Exhibit 4.4
WAIVER
THIS WAIVER (this "Waiver") is entered into as of October 12, 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"), 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, 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 August 31,
1999 is approximately negative Ten Million Five Hundred Eighty-Six Thousand
Dollars (-$10,586,000);
WHEREAS, Borrower has informed Lender that Borrowers' EBITDA (as
defined in the Loan Agreement) for the three month period ending August 31, 1999
is approximately negative One Million One Hundred Four Thousand Dollars
(-$1,104,000);
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 negative Two
Million Seven Hundred and Fifty Thousand Dollars (-$2,750,000) plus the Equity
Infusion Amount for the fiscal quarter ended August 31, 1999 and (ii) EBITDA of
Borrowers not being at least Five Hundred Thousand Dollars ($500,000) for the
three month period ending August 31, 1999. The foregoing waiver shall not
constitute a waiver of any other Event of Default that may exist, or a wavier of
any future Event of Default that 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 August 31, 1999).
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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 August 31, 1999 is
approximately negative Ten Million Five Hundred Eighty-Six Thousand Dollars
(-$10,586,000); and
(d) The EBITDA of Borrowers for the three month ending August 31, 1999
is approximately negative One Million One Hundred Four Thousand Dollars
(-$1,104,000).
4. Waiver Fee. In consideration of the waiver described above,
Borrowers agree to pay Lender a waiver fee of Two Thousand Five Hundred Dollars
($2,500) 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 thereunto duly authorized and
delivered as of the date first above written.
EFFECTIVE MANAGEMENT SYSTEMS, INC.,
a Wisconsin corporation
By /s/ X.X. Xxxxxxxxxxxx
X.X. Xxxxxxxxxxxx
Title: Chief Financial Officer
EMS-EAST, INC., a Massachusetts corporation
By /s/ Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Title: President
EFFECTIVE MANAGEMENT SYSTEMS OF
ILLINOIS, an Illinois corporation
By /s/ Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Title: President
FOOTHILL CAPITAL CORPORATION
By /s/ Xxxxx X. Xxxx
Xxxxx X. Xxxx
Title: Vice President
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