Document:

Form of Rights Certificate

 

Exhibit 4.1

eLOYALTY CORPORATION

RIGHTS CERTIFICATE FOR RIGHTS OFFERING

TO STOCKHOLDERS OF RECORD ON OCTOBER 8, 2001

	 	 	 
	

Rights Certificate Number	 	

CUSIP Number
	 
	 
	

Rights	 	

Record Date Common Shares

     eLoyalty Corporation (the “Company”) is conducting a rights offering (the
“Rights Offering”) pursuant to which each stockholder of record of the
Company’s common stock, par value $0.01 per share (the “Common Stock”), as of
5:00 p.m., New York City time, on October 8, 2001 (the “Record Date”) is
receiving one right (a “Right”) for each share of Common Stock held on the
Record Date. Each Right entitles its holder to subscribe for, at such holder’s
option, either $1.60, $1.00 or $0.50 (the “Subscription Price”) of 7% Series B
Convertible Preferred Stock, par value $0.01 per share, of the Company (the
“Preferred Stock”). The purchase price per share of Preferred Stock will be
the lesser of $0.51 and 90% of the average of the last sale price of the Common
Stock over the twenty trading days through and including the fourth trading day
prior to the closing date of the Rights Offering, subject to adjustment for a
proposed one-for-ten reverse split of the Common Stock to be effected
immediately prior to the closing of the Rights Offering. The Rights will
expire at 5:00 p.m., New York City time, on December 19, 2001 (the “Closing
Date”).

     For a more complete description of the terms and conditions of the Rights
Offering, please refer to the Prospectus for the Rights Offering, dated
November 13, 2001, which is incorporated herein by reference. Copies of the
Prospectus are available upon request from the Information Agent for the Rights
Offering, MacKenzie Partners, Inc. (toll-free (800) 322-2885).

     You must own at least one share of pre-split Common Stock (or one-tenth of
a share of post-split Common Stock) on the Closing Date for each Right that you
exercise. The Company reserves the right to rescind any purchase of Preferred
Stock in violation of this requirement.

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

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

     This Rights Certificate must be duly completed and received by the
Subscription Agent for the Rights Offering, Mellon Bank, N.A., together with
payment in full of the Subscription Price for each Right that is exercised, by
5:00 p.m., New York City time, on December 19, 2001, unless extended by the
Company. Any Rights not exercised prior to such time will be null and void.
Any subscription for shares of Preferred Stock made hereby is irrevocable.

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

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

 

 

(reverse of Rights Certificate)

FORM 1

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

	 	(a)	 	Number of Rights exercised:                    *
	 
	 	(b)	 	Dollar amount of Preferred Stock subscribed for per Right (check
only one box):
	 
	 	 	 	 $1.60
	 
	 	 	 	 $1.00
	 
	 	 	 	 $0.50
	 
	 	(c)	 	Total Subscription Price (multiply the number of Rights
specified in line (a) by the dollar amount checked in line (b)) =
$                    total payment.**

     Method of payment (check and complete appropriate boxes):

	 	 	 
		 	
Certified or cashier’s check drawn upon a U.S. bank, personal check or U.S. postal money order payable to “Mellon Investor
Services (acting on behalf of Mellon Bank, N.A., as Subscription Agent for eLoyalty)”; or
	 
		 	
Wire transfer directed to The Chase Manhattan Bank, New York, NY,
ABA No. 021 000 021, Acct. No. 323-885489, MIS REORG CONTROL for
the benefit of eLoyalty Corporation, A/C # 601569163 Attn Evelyn O’Connor 201-296-4515.

*     The undersigned hereby represents that the undersigned will own at least one
share of pre-split Common Stock (or one-tenth of a share of post-split Common
Stock) on the Closing Date for each Right exercised.

**     If the number of Rights being exercised is not specified in line (a) above,
the Rights will expire unexercised and the Subscription Price will be returned
without interest. If the dollar amount of Preferred Stock subscribed for per
Right is not specified in line (b) above, then the Company may accept the
Rights Certificate and Subscription Price for the maximum number of Rights (up
to the number of Rights specified in line (a) above) that may be exercised
based on the actual payment enclosed or transmitted. If the Subscription Price
that is enclosed or transmitted is insufficient to exercise all of the Rights
specified in line (a) above at the dollar amount of Preferred Stock per Right
specified in line (b) above, then (i) the Company may apply the Subscription
Price to the exercise of all of the Rights specified in line (a) at a lower
dollar amount, either $1.00 or $0.50 of Preferred Stock per Right, as
applicable, or (ii) if the Subscription Price enclosed or transmitted is
insufficient to exercise all of the Rights specified in line (a) above at $0.50
of Preferred Stock per Right, then the Company may accept the Rights
Certificate and Subscription Price for the maximum number of Rights that may be
exercised based on the actual payment enclosed or transmitted. If the
aggregate Subscription Price enclosed or transmitted exceeds the aggregate
amount applied to the payment of the purchase price for the Preferred Stock,
the unused portion of the Subscription Price shall be returned promptly
following the Closing Date, plus interest accruing after the Closing Date.

