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EXHIBIT 4.2
AMENDMENT TO RIGHTS AGREEMENT
AMENDMENT, dated as of September 24, 2001, between ELOYALTY CORPORATION, a
Delaware corporation (the "Company"), and MELLON INVESTOR SERVICES LLC (formerly
known as ChaseMellon Shareholder Services, L.L.C.), a New Jersey limited
liability company (the "Rights Agent"), to the Rights Agreement, dated as of
March 17, 2000, by and between the Company and the Rights Agent (the "Rights
Agreement").
WHEREAS, the Company wishes to exercise its right to amend the Rights
Agreement pursuant to Section 27 thereof.
Accordingly, the parties hereby agree as follows:
1. Definitions. Each capitalized term defined in the Rights Agreement
shall have the same meaning in this Amendment as in the Rights
Agreement, unless otherwise provided herein.
2. First Amendment. The definition of "Acquiring Person" in Section 1(a)
is amended by inserting the following at the end thereof:
Notwithstanding anything in this Section 1(a) to the contrary, none of
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. or ▇▇▇ ▇▇▇▇,
or their respective spouses, Associates, Affiliates, or Subsidiaries
(collectively, the "TCV Persons"), either individually, collectively
or in any combination, shall be deemed to be an Acquiring Person ;
provided that all of the TCV Persons do not beneficially own, in the
aggregate, more than 35% of the shares of Common Stock then
outstanding. Notwithstanding anything in this Section 1(a) to the
contrary, none of ▇▇▇▇▇▇ Hill Ventures, ▇▇▇▇▇▇ ▇▇▇▇ Entrepreneurs Fund
(AI), L.P., ▇▇▇▇▇▇ Hill Entrepreneurs Fund (QP), L.P. and ▇▇▇▇▇▇ ▇▇▇▇
Associates, L.P. or ▇▇▇▇▇ ▇▇▇▇, or their respective spouses,
Associates, Affiliates, or Subsidiaries (collectively, the "▇▇▇▇▇▇
Hill Persons"), either individually, collectively or in any
combination, shall be deemed to be an Acquiring Person; provided that
all of the ▇▇▇▇▇▇ ▇▇▇▇ Persons do not beneficially own, in the
aggregate, more than 20% of the shares of Common Stock then
outstanding.
3. Second Amendment. The definition of "Common Stock" in Section 1(a) is
amended by inserting the following at the end thereof:
Whenever used herein, the phrase "Common Stock then outstanding" shall
be deemed to include both then outstanding shares of Common Stock and
shares of Common Stock issuable upon conversion of then outstanding
shares of the Series B Preferred Stock (determined without reference
to the restriction on the conversion thereof during the six months
following the original issuance thereof).
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4. Third Amendment. The definition of "Beneficial Owner" set forth in
Section 1(d) is amended by adding the following sentence as the final
sentence of Section 1(d):
"Notwithstanding anything to the contrary contained herein, no TCV
Person or ▇▇▇▇▇▇ Hill Person shall be deemed to be the "Beneficial
Owner" of, or be deemed to "beneficially own," any shares of Common
Stock solely as a result of the receipt of rights to purchase Series B
Preferred Stock issued by the Company in connection with the
transactions contemplated by that Share Purchase Agreement dated as of
September 24, 2001 by and among the Company and the investors named in
Exhibit A thereto."
5. Fourth Amendment. Section 1 is amended by adding the following
immediately after subsection (n) thereof:
"(o) "Series B Preferred Stock" means the 7% Series B Convertible
Preferred Stock, $0.01 par value per share, of the Company."
6. Rights Agreement. Except as amended hereby, the Rights Agreement shall
remain in full force and effect.
7. Governing Law. This Amendment shall be deemed to be a contract made
under the laws of the State of Delaware and for all purposes shall be
governed by and construed in accordance with the laws of Delaware
applicable to contracts made and to be performed entirely within such
State.
8. Counterparts. This Amendment may be executed in any number of
counterparts and each such counterpart shall for all purposes be
deemed to an original, and all such counterparts shall together
constitute but one and the same instrument.
9. Descriptive Headings. Descriptive headings of the Sections of this
Amendment are inserted for convenience only and shall not control or
affect the meaning or construction of any of the provisions hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and attested, all as of the day and year first above written.
eLOYALTY CORPORATION
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ATTEST:
Title: President and Chief Executive Officer
/s/ ▇▇▇▇▇▇ ▇. Gold
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Name: ▇▇▇▇▇▇ ▇. Gold
Title: Vice President and
General Counsel
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MELLON INVESTOR SERVICES LLC
(formerly ChaseMellon Shareholder
Services, L.L.C.)
ATTEST: /s/ ▇▇▇ Tinto
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Name: ▇▇▇ Tinto
Title: Vice President
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Assistant Vice President
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