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And Subject To Contract - ELOYALTY CORP - 3-28-2002

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And Subject To Contract - ELOYALTY CORP - 3-28-2002 Powered By Docstoc
					EXHIBIT 10.26 WITHOUT PREJUDICE AND SUBJECT TO CONTRACT Dated December 18, 2001 ELOYALTY (UK) LIMITED and VAUGHAN THOMAS

COMPROMISE AGREEMENT

WITHOUT PREJUDICE AND SUBJECT TO CONTRACT
THIS AGREEMENT is made BETWEEN: (1) "The Company" ELOYALTY (UK) LIMITED, whose registered office is at Regina House, 5 Queen Street, London E4N 1SP; and VAUGHAN THOMAS of Westwind, Fitzroy Park, London N6 6HT. Dec. 18, 2001

(2)

"The Executive"

BACKGROUND A. The Executive was employed by the Company as Senior Vice President from 1 July 2000 under the terms and conditions set out in a Contract of Employment between the Executive and the Company dated 12 May 2000 (the "Contract of Employment"), a complete copy of which is attached to this Agreement at Appendix A. B. The Executive's employment with the Company terminated on 7th December 2001 ("the Termination Date") by reason of redundancy. C. The Executive has sought advice from the Independent Adviser about his ability to commence proceedings against the Company regarding his employment or the termination of it in relation to unfair dismissal (including constructive, unfair dismissal), wrongful dismissal, unpaid wages, unpaid holiday pay, redundancy pay (including statutory redundancy pay), race discrimination, bonus and commission payments, stock options, restricted stock grants, damages for breach of contract (the "Claims") and any other statutory or contractual claims which he has or may have against the Company or any Group Company, or its or their agents. D. This Agreement records the terms and conditions upon which the Company and the Executive have agreed to settle all outstanding claims that the Executive may have against the Company and/or any Group Company and/or any of its or their agents (including directors and officers), arising out of his employment and/or its termination, and it is the complete agreement between the parties regarding this matter. E. The Company is entering into this Agreement for itself and as agent for any Group Company and is duly authorised in that respect. Any Group Company may enforce any of the terms of this Agreement in its own right. The Contracts (Rights of Third Parties) Act 1999 shall apply to this Agreement.

WITHOUT PREJUDICE AND SUBJECT TO CONTRACT
THIS AGREEMENT is made BETWEEN: (1) "The Company" ELOYALTY (UK) LIMITED, whose registered office is at Regina House, 5 Queen Street, London E4N 1SP; and VAUGHAN THOMAS of Westwind, Fitzroy Park, London N6 6HT. Dec. 18, 2001

(2)

"The Executive"

BACKGROUND A. The Executive was employed by the Company as Senior Vice President from 1 July 2000 under the terms and conditions set out in a Contract of Employment between the Executive and the Company dated 12 May 2000 (the "Contract of Employment"), a complete copy of which is attached to this Agreement at Appendix A. B. The Executive's employment with the Company terminated on 7th December 2001 ("the Termination Date") by reason of redundancy. C. The Executive has sought advice from the Independent Adviser about his ability to commence proceedings against the Company regarding his employment or the termination of it in relation to unfair dismissal (including constructive, unfair dismissal), wrongful dismissal, unpaid wages, unpaid holiday pay, redundancy pay (including statutory redundancy pay), race discrimination, bonus and commission payments, stock options, restricted stock grants, damages for breach of contract (the "Claims") and any other statutory or contractual claims which he has or may have against the Company or any Group Company, or its or their agents. D. This Agreement records the terms and conditions upon which the Company and the Executive have agreed to settle all outstanding claims that the Executive may have against the Company and/or any Group Company and/or any of its or their agents (including directors and officers), arising out of his employment and/or its termination, and it is the complete agreement between the parties regarding this matter. E. The Company is entering into this Agreement for itself and as agent for any Group Company and is duly authorised in that respect. Any Group Company may enforce any of the terms of this Agreement in its own right. The Contracts (Rights of Third Parties) Act 1999 shall apply to this Agreement. -1-

WITHOUT PREJUDICE AND SUBJECT TO CONTRACT IT IS AGREED AS FOLLOWS:1.1 In this Agreement the following words and expressions shall have the following meanings:INTERPRETATION
EXPRESSION ---------Group Company MEANING ------any of (i) the Company and (ii) any Holding Company of the Company (including but not limited to eLoyalty Corporation) and (iii) any Subsidiary of any such Holding Company and (iv) any Subsidiary, parent, shareholder, employee, agent, officer or director of the Company or of any Holding Company.

WITHOUT PREJUDICE AND SUBJECT TO CONTRACT IT IS AGREED AS FOLLOWS:1.1 In this Agreement the following words and expressions shall have the following meanings:INTERPRETATION
EXPRESSION ---------Group Company MEANING ------any of (i) the Company and (ii) any Holding Company of the Company (including but not limited to eLoyalty Corporation) and (iii) any Subsidiary of any such Holding Company and (iv) any Subsidiary, parent, shareholder, employee, agent, officer or director of the Company or of any Holding Company. Michael Thomas of RadcliffesLeBrasseur, 5 Great College Street, Westminster, London SW1P 3SJ. have the respective meanings given to them by Section 736 of the Companies Act 1985 and any reference to the subsidiary or subsidiaries or holding company is (unless inconsistent with the context) intended to be a reference to the Subsidiary or Subsidiaries or Holding Company respectively of the Company in question at the relevant time. Any day of any week which is not either a Saturday, Sunday or a public holiday in the United States of America.

Independent Adviser

Subsidiary and Holding Company

US Business Day

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WITHOUT PREJUDICE AND SUBJECT TO CONTRACT
S203 ERA Section 203(3) of the Employment Rights Act 1996.

1.2 References to "clauses" are references to clauses in this Agreement unless specifically stated otherwise. 2. AGREEMENTS BY THE COMPANY Unless and until the Executive breaches any of his agreements contained in clause 3 of this Agreement, the Company agrees that: 2.1 the Executive's employment with the Company terminated with effect from 7th December 2001 (the "Termination Date"). The Company will pay the Executive his final accrued salary, and all accrued and unused reasonably documented holiday pay (7.5 days), earned up to and including the Termination Date through the payroll in the normal manner;

WITHOUT PREJUDICE AND SUBJECT TO CONTRACT
S203 ERA Section 203(3) of the Employment Rights Act 1996.

1.2 References to "clauses" are references to clauses in this Agreement unless specifically stated otherwise. 2. AGREEMENTS BY THE COMPANY Unless and until the Executive breaches any of his agreements contained in clause 3 of this Agreement, the Company agrees that: 2.1 the Executive's employment with the Company terminated with effect from 7th December 2001 (the "Termination Date"). The Company will pay the Executive his final accrued salary, and all accrued and unused reasonably documented holiday pay (7.5 days), earned up to and including the Termination Date through the payroll in the normal manner; 2.2 subject to clause 2.3 below, it will pay to the Executive a severance payment which includes a payment in lieu of the Executive's notice entitlement and is taxable in full. The severance payment made by the Company will be the sum of (pound)363,025 less basic rate Income Tax and Employee National Insurance Contributions ("the Severance Payment"). The Company will account to the Inland Revenue for the deductions of Income Tax and Employee National Insurance Contributions made. Any additional Income Tax and/or Employee National Insurance Contributions for which the Executive may be liable will be payable by the Executive to the Inland Revenue as part of the settlement of his tax affairs for the tax year 2001/2002;
2.3 the Severance Payment will be paid as follows: 2.3.1 the first (pound)150,000 (`the First Lump Sum Payment') will be paid into an escrow account opened in the joint names of Eversheds Solicitors and Radcliffes Solicitors for the benefit of the Executive ("the Escrow Account") within 7 US Business Days of receipt of this Agreement signed by the Executive and the Independent Adviser by Caroline Garden of Eversheds, 115 Colmore Row, Birmingham B3 3AL ("Eversheds"). In the event that the Company receives confirmation from the Inland Revenue that the Loan Forgiveness referred to at clause 2.7 below is not subject to Income Tax and/or Employee National Insurance Contributions the First Lump Sum Payment will be paid to the Executive, together with any interest

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WITHOUT PREJUDICE AND SUBJECT TO CONTRACT
earned thereon, within 7 US Business Days of receipt of such confirmation from the Inland Revenue. In the event that the Inland Revenue deems the Loan Forgiveness to be subject to Income Tax and/or Employee National Insurance Contributions, the Company will pay any such sums demanded to the Inland Revenue from the Escrow Account and pay to the Executive any balance remaining in the Escrow Account together with interest earned thereon, within 7 US Business Days of the Company's receipt of the demand from the Inland Revenue, subject to the Executive first being given 7 US Business Days from the Company's receipt of such demand from the Inland Revenue to appeal against such demand and obtain a decision from the Inland Revenue; 2.3.2 the sum of (pound)131,000 will be paid by the Company, after

WITHOUT PREJUDICE AND SUBJECT TO CONTRACT
earned thereon, within 7 US Business Days of receipt of such confirmation from the Inland Revenue. In the event that the Inland Revenue deems the Loan Forgiveness to be subject to Income Tax and/or Employee National Insurance Contributions, the Company will pay any such sums demanded to the Inland Revenue from the Escrow Account and pay to the Executive any balance remaining in the Escrow Account together with interest earned thereon, within 7 US Business Days of the Company's receipt of the demand from the Inland Revenue, subject to the Executive first being given 7 US Business Days from the Company's receipt of such demand from the Inland Revenue to appeal against such demand and obtain a decision from the Inland Revenue; 2.3.2 the sum of (pound)131,000 will be paid by the Company, after receipt by Eversheds of this Agreement signed by the Executive and the Independent Adviser, in 12 equal monthly instalments (`the Instalment Payments') commencing on 7th January 2002 and continuing until 7th December 2002; the balance of the Severance Payment remaining after the deduction of the First Lump Sum Payment and the Instalment Payments ("the Second Lump Sum Payment") will be paid after the issue of the Executive's P45 and within 7 US business days of receipt by Eversheds of this Agreement signed by the Executive and the Independent Adviser;

2.3.3

2.4 payment by the Company of the Instalment Payments referred to in clause 2.3.2 above will be secured by a Letter of Credit with LaSalle Bank N.A ("the Letter of Credit"); 2.5 it will pay to the Executive an ex gratia payment of (pound)30,000 ("the Ex Gratia Payment"). The parties acknowledge that the Ex Gratia Payment is a non-contractual payment for loss of employment and that section 148 of the Income and Corporation Taxes Act 1988 applies. The Ex Gratia Payment will be paid without deduction for Income Tax and Employee National Insurance Contributions and will be paid after the issue of the Executive's P45 and within 7 US business days of receipt by Eversheds of this Agreement signed by the Executive and the Independent Adviser; 2.6 for the period of 1 year from the Termination Date or until the date on which the Executive finds alternative employment, whichever is the earlier, the Company will:-4-

WITHOUT PREJUDICE AND SUBJECT TO CONTRACT
2.6.1 2.6.2 continue to pay the Executive's health benefits; and continue to make pension plan contributions on the Executive's behalf (collectively "the Benefits")

on the same terms as the Executive enjoyed during his employment with the Company; 2.7 it will forgive one hundred percent (100%) of the outstanding indebtedness as of the Termination Date owed by the Executive to the Company pursuant to the Loan Note between the Company and the Executive dated July 1, 2000 ("the Loan Forgiveness"), a copy of which is included within Appendix A, provided that the Executive will be solely responsible for any taxes or Employee National Insurance Contributions required to be paid to the Inland Revenue or any other governmental entity as a result of the Loan Forgiveness;

WITHOUT PREJUDICE AND SUBJECT TO CONTRACT
2.6.1 2.6.2 continue to pay the Executive's health benefits; and continue to make pension plan contributions on the Executive's behalf (collectively "the Benefits")

on the same terms as the Executive enjoyed during his employment with the Company; 2.7 it will forgive one hundred percent (100%) of the outstanding indebtedness as of the Termination Date owed by the Executive to the Company pursuant to the Loan Note between the Company and the Executive dated July 1, 2000 ("the Loan Forgiveness"), a copy of which is included within Appendix A, provided that the Executive will be solely responsible for any taxes or Employee National Insurance Contributions required to be paid to the Inland Revenue or any other governmental entity as a result of the Loan Forgiveness; it will use reasonable endeavours to ensure that its directors and executive officers do not disparage the Executive in any manner likely to be harmful to him, provided that the Company's executive officers will respond accurately and fully to any question, enquiry or request for information when required by law; it will provide upon request from any prospective employer of the Executive a reference in the terms attached to this Agreement at Appendix B. The Company agrees not to derogate from the terms of that reference to the detriment of the Executive; it will refund to the Executive in accordance with the terms of the Company's Employee Share Purchase Plan the balance of the Executive's contributions paid by the Executive into that Plan; it will pay a contribution towards the legal costs incurred by the Executive in obtaining advice from the Independent Adviser in respect of the termination of his employment and this Agreement of (pound)24,675 inclusive of VAT within 14 days of receipt of an invoice from the Independent Adviser's firm addressed to the Executive and marked as payable by the Company; and it will accept compliance by the Executive of the agreements on his part contained in clause 3 in full and final settlement of any claims it has or may have against the Executive, save that this will not preclude the operation of Section 310 of the

2.8

2.9

2.10

2.11

2.12

-5-

WITHOUT PREJUDICE AND SUBJECT TO CONTRACT Companies Act 1985 and save in respect of the Company's right to enforce the terms of this Agreement. 3. AGREEMENTS BY THE EMPLOYEE In consideration of the agreements on the part of the Company contained in clause 2, the Executive agrees as follows: 3.1 that he will accept compliance by the Company of the agreements on its part contained in clause 2 in full and final settlement of the Claims and all claims which he has or may have against the Company, any Group Company, or its or their agents, whether statutory or contractual including any claims arising out of or in any way connected with the Contract of Employment and the termination thereof save in respect of accrued pension rights and the right to enforce the terms of this Agreement;

WITHOUT PREJUDICE AND SUBJECT TO CONTRACT Companies Act 1985 and save in respect of the Company's right to enforce the terms of this Agreement. 3. AGREEMENTS BY THE EMPLOYEE In consideration of the agreements on the part of the Company contained in clause 2, the Executive agrees as follows: 3.1 that he will accept compliance by the Company of the agreements on its part contained in clause 2 in full and final settlement of the Claims and all claims which he has or may have against the Company, any Group Company, or its or their agents, whether statutory or contractual including any claims arising out of or in any way connected with the Contract of Employment and the termination thereof save in respect of accrued pension rights and the right to enforce the terms of this Agreement; 3.2 that on the advice of the Independent Adviser he is not aware of any claims that he has or may have other than those Claims referred to in this Agreement; 3.3 that with effect from the Termination Date, the Executive ceased to be an employee of the Company and has no authority to himself hold out as having any continuing connection with the Company or any Group Company; 3.4 that he will immediately notify the Company in writing as soon as he commences alternative employment; 3.5 that he will continue to comply with the post-termination restrictions set out at Section 12.1 of the Contract of Employment ("the Restrictive Covenants"), amended only to the extent that the definition of 'client' at clause 12.1. (a) of the Contract of Employment be limited to those companies set out at Appendix C of this Agreement. The Executive acknowledges that the Restrictive Covenants are enforceable and remain binding upon him for the period and extent contemplated by Clause 12.1 of the Contract of Employment. The Executive further acknowledges that in the one year period preceding the Termination Date, he has not dealt with in the course of his employment or participated in the submission of a proposal in relation to any companies not listed at Appendix C; 3.6 that he will promptly deliver up to Liz Archbold at the Company's London office at its request and in any event within 3 working days of this Agreement, any and all -6-

WITHOUT PREJUDICE AND SUBJECT TO CONTRACT
property belonging to the Company or any Group Company which is in the Executive's possession, custody or control, including but not limited to computer hardware and software, keycards, cell phones and pagers, which must be returned in good working condition. Such property also includes credit and phone cards (which must be cut in half), information and records, all correspondence and all other documents, papers, customer lists, customer contacts, customer sales proposals, sales contacts, customer sales proposals, sales contracts, Company plans, Company internal and external business correspondence, including those which may have been prepared by the Executive in the course of his employment which are in his possession, custody or control, and the Executive acknowledges that he has not made or retained copies of or extracts from documents or any notes of or information in relation to the business of the Company or any Group Company. The Executive further acknowledges that he has not deleted any files from his computer and that all files on his computer are the property of the Company and must not be copied, altered or deleted; 3.7 that any services being billed to the Company on behalf of the Executive have been terminated by the Executive;

WITHOUT PREJUDICE AND SUBJECT TO CONTRACT
property belonging to the Company or any Group Company which is in the Executive's possession, custody or control, including but not limited to computer hardware and software, keycards, cell phones and pagers, which must be returned in good working condition. Such property also includes credit and phone cards (which must be cut in half), information and records, all correspondence and all other documents, papers, customer lists, customer contacts, customer sales proposals, sales contacts, customer sales proposals, sales contracts, Company plans, Company internal and external business correspondence, including those which may have been prepared by the Executive in the course of his employment which are in his possession, custody or control, and the Executive acknowledges that he has not made or retained copies of or extracts from documents or any notes of or information in relation to the business of the Company or any Group Company. The Executive further acknowledges that he has not deleted any files from his computer and that all files on his computer are the property of the Company and must not be copied, altered or deleted; 3.7 that any services being billed to the Company on behalf of the Executive have been terminated by the Executive; that he will not demand any payment under the Letter of Credit referred to at clause 2.4 if he has breached any of the terms of this Agreement and if he does so, he will indemnify the Company in full in respect of the same; that he will honour his obligations under Section 10.3(b) of the Contract of Employment to keep secret and not use for any purposes, reveal, disclose or publish to any person any Confidential Information (as defined in the Contract of Employment) or any other information concerning the business or affairs of the Company; that he will honour his obligations under Section 2.9 of the Contract of Employment to not make any public statements in relation to the Company or any Group Company at any time and that he will not (a) represent that he is employed by or connected with the Company, or (b) use the style of "eLoyalty" or any name including the words "eLoyalty Corporation" or any name which is similar or likely to be confused therewith; that he will keep the terms of this Agreement and the reason for the termination of his employment stated herein confidential and will not disclose the same to any

3.8

3.9

3.10

3.11

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WITHOUT PREJUDICE AND SUBJECT TO CONTRACT
person other than his professional advisers, the Inland Revenue, his immediate family or as may be required by law; 3.12 that, save for any tax and National Insurance Contributions deducted by the Company, the Executive will indemnify and keep indemnified the Company and any Group Company against all and any liability to Income Tax and Employee National Insurance Contributions (including penalties and interest thereon) arising out of the Severance Payment, the Ex Gratia Payment and the Loan Forgiveness made by the Company pursuant to clauses 2.2, 2.3, 2.5 and 2.7, provided that the Executive is given notice by the Company of any assessment for Income Tax and National Insurance Contributions and is given 7 US Business Days from the Company's receipt of such assessment from the Inland Revenue to appeal against that assessment and obtain a decision from the Inland Revenue; that notwithstanding the terms of the eLoyalty Corporation 1999 Stock

3.13

WITHOUT PREJUDICE AND SUBJECT TO CONTRACT
person other than his professional advisers, the Inland Revenue, his immediate family or as may be required by law; 3.12 that, save for any tax and National Insurance Contributions deducted by the Company, the Executive will indemnify and keep indemnified the Company and any Group Company against all and any liability to Income Tax and Employee National Insurance Contributions (including penalties and interest thereon) arising out of the Severance Payment, the Ex Gratia Payment and the Loan Forgiveness made by the Company pursuant to clauses 2.2, 2.3, 2.5 and 2.7, provided that the Executive is given notice by the Company of any assessment for Income Tax and National Insurance Contributions and is given 7 US Business Days from the Company's receipt of such assessment from the Inland Revenue to appeal against that assessment and obtain a decision from the Inland Revenue; that notwithstanding the terms of the eLoyalty Corporation 1999 Stock Incentive Plan all outstanding stock options lapsed and ceased to be exercisable at the Termination Date; that notwithstanding the terms of the eLoyalty Corporation 1999 Stock Incentive Plan as amended and restated on 28 February 2001, the restricted stock under that Plan ceased vesting as of the Termination Date. The Executive's right to any remaining unvested restricted stock will be cancelled with effect from the Termination Date and the Executive agrees that he will undertake any action required by the Company to ensure that he ceases to have any interest in that restricted stock; that in respect of any Company or Group Company shares owned (beneficially or otherwise) by the Executive or any Company or Group Company shares which the Executive has the right to vote in relation to as of the record date of 22nd October 2001 or any other record date established for such voting (including but not limited to the Executive's 131,250 shares of Restricted Stock and the Executive's shares held in the eLoyalty Corporation Employee Stock Purchase Plan), the Executive will vote in favour of the 3 proposals as recommended by the eLoyalty Corporation Board of Directors which are described in the eLoyalty Corporation Proxy Statement dated 14th November 2001 and which are scheduled for consideration at the eLoyalty Corporation Special Meeting of Stockholders to be held on 18th December 2001 (or at any adjourned or postponed meeting thereof) and any subsequent meeting of shareholders called for the purpose of voting on such proposals. The Executive further agrees that he will not amend, modify or revoke such vote.

3.13

3.14

3.15

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WITHOUT PREJUDICE AND SUBJECT TO CONTRACT
3.16 that he will agree to any reasonable request by the Company to make himself available and assist the Company with any litigation that arises in respect of the period of the Executive's employment with the Company. The Company will pay the Executive at the rate of (pound)100 per hour for such assistance, together with reasonable documented expenses incurred; that he will not disparage the Company or any Group Company, or its or their officers, directors, employees, shareholders and agents, in any manner likely to be harmful to them or their business, business reputation or personal reputation; and that if he engages in any of the activities prohibited pursuant to Section 12.1 of the Contract of Employment or otherwise breaches any of the terms set out in this clause 3 of this Agreement, the Company's

3.17

3.18

WITHOUT PREJUDICE AND SUBJECT TO CONTRACT
3.16 that he will agree to any reasonable request by the Company to make himself available and assist the Company with any litigation that arises in respect of the period of the Executive's employment with the Company. The Company will pay the Executive at the rate of (pound)100 per hour for such assistance, together with reasonable documented expenses incurred; that he will not disparage the Company or any Group Company, or its or their officers, directors, employees, shareholders and agents, in any manner likely to be harmful to them or their business, business reputation or personal reputation; and that if he engages in any of the activities prohibited pursuant to Section 12.1 of the Contract of Employment or otherwise breaches any of the terms set out in this clause 3 of this Agreement, the Company's obligation to provide the Severance Payment, the Loan Forgiveness, the Ex Gratia Payment and the Benefits hereunder will immediately cease and the Company shall be entitled to seek recovery of damages from the Executive associated with or caused by Executive's breach. WAIVER OF RIGHT TO COMMENCE TRIBUNAL PROCEEDINGS The parties hereto believe the following statements to be true: 4.1.1 the Executive has received advice from the Independent Adviser as to the terms and effect of this Agreement and in particular its effect on his ability to pursue his rights before an Employment Tribunal; and that at the time when the Independent Adviser gave the advice referred to in clause 4.1.1 the risk of all or any claims by the Executive in respect of loss arising in consequence of the advice was covered by a contract of insurance or an indemnity provided for members of a profession or professional body;

3.17

3.18

4. 4.1

4.1.2

4.2

the Independent Adviser by signing this Agreement warrants that: 4.2.1 4.2.2 he is a qualified lawyer; and the statements set out in clauses 4.1.1 and 4.1.2 are correct.

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WITHOUT PREJUDICE AND SUBJECT TO CONTRACT 5. PROCEEDINGS 5.1 The Executive hereby warrants that, as at the date of this Agreement, he has not commenced proceedings against the Company or any Group Company in respect of the Claims or any other proceedings in either a Court or Employment Tribunal. 5.2 In the event that the Executive commences proceedings in respect of the Claims then the Executive will repay to the Company the Severance Payment and the Ex Gratia Payment and the Executive will have no entitlement to the Loan Forgiveness (which will become immediately due and payable together with interest at the rate specified in the Loan Note referred to at clause 2.7 above); 6. This Agreement satisfies the conditions for regulating Compromise Agreements under S203 ERA and Section 72 (4) (A) of the Race Relations Act 1976. 7. The parties acknowledge and agree that the various provisions and sub-provisions of this Agreement are

WITHOUT PREJUDICE AND SUBJECT TO CONTRACT 5. PROCEEDINGS 5.1 The Executive hereby warrants that, as at the date of this Agreement, he has not commenced proceedings against the Company or any Group Company in respect of the Claims or any other proceedings in either a Court or Employment Tribunal. 5.2 In the event that the Executive commences proceedings in respect of the Claims then the Executive will repay to the Company the Severance Payment and the Ex Gratia Payment and the Executive will have no entitlement to the Loan Forgiveness (which will become immediately due and payable together with interest at the rate specified in the Loan Note referred to at clause 2.7 above); 6. This Agreement satisfies the conditions for regulating Compromise Agreements under S203 ERA and Section 72 (4) (A) of the Race Relations Act 1976. 7. The parties acknowledge and agree that the various provisions and sub-provisions of this Agreement are severable and that if any provision or sub-provision or identifiable part is held to be invalid or unenforceable by any court of competent jurisdiction then such invalidity or unenforceability shall not affect the validity or enforceability of the agreement's remaining provisions, sub-provisions, or parts of the Agreement. Signed for and on
behalf of the Company /s/ Timothy J. Cunningham

Signed by the Executive

/s/ Vaughan Thomas

Signed by the
Independent Advisor /s/ Mike Thomas

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WITHOUT PREJUDICE AND SUBJECT TO CONTRACT APPENDIX A CONTRACT OF EMPLOYMENT -11-

WITHOUT PREJUDICE AND SUBJECT TO CONTRACT APPENDIX B AGREED REFERENCE TO BE TYPED ON ELOYALTY (UK) LIMITED NOTEPAPER [Date]

WITHOUT PREJUDICE AND SUBJECT TO CONTRACT APPENDIX A CONTRACT OF EMPLOYMENT -11-

WITHOUT PREJUDICE AND SUBJECT TO CONTRACT APPENDIX B AGREED REFERENCE TO BE TYPED ON ELOYALTY (UK) LIMITED NOTEPAPER [Date] Dear VAUGHAN THOMAS We confirm that Vaughan Thomas was employed as a Senior Vice President of the Company between 1 July 2000 and 7 December 2001. His responsibilities as a member of the executive included full operational management of the international business operations. This included profit & loss responsibility for Australia, Germany, France and the United Kingdom. Mr Thomas left the Company's employment by mutual agreement following a strategic realignment of the Company's business on a global basis. In accordance with the Company's usual practice, this reference is given without liability on the part of the Company or the writer. Yours Chief Executive -12-

WITHOUT PREJUDICE AND SUBJECT TO CONTRACT APPENDIX C LIST OF CLIENTS Client ASV Abbott Labs Axel Springer BBC BSkyB Deutsche Telekom Eircell Eli Lily Geneva Technology

WITHOUT PREJUDICE AND SUBJECT TO CONTRACT APPENDIX B AGREED REFERENCE TO BE TYPED ON ELOYALTY (UK) LIMITED NOTEPAPER [Date] Dear VAUGHAN THOMAS We confirm that Vaughan Thomas was employed as a Senior Vice President of the Company between 1 July 2000 and 7 December 2001. His responsibilities as a member of the executive included full operational management of the international business operations. This included profit & loss responsibility for Australia, Germany, France and the United Kingdom. Mr Thomas left the Company's employment by mutual agreement following a strategic realignment of the Company's business on a global basis. In accordance with the Company's usual practice, this reference is given without liability on the part of the Company or the writer. Yours Chief Executive -12-

WITHOUT PREJUDICE AND SUBJECT TO CONTRACT APPENDIX C LIST OF CLIENTS Client ASV Abbott Labs Axel Springer BBC BSkyB Deutsche Telekom Eircell Eli Lily Geneva Technology News Limited Teleperformance Westpac Banking -13-

EXHIBIT 10.27

WITHOUT PREJUDICE AND SUBJECT TO CONTRACT APPENDIX C LIST OF CLIENTS Client ASV Abbott Labs Axel Springer BBC BSkyB Deutsche Telekom Eircell Eli Lily Geneva Technology News Limited Teleperformance Westpac Banking -13-

EXHIBIT 10.27 LOAN AGREEMENT This LOAN AGREEMENT dated as of December __, 2001 (the "Agreement"), is executed by and between eLOYALTY CORPORATION, a Delaware corporation (the "Borrower"), whose address is 150 Field Drive, Suite 250, Lake Forest, Illinois 60045, and LASALLE BANK NATIONAL ASSOCIATION, a national banking association (the "Bank"), whose address is 135 South LaSalle Street, Chicago, Illinois 60603. In consideration of the mutual agreements hereinafter set forth, the Borrower and the Bank hereby agree as follows: 1. DEFINITIONS. 1.1. Defined Terms. For the purposes of this Agreement, the following capitalized words and phrases shall have the meanings set forth below. "Applicable Margin (Regular)" shall mean three-quarters of one percent (0.75%). "Bankruptcy Code" shall mean the United States Bankruptcy Code, as now existing or hereafter amended. "Borrowing Base Amount" shall mean one hundred percent (100%) of the amount of Cash Collateral. "Business Day" shall mean any day other than a Saturday, Sunday or a legal holiday on which banks are authorized or required to be closed for the conduct of commercial banking business in Chicago, Illinois. "Capital Lease" shall mean, as to any Person, a lease of any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible, by such Person as lessee that is, or should be, in accordance with Financial Accounting Standards Board Statement No. 13, as amended from time to time, or, if such Statement is not then in effect, such statement of GAAP as may be applicable, recorded as a "capital lease" on the balance sheet of the Borrower prepared in accordance with GAAP. "Cash Collateral" shall mean the cash collateral pledged to the Bank pursuant to the Cash Collateral Pledge Agreement.

EXHIBIT 10.27 LOAN AGREEMENT This LOAN AGREEMENT dated as of December __, 2001 (the "Agreement"), is executed by and between eLOYALTY CORPORATION, a Delaware corporation (the "Borrower"), whose address is 150 Field Drive, Suite 250, Lake Forest, Illinois 60045, and LASALLE BANK NATIONAL ASSOCIATION, a national banking association (the "Bank"), whose address is 135 South LaSalle Street, Chicago, Illinois 60603. In consideration of the mutual agreements hereinafter set forth, the Borrower and the Bank hereby agree as follows: 1. DEFINITIONS. 1.1. Defined Terms. For the purposes of this Agreement, the following capitalized words and phrases shall have the meanings set forth below. "Applicable Margin (Regular)" shall mean three-quarters of one percent (0.75%). "Bankruptcy Code" shall mean the United States Bankruptcy Code, as now existing or hereafter amended. "Borrowing Base Amount" shall mean one hundred percent (100%) of the amount of Cash Collateral. "Business Day" shall mean any day other than a Saturday, Sunday or a legal holiday on which banks are authorized or required to be closed for the conduct of commercial banking business in Chicago, Illinois. "Capital Lease" shall mean, as to any Person, a lease of any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible, by such Person as lessee that is, or should be, in accordance with Financial Accounting Standards Board Statement No. 13, as amended from time to time, or, if such Statement is not then in effect, such statement of GAAP as may be applicable, recorded as a "capital lease" on the balance sheet of the Borrower prepared in accordance with GAAP. "Cash Collateral" shall mean the cash collateral pledged to the Bank pursuant to the Cash Collateral Pledge Agreement. "Cash Collateral Pledge Agreement" shall mean the Cash Collateral Pledge Agreement of even date herewith between the Borrower and the Bank.

