<PAGE>
As filed with the Securities and Exchange Commission on April 15, 1999
Registration Statement No. 333-[_________]
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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Segue Software, Inc.
(Exact name of Registrant as specified in its charter)
Delaware 95-4188982
(State of incorporation) (I.R.S. Employer Identification Number)
201 Spring Street
Lexington, Massachusetts 02421
(781) 402-1000
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
-------------------------
Stephen B. Butler
President and Chief Executive Officer
Segue Software, Inc.
201 Spring Street
Lexington, Massachusetts 02421
(781) 402-1000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
-------------------------
With copies to:
JEFFREY C. HADDEN, P.C.
Goodwin, Procter & Hoar LLP
Exchange Place
53 State Street
Boston, Massachusetts 02109-2881
(617) 570-1000
Approximate date of commencement of proposed sale to the public: From time to
time after this Registration Statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]_______________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_] ______________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
-------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=================================================================================================================
Proposed Maximum
Title of Shares Amount to be Proposed Maximum Aggregate Offering Amount of
to be Registered Registered (1) Offering Price Per Share (2) Price Registration Fee (2)
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value 156,501 shares $5.50 $860,755.50 $239.29
$.01 per share
("Common Stock")
=================================================================================================================
</TABLE>
(1) The 156,501 shares of Common Stock being registered hereunder represents
certain shares of Common Stock issued to the stockholders of Eventus
Software, Inc. pursuant to an Agreement and Plan of Merger dated as of
December 3, 1998 by and among Segue Software, Inc., SSI Merger Corp.,
Eventus Software, Inc. and the stockholders named therein. In accordance
with Rule 416 under the Securities Act of 1933, as amended (the "Securities
Act"), this registration statement also covers such indeterminate number of
shares of Common Stock that may be offered or issued pursuant to terms which
provide for a change in the amount of shares of Common Stock being offered
or issued to prevent dilution resulting from stock splits, stock dividends
or similar transactions.
(2) These figures are estimates made solely for the purpose of calculating the
registration fee in accordance with Rule 457 under the Securities Act.
Based upon the average of the high and low prices per share of Common Stock
reported on the Nasdaq National Market on April 12, 1999, the fee paid
herewith for such shares is $239.29.
The registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Securities and Commission, acting pursuant to said
Section 8(a), may determine.
================================================================================
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
The information in this prospectus is not complete and may be changed. The
selling stockholders may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is effective. This
prospectus is not an offer to sell these securities and it is not soliciting an
offer to buy these securities in any state where the offer or sale is not
permitted.
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED APRIL 15, 1999
PROSPECTUS
- ----------
156,501 Shares
SEGUE SOFTWARE, INC.
Common Stock
The selling stockholders identified in this prospectus are offering to sell
up to an aggregate of 156,501 shares of common stock of Segue Software, Inc.
The common stock is quoted on the Nasdaq National Market under the trading
symbol "SEGU." The last reported sale price of the common stock on the Nasdaq
National Market on April 12, 1999 was $5.50 per share.
The selling stockholders may sell their shares of common stock in any manner
described in the "Plan of Distribution" section of this prospectus beginning on
page 7.
Investing in the common stock involves certain risks. See "Risk Factors"
beginning on page 2.
Neither the Securities Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. It is illegal for any person to tell you
otherwise.
The date of this prospectus is __________, 1999
<PAGE>
RISK FACTORS
An investment in the common stock involves various risks. This prospectus
contains forward-looking statements within the meaning of the federal securities
laws. You are cautioned that any such forward-looking statements are not
guarantees of future performance and involve risks and uncertainties. Actual
events or results may differ materially from those discussed in the forward-
looking statements as a result of various factors, including the factors
referenced in Segue's documents which are filed with the SEC and which are
incorporated by reference herein. In deciding whether or not to invest in the
common stock, you should consider the following risk factors:
Segue's quarterly results may fluctuate. Segue's quarterly revenue and
operating results are difficult to predict and may fluctuate significantly from
quarter to quarter. If Segue's quarterly revenue or operating results fall
below the expectations of investors or public market analysts, the price of its
common stock could fall substantially. Segue's quarterly revenue may fluctuate
significantly for several reasons, including: the timing of introductions of new
products or product enhancements by Segue or its competitors; personnel changes;
the size and timing of individual orders; software bugs or other product quality
problems; competition and pricing; customer order deferrals in anticipation of
new products or product enhancements; demand for Segue's products is difficult
to predict for reasons discussed below; changes in operating expenses; product
mix; and general economic conditions. A substantial portion of Segue's
operating expenses are related to personnel, facilities and marketing programs.
The level of spending for such expenses cannot be adjusted quickly and is based,
in significant part, on our expectations of future revenues. If actual revenue
levels are below management's expectations, results of operations are likely to
be adversely affected. In addition, Segue does not typically experience order
backlog. Furthermore, Segue has often recognized a substantial portion of its
revenues in the last month of a quarter, with these revenues frequently
concentrated in the last weeks or days of a quarter. As a result, product
revenues in any quarter are substantially dependent on orders booked and shipped
in the latter part of that quarter, and revenues for any future quarter are not
predictable with any significant degree of accuracy. For these reasons, Segue
believes that period-to-period comparisons of its results of operations are not
necessarily meaningful and should not be relied upon as indications of future
performance.
Segue may not be profitable in the future. Since Segue began operations, it
has generally experienced losses. Losses have resulted in an accumulated deficit
of approximately $18.0 million as of December 31, 1998. Segue had net income of
$144,000 in 1996, a net loss of $11.5 million in 1997, which includes a charge
of $9.1 million for purchased research and development in process and $718,000
for severance charges, and a net loss of $2.9 million in 1998, which includes a
charge of $1.5 million related to the Eventus Software and Black & White
Software acquisitions and a charge of $667,000 related to the write-offs of an
NRE fee and guaranteed royalties. While Segue has experienced revenue growth in
recent periods, continued growth at the same rate is not sustainable and is not
necessarily indicative of future operating results. Failure to sustain or
increase profitability may adversely affect the market price of the common
stock.
Segue has recently shifted its focus from general software testing to e-
business testing. In 1997 Segue began to develop and acquire technology to
provide automated software testing for Web-enabled software applications,
including its acquisition of SQLBench in December 1997. These developments
allowed Segue to extend its testing capabilities beyond distributed
client/server applications with GUI front ends. Because e-business scenario
testing is more complicated than general software testing, Segue may experience
issues with its product quality. In the second quarter of 1998, Segue introduced
"LiveQuality," an e-business scenario testing product. In the fourth quarter of
1998, Segue acquired Eventus Software and Black & White Software which provided
Segue with other technologies to expand its current line of e-business testing
products. Segue's shift from a general software testing company to an e-business
testing company during the past year has resulted in significant changes in (i)
Segue's organizational structure, (ii) management personnel, (iii) product mix,
and (iv) sales approach. If Segue fails to effectively manage these changes, or
make other changes which may be needed in connection with such shift to an e-
business testing company, Segue's business, operating results and financial
condition may be materially adversely affected.
The development of a market for Segue's products is uncertain. The market
for automated software testing products is relatively new and undeveloped.
Marketing and sales techniques in the automated software testing marketplace, as
well as the bases for competition, are not well established. There can be no
assurance as to the extent that a significant market for automated software
testing products will develop or the extent to which Segue's products will be
accepted in that market. Although Segue believes that the current trend
2
<PAGE>
toward increased use of automated software testing will continue, a majority of
software testing is still carried out manually, and there can be no assurance
that the automated software testing market will enjoy continued growth.
The commercial market for products and services designed for use on the
Internet, Intranet and Extranet has only recently begun to develop. The success
of Segue's products focused on e-commerce and Internet applications will depend
on the growth of the market and on its ability to continue to enhance its
products to work with all of the prevalent technologies driving Internet
applications. There can be no assurance that Segue will be able to effectively
adapt its products to the prevalent technologies being used on e-commerce
applications or to successfully compete in the market for Internet-related
products and services. As is typical for new and rapidly evolving industries,
demand for recently introduced products is highly uncertain.
Segue may have difficulty managing its growth. Segue has been experiencing a
period of rapid growth, including increases in the number of orders, customers
and employees. Segue's rapid growth has placed, and may continue to place,
strains on its management, operations and systems. To manage future growth
effectively, Segue must expand, improve and effectively utilize its operational,
management, marketing, sales and financial systems as necessitated by changes in
its business. Segue is implementing an ERP information system and opening a
Technical Support Center in Ireland in 1999, both of which could be disruptive.
Additionally, as part of the restructuring plan in the first quarter of 1999
Segue significantly changed the sales management team and consolidated the
position of Senior Vice President of Research and Development with the position
of Senior Vice President and General Manager of the executive management team.
In conjunction with these management changes, Segue also changed the structure
of its internal organization by adding product divisions which relate to its e-
business testing products. Segue also refocused its sales and marketing approach
to focus on e-commerce applications. There can be no assurance that Segue will
be able to effectively manage such changes and such changes are likely to be
disruptive.
Segue may be subject to risks associated with its recent acquisitions and
future acquisitions. In the fourth quarter of 1998 Segue acquired Eventus
Software and Black & White Software in two separate transactions. Segue's
product range and customer base have increased in the recent past due in part to
these acquisitions. These acquisitions provided Segue with technologies to
expand its current line of e-business testing products. There can be no
assurance that the integration of all of the acquired technologies will be
successful or will not result in unforeseen difficulties which may absorb
significant management attention.
In the future, Segue may acquire additional businesses or product lines. The
recently completed acquisitions, or any future acquisition, may not produce the
revenue, earnings or business synergies that it anticipated, and an acquired
product, service or technology might not perform as expected. Prior to
completing an acquisition, however, it is difficult to determine if such
benefits can actually be realized. The process of integrating acquired companies
into Segue's business may also result in unforeseen difficulties. Unforeseen
operating difficulties may absorb significant management attention, which Segue
might otherwise devote to its existing business. Also, the process may require
significant financial resources that Segue might otherwise allocate to other
activities, including the ongoing development or expansion of its existing
operations. The integration of the acquisitions of Eventus Software and Black &
White Software will take longer than expected.
If Segue pursues a future acquisition, its management could spend a
significant amount of time and effort in identifying and completing the
acquisition. To pay for a future acquisition, Segue might use capital stock or
cash. Alternatively, Segue might borrow money from a bank or other lender. If
Segue uses capital stock as it did with its recent acquisitions, Segue's
stockholders would experience dilution of their ownership interests. If Segue
uses cash or debt financing, its financial liquidity will be reduced.
Segue has recently changed its sales approach and restructured its sales
teams. As part of the shift in Segue's business to e-business testing, Segue has
recently begun to focus its marketing and sales efforts with a solution sales
approach. Segue's direct sales force focuses on large enterprise and strategic
sales in an effort to provide as many solutions as a particular client needs. To
facilitate the solution sales approach, Segue restructured its direct sales
force into teams of one strategic sales representative and one technical support
engineer. Segue has also recently hired additional sales personnel and worked to
integrate sales personnel from Eventus and Black & White. There can be no
assurance that this sales approach will result in greater revenues. Because
Segue's sales force focuses on making larger sales, its sales cycle may
increase.
3
<PAGE>
Larger purchases will take longer than smaller sales because customers will
generally take more time to decide on whether to make larger purchases. A longer
sales cycle reduces Segue's ability to forecast revenue levels. Any delay or
loss in sales of Segue's products could have a material adverse effect on its
business, operating results and financial condition, and could cause its
operating results to vary significantly from quarter to quarter.
