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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 18, 1997
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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ASPEN TECHNOLOGY, INC.
(Exact name of registrant as specified in its charter)
MASSACHUSETTS 04-2739697
(State or other jurisdiction (I.R.S. employer
of incorporation or organization) identification number)
TEN CANAL PARK
CAMBRIDGE, MASSACHUSETTS 02141
(617) 577-0100
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
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LAWRENCE B. EVANS
CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER
ASPEN TECHNOLOGY, INC.
Ten Canal Park
Cambridge, Massachusetts 02141
(617) 577-0100
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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Copies to:
STEPHEN J. DOYLE, ESQ. MARK L. JOHNSON, ESQ.
Vice President and General Counsel FOLEY, HOAG & ELIOT LLP
ASPEN TECHNOLOGY, INC. One Post Office Square
Ten Canal Park Boston, Massachusetts 02109
Cambridge, Massachusetts 02141
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Approximate date of commencement of proposed sale to the public: As soon as
practicable 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. [ ]
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CALCULATION OF REGISTRATION FEE
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PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM
TITLE OF EACH CLASS OF TO BE OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PER SHARE(1) OFFERING PRICE(1) REGISTRATION FEE
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Common Stock, $.10 par value............. 3,100 shares $68.40 $212,040 $65
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(1) Estimated solely for the purpose of determining the registration fee. In
accordance with Rule 457(c) under the Securities Act of 1933, the above
calculation is based on the average of the high and low sale prices
reported in the consolidated reporting system of the Nasdaq National Market
on February 11, 1997.
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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 COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
SUBJECT TO COMPLETION, DATED FEBRUARY 18, 1997
3,100 SHARES
ASPEN TECHNOLOGY, INC.
COMMON STOCK
All of the 6,400 shares of Common Stock offered hereby are being sold by
the Selling Stockholder. See "Selling Stockholder." The Company will not
receive any of the proceeds from the sale of shares by the Selling Stockholder.
The Company's Common Stock trades on the Nasdaq National Market under the
symbol "AZPN." On February 14, 1997, the closing sale price of the Common Stock,
as reported by the Nasdaq National Market, was $70.50 per share.
On January 28, 1997, the Company announced that it would effect a
two-for-one stock split of its Common Stock by way of a stock dividend to
persons who were holders of record of Common Stock as of February 14, 1997. The
stock dividend will be distributed on February 28, 1997. Information in this
Prospectus does not give effect to the stock dividend. See "Prospectus
Summary--Recent Events."
The shares of Common Stock offered hereby may be sold from time to time by
the Selling Stockholders, or by pledgees, donees, transferees or other
successors in interest of the Selling Stockholders. Such sales may be made on
the Nasdaq National Market, or otherwise, at prices and on terms then prevailing
or at prices related to the then-current market prices, or in negotiated
transactions at negotiated prices. The shares may be sold by one or a
combination of the following: (a) a block trade in which the broker or dealer so
engaged will attempt to sell the shares as agent, but may position and resell a
portion of the block as principal to facilitate the transaction; (b) purchases
by a broker or dealer as principal and resale by such broker or dealer for its
account pursuant to this Prospectus; and (c) ordinary brokerage transactions and
transactions in which the broker solicits purchasers. Brokers or dealers will
receive commissions or discounts from Selling Stockholders in amounts to be
negotiated immediately prior to the sale. The Selling Stockholders will be
responsible for any discounts, concessions, commissions or other compensation
due to any broker or dealer in connection with the sale of any of the shares
offered hereby. All of the other expenses of this offering, estimated at
$2,500, will be paid by the Company. See "Plan of Distribution."
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SEE "RISK FACTORS" COMMENCING ON PAGE 5 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF SHARES OF COMMON STOCK
OFFERED HEREBY.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
February , 1997
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the "Commission"). Such reports and other information may be
inspected and copies may be obtained (at prescribed rates) at the Commission's
Public Reference Section, 450 Fifth Street, N.W., Room 1024, Washington D.C.
20549, and at the Commission's Regional Offices at Northwestern Atrium Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511 and 7 World
Trade Center, Suite 1300, New York, New York 10048. Reports and other
information concerning the Company also may be inspected at the offices of the
Nasdaq Stock Market, 1735 K Street, N.W., Washington D.C. 20006-1500.
This Prospectus constitutes part of a Registration Statement on Form S-3
(the "Registration Statement") filed by the Company with the Commission under
the Securities Act of 1933, as amended (the "Securities Act"). This Prospectus
does not contain all of the information contained in the Registration Statement,
and reference is hereby made to the Registration Statement and related exhibits
for further information with respect to the Company and the securities offered
hereby. Any statements contained herein concerning the provisions of any
document are not necessarily complete, and, in such instance, reference is made
to the copy of such document filed as an exhibit to the Registration Statement
or otherwise filed with the Commission. Each such statement is qualified in its
entirety by such reference.
INFORMATION INCORPORATED BY REFERENCE
The following documents heretofore filed by the Company with the Commission
pursuant to the Exchange Act are incorporated herein by reference: (1) the
Company's Annual Report on Form 10-K for the fiscal year ended June 30, 1996
(the "Annual Report"); (2) the Company's definitive Proxy Statement dated
November 11, 1996 used in connection with its Annual Meeting of Stockholders
held on December 16, 1996; (3) the Company's Quarterly Reports on Form 10-Q for
the fiscal quarters ended September 30, 1996 and December 31, 1996 (together,
the "Quarterly Reports"); and (4) the Company's Current Report on Form 8-K dated
January 29, 1997.
