AMENDED AND RESTATED INTELLECTUAL PROPERTY SECURITY AGREEMENT

 

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                                                                   EXHIBIT 10.26

 

          AMENDED AND RESTATED INTELLECTUAL PROPERTY SECURITY AGREEMENT

 

         This Amended and Restated Intellectual Property Security Agreement

(this "IP Agreement") is made as of the ____ day of January, 2004 by and between

ART TECHNOLOGY GROUP, INC., a Delaware corporation with its principal place of

business at 25 First Street, Cambridge, Massachusetts 02141("Grantor"), and

SILICON VALLEY BANK, a California-chartered bank, with its principal place of

business at 3003 Tasman Drive, Santa Clara, California 95054 and with a loan

production office located at One Newton Executive Park, Suite 200, 2221

Washington Street, Newton, Massachusetts 02462, doing business under the name

"Silicon Valley East" ("Lender").T his Amended and Restated Intellectual

Property Security Agreement amends and restates a certain Intellectual Property

Security Agreement dated as of June 13, 2002, by and between Grantor and Lender.

 

                                    RECITALS

 

         A.       Lender has agreed to make advances of money and to extend

certain financial accommodations to Grantor (the "Loan"), pursuant to a certain

Amended and Restated Loan and Security Agreement dated as of June 13, 2002,

between Grantor and Lender, as amended by a certain First Loan Modification

Agreement dated as of September 27, 2002, as further amended by a certain

Amendment dated as of October __, 2002, as further amended by a certain Second

Loan Modification Agreement dated as of December 24, 2002, as further amended by

a certain Third Loan Modification Agreement dated as of October 20, 2003, and as

further amended by a certain Fourth Loan Modification Agreement dated as of

November 26, 2003, as amended from time to time (as amended, the "Loan

Agreement"). The Loan is secured pursuant to the terms of the Loan Agreement.

Lender is willing to enter into certain financial accommodations with Grantor,

but only upon the condition, among others, that Grantor shall grant to Lender a

security interest in certain Copyrights, Trademarks, Patents, and Mask Works to

secure the obligations of Grantor under the Loan Agreement. Defined terms used

but not defined herein shall have the same meanings as in the Loan Agreement.

 

         B.       Pursuant to the terms of the Loan Agreement, Grantor has

granted to Lender a security interest in all of Grantor's right title and

interest, whether presently existing or hereafter acquired in, to and under all

of the Collateral (as defined therein).

 

         NOW, THEREFORE, for good and valuable consideration, receipt of which

is hereby acknowledged and intending to be legally bound, as collateral security

for the prompt and complete payment when due of Grantor's Indebtedness (as

defined below), Grantor hereby represents, warrants, covenants and agrees as

follows:

 

         1.       Grant of Security Interest. As collateral security for the

prompt and complete payment and performance of all of Grantor's present or

future indebtedness, obligations and liabilities to Lender (hereinafter, the

"Indebtedness"), including, without limitation, under the Loan Agreement,

Grantor hereby grants a security interest in all of Grantor's right, title and

interest in, to and under its intellectual property collateral (all of which

shall collectively be called the "Intellectual Property Collateral"), including,

without limitation, the following:

 

                  (a)      Any and all copyright rights, copyright applications,

         copyright registrations and like protections in each work or authorship

         and derivative work thereof, whether published or unpublished and

         whether or not the same also constitutes a trade secret, now or

         hereafter existing, created, acquired or held, including without

         limitation those set forth on EXHIBIT A attached hereto (collectively,

         the "Copyrights");

 

                  (b)      Any and all trade secrets, and any and all

         intellectual property rights in computer software and computer software

         products now or hereafter existing, created, acquired or held;

 

                  (c)      Any and all design rights which may be available to

         Grantor now or hereafter existing, created, acquired or held;

 

                  (d)      All patents, patent applications and like protections

         including, without limitation, improvements, divisions, continuations,

         renewals, reissues, extensions and continuations-in-part of the same,

         including without limitation the patents and patent applications set

         forth on EXHIBIT B attached hereto (collectively, the "Patents");