Segue's performance will depend in part on the growth and commercial
acceptance of the Internet. Segue's future success will depend substantially
upon the widespread adoption of the Internet as a primary medium for commerce
and business applications. If the Internet does not become a viable and
substantial commercial medium, Segue's business, operating results and financial
condition will be materially adversely affected. The Internet has experienced,
and is expected to continue to experience, significant user and traffic growth
which has, at times, caused user frustration with slow access and download
times. The Internet infrastructure may not be able to support the demands
placed on it by continued growth. Moreover, critical issues concerning the
commercial use of the Internet, such as security, reliability, cost,
accessibility and quality of service, remain unresolved and may negatively
affect the growth of Internet use or the attractiveness of commerce and business
communication on the Internet. In addition, the Internet could lose its
viability due to delays in the development or adoption of new standards and
protocols to handle increased activity or due to increased government regulation
and taxation of Internet commerce.
Segue faces significant competition from other software companies. The
market for software quality management tools is new, intensely competitive and
subject to rapid technological change. Segue expects competition to intensify
in the future. Segue currently encounters competition from a number of public
and private companies including Mercury Interactive Corporation, Rational
Software Corporation and Compuware Corporation. Many of Segue's current and
potential competitors have longer operating histories, greater name recognition,
larger installed customer bases, and significantly greater financial, technical
and marketing resources than it does and, therefore, may be able to respond more
quickly than Segue can to new or changing opportunities, technologies, standards
or customer requirements or may be able to devote greater resources to the
promotion and sale of their products than Segue. Segue may also face increased
competition from the recent consolidation of several companies in the automated
software quality market. An increase in competition could result in price
reductions and loss of market share. Such competition and any resulting
reduction in profitability could have a material adverse effect on Segue's
business, operating results and financial condition.
Segue's business could be adversely affected if its products contain errors.
Software products as complex as Segue's products may contain undetected errors
or "bugs," which result in product failures. The occurrence of errors could
result in loss of or delay in revenue, loss of market share, failure to achieve
market acceptance, diversion of development resources, injury to Segue's
reputation, or damage to its efforts to build brand awareness, any of which
could have a material adverse effect on Segue's business, operating results and
financial condition.
Segue's future success will depend on its ability to enhance existing
products and develop new products. To be competitive, Segue must develop and
introduce product enhancements and new products that increase its customers'
ability to test their systems. If Segue fails to develop and introduce new
products and enhancements successfully and on a timely basis, it could have a
material adverse effect on Segue's business, operating results and financial
condition. The emerging nature of the automated software testing and e-commerce
testing markets requires that Segue continually improve the performance,
features and reliability of its products, particularly in response to
competitive offerings and evolving customer needs. Segue must also introduce
enhancements to existing products as quickly as possible and prior to the
introduction of competing products. Segue has acquired, and may in the future
acquire, technologies to provide it with the tools to introduce new products or
to enhance current products. The success of such acquisitions will depend in
part on Segue's ability to effectively integrate the technologies.
Segue must hire and retain skilled personnel in a tight labor market.
Qualified personnel are in great demand throughout the software industry.
Segue's success depends in large part upon its ability to attract, train,
motivate and retain highly skilled employees, particularly sales and marketing
personnel, software engineers and other senior personnel. There is intense
competition for sales personnel in Segue's business, and there can be no
assurance that Segue will be successful in attracting, integrating, motivating
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and retaining new sales personnel. The failure of Segue to attract and retain
the highly skilled personnel that are integral to its direct sales, product
development, service and support teams may limit the rate at which Segue can
generate sales and develop new products or product enhancements. This could
have a material adverse effect on Segue's business, operating results and
financial condition.
Segue faces many risks associated with international business activities.
Segue derived approximately 16% of its total product sales from international
customers in 1998. The international market for software products is highly
competitive and Segue expects to face substantial competition in this market
from established and emerging companies. Segue faces many risks associated with
international business activities including currency fluctuations, imposition of
government controls, export license requirements, restrictions on the export of
critical technology, political and economic instability, tailoring of products
to local requirements, trade restrictions, changes in tariffs and taxes,
difficulties in staffing and managing international operations, longer accounts
receivable payment cycles and the burdens of complying with a wide variety of
foreign laws and regulations. To the extent that Segue is unable to expand
international sales in a timely and cost-effective manner, Segue's business
could be materially adversely affected.
Segue may be affected by unexpected Year 2000 problems. Many existing
computer systems and software products do not properly recognize dates after
December 31, 1999. This "Year 2000" problem could result in miscalculations,
data corruption, system failures or disruptions of operations. Segue is subject
to potential Year 2000 problems affecting its products, its internal systems and
the systems of its vendors and distributors, any of which could have a material
adverse effect on Segue's business, operating results and financial condition.
In addition, there can be no assurance that Year 2000 errors or defects will
not be discovered in Segue's internal software systems and, if such errors or
defects are discovered, there can be no assurance that the costs of making such
systems Year 2000 compliant will not be material.
Year 2000 errors or defects in the internal systems maintained by Segue's
vendors or distributors could require Segue to incur significant unanticipated
expenses to remedy any problems or replace affected vendors and could reduce
Segue's revenue from its indirect distribution channel.
Segue may be subject to risks associated with its channel partner program.
Although Segue has not historically sold significant amounts of its products
through indirect channels, Segue intends to continue to develop channel sales as
part of its business strategy. Recently Segue has added significant resources to
expand its channel sales, including dedicating sales personnel to increase sales
through current channel partners and developing relationships with other
potential channel partners. There can be no assurance that Segue's greater
efforts will result in an increase in revenues. Furthermore, Segue may be
subject to certain distinct risks associated with channel sales. Segue licenses
its products to channel partners at a discount and such partners re-license the
products to end-users. Segue's agreements with its channel partners are non-
exclusive and provide the channel partners with 60-day price protection. Because
Segue's channel partners generally order products after they have received
purchase orders, there is no requirement that Segue repurchase any product.
Segue typically does not grant its channel partners a contractual right to
return software products. When approved by management, however, Segue has
accepted returns of certain software products and has provided an allowance for
the specified products. Segue selects its channel partners based on the
partner's financial viability, product expertise and market focus. In order for
Segue's strategy to broaden market penetration through its channel partner
program to be successful, Segue must increase its unit sales to offset the
discount Segue is providing to its channel partners. There can be no assurance
that Segue will succeed in the development of these channels. Moreover, selling
through indirect channels may limit Segue's contact with the end users of its
products. As a result, Segue's ability to accurately forecast sales, evaluate
customer satisfaction and recognize emerging customer requirements may be
hindered and its ability to develop and maintain customer goodwill may be
limited. Furthermore, Segue's existing or future channel partners may choose to
devote greater resources to marketing and supporting the products of other
companies. In addition, Segue will need to resolve potential conflicts among its
sales force and channel partners.
Segue could be subject to product liability claims. In selling its
products, Segue relies primarily on "shrink wrap" licenses that contain, among
other things, provisions protecting against the unauthorized use, copying and
transfer of the licensed program and limiting Segue's exposure to potential
product liability claims. However, these licenses are not signed by the
licensees and the provisions of these licenses, including the provisions
limiting Segue's exposure to product liability claims, may therefore be
unenforceable under the
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laws of certain jurisdictions. Segue's products may be used on applications
that are critical to the operations of its customers' businesses. Any failure
in a customer's applications could result in a claim for substantial damages
against Segue, regardless of Segue's responsibility for such failure. Although
Segue maintains general liability insurance, including coverage for errors and
omissions, there can be no assurance that such coverage will continue to be
available on reasonable terms or will be available in amounts sufficient to
cover one or more large claims, or that the insurer will not disclaim coverage
as to any future claim.
Segue's success depends on its ability to protect its proprietary
technology. Segue's success depends to a significant degree upon the protection
of its software and other proprietary technology. The unauthorized reproduction
or other misappropriation of Segue's proprietary technology could enable third
parties to benefit from Segue's technology without paying Segue for it. This
could have a material adverse effect on Segue's business, operating results and
financial condition. Although Segue has taken steps to protect its proprietary
technology, they may be inadequate. Segue currently relies on a combination of
trademark, copyright and trade secret laws and contractual provisions to protect
its proprietary rights in its products. Segue presently has no registered
copyrights. Segue has a patent but there can be no assurance that the patent
would be upheld if challenged. Moreover, the laws of other countries in which
Segue markets its products may afford little or no effective protection of
Segue's intellectual property. There can be no assurance that Segue's
competitors will not independently develop technologies that are substantially
equivalent or superior to Segue's technology. If Segue resorts to legal
proceedings to enforce its intellectual property rights, the proceedings could
be burdensome and expensive and could involve a high degree of risk. There can
be no assurance that third parties will not assert intellectual property
infringement claims against Segue. If Segue were to discover that any of its
products violated third party proprietary rights, there can be no assurance that
Segue would be able to obtain licenses on commercially reasonable terms to
continue offering the product without substantial reengineering or that any
effort to undertake such reengineering would be successful.
Any claim of infringement could cause Segue to incur substantial costs
defending against the claim, even if the claim is invalid, and could distract
management from Segue's business. Furthermore, a party making such a claim
could secure a judgment that requires Segue to pay substantial damages. A
judgment could also include an injunction or other court order that could
prevent Segue from selling its products. Any of these events could have a
material adverse effect on Segue's business, operating results and financial
condition.
THE COMPANY
Segue is a Delaware corporation with its principal executive offices at 201
Spring Street, Lexington, Massachusetts 02421. Its telephone number is (781)
402-1000.
USE OF PROCEEDS
Segue will not receive any proceeds from the sale of the common stock under
this prospectus.
MATERIAL TERMS OF THE EVENTUS TRANSACTION
On December 3, 1998, Segue and its wholly-owned subsidiary, SSI Merger
Corp., entered into an Agreement and Plan of Merger dated December 3, 1998, with
Eventus Software and the stockholders of Eventus Software. Under the terms of
the merger agreement, SSI Merger Corp. was merged with and into Eventus
Software, with Eventus Software surviving the merger. As a result of the
merger, which was treated for accounting purposes as a "pooling of interests"
transaction, the stockholders of Eventus Software received an aggregate of
312,990 shares of common stock, and the holders of outstanding Eventus Software
options and warrants received options and warrants to purchase up to an
aggregate of 31,951 shares of common stock. Eventus Software is now a wholly-
owned subsidiary of Segue based in San Francisco, California and engaged in the
business of developing and marketing web management software.
The stockholders of Eventus Software entered into a Registration Rights
Agreement with Segue pursuant to which Segue agreed to register 50% of the
shares of common stock issued to such stockholders in connection with the
merger. Under the registration rights agreement, each selling stockholder is
entitled for a period of 30 days in which this registration statement is
effective (the "Initial Sale Period") to sell shares of common stock issued by
Segue to such holder in connection with the merger. Near the end of the Initial
Sale Period, Segue will determine the total number of shares of common stock
registered pursuant to this registration statement which remain unsold and will
within five business days of the end of such 30-day period notify the selling
stockholders of the number of unsold shares (the "Request Notice"). The selling
stockholders will have the right to sell under this registration statement any
additional shares of common stock (up to the aggregate amount unsold) during the
Additional Sale Period (as defined below) by giving written notice to Segue
within five business days after delivery of the Request Notice advising Segue of
the number of shares that such selling stockholder desires to sell (the
"Additional Sale Notice"). If the number of shares requested to be sold by the
selling stockholders exceeds the amount unsold after the Initial Sale Period,
then the available shares will be allocated among the selling stockholders who
have timely sent an Additional Sale Notice to Segue on a pro rata basis. Within
five business days after the date upon which the Request Notice is required to
be delivered, Segue shall notify (the "Participation Notice") each participating
selling stockholder of the number of shares that such stockholder will be
entitled to sell during the Additional Sale Period. The Additional Sale Period
is the period from the date of the Participation Notice to a date on which there
has elapsed a total of 30 days for which this registration statement has been
effective and the participating selling stockholders could have sold their
shares thereunder. The selling stockholders agree that from the period after the
end of the Initial Sale Period to the beginning of the Additional Sale Period,
they will not sell any shares registered under this registration statement.