"Collateral" shall mean the Cash Collateral and any existing or hereafter arising or acquired property of Borrower in which a Lien is granted to the Bank to secure the Obligations. "Contingent Liability" and "Contingent Liabilities" shall mean, respectively, each obligation and liability of the Borrower and all such obligations and liabilities of the Borrower incurred pursuant to any agreement, undertaking or arrangement by which the Borrower: (a) guarantees, endorses or otherwise becomes or is contingently liable upon (by direct or indirect agreement, contingent or otherwise, to provide funds for payment, to supply funds to, or otherwise to invest in, a debtor, or otherwise to assure a creditor against loss) the indebtedness, dividend, obligation or other liability of any other Person in any manner (other than by endorsement of instruments in the course of collection), including without limitation, any indebtedness, dividend or other obligation which may be issued or incurred at some future time; (b) guarantees the payment of dividends or other distributions upon the shares or ownership interest of any other Person; (c) undertakes or agrees (whether contingently or otherwise): (i) to purchase, repurchase, or otherwise acquire any indebtedness, obligation or liability of any other Person or any or any property or assets constituting security therefor, (ii) to advance or provide funds for the payment or discharge of any indebtedness, obligation or liability of any other Person (whether in the form of loans, advances, stock purchases, capital contributions or otherwise), or to maintain solvency, assets, level of income, working capital or other financial condition of any other Person, or (iii) to make payment to any other Person other than for value received; (d) agrees to lease property or to

"Collateral" shall mean the Cash Collateral and any existing or hereafter arising or acquired property of Borrower in which a Lien is granted to the Bank to secure the Obligations. "Contingent Liability" and "Contingent Liabilities" shall mean, respectively, each obligation and liability of the Borrower and all such obligations and liabilities of the Borrower incurred pursuant to any agreement, undertaking or arrangement by which the Borrower: (a) guarantees, endorses or otherwise becomes or is contingently liable upon (by direct or indirect agreement, contingent or otherwise, to provide funds for payment, to supply funds to, or otherwise to invest in, a debtor, or otherwise to assure a creditor against loss) the indebtedness, dividend, obligation or other liability of any other Person in any manner (other than by endorsement of instruments in the course of collection), including without limitation, any indebtedness, dividend or other obligation which may be issued or incurred at some future time; (b) guarantees the payment of dividends or other distributions upon the shares or ownership interest of any other Person; (c) undertakes or agrees (whether contingently or otherwise): (i) to purchase, repurchase, or otherwise acquire any indebtedness, obligation or liability of any other Person or any or any property or assets constituting security therefor, (ii) to advance or provide funds for the payment or discharge of any indebtedness, obligation or liability of any other Person (whether in the form of loans, advances, stock purchases, capital contributions or otherwise), or to maintain solvency, assets, level of income, working capital or other financial condition of any other Person, or (iii) to make payment to any other Person other than for value received; (d) agrees to lease property or to purchase securities, property or services from such other Person with the purpose or intent of assuring the owner of such indebtedness or obligation of the ability of such other Person to make payment of the indebtedness or obligation; (e) to induce the issuance of, or in connection with the issuance of, any letter of credit for the benefit of such other Person; or (f) undertakes or agrees otherwise to assure a creditor against loss. The amount of any Contingent Liability shall (subject to any limitation set forth herein) be deemed to be the outstanding principal amount (or maximum permitted principal amount, if larger) of the indebtedness, obligation or other liability guaranteed or supported thereby. "Default Rate" shall mean a per annum rate of interest equal to the Prime Rate plus two percent (2%) per annum. "Employee Plan" includes any pension, stock bonus, employee stock ownership plan, retirement, disability, medical, dental or other health plan, life insurance or other death benefit plan, profit sharing, deferred compensation, stock option, bonus or other incentive plan, vacation benefit plan, severance plan or other employee benefit plan or arrangement, including, without limitation, those pension, profit-sharing and retirement plans of the Borrower described from time to time in the financial statements of the Borrower and any pension plan, welfare plan, Defined Benefit Pension Plans (as defined in ERISA) or any multi-employer plan, maintained or administered by the Borrower or to which the Borrower is a party or may have any liability or by which the Borrower is bound. "Environmental Laws" shall mean all federal, state, district, local and foreign laws, rules, regulations, ordinances, and consent decrees relating to health, safety, hazardous -2-

substances, pollution and environmental matters, as now or at any time hereafter in effect, applicable to the Borrower's business or facilities owned or operated by the Borrower, including laws relating to emissions, discharges, releases or threatened releases of pollutants, contamination, chemicals, or hazardous, toxic or dangerous substances, materials or wastes in the environment (including, without limitation, ambient air, surface water, land surface or subsurface strata) or otherwise relating to the generation, manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials. "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time. "Event of Default" shall mean any of the events or conditions set forth in Section 11 hereof. "GAAP" shall mean generally accepted accounting principles, using the accrual basis of accounting and consistently applied with prior periods, provided, however, that GAAP with respect to any interim financial statements or reports shall be deemed subject to fiscal year-end adjustments and footnotes made in accordance with GAAP.

substances, pollution and environmental matters, as now or at any time hereafter in effect, applicable to the Borrower's business or facilities owned or operated by the Borrower, including laws relating to emissions, discharges, releases or threatened releases of pollutants, contamination, chemicals, or hazardous, toxic or dangerous substances, materials or wastes in the environment (including, without limitation, ambient air, surface water, land surface or subsurface strata) or otherwise relating to the generation, manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials. "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time. "Event of Default" shall mean any of the events or conditions set forth in Section 11 hereof. "GAAP" shall mean generally accepted accounting principles, using the accrual basis of accounting and consistently applied with prior periods, provided, however, that GAAP with respect to any interim financial statements or reports shall be deemed subject to fiscal year-end adjustments and footnotes made in accordance with GAAP. "Hazardous Materials" shall mean any hazardous, toxic or dangerous substance, materials and wastes, including, without limitation, hydrocarbons (including naturally occurring or man-made petroleum and hydrocarbons), flammable explosives, asbestos, urea formaldehyde insulation, radioactive materials, biological substances, polychlorinated biphenyls, pesticides, herbicides and any other kind and/or type of pollutants or contaminants (including, without limitation, materials which include hazardous constituents), sewage, sludge, industrial slag, solvents and/or any other similar substances, materials or wastes that are or become regulated under any Environmental Law (including without limitation, any that are or become classified as hazardous or toxic under any Environmental Law). "Indebtedness" shall mean at any time (a) all Liabilities of the Borrower, (b) all Capital Lease obligations of the Borrower, (c) all other debt, secured or unsecured, created, issued, incurred or assumed by the Borrower for money borrowed or for the deferred purchase price of any fixed or capital asset, (d) indebtedness secured by any Lien existing on property owned by the Borrower whether or not the Indebtedness secured thereby has been assumed, and (e) all Contingent Liabilities of the Borrower whether or not reflected on its balance sheet. "Indemnified Party" and "Indemnified Parties" shall mean, respectively, each of the Bank and any parent corporations, affiliated corporations or subsidiaries of the Bank, and each of their respective officers, directors, employees, attorneys and agents, and all of such parties and entities. "Interest Period" shall mean, with regard to any LIBOR Loan, successive one, two, three or six month periods as selected from time to time by the Borrower by notice given to the Bank not less than three (3) Business Days prior to the first day of each -3-

respective Interest Period; provided, however, that: (i) each such Interest Period occurring after the initial Interest Period of any LIBOR Loan shall commence on the day on which the preceding Interest Period for such LIBOR Loan expires, (ii) whenever the last day of any Interest Period would otherwise occur on a day other than a Business Day, the last day of such Interest Period shall be extended to occur on the next succeeding Business Day, provided, however, that if such extension would cause the last day of such Interest Period to occur in the next following calendar month, then the last day of such Interest Period shall occur on the immediately preceding Business Day, (iii) whenever the first day of any Interest Period occurs on a day of a month for which there is no numerically corresponding day in the calendar month in which such Interest Period terminates, such Interest Period shall end on the last Business Day of such calendar month, and (iv) the final Interest Period must be such that its expiration occurs on or before the Maturity Date. "Interest Rate Agreements" shall mean any interest rate protection agreement, interest rate swap or other interest rate hedge arrangement (other than any interest rate cap or other similar agreement or arrangement pursuant to which the Borrower has no credit exposure to the Bank) to or under which the Borrower or any Subsidiary of the Borrower is a party or beneficiary.

respective Interest Period; provided, however, that: (i) each such Interest Period occurring after the initial Interest Period of any LIBOR Loan shall commence on the day on which the preceding Interest Period for such LIBOR Loan expires, (ii) whenever the last day of any Interest Period would otherwise occur on a day other than a Business Day, the last day of such Interest Period shall be extended to occur on the next succeeding Business Day, provided, however, that if such extension would cause the last day of such Interest Period to occur in the next following calendar month, then the last day of such Interest Period shall occur on the immediately preceding Business Day, (iii) whenever the first day of any Interest Period occurs on a day of a month for which there is no numerically corresponding day in the calendar month in which such Interest Period terminates, such Interest Period shall end on the last Business Day of such calendar month, and (iv) the final Interest Period must be such that its expiration occurs on or before the Maturity Date. "Interest Rate Agreements" shall mean any interest rate protection agreement, interest rate swap or other interest rate hedge arrangement (other than any interest rate cap or other similar agreement or arrangement pursuant to which the Borrower has no credit exposure to the Bank) to or under which the Borrower or any Subsidiary of the Borrower is a party or beneficiary. "Letter of Credit" and "Letters of Credit" shall mean, respectively, a standby letter of credit and all such standby letters of credit issued by the Bank, in its sole discretion, upon the execution and delivery by the Borrower and the acceptance by the Bank of a Master Letter of Credit Agreement and an application for Letter of Credit, as set forth in Section 2.5 of this Agreement. "Letter of Credit Obligations" shall mean, at any time, an amount equal to the aggregate of the original face amounts of all Letters of Credit minus the sum of (i) the amount of any reductions in the original face amount of any Letter of Credit which did not result from a draw thereunder, (ii) the amount of any payments made by the Bank with respect to any draws made under a Letter of Credit for which the Borrower has reimbursed the Bank, (iii) the amount of any payments made by the Bank with respect to any draws made under a Letter of Credit which have been converted to a Revolving Loan as set forth in Section 2.5, and (iv) the portion of any issued but expired Letter of Credit which has not been drawn by the beneficiary thereunder. For purposes of determining the outstanding Letter of Credit Obligations at any time, the Bank's acceptance of a draft drawn on the Bank pursuant to a Letter of Credit shall constitute a draw on the applicable Letter of Credit at the time of such acceptance. "Liabilities" shall mean at all times all liabilities of the Borrower that would be shown as such on a balance sheet of the Borrower prepared in accordance with GAAP. "LIBOR Loan" or "LIBOR Loans" shall mean that portion, and collectively those portions, of the aggregate outstanding principal balance of the Revolving Loans that will bear interest with reference to the LIBOR Rate. -4-

"LIBOR Rate" shall mean a rate of interest equal to the per annum rate of interest at which United States dollar deposits in an amount comparable to the amount of the relevant LIBOR Loan and for a period equal to the relevant Interest Period are offered generally to the Bank (rounded upward if necessary, to the nearest 1/16 of 1.00%) in the London Interbank Eurodollar market at 11:00 a.m. (London time) two (2) Business Days prior to the commencement of each Interest Period less the maximum reserve percentages for determining reserves to be maintained by member banks of the Federal Reserve System for Eurocurrency liabilities, or as LIBOR is otherwise determined by the Bank in its sole and absolute discretion, such rate to remain fixed for such Interest Period. The Bank's determination of LIBOR shall be conclusive, absent manifest error. "Lien" shall mean any mortgage, pledge, hypothecation, judgment lien or similar legal process, title retention lien, or other lien or security interest, including, without limitation, the interest of a vendor under any conditional sale or other title retention agreement and the interest of a lessor under a lease of any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible, by such Person as lessee that is, or should be, a Capital Lease on the balance sheet of the Borrower prepared in accordance with GAAP. "Loans" shall mean, collectively, all Revolving Loans (whether Prime Loans or LIBOR Loans) made by the Bank to the Borrower and all Letter of Credit Obligations, under and pursuant to this Agreement.

"LIBOR Rate" shall mean a rate of interest equal to the per annum rate of interest at which United States dollar deposits in an amount comparable to the amount of the relevant LIBOR Loan and for a period equal to the relevant Interest Period are offered generally to the Bank (rounded upward if necessary, to the nearest 1/16 of 1.00%) in the London Interbank Eurodollar market at 11:00 a.m. (London time) two (2) Business Days prior to the commencement of each Interest Period less the maximum reserve percentages for determining reserves to be maintained by member banks of the Federal Reserve System for Eurocurrency liabilities, or as LIBOR is otherwise determined by the Bank in its sole and absolute discretion, such rate to remain fixed for such Interest Period. The Bank's determination of LIBOR shall be conclusive, absent manifest error. "Lien" shall mean any mortgage, pledge, hypothecation, judgment lien or similar legal process, title retention lien, or other lien or security interest, including, without limitation, the interest of a vendor under any conditional sale or other title retention agreement and the interest of a lessor under a lease of any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible, by such Person as lessee that is, or should be, a Capital Lease on the balance sheet of the Borrower prepared in accordance with GAAP. "Loans" shall mean, collectively, all Revolving Loans (whether Prime Loans or LIBOR Loans) made by the Bank to the Borrower and all Letter of Credit Obligations, under and pursuant to this Agreement. "Loan Documents" shall have the meaning set forth in Section 3.1. "Maturity Date" shall mean the first anniversary of the date the Bank notifies the Borrower that the Loan Agreement has become effective pursuant to the Effective Date Letter which anniversary shall be on or before December 31, 2002. "Maximum Letter of Credit Obligation" shall mean Three Million and No/100 Dollars ($3,000,000.00). "Note" shall mean the Revolving Note. "Obligations" shall mean the Loans, all interest accrued thereon, any fees due the Bank hereunder, any expenses incurred by the Bank hereunder and any and all other liabilities and obligations of the Borrower (and of any partnership in which the Borrower is or may be a partner) to the Bank, howsoever created, arising or evidenced, and howsoever owned, held or acquired, whether now or hereafter existing, whether now due or to become due, direct or indirect, absolute or contingent, and whether several, joint or joint and several, including, but not limited to, any Interest Rate Agreements. "Obligor" shall mean the Borrower, any guarantor, accommodation endorser, third party pledgor, or any other party liable with respect to the Obligations. -5-

"Person" shall mean any individual, partnership, limited liability company, corporation, trust, joint venture, joint stock company, association, unincorporated organization, government or agency or political subdivision thereof, or other entity. "Prime Loan" or "Prime Loans" shall mean that portion, and collectively, those portions of the aggregate outstanding principal balance of the Revolving Loans that will bear interest with reference to the Prime Rate. "Prime Rate" shall mean the floating per annum rate of interest which at any time, and from time to time, shall be most recently announced by the Bank as its Prime Rate, which is not intended to be the Bank's lowest or most favorable rate of interest at any one time. The effective date of any change in the Prime Rate shall for purposes hereof be the date the Prime Rate is changed by the Bank. The Bank shall not be obligated to give notice of any change in the Prime Rate. "Regulatory Change" shall mean the introduction of, or any change in any applicable law, treaty, rule, regulation or guideline or in the interpretation or administration thereof by any governmental authority or any central bank or other fiscal, monetary or other authority having jurisdiction over the Bank or its lending office.

"Person" shall mean any individual, partnership, limited liability company, corporation, trust, joint venture, joint stock company, association, unincorporated organization, government or agency or political subdivision thereof, or other entity. "Prime Loan" or "Prime Loans" shall mean that portion, and collectively, those portions of the aggregate outstanding principal balance of the Revolving Loans that will bear interest with reference to the Prime Rate. "Prime Rate" shall mean the floating per annum rate of interest which at any time, and from time to time, shall be most recently announced by the Bank as its Prime Rate, which is not intended to be the Bank's lowest or most favorable rate of interest at any one time. The effective date of any change in the Prime Rate shall for purposes hereof be the date the Prime Rate is changed by the Bank. The Bank shall not be obligated to give notice of any change in the Prime Rate. "Regulatory Change" shall mean the introduction of, or any change in any applicable law, treaty, rule, regulation or guideline or in the interpretation or administration thereof by any governmental authority or any central bank or other fiscal, monetary or other authority having jurisdiction over the Bank or its lending office. "Revolving Loan" and "Revolving Loans" shall mean, respectively, each direct advance and the aggregate of all such direct advances, from time to time in the form of either Prime Loans and/or LIBOR Loans, made by the Bank to the Borrower under and pursuant to this Agreement, as set forth in Section 2.1 of this Agreement. "Revolving Loan Availability" shall mean at any time, the lesser of (a) the Revolving Loan Commitment less the Letter of Credit Obligations, or (b) the Borrowing Base Amount less the Letter of Credit Obligations. "Revolving Loan Commitment" shall mean Fifteen Million and No/100 Dollars ($15,000,000.00). "Revolving Note" shall have the meanings set forth in Section 4.1 hereof. "Subsidiary" and "Subsidiaries" shall mean, respectively, each and all such corporations, partnerships, limited partnerships, limited liability companies, limited liability partnerships or other entities of which or in which the Borrower owns directly or indirectly fifty percent (50%) or more of (i) the combined voting power of all classes of stock having general voting power under ordinary circumstances to elect a majority of the board of directors of such entity if a corporation, (ii) the management authority and capital interest or profits interest of such entity, if a partnership, limited partnership, limited liability company, limited liability partnership, joint venture or similar entity, or (iii) the beneficial interest of such entity, if a trust, association or other unincorporated organization. "UCC" shall mean the Uniform Commercial Code in effect in Illinois from time to time. -6-

1.2. Accounting Terms. Any accounting terms used in this Agreement which are not specifically defined herein shall have the meanings customarily given them in accordance with GAAP. Calculations and determinations of financial and accounting terms used and not otherwise specifically defined hereunder and the preparation of financial statements to be furnished to the Bank pursuant hereto shall be made and prepared, both as to classification of items and as to amount, in accordance with GAAP as used in the preparation of the financial statements of the Borrower on the date of this Agreement. If any changes in accounting principles or practices from those used in the preparation of the financial statements are hereafter occasioned by the promulgation of rules, regulations, pronouncements and opinions by or required by the Financial Accounting Standards Board or the American Institute of Certified Public Accountants (or any successor thereto or agencies with similar functions), which results in a material change in the method of accounting in the financial statements required to be furnished to the Bank hereunder or in the calculation of financial covenants, standards or terms contained in this Agreement, the parties hereto agree to enter into good faith negotiations to amend such provisions so as equitably to reflect such changes to the end that the criteria for evaluating the financial condition and performance of the Borrower will be the same after such changes as they were before such changes; and if the parties fail to agree on the amendment of such provisions, the Borrower will furnish financial statements in accordance with such changes but shall provide calculations for all financial covenants, perform all financial covenants and otherwise observe all

1.2. Accounting Terms. Any accounting terms used in this Agreement which are not specifically defined herein shall have the meanings customarily given them in accordance with GAAP. Calculations and determinations of financial and accounting terms used and not otherwise specifically defined hereunder and the preparation of financial statements to be furnished to the Bank pursuant hereto shall be made and prepared, both as to classification of items and as to amount, in accordance with GAAP as used in the preparation of the financial statements of the Borrower on the date of this Agreement. If any changes in accounting principles or practices from those used in the preparation of the financial statements are hereafter occasioned by the promulgation of rules, regulations, pronouncements and opinions by or required by the Financial Accounting Standards Board or the American Institute of Certified Public Accountants (or any successor thereto or agencies with similar functions), which results in a material change in the method of accounting in the financial statements required to be furnished to the Bank hereunder or in the calculation of financial covenants, standards or terms contained in this Agreement, the parties hereto agree to enter into good faith negotiations to amend such provisions so as equitably to reflect such changes to the end that the criteria for evaluating the financial condition and performance of the Borrower will be the same after such changes as they were before such changes; and if the parties fail to agree on the amendment of such provisions, the Borrower will furnish financial statements in accordance with such changes but shall provide calculations for all financial covenants, perform all financial covenants and otherwise observe all financial standards and terms in accordance with applicable accounting principles and practices in effect immediately prior to such changes. Calculations with respect to financial covenants required to be stated in accordance with applicable accounting principles and practices in effect immediately prior to such changes shall be reviewed and certified by the Borrower's accountants. 1.3. Other Terms Defined in UCC. All other capitalized words and phrases used herein and not otherwise specifically defined shall have the respective meanings assigned to such terms in the UCC, as amended from time to time, to the extent the same are used or defined therein. 1.4. Other Definitional Provisions; Construction. Whenever the context so requires, the neuter gender includes the masculine and feminine, the single number includes the plural, and vice versa, and in particular the word "Borrower" shall be so construed. The words "hereof", "herein" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and references to Article, Section, Subsection, Annex, Schedule, Exhibit and like references are references to this Agreement unless otherwise specified. An Event of Default shall "continue" or be "continuing" until such Event of Default has been waived in accordance with Section 13.3 hereof. References in this Agreement to any party shall include such party's successors and permitted assigns. References to any "Section" shall be a reference to such Section of this Agreement unless otherwise stated. To the extent any of the provisions of the other Loan Documents are inconsistent with the terms of this Loan Agreement, the provisions of this Loan Agreement shall govern. -7-

2. COMMITMENT OF THE BANK. 2.1. Revolving Loans. (a) Revolving Loan Commitment. Subject to the terms and conditions of this Agreement and the other Loan Documents, and in reliance upon the representations and warranties of the Borrower set forth herein and in the other Loan Documents, the Bank agrees to make such Revolving Loans at such times as the Borrower may from time to time request until, but not including, the Maturity Date, and in such amounts as the Borrower may from time to time request, provided, however, that the aggregate principal balance of all Revolving Loans outstanding at any time shall not exceed the Revolving Loan Availability. Revolving Loans made by the Bank may be repaid and, subject to the terms and conditions hereof, borrowed again up to, but not including the Maturity Date unless the Revolving Loans are otherwise terminated or extended as provided in this Agreement. The Revolving Loans shall be used by the Borrower for working capital purposes. (b) Revolving Loan Interest and Payments. Except as otherwise provided in this Section 2.1(b), (i) the principal amount of the Prime Loans outstanding from time to time shall bear interest at the Prime Rate, and (ii) the principal amount of the LIBOR Loans outstanding from time to time shall bear interest at the LIBOR Rate plus the Applicable Margin (Regular). Accrued and unpaid interest on the unpaid principal balance of all Revolving

2. COMMITMENT OF THE BANK. 2.1. Revolving Loans. (a) Revolving Loan Commitment. Subject to the terms and conditions of this Agreement and the other Loan Documents, and in reliance upon the representations and warranties of the Borrower set forth herein and in the other Loan Documents, the Bank agrees to make such Revolving Loans at such times as the Borrower may from time to time request until, but not including, the Maturity Date, and in such amounts as the Borrower may from time to time request, provided, however, that the aggregate principal balance of all Revolving Loans outstanding at any time shall not exceed the Revolving Loan Availability. Revolving Loans made by the Bank may be repaid and, subject to the terms and conditions hereof, borrowed again up to, but not including the Maturity Date unless the Revolving Loans are otherwise terminated or extended as provided in this Agreement. The Revolving Loans shall be used by the Borrower for working capital purposes. (b) Revolving Loan Interest and Payments. Except as otherwise provided in this Section 2.1(b), (i) the principal amount of the Prime Loans outstanding from time to time shall bear interest at the Prime Rate, and (ii) the principal amount of the LIBOR Loans outstanding from time to time shall bear interest at the LIBOR Rate plus the Applicable Margin (Regular). Accrued and unpaid interest on the unpaid principal balance of all Revolving Loans outstanding from time to time which are Prime Loans, shall be due and payable monthly, in arrears, commencing on January 1, 2002 and continuing on the first day of each calendar month thereafter, and on the Maturity Date. Accrued and unpaid interest on the unpaid principal balance of all Revolving Loans outstanding from time to time which are LIBOR Loans shall be payable on the last Business Day of each Interest Period (provided, however, that for Interest Periods of six months, accrued interest shall also be paid on the date which is three months from the first day of such Interest Period), commencing on the first such date to occur after the date hereof, on the date of any principal repayment of a LIBOR Loan and on the Maturity Date. During the continuance of an Event of Default, the Revolving Loans shall bear interest payable on demand at the Default Rate. (c) Revolving Loan Principal Repayments. (i) Mandatory Principal Prepayments. All Revolving Loans hereunder shall be repaid by the Borrower on the Maturity Date, unless payable sooner pursuant to the provisions of this Agreement. In the event the aggregate outstanding principal balance of all Revolving Loans hereunder exceeds the Revolving Loan Availability, the Borrower shall, without notice or demand of any kind, immediately make such repayments of the Revolving Loans or take such other actions as shall be necessary to eliminate such excess. Also, if the Borrower chooses not to convert any Revolving Loan which is a LIBOR Loan to a Prime Loan as provided in Section 2.3(b) and Section 2.3(c), then such Revolving Loan shall be immediately due and payable on the last -8-

Business Day of the then existing Interest Period or on such earlier date as required by law, all without further demand, presentment, protest or notice of any kind, all of which are hereby waived by the Borrower. (ii) Optional Prepayments. The Borrower may from time to time prepay the Revolving Loans which are Prime Loans, in whole or in part, without any prepayment penalty whatsoever, subject to the following conditions: (i) each partial prepayment shall be in an amount equal to Ten Thousand and No/100 Dollars ($10,000.00) or a higher integral multiple of Five Thousand and No/100 Dollars ($5,000.00); and (ii) any prepayment of the entire principal balance of the Prime Loans shall include accrued interest on such Prime Loans to the date of such prepayment and payment in full of all other Obligations (other than the LIBOR Loans), then due and payable. 2.2. Intentionally Omitted. 2.3. Additional LIBOR Loan Provisions. (a) LIBOR Loan Prepayments. Notwithstanding anything to the contrary contained herein, the principal balance of any LIBOR Loan may not be prepaid in whole or in part at any time. If, for any reason, a LIBOR Loan is paid prior to the last Business Day of any Interest Period, the Borrower agrees to indemnify the Bank against any loss

Business Day of the then existing Interest Period or on such earlier date as required by law, all without further demand, presentment, protest or notice of any kind, all of which are hereby waived by the Borrower. (ii) Optional Prepayments. The Borrower may from time to time prepay the Revolving Loans which are Prime Loans, in whole or in part, without any prepayment penalty whatsoever, subject to the following conditions: (i) each partial prepayment shall be in an amount equal to Ten Thousand and No/100 Dollars ($10,000.00) or a higher integral multiple of Five Thousand and No/100 Dollars ($5,000.00); and (ii) any prepayment of the entire principal balance of the Prime Loans shall include accrued interest on such Prime Loans to the date of such prepayment and payment in full of all other Obligations (other than the LIBOR Loans), then due and payable. 2.2. Intentionally Omitted. 2.3. Additional LIBOR Loan Provisions. (a) LIBOR Loan Prepayments. Notwithstanding anything to the contrary contained herein, the principal balance of any LIBOR Loan may not be prepaid in whole or in part at any time. If, for any reason, a LIBOR Loan is paid prior to the last Business Day of any Interest Period, the Borrower agrees to indemnify the Bank against any loss (including any loss on redeployment of the funds repaid), cost or expense incurred by the Bank as a result of such prepayment. (b) LIBOR Unavailability. If the Bank determines in good faith (which determination shall be conclusive, absent manifest error) prior to the commencement of any Interest Period that (i) United States dollar deposits of sufficient amount and maturity for funding any LIBOR Loan are not available to the Bank in the London Interbank Eurodollar market in the ordinary course of business, or (ii) by reason of circumstances affecting the London Interbank Eurodollar market, adequate and fair means do not exist for ascertaining the rate of interest to be applicable to the relevant LIBOR Loan, the Bank shall promptly notify the Borrower thereof and, so long as the foregoing conditions continue, Revolving Loans may not be advanced as a LIBOR Loan thereafter. In addition, at the Borrower's option, each existing LIBOR Loan shall be immediately (i) converted to a Prime Loan on the last Business Day of the then existing Interest Period, or (ii) due and payable on the last Business Day of the then existing Interest Period, without further demand, presentment, protest or notice of any kind, all of which are hereby waived by the Borrower. (c) Regulatory Change. In addition, if, after the date hereof, a Regulatory Change shall, in the reasonable determination of the Bank, make it unlawful for the Bank to make or maintain the LIBOR Loans, then the Bank shall promptly notify the Borrower and Revolving Loans may not be advanced as a LIBOR Loan thereafter. In addition, at the Borrower's option, each existing LIBOR Loan shall be immediately (i) converted to a Prime Loan on the last Business Day of the then existing Interest -9-

Period or on such earlier date as required by law, or (ii) due and payable on the last Business Day of the then existing Interest Period or on such earlier date as required by law, all without further demand, presentment, protest or notice of any kind, all of which are hereby waived by the Borrower. (d) LIBOR Loan Indemnity. If any Regulatory Change (whether or not having the force of law) shall (a) impose, modify or deem applicable any assessment, reserve, special deposit or similar requirement against assets held by, or deposits in or for the account of or loans by, or any other acquisition of funds or disbursements by, the Bank; (b) subject the Bank or any LIBOR Loan to any tax, duty, charge, stamp tax or fee or change the basis of taxation of payments to the Bank of principal or interest due from the Borrower to the Bank hereunder (other than a change in the taxation of the overall net income of the Bank); or (c) impose on the Bank any other condition regarding such LIBOR Loan or the Bank's funding thereof, and the Bank shall determine (which determination shall be conclusive, absent manifest error) that the result of the foregoing is to increase the cost to the Bank of making or maintaining such LIBOR Loan or to reduce the amount of principal or interest received by the Bank hereunder, then the Borrower shall pay to the Bank, on demand, such additional amounts as the Bank shall, from time to time, determine are sufficient to compensate and indemnify the Bank for such increased cost or reduced amount.

Period or on such earlier date as required by law, or (ii) due and payable on the last Business Day of the then existing Interest Period or on such earlier date as required by law, all without further demand, presentment, protest or notice of any kind, all of which are hereby waived by the Borrower. (d) LIBOR Loan Indemnity. If any Regulatory Change (whether or not having the force of law) shall (a) impose, modify or deem applicable any assessment, reserve, special deposit or similar requirement against assets held by, or deposits in or for the account of or loans by, or any other acquisition of funds or disbursements by, the Bank; (b) subject the Bank or any LIBOR Loan to any tax, duty, charge, stamp tax or fee or change the basis of taxation of payments to the Bank of principal or interest due from the Borrower to the Bank hereunder (other than a change in the taxation of the overall net income of the Bank); or (c) impose on the Bank any other condition regarding such LIBOR Loan or the Bank's funding thereof, and the Bank shall determine (which determination shall be conclusive, absent manifest error) that the result of the foregoing is to increase the cost to the Bank of making or maintaining such LIBOR Loan or to reduce the amount of principal or interest received by the Bank hereunder, then the Borrower shall pay to the Bank, on demand, such additional amounts as the Bank shall, from time to time, determine are sufficient to compensate and indemnify the Bank for such increased cost or reduced amount. 2.4. Interest and Fee Computation; Collection of Funds. All interest on LIBOR Loans shall be calculated on the basis of a year consisting of three hundred sixty (360) days and shall be paid for the actual number of days elapsed and all interest on Prime Loans and fees shall be calculated on the basis of a year consisting of 365 days and shall be paid for the actual number of days elapsed. Principal payments submitted in funds not immediately available shall continue to bear interest until collected. If any payment to be made by the Borrower hereunder or under the Note shall become due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day and such extension of time shall be included in computing any interest in respect of such payment. 2.5. Letters of Credit. Subject to the terms and conditions of this Agreement and upon the execution by the Borrower and the Bank of a Master Letter of Credit Agreement and, the upon the execution and delivery by the Borrower, and the acceptance by the Bank of an application for letter of credit, the Bank agrees to issue for the account of the Borrower such Letters of Credit in the standard form of the Bank and otherwise in form and substance acceptable to the Bank, from time to time during the term of this Agreement, provided that (i) the Letter of Credit Obligations may not at any time exceed the Maximum Letter of Credit Obligation, (ii) the Letter of Credit Obligations may not at any time exceed the Borrowing Base Amount less the aggregate outstanding principal amount of the Revolving Loans, and (iii) no Letter of Credit shall have an expiration date later than the Maturity Date. The amount of any payments made by the Bank with respect to draws made by a beneficiary under a Letter of Credit for which the Borrower has failed to reimburse the Bank upon the earlier of (i) the Bank's demand for repayment, or (ii) five (5) days from the date of such payment to such beneficiary by the Bank, shall be deemed to have been converted to a Revolving Loan as of the date such payment was made by the Bank to such beneficiary. -10-

Upon the occurrence of an Event of a Default and at the option of the Bank, all Letter of Credit Obligations shall be converted to Prime Loans, all without demand, presentment, protest or notice of any kind, all of which are hereby waived by the Borrower. The Borrower and the Bank acknowledge that letter of credit no. 5536057 in the face amount of 131,000 sterling pounds issued by the Bank to Mr. Vaughan Thomas of Westwind constitutes a Letter of Credit subject to the terms hereof. 3. CONDITIONS OF BORROWING. Notwithstanding any other provision of this Agreement, the Bank shall not be required to disburse or make all or any portion of the Loans (including without limitation issue any Letter of Credit) if any of the following conditions shall have occurred. 3.1. Loan Documents. The Borrower shall have failed to execute and deliver to the Bank any of the following Loan Documents (collectively, the "Loan Documents"), all of which must be satisfactory to the Bank and the Bank's counsel in form, substance and execution:

Upon the occurrence of an Event of a Default and at the option of the Bank, all Letter of Credit Obligations shall be converted to Prime Loans, all without demand, presentment, protest or notice of any kind, all of which are hereby waived by the Borrower. The Borrower and the Bank acknowledge that letter of credit no. 5536057 in the face amount of 131,000 sterling pounds issued by the Bank to Mr. Vaughan Thomas of Westwind constitutes a Letter of Credit subject to the terms hereof. 3. CONDITIONS OF BORROWING. Notwithstanding any other provision of this Agreement, the Bank shall not be required to disburse or make all or any portion of the Loans (including without limitation issue any Letter of Credit) if any of the following conditions shall have occurred. 3.1. Loan Documents. The Borrower shall have failed to execute and deliver to the Bank any of the following Loan Documents (collectively, the "Loan Documents"), all of which must be satisfactory to the Bank and the Bank's counsel in form, substance and execution: (a) Loan Agreement. Two copies of this Agreement duly executed by the Borrower. (b) Revolving Note. A Revolving Note duly executed by the Borrower. (c) Master Letter of Credit Agreement. Two copies of the Master Letter of Credit Agreement duly executed by the Borrower and the Bank. (d) Cash Collateral Pledge Agreement. Two copies of the Cash Collateral Pledge Agreement duly executed by the Borrower and the Bank. (e) Cash Management Documents. Two copies of the documents requested by the Bank to establish bank accounts and cash management with the Bank duly executed by the Borrower and the Bank. (f) Additional Documents. Such other certificates, financial statements, schedules, charter documents, resolutions, opinions of counsel, notes, agreements, assignments and other documents which are provided for hereunder or which the Bank shall from time to time require, including without limitation the documents listed on Schedule 3.1. 3.2. Event of Default. Any Event of Default, or any event which, with notice or lapse of time, or both would constitute an Event of Default, shall have occurred and be continuing. 3.3. Material Adverse Changes. A material adverse change in the financial condition, business assets or affairs of the Borrower shall have occurred, as reasonably determined by the Bank. -11-

3.4. Litigation. Any litigation or governmental proceeding shall have been instituted against the Borrower or any of its officers or shareholders which in the discretion of the Bank, reasonably exercised, materially adversely affects the financial condition, business issues, or continued operation of the Borrower. 3.5. Representations and Warranties. Any representation or warranty of the Borrower contained herein or in any Loan Document shall be untrue or incorrect in any material respect as of the date of any Loan as though made on such date, except to the extent such representation or warranty expressly relates to an earlier date. 3.6. Commitment Fee. The Borrower agrees to pay to the Bank a commitment fee in the amount of Twenty-Five Thousand and No/100 Dollars ($25,000.00) payable on the date hereof. 4. NOTES EVIDENCING LOANS. 4.1. Revolving Note. The Revolving Loans and the Letter of Credit Obligations shall be evidenced by a single Revolving Note (together with any and all renewal, extension, modification or replacement notes executed by the Borrower and delivered to the Bank and given in substitution therefor, the "Revolving Note") in the form of