All reports and other documents subsequently filed by the Company pursuant
to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Prospectus and prior to the termination of the offering made hereby shall be
deemed to be incorporated by reference herein and to be a part hereof from the
date of the filing of such reports and documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein modifies or supersedes such statement.
Any statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of the Registration Statement or
this Prospectus.
Any person to whom a copy of this Prospectus is delivered may obtain,
without charge, upon written or oral request, a copy of any of the documents
incorporated by reference herein, except for the exhibits to such documents
(other than exhibits expressly incorporated by reference into such documents).
Requests for such documents should be addressed to the Manager of Investor
Relations of the Company, Ten Canal Park, Cambridge, Massachusetts 02141 or
directed to the Manager of Investor Relations at either telephone number (617)
577-0100 or e-mail address invest@aspentech.com.
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PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information and financial statements, including the notes thereto, appearing
elsewhere in this Prospectus or incorporated by reference herein. Information
herein does not give effect to the two-for-one stock split of the Company's
Common Stock to be effected by a stock dividend on February 28, 1997 to persons
who were holders of record of Common Stock as of February 14, 1997. See "Recent
Events" below.
THE COMPANY
Aspen Technology, Inc. ("AspenTech" or the "Company") is a leading supplier
of off-the-shelf software products and services for the analysis, design and
automation of manufacturing facilities by companies in the process industries,
including the chemicals, petroleum, pharmaceuticals, pulp and paper, electric
power, and food and consumer products industries.
AspenTech provides a sophisticated, integrated family of off-the-shelf
software products for use across the entire process manufacturing life-cycle,
from "off-line" applications used primarily in research and development and
engineering to "on-line" applications used primarily in production. AspenTech's
product offering is classified in four categories: modeling; process information
management ("PIM"); advanced process control ("APC") and optimization; and
planning and scheduling. The Company's off-line modeling software is used by
engineers on desktop computers primarily to simulate and predict manufacturing
processes in connection with the design of new facilities or processes and the
analysis of existing facilities or processes. AspenTech's on-line PIM, APC and
optimization software, which is connected directly to plant instrumentation,
enables the real-time adjustment of production variables in response to
constantly changing operating conditions to improve process efficiency.
AspenTech's PC-based planning and scheduling software is used by companies in
the process industries for economic planning and scheduling for both short-term
and strategic applications, including feedstock selection, product mix
optimization, logistics and supply chain management, scheduling, process unit
optimization, and investment planning. AspenTech couples its off-the-shelf
software products with design and implementation consulting services in order to
market a complete solution to its customers. AspenTech believes its ability to
offer a complete solution of both industry-leading software and sophisticated
process engineering expertise is an important source of competitive
differentiation.
The Company initially became a provider of PIM software and services
through its acquisition of Industrial Systems, Inc. in May 1995. The Company
significantly enhanced its PIM, APC and optimization software service offerings
through its acquisitions of Dynamic Matrix Control Corporation ("DMCC") in
January 1996 and Setpoint, Inc. ("Setpoint") in February 1996. In October 1996
AspenTech acquired all of the outstanding stock of B-JAC International, Inc.
("B-JAC"), a supplier of detailed heat exchanger modeling software, in exchange
for 52,081 shares of the Company's Common Stock. In October 1996 the Company
also acquired, in a cash purchase transaction, all of the assets of the Process
Control Division of Cambridge Control Limited (the "Cambridge Control
Division"), which specializes in APC solutions specifically aimed towards
process manufacturing controls applications for the refining, petrochemical, and
pulp and paper industries. In December 1996 AspenTech acquired the process
industries modeling system business of Bechtel Corporation (the "Bechtel
Business"), which provides software products that are used for planning and
scheduling in the process industries and that are based on linear programming
technology. The consideration for the Bechtel Business consisted of a cash
payment to Bechtel Corporation and the issuance of 77,870 shares of the
Company's Common Stock in exchange for all of the outstanding stock of Basil
Joffe Associates, Inc., a related software development organization.
AspenTech's customers span a broad range of process industry segments. With
more than 750 customers worldwide, AspenTech's customers include 44 of the 50
largest chemical companies in the world and 18 of the 20 largest petroleum
refiners in the world.
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The Company was founded in 1981 and is a Massachusetts corporation.
AspenTech's executive offices are located at Ten Canal Park, Cambridge,
Massachusetts 02141, and its telephone number is (617) 577-0100.
RECENT EVENTS
On January 28, 1997, the Company announced that it would effect a
two-for-one stock split of its Common Stock by way of a stock dividend to
persons who were holders of record of Common Stock as of February 14, 1997. The
stock dividend was approved by the board of directors of the Company on January
27, 1997 and will be payable on February 28, 1997. INFORMATION IN THIS
PROSPECTUS DOES NOT GIVE EFFECT TO THE STOCK DIVIDEND.
THE OFFERING
All of the 3,100 shares of Common Stock offered hereby are being sold by
the Selling Stockholder. The offered shares were issued to the Selling
Stockholder in a private placement in January 1996. See "Selling Stockholder."