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SELLING STOCKHOLDERS
<TABLE>
<CAPTION>
Number of Shares of Number of Shares Percentage
Common Stock Number of Shares of Common Stock Ownership
Name of Selling Beneficially Owned as of Common Stock Beneficially Owned After
Stockholder of March 15, 1999(1) Offered Hereby After Offering(2) Offering
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<S> <C> <C> <C> <C>
Edan Kabatchnik 29,173 14,430 14,743 *
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SQRIBE 42,755 21,378 21,377 *
TECHNOLOGIES CORP
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Mike Burkland(3) 126,939 63,470 63,469 *
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Tom Burkland 192 96 96 *
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Kevin Edwards 98 49 49 *
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Bill Fry 141 71 70 *
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Michael Funk 28 14 14 *
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Nasreen Husain 384 192 192 *
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Ben King 1,359 680 679 *
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Eduard Klinkovich 42 21 21 *
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Chris Kocher 47 24 23 *
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Levinger & Associates 171 86 85 *
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Brian Perry 4,448 2,224 2,224 *
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David Shen 128 64 64 *
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Kerry Smith 51 26 25 *
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Troy Terry 832 416 416 *
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Charmen Weidenbach 1,595 798 797 *
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Steve Weiss 81 41 40 *
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Amisil Holdings Limited 27,421 13,711 13,710 *
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Dave DeWalt(4) 25,486(5) 7,479 7,478 *
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Arti Bhargava 7,478 3,739 3,739 *
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Fenwick & West LLP 2,492 1,246 1,246 *
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Mark C. Stevens 2,492 1,246 1,246 *
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Sumitomo Corporation 30,000 15,000 15,000 *
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Sumisho Datacom, Inc.(6) 15,000 7,500 7,500 *
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Sumitronics Inc.(7) 5,000 2,500 2,500 *
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</TABLE>
* Less than one percent.
- --------------------
(1) Beneficial ownership is determined in accordance with the rules of the SEC
and generally includes voting or investment power with respect to securities
and includes any securities which the person has the right to acquire within
60 days of March 15, 1999 through the conversion or exercise of any security
or other right.
(2) Gives effect to the sale of the shares of common stock.
(3) Mike Burkland is currently receiving termination benefits from Segue.
(4) Dave DeWalt is an employee of Segue.
(5) Represents 14,957 shares of common stock currently held and options to
purchase 10,529 shares of common stock.
(6) Sumisho Datacom, Inc. is the exclusive distributor for the sale of
SilkControl in Japan.
(7) Sumitronics Inc. is acting as a purchasing and shipping agent of Sumisho
Datacom, Inc. for SilkControl.
7
<PAGE>
PLAN OF DISTRIBUTION
The shares of common stock offered by this prospectus (the "Shares") are
being offered on behalf of the selling stockholders. Such Shares may be sold or
distributed from time to time by the selling stockholders, or by donees or
transferees of, or other successors in interest to, the selling stockholders,
directly to one or more purchasers or through brokers, dealers or underwriters
who may act solely as agents or may acquire such Shares as principals, at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices, at negotiated prices, or at fixed prices, which may be changed.
The sale of the Shares offered hereby may be effected in one or more of the
following methods: (i) ordinary brokers' transactions; (ii) transactions
involving cross or block trades or otherwise on the Nasdaq National Market;
(iii) purchases by brokers, dealers or underwriters as principal and resale by
such purchasers for their own accounts pursuant to this prospectus; (iv) "at the
market" to or through market makers or into an existing market for Segue common
stock; (v) in other ways not involving market makers or established trading
markets, including direct sales to purchasers or sales effected through agents;
(vi) through transactions in options, swaps or other derivatives (whether
exchange-listed or otherwise); (vii) in privately negotiated transactions;
(viii) to cover short sales; or (ix) any combination of the foregoing.
From time to time, one or more of the selling stockholders may pledge,
hypothecate or grant a security interest in some or all of the Shares owned by
them, and the pledgees, secured parties or persons to whom such Shares have been
hypothecated shall, upon foreclosure in the event of default, be deemed to be
selling stockholders hereunder. The number of Shares beneficially owned by
those selling stockholders who so transfer, pledge, donate or assign such Shares
will decrease as and when they take such actions. The plan of distribution for
the Shares sold hereunder will otherwise remain unchanged, except that the
transferees, pledgees, donees or other successors will be selling stockholders
hereunder. In addition, a selling stockholder may, from time to time, sell
short the Shares, and in such instances, this prospectus may be delivered in
connection with such short sales and the shares of Segue common stock offered
hereby may be used to cover such short sales.
A selling stockholder may enter into hedging transactions with broker-
dealers and the broker-dealers may engage in short sales of Segue common stock
in the course of hedging the positions they assume with such selling
stockholder, including, without limitation, in connection with distributions of
Segue common stock by such broker-dealers. A selling stockholder may also enter
into option or other transactions with broker-dealers that involve the delivery
of the Shares to the broker-dealers, who may then resell or otherwise transfer
such shares of Segue common stock. A selling stockholder may also loan or
pledge its Shares to a broker-dealer and the broker-dealer may sell the Shares
so loaned or upon a default may sell or otherwise transfer the pledged Shares.
Brokers, dealers, underwriters or agents participating in the distribution
of the Shares as agents may receive compensation in the form of commissions,
discounts or concessions from the selling stockholders and/or purchasers of the
Shares for whom such broker-dealers may act as agent, or to whom they may sell
as principal, or both (which compensation as to a particular broker-dealer may
be less than or in excess of customary commissions). The selling stockholders
and any broker-dealers who act in connection with the
8
<PAGE>
sale of the Shares hereunder may be deemed to be "Underwriters" within the
meaning of the Securities Act, and any commissions they receive and proceeds of
any sale of the Shares may be deemed to be underwriting discounts and
commissions under the Securities Act. Neither Segue nor any selling stockholders
can presently estimate the amount of such compensation. Segue knows of no
existing arrangements between any selling stockholders, any other stockholder,
broker, dealer, underwriter or agent relating to the sale or distribution of the
Shares.
Segue will pay substantially all of the expenses incident to the
registration, offering and sale of the Shares to the public other than
commissions or discounts of underwriters, broker-dealers or agents. Segue has
also agreed to indemnify the selling stockholders and certain related persons
against certain liabilities, including liabilities under the Securities Act.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of Segue, Segue
has been advised that in the opinion of the SEC such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable.
Segue has advised the selling stockholders that during such time as they may
be engaged in a distribution of the Shares included herein they are required to
comply with Regulation M promulgated under the Securities Exchange Act of 1934.
With certain exceptions, Regulation M precludes any selling stockholder, any
affiliated purchasers, and any broker-dealer or other person who participates in
such distribution from bidding for or purchasing, or attempting to induce any
person to bid for or purchase any security which is the subject of the
distribution until the entire distribution is complete. Regulation M also
prohibits any bids or purchases made in order to stabilize the price of a
security in connection with the distribution of that security. All of the
foregoing may affect the marketability of the Shares.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
This prospectus is part of a registration statement Segue filed with the SEC
to register the Segue common stock offered in this offering. It does not repeat
important information that you can find in the registration statement or in the
reports and other documents that Segue files with the SEC. The SEC allows Segue
to "incorporate by reference" the information it files with them. This means
that Segue can disclose important information to you by referring to other
documents that are legally considered to be part of this prospectus, and later
information that it files with the SEC will automatically update and supersede
the information in this prospectus and the documents listed below. Segue
incorporates by reference the documents listed below, and any future filings
made with the SEC under Section 13(a), 13(c), 14, or 15(d) of the Securities
Exchange Act of 1934 until the selling stockholders sell all the shares of
common stock offered under this prospectus:
1. the Annual Report on Form 10-K for the fiscal year ended
December 31, 1998;
2. the Quarterly Report on Form 10-Q/A for the fiscal quarter ended
September 30, 1998;
3. the Current Report on Form 8-K filed with the SEC on January 14, 1999;
4. the Current Report on Form 8-K filed with the SEC on December 17, 1998;
and
5. the description of common stock contained in Segue's Registration
Statement on Form 8-A, filed with the SEC on February 16, 1996, as
amended, under Section 12 of the Securities Exchange Act of 1934 and any
amendments or reports filed for the purpose of updating such description.
You may request a copy of these filings at no cost by writing or telephoning
Segue at the following address: Chief Financial Officer, Segue Software, Inc.,
201 Spring Street, Lexington, Massachusetts 02421 (Telephone: (781) 402-1000).
You should rely only on the information incorporated by reference or
contained in this prospectus or any supplement. Segue has not authorized anyone
else to provide you with different or additional
9
<PAGE>
information. The selling stockholders are not making an offer of these
securities in any state where the offer is not permitted. You should not assume
that the information in this prospectus or any supplement is accurate as of any
date other than the date on the front of those documents.
Segue files annual, quarterly and special reports, proxy statements and
other information electronically with the SEC. You may read a copy of any
reports, statements or other information that Segue files with the SEC at the
SEC's Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. Please
call the SEC at 1-800-SEC-0330 for further information on the Public Reference
Room. Segue's SEC filings are also available from the Internet site maintained
by the SEC at http://www.sec.gov.
LEGAL MATTERS
The validity of the shares of common stock has been passed upon for Segue by
Goodwin, Procter & Hoar LLP, Boston, Massachusetts.
EXPERTS
The consolidated balance sheets as of December 31, 1998 and 1997 and the
consolidated statements of operations, stockholders' equity and cash flows for
each of the three years in the period ended December 31, 1998, incorporated by
reference in this prospectus, have been incorporated herein in reliance on the
report of PricewaterhouseCoopers LLP, independent accountants, given on the
authority of that firm as experts in accounting and auditing.
10
<PAGE>
================================================================================
You should rely only on the information incorporated by reference or contained
in this prospectus or any supplement. Segue has not authorized anyone else to
provide you with different or additional information. The selling stockholders
are not making an offer of the Segue common stock in any state where the offer
is not permitted. You should not assume that the information in this prospectus
or any supplement is accurate as of any date other than the date on the front of
those documents.
-------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Risk Factors............................................................... 2
The Company................................................................ 6
Use of Proceeds............................................................ 6
Material Terms of the Eventus Transaction.................................. 6
Selling Stockholders....................................................... 7
Plan of Distribution....................................................... 8
Incorporation of Certain Documents by Reference............................ 9
Legal Matters.............................................................. 10
Experts.................................................................... 10
</TABLE>
---------------------
================================================================================
================================================================================
156,501 Shares
Segue Software, Inc.
Common Stock
---------------------
PROSPECTUS
---------------------
_________, 1999
================================================================================
<PAGE>
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The expenses in connection with the issuance and distribution of the Common
Stock being registered are set forth in the following table (all amounts except
the registration fee are estimated):
<TABLE>
<CAPTION>
<S> <C>
Registration fee $ 239.29
Legal fees and expenses 5,000.00
Accounting Fees 5,000.00
Printing fees 5,000.00
Miscellaneous 9,760.71
----------
Total $25,000.00
==========
</TABLE>
All expenses referenced above will be borne by Segue.
Item 15. Indemnification of Directors and Officers.
