PLATINUM TECHNOLOGY INC, S-1, 1996-07-09

PLATINUM TECHNOLOGY INC
S-1, 1996-07-09
PREPACKAGED SOFTWARE

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 8, 1996
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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PLATINUM TECHNOLOGY, INC.

(Exact name of Registrant as specified in its charter)

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DELAWARE 7372 36-350962
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of Classification Code Number) Identification
incorporation or organization) Number)
</TABLE>

1815 SOUTH MEYERS ROAD, OAKBROOK TERRACE, ILLINOIS 60181. TELEPHONE (708)
620-5000

(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrant's Principal Executive Offices)
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MICHAEL C. WYATT, ESQ.
PLATINUM TECHNOLOGY, INC.,
1815 SOUTH MEYERS ROAD, OAKBROOK TERRACE, ILLINOIS 60181, TELEPHONE (708)
620-5000

(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent For Service)

COPIES TO:

D. MARK MCMILLAN, ESQ.
BELL, BOYD & LLOYD
THREE FIRST NATIONAL PLAZA, CHICAGO, ILLINOIS 60602, TELEPHONE: (312) 372-1121
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
FROM TIME TO TIME AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
------------------------------

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, please 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, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering: / /
- ---------------

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: / /
- ---------------

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: / /
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CALCULATION OF REGISTRATION FEE

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<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED BE REGISTERED PER UNIT (1) OFFERING PRICE (1) REGISTRATION FEE
<S> <C> <C> <C> <C>
Common Stock, par value $.001 per share
(including preferred stock purchase
rights).................................... 5,000,000 $13.625 $68,125,000 $23,492
shares(2)
</TABLE>

(1) Calculated in accordance with Rule 457(c) and based upon the average of the
high and low bid prices of PLATINUM TECHNOLOGY, INC. common stock reported
on the Nasdaq National Market on July 3, 1996, as reported in THE WALL
STREET JOURNAL.

(2) Such number of shares are also registered hereunder for resale, with the
consent of the Registrant, by persons who receive shares covered by this
Registration Statement and who may wish to sell such shares under
circumstances requiring or making desirable use of the Prospectus contained
herein.
------------------------------

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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<PAGE>
PLATINUM TECHNOLOGY, INC.
CROSS REFERENCE SHEET SHOWING LOCATION IN PROSPECTUS OF
INFORMATION REQUIRED BY ITEMS OF PART I OF FORM S-1.

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<CAPTION>
REGISTRATION STATEMENT
ITEM NUMBER AND CAPTIONS CAPTION OR LOCATION IN PROSPECTUS
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1. Forepart of the Registration Statement and Outside
Front Cover Page of Prospectus...................... Outside Front Cover Page
2. Inside Front and Outside Back Cover Pages of
Prospectus.......................................... Inside Front Cover Page; Additional Information
3. Summary Information, Risk Factors, and Ratio of
Earnings to Fixed Charges........................... Prospectus Summary; Risk Factors
4. Use of Proceeds...................................... Securities Covered by this Prospectus
5. Determination of Offering Price...................... *
6. Dilution............................................. *
7. Selling Security Holders............................. Outside Front Cover Page; Securities Covered by this
Prospectus; Inside Back Cover Page
8. Plan of Distribution................................. Outside Front Cover Page; Securities Covered by this
Prospectus
9. Description of Securities to be Registered........... Description of Capital Stock
10. Interests of Named Experts and Counsel............... *
11. Information with Respect to the Registrant........... Outside Front Cover Page; Prospectus Summary; Risk
Factors; Price Range of Common Stock; Dividend
Policy; Selected Financial Data; Management's
Discussion and Analysis of Financial Condition and
Results of Operations; Business; Management; Certain
Transactions; Security Ownership of Management and
Principal Stockholders; Description of Capital
Stock; Shares Eligible for Future Sale; Financial
Statements
12. Disclosure of Commission Position on Indemnification
for Securities Act Liabilities...................... *
</TABLE>

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* Item inapplicable or answer is negative and omitted from Prospectus.
<PAGE>
THIS PROSPECTUS AND THE INFORMATION CONTAINED HEREIN ARE SUBJECT TO COMPLETION
OR AMENDMENT WITHOUT NOTICE. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO
BUY THEM BE ACCEPTED, PRIOR TO THE TIME THE PROSPECTUS IS DELIVERED IN FINAL
FORM. UNDER NO CIRCUMSTANCES SHALL THIS PROSPECTUS CONSTITUTE AN OFFER TO SELL
OR A SOLICITATION OF AN OFFER TO BUY, NOR SHALL THERE BE ANY SALE OF, THESE
SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD
BE UNLAWFUL PRIOR TO REGISTRATION, QUALIFICATION OR FILING UNDER THE SECURITIES
LAWS OF ANY SUCH JURISDICTION.
<PAGE>
PROSPECTUS SUBJECT TO COMPLETION, DATED JULY 8, 1996

5,000,000 SHARES

[LOGO]

COMMON STOCK

The 5,000,000 shares of common stock, $.001 par value per share (the "Common
Stock"), covered by this Prospectus may be offered and issued from time to time
by PLATINUM TECHNOLOGY, INC. (the "Company") in connection with acquisitions of
other businesses, real or personal properties, or securities in business
combination transactions in accordance with Rule 415(a)(1)(viii) of Regulation C
under the Securities Act of 1933, as amended (the "Securities Act"), or
otherwise under Rule 415. This Prospectus may also be used, with the Company's
prior consent, by persons who have received or will receive shares of Common
Stock in connection with acquisitions and who wish to offer and sell such shares
under circumstances requiring or making desirable its use. See "Securities
Covered by this Prospectus" and see the inside back cover page hereof for the
identity of such persons, if any.

