Exhibit 10.20
[SVB LOGO] SVB Securities
Securities Account Control Agreement
Customer: Art Technology Group, Inc.
Creditor: Silicon Valley Bank
Date: 12/20/02
This Securities Account Control Agreement entered into as of the above date
(this "Agreement") is among SVB Securities, A Division of Alliant Partners
("SVBS"), Banc of America BrokerDealer Services, a division of Banc of America
Securities LLC ("BA-BDS" or "Clearing Broker"), the Customer identified above
("Customer"), and the Creditor identified above ("Creditor").
Recitals
A. Customer has established a securities account or securities accounts
("Account") with and/or through SVBS and BA-BDS pursuant to a SVB Securities
Client Agreement ("Client Agreement"). The account number and title for the
Account (or Accounts) are identified in Exhibit A to this Agreement. SVBS acts
as the introducing broker. BA-BDS acts as the clearing broker. Both SVBS and
Clearing Broker are securities intermediaries pursuant to Article 8 of the
California Uniform Commercial Code ("CUCC"). Customer maintains in the Account
securities, financial assets and other investment property as defined under
Article 8 and 9 of the CUCC (collectively, the "Securities").
B. Pursuant to a security agreement or similar agreement identified in
Exhibit A hereto (the "Security Agreement"), Customer has granted to Creditor a
security interest in certain personal property of Customer, including without
limitation (i) the Account; (ii) the Securities, (iii) all dividends and
distributions, whether payable in cash, securities, or other property, in
respect of the Securities, (iv) all of Customer's rights in respect of the
Securities and Account, and (iv) all products, proceeds and revenues of and from
any of the foregoing personal property in sections (i) through (iv)
(collectively, the "Collateral").
C. SVBS, Clearing Broker, Customer and Creditor are entering into this
Agreement in order to perfect Creditor's security interest in the Collateral and
the Account by means of control pursuant to Article 8 of the CUCC.
Agreement
The parties hereto hereby agree as follows:
1. Defined Terms. All terms used in this Agreement which are defined in
the CUCC but are not otherwise defined herein shall have the meanings assigned
to such terms in the CUCC, as in effect as of the date of this Agreement. While
in the Account, all property credited to the Securities will be treated as
financial assets under Article 8 of the CUCC. By this Agreement, Customer grants
to Creditor "control" over the Securities within the meaning of Section 8106 of
the
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CUCC.
2. The Securities. SVBS and Clearing Broker represent to Creditor that, on
behalf of Customer, Customer maintains the Securities in the Account.
3. Acknowledgement of Security Interest. SVBS and Clearing Broker hereby
acknowledge the security interest granted in the Collateral to Creditor by
Customer. Creditor hereby acknowledges the security interest granted in the
Collateral to SVBS and Clearing Broker by Customer pursuant to the Client
Agreement.
4. Other Control Agreements. SVBS represents and warrants that, other than
any account control agreement listed in Exhibit A hereto, SVBS has executed no
other account control agreement with any other party and SVBS is not presently
obligated to accept any entitlement order from any person other than the
Customer with respect to the Collateral. Clearing Broker represents and warrants
that, other than any account control agreement listed in Exhibit A hereto,
Clearing Broker has executed no other account control agreement with any other
party and Clearing Broker is not presently obligated to accept any entitlement
order from any person other than the Customer with respect to the Collateral.
5. Future Control Agreements. Customer covenants and agrees that it will
not enter an account control agreement with any other party without Creditor's
prior written consent SVBS agrees that it will not enter into a control
agreement with any other party with respect to the Account without Creditor's
prior written consent. Clearing Broker agrees that it will not enter into a
control agreement with any other party with respect to the Account without
Creditor's prior written consent.
6. Limitation on SVBS' and Clearing Broker's Rights in the Collateral.
SVBS and Clearing Broker will not attempt to assert control and does not claim
and will not accept any security or other interest in any part of the
Collateral, and SVBS and Clearing Broker will not exercise, enforce or attempt
to enforce on their own behalves any right of setoff against the Collateral, or
otherwise charge or deduct from the Collateral on SVBS' or Clearing Broker's
behalves any amount whatsoever, other than for: security interests, liens,
encumbrances, claims or rights of setoff for the payment of any amounts owed by
Customer to SVBS and/or Clearing Broker arising in connection with SVBS' and
Clearing Broker's customary fees and commissions pursuant to their agreement
with Customer or for the payment for financial assets and securities purchased
for the Account (the "Account Claims"). Customer and Creditor hereby acknowledge
that any security Interests, liens, encumbrances, claims or rights of setoff for
the payment of any amounts owed by Customer to SVBS and Clearing Broker arising
in connection with the Account Claims shall at all times be prior to the rights
of Creditor in the Collateral and Securities whether or not Creditor sends to
SVBS a Notice of Exclusive Control described below.