The Selling Stockholder was employed by DMCC prior to January 10, 1997 and
is now engaged as a consultant to the Company. As part of certain severance
arrangements entered into with the Selling Stockholder, the Company is
obligated to keep the Registration Statement in effect until all of the shares
offered have been sold, subject to suspension by AspenTech in certain events.
See "Plan of Distribution."
The Company will not receive any of the proceeds from the sale of shares by
the Selling Stockholder. See "Use of Proceeds."
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"AspenTech" is a trademark of the Company.
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RISK FACTORS
THIS PROSPECTUS CONTAINS AND INCORPORATES BY REFERENCE FORWARD-LOOKING
STATEMENTS WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES ACT OF 1933 AND
SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934. THE COMPANY'S ACTUAL RESULTS
COULD DIFFER MATERIALLY FROM THE RESULTS CONTEMPLATED IN THE FORWARD-LOOKING
STATEMENTS AS A RESULT OF A NUMBER OF FACTORS, INCLUDING THE RISK FACTORS SET
FORTH BELOW.
Integration of Acquired Businesses. Since January 1996, the Company has
acquired DMCC, Setpoint, B-JAC, the Cambridge Control Division and the Bechtel
Business. Through these acquisitions, the Company has increased its product and
service offerings to include additional planning and scheduling, PIM, APC and
optimization software and services, and has substantially increased its scope of
operations and number of personnel. The successful and timely integration of
these acquired businesses into the Company is critical to the Company's future
financial performance. This integration will require that the Company, among
other things, integrate the companies' software products and technologies,
retain key employees, assimilate diverse corporate cultures, integrate
management information systems, consolidate the acquired operations and manage
geographically dispersed operations, each of which could pose significant
challenges. The diversion of the attention of management created by the
integration process, and any disruptions or other difficulties encountered in
the transition process, could have a material adverse effect on the business,
operating results and financial condition of the Company. The difficulty of
combining these numerous businesses may be increased by the need to integrate
personnel, and changes effected in the combination may cause key employees to
leave. The long-term success of the acquisitions will require the further
development of the PIM, APC and optimization software and services markets,
which currently are immature. There can be no assurance that the Company will be
able to integrate and develop the operations of the acquired businesses
successfully, and any failure to do so could have a material adverse effect on
the Company's business, operating results and financial condition.
A substantial majority of the revenues of each of DMCC, Setpoint and the
Cambridge Control Division has been generated by service engagements.
AspenTech's revenues historically have been derived principally from the
licensing of software products, and its management has limited experience in
managing a service business. In particular, a significant portion of the service
engagements of these businesses has been undertaken on a fixed-price basis. The
Company bears the risk of cost overruns and inflation in connection with
fixed-price engagements, and as a result any of these engagements may be
unprofitable. While the Company believes that its reserves for fixed-price
contracts are reasonable, there can be no assurance that the Company's reserves
will be sufficient to cover future losses that might be incurred with respect to
any fixed-price contracts. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Results of Operations" in the
Annual Report and the Quarterly Reports.
Dependence Upon Increased Market Penetration. Increased use in the process
industries, particularly the chemicals and petroleum industries, of software and
services for the analysis, design and automation of process manufacturing plants
in general and of the Company's software products and services in particular is
critical to the Company's future growth. The Company believes that a number of
factors will determine its ability to achieve increased market penetration.
These factors include product performance, accuracy of results, ease of
implementation and use, breadth and integration of product offerings,
reliability and scope of applications. Failure of the Company to achieve
increased market penetration in the process industries would substantially
restrict the future growth of the Company and could have a material adverse
effect on the Company's business, operating results and financial condition. See
"Business--The AspenTech Advantage" and "--Strategy" in the Annual Report.
Fluctuations in Quarterly Operating Results. The Company's operating
results have fluctuated in the past and may fluctuate significantly in the
future as a result of a variety of factors, including purchasing patterns,
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timing of new products and enhancements by the Company and its competitors, and
fluctuating foreign economic conditions. In addition, the Company ships software
products within a short period after receipt of an order and typically does not
have a material backlog of unfilled orders of software products. Therefore,
revenues from software licenses in any quarter are substantially dependent on
orders booked in that quarter. Historically, a majority of each quarter's
revenues from software licenses has come from license contracts that have been
effected in the final weeks of that quarter. The revenues for a quarter
typically include a number of large orders. If the timing of any of these orders
is delayed, it could result in a substantial reduction in revenues for that
quarter. Since the Company's expense levels are based in part on its
expectations as to future revenues, the Company may be unable to adjust spending
in a timely manner to compensate for any revenue shortfall and any revenue
shortfalls would likely have a disproportionate adverse effect on net income.
Prior to fiscal 1996, the Company experienced a net loss for the first quarter
of each fiscal year, in part because a substantial portion of the Company's
revenues is derived from countries other than the United States where business
is slow during the summer months and also in part because of the timing of
renewals of software licenses. The Company expects that these factors will
continue to affect its operating results and that the Company may experience net
losses in the initial quarter of future fiscal years. See "Management's
Discussion and Analysis of Financial Condition and Results of
Operations--Quarterly Results" in the Annual Report.