The Common Stock is traded on the Nasdaq National Market under the symbol
"PLAT". On July 5, 1996, the closing sale price of the Common Stock, as reported
in the WALL STREET JOURNAL was $13.375 per share. See "Price Range of Common
Stock."

------------------------

SEE "RISK FACTORS" AT PAGE 5 OF THIS PROSPECTUS FOR A DISCUSSION OF CERTAIN
FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS IN THE COMMON STOCK.

---------------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.

------------------------

THE DATE OF THIS PROSPECTUS IS , 1996.
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OF ANY SECURITIES
OTHER THAN THE REGISTERED SECURITIES TO WHICH IT RELATES OR AN OFFER TO ANY
PERSON IN ANY JURISDICTION WHERE SUCH OFFER WOULD BE UNLAWFUL. THE DELIVERY OF
THIS PROSPECTUS AT ANY TIME DOES NOT IMPLY THAT INFORMATION HEREIN IS CORRECT AS
OF ANY TIME SUBSEQUENT TO ITS DATE.

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TABLE OF CONTENTS

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PAGE
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Available Information...................................................................................... 2
Prospectus Summary......................................................................................... 3
Risk Factors............................................................................................... 5
Securities Covered by this Prospectus...................................................................... 11
Price Range of Common Stock................................................................................ 12
Dividend Policy............................................................................................ 12
Selected Financial Data.................................................................................... 13
Management's Discussion and Analysis of Financial Condition and Results of Operations...................... 14
Business................................................................................................... 21
Management................................................................................................. 30
Certain Transactions....................................................................................... 37
Security Ownership of Management and Principal Stockholders................................................ 38
Description of Capital Stock............................................................................... 39
Shares Eligible for Future Sale............................................................................ 42
Experts.................................................................................................... 43
Index to Financial Statements.............................................................................. F-1
</TABLE>

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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"). Reports, registration statements, proxy
statements and other information filed by the Company with the Commission can be
inspected and copied at the public reference facilities maintained by the
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Room 1024, Washington,
D.C. 20549, and at the Commission's regional offices: Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661 and 7 World Trade Center,
Suite 1300, New York, New York 10048. Copies of such materials can be obtained
at prescribed rates from the Public Reference Section of the Commission, 450
Fifth Street, N.W., Room 1024 Washington, D.C. 20549.

The Company has filed with the Commission a Registration Statement on Form
S-1 (the "Registration Statement") under the Securities Act with respect to the
Common Stock offered hereby. As used herein, the term Registration Statement
means the initial Registration Statement and any and all amendments thereto.
This Prospectus omits certain information contained in said Registration
Statement as permitted by the rules and regulations of the Commission. For
further information with respect to the Company and the Common Stock offered
hereby, reference is made to the Registration Statement, including the exhibits
thereto. Statements herein concerning the contents of any contract or other
document are not necessarily complete and in each instance reference is made to
such contract or other document filed with the Commission as an exhibit to the
Registration Statement, or otherwise, each such document being qualified by and
subject to such reference in all respects.

DB2 and MVS are trademarks, and IBM is a registered trademark, of
International Business Machines Corporation. This Prospectus also includes
product names and other trade names and trademarks of the Company and its
subsidiaries and of other companies.

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PROSPECTUS SUMMARY

THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO, AND
SHOULD BE READ IN CONJUNCTION WITH, THE MORE DETAILED INFORMATION AND FINANCIAL
STATEMENTS, INCLUDING THE NOTES THERETO, APPEARING ELSEWHERE IN THIS PROSPECTUS.
UNLESS THE CONTEXT SUGGESTS OTHERWISE, REFERENCES IN THIS PROSPECTUS TO
"PLATINUM" OR THE "COMPANY" MEAN PLATINUM technology, inc. AND ITS SUBSIDIARIES.

THE COMPANY

The Company develops, markets and supports systems software products, and
offers related consulting services and educational programs, for administering
the prevailing complex, heterogeneous computing environment known as the open
enterprise environment (the "OEE"). These products and services increase the
performance and interoperability of computing systems and databases in the OEE
by providing users in large and data intensive organizations with more efficient
and productive access to and use of critical information. The Company offers
systems software products in five primary categories: systems management, data
warehousing, business intelligence, application lifecycle and database
management. The Company markets its products and services principally through a
worldwide direct distribution network, as well as strategic indirect channels
and PLATINUM affiliates, which are independent organizations that contract with
the Company to promote and support its software products and services.

The Company originally established itself in the information systems
industry by supplying a complete line of tools and utilities for DB2, IBM's
relational database management system for its MVS mainframe operating system.
The Company then expanded its product offerings to address the emerging market
for distributed database management tools, and became a leader in relational
database administration technology. The Company has leveraged this relational
database experience and expertise to expand its presence in the larger market
for open enterprise systems software.

The Company's goal is to become a leading provider of software products for
the growing open enterprise systems market by offering a comprehensive set of
"best of breed" point products, an open systems architecture to fully integrate
these products referred to as the PLATINUM Open Enterprise Management System
("POEMS"), and complementary consulting and educational services. To achieve
this goal, the Company has identified key open systems technologies and skill
sets, and through a combination of leveraging its core competencies and an
aggressive acquisition program, has assembled the capabilities to create
complete open enterprise systems solutions.