7. Agreement for Control.
(a) SVBS and Clearing Broker will comply with all entitlement orders
(including requests to withdraw Collateral from the Account) originated by
Customer with respect to the Collateral, or any portion of the Collateral,
without further consent by Creditor until such time as SVBS receives from
Creditor (in accordance with Section 17 below) a written notice to SVBS that
Creditor is thereby exercising exclusive control over the Account (a "Notice of
Exclusive Control.") The Notice of Exclusive Control must be in the form set
forth in Exhibit B hereto. SVBS or Clearing Broker have no obligation whatsoever
to confirm that Creditor is entitled to send a Notice of Exclusive Control in
connection with the Account or that the Creditor's representative who signs any
Notice of Exclusive Control is authorized to do so. SVBS and Clearing Broker
(upon
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instruction from SVBS) will, upon SVBS' receipt of such Notice of Exclusive
Control, proceed in accordance with the remainder of this Section 7 even if
Creditor's instructions are contrary to any instructions or demands that
Customer may give to SVBS or Clearing Broker. After SVBS receives a Notice of
Exclusive Control and has had reasonable opportunity to comply with it, but no
later than two (2) Business Days ("Business Days" means days which SVBS is open
to the public for business and are measured in 24 hour increments) after receipt
of the Notice of Exclusive Control (in accordance with Section 17 below), SVBS
and Customer agree that SVBS and Clearing Broker will: (i) cease complying with
entitlement orders or other directions concerning the Account and Collateral
that are originated by Customer or its representatives until such time as SVBS
receives a written notice from Creditor rescinding the Notice of Exclusive
Control; and (ii) comply with the entitlement orders and instructions provided
to SVBS by Creditor without investigating: the reason for any action taken by
Creditor; the amount of any obligations of Customer to Creditor; the validity of
any of Creditor's agreements with Customer or the existence of any defaults
under such agreements.
(b) Notwithstanding the foregoing, Creditor agrees that upon receipt of
Creditor's Notice of Exclusive Control, SVBS and Clearing Broker may take all
steps necessary to satisfy or settle any Account Claims, may respond as required
pursuant to the terms of any other account control agreement with respect to
which SVBS believes it previously received a Notice of Exclusive Control or
similar notice, and may respond as required by law to any court or government
order, writ or other legal process received by SVBS or Clearing Broker. Creditor
also agrees that, before SVBS' receipt of Creditor's Notice of Exclusive
Control, SVBS and Clearing Broker may be required to and may respond to (i)
Notices of Exclusive Control or similar notices sent to SVBS by other parties
and (ii) a writ or other similar legal process served on SVBS or Clearing Broker
in connection with the Account and Collateral. SVBS and Clearing Broker agree to
use good faith efforts to promptly notify Creditor if any other party delivers
to SVBS a notice of exclusive control or any party other than Creditor or SVBS
asserts a claim against the Collateral by means of a writ or other similar legal
process, but failure to provide such notice does not constitute a breach of this
Agreement. Customer expressly agrees that SVBS, Clearing Broker and Creditor may
act in accordance with the terms of this Section 7.
8. Customer Waiver and Authorization. Customer hereby waives any rights
that Customer may have under the Client Agreement to the extent such rights are
inconsistent with the provisions of this Agreement, and hereby authorizes SVBS
and Clearing Broker to comply with all instructions and entitlement orders
delivered by Creditor to SVBS in accordance with the terms of this Agreement
9. Amendments to and Termination of Client Agreement. SVBS, Clearing
Broker and Customer shall not amend, supplement or otherwise modify the Client
Agreement insofar as it pertains to the Collateral without prior written notice
to Creditor. Customer may not terminate the Client Agreement insofar as it
pertains to the Collateral without consent of Creditor. SVBS and Clearing Broker
agree to use good faith efforts to notify Creditor if SVBS or Clearing Broker
terminate the Client Agreement, but SVBS' or Clearing Broker's failure to notify
Creditor shall not be a breach of this Agreement.
