Exhibit 10.26


 




 





AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT


 


By and Between


 


Segue Software, Inc.


 


and


 


The Investors


 


as defined herein


 


Dated as of October 21, 2003




 





 

















 


AMENDED
AND RESTATED 

REGISTRATION RIGHTS AGREEMENT


 


THIS REGISTRATION RIGHTS AGREEMENT (the “Agreement”)
is dated as of October 21, 2003, by and among Segue Software, Inc., a
Delaware corporation (the “Company”), S-7 Associates, LLC (the “Series B
Investor”) and Dr. Howard L. Morgan (the “Additional Investor” and together with
the Series B Investor, the “Investors”).


 


WHEREAS, the Company and the Series B Investor entered
into a registration rights agreement (the “Original Agreement”), dated as of
March 22, 2002, in connection with the Series B Investor’s purchase of
666,667 shares of Series B Preferred Stock of the Company for an aggregate
purchase price of $2,000,000;


 


WHEREAS, the parties to this Agreement are
simultaneously entering into a certain Series C Stock Purchase Agreement, dated
as of the date hereof (the “Purchase Agreement”), whereby the Investors have
agreed to purchase securities from the Company for an aggregate purchase price
of $500,001;


 


WHEREAS, the Company and the Series B Investor desire
to amend and restate the Original Agreement in connection with the transactions
contemplated by the Purchase Agreement; and


 


WHEREAS, the execution of this Agreement is a
condition precedent to the purchase by the Investors of the securities under
the Purchase Agreement;


 


NOW, THEREFORE, in consideration of the premises, as
an inducement to the Investors to consummate the transactions contemplated by
the Purchase Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the Company and the
Series B Investor hereby amend and restate the Original Agreement in its
entirety and the Investors and the Company agree with each other as follows:


 


1.                                       Certain
Definitions.


 


As used in this Agreement, the following terms shall
have the following respective meanings:


 


“Commission” means the United States Securities
and Exchange Commission, or any other federal agency administering the
Securities Act and the Exchange Act at the time.


 


“Common Stock” means the Common Stock and any
other common equity securities issued by the Company, and any other shares of
stock issued or issuable with respect thereto (whether by way of a stock
dividend or stock split or in exchange for or upon conversion of such shares or
otherwise in connection with a combination of shares, recapitalization, merger,
consolidation or other corporate reorganization).


 


“Exchange Act” means the Securities Exchange
Act of 1934, as amended, or any similar successor federal statute, and the
rules and regulations of the Commission thereunder, all as the same shall be in
effect at the time.


 

















 


“Person” means an individual, a corporation, a
partnership, a joint venture, a trust, an unincorporated organization, a
limited liability company or partnership, a government and any agency or
political subdivision thereof.


 


“Registrable
Securities” means (i) any shares of Common Stock issued or issuable upon
conversion of the Company’s Series C Preferred Stock or Series B Preferred
Stock, and (ii) any other securities issued and issuable with respect to the
shares described in clause (i) above by way of a stock dividend or stock split
or in connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization; provided, that any such shares shall
cease to be Registrable Securities when (i) such Registrable Securities
have been disposed of by the holder thereof pursuant to an effective
registration statement under the Securities Act, (ii) such Registrable
Securities are transferred by the holder thereof to any Person pursuant to
Rule 144 (or any successor rule or similar provision then in effect) under
the Securities Act, including a sale pursuant to the provisions of Rule 144(k),
or (iii) such Securities shall have ceased to be outstanding.


 


“Securities Act” means the Securities Act of
1933, as amended, or any similar successor federal statute, and the rules and
regulations of the Commission thereunder, all as the same shall be in effect at
the time.


 


All other capitalized terms not defined herein shall
have the meaning set forth in the Purchase Agreement unless otherwise
indicated.