Subsection (a) of Section 145 of the Delaware General Corporation Law (the
"DGCL") empowers a corporation to indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation) by reason of the
fact that the person is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by the person in connection with such action, suit or proceeding if the
person acted in good faith and in a manner the person reasonably believed to be
in or not opposed to the best interests of the corporation, and, with respect to
any criminal action or proceeding, had no reasonable cause to believe the
person's conduct was unlawful. Under subsection (a) the termination of any
action, suit or proceeding by judgment, order, settlement, conviction or upon a
plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which the
person reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that the person's conduct was unlawful.
Subsection (b) of Section 145 of the DGCL empowers a corporation to indemnify
any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that the
person is or was a director, officer, employee or agent of the corporation, or
is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise against expenses (including attorneys' fees) actually and
reasonably incurred by the person in connection with the defense or settlement
of such action or suit if the person acted in good faith and in a manner the
person reasonably believed to be in or not opposed to the best interests of the
corporation and except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the corporation unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Court of Chancery or such other court
shall deem proper.
Subsection (d) of Section 145 of the DGCL permits indemnification under
subsections (a) and (b) of Section 145 only if authorized in the specific case
following a determination that the individual seeking indemnification has met
the standard of conduct required by the applicable subsection. Such
determination shall be made (1) by a majority vote of the directors who are not
parties to such action, suit or proceeding, even though less than a quorum, or
(2) if there are no such directors, or if such directors so direct, by
independent legal counsel in a written opinion, or (3) by the stockholders.
Section 145 further provides that to the extent a director or officer of a
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections (a) and (b) of Section
145, or in the defense of any claim, issue or matter therein, he or she shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him or her in connection therewith; that indemnification provided
for by Section 145 shall not be deemed exclusive of any other rights to which
II-1
<PAGE>
the indemnified party may be entitled; that indemnification provided for by
Section 145 shall, unless otherwise provided when authorized or ratified,
continue as to a person who has ceased to be a director, officer, employee or
agent and shall inure to the benefit of such person's heirs, executors and
administrators; and that the corporation has the power to purchase and maintain
insurance on behalf of a director or officer of the corporation against any
liability asserted against him or her and incurred by him or her in any such
capacity, or arising out of his or her status as such whether or not the
corporation would have the power to indemnify him or her against such
liabilities under Section 145.
Article VII of Segue Software, Inc.'s Amended and Restated Certificate of
Incorporation, as amended (the "Certificate"), and Article V of Segue Software,
Inc.'s By-laws provides for indemnification by the Company, to the fullest
extent permitted by Section 145 of the DGCL, the same exists or may hereafter be
amended, of its directors, officers, and certain persons serving at the request
of the Company as a director, officer, employee or agent of another company, or
of a partnership, joint venture, trust or other enterprise, including service
with respect to an employee benefit plan (hereinafter "Indemnitee") against all
expense, liability and loss (including attorney's fees, judgments, fines, ERISA
excise taxes or penalties and amounts paid in settlement) reasonably incurred or
suffered by the Indemnitee in connection with the defense or settlement of any
threatened, pending or completed legal proceeding, whether civil, criminal,
administrative or investigative, in which said Indemnitee is involved by reason
of his relationship with Segue Software, Inc.
Article VIII of the Certificate provides that no director of Segue Software,
Inc. shall be personally liable to the Company or its stockholders for monetary
damages for breach of fiduciary duty as a director, except for liability (i)
for any breach of the director's duty of loyalty to Segue Software, Inc. or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) in respect of
certain unlawful dividend payments or stock redemptions or repurchases, or (iv)
for any transaction from which the director derived an improper personal
benefit. In addition, the Certificate provides that if the DGCL is amended to
authorize the further elimination or limitation of the liability of directors,
then the liability of a director of Segue Software, Inc. shall be eliminated or
limited to the fullest extent permitted by the DGCL as so amended.
Item 16. Exhibits.
Exhibit No. Description
- ----------- -----------
*4.1 Registration Rights Agreement, dated as of December 3, 1998.
*5.1 Opinion of Goodwin, Procter & Hoar LLP as to the legality of the
Common Stock being registered.
10.1 (1) Agreement and Plan of Merger, dated as of December 3, 1998
(excluding schedules and exhibits, which the Registrant agrees to
furnish supplementally to the Commission upon request).
*23.1 Consent of PricewaterhouseCoopers LLP.
23.2 Consent of Goodwin, Procter & Hoar LLP (included in Exhibit 5.1
hereto).
24.1 Powers of Attorney (included on page II-4).
- ---------------------
(1) Incorporated by reference from Exhibit 2.1 to Segue Software, Inc.'s current
report on Form 8-K dated December 17, 1998.
* Filed herewith.
Item 17. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement; and
II-2
<PAGE>
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) herein do not
apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed by the
undersigned registrant pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in the registration
statement;
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof; and
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing
of the registrant's annual report pursuant to Section 13(a) or 15(d) of
the Securities Exchange Act of 1934 that is incorporated by reference in
the Registration Statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the provisions described under Item
15 above, or otherwise, the registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act of 1933 and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of
expenses incurred or paid by a director, officer, or controlling person
of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act of 1933 and will be governed by the final
adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Segue Software,
Inc. certifies that it has duly caused this amendment to the registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Lexington, Massachusetts, on the 15th day of April, 1999.
Segue Software, Inc.
By: /s/ Stephen B. Butler
------------------------------------
Stephen B. Butler
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that we, the undersigned officers and
directors of Segue Software, Inc. hereby severally constitute Stephen B. Butler
and Carl D. Blandino, and each of them singly, our true and lawful attorneys
with full power to them, and each of them singly, to sign for us and in our
names in the capacities indicated below, the Registration Statement filed
herewith and any and all amendments to said Registration Statement, and
generally to do all such things in our names and in our capacities as officers
and directors to enable Segue Software, Inc. to comply with the provisions of
the Securities Act of 1933 and all requirements of the Securities and Exchange
Commission, hereby ratifying and confirming our signatures as they may be signed
by our said attorneys, or any of them, to said Registration Statement and any
and all amendments thereto.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
amendment to the registration statement has been signed by the following persons
in the capacities and on the dates indicated.
Signature Capacity Date
--------- -------- ----
/s/ Stephen B. Butler President, Chief Executive April 15, 1999
- ------------------------- Officer and Director (Principal
Stephen B. Butler Executive Officer)
/s/ Carl D. Blandino Senior Vice President of April 15, 1999
- ------------------------- Administration, Chief Financial
Carl D. Blandino Officer (Principal Financial and
Accounting Officer)
/s/ Leonard E. Baum Director April 15, 1999
- -------------------------
Leonard E. Baum
/s/ Ronald D. Fisher Director April 15, 1999
- -------------------------
Ronald D. Fisher
/s/ John R. Levine Director April 15, 1999
- -------------------------
John R. Levine
/s/ Howard L. Morgan Director April 15, 1999
- -------------------------
Howard L. Morgan
/s/ James H. Simons Director April 15, 1999
- -------------------------
James H. Simons
II-4
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
*4.1 Registration Rights Agreement, dated as of December 3, 1998.
*5.1 Opinion of Goodwin, Procter & Hoar LLP as to the legality of the
Common Stock being registered.
10.1 Agreement and Plan of Merger, dated as of December 3, 1998
(excluding schedules and exhibits, which the Registrant agrees to
furnish supplementally to the Commission upon request)(1)
*23.1 Consent of PricewaterhouseCoopers LLP.
23.2 Consent of Goodwin, Procter & Hoar LLP (included in Exhibit 5.1
hereto).
24.1 Powers of Attorney (included on page II-4).
- -------------------
(1) Incorporated by reference from Exhibit 2.1 to Segue Software, Inc.'s current
report on Form 8-K dated December 17, 1998.
* Filed herewith.
<PAGE>
EXHIBIT 4.1
-----------
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement"), dated as of December 3,
1998, is entered into by and among Segue Software, Inc., a Delaware corporation
(the "Company"), and each Holder (as hereinafter defined) executing a signature
page hereto.
This Agreement is made pursuant to a certain Agreement and Plan of Merger
(the "Merger Agreement"), dated as of December 3, 1998, by and among the
Company, SSI Merger Corp., Eventus Software, Inc., a California corporation
("Eventus") and the Principal Stockholders of Eventus. In order to induce the
stockholders of Eventus to approve the Merger Agreement, the Company has agreed
to provide the registration rights set forth in this Agreement. The execution
of this Agreement is a condition to the closing of the transactions contemplated
by the Merger Agreement.
In consideration of the foregoing, the parties hereby agree as follows:
Section 1. Definitions.
-----------
As used in this Agreement, the following terms shall have the following
meanings:
"Actual Effective Date" shall have the meaning set forth in Section 2(a).
---------------------
"Advice" shall have the meaning set forth in Section 3.
------
"Affiliate" means, with respect to any specified Person, any other Person (i)
---------
directly or indirectly controlling (including, but not limited to, all directors
and executive officers of such Person), controlled by or under direct or
indirect common control with such specified Person, or (ii) that directly or
indirectly owns more than 10% of the voting securities of such Person. A Person
shall be deemed to control a corporation if such Person possesses, directly or
indirectly, the power to direct or cause the direction of the management and
policies of such corporation, whether through the ownership of voting
securities, by contract or otherwise.
"Business Day" means a day that is not a Legal Holiday.
------------
"Commission" means the United States Securities and Exchange Commission.
----------
"Common Stock" means the common stock, par value $.01 per share, of the
------------
Company.
"Company" shall have the meaning set forth in the preamble and shall include
-------
the Company's successors by merger, acquisition, reorganization or otherwise.
"Controlling Persons" shall have the meaning set forth in Section 5(a).
-------------------
"Damages" shall have the meaning set forth in Section 5(a).
-------
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
------------
time to time, or any successor statute, and the rules and regulations of the
Commission promulgated thereunder.
"Holder" means (i) each Person (other than the Company) executing a signature
------
page hereto and (ii) each Person (other than the Company) to whom a Holder
transfers Shares if such Person acquires such Shares as Registrable Securities.
"Holders' Counsel" means Fenwick & West LLP, special counsel to the Holders,
----------------
or any successor counsel selected by Holders of a majority in interest of the
Registrable Securities.
"Legal Holiday" means a Saturday, Sunday or a day on which banking
-------------
institutions in New York City, New York, or Boston, Massachusetts, or at such
place of payment, are not required to be opened.
"Merger Agreement" means the Agreement and Plan of Merger, dated as of the
----------------
date of this Agreement, by and among the Company, SSI Merger Corp., Eventus and
the Principal Stockholders of Eventus, pursuant to which the Shares are being
issued, as amended, modified or supplemented from time to time, together with
any exhibits, schedules or other attachments thereto.
"Nasdaq" shall have the meaning set forth in Section 3(j).
------
1
<PAGE>
"Objection Notice" shall have the meaning set forth in Section 3(a).
----------------
"Objecting Party" shall have the meaning set forth in Section 3(a).
---------------
"Person" means any individual, corporation, partnership, joint venture,
------
association, joint-stock company, trust, limited liability company,
unincorporated organization, government or other agency, or any political
subdivision thereof, or any other entity of whatever nature.
"Prospectus" means the prospectus included in any Registration Statement
----------
(including, without limitation, a prospectus that discloses information
previously omitted from a prospectus filed as part of an effective Registration
Statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Securities covered by such
Registration Statement, and all other amendments and supplements to the
prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such prospectus.
"Registrable Securities" means the Shares; provided, however, that any Shares
---------------------- -------- -------
shall cease to be Registrable Securities when (i) a Registration Statement
covering such Registrable Securities has been declared effective and such
Registrable Securities have been disposed of pursuant to such effective
Registration Statement, (ii) such Registrable Securities are transferred to any
Person other than a Holder pursuant to Rule 144 (or any successor rule or
similar provision then in effect, but not Rule 144A) under the Securities Act,
including a sale pursuant to the provisions of Rule 144(k), or (iii) such Shares
shall have ceased to be outstanding.
