Document:

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                                                                   Exhibit 10.24

                             INSTALLMENT STOCK AWARD

         eLoyalty Corporation, a Delaware corporation (the "Company"), hereby
grants to the individual whose name appears below (the "Participant"), this
Installment Stock Award (this "Award") for the number of shares of its Common
Stock, $0.01 par value per share (the "Shares"), as set forth below. Any term
capitalized but not defined in this Agreement will have the meaning set forth in
the ELOYALTY CORPORATION __________ STOCK INCENTIVE PLAN (the "Plan").

         The Plan provides for the grant of shares of Common Stock to eligible
individuals as approved by the Company's Board of Directors. In the exercise of
its discretion under the Plan, the Company's Board of Directors has determined
that the Participant should receive an installment stock award under the Plan
and, accordingly, the Company hereby agrees as follows:

         PARTICIPANT'S NAME:                    _______________________________
         NUMBER OF SHARES SUBJECT TO AWARD:     __________________
         DATE OF AWARD:                         __________________

         1. Grant. The Company hereby agrees to grant to the Participant the
right to receive the Shares, subject to the terms and conditions of this Award.
The Shares will be granted in ___________ quarterly installments
__________________, beginning __________________ and ending ___________________;
provided that the Participant is employed by the Company on such dates. If the
application of this Section 1 would result in the grant of a fraction of a
Share, such fractional Share shall be rounded up to the next whole Share, in
which case adjustments may be made to future issuances to prevent exceeding the
total number of shares subject to the Award, as provided above. This Award will
be subject to the terms and conditions of the Plan. This Award constitutes the
right, subject to the terms and conditions of the Plan and this Agreement, to a
distribution of the Shares on each future quarterly grant date.

         2. Effect of Termination of Employment or Service. If the Participant
terminates employment or service with the Company for any reason before all of
the Shares have been granted under this Award, the Company will not have any
further obligations to the Participant under this Award and no additional Shares
will be granted on and after the effective date of the termination; provided,
however, that if the Participant's employment or service is terminated on
account of the Participant's (a) death or Disability (as defined below), all the
Shares that have not otherwise been granted under this Award will be granted as
of the date of such event; or (b) retirement (with the Company's approval at age
55 or greater and with at least 5 years of continuous service with the Company,
or with the Company and its predecessor on a combined and uninterrupted basis),
an additional 20% of the Shares subject to this Award (but not in excess of the
remaining number of Shares not yet granted under this Award) will be granted as
of the date of the Participant's retirement. Notwithstanding the foregoing, if
the Participant terminates employment or service with the Company because he or
she has become employed by an affiliate or subsidiary of the Company, the
Participant shall continue to be eligible to receive a grant of the Shares in
accordance with the schedule set forth in the preceding paragraph.

         For purposes of this Agreement, "Disability" means a physical or mental
condition of a Participant resulting from a bodily injury, disease or mental
disorder that renders the Participant eligible for benefits under the Company's
long-term disability plan (as in effect as of the date of the Participant's
termination of employment and regardless of whether the Participant is otherwise
eligible for benefits under such plan), as determined by the Company in its sole
discretion.

         The Board of Directors has the right to determine, in its sole
discretion, how the Participant's leave of absence will affect the terms of this
Award, including the grant of Shares hereunder.

         3. Award Confers No Rights as Stockholder. Neither the Participant nor
any other person has or will have any rights as a security holder of the Company
or any successor with respect to any Shares that are or may be granted hereunder
unless and until the Shares are granted and the Participant becomes a holder of
record with respect to such Shares.

         4. Terms and Conditions of Distribution. The Company, or its transfer
agent, will transfer the portion of the Shares that have been granted to a
brokerage account established by the Company on behalf of the Participant as
soon as practicable after each installment of the Shares is granted. If the
Participant dies before the Company has granted any portion of the Shares, the
Company will transfer that portion of the Shares to a brokerage account
established by the Company on behalf of the beneficiary designated by the
Participant on a form provided by the Company for this purpose. If the
Participant failed to designate a beneficiary, the Company will distribute
certificates for the Shares in accordance with the Participant's will or, if the
Participant

_______________                      Page 1              Installment Stock Award

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did not have a will, the Shares will be distributed in accordance with the laws
of descent and distribution. The Company will distribute certificates for any
undistributed portion of the Shares no later than six months after the
Participant's death.

