LOAN AND SECURITY AGREEMENT

                                  by and among

                       EFFECTIVE MANAGEMENT SYSTEMS, INC.,
                                 EMS-EAST, INC.,
                 EFFECTIVE MANAGEMENT SYSTEMS OF ILLINOIS, INC.

                                       and

                          FOOTHILL CAPITAL CORPORATION

                          DATED AS OF DECEMBER 30, 1997


   <PAGE>

   TABLE OF CONTENTS
                                                                    Page     

   1. DEFINITIONS AND CONSTRUCTION.  . . . . . . . . . . . . . . .   1
        1.1. Definitions.  . . . . . . . . . . . . . . . . . . . .   1
        1.2. Accounting Terms. . . . . . . . . . . . . . . . . . .   13
        1.3. Code.       . . . . . . . . . . . . . . . . . . . . .   13
        1.4. Construction. . . . . . . . . . . . . . . . . . . . .   13
        1.5. Schedules and Exhibits. . . . . . . . . . . . . . . .   13
   2. LOAN AND TERMS OF PAYMENT. . . . . . . . . . . . . . . . . .   14
        2.1. Revolving Advances. . . . . . . . . . . . . . . . . .   14
        2.2. Letters of Credit.  . . . . . . . . . . . . . . . . .   15
        2.3. Term Loan.  . . . . . . . . . . . . . . . . . . . . .   17
        2.4. Intentionally Omitted.  . . . . . . . . . . . . . . .   17
        2.5. Overadvances. . . . . . . . . . . . . . . . . . . . .   17
        2.6. Interest and Letter of Credit Fees:  Rates,
              Payments, and Calculations.  . . . . . . . . . . . .   17
        2.7. Collection of Accounts. . . . . . . . . . . . . . . .   19
        2.8. Crediting Payments; Application of Collections. . . .   19
        2.9. Designated Account. . . . . . . . . . . . . . . . . .   20
        2.10. Maintenance of Loan Account; Statements of
              Obligations. . . . . . . . . . . . . . . . . . . . .   20
        2.11. Fees . . . . . . . . . . . . . . . . . . . . . . . .   20

   3. CONDITIONS; TERM OF AGREEMENT. . . . . . . . . . . . . . . .   21
        3.1. Conditions Precedent to the Initial Advance,
              Letter of Credit, the Term Loan, and the Initial
              Capital Expenditure Loan.  . . . . . . . . . . . . .   21
        3.2. Conditions Precedent to all Advances, all Letters
              of Credit and the Term Loan. . . . . . . . . . . . .   23
        3.3. Condition Subsequent. . . . . . . . . . . . . . . . .   23
        3.4. Term; Automatic Renewal.  . . . . . . . . . . . . . .   24
        3.5. Effect of Termination.  . . . . . . . . . . . . . . .   24
        3.6. Early Termination by Borrower.  . . . . . . . . . . .   25
        3.7. Termination Upon Event of Default.  . . . . . . . . .   25
   4. CREATION OF SECURITY INTEREST. . . . . . . . . . . . . . . .   25
        4.1. Grant of Security Interest. . . . . . . . . . . . . .   25
        4.2. Negotiable Collateral.  . . . . . . . . . . . . . . .   26
        4.3. Collection of Accounts, General Intangibles, and
              Negotiable Collateral. . . . . . . . . . . . . . . .   26
        4.4. Delivery of Additional Documentation Required.  . . .   26
        4.5. Power of Attorney.  . . . . . . . . . . . . . . . . .   26
        4.6. Right to Inspect. . . . . . . . . . . . . . . . . . .   27
   5. REPRESENTATIONS AND WARRANTIES.  . . . . . . . . . . . . . .   27
        5.1. No Encumbrances.  . . . . . . . . . . . . . . . . . .   27
        5.2. Eligible Accounts.  . . . . . . . . . . . . . . . . .   27
        5.3. Intentionally Omitted.  . . . . . . . . . . . . . . .   27
        5.4. Equipment.  . . . . . . . . . . . . . . . . . . . . .   28
        5.5. Location of Inventory and Equipment.  . . . . . . . .   28
        5.6. Inventory Records.  . . . . . . . . . . . . . . . . .   28
        5.7. Location of Chief Executive Office; FEIN. . . . . . .   28
        5.8. Due Organization and Qualification; Subsidiaries. . .   28
        5.9. Due Authorization; No Conflict. . . . . . . . . . . .   29
        5.10. Litigation.  . . . . . . . . . . . . . . . . . . . .   29
        5.11. No Material Adverse Change.  . . . . . . . . . . . .   30
        5.12. Solvency.  . . . . . . . . . . . . . . . . . . . . .   30
        5.13. Employee Benefits. . . . . . . . . . . . . . . . . .   30
        5.14. Environmental Condition. . . . . . . . . . . . . . .   30
        5.15. Copyrights.  . . . . . . . . . . . . . . . . . . . .   31
   6. AFFIRMATIVE COVENANTS. . . . . . . . . . . . . . . . . . . .   31
        6.1. Accounting System.  . . . . . . . . . . . . . . . . .   31
        6.2. Collateral Reporting. . . . . . . . . . . . . . . . .   31
        6.3. Financial Statements, Reports, Certificates.  . . . .   32
        6.4. Tax Returns.  . . . . . . . . . . . . . . . . . . . .   33
        6.5. Guarantor Reports.  . . . . . . . . . . . . . . . . .   33
        6.6. Returns . . . . . . . . . . . . . . . . . . . . . . .   33
        6.7. Title to Equipment. . . . . . . . . . . . . . . . . .   33
        6.8. Maintenance of Equipment. . . . . . . . . . . . . . .   34
        6.9. Taxes.  . . . . . . . . . . . . . . . . . . . . . . .   34
        6.10. Insurance. . . . . . . . . . . . . . . . . . . . . .   34
        6.11. No Setoffs or Counterclaims. . . . . . . . . . . . .   35
        6.12. Location of Inventory and Equipment. . . . . . . . .   35
        6.13. Compliance with Laws.  . . . . . . . . . . . . . . .   36
        6.14. Employee Benefits. . . . . . . . . . . . . . . . . .   36
        6.15. Leases.  . . . . . . . . . . . . . . . . . . . . . .   37
        6.16. Copyrights.  . . . . . . . . . . . . . . . . . . . .   37
   7. NEGATIVE COVENANTS.  . . . . . . . . . . . . . . . . . . . .   37
        7.1. Indebtedness. . . . . . . . . . . . . . . . . . . . .   37
        7.2. Liens . . . . . . . . . . . . . . . . . . . . . . . .   38
        7.3. Restrictions on Fundamental Changes.  . . . . . . . .   38
        7.4. Disposal of Assets. . . . . . . . . . . . . . . . . .   38
        7.5. Change Name.  . . . . . . . . . . . . . . . . . . . .   38
        7.6. Guarantee.  . . . . . . . . . . . . . . . . . . . . .   38
        7.7. Nature of Business. . . . . . . . . . . . . . . . . .   38
        7.8. Prepayments and Amendments. . . . . . . . . . . . . .   39
        7.9. Change of Control.  . . . . . . . . . . . . . . . . .   39
        7.10. Consignments.  . . . . . . . . . . . . . . . . . . .   39
        7.11. Distributions. . . . . . . . . . . . . . . . . . . .   39
        7.12. Accounting Methods.  . . . . . . . . . . . . . . . .   39
        7.13. Investments. . . . . . . . . . . . . . . . . . . . .   39
        7.14. Transactions with Affiliates.  . . . . . . . . . . .   40
        7.15. Suspension.  . . . . . . . . . . . . . . . . . . . .   40
        7.16. Compensation.  . . . . . . . . . . . . . . . . . . .   40
        7.17. Use of Proceeds. . . . . . . . . . . . . . . . . . .   40
        7.18. Change in Location of Chief Executive Office;
              Inventory and Equipment with Bailees.  . . . . . . .   40
        7.19. No Prohibited Transactions Under ERISA.  . . . . . .   40
        7.20. Financial Covenants. . . . . . . . . . . . . . . . .   41
        7.21. Capital Expenditures.  . . . . . . . . . . . . . . .   42
   8. EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . . . . . .   42
   9. FOOTHILL'S RIGHTS AND REMEDIES.  . . . . . . . . . . . . . .   44
        9.1. Rights and Remedies.  . . . . . . . . . . . . . . . .   44
        9.2. Remedies Cumulative.  . . . . . . . . . . . . . . . .   46
   10. TAXES AND EXPENSES. . . . . . . . . . . . . . . . . . . . .   46
   11. WAIVERS; INDEMNIFICATION. . . . . . . . . . . . . . . . . .   47
        11.1. Demand; Protest; etc.  . . . . . . . . . . . . . . .   47
        11.2. Foothill's Liability for Collateral. . . . . . . . .   47
        11.3. Indemnification. . . . . . . . . . . . . . . . . . .   47
   12. NOTICES.  . . . . . . . . . . . . . . . . . . . . . . . . .   48
   13. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER. . . . . . . . .   49
   14. DESTRUCTION OF BORROWERS' DOCUMENTS.  . . . . . . . . . . .   49
   15. GENERAL PROVISIONS. . . . . . . . . . . . . . . . . . . . .   50
        15.1. Effectiveness. . . . . . . . . . . . . . . . . . . .   50
        15.2. Successors and Assigns.  . . . . . . . . . . . . . .   50
        15.3. Section Headings.  . . . . . . . . . . . . . . . . .   50
        15.4. Interpretation.  . . . . . . . . . . . . . . . . . .   50
        15.5. Severability of Provisions.  . . . . . . . . . . . .   50
        15.6. Amendments in Writing. . . . . . . . . . . . . . . .   51
        15.7. Counterparts; Facsimile Execution. . . . . . . . . .   51
        15.8. Revival and Reinstatement of Obligations.  . . . . .   51
        15.9. Integration. . . . . . . . . . . . . . . . . . . . .   51
        15.10. Joint and Several Liability.  . . . . . . . . . . .   51

   <PAGE>

                             SCHEDULES AND EXHIBITS

   Schedule P-1   Permitted Liens
   Schedule T-1   Calculation of Tangible Net Worth
   Schedule 5.7   Chief Executive Office and FEIN
   Schedule 5.8   Subsidiaries
   Schedule 5.10  Litigation
   Schedule 5.13  ERISA Benefit Plans
   Schedule 6.12  Location of Inventory and Equipment
   Schedule 7.1   Indebtedness
   Schedule 7.14  Affiliate Transactions
   Exhibit C-1    Form of Compliance Certificate


   <PAGE>

                           LOAN AND SECURITY AGREEMENT

             THIS LOAN AND SECURITY AGREEMENT (this "Agreement"), is entered
   into as of December 30, 1997, among FOOTHILL CAPITAL CORPORATION, a
   California corporation ("Foothill"), with a place of business located at
   11111 Santa Monica Boulevard, Suite 1500, Los Angeles, California 90025-
   3333 and EFFECTIVE MANAGEMENT SYSTEMS, INC. ("EMS"), a Wisconsin
   corporation, EMS-EAST, INC. ("EMS-East"), a Massachusetts corporation, and
   EFFECTIVE MANAGEMENT SYSTEMS OF ILLINOIS, INC. ("EMS-Illinois"), an
   Illinois corporation, (EMS, EMS-East and EMS-Illinois are each
   individually a "Borrower", and collectively "Borrowers").

             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:

             "Account Debtor" means any Person who is or who may become
   obligated under, with respect to, or on account of, an Account.

             "Accounts" means, with respect to a Borrower, all currently
   existing and hereafter arising accounts, contract rights, and all other
   forms of obligations owing to such Borrower arising out of the sale or
   lease of goods or the rendition of services by such Borrower, irrespective
   of whether earned by performance, and any and all credit insurance,
   guaranties, or security therefor.

             "AccuVal Appraisal" means that certain appraisal dated on or
   about November 19, 1997 prepared by AccuVal Associates, Incorporated with
   respect to Borrowers' Equipment.

             "Advances" has the meaning set forth in Section 2.1(a).

             "Affiliate" means, as applied to any Person, any other Person
   who directly or indirectly controls, is controlled by, is under common
   control with or is a director or officer of such Person.  For purposes of
   this definition, "control" means the possession, directly or indirectly,
   of the power to vote 5% or more of the securities having ordinary voting
   power for the election of directors or the direct or indirect power to
   direct the management and policies of a Person.

             "Agreement" has the meaning set forth in the preamble hereto.

             "Applicable Maintenance Revenue Amount" means, at any time, (i)
   during the period commencing on the Closing Date and ending on December
   31, 1998, an amount equal to the product of 50% multiplied by the
   maintenance and support revenue recognized (in accordance with GAAP) by
   Borrowers during the most recently ended 3 month period (excluding the
   portion of deferred maintenance revenue in excess of one year) multiplied
   by 4, (ii) at any time during the period commencing on January 1, 1999 and
   ending on December 31, 1999, an amount equal to the product of 42.5%
   multiplied by the maintenance and support revenue recognized (in
   accordance with GAAP) by Borrowers during the most recently ended 3 month
   period (excluding the portion of deferred maintenance revenue in excess of
   one year) multiplied by 4, and (iii) at any time after December 31, 1999,
   an amount equal to the product of 35% multiplied by the maintenance and
   support revenue recognized (in accordance with GAAP) by Borrowers during
   the most recently ended 3 month period (excluding the portion of deferred
   maintenance revenue in excess of one year) multiplied by 4.

             "Authorized Person" means any officer or other employee of any
   Borrower.

             "Average Unused Portion of Maximum Revolving Amount" means, as
   of any date of determination, (a) the Maximum Revolving Amount, less
   (b) the sum of (i) the average Daily Balance of Advances that were
   outstanding during the immediately preceding month, plus (ii) the average
   Daily Balance of the undrawn Letters of Credit that were outstanding
   during the immediately preceding month.

             "Bankruptcy Code" means the United States Bankruptcy Code (11
   U.S.C. Section  101 et seq.), as amended, and any successor statute.

             "Benefit Plan" means a "defined benefit plan" (as defined in
   Section 3(35) of ERISA) for which any Borrower, any Subsidiary of any
   Borrower, or any ERISA Affiliate has been an "employer" (as defined in
   Section 3(5) of ERISA) within the past six years.

             "Borrower" has the meaning set forth in the preamble to this
   Agreement.

             "Borrower's Books" means, with respect to a Borrower, all of
   such Borrower's books and records including:  ledgers; records indicating,
   summarizing, or evidencing such Borrower's properties or assets (including
   the Collateral) or liabilities; all information relating to such
   Borrower's business operations or financial condition; and all computer
   programs, disk or tape files, printouts, runs, or other computer prepared
   information.
             "Borrowing Base" has the meaning set forth in Section 2.1(a).
             "Business Day" means any day that is not a Saturday, Sunday, or
   other day on which national banks are authorized or required to close.
             "Change of Control" shall be deemed to have occurred at such
   time as a "person" or "group" (within the meaning of Sections 13(d) and
   14(d)(2) of the Securities Exchange Act of 1934) becomes the "beneficial
   owner" (as defined in Rule 13d-3 under the Securities Exchange Act of
   1934), directly or indirectly, of more than 20% of the total voting power
   of all classes of stock then outstanding of any Borrower entitled to vote
   in the election of directors.

             "Closing Date" means the date of the first to occur of the
   making of the initial Advance, the issuance of the initial Letter of
   Credit or the funding of the Term Loan.

             "Code" means the California Uniform Commercial Code.

             "Collateral" means, with respect to a Borrower, each of the
   following:

             such Borrower's Accounts,
             such Borrower's Books,
             such Borrower's Equipment,
             such Borrower's General Intangibles,
             such Borrower's Inventory,
             such Borrower's Negotiable Collateral,

             any money, or other assets of such Borrower that now or
   hereafter come into the possession, custody, or control of Foothill, and

             the proceeds and products, whether tangible or intangible, of
   any of the foregoing, including proceeds of insurance covering any or all
   of the Collateral of such Borrower, and any and all Accounts, Borrower's
   Books, Equipment, General Intangibles, Inventory, Negotiable Collateral,
   money, deposit accounts, or other tangible or intangible property
   resulting from the sale, exchange, collection, or other disposition of any
   of the foregoing, or any portion thereof or interest therein, and the
   proceeds thereof.

             "Collateral Access Agreement" means a landlord waiver, mortgagee
   waiver, bailee letter, or acknowledgment agreement of any warehouseman,
   processor, lessor, consignee, or other Person in possession of, having a
   Lien upon, or having rights or interests in the Equipment or Inventory, in
   each case, in form and substance satisfactory to Foothill.

             "Collections" means all cash, checks, notes, instruments, and
   other items of payment (including, insurance proceeds, proceeds of cash
   sales, rental proceeds, and tax refunds).

             "Compliance Certificate"  means a certificate substantially in
   the form of Exhibit C-1 and delivered by the chief accounting officer of
   EMS to Foothill.

             "Copyright Security Agreement" means that certain Copyright
   Security Agreement of even date herewith between EMS and Foothill.

             "Daily Balance" means the amount of an Obligation owed at the
   end of a given day.

             "deems itself insecure" means that the Person deems itself
   insecure in accordance with the provisions of Section 1208 of the Code.

             "Default" means an event, condition, or default that, with the
   giving of notice, the passage of time, or both, would be an Event of
   Default.

