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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 10, 1998
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)
DELAWARE 04-2739697
(State or other jurisdiction (I.R.S. employer
of incorporation or organization) identification number)
TEN CANAL PARK
CAMBRIDGE, MASSACHUSETTS 02141
(617) 949-1000
(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) 949-1000
(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, General Counsel, FOLEY, HOAG & ELIOT LLP
Chief Legal Officer and Secretary One Post Office Square
ASPEN TECHNOLOGY, INC. Boston, Massachusetts 02109
Ten Canal Park
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. [ ]
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............. 322,944 shares $23.73 $7,663,461 $2,261
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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 August 6, 1998.
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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 AUGUST 10, 1998
322,944 SHARES
ASPEN TECHNOLOGY, INC.
COMMON STOCK
All of the 322,944 shares of common stock, $.10 par value ("Common Stock"),
of Aspen Technology, Inc. ("AspenTech" or the "Company") offered hereby are
being sold by the Selling Stockholders named under "Selling Stockholders." The
Company will not receive any of the proceeds from the sales of shares by the
Selling Stockholders.
The Common Stock trades on the Nasdaq National Market under the symbol
"AZPN." On August 7, 1998, the closing sale price of the Common Stock, as
reported by the Nasdaq National Market, was $25.75 per share.
The shares of Common Stock offered hereby may be sold from time to time by
the Selling Stockholders, or by pledges, 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 $8,500,
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 COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
, 1998
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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.
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) Annual
Report on Form 10-K for the fiscal year ended June 30, 1997; (2) Quarterly
Report on Form 10-Q for the fiscal quarter ended September 30, 1997, Quarterly
Report on Form 10-Q for the fiscal quarter ended December 31, 1997 (as amended
by Amendment No. 1 thereto on Form 10-Q/A), and Quarterly Report on Form 10-Q
for the fiscal quarter ended March 31, 1998 (as amended by Amendment No. 1
thereto on Form 10-Q/A); (3) Current Report on Form 8-K dated October 9, 1997,
Current Report on Form 8-K dated March 12, 1998 (as amended by Amendment No. 1
thereto on Form 8-K/A), Current Report on Form 8-K dated April 28, 1998, Current
Report on Form 8-K dated May 27, 1998, Current Report on Form 8-K dated June 17,
1998 and Current Report on Form 8-K dated July 27, 1998; and (4) definitive
Proxy Statement dated November 25, 1997 used in connection with its Annual
Meeting of Stockholders held on December 16, 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)
949-0100 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. This
Prospectus contains and incorporates by reference certain forward-looking
statements that involve risks and uncertainties. See "Risk Factors" and
"Forward-Looking Statements."
THE COMPANY
Aspen Technology, Inc. (the "Company" or "AspenTech") is the leading
supplier of software and service solutions used by companies in the process
industries to design, operate and manage their manufacturing processes. The
process industries include manufacturers of chemicals, petrochemicals, petroleum
products, pharmaceuticals, pulp and paper, electric power, food and beverages,
consumer products, and metals and minerals. AspenTech offers a comprehensive,
integrated suite of process manufacturing optimization solutions that help
process manufacturers enhance profitability by improving efficiency,
productivity, capacity utilization, safety and environmental compliance
throughout the entire manufacturing life-cycle, from research and development to
engineering, planning and scheduling, procurement, production and distribution.
In addition to its software solutions, AspenTech offers systems implementation,
advanced process control, real-time optimization and other consulting services
through its staff of more than 450 project engineers. As part of its strategy to
offer the broadest, most integrated suite of process manufacturing optimization
solutions, AspenTech has acquired businesses from time to time to obtain
technologies and expertise that complement or enhance its core solutions.
AspenTech currently has more than 750 customers worldwide, including 44 of the
50 largest chemical companies, 17 of the 20 largest petroleum refiners and 16 of
the 20 largest pharmaceutical companies.
AspenTech believes its customers increasingly view their investments in its
solutions as strategic because of the substantial potential economic benefits
these solutions offer and the broad range of production issues they address. The
Company's competitive advantage is based upon its technology leadership, broad
suite of integrated solutions and substantial process industry expertise.
AspenTech believes that, through its research and development and strategic
acquisitions and partnerships, it has established itself as the technology
leader among providers of process manufacturing optimization solutions. The
Company's technologies have been applied to create what the Company believes is
the most complete suite of integrated software and service solutions available
for the design, operation and management of manufacturing processes in the
process industries. Over the past 17 years, AspenTech has developed a
significant base of chemical engineering and process manufacturing experience
and knowledge, which it has enhanced through extensive interaction with
customers that have performed millions of simulations using AspenTech's
software. To complement its software expertise, AspenTech has assembled a large
engineering team that the Company believes provides an important source of
competitive differentiation.
AspenTech's principal objective is to extend its leadership in providing
process management optimization solutions to the process industries. Key
elements of the Company's strategy to achieve this objective are to: (i) extend
its technology leadership position by continuing to invest in research and
development and to identify and pursue opportunities for strategic acquisitions;
(ii) leverage its installed customer base in the chemical, petrochemicals,
petroleum products, and pharmaceuticals industries by increasing the number of
users of software currently licensed by its existing customers and by licensing
complementary software and services to those customers; (iii) increase its
penetration of other process industries, particularly the pulp and paper,
electric power, and food and beverage industries, as well as the semiconductor
industry; (iv) pursue strategic acquisitions of complementary technologies and
services capabilities; and (v) selectively partner with providers of
complementary products and services to supplement the Company's ability to offer
enterprise-wide solutions.
The Company was incorporated as a Massachusetts corporation on August 11,
1981 and was reincorporated in Delaware on March 12, 1998. AspenTech's principal
executive offices are located at Ten Canal Park, Cambridge, Massachusetts 02141,
and its telephone number at that address is (617) 949-1000.
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THE OFFERING
All of the 322,944 shares of Common Stock offered hereby are being sold by
the Selling Stockholders. The offered shares were issued to the Selling
Stockholders pursuant to (i) the Share Exchange Agreement dated as of March 16,
1998 (the "Zyqad Agreement") between the Company and the Shareholders of Zyqad
Limited ("Zyqad"), under which 196,944 of the offered shares were issued in
exchange for all of the outstanding capital stock of Zyqad, and (ii) the Share
Exchange Agreement dated as of May 29, 1998 (the "Treiber Agreement") between
the Company, Treiber Controls Inc. ("Treiber") and Dr. Steven Treiber, under
which 126,000 of the offered shares were issued in exchange for all of the
outstanding capital stock of Treiber.
Under the Zyqad Agreement and the Treiber Agreement, the Company is
obligated to use its best efforts to keep the Registration Statement in effect
until (a) a period of ninety days has elapsed since the date of this Prospectus
or (b) all of the shares offered hereby have been sold hereunder.
The Company will not receive any of the proceeds from the sale of shares by
the Selling Stockholders. See "Use of Proceeds."
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"ASPENTECH" is a registered trademark of the Company.
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RISK FACTORS
In addition to the other information in this Prospectus, the following risk
factors should be considered in evaluating the Company and its business.
FLUCTUATIONS IN QUARTERLY OPERATING RESULTS AND CASH FLOW
The Company's operating results and cash flow have fluctuated in the past
and may fluctuate significantly in the future as a result of a variety of
factors, including purchasing patterns, timing of introductions of new solutions
and enhancements by the Company and its competitors, and fluctuating economic
conditions. Because license fees for the Company's software products are
substantial and the implementation of the Company's solutions often requires the
services of the Company's engineers over an extended period of time, the sales
process for the Company's solutions is lengthy and can exceed one year.