         The Participant, or the alternate recipient identified in the preceding
paragraph, will be required to satisfy any potential federal, state, local or
other tax withholding liability. Such liability must be satisfied at the time
the Shares are granted. In order to satisfy such withholding obligation, the
Company shall withhold whole shares of Common Stock which would otherwise be
delivered having an aggregate Fair Market Value, determined as of the Tax Date
in an amount necessary to satisfy the amount of applicable taxes required to be
withheld; provided, however, that in the event the Participant is subject to
Section 16 of the Exchange Act, the Committee may require that the method of
satisfying such an obligation be in compliance with Section 16 and the rules and
regulations thereunder.

         The Company will not make any distribution under this Section 4 before
the first date any portion of the Shares may be granted to the Participant
without penalty or forfeiture under federal or state laws or regulations
governing short swing trading of securities. In determining whether a
distribution would result in such a penalty or forfeiture, the Company and the
Committee may rely upon information reasonably available to them or upon
representations of the Participant's legal or personal representative.

         5. Delivery of Certificates. Despite the provisions of Section 4
hereof, the Company is not required to issue any Shares on any quarterly
installment date, or issue or deliver any certificates for Shares if at any time
the Company determines that the listing, registration or qualification of the
Shares upon any securities exchange or under any law, or the consent or approval
of any governmental body, or the taking of any other action is necessary or
desirable as a condition of, or in connection with, the delivery of the Shares
thereunder, unless such listing, registration, qualification, consent, approval
or other action has been effected or obtained, free of any conditions not
acceptable to the Company.

         6. No Right to Employment or Service. Nothing in the Plan or this
Agreement will be construed as creating any right in the Participant to
continued employment or service with the Company, or as altering or amending the
existing terms and conditions of the Participant's employment or service.

         7. Nontransferability. No interest of the Participant or any designated
beneficiary in or under this Award will be assignable or transferable by
voluntary or involuntary act or by operation of law, other than as set forth in
Section 4 hereof. Distribution of the Shares will be made only to the
Participant; or, if the Committee has been provided with evidence acceptable to
it that the Participant is legally incompetent, the Participant's personal
representative; or, if the Participant is deceased, to the designated
beneficiary or other appropriate recipient in accordance with Section 4 hereof.
The Committee may require personal receipts or endorsements of a Participant's
personal representative, designated beneficiary or an alternate recipient. Any
effort to otherwise assign or transfer the rights under this Award will be
wholly ineffective, and will be grounds for termination by the Committee of all
rights of the Participant and his or her beneficiary in and under this Award.

         8. Administration. The Compensation Committee (the "Committee") of the
Board of Directors of the Company has the authority to manage and supervise the
administration of the Plan. The Participant's rights under this Award are
expressly subject to the terms and conditions of the Plan, including any
required continued shareholder approval of the Plan, and to any guidelines the
Committee adopts from time to time that are not inconsistent with the Plan.

         9. Interpretation; Governing Law. Any interpretation by the Committee
of the terms and conditions of the Plan, this Award or any guidelines adopted as
described in Section 8 hereof will be final. This Award and all determinations
made and actions taken pursuant hereto, to the extent not otherwise governed by
the Code or the laws of the United States, will be governed by the laws of the
State of Delaware and construed in accordance therewith without giving effect to
the principles of conflicts of law.

         10. General. This Award is subject to the provisions of the Plan, and
will be interpreted in accordance therewith. In the event of any discrepancy
between this Award, or any other material describing this Award or the Shares to
be awarded hereunder, and the actual terms of the Plan, the Plan will govern in
all respects. A copy of the Plan is available upon request by contacting the
Legal Department at the Company's Lake Forest, Illinois office.

         IN WITNESS WHEREOF, this Award has been executed as of the day and year
first above written.

                                      ELOYALTY CORPORATION

                                      By:
                                         ---------------------------------------
                                                    Kelly D. Conway
                                      Its: President and Chief Executive Officer

_______________                      Page 2              Installment Stock Award<PAGE>

                                                                   EXHIBIT 10.25

                         EXECUTIVE EMPLOYMENT AGREEMENT

      eLOYALTY CORPORATION (the "Company"), and CHRISTOPHER J. DANSON, an
individual ("Employee"), enter into this Employment Agreement ("Agreement") as
of December 17, 2004.

      WHEREAS, the Company desires to continue to employ Employee to provide
personal services to the Company and to provide Employee with certain
compensation and benefits in return for his services; and

      WHEREAS, Employee wishes to continue to be employed by the Company and to
provide personal services to the Company in return for certain compensation and
benefits.

      NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, it is hereby agreed by and between the parties hereto as
follows:

      1. DUTIES. The Company shall continue to employ Employee as its Vice
President, Delivery, and Employee accepts such employment upon the terms and
conditions herein. Employee shall have such responsibilities, duties and
authority in all material respects as are presently assigned to Employee and
such other responsibilities, duties and authority as the President & Chief
Executive Officer may reasonably designate and are customarily associated with
his position. During the term of his employment with the Company, Employee shall
perform faithfully the duties assigned to him to the best of his ability, and
Employee shall devote his full and undivided business time and attention to the
transaction of the Company's business.

      2. OUTSIDE ACTIVITIES.

            (a) NON-COMPANY ACTIVITIES. Except in conformity with the
requirements with the Company's then-effective Code of Ethical Business Conduct,
Employee will not during the term of this Agreement undertake or engage (other
than as a passive investor) in any other employment, occupation or business
enterprise, whether as an agent, partner, proprietor, officer, director,
employee, consultant, contractor or otherwise, whether during or outside the
business hours of the Company. Employee may engage in civic and not-for-profit
activities so long as such activities do not interfere with the performance of
his duties hereunder.

            (b) NO ADVERSE INTERESTS. Except as permitted by Paragraph 2(c),
during his employment Employee agrees not to acquire, assume or participate in,
directly or indirectly, any position, investment or interest which is known or
should be known by him to be adverse or antagonistic to the Company, its
business or prospects, financial or otherwise.

            (c) NON-COMPETITION. During the term of his employment by the
Company, except on behalf of the Company, Employee will not directly or
indirectly, whether as a stockholder, agent, partner, proprietor, officer,
director, employee, consultant, contractor, or in any capacity whatsoever,
engage in, become financially interested in, be employed by or have any business
connection with any other person, corporation, firm, partnership or other entity

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whatsoever known by him to compete directly with the Company, anywhere
throughout the world, in any line of business engaged in (or planned to be
engaged in) by the Company; provided, however, that anything above to the
contrary notwithstanding, Employee may own, as a passive investor, public
securities of any competitor corporation, so long as his direct holdings in any
one such corporation shall not in the aggregate constitute more than one percent
(1%) of the voting stock of such corporation.

      3. TERM OF EMPLOYMENT; TERMINATION.

            (a) AT-WILL RELATIONSHIP. Employee's employment relationship is
at-will. Either Employee or the Company may terminate the employment
relationship at any time, for any reason or no reason, with or without Cause or
advance notice.

            (b) TERMINATION BY THE COMPANY WITHOUT CAUSE; TERMINATION BY
EMPLOYEE WITH GOOD REASON.

                  (i) CAUSE DEFINITION. For purposes of this Agreement, "Cause"
shall mean any of the following: (A) conviction, including a plea of guilty or
no contest, of any felony or any crime involving moral turpitude or dishonesty;
(B) fraud upon the Company (or an affiliate), embezzlement or misappropriation
of corporate funds; (C) willful acts of dishonesty materially harmful to the
Company; (D) activities materially harmful to the Company's reputation; (E)
Employee's willful misconduct, willful refusal to perform his duties, or
substantial willful disregard of his duties, provided that the Company first
provides Employee with written notice of such conduct and thirty (30) days to
cure such conduct, if such conduct is reasonably susceptible to cure; or (E)
material breach causing material harm to the Company of this Agreement, any
other agreement with the Company, any policy of the Company, or any statutory
duty or common law duty of loyalty owed to the Company; provided, no act or
omission on Employee's part shall be considered "willful" unless it is done by
the Employee without reasonable belief that the Employee's action was in the
best interests of the Company.

                  (ii) GOOD REASON DEFINITION. For the purposes of this
Agreement, "Good Reason" shall mean: (A) a reduction of Employee's base salary
below the amount set forth in Paragraph 4 of this Agreement, or a reduction in
the "Target Bonus Percentage" defined in Paragraph 5 of this Agreement), unless
such reduction is shared proportionally by the three most highly-salaried
officers of the Company; (B) an involuntary relocation of Employee's place of
work to any location outside of the metropolitan area in which his primary
office is located immediately prior to the relocation, excluding temporary
periods of thirty (30) days or less and ordinary course business travel; (C) a
significant diminution by the Company in Employee's position (including offices,
titles and reporting relationships), authority, duties or responsibilities,
excluding diminutions resulting in the ordinary course from the Company becoming
pursuant to a Change of Control of (x) part of a larger organization in which
Employee directly reports to the Chief Executive Officer of such organization;
or (y) a subsidiary or equivalent separate functional business unit of a larger
organization; (D) a material breach by the Company of this Agreement; or (E)
failure by the Company to assign this Agreement to a successor upon a Change of
Control. No Good Reason shall exist where: (1) Employee consents to the event
that forms the basis for the Good Reason resignation; (2) Employee does not
provide the Company's President and Chief Executive Officer with written notice
describing in detail the Good Reason

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within thirty (30) days of its occurrence; or (3) the Company cures the Good
Reason within thirty (30) days of its receipt of such notice, if such conduct is
reasonably susceptible to cure.

