Document:

exv4w4

 

     Exhibit 4.4

 

    eLOYALTY
    CORPORATION

    RIGHTS CERTIFICATE FOR RIGHTS OFFERING

    TO STOCKHOLDERS OF RECORD ON NOVEMBER [  ],
    2006

 

	 	 	 
	
 
	
 
	
 

	

	
 
	
    

	
    Rights Certificate Number
    
	
 
	
    Record Date Common Shares
    

	
 
	
 
	
 

	
    

	
 
	
    

	
    Rights
    
	
 
	
    Record Date Series B
    Preferred Shares
    

 

    eLoyalty Corporation (the “Company”) is conducting a
    rights offering (the “Rights Offering”) pursuant to
    which each stockholder of record of the Company’s common
    stock, par value $0.01 per share (the “Common
    Stock”) and the Company’s Series B convertible
    preferred stock, par value $0.01 per share (the
    “Series B Preferred Stock”), as of
    5:00 p.m., New York City time, on
    November [  ], 2006 (the “Record Date”)
    is receiving
    [          ]
    of a right for each share of Common Stock and each share of
    Series B Preferred Stock held on the Record Date. Each
    whole right (each a “Right”) entitles its holder to
    subscribe for one share of Common Stock (the “Basic
    Subscription Privilege”). If you exercise your Basic
    Subscription Privilege in full, you may also exercise an
    over-subscription privilege (the “Over-Subscription
    Privilege”) to purchase additional shares of Common Stock
    that remain unsubscribed for at the expiration of the Rights
    Offering, subject to availability and proration among persons
    exercising their Over-Subscription Privilege. The purchase price
    per share of Common Stock is $[     ].

 

    For a more complete description of the terms and conditions
    of the Rights Offering, please refer to the Prospectus for the
    Rights Offering, dated November [  ], 2006, which
    is incorporated herein by reference. Copies of the Prospectus
    are available upon request from the Subscription Agent for the
    Rights Offering, Mellon Bank, N.A. (toll-free
    (800) 777-3674).

 

    The Company has not issued any fractional Rights (or distributed
    any cash in lieu thereof). If the number of shares of Common
    Stock and Series B Preferred Stock held by a stockholder of record on the Record Date would
    have resulted in such stockholder receiving a fractional Right,
    the number of Rights issued to such stockholder has been rounded
    down to the nearest whole number.

 

    The Rights represented by this Rights Certificate may be
    exercised by duly completing Form 1. In addition, if
    certificates representing the Common Stock are to be issued in a
    name other than the registered holder or are to be sent to an
    address other than that shown on the face of this Rights
    Certificate, also complete Form 2.

 

    Set forth at the top of this Rights Certificate is the number of
    shares of Common Stock and the number of shares of Series B
    Preferred Stock held by the applicable stockholder of record as
    of the Record Date and the number of Rights that such
    stockholder received pursuant to the Rights Offering.

 

    This Rights Certificate must be duly completed and received
    by the Subscription Agent for the Rights Offering, Mellon Bank,
    N.A., together with payment in full of the Subscription Price
    for each Right that is exercised pursuant to the Basic
    Subscription Privilege plus the full Subscription Price for any
    additional shares of Common Stock subscribed for pursuant to the
    Over-Subscription Privilege, by 5:00 p.m., New York City
    time, on December [  ], 2006, unless extended by
    the Company. Any Rights not exercised prior to such time will be
    null and void. Any subscription for shares of Common Stock made
    hereby is irrevocable.

 

    To exercise the Rights represented hereby, duly complete the
    reverse of this Rights Certificate. Rights holders are advised
    to review the Prospectus and instructions, copies of which are
    available from the Subscription Agent, before exercising their
    Rights.

 

    This Rights Certificate and the Rights represented hereby may
    not be transferred.

 

    (reverse of Rights Certificate)

 

    FORM 1

 

    EXERCISE AND SUBSCRIPTION:  The undersigned
    hereby irrevocably exercises one or more Rights to subscribe for
    shares of Common Stock as indicated below, on the terms and
    subject to the conditions specified in the Prospectus, receipt
    of which is hereby acknowledged.

 

    Basic Subscription Privilege — If you
    wish to exercise your Basic Subscription Privilege in full or in
    part, please complete the following:

 

	 	 	 	 	 	 	 
	

    I apply for
    

	
 
	
    

	
 
	
    shares of Common Stock at $
    
	
 
	
    [     ]
    each = $
    _
    _
    

	
    (number of shares)
    
	
 
	
 
	
 
	
    (total for basic
    subscription)
    

 

    Over-Subscription Privilege — If you
    have exercised you Basic Subscription Privilege in full and you
    wish to exercise your Over-Subscription Privilege, please also
    complete the following:

 

	 	 	 	 	 	 	 
	

    I apply for
    

	
 
	
    

	
 
	
    additional shares of Common Stock at
    
	
 
	
    [     ]
    each = $
    _
    _
    

	
    (number of shares)
    
	
 
	
 
	
 
	
                   (total for basic subscription)
    

 

    METHOD OF
    PAYMENT (check and complete appropriate boxes):

 

			
	 	    o 
	
    Uncertified check payable to “Mellon Investor Services LLC
(acting on behalf of Mellon Bank, N.A., as Subscription Agent for
eLoyalty)”;

	 
	 	    o 
	
    Certified or cashier’s check drawn upon a U.S. bank payable to
    “Mellon Investor Services LLC (acting on behalf of Mellon Bank,
    N.A., as Subscription Agent for eLoyalty)”; or

 

			
	 	    o 
	
    U.S. money order payable to “Mellon Investor Services LLC
(acting on behalf of Mellon Bank N.A., as Subscription Agent for
eLoyalty)”.

 

    SIGNATURE(S)

 

    I acknowledge that I have received the Prospectus for this
    offering and I hereby irrevocably subscribe for the total number
    of shares indicated above on the terms and conditions specified
    in the Prospectus.

 

	 	 	 
	

    Signature: _
    _
    

	
 
	
    Telephone No.:
    (  ) _
    _
    

	
 
	
 
	
 

	

    Print
    Name: _
    _
    

	
 
	
 

 

    IMPORTANT:  THE SIGNATURE(S) MUST CORRESPOND IN EVERY
    PARTICULAR, WITHOUT ALTERATION, WITH THE NAME(S) AS THEY APPEAR
    ON THE BOOKS OF THE COMPANY’S TRANSFER AGENT.

 

    If signature by trustee(s), executor(s), administrator(s),
    guardian(s),
    attorney(s)-in-fact,
    agent(s), officer(s) of a corporation or another acting in a
    fiduciary or representative capacity, please provide the
    following information (please print):

 

    Name: _
    _ Capacity: _
    _ Soc.Sec.#/Tax
    ID#: _
    _

    Address: _
    _ Phone: _
    _

 

    FORM 2

 

    DELIVERY INSTRUCTIONS:  Address for mailing of
    stock or new Rights Certificate or any cash payment in
    accordance with the Prospectus, if different from the address
    shown on the face of this Rights Certificate.

 

    Name: _
    _

 

    Address: _
    _

 

 

    GUARANTEE
    OF SIGNATURE(S)

 

    YOU MUST HAVE YOUR SIGNATURE GUARANTEED IF YOU WISH TO HAVE YOUR
    SHARES DELIVERED TO AN ADDRESS OTHER THAN THE ONE LISTED ON
    THE FACT OF THIS RIGHTS CERTIFICATE OR TO A STOCKHOLDER OTHER
    THAN THE REGISTERED HOLDER.

 

    Your signature must be guaranteed by an Eligible Guarantor
    Institution, as defined in
    rule 17Ad-15
    of the Securities Exchange Act of 1934, as amended. These
    generally include (a) a commercial bank or trust company,
    (b) a member firm of a domestic stock exchange, or
    (c) a credit union.

	 	 	 
	

Signature: _ _

	
 
	
 

	

           (Name
    of Bank for Firm)
    

	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
 

	

    By: _
    _
    

	
 
	
 

	

           (Signature
    of Officer)exv10w43

 

Exhibit
10.43

NOVINT TECHNOLOGIES, INC.

2004 STOCK INCENTIVE PLAN

ADDENDUM NO. 1

     The undersigned, Thomas G. Anderson, the duly elected and acting President of Novint
Technologies, Inc., a Delaware corporation (the “Corporation”), does hereby certify that on
November 1, 2006, the Board of Directors of the Corporation approved the following changes to the
2004 Stock Incentive Plan (the “Plan”):

     Section V(A) of the Plan is hereby amended to read in its entirety:

     The stock issuable under the Plan shall be shares of authorized but unissued or reacquired
Common Stock, including shares repurchased by the Corporation on the open market. The maximum
number of shares of Common Stock initially reserved for issuance over the term of the Plan shall
not exceed 7,500,000 shares.

     Wherefore, I have set my hand this 1st day of November 2006.

	 	 	 	 	 
	 	Thomas G. Anderson

 	 
	 	/s/ Thomas G. Anderson
 	 
	 	PresidentExhibit 10.1

 

EXECUTION COPY

FIFTH AMENDMENT AND WAIVER, dated as November 16, 2006 (“Amendment”), to CREDIT AND SECURITY AGREEMENT, dated as of June 29, 2004 (as amended from time to time, the “Credit Agreement”), among INFOTECH USA, INC., a New Jersey corporation, as borrower (the “Borrower”), INFOTECH USA, INC., a Delaware corporation, and INFORMATION TECHNOLOGY SERVICES, INC., a New York corporation, as guarantors (together with the
Borrower, the “Obligors”), and WELLS FARGO BANK, NATIONAL ASSOCIATION, acting through its Wells Fargo Business Credit operating division (the “Lender”).  Terms which are capitalized in this Amendment and not otherwise defined shall have the meanings ascribed to such terms in the Credit Agreement.

WHEREAS, the Obligors have requested that the Lender waive as Events of Default violations of two of the financial covenants contained in the Credit Agreement, and modify certain terms of the Credit Agreement, and the Lender has agreed to the foregoing request, on the terms and conditions set forth herein;

NOW, THEREFORE, in consideration of the mutual promises contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Obligors and the Lender hereby agree as follows:

Section One.  Amendments.  Effective as of the date hereof, upon satisfaction of the conditions precedent set forth in Section Five hereof, the Credit Agreement is hereby amended as follows:

(a)           Section 1.1 Definitions.  The definitions of the terms “Adjusted Book Net Worth Amount” and “Original Maturity Date” set forth in Section 1.1 of the Credit Agreement is deleted in its entirety and the following substituted in lieu thereof, respectively:

“Adjusted Book Net Worth Amount” means, with respect to any fiscal quarter of the Obligors, an amount equal to the sum of:  (a) $1,575,000; plus (b) an amount equal to 50% of the aggregate consolidated Net Income of the Obligors for all fiscal years, commencing with the fiscal year ending in September 2008 and ending with the most recently completed fiscal year prior to such fiscal quarter, provided, that, for purposes of this definition, if the consolidated Net Income of the Obligors for any fiscal year is a negative number, such Net Income for such fiscal year shall be deemed equal to zero.”

“Original Maturity Date” means June 29, 2008.

(b)          Section 6.2(a).  Maximum Debt to Book Net Worth Ratio.  Section 6.2(a) of the Credit Agreement is deleted in its entirety and the following substituted in lieu thereof:

“(a) Maximum Debt to Rook Net Worth Ratio.  The Obligors will maintain a Debt to Book Net Worth Ratio of not more than 2.10 to 1.00, determined as of the end of each fiscal quarter.”

 

 

(c)           Section 6.2(b) Minimum Book Net Worth.  Section 6.2(b) of the Credit Agreement is deleted in its entirety and the following substituted in lieu thereof:

“(b) Minimum Book Net Worth.  The Obligors will have a Book Net Worth of not less than:  (a) $1,900,000, as of the end of the fiscal quarter ending in December 2006; (b) $1,800,000, as of the end of the fiscal quarter ending in March 2007; (c) $1,725,000, as of the end of the fiscal quarter ending in June 2007; (d) $1,575,000, as of the end of the fiscal quarter ending in September 2007; and (e) the Adjusted Book Net Worth Amount, as of the end of each fiscal quarter ending after September 30, 2007.”

(d)          Section 6.2(c) Minimum Net Income.  Section 6.2(c) of the Credit Agreement is deleted in its entirety and the following substituted in lieu thereof:

“(c) Minimum Net Income.  As of the end of each period set forth below, the Obligors will have achieved Net Income, on a cumulative quarterly basis, of not worse than the amount set forth below opposite such period:

	
             
 	
            
 “Period
 	
             
 	
            Minimum

Net Income
 
	
            A
 	
            fiscal quarter ending in December 2006
 	
             
 	
            $(220,000)
 
	
            B
 	
            two (2) fiscal quarters ending in March 2007
 	
             
 	
            $(320,000)
 
	
            C
 	
            three (3) fiscal quarters ending in June 2007
 	
             
 	
            $(400,000)
 
	
            D
 	
            four (4) fiscal quarters ending in September 2007
 	
             
 	
            $(570,000)
 

As of the end of each fiscal quarter ending after September 30, 2007, the Obligors will have Net Income on a cumulative quarterly basis of not less than eighty percent (80%) of the projected cumulative Net Income (or worse than one hundred percent (100%) of the projected cumulative Net Loss) of the Obligors for such period, as set forth in the projections for such period delivered to the Lender.  The Obligors’ failure to deliver projections to the Lender pursuant to Section 6.1(d) that are acceptable to the Lender, in its sole discretion, shall constitute an Event of Default.”

Section Two.  Waivers.  The Obligors have notified the Lender that:  (a) the Obligor Book Net Worth as of the end of the fiscal quarter ended in September 2006 was $2,155,000 and (b) the Obligors’ cumulative Net Income for the four fiscal quarters ended in September 2006 was 

 

2

 

 

$(2,142,000).  The failure of the Obligors to have:  (a) Book Net Worth as of the end of the fiscal quarter ended in September 2006 of not less than $3,200,000, in violation of Section 6.2(b) of the Credit Agreement; and (b) cumulative Net Income for the four fiscal quarters ended in September 2006 in an amount not worse than $(1,045,000), in violation of Section 6.2(c) of the Credit Agreement, in each case constitutes an Event of Default under Section 7.1(b) of the Credit Agreement.  The Events of Default expressly referred to in this paragraph are herein collectively referred to as the “Designated Defaults.”

Effective as of the date hereof, upon the satisfaction of the conditions precedent set forth in Section Five hereof, the Lender hereby waives the Designated Defaults as an Events of Default.  Nothing herein shall constitute a waiver by the Lender of any other Default or Event of Default, whether or not the Lender has any knowledge thereof, nor shall anything herein be deemed a waiver by the Lender of any Default or Event of Default which may occur after the date of this Amendment.

Section Three.  Amendment and Waiver Fee.  In consideration for the amendments and waivers provided herein, the Borrower shall pay to the Lender a non-refundable fee in the amount of $25,000 (the “Amendment Fee”), which fee shall be fully earned on the date hereof and payable in three (3) installments as follows:  $5,000 on December 1, 2006; $10,000 on January 2, 2007; and $10,000 on February 6, 2007.  The failure of the Borrower to pay any installment of the Amendment Fee when due shall constitute an Event of Default.

Section Four.  Representations and Warranties.  To induce the Lender to enter into this Amendment, each Obligor warrants and represents to the Lender as follows:

(a)           all of the representations and warranties contained in the Credit Agreement and each other Loan Document continue to be true and correct in all material respects as of the date hereof, as if repeated as of the date hereof, except for such representations and warranties which, by their terms, are only made as of a previous date;

(b)          the execution, delivery and performance of this Amendment by each Obligor is within its corporate powers, has been duly authorized by all necessary corporate action on its part, and each Obligor has received all necessary consents and approvals (if any shall be required) for the execution and delivery of this Amendment;

(c)           upon its execution, this Amendment shall constitute the legal, valid and binding obligation of each Obligor, enforceable against each Obligor in accordance with its terms, except as such enforceability may be limited by (i) bankruptcy, insolvency or similar laws affecting creditors’ rights generally and (ii) general principles of equity;

(d)          no Obligor is in default under any indenture, mortgage, deed of trust, or other material agreement or material instrument to which it is a party or by which it may be bound.  Neither the execution and delivery of this Amendment, nor the consummation of the transactions herein contemplated, nor compliance with the provisions hereof will (i) violate any law or regulation applicable to any Obligor, (ii) cause a violation by any Obligor of any order or decree of any court or government instrumentality applicable to it, (iii) conflict with, or result in the breach of, or constitute a default under, any indenture, mortgage, deed of trust, or other material agreement or material instrument to which any Obligor is a party or by which it may be bound, (iv) result in the creation or 

 

3

 

 

imposition of any lien, charge, or encumbrance upon any property of any Obligor, except in favor of the Lender, to secure the Obligations, or (v) violate any provision of the Constituent Documents of any Obligor;

(e)           no Default or Event of Default has occurred and is continuing, except for the Designated Defaults which are being waived pursuant to Section Two hereof; and

(f)           since September 30, 2006, no change or event has occurred which has had or is reasonably likely to have a Material Adverse Effect.