             "Designated Account" means account number 20478851 of Borrowers
   maintained with Borrowers' Designated Account Bank, or such other deposit
   account of Borrowers (located within the United States) which has been
   designated, in writing and from time to time, by Borrowers to Foothill.

             "Designated Account Bank" means Bank One, Wisconsin, whose
   office is located at 111 East Wisconsin Avenue, Milwaukee, Wisconsin
   53201, and whose ABA number is 075000019.

             "Dilution" means, in each case based upon the experience of the
   immediately prior 3 months, the result of dividing the Dollar amount of
   (a) bad debt write-downs, discounts, advertising, returns, promotions,
   credits, or other dilutive items (as determined by Foothill in its
   reasonable credit judgment) with respect to the Accounts of Borrowers by
   (b) Borrowers' Collections (excluding extraordinary items) plus the Dollar
   amount of clause (a).

             "Dilution Reserve" means, as of any date of determination, an
   amount sufficient to reduce Foothill's advance rate against Eligible
   Accounts by one percentage point for each percentage point by which
   Dilution is in excess of 5%.

             "Disbursement Letter" means an instructional letter executed and
   delivered by Borrowers to Foothill regarding the extensions of credit to
   be made on the Closing Date, the form and substance of which shall be
   satisfactory to Foothill.

             "Dollars or $" means United States dollars.

             "Early Termination Premium" has the meaning set forth in
   Section 3.6.

             "EBITDA" means, for any period, the consolidated operating
   income of Borrowers for such period, plus depreciation and amortization
   deducted in determining operating income for such period, minus
   amortization of capitalized software costs for such period.

             "Eligible Accounts" means those Accounts created by a Borrower
   in the ordinary course of business, that arise out of such Borrower's sale
   of goods or rendition of services, that strictly comply with each and all
   of the representations and warranties respecting Accounts made by
   Borrowers to Foothill in the Loan Documents, and that are and at all times
   continue to be acceptable to Foothill in all respects; provided, however,
   that standards of eligibility may be fixed and revised from time to time
   by Foothill in Foothill's reasonable credit judgment.  Eligible Accounts
   shall not include the following:

             Accounts of a Borrower that the Account Debtor has failed to pay
   within 90 days of invoice date or Accounts with selling terms of more than
   30 days (provided, that Accounts unpaid more than 90 days of invoice date
   and with selling terms of greater than 30 days shall be Eligible Accounts
   up to an aggregate amount for all such Accounts of up to $500,000 to the
   extent (i) such Accounts are otherwise Eligible Accounts, (ii) such
   Accounts are not unpaid more than 180 days past invoice date, and (iii)
   such Accounts are not unpaid more than 30 days past due date;

             Accounts of a Borrower owed by an Account Debtor or its
   Affiliates where 50% or more of all Accounts owed by that Account Debtor
   (or its Affiliates) to Borrowers are deemed ineligible under clause (a)
   above;

             Accounts of a Borrower with respect to which the Account Debtor
   is an employee, Affiliate, or agent of a Borrower;

             Accounts of a Borrower with respect to which goods are placed on
   consignment, guaranteed sale (except for guaranteed sales in the ordinary
   course of Borrowers' business consistent with past practices that allow
   Account Debtors to return goods within 90 days of the date of contract for
   such goods), 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;

             Accounts of a Borrower that are not payable in Dollars or with
   respect to which the Account Debtor: (i) does not maintain its chief
   executive office in the United States, or (ii) is not organized under the
   laws of the United States or any State thereof, or (iii) is the government
   of any foreign country or sovereign state, or of any state, province,
   municipality, or other political subdivision thereof, or of any
   department, agency, public corporation, or other instrumentality thereof,
   unless (y) the Account is supported by an irrevocable letter of credit
   satisfactory to Foothill (as to form, substance, and issuer or domestic
   confirming bank) that has been delivered to Foothill and is directly
   drawable by Foothill, or (z) the Account is covered by credit insurance in
   form and amount, and by an insurer, satisfactory to Foothill;

             Accounts of a Borrower with respect to which the Account Debtor
   is either (i) the United States or any department, agency, or
   instrumentality of the United States (exclusive, however, of Accounts with
   respect to which such Borrower has complied, to the satisfaction of
   Foothill, with the Assignment of Claims Act, 31 U.S.C. Section  3727), or
   (ii) any State of the United States (exclusive, however, of Accounts owed
   by any State that does not have a statutory counterpart to the Assignment
   of Claims Act);

             Accounts of a Borrower with respect to which the Account Debtor
   is a creditor of a Borrower, has or has asserted a right of setoff, has
   disputed its liability, or has made any claim with respect to the Account;

             Accounts of a Borrower with respect to an Account Debtor whose
   total obligations owing to Borrowers exceed 10% of all Eligible Accounts,
   to the extent of the obligations owing by such Account Debtor in excess of
   such percentage;

             Accounts of a Borrower with respect to which the Account Debtor
   is subject to any Insolvency Proceeding, or becomes insolvent, or goes out
   of business;

             Accounts of a Borrower the collection of which Foothill, in its
   reasonable credit judgment, believes to be doubtful by reason of the
   Account Debtor's financial condition; 

             Accounts of a Borrower with respect to which the goods giving
   rise to such Account have not been shipped and billed to the Account
   Debtor, the services giving rise to such Account have not been performed
   and accepted by the Account Debtor, or the Account otherwise does not
   represent a final sale;

             Accounts of a Borrower with respect to which the Account Debtor
   is located in the states of New Jersey, Minnesota, Indiana, or West
   Virginia (or any other state that requires a creditor to file a Business
   Activity Report or similar document in order to bring suit or otherwise
   enforce its remedies against such Account Debtor in the courts or through
   any judicial process of such state), unless such Borrower has qualified to
   do business in New Jersey, Minnesota, Indiana, West Virginia, or such
   other states, or has filed a Notice of Business Activities Report with the
   applicable division of taxation, the department of revenue, or with such
   other state offices, as appropriate, for the then-current year, or is
   exempt from such filing requirement;

             Accounts of a Borrower that represent progress payments (except
   to the extent such progress payments relate to services and materials that
   have been provided to Account Debtor thereof) or other advance billings
   that are due prior to the completion of performance by such Borrower of
   the subject contract for goods or services; and

             Accounts of a Borrower arising under a maintenance or support
   contract.

             "Equipment" means, with respect to a Borrower, all of such
   Borrower's present and hereafter acquired machinery, machine tools,
   motors, equipment, furniture, furnishings, fixtures, vehicles (including
   motor vehicles and trailers), tools, parts, goods (other than consumer
   goods, farm products, or Inventory), wherever located, including, (a) any
   interest of such Borrower in any of the foregoing, and (b) all
   attachments, accessories, accessions, replacements, substitutions,
   additions, and improvements to any of the foregoing.

             "ERISA" means the Employee Retirement Income Security Act of
   1974, 29 U.S.C. Section Section  1000 et seq., amendments thereto,
   successor statutes, and regulations or guidance promulgated thereunder.

             "ERISA Affiliate" means (a) any corporation subject to ERISA
   whose employees are treated as employed by the same employer as the
   employees of any Borrower under IRC Section 414(b), (b) any trade or
   business subject to ERISA whose employees are treated as employed by the
   same employer as the employees of any Borrower under IRC Section 414(c),
   (c) solely for purposes of Section 302 of ERISA and Section 412 of the
   IRC, any organization subject to ERISA that is a member of an affiliated
   service group of which any Borrower is a member under IRC Section 414(m),
   or (d) solely for purposes of Section 302 of ERISA and Section 412 of the
   IRC, any party subject to ERISA that is a party to an arrangement with any
   Borrower and whose employees are aggregated with the employees of such
   Borrower under IRC Section 414(o).

             "ERISA Event" means (a) a Reportable Event with respect to any
   Benefit Plan or Multiemployer Plan, (b) the withdrawal of any Borrower,
   any of its Subsidiaries or ERISA Affiliates from a Benefit Plan during a
   plan year in which it was a "substantial employer" (as defined in
   Section 4001(a)(2) of ERISA), (c) the providing of notice of intent to
   terminate a Benefit Plan in a distress termination (as described in
   Section 4041(c) of ERISA), (d) the institution by the PBGC of proceedings
   to terminate a Benefit Plan or Multiemployer Plan, (e) any event or
   condition (i) that provides a basis under Section 4042(a)(1), (2), or (3)
   of ERISA for the termination of, or the appointment of a trustee to
   administer, any Benefit Plan or Multiemployer Plan, or (ii) that may
   result in termination of a Multiemployer Plan pursuant to Section 4041A of
   ERISA, (f) the partial or complete withdrawal within the meaning of
   Sections 4203 and 4205 of ERISA, of any Borrower, any of its Subsidiaries
   or ERISA Affiliates from a Multiemployer Plan, or (g) providing any
   security to any Plan under Section 401(a)(29) of the IRC by any Borrower
   or its Subsidiaries or any of their ERISA Affiliates.

             "Event of Default" has the meaning set forth in Section 8.

             "Existing Lender" means Bank One, Wisconsin.

             "FEIN" means Federal Employer Identification Number.

             "Foothill" has the meaning set forth in the preamble to this
   Agreement.

             "Foothill Account" has the meaning set forth in Section 2.7.

             "Foothill Expenses" means all:  costs or expenses (including
   taxes, and insurance premiums) required to be paid by Borrowers under any
   of the Loan Documents that are paid or incurred by Foothill; fees or
   charges paid or incurred by Foothill in connection with Foothill's
   transactions with any Borrower, including, fees or charges for
   photocopying, notarization, couriers and messengers, telecommunication,
   public record searches (including tax lien, litigation, and UCC searches
   and including searches with the patent and trademark office, the copyright
   office, or the department of motor vehicles), filing, recording,
   publication, appraisal (including periodic Collateral or appraisals), real
   estate surveys, real estate title policies and endorsements, and
   environmental audits; costs and expenses incurred by Foothill in the
   disbursement of funds to any Borrower (by wire transfer or otherwise);
   charges paid or incurred by Foothill resulting from the dishonor of
   checks; costs and expenses paid or incurred by Foothill to correct any
   default or enforce any provision of the Loan Documents, or in gaining
   possession of, maintaining, handling, preserving, storing, shipping,
   selling, preparing for sale, or advertising to sell the Collateral, or any
   portion thereof, irrespective of whether a sale is consummated; costs and
   expenses paid or incurred by Foothill in examining any Borrower's Books;
   costs and expenses of third party claims or any other suit paid or
   incurred by Foothill in enforcing or defending the Loan Documents or in
   connection with the transactions contemplated by the Loan Documents or
   Foothill's relationship with any Borrower or any guarantor; and Foothill's
   reasonable attorneys fees and expenses incurred in advising, structuring,
   drafting, reviewing, administering, amending, terminating, enforcing
   (including attorneys fees and expenses incurred in connection with a
   "workout," a "restructuring," or an Insolvency Proceeding concerning any
   Borrower or any guarantor of the Obligations), defending, or concerning
   the Loan Documents, irrespective of whether suit is brought.

             "GAAP" means generally accepted accounting principles as in
   effect from time to time in the United States, consistently applied.

             "General Intangibles" means, with respect to a Borrower, all of
   such Borrower's present and future general intangibles and other personal
   property (including contract rights, rights arising under common law,
   statutes, or regulations, choses or things in action, goodwill, patents,
   trade names, trademarks, servicemarks, copyrights, blueprints, drawings,
   purchase orders, customer lists, monies due or recoverable from pension
   funds, route lists, rights to payment and other rights under any royalty
   or licensing agreements, infringement claims, computer programs,
   information contained on computer disks or tapes, literature, reports,
   catalogs, deposit accounts, insurance premium rebates, tax refunds, and
   tax refund claims), other than goods, Accounts, and Negotiable Collateral.

             "Governing Documents" means the certificate or articles of
   incorporation, by-laws, or other organizational or governing documents of
   any Person.

             "Hazardous Materials" means (a) substances that are defined or
   listed in, or otherwise classified pursuant to, any applicable laws or
   regulations as "hazardous substances," "hazardous materials," "hazardous
   wastes," "toxic substances," or any other formulation intended to define,
   list, or classify substances by reason of deleterious properties such as
   ignitability, corrosivity, reactivity, carcinogenicity, reproductive
   toxicity, or "EP toxicity", (b) oil, petroleum, or petroleum derived
   substances, natural gas, natural gas liquids, synthetic gas, drilling
   fluids, produced waters, and other wastes associated with the exploration,
   development, or production of crude oil, natural gas, or geothermal
   resources, (c) any flammable substances or explosives or any radioactive
   materials, and (d) asbestos in any form or electrical equipment that
   contains any oil or dielectric fluid containing levels of polychlorinated
   biphenyls in excess of 50 parts per million.

             "Indebtedness" means:  (a) all obligations of a Borrower for
   borrowed money, (b) all obligations of a Borrower evidenced by bonds,
   debentures, notes, or other similar instruments and all reimbursement or
   other obligations of a Borrower in respect of letters of credit, bankers
   acceptances, interest rate swaps, or other financial products, (c) all
   obligations of a Borrower under capital leases, (d) all obligations or
   liabilities of others secured by a Lien on any property or asset of a
   Borrower, irrespective of whether such obligation or liability is assumed,
   and (e) any obligation of a Borrower guaranteeing or intended to guarantee
   (whether guaranteed, endorsed, co-made, discounted, or sold with recourse
   to such Borrower) any indebtedness, lease, dividend, letter of credit, or
   other obligation of any other Person.

             "Insolvency Proceeding" means any proceeding commenced by or
   against any Person under any provision of the Bankruptcy Code or under any
   other bankruptcy or insolvency law, assignments for the benefit of
   creditors, formal or informal moratoria, compositions, extensions
   generally with creditors, or proceedings seeking reorganization,
   arrangement, or other similar relief.

             "Intangible Assets" means, with respect to any Person, that
   portion of the book value of all of such Person's assets that would be
   treated as intangibles under GAAP.

             "Inventory" means, with respect to a Borrower, all present and
   future inventory in which such Borrower has any interest, including goods
   held for sale or lease or to be furnished under a contract of service and
   all of such Borrower's present and future raw materials, work in process,
   finished goods, and packing and shipping materials, wherever located.

             "IRC" means the Internal Revenue Code of 1986, as amended, and
   the regulations thereunder.

             "L/C" has the meaning set forth in Section 2.2(a).

             "L/C Guaranty" has the meaning set forth in Section 2.2(a).

             "Letter of Credit" means an L/C or an L/C Guaranty, as the
   context requires.

             "Lien" means any interest in property securing an obligation
   owed to, or a claim by, any Person other than the owner of the property,
   whether such interest shall be based on the common law, statute, or
   contract, whether such interest shall be recorded or perfected, and
   whether such interest shall be contingent upon the occurrence of some
   future event or events or the existence of some future circumstance or
   circumstances, including the lien or security interest arising from a
   mortgage, deed of trust, encumbrance, pledge, hypothecation, assignment,
   deposit arrangement, security agreement, adverse claim or charge,
   conditional sale or trust receipt, or from a lease, consignment, or
   bailment for security purposes and also including reservations,
   exceptions, encroachments, easements, rights-of-way, covenants,
   conditions, restrictions, leases, and other title exceptions and
   encumbrances affecting real property.

             "Loan Account" has the meaning set forth in Section 2.10.

             "Loan Documents" means this Agreement, the Disbursement Letter,
   the Letters of Credit, the Lockbox Agreements, the Copyright Security
   Agreement, the Trademark Security Agreement, the Stock Pledge Agreement,
   any note or notes executed by any Borrower and payable to Foothill, and
   any other agreement entered into, now or in the future, in connection with
   this Agreement.

             "Lockbox Account" shall mean a depository account established
   pursuant to one of the Lockbox Agreements.

             "Lockbox Agreements" means those certain Lockbox Operating
   Procedural Agreements and those certain Depository Account Agreements, in
   form and substance satisfactory to Foothill, each of which is among
   Borrowers, Foothill, and one of the Lockbox Banks.

             "Lockbox Banks" means Bank One, Wisconsin.

             "Lockboxes" has the meaning set forth in Section 2.7.

             "Material Adverse Change" means (a) a material adverse change in
   the business, prospects, operations, results of operations, assets,
   liabilities or condition (financial or otherwise) of any Borrower, (b) the
   material impairment of any Borrower's ability to perform its obligations
   under the Loan Documents to which it is a party or of Foothill to enforce
   the Obligations or realize upon the Collateral, (c) a material adverse
   effect on the value of the Collateral or the amount that Foothill would be
   likely to receive (after giving consideration to delays in payment and
   costs of enforcement) in the liquidation of such Collateral, or (d) a
   material impairment of the priority of Foothill's Liens with respect to
   the Collateral.

             "Maximum Amount" means, as of any date of determination, the sum
   of (a) the Maximum Revolving Amount and (b) the then outstanding principal
   balance of the Term Loan.

             "Maximum Revolving Amount" means $9,000,000 less the then
   outstanding principal balance of the Term Loan.

             "Multiemployer Plan" means a "multiemployer plan" (as defined in
   Section 4001(a)(3) of ERISA) to which any Borrower, any of its
   Subsidiaries, or any ERISA Affiliate has contributed, or was obligated to
   contribute, within the past six years.