Accordingly, software revenue is difficult to predict, and the delay of any
order could cause the Company's quarterly revenues to fall substantially below
expectations. Moreover, to the extent that the Company succeeds in shifting
customer purchases away from individual software solutions and toward integrated
suites of its software and service solutions, the likelihood of delays in
ordering may increase and the effect of any delay may become more pronounced.
The Company ships software products within a short period after receipt of
an order and usually does not have a material backlog of unfilled orders of
software products. Consequently, revenues from software licenses in any quarter
are substantially dependent on orders booked and shipped in that quarter.
Historically, a majority of each quarter's revenues from software licenses has
been derived from license agreements that have been consummated in the final
weeks of the quarter. Therefore, even a short delay in the consummation of an
agreement may cause revenues to fall below expectations for that quarter. Since
the Company's expense levels are based in part on anticipated 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
disproportionately adverse effect on net income. The Company expects that these
factors will continue to affect its operating results for the foreseeable
future.
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 total 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. Although the Company has generated a
profit for the first quarter of each of fiscal 1997 and fiscal 1998, the Company
expects that it will continue to experience declines in total revenues and net
income in the first fiscal quarter as compared to the immediately preceding
fiscal quarter. Because of the foregoing factors, the Company believes that
period-to-period comparisons of its operating results are not necessarily
meaningful and should not be relied upon as indications of future performance.
Due to all of the foregoing factors, it is possible that in one or more
future quarters the Company's operating results will be below the expectations
of public market analysts and investors. In such event, the price of the Common
Stock would likely be materially adversely affected. As a result principally of
slower-than-anticipated growth in the Company's services revenue and
higher-than-expected levels of expenses throughout the AspenTech organization in
the fiscal quarter ended June 30, 1998, the Company's operating results in the
fiscal quarter and fiscal year ended June 30, 1998 were below the expectations
of certain public market analysts and investors. From July 27, 1998, the date on
which the Company preliminarily announced its results for the quarter ended June
30, 1998, through the close of business on August 7, 1998, the price per share
of Common Stock, as reported by the Nasdaq National Market, decreased from
$48.25 to $25.75.
The Company derives a substantial portion of its total revenues from
service engagements and a majority of these engagements have 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.
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LIMITED SUPPLY OF QUALIFIED PROJECT ENGINEERS
The Company derives a substantial portion of its total revenues from
services, particularly projects involving advanced process control and
optimization and similar projects. These projects can be extremely complex and
in general only highly qualified, highly educated project engineers have the
necessary training and skills to complete these projects successfully. In order
to continue to staff its current and future projects, the Company will need to
attract, motivate and retain a significant number of highly qualified, highly
educated chemical and other project engineers. The Company primarily hires as
project engineers individuals who have obtained a doctoral or master's degree in
chemical engineering or a related discipline or who have significant relevant
industry experience. As a result, the pool of potential qualified employees is
relatively small, and the Company faces significant competition for these
employees, from not only the Company's direct competitors but also the Company's
clients, academic institutions and other enterprises. Many of these competing
employers are able to offer potential employees significantly greater
compensation and benefits or more attractive lifestyle choices, career paths or
geographic locations than the Company. The failure to recruit and retain a
significant number of qualified project engineers could have a material adverse
effect on the Company's business, operating results and financial condition.
Moreover, increasing competition for these engineers may also result in
significant increases in the Company's labor costs, which could have a material
adverse effect on the Company's business, operating results and financial
condition.
INTEGRATION OF CHESAPEAKE AND OTHER RECENTLY ACQUIRED COMPANIES
Through its acquisitions of Chesapeake Decision Sciences, Inc.
("Chesapeake") and several smaller companies in 1998, the Company has expanded
its product and service offerings, has entered new markets and has increased its
scope of operations and the number of its employees. The successful and timely
integration of Chesapeake and these other companies into the Company's
operations 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. To succeed in the
market for supply chain management solutions, the Company must also invest
additional resources, primarily in the areas of sales and marketing, to extend
name recognition and increase market share. The diversion of the attention of
management created by the integration process, any disruptions or other
difficulties encountered in the integration process, and unforeseen liabilities
or unanticipated problems with the acquired businesses could have a material
adverse effect on the business, operating results and financial condition of the
Company. The difficulty of combining these companies may be increased by the
need to integrate personnel, and changes effected in the combination may cause
key employees to leave. There can be no assurance that these acquisitions will
provide the benefits expected by the Company or that the Company will be able to
integrate and develop the operations of Chesapeake and these other companies
successfully. Any failure to do so could have a material adverse effect on the
Company's business, operating results and financial condition.
COMPETITION
The Company faces three primary sources of competition: commercial vendors
of software products for one or more elements in the design, operation and
management of manufacturing processes; vendors of hardware that offer software
solutions in order to add value to their proprietary DCS; and large companies in
the process industries that have developed their own proprietary software
solutions. Because of the breadth of its software and service offerings, the
Company faces competition from different vendors depending on the solution in
question. The Company competes with respect to the largest number of its
solutions with Simulation Sciences, Inc., a subsidiary of Siebe plc. With
respect to particular software solutions, the Company also competes with
Chemstations, Inc., Hyprotech, Ltd. (a subsidiary of AEA Technology plc), The
Foxboro Company and Wonderware Corporation (both of which are subsidiaries of
Siebe plc), OSI Software, Inc., the Simcon division of ABB Asea Brown Boveri
(Holding) Ltd., and several smaller competitors, such as Pavilion Technologies,
Inc.
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With the acquisition of Chesapeake, the Company now competes with established
commercial vendors of supply chain management software, including i2
Technologies, Inc. and Manugistics Group, Inc. A number of vendors of ERP
software products, such as Baan Company N.V., J.D. Edwards Inc., Oracle
Corporation, PeopleSoft, Inc., and SAP A.G., have announced their intentions to
enter or expand their existing presence in the market for supply chain
management solutions. The Company also expects to encounter increasing
competition from DCS solution vendors, such as Honeywell Inc., as they expand
their software and service offerings to include additional aspects of process
manufacturing. Moreover, in recent years, there has been consolidation in the
markets in which the Company competes that has expanded the breadth of product
and service offerings by certain of the Company's competitors, such as the
acquisitions by Siebe plc of Simulation Sciences, Inc. and Wonderware
Corporation. As a result of this consolidation and the expansion of DCS and ERP
vendors into additional markets, the Company from time to time may compete with
divisions of companies with which it collaborates on other occasions, such as
Honeywell Inc. and Siebe plc. There can be no assurance that the Company's
efforts to compete and cooperate simultaneously with these or other companies
will be successful. The further consolidation of existing competitors or the
emergence of new competitors could have a material adverse effect on the
Company's business, operating results and financial condition. Certain
competitors also supply related hardware products to existing and potential
customers of the Company and may have established relationships that afford
those 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 can be no assurance that the Company will be
able to maintain its competitive position.
RISKS ASSOCIATED WITH FUTURE ACQUISITIONS
An element of the Company's business strategy is to continue to pursue
strategic acquisitions that will provide it with complementary products,
services and technologies and with additional engineering personnel. The
identification and pursuit of these acquisition opportunities and the
integration of acquired personnel, products, technologies and businesses require
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. In light of the consolidation
trend in the Company's industry, the Company expects to face competition for
acquisition opportunities, which may substantially increase the cost of any
acquisition consummated by the Company. There can also be no assurance that any
future acquisition will not have a material adverse effect upon the Company's
operating results as a result of non-recurring charges associated with the
acquisition or as a result of integration problems in the fiscal quarters
following consummation of the acquisition. Acquisitions may also expose the
Company to additional risks, including diversion of management's attention,
failure to retain key acquired personnel, assumption of legal or other
liabilities and contingencies, and amortization of goodwill and other acquired
intangible assets, some or all of which could have a material adverse effect on
the Company's business, operating results and financial condition. Moreover,
customer dissatisfaction with, or problems caused by, the performance of any
acquired technologies could have a material adverse impact on the reputation of
the Company as a whole. In addition, there can be no assurance that acquired
businesses will achieve anticipated revenues and earnings. The Company may use
Common Stock or Preferred Stock or may incur 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.