Section Five.  Conditions Precedent.  This Amendment shall become effective upon the date on which all of the following events shall have occurred; provided, however, that in the event that all of the following events shall not have occurred on or before November 16, 2006, then this Amendment shall thereafter be null and void and cease to be of any force and effect:

(a)           the Lender shall have received this Amendment, duly executed by each Obligor;

(b)          the Lender shall have received an Officer’s Certificate, in the form Exhibit A hereto, duly executed by an officer of Borrower;

(c)           the Lender shall have received payment of all fees and disbursements incurred by the Lender in connection with the preparation, negotiation and closing of this Amendment and the transactions contemplated to occur hereunder; and

(d)           except for the Designated Defaults which are being waived pursuant to Section Two hereof, no Default or Event of Default shall have occurred and be continuing, and no event or development which has had or is reasonably likely to have a Material Adverse Effect shall have occurred, in each case since the date of the financial statements referred to above.

Section Six.  General Provisions.

(a)           Except as herein expressly amended, the Credit Agreement and all of the other Loan Documents are ratified and confirmed in all respects and shall remain in full force and effect in accordance with their respective terms.

(b)          All references to the Credit Agreement in the Loan Documents shall mean the Credit Agreement as amended as of the effective date hereof, and as amended hereby and as hereafter amended, supplemented and modified from time to time.

(c)           This Amendment embodies the entire agreement between the parties hereto with respect to the subject matter hereof and supercedes all prior agreements, commitments, arrangements, negotiations or understandings, whether written or oral, of the parties with respect thereto.

(d)           This Amendment shall be governed by and construed in accordance with the internal laws of the State of New York, without regard to the conflict of laws principals thereof.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

4

 

 

IN WITNESS WHEREOF, the Obligors and the Lender have signed below to indicate their agreement with the foregoing and their intent to be bound thereby.

 

	
             
 	
            INFOTECH USA, INC., a New Jersey corporation
 
	
             
 	
             
 	
             
 
	
             
 	
            By:
 	
            /s/ J. Robert Patterson
 
	
             
 	
            Name:
 	
            J. Robert Patterson
 
	
             
 	
            Title:
 	
            Secretary and Treasurer
 

 

	
             
 	
            INFOTECH USA, INC., a Delaware corporation
 
	
             
 	
             
 	
             
 
	
             
 	
            By:
 	
            /s/ J. Robert Patterson
 
	
             
 	
            Name:
 	
            J. Robert Patterson
 
	
             
 	
            Title:
 	
            Chief Financial Officer, Vice President 
 and Treasurer
 

 

	
             
 	
            INFORMATION TECHNOLOGY SERVICES, INC.
 
	
             
 	
             
 	
             
 
	
             
 	
            By:
 	
            /s/ J. Robert Patterson
 
	
             
 	
            Name:
 	
            J. Robert Patterson
 
	
             
 	
            Title:
 	
            Chief Financial Officer, Vice President and
 Treasurer
 

 

	
             
 	
            WELLS FARGO BANK, NATIONAL
 ASSOCIATION, acting through its Wells Fargo
 Business Credit operating division
 
	
             
 	
             
 	
             
 
	
             
 	
            By:
 	
            /s/ Sal Mutone
 
	
             
 	
            Name:
 	
            Sal Mutone
 
	
             
 	
            Title:
 	
            Vice President 
 

 

 

5

 

 

EXHIBIT A

 

OFFICER’S CERTIFICATE

	
            TO:
 	
            Wells Fargo Bank, National Association, 
 

acting through its Wells Fargo Business Credit 

operating division

119 West 40th Street

New York, NY 10018

To induce you to enter into that certain Fifth Amendment and Waiver, dated on or about the date hereof (the “Amendment”), to the Credit and Security Agreement dated as of June 29, 2004 among INFOTECH USA, INC., A New Jersey corporation (“Borrower”), INFOTECH USA, INC., a Delaware corporation, INFORMATION TECHNOLOGY SERVICES, INC., a Delaware corporation and you, I DO HEREBY CERTIFY TO YOU, in my capacity as Secretary and Treasurer of the Borrower, that each and every representation and warranty set forth in Section Four of the Amendment is true and correct as of the date hereof.

IN WITNESS WHEREOF, the undersigned has duly executed this Officer’s Certificate as of November 16, 2006.

	
             
 	
            INFOTECH USA, INC.
 
	
             
 	
             
 	
             
 
	
             
 	
            By:
 	
            /s/ J. Robert Patterson
 
	
             
 	
             
 	
            J. Robert Patterson
 

 

 

6

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