Concentration of Revenues in the Chemicals and Petroleum Industries. The
Company derives a significant portion of its revenues from companies in the
chemicals and petroleum industries. Accordingly, the Company's future success is
dependent upon the continued demand for modeling software by companies in the
chemicals industry, for planning and scheduling software in the petroleum
industry, and for PIM, APC and optimization software and services by companies
in the chemical and petroleum industries. The chemical and petroleum industries
are highly cyclical. The Company believes that economic downturns in the United
States, Europe, Japan, Asia and South America and pricing pressures experienced
by chemical and petroleum companies in connection with cost-containment measures
have led to delays and reductions in certain capital and operating expenditures
by many of such companies worldwide. The Company's revenues have in the past
been, and may in the future be, subject to substantial period-to-period
fluctuations as a consequence of such industry patterns, as well as general
domestic and foreign economic conditions and other factors affecting spending by
companies in the Company's target process industries. There can be no assurance
that such factors will not have a material adverse effect on the Company's
business, operating results and financial condition. See "Management's
Discussion and Analysis of Financial Condition and Results of
Operations--Results of Operations" in the Annual Report and the Quarterly
Reports.
Product Development and Technological Change. The market for software and
services for the analysis, design and automation of process manufacturing plants
is characterized by continual change and improvement in computer hardware and
software technology. The Company's future success will depend on its ability to
enhance its current software products and services, to introduce new software
products and services that keep pace with technological developments, and to
continue to address the changing needs of its customers. There can be no
assurance that the Company will be successful in developing and marketing new
and enhanced products and services, or that its products and services will
continue to address adequately the needs of the marketplace. Like many other
software products, the Company's products have on occasion contained undetected
errors or "bugs." In addition, because new releases of the Company's products
are initially installed only by a small number of customers, any errors or
"bugs" in those new releases may not be detected for a number of months after
the delivery of the software. If the Company's products do not perform
substantially as expected or are not accepted in the marketplace, the Company's
business, operating results and financial condition would be materially
adversely affected. See "Business--Product Development" in the Annual Report.
Dependence on Key Personnel. The Company's future success depends to a
significant extent on Lawrence B. Evans, the Company's chief executive officer,
its other executive officers, and certain key technical, managerial and
marketing personnel. The loss of the services of any of these individuals or
groups
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of individuals could have a material adverse effect on the Company's business,
operating results and financial condition. None of the Company's executive
officers has entered into an employment agreement with the Company, and the
Company does not have, and is not contemplating securing, any significant amount
of key- man life insurance on any of its executive officers or other key
employees. The Company believes that its future success also will depend
significantly upon its ability to attract, motivate and retain additional highly
skilled technical, managerial and marketing personnel. Competition for such
personnel is intense, and there can be no assurance that the Company will be
successful in attracting and retaining the personnel it requires to continue to
grow and operate profitably. See "Business--Employees" in the Annual Report.
Product Liability. The sale and implementation of on-line applications by
the Company may entail the risk of product liability claims. The Company's APC
and optimization software products and services are used in the design,
operation and management of manufacturing processes at large facilities, and any
failure by the software at those facilities could result in significant claims
for damages or for violations of environmental, safety and other laws and
regulations. The Company's agreements with its customers generally contain
provisions designed to limit the Company's exposure to potential product
liability claims. It is possible, however, that the limitation of liability
provisions contained in the Company's license agreements may not be effective as
a result of federal, state or local laws or ordinances or unfavorable judicial
decisions. A successful product liability claim against the Company could have a
material adverse effect upon the Company's business, operating results and
financial condition.
Migration to Microsoft Windows. AspenTech believes that operating systems
similar to Microsoft Windows, due to their interoperability and customization
capabilities, are increasingly the preferred choice of certain of its customers.
AspenTech is currently developing native Windows 95 and Windows NT versions of
its software products. The Company is aware of two competitors that are
marketing modeling and simulation software for use with existing Microsoft
Windows operating systems, both of which are currently shipping a release of
modeling and simulation software for Windows operating systems. There can be no
assurance that the Company will be successful in developing versions of any or
all of its software products that will operate on Windows 95 or Windows NT, or
that any such development, even if successful, will be completed concurrent with
or prior to introductions by competitors of software products on Windows 95,
Windows NT or any other Microsoft Window system. Any such failure or delay could
affect the Company's competitive position or lead to product obsolescence in the
future. See "Business--Product Development" and "Competition" in the Annual
Report.
Dependence on Proprietary Technology. The Company regards its software as
proprietary and relies on a combination of copyright, patent, trademark and
trade secret laws, license and confidentiality agreements, and software security
measures to protect its proprietary rights. AspenTech has received a United
States patent for the expert guidance system in its proprietary graphical user
interface. The Company has registered or applied to register certain of its
significant trademarks in the United States. The Company generally enters into
non-disclosure agreements with its employees and customers, and historically has
restricted access to its software products' source codes, which it regards as
proprietary information. In a few cases, the Company has provided copies of the
source code for certain products to customers solely for the purpose of special
customization of the products and has deposited copies of the source code for
certain products in third-party escrow accounts as security for on-going service
and license obligations. In these cases, the Company relies on nondisclosure and
other contractual provisions to protect its proprietary rights.
The laws of certain countries in which the Company's products are
distributed do not protect the Company's products and intellectual property
rights to the same extent as the laws of the United States. The laws of many
countries in which the Company licenses its products protect trademarks solely
on the basis of registration. The Company currently possesses a limited number
of trademark registrations in certain foreign jurisdictions and does not possess
any foreign copyright or patent registrations. The Company derived more than 50%
of its revenues in each of fiscal 1994 and fiscal 1995, approximately 45% of its
revenues in fiscal
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1996 and approximately 57% of its revenues in the first six months of fiscal
1997 from customers outside the United States.