CONCENTRATION OF REVENUES IN THE CHEMICALS, PETROCHEMICALS AND PETROLEUM
INDUSTRIES
The Company derives a substantial majority of its total revenues from
companies in the chemicals, petrochemicals and petroleum industries.
Accordingly, the Company's future success depends upon the continued demand for
process manufacturing optimization software and services by companies in these
industries. The
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chemicals, petrochemicals and petroleum industries are highly cyclical. The
Company believes that worldwide economic downturns and pricing pressures
experienced by chemical, petrochemical and petroleum companies in connection
with cost-containment measures and environmental regulatory pressures have in
the past led to worldwide delays and reductions in certain capital and operating
expenditures by many of these companies. There can be no assurance that these
industry patterns, as well as general domestic and foreign economic conditions
and other factors affecting spending by companies in these industries, will not
have a material adverse effect on the Company's business, operating results and
financial condition.
PRODUCT DEVELOPMENT AND TECHNOLOGICAL CHANGE
The market for software and services for process manufacturing optimization
is characterized by rapidly changing technology and continuing improvements in
computer hardware, operating systems, programming tools, programming languages
and database technology. The Company's future success will depend on its ability
to enhance its current software products and services, integrate its current and
future software offerings, modify its products to operate on additional or new
operating platforms or systems, and develop in a timely and cost-effective
manner new software and services that meet changing market conditions, including
evolving customer needs, new competitive software and service offerings,
emerging industry standards and changing technology. The Company has announced
its intention to further integrate its software products with each other and to
integrate those products with ERP, DCS and other business software solutions.
The Company believes additional development will be necessary before its
products are fully integrated with each other and with these other solutions,
particularly with respect to ERP solutions. In the past, the Company has
experienced delays in the development and enhancement of new and existing
products, particularly the Windows version of Aspen Plus, and has on occasion
postponed scheduled delivery dates for certain of its products. There can be no
assurance that the Company will be able to meet customers' expectations with
respect to product development, enhancement and integration or that the
Company's software and services will otherwise address adequately the needs of
customers. Like many other software products, the Company's software has on
occasion contained undetected errors or "bugs." Because new releases of the
Company's software products are initially installed only by a selected group 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.
DEPENDENCE ON KEY PERSONNEL
The Company's future success depends to a significant extent on Lawrence B.
Evans, the principal founder of the Company and its Chairman and Chief Executive
Officer, its other executive officers, and certain engineering, technical,
managerial and marketing personnel. The loss of the services of any of these
individuals or groups 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-person life insurance on any of its executive officers
or other key employees. In addition to the need to recruit qualified project
engineers, the Company believes that its future success will also 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, motivating and retaining the personnel it requires to
continue to grow and operate profitably.
PRODUCT LIABILITY
The sale and implementation of certain of the Company's software products
and services, particularly in the areas of advanced process control and
optimization, may entail the risk of product liability claims. The Company's
software products and services are used in the design, operation and management
of manufacturing processes at
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large facilities, and any failure of 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 in the Company's agreements may not be
effective as a result of federal, state or local laws or ordinances or
unfavorable judicial decisions. A substantial product liability claim against
the Company could have a material adverse effect upon the Company's business,
operating results and financial condition.
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 United States patents for the expert guidance
system in its proprietary graphical user interface, the simulation and
optimization methods in its optimization software, a process flow diagram
generator in its planning and scheduling software, and a process simulation
apparatus in its polymers software. The Company has registered or has applied to
register certain of its significant trademarks in the United States and in
certain other countries. 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 licensed
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, and has not
applied for, any foreign copyright or patent registrations. In fiscal 1996,
fiscal 1997 and the nine months ended March 31, 1998, the Company derived
approximately 42.0%, 50.0% and 45.3% of its total revenues, respectively, 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
Company's business, operating results and financial condition. 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, if at
all.
MANAGEMENT OF GROWTH
The Company has experienced substantial growth in recent years 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. This
growth has resulted in increased responsibilities for the Company's management.
To manage its growth effectively, the Company must continue to expand its
management team, attract, motivate and retain employees, including qualified
project engineers, and implement and improve its operating and financial
systems. There can be no assurance that the
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Company's current management systems will be adequate or that the Company will
be able to manage the Company's recent or future growth successfully. Any
failure to do so could have a material adverse effect on the Company's business,
operating results and financial condition.
INTERNATIONAL OPERATIONS
In fiscal 1996, fiscal 1997 and the nine months ended March 31, 1998, the
Company derived approximately 42.0%, 50.0% and 45.3% of its total revenues,
respectively, from customers outside the United States. The Company anticipates
that revenues from customers outside the United States will continue to account
for a significant portion of its total revenues for the foreseeable future. The
Company's operations outside the United States are subject to additional 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. In addition, the Company currently is unable to determine the
effect, if any, that recent economic downturns in Asia, particularly Japan, or
the adoption and use of the euro, the single European currency to be introduced
in January 1999, will have on the Company's business. 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 operating results 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, operating results and financial
condition.
DEPENDENCE ON INCREASED MARKET PENETRATION
Increased use in the process industries of software and services for
process manufacturing optimization 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
increase market penetration. These factors include product performance, accuracy
of results, reliability, breadth and integration of product offerings, scope of
applications, and ease of implementation and use. 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.
YEAR 2000 COMPLIANCE
Many currently installed computer systems and software applications are
designed to accept only two digit entries in the date code field used to
identify years. These date code fields will need to be modified to recognize
twenty-first century years. As a result, computer systems and software
applications used by many companies may need to be upgraded to comply with "year
2000" requirements. Significant uncertainty exists in the software industry
concerning the potential effects of failure to comply with such requirements.
The Company has developed a testing and compliance program to ascertain
whether and to what extent the Company may need to update its software products
to become year 2000 compliant. The Company does not intend to test or modify all
prior versions of its software products, current products used on year 2000
non-compliant systems, custom applications developed by or for customers, or
certain current software products that the Company plans to replace with either
new software products or year 2000 compliant releases by the end of 1999.
Certain of the Company's software products are currently year 2000 compliant;
however, the Company
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has not completed testing on many of the other software products that it intends
to test. There can be no assurance that the Company will complete in a timely
manner the testing of such software products or the development of any updates
necessary to render such software products year 2000 compliant. Although the
Company has obtained representations as to year 2000 compliance from the sellers
of certain of its recently acquired technologies, there can be no assurance that
the Company will not encounter year 2000 problems arising from these
technologies or any other technologies that the Company may acquire in the
future. Moreover, the ability of the Company's software products to comply with
year 2000 requirements depends in part upon the availability of year 2000
compliant versions of operating systems and software applications used by or
with the Company's products. Any delay in developing or offering, or the failure
to develop or offer year 2000 compliant products or any necessary updates to
existing products, could result in delays in the purchasing of the Company's
products and services or in reduced demand for those products and services, and
could also result in errors that materially impair the utility of one or more of
the Company's products, any of which could have a material adverse effect on the
Company's business, operating results and financial condition. Although the
Company does not expect the costs associated with its year 2000 compliance
program to be material, there can be no assurance that unidentified year 2000
problems will not cause the Company to incur material expenses in responding to
such problems or otherwise have a material adverse effect on the Company's
business, operating results and financial condition. Moreover, customer
purchasing patterns may be affected by year 2000 issues as customers delay
purchases in anticipation of the future release of year 2000 compliant products
or releases, and as customers expend significant resources to upgrade their
current software systems and applications for year 2000 compliance. These
expenditures may result in reduced funds available to purchase software products
such as those offered by the Company.