3.4. Litigation. Any litigation or governmental proceeding shall have been instituted against the Borrower or any of its officers or shareholders which in the discretion of the Bank, reasonably exercised, materially adversely affects the financial condition, business issues, or continued operation of the Borrower. 3.5. Representations and Warranties. Any representation or warranty of the Borrower contained herein or in any Loan Document shall be untrue or incorrect in any material respect as of the date of any Loan as though made on such date, except to the extent such representation or warranty expressly relates to an earlier date. 3.6. Commitment Fee. The Borrower agrees to pay to the Bank a commitment fee in the amount of Twenty-Five Thousand and No/100 Dollars ($25,000.00) payable on the date hereof. 4. NOTES EVIDENCING LOANS. 4.1. Revolving Note. The Revolving Loans and the Letter of Credit Obligations shall be evidenced by a single Revolving Note (together with any and all renewal, extension, modification or replacement notes executed by the Borrower and delivered to the Bank and given in substitution therefor, the "Revolving Note") in the form of Exhibit "A" attached hereto, duly executed by the Borrower and payable to the order of the Bank. At the time of the initial disbursement of a Revolving Loan and at each time an additional Revolving Loan shall be requested hereunder or a repayment made in whole or in part thereon, an appropriate notation thereof shall be made on the books and records of the Bank. All amounts recorded shall be, absent demonstrable error, conclusive and binding evidence of (i) the principal amount of the Revolving Loans advanced hereunder and the amount of all Letter of Credit Obligations, (ii) any unpaid interest owing on the Revolving Loans, and (iii) all amounts repaid on the Revolving Loans or the Letter of Credit Obligations. The failure to record any such amount or any error in recording such amounts shall not, however, limit or otherwise affect the obligations of the Borrower under the Revolving Note to repay the principal amount of the Revolving Loans, together with all interest accruing thereon. 5. MANNER OF BORROWING. Each Loan shall be made available to the Borrower upon its request, from any Person whose authority to so act has not been revoked by the Borrower in writing previously received by the Bank. Each Revolving Loan may be advanced either as a Prime Loan or a LIBOR Loan, as requested by the Borrower, provided, however, that at any time, the Borrower may identify no more than five (5) Revolving Loans which may be LIBOR Loans and no LIBOR Loans may be requested by the Borrower if an Event of Default exists. A request for a Prime Loan must be received by no later than 11:00 a.m. Chicago, Illinois time, on the day it is to be funded. A request for a LIBOR Loan must be (i) received by no later than 11:00 a.m. Chicago, Illinois time, three (3) days before the day it is to be funded, and (ii) in an amount equal to One Million and No/100 Dollars ($1,000,000.00) or a higher integral multiple of One Hundred Thousand and No/100 Dollars ($100,000.00). If for any reason the Borrower shall fail to select timely an Interest Period for an existing LIBOR Loan, -12-

then such LIBOR Loan shall be immediately converted to a Prime Loan on the last Business Day of the then existing Interest Period, all without demand, presentment, protest or notice of any kind, all of which are hereby waived by the Borrower. The proceeds of each Prime Loan or LIBOR Loan shall be made available at the office of the Bank by credit to the account of the Borrower or by other means requested by the Borrower and acceptable to the Bank. Each Letter of Credit shall be issued by the Bank upon the execution of the Bank's standard Master Letter of Credit Agreement by the Borrower and the Bank, and the execution and delivery by the Borrower and the acceptance by the Bank of the Bank's standard application for Letter of Credit and the payment by the Borrower of the Bank's customary fees charged in connection therewith. In addition to all other applicable fees, charges and/or interest payable by the Borrower pursuant to the Master Letter of Credit Agreement or otherwise payable in accordance with the Bank's standard letter of credit fee schedule, all Letters of Credit issued under and pursuant to this Agreement shall bear an annual fee equal to three-quarters of one percent (0.75%) of the face amount of such Letter of Credit, payable by the Borrower on or before the issuance of such Letter of Credit by the Bank and annually thereafter on the same date unless and until (i) such Letter of Credit has expired or has been returned to the Bank, or

then such LIBOR Loan shall be immediately converted to a Prime Loan on the last Business Day of the then existing Interest Period, all without demand, presentment, protest or notice of any kind, all of which are hereby waived by the Borrower. The proceeds of each Prime Loan or LIBOR Loan shall be made available at the office of the Bank by credit to the account of the Borrower or by other means requested by the Borrower and acceptable to the Bank. Each Letter of Credit shall be issued by the Bank upon the execution of the Bank's standard Master Letter of Credit Agreement by the Borrower and the Bank, and the execution and delivery by the Borrower and the acceptance by the Bank of the Bank's standard application for Letter of Credit and the payment by the Borrower of the Bank's customary fees charged in connection therewith. In addition to all other applicable fees, charges and/or interest payable by the Borrower pursuant to the Master Letter of Credit Agreement or otherwise payable in accordance with the Bank's standard letter of credit fee schedule, all Letters of Credit issued under and pursuant to this Agreement shall bear an annual fee equal to three-quarters of one percent (0.75%) of the face amount of such Letter of Credit, payable by the Borrower on or before the issuance of such Letter of Credit by the Bank and annually thereafter on the same date unless and until (i) such Letter of Credit has expired or has been returned to the Bank, or (ii) the Bank has paid the beneficiary thereunder the full face amount of such Letter of Credit. The Bank is authorized to rely on any written, verbal, electronic, telephonic or telecopy loan requests which the Bank believes in its reasonable good faith judgment to emanate from a properly authorized representative of the Borrower, whether or not that is in fact the case. The Borrower does hereby irrevocably confirm, ratify and approve all such advances by the Bank and does hereby indemnify the Bank against losses and expenses (including court costs, attorneys' and paralegals' fees) and shall hold the Bank harmless with respect thereto. 6. REDUCTION OF CASH COLLATERAL REQUIREMENT. Pursuant to a commitment letter dated November 14, 2001 (the "COMMITMENT LETTER") between the Bank and the Borrower, the Bank agreed to reduce the Cash Collateral required to secure the Obligations on the terms and conditions set forth in the Commitment Letter. The Borrower determined that it did not want to include such terms and conditions in this Agreement; however, the Borrower has requested that the Bank consider adding such terms and conditions after the Bank's receipt of the Borrower's financial statements for the period ending June 30, 2002. Although the Bank no longer has any commitment to add such terms and conditions, the Bank agrees to negotiate in good faith with the Borrower to add such terms and conditions at such time. 7. REPRESENTATIONS AND WARRANTIES. To induce the Bank to make the Loans, the Borrower makes the following representations and warranties to the Bank, each of which shall be true and correct as of the date of the execution and delivery of this Agreement, and which shall survive the execution and delivery of this Agreement: -13-

7.1. Borrower Organization and Name. The Borrower is a corporation duly organized, existing and in good standing under the laws of the State of Delaware, with full and adequate corporate power to carry on and conduct its business as presently conducted. The Borrower's state issued organizational identification number is 3041162. The Borrower is duly licensed or qualified in all foreign jurisdictions wherein the nature of its activities require such qualification or licensing, except for jurisdictions where the failure to obtain such qualification or licensing could not reasonably be expected to have a material adverse effect on the financial condition, business, assets or affairs of the Borrower. The exact legal name of the Borrower is as set forth in the first paragraph of this Agreement, and the Borrower currently does not conduct, nor has it during the last five (5) years conducted, business under any other name or trade name, except as disclosed on Schedule 7.1. 7.2. Authorization; Validity. The Borrower has full right, power and authority to enter into this Agreement, to make the borrowings and execute and deliver the Loan Documents as provided herein and to perform all of its duties and obligations under this Agreement and the Loan Documents. The execution and delivery of this Agreement and the Loan Documents will not, nor will the observance or performance of any of the matters and things herein or therein set forth, violate or contravene any provision of law or of the certificate of incorporation

7.1. Borrower Organization and Name. The Borrower is a corporation duly organized, existing and in good standing under the laws of the State of Delaware, with full and adequate corporate power to carry on and conduct its business as presently conducted. The Borrower's state issued organizational identification number is 3041162. The Borrower is duly licensed or qualified in all foreign jurisdictions wherein the nature of its activities require such qualification or licensing, except for jurisdictions where the failure to obtain such qualification or licensing could not reasonably be expected to have a material adverse effect on the financial condition, business, assets or affairs of the Borrower. The exact legal name of the Borrower is as set forth in the first paragraph of this Agreement, and the Borrower currently does not conduct, nor has it during the last five (5) years conducted, business under any other name or trade name, except as disclosed on Schedule 7.1. 7.2. Authorization; Validity. The Borrower has full right, power and authority to enter into this Agreement, to make the borrowings and execute and deliver the Loan Documents as provided herein and to perform all of its duties and obligations under this Agreement and the Loan Documents. The execution and delivery of this Agreement and the Loan Documents will not, nor will the observance or performance of any of the matters and things herein or therein set forth, violate or contravene any provision of law or of the certificate of incorporation or bylaws of the Borrower. All necessary and appropriate corporate action has been taken on the part of the Borrower to authorize the execution and delivery of this Agreement and the Loan Documents. This Agreement and the Loan Documents are valid and binding agreements and contracts of the Borrower in accordance with their respective terms. 7.3. Compliance With Laws. The nature and transaction of the Borrower's business and operations and the use of its properties and assets, including, but not limited to, the Collateral or any real estate owned or occupied by the Borrower, do not and during the term of the Loans shall not, violate or conflict with any applicable law, statute, ordinance, rule, regulation or order of any kind or nature, including, without limitation, the provisions of the Fair Labor Standards Act or any zoning, land use, building, noise abatement, occupational health and safety or other laws, any building permit or any condition, grant, easement, covenant, condition or restriction, whether recorded or not. 7.4. Environmental Laws and Hazardous Substances. The Borrower represents, warrants and agrees with the Bank that (i) the Borrower has not generated, used, stored, treated, transported, manufactured, handled, produced or disposed of any Hazardous Materials, on or off any of the premises of the Borrower (whether or not owned by it) in any manner which at any time materially violates any Environmental Law or any license, permit, certificate, approval or similar authorization thereunder, (ii) the operations of the Borrower comply in all material respects with all Environmental Laws and all licenses, permits certificates, approvals and similar authorizations thereunder, (iii) there has been no investigation, proceeding, complaint, order, directive, claim, citation or notice by any governmental authority or any other Person, nor is any pending or, to the best of the Borrower's knowledge, threatened, and the Borrower shall immediately notify the Bank upon becoming aware of any such investigation, proceeding, complaint, order, directive, claim, citation or notice, and shall take prompt and appropriate actions to respond thereto, with -14-

respect to any non-compliance with, or violation of, the requirements of any Environmental Law by the Borrower or the release, spill or discharge, threatened or actual, of any Hazardous Material or the generation, use, storage, treatment, transportation, manufacture, handling, production or disposal of any Hazardous Material or any other environmental, health or safety matter, by the Borrower which affects its business, operations or assets or any properties at which the Borrower has transported, stored or disposed of any Hazardous Materials, (iv) the Borrower has no material liability, contingent or otherwise, in connection with a release, spill or discharge, threatened or actual, of any Hazardous Materials or the generation, use, storage, treatment, transportation, manufacture, handling, production or disposal of any Hazardous Material; and (v) without limiting the generality of the foregoing, the Borrower shall, following determination by the Bank that there is material non-compliance, or any condition which requires any action by or on behalf of the Borrower in order to avoid any material noncompliance, with any Environmental Law, at the Borrower's sole expense, cause an independent environmental engineer acceptable to the Bank to conduct such tests of the relevant site as are appropriate, and prepare and deliver a report setting forth the result of such tests, a proposed plan for remediation and an estimate of the costs thereof.

respect to any non-compliance with, or violation of, the requirements of any Environmental Law by the Borrower or the release, spill or discharge, threatened or actual, of any Hazardous Material or the generation, use, storage, treatment, transportation, manufacture, handling, production or disposal of any Hazardous Material or any other environmental, health or safety matter, by the Borrower which affects its business, operations or assets or any properties at which the Borrower has transported, stored or disposed of any Hazardous Materials, (iv) the Borrower has no material liability, contingent or otherwise, in connection with a release, spill or discharge, threatened or actual, of any Hazardous Materials or the generation, use, storage, treatment, transportation, manufacture, handling, production or disposal of any Hazardous Material; and (v) without limiting the generality of the foregoing, the Borrower shall, following determination by the Bank that there is material non-compliance, or any condition which requires any action by or on behalf of the Borrower in order to avoid any material noncompliance, with any Environmental Law, at the Borrower's sole expense, cause an independent environmental engineer acceptable to the Bank to conduct such tests of the relevant site as are appropriate, and prepare and deliver a report setting forth the result of such tests, a proposed plan for remediation and an estimate of the costs thereof. 7.5. Absence of Breach. The execution, delivery and performance of this Agreement, the Loan Documents and any other documents or instruments to be executed and delivered by the Borrower in connection with the Loans shall not: (i) violate any provisions of law or any applicable regulation, order, writ, injunction or decree of any court or governmental authority, or (ii) conflict with, be inconsistent with, or result in any breach or default of any of the terms, covenants, conditions, or provisions of any indenture, mortgage, deed of trust, instrument, document, agreement or contract of any kind to which the Borrower is a party or by which the Borrower or any of its property or assets may be bound, which breach or default could reasonably be expected to have a material adverse effect on the financial condition, business, assets or affairs of the Borrower. 7.6. Collateral Representations. The Borrower is the sole owner of the Collateral, free from any Lien of any kind, other than the Lien of the Bank and the Liens permitted under Section 8.2. 7.7. Financial Statements. All financial statements submitted to the Bank have been prepared in accordance with GAAP on a basis, except as otherwise noted therein, consistent with the previous fiscal year and truly and accurately reflect the financial condition of the Borrower and the results of the operations for the Borrower as of such date and for the periods indicated. Since the date of the most recent financial statement submitted by the Borrower to the Bank, there has been no material adverse change in the financial condition or in the assets or liabilities of the Borrower. 7.8. Litigation and Taxes. There is no litigation, demand, charge, claim, petition or governmental investigation or proceeding pending, or to the best knowledge of the Borrower, threatened, against the Borrower, which, if adversely determined, would result in any material adverse change in the financial condition or properties, business or operations of the Borrower. The Borrower has duly filed all applicable income or other tax returns and has -15-

paid all income or other taxes when due. There is no controversy or objection pending, or to the best knowledge of the Borrower, threatened in respect of any tax returns of the Borrower. 7.9. Event of Default. No Event of Default has occurred and is continuing, and no event has occurred and is continuing which, with the lapse of time, the giving of notice, or both, would constitute such an Event of Default under this Agreement or any of the Loan Documents and the Borrower is not in default (without regard to grace or cure periods) under any contract or agreement to which it is a party, the effect of which default shall materially adversely affect the performance by the Borrower of its obligations pursuant to and as contemplated by the terms and provisions of this Agreement. 7.10. ERISA Obligations. All Employee Plans of the Borrower meet the minimum funding standards of Section 302 of ERISA where applicable and each such Employee Plan that is intended to be qualified within the meaning of Section 401 of the Internal Revenue Code of 1986 is qualified. No withdrawal liability has been incurred under any such Employee Plans and no "Reportable Event" or "Prohibited Transaction" (as such terms are defined in

paid all income or other taxes when due. There is no controversy or objection pending, or to the best knowledge of the Borrower, threatened in respect of any tax returns of the Borrower. 7.9. Event of Default. No Event of Default has occurred and is continuing, and no event has occurred and is continuing which, with the lapse of time, the giving of notice, or both, would constitute such an Event of Default under this Agreement or any of the Loan Documents and the Borrower is not in default (without regard to grace or cure periods) under any contract or agreement to which it is a party, the effect of which default shall materially adversely affect the performance by the Borrower of its obligations pursuant to and as contemplated by the terms and provisions of this Agreement. 7.10. ERISA Obligations. All Employee Plans of the Borrower meet the minimum funding standards of Section 302 of ERISA where applicable and each such Employee Plan that is intended to be qualified within the meaning of Section 401 of the Internal Revenue Code of 1986 is qualified. No withdrawal liability has been incurred under any such Employee Plans and no "Reportable Event" or "Prohibited Transaction" (as such terms are defined in ERISA), has occurred with respect to any such Employee Plans, unless approved by the appropriate governmental agencies. The Borrower has promptly paid and discharged all obligations and liabilities arising under the Employee Retirement Income Security Act of 1974 ("ERISA") of a character which if unpaid or unperformed might result in the imposition of a Lien against any of its properties or assets. 7.11. Adverse Circumstances. No condition, circumstance, event, agreement, document, instrument, restriction, litigation or proceeding (or threatened litigation or proceeding or basis therefor) exists which (a) could adversely affect the validity or priority of the Liens granted to the Bank under the Loan Documents, (b) could materially adversely affect the ability of the Borrower to perform its obligations under the Loan Documents, (c) would constitute a default under any of the Loan Documents, or (d) would constitute such a default with the giving of notice or lapse of time or both. 7.12. Lending Relationship. The Borrower acknowledges and agrees that the relationship hereby created with the Bank is and has been conducted on an open and arm's length basis in which no fiduciary relationship exists and that the Borrower has not relied and is not relying on any such fiduciary relationship in executing this Agreement and in consummating the Loans. The Bank represents that it will receive the Note payable to its order as evidence of a bank loan. 7.13. Intentionally Omitted. 7.14. Compliance with Regulation U. No portion of the proceeds of the Loans shall be used by the Borrower, or any affiliates of the Borrower, either directly or indirectly, for the purpose of purchasing or carrying any margin stock, within the meaning of Regulation U as adopted by the Board of Governors of the Federal Reserve System. 7.15. Governmental Regulation. The Borrower is not, or after giving effect to any Loan, will not be, subject to regulation under the Public Utility Holding Company Act of -16-

1935, the Federal Power Act or the Investment Company Act of 1940 or to any federal or state statute or regulation limiting its ability to incur indebtedness for borrowed money. 7.16. Bank Accounts. The account numbers and locations of all Deposit accounts and other bank accounts of the Borrower and its Subsidiaries are listed on Schedule 7.16. 7.17. Place of Business. The principal place of business of the Borrower is 150 Field Drive, Lake Forest, Illinois 60045 and the Borrower shall promptly notify the Bank of any change in such location. 7.18. Complete Information. This Agreement and all financial statements, schedules, certificates, confirmations, agreements, contracts, and other materials submitted to the Bank in connection with or in furtherance of this Agreement by or on behalf of the Borrower fully and fairly state the matters with which they purport to deal. 8. NEGATIVE COVENANTS.

1935, the Federal Power Act or the Investment Company Act of 1940 or to any federal or state statute or regulation limiting its ability to incur indebtedness for borrowed money. 7.16. Bank Accounts. The account numbers and locations of all Deposit accounts and other bank accounts of the Borrower and its Subsidiaries are listed on Schedule 7.16. 7.17. Place of Business. The principal place of business of the Borrower is 150 Field Drive, Lake Forest, Illinois 60045 and the Borrower shall promptly notify the Bank of any change in such location. 7.18. Complete Information. This Agreement and all financial statements, schedules, certificates, confirmations, agreements, contracts, and other materials submitted to the Bank in connection with or in furtherance of this Agreement by or on behalf of the Borrower fully and fairly state the matters with which they purport to deal. 8. NEGATIVE COVENANTS. 8.1. Indebtedness. The Borrower shall not, either directly or indirectly, create, assume, permit to exist, incur or have outstanding any Indebtedness (including purchase money indebtedness), or become liable, whether as endorser, guarantor, surety or otherwise, for any debt or obligation of any other Person, except: (a) the Obligations; (b) endorsement for collection or deposit of any commercial paper secured in the ordinary course of business; (c) obligations of the Borrower for taxes, assessments, municipal or other governmental charges; (d) obligations of the Borrower for accounts payable, other than for money borrowed, incurred in the ordinary course of business; (e) obligations existing on the date hereof which are disclosed on Schedule 8.1; (f) obligations arising under Capital Leases or purchase money financing for fixed assets acquired (or deemed to be acquired) by the Borrower, so long as the aggregate outstanding amount of such obligations (whether or not described on Schedule 8.2) at any time does not exceed $500,000; (g) unfunded pension fund and other employee benefit obligations and liabilities to the extent they are permitted to remain unfunded under applicable law; (h) obligations with respect to warranty and indemnity claims arising in the ordinary course of the Borrower's business in connection with services provided by the Borrower to its customers; -17-

(i) intercompany loans made by a Subsidiary to the Borrower; (j) guaranties by the Borrower of indebtedness of any Subsidiary; and (k) guaranties by the Borrower of obligations of its employees in the ordinary course of the Borrower's business. 8.2. Encumbrances. The Borrower shall not, either directly or indirectly, create, assume, incur or suffer or permit to exist any Lien or charge of any kind or character upon any asset of the Borrower, whether owned at the date hereof or hereafter acquired except: (a) Liens for taxes, assessments or other governmental charges not yet due or which are being contested in good faith by appropriate proceedings in such a manner as not to make any property of Borrower forfeitable and for which adequate reserves for such contest are maintained by the Borrower; (b) Liens arising out of judgments and pre-judgment attachments not constituting an Event of Default under

(i) intercompany loans made by a Subsidiary to the Borrower; (j) guaranties by the Borrower of indebtedness of any Subsidiary; and (k) guaranties by the Borrower of obligations of its employees in the ordinary course of the Borrower's business. 8.2. Encumbrances. The Borrower shall not, either directly or indirectly, create, assume, incur or suffer or permit to exist any Lien or charge of any kind or character upon any asset of the Borrower, whether owned at the date hereof or hereafter acquired except: (a) Liens for taxes, assessments or other governmental charges not yet due or which are being contested in good faith by appropriate proceedings in such a manner as not to make any property of Borrower forfeitable and for which adequate reserves for such contest are maintained by the Borrower; (b) Liens arising out of judgments and pre-judgment attachments not constituting an Event of Default under Section 11.8 to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review and with respect to which it shall have secured a stay of execution pending such appeal or proceedings for review; (c) pledges or deposits to secure obligations under worker's compensation laws or similar legislation; (d) good faith deposits in connection with contracts (other than contracts for the payment of money) or leases to which the Borrower is a party; (e) carriers,' warehousemen's, suppliers' or similar possessing liens existing in the ordinary course of Borrower's business; (f) Liens existing on the date hereof and disclosed on Schedule 8.2 referred to in Section 7; (g) Liens on fixed assets acquired in connection with incurring obligations permitted under Section 8.1(f), to secure such obligations; (h) zoning restrictions, easements, licenses, or other restrictions on the use of any real estate or other minor irregularities in title (including leasehold title) thereto, so long as the same do not materially impair the use, value, or marketability of such real estate; and (i) Liens granted to the Bank. 8.3. Investments. The Borrower shall not, either directly or indirectly, make or have outstanding any investments (whether through purchase of stocks, obligations or otherwise) in, or loans or advances to, any other Person, except: -18-

(a) investments in direct obligations of the United States; (b) existing and future investments in Subsidiaries existing as of the date hereof; (c) intercompany loans made by the Borrower to any Subsidiary; (d) investments in certificates of deposit issued by the Bank or any bank with assets greater than One Hundred Million and No/100 Dollars ($100,000,000.00); or (e) investments in Prime Commercial Paper (for purposes hereof, Prime Commercial Paper shall mean short-term unsecured promissory notes sold by large corporations and rated A-1/P-1 by Standard & Poor's Ratings Group, a division of McGraw Hill, Inc., and Moody's Investment Service, Inc.). 8.4. Transfer; Merger. The Borrower shall not, either directly or indirectly, (a) purchase or acquire any

(a) investments in direct obligations of the United States; (b) existing and future investments in Subsidiaries existing as of the date hereof; (c) intercompany loans made by the Borrower to any Subsidiary; (d) investments in certificates of deposit issued by the Bank or any bank with assets greater than One Hundred Million and No/100 Dollars ($100,000,000.00); or (e) investments in Prime Commercial Paper (for purposes hereof, Prime Commercial Paper shall mean short-term unsecured promissory notes sold by large corporations and rated A-1/P-1 by Standard & Poor's Ratings Group, a division of McGraw Hill, Inc., and Moody's Investment Service, Inc.). 8.4. Transfer; Merger. The Borrower shall not, either directly or indirectly, (a) purchase or acquire any Subsidiary, (b) merge with, consolidate with, acquire all or substantially all of the assets, business, capital sock or beneficial ownership of or otherwise combine with or acquire, any Person, or (c) sell, transfer, assign, convey, license, lease or otherwise dispose of any of its property; provided, that so long as no Event of Default exists, Borrower may dispose of any of its obsolete or unusable equipment in the ordinary course of its business. 8.5. Distributions. The Borrower shall not, either directly or indirectly, purchase or redeem any shares of its stock, or declare or pay any dividends (other than stock dividends), whether in cash or otherwise, or set aside any funds for any such purpose or make any distribution to its shareholders; provided, that the Borrower may pay dividends to holders of its 7% Series B Convertible Preferred Stock on the terms described in the Registration Statement in Form S-3/A filed on November 13, 2001. 8.6. Affiliate Transactions. The Borrower shall not enter into or be a party to any transaction with any affiliate of the Borrower except in the ordinary course of and pursuant to the reasonable requirements of the Borrower's business and upon fair and reasonable terms that are no less favorable to the Borrower than would be obtained in a comparable arm's length transaction with a Person not an affiliate of the Borrower. 8.7. Capital Structure and Business. The Borrower shall not (a) make any changes in any of its business objectives, purposes or operations that could in any way adversely affect the repayment of the Loans or any of the other Obligations, or (b) amend its charter or bylaws in a manner that would adversely affect Lender or the Borrower's duty or ability to repay the Obligations. The Borrower shall not engage in any business other than the business currently engaged in by it. 8.8. Sale-Leasebacks. The Borrower shall not engage in any sale-leaseback, synthetic lease or similar transaction involving any of its assets. -19-

8.9. Use of Proceeds. Neither the Borrower nor any of its Subsidiaries or affiliates shall use any portion of the proceeds of the Loans, either directly or indirectly, for the purpose of purchasing any securities underwritten by ABN AMRO Incorporated, an affiliate of the Bank. 8.10. Bank Accounts. The Borrower shall not establish any new deposit accounts or other bank accounts, other than bank accounts established at or with the Bank, without the prior written consent of the Bank. 8.11. Change of Legal Status. The Borrower shall not change its name, its organizational identification number, if it has one, its type of organization, its jurisdiction of organization or other legal structure. 9. AFFIRMATIVE COVENANTS. 9.1. Compliance with Bank Regulatory Requirements. Upon demand by the Bank, the Borrower shall reimburse the Bank for the Bank's additional costs and/or reductions in the amount of principal or interest received or receivable by the Bank if at any time after the date of this Agreement any law, treaty or regulation or any change in any law, treaty or regulation or the interpretation thereof by any governmental authority charged with the

8.9. Use of Proceeds. Neither the Borrower nor any of its Subsidiaries or affiliates shall use any portion of the proceeds of the Loans, either directly or indirectly, for the purpose of purchasing any securities underwritten by ABN AMRO Incorporated, an affiliate of the Bank. 8.10. Bank Accounts. The Borrower shall not establish any new deposit accounts or other bank accounts, other than bank accounts established at or with the Bank, without the prior written consent of the Bank. 8.11. Change of Legal Status. The Borrower shall not change its name, its organizational identification number, if it has one, its type of organization, its jurisdiction of organization or other legal structure. 9. AFFIRMATIVE COVENANTS. 9.1. Compliance with Bank Regulatory Requirements. Upon demand by the Bank, the Borrower shall reimburse the Bank for the Bank's additional costs and/or reductions in the amount of principal or interest received or receivable by the Bank if at any time after the date of this Agreement any law, treaty or regulation or any change in any law, treaty or regulation or the interpretation thereof by any governmental authority charged with the administration thereof or any central bank or other fiscal, monetary or other authority having jurisdiction over the Bank or the Loans, whether or not having the force of law, shall impose, modify or deem applicable any reserve (except reserve requirements taken into account in calculating the LIBOR Rate and/or special deposit requirement against or in respect of assets held by or deposits in or for the account of the Loans by the Bank or impose on the Bank any other condition with respect to this Agreement or the Loans, the result of which is to either increase the cost to the Bank of making or maintaining the Loans or to reduce the amount of principal or interest received or receivable by the Bank with respect to such Loans. Said additional costs and/or reductions will be those which directly result from the imposition of such requirement or condition on the making or maintaining of such Loans. All Loans shall be deemed to be match funded for the purposes of the Bank's determination in the previous sentence. Notwithstanding the foregoing, the Borrower shall not be required to pay any such additional costs which could be avoided by the Bank with the exercise of reasonable conduct and diligence. 9.2. Corporate Existence. The Borrower shall at all times preserve and maintain its corporate existence, rights, franchises and privileges, and shall at all times continue as a going concern in the business which the Borrower is presently conducting. If the Borrower does not have a state issued identification number and later obtains one, the Borrower shall promptly notify the Bank of such organizational identification number. 9.3. Maintain Property. The Borrower shall at all times maintain, preserve and keep its plant, properties and equipment, in good repair, working order and condition, normal wear and tear excepted, and shall from time to time make all needful and proper repairs, renewals, replacements, and additions thereto so that at all times the efficiency thereof shall -20-

be fully preserved and maintained. The Borrower shall permit the Bank to examine and inspect such plant, properties and equipment at all reasonable times. 9.4. Maintain Insurance. The Borrower shall at all times insure and keep insured in insurance companies acceptable to the Bank, all insurable property owned by it which is of a character usually insured by companies similarly situated and operating like properties, against loss or damage from fire and such other hazards or risks as are customarily insured against by companies similarly situated and operating like properties; and shall similarly insure employers', public and professional liability risks. Prior to the date of the funding of the Note, the Borrower shall deliver to the Bank a certificate setting forth in summary form the nature and extent of the insurance maintained by the Borrower pursuant to this Section 9. All such policies of insurance must be reasonably satisfactory to the Bank in relation to the amount and term of the Obligations and type and value of the assets of the Borrower, and shall identify the Bank as sole lender's loss payee (to the extent the Bank has a Lien on such assets) and as an additional insured. This insurance coverage (i) may, but need not, protect the Borrower's interest in the such property and (ii) may not pay any claim made by, or against, the Borrower in connection with such property. The Borrower may later cancel any such insurance purchased by the Bank, but only after providing the Bank with evidence that the Borrower has obtained the insurance coverage required by this

be fully preserved and maintained. The Borrower shall permit the Bank to examine and inspect such plant, properties and equipment at all reasonable times. 9.4. Maintain Insurance. The Borrower shall at all times insure and keep insured in insurance companies acceptable to the Bank, all insurable property owned by it which is of a character usually insured by companies similarly situated and operating like properties, against loss or damage from fire and such other hazards or risks as are customarily insured against by companies similarly situated and operating like properties; and shall similarly insure employers', public and professional liability risks. Prior to the date of the funding of the Note, the Borrower shall deliver to the Bank a certificate setting forth in summary form the nature and extent of the insurance maintained by the Borrower pursuant to this Section 9. All such policies of insurance must be reasonably satisfactory to the Bank in relation to the amount and term of the Obligations and type and value of the assets of the Borrower, and shall identify the Bank as sole lender's loss payee (to the extent the Bank has a Lien on such assets) and as an additional insured. This insurance coverage (i) may, but need not, protect the Borrower's interest in the such property and (ii) may not pay any claim made by, or against, the Borrower in connection with such property. The Borrower may later cancel any such insurance purchased by the Bank, but only after providing the Bank with evidence that the Borrower has obtained the insurance coverage required by this Section. The costs of such insurance obtained by the Bank, through and including the effective date such insurance coverage is canceled or expires, shall be payable on demand by the Borrower to the Bank, together with interest at the Default Rate on such amounts until repaid and any other charges by the Bank in connection with the placement of such insurance. The costs of such insurance, which may be greater than the cost of insurance which the Borrower may be able to obtain on its own, together with interest thereon at the Default Rate and any other charges by the Bank in connection with the placement of such insurance may be added to the total Obligations due and owing. 9.5. Tax Liabilities. The Borrower shall at all times pay and discharge all property and other taxes, assessments and governmental charges upon, and all claims (including claims for labor, materials and supplies) against the Borrower or any of its properties before the same shall become delinquent and before penalties accrue thereon, unless and to the extent that the same are being contested in good faith by appropriate proceedings and are insured against or bonded over to the satisfaction of the Bank. 9.6. ERISA Liabilities; Employee Plans. The Borrower shall (i) keep in full force and effect any and all Employee Plans which are presently in existence or may, from time to time, come into existence under ERISA, and not withdraw from any such Employee Plans, unless such withdrawal can be effected or such Employee Plans can be terminated without liability to the Borrower; (ii) make contributions to all of such Employee Plans in a timely manner and in a sufficient amount to comply with the standards of ERISA; including the minimum funding standards of ERISA; (iii) comply with all material requirements of ERISA which relate to such Employee Plans; (iv) notify the Bank immediately upon receipt by the Borrower of any notice concerning the imposition of any withdrawal liability or of the institution of any proceeding or other action which may result in the termination of any such Employee Plans or the appointment of a trustee to administer such Employee Plans; (v) -21-

promptly advise the Bank of the occurrence of any "Reportable Event" or "Prohibited Transaction" (as such terms are defined in ERISA), with respect to any such Employee Plans; and (vi) amend any Employee Plan that is intended to be qualified within the meaning of Section 401 of the Internal Revenue Code of 1986 to the extent necessary to keep the Employee Plan qualified, and to cause the Employee Plan to be administered and operated in a manner that does not cause the Employee Plan to lose its qualified status. 9.7. Financial Statements. The Borrower shall at all times maintain a standard and modern system of accounting, on the accrual basis of accounting and in all respects in accordance with GAAP, and shall furnish to the Bank or its authorized representatives such information regarding the business affairs, operations and financial condition of the Borrower, including, but not limited to: (a) as soon as available, and in any event, within one hundred twenty (120) days after the close of each of its fiscal years, a copy of the annual audited financial statements of the Borrower, including balance sheet, statement of income and retained earnings, statement of cash flows for the fiscal year then ended and such other information (including nonfinancial information) as the Bank may request, in reasonable detail, prepared and certified by an

promptly advise the Bank of the occurrence of any "Reportable Event" or "Prohibited Transaction" (as such terms are defined in ERISA), with respect to any such Employee Plans; and (vi) amend any Employee Plan that is intended to be qualified within the meaning of Section 401 of the Internal Revenue Code of 1986 to the extent necessary to keep the Employee Plan qualified, and to cause the Employee Plan to be administered and operated in a manner that does not cause the Employee Plan to lose its qualified status. 9.7. Financial Statements. The Borrower shall at all times maintain a standard and modern system of accounting, on the accrual basis of accounting and in all respects in accordance with GAAP, and shall furnish to the Bank or its authorized representatives such information regarding the business affairs, operations and financial condition of the Borrower, including, but not limited to: (a) as soon as available, and in any event, within one hundred twenty (120) days after the close of each of its fiscal years, a copy of the annual audited financial statements of the Borrower, including balance sheet, statement of income and retained earnings, statement of cash flows for the fiscal year then ended and such other information (including nonfinancial information) as the Bank may request, in reasonable detail, prepared and certified by an independent certified public accountant acceptable to the Bank, containing an unqualified opinion; and (b) as soon as available, and in any event within thirty (30) days following the end of each fiscal month, a copy of the financial statements of the Borrower regarding such fiscal month, including balance sheet, statement of income and retained earnings, statement of cash flows for the fiscal month then ended and such other information (including nonfinancial information) as the Bank may request, in reasonable detail, prepared and certified as accurate by the Borrower. No change with respect to such accounting principles shall be made by the Borrower without giving prior notification to the Bank. The Borrower represents and warrants to the Bank that the financial statements delivered to the Bank at or prior to the execution and delivery of this Agreement and to be delivered at all times thereafter accurately reflect and will accurately reflect the financial condition of the Borrower. The Bank shall have the right at all times during business hours to inspect the books and records of the Borrower and make extracts therefrom. The Borrower agrees to advise the Bank immediately of any material adverse change in the financial condition, the operations or any other status of the Borrower. 9.8. Supplemental Financial Statements. The Borrower shall immediately upon receipt thereof, provide to the Bank copies of interim and supplemental reports if any, submitted to the Borrower by independent accountants in connection with any interim audit or review of the books of the Borrower. 9.9. Intentionally Omitted. 9.10. Intentionally Omitted. -22-