"Registration Expenses" shall have the meaning set forth in Section 4.
---------------------
"Securities Act" means the Securities Act of 1933 or any successor statute,
--------------
and the rules and regulations of the Commission promulgated thereunder.
"Shares" means fifty percent (50%) of the shares of Common Stock issued to
------
all stockholders of Eventus pursuant to the Merger Agreement and shall include
any additional shares issued with respect to such shares pursuant to a stock
dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation, or other reorganization.
"Shelf Registration Statement" means a registration statement of the Company
----------------------------
on the appropriate form for an offering to be made on a continuous basis
pursuant to Rule 415 under the Securities Act that covers any of the Registrable
Securities pursuant to the provisions of this Agreement, and all amendments and
supplements to any such registration statement, including post-effective
amendments, in each case including the Prospectus, all exhibits, and all
material incorporated by reference or deemed to be incorporated by reference in
such registration statement.
"Suspension Notice" shall have the meaning set forth in Section 3.
-----------------
"Suspension Period" shall have the meaning set forth in Section 3.
-----------------
"Target Effective Date" means April 30, 1999.
---------------------
"Target Effective Period" shall have the meaning set forth in Section 2(a).
-----------------------
"Target Filing Date" means March 31, 1999.
------------------
Section 2. Shelf Registration.
------------------
(a) Filing; Effectiveness. Not later than the Target Filing Date, the
---------------------
Company shall prepare and file with the Commission a Shelf Registration
Statement covering the resale of all of the Registrable Securities. The Company
shall use best efforts to cause the Shelf Registration Statement to be declared
effective on or before the Target Effective Date and to keep such Shelf
Registration Statement continuously effective for a period (the "Target
Effective Period") following the date on which such Shelf Registration Statement
is declared effective (the "Actual Effective Date"), which Target Effective
Period shall be equal to, with respect to each Holder, the period of time
between the Actual Effective Date and the date which is 180 days following the
Actual Effective Date.
(b) Supplements; Amendments. The Company agrees, if necessary, to
-----------------------
supplement or amend the Shelf Registration Statement, as required by the rules,
regulations or instructions applicable to the registration form used by the
Company for such Shelf Registration Statement or by the Securities Act or as
requested (which request shall result in the filing of a supplement or
amendment) by any Holder of Registrable Securities to which such Shelf
Registration Statement relates, and the Company agrees to furnish to the Holders
and Holders' Counsel copies of any such supplement or amendment prior to its
being used and/or filed with the Commission.
2
<PAGE>
(c) Effective Registration. A registration will not be deemed to have
----------------------
been effected as a Shelf Registration Statement unless the Shelf Registration
Statement with respect thereto has been declared effective by the Commission and
the Company has complied in all material respects with its obligations under
this Agreement with respect thereto; provided, however, that if after a Shelf
-------- -------
Registration Statement has been declared effective, the offering of Registrable
Securities pursuant to such Shelf Registration Statement is interfered with by
any stop order, injunction or other order or requirement of the Commission or
any other governmental agency or court, such Shelf Registration Statement will
be deemed not to have become effective during the period of such interference
until the offering of Registrable Securities pursuant to such Shelf Registration
Statement may legally resume. If a registration requested pursuant to this
Section 2 is deemed not to have been effected, then the Company shall continue
to be obligated to effect a registration pursuant to this Section 2.
Section 3. Registration Procedures.
-----------------------
In connection with the obligations of the Company to effect or cause the
registration of any Registrable Securities pursuant to the terms and conditions
of this Agreement, the Company shall use its best efforts to effect the
registration and sale of such Registrable Securities in accordance with the
intended method of disposition thereof as quickly as practicable, and in
connection therewith:
(a) The Company shall prepare and file with the Commission a Shelf
Registration Statement on the appropriate form under the Securities Act,
which Shelf Registration Statement shall comply as to form in all material
respects with the requirements of the applicable form and include all
financial statements required by the Commission to be filed therewith, and
use its best efforts to cause such Shelf Registration Statement to become
effective and remain effective in accordance with the provisions of this
Agreement; provided, however, that, at least three Business Days prior to
-------- -------
filing a Shelf Registration Statement or Prospectus or any amendments or
supplements thereto, including documents incorporated by reference after the
initial filing of the Shelf Registration Statement, the Company shall furnish
to the Holders of the Registrable Securities covered by such Shelf
Registration Statement and Holders' Counsel draft copies of all such
documents proposed to be filed, which documents will be subject to the review
of Holders' Counsel and the Company will not, unless required by law or this
Agreement, file any Shelf Registration Statement or amendment thereto or any
Prospectus or any supplement thereto to which Holders holding a majority in
interest of the Registrable Securities covered by such Shelf Registration
Statement shall object; provided, however, that any such objection to the
-------- -------
filing of any Shelf Registration Statement or amendment thereto or any
Prospectus or supplement thereto shall be made by written notice (the
"Objection Notice") delivered to the Company no later than two Business Days
after the party or parties asserting such objection or their counsel (the
"Objecting Party") receives draft copies of the documents that the Company
proposes to file. The Objection Notice shall set forth the objections and
the specific areas in the draft documents where such objections arise. The
Company shall have five Business Days after receipt of the Objection Notice
to correct such deficiencies to the satisfaction of the Objecting Party, and
will notify each Holder of any stop order issued or threatened by the
Commission in connection therewith and shall use its best efforts to prevent
the entry of such stop order or, if entered, to have such stop order
withdrawn at the earliest possible moment.
(b) The Company shall promptly prepare and file with the Commission such
amendments and post-effective amendments to such Shelf Registration Statement
as may be necessary to keep such Shelf Registration Statement effective for
as long as the Company is required to keep such Shelf Registration Statement
effective pursuant to the terms hereof; shall cause the Prospectus to be
supplemented by any required Prospectus supplement, and, as so supplemented,
to be filed pursuant to Rule 424 under the Securities Act; and shall comply
with the provisions of the Securities Act applicable to it with respect to
the disposition of all Registrable Securities covered by such Shelf
Registration Statement during the applicable period in accordance with the
intended methods of disposition by the Holders set forth in such Shelf
Registration Statement or amendment thereto or such Prospectus or supplement
thereto;
(c) The Company shall promptly furnish to any Holder of Registrable
Securities included in a Shelf Registration Statement, without charge, such
number of conformed copies of such Shelf Registration Statement and any post-
effective amendment thereto and such number of copies of the Prospectus
(including each preliminary Prospectus) and any amendments or supplements
thereto, any documents incorporated by reference therein and such other
documents as any such Holder may reasonably request in order to facilitate
the public sale or other disposition of the Registrable Securities being sold
by such Holder.
(d) The Company shall, on or prior to the date on which a Shelf
Registration Statement is declared effective, (i) use its best efforts to
register or qualify the Registrable Securities covered by such Shelf
Registration Statement under the securities or "blue sky" laws of each of the
50 states of the United States or obtain appropriate exemptions therefrom;
(ii) do any and all other acts and things which may be necessary or advisable
to enable the Holders of Registrable Securities included in such Shelf
Registration Statement to consummate the disposition of such Registrable
Securities in
3
<PAGE>
accordance with their intended method of disposition thereof; (iii) use its
best efforts to keep each such state securities or "blue sky" registration or
qualification (or exemption therefrom) effective during the period in which
the Company is required to keep such Shelf Registration Statement effective;
and (iv) do any and all other acts or things which may be necessary or
advisable to enable the Holders of Registrable Securities included in such
Shelf Registration Statement to complete the disposition in such
jurisdictions of such Registrable Securities in accordance with their
intended method of disposition thereof; provided, however, that the Company
-------- -------
shall not be required (x) to qualify to do business in any jurisdiction where
it would not otherwise be required to so qualify but for this Section 3(d) or
(y) to file any general consent to service of process.
(e) The Company shall use its best efforts to cause the Registrable
Securities covered by a Shelf Registration Statement to be registered with or
approved by such other governmental agencies or authorities as may be
necessary by virtue of the business and operations of the Company to enable
the Holders to consummate the disposition of such Registrable Securities in
accordance with their intended method of disposition thereof.
(f) The Company shall promptly notify each Holder of Registrable
Securities included in a Shelf Registration Statement and Holders' Counsel
(i) when such Shelf Registration Statement or a Prospectus or any post-
effective amendment or any Prospectus supplement has been filed and, with
respect to such Shelf Registration Statement or any post-effective amendment,
when the same has become effective, (ii) of any request by the Commission or
any state securities authority for amendments and supplements to such Shelf
Registration Statement and Prospectus or for additional information after
such Shelf Registration Statement has become effective, (iii) of the issuance
by the Commission of any stop order suspending the effectiveness of such
Shelf Registration Statement or the initiation or threatening of any
proceedings for that purpose, (iv) of the issuance by any state securities
commission or other regulatory authority of any order suspending the
registration or qualification or exemption from registration or qualification
of any of the Registrable Securities under state securities or "blue sky"
laws or the initiation of any proceedings for that purpose, and (v) of the
happening of any event which makes any statement of a material fact made in
such Shelf Registration Statement or related Prospectus untrue or which
requires the making of any changes in such Shelf Registration Statement or
Prospectus so that such Shelf Registration Statement or Prospectus will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; and, as promptly as practicable thereafter, prepare and file an
amendment to such Shelf Registration Statement with the Commission and
furnish to any such Holders a supplement or amendment to such Prospectus so
that, as thereafter deliverable to the purchasers of such Registrable
Securities, such Prospectus will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
(g) The Company shall promptly use its best efforts to prevent the
issuance of any order suspending the effectiveness of a Shelf Registration
Statement, and, if any such order suspending the effectiveness of a Shelf
Registration Statement is issued, shall promptly use its best efforts to
obtain the withdrawal of such order at the earliest possible moment.
(h) The Company shall cooperate with the Holders of Registrable
Securities included in a Shelf Registration Statement to facilitate the
timely preparation and delivery of certificates (which shall not bear any
restrictive legends unless required under applicable law) representing
Registrable Securities sold under such Shelf Registration Statement to the
purchasers thereof, and enable such Registrable Securities to be in such
denominations and registered in such names as such Holders may request and
keep available and make available to the Company's transfer agent prior to
the effectiveness of such Shelf Registration Statement a supply of such
certificates.
(i) Initial Sale Period; Additional Sale Period. For a period of thirty
-------------------------------------------
(30) days in which the Registration Statement is effective after the Actual
Effective Date of the Registration Statement (the "Initial Sale Period"), each
-------------------
Holder will be entitled to sell Registrable Securities under such Registration
Statement representing up to fifty percent (50%) of the Common Stock issued to
such Holder pursuant to the Merger Agreement. At the end of the Initial Sale
Period the Company shall determine the total number of Registrable Securities
which remain unsold by the Holders, and shall within five (5) business days
after expiration of the Initial Sale Period, give written notice ("Request
-------
Notice") to all Holders advising the Holders that additional Registrable
- ------
Securities remain unsold. The Holders will be entitled to sell under such
Registration Statement any additional Registrable Securities held by such
Holders during the Additional Sale Period (as defined below), by sending written
notice to the Company within five (5) business days after delivery to such
Holder of the Request Notice advising the Company of the number of shares of
Registrable Securities that such Holder desires to sell (the "Additional Sale
---------------
Notice"); provided that to the extent that the Registrable Securities timely
- ------ --------
requested by the Holders to be sold during the Additional Sale Period exceeds
the Registrable Securities which remain unsold, then the Registrable Securities
that may be sold in the Additional Sale Period shall be reduced and allocated
among the Holders of Registrable Securities who have timely sent an Additional
Sale Notice to the Company (each, a
4
<PAGE>
"Participating Holder") on a pro rata basis according to the Registrable
- -----------------------
Securities then held by each such Participating Holder (the "Participating
-------------
Shares"). Within five (5) business days after the date upon which the Additional
- ------
Sale Notice is required to be sent to the Company, the Company shall send a
written notice to all Participating Holders notifying them of the number of
Participating Shares each will be entitled to sell during the Additional Sale
Period (the "Participation Notice"). The Additional Sale Period shall mean the
--------------------
period from date of the Participation Notice to a date on which there has
elapsed a total of thirty days for which the Registration Statement has been
effective and such Participating Holders could have sold shares thereunder. The
Holders agree that from the period after the end of the Initial Sale Period to
the start of the Additional Sale Period they will not sell any Registrable
Securities held by them. Promptly after the end of such Additional Sale Period,
the Company shall notify each Holder in writing of the end of such period, and
thereafter each Holder shall be entitled to sell such Holder's pro rata share of
all the Registrable Securities which remain unsold by the Holders as determined
according to the Registrable Securities then held by such Holders.