The Company has reviewed certain internal systems and future system plans
on a preliminary basis to assess Year 2000 compliance. The Company expects that
its internal system development plans will address the Year 2000 issue and will
correct any existing non-compliant systems without the need to accelerate the
overall information systems implementation plans. The Company believes that the
cost of any modifications will not be material. The Company's ability to
implement its information systems plan and to make the necessary modifications
or replacements may be adversely affected by a number of factors outside the
control of the Company, including the availability and cost of trained personnel
and the ability of such personnel to acquire Year 2000 compliant systems and
otherwise to locate and correct all relevant computer codes. The Company is also
conducting an additional assessment of its systems and operations in order to
more fully identify and plan for any Year 2000 risks, although it believes that
its business would not be materially affected by the failure of any internal
systems to be Year 2000 compliant. If there are unidentified dependencies on
internal systems to operate the business, or if any required modifications are
not completed on a timely basis or are more costly to implement than currently
anticipated, the Company's business, financial condition or results of
operations could be materially adversely affected.
NEW ACCOUNTING STANDARD
In October 1997, the American Institute of Certified Public Accountants
("AICPA") issued Statement of Position No. 97-2 ("SOP 97-2"), "Software Revenue
Recognition," which the Company adopted for software license agreements entered
into with customers on or after January 1, 1998. This statement provides
accounting standards for software revenue recognition. The Company believes that
its revenue recognition policies comply with SOP 97-2; however, unanticipated
changes or new interpretations by the AICPA of SOP 97-2 could require changes in
the Company's revenue recognition practices, which could have a material adverse
effect on the Company's operating results and financial condition.
POTENTIAL VOLATILITY OF PRICE OF COMMON STOCK
The equity markets have 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 the financial performance of
the Company, announcements of
11
13
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 Common Stock. From July 27,
1998, the date on which the Company preliminarily announced its results for the
quarter ended June 30, 1998, through the close of business on August 7, 1998,
the price per share of Common Stock, as reported by the Nasdaq National Market,
decreased from $48.25 to $25.75. See "--Fluctuations in Quarterly Operating
Results and Cash Flow."
EFFECT OF CERTAIN CHARTER AND BY-LAW PROVISIONS AND ANTI-TAKEOVER PROVISIONS;
POSSIBLE ISSUANCES OF PREFERRED STOCK; STOCKHOLDER RIGHTS PLAN
The Company's Certificate of Incorporation, its By-Laws and certain
Delaware laws contain provisions that may discourage acquisition bids for the
Company and that may deprive stockholders of certain opportunities to 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 Directors 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 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 adopted a stockholder rights plan, which may
deter or delay attempts to acquire the Company or accumulate shares of Common
Stock. Except for the stockholder rights plan, the Company has no present plans
to designate or issue any shares of Preferred Stock.
FORWARD-LOOKING STATEMENTS
This Prospectus contains and incorporates by reference certain
forward-looking statements within the meaning of Section 27A of the Securities
Act and Section 21E of the Exchange Act, which are intended to be covered by the
safe harbors created thereby. For this purpose, any statements contained or
incorporated by reference herein that are not statements of historical fact may
be deemed to be forward-looking statements. Without limiting the foregoing, the
words "believes," "anticipates," "plans," "expects," and similar expressions are
intended to identify forward-looking statements. Readers are cautioned that all
forward-looking statements involve risks and uncertainties, many of which are
beyond the Company's control, including the factors set forth under "Risk
Factors." Although the Company believes that the assumptions underlying the
forward-looking statements contained or incorporated by reference herein are
reasonable, any of the assumptions could be inaccurate and there can be no
assurance that actual results will be the same as those indicated by the
forward-looking statements included or incorporated by reference in this
Prospectus. In light of the significant uncertainties inherent in the
forward-looking statements included herein, the inclusion or incorporation by
reference of such information should not be regarded as a representation by the
Company or any other person that the objectives and plans of the Company will be
achieved. Moreover, the Company assumes no obligation to update these
forward-looking statements to reflect actual results, changes in assumptions or
changes in other factors affecting such forward-looking statements.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of Common Stock by
the Selling Stockholders, nor will any such proceeds be available for use by the
Company or otherwise for the Company's benefit. See "Selling Stockholders."
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14
SELLING STOCKHOLDERS
The following table sets forth certain information with respect to the
beneficial ownership of Common Stock by the Selling Stockholders as of August 4,
1998 and as adjusted to reflect the sale of the shares of Common Stock offered
hereby. Except as indicated, each of the Selling Stockholders possesses sole
voting and investment power with respect to shares, subject to community
property laws where applicable.
SHARES SHARES TO BE
BENEFICIALLY NUMBER BENEFICIALLY OWNED
OWNED OF AFTER OFFERING IF
PRIOR TO OFFERING SHARES ALL SHARES SOLD
------------------- BEING ------------------
NAME NUMBER PERCENT OFFERED NUMBER PERCENT
- ------- --------- ------- ------- ------ -------
Steven Treiber........................................ 140,000 * 126,000 14,000 *
James Madden(1)....................................... 108,451 * 97,605 10,846 *
Joyce Madden(2)....................................... 108,451 * 97,605 10,846 *
Margaret Iolene Taylor................................ 35,945 * 32,351 3,594 *
John De Brugha........................................ 19,834 * 17,850 1,984 *
Andrew McBrien........................................ 19,220 * 17,298 1,922 *
Nigel Shadbolt........................................ 8,436 * 7,592 844 *
Alison C.M. Lindsey................................... 8,088 * 7,279 809 *
Francis Neil Madden................................... 8,088 * 7,279 809 *
Mark Madden........................................... 8,088 * 7,279 809 *
Stephen Madden........................................ 8,088 * 7,279 809 *
Richard Mervyn Wordsworth Deaville.................... 7,592 * 6,833 759 *
John E. Richards...................................... 7,189 * 6,470 719 *
Simon Monk............................................ 4,842 * 4,358 484 *
Julian C. Burman...................................... 3,594 * 3,235 359 *
Jannette Parsons...................................... 2,552 * 2,297 255 *
Anne Mecklenburgh..................................... 1,172 * 1,055 117 *
- ----------------
* Percentage of shares beneficially owned is less than 1.0%.
(1) Includes (a) 37,742 shares beneficially owned before the offering by Joyce
Madden, who is the spouse of James Madden and who is offering 33,968 shares
hereby, and (b) 8,088 shares beneficially owned before the offering by each
of Alison C.M. Lindsey, Francis Neil Madden, Mark Madden and Stephen
Madden, who are children of James Madden and each of whom is offering 7,279
shares hereby.
(2) Includes (a) 38,357 shares beneficially owned before the offering by James
Madden, who is the spouse of Joyce Madden and who is offering 34,521 shares
hereby, and (b) 8,088 shares beneficially owned before the offering by each
of Alison C.M. Lindsey, Francis Neil Madden, Mark Madden and Stephen
Madden, who are children of Joyce Madden and each of whom is offering 7,279
shares hereby.