Since mid-1994, the Company has acquired numerous businesses which supply
open enterprise systems and data warehouse products and related services and has
completed several product acquisitions. During 1995, the Company acquired 14
businesses whose products and services complement the Company's existing
products and enhance the ability of POEMS to integrate proprietary and non-
proprietary software products. In the first three months of 1996, the Company
acquired Prodea Software Corporation ("Prodea"), a leading provider of data
warehousing and business intelligence tools and Advanced Systems Technologies,
Inc. ("AST"), a developer of performance management tools, and the Company has
also completed the acquisitions of Paradigm Systems Corporation ("Paradigm") and
Axis Systems International, Inc. ("Axis"), two providers of professional
services for the OEE. The Company believes that acquisitions are, and will
continue to be, an essential part of the Company's strategy to compete
effectively in its rapidly evolving marketplace.

The Company was incorporated in Delaware on April 16, 1987. Its principal
executive offices are located at 1815 South Meyers Road, Oakbrook Terrace,
Illinois 60181, and its telephone number is (708) 620-5000.

SPECIAL NOTE ON FORWARD-LOOKING STATEMENTS

Certain statements in this Prospectus Summary and under the captions "Risk
Factors," "Recent Developments," "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and "Business," and elsewhere in
this Prospectus relate to future events and expectations and

3
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as such constitute "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. Such forward-looking
statements involve known and unknown risks, uncertainties and other factors
which may cause the actual results, performance or achievements of the Company
to be materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Such factors include,
among other things, the maturation and success of the Company's new open
enterprise systems strategy; risks inherent in conducting international
business; general economic and business conditions; charges and costs related to
acquisitions; and the ability of the Company to develop and market existing and
acquired products for the open enterprise systems market, to successfully
integrate its acquired products, services and business, to adjust to changes in
technology, customer preferences, enhanced competition and new competitors in
the open systems software and professional services markets, and to maintain or
enhance its relationships with relational database vendors. See "Risk Factors."

SUMMARY FINANCIAL INFORMATION(1)

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THREE MONTHS
YEAR ENDED DECEMBER 31, ENDED MARCH 31,
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1991 1992 1993 1994 1995 1995 1996
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(IN THOUSANDS, EXCEPT PER SHARE DATA)
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STATEMENT OF OPERATIONS DATA:
Total revenues.................. $ 123,177 $ 141,964 $ 175,380 $ 225,439 $ 304,676 $ 63,060 $ 82,471
Operating income (loss)......... (6,011) 3,012(2) 3,336(3) (2,223)(4) (128,162)(5) (17,318)(6) (32,327)(7)
Net income (loss)............... (11,231) (2,433)(2) 625(3) (2,644)(4) (111,933)(5) (14,006)(6) (24,504)(7)
Net income (loss) per share..... (0.32) (0.06)(2) 0.02(3) (0.07)(4) (2.59)(5) (0.34)(6) (0.45)(7)
Shares used in computing per
share amounts.................. 37,671 35,507 37,971 39,890 43,267 40,738 54,915
</TABLE>

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DECEMBER 31,
----------------------------------------------------- MARCH 31,
1991 1992 1993 1994 1995 1996
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(IN THOUSANDS)
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BALANCE SHEET DATA:
Cash and cash equivalents and investments............ $ 54,125 $ 60,054 $ 69,554 $ 124,563 $ 132,775 $ 93,354
Working capital...................................... 49,504 40,530 43,607 89,651 126,679 91,440
Total assets......................................... 118,825 136,307 169,882 262,760 438,188 417,906
Long term obligations and acquisition-related
payables, less current portion...................... 191 181 3,416 9,075 11,342 8,903
Stockholders' equity................................. 75,667 82,963 92,944 158,837 288,452 270,069
</TABLE>

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(1) The selected consolidated financial data gives retroactive effect to the
acquisitions of Prodea as of February 8, 1996, Paradigm as of March 26,
1996, and Axis as of March 29, 1996, each of which has been accounted for as
a pooling of interests for financial reporting purposes, and as a result,
the financial position and results of operations are presented as if the
combining companies had been consolidated for all periods presented. The
financial data as of and for the years ended December 31, 1991 and 1992, as
well as the balance sheet data as of December 31, 1993 are derived from
unaudited consolidated financial statements and include, in the opinion of
management, all adjustments (consisting only of normal recurring
adjustments) necessary to present fairly the data for the periods. The
selected consolidated financial data should be read in conjunction with the
other financial information included in this Prospectus.

(2) Reflects a pre-tax charge of $7,873,000 relating to Trinzic Corporation
("Trinzic") restructuring costs.

(3) Reflects a pre-tax charge for acquired in-process technology of $8,735,000
relating primarily to the Company's acquisition of the stock of Datura
Corporation and a pre-tax charge of $4,659,000 relating to Trinzic and Locus
Computing Corporation ("Locus") restructuring costs.

(4) Reflects a pre-tax charge for acquired in-process technology of $24,594,000
relating primarily to the Company's acquisitions of the stock of Dimeric
Development, Inc. and the net assets of Aston Brooke Software, Inc. and
AutoSystems Corporation.

(5) Reflects a pre-tax charge for acquired in-process technology of $88,493,000
relating primarily to the Company's acquisitions of the stock of Advanced
Software Concepts, Inc., SQL Software Corporation, Reltech Group, Inc.,
Protellicess Software, Inc., AIB Software Corporation and BMS Computer, Inc.
and the net assets of ViaTech Development, Inc., BrownStone Solutions, Inc.
and Protosoft, Inc. and to certain product acquisitions, and a pre-tax
charge for merger costs of $30,819,000 relating to the acquisitions
accounted for as poolings of interests.

(6) Reflects a pre-tax charge for acquired in-process technology of $18,799,000
relating primarily to the Company's acquisitions of all of the outstanding
capital stock of SQL Software Corporation, Viatech Development, Inc.,
BrownStone Solutions, Inc., and Reltech Group, Inc.