(j) The Company shall use its best efforts to cause the Registrable
Securities included in a Shelf Registration Statement (if the Company and the
Registrable Securities so qualify) (i) to be listed on each national
securities exchange, if any, on which similar securities issued by the
Company are then listed, or (ii) if similar securities issued by the Company
are not then listed, to be authorized for listing or quotation, as
applicable, on the New York Stock Exchange or The Nasdaq Stock Market, Inc.'s
("Nasdaq") National Market.
(k) The Company shall, during the period when the Prospectus is required
to be delivered under the Securities Act, promptly file all documents
required to be filed with the Commission pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act.
Each Holder of Registrable Securities included in a Shelf Registration
Statement, upon receipt of any notice (a "Suspension Notice") from the Company
of the happening of any event of the kind described in Section 3(f), shall
forthwith discontinue disposition of the Registrable Securities pursuant to such
Shelf Registration Statement covering such Registrable Securities until such
Holder's receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 3(f) or until such Holder is advised in writing (the
"Advice") by the Company that the use of the Prospectus may be resumed, and such
Holder has received copies of any additional or supplemental filings which are
incorporated by reference in the Prospectus, and, if so directed by the Company,
such Holder will deliver to the Company all copies, other than permanent file
copies then in such Holder's possession, of the Prospectus covering such
Registrable Securities current at the time of receipt of such notice; provided,
--------
however, that (i) the Company shall not give a Suspension Notice until after the
- -------
Shelf Registration Statement has been declared effective and shall not give more
than six Suspension Notices during any period of twelve consecutive months, (ii)
in no event shall the period from the date on which any such Holder receives a
Suspension Notice to the date on which any such Holder receives either the
Advice or copies of the supplemented or amended Prospectus contemplated by
Section 3(f) (the "Suspension Period") exceed 30 days, and (iii) in no event
-----------------
shall the Company give more than two consecutive Suspension Notices without
allowing for a period of at least 30 days in which the disposition of the
Registrable Securities is permitted prior to issuing of any further Suspension
Notices. In the event that the Company shall give any Suspension Notice, (i)
the Company shall use its best efforts and take such actions as are reasonably
necessary to render the Advice and end the Suspension Period as promptly as
practicable and (ii) the time periods for which a Shelf Registration Statement
is required to be kept effective pursuant to Section 2 hereof shall be extended
by the number of days during the Suspension Period.
Section 4. Registration Expenses. Any and all expenses incident to the
---------------------
Company's performance of or compliance with this Agreement, including without
limitation, all Commission and securities exchange, Nasdaq filing fees, all fees
and expenses incurred in connection with compliance with state securities or
"blue sky" laws, all expenses for printing any Shelf Registration Statement, any
Prospectus and any amendments or supplements thereto, the fees and expenses of
the Company incurred in connection with the listing of the Registrable
Securities, and the fees and disbursements of counsel for the Company (and of
one special counsel for the Holders up to $15,000) and of the independent
certified public accountants of the Company (all such expenses being herein
called "Registration Expenses"), will be borne by the Company whether or not the
Shelf Registration Statement to which such expenses relate becomes effective.
Section 5. Indemnification and Contribution.
--------------------------------
(a) Indemnification by the Company. The Company agrees to indemnify and
------------------------------
hold harmless, to the full extent permitted by law, each Holder, its partners,
members, officers, directors, trustees, stockholders, employees, agents and
investment advisers, and each Person who controls such Holder within the meaning
of either Section 15 of the Securities Act or Section 20 of the Exchange Act, or
is under common control with, or is controlled by, such Holder, together with
the partners, members, officers, directors, trustees, stockholders, employees,
agents and investment advisors of such controlling Person (collectively, the
"Controlling Persons"), from and against all losses, claims, damages,
liabilities and expenses (including, without limitation, any legal or other fees
and expenses incurred by any Holder or
5
<PAGE>
any such Controlling Person in connection with defending or investigating any
action or claim in respect thereof) (collectively, the "Damages") to which such
Holder, its partners, officers, directors, trustees, stockholders, employees,
agents and investment advisers, and any such Controlling Person, may become
subject under the Securities Act or otherwise, insofar as such Damages (or
proceedings in respect thereof) arise out of or are based upon any untrue or
alleged untrue statement of material fact contained in any Shelf Registration
Statement (or any amendment thereto) pursuant to which Registrable Securities
were registered under the Securities Act, including all documents incorporated
therein by reference, or are caused by any omission or alleged omission to state
therein a material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, or arise out of or
are based upon any untrue statement or alleged untrue statement of a material
fact contained in any Prospectus (as amended or supplemented if the Company
shall have furnished any amendments or supplements thereto), or are caused by
any omission or alleged omission to state therein a material fact necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading; provided, however, that the Company shall not be liable
-------- -------
for Damages to any Holder under this Section 5(a) to the extent that any such
Damages (i) arise out of or are based upon any such untrue statement or omission
which is based upon information relating to such Holder furnished in writing to
the Company by such Holder expressly for use in any such Shelf Registration
Statement (or any amendment thereto) or Prospectus (or amendment or supplement
thereto); or (ii) were caused by the fact that such Holder knowingly sold
Securities to a Person as to whom it shall be established that there was not
sent or given, or deemed sent or given pursuant to Rule 153 under the Securities
Act, at the time of or prior to the written confirmation of such sale, a copy of
the Prospectus as then amended or supplemented if, and only if, (a) the Company
has previously furnished copies of such amended or supplemented Prospectus to
such Holder and (b) such Damages were caused by any untrue statement or omission
or alleged untrue statement or omission contained in the Prospectus so delivered
which was corrected in such amended or supplemented Prospectus.
(b) Indemnification by the Holders. In connection with any Shelf
------------------------------
Registration Statement in which a Holder is participating, each such Holder
agrees, severally and not jointly, to indemnify and hold harmless the Company,
its directors and officers and each Person, if any, who controls the Company
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act from and against all Damages to the same extent as the
foregoing indemnity from the Company to such Holder, but only to the extent such
Damages arise out of or are based upon any untrue statement of a material fact
contained in any Shelf Registration Statement (or any amendment thereto) or
Prospectus (or any amendment or supplement thereto) or are caused by any
omission to state therein a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, which untrue statement or omission is based upon information
relating to such Holder furnished in writing to the Company by such Holder
expressly for use in any such Shelf Registration Statement (or any amendment
thereto) or any such Prospectus (or any amendment or supplement thereto);
provided, however, that such Holder shall not be obligated to provide such
- -------- -------
indemnity to the extent that such Damages result from the failure of the Company
to promptly amend or take action to correct or supplement any such Shelf
Registration Statement or Prospectus on the basis of corrected or supplemental
information furnished in writing to the Company by such Holder expressly for
such purpose. In no event shall the liability of any Holder of Registrable
Securities hereunder be greater in amount than the dollar amount of the net
proceeds received by such Holder upon the sale of the Registrable Securities
giving rise to such indemnification obligation.
(c) Indemnification Procedures. In case any proceeding (including any
--------------------------
governmental investigation) shall be instituted involving any Person in respect
of which indemnity may be sought pursuant to either paragraph (a) or (b) above,
such Person (the "indemnified party") shall promptly notify the Person against
whom such indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceedings
and shall pay the fees and disbursements of such counsel relating to such
proceeding. The failure of an indemnified party to notify the indemnifying
party with respect to a particular proceeding shall not relieve the indemnifying
party from any obligation or liability (i) which it may have pursuant to this
Agreement if the indemnifying party is not substantially prejudiced by such
failure to so notify it or (ii) which it may have otherwise than pursuant to
this Agreement. In any such proceeding, any indemnified party shall have the
right to retain its own counsel, but the fees and expenses of such counsel shall
be at the expense of such indemnified party unless (i) the indemnifying party
and the indemnified party shall have mutually agreed to the retention of such
counsel, or (ii) the indemnifying party fails promptly to assume the defense of
such proceeding or fails to employ counsel reasonably satisfactory to such
indemnified party, or (iii) (A) the named parties to any such proceeding
(including any impleaded parties) include both such indemnified party or an
Affiliate of such indemnified party and any indemnifying party or an Affiliate
of such indemnifying party, (B) there may be one or more defenses available to
such indemnified party or such Affiliate of such indemnified party that are
different from or additional to those available to any indemnifying party or
such Affiliate of any indemnifying party and (C) such indemnified party shall
have been advised by such counsel that there may exist a conflict of interest
between or among such indemnified party or such Affiliate of such indemnified
party and any indemnifying party or such Affiliate of any indemnifying party, in
which case, if such indemnified party
6
<PAGE>
notifies the indemnifying party in writing that it elects to employ separate
counsel of its choice at the expense of the indemnifying party, the indemnifying
party shall not have the right to assume the defense thereof and such counsel
shall be at the expense of the indemnifying party, it being understood, however,
that unless there exists a conflict among indemnified parties, the indemnifying
parties shall not, in connection with any one such proceeding or separate but
substantially similar or related proceedings in the same jurisdiction, arising
out of the same general allegations or circumstances, be liable for the fees and
expenses of more than one separate firm of attorneys (together with appropriate
local counsel) at any time for such indemnified parties. The indemnifying party
shall not be liable for any settlement of any proceeding effected without its
written consent (which consent shall not be unreasonably withheld) but, if
settled with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify each indemnified party from and against
any loss or liability by reason of such settlement or judgment. No indemnifying
party shall, without the prior written consent of any indemnified party (which
consent shall not be unreasonably withheld), effect any settlement of any
pending or threatened proceeding in respect of which such indemnified party is a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on all claims that are the subject matter of such
proceeding with no payment by such indemnified party of consideration.
(d) Contribution. If the indemnification from the indemnifying party
------------
provided for in this Section 5 is found, pursuant to a final judicial
determination not subject to appeal, to be unavailable to an indemnified party
hereunder in respect of any losses, claims, damages, liabilities, or expenses
referred to therein, then the indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities, or
expenses in such proportion as is appropriate to reflect the relative fault of
the indemnifying party and the indemnified parties in connection with the
actions that resulted in such losses, claims, damages, liabilities or expenses,
as well as any other relevant equitable considerations. The relative fault of
such indemnifying party and indemnified parties shall be determined by reference
to, among other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact, has been made by, or relates to information supplied
by, such indemnifying party or indemnified parties, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such action. The amount paid or payable by a party as a result of the losses,
claims, damages, liabilities, and expenses referred to above shall be deemed to
include, subject to the limitations set forth in Section 5(c), any legal or
other expenses reasonably incurred by such party in connection with any
investigation or proceeding.