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15
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. Under the Zyqad Agreement and the Treiber Agreement, the
Company is obligated to use its best efforts to keep the shelf registration in
effect until (a) a period of ninety days has elapsed since the date of this
Prospectus or (b) all of the shares offered hereby have been sold hereunder.
The shares offered hereby may be sold from time to time by the Selling
Stockholders, or by pledges, 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. In effecting sales,
brokers or dealers engaged by the Selling Stockholders may arrange for other
brokers or dealers to participate. Brokers or dealers will receive commissions
or discounts from Selling Stockholders in amounts to be negotiated immediately
prior to the sale. The Selling Stockholders 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 Stockholders 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 and supplemental consolidated balance sheets of the
Company as of June 30, 1996 and 1997 and the related consolidated and
supplemental consolidated statements of operations, stockholders' equity and
cash flows for the years ended June 30, 1995, 1996 and 1997 incorporated by
reference herein from the Company's Current Report on Form 8-K dated May 27,
1998 have been audited by Arthur Andersen LLP, independent public accountants,
to the extent and for the periods indicated in their reports included in such
Form 8-K, and are incorporated by reference herein in reliance upon the
authority of that firm as experts in giving those reports.
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16
======================================= =======================================
No broker, dealer or any other person 322,944 SHARES
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 Stockholders. This Prospectus
does not constitute an offer to sell or
a solicitation of an offer to buy any
securities other than the shares of ASPEN TECHNOLOGY, INC.
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. COMMON STOCK
----------------- ----------
TABLE OF CONTENTS PROSPECTUS
----------------- ----------
Page
----
Available Information.............. 2
Information Incorporated by
Reference......................... 2
Prospectus Summary................. 3
Risk Factors....................... 5
Forward-Looking Information........ 12
Use of Proceeds.................... 12
Selling Stockholders............... 13
Plan of Distribution............... 14
Legal Matters...................... 14
Experts............................ 14 , 1998
======================================= =======================================
17
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 Stockholders (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.
Securities and Exchange Commission registration fee....... $2,261
Legal fees and expenses................................... 4,500
Printing, EDGAR formatting and mailing expenses........... 500
Miscellaneous............................................. 1,239
------
Total................................................ $8,500
======
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article SEVENTH of the Registrant's Certificate of Incorporation, as
amended (the "Certificate of Incorporation"), provides that no director of the
Registrant shall be personally liable for any monetary damages for any breach of
fiduciary duty as a director, except to the extent that the Delaware General
Corporation Law prohibits the elimination or limitation of liability of
directors for breach of fiduciary duty.
Article EIGHTH of the Certificate of Incorporation provides that a director
or officer of the Registrant shall be indemnified by the Registrant against (a)
all expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement incurred in connection with any litigation or other legal proceeding
(other than an action by or in the right of the Registrant) brought against him
or her by virtue of his or her position as a director or officer of the
Registrant if he or she acted in good faith and in a manner he or she reasonably
believed to be in, or not opposed to, the best interests of the Registrant, and,
with respect to any criminal action or proceeding, had no reasonable cause to
believe his or her conduct was unlawful and (b) all expenses (including
attorneys' fees) and amounts paid in settlement incurred in connection with any
action by or in the right of the Registrant brought against him or her by virtue
of his or her position as a director or officer of the Registrant if he or she
acted in good faith and in a manner he or she reasonably believed to be in, or
not opposed to, the best interests of the Registrant, except that no
indemnification shall be made with respect to any matter as to which such person
shall have been adjudged to be liable to the Registrant, unless a court
determines that, despite such adjudication but in view of all of the
circumstances, he or she is entitled to indemnification of such expenses.
Notwithstanding the foregoing, to the extent that a director or officer has been
successful, on the merits or otherwise, including the dismissal of an action
without prejudice, he or she is required to be indemnified by the Registrant
against all expenses (including attorneys' fees) incurred in connection
therewith. Expenses shall be advanced to a director or officer at his or her
request, provided that he or she undertakes to repay the amount advanced if it
is ultimately determined that he or she is not entitled to indemnification for
such expenses.
Indemnification is required to be made unless the Registrant determines
that the applicable standard of conduct required for indemnification has not
been met. In the event of a determination by the Registrant that the director or
officer did not meet the applicable standard of conduct required for
indemnification, or if the Registrant fails to make an indemnification payment
within sixty days after such payment is claimed by such person, such person is
permitted to petition the court to make an independent determination as to
whether such person is entitled to
II-1
18
indemnification. As a condition precedent to the right of indemnification, the
director or officer must give the Registrant notice of the action for which
indemnity is sought and the Registrant has the right to participate in such
action or assume the defense thereof.
Article EIGHTH of the Certificate of Incorporation further provides that
the indemnification provided therein is not exclusive, and provides that in the
event that the Delaware General Corporation Law is amended to expand the
indemnification permitted to directors or officers the Registrant must indemnify
those persons to the fullest extent permitted by such law as so amended.
Section 145 of the Delaware General Corporation Law provides that a
corporation has the power to indemnify a director, officer, employee or agent of
the corporation and certain other persons serving at the request of the
corporation in related capacities against amounts paid and expenses incurred in
connection with an action or proceeding to which he or she is or is threatened
to be made a party by reason of such position, if such person shall have acted
in good faith and in a manner he or she reasonably believed to be in or not
opposed to the best interests of the corporation, and, in any criminal
proceeding, if such person had no reasonable cause to believe his or her conduct
was unlawful; provided that, in the case of actions brought by or in the right
of the corporation, no indemnification shall be made with respect to any matter
as to which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that the adjudicating court determines that such
indemnification is proper under the circumstances.
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.
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 page II-4)
99.1 Section 5.8 (Registration of Exchanged Shares) of Share Exchange
Agreement dated as of March 16, 1998 between Aspen Technology,
Inc. and the Shareholders of Zyqad Limited
99.2 Section 6 (Registration Rights) of Share Exchange Agreement dated
as of May 29, 1998 between Aspen Technology Inc., Treiber Controls
Inc. and Dr. Steven Treiber
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;
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19
(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, or
Form F-3, 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.
(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.
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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, as of
August 5, 1998.
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 indicated as of August 5, 1998.
SIGNATURE TITLE
--------- -----
/s/ LAWRENCE B. EVANS Chairman of the Board and Chief Executive Officer
- ----------------------------- (Principal Executive Officer)
LAWRENCE B. EVANS
/s/ MARY A. PALERMO Executive Vice President, Finance and Chief Financial Officer
- ----------------------------- (Principal Financial and Accounting Officer)
MARY A. PALERMO
/s/ JOSEPH F. BOSTON Director
- -----------------------------
JOSEPH F. BOSTON
/s/ GRESHAM T. BREBACH, JR. Director
- -----------------------------
GRESHAM T. BREBACH, JR.
/s/ DOUGLAS R. BROWN Director
- -----------------------------
DOUGLAS R. BROWN
/s/ JOAN C. MCARDLE Director
- -----------------------------
JOAN C. MCARDLE
/s/ ALISON ROSS Director
- -----------------------------
ALISON ROSS
II-4
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EXHIBIT INDEX
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 page II-4)
99.1 Section 5.8 (Registration of Exchanged Shares) of Share Exchange
Agreement dated as of March 16, 1998 between Aspen Technology,
Inc. and the Shareholders of Zyqad Limited
99.2 Section 6 (Registration Rights) of Share Exchange Agreement dated
as of May 29, 1998 between Aspen Technology Inc., Treiber Controls
Inc. and Dr. Steven Treiber
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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
August 10, 1998
ASPEN TECHNOLOGY, INC.