 


2.                                       Demand Registration on Form S-3.


 


(a)                                  At
any time after the date hereof and prior to the fifth anniversary of the date
hereof, the holders of at least fifty percent (50%) of the Registrable
Securities may notify the Company that they intend to offer or cause to be
offered for public sale all or any portion of their Registrable Securities in
the manner specified in such request. 
Upon receipt of such request, the Company shall promptly deliver notice
of such request to all holders of Registrable Securities, who shall then have
thirty (30) days to notify the Company in writing of their desire to be
included in such registration.  If the
request for registration contemplates an underwritten public offering, the
Company shall state such in the written notice and in such event the right of
any Person to participate in such registration shall be conditioned upon such
Person’s participation in such underwritten public offering and the inclusion
of such Person’s Registrable Securities in the underwritten public offering to
the extent provided herein.  The Company
will use its reasonable efforts to effect the registration on Form S-3 (or a
comparable successor form) of all Registrable Securities whose holders request
participation in such registration under the Securities Act, but only to the
extent provided for in this Agreement. 
The Company shall not be required to effect registration pursuant to a
request under this Section 2 more than one time.  Notwithstanding anything to the contrary contained herein, the
Company shall not be obligated to file a registration statement under this
Section 2:  (a) if Form S-3 is not
then available for the proposed offering; (b) within ninety (90) days after the
effective date of a registration statement filed by the Company covering a firm
commitment underwritten public offering in which the holders of Registrable
Securities shall have been entitled to join pursuant to Section 4; or (c)
during a Suspension Period (as defined in Section 8(a)).  A registration will not count as a


 


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requested registration under this section 2(a) unless and until
the registration statement relating to such registration has been declared
effective by the Commission.


 


(b)                                 If
a requested registration involves an underwritten public offering and the
managing underwriter of such offering determines in good faith that the number
of securities sought to be offered should be limited due to market conditions,
then the number of securities to be included in such underwritten public
offering shall be reduced to a number deemed satisfactory by such managing
underwriter; provided, that the shares to be excluded shall be determined in
the following order of priority:  (i)
persons not having any contractual or other right to include such securities in
the registration statement, (ii) securities held by any other Persons (other
than the holders of Registrable Securities) having a contractual, incidental
“piggy back” right to include such securities in the registration statement,
(iii) securities to be registered by the Company pursuant to such registration
statement, (iv) Registrable Securities of holders who did not make the original
request for registration and, if necessary, (v) Registrable Securities of
holders who requested such registration pursuant to Section 2(a).  If there is a reduction of the number of
Registrable Securities pursuant to clauses (iv) or (v), such reduction shall be
made on a pro rata basis (based upon the aggregate number of Registrable
Securities held by such holders).


 


(c)                                  With
respect to a request for registration pursuant to Section 2(a) which is
for an underwritten public offering, the managing underwriter shall be chosen
by the holders of a majority of the Registrable Securities to be sold in such
offering (which approval will not be unreasonably withheld or delayed).  The Company may not cause any other
registration of securities for sale for its own account (other than a
registration effected solely to implement an employee benefit plan or a
transaction to which Rule 145 of the Securities Act is applicable) to become
effective within ninety (90) days following the effective date of any
registration required pursuant to this Section 2.


 


3.                                       Piggyback Registration.


 


If the Company at any time proposes to register any of
its securities under the Securities Act for sale to the public (except with
respect to registration statements on Forms S-4, S-8 or another form not
available for registering the Registrable Securities for sale to the public),
each such time it will give written notice at the applicable address of record
to each holder of Registrable Securities of its intention to do so.  Upon the written request of any of such
holders, given within twenty (20) days after receipt by such Person of such
notice, the Company will, subject to the limits contained in this
Section 3, use its reasonable efforts to cause all such Registrable
Securities of said requesting holders to be registered under the Securities Act
and qualified for sale under any state blue sky law, all to the extent required
to permit such sale or other disposition of said Registrable Securities;
provided, however, that if the Company is advised in writing by any managing
underwriter of the Company’s securities being offered in a public offering
pursuant to such registration statement that the amount to be sold by persons
other than the Company (collectively, “Selling Stockholders”) is greater than
the amount which can be offered without adversely affecting the offering, the
Company may reduce the amount offered for the accounts of Selling Stockholders
(including such holders of Registrable Securities) to a number deemed
satisfactory by such managing underwriter; and provided further, that any
shares to be excluded shall be determined in the following order of
priority:  (i)


 


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securities held by any Persons not having any such contractual,
incidental registration rights, (ii) securities held by any Persons having
contractual, incidental registration rights pursuant to an agreement which is
not this Agreement and (iii) the Registrable Securities sought to be
included by the holders thereof as determined on a pro rata basis (based upon
the aggregate number of Registrable Securities held by such holders).