                  (iii) SEVERANCE BENEFITS. In the event that Employee's
employment is terminated without Cause by the Company or terminated by Employee
with Good Reason, Employee shall receive the following as his sole and exclusive
severance benefits (collectively, the "Severance Benefits"):

                        (1) SEVERANCE PAY. Employee will receive a lump sum
payment, within seven (7) days following the effective date of termination,
equal to twelve (12) months of his then current base salary, less standard
payroll deductions and withholdings (the "Severance Payment").

                        (2) SEVERANCE BONUS. Employee will be paid a bonus (the
"Severance Bonus"), within seven (7) days following the effective date of
termination, equal to the average of (A) the annual bonus he was paid for year
immediately preceding the termination and (B) a reasonable estimate of his
annual bonus for the year in which the termination occurs under the Company's
then-current bonus plan if any, less standard payroll deductions and
withholdings.

                        (3) SEVERANCE HEALTH PREMIUM REIMBURSEMENTS. If Employee
timely elects to continue his Company-provided group health insurance coverage
pursuant to the federal COBRA law, the Company will reimburse Employee for the
cost of such COBRA premiums to continue health insurance coverage at the same
level of coverage for Employee and his dependents (if applicable) in effect as
of the termination date, through the end of twelve (12) months or until such
time as Employee qualifies for health insurance benefits through a new employer,
whichever occurs first ("Severance Health Premium Benefits"). Employee shall
notify the Company in writing of such new employment not later than five (5)
business days after securing it.

                        (4) SEVERANCE VESTING. The vesting of Employee's
restricted stock, stock option and other equity grants that Employee previously
has then received, shall be accelerated so that, as of the date of the
termination, such restricted stock and stock option grants shall vest as to the
number of shares that would have vested had Employee provided an additional
twelve (12) months of continuous service to the Company, provided, however, that
if Employee is terminated without cause within six (6) months following a Change
in Control, Employee terminates his employment for Good Reason within six (6)
months following a Change in Control, or Employee terminates his employment for
the Good Reason described in clause (E) of Section 3(b)(ii), then such
restricted stock and stock option grants shall vest as to the number of shares
that would have vested had Employee provided an additional twenty-four (24)
months of continuous service to the Company.

                  (iv) SEVERANCE CONDITIONS. As a condition of and prior to the
receipt of all or any of the Severance Benefits, Employee must execute and allow
to become effective a general release of claims in a form mutually acceptable to
the parties in their reasonable determination and to comply with the terms of
this Agreement (the "Severance Conditions"). Upon any termination of Employee's
employment by the Company without Cause or by

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Employee for Good Reason, the Company and its affiliates (by and through their
respective directors and senior executive officers) and Executive agree not to
disparage the other party.

                  (c) TERMINATION FOR CAUSE; VOLUNTARY OR MUTUAL TERMINATION.

                        (i) NO SEVERANCE. In the event Employee's employment is
terminated by the Company at any time for Cause, or Employee terminates his
employment without Good Reason, or the parties mutually terminate their
employment relationship, Employee will not be entitled to any Severance
Benefits, pay in lieu of notice, or any other severance, compensation, benefits,
equity, acceleration, or any other amounts, with the exception of any benefit to
which Employee has a vested right under a written benefit plan.

                        (ii) RESIGNATION. Employee may voluntarily terminate his
employment with the Company at any time, without liability therefore. Employee
agrees to use good faith to give the Company reasonable notice of any such
voluntary termination. Upon receipt of any termination notice from Employee, the
Company, at its election, may require Employee to resign his employment prior to
the occurrence of any requested termination date.

                  (d) TERMINATION FOR DEATH OR DISABILITY.

                        (i) TERMINATION. Employee's employment will terminate
upon his death or Disability.

                        (ii) DISABILITY DEFINITION. For the purposes of this
Agreement, "Disability" shall have the meaning set forth in the Company's then
current long term disability benefit program or, if no such program is then in
effect, shall mean a permanent disability rendering Employee unable to perform
his duties for the Company for ninety (90) consecutive days or one hundred
eighty (180) days in any twelve (12) month period, which determination shall be
made after the period of disability, unless an earlier determination can be
made, by an independent physician appointed by the Board.