Ten Canal Park
Cambridge, Massachusetts 02141
Ladies and Gentlemen:
We have acted as special counsel for Aspen Technology, Inc., a Delaware
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 322,944 shares (the "Shares") of the Company's
common stock, $.10 par value, by certain stockholders of the Company.
In arriving at the opinion expressed below, we have examined and relied
on: (i) the Registration Statement; (ii) the Certificate of Incorporation of the
Company, as amended; (iii) the By-Laws of the Company; and (iv) minutes of
meetings of the Board of Directors of the Company, including meetings held on
March 11, 1998 and May 26, 1998. 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 corporation laws of the State
of Delaware.
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
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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 reports included
in the Current Report on Form 8-K of Aspen Technology, Inc. dated May 27, 1998
and to the reference to our firm in this Registration Statement.
/s/ ARTHUR ANDERSEN LLP
Boston, Massachusetts
August 6, 1998
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EXHIBIT 99.1
[Excerpted from Share Exchange Agreement dated as of March 16, 1998
between Aspen Technology, Inc. and The Shareholders of Zyqad Limited]
5.8. Registration of Exchanged Shares.
a. Holders and Initial Holders. The rights to registration of shares
under this section are for the Shareholders, and the Derivative
Rights Holders to the extent they are entitled to registration as
set forth in Section 2.2, and any of their respective (i)
successors-in-interest, (ii) family members, trusts wholly or
principally for the benefit of family members and affiliates to whom
a Shareholder or Derivative Rights Holder or its
successor-in-interest transfers any of the Registrable Securities
(as defined in paragraph (b) of this section) initially issued to
such Shareholder or Derivative Rights Holder and (iii) any other
person or persons to whom a Shareholder or Derivative Rights Holder
transfers all or substantially all of the Registrable Securities
initially issued to such Shareholder or Derivative Rights Holder,
which family member, trust, affiliate or person described in clause
(ii) or (iii) is registered on the books of AspenTech (together with
the Shareholders, Derivative Rights Holder such successors-in-
interest, family members, trusts, affiliates and other persons are
hereinafter sometimes referred to as the "Holders").
b. Securities Subject to this Section. The securities entitled to the
benefits of this section are the Exchanged Shares, and the
Derivative Rights Shares if the converted AT Derivative Rights are
exercised prior to registration of the Exchanged Shares hereunder,
and any other securities issued by AspenTech in exchange for any of
the Exchanged Shares (collectively the "Registrable Securities")
but, with respect to any particular Registrable Security, only so
long as it continues to be a Registrable Security. Registrable
Securities shall include any securities issued as a dividend or
distribution on account of Registrable Securities or resulting from
a subdivision of the outstanding shares of Registrable Securities
into a greater number of shares (by reclassification, stock split or
otherwise). For the purposes of this Agreement a security that was
at one time a Registrable Security shall cease to be a Registrable
Security when (i) such security has been effectively registered
under the Securities Act and has been disposed of pursuant to such
registration statement, (ii) such security is or can be distributed
to the public pursuant to Rule 144 (or any similar provision then in
force) under the Securities Act, (iii) such security has been
otherwise transferred and (A) AspenTech has delivered a new
certificate or other evidence of ownership not bearing the legend
set forth on the Exchanged Shares upon the initial issuance thereof
(or other legend of similar import) and (B) in the opinion of
counsel to AspenTech, the subsequent disposition of such security
shall not require the registration or qualification under the
Securities Act or [(iv)] such security has ceased to be outstanding.
c. Shelf Registration. AspenTech agrees that it shall cause to be filed
a registration statement (the "Shelf Registration") on Form S-3 or
any other appropriate form under the Securities Act for an offering
to be made on a delayed or continuous basis pursuant to Rule 415
thereunder or any similar rule that may be adopted by the Securities
and Exchange Commission (the "Commission") and permitting sales in
ordinary course brokerage or dealer transactions not involving an
underwritten public offering (and shall register or qualify the
shares to be sold in such offering under such other securities or
"blue sky" laws as would reasonably be required) covering the entire
issue of Registrable Securities and such other shares of Aspen
Common as may be included pursuant to registration rights of other
holders of Aspen Common. AspenTech shall use its best efforts to (i)
cause the Shelf Registration to be declared effective by the
Commission on, or as soon as practicable after, the date on which
AspenTech first publishes financial results covering at least thirty
days of post-acquisition combined operations of AspenTech and Zyqad
and (ii) keep the Shelf Registration continuously effective (and
register or qualify the shares to be sold in such offering under
such other securities or "blue sky" laws as would be required for a
period (the "Shelf Registration Period") of ninety (90) days after
the date on which the Shelf Registration is declared effective by
the Commission (or such shorter period that will terminate
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when all Registrable Securities covered by the Shelf Registration
have been sold), provided that AspenTech may terminate the
effectiveness of the Shelf Registration or delay registration of the
Shelf Registration upon a finding in good faith by AspenTech board
of directors that continuation or registration would be
significantly disadvantageous to AspenTech because AspenTech would
be required to disclose in such registration statement, either
directly or through incorporation by reference, non-public
information that it would not otherwise be obligated to disclose at
such time). AspenTech agrees, if necessary, to supplement or make
amendments to the Shelf Registration, if required by the
registration form used by AspenTech for the Shelf Registration or by
the instructions applicable to such registration form or by the
Securities Act or the rules or regulations thereunder.
d. Expenses. AspenTech shall pay all expenses incident to its
performance of or compliance with this Section 5.8, regardless of
whether such registration becomes effective, including (i) all
Commission, stock exchange or market registration and filing fees,
(ii) all printing, messenger and delivery expenses, (iii) all fees
and disbursements of AspenTech's independent public accountants and
counsel, (iv) all expenses incurred in registering the Exchanged
Shares, and if applicable the Derivative Rights Shares, under any
applicable state securities or "blue sky" laws, and (v) all fees and
expenses of any special experts retained by AspenTech in connection
with any registration pursuant to the terms of this Agreement;
provided, however, that the Holders shall be liable for (A) any fees
or commissions of brokers, dealers or underwriters, (B) any transfer
taxes and (C) any fees or expenses of consultants, financial
advisors, counsel and other professionals acting on behalf of the
Holders in connection with any registration pursuant to the tenets
of this Agreement.
e. Rule 144. AspenTech covenants that it shall use its best efforts to
file the reports required to be filed by it under the Securities
Exchange Act of 1934, as amended, and the rules and regulations of
the Commission thereunder, and it shall, if feasible, take such
further action as any Holder may reasonable request all to the
extent required from time to time to enable such Holder to sell
shares of Aspen Common which were formerly Registrable Securities
without registration under the Securities Act within the limitation
of the exemptions provided by (a) Rule 144 under the Securities Act,
as such Rule may be amended from time to time or (b) any similar
rules or regulations hereafter adopted by the Commission; provided
that nothing herein shall obligate AspenTech to disclose non-public
information that it would not otherwise be obligated to disclose at
such time.
[For purposes of the foregoing Section 5.8, the following terms have the
indicated meanings:
"Aspen Common" means common stock, $.10 par value, of AspenTech.
"AspenTech" means Aspen Technology, Inc.
"AT Derivative Rights" means convertible debentures, options, warrants or other
rights to Aspen Common.
"Derivative Rights Holders" means certain persons identified as holders of
convertible debentures, options, warrants or other rights to shares of Zyqad
Limited.
"Exchanged Shares" means 171,337 shares of Aspen Common exchanged for previously
outstanding shares of capital stock of Zyqad Limited.
"Securities Act" means the Securities Act of 1933, as amended.
"Shareholders" means the former shareholders of Zyqad Limited.
"Zyqad" means Zyqad Limited.]