             "Negotiable Collateral" means, with respect to a Borrower, all
   of such Borrower's present and future letters of credit, notes, drafts,
   instruments, investment property, security entitlements, securities
   (including the shares of stock of Subsidiaries of such Borrower),
   documents, personal property leases (wherein such Borrower is the lessor),
   chattel paper, and such Borrower's Books relating to any of the foregoing.

             "Obligations" means all loans (including, without limitation,
   the Term Loan), Advances, debts, principal, interest (including any
   interest that, but for the provisions of the Bankruptcy Code, would have
   accrued), contingent reimbursement obligations under any outstanding
   Letters of Credit, premiums (including Early Termination Premiums),
   liabilities (including all amounts charged to Borrowers' Loan Account
   pursuant hereto), obligations, fees, charges, costs, or Foothill Expenses
   (including any fees or expenses that, but for the provisions of the
   Bankruptcy Code, would have accrued), lease payments, guaranties,
   covenants, and duties owing by any Borrower to Foothill of any kind and
   description (whether pursuant to or evidenced by the Loan Documents or
   pursuant to any other agreement between Foothill and any Borrower, and
   irrespective of whether for the payment of money), whether direct or
   indirect, absolute or contingent, due or to become due, now existing or
   hereafter arising, and including any debt, liability, or obligation owing
   from any Borrower to others that Foothill may have obtained by assignment
   or otherwise, and further including all interest not paid when due and all
   Foothill Expenses that any Borrower is required to pay or reimburse by the
   Loan Documents, by law, or otherwise.

             "Overadvance" has the meaning set forth in Section 2.5.

             "Pay-Off Letter" means a letter, in form and substance
   reasonably satisfactory to Foothill, from Existing Lender respecting the
   amount necessary to repay in full all of the obligations of Borrowers
   owing to Existing Lender and obtain a termination or release of all of the
   Liens existing in favor of Existing Lender in and to the properties or
   assets of each Borrower.

             "PBGC" means the Pension Benefit Guaranty Corporation as defined
   in Title IV of ERISA, or any successor thereto.

             "Permitted Liens" means (a) Liens held by Foothill, (b) Liens
   for unpaid taxes that either (i) are not yet due and payable or (ii) are
   the subject of Permitted Protests, (c) Liens set forth on Schedule P-1,
   (d) the interests of lessors under operating leases and purchase money
   Liens of lessors under capital leases to the extent that the acquisition
   or lease of the underlying asset occurs after the Closing Date and is
   permitted under Section 7.21 and so long as the Lien only attaches to the
   asset purchased or acquired and only secures the purchase price of the
   asset, (e) Liens arising by operation of law in favor of warehousemen,
   landlords, carriers, mechanics, materialmen, laborers, or suppliers,
   incurred in the ordinary course of business of any Borrower and not in
   connection with the borrowing of money, and which Liens either (i) are for
   sums not yet due and payable, or (ii) are the subject of Permitted
   Protests, (f) Liens arising from deposits made in connection with
   obtaining worker's compensation or other unemployment insurance, (g) Liens
   or deposits to secure performance of bids, tenders, or leases (to the
   extent permitted under this Agreement), incurred in the ordinary course of
   business of a Borrower and not in connection with the borrowing of money,
   (h) Liens arising by reason of security for surety or appeal bonds in the
   ordinary course of business of a Borrower, and (i) Liens of or resulting
   from any judgment or award that would not have a Material Adverse Effect
   and as to which the time for the appeal or petition for rehearing of which
   has not yet expired, or in respect of which a Borrower is in good faith
   prosecuting an appeal or proceeding for a review, and in respect of which
   a stay of execution pending such appeal or proceeding for review has been
   secured.

             "Permitted Protest" means the right of a Borrower to protest any
   Lien other than any such Lien that secures the Obligations, tax (other
   than payroll taxes or taxes that are the subject of a United States
   federal tax lien), or rental payment, provided that (a) a reserve with
   respect to such obligation is established on the books of such Borrower in
   an amount that is reasonably satisfactory to Foothill, (b) any such
   protest is instituted and diligently prosecuted by such Borrower in good
   faith, and (c) Foothill is satisfied that, while any such protest is
   pending, there will be no impairment of the enforceability, validity, or
   priority of any of the Liens of Foothill in and to the Collateral.

             "Person" means and includes natural persons, corporations,
   limited liability companies, limited partnerships, general partnerships,
   limited liability partnerships, joint ventures, trusts, land trusts,
   business trusts, or other organizations, irrespective of whether they are
   legal entities, and governments and agencies and political subdivisions
   thereof.

             "Plan" means any employee benefit plan, program, or arrangement
   maintained or contributed to by any Borrower or with respect to which it
   may incur liability.

             "Reference Rate" means the variable rate of interest, per annum,
   most recently announced by Norwest Bank Minnesota, National Association,
   or any successor thereto, as its "base rate," irrespective of whether such
   announced rate is the best rate available from such financial institution.

             "Renewal Date" has the meaning set forth in Section 3.4.

             "Reportable Event" means any of the events described in
   Section 4043(c) of ERISA or the regulations thereunder other than a
   Reportable Event as to which the provision of 30 days notice to the PBGC
   is waived under applicable regulations.

             "Retiree Health Plan" means an "employee welfare benefit plan"
   within the meaning of Section 3(1) of ERISA that provides benefits to
   individuals after termination of their employment, other than as required
   by Section 601 of ERISA.

             "Solvent" means, with respect to any Person on a particular
   date, that on such date (a) at fair valuations, all of the properties and
   assets of such Person are greater than the sum of the debts, including
   contingent liabilities, of such Person, (b) the present fair salable value
   of the properties and assets of such Person is not less than the amount
   that will be required to pay the probable liability of such Person on its
   debts as they become absolute and matured, (c) such Person is able to
   realize upon its properties and assets and pay its debts and other
   liabilities, contingent obligations and other commitments as they mature
   in the normal course of business, (d) such Person does not intend to, and
   does not believe that it will, incur debts beyond such Person's ability to
   pay as such debts mature, and (e) such Person is not engaged in business
   or a transaction, and is not about to engage in business or a transaction,
   for which such Person's properties and assets would constitute
   unreasonably small capital after giving due consideration to the
   prevailing practices in the industry in which such Person is engaged.  In
   computing the amount of contingent liabilities at any time, it is intended
   that such liabilities will be computed at the amount that, in light of all
   the facts and circumstances existing at such time, represents the amount
   that reasonably can be expected to become an actual or matured liability.

             "Stock Pledge Agreement" means that certain Stock Pledge
   Agreement of even date herewith between EMS and Foothill.

             "Subsidiary" of a Person means a corporation, partnership,
   limited liability company, or other entity in which that Person directly
   or indirectly owns or controls the shares of stock or other ownership
   interests having ordinary voting power to elect a majority of the board of
   directors (or appoint other comparable managers) of such corporation,
   partnership, limited liability company, or other entity.

             "Tangible Net Worth" means, as of any date of determination, the
   difference of (a) total stockholder's equity of Borrowers on a
   consolidated basis (exclusive of Total Management Systems, Inc., EMS-Asia
   Pacific Ltd., EMS of China Limited, EMS-Virgin Islands and EMS-Polska),
   minus (b) the sum of:  (i) all Intangible Assets of Borrowers, (ii) all of
   Borrowers' prepaid expenses, and (iii) all amounts due to Borrowers from
   Affiliates.  Schedule T-1 sets forth an example of the calculation of
   Tangible Net Worth based on Borrowers' projections for February 28, 1998.

             "Term Loan" has the meaning set forth in Section 2.3.

             "Trademark Security Agreement" means that certain Trademark
   Security Agreement of even date herewith between EMS and Foothill.

             "Voidable Transfer" has the meaning set forth in Section 15.8.

        1.2. Accounting Terms.

             All accounting terms not specifically defined herein shall be
   construed in accordance with GAAP.  When used herein, the term "financial
   statements" shall include the notes and schedules thereto.  Whenever the
   term "Borrower" is used in respect of a financial covenant or a related
   definition, it shall be understood to mean Borrowers on a consolidated
   basis unless the context clearly requires otherwise.

        1.3. Code.

             Any terms used in this Agreement that are defined in the Code
   shall be construed and defined as set forth in the Code unless otherwise
   defined herein.

        1.4. Construction.

             Unless the context of this Agreement clearly requires otherwise,
   references to the plural include the singular, references to the singular
   include the plural, the term "including" is not limiting, and the term
   "or" has, except where otherwise indicated, the inclusive meaning
   represented by the phrase "and/or."  The words "hereof," "herein,"
   "hereby," "hereunder," and similar terms in this Agreement refer to this
   Agreement as a whole and not to any particular provision of this
   Agreement.  An Event of Default shall "continue" or be "continuing" until
   such Event of Default has been waived in writing by Foothill.  Section,
   subsection, clause, schedule, and exhibit references are to this Agreement
   unless otherwise specified.  Any reference in this Agreement or in the
   Loan Documents to this Agreement or any of the Loan Documents shall
   include all alterations, amendments, changes, extensions, modifications,
   renewals, replacements, substitutions, and supplements, thereto and
   thereof, as applicable.

        1.5. Schedules and Exhibits.

             All of the schedules and exhibits attached to this Agreement
   shall be deemed incorporated herein by reference.

   2.   LOAN AND TERMS OF PAYMENT.

        2.1. Revolving Advances.

             (a)  Subject to the terms and conditions of this Agreement,
   Foothill agrees to make advances ("Advances") to Borrowers in an amount
   outstanding not to exceed at any one time the lesser of (i) the Maximum
   Revolving Amount less the outstanding balance of all undrawn or
   unreimbursed Letters of Credit, or (ii) the Borrowing Base less (A) the
   aggregate amount of all undrawn or unreimbursed Letters of Credit.  For
   purposes of this Agreement, "Borrowing Base", as of any date of
   determination, shall mean the result of:

                  (x)  the lesser of (i) 80% of Eligible Accounts of
             Borrowers, less the amount, if any, of the Dilution
             Reserve, and (ii) an amount equal to Borrowers' Collections
             with respect to Accounts of Borrowers for the immediately
             preceding 100 day period (provided, that such period may be
             adjusted for seasonality in Foothill's reasonable credit
             judgment), minus

                  (z)  the aggregate amount of reserves, if any,
             established by Foothill under Section 2.1(b).

             (b)  Anything to the contrary in Section 2.1(a) above
   notwithstanding, Foothill may create reserves against the Borrowing Base
   or reduce its advance rates based upon Eligible Accounts without declaring
   an Event of Default (i) for any amount subject to a Permitted Protest,
   (ii) for amounts owing to landlords or similar Persons that could assert a
   statutory lien in respect of any of the Collateral, (iii) if in Foothill's
   reasonable determination any of the equipment listed in the Leasetec
   Letter or in the Hewlett-Packard Letter is listed in the AccuVal
   Appraisal, and/or (iii) if it determines in its reasonable credit judgment
   that there has occurred a Material Adverse Change.  In addition to the
   foregoing reserves, Foothill shall establish an additional reserve of
   $1,500,000; provided, that upon satisfaction of the conditions subsequent
   set forth in Sections 3.3 (e), (f), (g) and (h), such reserve shall be
   reduced to $500,000, and upon satisfaction of the conditions set forth in
   Section 3.3(b) and (d), such reserve shall be reduced to zero. 
   Notwithstanding the additional reserve described in the preceding
   sentence, the failure of Borrowers to satisfy any of the conditions
   subsequent set forth in Section 3.3 within the time constraints set forth
   therein shall constitute an Event of Default as set forth therein, and
   Foothill reserves the right to take such action as a result of any such
   Event of Default as Foothill is permitted under the terms of the Loan
   Documents.

             (c)  Foothill shall have no obligation to make Advances
   hereunder to the extent they would cause the outstanding Obligations
   (other than under the Term Loan) to exceed the Maximum Revolving Amount.

             (d)  Amounts borrowed pursuant to this Section 2.1 may be repaid
   and, subject to the terms and conditions of this Agreement, reborrowed at
   any time during the term of this Agreement.

        2.2. Letters of Credit.

             (a)  Subject to the terms and conditions of this Agreement,
   Foothill agrees to issue letters of credit for the account of a Borrower
   (each, an "L/C") or to issue guarantees of payment (each such guaranty, an
   "L/C Guaranty") with respect to letters of credit issued by an issuing
   bank for the account of a Borrower.  Foothill shall have no obligation to
   issue a Letter of Credit if any of the following would result:

                  (i)  the aggregate amount of all undrawn and
             unreimbursed Letters of Credit, would exceed the Borrowing
             Base less the amount of outstanding Advances; or

                  (ii) the aggregate amount of all undrawn or
             unreimbursed Letters of Credit would exceed the lower of:
             (x) the Maximum Revolving Amount less the amount of
             outstanding Advances; or (y) $1,000,000; or

                  (iii)     the outstanding Obligations (other than
             under the Term Loan) would exceed the Maximum Revolving
             Amount.

   Each Borrower expressly understands and agrees that Foothill shall have no
   obligation to arrange for the issuance by issuing banks of the letters of
   credit that are to be the subject of L/C Guarantees.  Each Borrower and
   Foothill acknowledge and agree that certain of the letters of credit that
   are to be the subject of L/C Guarantees may be outstanding on the Closing
   Date.  Each Letter of Credit shall have an expiration date no later than
   60 days prior to the date on which this Agreement is scheduled to
   terminate under Section 3.4 (without regard to any potential renewal term)
   and all such Letters of Credit shall be in form and substance acceptable
   to Foothill in its sole discretion.  If Foothill is obligated to advance
   funds under a Letter of Credit, Borrowers immediately shall reimburse such
   amount to Foothill and, in the absence of such reimbursement, the amount
   so advanced immediately and automatically shall be deemed to be an Advance
   hereunder and, thereafter, shall bear interest at the rate then applicable
   to Advances under Section 2.6.

             (b)  Each Borrower hereby agrees to indemnify, save, defend, and
   hold Foothill harmless from any loss, cost, expense, or liability,
   including payments made by Foothill, expenses, and reasonable attorneys
   fees incurred by Foothill arising out of or in connection with any Letter
   of Credit.  Each Borrower agrees to be bound by the issuing bank's
   regulations and interpretations of any Letters of Credit guarantied by
   Foothill and opened to or for a Borrower's account or by Foothill's
   interpretations of any L/C issued by Foothill to or for a Borrower's
   account, even though this interpretation may be different from such
   Borrower's own, and each Borrower understands and agrees that Foothill
   shall not be liable for any error, negligence, or mistake, whether of
   omission or commission, in following any Borrower's instructions or those
   contained in the Letter of Credit or any modifications, amendments, or
   supplements thereto.  Each Borrower understands that the L/C Guarantees
   may require Foothill to indemnify the issuing bank for certain costs or
   liabilities arising out of claims by such Borrower against such issuing
   bank.  Each Borrower hereby agrees to indemnify, save, defend, and hold
   Foothill harmless with respect to any loss, cost, expense (including
   reasonable attorneys fees), or liability incurred by Foothill under any
   L/C Guaranty as a result of Foothill's indemnification of any such issuing
   bank. 

             (c)  Each Borrower hereby authorizes and directs any bank that
   issues a letter of credit guaranteed by Foothill to deliver to Foothill
   all instruments, documents, and other writings and property received by
   the issuing bank pursuant to such letter of credit, and to accept and rely
   upon Foothill's instructions and agreements with respect to all matters
   arising in connection with such letter of credit and the related
   application.  Such Borrower may or may not be the "applicant" or "account
   party" with respect to such letter of credit.

             (d)  Any and all charges, commissions, fees, and costs incurred
   by Foothill relating to the letters of credit guaranteed by Foothill shall
   be considered Foothill Expenses for purposes of this Agreement and
   immediately shall be reimbursable by Borrowers to Foothill.

             (e)  Immediately upon the termination of this Agreement,
   Borrowers agree to either (i) provide cash collateral to be held by
   Foothill in an amount equal to 102% of the maximum amount of Foothill's
   obligations under Letters of Credit, or (ii) cause to be delivered to
   Foothill releases of all of Foothill's obligations under outstanding
   Letters of Credit.  At Foothill's discretion, any proceeds of Collateral
   of Borrowers received by Foothill after the occurrence and during the
   continuation of an Event of Default may be held as the cash collateral
   required by this Section 2.2(e).

             (f)  If by reason of (i) any change in any applicable law,
   treaty, rule, or regulation or any change in the interpretation or
   application by any governmental authority of any such applicable law,
   treaty, rule, or regulation, or (ii) compliance by the issuing bank or
   Foothill with any direction, request, or requirement (irrespective of
   whether having the force of law) of any governmental authority or monetary
   authority including, without limitation, Regulation D of the Board of
   Governors of the Federal Reserve System as from time to time in effect
   (and any successor thereto):

                       (A)  any reserve, deposit, or similar requirement
                  is or shall be imposed or modified in respect of any
                  Letters of Credit issued hereunder, or

                       (B)  there shall be imposed on the issuing bank
                  or Foothill any other condition regarding any letter
                  of credit, or Letter of Credit, as applicable, issued
                  pursuant hereto;

   and the result of the foregoing is to increase, directly or indirectly,
   the cost to the issuing bank or Foothill of issuing, making, guaranteeing,
   or maintaining any letter of credit, or Letter of Credit, as applicable,
   or to reduce the amount receivable in respect thereof by such issuing bank
   or Foothill, then, and in any such case, Foothill may, at any time within
   a reasonable period after the additional cost is incurred or the amount
   received is reduced, notify Borrowers, and Borrowers shall pay on demand
   such amounts as the issuing bank or Foothill may specify to be necessary
   to compensate the issuing bank or Foothill for such additional cost or
   reduced receipt, together with interest on such amount from the date of
   such demand until payment in full thereof at the rate set forth in
   Section 2.6(a)(i) or (c)(i), as applicable.  The determination by the
   issuing bank or Foothill, as the case may be, of any amount due pursuant
   to this Section 2.2(f), as set forth in a certificate setting forth the
   calculation thereof in reasonable detail, shall, in the absence of
   manifest or demonstrable error, be final and conclusive and binding on all
   of the parties hereto.