 

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                  (e)      Any trademark and servicemark rights, whether

         registered or not, applications to register and registrations of the

         same and like protections, and the entire goodwill of the business of

         Grantor connected with and symbolized by such trademarks, including

         without limitation those set forth on EXHIBIT C attached hereto

         (collectively, the "Trademarks");

 

                  (f)      All mask works or similar rights available for the

         protection of semiconductor chips, now owned or hereafter acquired,

         including, without limitation those set forth on EXHIBIT D attached

         hereto (collectively, the "Mask Works");

 

                  (g)      Any and all claims for damages by way of past,

         present and future infringements of any of the rights included above,

         with the right, but not the obligation, to sue for and collect such

         damages for said use or infringement of the intellectual property

         rights identified above;

 

                  (h)      All licenses or other rights to use any of the

         Copyrights, Patents, Trademarks, or Mask Works and all license fees and

         royalties arising from such use to the extent permitted by such license

         or rights, including, without limitation those set forth on EXHIBIT E

         attached hereto (collectively, the "Licenses"); and

 

                  (i)      All amendments, extensions, renewals and extensions

         of any of the Copyrights, Trademarks, Patents, or Mask Works; and

 

                  (j)      All proceeds and products of the foregoing, including

         without limitation all payments under insurance or any indemnity or

         warranty payable in respect of any of the foregoing.

 

         2.       Authorization and Request. Grantor authorizes and requests

that the Register of Copyrights and the Commissioner of Patents and Trademarks

record this IP Agreement.

 

         3.       Covenants and Warranties. Grantor represents, warrants,

covenants and agrees as follows:

 

                  (a)      Grantor is now the sole owner of the Intellectual

         Property Collateral, except for non-exclusive licenses granted by

         Grantor to its customers in the ordinary course of business.

 

                  (b)      Performance of this IP Agreement does not conflict

         with or result in a breach of any IP Agreement to which Grantor is

         bound, except to the extent that certain intellectual property

         agreements prohibit the assignment of the rights thereunder to a third

         party without the licensor's or other party's consent and this IP

         Agreement constitutes a security interest.

 

                  (c)      During the term of this IP Agreement, Grantor will

         not transfer or otherwise encumber any interest in the Intellectual

         Property Collateral, except for non-exclusive licenses granted by

         Grantor in the ordinary course of business or as set forth in this IP

         Agreement;

 

                  (d)      To its knowledge, each of the Patents is valid and

         enforceable, and no part of the Intellectual Property Collateral has

         been judged invalid or unenforceable, in whole or in part, and no claim

         has been made that any part of the Intellectual Property Collateral

         violates the rights of any third party;

 

                  (e)      Grantor shall promptly advise Lender of any material

         adverse change in the composition of the Collateral, including but not

         limited to any subsequent ownership right of the Grantor in or to any

         Trademark, Patent, Copyright, or Mask Work specified in this IP

         Agreement;

 

                  (f)      Grantor shall (i) protect, defend and maintain the

         validity and enforceability of the Trademarks, Patents, Copyrights, and

         Mask Works, (ii) use its best efforts to detect infringements of the

         Trademarks, Patents, Copyrights, and Mask Works and promptly advise

         Lender in writing of material infringements detected and (iii) not

         allow any Trademarks, Patents, Copyrights, or Mask Works to be

         abandoned, forfeited or dedicated to the public without the written

         consent of Lender, which shall not be unreasonably withheld, unless

         Grantor determines that reasonable business practices suggest that

         abandonment is appropriate.

 

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                  (g)      Grantor shall promptly register the most recent

         version of any of Grantor's Copyrights, if not so already registered,

         and shall, from time to time, execute and file such other instruments,

         and take such further actions as Lender may reasonably request from

         time to time to perfect or continue the perfection of Lender's interest

         in the Intellectual Property Collateral;

 

                  (h)      This IP Agreement creates, and in the case of after

         acquired Intellectual Property Collateral, this IP Agreement will

         create at the time Grantor first has rights in such after acquired