NINTH AMENDMENT TO LOAN AND SECURITY AGREEMENT
This Ninth Amendment to Loan and Security agreement is dated as of
September 9, 1997 by and between Bank One, Wisconsin successor by merger
to Bank One, Milwaukee, NA, its successors and assigns (the "Secured
Party") and Effective Management Systems, Inc. ("EMS"), Effective
Management Systems of Michigan, Inc., EMS-East, Inc., Intercim Corp.,
Effective Management Systems of Illinois, Inc., and EMS Asia Pacific
Limited (collectively, the "Debtors").
RECITALS
WHEREAS, the Secured Party and certain of the Debtors entered into a
Loan and Security Agreement dated as of November 9, 1992, which agreement
has subsequently been amended as of April 23, 1993, February 8, 1994, May
11, 1995, August 31, 1995, May 31, 1996, October 31, 1996, February 27,
1997, July 11, 1997 and as of the date hereof (as amended and as hereafter
renewed, extended, amended, modified, or supplemented, the "Loan
Agreement"); and
WHEREAS, the Secured Party and the Debtors desire to further amend
the Loan Agreement as hereinafter set forth.
NOW, THEREFORE, the parties hereto agree as follows:
1. Capitalized terms not defined herein shall have the meaning
ascribed in the Loan Agreement.
2. Section 5 of the Loan Agreement shall be amended and restated in
its entirety to read as follows:
5. Collections.
(a) Lock Box Service. Debtors have entered into a
Lock Box Service Agreement with Secured Party, pursuant to which
Secured Party shall be granted access to the post office box to
which all Customers shall be instructed to forward payments made
with respect to all Collateral.
(b) Receipt and Credit for Collections. All checks,
drafts, cash, notes, money orders, acceptances and other
remittances ("Collections") in part or full payment of and with
respect to the Collateral received through the Lock Box Service
Agreement shall be retained by Secured Party and processed in
accordance with such Lock Box Service Agreement. All
Collections received directly by a Debtor shall immediately be
delivered by Debtors to Secured Party in precisely the form
received (but endorsed by such Debtor if necessary for
collection), and until such delivery Debtors shall not commingle
any Collections with any other funds or property of any Debtor
but shall hold the Collections in trust for Secured Party. The
amount of any Collections received by or transferred to the
Commercial Finance Department of Secured Party in Milwaukee,
Wisconsin will be applied by Secured Party against the
Obligations within two business days after such receipt by
crediting Debtors's Loan Account. The application of all
Collections with respect to the Obligations shall be conditional
upon actual collection. In the event that any such item, the
amount of which has been credited against the Obligations, is
subsequently dishonored or otherwise returned unpaid, Secured
Party may retroactively debit Debtors' Loan Account or any
deposit account maintained by a Debtor or Debtors at Secured
Party or any Secured Party Affiliate for the amount of such item
plus applicable transaction and interest charges.
(c) Verification and Notification. Secured Party may
confirm and verify all Receivables in any manner, and Debtors
shall assist Secured Party in so doing. Notwithstanding the
existence of any Lock Box Service Agreement, Secured Party may
at any time notify, or require Debtors to notify, all Customers
or any of them to make payment directly to Secured Party, and
Secured Party may enforce collection of, settle, compromise,
extend or renew the indebtedness of any or all Customers without
liability of any kind.
(d) Authority to Perform for Debtors. Each Debtor
appoints each and every officer of Secured Party as Debtor's
attorney-in-fact to endorse the name of Debtor on any notes,
acceptances, checks, drafts, money orders or other instruments
for the payment of money that may come into Secured Party's
possession; to sign Debtor's name on any invoice or xxxx of
lading relating to any of the Receivables, on drafts against
Customers and on notices to Customers. This power, because it
is coupled with an interest, is irrevocable while any Obligation
remains unpaid. Secured Party is hereby authorized and
empowered to accept the return of goods represented by any of
the Receivables, without notice to or the consent of Debtors and
without discharging or in any way affecting Debtors' liability
hereunder. All acts of Secured Party or its appointee are
hereby ratified and approved, and Secured Party or its appointee
shall not be liable for any acts of commission or omission, nor
for any error of judgment or mistake of fact or law.