        2.3. Term Loan.

             Foothill has agreed to make a term loan (the "Term Loan") to
   Borrowers in the original principal amount of $3,112,500, consisting of an
   advance of $3,000,000 and the closing fee of $112,500 described in
   Section 2.11(b).  The Term Loan shall be repaid in 36 installments of
   principal each in the amount of $64,843.75 (except for the last such
   installment which shall be in the amount of the unpaid principal balance
   of the Term Loan).  Each such installment shall be due and payable on the
   tenth day of each month commencing on the tenth day of February, 1998 and
   continuing on the tenth day of each succeeding month, and the final
   payment shall be on the third anniversary of the Closing Date.  In
   addition to the foregoing, Borrowers shall make prepayments of principal
   of the Term Loan such that at all times the outstanding principal balance
   of the Term Loan is less than the Applicable Maintenance Revenue Amount. 
   The outstanding principal balance and all accrued and unpaid interest
   under the Term Loan shall be due and payable upon the termination of this
   Agreement, whether by its terms, by prepayment, by acceleration, or
   otherwise.  The unpaid principal balance of the Term Loan may be prepaid
   in whole or in part without penalty or premium at any time during the term
   of this Agreement upon 30 days prior written notice by Borrowers to
   Foothill.  All prepayments of principal of the Term Loan shall be applied
   to the installments due on the Term Loan in the inverse order of their
   maturity.  All amounts outstanding under the Term Loan shall constitute
   Obligations.

        2.4. Intentionally Omitted.

        2.5. Overadvances.

             If, at any time or for any reason, the amount of Obligations
   owed by Borrowers to Foothill pursuant to Sections 2.1 and 2.2 is greater
   than either the Dollar or percentage limitations set forth in Sections 2.1
   and 2.2 (an "Overadvance"), Borrowers immediately shall pay to Foothill,
   in cash, the amount of such excess to be used by Foothill first, to repay
   Advances outstanding under Section 2.1 and, thereafter, to be held by
   Foothill as cash collateral to secure Borrowers' obligation to repay
   Foothill for all amounts paid pursuant to Letters of Credit.

        2.6. Interest and Letter of Credit Fees:  Rates, Payments, and
             Calculations.

             (a)  Interest Rate.  Except as provided in clause (b) below,
   (i) all Obligations (except for undrawn Letters of Credit and the Term
   Loan) shall bear interest at a per annum rate of 0.75 percentage points
   above the Reference Rate and (ii) the Term Loan shall bear interest at a
   per annum fixed rate of 13.5%.

             (b)  Letter of Credit Fee.  Borrowers shall pay Foothill a fee
   (in addition to the charges, commissions, fees, and costs set forth in
   Section 2.2(d)) equal to 1.00% per annum times the aggregate undrawn
   amount of all outstanding Letters of Credit.

             (c)  Default Rate.  Upon the occurrence and during the
   continuation of an Event of Default, (i) all Obligations (except for
   undrawn Letters of Credit and the Term Loan) shall bear interest at a per
   annum rate equal to 4.75% above the Reference Rate, (ii) the Term Loan
   shall bear interest at a per annum fixed rate equal to 17.5%, and
   (iii) the Letter of Credit fee provided in Section 2.6(b) shall be
   increased to 5% per annum times the amount of the undrawn Letters of
   Credit that were outstanding during the immediately preceding month.

             (d)  Minimum Interest.  In no event shall the rate of interest
   chargeable hereunder for any day be less than 7% per annum.  To the extent
   that interest accrued hereunder at the rate set forth herein would be less
   than the foregoing minimum daily rate, the interest rate chargeable
   hereunder for such day automatically shall be deemed increased to the
   minimum rate.  To the extent that interest accrued hereunder at the rate
   set forth herein (including the minimum interest rate) would yield less
   than the foregoing minimum amount, the interest rate chargeable hereunder
   for the period in question automatically shall be deemed increased to that
   rate that would result in the minimum amount of interest being accrued and
   payable hereunder.

             (e)  Payments.  Interest and Letter of Credit fees payable
   hereunder shall be due and payable, in arrears, on the first day of each
   month during the term hereof.  Each Borrower hereby authorizes Foothill,
   at its option, without prior notice to any Borrower, to charge such
   interest and Letter of Credit fees, all Foothill Expenses (as and when
   incurred), the charges, commissions, fees, and costs provided for in
   Section 2.2(d) (as and when accrued or incurred), the fees and charges
   provided for in Section 2.11 (as and when accrued or incurred), and all
   installments or other payments due under the Term Loan, or any Loan
   Document to Borrowers' Loan Account, which amounts thereafter shall accrue
   interest at the rate then applicable to Advances hereunder.  Any interest
   not paid when due shall be compounded and shall thereafter accrue interest
   at the rate then applicable to Advances hereunder.

             (f)  Computation.  The Reference Rate as of the date of this
   Agreement is 8.5% per annum.  In the event the Reference Rate is changed
   from time to time hereafter, the applicable rate of interest hereunder
   automatically and immediately shall be increased or decreased by an amount
   equal to such change in the Reference Rate.  All interest and fees
   chargeable under the Loan Documents shall be computed on the basis of a
   360 day year for the actual number of days elapsed.

             (g)  Intent to Limit Charges to Maximum Lawful Rate.  In no
   event shall the interest rate or rates payable under this Agreement, plus
   any other amounts paid in connection herewith, exceed the highest rate
   permissible under any law that a court of competent jurisdiction shall, in
   a final determination, deem applicable.  Each Borrower and Foothill, in
   executing and delivering this Agreement, intend legally to agree upon the
   rate or rates of interest and manner of payment stated within it;
   provided, however, that, anything contained herein to the contrary
   notwithstanding, if said rate or rates of interest or manner of payment
   exceeds the maximum allowable under applicable law, then, ipso facto as of
   the date of this Agreement, Borrowers are and shall be liable only for the
   payment of such maximum as allowed by law, and payment received from any
   Borrower in excess of such legal maximum, whenever received, shall be
   applied to reduce the principal balance of the Obligations to the extent
   of such excess.

        2.7. Collection of Accounts.

             Borrowers shall at all times maintain lockboxes (the
   "Lockboxes") and, immediately after the Closing Date, shall instruct all
   Account Debtors with respect to the Accounts, General Intangibles, and
   Negotiable Collateral of Borrowers to remit all Collections in respect
   thereof to such Lockboxes.  Borrowers, Foothill, and the Lockbox Banks
   shall enter into the Lockbox Agreements, which among other things shall
   provide for the opening of a Lockbox Account for the deposit of
   Collections at a Lockbox Bank.  Borrowers agree that all Collections and
   other amounts received by any Borrower from any Account Debtor or any
   other source immediately upon receipt shall be deposited into a Lockbox
   Account.  No Lockbox Agreement or arrangement contemplated thereby shall
   be modified by any Borrower without the prior written consent of
   Foothill.  Upon the terms and subject to the conditions set forth in the
   Lockbox Agreements, all amounts received in each Lockbox Account shall be
   wired each Business Day into an account (the "Foothill Account")
   maintained by Foothill at a depository selected by Foothill.

        2.8. Crediting Payments; Application of Collections.

             The receipt of any Collections by Foothill (whether from
   transfers to Foothill by the Lockbox Banks pursuant to the Lockbox
   Agreements or otherwise) immediately shall be applied provisionally to
   reduce the Obligations outstanding under Section 2.1, but shall not be
   considered a payment on account unless such Collection item is a wire
   transfer of immediately available federal funds and is made to the
   Foothill Account or unless and until such Collection item is honored when
   presented for payment.  From and after the Closing Date, Foothill shall be
   entitled to charge Borrowers for 2 Business Days of `clearance' or `float'
   at the rate set forth in Section 2.6(a)(i) or Section 2.6(c)(i), as
   applicable, on all Collections that are received by Foothill (regardless
   of whether forwarded by the Lockbox Banks to Foothill, whether
   provisionally applied to reduce the Obligations under Section 2.1, or
   otherwise).  This across-the-board 2 Business Day clearance or float
   charge on all Collections is acknowledged by the parties to constitute an
   integral aspect of the pricing of Foothill's financing of Borrowers, and
   shall apply irrespective of the characterization of whether receipts are
   owned by any Borrower or Foothill, and whether or not there are any
   outstanding Advances, the effect of such clearance or float charge being
   the equivalent of charging 2 Business Days of interest on such
   Collections.  Should any Collection item not be honored when presented for
   payment, then Borrowers shall be deemed not to have made such payment, and
   interest shall be recalculated accordingly.  Anything to the contrary
   contained herein notwithstanding, any Collection item shall be deemed
   received by Foothill only if it is received into the Foothill Account on a
   Business Day on or before 11:00 a.m. California time.  If any Collection
   item is received into the Foothill Account on a non-Business Day or after
   11:00 a.m. California time on a Business Day, it shall be deemed to have
   been received by Foothill as of the opening of business on the immediately
   following Business Day.

        2.9. Designated Account.

             Foothill is authorized to make the Advances, the Letters of
   Credit and the Term Loan under this Agreement based upon telephonic or
   other instructions received from anyone purporting to be an Authorized
   Person, or without instructions if pursuant to Section 2.6(e).  Borrowers
   agree to establish and maintain the Designated Account with the Designated
   Account Bank for the purpose of receiving the proceeds of the Advances
   requested by any Borrower and made by Foothill hereunder.  Unless
   otherwise agreed by Foothill and Borrowers, any Advance requested by any
   Borrower and made by Foothill hereunder shall be made to the Designated
   Account.

        2.10.     Maintenance of Loan Account; Statements of Obligations.

             Foothill shall maintain an account on its books in the name of
   Borrowers (the "Loan Account") on which Borrowers will be charged with all
   Advances made by Foothill to any Borrower or for Borrowers' account,
   including, accrued interest, Foothill Expenses, and any other payment
   Obligations of any Borrower.  In accordance with Section 2.8, the Loan
   Account will be credited with all payments received by Foothill from any
   Borrower or for Borrowers' account, including all amounts received in the
   Foothill Account from any Lockbox Bank.  Foothill shall render statements
   regarding the Loan Account to Borrowers, including principal, interest,
   fees, and including an itemization of all charges and expenses
   constituting Foothill Expenses owing, and such statements shall be
   conclusively presumed to be correct and accurate and constitute an account
   stated between Borrowers and Foothill unless, within 30 days after receipt
   thereof by Borrowers, Borrowers shall deliver to Foothill written
   objection thereto describing the error or errors contained in any such
   statements.

        2.11.     Fees.

             Borrowers shall pay to Foothill the following fees:

             (a)  Closing Fee.  A closing fee of $112,500 (which amount has
   been added to the Term Loan and will be paid as part of the amortization
   of the Term Loan);

             (b)  Unused Line Fee.  On the first day of each month during the
   term of this Agreement, an unused line fee in an amount equal to 0.50% per
   annum times the Average Unused Portion of the Maximum Revolving Amount.

             (c)  Financial Examination, Documentation, and Appraisal Fees. 
   Foothill's customary fee of $650 per day per examiner, plus out-of-pocket
   expenses for each financial analysis and examination (i.e., audits) of
   Borrowers performed by personnel employed by Foothill; provided, that so
   long as no Event of Default exists, Borrowers shall not be liable for more
   than 20 days of examination fees in any fiscal year; Foothill's customary
   appraisal fee of $1,500 per day per appraiser, plus out-of-pocket expenses
   for each appraisal of the Collateral performed by personnel employed by
   Foothill (provided, that so long as no Event of Default exists, Borrowers
   shall not be liable for any appraisal fees incurred by Foothill after the
   date hereof); and, the actual charges paid or incurred by Foothill if it
   elects to employ the services of one or more third Persons to perform such
   financial analyses and examinations (i.e., audits) of Borrowers or to
   appraise the Collateral; and, on each anniversary of the Closing Date,
   Foothill's customary fee of $1,000 per year for its loan documentation
   review; and

             (d)  Servicing Fee.  On the first day of each month during the
   term of this Agreement, and thereafter so long as any Obligations are
   outstanding, a servicing fee in an amount equal to $2,000 per month.

   3.   CONDITIONS; TERM OF AGREEMENT.

        3.1. Conditions Precedent to the Initial Advance, Letter of Credit,
             the Term Loan, and the Initial Capital Expenditure Loan.

             The obligation of Foothill to make the initial Advance, to issue
   the initial Letter of Credit or to make the Term Loan is subject to the
   fulfillment, to the satisfaction of Foothill and its counsel, of each of
   the following conditions on or before the Closing Date:

             (a)  the Closing Date shall occur on or before December 30,
   1997;

             (b)  Foothill shall have received searches reflecting the filing
   of its financing statements and fixture filings and each Borrower;

             (c)  Foothill shall have received each of the following
   documents, duly executed, and each such document shall be in full force
   and effect:

                  (i)  the Lockbox Agreements;

                  (ii) the Disbursement Letter;

                  (iii)     the Pay-Off Letter, together with UCC
             termination statements and other documentation evidencing
             the termination by Existing Lender of its Liens in and to
             the properties and assets of all Borrowers; and

                  (iv) the Copyright Security Agreement, the Trademark
             Security Agreement and the Stock Pledge Agreement.

             (d)  Foothill shall have received a certificate from the
   Secretary of each Borrower attesting to the resolutions of such Borrower's
   Board of Directors authorizing its execution, delivery, and performance of
   this Agreement and the other Loan Documents to which such Borrower is a
   party and authorizing specific officers of Borrower to execute the same;

             (e)  Foothill shall have received copies of each Borrower's
   Governing Documents, as amended, modified, or supplemented to the Closing
   Date, certified by the Secretary of such Borrower;

             (f)  Foothill shall have received a certificate of status with
   respect to each Borrower, dated within 10 days of the Closing Date, such
   certificate to be issued by the appropriate officer of the jurisdiction of
   organization of such Borrower, which certificate shall indicate that such
   Borrower is in good standing in such jurisdiction;

             (g)  Foothill shall have received certificates of status with
   respect to each Borrower, each dated within 15 days of the Closing Date,
   such certificates to be issued by the appropriate officer of the
   jurisdictions in which its failure to be duly qualified or licensed would
   constitute a Material Adverse Change, which certificates shall indicate
   that such Borrower is in good standing in such jurisdictions;

             (h)  Foothill shall have received a certificate of insurance,
   together with the endorsements thereto, as are required by Section 6.10,
   the form and substance of which shall be satisfactory to Foothill and its
   counsel;

             (i)  Foothill shall have received duly executed certificates of
   title with respect to that portion of the Collateral that is subject to
   certificates of title;

             (j)  Foothill shall have received such Collateral Access
   Agreements from lessors, warehousemen, bailees, and other third persons as
   Foothill may require;

             (k)  Foothill shall have received an opinion of Borrowers'
   counsel in form and substance satisfactory to Foothill in its sole
   discretion;

             (l)  Borrowers shall have registered all material copyrights and
   other intellectual property with the appropriate federal filing office;

             (m)  Foothill shall have received background searches of the
   officers of Borrowers and be satisfied with the results thereof;

             (n)  Foothill shall have received satisfactory evidence that all
   tax returns required to be filed by each Borrower have been timely filed
   and all taxes upon each Borrower or its properties, assets, income, and
   franchises (including real property taxes and payroll taxes) have been
   paid prior to delinquency, except such taxes that are the subject of a
   Permitted Protest; and

             (o)  all other documents and legal matters in connection with
   the transactions contemplated by this Agreement shall have been delivered,
   executed, or recorded and shall be in form and substance satisfactory to
   Foothill and its counsel.

        3.2. Conditions Precedent to all Advances, all Letters of Credit and
             the Term Loan.

             The following shall be conditions precedent to all Advances, all
   Letters of Credit and the Term Loan hereunder:

             (a)  the representations and warranties contained in this
   Agreement and the other Loan Documents shall be true and correct in all
   material respects on and as of the date of such extension of credit, as
   though made on and as of such date (except to the extent that such
   representations and warranties relate solely to an earlier date); 

             (b)  no Default or Event of Default shall have occurred and be
   continuing on the date of such extension of credit, nor shall either
   result from the making thereof; and

             (c)  no injunction, writ, restraining order, or other order of
   any nature prohibiting, directly or indirectly, the extending of such
   credit shall have been issued and remain in force by any governmental
   authority against any Borrower, Foothill, or any of their Affiliates.