                        (iii) SEVERANCE. Following the death or Disability of
Employee while employed by the Company, the Company will provide Employee (or,
in the case of death, Employee's estate) with the Severance Payment, two-thirds
(2/3) of the Severance Bonus, and Severance Health Premium Reimbursements for
twelve (12) months (all as described and on the same terms and conditions
provided above). The Employee's restricted stock and stock option grants that
Employee has then received from the Company, shall be vested as to half of the
unvested shares (or such greater amount, if any, as is provided for in the
agreement for the applicable grant), and all such stock options shall,
notwithstanding any lesser period, if any, provided for in the agreement for the
applicable grant, be exercisable for one (1) year following such termination
(but not exceeding the term of such option).

                        (iv) SEVERANCE CONDITIONS. As a condition of and prior
to the receipt of all or any of the Severance provided for death or Disability,
Employee (or, in the case of death, Employee's estate) must execute and allow to
become effective a general release of claims in a form mutually acceptable to
the parties in their reasonable determination and to comply with the terms of
this Agreement (the "Severance Conditions"). Upon any termination of Employee's
employment for death of Disability, the Company and its affiliates (by and
through their

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respective directors and senior executive officers) and Executive
(or, in the case of death, Employee's estate) agree not to disparage the other
party.

                  (e) NO MITIGATION. In no event shall Employee be obligated to
seek other employment or take any other action by way of mitigation of the
severance amounts payable to the Employee under Paragraph 3 of this Agreement,
and such amounts (other than as provided at Paragraph 3(b)(iii)(3)) shall not be
reduced whether or not the Employee obtains other employment.

                  (f) ACCRUED OBLIGATIONS. Not later than ten (10) days after
termination of Employee's employment, the Company shall pay Employee ("Accrued
Obligations"): (i) his accrued and unpaid base salary at the rate in effect at
the time of notice of termination; (ii) any previous year's earned but unpaid
bonus and other earned and unpaid incentive cash compensation; and (iii) accrued
and unused vacation time, unpaid expense reimbursements and other unpaid cash
entitlements earned by Employee as of the date of termination pursuant to the
terms of the applicable Company plan or program.

      4. SALARY. For services rendered hereunder, the Company shall pay Employee
a base salary at the per annum rate of $300,000, less standard payroll
deductions and withholdings, and payable in accordance with the Company's
regular payroll schedule. Employee's base salary (as well as his eligibility for
incentive equity grants) shall be subject to annual review and his base salary
may, at the discretion of the Company's Board of Directors, be adjusted from
time to time.

      5. BONUSES. Subject to the requirements set forth below, the Company may
elect to pay Employee bonuses in its sole discretion. Employee will be offered
the opportunity to participate in the Company's then-current bonus plan, and,
subject to and in accordance with the terms and conditions of such plan and this
paragraph, upon achievement of all target bonus objectives set by the Board of
Directors and/or the Chief Executive Officer for the Company and for Employee,
shall receive a cash bonus equal to 100% ("Target Bonus Percentage") of his base
salary, less standard payroll deductions and withholdings. The Company shall
have the sole discretion to change or eliminate bonus plans or programs at any
time (provided, however, that after the bonus plan and target objectives have
been established by the Board and/or the Chief Executive Officer for a given
year, neither the Board nor the Chief Executive Officer shall later materially
change the bonus plan or target objectives for such year to Employee's detriment
without Employee's consent), to determine whether performance criteria set forth
pursuant to the bonus plan for a year have been achieved, and to determine (in
accordance with this paragraph and such performance criteria and bonus plan) the
amount of any bonus earned by Employee, if any. Bonuses are intended to retain
valuable Company employees, and if Employee is not employed, for any reason on
the last day of the bonus year, he will not have earned the bonus and, except as
expressly provided herein with respect to the Severance Bonus, no partial or
pro-rata bonus will be paid.

      6. EMPLOYEE BENEFITS. Employee shall be entitled to participate in such
employee benefit plans, including the Company's 401(k) plan, life insurance, and
medical benefits plans, and shall receive all other fringe benefits, as the
Company may make available generally to its senior executive employees
generally, for which Employee is eligible under the terms and

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conditions of such plans, in each case subject to the requirements, rules and
regulations from time to time applicable thereto. Details about these benefits
are set forth in summary plan descriptions and other materials.