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EXHIBIT 99.2
[Excerpted from Share Exchange Agreement dated as of May 29, 1998
between Aspen Technology, Inc., Treiber Controls Inc. and Dr. Steven Treiber]
6. REGISTRATION RIGHTS
6.1. REGISTRATION STATEMENT. After the Publication Date, AspenTech shall
either, at the Stockholder's option, (i) prepare and file with the
SEC a registration statement on Form S-3 (a "Shelf Registration")
that shall register under the Securities Act the Registrable Shares
within ten days of the Publication Date, or (ii) include the
Registrable Shares in an underwritten public offering of Aspen
Common conducted by AspenTech for its own account or the account of
other security holders of AspenTech on or before September 25, 1998
(a "Piggyback Underwriting") (the registration statements filed
under either the Shelf Registration or Piggyback Underwriting
collectively called the "Registration Statements"). A Piggyback
Underwriting shall not include (a) a registration on Form S-4 or S-8
(or any successor form), (b) a registration on any form that does
not include substantially the same information as would be required
to be included in a Registration Statement covering the sale of
[Registrable Shares], or (c) a registration relating solely to
securities of AspenTech convertible into Aspen Common or as to which
Aspen Common may be issued upon exercise of rights thereunder and to
the Aspen Common issuable upon conversion or exercise thereof. If
Stockholder notifies AspenTech of his election for either a Shelf
Registration or Piggyback Underwriting by August 1, 1998, AspenTech
shall use its reasonable efforts to register the Registrable Shares
under clause (i) above by August 20, 1998 or clause (ii) above, as
the case may be, by September 25, 1998. In the event of a Shelf
Registration, AspenTech agrees to use reasonable efforts to keep
such registration statement continuously effective for a period of
ninety (90) days after its effective date. The Stockholder shall
furnish all information that AspenTech may reasonably request in
connection with the foregoing registration or any other filings
required to be made in connection with this transaction. AspenTech
shall, within fifteen (15) days of the Closing Date, list the
Exchanged Shares on NASDAQ.
6.2 OBLIGATIONS OF ASPENTECH.
a. In connection with registrations under this Section, and
subject to the limitations of this Section, AspenTech shall:
i. use its reasonable efforts to keep the registration
statement filed in connection with a Shelf Registration
effective as provided therein;
ii. prepare and file with the SEC such amendments and
supplements to such registration statements and the
prospectuses used in connection therewith as may be
necessary, and comply with the provisions of the
Securities Act with respect to the sale or other
disposition of all Registrable Shares registered in such
registration statements;
iii. furnish to the Stockholder such number of copies of any
prospectus (including any preliminary prospectus and any
amended or supplemented prospectus) in conformity with
the requirements of the Securities Act, and such other
documents, as the Stockholder may reasonably request in
order to effect the offering and sale of the Registrable
Shares to be offered and sold, but only while AspenTech
shall be required under the provisions hereof to cause
the registration statement to remain current;
iv. use its reasonable efforts to register or qualify the
Registrable Shares covered by such registration
statements under the securities or blue sky laws of such
jurisdictions as the Stockholder shall reasonably
request (provided that AspenTech shall not be required
in
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connection therewith or as a condition thereto to
qualify to do business or to file a general consent to
service of process in any such jurisdiction where it has
not been qualified).
b. NOTIFICATION OBLIGATIONS. AspenTech shall promptly notify the
Stockholder once the Registrable Shares are covered by a
registration statement hereunder:
i. when a prospectus or any prospectus supplement or
post-effective amendment has been filed, and, with
respect to the registration statements or any
post-effective amendment, when the same has become
effective;
ii. of any request by the SEC or any other federal or state
governmental authority during the period of
effectiveness of the registration statements for
amendments or supplements to the registration statements
or related prospectus or for additional information
relating to the registration statements,
iii. of the issuance by the SEC or any other federal or state
governmental authority of any stop order suspending the
effectiveness of the registration statements or the
initiation of any proceedings for that purpose,
iv. of the receipt by AspenTech of any notification with
respect to the suspension of the qualification or
exemption from qualification of any of the Registrable
Shares for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; or
v. of the happening of any event which makes any statement
made in the registration statements or related
prospectuses or any document incorporated or deemed to
be incorporated therein by reference untrue in any
material respect or which requires the malting of any
changes in the registration statements or prospectuses
so that, in the case of the registration statements,
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 not misleading, and that in the case of the
prospectuses, 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.
Upon the happening of any event of the kind described in
clause (ii), (iii), (iv) or (v) above or any other event that,
in the good faith judgment of AspenTech's Board of Directors,
renders it advisable to suspend use of any prospectus due to
pending corporate developments, public filings with the SEC or
similar material events, AspenTech may suspend use of the
prospectuses on written notice to the Stockholder (in which
case the Stockholder shall discontinue disposition of
Registrable Shares covered by a registration statement or
prospectus until copies of a supplemented or amended
prospectus are distributed to the Stockholder or until the
Stockholder is advised in writing by the AspenTech that the
use of the applicable prospectus may be resumed). AspenTech
shall use its reasonable efforts to ensure that the use of the
prospectuses may be resumed as soon as practicable. AspenTech
shall use its reasonable efforts to obtain the withdrawal of
any order suspending the effectiveness of a registration
statement, or the lifting of any suspension of the
qualification (or exemption from qualification) of any of the
securities for sale in any jurisdiction, at the earliest
practicable moment. AspenTech shall, upon the occurrence of
any event contemplated by clause (v) above, prepare a
supplement or post-effective amendment to the registration
statements or a supplement to the related prospectuses or any
document incorporated therein by reference or file any other
required document so that, as thereafter delivered to the
purchasers of the Registrable Shares being sold thereunder,
such prospectuses will
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not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. In
addition to the foregoing, AspenTech may either suspend or
terminate the Shelf Registration on written notice to the
Stockholder, in which case the Stockholder shall discontinue
dispositions of such Registrable Shares and in the event of
termination, AspenTech shall deregister any shares registered
but unsold thereunder. In such event the Chief Financial
Officer shall furnish a certificate of AspenTech stating that
in the good faith judgment of the Board of Directors of
AspenTech it would be significantly disadvantageous to Aspen
and its stockholders for any such registration statement to be
amended or supplemented or continued because AspenTech would
be required to disclose in such registration statement, either
directly or though incorporation by reference, non-public
information that it would not otherwise be obligated to
disclose at such time. If AspenTech provides Stockholder with
notice of suspension, AspenTech shall extend the period during
which such Shelf Registration shall be maintained effective
pursuant to this Agreement by the same number of days the
Stockholder is required to discontinue dispositions
thereunder. If AspenTech provides Stockholder with notice of
termination, AspenTech shall file a new shelf registration as
provided herein as soon as practicable after the cause for
such termination ceases to prohibit the registration, and such
new shelf registration shall be maintained for a subsequent
two months subject to the provisions of this Agreement.
c. REPORTS UNDER EXCHANGE ACT. AspenTech agrees to (a) use its
reasonable efforts to file with the SEC in a timely manner all
reports and other documents required of AspenTech under the
Securities Act and the Exchange Act and (b) furnish to the
Stockholder forthwith upon request (i) a written statement by
AspenTech that it has complied with the reporting requirements
of the Securities Act and the Exchange Act or that it
qualifies as a registrant whose securities may be resold
pursuant to Form S-3 (at any time that it so qualifies) and
(ii) such other information as may be reasonably requested in
availing the Stockholder of any rule or regulation of the SEC
which permits the selling of any such securities pursuant to
Form S-3.