(7) Reflects a pre-tax charge for acquired in-process technology of $7,005,000
relating to the Company's acquisition of all of the outstanding capital
stock of Advance Systems Technologies, Inc. and the purchase of certain
product technologies. Also reflects a pre-tax charge of $5,714,000 relating
to merger costs for acquisitions accounted for as poolings of interests.

4
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RISK FACTORS

PROSPECTIVE PURCHASERS OF THE SHARES OF COMMON STOCK OFFERED HEREBY SHOULD
CONSIDER CAREFULLY THE SPECIFIC FACTORS SET FORTH BELOW AS WELL AS THE OTHER
INFORMATION CONTAINED IN THIS PROSPECTUS IN EVALUATING AN INVESTMENT IN THE
COMMON STOCK.

DEPENDENCE ON SUCCESS OF THE OPEN ENTERPRISE SYSTEMS STRATEGY

The Company's business substantially depends on the success of the Company's
strategy of providing complete open enterprise systems solutions. The Company is
implementing this open enterprise systems strategy by, among other things,
continuing its development of a comprehensive systems software product line and
the POEMS architecture, an open systems architecture designed to enable
companies to integrate their administration systems. The open enterprise systems
strategy is an important new and untested initiative for the Company, which
involves a significant investment of resources and upon which the Company's
future success is substantially dependent. No assurances can be given that this
strategy will succeed or that the market for the Company's new products will
develop as expected. The failure of the open enterprise systems strategy would
have a material adverse effect on the Company's results of operations and
financial condition.

DEPENDENCE ON SUCCESS OF DATA WAREHOUSE CONCEPT

The Company's business strategy is in large part dependent on the success
and maturation of its "data warehouse" concept ("Data Warehouse"). A Data
Warehouse is a database that gives the end users full access to periodically
consolidated historical data without jeopardizing the performance of
mission-critical operations. The Company is seeking to quickly expand its
capabilities, through internal development and an aggressive acquisition
program, to provide a total data warehousing solution in heterogeneous
distributed computing environments. Building the Data Warehouse product offering
is a significant new strategic initiative for the Company which involves a
significant investment of resources. While the Company believes that the Data
Warehouse presents it with a significant market opportunity, the Data Warehouse
product offering is an emerging concept and market. No assurances can be given
that these concepts will succeed or mature or that the marketplace will respond
as expected.

RAPID TECHNOLOGICAL CHANGE; DEPENDENCE ON NEW PRODUCTS AND MARKETS

The Company expects that the market for systems software products will
continue to be subject to frequent and rapid changes in technology and customer
preferences. The introduction of products embodying new technologies and the
emergence of new industry standards can render existing products obsolete and
unmarketable. For example, there has been a substantial change in customer
preferences for open enterprise systems rather than exclusively mainframe
technologies. The Company's growth and future financial performance will depend
upon its ability to develop and introduce new products and enhancements of
existing products that accommodate the latest technological advances and
customer requirements. Moreover, the Company has only a limited history in
developing and marketing products for the expanding open enterprise systems
market. Most of the Company's open enterprise systems products were recently
acquired. There can be no assurance that additional new products will be
successfully developed or marketed by the Company, that any new products will
achieve market acceptance, or that other software vendors will not develop and
market products which are superior to the Company's products or that such
products will not achieve greater market acceptance. Furthermore, customers may
delay purchases in anticipation of technological changes. The Company's ability
to develop and market open enterprise systems and other new products is
dependent upon its ability to attract and retain qualified employees. Any
failure by the Company to anticipate or respond adequately to the changes in
technology and customer preferences, or to develop and introduce new products in
a timely fashion, could materially adversely affect the Company's business and
operating results.

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DEPENDENCE ON PROPRIETARY TECHNOLOGY

The Company's success is heavily dependent upon its proprietary software
technology. See "-- Dependence on Success of the Open Enterprise Systems
Strategy." The Company relies on a combination of contractual rights,
trademarks, trade secrets, patents and copyright laws to establish or protect
its proprietary rights in its products. The Company's license agreements
restrict a customer's use of the Company's software and prohibit disclosure to
third persons. Notwithstanding those restrictions, it may be possible for
unauthorized persons to obtain copies of the Company's software products. The
Company registers its product names and other trademarks in the United States
and certain foreign countries. There can be no assurance that the steps taken by
the Company in this regard will be adequate to deter misappropriation of its
proprietary rights or independent third party development of functionally
equivalent technology. Although the Company does not believe that it is
infringing on the intellectual property rights of others, there can be no
assurance that such a claim will not be asserted against the Company in the
future or that any attempt to protect its technology will not be challenged.

DEPENDENCE ON DB2 AND RELATIONSHIP WITH IBM

A substantial majority of the Company's historic revenues were, and a
significant portion of the Company's revenues will continue to be, derived from
products that enhance the performance and functionality of IBM's DB2 relational
database management software, which operates on IBM and compatible mainframe
computer systems running the MVS operating system. Future revenues are dependent
in part on the continued utilization of DB2. A decline or a perceived decline in
IBM's commitment to DB2 or a decline in the market's acceptance and utilization
of DB2 would have an adverse effect on the Company, and such adverse effect
could be material. Also, if IBM were to enhance DB2 or its DB2 utilities so as
to render the Company's products obsolete or unnecessary, or to devote more
resources to developing and marketing IBM's own DB2 tools and utilities, the
Company's business could be materially adversely affected.

The Company licenses DB2 and other systems software from IBM in order to
maintain compatibility with IBM and develop and test new or enhanced products.
The Company would be adversely affected if it were to lose access to these IBM
products. IBM historically has cooperated closely with the Company and others by
providing timely information on enhancements and developments affecting DB2. The
Company has no written agreement with IBM that assures continued access to such
information in the future, however, and if IBM were to favor a competitor of the
Company with access to such information, the Company could suffer a competitive
disadvantage.