      7. CHANGE OF CONTROL. A Change in Control shall have the meaning set forth
in Section 6.8(b) of the Company's 1999 Stock Incentive Plan.

      8. PARACHUTE TAX. Notwithstanding anything in the foregoing to the
contrary, if any of the payments to Employee (prior to any reduction below)
provided for in this Agreement, together with any other payments which Employee
has the right to receive from the Company or any corporation which is a member
of an "affiliated group" as defined in Section 1504(a) of the Internal Revenue
Code of 1986, as amended ("Code"), without regard to Section 1504(b) of the
Code, of which the Company is a member (the "Payments") would constitute a
"parachute payment" (as defined in Section 280G(b)(2) of the Code), and if the
Safe Harbor Amount is greater than the Taxed Amount, then the total amount of
such Payments shall be reduced to the Safe Harbor Amount. The "Safe Harbor
Amount" is the largest portion of the Payments that would result in no portion
of the Payments being subject to the excise tax set forth at Section 4999 of the
Code ("Excise Tax"). The "Taxed Amount" is the total amount of the Payments
(prior to any reduction, above) notwithstanding that all or some portion of the
Payments may be subject to the Excise Tax. Solely for the purpose of comparing
which of the Safe Harbor Amount and the Taxed Amount is greater, the
determination of each such amount, shall be made on an after-tax basis, taking
into account all applicable federal, state and local employment taxes, income
taxes, and the Excise Tax (all of which shall be computed at the highest
applicable marginal rate). If a reduction of the Payments to the Safe Harbor
Amount is necessary, then the reduction shall occur in the following order
unless the Employee elects in writing a different order (provided, however, that
such election shall be subject to Company approval if made on or after the date
on which the event that triggers the Payments occurs): reduction of cash
payments; cancellation of accelerated vesting of stock awards; reduction of
employee benefits. In the event that acceleration of vesting of stock award
compensation is to be reduced, such acceleration of vesting shall be cancelled
in the reverse order of the date of grant of the Employee's participant's stock
awards unless the Employee elects in writing a different order for cancellation.

      9. BUSINESS EXPENSES. The Company shall reimburse Employee for all
reasonable and necessary business expenses incurred by Employee in performing
Employee's duties that are submitted in compliance with the Company's
then-current policy on such business expense reimbursement. Employee shall
provide the Company with supporting documentation sufficient to satisfy
reporting requirements of such policy and the Internal Revenue Service. The
Company's determinations as to reasonableness and necessity shall be final.

      10. PROPRIETARY INFORMATION AND INVENTIONS; NON-COMPETITION AND
NON-SOLICITATION. Employee acknowledges that the successful development,
marketing, sale and performance of the Company's professional services and
products require substantial time and expense. Such efforts generate for the
Company valuable and proprietary information ("Confidential Information"),
including without limitation business plans and strategies, prospective or
actual opportunities, prospects and customer lists, proposals, deliverables,
methodologies, training materials, other intellectual property, the nature,
identity and requirements of customers, clients, suppliers and business
partners, computer software, financial

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data of any nature, and any information of others that the Company is obligated,
contractually or otherwise, to treat in a confidential manner, in each case in
whatever form, whether oral, written, graphic, recorded, photographic, machine
readable or otherwise, and whether or not marked or otherwise labeled
"confidential" or specifically indicated as being confidential and/or
proprietary in nature. The term "Confidential Information" also includes all
notes, analyses, compilations, studies, interpretations or other materials to
the extent such materials contain or are based on other Confidential
Information. Employee acknowledges that during his employment, he will obtain
knowledge of such Confidential Information. Employee agrees to undertake the
following obligations which he acknowledges to be reasonably designed to protect
the Company's legitimate business interests (including its Confidential
Information and its near-permanent relationships with customers and other third
parties) without unnecessarily or unreasonably restricting Employee's
post-employment opportunities:

            (a) PROPRIETARY INFORMATION. During the term of employment with the
Company, Employee shall disclose to the Company all ideas, inventions and
business plans that Employee develops during the course of Employee's employment
with the Company that relate directly or indirectly to the Company's business,
including but not limited to any computer programs, processes, products or
procedures which may, upon application, be protected by patent or copyright.
Employee agrees that any such ideas, inventions or business plans shall be the
property of the Company (and in furtherance thereof hereby assigns to the
Company any and all rights and interests of Employee therein and thereto) and
that Employee shall, at the Company's request and cost (including reimbursement
of Employee's expenses and, if Employee is no longer in the employ of the
Company, reasonable per diem compensation to Employee), provide the Company with
such assurances as is necessary to secure a patent or copyright..