The parties hereto agree that it would not be just or equitable if
contribution pursuant to this Section 5(d) were determined by pro rata
--- ----
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 5(d), no selling Holder shall be
required to contribute any amount in excess of the amount by which the total net
proceeds received by such selling Holder with respect to Registrable Securities
sold by such selling Holder exceeds the amount of any damages which such selling
Holder has otherwise been required to pay by reason of such untrue statement or
alleged untrue statement or omission or alleged omission. Each Holder's
obligation to contribute pursuant to this Section 5(d) is several and not joint
and shall be determined by reference to the proportion that the net proceeds of
the offering received by such Holder bears to the total net proceeds of the
offering received by all the Holders. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The remedies provided for in this Section 5 are
not exclusive and shall not limit any rights or remedies that may otherwise be
available to any indemnified party at law or in equity.
If indemnification is available under this Section 5, the indemnifying party
shall indemnify each indemnified party to the full extent provided in Sections
5(a) and (b) without regard to the relative fault of said indemnifying party or
indemnified party or any other equitable consideration provided for in this
Section 5(d).
Section 6. Rule 144. The Company covenants that it will file any reports
--------
required to be filed by it under the Securities Act and the Exchange Act, and
the rules and regulations adopted by the Commission thereunder (or, if the
Company is not required to file such reports, it will, upon the request of any
Holder, make publicly available other information so long as necessary to permit
sales of the Registrable Securities pursuant to Rule 144 under the Securities
Act), and it will take such further action as any Holder may request, all to the
extent required from time to time to enable such Holder to sell Registrable
Securities without registration under the Securities Act within the limitation
of the exemptions provided by (a) Rule 144 under the Securities Act, as such
Rule may be amended from time to time, or (b) any successor rule or similar
provision hereafter adopted by the Commission.
Section 7. Rule 144A. The Company covenants that it will file all reports
---------
required to be filed by it under the Securities Act and the Exchange Act, and
the rules and regulations adopted by the Commission thereunder (or if the
Company is not required to file such reports, it will, upon the request of any
Holder, make available other information so long as necessary to permit sales of
the Registrable Securities pursuant
7
<PAGE>
to Rule 144A under the Securities Act), and it will take such further action as
any Holder may request, all to the extent required from time to time to enable
such Holder to sell Registrable Securities without registration under the
Securities Act within the limitation of the exemptions provided by (a) Rule
144A, as such rule may be amended from time to time, or (b) any successor rule
or similar provision hereafter adopted by the Commission.
Section 8. Miscellaneous.
-------------
(a) No Inconsistent Agreements. The Company has not entered into nor
--------------------------
will the Company on or after the date of this Agreement enter into any agreement
which is inconsistent with the rights granted to the Holders of Registrable
Securities in this Agreement or otherwise conflicts with the provisions hereof.
The rights granted to the Holders hereunder do not in any way conflict with, and
are not inconsistent with, the rights granted to the holders of the Company's
other issued and outstanding securities under any such agreements. The Company
may grant registration rights that would permit any Person the right to piggy-
back or may itself exercise its right to piggy-back, on any Shelf Registration
Statement.
(b) Amendments and Waivers. The provisions of this Agreement, including
----------------------
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given, unless the Company has obtained the written consent of Holders of at
least a majority of Shares which are affected by such amendment, modification,
supplement, waiver or consent.
(c) Notices. All notices and other communications provided for or
-------
permitted hereunder shall be in writing and shall be deemed to have been duly
given if delivered personally or sent by telecopier, registered or certified
mail (return receipt requested), postage prepaid or courier to the parties at
their respective addresses set forth on the signature pages hereof (or at such
other address for any party as shall be specified by like notice, provided that
notices of a change of address shall be effective only upon receipt thereof).
All such notices and communications shall be deemed to have been duly given:
at the time delivered by hand, if personally delivered; five Business Days after
being deposited in the mail, postage prepaid, if mailed; by confirmed receipt of
transmission, if telecopied; and on the next Business Day, if timely delivered
to a courier guaranteeing overnight delivery.
(d) Successors and Assigns. This Agreement shall inure to the benefit of
----------------------
and be binding upon the successors, assigns and transferees of each of the
parties, including, without limitation and without the need for an express
assignment, subsequent Holders. If any transferee of any Holder shall acquire
Registrable Securities in any manner, whether by operation of law or otherwise,
such Registrable Securities shall be held subject to all of the terms of this
Agreement, and by taking and holding such Registrable Securities such Person
shall be conclusively deemed to have agreed to be bound by and to perform all of
the terms and provisions of this Agreement and such Person shall be entitled to
receive the benefits hereof.
(e) Counterparts. This Agreement may be executed in any number of
------------
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(f) Headings. The headings in this Agreement are for convenience of
--------
reference only and shall not limit or otherwise affect the meaning hereof.
(g) Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the laws of the State of Delaware without regard to principles
or rules of conflicts of law.
(h) Severability. In the event that any one or more of the provisions
------------
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions contained herein shall not be in any way impaired
thereby, it being intended that all of the rights and privileges of the Holders
shall be enforceable to the fullest extent permitted by law.
(i) Entire Agreement. This Agreement is intended by the parties as a
----------------
final expression of their agreement and is intended to be the complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein. This Agreement and the Merger Agreement supersede all prior agreements
and understandings between the parties with respect to such subject matter.
8
<PAGE>
(j) Further Assurances. Each party shall cooperate and take such action
------------------
as may be reasonably requested by another party in order to carry out the
provisions and purposes of this Agreement and the transactions contemplated
hereby.
(k) Remedies. In the event of a breach or a threatened breach by any
--------
party to this Agreement of its obligations under this Agreement, any party
injured or to be injured by such breach will be entitled to specific performance
of its rights under this Agreement or to injunctive relief, in addition to being
entitled to exercise all rights provided in this Agreement and granted by law.
The parties agree that the provisions of this Agreement shall be specifically
enforceable, it being agreed by the parties that remedies at law for violations
hereof including monetary damages, are inadequate and that the right to object
in any action for specific performance or injunctive relief hereunder on the
basis that a remedy at law would be adequate is waived.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
9
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.
SEGUE SOFTWARE, INC.
By:/s/ Stephen B. Butler
------------------------------
Name: Stephen B. Butler
Title: Chief Executive Officer
Notice Information:
Segue Software, Inc.
201 Spring Street
Lexington, MA 02421
Attn: Mr. Stephen B. Butler
Facsimile: 781-402-1099
10
<PAGE>
REGISTRATION RIGHTS AGREEMENT
HOLDER SIGNATURE PAGE
For individuals: Edan Kabatchnik
-------------------------------
[Print Name]
/s/ Edan Kabatchnik
-------------------------------
[Signature]
For entities:
-------------------------------
[Print Name]
By:
----------------------------
Name:
Title:
Notice Information:
c/o Eventus Software Inc.
220 Sansome Street, 3rd Floor
San Francisco, CA 94104
Attention: Mr. Michael Burkland
Facsimile: 415-477-3737
11
<PAGE>
REGISTRATION RIGHTS AGREEMENT
HOLDER SIGNATURE PAGE
For individuals:
-------------------------------
[Print Name]
-------------------------------
[Signature]
For entities: SQRIBE Technologies Corp.
-------------------------------
[Print Name]
By:/s/ Ofir Kedar
----------------------------
Name: Ofir Kedar
Title: Chief Executive Officer
Notice Information:
c/o Eventus Software Inc.
220 Sansome Street, 3rd Floor
San Francisco, CA 94104
Attention: Mr. Michael Burkland
Facsimile: 415-477-3737
12
<PAGE>
REGISTRATION RIGHTS AGREEMENT
HOLDER SIGNATURE PAGE
For individuals: Mike Burkland
-------------------------------
[Print Name]
/s/ Mike Burkland
-------------------------------
[Signature]
For entities:
-------------------------------
[Print Name]
By:
----------------------------
Name:
Title:
Notice Information:
c/o Eventus Software Inc.
220 Sansome Street, 3rd Floor
San Francisco, CA 94104
Attention: Mr. Michael Burkland
Facsimile: 415-477-3737
13
<PAGE>
REGISTRATION RIGHTS AGREEMENT
HOLDER SIGNATURE PAGE
For individuals: Tom Burkland
-------------------------------
[Print Name]
/s/ Tom Burkland
-------------------------------
[Signature]
For entities:
-------------------------------
[Print Name]
By:
----------------------------
Name:
Title:
Notice Information:
c/o Eventus Software Inc.
220 Sansome Street, 3rd Floor
San Francisco, CA 94104
Attention: Mr. Michael Burkland
Facsimile: 415-477-3737
14
<PAGE>
REGISTRATION RIGHTS AGREEMENT
HOLDER SIGNATURE PAGE
For individuals: Kevin Edwards
-------------------------------
[Print Name]
/s/ Kevin Edwards
-------------------------------
[Signature]
For entities:
-------------------------------
[Print Name]
By:
----------------------------
Name:
Title:
Notice Information:
c/o Eventus Software Inc.
220 Sansome Street, 3rd Floor
San Francisco, CA 94104
Attention: Mr. Michael Burkland
Facsimile: 415-477-3737
15
<PAGE>
REGISTRATION RIGHTS AGREEMENT
HOLDER SIGNATURE PAGE
For individuals: Bill Fry
-------------------------------
[Print Name]
/s/ Bill Fry
-------------------------------
[Signature]
For entities:
-------------------------------
[Print Name]
By:
----------------------------
Name:
Title:
Notice Information:
c/o Eventus Software Inc.
220 Sansome Street, 3rd Floor
San Francisco, CA 94104
Attention: Mr. Michael Burkland
Facsimile: 415-477-3737
16
<PAGE>
REGISTRATION RIGHTS AGREEMENT
HOLDER SIGNATURE PAGE
For individuals: Michael Funk
-------------------------------
[Print Name]
/s/ Michael Funk
-------------------------------
[Signature]
For entities:
-------------------------------
[Print Name]
By:
----------------------------
Name:
Title:
Notice Information:
c/o Eventus Software Inc.
220 Sansome Street, 3rd Floor
San Francisco, CA 94104
Attention: Mr. Michael Burkland
Facsimile: 415-477-3737
17
<PAGE>
REGISTRATION RIGHTS AGREEMENT
HOLDER SIGNATURE PAGE
For individuals: Nasreen Husain
-------------------------------
[Print Name]
/s/ Nasreen Husain
-------------------------------
[Signature]
For entities:
-------------------------------
[Print Name]
By:
----------------------------
Name:
Title:
Notice Information:
c/o Eventus Software Inc.
220 Sansome Street, 3rd Floor
San Francisco, CA 94104
Attention: Mr. Michael Burkland
Facsimile: 415-477-3737
18
<PAGE>
REGISTRATION RIGHTS AGREEMENT
HOLDER SIGNATURE PAGE
For individuals: Ben King
-------------------------------
[Print Name]
/s/ Ben King
-------------------------------
[Signature]
For entities:
-------------------------------
[Print Name]
By:
----------------------------
Name:
Title:
Notice Information:
c/o Eventus Software Inc.
220 Sansome Street, 3rd Floor
San Francisco, CA 94104
Attention: Mr. Michael Burkland
Facsimile: 415-477-3737
19
<PAGE>
REGISTRATION RIGHTS AGREEMENT
HOLDER SIGNATURE PAGE
For individuals: Eduard Klinkovich
-------------------------------
[Print Name]
/s/ Eduard Klinkovich
-------------------------------
[Signature]
For entities:
-------------------------------
[Print Name]
By:
----------------------------
Name:
Title:
Notice Information:
c/o Eventus Software Inc.
