WAIVER AND FIRST AMENDMENT TO
                                 LOAN AGREEMENT

        THIS WAIVER AND FIRST AMENDMENT (this "Amendment") is entered into as
   of May 8, 1998, 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"), an 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 (the "Loan Agreement");

        WHEREAS, Borrowers have executed a Secured Promissory Note dated
   December 30, 1997 (the "Note");

        WHEREAS, Borrowers have requested that Lender consent to the deferral
   of the two installment payments of principal due on May 10, 1998 and June
   10, 1998 under the Note until the third anniversary of the Closing Date
   (as defined in the Loan Agreement); and

        WHEREAS, Borrowers have requested that Lender amend the Loan
   Agreement, and Lender has agreed to do so subject to the terms and
   conditions contained herein;

        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.   Consent.  Subject to the satisfaction of the conditions set
   forth in Section 5 hereof, Lender hereby consents to the deferral of the
   two installment payments of principal due on May 10, 1998 and June 10,
   1998 under the Note until the third anniversary of the Closing Date.

        3.   Amendments to Loan Agreement.  Subject to the satisfaction of
   the conditions set forth in Section 5 hereof, the Loan Agreement is
   amended as follows:

        (a)  Section 2.1(a) of the Loan Agreement if hereby amended and
   restated in its entirety, as follows:

        "(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) and 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 judgement), minus

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

             (z)  the "Additional Availability Amount" (as defined below). 
        The "Additional Availability Amount" means (i) during the period
        commencing on May 8, 1998 and ending on August 31, 1998 (the
        "Additional Availability Termination Date"), an amount up to $750,000
        as designated in writing by EMS to Foothill, provided that such
        designation shall be in increments of $250,000 and (ii) at all times
        on and after the Additional Availability Termination Date, an amount
        equal to zero."

        (b)  Section 2.11 of the Loan Agreement is hereby amended to add the
   following sentence at the end of said section, as follows:

        "(e) Additional Availability Fees.  At the time EMS designates an
   Additional Availability Amount, a fee of $2,500 per $250,000 so
   designated."

        4.   Ratification.  This Amendment, subject to satisfaction of the
   conditions provided below, shall constitute amendments to the Loan
   Agreement and all of the Loan Documents as appropriate to express the
   agreements contained herein.  In all other respects, the Loan Agreement
   and the Loan Documents shall remain unchanged and in full force and effect
   in accordance with their original terms.  Without limiting the foregoing,
   Borrower acknowledges that Eligible Accounts do not include Accounts with
   respect to which goods are placed on consignment, guaranteed sale, sale or
   return, sale on approval, bill and hold (unless the Account Debtor with
   respect to such bill and hold goods has unconditionally agreed in writing
   to purchase such goods), or other terms by reason of which the payment by
   the Account Debtor may be conditional.

        5.   Conditions to Effectiveness.  Subject to Section 6 below, the
   amendments to the Loan Agreement set forth in this Amendment shall become
   effective as of the date of this Amendment and upon the satisfaction of
   the following conditions precedent in form and substance satisfactory to
   Lender:

        (a)  Deferral Fee.  Borrower shall pay to Lender a deferral fee equal
   to Two Thousand Five Hundred Dollars ($2,500)

        (b)  No Default.  No Event of Default or event which, with the giving
   of notice or the passage of time, or both would become an Event of
   Default, shall have occurred and be continuing, and, after giving effect
   to the amendments contained herein, no Event of Default or event which,
   with the giving of notice or the passage of time, or both, would become an
   Event of Default, shall have occurred and be continuing.

        6.   Miscellaneous.

        (a)  Warranties and Absence of Defaults.  In order to induce Lender
   to enter into this Amendment, each Borrower hereby warrants to Lender, as
   of the date hereof, that:

             (i)  The warranties of such Borrower contained in the Loan
        Agreement, as herein amended, are true and correct as of the date
        hereof as if made on the date hereof.

             (ii) All information, reports and other papers and data
        heretofore furnished to Lender by such Borrower in connection with
        this Amendment, the Loan Agreement and the other Loan Documents are
        accurate and correct in all material respects and complete insofar as
        may be necessary to give Lender true and accurate knowledge of the
        subject matter thereof.  Such Borrower has disclosed to Lender every
        fact of which it is aware which would reasonably be expected to
        materially and adversely affect the business, operations or financial
        condition of such Borrower or the ability of such Borrower to perform
        its obligations under this Amendment, the Loan Agreement or under any
        of the other Loan Documents.  None of the information furnished to
        Lender by or on behalf of such Borrower contained any material
        misstatement of fact or omitted to state a material fact or any fact
        necessary to make the statements contained herein or therein not
        materially misleading. 

             (iii)     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.

        (b)  Expenses.  Borrowers agree to pay on demand all costs and
   expenses of Lender (including the reasonable fees and expenses of outside
   counsel for Lender) in connection with the preparation, negotiation,
   execution, delivery and administration of the Amendment and all other
   instruments or documents provided for herein or delivered or to be
   delivered hereunder or in connection herewith.  In addition, Borrowers
   agree to pay, and save Lender harmless from all liability for, any stamp
   or other taxes which may be payable in connection with the execution or
   delivery of this Amendment or the Loan Agreement, as amended hereby, and
   the execution and delivery of any instruments or documents provided for
   herein or delivered or to be delivered hereunder or in connection
   herewith.  All obligations provided in this Section 6 (b) shall survive
   any termination of this Amendment and the Loan Agreement as amended
   hereby.

        (c)  Governing Law.  This Amendment shall be a contract made under
   and governed by the internal laws of the State of California.

        (d)  Counterparts.  This Amendment may be executed in any number of
   counterparts, and by the parties hereto on the same or separate
   counterparts, and each such counterpart, when executed and delivered,
   shall be deemed to be an original, but all such counterparts shall
   together constitute but one and the same Amendment.

        (e)  Reference to Loan Agreement.  On and after the effectiveness of
   the amendment to the Loan Agreement accomplished hereby, each reference in
   the Loan Agreement to "this Agreement," "hereunder," "hereof," "herein" or
   words of like import, and each reference to the Loan Agreement in any Loan
   Documents, or other agreements, documents or other instruments executed
   and delivered pursuant to the Loan Agreement, shall mean and be a
   reference tot he Loan Agreement, as amended by this Amendment.

        (f)  Successors.  This Amendment shall be binding upon Borrowers,
   Lender and their respective successors and assigns, and shall inure to the
   benefit of Borrowers, Lender and their respective successors and assigns.

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


                                      EFFECTIVE MANAGEMENT SYSTEMS, INC.,
                                      a Wisconsin corporation

                                      By
                                      Its            President



                                      EMS-EAST, Inc., a Massachusetts
                                      corporation

                                      By
                                      Its            Secretary



                                      EFFECTIVE MANAGEMENT SYSTEMS OF
                                      ILLINOIS, an Illinois corporation

                                      By
                                      Its            Secretary



                                      FOOTHILL CAPITAL CORPORATION,
                                      a California corporation

                                      By
                                      Its            Vice President