        3.3. Condition Subsequent.

             As a condition subsequent to initial closing hereunder,
   Borrowers shall perform or cause to be performed the following (the
   failure by Borrowers to so perform or cause to be performed constituting
   an Event of Default):

             (a)  within 30 days of the Closing Date, deliver to Foothill the
   certified copies of the policies of insurance, together with the
   endorsements thereto, as are required by Section 6.10, the form and
   substance of which shall be satisfactory to Foothill and its counsel;

             (b)  within 10 days of the Closing Date, deliver to Foothill a
   landlord waiver, in form and substance satisfactory to Foothill, executed
   by the landlord of the leased premises commonly known as 12000 West Park
   Place, Milwaukee, Wisconsin, and within 30 days of the Closing Date,
   deliver to Foothill landlord waivers in form and substance satisfactory to
   Foothill, executed by the landlords of the leased premises commonly known
   as 100 Foxborough Boulevard, Suite 230, Foxborough, Massachusetts, 1771
   West Diehl Road, Suite 120, Naperville, Illinois and 501 East Highway 12,
   Burnsville, Minnesota;

             (c)  within 15 days of the Closing Date, either deliver to
   Foothill a lockbox agreement in form and substance satisfactory to
   Foothill, executed by Old Second Bank of Aurora or replace the existing
   lockbox arrangement with Old Second Bank of Aurora with a lockbox
   arrangement satisfactory to Foothill;

             (d)  within 10 days of the Closing Date, deliver to Foothill all
   of the original stock certificates of Total Management Systems, Inc.
   evidencing EMS's ownership thereof;

             (e)  within 20 days of the Closing Date, deliver to Foothill UCC
   termination statements executed by each of International Business Machines
   Corporation and Digital Equipment Corporation with respect to UCC
   financing statement number 1502166 (dated April 19, 1995) filed with the
   Secretary of State of Wisconsin and UCC financing statement number 1380462
   (dated September 20, 1993) filed with the Secretary of State of Wisconsin,
   respectively;

             (f)  within 20 days of the Closing Date, deliver a letter (the
   "Leasetec Letter") executed by Leasetec Corporation, certifying that its
   security interest in any of the property of Borrowers is limited to the
   equipment specified in such letter;

             (g)  within 20 days of the Closing Date, deliver a letter (the
   "Hewlett-Packard Letter") executed by Hewlett-Packard Company, certifying
   that its security interest in any of the property of Borrowers is limited
   to the equipment specified in such letter; and

             (h)  within 30 days of the Closing Date, registration numbers
   for the TCM and FactoryNet copyrights filed by EMS with the Copyright
   Office.

        3.4. Term; Automatic Renewal.

             This Agreement shall become effective upon the execution and
   delivery hereof by Borrowers and Foothill and shall continue in full force
   and effect for a term ending on the date (the "Renewal Date") that is
   three years from the Closing Date and automatically shall be renewed for
   successive one year periods thereafter, unless sooner terminated pursuant
   to the terms hereof.  Either Borrowers or Foothill may terminate this
   Agreement effective on the Renewal Date or on any one year anniversary of
   the Renewal Date by giving the other parties at least 90 days prior
   written notice.  The foregoing notwithstanding, Foothill shall have the
   right to terminate its obligations under this Agreement immediately and
   without notice upon the occurrence and during the continuation of an Event
   of Default.

        3.5. Effect of Termination.

             On the date of termination of this Agreement, all Obligations
   (including contingent reimbursement obligations of Borrowers with respect
   to any outstanding Letters of Credit) immediately shall become due and
   payable without notice or demand.  No termination of this Agreement,
   however, shall relieve or discharge Borrowers of their duties,
   Obligations, or covenants hereunder, and Foothill's continuing security
   interests in the Collateral shall remain in effect until all Obligations
   have been fully and finally discharged and Foothill's obligation to
   provide additional credit hereunder is terminated.  If any Borrower has
   sent a notice of termination pursuant to the provisions of Section 3.4,
   but Borrowers fail to pay the Obligations in full on the date set forth in
   said notice, then Foothill may, but shall not be required to, renew this
   Agreement for an additional term of one year.

        3.6. Early Termination by Borrower.

             The provisions of Section 3.4 that allow termination of this
   Agreement by Borrowers only on the Renewal Date and certain anniversaries
   thereof notwithstanding, Borrowers have the option, at any time upon 90
   days prior written notice to Foothill, to terminate this Agreement by
   paying to Foothill, in cash, the Obligations (including an amount equal to
   102% of the undrawn amount of the Letters of Credit), in full, together
   with a premium (the "Early Termination Premium") equal to (a) 3% of the
   Maximum Amount if such termination occurs on or before the first
   anniversary of the date hereof, (b) 2% of the Maximum Amount if such
   termination occurs after the first anniversary of the date hereof but on
   or before the second anniversary of the date hereof and (c) 1% of the
   Maximum Amount if such termination occurs after the second anniversary of
   the date hereof but before the third anniversary of the date hereof;
   provided, that if Borrowers refinance the facility provided for under this
   Agreement after the eighteen month anniversary of the date hereof with
   Norwest Bank, N.A. or any of its subsidiaries, the Early Termination
   Premium will be waived by Foothill.

        3.7. Termination Upon Event of Default.

             If Foothill terminates this Agreement upon the occurrence of an
   Event of Default, in view of the impracticability and extreme difficulty
   of ascertaining actual damages and by mutual agreement of the parties as
   to a reasonable calculation of Foothill's lost profits as a result
   thereof, Borrowers shall pay to Foothill upon the effective date of such
   termination, a premium in an amount equal to the Early Termination
   Premium.  The Early Termination Premium shall be presumed to be the amount
   of damages sustained by Foothill as the result of the early termination
   and Borrowers agree that it is reasonable under the circumstances
   currently existing.  The Early Termination Premium provided for in this
   Section 3.7 shall be deemed included in the Obligations.

   4.   CREATION OF SECURITY INTEREST.

        4.1. Grant of Security Interest.

             Each Borrower hereby grants to Foothill a continuing security
   interest in all currently existing and hereafter acquired or arising
   Collateral of such Borrower in order to secure prompt repayment of any and
   all Obligations and in order to secure prompt performance by each Borrower
   of each of its covenants and duties under the Loan Documents.  Foothill's
   security interests in the Collateral shall attach to all Collateral
   without further act on the part of Foothill or any Borrower.  Anything
   contained in this Agreement or any other Loan Document to the contrary
   notwithstanding, except for the sale of Inventory to buyers in the
   ordinary course of business and as permitted under Section 7.4, no
   Borrower has any authority, express or implied, to dispose of any item or
   portion of the Collateral.

        4.2. Negotiable Collateral.

             In the event that any Collateral, including proceeds, is
   evidenced by or consists of Negotiable Collateral, Borrowers, immediately
   upon the request of Foothill, shall endorse and deliver physical
   possession of such Negotiable Collateral to Foothill.

        4.3. Collection of Accounts, General Intangibles, and Negotiable
             Collateral.

             At any time, Foothill or Foothill's designee may after the
   occurrence of an Event of Default, (a) notify customers or Account Debtors
   of a Borrower that the Accounts, General Intangibles, or Negotiable
   Collateral have been assigned to Foothill or that Foothill has a security
   interest therein, and (b) collect the Accounts, General Intangibles, and
   Negotiable Collateral directly and charge the collection costs and
   expenses to the Loan Account.  Each Borrower agrees that it will hold in
   trust for Foothill, as Foothill's trustee, any Collections that it
   receives and immediately will deliver said Collections to Foothill in
   their original form as received by such Borrower.

        4.4. Delivery of Additional Documentation Required.

             At any time upon the request of Foothill, each Borrower shall
   execute and deliver to Foothill all financing statements, continuation
   financing statements, fixture filings, security agreements, pledges,
   assignments, endorsements of certificates of title, applications for
   title, affidavits, reports, notices, schedules of accounts, letters of
   authority, and all other documents that Foothill reasonably may request,
   in form satisfactory to Foothill, to perfect and continue perfected
   Foothill's security interests in the Collateral, and in order to fully
   consummate all of the transactions contemplated hereby and under the other
   the Loan Documents.

        4.5. Power of Attorney.

             Each Borrower hereby irrevocably makes, constitutes, and
   appoints Foothill (and any of Foothill's officers, employees, or agents
   designated by Foothill) as such Borrower's true and lawful attorney, with
   power to (a) if any Borrower refuses to, or fails timely to execute and
   deliver any of the documents described in Section 4.4, sign the name of
   such Borrower on any of the documents described in Section 4.4, (b) at any
   time that an Event of Default has occurred and is continuing or Foothill
   deems itself insecure in its reasonable credit judgment, sign such
   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, (c) send
   requests for verification of Accounts, (d) endorse such Borrower's name on
   any Collection item that may come into Foothill's possession, (e) at any
   time that an Event of Default has occurred and is continuing or Foothill
   deems itself insecure in its reasonable credit judgment, notify the post
   office authorities to change the address for delivery of such Borrower's
   mail to an address designated by Foothill, to receive and open all mail
   addressed to such Borrower, and to retain all mail relating to the
   Collateral and forward all other mail to such Borrower, (f) at any time
   that an Event of Default has occurred and is continuing or Foothill deems
   itself insecure in its reasonable credit judgment, make, settle, and
   adjust all claims under such Borrower's policies of insurance and make all
   determinations and decisions with respect to such policies of insurance,
   and (g) at any time that an Event of Default has occurred and is
   continuing or Foothill deems itself insecure in its reasonable credit
   judgment, settle and adjust disputes and claims respecting the Accounts
   directly with Account Debtors, for amounts and upon terms that Foothill
   determines to be reasonable, and Foothill may cause to be executed and
   delivered any documents and releases that Foothill determines to be
   necessary.  The appointment of Foothill as each Borrower's attorney, and
   each and every one of Foothill's rights and powers, being coupled with an
   interest, is irrevocable until all of the Obligations have been fully and
   finally repaid and performed and Foothill's obligation to extend credit
   hereunder is terminated.

        4.6. Right to Inspect.

             Foothill (through any of its officers, employees, or agents)
   shall have the right, from time to time hereafter to inspect each
   Borrower's Books and to check, test, and appraise the Collateral in order
   to verify each Borrower's financial condition or the amount, quality,
   value, condition of, or any other matter relating to, the Collateral.

   5.   REPRESENTATIONS AND WARRANTIES.

             In order to induce Foothill to enter into this Agreement, each
   Borrower makes the following representations and warranties which shall be
   true, correct, and complete in all respects as of the date hereof, and
   shall be true, correct, and complete in all respects as of the Closing
   Date, and at and as of the date of the making of each Advance, Letter of
   Credit or Term Loan made thereafter, as though made on and as of the date
   of such Advance, Letter of Credit or Term Loan (except to the extent that
   such representations and warranties relate solely to an earlier date) and
   such representations and warranties shall survive the execution and
   delivery of this Agreement:

        5.1. No Encumbrances.

             Each Borrower has good and indefeasible title to its respective
   Collateral, free and clear of Liens except for Permitted Liens.

        5.2. Eligible Accounts.

             The Eligible Accounts of each Borrower are bona fide existing
   obligations created by the sale and delivery of Inventory or the rendition
   of services to Account Debtors in the ordinary course of such Borrower's
   business, unconditionally owed to such Borrower without defenses,
   disputes, offsets, counterclaims, or rights of return or cancellation. 
   The property giving rise to such Eligible Accounts has been delivered to
   the Account Debtor, or to the Account Debtor's agent for immediate
   shipment to and unconditional acceptance by the Account Debtor.  No
   Borrower has received notice of actual or imminent bankruptcy, insolvency,
   or material impairment of the financial condition of any Account Debtor
   regarding any Eligible Account.

        5.3. Intentionally Omitted.

        5.4. Equipment.

             All of the Equipment of each Borrower is used or held for use in
   such Borrower's respective business and is fit for such purposes.

        5.5. Location of Inventory and Equipment.

             The Inventory and Equipment are not stored with a bailee,
   warehouseman, or similar party (without Foothill's prior written consent)
   and are located only at the locations identified on Schedule 6.12 or
   otherwise permitted by Section 6.12.

        5.6. Inventory Records.

             Each Borrower keeps correct and accurate records itemizing and
   describing the kind, type, quality, and quantity of the Inventory, and
   such Borrower's cost therefor.

        5.7. Location of Chief Executive Office; FEIN.

             The address of each Borrower 's chief executive office and FEIN
   is as set forth on Schedule 5.7.

        5.8. Due Organization and Qualification; Subsidiaries.

             (a)  Each Borrower is duly organized and existing and in good
   standing under the laws of the jurisdiction of its incorporation and
   qualified and licensed to do business in, and in good standing in, any
   state where the failure to be so licensed or qualified reasonably could be
   expected to have a Material Adverse Change. 

             (b)  Set forth on Schedule 5.8, is a complete and accurate list
   of each Borrower's direct and indirect Subsidiaries, showing: (i) the
   jurisdiction of their incorporation; (ii) the number of shares of each
   class of common and preferred stock authorized for each of such
   Subsidiaries; and (iii) the number and the percentage of the outstanding
   shares of each such class owned directly or indirectly by such Borrower. 
   All of the outstanding capital stock of each such Subsidiary has been
   validly issued and is fully paid and non-assessable.

             (c)  Except as set forth on Schedule 5.8, no capital stock (or
   any securities, instruments, warrants, options, purchase rights,
   conversion or exchange rights, calls, commitments or claims of any
   character convertible into or exercisable for capital stock) of any direct
   or indirect Subsidiary of any Borrower is subject to the issuance of any
   security, instrument, warrant, option, purchase right, conversion or
   exchange right, call, commitment or claim of any right, title, or interest
   therein or thereto.

        5.9. Due Authorization; No Conflict.

             (a)  The execution, delivery, and performance by each Borrower
   of this Agreement and the Loan Documents to which it is a party have been
   duly authorized by all necessary corporate action.

             (b)  The execution, delivery, and performance by each Borrower
   of this Agreement and the Loan Documents to which it is a party do not and
   will not (i) violate any provision of federal, state, or local law or
   regulation (including Regulations G, T, U, and X of the Federal Reserve
   Board) applicable to such Borrower, the Governing Documents of such
   Borrower, or any order, judgment, or decree of any court or other
   Governmental Authority binding on such Borrower, (ii) conflict with,
   result in a breach of, or constitute (with due notice or lapse of time or
   both) a default under any material contractual obligation or material
   lease of such Borrower, (iii) result in or require the creation or
   imposition of any Lien of any nature whatsoever upon any properties or
   assets of such Borrower, other than Permitted Liens, or (iv) require any
   approval of stockholders or any approval or consent of any Person under
   any material contractual obligation of such Borrower.

             (c)  Other than the filing of appropriate financing statements,
   fixture filings, and mortgages, the execution, delivery, and performance
   by each Borrower of this Agreement and the Loan Documents to which such
   Borrower is a party do not and will not require any registration with,
   consent, or approval of, or notice to, or other action with or by, any
   federal, state, foreign, or other Governmental Authority or other Person.

             (d)  This Agreement and the Loan Documents to which each
   Borrower is a party, and all other documents contemplated hereby and
   thereby, when executed and delivered by such Borrower will be the legally
   valid and binding obligations of such Borrower, enforceable against such
   Borrower in accordance with their respective terms, except as enforcement
   may be limited by equitable principles or by bankruptcy, insolvency,
   reorganization, moratorium, or similar laws relating to or limiting
   creditors' rights generally.

             (e)  The Liens granted by each Borrower to Foothill in and to
   its properties and assets pursuant to this Agreement and the other Loan
   Documents are validly created, perfected, and first priority Liens,
   subject only to Permitted Liens.

        5.10.     Litigation.

             There are no actions or proceedings pending by or against any
   Borrower before any court or administrative agency and none of the
   Borrowers has knowledge or belief of any pending, threatened, or imminent
   litigation, governmental investigations, or claims, complaints, actions,
   or prosecutions involving any Borrower or any guarantor of the
   Obligations, except for:  (a) ongoing collection matters in which any
   Borrower is the plaintiff; (b) matters disclosed on Schedule 5.10; and
   (c) matters arising after the date hereof that, if decided adversely to
   any Borrower, would not have a Material Adverse Change. 

        5.11.     No Material Adverse Change.

             All financial statements relating to each Borrower or any
   guarantor of the Obligations that have been delivered by such Borrower to
   Foothill have been prepared in accordance with GAAP (except, in the case
   of unaudited financial statements, for the lack of footnotes and being
   subject to year-end audit adjustments) and fairly present such Borrower's
   (or such guarantor's, as applicable) financial condition as of the date
   thereof and such Borrower's results of operations for the period then
   ended.  There has not been a Material Adverse Change with respect to any
   Borrower (or such guarantor, as applicable) since the date of the latest
   financial statements submitted to Foothill on or before the Closing Date.

        5.12.     Solvency.

             Each Borrower is Solvent.  No transfer of property is being made
   by any Borrower and no obligation is being incurred by any Borrower in
   connection with the transactions contemplated by this Agreement or the
   other Loan Documents with the intent to hinder, delay, or defraud either
   present or future creditors of any Borrower.

