SIXTH AMENDMENT TO LOAN AND SECURITY AGREEMENT
This Sixth Amendment to Loan and Security Agreement is dated as
of October 31, 1996 by and between Bank One, Milwaukee, NA (the "Secured
Party") and Effective Management Systems, Inc. ("EMS"), Effective
Management Systems of Michigan, Inc., EMS-East, Inc., Intercim Corp. f/k/a
EMS Acquisition Corp. and Effective Management Systems of Illinois, Inc.
(collectively, the "Debtors").
WHEREAS, the Secured Party and certain of the Debtors entered
into a loan and security agreement dated as of April 23, 1993, which
agreement has subsequently been amended (as amended, the "Loan
Agreement"); and
WHEREAS, the Secured Party and the Debtors desire to further
amend the Loan Agreement as hereinafter set forth.
NOW, THEREFORE, the parties hereto agree as follows (all
capitalized terms used but not defined herein shall have the meaning
assigned in the Loan Agreement):
1. The definition of "Note A" is amended and restated such
that it shall mean Debtors' amended and restated Note A of even date
herewith, a copy of which is attached as Exhibit A.
2. The definitions for the defined terms "Default," "Minimum"
and "Target" levels of Consolidated adjusted Net Earnings From Operations
are amended and restated as follows:
"Default," "Minimum" and "Target" levels of Consolidated
Adjusted Net Earnings From Operations shall be determined in
accordance with the following table, for the periods set forth
therein, as follows:
Consolidated Adjusted
Period Net Earnings From Operations
Four fiscal quarters
ending: Default Minimum Target
August 31, 1996 ($175,000) $ 500,000 $ 700,000
November 30, 1996 ($100,000) $ 550,000 $ 750,000
February 28, 1997 $100,000 $ 600,000 $ 800,000
May 31, 1997 $400,000 $ 600,000 $ 800,000
each quarter end thereafter $800,000 $1,000,000 $1,250,000
As used herein, amounts within parentheses are negative numbers.
3. Section 2(a) of the Loan Agreement is amended by deleting
"$3,000,000" appearing therein and inserting "$5,000,000" in its place.
4. This Sixth Amendment shall be effective upon the execution
of this Sixth Amendment, as well as the Amended and Restated Note A of
even date herewith in the amount of $5,000,000, a copy of which is
attached hereto as Exhibit A Thereafter, such note shall become Exhibit A
to the Loan Agreement.
5. The Debtors represent that all of the representations and
warranties contained in the Loan Agreement are true and correct as of the
date hereof, there is no event of default which has occurred and is
continuing under the Loan Agreement and there has not, since May 31, 1996,
been any material adverse change in the financial condition or business
prospects of the Debtors.
6. Except as specifically amended hereby, the Loan Agreement
continues in full force and effect and all references therein or otherwise
to the Loan Agreement shall mean the Loan Agreement as amended hereby.
EFFECTIVE MANAGEMENT
BANK ONE, MILWAUKEE, NA SYSTEMS, INC.
By: By:
Xxxxxxx X. Xxxx, Vice
President
EFFECTIVE MANAGEMENT
SYSTEMS OF MICHIGAN, INC.
By:
EMS-EAST, INC.
By:
INTERCIM CORP. f/k/a
EMS ACQUISITION CORP.
By:
EFFECTIVE MANAGEMENT
SYSTEMS OF ILLINOIS, INC.
By:
EXHIBIT A
AMENDED AND RESTATED NOTE A
Dated: October 31, 1996 Executed at
Stated Principal: $5,000,000 Milwaukee, Wisconsin
FOR VALUE RECEIVED, Effective Management Systems, Inc., a
Wisconsin corporation, Effective Management Systems of Michigan, Inc., a
Michigan corporation, EMS-East, Inc., a Massachusetts corporation,
Intercim Corp. f/k/a EMS Acquisition Corp., a Minnesota corporation and
Effective Management Systems of Illinois, Inc., an Illinois corporation
(collectively, "Borrowers"), hereby promise to pay, jointly and severally,
to the order of Bank One, Milwaukee, National Association, its successors
ad assigns (the "Secured Party") at its Milwaukee office at 000 Xxxx
Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxx 00000, the principal sum of Five
Million Dollars ($5,000,000) or the aggregate unpaid principal amount of
all advances made by the Secured Party hereunder pursuant to the Loan
Agreement hereinafter referred to ad to pay interest from the date hereof
on the unpaid balances hereof at the rate set forth in Section 2 of the
Loan Agreement and to pay interest at a rate equal to 2.5% per annum above
the Reference Rate (as defined in the Loan Agreement) after default or
maturity. Any change in interest hereon shall be effective on the date of
each such change in the Reference Rate. In the absence of a default,
interest (computed on the basis of actual days elapsed and a year of 360
days) for each calendar month shall be due and payable as of the first day
of the next succeeding month, commencing on the first such date after the
date hereof, and at Secured Party's sole discretion may be debited to
Borrowers' loan account ledger for Credit Facility A (as defined in the
Loan Agreement) or debited to any Borrowers commercial demand account
maintained with Secured Party, and all principal and accrued but unpaid
interest shall be due and payable upon termination of the Loan Agreement.
All payments received hereunder shall be applied first to
interest accrued and unpaid to date of receipt and then to repay
principal.
No deferral of time of payment shall be valid unless the holder
consents in writing and if such deferral is granted, the deferred balance
including interest thereof at 2.5% in excess of the Reference Rate shall
be an additional obligation under this Note. The undersigned and each
endorser hereby waive presentment, protest, and notice of dishonor and
give consent to the holder to extend time and to compound, release or
delay enforcement of rights against the undersigned or the security.
This Note is cross-defaulted and cross-collateralized with
Borrowers' Amended and Restated Note B payable to Secured Party dated
February 8, 1994.
This Note is the Note A referred to in the Loan and Security
Agreement dated as of November 9, 1992 as amended by the First Amendment
to ban and Security Agreement dated as of April 23,993, by the Second
Amendment to ban and Security Agreement dated February 8, 1994, by Third
Amendment to Loan and Security Agreement dated May 11, 1995, by Fourth
Amendment to Loan and Security Agreement dated January 26, 1996, by Fifth
Amendment to Loan and Security Agreement dated May 31, 1996 and by Sixth
Amendment to Loan and Security Agreement of even date, between the
undersigned, or some of the undersigned, and the Secured Party (as the
same may be amended, modified, supplemented or restated from time to time,
the "Loan Agreement"). This Note is secured by certain collateral
referred to in the loan Agreement.
This Note is, in part, in substitution and replacement of the
Amended and Restated Note A executed by the undersigned, or some of the
undersigned, and delivered to Secured Party dated May 31, 1996 in the
original principal amount of $3,000,000, and does not constitute repayment
of such Note.
EFFECTIVE MANAGEMENT
SYSTEMS, INC. INTERCIM CORP. f/k/a
EMS ACQUISITION CORP.
By:
By:
Attest:
Attest:
EFFECTIVE MANAGEMENT
SYSTEMS OF MICHIGAN, INC. EFFECTIVE MANAGEMENT
SYSTEMS OF ILLINOIS, INC.
By:
By:
Attest:
Attest:
EMS-EAST, INC.
By:
Attest:
