Document:

<PAGE>

                                                                   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
<PAGE>

      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
<PAGE>

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
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      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
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                                   EXHIBIT A

                             SCHEDULE OF INVESTORS

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------
The following are the "TCV                    Maximum Aggregate Investment:      Percentage of TCV
Investors" for the purposes of                                                   Shares:
the Agreement (list continues
on multiple pages):
-------------------------------------------------------------------------------------------------------------
<S>                                           <C>                                <C>
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)
-------------------------------------------------------------------------------------------------------------
</TABLE>

                                       5
<PAGE>

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------
The following are the "TCV                    Maximum Aggregate Investment:      Percentage of TCV
Investors" for the purposes of                                                   Shares:
the Agreement (list continues
on multiple pages):
-------------------------------------------------------------------------------------------------------------
<S>                                           <C>                                <C>
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)
-------------------------------------------------------------------------------------------------------------
</TABLE>

                                       6
<PAGE>

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------
The following are the "SH                     Maximum Aggregate Investment:      Percentage of SH
Investors" for the purposes of                                                   Shares:
the Agreement (list continues
on multiple pages):
-------------------------------------------------------------------------------------------------------------
<S>                                           <C>                                <C>
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
-------------------------------------------------------------------------------------------------------------
</TABLE>

                                       7
<PAGE>

                                    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
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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
<PAGE>

      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
<PAGE>

            (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
<PAGE>

      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
<PAGE>

            (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
<PAGE>

      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
<PAGE>

      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
<PAGE>

      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
<PAGE>

      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
<PAGE>

            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
<PAGE>

      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
<PAGE>

      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<PAGE>

                                                                   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:
<PAGE>

      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
<PAGE>

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
<PAGE>

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
<PAGE>

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
post-effective 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
<PAGE>

                  (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
<PAGE>

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
<PAGE>

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
<PAGE>

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
<PAGE>

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
<PAGE>

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
<PAGE>

            (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
<PAGE>

      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
<PAGE>

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
<PAGE>

            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
<PAGE>

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
<PAGE>

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
<PAGE>

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
<PAGE>

                                   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

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