9.11. Intentionally Omitted. 9.12. Other Reports. The Borrower shall, within such period of time as the Bank may specify, deliver to the Bank such other schedules and reports as the Bank may reasonably require. 9.13. Notice of Proceedings. The Borrower shall, immediately after knowledge thereof shall have come to the attention of any officer of the Borrower, give written notice to the Bank of all threatened or pending actions, suits, and proceedings before any court or governmental department, commission, board or other administrative agency which may have a material effect on the business, property or operations of the Borrower. 9.14. Notice of Default. The Borrower shall, immediately after the commencement thereof, give notice to the Bank in writing of the occurrence of an Event of Default or of any event which, with the lapse of time, the giving of notice or both, would constitute an Event of Default hereunder. 9.15. Banking Relationship. The Borrower covenants and agrees, at all times during the term of this Agreement, to utilize the Bank as its primary bank of account and depository for all financial services, including all receipts,

9.11. Intentionally Omitted. 9.12. Other Reports. The Borrower shall, within such period of time as the Bank may specify, deliver to the Bank such other schedules and reports as the Bank may reasonably require. 9.13. Notice of Proceedings. The Borrower shall, immediately after knowledge thereof shall have come to the attention of any officer of the Borrower, give written notice to the Bank of all threatened or pending actions, suits, and proceedings before any court or governmental department, commission, board or other administrative agency which may have a material effect on the business, property or operations of the Borrower. 9.14. Notice of Default. The Borrower shall, immediately after the commencement thereof, give notice to the Bank in writing of the occurrence of an Event of Default or of any event which, with the lapse of time, the giving of notice or both, would constitute an Event of Default hereunder. 9.15. Banking Relationship. The Borrower covenants and agrees, at all times during the term of this Agreement, to utilize the Bank as its primary bank of account and depository for all financial services, including all receipts, disbursements, funds management, cash management (global) and related service. 10. FINANCIAL COVENANTS. 10.1. Cash Collateral. At all times, the amount of Cash Collateral shall not be less than one hundred percent (100%) of the aggregate outstanding Obligations. 11. EVENTS OF DEFAULT. The Borrower, without notice or demand of any kind, shall be in default under this Agreement upon the occurrence of any of the following events (each an "Event of Default"). 11.1. Nonpayment of Obligations. Any amount due and owing on the Note or any of the Obligations, whether by its terms or as otherwise provided herein, is not paid when due. 11.2. Misrepresentation. Any oral or written warranty, representation, certificate or statement in this Agreement, the Loan Documents or any other agreement with the Bank shall be false in any material respect when made or at any time. 11.3. Nonperformance. Any failure to perform or default in the performance of any covenant, condition or agreement contained in this Agreement, or in the Loan Documents or any other agreement with the Bank; provided, that any failure to perform or default in the performance of Sections 9.2, 9.3, 9.5, 9.6, 9.13 or 9.14 shall not constitute an Event of Default unless such failure or default is not cured within thirty (30) days of the date such failure or default first occurred. -23-

11.4. Default under Other Agreements. Any default in the payment of principal, interest or any other sum for any other obligation in excess of Five Hundred Thousand and No/100 Dollars ($500,000.00) beyond any period of grace provided with respect thereto or in the performance of any other term, condition or covenant contained in any agreement (including, but not limited to any capital or operating lease or any agreement in connection with the deferred purchase price of property) under which any such obligation in excess of Five Hundred Thousand and No/100 Dollars ($500,000.00) is created, the effect of which default is to cause or permit the holder of such obligation (or the other party to such other agreement) to cause such obligation to become due prior to its stated maturity or terminate such other agreement. 11.5. Assignment for Creditors. Any Obligor makes an assignment for the benefit of creditors, fails to pay, or admits in writing its inability to pay its debts as they mature; or if a trustee of any substantial part of the assets of any Obligor is applied for or appointed. 11.6. Bankruptcy. Any proceeding involving any Obligor, is commenced by or against such Obligor under any

11.4. Default under Other Agreements. Any default in the payment of principal, interest or any other sum for any other obligation in excess of Five Hundred Thousand and No/100 Dollars ($500,000.00) beyond any period of grace provided with respect thereto or in the performance of any other term, condition or covenant contained in any agreement (including, but not limited to any capital or operating lease or any agreement in connection with the deferred purchase price of property) under which any such obligation in excess of Five Hundred Thousand and No/100 Dollars ($500,000.00) is created, the effect of which default is to cause or permit the holder of such obligation (or the other party to such other agreement) to cause such obligation to become due prior to its stated maturity or terminate such other agreement. 11.5. Assignment for Creditors. Any Obligor makes an assignment for the benefit of creditors, fails to pay, or admits in writing its inability to pay its debts as they mature; or if a trustee of any substantial part of the assets of any Obligor is applied for or appointed. 11.6. Bankruptcy. Any proceeding involving any Obligor, is commenced by or against such Obligor under any bankruptcy, reorganization, arrangement, insolvency, readjustment of debt, dissolution or liquidation law or statute of the federal government or any state government, and in the case of any such proceeding being instituted against such Obligor, (i) such Obligor, by any action or failure to act indicates its approval of, consent to or acquiescence therein, or (ii) an order shall be entered approving the petition in such proceedings and such order is not vacated, stayed on appeal or otherwise shall not have ceased to continue in effect within forty-five (45) days after the entry thereof. 11.7. Judgments. The entry of any judgment, decree, levy, attachment, garnishment or other process, or the filing of any Lien against any Obligor involving an excess of Five Hundred Thousand and No/100 Dollars ($500,000.00) which is not fully covered by insurance. 12. REMEDIES. Upon the occurrence of an Event of Default, the Bank shall have all rights, powers and remedies set forth in the Loan Documents, in any written agreement or instrument (other than this Agreement or the Loan Documents) relating to any of the Obligations or any security therefor, or as otherwise provided at law or in equity. Without limiting the generality of the foregoing, the Bank may, at its option upon the occurrence of an Event of Default, declare its commitments to the Borrower to be terminated or reduced and all Obligations to be immediately due and payable, provided, however, that upon the occurrence of an Event of Default under either Section 11.5, "Assignment for Creditors", or Section 11.6, "Bankruptcy", all commitments of the Bank to the Borrower shall immediately terminate and all Obligations shall be automatically due and payable, all without demand, notice or further action of any kind required on the part of the Bank. The Borrower hereby waives any and all presentment, demand, notice of dishonor, protest, and all other notices and demands in connection with the enforcement of Bank's rights under the Loan Documents, and hereby consents to, and waives notice of release, with or without -24-

consideration, of any Collateral, notwithstanding anything contained herein or in the Loan Documents to the contrary. In addition to the foregoing: 12.1. Offset Rights. The Bank may exercise, from time to time, any and all rights and remedies available to it under the UCC or under any other applicable law in addition to, and not in lieu of, any rights and remedies expressly granted in this Agreement or in any other agreements between any Obligor and the Bank, and may, without demand or notice of any kind, appropriate and apply toward the payment of such of the Obligations, whether matured or unmatured, including costs of collection and attorneys' and paralegals' fees, and in such order of application as the Bank may, from time to time, elect, any indebtedness of the Bank to any Obligor, however created or arising, including, but not limited to, balances, credits, deposits, accounts or moneys of such Obligor in the possession, control or custody of, or in transit to the Bank. The Borrower, on behalf of itself and each Obligor, hereby waives the benefit of any law that would otherwise restrict or limit the Bank in the exercise of its right, which is hereby acknowledged, to appropriate at any time hereafter any such indebtedness owing from the Bank to any Obligor.

consideration, of any Collateral, notwithstanding anything contained herein or in the Loan Documents to the contrary. In addition to the foregoing: 12.1. Offset Rights. The Bank may exercise, from time to time, any and all rights and remedies available to it under the UCC or under any other applicable law in addition to, and not in lieu of, any rights and remedies expressly granted in this Agreement or in any other agreements between any Obligor and the Bank, and may, without demand or notice of any kind, appropriate and apply toward the payment of such of the Obligations, whether matured or unmatured, including costs of collection and attorneys' and paralegals' fees, and in such order of application as the Bank may, from time to time, elect, any indebtedness of the Bank to any Obligor, however created or arising, including, but not limited to, balances, credits, deposits, accounts or moneys of such Obligor in the possession, control or custody of, or in transit to the Bank. The Borrower, on behalf of itself and each Obligor, hereby waives the benefit of any law that would otherwise restrict or limit the Bank in the exercise of its right, which is hereby acknowledged, to appropriate at any time hereafter any such indebtedness owing from the Bank to any Obligor. 12.2. Attorney-in-Fact. The Borrower hereby irrevocably makes, constitutes and appoints the Bank (and any officer of the Bank or any Person designated by the Bank for that purpose) as the Borrower's true and lawful proxy and attorney-in-fact (and agent-in-fact) in the Borrower's name, place and stead, with full power of substitution, to (i) take such actions as are permitted in this Agreement, (ii) execute such financing statements and other documents and to do such other acts as the Bank may require to perfect and preserve the Bank's security interest in, and to enforce such interests in the Collateral, and (iii) after the occurrence and during the continuance of an Event of Default carry out any remedy provided for in this Agreement, including, without limitation, endorsing the Borrower's name to checks, drafts, instruments and other items of payment, and proceeds of the Collateral, executing change of address forms with the postmaster of the United States Post Office serving the address of the Borrower, changing the address of the Borrower to that of the Bank, opening all envelopes addressed to the Borrower and applying any payments contained therein to the Obligations. The Borrower hereby acknowledges that the constitution and appointment of such proxy and attorney-in-fact are coupled with an interest and are irrevocable. The Borrower hereby ratifies and confirms all that said attorney-in-fact may do or cause to be done by virtue of any provision of this Agreement. 12.3. No Marshaling. The Bank shall not be required to marshal any present or future collateral security (including but not limited to the Collateral) for, or other assurances of payment of, the Obligations or any of them or to resort to such collateral security or other assurances of payment in any particular order. To the extent that it lawfully may, the Borrower hereby agrees that it will not invoke any law relating to the marshaling of collateral which might cause delay in or impede the enforcement of the Bank's rights under this Agreement or under any other instrument creating or evidencing any of the Obligations or under which any of the Obligations is outstanding or by which any of the Obligations is secured or payment thereof is otherwise assured, and, to the extent that it lawfully may, the Borrower hereby irrevocably waives the benefits of all such laws. -25-

12.4. Application of Proceeds. The Bank will immediately after receipt of cash or solvent credits from collection of items of payment, proceeds of Collateral or any other source, apply the whole or any part thereof against the Obligations secured hereby. The Bank shall further have the exclusive right to determine how, when and what application of such payments and such credits shall be made on the Obligations, and such determination shall be conclusive upon the Borrower. Any proceeds of any disposition by the Bank of all or any part of the Collateral may be first applied by the Bank to the payment of expenses incurred by the Bank in connection with the Collateral, including attorneys' fees and legal expenses as provided for in Section 13 hereof. 12.5. No Waiver. No Event of Default shall be waived by the Bank except in writing. No failure or delay on the part of the Bank in exercising any right, power or remedy hereunder shall operate as a waiver of the exercise of the same or any other right at any other time; nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy hereunder. There shall be no obligation on the part of the Bank to exercise any remedy available to the Bank in any order. The remedies provided for herein are cumulative and not exclusive of any remedies provided at law or in equity. The Borrower agrees that in the event that the Borrower fails to perform, observe or discharge any of its Obligations or liabilities under this Agreement or any other agreements with the Bank, no remedy of law will

12.4. Application of Proceeds. The Bank will immediately after receipt of cash or solvent credits from collection of items of payment, proceeds of Collateral or any other source, apply the whole or any part thereof against the Obligations secured hereby. The Bank shall further have the exclusive right to determine how, when and what application of such payments and such credits shall be made on the Obligations, and such determination shall be conclusive upon the Borrower. Any proceeds of any disposition by the Bank of all or any part of the Collateral may be first applied by the Bank to the payment of expenses incurred by the Bank in connection with the Collateral, including attorneys' fees and legal expenses as provided for in Section 13 hereof. 12.5. No Waiver. No Event of Default shall be waived by the Bank except in writing. No failure or delay on the part of the Bank in exercising any right, power or remedy hereunder shall operate as a waiver of the exercise of the same or any other right at any other time; nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy hereunder. There shall be no obligation on the part of the Bank to exercise any remedy available to the Bank in any order. The remedies provided for herein are cumulative and not exclusive of any remedies provided at law or in equity. The Borrower agrees that in the event that the Borrower fails to perform, observe or discharge any of its Obligations or liabilities under this Agreement or any other agreements with the Bank, no remedy of law will provide adequate relief to the Bank, and further agrees that the Bank shall be entitled to temporary and permanent injunctive relief in any such case without the necessity of proving actual damages. 13. MISCELLANEOUS. 13.1. Obligations Absolute. None of the following shall affect the Obligations of the Borrower to the Bank under this Agreement or the Bank's rights with respect to the Collateral: (a) acceptance or retention by the Bank of other property or any interest in property as security for the Obligations; (b) release by the Bank of all or any part of the Collateral or of any party liable with respect to the Obligations; (c) release, extension, renewal, modification or substitution by the Bank of the Note, or any note evidencing any of the Obligations, or the compromise of the liability of any guarantor of the Obligations; or (d) failure of the Bank to resort to any other security or to pursue the Borrower or any other obligor liable for any of the Obligations before resorting to remedies against the Collateral. 13.2. Entire Agreement. This Agreement (i) is valid, binding and enforceable against the Borrower and the Bank in accordance with its provisions and no conditions exist -26-

as to its legal effectiveness; (ii) constitutes the entire agreement between the parties; and (iii) is the final expression of the intentions of the Borrower and the Bank. No promises, either expressed or implied, exist between the Borrower and the Bank, unless contained herein. This Agreement supersedes all negotiations, representations, warranties, commitments, offers, contracts (of any kind or nature, whether oral or written) prior to or contemporaneous with the execution hereof. 13.3. Amendments; Waivers. No amendment, modification, termination, discharge or waiver of any provision of this Agreement or of the Loan Documents, or consent to any departure by the Borrower therefrom, shall in any event be effective unless the same shall be in writing and signed by the Bank, and then such waiver or consent shall be effective only for the specific purpose for which given. 13.4. WAIVER OF DEFENSES. THE BORROWER WAIVES EVERY PRESENT AND FUTURE DEFENSE, CAUSE OF ACTION, COUNTERCLAIM OR SETOFF WHICH THE BORROWER MAY NOW HAVE OR HEREAFTER MAY HAVE TO ANY ACTION BY THE BANK IN ENFORCING THIS AGREEMENT. THE BORROWER WAIVES ANY IMPLIED COVENANT OF GOOD FAITH AND RATIFIES AND CONFIRMS WHATEVER THE BANK MAY DO PURSUANT TO THE TERMS OF THIS AGREEMENT. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE BANK

as to its legal effectiveness; (ii) constitutes the entire agreement between the parties; and (iii) is the final expression of the intentions of the Borrower and the Bank. No promises, either expressed or implied, exist between the Borrower and the Bank, unless contained herein. This Agreement supersedes all negotiations, representations, warranties, commitments, offers, contracts (of any kind or nature, whether oral or written) prior to or contemporaneous with the execution hereof. 13.3. Amendments; Waivers. No amendment, modification, termination, discharge or waiver of any provision of this Agreement or of the Loan Documents, or consent to any departure by the Borrower therefrom, shall in any event be effective unless the same shall be in writing and signed by the Bank, and then such waiver or consent shall be effective only for the specific purpose for which given. 13.4. WAIVER OF DEFENSES. THE BORROWER WAIVES EVERY PRESENT AND FUTURE DEFENSE, CAUSE OF ACTION, COUNTERCLAIM OR SETOFF WHICH THE BORROWER MAY NOW HAVE OR HEREAFTER MAY HAVE TO ANY ACTION BY THE BANK IN ENFORCING THIS AGREEMENT. THE BORROWER WAIVES ANY IMPLIED COVENANT OF GOOD FAITH AND RATIFIES AND CONFIRMS WHATEVER THE BANK MAY DO PURSUANT TO THE TERMS OF THIS AGREEMENT. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE BANK GRANTING ANY FINANCIAL ACCOMMODATION TO THE BORROWER. 13.5. WAIVER OF JURY TRIAL. THE BANK AND THE BORROWER, AFTER CONSULTING OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL, EACH KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE IRREVOCABLY, THE RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY LEGAL PROCEEDING BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT, THE NOTE OR ANY OF THE OTHER OBLIGATIONS, THE COLLATERAL, OR ANY OTHER AGREEMENT EXECUTED OR CONTEMPLATED TO BE EXECUTED IN CONJUNCTION WITH THIS AGREEMENT, OR ANY COURSE OF CONDUCT OR COURSE OF DEALING IN WHICH THE BANK AND THE BORROWER ARE ADVERSE PARTIES. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE BANK GRANTING ANY FINANCIAL ACCOMMODATION TO THE BORROWER. 13.6. LITIGATION. TO INDUCE THE BANK TO MAKE THE LOANS, THE BORROWER IRREVOCABLY AGREES THAT ALL ACTIONS ARISING, DIRECTLY OR INDIRECTLY, AS A RESULT OR CONSEQUENCE OF THIS AGREEMENT, THE NOTE, ANY OTHER AGREEMENT WITH THE BANK OR THE COLLATERAL, SHALL BE INSTITUTED AND LITIGATED ONLY IN COURTS HAVING THEIR SITUS IN THE CITY OF CHICAGO, ILLINOIS. THE BORROWER HEREBY CONSENTS TO THE EXCLUSIVE JURISDICTION AND VENUE OF ANY STATE OR FEDERAL COURT HAVING ITS SITUS IN SAID CITY, AND WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS. THE BORROWER HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY CERTIFIED MAIL, -27-

RETURN RECEIPT REQUESTED, DIRECTED TO THE BORROWER AS SET FORTH HEREIN IN THE MANNER PROVIDED BY APPLICABLE STATUTE, LAW, RULE OF COURT OR OTHERWISE. 13.7. Assignability. The Bank may at any time assign the Bank's rights in this Agreement, the Note, the Obligations, or any part thereof and transfer the Bank's rights in any or all of the Collateral, and the Bank thereafter shall be relieved from all liability with respect to such Collateral. In addition, the Bank may at any time sell one or more participations in the Loans. The Borrower may not sell or assign this Agreement, or any other agreement with the Bank or any portion thereof, either voluntarily or by operation of law, without the prior written consent of the Bank. This Agreement shall be binding upon the Bank and the Borrower and their respective legal representatives and successors. All references herein to the Borrower shall be deemed to include any successors, whether immediate or remote. In the case of a joint venture or partnership, the term "Borrower" shall be deemed to include all joint venturers or partners thereof, who shall be jointly and severally liable hereunder.

RETURN RECEIPT REQUESTED, DIRECTED TO THE BORROWER AS SET FORTH HEREIN IN THE MANNER PROVIDED BY APPLICABLE STATUTE, LAW, RULE OF COURT OR OTHERWISE. 13.7. Assignability. The Bank may at any time assign the Bank's rights in this Agreement, the Note, the Obligations, or any part thereof and transfer the Bank's rights in any or all of the Collateral, and the Bank thereafter shall be relieved from all liability with respect to such Collateral. In addition, the Bank may at any time sell one or more participations in the Loans. The Borrower may not sell or assign this Agreement, or any other agreement with the Bank or any portion thereof, either voluntarily or by operation of law, without the prior written consent of the Bank. This Agreement shall be binding upon the Bank and the Borrower and their respective legal representatives and successors. All references herein to the Borrower shall be deemed to include any successors, whether immediate or remote. In the case of a joint venture or partnership, the term "Borrower" shall be deemed to include all joint venturers or partners thereof, who shall be jointly and severally liable hereunder. 13.8. Confidentiality. The Borrower and the Bank hereby agree and acknowledge that any and all information relating to the Borrower which is (i) furnished by the Borrower to the Bank (or to any affiliate of the Bank), and (ii) non-public, confidential or proprietary in nature, shall be kept confidential by the Bank or such affiliate in accordance with applicable law, provided, however, that such information and other credit information relating to the Borrower may be distributed by the Bank or such affiliate to the Bank's or such affiliate's directors, officers, employees, attorneys, affiliates, auditors and regulators, and upon the order of a court or other governmental agency having jurisdiction over the Bank or such affiliate, to any other party. The Borrower and the Bank further agree that this provision shall survive the termination of this Agreement. 13.9. Binding Effect. This Agreement shall become effective upon execution by the Borrower and the Bank. If this Agreement is not dated or contains any blanks when executed by the Borrower, the Bank is hereby authorized, upon notice to the Borrower, to date this Agreement as of the date when it was executed by the Borrower, and to complete any such blanks according to the terms upon which this Agreement is executed. 13.10. Governing Law. This Agreement, the Loan Documents and the Note shall be delivered and accepted in and shall be deemed to be contracts made under and governed by the internal laws of the State of Illinois (but giving effect to federal laws applicable to national banks), and for all purposes shall be construed in accordance with the laws of such State, without giving effect to the choice of law provisions of such State. 13.11. Enforceability. Wherever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by, unenforceable or invalid under any jurisdiction, such provision shall as to such jurisdiction, be severable and be ineffective to the extent of such prohibition or invalidity, without invalidating the remaining provisions of this -28-

Agreement or affecting the validity or enforceability of such provision in any other jurisdiction. 13.12. Survival of Borrower Representations. All covenants, agreements, representations and warranties made by the Borrower herein shall, notwithstanding any investigation by the Bank, be deemed material and relied upon by the Bank and shall survive the making and execution of this Agreement and the Loan Documents and the issuance of the Note, and shall be deemed to be continuing representations and warranties until such time as the Borrower has fulfilled all of its Obligations to the Bank, and the Bank has been paid in full. The Bank, in extending financial accommodations to the Borrower, is expressly acting and relying on the aforesaid representations and warranties. 13.13. Extensions of Bank's Commitment and Note. This Agreement shall secure and govern the terms of any extensions or renewals of the Bank's commitment hereunder and the Note pursuant to the execution of any modification, extension or renewal note executed by the Borrower and accepted by the Bank in its sole and absolute discretion in substitution for the Note. 13.14. Time of Essence. Time is of the essence in making payments of all amounts due the Bank under this Agreement and in the performance and observance by the Borrower of each covenant, agreement, provision and

Agreement or affecting the validity or enforceability of such provision in any other jurisdiction. 13.12. Survival of Borrower Representations. All covenants, agreements, representations and warranties made by the Borrower herein shall, notwithstanding any investigation by the Bank, be deemed material and relied upon by the Bank and shall survive the making and execution of this Agreement and the Loan Documents and the issuance of the Note, and shall be deemed to be continuing representations and warranties until such time as the Borrower has fulfilled all of its Obligations to the Bank, and the Bank has been paid in full. The Bank, in extending financial accommodations to the Borrower, is expressly acting and relying on the aforesaid representations and warranties. 13.13. Extensions of Bank's Commitment and Note. This Agreement shall secure and govern the terms of any extensions or renewals of the Bank's commitment hereunder and the Note pursuant to the execution of any modification, extension or renewal note executed by the Borrower and accepted by the Bank in its sole and absolute discretion in substitution for the Note. 13.14. Time of Essence. Time is of the essence in making payments of all amounts due the Bank under this Agreement and in the performance and observance by the Borrower of each covenant, agreement, provision and term of this Agreement. 13.15. Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which taken together shall constitute one and the same instrument. 13.16. Facsimile Signatures. The Bank is hereby authorized to rely upon and accept as an original any Loan Documents or other communication which is sent to the Bank by facsimile, telegraphic or other electronic transmission (each, a "Communication") which the Bank in good faith believes has been signed by Borrower and has been delivered to the Bank by a properly authorized representative of the Borrower, whether or not that is in fact the case. Notwithstanding the foregoing, the Bank shall not be obligated to accept any such Communication as an original and may in any instance require that an original document be submitted to the Bank in lieu of, or in addition to, any such Communication. 13.17. Notices. Except as otherwise provided herein, the Borrower waives all notices and demands in connection with the enforcement of the Bank's rights hereunder. All notices, requests, demands and other communications provided for hereunder shall be in writing, sent by certified or registered mail, postage prepaid, by facsimile, telegram or delivered in person, and addressed as follows: If to the Borrower: eLoyalty Corporation 150 Field Drive Lake Forest, Illinois 60045 Attention: Rob Wert -29If to the Bank: LaSalle Bank National Association 135 South LaSalle Street Chicago, Illinois 60603 Attention: June Courtney

or, as to each party, at such other address as shall be designated by such party in a written notice to each other party complying as to delivery with the terms of this subsection. No notice to or demand on the Borrower in any case shall entitle the Borrower to any other or further notice or demand in similar or other circumstances. 13.18. Indemnification. The Borrower agrees to defend (with counsel satisfactory to the Bank), protect, indemnify and hold harmless each Indemnified Party from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, claims, costs, expenses and distributions of any kind or nature (including, without limitation, the disbursements and the reasonable fees of counsel for each Indemnified Party thereto, which shall also include, without limitation, attorneys' fees and time charges of attorneys who may be employees of the Bank, any parent corporation or affiliated corporation of the Bank), which may be imposed on, incurred by, or asserted against, any Indemnified Party (whether direct, indirect or consequential and whether based on any federal, state or local laws or regulations, including, without limitation, securities, Environmental

If to the Bank:

LaSalle Bank National Association 135 South LaSalle Street Chicago, Illinois 60603 Attention: June Courtney

or, as to each party, at such other address as shall be designated by such party in a written notice to each other party complying as to delivery with the terms of this subsection. No notice to or demand on the Borrower in any case shall entitle the Borrower to any other or further notice or demand in similar or other circumstances. 13.18. Indemnification. The Borrower agrees to defend (with counsel satisfactory to the Bank), protect, indemnify and hold harmless each Indemnified Party from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, claims, costs, expenses and distributions of any kind or nature (including, without limitation, the disbursements and the reasonable fees of counsel for each Indemnified Party thereto, which shall also include, without limitation, attorneys' fees and time charges of attorneys who may be employees of the Bank, any parent corporation or affiliated corporation of the Bank), which may be imposed on, incurred by, or asserted against, any Indemnified Party (whether direct, indirect or consequential and whether based on any federal, state or local laws or regulations, including, without limitation, securities, Environmental Laws and commercial laws and regulations, under common law or in equity, or based on contract or otherwise) in any manner relating to or arising out of this Agreement or any of the Loan Documents, or any act, event or transaction related or attendant thereto, the preparation, execution and delivery of this Agreement and the Loan Documents, including, but not limited to, the making or issuance and management of the Loans, the use or intended use of the proceeds of the Loans, the enforcement of the Bank's rights and remedies under this Agreement, the Loan Documents, the Note, any other instruments and documents delivered hereunder, or under any other agreement between the Borrower and the Bank; provided, however, that the Borrower shall not have any obligations hereunder to any Indemnified Party with respect to matters caused by or resulting from the willful misconduct or gross negligence of such Indemnified Party. To the extent that the undertaking to indemnify set forth in the preceding sentence may be unenforceable because it violates any law or public policy, the Borrower shall satisfy such undertaking to the maximum extent permitted by applicable law. Any liability, obligation, loss, damage, penalty, cost or expense covered by this indemnity shall be paid to each Indemnified Party on demand, and, failing prompt payment, shall, together with interest thereon at the Default Rate from the date incurred by each Indemnified Party until paid by the Borrower, be added to the Obligations of the Borrower and be secured by the Collateral. The provisions of this Section 13.18 shall survive the satisfaction and payment of the other Obligations and the termination of this Agreement. -30-

IN WITNESS WHEREOF, the Borrower and the Bank have executed this Loan and Security Agreement as of the date first above written. eLOYALTY CORPORATION, a Delaware corporation By Name Title Agreed and accepted: LASALLE BANK NATIONAL ASSOCIATION, a national banking association, By Name Title -31-

IN WITNESS WHEREOF, the Borrower and the Bank have executed this Loan and Security Agreement as of the date first above written. eLOYALTY CORPORATION, a Delaware corporation By Name Title Agreed and accepted: LASALLE BANK NATIONAL ASSOCIATION, a national banking association, By Name Title -31-

SCHEDULE 3.1 (See attached Closing Checklist) -32-

SCHEDULE 7.1 eLoyalty Corporation was spun off from Technology Solutions Company in February of 2000, and until that date was doing business as Technology Solutions Company. -33-

SCHEDULE 7.16 (See attached list of Bank Accounts) -34-

SCHEDULE 8.1 None. -35-

SCHEDULE 8.2 (See attached Lien Search Summary) -36-

SCHEDULE 3.1 (See attached Closing Checklist) -32-

SCHEDULE 7.1 eLoyalty Corporation was spun off from Technology Solutions Company in February of 2000, and until that date was doing business as Technology Solutions Company. -33-

SCHEDULE 7.16 (See attached list of Bank Accounts) -34-

SCHEDULE 8.1 None. -35-

SCHEDULE 8.2 (See attached Lien Search Summary) -36-

AMENDMENT NO. 1 AND CONSENT TO LOAN AGREEMENT This Amendment No. 1 and Consent to Loan Agreement (the "Amendment") is dated as of the ____ day of February, 2002 and is by and between LASALLE BANK NATIONAL ASSOCIATION ("Lender") and eLOYALTY CORPORATION, a Delaware corporation (the "Borrower"). WITNESSETH: WHEREAS, Lender and Borrower are parties to that certain Loan Agreement, dated as of December 17, 2001 (as the same may from time to time be amended or otherwise modified, the "Loan Agreement"; capitalized terms used herein without definition shall have the meanings ascribed to such terms in the Loan Agreement); and WHEREAS, the Borrower has requested that (i) Lender consent to Borrower's participation in a proposed exchange of its shares in YOUcentric, Inc. in part for shares of common stock of J.D. Edwards & Company ("YOUcentric Exchange") and in part for cash, which would otherwise violate Section 8.3 of the Loan Agreement (ii) Lender consent to Borrower's provision of its employees with bonus compensation in the form of forgivable loans (the "Bonus Loans") and the maintenance of Bonus Loans previously provided, which would otherwise violate Sections 8.3 and, in certain instances, Section 8.6 of the Loan Agreement and (iii) the Loan Agreement be amended in certain respects. NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt

SCHEDULE 7.1 eLoyalty Corporation was spun off from Technology Solutions Company in February of 2000, and until that date was doing business as Technology Solutions Company. -33-

SCHEDULE 7.16 (See attached list of Bank Accounts) -34-

SCHEDULE 8.1 None. -35-

SCHEDULE 8.2 (See attached Lien Search Summary) -36-

AMENDMENT NO. 1 AND CONSENT TO LOAN AGREEMENT This Amendment No. 1 and Consent to Loan Agreement (the "Amendment") is dated as of the ____ day of February, 2002 and is by and between LASALLE BANK NATIONAL ASSOCIATION ("Lender") and eLOYALTY CORPORATION, a Delaware corporation (the "Borrower"). WITNESSETH: WHEREAS, Lender and Borrower are parties to that certain Loan Agreement, dated as of December 17, 2001 (as the same may from time to time be amended or otherwise modified, the "Loan Agreement"; capitalized terms used herein without definition shall have the meanings ascribed to such terms in the Loan Agreement); and WHEREAS, the Borrower has requested that (i) Lender consent to Borrower's participation in a proposed exchange of its shares in YOUcentric, Inc. in part for shares of common stock of J.D. Edwards & Company ("YOUcentric Exchange") and in part for cash, which would otherwise violate Section 8.3 of the Loan Agreement (ii) Lender consent to Borrower's provision of its employees with bonus compensation in the form of forgivable loans (the "Bonus Loans") and the maintenance of Bonus Loans previously provided, which would otherwise violate Sections 8.3 and, in certain instances, Section 8.6 of the Loan Agreement and (iii) the Loan Agreement be amended in certain respects. NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, each of Lender and Borrower hereby agree as follows: 1. Amendments to Loan Agreement. In reliance on the representations and warranties set forth in Section 3 of this Amendment and subject to the satisfaction of the conditions precedent set forth in Section 4 of this Amendment, the Loan Agreement is hereby amended as follows: 1.1. The following proviso is added to the end of the first sentence of Section 2.5 of the Loan Agreement:

SCHEDULE 7.16 (See attached list of Bank Accounts) -34-

SCHEDULE 8.1 None. -35-

SCHEDULE 8.2 (See attached Lien Search Summary) -36-

AMENDMENT NO. 1 AND CONSENT TO LOAN AGREEMENT This Amendment No. 1 and Consent to Loan Agreement (the "Amendment") is dated as of the ____ day of February, 2002 and is by and between LASALLE BANK NATIONAL ASSOCIATION ("Lender") and eLOYALTY CORPORATION, a Delaware corporation (the "Borrower"). WITNESSETH: WHEREAS, Lender and Borrower are parties to that certain Loan Agreement, dated as of December 17, 2001 (as the same may from time to time be amended or otherwise modified, the "Loan Agreement"; capitalized terms used herein without definition shall have the meanings ascribed to such terms in the Loan Agreement); and WHEREAS, the Borrower has requested that (i) Lender consent to Borrower's participation in a proposed exchange of its shares in YOUcentric, Inc. in part for shares of common stock of J.D. Edwards & Company ("YOUcentric Exchange") and in part for cash, which would otherwise violate Section 8.3 of the Loan Agreement (ii) Lender consent to Borrower's provision of its employees with bonus compensation in the form of forgivable loans (the "Bonus Loans") and the maintenance of Bonus Loans previously provided, which would otherwise violate Sections 8.3 and, in certain instances, Section 8.6 of the Loan Agreement and (iii) the Loan Agreement be amended in certain respects. NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, each of Lender and Borrower hereby agree as follows: 1. Amendments to Loan Agreement. In reliance on the representations and warranties set forth in Section 3 of this Amendment and subject to the satisfaction of the conditions precedent set forth in Section 4 of this Amendment, the Loan Agreement is hereby amended as follows: 1.1. The following proviso is added to the end of the first sentence of Section 2.5 of the Loan Agreement: ;provided, however, that Bank may issue Letters of Credit with an expiration date on or before June 31, 2005 in an aggregate face amount not to exceed $200,000.

