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Eloyalty Employee Investors LLC Agreement 07-2000






This Operating Agreement of ELOYALTY EMPLOYEE INVESTORS, L.L.C., a

Delaware Limited Liability Company (the "COMPANY"), is entered into this ____

day of July 2000, by eLoyalty Corporation, a Delaware corporation (the "INITIAL

MEMBER"), Sarah Faux (the "MANAGER") and the Company shall be formed as follows:


1. NAME. The name of the Company is eLoyalty Employee Investors, L.L.C.


2. PURPOSES AND POWERS. The Company is organized for engaging in any

lawful act or activity for which a limited liability company may be organized

under the laws of the State of Delaware. The Company shall have the power to

make and perform all contracts and to engage in all activities and transactions

necessary or advisable to carry out the purposes of the Company, and all other

powers available to it as a limited liability company under the laws of the

State of Delaware.


3. MEMBERS. The name and membership interest (the "MEMBERSHIP

INTEREST") in the Company of the Initial Member are set forth on Exhibit A

attached hereto and incorporated herein by reference.


4. TERM. The Company shall commence upon the filing of the Company's

Certificate of Formation in the Office of the Secretary of State of the State of

Delaware and shall conclude upon the determination of the Manager.


5. MANAGER. Sarah Faux is hereby designated as the Manager of the



6. CAPITAL CONTRIBUTIONS. The Initial Member shall contribute capital

to the Company from time to time at the request of the Manager.


7. ALLOCATIONS. All income, gains and losses will be allocated to the

accounts of the Initial Member in accordance with its Membership Interest.


8. DISTRIBUTIONS TO MEMBERS. The Initial Member will receive

distributions if, upon winding up of the Company, the assets or proceeds

available exceed the amount required for the payment and discharge of all of the

Company's debts and liabilities. Other than as stated above, distributions to

the Initial Member shall be in the discretion of the Manager. The Manager may,

in her discretion, make distributions to the Initial Member which include a

return of all or any part of the Initial Member's contribution. The Initial

Member has no right to demand or receive property other than cash from the

Company in return for its capital contribution.


9. MANAGEMENT. The management, operation and policies of the Company

are vested exclusively in the Manager. The Manager shall have the power on

behalf and in the name of the Company to carry out and implement any and all of

the objects and purposes of the Company. The Manager shall not be liable to the

Initial Member for honest mistakes of judgment or for any losses due to such

mistakes or for the negligence, dishonesty or bad faith of any employee, broker

or other agent of the Company selected by it with reasonable care.


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10. MISCELLANEOUS. The terms and provisions of this Agreement may be

modified or amended at any time and from time to time by the Initial Member.

This Agreement shall be binding upon the heirs, personal representatives and

other successors of the Initial Member. This Agreement shall be construed in

accordance with the laws of the State of Delaware.








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IN WITNESS WHEREOF, the undersigned have signed this OPERATING

AGREEMENT as of the day and year first above written.






















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Name and Address Membership Interest

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eLoyalty Corporation 100.00%