            (B) NON-COMPETITION. Without limiting the obligations of Paragraph
10(a), without the prior written consent of the President and Chief Executive
Officer or the authorized designee thereof, Employee shall not, for himself or
as an agent, partner or employee of any person, firm or corporation: (i) for a
period of twelve (12) months following his termination of employment with the
Company and all affiliates for any reason, engage in the practice of providing
consulting or related services for any Prohibited Client. The term "Prohibited
Client" shall mean any client or prospect of the Company to or for whom Employee
directly or indirectly performed or provided consulting or related services, or
with whom Employee had personal contact, or prospect to whom Employee submitted,
or assisted or participated in any way in the submission, of a proposal, during
the two (2) year period preceding termination of Employee's employment with the
Company.

            (c) NON-SOLICITATION. While employed by the Company and during the
twelve (12) month period immediately following Employee's termination of
employment for any reason, Employee shall not directly or indirectly hire,
solicit, encourage, or otherwise induce or assist in the inducement away from
the Company of any Company customer, client, contractor, consultant, or other
person or party with whom the Company has a contractual relationship, any
Prohibited Client, or any Company employee (either away from the Company's
employ or from the faithful discharge of such employee's contractual, statutory
and fiduciary obligations to serve the Company's interests with undivided
loyalty).

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            (d) REASONABLE ALTERATION. In the event that a court or other
adjudicative body should decline to enforce the provisions of any part of this
Paragraph 10, whether because of scope, duration or otherwise, Employee and the
Company agree that the provisions shall be modified to restrict Employee's
competition with the Company to the maximum extent enforceable under applicable
law.

      11. REMEDIES. Employee recognizes and agrees that a breach of any or all
of the provisions of Paragraph 10 will constitute immediate and irreparable harm
to the Company's business advantage, including but not limited to the Company's
valuable business relations, for which damages cannot be readily calculated and
for which damages are an inadequate remedy. Accordingly, Employee acknowledges
that the Company shall therefore be entitled to an order enjoining any further
breaches by the Employee, without the necessity of posting a bond.

      12. POLICIES AND PROCEDURES. The employment relationship between the
parties shall be governed by the general employment policies and practices of
the Company, which the Company may change from time to time, and Employee will
be expected to abide by such Company policies and practices.

      13. ASSISTANCE IN LITIGATION. Employee shall upon reasonable notice and
without compulsion of law (e.g., subpoena), furnish accurate and complete
information and other assistance to the Company as the Company may reasonably
require in connection with any litigation, proceeding or dispute to which the
Company is, or may become, a party, or in which it may otherwise become
involved, either during or after Employee's employment; provided, if such
assistance shall occur after termination of Employee's employment, the Company
shall reimburse Employee for his reasonable expenses incurred in connection with
such assistance, including, without limitation, as relevant transportation,
meals and lodging, and shall also pay Employee a consulting fee of $200 per
hour, as compensation for his inconvenience and the disruption of his other
endeavors.

      14. INDEMNIFICATION. Employee's rights to indemnification will be as
provided in the Indemnification Agreement between Employee and the Company,
effective as of the effective date hereof.

      15. SUCCESSORS AND ASSIGNS. This Agreement is intended to bind and inure
to the benefit of, and be enforceable by, Employee and the Company, and their
respective successors, assigns, heirs, executors and administrators. Employee
acknowledges that the services to be rendered pursuant to this Agreement are
unique and personal. Accordingly, Employee may not assign any of his rights or
delegate any of his duties or obligations under this Agreement. The Company may
assign its rights, duties or obligations under this Agreement to a subsidiary or
affiliated company of the Company or purchaser or transferee of a majority of
the Company's outstanding capital stock or a purchaser of all, or substantially
all, of the assets of the Company.

      16. NOTICES. All notices required by this Agreement shall be in writing.
Notices intended for the Company shall be sent by certified mail or nationally
recognized overnight courier service, addressed to it at 150 Field Drive, Suite
250, Lake Forest, Illinois 60045, or its current principal office, and notices
intended for Employee shall be either delivered personally to Employee or sent
by certified mail or nationally recognized overnight courier service addressed

                                       8
<PAGE>

to Employee at his address as listed on the Company's payroll. Notices sent by
certified mail in accordance with the foregoing shall be deemed given three (3)
business days following delivery to the United States Postal Service, postage
prepaid, and notices sent by overnight courier service in accordance with the
foregoing shall be deemed given one (1) business day following delivery to such
courier, delivery fees for overnight delivery prepaid.