 


4.                                       Registration Procedures.


 


If and whenever the Company is required by the
provisions of this Agreement to use its reasonable efforts to promptly effect
the registration of any of its securities under the Securities Act, the Company
will:


 


(a)                                  use
its reasonable efforts to prepare and file with the Commission a registration
statement on the appropriate form under the Securities Act with respect to such
securities, which form 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 reasonable
efforts to cause such registration statement to become and remain effective for
90 days or until the completion of the proposed offering, whichever is earlier;
provided, that such 90-day period shall be extended for a period of time equal
to the period the selling holders refrain from selling Registrable Securities
pursuant to Section 8.


 


(b)                                 use
its reasonable best efforts to prepare and file with the Commission such
amendments and supplements to such registration statement and the prospectus
used in connection therewith as may be necessary to keep such registration
statement effective for the period as specified in Section 4(b) and to
comply with the provisions of the Securities Act with respect to the sale or
other disposition of all securities covered by such registration statement
whenever the seller or sellers of such securities shall desire to sell or
otherwise dispose of the same, but only to the extent provided in this
Agreement;


 


(c)                                  furnish
to each selling holder and the underwriters, if any, such number of copies of
such registration statement, any amendments thereto, any documents incorporated
by reference therein, the prospectus, including a preliminary prospectus, in
conformity with the requirements of the Securities Act, and such other
documents as such selling holder may reasonably request in order to facilitate
the public sale or other disposition of the securities owned by such selling
holder;


 


(d)                                 use
its reasonable efforts to register or qualify the securities covered by such
registration statement under such other securities or state blue sky laws of
such jurisdictions as each selling holder shall request, and to do any and all
other acts and things which may be necessary under such securities or blue sky
laws to enable such selling holder to consummate the public sale or other
disposition in such jurisdictions of the securities owned by such selling
holder, except that the Company shall not for any such purpose be required to
qualify to do business as a foreign corporation in any jurisdiction wherein it
is not so qualified;


 


(e)                                  within
a reasonable time before the filing of the registration statement or prospectus
or amendments or supplements thereto with the Commission, furnish to counsel
selected by the holders of Registrable Securities copies of such documents
proposed to be filed;


 


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(f)                                    promptly
notify each selling holder of Registrable Securities, such selling holder’s
counsel and any underwriter of the happening of any event which makes any
statement made in the registration statement or related prospectus untrue or
which requires the making of any changes in such registration statement or
prospectus so that they 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 the light of the circumstances
under which they were made not misleading; and, subject to Section 8, as
promptly as practicable thereafter, prepare and file with the Commission and
furnish 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 the light of the
circumstances under which they were made, not misleading;


 


(g)                                 use
its reasonable efforts to prevent the issuance of any order suspending the
effectiveness of the registration statement, and if one is issued use its
reasonable efforts to obtain the withdrawal of any such order;


 


(h)                                 if
requested by the managing underwriter or underwriters (if any), any selling
holder, or such selling holder’s counsel, promptly incorporate in a prospectus
supplement or post-effective amendment such information as such Person requests
to be included therein with respect to the securities being sold by such
selling holder to such underwriter or underwriters, the purchase price being
paid therefor by such underwriter or underwriters and with respect to any other
terms of an underwritten offering of the securities to be sold in such
offering, and promptly make all required filings of such prospectus supplement
or post-effective amendment;


 


(i)                                     make
available to each selling holder, any underwriter participating in any
disposition pursuant to a registration statement, and any attorney, accountant
or other agent or representative retained by any such selling holder or
underwriter (collectively, the “Inspectors”), all financial and other records,
pertinent corporate documents and properties of the Company, as shall be
reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the Company’s officers, directors and employees to
supply all information reasonably requested by any such Inspector in connection
with such registration statement;


 


(j)                                     enter
into any reasonable underwriting agreement required by the proposed
underwriter(s) for the selling holders, if any;


 


(k)                                  cause
the securities covered by such registration statement to be listed on the
securities exchange or quoted on the quotation system on which the Common Stock
of the Company is then listed or quoted; and


 


(l)                                     during
the period when the prospectus is required to be delivered under the Securities
Act, 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.