10. Termination of this Agreement. Creditor may terminate this Agreement
by giving SVBS and Customer written notice of termination; provided that, by
giving such notice, Creditor acknowledges that it will thereby be confirming
that, as of the termination date, it will no longer
SVBS Form Dated September 15, 2002
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have a perfected security interest in the Account and Securities in the
Collateral which is perfected by control via this Agreement, although Creditor
may continue to have a perfected security interest in the Account by other
means. SVBS and Clearing Broker may terminate this Agreement by giving Creditor
and Customer 30 days prior written notice of termination (unless a shorter
notice period is mandated by applicable law). Customer may only terminate this
Agreement with the written consent of Creditor; provided that, by giving such
notice with Creditor's written consent, both Customer and Creditor acknowledge
that they will thereby be confirming that, as of the termination date, Creditor
will no longer have a perfected security interest in the Collateral which is
perfected by control pursuant to this Agreement, although Creditor may continue
to have a perfected security interest in the Collateral by other means.
11. Delivery of Account Statements. SVBS and Clearing Broker are hereby
authorized by Customer and agree to send to Creditor at its address for notices
set forth below Creditor's signature block at the end of this Agreement,
concurrently with the sending thereof to Customer, duplicate copies of any and
all monthly statements or reports issued or sent to Customer with respect to the
Collateral and the Account. Until this Agreement is terminated, Customer
authorizes SVBS to disclose to Creditor at Creditor's request any information
concerning Customer's Account and the Securities in the Account, including but
not limited to the identity of any other party with which Customer and SVBS and
Clearing Broker have executed account control agreements or similar agreements.
12. Responsibility of SVBS, Clearing Broker and Creditor. This Agreement
does not create any obligation or duty on the part of SVBS, Clearing Broker or
Creditor other than those expressly set forth herein.
13. No Waiver. Any forbearance or failure or delay by SVBS, Clearing
Broker or Creditor in exercising any right hereunder shall not be deemed a
waiver thereof and any single or partial exercise of any right shall not
preclude the further exercise thereof.
14. Amendments. This Agreement and all exhibits attached hereto may be
amended only in writing signed by all parties hereto.
15. Governing Law. Notwithstanding the terms of any other agreement, the
parties hereto agree that this Agreement shall be governed under and in
accordance with the laws of the State of California. All parties hereto each
submit to the exclusive jurisdiction of the State and Federal courts in Santa
▇▇▇▇▇ County, California.
16. Integration Provision. This Agreement constitutes the entire agreement
among SVBS, Clearing Broker, Customer and Creditor with respect to Creditor's
control over the Collateral and Securities and matters specifically set forth
herein, and all prior communications, whether verbal or written, between any of
the parties hereto with respect to the subject matter hereof shall be of no
further effect or evidentiary value.
17. Notices.
(a) Any notice, other than a Notice of Exclusive Control, or other
communication provided for or allowed hereunder shall be in writing and shall be
considered to have been validly given (a) when actually received by the
recipient at the address or facsimile number, if delivered
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personally (whether by messenger, air courier service or otherwise) or sent by
facsimile to the address or facsimile number identified below the signature
of the applicable party's signature below and addressed to the addressee
identified below the signature of the applicable party's signature below; or (b)
72 hours after being deposited in the United States mail, registered or
certified, postage prepaid, return receipt requested, if sent to the address and
addressee as set forth below the signature of the applicable party hereto. The
addresses to which notices or other communications are to be given may be
changed from time to time by notice served as provided herein.
