with the other party and (iv) information that any
party hereto reasonably believes it is required to disclose by law, provided
that it first notifies the other party hereto of such requirement and allows
such party a reasonable opportunity to seek a protective order or other
appropriate remedy to prevent such disclosure. Without prejudice to the rights
and remedies of either party to this Agreement, a party disclosing any
Confidential Information to the other party in accordance with the provisions of
this Agreement shall be entitled to equitable relief by way of an injunction if
the other party hereto breaches or threatens to breach any provision of this
Section 7.08.
Section 7.09. Notices. Any notice, instruction, direction or demand under the
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terms of this Agreement required to be in writing will be duly given upon
delivery, if delivered by hand, facsimile transmission, intercompany mail, or
mail, to the following addresses:
(a) If to Logility, to:
Logility, Inc.
470 East Paces Ferry Road
Atlanta, Georgia 30305
Attention: Chief Financial Officer
Fax: 404/264-5394
(b) If to ASI, to:
American Software, Inc.
470 East Paces Ferry Road
Atlanta, Georgia 30305
Attention: Controller
Fax: 404/264-5813
or to such other addresses or facsimile numbers as may be specified by like
notice to the other parties.
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Section 7.10. Governing Law. This Agreement shall be construed in accordance
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with and governed by the laws of the State of Georgia.
Section 7.11. Severability. If any provision of this Agreement shall be
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invalid or unenforceable, such invalidity or unenforceability shall not render
the entire Agreement invalid. Rather, the Agreement shall be construed as if
not containing the particular invalid or unenforceable provision, and the rights
and obligations of each party shall be construed and unforced accordingly.
Section 7.12. Amendment. This Agreement may only be amended by a written
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agreement executed by both parties hereto.
Section 7.13. Counterparts. This Agreement may be executed in separate
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counterparts, each of which shall be deemed an original and all of which, when
taken together, shall constitute one agreement.
Section 7.14. Successors and Assigns. This Agreement shall be binding upon and
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inure to the benefit of the parties hereto and their respective successors and
permitted assigns. The foregoing notwithstanding, and except as provided in
Section 7.04, neither party may assign its rights or obligations under this
Agreement without the prior written consent of the other party.
Section 7.15. Dispute Resolution. In the event that any dispute arises between
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Logility and ASI in connection with this Agreement, the representatives of each
party responsible for the subject matter of such dispute shall use good faith
efforts to resolve such dispute promptly. In the event that such dispute cannot
be resolved by the parties' representatives, the matter shall be submitted to
the parties' respective Chief Executive Officers ("CEOs") for resolution. In the
event that the CEOs cannot reach resolution of the issue (an "Unresolved
Dispute"), then the Unresolved Dispute shall be settled at the election of
either party, by final and binding independent arbitration. All arbitrations
pursuant to this Agreement shall be conducted before the American Arbitration
Association ("AAA") in Atlanta, Georgia, U.S.A., and shall be carried out in
accordance with the Commercial Arbitration Rules of the AAA then in effect (the
"Rules") and the provisions of this Agreement. Logility and ASI shall each
select one arbitrator and a third arbitrator will be selected unanimously by the
arbitrators selected by Logility and ASI. If the two arbitrators selected by
Logility and ASI are unable to select the third arbitrator within ten (10) days
of the appointment of the two arbitrators, the parties consent to the selection
of the third arbitrator by the AAA administrator. The award of the arbitrators
may be enforced by any court having jurisdiction over the parties.
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<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by
their duly authorized representatives as of the date and year first above
written.
AMERICAN SOFTWARE, INC.
BY: /s/ James C. Edenfield
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NAME: JAMES C. EDENFIELD
TITLE: PRESIDENT
LOGILITY, INC.
BY: /s/ J. Michael Edenfield
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NAME: J. MICHAEL EDENFIELD
TITLE: PRESIDENT
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Services Agreement - Schedule I
General Corporate Services
SERVICE
PART I -- CORPORATE AND SHARED SERVICES.
A. The "Customary Billing" methodology, based on ASI's internal apportionment
formulas, shall be used for each of the following services:
- Travel administration;
- Property administration;
- Office of the Chief Information Officer;
- Transaction processing and accounting;
- Money and banking and other treasury services;
- Corporate Controller's Headquarters (financial planning and analysis);
- Human resource services--baseline, corporate, shared, and transition
services;
- Company-wide and executive training, development, and administration;
- Corporate general and administrative purchasing and "core group"
purchasing;
- Environmental health and safety;
- Trade (import/export and shipping services);
- Corporate security;
- Credit and collection; and
- Insurance Policies (including liability, property, and casualty).
A. The "Pass-Through" methodology, based on ASI's internal apportionment
formulas, shall be used for each of the following services, unless and until
such third-party costs may be billed directly to Logility:
- Tax return preparation
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PART II -- COMPUTING AND COMMUNICATIONS SERVICES. The Customary Billing
methodology, based on actual usage, shall be used for each of the following
services:
- Global data processing;
- Voice/data transmission services;
- Timesharing (computer resources);
- Personal computer and work station (maintenance and repair services);
- Contract administration; and
- Global telecommunications and network services.
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Services Agreement - Schedule II
Professional Services
Professional services to be provided under this Agreement shall include any
professional or other commercial services that ASI provides from time to time to
third parties on a fee basis, in each case as requested by Logility to be
provided by ASI, unless ASI determines in its reasonable discretion that the
provision of such requested services would not be economic or would be otherwise
unfeasible. All such services shall be provided in accordance with the Cost
Plus Billing method, with the percentage of costs and expenses to be negotiated
by the parties in good faith.
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Services Agreement - Schedule III
Benefits Services
SERVICE BILLING
METHODOLOGY
The Customary Billing methodology, based on
apportioned customary ASI "Fringe Rate"
allocations, (except as noted) shall be used for
each of the following services:
MEDICAL/DENTAL PROGRAMS
Benefits/Claims
- Claims costs for Logility Employees Customary Billing
participating in ASI Plans and programs
Administration
- Administration of Logility plans and programs: Customary Billing
- maintenance of eligibility files upon Logility's
notification of status changes
- claim adjudication under the terms of applicable plans
- maintenance of toll-free telephone lines for inquiries, etc.
- support services (internal and external, including COBRA)
Participant Contributions
- Participant contributions for deductions above Payroll Deduction
plans or direct bill to employees/retirees
OTHER BENEFIT PLANS
Life Insurance (including Accidental Customary Billing
Death and Dismemberment)
Savings/Retirement Plans
- Company match/retirement contribution Customary Billing
- Participant Contributions Payroll Deduction
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Long-Term Disability Plans
- Employer contributions Customary Billing
- Employee contributions Payroll Deduction
Other Benefit Support Services
- Audit, legal, actuarial fees and related Customary Billing
recoveries
- Payroll support of benefits administration Customary Billing
(insurance. savings, other benefit plans
and statutory requirements)
Payroll Services Customary Billing
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