 


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5.                                       Expenses.


 


All expenses incurred by the Company or the holders of
Registrable Securities in effecting the registrations provided for in Sections
2 and 3, including, without limitation, all registration and filing fees,
printing expenses, fees and disbursements of counsel for the Company, and one
counsel for the holders participating in such registration as a group (selected
by a majority in interest of the holders of Registrable Securities who
participate in the registration), underwriting expenses (other than fees,
commissions or discounts), expenses of any audits incident to or required by
any such registration and expenses of complying with the securities or blue sky
laws of any jurisdictions (all of such expenses referred to as “Registration
Expenses”), shall be paid by the Company.


 


6.                                       Indemnification.



 


(a)                                  The
Company shall indemnify and hold harmless each selling holder of Registrable
Securities, each underwriter (as defined in the Securities Act), and directors,
officers, employees and agents of any of them, and each other Person who
participates in the offering of such securities and each other Person, if any,
who controls (within the meaning of the Securities Act) such seller,
underwriter or participating Person (individually and collectively, the
“Indemnified Person”) against any losses, claims, damages, expenses or
liabilities (collectively, the “liability”), joint or several, to which such
Indemnified Person may become subject under the Securities Act or any other
statute or at common law, insofar as such liability (or action in respect
thereof) arises out of or is based upon (i) any untrue statement or alleged
untrue statement of any material fact contained, on the effective date thereof,
in any registration statement under which such securities were registered under
the Securities Act, any preliminary prospectus or final prospectus contained
therein, or any amendment or supplement thereto, or (ii) any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, or (iii) any
violation by the Company of the Securities Act, any state securities or “blue
sky” laws or any sale or regulation thereunder in connection with such
registration.  Except as otherwise
provided in Section 6(d), the Company shall reimburse each such
Indemnified Person in connection with investigating or defending any such
liability; provided, however, that the Company shall not be
liable to any Indemnified Person in any such case to the extent that any such
liability arises out of or is based upon any untrue statement or alleged untrue
statement or omission or alleged omission made in such registration statement,
preliminary or final prospectus, or amendment or supplement thereto in reliance
upon and in conformity with information furnished in writing to the Company by
such Person specifically for use therein; and provided  further,
that the Company shall not be required to indemnify any Person against any
liability arising from any untrue or misleading statement or omission contained
in any preliminary prospectus if such deficiency is corrected in the final
prospectus or for any liability which arises out of the failure of any Person
to deliver a prospectus as required by the Securities Act regardless of any
investigation made by or on behalf of such Indemnified Person and shall survive
transfer of such securities by such seller.


 


(b)                                 Each
holder of any securities included in such registration being effected shall
indemnify and hold harmless each other selling holder of any securities, the
Company, its directors and officers, each underwriter and each other Person, if
any, who controls (within the meaning of the Securities Act) the Company or
such underwriter (individually and collectively


 


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also the “Indemnified Person”), against any liability, joint or
several, to which any such Indemnified Person may become subject under the
Securities Act or any other statute or at common law, insofar as such liability
(or actions in respect thereof) arises out of or is based upon (i) any untrue
statement or alleged untrue statement of any material fact contained, on the
effective date thereof, in any registration statement under which securities
were registered under the Securities Act at the request of such selling holder,
any preliminary prospectus or final prospectus contained therein, or any
amendment or supplement thereto, or (ii) any omission or alleged omission by
such selling holder to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in the case
of (i) and (ii) to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in such registration statement, preliminary or final prospectus, amendment or
supplement thereto in reliance upon and in conformity with information
furnished in writing to the Company by such selling holder specifically for use
therein.  Such selling holder shall
reimburse any Indemnified Person for any legal fees incurred in investigating
or defending any such liability; provided, however, that in no
event shall the liability of any holder for indemnification under this
Section 6 in its capacity as a seller of Registrable Securities exceed the
lesser of (i) that proportion of the total of such losses, claims, damages, expenses
or liabilities indemnified against equal to the proportion of the total
securities sold under such registration statement which are being sold by such
holder, or (ii) an amount equal to the proceeds to such holder of the
securities sold in any such registration; and provided  further,
however, that no selling holder shall be required to indemnify any Person
against any liability arising from any untrue or misleading statement or
omission contained in any preliminary prospectus if such deficiency is corrected
in the final prospectus or for any liability which arises out of the failure of
any Person to deliver a prospectus as required by the Securities Act.