2. Consents. In reliance on the representations and warranties set forth in Section 3 of this Amendment and subject to the satisfaction of the conditions precedent set forth in Section 4 of this Amendment, Lender hereby

SCHEDULE 8.1 None. -35-

SCHEDULE 8.2 (See attached Lien Search Summary) -36-

AMENDMENT NO. 1 AND CONSENT TO LOAN AGREEMENT This Amendment No. 1 and Consent to Loan Agreement (the "Amendment") is dated as of the ____ day of February, 2002 and is by and between LASALLE BANK NATIONAL ASSOCIATION ("Lender") and eLOYALTY CORPORATION, a Delaware corporation (the "Borrower"). WITNESSETH: WHEREAS, Lender and Borrower are parties to that certain Loan Agreement, dated as of December 17, 2001 (as the same may from time to time be amended or otherwise modified, the "Loan Agreement"; capitalized terms used herein without definition shall have the meanings ascribed to such terms in the Loan Agreement); and WHEREAS, the Borrower has requested that (i) Lender consent to Borrower's participation in a proposed exchange of its shares in YOUcentric, Inc. in part for shares of common stock of J.D. Edwards & Company ("YOUcentric Exchange") and in part for cash, which would otherwise violate Section 8.3 of the Loan Agreement (ii) Lender consent to Borrower's provision of its employees with bonus compensation in the form of forgivable loans (the "Bonus Loans") and the maintenance of Bonus Loans previously provided, which would otherwise violate Sections 8.3 and, in certain instances, Section 8.6 of the Loan Agreement and (iii) the Loan Agreement be amended in certain respects. NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, each of Lender and Borrower hereby agree as follows: 1. Amendments to Loan Agreement. In reliance on the representations and warranties set forth in Section 3 of this Amendment and subject to the satisfaction of the conditions precedent set forth in Section 4 of this Amendment, the Loan Agreement is hereby amended as follows: 1.1. The following proviso is added to the end of the first sentence of Section 2.5 of the Loan Agreement: ;provided, however, that Bank may issue Letters of Credit with an expiration date on or before June 31, 2005 in an aggregate face amount not to exceed $200,000.

2. Consents. In reliance on the representations and warranties set forth in Section 3 of this Amendment and subject to the satisfaction of the conditions precedent set forth in Section 4 of this Amendment, Lender hereby consents to: (a) the YOUcentric Exchange, (b) the establishment and maintenance of the Bonus Loan program. These consents shall be deemed effective as of the date of the Agreement. Except as expressly provided herein, the foregoing consents shall not constitute (a) a modification or alteration of the terms, conditions or covenants of the Loan Agreement or any document entered into in connection therewith, or (b) a waiver, release or limitation upon the exercise by Lender of any of its rights, legal or equitable, hereunder or under the Loan Agreement or any Loan Document. Except as set forth above, the Lender reserves any and all

SCHEDULE 8.2 (See attached Lien Search Summary) -36-

AMENDMENT NO. 1 AND CONSENT TO LOAN AGREEMENT This Amendment No. 1 and Consent to Loan Agreement (the "Amendment") is dated as of the ____ day of February, 2002 and is by and between LASALLE BANK NATIONAL ASSOCIATION ("Lender") and eLOYALTY CORPORATION, a Delaware corporation (the "Borrower"). WITNESSETH: WHEREAS, Lender and Borrower are parties to that certain Loan Agreement, dated as of December 17, 2001 (as the same may from time to time be amended or otherwise modified, the "Loan Agreement"; capitalized terms used herein without definition shall have the meanings ascribed to such terms in the Loan Agreement); and WHEREAS, the Borrower has requested that (i) Lender consent to Borrower's participation in a proposed exchange of its shares in YOUcentric, Inc. in part for shares of common stock of J.D. Edwards & Company ("YOUcentric Exchange") and in part for cash, which would otherwise violate Section 8.3 of the Loan Agreement (ii) Lender consent to Borrower's provision of its employees with bonus compensation in the form of forgivable loans (the "Bonus Loans") and the maintenance of Bonus Loans previously provided, which would otherwise violate Sections 8.3 and, in certain instances, Section 8.6 of the Loan Agreement and (iii) the Loan Agreement be amended in certain respects. NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, each of Lender and Borrower hereby agree as follows: 1. Amendments to Loan Agreement. In reliance on the representations and warranties set forth in Section 3 of this Amendment and subject to the satisfaction of the conditions precedent set forth in Section 4 of this Amendment, the Loan Agreement is hereby amended as follows: 1.1. The following proviso is added to the end of the first sentence of Section 2.5 of the Loan Agreement: ;provided, however, that Bank may issue Letters of Credit with an expiration date on or before June 31, 2005 in an aggregate face amount not to exceed $200,000.

2. Consents. In reliance on the representations and warranties set forth in Section 3 of this Amendment and subject to the satisfaction of the conditions precedent set forth in Section 4 of this Amendment, Lender hereby consents to: (a) the YOUcentric Exchange, (b) the establishment and maintenance of the Bonus Loan program. These consents shall be deemed effective as of the date of the Agreement. Except as expressly provided herein, the foregoing consents shall not constitute (a) a modification or alteration of the terms, conditions or covenants of the Loan Agreement or any document entered into in connection therewith, or (b) a waiver, release or limitation upon the exercise by Lender of any of its rights, legal or equitable, hereunder or under the Loan Agreement or any Loan Document. Except as set forth above, the Lender reserves any and all rights and remedies which it has had, has or may have under the Loan Agreement and each Loan Document. 3. Representations and Warranties. To induce the Lender to enter into this Amendment, the Borrower hereby represents and warrants to the Lender that: 3.1. the execution, delivery and performance by the Borrower of this Amendment and each of the other agreements, instruments and documents contemplated hereby are within its corporate power, have been duly

AMENDMENT NO. 1 AND CONSENT TO LOAN AGREEMENT This Amendment No. 1 and Consent to Loan Agreement (the "Amendment") is dated as of the ____ day of February, 2002 and is by and between LASALLE BANK NATIONAL ASSOCIATION ("Lender") and eLOYALTY CORPORATION, a Delaware corporation (the "Borrower"). WITNESSETH: WHEREAS, Lender and Borrower are parties to that certain Loan Agreement, dated as of December 17, 2001 (as the same may from time to time be amended or otherwise modified, the "Loan Agreement"; capitalized terms used herein without definition shall have the meanings ascribed to such terms in the Loan Agreement); and WHEREAS, the Borrower has requested that (i) Lender consent to Borrower's participation in a proposed exchange of its shares in YOUcentric, Inc. in part for shares of common stock of J.D. Edwards & Company ("YOUcentric Exchange") and in part for cash, which would otherwise violate Section 8.3 of the Loan Agreement (ii) Lender consent to Borrower's provision of its employees with bonus compensation in the form of forgivable loans (the "Bonus Loans") and the maintenance of Bonus Loans previously provided, which would otherwise violate Sections 8.3 and, in certain instances, Section 8.6 of the Loan Agreement and (iii) the Loan Agreement be amended in certain respects. NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, each of Lender and Borrower hereby agree as follows: 1. Amendments to Loan Agreement. In reliance on the representations and warranties set forth in Section 3 of this Amendment and subject to the satisfaction of the conditions precedent set forth in Section 4 of this Amendment, the Loan Agreement is hereby amended as follows: 1.1. The following proviso is added to the end of the first sentence of Section 2.5 of the Loan Agreement: ;provided, however, that Bank may issue Letters of Credit with an expiration date on or before June 31, 2005 in an aggregate face amount not to exceed $200,000.

2. Consents. In reliance on the representations and warranties set forth in Section 3 of this Amendment and subject to the satisfaction of the conditions precedent set forth in Section 4 of this Amendment, Lender hereby consents to: (a) the YOUcentric Exchange, (b) the establishment and maintenance of the Bonus Loan program. These consents shall be deemed effective as of the date of the Agreement. Except as expressly provided herein, the foregoing consents shall not constitute (a) a modification or alteration of the terms, conditions or covenants of the Loan Agreement or any document entered into in connection therewith, or (b) a waiver, release or limitation upon the exercise by Lender of any of its rights, legal or equitable, hereunder or under the Loan Agreement or any Loan Document. Except as set forth above, the Lender reserves any and all rights and remedies which it has had, has or may have under the Loan Agreement and each Loan Document. 3. Representations and Warranties. To induce the Lender to enter into this Amendment, the Borrower hereby represents and warrants to the Lender that: 3.1. the execution, delivery and performance by the Borrower of this Amendment and each of the other agreements, instruments and documents contemplated hereby are within its corporate power, have been duly authorized by all necessary corporate action, have received all necessary governmental approval (if any shall be required), and do not and will not contravene or conflict with any provision of law applicable to the Borrower, the certificate of incorporation and by-laws of the Borrower (as amended to date), any order, judgment or decree of any court or governmental agency, or any agreement, instrument or document binding upon the Borrower or any of its property; 3.2. each of the Loan Agreement and the other Loan Documents, each as amended by this Amendment, are the

2. Consents. In reliance on the representations and warranties set forth in Section 3 of this Amendment and subject to the satisfaction of the conditions precedent set forth in Section 4 of this Amendment, Lender hereby consents to: (a) the YOUcentric Exchange, (b) the establishment and maintenance of the Bonus Loan program. These consents shall be deemed effective as of the date of the Agreement. Except as expressly provided herein, the foregoing consents shall not constitute (a) a modification or alteration of the terms, conditions or covenants of the Loan Agreement or any document entered into in connection therewith, or (b) a waiver, release or limitation upon the exercise by Lender of any of its rights, legal or equitable, hereunder or under the Loan Agreement or any Loan Document. Except as set forth above, the Lender reserves any and all rights and remedies which it has had, has or may have under the Loan Agreement and each Loan Document. 3. Representations and Warranties. To induce the Lender to enter into this Amendment, the Borrower hereby represents and warrants to the Lender that: 3.1. the execution, delivery and performance by the Borrower of this Amendment and each of the other agreements, instruments and documents contemplated hereby are within its corporate power, have been duly authorized by all necessary corporate action, have received all necessary governmental approval (if any shall be required), and do not and will not contravene or conflict with any provision of law applicable to the Borrower, the certificate of incorporation and by-laws of the Borrower (as amended to date), any order, judgment or decree of any court or governmental agency, or any agreement, instrument or document binding upon the Borrower or any of its property; 3.2. each of the Loan Agreement and the other Loan Documents, each as amended by this Amendment, are the legal, valid and binding obligation of the Borrower to the extent the Borrower is a party thereto, and the Loan Agreement and such Loan Documents are enforceable against the Borrower in accordance with their respective terms; 3.3. the representations and warranties of Borrower contained in the Loan Agreement and the Loan Documents, each as amended hereby, are true and correct in all material respects as of the date hereof, with the same effect as though made on the date hereof, except to the extent that such representations and warranties expressly relate to an earlier date, in which case such representations and warranties are true and correct as of such earlier date; and 3.4. Borrower has performed in all material respects all of its obligations under the Loan Agreement and the other Loan Documents to be performed by it on or before the date hereof and as of the date hereof, Borrower is in compliance with all applicable terms and provisions of the Loan Agreement and each of the other Loan Documents to be observed

and performed by it and, assuming the effectiveness of the consents set forth herein, no Event of Default has occurred and is continuing. 4. Conditions. The effectiveness of the amendments and consents set forth above is subject to the following conditions precedent: 4.1. Borrower shall have executed and delivered to Lender, or shall have caused to be executed and delivered to Lender, each in form and substance satisfactory to Lender, this Amendment and such other documents, instruments and agreements as Lender may reasonably request. 4.2. All proceedings taken in connection with the transactions contemplated by this Amendment and all documents, instruments and other legal matters incident thereto shall be satisfactory to Lender and its legal counsel. 4.3. Assuming the effectiveness of the consents set forth herein, no Event of Default shall have occurred and be continuing. 5. References; Effectiveness. Each of the Lender and the Borrower hereby agree that all references to the Loan

and performed by it and, assuming the effectiveness of the consents set forth herein, no Event of Default has occurred and is continuing. 4. Conditions. The effectiveness of the amendments and consents set forth above is subject to the following conditions precedent: 4.1. Borrower shall have executed and delivered to Lender, or shall have caused to be executed and delivered to Lender, each in form and substance satisfactory to Lender, this Amendment and such other documents, instruments and agreements as Lender may reasonably request. 4.2. All proceedings taken in connection with the transactions contemplated by this Amendment and all documents, instruments and other legal matters incident thereto shall be satisfactory to Lender and its legal counsel. 4.3. Assuming the effectiveness of the consents set forth herein, no Event of Default shall have occurred and be continuing. 5. References; Effectiveness. Each of the Lender and the Borrower hereby agree that all references to the Loan Agreement which are contained in any of the other Loan Documents shall refer to the Loan Agreement as amended by this Amendment. 6. Counterparts. This Amendment may be executed in any number of counterparts and by the different parties on separate counterparts, and each such counterpart shall be deemed to be an original, but all such counterparts shall together constitute but one and the same Amendment. 7. Continued Effectiveness. Except as specifically set forth herein, the Loan Agreement and each of the other Loan Documents shall continue in full force and effect according to their respective terms. 8. Governing Law. This Amendment shall be a contract made under and governed by the internal laws of the State of Illinois. 9. Costs and Expenses. Borrower hereby agrees that all expenses incurred by the Lender in connection with the preparation, negotiation and closing of the transactions contemplated hereby, including without limitation reasonable attorneys' fees and expenses, shall be part of the Obligations.

IN WITNESS WHEREOF, this Amendment has been executed as of, and is effective as of, the day and year first written above. eLOYALTY CORPORATION, a Delaware corporation, as Borrower By Its LASALLE BANK NATIONAL ASSOCIATION, as Lender By Its

EXHIBIT 10.29 AMENDMENT NO. 1 TO SHARE PURCHASE AGREEMENT THIS AMENDMENT NO. 1 TO SHARE PURCHASE AGREEMENT (this "Amendment") is made as of

IN WITNESS WHEREOF, this Amendment has been executed as of, and is effective as of, the day and year first written above. eLOYALTY CORPORATION, a Delaware corporation, as Borrower By Its LASALLE BANK NATIONAL ASSOCIATION, as Lender By Its

EXHIBIT 10.29 AMENDMENT NO. 1 TO SHARE PURCHASE AGREEMENT THIS AMENDMENT NO. 1 TO SHARE PURCHASE AGREEMENT (this "Amendment") is made as of December 19, 2001, by and among eLOYALTY CORPORATION, a Delaware corporation (the "Company"), and the investors listed on Exhibit A hereto, each of which is herein referred to as an "Investor" and all of which are collectively referred to herein as the "Investors." RECITALS WHEREAS, the Company has entered into that certain Share Purchase Agreement, dated as of September 24, 2001, with the Investors (the "Share Purchase Agreement"); and WHEREAS, the Company and the Investors desire to amend the Share Purchase Agreement to revise the allocation of Shares (as such term is defined in the Share Purchase Agreement) to be purchased by certain of the Investors pursuant to the Share Purchase Agreement and to reflect certain other agreements among them. AGREEMENT NOW THEREFORE, in consideration of the mutual covenants and agreements set forth herein and for other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows: 1. Amendment of Exhibit A. Exhibit A to the Share Purchase Agreement is hereby amended and restated in its entirety to read as is set forth as Exhibit A to this Amendment. 2. Amendment of Exhibit B. Exhibit B to the Share Purchase Agreement is hereby amended and restated in its entirety to read as is set forth as Exhibit B to this Amendment. 3. Amendment of Section 7.6. Each reference to "December 31, 2002" in Section 7.6 of the Share Purchase Agreement is hereby replaced in its entirety by "December 15, 2002." 4. No Other Amendments. Except as amended hereby, the Share Purchase Agreement shall remain in full force and effect. 5. Governing Law. This Amendment shall be governed in all respects by the laws of the State of Illinois without regard to choice of laws or conflict of laws provisions thereof. 6. Counterparts. This Amendment may be executed in any number of counterparts and signatures may be delivered by facsimile, each of which may be executed by less than all Investors, each of which shall be enforceable against the parties actually executing such counterparts, and all of which together shall constitute one

EXHIBIT 10.29 AMENDMENT NO. 1 TO SHARE PURCHASE AGREEMENT THIS AMENDMENT NO. 1 TO SHARE PURCHASE AGREEMENT (this "Amendment") is made as of December 19, 2001, by and among eLOYALTY CORPORATION, a Delaware corporation (the "Company"), and the investors listed on Exhibit A hereto, each of which is herein referred to as an "Investor" and all of which are collectively referred to herein as the "Investors." RECITALS WHEREAS, the Company has entered into that certain Share Purchase Agreement, dated as of September 24, 2001, with the Investors (the "Share Purchase Agreement"); and WHEREAS, the Company and the Investors desire to amend the Share Purchase Agreement to revise the allocation of Shares (as such term is defined in the Share Purchase Agreement) to be purchased by certain of the Investors pursuant to the Share Purchase Agreement and to reflect certain other agreements among them. AGREEMENT NOW THEREFORE, in consideration of the mutual covenants and agreements set forth herein and for other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows: 1. Amendment of Exhibit A. Exhibit A to the Share Purchase Agreement is hereby amended and restated in its entirety to read as is set forth as Exhibit A to this Amendment. 2. Amendment of Exhibit B. Exhibit B to the Share Purchase Agreement is hereby amended and restated in its entirety to read as is set forth as Exhibit B to this Amendment. 3. Amendment of Section 7.6. Each reference to "December 31, 2002" in Section 7.6 of the Share Purchase Agreement is hereby replaced in its entirety by "December 15, 2002." 4. No Other Amendments. Except as amended hereby, the Share Purchase Agreement shall remain in full force and effect. 5. Governing Law. This Amendment shall be governed in all respects by the laws of the State of Illinois without regard to choice of laws or conflict of laws provisions thereof. 6. Counterparts. This Amendment may be executed in any number of counterparts and signatures may be delivered by facsimile, each of which may be executed by less than all Investors, each of which shall be enforceable against the parties actually executing such counterparts, and all of which together shall constitute one instrument. 1

IN WITNESS WHEREOF, the parties have executed this Amendment as of the date first above written. THE COMPANY: eLOYALTY CORPORATION
By: /s/ Timothy J. Cunningham --------------------------------------------Name: Timothy J. Cunningham Title: Senior Vice President and Chief Financial Officer

IN WITNESS WHEREOF, the parties have executed this Amendment as of the date first above written. THE COMPANY: eLOYALTY CORPORATION
By: /s/ Timothy J. Cunningham --------------------------------------------Name: Timothy J. Cunningham Title: Senior Vice President and Chief Financial Officer

Address: 150 Field Drive, Suite 250 Lake Forest, IL 60045 2

THE INVESTORS: TCV IV, L.P., a Delaware limited partnership By: Technology Crossover Management IV, L.L.C. Its: General Partner
By: /s/ Carla S. Newell ----------------------------------------Name: Carla S. Newell Title: Attorney in Fact

TCV IV STRATEGIC PARTNERS, L.P., a Delaware limited partnership By: Technology Crossover Management IV, L.L.C. Its: General Partner
By: /s/ Carla S. Newell ----------------------------------------Name: Carla S. Newell Title: Attorney in Fact

TCV III (GP), a Delaware general partnership By: Technology Crossover Management III, L.L.C. Its: General Partner
By: /s/ Carla S. Newell ----------------------------------------Name: Carla S. Newell Title: Attorney in Fact

TCV III, L.P., a Delaware limited partnership By: Technology Crossover Management III, L.L.C. Its: General Partner
By: /s/ Carla S. Newell ----------------------------------------Name: Carla S. Newell Title: Attorney in Fact

TCV III (Q), L.P., a Delaware limited partnership By: Technology Crossover Management III, L.L.C. Its: General Partner
By: /s/ Carla S. Newell

THE INVESTORS: TCV IV, L.P., a Delaware limited partnership By: Technology Crossover Management IV, L.L.C. Its: General Partner
By: /s/ Carla S. Newell ----------------------------------------Name: Carla S. Newell Title: Attorney in Fact

TCV IV STRATEGIC PARTNERS, L.P., a Delaware limited partnership By: Technology Crossover Management IV, L.L.C. Its: General Partner
By: /s/ Carla S. Newell ----------------------------------------Name: Carla S. Newell Title: Attorney in Fact

TCV III (GP), a Delaware general partnership By: Technology Crossover Management III, L.L.C. Its: General Partner
By: /s/ Carla S. Newell ----------------------------------------Name: Carla S. Newell Title: Attorney in Fact

TCV III, L.P., a Delaware limited partnership By: Technology Crossover Management III, L.L.C. Its: General Partner
By: /s/ Carla S. Newell ----------------------------------------Name: Carla S. Newell Title: Attorney in Fact

TCV III (Q), L.P., a Delaware limited partnership By: Technology Crossover Management III, L.L.C. Its: General Partner
By: /s/ Carla S. Newell ----------------------------------------Name: Carla S. Newell Title: Attorney in Fact

3

TCV III STRATEGIC PARTNERS, L.P., a Delaware limited partnership By: Technology Crossover Management III, L.L.C. Its: General Partner
By: /s/ Carla S. Newell ----------------------------------------Name: Carla S. Newell Title: Attorney in Fact

SUTTER HILL VENTURES, a California limited partnership By: Sutter Hill Ventures, LLC

TCV III STRATEGIC PARTNERS, L.P., a Delaware limited partnership By: Technology Crossover Management III, L.L.C. Its: General Partner
By: /s/ Carla S. Newell ----------------------------------------Name: Carla S. Newell Title: Attorney in Fact

SUTTER HILL VENTURES, a California limited partnership By: Sutter Hill Ventures, LLC Its: General Partner
By: /s/ Tench Coxe ----------------------------------------Name: Tench Coxe Title: Managing Director

SUTTER HILL ENTREPRENEURS FUND (AI), L.P., a California limited partnership By: Sutter Hill Ventures, LLC Its: General Partner
By: /s/ Tench Coxe ----------------------------------------Name: Tench Coxe Title: Managing Director

SUTTER HILL ENTREPRENEURS FUND (QP), L.P., a California limited partnership By: Sutter Hill Ventures, LLC Its: General Partner
By: /s/ Tench Coxe ----------------------------------------Name: Tench Coxe Title: Managing Director

SUTTER HILL ASSOCIATES, L.P., a California limited partnership
/s/ Tench Coxe ----------------------------------------By: Tench Coxe Its: General Partner

4

EXHIBIT A SCHEDULE OF INVESTORS
--------------------------------------------------------------------------------------------------------The following are the "TCV Maximum Aggregate Investment: Percentage of TCV Investors" for the purposes of Shares:

EXHIBIT A SCHEDULE OF INVESTORS
--------------------------------------------------------------------------------------------------------The following are the "TCV Maximum Aggregate Investment: Percentage of TCV Investors" for the purposes of Shares: the Agreement (list continues on multiple pages): --------------------------------------------------------------------------------------------------------TCV IV, L.P., a Delaware $12,027,468.00 80.18312% limited partnership 528 Ramona Street Palo Alto, California 94301 Fax: 650-614-8222 (principal address) 56 Main Street, Suite 210 Millburn, New Jersey 07041 (copy) --------------------------------------------------------------------------------------------------------TCV IV STRATEGIC $452,658.00 3.01772% PARTNERS, L.P., a Delaware limited partnership 528 Ramona Street Palo Alto, California 94301 Fax: 650-614-8222 (principal address) 56 Main Street, Suite 210 Millburn, New Jersey 07041 (copy) --------------------------------------------------------------------------------------------------------TCV III (GP), a Delaware $18,298.50 .12199% general partnership 528 Ramona Street Palo Alto, California 94301 Fax: 650-614-8222 (principal address) 56 Main Street, Suite 210 Millburn, New Jersey 07041 (copy) ---------------------------------------------------------------------------------------------------------

5
--------------------------------------------------------------------------------------------------------The following are the "TCV Maximum Aggregate Investment: Percentage of TCV Investors" for the purposes of Shares: the Agreement (list continues on multiple pages): --------------------------------------------------------------------------------------------------------TCV III, L.P., a Delaware $86,916.00 .57944% limited partnership 528 Ramona Street Palo Alto, California 94301 Fax: 650-614-8222 (principal address) 56 Main Street, Suite 210 Millburn, New Jersey 07041 (copy) --------------------------------------------------------------------------------------------------------TCV III (Q), L.P., a Delaware $2,310,078.00 15.40052% limited partnership 528 Ramona Street Palo Alto, California 94301 Fax: 650-614-8222 (principal address) 56 Main Street, Suite 210 Millburn, New Jersey 07041 (copy)

--------------------------------------------------------------------------------------------------------The following are the "TCV Maximum Aggregate Investment: Percentage of TCV Investors" for the purposes of Shares: the Agreement (list continues on multiple pages): --------------------------------------------------------------------------------------------------------TCV III, L.P., a Delaware $86,916.00 .57944% limited partnership 528 Ramona Street Palo Alto, California 94301 Fax: 650-614-8222 (principal address) 56 Main Street, Suite 210 Millburn, New Jersey 07041 (copy) --------------------------------------------------------------------------------------------------------TCV III (Q), L.P., a Delaware $2,310,078.00 15.40052% limited partnership 528 Ramona Street Palo Alto, California 94301 Fax: 650-614-8222 (principal address) 56 Main Street, Suite 210 Millburn, New Jersey 07041 (copy) --------------------------------------------------------------------------------------------------------TCV III STRATEGIC $104,581.50 .69721% PARTNERS, L.P., a Delaware limited partnership 528 Ramona Street Palo Alto, California 94301 Fax: 650-614-8222 (principal address) 56 Main Street, Suite 210 Millburn, New Jersey 07041 (copy) ---------------------------------------------------------------------------------------------------------

6
--------------------------------------------------------------------------------------------------------The following are the "SH Maximum Aggregate Investment: Percentage of SH Investors" for the purposes of Shares: the Agreement (list continues on multiple pages): --------------------------------------------------------------------------------------------------------SUTTER HILL VENTURES, $7,169,888.00 71.69888% a California limited partnership 755 Page Mill Road Suite A-200 Palo Alto, California 94304 Fax: 650-858-1854 --------------------------------------------------------------------------------------------------------SUTTER HILL $70,913.00 .70913% ENTREPRENEURS FUND (AI), L.P., a California limited partnership 755 Page Mill Road Suite A-200 Palo Alto, California 94304 Fax: 650-858-1854 --------------------------------------------------------------------------------------------------------SUTTER HILL $179,551.00 1.79551% ENTREPRENEURS FUND (QP), L.P., a California limited partnership 755 Page Mill Road Suite A-200 Palo Alto, California 94304 Fax: 650-858-1854 --------------------------------------------------------------------------------------------------------SUTTER HILL $2,579,648.00 25.79648% ASSOCIATES, L.P., a

--------------------------------------------------------------------------------------------------------The following are the "SH Maximum Aggregate Investment: Percentage of SH Investors" for the purposes of Shares: the Agreement (list continues on multiple pages): --------------------------------------------------------------------------------------------------------SUTTER HILL VENTURES, $7,169,888.00 71.69888% a California limited partnership 755 Page Mill Road Suite A-200 Palo Alto, California 94304 Fax: 650-858-1854 --------------------------------------------------------------------------------------------------------SUTTER HILL $70,913.00 .70913% ENTREPRENEURS FUND (AI), L.P., a California limited partnership 755 Page Mill Road Suite A-200 Palo Alto, California 94304 Fax: 650-858-1854 --------------------------------------------------------------------------------------------------------SUTTER HILL $179,551.00 1.79551% ENTREPRENEURS FUND (QP), L.P., a California limited partnership 755 Page Mill Road Suite A-200 Palo Alto, California 94304 Fax: 650-858-1854 --------------------------------------------------------------------------------------------------------SUTTER HILL $2,579,648.00 25.79648% ASSOCIATES, L.P., a California limited partnership 755 Page Mill Road Suite A-200 Palo Alto, California 94304 Fax: 650-858-1854 ---------------------------------------------------------------------------------------------------------

7

EXHIBIT B CERTIFICATE OF DESIGNATIONS OF 7% SERIES B CONVERTIBLE PREFERRED STOCK OF ELOYALTY CORPORATION Pursuant to Section 151 of the General Corporation Law of the State of Delaware The undersigned do hereby certify that the following resolution was duly adopted by the Board of Directors of eLoyalty Corporation, a Delaware corporation, on December 19th, 2001: WHEREAS, the Certificate of Incorporation of eLoyalty Corporation, a Delaware corporation (the "Corporation"), authorizes the Corporation to issue a total of [___________] shares of preferred stock, par value $.01 per share ("Preferred Stock"), which may be divided into one or more series as the Board of Directors may determine; WHEREAS, the Certificate of Incorporation of the Corporation expressly vests in the Board of Directors the authority to fix and determine the designations, powers, preferences and rights, and the qualifications, limitations

EXHIBIT B CERTIFICATE OF DESIGNATIONS OF 7% SERIES B CONVERTIBLE PREFERRED STOCK OF ELOYALTY CORPORATION Pursuant to Section 151 of the General Corporation Law of the State of Delaware The undersigned do hereby certify that the following resolution was duly adopted by the Board of Directors of eLoyalty Corporation, a Delaware corporation, on December 19th, 2001: WHEREAS, the Certificate of Incorporation of eLoyalty Corporation, a Delaware corporation (the "Corporation"), authorizes the Corporation to issue a total of [___________] shares of preferred stock, par value $.01 per share ("Preferred Stock"), which may be divided into one or more series as the Board of Directors may determine; WHEREAS, the Certificate of Incorporation of the Corporation expressly vests in the Board of Directors the authority to fix and determine the designations, powers, preferences and rights, and the qualifications, limitations and restrictions, of the Preferred Stock; WHEREAS, the Board of Directors deems it advisable to designate a series of the Preferred Stock consisting of [__________] shares designated as 7% Series B Convertible Preferred Stock; and WHEREAS, immediately prior to the filing of this Certificate of Designation with the Secretary of State of the State of Delaware, the Corporation filed an amendment to its Certificate of Incorporation which, among other things, gave effect to a one-for-ten reverse stock split of the Corporation's common stock, $.01 par value per share. NOW, THEREFORE, IT IS HEREBY RESOLVED, that pursuant to Article IV of the Certificate of Incorporation of the Corporation, there be and hereby is authorized and created a series of Preferred Stock hereby designated as 7% Series B Convertible Preferred Stock, to consist of [_____________] shares, having a par value of $.01 per share, which series shall have the voting rights, designations, powers, preferences, relative and other special rights, and the qualifications, limitations and restrictions set forth below: Series B Convertible Preferred Stock. [______________] of the authorized shares of Preferred Stock are hereby designated "7% Series B Convertible Preferred Stock" (the "Series B 8

Preferred Stock"). The rights, preferences, privileges, restrictions and other matters relating to the Series B Preferred Stock are as follows: (a) Dividend Rights. (i) Subject to the right of any other series of Preferred Stock that may from time to time come into existence and which is expressly senior to the rights of the Series B Preferred Stock, the holders of Series B Preferred Stock, in preference to the holders of common stock, par value $.01 per share, of the Corporation (the "Common Stock"), the Series A Junior Participating Preferred Stock, par value $.01 per share, of the Corporation and any other stock of the Corporation hereafter created which shall be junior to the Series B Preferred Stock (together, "Series B Junior Stock"), shall be entitled to receive dividends, when, as and if declared by the Board of Directors, but only out of funds that are legally available therefor, at the rate of 7% of the Series B Original Issue