There can be no assurance that the steps taken by the Company to protect
its proprietary rights will be adequate to deter misappropriation of its
technology or independent development by others of technologies that are
substantially equivalent or superior to the Company's technology. Any such
misappropriation of the Company's technology or development of competitive
technologies could have a material adverse effect on the business, results of
operations and financial condition of the Company. The Company could incur
substantial costs in protecting and enforcing its intellectual property rights.
Moreover, from time to time third parties may assert patent, trademark,
copyright and other intellectual property rights to technologies that are
important to the Company. In such an event, the Company may be required to incur
significant costs in litigating a resolution to the asserted claims. There can
be no assurance that such a resolution would not require that the Company pay
damages or obtain a license of a third party's proprietary rights in order to
continue licensing its products as currently offered or, if such a license is
required, that it will be available on terms acceptable to the Company. See
"Business--Proprietary Rights."
Competition. The Company's software products compete with software tools
that are internally developed by companies in the process industries and with
certain process modeling, PIM, APC and optimization software products that are
sold by a number of commercial suppliers. AspenTech's primary commercial
competitors in the process modeling software market are Simulation Sciences
Inc., Hyprotech, Ltd. and Chemstations, Inc. In the planning and scheduling
market, AspenTech primarily competes with Bonner & Moore Associates, Inc.,
Haverly Systems, Inc., Chesapeake Decision Sciences, Inc., and Ernst & Young
Wright Killen. In the PIM market, AspenTech primarily competes with Oil Systems
Inc. and Biles and Associates and, to a lesser extent, with digital control
system vendors such as Honeywell Inc. In the APC and optimization markets,
AspenTech competes with the Profimatics and Icotron divisions of Honeywell Inc.,
which primarily sell digital control system hardware, as well as with the Simcon
division of ABB Asea Brown Boveri (Holding) Ltd. Several smaller competitors,
including the Litwin Engineering division of Raytheon Company and Treiber
Control, focus exclusively on the APC market. Emergence of a new competitor or
the consolidation of existing competitors could adversely affect the Company's
business, operating results and financial condition. Certain competitors also
supply related hardware products to existing and potential customers of
AspenTech, and may have established relationships that afford the competitors an
advantage in supplying software and services to those customers. The Company's
continued success depends on its ability to compete effectively with its
commercial competitors and to persuade prospective customers to use the
Company's products and services instead of, or in addition to, software
developed internally or services provided by their own personnel. In light of
these factors, there is no assurance that the Company will be able to maintain
its competitive position. See "Business--Competition" in the Annual Report.
Management of Growth. Since fiscal 1990, the Company has experienced
substantial growth in the number of its employees, the scope of its operating
and financial systems, and the geographic area of its operations. The Company's
operations have expanded significantly through both internally generated growth
and acquisitions, particularly the acquisitions of DMCC and Setpoint in the
third quarter of fiscal 1996. This growth has resulted in an increase in the
level of responsibility for management personnel. To manage its growth
effectively, the Company must continue to implement and improve its operating
and financial systems, and to retain and increase its employee base. There can
be no assurance that the management systems currently in place will be adequate
or that the Company will be able to manage the Company's recent or future growth
successfully, and any failure to do so could have a material adverse effect on
the Company's business, operating results and financial condition. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Results of Operations" in the Annual Report and the Quarterly
Reports.
International Operations. The Company derived more than 50% of its revenues
in each of fiscal 1994 and fiscal 1995, approximately 45% of its revenues in
fiscal 1996 and approximately 57% of its revenues in the first six months of
fiscal 1997 from customers outside the United States. The Company anticipates
that
8
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revenues from customers outside the United States will continue to account for a
significant portion of its total revenues in the foreseeable future. AspenTech's
customers outside the United States historically have been located principally
in Europe and Japan, while Setpoint historically has derived a substantial
portion of its revenues from customers in Asia and South America. The Company's
operations outside the United States are subject to certain risks, including
unexpected changes in regulatory requirements, exchange rates, tariffs and other
barriers, political and economic instability, difficulties in managing
distributors or representatives, difficulties in staffing and managing foreign
subsidiary operations, difficulties or delays in translating products and
product documentation into foreign languages, and potentially adverse tax
consequences. There can be no assurance that any of these factors will not have
a material adverse effect on the Company's business, operating results and
financial condition.
The impact of future exchange rate fluctuations on the Company's financial
condition and results of operations cannot be accurately predicted. In recent
years, the Company has increased the extent to which it denominates arrangements
with customers outside the United States in the currencies of the country in
which the software or services are provided. From time to time the Company has
engaged in, and may continue to engage in, hedges of a significant portion of
installment contracts denominated in foreign currencies. There can be no
assurance that any hedging policies implemented by the Company will be
successful or that the cost of such hedging techniques will not have a
significant impact on the Company's business, results of operations or financial
condition. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations" in the Annual Report and the Quarterly Reports.
Risks Associated With Future Acquisitions. To expand its markets, the
Company's business strategy includes growth through additional acquisitions.
Identifying and pursuing acquisition opportunities and integrating acquired
products and businesses requires a significant amount of management time and
skill. There can be no assurance that the Company will be able to identify
suitable acquisition candidates, consummate any acquisition on acceptable terms
or successfully integrate any acquired business into the Company's operations.