        5.13.     Employee Benefits.

             No Borrower, any of its Subsidiaries, or any of their ERISA
   Affiliates maintains or contributes to any Benefit Plan, other than those
   listed on Schedule 5.13.  Each Borrower, each of its Subsidiaries and each
   ERISA Affiliate have satisfied the minimum funding standards of ERISA and
   the IRC with respect to each Benefit Plan to which it is obligated to
   contribute.  No ERISA Event has occurred nor has any other event occurred
   that may result in an ERISA Event that reasonably could be expected to
   result in a Material Adverse Change.  No Borrower or its Subsidiaries, any
   ERISA Affiliate, or any fiduciary of any Plan is subject to any direct or
   indirect liability with respect to any Plan under any applicable law,
   treaty, rule, regulation, or agreement.  No Borrower or its Subsidiaries
   or any ERISA Affiliate is required to provide security to any Plan under
   Section 401(a)(29) of the IRC.

        5.14.     Environmental Condition.

             No Borrower's properties or assets has ever been used by such
   Borrower or, to the best of Borrowers' knowledge, by previous owners or
   operators in the disposal of, or to produce, store, handle, treat,
   release, or transport, any Hazardous Materials.  No Borrower's properties
   or assets has ever been designated or identified in any manner pursuant to
   any environmental protection statute as a Hazardous Materials 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 or
   operated by any Borrower.  No Borrower has received a summons, citation,
   notice, or directive from the Environmental Protection Agency or any other
   federal or state governmental agency concerning any action or omission by
   any Borrower resulting in the releasing or disposing of Hazardous
   Materials into the environment.

        5.15.     Copyrights.

             Each Borrower has registered with the applicable federal filing
   office all copyrights and all works protectable by copyrights that account
   for more than 2% of its revenues or are otherwise material to its
   business.

   6.   AFFIRMATIVE COVENANTS.

             Each Borrower covenants and agrees that, so long as any credit
   hereunder shall be available and until full and final payment of the
   Obligations, and unless Foothill shall otherwise consent in writing, each
   Borrower shall do all of the following:

        6.1. Accounting System.

             Maintain a standard and modern system of accounting that enables
   each Borrower to produce financial statements in accordance with GAAP, and
   maintain records pertaining to the Collateral that contain information as
   from time to time may be requested by Foothill.  Each Borrower also shall
   keep a modern inventory reporting system that shows all additions, sales,
   claims, returns, and allowances with respect to the Inventory.

        6.2. Collateral Reporting.

             Provide Foothill with the following documents at the following
   times in form satisfactory to Foothill:  (a) on a weekly basis, a sales
   journal, collection journal, and credit register since the last such
   schedule and a calculation of the Borrowing Base as of such date, (b) on a
   monthly basis and, in any event, by no later than the 10th day of each
   month during the term of this Agreement (except for a month following the
   end of a fiscal quarter in which case no later than the 15th day of such
   month), (i) a detailed calculation of the Borrowing Base, and (ii) a
   detailed aging, by total, of the Accounts of each Borrower, together with
   a reconciliation to the detailed calculation of the Borrowing Base
   previously provided to Foothill, and (iii) a detailed calculation of the
   Applicable Maintenance Revenue Amount as of the end of such month, (c) on
   a monthly basis and, in any event, by no later than the 10th day of each
   month during the term of this Agreement, a summary aging, by vendor, of
   each Borrower's accounts payable and any book overdraft, (d) on a weekly
   basis, notice of all returns, disputes, or claims, (e) upon request,
   copies of invoices in connection with the Accounts, customer statements,
   credit memos, remittance advices and reports, deposit slips, shipping and
   delivery documents in connection with the Accounts and for Inventory and
   Equipment acquired by each Borrower, purchase orders and invoices, (f) on
   a quarterly basis, a detailed list of each Borrower's customers, (g) on a
   monthly basis, a calculation of the Dilution for the prior month; and
   (h) such other reports as to the Collateral or the financial condition of
   each Borrower as Foothill may request from time to time.  Original sales
   invoices evidencing daily sales shall be mailed by each Borrower to each
   Account Debtor and, at Foothill's direction after the occurrence of an
   Event of Default, the invoices shall indicate on their face that the
   Account has been assigned to Foothill and that all payments are to be made
   directly to Foothill.

        6.3. Financial Statements, Reports, Certificates.

             Deliver to Foothill:  (a) as soon as available, but in any event
   within 30 days after the end of each month during each of each Borrower's
   fiscal years, a company an internally prepared balance sheet, income
   statement, and statement of cash flow covering each Borrower's operations
   during such period; and (b) as soon as available, but in any event within
   90 days after the end of each of each Borrower's fiscal years, financial
   statements of each Borrower for each such fiscal year, audited by
   independent certified public accountants reasonably acceptable to Foothill
   and certified, without any qualifications, by such accountants to have
   been prepared in accordance with GAAP, together with a certificate of such
   accountants addressed to Foothill stating that such accountants do not
   have knowledge of the existence of any Default or Event of Default.  Such
   audited financial statements shall include a balance sheet, profit and
   loss statement, and statement of cash flow and, if prepared, such
   accountants' letter to management.  If a Borrower is a parent company of
   one or more Subsidiaries, or Affiliates, or is a Subsidiary or Affiliate
   of another company, then, in addition to the financial statements referred
   to above, such Borrower agrees to deliver financial statements prepared on
   a consolidating basis so as to present such Borrower and each such related
   entity separately, and on a consolidated basis.

             Together with the above, each Borrower also shall deliver to
   Foothill such Borrower's Form 10-Q Quarterly Reports, Form 10-K Annual
   Reports, and Form 8-K Current Reports, and any other filings made by such
   Borrower with the Securities and Exchange Commission, if any, as soon as
   the same are filed, or any other information that is provided by such
   Borrower to its shareholders, and any other report reasonably requested by
   Foothill relating to the financial condition of such Borrower.

             Each month, together with the financial statements provided
   pursuant to Section 6.3(a), EMS shall deliver to Foothill a certificate
   signed by its chief financial officer to the effect that:  (i) all
   financial statements delivered or caused to be delivered to Foothill
   hereunder have been prepared in accordance with GAAP (except, in the case
   of unaudited financial statements, for the lack of footnotes and being
   subject to year-end audit adjustments) and fairly present the financial
   condition of each Borrower, (ii) the representations and warranties of
   each Borrower contained in this Agreement and the other Loan Documents are
   true and correct in all material respects on and as of the date of such
   certificate, as though made on and as of such date (except to the extent
   that such representations and warranties relate solely to an earlier
   date), (iii) for each month that also is the date on which a financial
   covenant in Sections 7.20 and 7.21 is to be tested, a Compliance
   Certificate demonstrating in reasonable detail compliance at the end of
   such period with the applicable financial covenants contained in
   Sections 7.20 and 7.21, and (iv) on the date of delivery of such
   certificate to Foothill there does not exist any condition or event that
   constitutes a Default or Event of Default (or, in the case of clauses (i),
   (ii), or (iii), to the extent of any non-compliance, describing such non-
   compliance as to which he or she may have knowledge and what action
   Borrowers have taken, are taking, or propose to take with respect
   thereto).

             Each Borrower shall have issued written instructions to its
   independent certified public accountants authorizing them to communicate
   with Foothill and to release to Foothill whatever financial information
   concerning such Borrower that Foothill may request.  Such Borrower hereby
   irrevocably authorizes and directs all auditors, accountants, or other
   third parties to deliver to Foothill, at such Borrower's expense, copies
   of such Borrower's financial statements, papers related thereto, and other
   accounting records of any nature in their possession, and to disclose to
   Foothill any information they may have regarding such Borrower's business
   affairs and financial conditions.

        6.4. Tax Returns.

             Deliver to Foothill copies of each of each Borrower's future
   federal income tax returns, and any amendments thereto, within 30 days of
   the filing thereof with the Internal Revenue Service.

        6.5. Guarantor Reports.

             Cause any guarantor of any of the Obligations to deliver its
   annual financial statements at the time when each Borrower provides its
   audited financial statements to Foothill and copies of all federal income
   tax returns as soon as the same are available and in any event no later
   than 30 days after the same are required to be filed by law.

        6.6. Returns.

             Cause returns and allowances, if any, as between each Borrower
   and its Account Debtors to be on the same basis and in accordance with the
   usual customary practices of such Borrower, as they exist at the time of
   the execution and delivery of this Agreement.  If, at a time when no Event
   of Default has occurred and is continuing, any Account Debtor returns any
   Inventory to a Borrower, such Borrower promptly shall determine the reason
   for such return and, if such Borrower accepts such return, issue a credit
   memorandum (with a copy to be sent to Foothill) in the appropriate amount
   to such Account Debtor.  If, at a time when an Event of Default has
   occurred and is continuing, any Account Debtor returns any Inventory to
   such Borrower, such Borrower promptly shall determine the reason for such
   return and, if Foothill consents (which consent shall not be unreasonably
   withheld), issue a credit memorandum (with a copy to be sent to Foothill)
   in the appropriate amount to such Account Debtor.

        6.7. Title to Equipment.

             Upon Foothill's request, each Borrower immediately shall deliver
   to Foothill, properly endorsed, any and all evidences of ownership of,
   certificates of title, or applications for title to any items of
   Equipment.

        6.8. Maintenance of Equipment.

             Maintain the Equipment in good operating condition and repair
   (ordinary wear and tear excepted), and make all necessary replacements
   thereto so that the value and operating efficiency thereof shall at all
   times be maintained and preserved.  Other than those items of Equipment
   that constitute fixtures on the Closing Date, no Borrower shall permit any
   item of Equipment to become a fixture to real estate or an accession to
   other property, and such Equipment shall at all times remain personal
   property.

        6.9. Taxes.

             Cause all assessments and taxes, whether real, personal, or
   otherwise, due or payable by, or imposed, levied, or assessed against any
   Borrower or any of its property to be paid in full, before delinquency or
   before the expiration of any extension period, except to the extent that
   the validity of such assessment or tax  shall be the subject of a
   Permitted Protest.  To the extent that a Borrower fails timely to make
   payment of such taxes or assessments, Foothill shall be entitled, in its
   discretion, to reserve an amount equal to such unpaid amounts against the
   Borrowing Base.  Each Borrower shall make due and timely payment or
   deposit of all such federal, state, and local taxes, assessments, or
   contributions required of it by law, and will execute and deliver to
   Foothill, on demand, appropriate certificates attesting to the payment
   thereof or deposit with respect thereto.  Each Borrower will make timely
   payment or deposit of all tax payments and withholding taxes required of
   it by applicable laws, including 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 Foothill with proof satisfactory to Foothill
   indicating that such Borrower has made such payments or deposits.

        6.10.     Insurance.

             (a)  At its expense, keep the Collateral insured against loss or
   damage by fire, theft, explosion, sprinklers, and all other hazards and
   risks, and in such amounts, as are ordinarily insured against by other
   owners in similar businesses.  Each Borrower also shall maintain business
   interruption, public liability, product liability, and property damage
   insurance relating to such Borrower's ownership and use of the Collateral,
   as well as insurance against larceny, embezzlement, and criminal
   misappropriation.

             (b)  All such policies of insurance shall be in such form, with
   such companies, and in such amounts as may be reasonably satisfactory to
   Foothill.  All insurance required herein shall be written by companies
   which are authorized to do insurance business in the State of California. 
   All hazard insurance and such other insurance as Foothill shall specify,
   shall contain a California Form 438BFU (NS) mortgagee endorsement, or an
   equivalent endorsement satisfactory to Foothill, showing Foothill as sole
   loss payee thereof, and shall contain a waiver of warranties.  Every
   policy of insurance referred to in this Section 6.10 shall contain an
   agreement by the insurer that it will not cancel such policy except after
   30 days prior written notice to Foothill and that any loss payable
   thereunder shall be payable notwithstanding any act or negligence of any
   Borrower or Foothill which might, absent such agreement, result in a
   forfeiture of all or a part of such insurance payment.  Borrowers shall
   deliver to Foothill certified copies of such policies of insurance and
   evidence of the payment of all premiums therefor.

             (c)  Original policies or certificates thereof satisfactory to
   Foothill evidencing such insurance shall be delivered to Foothill at least
   30 days prior to the expiration of the existing or preceding policies. 
   Each Borrower shall give Foothill prompt notice of any loss covered by
   such insurance, and Foothill shall have the right to adjust any loss. 
   Foothill shall have the exclusive right to adjust all losses payable under
   any such insurance policies without any liability to any Borrower
   whatsoever in respect of such adjustments.  Any monies received as payment
   for any loss under any insurance policy including the insurance policies
   mentioned above, shall be paid over to Foothill to be applied at the
   option of Foothill either to the prepayment of the Obligations without
   premium, in such order or manner as Foothill may elect, or shall be
   disbursed to Borrowers under stage payment terms satisfactory to Foothill
   for application to the cost of repairs, replacements, or restorations. 
   All repairs, replacements, or restorations shall be effected with
   reasonable promptness and shall be of a value at least equal to the value
   of the items or property destroyed prior to such damage or destruction. 
   Upon the occurrence of an Event of Default, Foothill shall have the right
   to apply all prepaid premiums to the payment of the Obligations in such
   order or form as Foothill shall determine.

             (d)  No Borrower shall take out separate insurance concurrent in
   form or contributing in the event of loss with that required to be
   maintained under this Section 6.10, unless Foothill is included thereon as
   named insured with the loss payable to Foothill under a standard
   California 438BFU (NS) Mortgagee endorsement, or its local equivalent. 
   Each Borrower immediately shall notify Foothill whenever such separate
   insurance is taken out, specifying the insurer thereunder and full
   particulars as to the policies evidencing the same, and originals of such
   policies immediately shall be provided to Foothill.

        6.11.     No Setoffs or Counterclaims.

             Make payments hereunder and under the other Loan Documents by or
   on behalf of each Borrower without setoff or counterclaim and free and
   clear of, and without deduction or withholding for or on account of, any
   federal, state, or local taxes.

        6.12.     Location of Inventory and Equipment.

             Keep the Inventory and Equipment only at the locations
   identified on Schedule 6.12; provided, however, that Borrowers may amend
   Schedule 6.12 to add a new location so long as such amendment occurs by
   written notice to Foothill not less than 30 days prior to the date on
   which the Inventory or Equipment is moved to such new location, so long as
   such new location is within the continental United States, and so long as,
   at the time of such written notification, Borrowers provide any financing
   statements or fixture filings necessary to perfect and continue perfected
   Foothill's security interests in such assets and also provide to Foothill
   a Collateral Access Agreement.

        6.13.     Compliance with Laws.

             Comply with the requirements of all applicable laws, rules,
   regulations, and orders of any governmental authority, including the Fair
   Labor Standards Act and the Americans With Disabilities Act, other than
   laws, rules, regulations, and orders the non-compliance with which,
   individually or in the aggregate, would not have and could not reasonably
   be expected to have a Material Adverse Change.

        6.14.     Employee Benefits.

             (a)  Promptly, and in any event within 10 Business Days after
   any Borrower or any of its Subsidiaries knows or has reason to know that
   an ERISA Event has occurred that reasonably could be expected to result in
   a Material Adverse Change, a written statement of the chief financial
   officer of such Borrower describing such ERISA Event and any action that
   is being taken with respect thereto by such Borrower, any such Subsidiary
   or ERISA Affiliate, and any action taken or threatened by the IRS,
   Department of Labor, or PBGC.  Such Borrower or such Subsidiary, as
   applicable, shall be deemed to know all facts known by the administrator
   of any Benefit Plan of which it is the plan sponsor, (ii) promptly, and in
   any event within 3 Business Days after the filing thereof with the IRS, a
   copy of each funding waiver request filed with respect to any Benefit Plan
   and all communications received by such Borrower, any of its Subsidiaries
   or, to the knowledge of Borrowers, any ERISA Affiliate with respect to
   such request, and (iii) promptly, and in any event within 3 Business Days
   after receipt by such Borrower, any of its Subsidiaries or, to the
   knowledge of Borrowers, any ERISA Affiliate, of the PBGC's intention to
   terminate a Benefit Plan or to have a trustee appointed to administer a
   Benefit Plan, copies of each such notice.

             (b)  Cause to be delivered to Foothill, upon Foothill's request,
   each of the following:  (i) a copy of each Plan (or, where any such plan
   is not in writing, complete description thereof) (and if applicable,
   related trust agreements or other funding instruments) and all amendments
   thereto, all written interpretations thereof and written descriptions
   thereof that have been distributed to employees or former employees of any
   Borrower or its Subsidiaries; (ii) the most recent determination letter
   issued by the IRS with respect to each Benefit Plan; (iii) for the three
   most recent plan years, annual reports on Form 5500 Series required to be
   filed with any governmental agency for each Benefit Plan; (iv) all
   actuarial reports prepared for the last three plan years for each Benefit
   Plan; (v) a listing of all Multiemployer Plans, with the aggregate amount
   of the most recent annual contributions required to be made by any
   Borrower or any ERISA Affiliate to each such plan and copies of the
   collective bargaining agreements requiring such contributions; (vi) any
   information that has been provided to any Borrower or any ERISA Affiliate
   regarding withdrawal liability under any Multiemployer Plan; and (vii) the
   aggregate amount of the most recent annual payments made to former
   employees of any Borrower or its Subsidiaries under any Retiree Health
   Plan.

        6.15.     Leases.

             Pay when due all rents and other amounts payable under any
   leases to which any Borrower is a party or by which any Borrower's
   properties and assets are bound, unless such payments are the subject of a
   Permitted Protest.  To the extent that any Borrower fails timely to make
   payment of such rents and other amounts payable when due under its leases,
   Foothill shall be entitled, in its discretion, to reserve an amount equal
   to such unpaid amounts against the Borrowing Base.