220 Sansome Street, 3rd Floor
San Francisco, CA 94104
Attention: Mr. Michael Burkland
Facsimile: 415-477-3737
20
<PAGE>
REGISTRATION RIGHTS AGREEMENT
HOLDER SIGNATURE PAGE
For individuals: Chris Kocher
-------------------------------
[Print Name]
/s/ Chris Kocher
-------------------------------
[Signature]
For entities:
-------------------------------
[Print Name]
By:
---------------------------
Name:
Title:
Notice Information:
c/o Eventus Software Inc.
220 Sansome Street, 3rd Floor
San Francisco, CA 94104
Attention: Mr. Michael Burkland
Facsimile: 415-477-3737
21
<PAGE>
REGISTRATION RIGHTS AGREEMENT
HOLDER SIGNATURE PAGE
For individuals:
-------------------------------
[Print Name]
-------------------------------
[Signature]
For entities: Levinger & Associates
-------------------------------
[Print Name]
By: /s/ Jeffrey E. Levinger
--------------------------
Name: Jeffrey E. Levinger
Title:
Notice Information:
c/o Eventus Software Inc.
220 Sansome Street, 3rd Floor
San Francisco, CA 94104
Attention: Mr. Michael Burkland
Facsimile: 415-477-3737
22
<PAGE>
REGISTRATION RIGHTS AGREEMENT
HOLDER SIGNATURE PAGE
For individuals: Brian Perry
-------------------------------
[Print Name]
/s/ Brian Perry
-------------------------------
[Signature]
For entities:
-------------------------------
[Print Name]
By:
----------------------------
Name:
Title:
Notice Information:
c/o Eventus Software Inc.
220 Sansome Street, 3rd Floor
San Francisco, CA 94104
Attention: Mr. Michael Burkland
Facsimile: 415-477-3737
23
<PAGE>
REGISTRATION RIGHTS AGREEMENT
HOLDER SIGNATURE PAGE
For individuals: David Shen
-------------------------------
[Print Name]
/s/ David Shen
-------------------------------
[Signature]
For entities:
-------------------------------
[Print Name]
By:
----------------------------
Name:
Title:
Notice Information:
c/o Eventus Software Inc.
220 Sansome Street, 3rd Floor
San Francisco, CA 94104
Attention: Mr. Michael Burkland
Facsimile: 415-477-3737
24
<PAGE>
REGISTRATION RIGHTS AGREEMENT
HOLDER SIGNATURE PAGE
For individuals: Kerry Smith
-------------------------------
[Print Name]
/s/ Kerry Smith
-------------------------------
[Signature]
For entities:
-------------------------------
[Print Name]
By:
----------------------------
Name:
Title:
Notice Information:
c/o Eventus Software Inc.
220 Sansome Street, 3rd Floor
San Francisco, CA 94104
Attention: Mr. Michael Burkland
Facsimile: 415-477-3737
25
<PAGE>
REGISTRATION RIGHTS AGREEMENT
HOLDER SIGNATURE PAGE
For individuals: Troy Terry
-------------------------------
[Print Name]
/s/ Troy Terry
-------------------------------
[Signature]
For entities:
-------------------------------
[Print Name]
By:
----------------------------
Name:
Title:
Notice Information:
c/o Eventus Software Inc.
220 Sansome Street, 3rd Floor
San Francisco, CA 94104
Attention: Mr. Michael Burkland
Facsimile: 415-477-3737
26
<PAGE>
REGISTRATION RIGHTS AGREEMENT
HOLDER SIGNATURE PAGE
For individuals: Charmen Weidenbach
-------------------------------
[Print Name]
/s/ Charmen Weidenbach
-------------------------------
[Signature]
For entities:
-------------------------------
[Print Name]
By:
----------------------------
Name:
Title:
Notice Information:
c/o Eventus Software Inc.
220 Sansome Street, 3rd Floor
San Francisco, CA 94104
Attention: Mr. Michael Burkland
Facsimile: 415-477-3737
27
<PAGE>
REGISTRATION RIGHTS AGREEMENT
HOLDER SIGNATURE PAGE
For individuals: Steve Weiss
-------------------------------
[Print Name]
/s/ Steve Weiss
-------------------------------
[Signature]
For entities:
-------------------------------
[Print Name]
By:
----------------------------
Name:
Title:
Notice Information:
c/o Eventus Software Inc.
220 Sansome Street, 3rd Floor
San Francisco, CA 94104
Attention: Mr. Michael Burkland
Facsimile: 415-477-3737
28
<PAGE>
REGISTRATION RIGHTS AGREEMENT
HOLDER SIGNATURE PAGE
For individuals:
-------------------------------
[Print Name]
-------------------------------
[Signature]
For entities: Amisil Holdings Limited
-------------------------------
[Print Name]
By:/s/ Amit Choudhury
----------------------------
Name: Amit Choudhury
Title: Sr. Vice President
Notice Information:
c/o Eventus Software Inc.
220 Sansome Street, 3rd Floor
San Francisco, CA 94104
Attention: Mr. Michael Burkland
Facsimile: 415-477-3737
29
<PAGE>
REGISTRATION RIGHTS AGREEMENT
HOLDER SIGNATURE PAGE
For individuals: Dave DeWalt
-------------------------------
[Print Name]
/s/ Dave DeWalt
-------------------------------
[Signature]
For entities:
-------------------------------
[Print Name]
By:
----------------------------
Name:
Title:
Notice Information:
c/o Eventus Software Inc.
220 Sansome Street, 3rd Floor
San Francisco, CA 94104
Attention: Mr. Michael Burkland
Facsimile: 415-477-3737
30
<PAGE>
REGISTRATION RIGHTS AGREEMENT
HOLDER SIGNATURE PAGE
For individuals: Arti Bhargava
-------------------------------
[Print Name]
/s/ Arti Bhargava
-------------------------------
[Signature]
For entities:
-------------------------------
[Print Name]
By:
----------------------------
Name:
Title:
Notice Information:
c/o Eventus Software Inc.
220 Sansome Street, 3rd Floor
San Francisco, CA 94104
Attention: Mr. Michael Burkland
Facsimile: 415-477-3737
31
<PAGE>
REGISTRATION RIGHTS AGREEMENT
HOLDER SIGNATURE PAGE
For individuals:
-------------------------------
[Print Name]
-------------------------------
[Signature]
For entities: Fenwick & West LLP
-------------------------------
[Print Name]
By:/s/ Mark C. Stevens
----------------------------
Name: Mark C. Stevens
Title: Partner
Notice Information:
c/o Eventus Software Inc.
220 Sansome Street, 3rd Floor
San Francisco, CA 94104
Attention: Mr. Michael Burkland
Facsimile: 415-477-3737
32
<PAGE>
REGISTRATION RIGHTS AGREEMENT
HOLDER SIGNATURE PAGE
For individuals: Mark C. Stevens
-------------------------------
[Print Name]
/s/ Mark C. Stevens
-------------------------------
[Signature]
For entities:
-------------------------------
[Print Name]
By:
----------------------------
Name:
Title:
Notice Information:
c/o Eventus Software Inc.
220 Sansome Street, 3rd Floor
San Francisco, CA 94104
Attention: Mr. Michael Burkland
Facsimile: 415-477-3737
33
<PAGE>
REGISTRATION RIGHTS AGREEMENT
HOLDER SIGNATURE PAGE
For individuals:
-------------------------------
[Print Name]
-------------------------------
[Signature]
For entities: Sumitomo Corporation
-------------------------------
[Print Name]
By:/s/ Kazuyuki Inoue
----------------------------
Name: Kazuyuki Inoue
Title: General Manager
Information Electronics Division
Notice Information:
c/o Eventus Software Inc.
220 Sansome Street, 3rd Floor
San Francisco, CA 94104
Attention: Mr. Michael Burkland
Facsimile: 415-477-3737
34
<PAGE>
REGISTRATION RIGHTS AGREEMENT
HOLDER SIGNATURE PAGE
For individuals:
-------------------------------
[Print Name]
-------------------------------
[Signature]
For entities: Sumisho Datacom, Inc.
-------------------------------
[Print Name]
By:/s/ Eiichi Takaya
-------------------------------
Name: Eiichi Takaya
Title: President
Notice Information:
c/o Eventus Software Inc.
220 Sansome Street, 3rd Floor
San Francisco, CA 94104
Attention: Mr. Michael Burkland
Facsimile: 415-477-3737
35
<PAGE>
REGISTRATION RIGHTS AGREEMENT
HOLDER SIGNATURE PAGE
For individuals:
-------------------------------
[Print Name]
-------------------------------
[Signature]
For entities: Sumtronics Inc.
-------------------------------
[Print Name]
By:/s/ Takehiko Kimoto
----------------------------
Name: Takehiko Kimoto
Title: CEO
Notice Information:
c/o Eventus Software Inc.
220 Sansome Street, 3rd Floor
San Francisco, CA 94104
Attention: Mr. Michael Burkland
Facsimile: 415-477-3737
36
<PAGE>
EXHIBIT 5.1
-----------
OPINION OF GOODWIN, PROCTER & HOAR LLP
April 15, 1999
Segue Software, Inc.
201 Spring Street
Lexington, MA 02421
Ladies and Gentlemen:
This opinion is furnished in connection with the registration on Form S-3
(the "Registration Statement") pursuant to the Securities Act of 1933, as
amended (the "Securities Act"), of 156,501 shares of common stock, par value
$.01 per share (the "Common Stock"), of Segue Software, Inc., a Deleware
corporation (the "Company"). The Common Stock was issued by the Company to the
holders thereof (collectively, the "Selling Shareholders") pursuant to the terms
and conditions of an Agreement and Plan of Merger, dated as of December 3, 1998
by and among the Company, SSI Merger Corp., Eventus Software, Inc. and the
Selling Stockholders.
In connection with rendering this opinion, we have examined the Amended and
Restated Certificate of Incorporation of the Company and the Amended and
Restated Bylaws of the Company, each as amended to date; such records of the
corporate proceedings of the Company as we deemed material; and such other
certificates, receipts, records and documents as we considered necessary for the
purposes of this opinion. In our examination, we have assumed the genuineness of
all signatures, the legal capacity of natural persons, the authenticity of all
documents submitted to us as certified, photostatic or facsimile copies, the
authenticity of the originals of such copies and the authenticity of telephonic
confirmations of public officials and others. As to facts material to our
opinion, we have relied upon certificates or telephonic confirmations of public
officials and certificates, documents, statements and other information of the
Company or representatives or officers thereof.
We are attorneys admitted to practice in The Commonwealth of Massachusetts.
We express no opinion concerning the laws of any jurisdictions other than the
laws of the United States of America and The Commonwealth of Massachusetts and
the General Corporation Law of the State of Delaware.
Based upon the foregoing, we are of the opinion that the Common Stock being
registered for the account of the Selling Shareholders are duly issued and are
validly issued, fully paid and nonassessable.
The foregoing assumes that all requisite steps were taken to comply with the
requirements of the Securities Act and applicable requirements of state laws
regulating the offer and sale of securities.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to us with respect to this opinion
under the heading "Legal Matters" in the prospectus which is a part of the
Registration Statement. In giving such consent, we do not thereby admit that we
are in the category of persons whose consent is required under Section 7 of
the Act.
Very truly yours,
/s/ GOODWIN, PROCTER & HOAR LLP
GOODWIN, PROCTER & HOAR LLP
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement
of Segue Software, Inc. on Form S-3 of our report dated April 15, 1999, on our
audits of the consolidated financial statements of Segue Software, Inc. as of
December 31, 1998 and 1997, and for each of the three years in the period ended
December 31, 1998, which report is included in the Segue Software, Inc. Annual
Report on Form 10-K for the year ended December 31, 1998. We also consent to the
reference to our firm under the caption "Experts."
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Boston, Massachusetts
April 15, 1999