6.3 OBLIGATIONS OF STOCKHOLDER.
In order for any Registrable Shares to be included in any Piggyback
Underwriting or Shelf Registration, the Stockholder shall provide
all such information and materials to AspenTech and take all such
action as may be required in order to permit AspenTech to comply
with all applicable requirements of the SEC and any state securities
commission and to obtain the effectiveness of and any desired
acceleration of the effective date of such registration statement.
Such provision of information and materials is a condition precedent
to the obligations of AspenTech pursuant to Section 6.1, provided
that AspenTech shall have used its reasonable efforts to provide
reasonable advance notice of the need for such information,
materials or action and shall have afforded the Stockholder a
reasonable opportunity to provide such materials and to take such
action. The Stockholder shall enter into, if the registration is
pursuant to a Piggyback Underwriting, an underwriting agreement with
the underwriter or underwriter of such offering containing
representations, warranties, indemnities and agreements then
customarily included by selling stockholders in underwriting
agreements with respect to secondary distributions.
6.4 EXPENSES.
AspenTech shall pay all expenses incident to its performance of or
compliance with this Section 6, regardless of whether any
registration becomes effective, including all registration and
filing fees of the SEC, the National Association of Securities
Dealers, Inc. and the NASDAQ Stock Market, Inc., all fees and
expenses incurred in complying with securities or blue sky laws
(including reasonable fees and disbursements of counsel in
connection with blue sky qualifications of the Registrable Shares),
all
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4
printing, messenger and delivery expenses, all fees and expenses of
AspenTech's transfer agent and registrar, all fees and disbursements
of AspenTech's independent public accountants and counsel and all
fees and expenses of any special experts retained by AspenTech in
connection with any registration pursuant to the terms of this
Section; provided, however, that (a) in connection with any
Piggyback Underwriting pursuant to the terms of this Section, or (b)
in connection with the sale of Registrable Shares by the Stockholder
under an S-3 registration filing through a broker other than
Nationsbank Montgomery Securities, then in each such event the
Stockholder shall be liable for any fees or commissions of brokers
with respect to the Registrable Shares, and any fees or expenses of
consultants, financial advisors, counsel and other professionals
acting on behalf of the Stockholder in connection with any
registration or Piggyback Underwriting pursuant to the terms of this
Section.
6.5 INDEMNIFICATION.
In the event of any offering registered pursuant to this Section:
a. AspenTech will indemnify the Stockholder against all claims,
losses, damages and liabilities (or actions in respect
thereof), including any of the foregoing incurred in
settlement of any litigation, commenced or threatened, arising
out of or based on any untrue statement (or alleged untrue
statement) of a material fact contained in any registration
statement, prospectus, or any amendment or supplement thereto,
incident to any offering registered pursuant to this Section,
or based on any omission (or alleged omission) to state
therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances in which they are made, not misleading, or any
violation by AspenTech of any rule or regulation promulgated
under the Securities Act, or state securities laws applicable
to AspenTech in connection with any such registration, and
subject to Section 6.5, will reimburse the Stockholder for any
legal and any other out-of-pocket expenses reasonably incurred
in connection with investigating, preparing or defending any
such claim, loss, damage, liability or action, provided that
AspenTech will not be liable in any such case to the extent
that any such claim, loss, damage, or liability arises out of
or is based on any untrue statement or omission or alleged
untrue statement or omission, made in reliance upon and in
conformity with written information furnished to AspenTech by
the Stockholder.
6. The Stockholder will indemnify AspenTech, each of its
directors and officers and its legal counsel and independent
accountants, each underwriter, if any, of AspenTech's
securities covered by such a registration statement, each
person who controls AspenTech or such underwriter within the
meaning of Section 15 of the Securities Act, and each other
such Stockholder of shares included in the offering, and such
Stockholder's legal counsel and independent accountants,
against all claims, losses, damages and liabilities (or
actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) or a material
fact contained in any such registration statement, prospectus,
offering circular or any amendment or supplement thereto, or
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, and will reimburse
AspenTech, such Stockholders, such directors, officers, legal
counsel, independent accountants, underwriters or control
persons for any legal or any other expenses reasonably
incurred in connection with investigating or defending any
such claim, loss, damage, liability or action, in each case to
the extent, but only to the extent, that such untrue statement
(or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement, prospectus,
offering circular or any amendment or supplement thereto in
reliance upon and in conformity with written information
furnished to AspenTech by the Stockholder.
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5
c. Each party entitled to indemnification under this Section 6.6
(the "Indemnified Party") shall give notice to the party
required to provide indemnification (the "Indemnifying Party")
promptly after such Indemnified Party receives written notice
of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any
such claim or any litigation resulting therefrom, provided
that counsel for the Indemnifying Party, who shall conduct the
defense of such claim or litigation, shall be approved by the
Indemnified Party (whose approval shall not be unreasonably
withheld), and the Indemnified Party may participate in such
defense at such Indemnified Party's expense, and provided
further that the failure of any Indemnified Party to give
notice as provided herein shall not relieve the Indemnifying
Party of its obligations under this Section, except to the
extent, but only to the extent, that the Indemnifying Party's
ability to defend against such claim or litigation is impaired
as a result of such failure to give notice. Notwithstanding
the foregoing sentence, the Indemnified Party may retain its
own counsel to conduct the defense of any such claim or
litigation, and shall be entitled to be reimbursed by the
Indemnifying Party for expenses reasonably incurred by the
Indemnified Party in defense of such claim or litigation, in
the event that (i) the Indemnifying Party does not assume the
defense of such claim or litigation within ten days after the
Indemnifying Party receives notice thereof from the
Indemnified Party or (ii) the Indemnified Party reasonably
determines that counsel for the Indemnifying Party has a
conflict of interest in representing the Indemnified Party.
Further, an Indemnifying Party shall be liable for amounts
paid in settlement of any such claim or litigation only if the
Indemnifying Party consents in writing to such settlement
(which consent shall not be reasonably withheld). No
Indemnifying Party, in the defense of any such claim or
litigation, shall, except with the consent of each Indemnified
Party, consent to entry of any judgment or enter any
settlement which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such
Indemnified Party a release from all liability in respect to
such claim or litigation.
[For purposes of the foregoing Section 6, the following terms have the indicated
meanings:
"Aspen Common" means common stock, $.10 par value, of AspenTech.
"AspenTech" means Aspen Technology, Inc.
"Closing Date" means May 29, 1998.
"Exchanged Shares" means 140,000 shares of Aspen Common exchanged for all
ownership interest in and to Treiber Controls Inc..
"Publication Date" means the date on which AspenTech initially publishes
financial results reflecting the first thirty days of combined operations of
AspenTech and Treiber Controls Inc.
"Registrable Shares" means (a) the shares of Aspen Common issued to the
Stockholder in exchange for all of the outstanding equity of Treiber Controls
Inc., (b) any other securities issued by AspenTech in exchange for any of such
shares (but, with respect to any particular Registrable Share, only so long as
it continues to be a Registrable Share) and (c) any shares of Aspen Common
issued as a dividend or distribution on account of Registrable Shares or
resulting from a subdivision of outstanding Registrable Shares into a greater
number of securities (by reclassification, stock split or otherwise), provided
that a security that was at one time a Registrable Share shall cease to be a
Registrable Share when (i) it has been effectively registered under the
Securities Act and has been disposed of pursuant to a registration statement or
(ii) it has been transferred and is no longer held of record by the Stockholder.
"SEC" means the Securities and Exchange Commission.
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"Securities Act" means the Securities Act of 1933, as amended.
"Securities Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Stockholder" means Dr. Steven Treiber, sole equity holder of Treiber Controls
Inc.]
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