DEPENDENCE ON RELATIONSHIPS WITH RELATIONAL DATABASE VENDORS

The Company believes that in order to provide solutions for the OEE,
including open enterprise systems technologies, the Company will be required to
develop, maintain and enhance close associations with, and obtain access to the
technical personnel of, leading relational database vendors. This may become
increasingly difficult due to competition among such vendors. The Company has
entered into alliances with, among others, Oracle Systems Corp., Sybase, Inc.
and Informix Software, Inc. There can be no assurance that the Company will be
able to maintain existing relationships or enter into new relationships with
such vendors. The Company's failure to do so would have an adverse effect on its
business and operating results, and such adverse effect could be material.

RISKS OF COMPLETED ACQUISITIONS

As an integral part of PLATINUM's growth strategy, the Company has
consummated a number of significant acquisitions. The anticipated benefits of
these acquisitions may not be achieved, and the Company's open enterprise
systems strategy may not be fully realized, unless the Company successfully
integrates and markets its acquired products and services in a timely manner.
The difficulties of such integration may initially be increased by the necessity
of integrating personnel with disparate business backgrounds and corporate
cultures. Management's focus on the integration of the acquired

6
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companies and the implementation of the Company's strategy may cause an
interruption, or a loss of momentum in the ongoing activities of the Company,
which could have a material adverse effect on the revenues and operating results
of the Company, particularly in the near term.

In order to realize the increases in revenues expected as a result of these
acquisitions, the Company may need to hire additional salespeople, train both
existing and new salespeople in the Company's complete range of product
offerings and successfully motivate them to sell the Company's entire range of
new products and services. There are no assurances that the Company will be able
to successfully integrate acquired products or services into the Company's
sales, marketing or distribution channels or that any expectations with respect
to product revenues will be fulfilled. Failure to fulfill these expectations
could have a material adverse effect on the Company's results of operations and
financial condition.

RELIANCE ON AND RISKS OF ACQUISITION STRATEGY

The Company expects to continue its strategy of identifying, acquiring and
developing open enterprise systems products and technologies through the
acquisition of specific products and of businesses which have developed such
products and technologies, including acquisitions which could be material in
size and scope. The Company believes that its future growth depends, in part,
upon the success of this strategy. There can be no assurance that the Company
will successfully identify, acquire on favorable terms or integrate such
businesses, products or technologies. The Company may in the future face
increased competition for acquisition opportunities, which may inhibit the
Company's ability to consummate suitable acquisitions and increase the costs of
completing acquisitions.

Acquisitions involve a number of special risks and factors, including the
diversion of management's attention, the assimilation of the operations and
personnel of the acquired companies, the incorporation of acquired products into
existing product lines, adverse short-term effects on reported operating
results, the amortization of acquired intangible assets, the assumption of
liabilities of the acquired companies, the loss of key employees and the
difficulty of presenting a unified corporate image. No assurance can be given
that any acquisition by the Company will or will not occur, and that if an
acquisition does occur, that it will not have a material adverse affect on the
Company or that any such acquisition will be successful in enhancing the
Company's business. See "-- Risks of Completed Acquisitions."

The Company has recorded charges for acquired in-process technology and
merger costs in connection with certain of its past acquisitions, which reduced
operating and net income for the periods in which the acquisitions were
recorded. The Company expects to continue to incur such charges in connection
with future acquisitions. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations."

HIGHLY COMPETITIVE MARKETS

The market for the Company's products is highly competitive. The Company
expects to encounter enhanced competition and new competitors as it continues to
penetrate the open enterprise systems market, including competition from
relational database vendors and systems software companies. Many of the
Company's current and prospective competitors have significantly greater
financial, technical and marketing resources than the Company. Competitive
pressures could cause the Company's products to lose market acceptance or result
in significant price erosion, with a material adverse effect upon the results of
operations.

A variety of external and internal factors could adversely affect the
Company's ability to compete in the open enterprise systems software market.
Such factors include the following: relative functionality, integration,
performance and reliability of the products offered by the Company and its
competitors; the success and timing of new product development efforts; changes
affecting the hardware, operating systems or database systems which the Company
currently supports; demonstrable economic benefits for users relative to cost;
quality of customer support and user documentation and ease of installation;
vendor reputation, experience and financial stability; and price.

7
<PAGE>
The Company encounters competition from a broad range of firms in the market
for professional services. Many of the Company's current and prospective
competitors in the professional services market have significantly greater
financial, technical and marketing resources than the Company. The competitive
factors affecting the market for the Company's professional services include the
following: breadth and quality of services offered, vendor reputation, and the
ability to retain qualified technical personnel.

SEASONALITY AND VARIABILITY OF QUARTERLY OPERATING RESULTS

The Company has experienced a seasonal pattern in its operating results,
with the fourth quarter typically having the highest total revenues and
operating income. Further, revenues for the Company's fourth quarters have
historically been higher than those for the first quarters of the following
years. Since operating expenses continued to increase in the first quarters of
those years, the Company realized substantially lower operating margins and net
income (excluding the effect of charges for acquired in-process technology and
merger costs) for such quarters. The Company expects this pattern to continue
for the foreseeable future. The Company believes the seasonality of its revenues
results primarily from the budgeting cycles of its software product customers
and the structure of the Company's sales commission and bonus programs.

The Company operates with relatively little order backlog and substantially
all of its software product revenues in each quarter result from sales made in
that quarter. Consequently, if near term demand for the Company's products
weakens or if sales do not close in any quarter as anticipated, the Company's
results of operations for that quarter would be adversely, and perhaps
materially, affected. In addition, the timing and amount of the Company's
revenues are subject to a number of factors that make estimation of operating
results prior to the end of a quarter extremely uncertain. Historically, a
substantial majority of the Company's quarterly software products revenues have
been recorded in the third month of any given quarter, with a concentration of
such revenues in the last week of that third month.

