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EXHIBIT 5
Winston & Strawn Letterhead
July 26, 2000
eLoyalty Corporation
150 Field Drive
Suite 250
Lake Forest, Illinois 60045
Re: 2,400,000 shares of Common Stock, $0.01 par value
2,400,000 Preferred Stock Purchase Rights
Ladies and Gentlemen:
We have acted as special counsel to eLoyalty Corporation, a
Delaware corporation (the "Company"), in connection with the registration
statement on Form S-8 (the "Registration Statement") relating to the
registration of an aggregate of 2,400,000 shares of the Company's common stock,
par value $0.01 per share ("Common Stock"), and the associated 2,400,000
Preferred Stock Purchase Rights (together with the Common Stock, the "Shares")
issuable upon the exercise of certain stock options ("Options") that may be
granted pursuant to the eLoyalty Corporation 2000 Stock Incentive Plan (the
"Plan").
This opinion is delivered in accordance with the requirements
of Item 601(b)(5) of Regulation S-K under the Securities Act of 1933, as amended
(the "Act").
In connection with this opinion, we have examined and are
familiar with originals or copies, certified or otherwise identified to our
satisfaction, of: (i) the Registration Statement, as filed with the Securities
and Exchange Commission (the "Commission") under the Act; (ii) the Certificate
of Incorporation of the Company, as currently in effect; (iii) the By-laws of
the Company, as currently in effect; (iv) the Plan; and (v) the resolutions of
the Board of Directors of the Company relating to, among other things, the
reservation for issuance of the Shares, the filing of the Registration Statement
and the approval of the Plan. We have also examined such other documents as we
have deemed necessary or appropriate as a basis for the opinion set forth below.
In our examination, we have assumed the legal capacity of all
natural persons, the genuineness of all signatures, the authenticity of all
documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such latter documents. We have also assumed
that the Company's Board of Directors, or a duly authorized committee thereof,
will have approved the grant of each Option prior to the grant thereof. As to
any facts material to this opinion which we did not independently establish or
verify, we have relied upon oral or written statements and representations of
officers and other representatives of the Company and others.
Based upon and subject to the foregoing, we are of the opinion
that all Shares issued upon exercise of stock options granted pursuant to the
Plan will be, upon payment of the specified exercise price therefor, validly
issued, fully paid and non-assessable Shares of the Company.
We hereby consent to the filing of this opinion with the
Commission as an exhibit to the Registration Statement. In giving such consent,
we do not concede that we are experts within the meaning of the Act or the rules
and regulations thereunder or that this consent is required by Section 7 of the
Act.
Very truly yours,
Winston & Strawn