 


(c)                                  In
the event the Company, any selling holder or other Person receives a complaint,
claim or other notice of any liability or action, giving rise to a claim for
indemnification under Sections 6(a) or (b) above, the Person claiming
indemnification under such paragraphs shall promptly notify the Person against
whom indemnification is sought of such complaint, notice, claim or action, and
such indemnifying Person shall have the right to investigate and defend any
such loss, claim, damage, liability or action.


 


(d)                                 If
the indemnification provided for in this Section 6 for any reason is held
by a court of competent jurisdiction to be unavailable to an Indemnified Person
in respect of any liability referred to therein, then each indemnifying party
under this Section 6, in lieu of indemnifying such indemnified party
thereunder, shall contribute to the amount paid or payable by such indemnified
party as a result of such liability (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company, the selling holders and
the underwriters from the offering of Registrable Securities or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company, the
selling holders and the underwriters in connection with the statements or
omissions which resulted in such liability, as well as any other relevant
equitable considerations.  The relative
benefits received by the Company, the selling holders and the underwriters
shall be deemed to be in the same respective proportions that the net proceeds
from the offering (before deducting expenses) received by the Company and the
selling holders and the underwriting discount


 


7

















 


received by the underwriters, in each case as set forth in the table on
the cover page of the applicable prospectus, bear to the aggregate public
offering price of the securities.  The
relative fault of the Company, the selling holders and the underwriters shall
be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company, the
selling holders, or the underwriters and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.


 


The Company, each selling holder and the underwriters
agree that it would not be just and equitable if contribution to this
Section 6 were determined by pro rata or per capita allocation or by any
other method of allocation which does not take account the equitable
considerations referred to in the immediately preceding paragraph.  In no event, however, shall a selling holder
be required to contribute under this Section 6(d) in excess of the lesser
of (i) that proportion of the total of such liability indemnified against equal
to the proportion of the total Registrable Securities sold under such registration
statement which are being sold by such holder or (ii) the net proceeds received
by such holder from its sale of Registrable Securities under such registration
statement.  No Person found guilty of
fraudulent representation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
found guilty of such fraudulent misrepresentation.


 


(e)                                  The
amount paid by an indemnifying party or payable to an Indemnified Person as a
result of the losses, claims, damages, expenses and liabilities referred to in
this Section 6 shall be deemed to include, subject to limitations set
forth above, any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim, payable as the same are incurred. 
The indemnification and contribution provided for in this Section 6
will remain in full force and effect regardless of any investigation made by or
on behalf of the indemnified parties or any other officer, director, employee,
agent or controlling person of the indemnified parties.  No indemnifying party, in the defense of any
such claim or litigation, shall enter into a consent or entry of any judgment
or enter into a settlement without the consent of the Indemnified Person, which
consent will not be unreasonably withheld or delayed.


 


7.                                       Amendments.


 


The provisions of this Agreement may be amended, and
the Company may take any action herein prohibited or omit to perform any act
herein required to be performed by it, only if the Company has obtained the
written consent of the holders of at least a majority of the Registrable
Securities. For the purposes of this Agreement and all agreements executed
pursuant hereto, no course of dealing between or among any of the parties
hereto and no delay on the part of any party hereto in exercising any rights
hereunder or thereunder shall operate as a waiver of the rights hereof and
thereof.


 


8.                                       Suspension
Period.


 


(a)                                  Notwithstanding
anything to the contrary set forth in this Agreement, the Company’s obligation
under this Agreement to use reasonable efforts to cause a registration
statement to be made or to become effective or to amend or supplement a
registration statement


 


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shall be suspended during any period in which a transaction or
occurrence (a “Suspension Event”) would require additional disclosure of
material information by the Company in the registration statement (such period
being hereinafter referred to as a “Suspension Period”) that would make it
inadvisable to cause the registration statement to be made or to become
effective or to amend or supplement the registration statement, but in no event
will the Suspension Period exceed ninety (90) days.  In the event any holder of Registrable Securities requests
registration during a Suspension Event, the Company shall notify the Holder of
the existence of such Suspension Event.