      17. ENTIRE AGREEMENT. This Agreement constitutes the complete, final, and
exclusive embodiment of the entire agreement between Employee and the Company
with regard to the subject matter hereof. It is entered into without reliance on
any promise or representation other than those expressly contained herein, and
it cannot be modified or amended except in a written instrument signed by
Employee and a duly authorized officer or director of the Company.

      18. WAIVER. If either party should waive any breach of any provisions of
this Agreement, he or it shall not thereby be deemed to have waived any
preceding or succeeding breach of the same or any other provision of this
Agreement.

      19. APPLICABLE LAW. This Agreement, and all questions concerning the
construction, validity and interpretation of this Agreement, shall be governed
by and construed in accordance with the laws of the State of Illinois as applied
to contracts made and to be performed entirely within the State of Illinois.

      20. MEDIATION OF DISPUTES. Neither party shall initiate arbitration or
other legal proceedings (except for any claim under Paragraph 10 of this
Agreement or the Proprietary Information Agreement), against the other party,
or, in the case of the Company, the Company, its affiliates, and its and their
directors, officers, employees, contractors, agents, and representatives,
relating in any way to claims or disputes or controversies of any nature
whatsoever arising from or regarding Employee's employment, the termination of
such employment, this Agreement (including without limitation its
interpretation, performance, enforcement or breach) or any or all other claims
that one party might have against the other party (collectively, the "Claims"),
until thirty (30) days after the party against whom the Claim[s] is made
("Respondent") receives written notice from the claiming party of the specific
nature of any purported Claim and the amount of any purported damages. Employee
and the Company further agree that if Respondent submits the claiming party's
Claim to JAMS Inc. for nonbinding mediation, in Chicago, Illinois, prior to the
expiration of such thirty (30) day period, the claiming party may not institute
arbitration or other legal proceedings against Respondent until the earlier of
(i) the completion of nonbinding mediation efforts, or (ii) ninety (90) days
after the date on which the Respondent received written notice of the Claim. If
Company is Respondent, the Company shall pay the JAMS Inc. fees and Employee's
reasonable attorneys' fees incurred by Employee in connection with the mediation
up to a maximum of $10,000.

      21. BINDING ARBITRATION.

            (a) Employee and the Company agree that all Claims, to the fullest
extent allowed by law, shall be resolved by confidential, final and binding
arbitration conducted under the Expedited Commercial Rules of the American
Arbitration Association in Illinois. If either party pursues a Claim and such
Claim results in an arbitrator's decision, both parties agree to accept such
decision as final and binding. THE PARTIES ACKNOWLEDGE THAT BY AGREEING TO THIS

                                       9
<PAGE>

ARBITRATION PROCEDURE, THEY WAIVE THE RIGHT TO RESOLVE ANY SUCH DISPUTE THROUGH
A TRIAL BY JURY, JUDGE OR ADMINISTRATIVE PROCEEDING. The arbitrator shall: (a)
have the authority to compel adequate discovery for the resolution of the
dispute and to award such relief as would otherwise be permitted by law; and (b)
issue a written arbitration decision including the arbitrator's essential
findings and conclusions and a statement of the award. The Company shall pay all
AAA arbitration fees. Nothing in this Agreement is intended to prevent either
Employee or the Company from obtaining injunctive relief in court to prevent
irreparable harm pending the conclusion of any such arbitration.

            (b) The arbitrator, and not a court, shall be authorized to
determine whether the provisions of this paragraph apply to a dispute,
controversy or claim sought to be resolved in accordance with these arbitration
procedures.

      22. SEVERABILITY. Whenever possible, each provision of this Agreement will
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be prohibited by or invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, and such invalid, illegal or
unenforceable provision will be reformed, construed and enforced in such
jurisdiction so as to render it valid, legal, and enforceable consistent with
the general intent of the parties insofar as possible.

      23. RIGHT TO WORK. As required by law, this Agreement is subject to
satisfactory proof of Employee's right to work in the United States.

EMPLOYEE ACKNOWLEDGES THAT HE HAS READ, UNDERSTOOD AND ACCEPTS THE PROVISIONS OF
THIS AGREEMENT.

eLOYALTY CORPORATION ("COMPANY")            CHRISTOPHER J. DANSON ("EMPLOYEE")

By: /s/ Kelly D. Conway                     /s/ Christopher J. Danson
    ------------------                      -----------------------------------

Title:  President and CEO

Date:  February 23, 2005                    Date: February 23, 2005

                                       10

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