There also can be no assurance that any future acquisition will not have an
adverse effect upon the Company's operating results, particularly in the fiscal
quarters immediately following consummation of the acquisition while the
acquired business is being integrated into the Company's operations. As a result
of acquisitions, the Company may encounter unexpected liabilities and
contingencies associated with the acquired businesses. The Company may use
Common Stock or Preferred Stock or may incur additional long-term indebtedness
or a combination thereof for all or a portion of the consideration to be paid in
future acquisitions. The issuance of Common Stock or Preferred Stock in
acquisitions could result in dilution to existing stockholders, while the use of
cash reserves or significant debt financing to fund acquisitions could reduce
the Company's liquidity.
Potential Volatility of Stock Price. The stock market has from time to time
experienced extreme price and volume fluctuations, particularly in the high
technology sector, and those fluctuations have often been unrelated to the
operating performance of particular companies. In addition, factors such as
announcements of technological innovations or new products by the Company or its
competitors, as well as market conditions in the computer software or hardware
industries, may have a significant impact on the market price of the Company's
Common Stock.
Effect of Certain Charter and By-Law Provisions and Anti-Takeover
Provisions; Possible Issuances of Preferred Stock. The Company's Restated
Articles of Organization, its By-Laws and certain Massachusetts laws contain
provisions that may discourage acquisition bids for the Company and that may
reduce the temporary fluctuations in the trading price of the Company's Common
Stock which are caused by accumulations of stock, thereby depriving stockholders
of certain opportunities to sell their stock at temporarily higher prices or
receive a premium for their shares as part of an acquisition of the Company.
Preferred Stock may be issued by the Company in the future without stockholder
approval and upon such terms as the Board of Director may determine. The rights
of the holders of Common Stock will be subject to, and may be adversely affected
by, the rights of the holders of any Preferred Stock that may be issued in
9
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the future. The issuance of Preferred Stock, while providing desirable
flexibility in connection with possible acquisitions and other corporate
purposes, could have the effect of making it more difficult for a third party to
acquire, or of discouraging a third party from acquiring, a majority of the
outstanding stock of the Company. The Company has no present plans to issue any
shares of Preferred Stock.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of Common Stock by
the Selling Stockholder, nor will any such proceeds be available for use by the
Company or otherwise for the Company's benefit. See "Selling Stockholder."
SELLING STOCKHOLDER
The following table sets forth certain information with respect to the
beneficial ownership of the Company's Common Stock by the Selling Stockholder as
of February 17, 1997 and as adjusted to reflect the sale of the shares of Common
Stock offered hereby. The following information does not give effect to the
stock dividend described in "Prospectus Summary--Recent Events. "The Selling
Stockholder possesses sole voting and investment power with respect to shares,
subject to community property laws where applicable.
Shares to be
Shares Beneficially Owned
Beneficially Owned After Offering if
Prior to Offering Number of All Shares Sold
------------------- Shares Being ------------------
Name Number Percent Offered Number Percent
- ---- ------ ------- ------------ ------ -------
Pierre R. Latour.......... 3,100 * 3,100 -- --
- ----------------
* Percentage of shares beneficially owned is less than 1.0%.
10
12
PLAN OF DISTRIBUTION
This Prospectus and the Registration Statement are in furtherance of a
"shelf" registration pursuant to Rule 415 promulgated by the Commission under
the Securities Act. Pursuant to registration rights arrangements entered into
with the Selling Stockholder, the Company is obligated to keep the "shelf"
registration effective until all of the shares offered have been sold, subject
to suspension by AspenTech in certain events.
The shares offered hereby may be sold from time to time by the Selling
Stockholder, or by pledgees, donees, transferees or other successors in
interest of the Selling Stockholder. Such sales may be made on the Nasdaq
National Market, or otherwise, at prices and on terms then prevailing or at
prices related to the then-current market prices, or in negotiated transactions
at negotiated prices. The shares may be sold by one or a combination of the
following: (a) a block trade in which the broker or dealer so engaged will
attempt to sell the shares as agent, but may position and resell a portion of
the block as principal to facilitate the transaction; (b) purchases by a broker
or dealer as principal and resale by such broker or dealer for its account
pursuant to this Prospectus; and (c) ordinary brokerage transactions and
transactions in which the broker solicits purchasers. In effecting sales,
brokers or dealers engaged by the Selling Stockholder may arrange for other
brokers or dealers to participate. Brokers or dealers will receive commissions
or discounts from Selling Stockholder in amounts to be negotiated immediately
prior to the sale. The Selling Stockholder and any broker-dealers that
participate in the distribution may be deemed to be "underwriters" within the
meaning of Section 2(11) of the Securities Act, and any commission received by
them and any profit on the resale of shares sold by them may be deemed to be
underwriting discounts and commissions.
Upon the Company being notified by the Selling Stockholder that any
material arrangement has been entered into with a broker-dealer for the sale of
shares through a block trade, special offering, exchange distribution or
secondary distribution or a purchase by a broker or dealer, a supplemented
prospectus will be filed, if required, pursuant to Rule 424(c) under the
Securities Act, setting forth (i) the name of each of the participating
broker-dealers, (ii) the number of shares involved, (iii) the price at which
such shares were sold, (iv) the commissions paid or discounts or concessions
allowed to such broker-dealers, where applicable, (v) a statement to the effect
that such broker-dealers did not conduct any investigation to verify the
information set out or incorporated by reference in this Prospectus and (vi)
other facts material to the transaction.