	 	 	 
	Signature:
	 	
Telephone No.: (     )     

	 
	Print Name:      
	 	 

 

 

FORM 2

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

Name:     

Address:Specimen Certificate

 

Exhibit 4.3

SPECIMEN

     See reverse side for important notice on transfer restrictions and other information.

	 	 	 
	Certificate Number	 	
Shares
	 
	
	 	

Incorporated under the laws of

the State of Delaware

eLOYALTY CORPORATION
7% Series B Convertible Preferred Stock

CUSIP______________

     This certifies that  __________ is the owner of  ________ fully paid and non-assessable shares
of 7% Series B Convertible Preferred Stock, $.01 par value per share, of eLoyalty Corporation, a Delaware corporation,
transferable on the books of the Corporation in person or by duly authorized attorney upon surrender of this
certificate properly endorsed. This certificate and the shares represented hereby are issued and shall be
held subject to all of the provisions of the Certificate of Incorporation of the Corporation (copies of which
are on file with the Transfer Agent) to all of which the holder by acceptance hereof assents. This certificate
is not valid unless endorsed by the Transfer Agent and registered by the Registrar.

	 	 	 
	Dated: __________________	 	 
	 
	 

	 	 
	 
	eLoyalty Corporation	 	
Mellon Investor Services, LLC,
	 	 	
Transfer Agent and Registrar
	 
	By:	 	
By:
	 

Title:	 	
 

Title:
	Name:	 	
Name:
	 
	By:	 	
By:
	 

Title:	 	
 

Title:
	Name:	 	
Name:

 

 

     The following abbreviations, when used in the inscription on the face of this certificate, will be construed
as though they were written out in full according to applicable laws or regulations:

	 	 	 
	TEN COM — as tenants in common	 	
UNIF GIFT MIN ACT —  _____ Custodian  _____ 
	 	 	
under Uniform Gifts to Minors Act of  _____ 
	 
	TEN ENT — as tenants by the entireties	 	 
	JT TEN — as joint tenants with right of survivorship	 	 
	     and not as tenants in common	 	 

     FOR VALUE RECEIVED,  ____________   hereby sells, assign and transfers unto  ________________  shares of 7%
Series B Convertible Preferred Stock represented by this certificate, and does hereby constitute and appoint
 _____________  attorney to transfer said shares on the books of the within named Corporation will full power
of substitution in the premises.

Dated:  _________________

In the presence of  _______________

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN TRANSFERABILITY RESTRICTIONS AS SET FORTH IN THE
CERTIFICATE OF DESIGNATIONS FOR THESE SHARES AS FILED WITH THE SECRETARY OF STATE OF THE STATE OF DELAWARE ON
[     ], 2001.
COPIES OF SUCH DOCUMENTS ARE ON FILE AND MAY BE INSPECTED AT THE CORPORATION’S PRINCIPAL EXECUTIVE OFFICES BY THE
REGISTERED
HOLDER OF THIS CERTIFICATE.

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE ISSUED AND SHALL BE HELD SUBJECT TO ALL THE PROVISIONS OF THE
CERTIFICATE OF
INCORPORATION AND THE BYLAWS OF THE CORPORATION AND ANY AMENDMENTS THERETO, TO AL OF WHICH THE HOLDER OF THIS
CERTIFICATE, BY
ACCEPTANCE HEREOF, ASSENTS. THE CORPORATION WILL FURNISH WITHOUT CHARGE TO EACH STOCKHOLDER WHO SO REQUESTS THE
DESIGNATIONS,
PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS OF EACH CLASS OF STOCK OR SERIES
THEREOF OF THE
CORPORATION, AND THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS OF SUCH PREFERENCES AND/OR RIGHTS. SUCH REQUEST
MAY BE MADE
TO THE SECRETARY OF THE CORPORATION AT ITS PRINCIPAL EXECUTIVE OFFICES, OR THE TRANSFER AGENT.

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