The Company's operating results may vary significantly from quarter to
quarter depending on other factors such as the size and timing of customer
orders, price and other competitive conditions in the industry, the timing of
new product announcements and releases by the Company and its competitors, the
ability of the Company to develop, introduce and market new and enhanced
versions of the Company's products on a timely basis, changes in the Company's
level of operating expenses, changes in the Company's sales incentive plans,
budgeting cycles of its customers, customer order deferrals in anticipation of
enhancements or new products offered by the Company or its competitors, the
cancellation of licenses during the warranty period or nonrenewal of maintenance
agreements, product life cycles, software bugs, and other risks discussed
herein. See "-- Highly Competitive Markets," and "-- Rapid Technological Change;
Dependence on New Products and Markets."

RISKS OF INTERNATIONAL SALES

The risks inherent in conducting international business generally include
exposure to currency fluctuations, longer payment cycles, greater difficulties
in accounts receivable collection and the burdens of complying with a wide
variety of foreign laws. Approximately 24% of the Company's revenues in fiscal
1995 were attributable to international sales and were made at prices based
either on U.S. dollars or foreign currencies. As a result, exchange rate
fluctuations can have a material effect on the total level of foreign sales and
the profitability of those sales. The Company has changed the primary means of
international distribution of its products from the Company's affiliate network
to wholly-owned PLATINUM subsidiaries during the past three years. The Company
may encounter difficulties in integrating and managing these new overseas
subsidiaries.

RISKS OF CONSULTING SERVICES BUSINESS

The Company recently formed a group to provide open systems software
consulting services and greatly expanded this group through its acquisitions of
Locus Computing Corporation ("Locus"), the Reltech Group, Inc. ("Reltech"),
Krystal Software S.A. ("Krystal"), Axis and Paradigm. Although

8
<PAGE>
Locus, Reltech, Krystal, Axis and Paradigm had substantial experience in
providing consulting services, this is a new lower-margin business area for the
Company. There can be no assurance that the consulting services business will be
successfully integrated with the Company's product licensing and educational
programs businesses or that the Company will be able to effectively compete in
this market. See "-- Risks of Completed Acquisitions" and "-- Highly Competitive
Markets." In addition, the Company will be subject to the risks associated with
a consulting services business, including dependence on reputation with existing
customers, volatility of workload and dependence on ability to retain qualified
technical personnel. Also, a substantial portion of the Company's consulting
services revenue may be derived from the performance of services under
fixed-price contracts. There can be no assurance that the Company can
consistently perform in a profitable manner under these contracts, particularly
in the field of software development, where cost overruns are commonplace.

DEPENDENCE ON KEY PERSONNEL

Competition for qualified personnel in the software industry is intense and
there can be no assurance that the Company will be able to attract and retain a
sufficient number of qualified employees. The Company's success depends to a
significant degree upon the continued contributions of its key management,
marketing, product development and operational personnel, including key
personnel of acquired companies. As the business of the Company grows, it may
become increasingly difficult for it to hire, train and assimilate the new
employees needed. In addition, it is possible that the business changes or
uncertainty brought about by recent acquisitions may cause key employees to
leave the Company, and certain key members of the management teams of acquired
companies may not continue with the management of the Company. The Company's
inability to attract and retain key employees could have a material adverse
effect on the Company's product development efforts and results of operations.

The Company's success to date has depended in large part on the skills and
efforts of Andrew J. Filipowski, the Company's President and Chief Executive
Officer, and Paul L. Humenansky, the Company's Executive Vice President --
Product Development and Chief Operations Officer. The Company has not entered
into non-competition agreements with Messrs. Filipowski or Humenansky or any of
its other key personnel, nor does the Company have "key man" life insurance
policies covering any of these individuals.

VOLATILITY OF THE COMPANY'S STOCK PRICE

The Company's stock price has historically been volatile. The Company
believes factors such as quarterly fluctuations in results of operations,
announcements of new products and acquisitions by the Company or by its
competitors, changes in earnings estimates by analysts, changes in accounting
treatments or principles and other factors may cause the market price of the
Common Stock to fluctuate, perhaps substantially. In addition, stock prices for
many technology companies fluctuate widely for reasons which may be unrelated to
operating results. Due to analysts' expectations of continued rapid growth and
the high price/earnings ratio at which the Common Stock may trade, any shortfall
in expectations could have an immediate and significant adverse effect on the
trading price of the Common Stock. These fluctuations, as well as general
economic, political and market conditions may adversely affect the market price
of the Common Stock in the future.

ANTITAKEOVER EFFECT OF RIGHTS AGREEMENT, CHARTER AND STATUTORY PROVISIONS

The Company has entered into a rights agreement (the "Right Agreement")
which provides that in the event that 15% or more of the outstanding shares of
Common Stock are acquired by a person or group of persons, the holder of each
outstanding share of Common Stock, other than such acquiring person(s), shall
have the right to purchase from the Company additional shares of Common Stock
having a market value equal to two times the exercise price of such right. In
addition, the Company's Restated Certificate of Incorporation provides that the
Board of Directors shall be classified with respect to the terms for which its
members shall hold office by dividing the members into three classes. The
Company is also subject to Section 203 of the Delaware General Corporation Law
which, in general, imposes restrictions upon acquirors of 15% or more of the
Company's Common Stock. The

9
<PAGE>
Rights Agreement and these other provisions may have the effect of delaying,
deferring or preventing a change of control of the Company, even if such event
would be beneficial to stockholders. See "Description of Capital Stock."