 


(b)                                 Following
the effectiveness of a Company registration statement, the holders of
Registrable Securities agree that they will not effect any sales of the
Registrable Securities pursuant to the registration statement at any time after
they have received notice from the Company to suspend sales (i) as a result of
and during a Suspension Period or (ii) for a reasonable time so that the
Company may correct or update the registration statement pursuant to
Section 4(f).  The holders of
Registrable Securities may recommence effecting sales of the Registrable
Securities pursuant to the registration statement following further notice to
such effect from the Company.


 


9.                                       Market
Stand-Off.


 


Each holder of Registrable Securities agrees if
requested by the Company and an underwriter in connection with any public
offering of the Company, not to directly or indirectly offer, sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant for the sale of or otherwise
dispose of or transfer any shares held by it for such period, not to exceed
ninety (90) days following the effective date of the relevant registration
statement, as may be specified by the Company or such underwriter.


 


10.                                 Transferability
of Registration Rights.


 


The registration rights set forth in this Agreement are
transferable to each transferee of Registrable Securities; provided, that each
subsequent holder of Registrable Securities must consent in writing to be bound
by the terms and conditions of this Agreement in order to acquire the rights
granted pursuant to this Agreement.


 


11.                                 Grant
of Additional Registration Rights.


 


Other than permitted transferees of Registrable
Securities under Section 10, the Company shall not, without the prior
written consent of holders of at least a majority of the Registrable Securities,
(a) allow purchasers of the Company’s securities to become a party to this
Agreement or (b) grant any other registration rights other than any incidental
or so called piggyback registration rights to any third parties that are not
inconsistent with the terms of this Agreement.


 


12.                                 Miscellaneous.


 


(a)                                  Notices.  All notices, requests, demands and other
communications provided for hereunder shall be in writing and mailed (by first
class registered or certified mail, postage prepaid), telegraphed, sent by
express overnight courier service or electronic facsimile


 


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transmission (with a copy by mail), or delivered to the applicable
party at the addresses indicated in the Purchase Agreement or, in the case of a
transferee holder, at the address of such holder as set forth in the books of
the Company or at such other address as shall be designated by such Person in a
written notice to other parties complying as to delivery with the terms of this
subsection (a).  All such notices,
requests, demands and other communications shall, when mailed, telegraphed or
sent, respectively, be effective (i) two days after being deposited in the
mails, (ii) one day after being delivered to the telegraph company or deposited
with the express overnight courier service or (iii) upon receipt, if sent by
electronic facsimile transmission.


 


(b)                                 Governing
Law.  This Agreement shall be
governed by and construed in accordance with the laws of the State of Delaware,
without giving effect to conflict of laws principles thereof.


 


(c)                                  Counterparts.  This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.


 


(d)                                 Severability.  If any provision of this Agreement shall be
held to be illegal, invalid or unenforceable, such illegality, invalidity or
unenforceability shall attach only to such provision and shall not in any
manner affect or render illegal, invalid or unenforceable any other provision
of this Agreement, and this Agreement shall be carried out as if any such
illegal, invalid or unenforceable provision were not contained herein.


 


(e)                                                                                  Integration.  This Agreement, including the exhibits,
documents and instruments referred to herein or therein, constitutes the entire
agreement among the parties with respect to the subject matter.


 


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IN WITNESS WHEREOF, the parties hereto have caused
this Registration Rights Agreement to be duly executed as of the date first set
forth above.


 


	
   

  	
  COMPANY:

  
	
   

  	
   

  
	
   

  	
  SEGUE SOFTWARE, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Joseph Krivickas

  	
   

  
	
   

  	
   

  	
  Joseph Krivickas

  
	
   

  	
   

  	
  President and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  INVESTOR:

  
	
   

  	
   

  
	
   

  	
  S-7 ASSOCIATES, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/James H. Simons

  	
   

  
	
   

  	
   

  	
  James H. Simons

  
	
   

  	
   

  	
  Managing Member

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/Dr. Howard L. Morgan

  
	
   

  	
  Name: Dr. Howard L. Morgan

  
					



 


 


[Signature Page to Amended and
Restated Registration Rights Agreement]


 


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