        6.16.     Copyrights.

             Each Borrower will promptly register with the applicable federal
   filing office (a) all copyrights and all works protectable by copyrights
   that account for more than 2% of its revenues or are otherwise material to
   its business, (b) any material changes to copyrights that have already
   been registered by such Borrower with the applicable federal filing
   office, and (c) on an annual basis any changes to copyrights that have
   already been registered by such Borrower with the applicable federal
   filing office.

   7.   NEGATIVE COVENANTS.

             Each Borrower covenants and agrees that, so long as any credit
   hereunder shall be available and until full and final payment of the
   Obligations, no Borrower will do any of the following without Foothill's
   prior written consent:

        7.1. Indebtedness.

             Create, incur, assume, permit, guarantee, or otherwise become or
   remain, directly or indirectly, liable with respect to any Indebtedness,
   except:

             (a)  Indebtedness evidenced by this Agreement, together with
   Indebtedness to issuers of letters of credit that are the subject of L/C
   Guarantees;

             (b)  Indebtedness set forth on Schedule 7.1;

             (c)  Indebtedness secured by Permitted Liens; and

             (d)  refinancings, renewals, or extensions of Indebtedness
   permitted under clauses (b) and (c) of this Section 7.1 (and continuance
   or renewal of any Permitted Liens associated therewith) so long as:
   (i) the terms and conditions of such refinancings, renewals, or extensions
   do not materially impair the prospects of repayment of the Obligations by
   any Borrower, (ii) the net cash proceeds of such refinancings, renewals,
   or extensions do not result in an increase in the aggregate principal
   amount of the Indebtedness so refinanced, renewed, or extended, (iii) such
   refinancings, renewals, refundings, or extensions do not result in a
   shortening of the average weighted maturity of the Indebtedness so
   refinanced, renewed, or extended, and (iv) to the extent that Indebtedness
   that is refinanced was subordinated in right of payment to the
   Obligations, then the subordination terms and conditions of the
   refinancing Indebtedness must be at least as favorable to Foothill as
   those applicable to the refinanced Indebtedness.

        7.2. Liens.

             Create, incur, assume, or permit to exist, directly or
   indirectly, any Lien on or with respect to any of its property or assets,
   of any kind, whether now owned or hereafter acquired, or any income or
   profits therefrom, except for Permitted Liens (including Liens that are
   replacements of Permitted Liens to the extent that the original
   Indebtedness is refinanced under Section 7.1(d) and so long as the
   replacement Liens only encumber those assets or property that secured the
   original Indebtedness).

        7.3. Restrictions on Fundamental Changes.

             Enter into any merger, consolidation, reorganization, or
   recapitalization, or reclassify its capital stock, or liquidate, wind up,
   or dissolve itself (or suffer any liquidation or dissolution), or convey,
   sell, assign, lease, transfer, or otherwise dispose of, in one transaction
   or a series of transactions, all or any substantial part of its property
   or assets.

        7.4. Disposal of Assets.

             Sell, lease, assign, transfer, or otherwise dispose of any of
   any Borrower's properties or assets other than sales of Inventory to
   buyers in the ordinary course of such Borrower's business as currently
   conducted; provided, that so long as no Event of Default exists,
   Borrowers' may dispose of obsolete or unuseful Equipment with a book value
   of up to $25,000 in any fiscal year to the extent the proceeds thereof are
   remitted to Foothill and applied to the Obligations in such order and
   manner as Foothill shall determine.

        7.5. Change Name.

             Change any Borrower's name, FEIN, corporate structure (within
   the meaning of Section 9402(7) of the Code), or identity, or add any new
   fictitious name.

        7.6. Guarantee.

             Guarantee or otherwise become in any way liable with respect to
   the obligations of any third Person except by endorsement of instruments
   or items of payment for deposit to the account of a Borrower or which are
   transmitted or turned over to Foothill.

        7.7. Nature of Business.

             Make any change in the principal nature of any Borrower's
   business.

        7.8. Prepayments and Amendments.

             (a)  Except in connection with a refinancing permitted by
   Section 7.1(d), prepay, redeem, retire, defease, purchase, or otherwise
   acquire any Indebtedness owing to any third Person, other than the
   Obligations in accordance with this Agreement, and

             (b)  Directly or indirectly, amend, modify, alter, increase, or
   change any of the terms or conditions of any agreement, instrument,
   document, indenture, or other writing evidencing  or concerning
   Indebtedness permitted under Sections 7.1(b), (c) or (d).

        7.9. Change of Control.

             Cause, permit, or suffer, directly or indirectly, any Change of
   Control.

        7.10.     Consignments.

             Consign any Inventory or sell any Inventory on bill and hold,
   sale or return, sale on approval, or other conditional terms of sale.

        7.11.     Distributions.

             Make any distribution or declare or pay any dividends (in cash
   or other property, other than capital stock) on, or purchase, acquire,
   redeem, or retire any of any Borrower's capital stock, of any class,
   whether now or hereafter outstanding, except that each of EMS-East and
   EMS-Illinois may pay dividends to EMS.

        7.12.     Accounting Methods.

             Modify or change its method of accounting or enter into, modify,
   or terminate any agreement currently existing, or at any time hereafter
   entered into with any third party accounting firm or service bureau for
   the preparation or storage of any Borrower's accounting records without
   said accounting firm or service bureau agreeing to provide Foothill
   information regarding the Collateral or such Borrower's financial
   condition.  Each Borrower waives the right to assert a confidential
   relationship, if any, it may have with any accounting firm or service
   bureau in connection with any information requested by Foothill pursuant
   to or in accordance with this Agreement, and agrees that Foothill may
   contact directly any such accounting firm or service bureau in order to
   obtain such information.

        7.13.     Investments.

             Directly or indirectly make, acquire, or incur any liabilities
   (including contingent obligations) for or in connection with (a) the
   acquisition of the securities (whether debt or equity) of, or other
   interests in, a Person, (b) loans, advances, capital contributions, or
   transfers of property to a Person, or (c) the acquisition of all or
   substantially all of the properties or assets of a Person.

        7.14.     Transactions with Affiliates.

             Except as described on Schedule 7.14, directly or indirectly
   enter into or permit to exist any material transaction with any Affiliate
   of any Borrower except for transactions that are in the ordinary course of
   such Borrower's business, upon fair and reasonable terms, that are fully
   disclosed to Foothill, and that are no less favorable to such Borrower
   than would be obtained in an arm's length transaction with a non-
   Affiliate.

        7.15.     Suspension.

             Suspend or go out of a substantial portion of its business.

        7.16.     Compensation.

             Increase the annual fee or per-meeting fees paid to directors of
   Borrowers during any year by more than 15% over the prior year; pay or
   accrue total cash compensation, during any year, to officers and senior
   management employees of Borrowers in an aggregate amount in excess of 115%
   of that paid or accrued in the prior year.

        7.17.     Use of Proceeds.

             Use the proceeds of the Advances and the Term Loan made
   hereunder for any purpose other than (i) on the Closing Date, (y) to repay
   in full the outstanding principal, accrued interest, and accrued fees and
   expenses owing to Existing Lender, and (z) to pay transactional costs and
   expenses incurred in connection with this Agreement, and (ii) thereafter,
   consistent with the terms and conditions hereof, for its lawful and
   permitted corporate purposes.

        7.18.     Change in Location of Chief Executive Office; Inventory and
                  Equipment with Bailees.

             Relocate its chief executive office to a new location without
   providing 30 days prior written notification thereof to Foothill and so
   long as, at the time of such written notification, Borrowers provide any
   financing statements or fixture filings necessary to perfect and continue
   perfected Foothill's security interests and also provides to Foothill a
   Collateral Access Agreement with respect to such new location.  The
   Inventory and Equipment shall not at any time now or hereafter be stored
   with a bailee, warehouseman, or similar party without Foothill's prior
   written consent.

        7.19.     No Prohibited Transactions Under ERISA.

             Directly or indirectly:

             (a)  engage, or permit any Subsidiary of any Borrower to engage,
   in any prohibited transaction which is reasonably likely to result in a
   civil penalty or excise tax described in Sections 406 of ERISA or 4975 of
   the IRC for which a statutory or class exemption is not available or a
   private exemption has not been previously obtained from the Department of
   Labor;

             (b)  permit to exist with respect to any Benefit Plan any
   accumulated funding deficiency (as defined in Sections 302 of ERISA
   and 412 of the IRC), whether or not waived;

             (c)  fail, or permit any Subsidiary of any Borrower to fail, to
   pay timely required contributions or annual installments due with respect
   to any waived funding deficiency to any Benefit Plan;

             (d)  terminate, or permit any Subsidiary of any Borrower to
   terminate, any Benefit Plan where such event would result in any liability
   of such Borrower, any of its Subsidiaries or any ERISA Affiliate under
   Title IV of ERISA;

             (e)  fail, or permit any Subsidiary of any Borrower to fail, to
   make any required contribution or payment to any Multiemployer Plan;

             (f)  fail, or permit any Subsidiary of any Borrower to fail, to
   pay any required installment or any other payment required under
   Section 412 of the IRC on or before the due date for such installment or
   other payment;

             (g)  amend, or permit any Subsidiary of any Borrower to amend, a
   Plan resulting in an increase in current liability for the plan year such
   that any Borrower, any Subsidiary of any Borrower or any ERISA Affiliate
   is required to provide security to such Plan under Section 401(a)(29) of
   the IRC; or

             (h)  withdraw, or permit any Subsidiary of any Borrower to
   withdraw, from any Multiemployer Plan where such withdrawal is reasonably
   likely to result in any liability of any such entity under Title IV of
   ERISA; 

   which, individually or in the aggregate, results in or reasonably would be
   expected to result in a claim against or liability of any Borrower, any of
   its Subsidiaries or any ERISA Affiliate in excess of $100,000.

        7.20.     Financial Covenants.

             Fail to maintain:

             (a)  Tangible Net Worth.  Tangible Net Worth as of the last day
   of any fiscal quarter set forth below of at least the amount set forth
   below opposite such fiscal quarter:

                          Fiscal Quarter              Amount
                    February 28, 1998, May 31,       $250,000
                    1998 and August 31, 1998
                    November 30, 1998,               $500,000
                    February 28, 1999 and May
                    31, 1999
                    August 31, 1999 and the          $750,000
                    last day of each fiscal
                    quarter thereafter


             (b)  EBITDA.  EBITDA for any period set forth below of at least
   the amount set forth below opposite such period:

                              Period                  Amount
                    3 month period ending           ($500,000)
                    February 28, 1998

                    6 month period ending May           0
                    31, 1998

                    9 month period ending               0
                    August 31, 1998

                    12 month period ending          $1,000,000
                    November 30, 1998 and 12
                    month period ending
                    February 28, 1999

                    12 month period ending May      $1,500,000
                    31, 1999 and 12 month
                    period ending on the last
                    day of each fiscal quarter
                    thereafter


        7.21.     Capital Expenditures.

             Make capital expenditures in any fiscal year set forth below in
   excess of the amount set forth opposite such fiscal year:

                               Period                 Amount
                    Fiscal year ending November     $1,500,000
                    30, 1998

                    Fiscal year ending November     $1,750,000
                    30, 1999

                    Fiscal year ending November     $2,000,000
                    30, 2000 and each fiscal
                    year thereafter


   8.   EVENTS OF DEFAULT.

             Any one or more of the following events shall constitute an
   event of default (each, an "Event of Default") under this Agreement:

        8.1. If any Borrower fails to pay when due and payable or when
   declared due and payable, any portion of the Obligations (whether of
   principal, interest (including any interest which, but for the provisions
   of the Bankruptcy Code, would have accrued on such amounts), fees and
   charges due Foothill, reimbursement of Foothill Expenses, or other amounts
   constituting Obligations);

        8.2. If any Borrower fails to perform, keep, or observe any 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 such Borrower and Foothill and such failure continues for 5 days;
   provided, that such 5 day period shall not apply in the case of (A) any
   failure to observe any such term, provision, condition, covenant or
   agreement which is not capable of being cured or which has been the
   subject of a prior failure within a 6 month period or (B) an intentional
   breach by a Borrower of any such term, provision, condition, covenant or
   agreement, or (C) the failure to observe or perform any of the covenants
   or provisions contained in Section 2.7, 6.10 or Section 7 of this
   Agreement or any covenants or agreements covering substantially the same
   matter as such sections in any of the other Loan Documents;

        8.3. If there is a Material Adverse Change;

        8.4. If any material portion of any Borrower's properties or assets
   is attached, seized, subjected to a writ or distress warrant, or is levied
   upon, or comes into the possession of any third Person;

        8.5. If an Insolvency Proceeding is commenced by any Borrower;

        8.6. If an Insolvency Proceeding is commenced against any Borrower
   and any of the following events occur:  (a) any Borrower consents to the
   institution of the Insolvency Proceeding against it; (b) the petition
   commencing the Insolvency Proceeding is not timely controverted; (c) the
   petition commencing the Insolvency Proceeding is not dismissed within 60
   calendar days of the date of the filing thereof; provided, however, that,
   during the pendency of such period, Foothill shall be relieved of its
   obligation to extend credit hereunder; (d) an interim trustee is appointed
   to take possession of all or a substantial portion of the properties or
   assets of, or to operate all or any substantial portion of the business
   of, any Borrower; or (e) an order for relief shall have been issued or
   entered therein;

        8.7. If any 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;

        8.8. If a notice of Lien, levy, or assessment is filed of record with
   respect to any of any Borrower's properties or assets by the United States
   Government, or any department, agency, or instrumentality thereof, or by
   any state, county, municipal, or governmental agency, or if any taxes or
   debts owing at any time hereafter to any one or more of such entities
   becomes a Lien, whether choate or otherwise, upon any of any Borrower's
   properties or assets and the same is not paid on the payment date thereof;
   provided, however, that such notice of Lien, levy or assessment shall not
   constitute an Event of Default under this Section 8.8 if such notice of
   Lien, levy or assessment is subject to a Permitted Protest and involves
   less than $25,000;

        8.9. If a judgment or other claim becomes a Lien or encumbrance upon
   any material portion of any Borrower's properties or assets;

        8.10.     If there is a default in any material agreement to which
   any Borrower is a party with one or more third Persons and such default
   (a) occurs at the final maturity of the obligations thereunder, or
   (b) results in a right by such third Person(s), irrespective of whether
   exercised, to accelerate the maturity of any Borrower's obligations
   thereunder;

        8.11.     If any Borrower makes any payment on account of
   Indebtedness that has been contractually subordinated in right of payment
   to the payment of the Obligations, except to the extent such payment is
   permitted by the terms of the subordination provisions applicable to such
   Indebtedness;

        8.12.     If any warranty, representation, statement, or report made
   to Foothill by any Borrower or any officer, employee, agent, or director
   of any Borrower, is untrue or misleading in any material respect when
   made, or if any such warranty or representation is withdrawn; or

        8.13.     If the obligation of any guarantor under its guaranty or
   other third Person under any Loan Document is limited or terminated by
   operation of law or by the guarantor or other third Person thereunder, or
   any such guarantor or other third Person becomes the subject of an
   Insolvency Proceeding.