ABSENCE OF DIVIDENDS

The Company has never declared any cash dividends or distributions on its
capital stock. The Company currently intends to retain its earnings to finance
future growth and therefore does not anticipate paying any cash dividends in the
foreseeable future. See "Dividend Policy."

10
<PAGE>
SECURITIES COVERED BY THIS PROSPECTUS

The shares of Common Stock covered by this Prospectus are available for use
in future acquisitions of other businesses, real or personal properties, or
securities in business combination transactions in accordance with Rule
415(a)(1)(viii) of Regulation C under the Securities Act or otherwise under Rule
415. Such acquisitions may be made directly by the Company or indirectly through
a subsidiary, may relate to businesses or securities of businesses similar or
dissimilar to the Company's systems software products, related consulting
services or educational programs, and may be made in connection with the
settlement of litigation or other disputes. The consideration offered by the
Company in such acquisitions, in addition to the shares of Common Stock offered
by this Prospectus, may include cash, debt or other securities (which may be
convertible into shares of Common Stock covered by this Prospectus), or
assumption by the Company of liabilities of the business, properties or
securities being acquired or of their owners, or a combination thereof. It is
contemplated that the terms of acquisitions will be determined by negotiations
between the Company and the owners of the businesses, properties or securities
to be acquired, with the Company taking into account such factors as the quality
of management, the past and potential earning power, growth and appreciation of
the businesses, properties or securities acquired, and other relevant factors,
and it is anticipated that shares of Common Stock issued in acquisitions will be
valued at a price reasonably related to the market value of the Common Stock
either at the time the terms of the acquisition are tentatively agreed upon or
at or about the time or times of delivery of the shares.

The Company may from time to time, in an effort to maintain an orderly
market in the Common Stock, negotiate agreements with persons receiving Common
Stock covered by this Prospectus that will limit the number of shares that may
be sold by such persons at specified intervals. Such agreements may be more
restrictive than restrictions on sales made pursuant to the exemption from
registration requirements of the Securities Act, including the requirements
under Rule 144 or Rule 145(d), and certain persons party to such agreements may
not otherwise be subject to such Securities Act requirements. The Company
anticipates that, in general, such negotiated agreements will be of limited
duration and will permit the recipients of Common Stock issued in connection
with acquisitions to sell up to a specified number of shares per business day or
days.

With the consent of the Company, this Prospectus may also be used by persons
who have received or will receive from the Company Common Stock covered by this
Prospectus and who may wish to sell such stock under circumstances requiring or
making desirable its use. This Prospectus may also be used, with the Company's
consent, by pledgees, donees or assignees of such persons. The Company's consent
to any such use may be conditioned upon such persons' agreeing not to offer more
than a specified number of shares following supplements or amendments to this
Prospectus, which the Company may agree to use its best efforts to prepare and
file at certain intervals. The Company may require that any such offering be
effected in an organized manner through securities dealers.

Sales by means of this Prospectus may be made from time to time privately at
prices to be individually negotiated with the purchasers, or publicly through
transactions in the over-the-counter market (which may involve block
transactions), at prices reasonably related to market prices at the time of sale
or at negotiated prices. Broker-dealers participating in such transactions may
act as agent or as principal and, when acting as agent, may receive commissions
from the purchasers as well as from the sellers (if also acting as agent for the
purchasers). The Company may indemnify any broker-dealer participating in such
transactions against certain liabilities, including liabilities under the
Securities Act. Profits, commissions and discounts on sales by persons who may
be deemed to be underwriters within the meaning of the Securities Act may be
deemed underwriting compensation under the Securities Act.

Stockholders may also offer shares of stock covered by this Prospectus by
means of prospectuses under other registration statements or pursuant to
exemptions from the registration requirements of

11
<PAGE>
the Securities Act, including sales which meet the requirements of Rule 144 or
Rule 145(d) under the Securities Act, and stockholders should seek the advice of
their own counsel with respect to the legal requirements for such sales.

This Prospectus may be supplemented or amended from time to time to reflect
its use for resales by persons who have received shares of Common Stock for whom
the Company has consented to the use of this Prospectus in connection with
resales of such shares. See the inside back cover pages of this Prospectus for
the identity of any such persons.

PRICE RANGE OF COMMON STOCK

The Company's Common Stock is traded on the Nasdaq National Market under the
symbol "PLAT". The following table sets forth, for the quarters indicated, the
range of high and low closing sale prices for the Common Stock on the Nasdaq
National Market. On July 5, 1996, the last reported sale price of the Common
Stock on the Nasdaq National Market was $13.375 per share. At April 1, 1996,
there were approximately 1,195 record holders of the Common Stock.

<TABLE>
<CAPTION>
PRICE RANGE
OF COMMON STOCK
------------------------
HIGH LOW
----------- -----------
<S> <C> <C>
Year Ended December 31, 1994:
First Quarter...................................................... $ 14.7500 $ 10.0000
Second Quarter..................................................... 14.2500 11.5000
Third Quarter...................................................... 21.0000 12.5000
Fourth Quarter..................................................... 23.2500 18.6250
Year Ended December 31, 1995:
First Quarter...................................................... 25.0000 19.0000
Second Quarter..................................................... 20.2500 15.0000
Third Quarter...................................................... 25.2500 18.1250
Fourth Quarter..................................................... 20.6250 14.5000
Year Ended December 31, 1996:
First Quarter...................................................... 18.3750 11.8750
Second Quarter..................................................... 18.1875 12.8750
Third Quarter (through July 5, 1996)............................... 15.8750 13.1250
</TABLE>

DIVIDEND POLICY

The Company has not paid dividends on its Common Stock, and the Board of
Directors intends to continue a policy of retaining earnings to finance its
growth and for general corporate purposes. The Company does not anticipate
paying any such dividends in the foreseeable future.

