WAIVER

       THIS WAIVER (this "Waiver") is entered into as of January 28, 1999, among
Effective Management Systems, Inc. ("EMS"), a Wisconsin  corporation,  EMS-East,
Inc. ("EMS-East"), a Massachusetts corporation,  Effective Management Systems of
Illinois,  Inc.  ("EMS-Illinois"),  and Illinois  corporation (EMS, EMS-East and
EMS-Illinois are each individually a "Borrower",  and collectively "Borrowers"),
and Foothill Capital Corporation ("Lender").

       WHEREAS,  Borrowers  and  Lender  are  parties  to a  Loan  and  Security
Agreement dated as of December 30, 1997, as amended (the "Loan Agreement");

       WHEREAS,  Borrower has informed Lender that Borrowers' Tangible Net Worth
(as defined in the Loan  Agreement)  for the fiscal  quarter ended  November 30,
1998 is  approximately  negative Four Million Four Hundred  Eighty-Two  Thousand
Dollars (-$4,482,000);

       WHEREAS,  Borrower has informed Lender that Borrowers' EBITDA (as defined
in the Loan  Agreement)  for the three month period ending  November 30, 1998 is
approximately negative Eight Hundred Seventeen Thousand Dollars (-$817,000);

       WHEREAS,  as a result of the foregoing,  Borrowers have breached Sections
7.20(a)  and 7.20 (b) of the Loan  Agreement  and Events of Default  exist under
Section 8.2 of the Loan Agreement.

       WHEREAS,  Borrowers have requested that Lender waive the foregoing Events
of Default and Lender has agreed to do so subject to the terms hereof;'

       NOW THEREFORE,  in  consideration  of the premises and mutual  agreements
herein contained, the parties hereto agree as follows:

1.     Defined Terms.  Unless otherwise  defined herein,  capitalized terms used
       herein  shall  have  the  meanings  ascribed  to such  terms  in the Loan
       Agreement.

2.     Waiver.   Subject  to  the   reaffirmation   by  each   Borrower  of  its
       representations   and  warranties   under  the  Loan  Agreement  and  its
       representations  and warranties set forth herein and receipt by Lender of
       the waiver fee  referred  to below,  Lender  hereby  waives the Events of
       Default  arising  solely  as a result  of the (i)  Tangible  Net Worth of
       Borrowers not being at least Three Hundred Seventy-Five  Thousand Dollars
       ($375,000) for the fiscal quarter ended November 30, 1998 and (ii) EBITDA
       of  Borrowers  not  being at least  Zero  Dollars  ($0) for the six month
       period  ending  November  30,  1998.  The  foregoing   waiver  shall  not
       constitute  a waiver of any other Event of Default 


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       that may  exist,  or a waiver of any future  Event of  Default  tha0t may
       occur (including, without limitation, any Event of Default occurring as a
       result of a breach of Section 7.20 (a) or Section 7.20 (b) as of any date
       or for any period ending after November 30, 1998).

3.     Representations.  In order to induce  Lender to enter  into this  Waiver,
       Borrower hereby represents and warrants to Lender that:

(a)    The representations and warranties of each Borrower contained in the Loan
       Agreement,  are true and  correct as of the date hereof as if made on the
       date hereof;

(b)    No Event of Default or event which,  with giving of notice or the passage
       of time, or both would become an Event of Default,  exists as of the date
       hereof (other than as described in Section 2 above);

(c)    The  Tangible  Net  Worth  of  Borrowers  as  of  November  30,  1998  is
       approximately  negative  Four  Million Four  Hundred  Eight-Two  Thousand
       Dollars (-$4,482,000); and

(d)    The EBITDA of Borrowers  for the six month  ending  November 30, 1998 was
       approximately   negative  Eight  Hundred   Seventeen   Thousand   Dollars
       (-$817,000).


4.     Waiver Fee. In consideration  of the waiver  described  above,  Borrowers
       agree to pay Lender a waiver fee of Two Thousand  Dollars ($2,000) on the
       date hereof.






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       IN WITNESS  WHEREOF,  the  parties  hereto  have caused this Waiver to be
executed by their respective  officers therunto duly authorized and delivered as
of the date first above written.


                                   EFFECTIVE MANAGEMENT SYSTEMS, INC.,
                                   A Wisconsin corporation
                   
                   
                                   By:
                                   ---------------------------------------------
                                   Its:
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                                   EMS - EAST, INC., a Massachusetts corporation
                   
                   
                                   By:
                                   ---------------------------------------------
                                   Its:
                                   ---------------------------------------------
                   
                   
                                   EFFECTIVE MANAGEMENT SYSTEMS OF
                                    ILLINOIS, an Illinois corporation
                   
                   
                                   By:
                                   ---------------------------------------------
                                   Its:
                                   ---------------------------------------------
                   
                   
                                   FOOTHILL CAPITAL CORPORATION
                   
                   
                                   By:
                                   ---------------------------------------------
                                   Its:
                                   ---------------------------------------------