Preferred Stock"). The rights, preferences, privileges, restrictions and other matters relating to the Series B Preferred Stock are as follows: (a) Dividend Rights. (i) Subject to the right of any other series of Preferred Stock that may from time to time come into existence and which is expressly senior to the rights of the Series B Preferred Stock, the holders of Series B Preferred Stock, in preference to the holders of common stock, par value $.01 per share, of the Corporation (the "Common Stock"), the Series A Junior Participating Preferred Stock, par value $.01 per share, of the Corporation and any other stock of the Corporation hereafter created which shall be junior to the Series B Preferred Stock (together, "Series B Junior Stock"), shall be entitled to receive dividends, when, as and if declared by the Board of Directors, but only out of funds that are legally available therefor, at the rate of 7% of the Series B Original Issue Price (as defined below) per annum (the "Series B Dividend Rate") on each outstanding share of Series B Preferred Stock (as adjusted for any stock dividends, combinations, splits, recapitalizations and the like with respect to such shares). For any share of Series B Preferred Stock, such dividends shall begin to accrue commencing upon the first date such share is issued and becomes outstanding and shall be payable semi-annually in cash on January 1 and July 1 of each year, beginning on July 1, 2002 (each, a "Dividend Payment Date"), provided, that, (i) if any such Dividend Payment Date is not a Business Day, then any such dividend shall be payable on the next Business Day, and (ii) any such dividend shall be payable only as the Board of Directors may from time to time determine, and only when, as and if declared by the Board of Directors. Subject to the foregoing, any such dividend shall be paid to the holders of record at the close of business on the date specified by the Board of Directors at the time such dividend is declared, provided, however, that such date may not be more than 60 days nor less than 10 days prior to the applicable dividend payment date. Such dividends shall accrue day by day and shall be cumulative, whether or not declared by the Board of Directors and whether or not there shall be funds legally available for the payment of dividends. The original issue price of the Series B Preferred Stock shall be $5.10 (the "Series B Original Issue Price"). Dividends payable for any period shorter or longer than a semi-annual dividend period shall be computed on the basis of a 360-day year of twelve 30-day months. Dividends in arrears may be declared by the Board of Directors and paid on any date fixed by the Board of Directors, without reference to any regular Dividend Payment Date. Any dividend paid upon the Series B Preferred Stock at a time when any accrued dividends for any prior periods are delinquent shall be expressly declared as a dividend in whole or partial payment of the accrued dividend for the earliest period or periods for which dividends are then delinquent, and shall be so designated to each holder to whom payment is made thereof. The term "Business Day" means any day other than a Saturday, a Sunday or a day on which banking institutions in the City of Chicago, Illinois are authorized or required by law to be closed. (ii) So long as any shares of Series B Preferred Stock shall be outstanding, without the prior written consent of the holders of a majority of the then issued and 9

outstanding shares of Series B Preferred Stock, no dividend (other than a Common Stock dividend paid pro rata to the Corporation's stockholders), whether in cash, securities or other property, shall be paid or declared, nor shall any other distribution (other than a Common Stock dividend paid pro rata to the Corporation's stockholders) be made, on any Series B Junior Stock, nor shall any shares of any Series B Junior Stock of the Corporation be purchased, redeemed or otherwise acquired for value by the Corporation or any of its subsidiaries (except (A) for acquisitions of Common Stock by the Corporation or its subsidiaries pursuant to stock-based compensation arrangements or agreements that permit the Corporation to repurchase such shares upon termination of services to the Corporation or its subsidiaries for a price not greater than the cost thereof to the applicable service provider, (B) for acquisitions by the Corporation or its subsidiaries in whole or partial satisfaction of the exercise price or applicable tax withholding requirements in respect of any option, restricted stock or similar award made pursuant to any compensation or benefit plan, agreement or arrangement maintained or assumed by the Corporation or its subsidiaries and (C) by conversion into or exchange for Series B Junior Stock or any security convertible into or exchangeable for Series B Junior Stock) until all dividends (set forth in Section (a)(i) above) then accrued on the Series B Preferred Stock shall have been paid or declared and set apart. In the event that the Corporation shall declare a dividend or distribution payable in securities of the Corporation or of other persons (other than a dividend paid solely in shares of Common Stock), evidences of indebtedness issued by the Corporation or other persons, or options or rights to purchase any such securities or

outstanding shares of Series B Preferred Stock, no dividend (other than a Common Stock dividend paid pro rata to the Corporation's stockholders), whether in cash, securities or other property, shall be paid or declared, nor shall any other distribution (other than a Common Stock dividend paid pro rata to the Corporation's stockholders) be made, on any Series B Junior Stock, nor shall any shares of any Series B Junior Stock of the Corporation be purchased, redeemed or otherwise acquired for value by the Corporation or any of its subsidiaries (except (A) for acquisitions of Common Stock by the Corporation or its subsidiaries pursuant to stock-based compensation arrangements or agreements that permit the Corporation to repurchase such shares upon termination of services to the Corporation or its subsidiaries for a price not greater than the cost thereof to the applicable service provider, (B) for acquisitions by the Corporation or its subsidiaries in whole or partial satisfaction of the exercise price or applicable tax withholding requirements in respect of any option, restricted stock or similar award made pursuant to any compensation or benefit plan, agreement or arrangement maintained or assumed by the Corporation or its subsidiaries and (C) by conversion into or exchange for Series B Junior Stock or any security convertible into or exchangeable for Series B Junior Stock) until all dividends (set forth in Section (a)(i) above) then accrued on the Series B Preferred Stock shall have been paid or declared and set apart. In the event that the Corporation shall declare a dividend or distribution payable in securities of the Corporation or of other persons (other than a dividend paid solely in shares of Common Stock), evidences of indebtedness issued by the Corporation or other persons, or options or rights to purchase any such securities or evidences of indebtedness or other assets (including cash) to the holders of the Common Stock, then the holders of the Series B Preferred Stock shall be entitled to a proportionate share of any such dividend or distribution as though the holders of the Series B Preferred Stock were the holders of the number of shares of Common Stock into which their respective shares of Series B Preferred Stock are convertible as of the record date fixed for the determination of the holders of the Common Stock entitled to receive such dividend or distribution (calculated as if the Series B Preferred Stock were convertible upon the Series B Original Issue Date and without consideration of the restriction on conversion contained in Section (d)(i) hereof). (b) Voting Rights. (i) General Rights. Except as otherwise provided herein or as required by law, the Series B Preferred Stock shall be voted equally with the shares of the Common Stock of the Corporation and not as a separate class, at any annual or special meeting of stockholders of the Corporation, upon the following basis: each holder of shares of Series B Preferred Stock shall be entitled to such number of votes as shall be equal to the whole number of shares of Common Stock into which such holder's aggregate number of shares of Series B Preferred Stock are convertible pursuant to Section (d) hereof immediately after the close of business on the record date fixed for such meeting or the effective date of such written consent (calculated as if the Series B Preferred Stock were convertible upon the Series B Original Issue Date and without consideration of the restriction on conversion contained in Section (d)(i) hereof). 10

(ii) Separate Vote of Series B Preferred Stock. In addition to any other vote or consent required herein or by law, the vote of the holders of at least a majority of the outstanding Series B Preferred Stock shall be necessary for effecting or validating the following actions: (A) any action that authorizes, creates or results in the issuance of any class or series of stock or any other securities convertible into or exercisable for equity securities of the Corporation having rights, preferences or privileges senior to or on a parity with the Series B Preferred Stock; (B) any increase or decrease in the authorized number of shares of Series B Preferred Stock; or (C) any amendment, waiver, alteration or repeal of any provisions of the Certificate of Incorporation (including without limitation by merger, consolidation or otherwise) or Bylaws of the Corporation in a way that, directly or indirectly, adversely affects the rights, preferences or privileges of the Series B Preferred Stock. (iii) Special Voting Rights. During the period beginning on the Series B Original Issue Date (as defined below), and ending on the date which is six months after the Series B Original Issue Date, the Corporation shall not consummate any Sale Transaction to which it is a party unless such Sale Transaction has been approved by the affirmative vote of the holders of at least 85% of the Series B Preferred Stock present in person or by proxy and

(ii) Separate Vote of Series B Preferred Stock. In addition to any other vote or consent required herein or by law, the vote of the holders of at least a majority of the outstanding Series B Preferred Stock shall be necessary for effecting or validating the following actions: (A) any action that authorizes, creates or results in the issuance of any class or series of stock or any other securities convertible into or exercisable for equity securities of the Corporation having rights, preferences or privileges senior to or on a parity with the Series B Preferred Stock; (B) any increase or decrease in the authorized number of shares of Series B Preferred Stock; or (C) any amendment, waiver, alteration or repeal of any provisions of the Certificate of Incorporation (including without limitation by merger, consolidation or otherwise) or Bylaws of the Corporation in a way that, directly or indirectly, adversely affects the rights, preferences or privileges of the Series B Preferred Stock. (iii) Special Voting Rights. During the period beginning on the Series B Original Issue Date (as defined below), and ending on the date which is six months after the Series B Original Issue Date, the Corporation shall not consummate any Sale Transaction to which it is a party unless such Sale Transaction has been approved by the affirmative vote of the holders of at least 85% of the Series B Preferred Stock present in person or by proxy and entitled to vote at a stockholder meeting called for the purpose of approving such Sale Transaction. (c) Liquidation Rights. (i) Upon any liquidation, dissolution, or winding up of the Corporation, whether voluntary or involuntary, before any distribution or payment shall be made to the holders of any Series B Junior Stock, subject to the rights of any series of Preferred Stock that may from time to time come into existence and which is expressly senior to the rights of the Series B Preferred Stock, the holders of Series B Preferred Stock shall be entitled to be paid in cash out of the assets of the Corporation an amount per share of Series B Preferred Stock equal to 100% of the Series B Original Issue Price (as adjusted for any stock dividends, combinations, splits, recapitalizations and the like with respect to such shares), plus an amount equal to accrued but unpaid dividends (the "Liquidation Preference"), for each share of Series B Preferred Stock held by each such holder. If, upon any such liquidation, dissolution, or winding up, the assets of the Corporation shall be insufficient to make payment in full of the Liquidation Preference to all holders of Series B Preferred Stock, then such assets shall be distributed among the holders of Series B Preferred Stock at the time outstanding, ratably in proportion to the full amounts to which they would otherwise be respectively entitled. After the payment of the foregoing full Liquidation Preference of the Series B Preferred Stock and any other distribution that may be required with respect to any 11

series of Preferred Stock that may from time to time come into existence, the assets of the Corporation legally available for distribution, if any, shall be distributed ratably to the holders of the Series B Junior Stock and the Series B Preferred Stock, on an as converted basis; provided, however, that if, in connection with a Sale Transaction (as defined below), the holders of a share of the Common Stock (before giving effect to the payment of the Liquidation Preference but after giving effect to the payment of the liquidation preference of any other class of Preferred Stock and assuming conversion in full of the outstanding shares of Series B Preferred Stock into Common Stock) would receive consideration with a value of at least four times the Series B Original Issue Price (as adjusted for stock splits, stock dividends, combinations, recapitalizations and the like), then in lieu of the Liquidation Preference plus participation with the Series B Junior Stock provided for above, the holders of the Series B Preferred Stock shall receive the amount that they would be entitled to receive if all shares of Series B Preferred Stock were converted to Common Stock immediately prior to the Sale Transaction. The Corporation shall not enter into any Sale Transaction that does not provide for the treatment of the holders of Series B Preferred Stock in a manner consistent (assuming in the case of a merger or consolidation that the assets of the Corporation legally available for distribution equals the aggregate consideration to be received by the Corporation's stockholders in such merger or consolidation) with the provisions of this Section (c). In the event the requirements of the immediately preceding sentence are not complied with in connection with a Sale Transaction, the Corporation shall forthwith either (A) cause the closing of such Sale Transaction to be postponed until such time as such requirements have been complied with or (B) cancel such Sale Transaction, in which event the rights, preferences and privileges of the holders of the Series B Preferred Stock shall revert to

series of Preferred Stock that may from time to time come into existence, the assets of the Corporation legally available for distribution, if any, shall be distributed ratably to the holders of the Series B Junior Stock and the Series B Preferred Stock, on an as converted basis; provided, however, that if, in connection with a Sale Transaction (as defined below), the holders of a share of the Common Stock (before giving effect to the payment of the Liquidation Preference but after giving effect to the payment of the liquidation preference of any other class of Preferred Stock and assuming conversion in full of the outstanding shares of Series B Preferred Stock into Common Stock) would receive consideration with a value of at least four times the Series B Original Issue Price (as adjusted for stock splits, stock dividends, combinations, recapitalizations and the like), then in lieu of the Liquidation Preference plus participation with the Series B Junior Stock provided for above, the holders of the Series B Preferred Stock shall receive the amount that they would be entitled to receive if all shares of Series B Preferred Stock were converted to Common Stock immediately prior to the Sale Transaction. The Corporation shall not enter into any Sale Transaction that does not provide for the treatment of the holders of Series B Preferred Stock in a manner consistent (assuming in the case of a merger or consolidation that the assets of the Corporation legally available for distribution equals the aggregate consideration to be received by the Corporation's stockholders in such merger or consolidation) with the provisions of this Section (c). In the event the requirements of the immediately preceding sentence are not complied with in connection with a Sale Transaction, the Corporation shall forthwith either (A) cause the closing of such Sale Transaction to be postponed until such time as such requirements have been complied with or (B) cancel such Sale Transaction, in which event the rights, preferences and privileges of the holders of the Series B Preferred Stock shall revert to and be the same as such rights, preferences and privileges existing immediately prior to the date of the first notice referred to in Section (c)(iv) hereof. Upon receipt by any holder of the full amount of the distributions to such holder as contemplated by this Section (c)(i) in respect of any share of Series B Preferred Stock, such share of Series B Preferred Stock shall be deemed to be retired and shall no longer be outstanding. (ii) The following events (each a "Sale Transaction") shall be considered a liquidation under this Section: (A) any consolidation or merger of the Corporation with or into any other corporation or other entity or person, or any other corporate reorganization, in which the stockholders of the Corporation immediately prior to such consolidation, merger or reorganization, own less than 50% of the Corporation's voting power immediately after such consolidation, merger or reorganization, or any transaction or series of related transactions to which the Corporation is a direct contracting party in which in excess of 50% of the Corporation's voting power is transferred, excluding any consolidation or merger effected exclusively to change the domicile of the Corporation (an "Acquisition"); or (B) a sale, lease or other disposition of all or substantially all of the assets of the Corporation (an "Asset Transfer"). 12

(iii) In any of the events set forth in subparagraph (ii), if the consideration received by the Corporation or its stockholders is other than cash, its value will be deemed its fair market value as determined in good faith by the Board of Directors. Any securities shall be valued as follows: (A) Securities not subject to restrictions on free marketability covered by subparagraph (B) below: (1) If traded on a securities exchange or through the Nasdaq National Market (or a similar national quotation system), the value shall be deemed to be the average of the closing prices of the securities on such quotation system over the 30 day period ending three days prior to the closing; (2) If actively traded over-the-counter, the value shall be deemed to be the average of the closing bid or sale prices (whichever is applicable) over the 30 day period ending three days prior to the closing; and (3) If there is no active public market, the value shall be the fair market value thereof, as determined in good faith by the Board of Directors. (B) The method of valuation of securities subject to restrictions on free marketability (other than restrictions

(iii) In any of the events set forth in subparagraph (ii), if the consideration received by the Corporation or its stockholders is other than cash, its value will be deemed its fair market value as determined in good faith by the Board of Directors. Any securities shall be valued as follows: (A) Securities not subject to restrictions on free marketability covered by subparagraph (B) below: (1) If traded on a securities exchange or through the Nasdaq National Market (or a similar national quotation system), the value shall be deemed to be the average of the closing prices of the securities on such quotation system over the 30 day period ending three days prior to the closing; (2) If actively traded over-the-counter, the value shall be deemed to be the average of the closing bid or sale prices (whichever is applicable) over the 30 day period ending three days prior to the closing; and (3) If there is no active public market, the value shall be the fair market value thereof, as determined in good faith by the Board of Directors. (B) The method of valuation of securities subject to restrictions on free marketability (other than restrictions arising solely by virtue of a stockholder's status as an affiliate or former affiliate) shall be to make an appropriate discount from the market value determined as above in subparagraphs (iii)(A)(1), (2) or (3) to reflect the approximate fair market value thereof, as determined in good faith by the Board of Directors. (iv) Written notice of any such liquidation, dissolution or winding up (or deemed liquidation, dissolution or winding up) of the Corporation within the meaning of this Section, which states the payment date, the place where said payments shall be made and the date on which conversion rights as set forth herein terminate as to such shares (which shall be not less than 10 days after the date of such notice), shall be given by first class mail, postage prepaid, or by telecopy or facsimile, not less than 20 days prior to the payment date stated therein, to the then holders of record of Series B Preferred Stock, such notice to be addressed to each such holder at its address as shown on the records of the Corporation. (d) Conversion Rights. The holders of the Series B Preferred Stock shall have the following rights with respect to the conversion of the Series B Preferred Stock into shares of Common Stock: (i) Optional Conversion. Subject to and in compliance with the provisions of this Section (d), any shares of Series B Preferred Stock may, at the option of the holder, be converted at any time on and after the date which is six months after the Series B Original 13

Issue Date into fully-paid and nonassessable shares of Common Stock. The number of shares of Common Stock to which a holder of Series B Preferred Stock shall be entitled upon conversion shall be the product obtained by multiplying the "Series B Preferred Conversion Rate" then in effect (determined as provided in subsection (ii)) by the number of shares of Series B Preferred Stock being converted. (ii) Series B Preferred Conversion Rate. The conversion rate in effect at any time for conversion of the Series B Preferred Stock (the "Series B Preferred Conversion Rate") shall be the quotient obtained by dividing the Series B Original Issue Price by the "Series B Preferred Conversion Price," calculated as provided in subsection (iii) below. (iii) Series B Preferred Conversion Price. The conversion price for the Series B Preferred Stock shall initially be the Series B Original Issue Price (the "Series B Preferred Conversion Price"). Such initial Series B Preferred Conversion Price shall be adjusted from time to time in accordance with this Section (d). All references to the Series B Preferred Conversion Price herein shall mean the Series B Preferred Conversion Price as so adjusted. (iv) Mechanics of Conversion. Each holder of Series B Preferred Stock who desires to convert the same into shares of Common Stock pursuant to this Section (d) shall surrender the certificate or certificates therefor, duly endorsed, at the office of the Corporation or any transfer agent for the Series B Preferred Stock, and shall give written notice to the Corporation at such office that such holder elects to convert the same. Such notice shall state

Issue Date into fully-paid and nonassessable shares of Common Stock. The number of shares of Common Stock to which a holder of Series B Preferred Stock shall be entitled upon conversion shall be the product obtained by multiplying the "Series B Preferred Conversion Rate" then in effect (determined as provided in subsection (ii)) by the number of shares of Series B Preferred Stock being converted. (ii) Series B Preferred Conversion Rate. The conversion rate in effect at any time for conversion of the Series B Preferred Stock (the "Series B Preferred Conversion Rate") shall be the quotient obtained by dividing the Series B Original Issue Price by the "Series B Preferred Conversion Price," calculated as provided in subsection (iii) below. (iii) Series B Preferred Conversion Price. The conversion price for the Series B Preferred Stock shall initially be the Series B Original Issue Price (the "Series B Preferred Conversion Price"). Such initial Series B Preferred Conversion Price shall be adjusted from time to time in accordance with this Section (d). All references to the Series B Preferred Conversion Price herein shall mean the Series B Preferred Conversion Price as so adjusted. (iv) Mechanics of Conversion. Each holder of Series B Preferred Stock who desires to convert the same into shares of Common Stock pursuant to this Section (d) shall surrender the certificate or certificates therefor, duly endorsed, at the office of the Corporation or any transfer agent for the Series B Preferred Stock, and shall give written notice to the Corporation at such office that such holder elects to convert the same. Such notice shall state the number of shares of Series B Preferred Stock being converted. Thereupon, the Corporation shall promptly issue and deliver at such office to such holder a certificate or certificates for the number of shares of Common Stock to which such holder is entitled and shall promptly pay in cash (at the Common Stock's fair market value determined by the Board of Directors as of the date of conversion) the value of any fractional share of Common Stock otherwise issuable to any holder of Series B Preferred Stock. Such conversion shall be deemed to have been made at the close of business on the date of such surrender of the certificates representing the shares of Series B Preferred Stock to be converted, and the person entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the record holder of such shares of Common Stock on such date. (v) Adjustment Upon Common Stock Event. Upon the happening of a Common Stock Event (as hereinafter defined) at any time or from time to time after the date that the first share of Series B Preferred Stock is issued (the "Series B Original Issue Date"), the Series B Preferred Conversion Price shall, simultaneously with the happening of such Common Stock Event, be adjusted by multiplying the Series B Preferred Conversion Price in effect immediately prior to such Common Stock Event by a fraction, (i) the numerator of which shall be the number of shares of Common Stock issued and outstanding immediately prior to such Common Stock Event, and (ii) the denominator of which shall be the number of shares of Common Stock issued and outstanding immediately after such Common Stock Event, and the product so obtained shall thereafter be the Series B Preferred Conversion 14

Price. The Series B Preferred Conversion Price shall be readjusted in the same manner upon the happening of each subsequent Common Stock Event. As used in this Section (d), the term "Common Stock Event" shall mean (i) the issue by the Corporation of additional shares of Common Stock as a dividend or other distribution on outstanding Common Stock, (ii) a subdivision of the outstanding shares of Common Stock into a greater number of shares of Common Stock (by stock split, reclassification or otherwise), or (iii) a combination or consolidation, by reclassification or otherwise, of the outstanding shares of Common Stock into a smaller number of shares of Common Stock (unless the Series B Preferred Stock is combined, consolidated or reclassified on an equal basis). (vi) Adjustment for Other Dividends and Distributions. If at any time or from time to time after the Series B Original Issue Date the Corporation pays a dividend or makes another distribution to the holders of the Common Stock (or fixes a record date for the determination of holders of Common Stock entitled to receive such dividend or other distribution) payable in securities of the Corporation or any of its subsidiaries other than shares of Common Stock, then in each such event provision shall be made so that the holders of Series B Preferred Stock shall receive upon conversion thereof, in addition to the number of shares of Common Stock receivable upon conversion thereof, the amount of securities of the Corporation or such subsidiary which they would have

Price. The Series B Preferred Conversion Price shall be readjusted in the same manner upon the happening of each subsequent Common Stock Event. As used in this Section (d), the term "Common Stock Event" shall mean (i) the issue by the Corporation of additional shares of Common Stock as a dividend or other distribution on outstanding Common Stock, (ii) a subdivision of the outstanding shares of Common Stock into a greater number of shares of Common Stock (by stock split, reclassification or otherwise), or (iii) a combination or consolidation, by reclassification or otherwise, of the outstanding shares of Common Stock into a smaller number of shares of Common Stock (unless the Series B Preferred Stock is combined, consolidated or reclassified on an equal basis). (vi) Adjustment for Other Dividends and Distributions. If at any time or from time to time after the Series B Original Issue Date the Corporation pays a dividend or makes another distribution to the holders of the Common Stock (or fixes a record date for the determination of holders of Common Stock entitled to receive such dividend or other distribution) payable in securities of the Corporation or any of its subsidiaries other than shares of Common Stock, then in each such event provision shall be made so that the holders of Series B Preferred Stock shall receive upon conversion thereof, in addition to the number of shares of Common Stock receivable upon conversion thereof, the amount of securities of the Corporation or such subsidiary which they would have received had their Series B Preferred Stock been converted into Common Stock (determined as if the Series B Preferred Stock were convertible upon the Series B Original Issue Date and without consideration of the restriction on conversion contained in Section (d)(i) hereof) on the date of such event (or such record date, as applicable) and had they thereafter, during the period from the date of such event (or such record date, as applicable) to and including the conversion date, retained such securities receivable by them as aforesaid during such period, subject to all other adjustments called for during such period under this Section (d) with respect to the rights of the holders of the Series B Preferred Stock or with respect to such other securities by their terms. Notwithstanding the foregoing, the adjustment provided by this Section (d)(vi) shall not be made if the holders of the Series B Preferred Stock shall have received a proportionate dividend as provided in Section (a)(ii). (vii) Adjustment for Reclassification, Exchange and Substitution. If at any time or from time to time after the Series B Original Issue Date, the Common Stock issuable upon the conversion of the Series B Preferred Stock is changed into the same or a different number of shares of any class or classes of stock, whether by recapitalization, reclassification or otherwise (other than an Acquisition or Asset Transfer as defined in Section (c) or a subdivision or combination of shares or stock dividend or a reorganization, merger, consolidation or sale of assets provided for elsewhere in this Section (d)), in any such event each holder of Series B Preferred Stock shall have the right thereafter (to the extent such Series B Preferred Stock is convertible as otherwise provided herein) to convert such Series B Preferred Stock into the kind and amount of stock and other securities and property receivable upon such recapitalization, reclassification or other change by holders of the maximum number of shares of Common Stock into which such shares of Series B Preferred Stock could have been converted immediately prior to such recapitalization, 15

reclassification or change (determined as if the Series B Preferred Stock were convertible upon the Series B Original Issue Date and without consideration of the restriction on conversion contained in Section (d)(i) hereof), all subject to further adjustment as provided herein or with respect to such other securities or property by the terms thereof. In any such case, appropriate adjustment shall be made in the application of the provisions of this Section (d) with respect to the rights of the holders of Series B Preferred Stock after such recapitalization, reclassification or other change (including adjustment of the Series B Preferred Conversion Price then in effect and the number of shares issuable upon conversion of the Series B Preferred Stock), to the end that the provisions of this Section (d) shall be applicable after that event and be as nearly equivalent as practicable. (viii) Adjustment for Reorganizations, Mergers or Consolidations. If at any time or from time to time after the Series B Original Issue Date, there is a capital reorganization of the Common Stock or the merger or consolidation of the Corporation with or into another corporation or another entity or person (other than an Acquisition or Asset Transfer as defined in Section (c) or a recapitalization, subdivision, combination, reclassification, exchange or substitution of shares provided for elsewhere in this Section (d)), as a part of such capital reorganization, merger or consolidation, provision shall be made so that the holders of the Series B Preferred Stock, if any shares thereof remaining outstanding thereafter, shall thereafter be entitled to receive upon

reclassification or change (determined as if the Series B Preferred Stock were convertible upon the Series B Original Issue Date and without consideration of the restriction on conversion contained in Section (d)(i) hereof), all subject to further adjustment as provided herein or with respect to such other securities or property by the terms thereof. In any such case, appropriate adjustment shall be made in the application of the provisions of this Section (d) with respect to the rights of the holders of Series B Preferred Stock after such recapitalization, reclassification or other change (including adjustment of the Series B Preferred Conversion Price then in effect and the number of shares issuable upon conversion of the Series B Preferred Stock), to the end that the provisions of this Section (d) shall be applicable after that event and be as nearly equivalent as practicable. (viii) Adjustment for Reorganizations, Mergers or Consolidations. If at any time or from time to time after the Series B Original Issue Date, there is a capital reorganization of the Common Stock or the merger or consolidation of the Corporation with or into another corporation or another entity or person (other than an Acquisition or Asset Transfer as defined in Section (c) or a recapitalization, subdivision, combination, reclassification, exchange or substitution of shares provided for elsewhere in this Section (d)), as a part of such capital reorganization, merger or consolidation, provision shall be made so that the holders of the Series B Preferred Stock, if any shares thereof remaining outstanding thereafter, shall thereafter be entitled to receive upon conversion of the Series B Preferred Stock the number of shares of stock or other securities or property which a holder of the number of shares of Common Stock deliverable upon conversion would have been entitled on such capital reorganization, merger or consolidation, subject to adjustment in respect of such stock or securities by the terms thereof. In any such case, appropriate adjustment shall be made in the application of the provisions of this Section (d) with respect to the rights of the holders of Series B Preferred Stock after the capital reorganization, merger or consolidation (including adjustment of the Series B Preferred Conversion Price then in effect and the number of shares issuable upon conversion of the Series B Preferred Stock), to the end that the provisions of this Section (d) shall be applicable after that event and be as nearly equivalent as practicable. (ix) Notices of Record Date. Upon (i) any taking by the Corporation of a record of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend or other distribution, or (ii) any Acquisition (as defined in Section (c)) or other capital reorganization of the Corporation, any reclassification or recapitalization of the capital stock of the Corporation, any merger or consolidation of the Corporation with or into any other entity, or any Asset Transfer (as defined in Section (c)), or any voluntary or involuntary dissolution, liquidation or winding up of the Corporation, the Corporation shall mail to each holder of Series B Preferred Stock at least 10 days prior to the record date specified therein (or such shorter period approved by a majority of the outstanding Series B Preferred Stock) a notice specifying (A) the date on which any such record is to be taken for the purpose of such dividend or distribution and a description of such dividend or distribution, (B) the date on which any such Acquisition, reorganization, reclassification, transfer, consolidation, merger, Asset Transfer, dissolution, liquidation or 16

winding up is expected to become effective, and (C) the date, if any, that is to be fixed as to when the holders of record of Common Stock (or other securities) shall be entitled to exchange their shares of Common Stock (or other securities) for securities or other property deliverable upon such Acquisition, reorganization, reclassification, transfer, consolidation, merger, Asset Transfer, dissolution, liquidation or winding up. (x) Automatic Conversion. (A) Each share of Series B Preferred Stock shall automatically be converted into shares of Common Stock, based on the then-effective Series B Preferred Conversion Price, (i) with respect to holders of the Series B Preferred Stock other than the Investors (as defined below), if at any time after six months from the Series B Original Issue Date the Common Stock has a Closing Price (as defined below) of at least five times the Series B Original Issue Price (as adjusted for any stock dividends, combinations, splits, recapitalizations and the like with respect to such shares) for thirty consecutive trading days, and (ii) with respect to the Investors, if at any time after six months from the Series B Original Issue Date (y) the Common Stock has a Closing Price (as defined below) of at least five times the Series B Original Issue Price (as adjusted for any stock dividends, combinations, splits, recapitalizations and the like with respect to such shares) for thirty consecutive trading days, and (z) the Shelf Registration as defined in and provided for in the Amended and Restated Investor Rights Agreement, dated

winding up is expected to become effective, and (C) the date, if any, that is to be fixed as to when the holders of record of Common Stock (or other securities) shall be entitled to exchange their shares of Common Stock (or other securities) for securities or other property deliverable upon such Acquisition, reorganization, reclassification, transfer, consolidation, merger, Asset Transfer, dissolution, liquidation or winding up. (x) Automatic Conversion. (A) Each share of Series B Preferred Stock shall automatically be converted into shares of Common Stock, based on the then-effective Series B Preferred Conversion Price, (i) with respect to holders of the Series B Preferred Stock other than the Investors (as defined below), if at any time after six months from the Series B Original Issue Date the Common Stock has a Closing Price (as defined below) of at least five times the Series B Original Issue Price (as adjusted for any stock dividends, combinations, splits, recapitalizations and the like with respect to such shares) for thirty consecutive trading days, and (ii) with respect to the Investors, if at any time after six months from the Series B Original Issue Date (y) the Common Stock has a Closing Price (as defined below) of at least five times the Series B Original Issue Price (as adjusted for any stock dividends, combinations, splits, recapitalizations and the like with respect to such shares) for thirty consecutive trading days, and (z) the Shelf Registration as defined in and provided for in the Amended and Restated Investor Rights Agreement, dated as of December 19, 2001 (as the same may be amended from time to time, the "Investor Agreement"), between the Corporation and the investors named on Exhibit A thereto (collectively with the Holders, as such term is defined in the Investor Agreement, the "Investors") has become effective under the Securities Act of 1933, as amended, and is available for sales of Common Stock by the Investors thereunder (to the extent the requirement to maintain such Shelf Registration effective has not at such time lapsed pursuant to Section 5 of such Investor Agreement). For purposes of this Section (d)(x), the term "Closing Price" shall mean (1) if the Common Stock is traded on a securities exchange or through the Nasdaq National Market (or a similar national quotation system), the closing price of the Common Stock on such exchange or the last sale price of the Common Stock on such quotation system, and (2) if clause (1) is inapplicable, the closing bid or sale price (whichever is applicable) in the over-the-counter market. (B) Upon the occurrence of any of the events specified in subparagraph (A), the applicable outstanding shares of Series B Preferred Stock shall be converted automatically without any further action by the holders of such shares and whether or not the certificates representing such shares are surrendered to the Corporation or its transfer agent; provided, however, that the Corporation shall not be obligated to issue certificates evidencing the shares of Common Stock issuable upon such conversion unless the certificates evidencing such shares of Series B Preferred Stock are either delivered to the Corporation or its transfer agent as provided below, or the 17

holder notifies the Corporation or its transfer agent that such certificates have been lost, stolen or destroyed and executes an agreement satisfactory to the Corporation to indemnify the Corporation from any loss incurred by it in connection with such certificates. Upon the occurrence of such automatic conversion of any of the Series B Preferred Stock, (y) the Corporation shall notify (the "Automatic Conversion Notice") each holder of such Series B Preferred Stock who is shown to be such a holder on the books of the Corporation as of the time immediately prior to such conversion, and (z) the holders of such Series B Preferred Stock shall surrender the certificates representing such shares at the office of the Corporation or any transfer agent for the Series B Preferred Stock, which shall be designated in the Automatic Conversion Notice. Thereupon, there shall be issued and delivered to such holder promptly at such office and in its name as shown on such surrendered certificate or certificates, a certificate or certificates for the number of shares of Common Stock into which the shares of Series B Preferred Stock surrendered were convertible on the date on which such automatic conversion occurred. Until such time as a holder of shares of Series B Preferred Stock shall surrender his or its certificates therefor as provided above, such certificates shall be deemed to represent the shares of Common Stock to which such holder shall be entitled pursuant to the terms hereof. (xi) Fractional Shares. No fractional shares of Common Stock shall be issued upon conversion of Series B Preferred Stock. All shares of Common Stock (including fractions thereof) issuable upon conversion of more than one share of Series B Preferred Stock by a holder thereof shall be aggregated for purposes of determining whether the conversion would result in the issuance of any fractional share. If, after the aforementioned aggregation, the conversion would result in the issuance of any fractional share, the Corporation shall, in lieu of

holder notifies the Corporation or its transfer agent that such certificates have been lost, stolen or destroyed and executes an agreement satisfactory to the Corporation to indemnify the Corporation from any loss incurred by it in connection with such certificates. Upon the occurrence of such automatic conversion of any of the Series B Preferred Stock, (y) the Corporation shall notify (the "Automatic Conversion Notice") each holder of such Series B Preferred Stock who is shown to be such a holder on the books of the Corporation as of the time immediately prior to such conversion, and (z) the holders of such Series B Preferred Stock shall surrender the certificates representing such shares at the office of the Corporation or any transfer agent for the Series B Preferred Stock, which shall be designated in the Automatic Conversion Notice. Thereupon, there shall be issued and delivered to such holder promptly at such office and in its name as shown on such surrendered certificate or certificates, a certificate or certificates for the number of shares of Common Stock into which the shares of Series B Preferred Stock surrendered were convertible on the date on which such automatic conversion occurred. Until such time as a holder of shares of Series B Preferred Stock shall surrender his or its certificates therefor as provided above, such certificates shall be deemed to represent the shares of Common Stock to which such holder shall be entitled pursuant to the terms hereof. (xi) Fractional Shares. No fractional shares of Common Stock shall be issued upon conversion of Series B Preferred Stock. All shares of Common Stock (including fractions thereof) issuable upon conversion of more than one share of Series B Preferred Stock by a holder thereof shall be aggregated for purposes of determining whether the conversion would result in the issuance of any fractional share. If, after the aforementioned aggregation, the conversion would result in the issuance of any fractional share, the Corporation shall, in lieu of issuing any fractional share, pay cash equal to the product of such fraction multiplied by the Common Stock's fair market value (as determined by the Board of Directors) on the date of conversion. (xii) Reservation of Stock Issuable Upon Conversion. The Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of the Series B Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of the Series B Preferred Stock. If at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of the Series B Preferred Stock, the Corporation will take such corporate action as may be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purpose. (xiii) Notices. Any notice required by the provisions of this Section (d) shall be in writing and shall be deemed effectively given: (i) upon personal delivery to the party to be notified, (ii) when sent by confirmed electronic mail or facsimile if sent during normal business hours of the recipient; if not, then on the next business day, (iii) five days after 18

having been sent by registered or certified mail, return receipt requested, postage prepaid, or (iv) one day after deposit with a nationally recognized overnight courier, specifying next day delivery, with verification of receipt. All notices shall be addressed to each holder of record at the address of such holder appearing on the books of the Corporation. (xiv) Payment of Taxes. The Corporation will pay all taxes (other than taxes based upon income) and other governmental charges that may be imposed with respect to the issue or delivery of shares of Common Stock upon conversion of shares of Series B Preferred Stock, excluding any tax or other charge imposed in connection with any transfer involved in the issue and delivery of shares of Common Stock in a name other than that in which the shares of Series B Preferred Stock so converted were registered. (xv) No Impairment. The Corporation shall not avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Corporation, but shall at all times in good faith assist in carrying out all such actions as may be reasonably necessary or appropriate in order to protect the conversion rights of the holders of the Series B Preferred Stock against impairment. (xvi) Satisfaction of Accrued Dividends. Except as otherwise expressly provided, upon the conversion of any shares of Series B Preferred Stock into Common Stock as provided herein, the Corporation shall pay holders

having been sent by registered or certified mail, return receipt requested, postage prepaid, or (iv) one day after deposit with a nationally recognized overnight courier, specifying next day delivery, with verification of receipt. All notices shall be addressed to each holder of record at the address of such holder appearing on the books of the Corporation. (xiv) Payment of Taxes. The Corporation will pay all taxes (other than taxes based upon income) and other governmental charges that may be imposed with respect to the issue or delivery of shares of Common Stock upon conversion of shares of Series B Preferred Stock, excluding any tax or other charge imposed in connection with any transfer involved in the issue and delivery of shares of Common Stock in a name other than that in which the shares of Series B Preferred Stock so converted were registered. (xv) No Impairment. The Corporation shall not avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Corporation, but shall at all times in good faith assist in carrying out all such actions as may be reasonably necessary or appropriate in order to protect the conversion rights of the holders of the Series B Preferred Stock against impairment. (xvi) Satisfaction of Accrued Dividends. Except as otherwise expressly provided, upon the conversion of any shares of Series B Preferred Stock into Common Stock as provided herein, the Corporation shall pay holders thereof all accrued but unpaid dividends out of funds legally available therefor. (e) Waiver. Any rights of the holders of Series B Preferred Stock set forth herein, other than the voting rights set forth in Section (b)(iii), may be waived by the affirmative vote or consent of the holders of a majority of the shares of Series B Preferred Stock then outstanding. (f) Limitation on Reissuance of Shares. No share of shares of Series B Preferred Stock acquired by the Corporation by reason of purchase, conversion or otherwise shall be reissued, and all such shares shall be cancelled, retired and eliminated from the shares of Series B Preferred Stock that the Corporation is authorized to issue. (g) Limitation on Transfer. The Series B Preferred Stock shall not be eligible to be transferred on the books of the Corporation prior to the one year anniversary of the Series B Original Issue Date except for transfers: (i) in connection with a Sale Transaction, (ii) in any transaction in which a holder that is a partnership or limited liability company distributes Series B Preferred Stock solely to its affiliates (including affiliated fund partnerships), current or former partners or members thereof, or (ii) by will or by the laws of intestate succession. Certificates issued in respect of the Series B Preferred Stock within one year after the Series B Original Issue Date shall bear a legend referencing the restrictions set forth in this Section (g). This Certificate of Designations, and the designations effected hereby, shall become effective upon filing. 19