   9.   FOOTHILL'S RIGHTS AND REMEDIES.

        9.1. Rights and Remedies.

             Upon the occurrence, and during the continuation, of an Event of
   Default Foothill 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 Borrowers:

             (a)  Declare all Obligations, whether evidenced by this
   Agreement, by any of the other Loan Documents, or otherwise, immediately
   due and payable;

             (b)  Cease advancing money or extending credit to or for the
   benefit of Borrowers under this Agreement, under any of the Loan
   Documents, or under any other agreement between any Borrower and Foothill;

             (c)  Terminate this Agreement and any of the other Loan
   Documents as to any future liability or obligation of Foothill, but
   without affecting Foothill's rights and security interests in the
   Collateral and without affecting the Obligations;

             (d)  Settle or adjust disputes and claims directly with Account
   Debtors for amounts and upon terms which Foothill considers advisable, and
   in such cases, Foothill will credit Borrowers' Loan Account with only the
   net amounts received by Foothill in payment of such disputed Accounts
   after deducting all Foothill Expenses incurred or expended in connection
   therewith;

             (e)  Cause each Borrower to hold all returned Inventory in trust
   for Foothill, segregate all returned Inventory from all other property of
   such Borrower or in such Borrower's possession and conspicuously label
   said returned Inventory as the property of Foothill;

             (f)  Without notice to or demand upon any Borrower or any
   guarantor, make such payments and do such acts as Foothill considers
   necessary or reasonable to protect its security interests in the
   Collateral.  Each Borrower agrees to assemble the Collateral if Foothill
   so requires, and to make the Collateral available to Foothill as Foothill
   may designate.  Each Borrower authorizes Foothill 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 that in Foothill's
   determination appears to conflict with its security interests and to pay
   all expenses incurred in connection therewith.  With respect to any of
   each Borrower's owned or leased premises, each Borrower hereby grants
   Foothill a license to enter into possession of such premises and to occupy
   the same, without charge, in order to exercise any of Foothill's rights or
   remedies provided herein, at law, in equity, or otherwise;

             (g)  Without notice to any Borrower (such notice being expressly
   waived), and without constituting a retention of any collateral in
   satisfaction of an obligation (within the meaning of Section 9505 of the
   Code), set off and apply to the Obligations any and all (i) balances and
   deposits of any Borrower held by Foothill (including any amounts received
   in the Lockbox Accounts), or (ii) indebtedness at any time owing to or for
   the credit or the account of Borrowers held by Foothill;

             (h)  Hold, as cash collateral, any and all balances and deposits
   of any Borrower held by Foothill, and any amounts received in the Lockbox
   Accounts, to secure the full and final repayment of all of the
   Obligations;

             (i)  Ship, reclaim, recover, store, finish, maintain, repair,
   prepare for sale, advertise for sale, and sell (in the manner provided for
   herein) the Collateral.  Foothill is hereby granted a license or other
   right to use, without charge, each Borrower's labels, patents, copyrights,
   rights of use of any name, trade secrets, 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 any Borrower's rights under all
   licenses and all franchise agreements shall inure to Foothill's benefit;

             (j)  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 any Borrower's
   premises) as Foothill determines is commercially reasonable.  It is not
   necessary that the Collateral be present at any such sale;

             (k)  Foothill shall give notice of the disposition of the
   Collateral as follows:

                  (i)  Foothill shall give Borrowers and each holder of
             a security interest in the Collateral who has filed with
             Foothill a written request for notice, a notice in writing
             of the time and place of public sale, or, if the sale is a
             private sale or some other disposition other than a public
             sale is to be made of the Collateral, then the time on or
             after which the private sale or other disposition is to be
             made;

                  (ii) The notice shall be personally delivered or
             mailed, postage prepaid, to Borrowers as provided in
             Section 12, at least 10 days before the date fixed for the
             sale, or at least 10 days before the date on or after which
             the private sale or other disposition is to be made; no
             notice needs to be given prior to the disposition of any
             portion of the Collateral that is perishable or threatens
             to decline speedily in value or that is of a type
             customarily sold on a recognized market.  Notice to Persons
             other than Borrowers claiming an interest in the Collateral
             shall be sent to such addresses as they have furnished to
             Foothill;

                  (iii)     If the sale is to be a public sale, Foothill
             also shall give notice of the time and place by publishing
             a notice one time at least 10 days before the date of the
             sale in a newspaper of general circulation in the county in
             which the sale is to be held;

             (l)  Foothill may credit bid and purchase at any public sale;
   and

             (m)  Any deficiency that exists after disposition of the
   Collateral as provided above will be paid immediately by Borrowers.  Any
   excess will be returned, without interest and subject to the rights of
   third Persons, by Foothill to Borrowers.

        9.2. Remedies Cumulative.

             Foothill's rights and remedies under this Agreement, the Loan
   Documents, and all other agreements shall be cumulative.  Foothill shall
   have all other rights and remedies not inconsistent herewith as provided
   under the Code, by law, or in equity.  No exercise by Foothill of one
   right or remedy shall be deemed an election, and no waiver by Foothill of
   any Event of Default shall be deemed a continuing waiver.  No delay by
   Foothill shall constitute a waiver, election, or acquiescence by it.

   10.  TAXES AND EXPENSES.

             If any Borrower fails to pay any monies (whether taxes,
   assessments, insurance premiums, or, in the case of leased properties or
   assets, rents or other amounts payable under such leases) due to third
   Persons, or fails to make any deposits or furnish any required proof of
   payment or deposit, all as required under the terms of this Agreement,
   then, to the extent that Foothill determines that such failure by such
   Borrower could result in a Material Adverse Change, in its discretion and
   without prior notice to any Borrower, Foothill may do any or all of the
   following:  (a) make payment of the same or any part thereof; (b) set up
   such reserves in Borrowers' Loan Account as Foothill deems necessary to
   protect Foothill from the exposure created by such failure; or (c) obtain
   and maintain insurance policies of the type described in Section 6.10, and
   take any action with respect to such policies as Foothill deems prudent. 
   Any such amounts paid by Foothill shall constitute Foothill Expenses.  Any
   such payments made by Foothill shall not constitute an agreement by
   Foothill to make similar payments in the future or a waiver by Foothill of
   any Event of Default under this Agreement.  Foothill need not inquire as
   to, or contest the validity of, any such expense, tax, or Lien and the
   receipt of the usual official notice for the payment thereof shall be
   conclusive evidence that the same was validly due and owing.

   11.  WAIVERS; INDEMNIFICATION.

        11.1.     Demand; Protest; etc.

             Each Borrower waives demand, protest, notice of protest, notice
   of default or dishonor, notice of payment and nonpayment, nonpayment at
   maturity, release, compromise, settlement, extension, or renewal of
   accounts, documents, instruments, chattel paper, and guarantees at any
   time held by Foothill on which such Borrower may in any way be liable.

        11.2.     Foothill's Liability for Collateral.

             So long as Foothill complies with its obligations, if any, under
   Section 9207 of the Code, Foothill 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.  All risk of loss, damage, or destruction of the Collateral shall
   be borne by Borrowers.

        11.3.     Indemnification.

             Each Borrower shall pay, indemnify, defend, and hold Foothill
   and each of their respective officers, directors, employees, counsel,
   agents, and attorneys-in-fact (each, an "Indemnified Person") harmless (to
   the fullest extent permitted by law) from and against any and all claims,
   demands, suits, actions, investigations, proceedings, and damages, and all
   reasonable attorneys fees and disbursements and other costs and expenses
   actually incurred in connection therewith (as and when they are incurred
   and irrespective of whether suit is brought), at any time asserted
   against, imposed upon, or incurred by any of them in connection with or as
   a result of or related to the execution, delivery, enforcement,
   performance, and administration of this Agreement and any other Loan
   Documents or the transactions contemplated herein, and with respect to any
   investigation, litigation, or proceeding related to this Agreement, any
   other Loan Document, or the use of the proceeds of the credit provided
   hereunder (irrespective of whether any Indemnified Person is a party
   thereto), or any act, omission, event or circumstance in any manner
   related thereto (all the foregoing, collectively, the "Indemnified
   Liabilities").  No Borrower shall have any obligation to any Indemnified
   Person under this Section 11.3 with respect to any Indemnified Liability
   that a court of competent jurisdiction finally determines to have resulted
   from the gross negligence or willful misconduct of such Indemnified
   Person.  This provision shall survive the termination of this Agreement
   and the repayment of the Obligations.

   12.  NOTICES.

             Unless otherwise provided in this Agreement, all notices or
   demands by any party relating to this Agreement or any other Loan Document
   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 registered or certified
   mail (postage prepaid, return receipt requested), overnight courier, or
   facsimile to Borrowers or to Foothill, as the case may be, at its address
   set forth below:

       If to Borrowers:       c/o Effective Management Systems, Inc.
                              12000 West Park Place
                              Milwaukee, Wisconsin  53224
                              Attn:  Jeffrey Fossum
                              Fax No. (414) 359-9011

       with copies to:        c/o Effective Management Systems, Inc.
                              12000 West Park Place
                              Milwaukee, Wisconsin  53224
                              Attn:  Richard Koenings, Esq.
                              Fax No. (414) 359-9011

       If to Foothill:        FOOTHILL CAPITAL CORPORATION
                              11111 Santa Monica Boulevard
                              Suite 1500
                              Los Angeles, California  90025-3333
                              Attn:  Business Finance Division Manager
                              Fax No. (310) 478-9788

       with copies to:        GOLDBERG, KOHN, BELL, BLACK,
                                  ROSENBLOOM & MORITZ, LTD.
                              55 East Monroe Street
                              Suite 3700
                              Chicago, Illinois  60603
                              Attn:  Gary Zussman, Esq.
                              Fax No. (312) 332-2196

             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.  All notices or demands sent in accordance with this
   Section 12, other than notices by Foothill in connection with
   Sections 9504 or 9505 of the Code, shall be deemed received on the earlier
   of the date of actual receipt or 3 days after the deposit thereof in the
   mail.  Each Borrower acknowledges and agrees that notices sent by Foothill
   in connection with Sections 9504 or 9505 of the Code shall be deemed sent
   when deposited in the mail or personally delivered, or, where permitted by
   law, transmitted facsimile or other similar method set forth above.

   13.  CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.

             THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
   (UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN AN ANOTHER LOAN DOCUMENT),
   THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF AND THEREOF, AND
   THE RIGHTS OF THE PARTIES HERETO AND THERETO WITH RESPECT TO ALL MATTERS
   ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR THERETO SHALL BE
   DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS
   OF THE STATE OF CALIFORNIA.  THE PARTIES AGREE THAT ALL ACTIONS OR
   PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN
   DOCUMENTS SHALL BE TRIED AND LITIGATED ONLY IN THE STATE AND FEDERAL
   COURTS LOCATED IN THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA OR, AT
   THE SOLE OPTION OF FOOTHILL, IN ANY OTHER COURT IN WHICH FOOTHILL SHALL
   INITIATE LEGAL OR EQUITABLE PROCEEDINGS AND WHICH HAS SUBJECT MATTER
   JURISDICTION OVER THE MATTER IN CONTROVERSY.  EACH OF EACH BORROWER AND
   FOOTHILL WAIVES, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT
   EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT
   TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS
   SECTION 13.  EACH OF EACH BORROWER AND FOOTHILL 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
   OF EACH BORROWER AND FOOTHILL REPRESENTS THAT IT HAS REVIEWED THIS WAIVER
   AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
   CONSULTATION WITH LEGAL COUNSEL.  IN THE EVENT OF LITIGATION, A COPY OF
   THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

   14.  DESTRUCTION OF BORROWERS' DOCUMENTS.

             All documents, schedules, invoices, agings, or other papers
   delivered to Foothill may be destroyed or otherwise disposed of by
   Foothill 4 months after they are delivered to or received by Foothill,
   unless a Borrower requests, in writing, the return of said documents,
   schedules, or other papers and makes arrangements, at such Borrower's
   expense, for their return.

   15.  GENERAL PROVISIONS.

        15.1.     Effectiveness.

             This Agreement shall be binding and deemed effective when
   executed by each Borrower and Foothill.

        15.2.     Successors and Assigns.

             This Agreement shall bind and inure to the benefit of the
   respective successors and assigns of each of the parties; provided,
   however, that no Borrower may assign this Agreement or any rights or
   duties hereunder without Foothill's prior written consent and any
   prohibited assignment shall be absolutely void.  No consent to an
   assignment by Foothill shall release any Borrower from its Obligations. 
   Foothill may assign this Agreement and its rights and duties hereunder and
   no consent or approval by any Borrower is required in connection with any
   such assignment.  Foothill reserves the right to sell, assign, transfer,
   negotiate, or grant participations in all or any part of, or any interest
   in Foothill's rights and benefits hereunder.  In connection with any such
   assignment or participation, Foothill may disclose all documents and
   information which Foothill now or hereafter may have relating to any
   Borrower or any Borrower's business.  To the extent that Foothill assigns
   its rights and obligations hereunder to a third Person, Foothill
   thereafter shall be released from such assigned obligations to Borrowers.

        15.3.     Section Headings.

             Headings and numbers have been set forth herein for convenience
   only.  Unless the contrary is compelled by the context, everything
   contained in each Section applies equally to this entire Agreement.

        15.4.     Interpretation.

             Neither this Agreement nor any uncertainty or ambiguity herein
   shall be construed or resolved against Foothill or Borrowers, whether
   under any rule of construction or otherwise.  On the contrary, this
   Agreement has been reviewed by all parties and shall be construed and
   interpreted according to the ordinary meaning of the words used so as to
   fairly accomplish the purposes and intentions of all parties hereto.

        15.5.     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.

        15.6.     Amendments in Writing.

             This Agreement can only be amended by a writing signed by both
   Foothill and Borrowers.

        15.7.     Counterparts; Facsimile Execution.

             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.  Delivery of an executed counterpart of this Agreement by
   facsimile shall be equally as effective as delivery of an original
   executed counterpart of this Agreement.  Any party delivering an executed
   counterpart of this Agreement by facsimile also shall deliver an original
   executed counterpart of this Agreement but the failure to deliver an
   original executed counterpart shall not affect the validity,
   enforceability, and binding effect of this Agreement.

        15.8.     Revival and Reinstatement of Obligations.

             If the incurrence or payment of the Obligations by Borrowers or
   any guarantor of the Obligations or the transfer by either or both of such
   parties to Foothill of any property of either or both of such parties
   should for any reason subsequently be declared to be void or voidable
   under any state or federal law relating to creditors' rights, including
   provisions of the Bankruptcy Code relating to fraudulent conveyances,
   preferences, and other voidable or recoverable payments of money or
   transfers of property (collectively, a "Voidable Transfer"), and if
   Foothill is required to repay or restore, in whole or in part, any such
   Voidable Transfer, or elects to do so upon the reasonable advice of its
   counsel, then, as to any such Voidable Transfer, or the amount thereof
   that Foothill is required or elects to repay or restore, and as to all
   reasonable costs, expenses, and attorneys fees of Foothill related
   thereto, the liability of Borrowers or such guarantor automatically shall
   be revived, reinstated, and restored and shall exist as though such
   Voidable Transfer had never been made.

        15.9.     Integration.

             This Agreement, together with the other Loan Documents, reflects
   the entire understanding of the parties with respect to the transactions
   contemplated hereby and shall not be contradicted or qualified by any
   other agreement, oral or written, before the date hereof.

        15.10.    Joint and Several Liability.

             (a)  The obligation of the Borrowers hereunder and under the
   other Loan Documents are joint and several.

             (b)  The liability of each Borrower hereunder and under the Loan
   Documents shall be absolute, unconditional and irrevocable irrespective
   of:

                  (i)  any lack of validity, legality or enforceability
             of this Agreement, or any other Loan Document as to any
             Borrower;

                  (ii) the failure of Foothill

                       (A)  to enforce any right or remedy against any
                  Borrower or any other Person (including any guarantor
                  or any Borrower) under the provisions of this
                  Agreement, any other Loan Documents or otherwise, or

                       (B)  to exercise any right or remedy against any
                  guarantor of, or collateral security any Obligations;

                  (iii)     any change in the time, manner or place of
             payment of, or in any other term of, all or any of the
             Obligations, or other extension, compromise or renewal of
             any Obligations;

                  (iv) any reduction, limitation, impairment or
             termination of any Obligations with respect to any Borrower
             for any reason including any claim of waiver, release,
             surrender, alteration or compromise, and shall not be
             subject to (and each Borrower hereby waives any right to or
             claim of) any defense or setoff, counterclaim, recoupment
             or termination whatsoever by reason of the invalidity,
             illegality, nongenuineness, irregularity, compromise,
             unenforceability of, or any other event or occurrence
             affecting, any Obligations with respect to any Borrower;

                  (v)  any addition, exchange, release, surrender or
             nonperfection of any Collateral, or any amendment to or
             waiver or release or addition of, or consent to departure
             from any guaranty, held by any Foothill securing any of the
             Obligations; or

                  (vi) any other circumstance which might otherwise
             constitute a defense available to, or a legal or equitable
             discharge of, any Borrower, any surety or any guarantor.

             Each Borrower agrees if such Borrower's joint and several
   liability hereunder, or if any liens securing such joint and several
   liability, would, but for the application of this sentence, be
   unenforceable under applicable law, such joint and several liability and
   each such lien shall be valid and enforceable to the maximum extent that
   would not cause such joint and several liability or such lien to be
   enforceable under applicable law, and such joint and several liability and
   such lien shall be deemed to have been automatically amended accordingly
   at all relevant times.

             To the maximum extent permitted by law, each Borrower hereby
   waives any defense arising by reason of any claim or defense based upon an
   election of remedies by Foothill including any defense based upon an
   election of remedies by Foothill under the provisions of Sections 580d and
   726 of the California Code of Civil Procedure, or any similar law of
   California or any other jurisdiction.

             WITHOUT LIMITING THE GENERALITY OF ANY OTHER WAIVER OR OTHER
   PROVISION SET FORTH IN THIS AGREEMENT, EACH BORROWER HEREBY WAIVES, TO THE
   MAXIMUM EXTENT PERMITTED BY LAW, ANY AND ALL BENEFITS OR DEFENSES ARISING
   DIRECTLY OR INDIRECTLY UNDER ANY ONE OR MORE OF CALIFORNIA CIVIL CODE
   SECTIONS 2799, 2808, 2809, 2810, 2815, 2819, 2820, 2821, 2822, 2838, 2839,
   2845, 2848, 2849, AND 2850, CALIFORNIA CODE OF CIVIL PROCEDURE SECTIONS
   580a, 580b, 580c, 580d, AND 726, AND CHAPTER 2 OF TITLE 14 OF THE
   CALIFORNIA CIVIL CODE.

             IN WITNESS WHEREOF, the parties hereto have caused this
   Agreement to be executed in Los Angeles, California.

                                      EFFECTIVE MANAGEMENT SYSTEMS, INC.,
                                      a Wisconsin corporation


                                      By
                                      Title


                                      EMS-EAST, INC., a Massachusetts
                                      corporation


                                      By
                                      Title


                                      EFFECTIVE MANAGEMENT SYSTEMS OF
                                      ILLINOIS, INC., an Illinois
                                      corporation


                                      By
                                      Title


                                      FOOTHILL CAPITAL CORPORATION,
                                      a California corporation


                                      By
                                      Title