(b) A Notice of Exclusive Control shall be in writing, must be in the form
set forth in Exhibit B hereto, must be delivered to the address listed below
SVBS' signature block at the end of this Agreement, must be delivered to SVBS
via hand delivery, messenger, overnight delivery or facsimile and shall be
considered to have been validly given when actually received, except that a
facsimile will be considered to have been validly given only when acknowledged
in writing by SVBS (SVBS agrees that it will use its good faith effort to
promptly acknowledge receipt of such facsimile). Creditor acknowledges that SVBS
may not be able to respond to a Notice of Exclusive Control pursuant to section
7 above, and Creditor agrees that SVBS will not be held liable for any failure
to respond to a Notice of Exclusive Control, if the Creditor does not deliver
the Notice of Exclusive Control as set forth in this Section 17 or to the
address listed below SVBS' signature block at the end of this Agreement. `
18. Indemnification and Hold Harmless of SVBS and Clearing Broker by
Customer. Customer hereby agrees to indemnify and hold harmless SVBS and
Clearing Broker, and their respective affiliates and their respective directors,
officers, agents and employees (each, an "Indemnified Person") against any and
all claims, causes of action, liabilities, lawsuits, demands and damages (each,
a "Claim") asserted by Creditor or any other party, including without
limitation, any and all court costs and reasonable attorneys' fees, in any way
related to or arising out of or in connection with this Agreement or any action
taken or not taken pursuant hereto, including any claims arising as a result of
SVBS' and Clearing Broker's adherence (or alleged failure of adherence) to the
foregoing instructions including, without limitation, Claims that allegedly
result from SVBS' and/or Clearing Broker's ceasing, based on this Agreement, to
permit withdrawals of or from the Collateral or resulting from SVBS' and/or
Clearing Broker's paying over or delivering all or any part of the Collateral
pursuant to the directions of Creditor; provided that no Indemnified Person
shall be entitled to be indemnified to the extent that such Claims arise from
the Indemnified Person's own gross negligence or willful misconduct. Customer
agrees that SVBS and/or Clearing Broker shall not be liable for delays or errors
occurring by reason of circumstances beyond the control of SVBS or Clearing
Broker including, without limitation, acts of civil, military, or banking
authorities, national emergencies, market disorder, labor difficulties, fire,
flood or other catastrophes, acts of God, terrorism, insurrection, war, riots,
failure of transportation or equipment, or failure of vendors, communication or
power supply. Clearing Broker shall have no responsibility or liability under
this Agreement to Customer for any acts or omissions by SVBS, its officers,
employees or agents; and SVBS shall have no responsibility or liability under
this Agreement to Customer for any acts or omissions by Clearing Broker, its
officers, employees or agents.
19. Indemnification and Hold Harmless of SVBS and Clearing Broker by
Creditor. Creditor hereby agrees to indemnify Indemnified Persons against any
and all Claims asserted by Customer or any other party (including, without
limitation, any and all court costs and
SVBS Form Dated September 15, 2002
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reasonable attorneys' fees) arising directly out of SVBS' and/or Clearing
Broker's adherence or failure of adherence to Creditor's instructions in its
Notice of Exclusive Control, including, without limitation, any Claim that
arises directly out of SVBS' and/or Clearing Broker's ceasing, based on this
Agreement, to permit withdrawals of or from the Collateral or resulting from
SVBS' and/or Clearing Broker's paying over or delivering all or any part of the
Collateral pursuant to Creditor's instructions in its Notice of Exclusive
Control; provided, that no Indemnified Person shall be entitled to be
indemnified (a) to the extent that such Claim results from an Indemnified
Person's gross negligence or willful misconduct; or (b) for any special,
indirect, consequential or punitive damages asserted by Customer if the waiver
in Section 21 of this Agreement is enforceable. Creditor agrees that it will not
hold Indemnified Persons liable for any Claim arising out of or relating to any
Indemnified Person's performance or failure of performance under this Agreement
other than those Claims that result directly from the acts or omissions of the
Indemnified Person which are deemed gross negligence or willful misconduct by a
civil court or other similar judicial body. Clearing Broker shall have no
responsibility or liability under this Agreement to Creditor for any acts or
omissions by SVBS, its officers, employees or agents; and SVBS shall have no
responsibility or liability under this Agreement to Creditor for any acts or
omissions by Clearing Broker, its officers, employees or agents.
20. Jury Trial Waiver. CUSTOMER, CREDITOR, SVBS AND CLEARING BROKER EACH
WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF
OR BASED UPON THIS AGREEMENT, OR ANY CONTEMPLATED TRANSACTION, INCLUDING
CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS. THIS WAIVER IS A MATERIAL
INDUCEMENT FOR ALL PARTIES TO ENTER INTO THIS AGREEMENT. EACH PARTY HAS REVIEWED
THIS WAIVER WITH ITS COUNSEL.
21. Waiver. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS
AGREEMENT OR ANYWHERE ELSE, CUSTOMER WAIVES AND AGREES THAT IT SHALL NOT SEEK
FROM SVBS, CLEARING BROKER OR CREDITOR UNDER ANY THEORY OF LIABILITY (INCLUDING
WITHOUT LIMITATION ANY THEORY IN TORTS), ANY SPECIAL, INDIRECT, CONSEQUENTIAL OR
PUNITIVE DAMAGES.
22. Unpaid Account Claims. Before Creditor exercises exclusive control
over the Account, SVBS and/or Clearing Broker may, in the ordinary course of
business, debit from the Account any unpaid Account Claims. After Creditor
exercises exclusive control over the Account, if (a) funds are not available in
the Account to pay SVBS and/or Clearing Broker for any Account Claims, and (b)
Customer fails to pay such Account Claims within fifteen (15) Business days of
SVBS' and/or Clearing Broker's written demand therefore, Creditor will pay to
SVBS and/or Clearing Broker, within ten (10) Business days of a written demand
by SVBS and/or Clearing Broker, any amounts owed for an Account Claim and that
is not paid in full by Customer up to the amount of the proceeds received by
Creditor from the Account.