3. Debtors represents and warrants that (a) the representations and
warranties contained in the Loan Agreement are true and correct in all
material respects as of the date of this Amendment, (b) except as
disclosed to Secured Party in writing, which defaults or Events of Default
have not been waived by Secured Party (and shall not be waived by the
execution hereof), no condition, act or event which could constitute an
Event of Default under the Loan Agreement exists, and (c) no condition,
event, act or omission has occurred, which, with the giving of notice or
passage of time, would constitute an Event of Default under the Loan
Agreement.
4. Debtors agrees to pay all fees and out-of-pocket disbursements
incurred by the Secured Party in connection with this Amendment, including
legal fees incurred by the Secured Party in the preparation, consummation,
administration and enforcement of this Amendment.
5. This Amendment shall become effective as of September 9, 1997,
notwithstanding the date of execution. Except as amended by this Ninth
Amendment, the Loan Agreement shall remain in full force and effect in
accordance with its terms.
6. This Amendment is a modification only and not a novation.
Except for the above-quoted modification(s), the Loan Agreement, any
agreement or security document, and all the terms and conditions thereof,
shall be and remain in full force and effect with the changes herein
deemed to be incorporated therein. This Amendment is to be considered
attached to the Loan Agreement and made a part thereof. This Amendment
shall not release or affect the liability of any guarantor, surety or
endorser of the Loan Agreement or release any owner of collateral securing
the Loan Agreement. The validity, priority and enforceability of the Loan
Agreement shall not be impaired hereby. To the extent that any provision
of this Amendment conflicts with any term or condition set forth in the
Loan Agreement, or any agreement or security document executed in
conjunction therewith, the provisions of this Amendment shall supersede
and control. Each Debtor acknowledges that as of the date of this
Amendment they have no offsets with respect to all amounts owed by Debtors
to Secured Party and each Debtor waives and releases all claims which they
may have against Secured Party arising under the Loan Agreement on or
prior to the date of this Amendment.
7. The Debtors acknowledge and agree that this Amendment is limited
to the terms outlined above, and shall not be construed as an amendment of
any other terms or provisions of the Loan Agreement. The Debtors hereby
specifically ratify and affirm the terms and provisions of the Loan
Agreement. Each Debtor releases the Secured Party from any and all claims
which may have arisen, known or unknown, in connection with the Loan
Agreement on or prior to the date hereof. This Amendment shall not
establish a course of dealing or be construed as evidence of any
willingness on the Secured Party's part to grant other or future
amendments, should any be requested.
8. All obligations of the Debtors under the Loan Agreement and this
Amendment shall be their joint and several obligations.
IN WITNESS WHEREOF, the parties have entered into this Amendment as
of the day and year first above written.
BANK ONE, WISCONSIN
By: /s/ Xxxxxxx X. Xxxx
Xxxxxxx X. Xxxx, Vice President
EFFECTIVE MANAGEMENT SYSTEMS, INC.
By:/s/ Xxxxxxx X. Xxxxxx
Title:President
EFFECTIVE MANAGEMENT SYSTEMS OF ILLINOIS, INC.
By:/s/ Xxxxxxx X. Xxxxxx
Title:Secretary
[ ALL OTHER DEBTORS ON ATTACHED SIGNATURE PAGE ]
EFFECTIVE MANAGEMENT SYSTEMS OF MICHIGAN, INC.
By:/s/ Xxxxxxx X. Xxxxxx
Title:Secretary
EMS-EAST, INC.
By:/s/ Xxxxxxx X. Xxxxxx
Title:Treasurer
EMS ASIA PACIFIC LIMITED
By:/s/ Xxxxxxx X. Xxxxxx
Title:President