LEGAL MATTERS
The validity of the shares of Common Stock offered hereby has been passed
upon for the Company by Foley, Hoag & Eliot LLP, Boston, Massachusetts.
EXPERTS
The consolidated balance sheets of the Company and its subsidiaries as of
June 30, 1995 and 1996 and the related consolidated statements of operations,
stockholders' equity and cash flows for the years ended June 30, 1994, 1995 and
1996 incorporated by reference herein have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their report with respect
thereto, and are incorporated by reference herein in reliance upon the authority
of said firm as experts in giving said reports.
11
13
================================================================================
No broker, dealer or any other person has been authorized to give any
information or to make any representations in connection with this offering
other than those contained in this Prospectus, and, if given or made, such
information or representations must not be relied upon as having been authorized
by the Company or the Selling Stockholder. This Prospectus does not constitute
an offer to sell or a solicitation of an offer to buy any securities other than
the shares of Common Stock to which it relates or an offer to, or a solicitation
of, any person in any jurisdiction where such an offer or solicitation would be
unlawful. Neither the delivery of this Prospectus nor any sale made hereunder
shall, under any circumstances, create any implication that there has been no
change in the affairs of the Company since the date hereof or that information
contained herein is correct as of any time subsequent to its date.
=================
TABLE OF CONTENTS
=================
Available Information....................... 2
Information Incorporated by Reference....... 2
Prospectus Summary.......................... 3
Risk Factors................................ 5
Use of Proceeds............................. 10
Selling Stockholder......................... 10
Plan of Distribution........................ 11
Legal Matters............................... 11
Experts..................................... 11
================================================================================
3,100 SHARES
ASPEN TECHNOLOGY, INC.
COMMON STOCK
----------
PROSPECTUS
----------
February , 1997
================================================================================
14
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the various expenses to be paid by the
Registrant in connection with the issuance and distribution of the shares of
Common Stock being registered. All amounts shown are estimates except for the
Securities and Exchange Commission registration fee. The Registrant will pay all
expenses in connection with the distribution of the shares of Common Stock being
sold by the Selling Stockholder (including fees and expenses of counsel for the
Company), except for any discounts, concessions, commissions or other
compensation due to any broker or dealer in connection with the sale of any of
the shares offered hereby.
Payable by
Company
-------
Securities and Exchange Commission registration fee... $ 65
Legal fees and expenses............................... 1,750
Printing, EDGAR formatting and mailing expenses....... 500
Miscellaneous......................................... 185
------
Total............................................ $2,500
======
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article 6 of the Company's Restated Articles of Organization provides that
the Company shall indemnify each person who is or was a director, officer,
employee or other agent of the Company, and each person who is or was serving at
the request of the Company as a director, trustee, officer, employee or other
agent of another organization in which it directly or indirectly owns shares or
of which it is directly or indirectly a creditor, against all liabilities, costs
and expenses reasonably incurred by any such persons in connection with the
defense or disposition of or otherwise in connection with or resulting from any
action, suit, or other proceeding in which they may be involved by reason of
being or having been such a director, officer, employee agent or trustee, or by
reason of any action taken or not taken in such capacity, except with respect to
any matter as to which such person shall have been finally adjudicated by a
court of competent jurisdiction not to have acted in good faith in the
reasonable belief that his or her action was in the best interests of the
Company. The provisions of the Company's Articles pertaining to indemnification
may not be amended and no provision inconsistent therewith may be adopted
without the approval of either the Board of Directors or the holders of at least
a majority of the voting power of the Company. Section 67 of Chapter 156B of the
Massachusetts Business Corporation Law authorizes a corporation to indemnify its
directors, officers, employees and other agents unless such person shall have
been adjudicated in any proceeding not to have acted in good faith in the
reasonable belief that such action was in the best interests of the corporation.
The Company maintains a directors' and officers' insurance policy that
covers certain liabilities of directors and officers of the Company, including
liabilities under the Securities Act. The Company maintains a general liability
insurance policy that covers certain liabilities of directors and officers of
the Company arising out of claims based on acts or omissions in their capacities
as directors or officers.
II-1
15
ITEM 16. EXHIBITS
EXHIBIT NO.
-----------
5.1 Opinion of Foley, Hoag & Eliot LLP
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Foley, Hoag & Eliot LLP (included in Exhibit 5.1)
24.1 Powers of Attorney (included on pages II-4 and II-5)
99.1 Section 1(c) (Private Placement Stock Registration) of Release and
Settlement Agreement dated January 10, 1997 between Pierre R. Latour and
Aspen Technology, Inc.
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 to Section 10(a)(3) of
the Securities Act of 1933;
(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
(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) do not
apply if the registration statement is on Form S-3, Form S-8, and
the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports
filed by the Registrant pursuant to Section 13 or Section 15(d) of
the Securities Exchange Act of 1934 that are incorporated by
reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, 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.
(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 Section
15(d) of the Securities Exchange Act of 1934 that is incorporated by
reference to 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.
II-2
16
(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 foregoing provisions, 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 Act 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 Act
and will be governed by the final adjudication of such issue.
II-3
17
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Cambridge, Commonwealth of Massachusetts, on
February 14, 1997.
ASPEN TECHNOLOGY, INC.