IN WITNESS WHEREOF, eLoyalty Corporation has caused this certificate to be signed by Kelly D. Conway, its President and Chief Executive Officer, and the same to be attested to by Timothy J. Cunningham, its Senior Vice President and Chief Financial Officer, this 19th day of December, 2001. eLOYALTY CORPORATION By: ________________________________________ Name: Kelly D. Conway Title: President and Chief Executive Officer Attest: By:_______________________________ Name: Timothy J. Cunningham Title: Senior Vice President and Chief Financial Officer

IN WITNESS WHEREOF, eLoyalty Corporation has caused this certificate to be signed by Kelly D. Conway, its President and Chief Executive Officer, and the same to be attested to by Timothy J. Cunningham, its Senior Vice President and Chief Financial Officer, this 19th day of December, 2001. eLOYALTY CORPORATION By: ________________________________________ Name: Kelly D. Conway Title: President and Chief Executive Officer Attest: By:_______________________________ Name: Timothy J. Cunningham Title: Senior Vice President and Chief Financial Officer

EXHIBIT 10.30 AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT THIS AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT (this "Agreement") is entered into as of December 19, 2001, by and among eLOYALTY CORPORATION, a Delaware corporation (the "Company"), and the persons set forth on the Schedule of Investors attached hereto as Exhibit A (the "Investors"). RECITALS 1. The Company entered into a Common Stock Purchase Agreement, dated May 26, 2000 (the "Common Purchase Agreement") with each of TCV IV, L.P., TCV IV Strategic Partners, L.P., TCV III (GP), TCV III, L.P., TCV III (Q), L.P. and TCV III Strategic Partners, L.P. (together, the "Common Stock Investors") pursuant to which the Company sold to the Common Stock Investors shares of the Company's Common Stock, par value $0.01 per share (the "Common Stock"). 2. In connection with the Common Purchase Agreement, the Company and the Common Stock Investors entered into the Investor Rights Agreement, dated May 26, 2000 (the "Investor Rights Agreement"), for the purpose of granting certain registration and other rights to the Common Stock Investors. 3. The Company entered into a Share Purchase Agreement, dated as of September 24, 2001 (the "Series B Purchase Agreement") with each of the Investors pursuant to which the Company shall sell to the Investors and the Investors shall purchase from the Company shares of the Company's 7% Series B Convertible Preferred Stock, par value $0.01 per share (the "Series B Preferred"). 4. As a condition to each of the Investor's obligations under the Series B Purchase Agreement, the Company will grant the Investors certain registration and other rights. 5. The Company and the Common Stock Investors have agreed to amend the Investor Rights Agreement to extend certain registration and other rights to the Investors. NOW, THEREFORE, in consideration of the covenants and promises set forth herein, and for other good and valuable consideration, intending to be legally bound hereby the parties agree as follows:

SECTION 1. Certain Definitions. As used in this Agreement, the capitalized terms identified in the Preamble and

EXHIBIT 10.30 AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT THIS AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT (this "Agreement") is entered into as of December 19, 2001, by and among eLOYALTY CORPORATION, a Delaware corporation (the "Company"), and the persons set forth on the Schedule of Investors attached hereto as Exhibit A (the "Investors"). RECITALS 1. The Company entered into a Common Stock Purchase Agreement, dated May 26, 2000 (the "Common Purchase Agreement") with each of TCV IV, L.P., TCV IV Strategic Partners, L.P., TCV III (GP), TCV III, L.P., TCV III (Q), L.P. and TCV III Strategic Partners, L.P. (together, the "Common Stock Investors") pursuant to which the Company sold to the Common Stock Investors shares of the Company's Common Stock, par value $0.01 per share (the "Common Stock"). 2. In connection with the Common Purchase Agreement, the Company and the Common Stock Investors entered into the Investor Rights Agreement, dated May 26, 2000 (the "Investor Rights Agreement"), for the purpose of granting certain registration and other rights to the Common Stock Investors. 3. The Company entered into a Share Purchase Agreement, dated as of September 24, 2001 (the "Series B Purchase Agreement") with each of the Investors pursuant to which the Company shall sell to the Investors and the Investors shall purchase from the Company shares of the Company's 7% Series B Convertible Preferred Stock, par value $0.01 per share (the "Series B Preferred"). 4. As a condition to each of the Investor's obligations under the Series B Purchase Agreement, the Company will grant the Investors certain registration and other rights. 5. The Company and the Common Stock Investors have agreed to amend the Investor Rights Agreement to extend certain registration and other rights to the Investors. NOW, THEREFORE, in consideration of the covenants and promises set forth herein, and for other good and valuable consideration, intending to be legally bound hereby the parties agree as follows:

SECTION 1. Certain Definitions. As used in this Agreement, the capitalized terms identified in the Preamble and the Recitals shall have the meanings identified therein and the following terms shall have the following respective meanings: "Closing" has the meaning set forth in the Series B Purchase Agreement. "Commission" shall mean the Securities and Exchange Commission or any other federal agency at the time administering the Securities Act. "Common Purchase Agreement" has the meaning set forth in the Recitals hereto. "Common Stock" has the meaning set forth in the Recitals hereto. "Common Stock Investors" has the meaning set forth in the Recitals hereto. "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended, or any similar successor federal statute, and the rules and regulations thereunder, all as the same shall be in effect from time to time. "Holder" shall mean (i) any Investor holding Registrable Securities and (ii) any person or entity holding Registrable

SECTION 1. Certain Definitions. As used in this Agreement, the capitalized terms identified in the Preamble and the Recitals shall have the meanings identified therein and the following terms shall have the following respective meanings: "Closing" has the meaning set forth in the Series B Purchase Agreement. "Commission" shall mean the Securities and Exchange Commission or any other federal agency at the time administering the Securities Act. "Common Purchase Agreement" has the meaning set forth in the Recitals hereto. "Common Stock" has the meaning set forth in the Recitals hereto. "Common Stock Investors" has the meaning set forth in the Recitals hereto. "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended, or any similar successor federal statute, and the rules and regulations thereunder, all as the same shall be in effect from time to time. "Holder" shall mean (i) any Investor holding Registrable Securities and (ii) any person or entity holding Registrable Securities to whom the rights under this Agreement have been transferred in accordance with Section 14 hereof. "Investors" has the meaning set forth in the Preamble hereto. The terms "register", "registered" and "registration" refer to a registration effected by preparing and filing a registration statement in compliance with the Securities Act, and the declaration or ordering of the effectiveness of such registration statement. "Registration Expenses" shall mean all expenses incurred by the Company in complying with Sections 5 and 6 hereof, including, without limitation, all registration, qualification, listing and filing fees, printing expenses, escrow fees, fees and disbursements of counsel for the Company, blue sky fees and expenses, and the expense of any special audits incident to or required by any such registration (but excluding the compensation of regular employees of the Company which shall be paid in any event by the Company). "Registrable Securities" shall mean (i) any Common Stock issued pursuant to the Common Purchase Agreement, (ii) any Common Stock issued upon conversion of the Series B Preferred issued pursuant to the Series B Purchase Agreement and (iii) any Common Stock issued or issuable with respect to the Shares upon any stock split, stock dividend, recapitalization, or similar event, or any securities otherwise issued or issuable with respect to the Shares in such an event; provided, however, that shares of Common Stock or other securities shall only be treated as 2

Registrable Securities if and so long as they (A) have not been sold to or through a broker or dealer or underwriter in a public distribution or a public securities transaction, (B) have not been transferred in a transaction pursuant to which the registration rights are not also assigned in accordance with Section 14 hereof, and (C) with respect to Registrable Securities that were issued in connection with or related to the Common Purchase Agreement, are not eligible for public sale pursuant to Rule 144(k). "Restricted Securities" shall mean the shares of Common Stock and Series B Preferred and other securities required to bear the legend set forth in Section 3 hereof. "Securities Act" shall mean the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder or any similar federal statute and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time. "Selling Expenses" shall mean all underwriting discounts, selling commissions and stock transfer taxes applicable

Registrable Securities if and so long as they (A) have not been sold to or through a broker or dealer or underwriter in a public distribution or a public securities transaction, (B) have not been transferred in a transaction pursuant to which the registration rights are not also assigned in accordance with Section 14 hereof, and (C) with respect to Registrable Securities that were issued in connection with or related to the Common Purchase Agreement, are not eligible for public sale pursuant to Rule 144(k). "Restricted Securities" shall mean the shares of Common Stock and Series B Preferred and other securities required to bear the legend set forth in Section 3 hereof. "Securities Act" shall mean the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder or any similar federal statute and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time. "Selling Expenses" shall mean all underwriting discounts, selling commissions and stock transfer taxes applicable to the securities registered by the Holders. "Series B Preferred" has the meaning set forth in the Recitals hereto. "Series B Purchase Agreement" has the meaning set forth in the Recitals hereto. "Shares" shall mean all shares of Common Stock purchased by the Common Stock Investors pursuant to the Common Purchase Agreement, all shares of Series B Preferred purchased by the Series B Investors pursuant to the Series B Purchase Agreement and all shares of Common Stock issued or issuable upon conversion of the Series B Preferred issued pursuant to the Series B Purchase Agreement. SECTION 2. Restrictions. The Shares, and any Common Stock or other securities issued or issuable with respect to the Shares upon any stock split, stock dividend, recapitalization, or similar event, shall not be sold, assigned, transferred or pledged except upon the conditions specified in Section 4, which conditions are intended to ensure compliance with the provisions of the Securities Act. Notwithstanding anything in this Agreement, a Holder which is a partnership or limited liability company shall not be prohibited by any provision of this Agreement from distributing Restricted Securities solely to its affiliates (including affiliated fund partnerships), partners or members thereof for no consideration (it being understood that, notwithstanding the foregoing, the rights to cause the Company to register securities pursuant hereto may be assigned only pursuant to and in accordance with Section 14). SECTION 3. Restrictive Legends. Each certificate representing Shares or any other securities issued or issuable with respect to Shares upon any stock split, stock dividend, recapitalization, or similar event (unless otherwise permitted by the provisions of Section 4 below), shall be stamped or otherwise imprinted with a legend in the following form (in addition to any 3

legend required under applicable state securities laws or, in the case of the Series B Preferred, the terms of the Series B Preferred): "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. SUCH SHARES MAY NOT BE SOLD, TRANSFERRED OR PLEDGED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION FROM SUCH REGISTRATION. SUCH SHARES ARE ALSO SUBJECT TO CERTAIN TRANSFERABILITY RESTRICTIONS AS SET FORTH IN THE AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT DATED AS OF DECEMBER 19, 2001, AMONG THE CORPORATION AND THE INVESTORS NAMED THEREIN. A COPY OF SUCH AGREEMENT IS ON FILE AND MAY BE INSPECTED AT THE CORPORATION'S PRINCIPAL EXECUTIVE OFFICES BY THE REGISTERED HOLDER OF THIS CERTIFICATE." Each Investor consents to the Company making a notation on its records and giving instructions to any transfer

legend required under applicable state securities laws or, in the case of the Series B Preferred, the terms of the Series B Preferred): "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. SUCH SHARES MAY NOT BE SOLD, TRANSFERRED OR PLEDGED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION FROM SUCH REGISTRATION. SUCH SHARES ARE ALSO SUBJECT TO CERTAIN TRANSFERABILITY RESTRICTIONS AS SET FORTH IN THE AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT DATED AS OF DECEMBER 19, 2001, AMONG THE CORPORATION AND THE INVESTORS NAMED THEREIN. A COPY OF SUCH AGREEMENT IS ON FILE AND MAY BE INSPECTED AT THE CORPORATION'S PRINCIPAL EXECUTIVE OFFICES BY THE REGISTERED HOLDER OF THIS CERTIFICATE." Each Investor consents to the Company making a notation on its records and giving instructions to any transfer agent of the Restricted Securities in order to implement the restrictions on transfer established in Section 2 and Section 4 and, in the case of the Series B Preferred, by the terms of the Series B Preferred. SECTION 4. Restrictions on Transfers. Each holder of Restricted Securities, by acceptance thereof, agrees to comply in all respects with the provisions of this Section 4. Subject to the further limitations described in the Certificate of Designation of the Series B Preferred, prior to any proposed sale, assignment, transfer or pledge of any Restricted Securities, unless there is in effect a registration statement under the Securities Act covering the proposed transfer, the holder thereof shall give written notice to the Company of such holder's intention to effect such transfer, sale, assignment or pledge. Each such notice shall describe the manner and circumstances of the proposed transfer, sale, assignment or pledge in sufficient detail, and shall be accompanied at such holder's expense by either (i) an unqualified written opinion of legal counsel who shall, and whose legal opinion shall, be satisfactory to the Company, addressed to the Company, to the effect that the proposed transfer of the Restricted Securities may be effected without registration under the Securities Act, or (ii) a "no action" letter from the Commission to the effect that the transfer of such securities without registration will not result in a recommendation by the staff of the Commission that action be taken with respect thereto, or (iii) any other evidence satisfactory to counsel to the Company, whereupon the holder of such Restricted Securities shall be entitled to transfer such Restricted Securities in accordance with the terms of the notice delivered by the holder to the Company. The Company will not require such a notice or legal opinion or "no action" letter (a) in any customary transaction in compliance with Rule 144, (b) in any transaction in which a Holder which is a corporation distributes Restricted Securities solely to its majority owned subsidiaries or affiliates for no consideration, or (c) in any transaction in which a Holder which is a partnership or 4

limited liability company distributes Restricted Securities solely to its affiliates (including affiliated fund partnerships), partners or members thereof for no consideration. Each certificate evidencing the Restricted Securities transferred as above provided shall bear the appropriate restrictive legend set forth in Section 3 above, except that such certificate shall not bear such restrictive legend if, in the opinion of counsel for such holder and the Company, such legend is not required in order to establish compliance with any provisions of the Securities Act. SECTION 5. Requested Registration. The Company shall use its reasonable best efforts to register the sale or distribution by the Holders, on a delayed or continuous basis, of all of the Registrable Securities on a Form S-3 registration statement (or any successor form to Form S-3) (the "Shelf Registration") by the date which is 180 days after the date of the Closing (including, without limitation, the execution of an undertaking to file posteffective amendments, appropriate qualification under applicable blue sky or other state securities laws and appropriate compliance with applicable regulations issued under the Securities Act and any other governmental requirements or regulations). Once declared effective, the Company shall use its reasonable best efforts to cause (x) the Shelf Registration to remain effective until such time as all of the Registrable Securities issued in connection with or related to the Series B Purchase Agreement can be resold to the public within any and all three month periods under Rule 144 or another similar exemption under the Securities Act (without giving effect to Rule 144 (k)), and (y) the Shelf Registration to be useable by the Holders during the entire relevant period, except that the Shelf Registration may be unuseable (including by way of notice sent pursuant to Section 10(d)) for an aggregate

limited liability company distributes Restricted Securities solely to its affiliates (including affiliated fund partnerships), partners or members thereof for no consideration. Each certificate evidencing the Restricted Securities transferred as above provided shall bear the appropriate restrictive legend set forth in Section 3 above, except that such certificate shall not bear such restrictive legend if, in the opinion of counsel for such holder and the Company, such legend is not required in order to establish compliance with any provisions of the Securities Act. SECTION 5. Requested Registration. The Company shall use its reasonable best efforts to register the sale or distribution by the Holders, on a delayed or continuous basis, of all of the Registrable Securities on a Form S-3 registration statement (or any successor form to Form S-3) (the "Shelf Registration") by the date which is 180 days after the date of the Closing (including, without limitation, the execution of an undertaking to file posteffective amendments, appropriate qualification under applicable blue sky or other state securities laws and appropriate compliance with applicable regulations issued under the Securities Act and any other governmental requirements or regulations). Once declared effective, the Company shall use its reasonable best efforts to cause (x) the Shelf Registration to remain effective until such time as all of the Registrable Securities issued in connection with or related to the Series B Purchase Agreement can be resold to the public within any and all three month periods under Rule 144 or another similar exemption under the Securities Act (without giving effect to Rule 144 (k)), and (y) the Shelf Registration to be useable by the Holders during the entire relevant period, except that the Shelf Registration may be unuseable (including by way of notice sent pursuant to Section 10(d)) for an aggregate of 90 days in any twelve month period (provided, however, that for the period consisting of the first 12 months following the date the Shelf Registration is initially declared effective under the Securities Act such 90-day period shall be reduced by the number of days the effectiveness of the Shelf Registration was delayed pursuant to clause (2) below of this Section). The Company shall not be obligated to take any action to effect the Shelf Registration: (1) in any particular jurisdiction in which the Company would be required to execute a general consent to service of process in effecting such registration, qualification or compliance unless the Company is already subject to service in such jurisdiction and except as may be required by the Securities Act; or (2) if the Company shall furnish to such Holders a certificate, signed by the President or Chief Executive Officer of the Company, stating that in the good faith judgment of the Board of Directors it would be seriously detrimental to the Company for a registration statement to be declared effective in the near future, then the date by which the Company shall have the Shelf Registration effective may be extended by up to 90 days. SECTION 6. Company Registration. (a) Notice of Registration. If at any time or from time to time, the Company shall determine to register any of its equity securities, either for its own account or the account of a security holder or holders other than (i) a registration relating solely to employee benefit plans, (ii) a registration relating solely to a Commission Rule 145 transaction, or (iii) a registration on any registration form that does not permit secondary sales (such as a "universal shelf" Form S-3), the Company will: 5

(i) promptly give to each Holder written notice thereof; and (ii) subject to Section 6(b) below, include in such registration (and any related qualification under blue sky laws or other compliance), and in any underwriting involved therein, all the Registrable Securities specified in a written request or requests made within 15 days after receipt of such written notice from the Company by any Holder. (b) Underwriting. If the registration of which the Company gives notice is for a registered public offering involving an underwriting, the Company shall so advise the Holders as a part of the written notice given pursuant to Section 6(a)(i). In such event, the right of any Holder to registration pursuant to this Section 6 shall be conditioned upon such Holder's participation in such underwriting and the inclusion of Registrable Securities in the underwriting to the extent provided herein. All Holders proposing to distribute their securities through such underwriting shall (together with the Company and the other holders distributing their securities through such underwriting) enter into and perform its obligations under an underwriting agreement in customary form with the managing underwriter selected for such underwriting by the Company (or by the holders who have demanded such registration). Notwithstanding any other provision of this Section 6, if the managing underwriter provides written notice to the Holders that it has determined that the inclusion of all of the shares requested to be included in the offering would

(i) promptly give to each Holder written notice thereof; and (ii) subject to Section 6(b) below, include in such registration (and any related qualification under blue sky laws or other compliance), and in any underwriting involved therein, all the Registrable Securities specified in a written request or requests made within 15 days after receipt of such written notice from the Company by any Holder. (b) Underwriting. If the registration of which the Company gives notice is for a registered public offering involving an underwriting, the Company shall so advise the Holders as a part of the written notice given pursuant to Section 6(a)(i). In such event, the right of any Holder to registration pursuant to this Section 6 shall be conditioned upon such Holder's participation in such underwriting and the inclusion of Registrable Securities in the underwriting to the extent provided herein. All Holders proposing to distribute their securities through such underwriting shall (together with the Company and the other holders distributing their securities through such underwriting) enter into and perform its obligations under an underwriting agreement in customary form with the managing underwriter selected for such underwriting by the Company (or by the holders who have demanded such registration). Notwithstanding any other provision of this Section 6, if the managing underwriter provides written notice to the Holders that it has determined that the inclusion of all of the shares requested to be included in the offering would adversely effect the price at which the shares can be sold, the managing underwriter shall include in the offering the maximum number of shares that may be included in the offering without such adverse effect as follows (i) first, the shares requested to be sold by the Company or the holder of securities initiating the registration, (ii) second, the shares requested to be included in the offering by the Holders pro rata based on the number of Registrable Securities held, and (iii) third, any other shares requested to be included. To facilitate the allocation of shares in accordance with the above provisions, the Company or the underwriters may round the number of shares allocated to any Holder or other holder to the nearest 100 shares. If any Holder or other holder disapproves of the terms of any such underwriting, he or she may elect to withdraw therefrom by written notice to the Company and the managing underwriter. Any securities excluded or withdrawn from such underwriting shall be withdrawn from such registration. (c) Right to Terminate Registration. The Company shall have the right to terminate or withdraw any registration initiated by it under this Section 6 prior to the effectiveness of such registration, whether or not any Holder has elected to include securities in such registration. SECTION 7. Notice of Sales. Following the second anniversary of the effective date of the Shelf Registration, no Holder may make offers or sales pursuant to the Shelf Registration prior to the date which is three business days after the date upon which a notice of the proposed offer or sale (a "Distribution Notice") is delivered to the Company. Each Distribution Notice shall state that the Holder giving such Distribution Notice desires to offer and sell Registrable Securities pursuant to 6

the Shelf Registration and shall include a description of the manner in which such sale is to be made. Each Distribution Notice shall be effective for 45 days from the date of delivery and any sales after that time must be made pursuant to another Distribution Notice. The Holders covenant that each Distribution Notice shall be given in good faith and accurately reflect the Holders' intent at the time such Distribution Notice is delivered. Each offer and sale undertaken and carried out by any Holder shall be made in a manner consistent in all material respects with the description thereof set forth in the related Distribution Notice. SECTION 8. Limitations on Subsequent Registration Rights. From and after the date hereof, the Company shall not enter into any agreement granting any holder or prospective holder of any securities of the Company registration rights with respect to such securities that are inconsistent with the rights granted to the Holders herein, without the consent of Holders of at least a majority of the Registrable Securities outstanding at such time. SECTION 9. Expenses of Registration. All Registration Expenses incurred in connection with any registration pursuant to Sections 5 and 6 and the reasonable cost of one special legal counsel to represent all of the Holders together in any such registration (not to exceed $10,000) shall be borne by the Company. All Selling Expenses relating to securities registered on behalf of the Holders shall be borne by the Holders of the registered securities included in such registration pro rata on the basis of the number of shares so sold.

the Shelf Registration and shall include a description of the manner in which such sale is to be made. Each Distribution Notice shall be effective for 45 days from the date of delivery and any sales after that time must be made pursuant to another Distribution Notice. The Holders covenant that each Distribution Notice shall be given in good faith and accurately reflect the Holders' intent at the time such Distribution Notice is delivered. Each offer and sale undertaken and carried out by any Holder shall be made in a manner consistent in all material respects with the description thereof set forth in the related Distribution Notice. SECTION 8. Limitations on Subsequent Registration Rights. From and after the date hereof, the Company shall not enter into any agreement granting any holder or prospective holder of any securities of the Company registration rights with respect to such securities that are inconsistent with the rights granted to the Holders herein, without the consent of Holders of at least a majority of the Registrable Securities outstanding at such time. SECTION 9. Expenses of Registration. All Registration Expenses incurred in connection with any registration pursuant to Sections 5 and 6 and the reasonable cost of one special legal counsel to represent all of the Holders together in any such registration (not to exceed $10,000) shall be borne by the Company. All Selling Expenses relating to securities registered on behalf of the Holders shall be borne by the Holders of the registered securities included in such registration pro rata on the basis of the number of shares so sold. SECTION 10. Registration Procedures. In the case of each registration, qualification or compliance effected by the Company pursuant to Section 5 and 6, the Company will keep each Holder advised in writing as to the initiation of each registration, qualification and compliance and as to the completion thereof and, at its expense, the Company will: (a) Prepare and file with the Commission a registration statement with respect to such securities; (b) Furnish to the Holders participating in such registration and to the underwriters of the securities being registered such reasonable number of copies of the registration statement, preliminary prospectus, final prospectus and such other documents as such underwriters may reasonably request in order to facilitate the public offering of such securities; (c) Prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection with such registration statements as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement; (d) Notify each seller of Registrable Securities covered by such registration statement at any time when a prospectus relating thereto is required to be delivered under the Securities Act of the happening of any event as a result of which the prospectus included in such 7

registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading or incomplete in the light of the circumstances then existing; provided, that after the second anniversary of the effective date of the Shelf Registration, the Company shall be required to provide such notice only if it has received a Distribution Notice that is still in effect and shall be obligated only to the Holder that delivered such Distribution Notice; and at the request of any such seller, prepare promptly and furnish to such seller a reasonable number of copies of a supplement to or an amendment of such prospectus as may be necessary so that, as thereafter delivered to the purchaser of such shares, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading or incomplete in the light of the circumstances then existing; (e) Use reasonable efforts to register and qualify the securities covered by such registration statement under such other securities or blue sky laws of such jurisdictions as shall be reasonably requested by the Holders, provided that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions;

registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading or incomplete in the light of the circumstances then existing; provided, that after the second anniversary of the effective date of the Shelf Registration, the Company shall be required to provide such notice only if it has received a Distribution Notice that is still in effect and shall be obligated only to the Holder that delivered such Distribution Notice; and at the request of any such seller, prepare promptly and furnish to such seller a reasonable number of copies of a supplement to or an amendment of such prospectus as may be necessary so that, as thereafter delivered to the purchaser of such shares, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading or incomplete in the light of the circumstances then existing; (e) Use reasonable efforts to register and qualify the securities covered by such registration statement under such other securities or blue sky laws of such jurisdictions as shall be reasonably requested by the Holders, provided that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions; (f) Make available for inspection by any Holder participating in such registration, any underwriter participating in any disposition pursuant to such registration, and any attorney or accountant retained by any such Holder or underwriter, all financial and other records, pertinent corporate documents and properties of the Company, and cause the Company's officers and directors to supply all information reasonably requested by any such Holder, underwriter, attorney or accountant in connection with such registration statement; provided, however, that such Holder, underwriter, attorney or accountant shall agree to hold in confidence and trust all information so provided; and (g) Use reasonable efforts to furnish, on the date that such Registrable Securities are delivered to the underwriters for sale, if such securities are being sold through underwriters, (i) an opinion, dated as of such date, of the counsel representing the Company for the purposes of such registration, in form and substance as is customarily given to underwriters in an underwritten public offering, addressed to the underwriters, if any, and (ii) a letter dated as of such date, from the independent certified public accountants of the Company, in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering, addressed to the underwriters. SECTION 11. Indemnification. (a) The Company will indemnify each Holder, each of its current and former officers and directors and partners, and each person controlling such Holder within the meaning of Section 15 of the Securities Act, with respect to which registration, qualification or compliance has been effected pursuant to this Agreement, and each underwriter, if any, and each person who 8

controls any underwriter within the meaning of Section 15 of the Securities Act, against all expenses, claims, losses, damages or liabilities (or actions in respect thereof) arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in any registration statement, prospectus, offering circular or other document, or any amendment or supplement thereto, incident to any such registration, qualification or compliance, or based on any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading, or any violation by the Company of any rule or regulation promulgated under the Securities Act, Exchange Act or state securities laws applicable to the Company in connection with any such registration, qualification or compliance, and the Company will reimburse each such Holder, each of its current and former officers and directors, and each person controlling such Holder, each such underwriter and each person who controls any such underwriter, for any legal and any other expenses reasonably incurred in connection with investigating, preparing or defending any such claim, loss, damage, liability or action, as such expenses are incurred, provided that the Company will not be liable in any such case to the extent that any such claim, loss, damage, liability or expense arises out of or is based on any untrue statement or omission or alleged untrue statement or omission, made in reliance upon and in conformity with written information furnished to the Company by such Holder, controlling person or underwriter and stated to be specifically for use therein. The

controls any underwriter within the meaning of Section 15 of the Securities Act, against all expenses, claims, losses, damages or liabilities (or actions in respect thereof) arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in any registration statement, prospectus, offering circular or other document, or any amendment or supplement thereto, incident to any such registration, qualification or compliance, or based on any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading, or any violation by the Company of any rule or regulation promulgated under the Securities Act, Exchange Act or state securities laws applicable to the Company in connection with any such registration, qualification or compliance, and the Company will reimburse each such Holder, each of its current and former officers and directors, and each person controlling such Holder, each such underwriter and each person who controls any such underwriter, for any legal and any other expenses reasonably incurred in connection with investigating, preparing or defending any such claim, loss, damage, liability or action, as such expenses are incurred, provided that the Company will not be liable in any such case to the extent that any such claim, loss, damage, liability or expense arises out of or is based on any untrue statement or omission or alleged untrue statement or omission, made in reliance upon and in conformity with written information furnished to the Company by such Holder, controlling person or underwriter and stated to be specifically for use therein. The indemnity agreement contained in this section shall not apply to amounts paid in settlement of any loss, claim, damage, liability or action if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld), nor shall the Company be liable to a Holder in any such case for any such loss, claim, damage, liability or action (1) to the extent that it arises our of or is based upon a violation of any state or federal law which occurs in reliance upon and in conformity with written information furnished expressly for use in connection with such registration by or on behalf of such Holder, or (2) in the case of a sale directly by a Holder of Registrable Securities (including a sale of such Registrable Securities through any underwriter retained by such Holder engaging in a distribution solely on behalf of such Holder), such untrue statement or alleged untrue statement or omission or alleged omission was contained in a preliminary prospectus and corrected in a final or amended prospectus, and such Holder failed to deliver a copy of the final or amended prospectus at or prior to the confirmation of the sale of the Registrable Securities to the person asserting any such loss, claim, damage or liability in any case in which such delivery is required by the Securities Act. (b) Each Holder will, if Registrable Securities held by such Holder are included in the securities as to which such registration, qualification or compliance is being effected, indemnify the Company, each of its directors, officers and partners, each underwriter, if any, of the Company's securities covered by such a registration statement, each person who controls the Company or such underwriter within the meaning of Section 15 of the Securities Act, and each other such Holder, each of its officers and directors and each person controlling such Holder within the meaning of Section 15 of the Securities Act, against all claims, losses, damages and liabilities (or actions in respect thereof) arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in any such registration statement, prospectus, offering 9

circular or other document, or any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse the Company, such Holders, such directors, officers, persons, underwriters or control persons for any legal or any other expenses reasonably incurred in connection with investigating or defending any such claim, loss, damage, liability or action, as such expenses are incurred, in each case to the extent, but only to the extent, that such untrue statement (or alleged untrue statement) or omission (or alleged omission) is made in such registration statement, prospectus, offering circular or other document in reliance upon and in conformity with written information furnished to the Company by such Holder and stated to be specifically for use therein; provided that in no event shall any indemnity under this Section 11(b) exceed in the aggregate the net proceeds (after Selling Expenses) received by such Holder from the sale of securities included in such registration. (c) Each party entitled to indemnification under this Section 11 (the "Indemnified Party") shall give notice to the party required to provide indemnification (the "Indemnifying Party") promptly after such Indemnified Party has actual knowledge of any claim as to which indemnity may be sought, and shall permit the Indemnifying Party to assume the defense of any such claim or any litigation resulting therefrom, provided that counsel for the Indemnifying Party, who shall conduct the defense of such claim or litigation, shall be approved by the Indemnified Party (whose approval shall not unreasonably be withheld), and the Indemnified Party may

circular or other document, or any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse the Company, such Holders, such directors, officers, persons, underwriters or control persons for any legal or any other expenses reasonably incurred in connection with investigating or defending any such claim, loss, damage, liability or action, as such expenses are incurred, in each case to the extent, but only to the extent, that such untrue statement (or alleged untrue statement) or omission (or alleged omission) is made in such registration statement, prospectus, offering circular or other document in reliance upon and in conformity with written information furnished to the Company by such Holder and stated to be specifically for use therein; provided that in no event shall any indemnity under this Section 11(b) exceed in the aggregate the net proceeds (after Selling Expenses) received by such Holder from the sale of securities included in such registration. (c) Each party entitled to indemnification under this Section 11 (the "Indemnified Party") shall give notice to the party required to provide indemnification (the "Indemnifying Party") promptly after such Indemnified Party has actual knowledge of any claim as to which indemnity may be sought, and shall permit the Indemnifying Party to assume the defense of any such claim or any litigation resulting therefrom, provided that counsel for the Indemnifying Party, who shall conduct the defense of such claim or litigation, shall be approved by the Indemnified Party (whose approval shall not unreasonably be withheld), and the Indemnified Party may participate in such defense at such party's expense; provided, however, that an Indemnified Party (together with all other Indemnified Parties which may be represented without conflict by one counsel) shall have the right to retain one separate counsel, with the fees and expenses to be paid by the Indemnifying Party, if representation of such Indemnified Party by the counsel retained by the Indemnifying Party would be inappropriate due to actual or potential differing interests between such Indemnified Party and any other party represented by such counsel in such proceeding. The failure of any Indemnified Party to give notice as provided herein shall relieve the Indemnifying Party of its obligations under this Section 11 only to the extent that the failure to give such notice is materially prejudicial to an Indemnifying Party's ability to defend such action. No Indemnifying Party, in the defense of any such claim or litigation, shall, except with the consent of each Indemnified Party, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect to such claim or litigation. The indemnity agreements contained in this Section 11 shall not apply to amounts paid in settlement of any loss, claim, damage, liability or action if such settlement is effected without the consent of the Indemnifying Party, which consent shall not be unreasonably withheld. (d) If the indemnification provided for in this Section 11 is held by a court of competent jurisdiction to be unavailable to an Indemnified Party, other than pursuant to its terms, with respect to any claim, loss, damage, liability or action referred to therein, then the Indemnifying Party, in lieu of indemnifying such Indemnified Party hereunder, shall contribute to the amount paid or payable by such Indemnified Party as a result of such claim, loss, damage, liability or action in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party on the one hand and the Indemnified Party on the other in connection with the actions that resulted in such 10

claims, loss, damage, liability or action, as well as any other relevant equitable considerations. The relative fault of the Indemnifying Party and of the Indemnified Party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact related to information supplied by the Indemnifying Party or by the Indemnified Party and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Holders agree that it would not be just and equitable if contribution pursuant to this Section 11 (d) were based solely upon the number of entities from whom contribution was requested or by any other method of allocation which does not take account of the equitable considerations referred to above in this Section 11(d). In no event shall any Holder's contribution obligation under this Section 11(d) exceed in the aggregate the net proceeds (after Selling Expenses) received by such Holder from the sale of securities included in such registration. (e) The amount paid or payable by an Indemnified Party as a result of the losses, claims, damages and liabilities referred to above in this Section 11 shall be deemed to include any legal or other expenses reasonably incurred by such Indemnified Party in connection with investigating or defending any such action or claim, subject to the

claims, loss, damage, liability or action, as well as any other relevant equitable considerations. The relative fault of the Indemnifying Party and of the Indemnified Party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact related to information supplied by the Indemnifying Party or by the Indemnified Party and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Holders agree that it would not be just and equitable if contribution pursuant to this Section 11 (d) were based solely upon the number of entities from whom contribution was requested or by any other method of allocation which does not take account of the equitable considerations referred to above in this Section 11(d). In no event shall any Holder's contribution obligation under this Section 11(d) exceed in the aggregate the net proceeds (after Selling Expenses) received by such Holder from the sale of securities included in such registration. (e) The amount paid or payable by an Indemnified Party as a result of the losses, claims, damages and liabilities referred to above in this Section 11 shall be deemed to include any legal or other expenses reasonably incurred by such Indemnified Party in connection with investigating or defending any such action or claim, subject to the provisions of Section 11 hereof. Notwithstanding the provisions of this Section 11, no Holder shall be required to contribute any amount or make any other payments under this Agreement which in the aggregate exceed the net proceeds (after selling expenses) received by such Holder. No person guilty of fraudulent misrepresentation (within the meaning of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. SECTION 12. Information by Holder. The Holder or Holders of Registrable Securities included in any registration shall furnish to the Company such information regarding such Holder or Holders, the Registrable Securities held by them and the distribution proposed by such Holder or Holders as the Company may request in writing and as shall be required in connection with any registration, qualification or compliance referred to in this Agreement. SECTION 13. Rule 144 Reporting. With a view to making available the benefits of certain rules and regulations of the Commission which may at any time permit the sale of the Restricted Securities to the public without registration, the Company agrees to use its reasonable best efforts to: (a) Make and keep public information available, as those terms are understood and defined in Rule 144 under the Securities Act; (b) File with the Commission in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements); and 11