23. Attorneys' Fees, Costs and Expenses. In any action or proceeding
between Customer and SVBS, between Customer and Clearing Broker, between
Creditor and SVBS, or between Creditor and Clearing Broker, arising out of this
Agreement, the prevailing party will be entitled to recover its reasonable
attorneys' fees and other costs and expenses incurred, in addition to any other
relief to which it may be entitled, whether or not a lawsuit is filed.
SVBS Form Dated September 15, 2002
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24. No Conflict. To the extent that the terms or conditions of this
Agreement are inconsistent with the Client Agreement or any other document,
instrument or agreement between SVBS, Clearing Broker and Customer, the terms
and conditions of this Agreement shall prevail.
25. Successors. The terms of this Agreement shall be binding upon, and
shall inure to the benefit of, the parties hereto and to each party's respective
successors or heirs and personal representatives. The parties may assign this
Agreement and any rights under the Agreement only if that party's successor or
assign assume all obligations under this Agreement.
26. Counterparts. This Agreement may be executed in any number of
counterparts and by different parties on separate counterparts, each of which,
when executed and delivered, are an original, and all taken together, are one
Agreement.
27. Survival. Sections 15 and 18 through 25 shall survive the termination
of this Agreement.
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SVBS Form Dated September 15, 2002
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IN WITNESS whereof, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the date first above
written.
CUSTOMER: Art Technology Group
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title:
Address for Notices
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇
Telephone:
Facsimile:
CREDITOR: Silicon Valley Bank
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: SVP
Address for Notices
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
SVBS: SVB SECURITIES
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Operations Manager
Address for Notices
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Mail Sort HG250
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Operations Manager
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
CLEARING BROKER: BANC OF AMERICA SECURITIES LLC
By: /s/ ▇▇▇▇ ▇▇▇▇▇
Name: ▇▇▇▇ ▇▇▇▇▇
Title: Managing Director
SVBS Form Dated September 15, 2002
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SVB Securities
Securities Account Control Agreement
Exhibit A
1. Account Title and Number:
Account Title: Art Technology Group
Account Number: ▇▇▇▇▇▇▇▇
2. "Security Agreement" (This section to be completed by creditor):
Amended and Restated Loan and Security Agreement dated June 13, 2002, by
and between Art Technology Group and Silicon Valley Bank
3. Account Control Agreements Previously Executed by SVB Securities and
Clearing Broker with other Parties Asserting an Interest in the Account
(This Section to be completed by SVBS): None
SVBS Form Dated September 15, 2002
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SVB Securities
Securities Account Control Agreement
Exhibit B
Notice of Exclusive Control
To: SVB Securities ("SVBS")
From: ("Creditor")
Re: ("Customer") Art Technology Group
Date:
Pursuant to the Securities Account Control Agreement dated ______________
("Agreement") entered among SVBS, Clearing Broker (as defined in the Agreement)
Customer and Creditor, Creditor hereby notifies SVBS of Creditor's exercise of
Creditor's rights under the Agreement and directs SVBS to cease complying with
trading instructions or any entitlement orders originated by Customer or its
agents.
Creditor understands and agrees that SVBS and Clearing Broker shall have no duty
or obligation whatsoever of any kind or character to determine the validity of
Creditor's exercise of its rights under the Agreement or the certification
above, to determine if SVBS and/or Clearing Broker is/are obligated to take
further instructions from Customer, or to determine whether Creditor has a right
to all or part of the Collateral. Creditor hereby agrees to indemnify and hold
harmless SVBS and Clearing Broker, their respective affiliates, and their
respective directors, officers, employees and agents pursuant to the terms of
Section 19 of the Agreement.
Creditor agrees that upon receipt of Creditor's Notice of Exclusive Control,
SVBS and Clearing Broker may exercise their rights and remedies as permitted
under the Agreement.
Creditor hereby certifies that the person executing this Notice of Exclusive
Control is an officer, representative or agent of Creditor authorized to act on
the behalf of Creditor and to make the representations and agreements contained
in this Notice of Exclusive Control.
CREDITOR: ______________________________
By____________________________
Title:
ACKNOWLEDGED BY: SVB SECURITIES
(for facsimile only)
By:___________________________
Name:
Title:
Date:
Time:
SVBS Form Dated September 15, 2002
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