By: /S/ LAWRENCE B. EVANS
------------------------
Lawrence B. Evans
Chairman of the Board and
Chief Executive Officer
POWER OF ATTORNEY
We, the undersigned officers and directors of Aspen Technology, Inc.,
hereby severally constitute and appoint Lawrence B. Evans, Mary A. Palermo and
Stephen J. Doyle, 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 on Form S-3 filed
herewith and any and all pre-effective and post-effective amendments to said
Registration Statement, and any subsequent Registration Statement for the same
offering which may be filed under Rule 462(b) under the Securities Act of 1933
and generally to do all such things in our names and on our behalf in our
capacities as officers and directors to enable Aspen Technology, 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 or to any subsequent
Registration Statement for the same offering which may be filed under said Rule
462(b).
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and as of the date indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/S/ LAWRENCE B. EVANS Chairman of the Board February 14, 1997
- -------------------------- and Chief Executive Officer
LAWRENCE B. EVANS (Principal Executive Officer)
/S/ MARY A. PALERMO Executive Vice President, February 14, 1997
- -------------------------- Finance and Chief Financial
MARY A. PALERMO Officer (Principal Financial
and Accounting Officer)
/S/ JOSEPH F. BOSTON Director February 14, 1997
- --------------------------
JOSEPH F. BOSTON
Director February 14, 1997
- --------------------------
GRESHAM T. BREBACH, JR.
Director February 14, 1997
- --------------------------
DOUGLAS R. BROWN
II-4
18
/S/ JOAN C. MCARDLE
. . . . . . . . . . . . . . . . . . Director February 14, 1997
JOAN C. MCARDLE
/S/ ALISON ROSS
. . . . . . . . . . . . . . . . . . Director February 14, 1997
ALISON ROSS
II-5
1
Exhibit 5.1
FOLEY, HOAG & ELIOT LLP
One Post Office Square
Boston, Massachusetts 02109-2170
Telephone: (617) 832-1000
Facsimile: (617) 832-7000
Telex 940693
http://www.fhe.com
February 18, 1997
ASPEN TECHNOLOGY, INC.
Ten Canal Park
Cambridge, Massachusetts 02141
Ladies and Gentlemen:
We have acted as special counsel for Aspen Technology, Inc., a
Massachusetts corporation (the "Company"), in connection with the preparation
and filing with the Securities and Exchange Commission under the Securities Act
of 1933, as amended, of a Registration Statement on Form S-3 (the "Registration
Statement") relating to the offering of up to 3,100 shares (the "Shares") of
the Company's common stock, $.10 par value ("Common Stock"), by Pierre R.
Latour.
In arriving at the opinion expressed below, we have examined and relied on
the following documents:
(i) the Registration Statement;
(ii) the Articles of Organization of the Company, as amended as of the
date hereof;
(iii) the By-Laws of the Company, as amended as of the date hereof; and
(iv) copies of a written consent of the Board of Directors of the Company
adopted on January 8, 1996.
In addition, we have examined and relied on the originals or copies certified or
otherwise identified to our satisfaction of all such other records, documents
and instruments of the Company and such other persons, and we have made such
investigations of law, as we have deemed appropriate as a basis for the opinions
expressed below. We have assumed the genuineness of all signatures and the
authenticity of all documents submitted to us as originals and the conformity to
the original documents of all documents submitted to us as certified or
photostatic copies.
We express no opinion other than as to the laws of The Commonwealth of
Massachusetts.
2
ASPEN TECHNOLOGY, INC.
February 18, 1997
Page Two
Based upon the foregoing, we are of the opinion that the Shares have been
duly authorized and validly issued and are fully paid and non-assessable.
We consent to the filing of this opinion as Exhibit 5.1 to the Registration
Statement and to the reference to us under the heading "Legal Matters" in the
prospectus forming a part of the Registration Statement.
Very truly yours,
FOLEY, HOAG & ELIOT LLP
By /s/ MARK L. JOHNSON
-------------------
A Partner
1
Exhibit 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this Registration Statement on Form S-3 of our report included
in the Annual Report on Form 10-K of Aspen Technology, Inc. for the fiscal year
ended June 30, 1996 and to the reference to our firm in this Registration
Statement.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
February 14, 1997
1
Exhibit 99.1
[Excerpted from Release and Settlement Agreement dated as of
January 10, 1997 between Pierre R. Latour and Aspen Technology, Inc.]
1. ...
c) Private Placement Stock Registration. The 3,100 shares of restricted
AspenTech common stock that Latour purchased in the private placement
program will be included in the planned registration (Shelf
Registration) of other securities to permit sales in ordinary course
brokerage or dealer transactions. This currently is planned for late
January or early February. Latour's shares will be registered by
February 15, 1997. AspenTech will use its best efforts to keep the
Shelf Registration continuously effective beyound an initial 90 day
period. The continued effectiveness of the Shelf Registration depends
on AspenTech supplementing or amending the Shelf Registration as
required by law, and it plans to make such supplements or amendments
absent a determination that it would be significantly disadvantageous
to AspenTech and its stockholders to make such a supplement or
amendment requiring disclosure of non-public information which it is
not otherwise obligated to disclose. Latour would be notified of any
suspension of the Shelf Registration.
[For purposes of the foregoing Section 1(c), the following terms have the
indicated meanings:
"AspenTech" means Aspen Technology, Inc.
"Latour" means Dr. Pierre R. Latour]