(c) So long as a Holder owns any Restricted Securities, furnish to the Holder forthwith upon request a written statement by the Company as to its compliance with the reporting requirements of said Rule 144, and of the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements), a copy of the most recent annual or quarterly report of the Company, and such other reports and documents of the Company and other information in the possession of or reasonably obtainable by the Company as a Holder may reasonably request in availing itself of any rule or regulation of the Commission allowing a Holder to sell any such securities without registration. SECTION 14. Transfer of Registration Rights. The rights to cause the Company to register securities granted to any party hereto under this Agreement may be assigned to a transferee or assignee in connection with any transfer or assignment of Registrable Securities by such party; provided that (a) such transfer may otherwise be effected in accordance with applicable securities laws, (b) notice of such assignment is given to the Company (which notice shall include the name and address of the transferee or assignee and identify the Registrable Securities with respect to which rights are to be transferred or assigned), and the transferor complies with any applicable provisions of Section 4 hereof, (c) such transferee or assignee (i) is a subsidiary, affiliated partnership, affiliate or partner or limited liability company member (including limited partners, retired partners, withdrawn members, spouses and ancestors, lineal descendants and siblings of such partners or spouses who acquire Registrable

(c) So long as a Holder owns any Restricted Securities, furnish to the Holder forthwith upon request a written statement by the Company as to its compliance with the reporting requirements of said Rule 144, and of the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements), a copy of the most recent annual or quarterly report of the Company, and such other reports and documents of the Company and other information in the possession of or reasonably obtainable by the Company as a Holder may reasonably request in availing itself of any rule or regulation of the Commission allowing a Holder to sell any such securities without registration. SECTION 14. Transfer of Registration Rights. The rights to cause the Company to register securities granted to any party hereto under this Agreement may be assigned to a transferee or assignee in connection with any transfer or assignment of Registrable Securities by such party; provided that (a) such transfer may otherwise be effected in accordance with applicable securities laws, (b) notice of such assignment is given to the Company (which notice shall include the name and address of the transferee or assignee and identify the Registrable Securities with respect to which rights are to be transferred or assigned), and the transferor complies with any applicable provisions of Section 4 hereof, (c) such transferee or assignee (i) is a subsidiary, affiliated partnership, affiliate or partner or limited liability company member (including limited partners, retired partners, withdrawn members, spouses and ancestors, lineal descendants and siblings of such partners or spouses who acquire Registrable Securities by gift, will or intestate succession) of such party, or (ii) acquires from such party at least 250,000 (which number shall be adjusted for stock splits, combinations, dividends and similar transactions occurring after the signing hereof) Registrable Securities, and (d) such transferee or assignee agrees in writing to be bound hereby (if so requested by the Company). SECTION 15. Termination of Rights. The rights of any particular Holder to cause the Company to register securities under Section 6 shall terminate with respect to such Holder at such time as Rule 144 or another similar exemption under the Securities Act is available for the sale of all such Holder's shares to the public in any and all three-month periods (disregarding, for this purpose with respect to any Registrable Securities that were issued in connection with or related to the Series B Purchase Agreement, sales which may be permitted under Rule 144 (k)). SECTION 16. Third Parties. Nothing in this Agreement, express or implied, is intended to confer upon any party, other than the parties hereto, and their respective successors and assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided herein. SECTION 17. Governing Law. This Agreement shall be governed by and construed under the laws of the State of Illinois without regard to choice of laws or conflict of laws' provisions thereof. 12

SECTION 18. Counterparts. This Agreement may be executed in two or more counterparts and signature pages may be delivered by facsimile, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. SECTION 19. Notices. All notices and other communications required or permitted hereunder shall be in writing and shall be (A) mailed by registered or certified mail, postage prepaid, return receipt requested, (B) delivered by a nationally recognized overnight courier, (C) sent by confirmed telecopy or (D) otherwise delivered by hand or by messenger, addressed (i) if to an Investor, at such Investor's address set forth on Exhibit A, or at such other address as such Investor shall have furnished to the Company in writing; (ii) if to the Company, at its address set forth on the signature page of this Agreement addressed to the attention of the Corporate Secretary, or at such other address as the Company shall have furnished to the Investors; or (iii) if to a Holder other than an Investor, at its address as specified in the notice provided to the Company under Section 14 hereof, or at such other address as such Holder shall have furnished to the Company. If notice is provided by mail, notice shall be deemed to be given 48 hours after proper deposit in a mailbox; if by overnight courier, notice shall be deemed to be given 24 hours after deposit; if by facsimile, upon completion of such facsimile transmission as conclusively evidenced by the transmission receipt; and if by hand or messenger, upon receipt by the addressee. SECTION 20. Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, portions of such provisions, or such provisions in their entirety, to the extent necessary, shall be

SECTION 18. Counterparts. This Agreement may be executed in two or more counterparts and signature pages may be delivered by facsimile, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. SECTION 19. Notices. All notices and other communications required or permitted hereunder shall be in writing and shall be (A) mailed by registered or certified mail, postage prepaid, return receipt requested, (B) delivered by a nationally recognized overnight courier, (C) sent by confirmed telecopy or (D) otherwise delivered by hand or by messenger, addressed (i) if to an Investor, at such Investor's address set forth on Exhibit A, or at such other address as such Investor shall have furnished to the Company in writing; (ii) if to the Company, at its address set forth on the signature page of this Agreement addressed to the attention of the Corporate Secretary, or at such other address as the Company shall have furnished to the Investors; or (iii) if to a Holder other than an Investor, at its address as specified in the notice provided to the Company under Section 14 hereof, or at such other address as such Holder shall have furnished to the Company. If notice is provided by mail, notice shall be deemed to be given 48 hours after proper deposit in a mailbox; if by overnight courier, notice shall be deemed to be given 24 hours after deposit; if by facsimile, upon completion of such facsimile transmission as conclusively evidenced by the transmission receipt; and if by hand or messenger, upon receipt by the addressee. SECTION 20. Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, portions of such provisions, or such provisions in their entirety, to the extent necessary, shall be severed from this Agreement, and the balance of this Agreement shall be enforceable in accordance with its terms. SECTION 21. Amendment and Waiver. Any provision of this Agreement may be amended or waived with the written consent of the Company and the Holders of at least a majority of the outstanding Registrable Securities provided that (i) no such amendment shall impose or increase any liability or obligation on a Holder without the consent of such Holder and (ii) no such amendment having a disproportionately adverse effect on any Holder in relation to the other holders may be made without consent of such Holder. Any amendment or waiver effected in accordance with this paragraph shall be binding upon each holder and the Company. In addition, the Company may waive performance of any obligation owing to it, as to some or all of the holders, or agree to accept alternatives to such performance, without obtaining the consent of any holder. In the event that an underwriting agreement is entered into between the Company and any Holder, and such underwriting agreement contains terms differing from this Agreement, as to any such Holder the terms of such underwriting agreement shall govern. SECTION 22. Rights of Holders. Each party to this Agreement shall have the absolute right to exercise or refrain from exercising any right or rights that such party may have by reason of this Agreement, including, without limitation, the right to consent to the waiver or modification of any obligation under this Agreement, and such party shall not incur any liability to any other party or 13

other Holder of any securities of the Company as a result of exercising or refraining from exercising any such right or rights. SECTION 23. Delays or Omissions. No delay or omission to exercise any right, power or remedy accruing to any party to this Agreement, upon any breach or default of any other party, shall impair any such right, power or remedy of such non-breaching party nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any party of any breach or default under this Agreement, or any waiver on the part of any party of any provisions or conditions of this Agreement, must be made in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement, or by law or otherwise afforded to any party or holder, shall be cumulative and not alternative. SECTION 24. Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

other Holder of any securities of the Company as a result of exercising or refraining from exercising any such right or rights. SECTION 23. Delays or Omissions. No delay or omission to exercise any right, power or remedy accruing to any party to this Agreement, upon any breach or default of any other party, shall impair any such right, power or remedy of such non-breaching party nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any party of any breach or default under this Agreement, or any waiver on the part of any party of any provisions or conditions of this Agreement, must be made in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement, or by law or otherwise afforded to any party or holder, shall be cumulative and not alternative. SECTION 24. Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement. SECTION 25. Legal Fees. If any action at law or in equity (including arbitration) is necessary to enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to reasonable attorneys' fees, costs and necessary disbursements, including on appeal, in addition to any other relief to which such party may be entitled. 14

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. THE COMPANY: eLOYALTY CORPORATION
By: /s/ Timothy J. Cunningham --------------------------------------------------Name: Timothy J. Cunningham Title: Senior Vice President & Chief Financial Officer

Address: 150 Field Avenue, Suite 250 Lake Forest, Illinois 60045 15

THE INVESTORS: TCV IV, L.P., a Delaware limited partnership By: Technology Crossover Management IV, L.L.C. Its: General Partner
By: /s/ Carla S. Newell ----------------------------------------Name: Carla S. Newell Title: Attorney in Fact

TCV IV STRATEGIC PARTNERS, L.P., a Delaware limited partnership By: Technology Crossover Management IV, L.L.C. Its: General Partner
By: /s/ Carla S. Newell ----------------------------------------Name: Carla S. Newell

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. THE COMPANY: eLOYALTY CORPORATION
By: /s/ Timothy J. Cunningham --------------------------------------------------Name: Timothy J. Cunningham Title: Senior Vice President & Chief Financial Officer

Address: 150 Field Avenue, Suite 250 Lake Forest, Illinois 60045 15

THE INVESTORS: TCV IV, L.P., a Delaware limited partnership By: Technology Crossover Management IV, L.L.C. Its: General Partner
By: /s/ Carla S. Newell ----------------------------------------Name: Carla S. Newell Title: Attorney in Fact

TCV IV STRATEGIC PARTNERS, L.P., a Delaware limited partnership By: Technology Crossover Management IV, L.L.C. Its: General Partner
By: /s/ Carla S. Newell ----------------------------------------Name: Carla S. Newell Title: Attorney in Fact

TCV III (GP), a Delaware general partnership By: Technology Crossover Management III, L.L.C. Its: General Partner
By: /s/ Carla S. Newell ----------------------------------------Name: Carla S. Newell Title: Attorney in Fact

TCV III, L.P., a Delaware limited partnership By: Technology Crossover Management III, L.L.C. Its: General Partner
By: /s/ Carla S. Newell ----------------------------------------Name: Carla S. Newell Title: Attorney in Fact

16

THE INVESTORS: TCV IV, L.P., a Delaware limited partnership By: Technology Crossover Management IV, L.L.C. Its: General Partner
By: /s/ Carla S. Newell ----------------------------------------Name: Carla S. Newell Title: Attorney in Fact

TCV IV STRATEGIC PARTNERS, L.P., a Delaware limited partnership By: Technology Crossover Management IV, L.L.C. Its: General Partner
By: /s/ Carla S. Newell ----------------------------------------Name: Carla S. Newell Title: Attorney in Fact

TCV III (GP), a Delaware general partnership By: Technology Crossover Management III, L.L.C. Its: General Partner
By: /s/ Carla S. Newell ----------------------------------------Name: Carla S. Newell Title: Attorney in Fact

TCV III, L.P., a Delaware limited partnership By: Technology Crossover Management III, L.L.C. Its: General Partner
By: /s/ Carla S. Newell ----------------------------------------Name: Carla S. Newell Title: Attorney in Fact

16

TCV III (Q), L.P., a Delaware limited partnership By: Technology Crossover Management III, L.L.C. Its: General Partner
By: /s/ Carla S. Newell ----------------------------------------Name: Carla S. Newell Title: Attorney in Fact

TCV III STRATEGIC PARTNERS, L.P., a Delaware limited partnership By: Technology Crossover Management III, L.L.C. Its: General Partner
By: /s/ Carla S. Newell -----------------------------------------

TCV III (Q), L.P., a Delaware limited partnership By: Technology Crossover Management III, L.L.C. Its: General Partner
By: /s/ Carla S. Newell ----------------------------------------Name: Carla S. Newell Title: Attorney in Fact

TCV III STRATEGIC PARTNERS, L.P., a Delaware limited partnership By: Technology Crossover Management III, L.L.C. Its: General Partner
By: /s/ Carla S. Newell ----------------------------------------Name: Carla S. Newell Title: Attorney in Fact

SUTTER HILL VENTURES, a California limited partnership By: Sutter Hill Ventures, LLC Its: General Partner
By: /s/ Tench Coxe ----------------------------------------Name: Tench Coxe Title: Managing Director

SUTTER HILL ENTREPRENEURS FUND (AI), L.P., a California limited partnership By: Sutter Hill Ventures, LLC Its: General Partner
By: /s/ Tench Coxe ----------------------------------------Name: Tench Coxe Title: Managing Director

17

SUTTER HILL ENTREPRENEURS FUND (QP), L.P., a California limited partnership By: Sutter Hill Ventures, LLC Its: General Partner
By: /s/ Tench Coxe ----------------------------------------Name: Tench Coxe Title: Managing Director

SUTTER HILL ASSOCIATES, L.P., a California limited partnership
/s/ Tench Coxe ----------------------------------------By: Tench Coxe

SUTTER HILL ENTREPRENEURS FUND (QP), L.P., a California limited partnership By: Sutter Hill Ventures, LLC Its: General Partner
By: /s/ Tench Coxe ----------------------------------------Name: Tench Coxe Title: Managing Director

SUTTER HILL ASSOCIATES, L.P., a California limited partnership
/s/ Tench Coxe ----------------------------------------By: Tench Coxe Its: General Partner

18

EXHIBIT A SCHEDULE OF INVESTORS TCV IV, L.P. TCV IV STRATEGIC PARTNERS, L.P. TCV III (GP) TCV III, L.P. TCV III (Q), L.P. TCV III STRATEGIC PARTNERS, L.P. Mailing Address: Technology Crossover Ventures 528 Ramona Street Palo Alto, CA 94301 Attention: Jay C. Hoag Phone: (650) 614-8210 Fax: (650) 614-8222 with a copy to: Technology Crossover Ventures 56 Main Street, Suite 210

EXHIBIT A SCHEDULE OF INVESTORS TCV IV, L.P. TCV IV STRATEGIC PARTNERS, L.P. TCV III (GP) TCV III, L.P. TCV III (Q), L.P. TCV III STRATEGIC PARTNERS, L.P. Mailing Address: Technology Crossover Ventures 528 Ramona Street Palo Alto, CA 94301 Attention: Jay C. Hoag Phone: (650) 614-8210 Fax: (650) 614-8222 with a copy to: Technology Crossover Ventures 56 Main Street, Suite 210 Millburn, NJ 07041 Attention: Robert C. Bensky Phone: (973) 467-5320 Fax: (973) 467-5323 SUTTER HILL VENTURES SUTTER HILL ENTREPRENEURS FUND (AI), L.P. SUTTER HILL ENTREPRENEURS FUND (QP), L.P. SUTTER HILL ASSOCIATES, L.P. Mailing Address: Sutter Hill Ventures 755 Page Mill Road Suite A-200 Palo Alto, California 94304 Attention: Tench Coxe Phone: (650) 493-5600 Fax: (650) 858-1854 19

EXHIBIT 21.1 eLOYALTY SUBSIDIARIES
Name of Company --------------eLoyalty Europe Holding Corporation eLoyalty International Holding, Inc. Geising International, Ltd. eLoyalty (Netherlands) B.V. eLoyalty (Canada) Corporation eLoyalty de Venezuela, C.A. eLoyalty de Mexico, S. de R.L. de C.V. eLoyalty do Brasil Ltda. eLoyalty (Switzerland) Ltd. eLoyalty (Deutschland) GmbH Jurisdiction of Incorporation ----------------------------Delaware Illinois New York Netherlands Canada Venezuela Mexico Brazil Switzerland Germany

EXHIBIT 21.1 eLOYALTY SUBSIDIARIES
Name of Company --------------eLoyalty Europe Holding Corporation eLoyalty International Holding, Inc. Geising International, Ltd. eLoyalty (Netherlands) B.V. eLoyalty (Canada) Corporation eLoyalty de Venezuela, C.A. eLoyalty de Mexico, S. de R.L. de C.V. eLoyalty do Brasil Ltda. eLoyalty (Switzerland) Ltd. eLoyalty (Deutschland) GmbH eLoyalty (UK) Limited eLoyalty (France) S.A.R.L. eLoyalty Corporation (Australia) Pty. Ltd. eLoyalty International Limited Jurisdiction of Incorporation ----------------------------Delaware Illinois New York Netherlands Canada Venezuela Mexico Brazil Switzerland Germany England & Wales France Australia Ireland

EXHIBIT 23.1 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (No. 33368530), Form S-8 (No. 333-68540), Form S-8 (No. 333-30374) and Form S-3 (No. 333-70078) of eLoyalty Corporation of our report dated January 31, 2002, except for Note 18, as to which the date is February 28, 2002, relating to the financial statements and financial statement schedule, which appear in this Annual Report on Form 10-K for the year ended December 29, 2001. PricewaterhouseCoopers LLP Chicago, Illinois March 28, 2002

EXHIBIT 24.1 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or officer of eLoyalty Corporation, a Delaware corporation (the "Company"), hereby constitutes and appoints each of Kelly D. Conway and Timothy J. Cunningham, signing singly, as the undersigned's true and lawful attorney-in-fact, with full power and authority and full power of substitution, re-substitution or revocation, to: (a) execute for, in the name and on behalf of the undersigned, in the undersigned's capacity as a director and/or officer of the Company, the Company's Annual Report on Form 10-K for the fiscal year ended December 29, 2001, together with any and all amendments thereto on Form 10-K/A deemed necessary, appropriate or desirable (collectively, the "Form 10-K"), pursuant to the Securities Exchange Act of 1934 and the rules thereunder; (b) file the Form 10-K, with all exhibits thereto and other documents in connection therewith, with the U.S. Securities and Exchange Commission and any stock exchange or market or similar authority on which the Company's Common Stock is listed for trading and any other governmental or regulatory authority, and otherwise to act for him or her and on his or her behalf in connection therewith; and

EXHIBIT 23.1 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (No. 33368530), Form S-8 (No. 333-68540), Form S-8 (No. 333-30374) and Form S-3 (No. 333-70078) of eLoyalty Corporation of our report dated January 31, 2002, except for Note 18, as to which the date is February 28, 2002, relating to the financial statements and financial statement schedule, which appear in this Annual Report on Form 10-K for the year ended December 29, 2001. PricewaterhouseCoopers LLP Chicago, Illinois March 28, 2002

EXHIBIT 24.1 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or officer of eLoyalty Corporation, a Delaware corporation (the "Company"), hereby constitutes and appoints each of Kelly D. Conway and Timothy J. Cunningham, signing singly, as the undersigned's true and lawful attorney-in-fact, with full power and authority and full power of substitution, re-substitution or revocation, to: (a) execute for, in the name and on behalf of the undersigned, in the undersigned's capacity as a director and/or officer of the Company, the Company's Annual Report on Form 10-K for the fiscal year ended December 29, 2001, together with any and all amendments thereto on Form 10-K/A deemed necessary, appropriate or desirable (collectively, the "Form 10-K"), pursuant to the Securities Exchange Act of 1934 and the rules thereunder; (b) file the Form 10-K, with all exhibits thereto and other documents in connection therewith, with the U.S. Securities and Exchange Commission and any stock exchange or market or similar authority on which the Company's Common Stock is listed for trading and any other governmental or regulatory authority, and otherwise to act for him or her and on his or her behalf in connection therewith; and (c) take any other action of any type whatsoever in connection with the foregoing which, in the opinion of such attorney-in-fact, may be required, appropriate or desirable to be done in the exercise of any of the rights and powers herein granted, as fully to all intents and purposes as the undersigned might or could do if personally present, hereby ratifying and confirming all that such attorney-in-fact, or such attorney-in-fact's substitute or substitutes, shall lawfully do or cause to be done by virtue of this Power of Attorney and the rights and powers herein granted. IN WITNESS WHEREOF, the undersigned has signed this Power of Attorney as of this 15th day of March, 2002.
/s/ TENCH COXE ------------------------Signature

Tench Coxe Printed Name

EXHIBIT 24.2 POWER OF ATTORNEY

EXHIBIT 24.1 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or officer of eLoyalty Corporation, a Delaware corporation (the "Company"), hereby constitutes and appoints each of Kelly D. Conway and Timothy J. Cunningham, signing singly, as the undersigned's true and lawful attorney-in-fact, with full power and authority and full power of substitution, re-substitution or revocation, to: (a) execute for, in the name and on behalf of the undersigned, in the undersigned's capacity as a director and/or officer of the Company, the Company's Annual Report on Form 10-K for the fiscal year ended December 29, 2001, together with any and all amendments thereto on Form 10-K/A deemed necessary, appropriate or desirable (collectively, the "Form 10-K"), pursuant to the Securities Exchange Act of 1934 and the rules thereunder; (b) file the Form 10-K, with all exhibits thereto and other documents in connection therewith, with the U.S. Securities and Exchange Commission and any stock exchange or market or similar authority on which the Company's Common Stock is listed for trading and any other governmental or regulatory authority, and otherwise to act for him or her and on his or her behalf in connection therewith; and (c) take any other action of any type whatsoever in connection with the foregoing which, in the opinion of such attorney-in-fact, may be required, appropriate or desirable to be done in the exercise of any of the rights and powers herein granted, as fully to all intents and purposes as the undersigned might or could do if personally present, hereby ratifying and confirming all that such attorney-in-fact, or such attorney-in-fact's substitute or substitutes, shall lawfully do or cause to be done by virtue of this Power of Attorney and the rights and powers herein granted. IN WITNESS WHEREOF, the undersigned has signed this Power of Attorney as of this 15th day of March, 2002.
/s/ TENCH COXE ------------------------Signature

Tench Coxe Printed Name

EXHIBIT 24.2 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or officer of eLoyalty Corporation, a Delaware corporation (the "Company"), hereby constitutes and appoints each of Kelly D. Conway and Timothy J. Cunningham, signing singly, as the undersigned's true and lawful attorney-in-fact, with full power and authority and full power of substitution, re-substitution or revocation, to: (a) execute for, in the name and on behalf of the undersigned, in the undersigned's capacity as a director and/or officer of the Company, the Company's Annual Report on Form 10-K for the fiscal year ended December 29, 2001, together with any and all amendments thereto on Form 10-K/A deemed necessary, appropriate or desirable (collectively, the "Form 10-K"), pursuant to the Securities Exchange Act of 1934 and the rules thereunder; (b) file the Form 10-K, with all exhibits thereto and other documents in connection therewith, with the U.S. Securities and Exchange Commission and any stock exchange or market or similar authority on which the Company's Common Stock is listed for trading and any other governmental or regulatory authority, and otherwise to act for him or her and on his or her behalf in connection therewith; and

EXHIBIT 24.2 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or officer of eLoyalty Corporation, a Delaware corporation (the "Company"), hereby constitutes and appoints each of Kelly D. Conway and Timothy J. Cunningham, signing singly, as the undersigned's true and lawful attorney-in-fact, with full power and authority and full power of substitution, re-substitution or revocation, to: (a) execute for, in the name and on behalf of the undersigned, in the undersigned's capacity as a director and/or officer of the Company, the Company's Annual Report on Form 10-K for the fiscal year ended December 29, 2001, together with any and all amendments thereto on Form 10-K/A deemed necessary, appropriate or desirable (collectively, the "Form 10-K"), pursuant to the Securities Exchange Act of 1934 and the rules thereunder; (b) file the Form 10-K, with all exhibits thereto and other documents in connection therewith, with the U.S. Securities and Exchange Commission and any stock exchange or market or similar authority on which the Company's Common Stock is listed for trading and any other governmental or regulatory authority, and otherwise to act for him or her and on his or her behalf in connection therewith; and (c) take any other action of any type whatsoever in connection with the foregoing which, in the opinion of such attorney-in-fact, may be required, appropriate or desirable to be done in the exercise of any of the rights and powers herein granted, as fully to all intents and purposes as the undersigned might or could do if personally present, hereby ratifying and confirming all that such attorney-in-fact, or such attorney-in-fact's substitute or substitutes, shall lawfully do or cause to be done by virtue of this Power of Attorney and the rights and powers herein granted. IN WITNESS WHEREOF, the undersigned has signed this Power of Attorney as of this 15th day of March, 2002.
/s/ JAY C. HOAG ---------------------------Signature

Jay C. Hoag Printed Name

EXHIBIT 24.3 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or officer of eLoyalty Corporation, a Delaware corporation (the "Company"), hereby constitutes and appoints each of Kelly D. Conway and Timothy J. Cunningham, signing singly, as the undersigned's true and lawful attorney-in-fact, with full power and authority and full power of substitution, re-substitution or revocation, to: (a) execute for, in the name and on behalf of the undersigned, in the undersigned's capacity as a director and/or officer of the Company, the Company's Annual Report on Form 10-K for the fiscal year ended December 29, 2001, together with any and all amendments thereto on Form 10-K/A deemed necessary, appropriate or desirable (collectively, the "Form 10-K"), pursuant to the Securities Exchange Act of 1934 and the rules thereunder; (b) file the Form 10-K, with all exhibits thereto and other documents in connection therewith, with the U.S. Securities and Exchange Commission and any stock exchange or market or similar authority on which the Company's Common Stock is listed for trading and any other governmental or regulatory authority, and otherwise to act for him or her and on his or her behalf in connection therewith; and

EXHIBIT 24.3 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or officer of eLoyalty Corporation, a Delaware corporation (the "Company"), hereby constitutes and appoints each of Kelly D. Conway and Timothy J. Cunningham, signing singly, as the undersigned's true and lawful attorney-in-fact, with full power and authority and full power of substitution, re-substitution or revocation, to: (a) execute for, in the name and on behalf of the undersigned, in the undersigned's capacity as a director and/or officer of the Company, the Company's Annual Report on Form 10-K for the fiscal year ended December 29, 2001, together with any and all amendments thereto on Form 10-K/A deemed necessary, appropriate or desirable (collectively, the "Form 10-K"), pursuant to the Securities Exchange Act of 1934 and the rules thereunder; (b) file the Form 10-K, with all exhibits thereto and other documents in connection therewith, with the U.S. Securities and Exchange Commission and any stock exchange or market or similar authority on which the Company's Common Stock is listed for trading and any other governmental or regulatory authority, and otherwise to act for him or her and on his or her behalf in connection therewith; and (c) take any other action of any type whatsoever in connection with the foregoing which, in the opinion of such attorney-in-fact, may be required, appropriate or desirable to be done in the exercise of any of the rights and powers herein granted, as fully to all intents and purposes as the undersigned might or could do if personally present, hereby ratifying and confirming all that such attorney-in-fact, or such attorney-in-fact's substitute or substitutes, shall lawfully do or cause to be done by virtue of this Power of Attorney and the rights and powers herein granted. IN WITNESS WHEREOF, the undersigned has signed this Power of Attorney as of this 15th day of March, 2002.
/s/ JOHN T. KOHLER ---------------------------Signature

John T. Kohler Printed Name

EXHIBIT 24.4 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or officer of eLoyalty Corporation, a Delaware corporation (the "Company"), hereby constitutes and appoints each of Kelly D. Conway and Timothy J. Cunningham, signing singly, as the undersigned's true and lawful attorney-in-fact, with full power and authority and full power of substitution, re-substitution or revocation, to: (a) execute for, in the name and on behalf of the undersigned, in the undersigned's capacity as a director and/or officer of the Company, the Company's Annual Report on Form 10-K for the fiscal year ended December 29, 2001, together with any and all amendments thereto on Form 10-K/A deemed necessary, appropriate or desirable (collectively, the "Form 10-K"), pursuant to the Securities Exchange Act of 1934 and the rules thereunder; (b) file the Form 10-K, with all exhibits thereto and other documents in connection therewith, with the U.S. Securities and Exchange Commission and any stock exchange or market or similar authority on which the Company's Common Stock is listed for trading and any other governmental or regulatory authority, and otherwise to act for him or her and on his or her behalf in connection therewith; and

EXHIBIT 24.4 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or officer of eLoyalty Corporation, a Delaware corporation (the "Company"), hereby constitutes and appoints each of Kelly D. Conway and Timothy J. Cunningham, signing singly, as the undersigned's true and lawful attorney-in-fact, with full power and authority and full power of substitution, re-substitution or revocation, to: (a) execute for, in the name and on behalf of the undersigned, in the undersigned's capacity as a director and/or officer of the Company, the Company's Annual Report on Form 10-K for the fiscal year ended December 29, 2001, together with any and all amendments thereto on Form 10-K/A deemed necessary, appropriate or desirable (collectively, the "Form 10-K"), pursuant to the Securities Exchange Act of 1934 and the rules thereunder; (b) file the Form 10-K, with all exhibits thereto and other documents in connection therewith, with the U.S. Securities and Exchange Commission and any stock exchange or market or similar authority on which the Company's Common Stock is listed for trading and any other governmental or regulatory authority, and otherwise to act for him or her and on his or her behalf in connection therewith; and (c) take any other action of any type whatsoever in connection with the foregoing which, in the opinion of such attorney-in-fact, may be required, appropriate or desirable to be done in the exercise of any of the rights and powers herein granted, as fully to all intents and purposes as the undersigned might or could do if personally present, hereby ratifying and confirming all that such attorney-in-fact, or such attorney-in-fact's substitute or substitutes, shall lawfully do or cause to be done by virtue of this Power of Attorney and the rights and powers herein granted. IN WITNESS WHEREOF, the undersigned has signed this Power of Attorney as of this 15th day of March, 2002.
/s/ MICHAEL J. MURRAY ---------------------------Signature

Michael J. Murray Printed Name


				
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