12
<PAGE>
SELECTED FINANCIAL DATA(1)

The selected financial data set forth below has been derived from the
historical financial statements of the Company. The historical financial
statements for the Company as of December 31, 1994 and 1995 and for the years
ended December 31, 1993, 1994 and 1995 have been audited by KPMG Peat Marwick
LLP, independent certified public accountants, whose report thereon appears
elsewhere herein. The selected financial data set forth below at March 31, 1996
and for the three-month periods ended March 31, 1995 and 1996 has been derived
from the Company's unaudited internal financial statements and reflects all
adjustments which management considers necessary for a fair and consistent
presentation of the results of operations for those periods. These selected
financial data should be read in conjunction with "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and the historical
financial statements and related notes thereto contained elsewhere herein.

<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH
YEAR ENDED DECEMBER 31, 31,
---------------------------------------------------------------- --------------------------
1991 1992 1993 1994 1995 1995 1996
--------- ------------ ----------- ------------ ------------ ------------ ------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
DATA:
Total revenues............ $ 123,177 $ 141,964 $ 175,380 $ 225,439 $ 304,676 $ 63,060 $ 82,471
Operating income (loss)... (6,011) 3,012(2) 3,336(3) (2,223)(4) (128,162)(5) (17,318)(6) (32,327)(7)
Net income (loss)......... (11,231) (2,433)(2) 625(3) (2,644)(4) (111,933)(5) (14,006)(6) (24,504)(7)
Net income (loss) per
share.................... (0.32) (0.06)(2) 0.02(3) (0.07)(4) (2.59)(5) (0.34)(6) (0.45)(7)
Shares used in computing
per share amounts........ 37,671 35,507 37,971 39,890 43,267 40,738 54,915
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31,
----------------------------------------------------- MARCH 31,
1991 1992 1993 1994 1995 1996
--------- --------- --------- --------- --------- -----------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents and investments... $ 54,125 $ 60,054 $ 69,554 $ 124,563 $ 132,775 $ 93,354
Working capital............................. 49,504 40,530 43,607 89,651 126,679 91,440
Total assets................................ 118,825 136,307 169,882 262,760 438,188 417,906
Long term obligations and
acquisition-related payables, less current
portion.................................... 191 181 3,416 9,075 11,342 8,903
Stockholders' equity........................ 75,667 82,963 92,944 158,837 288,452 270,069
</TABLE>

(2) Reflects a pre-tax charge of $7,873,000 relating to Trinzic Corporation
("Trinzic") restructuring costs.

13
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

GENERAL

The Company's products and services increase the performance and
interoperability of computing systems and databases in the OEE by providing
users in large and data intensive organizations with more efficient and
productive access to and use of critical information. As an integral part of the
Company's growth strategy, it has consummated a number of significant business
combinations, including the acquisitions of Software Interfaces, Inc. ("SII"),
Answer Systems, Inc. ("Answer"), Locus, Altai, Inc. ("Altai"), Trinzic
Corporation, Softool Corporation ("Softool"), Prodea, Paradigm, and Axis, each
of which has been accounted for using the pooling-of-interests method. As a
result, the consolidated financial statements are presented as if the Company
and such acquired companies had been consolidated for all periods presented.
Consequently, information regarding the Company in this Management's Discussion
and Analysis of Financial Condition and Results of Operations ("MD&A") gives
retroactive effect to these acquisitions. See note 2 to the Company's
consolidated financial statements for a more detailed discussions of these
acquisitions.

RESULTS OF OPERATIONS

The table below sets forth for the periods indicated (1) the statement of
operations items expressed as a percentage of revenues and (2) the percentage
change in each line item from the prior period.
<TABLE>
<CAPTION>
PERIOD-TO-PERIOD
PERCENTAGE OF TOTAL REVENUES PERCENTAGE
-------------------------------------------------------------- CHANGE
THREE MONTHS ENDED -------------
YEARS ENDED
DECEMBER 31, MARCH 31,
------------------------------------ ------------------------ 1994 COMPARED
1993 1994 1995 1995 1996 TO 1993
----- ----------- ----------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA
Revenues:
Software products...................... 50% 51% 52% 47% 48% 29%
Maintenance............................ 27 26 25 28 27 26
Professional services.................. 23 23 23 25 25 31
--- --- --- --- ---
Total revenues....................... 100 100 100 100 100 29
--- --- --- --- ---
Costs and expenses:
Professional services.................. 18 19 19 23 23 35
Product development and support........ 25 23 31 28 46 19
Sales and marketing.................... 34 34 39 36 45 27
General and administrative............. 13 14 14 11 10 38
Restructuring costs.................... 3 -- -- -- -- *
Merger costs........................... -- -- 10 -- 7 --
Acquired in-process technology......... 5 11 29 29 8 182
--- --- --- --- ---
Total costs and expenses............. 98 101 142 127 139 32
--- --- --- --- ---
Operating income (loss).................. 2 (1) (42) (27) (39) (167)
Other income............................. 1 1 1 2 1 48
--- --- --- --- ---
Income (loss) before income taxes........ 3 0 (41) (25) (38) (85)
Income taxes............................. 3 1 (4) (3) (8) (27)
--- --- --- --- ---
Net income (loss)........................ 0% (1)% (37)% (22)% (30)% *%
--- --- --- --- ---
--- --- --- --- ---

<CAPTION>
THREE MONTHS
ENDED
1995 COMPARED MAR. 31, 1996
TO 1994 COMPARED TO 1995
-------------- -----------------
<S> <C> <C>
STATEMENT OF OPERATIONS DATA
Revenues:
Software products...................... 39% 32%
Maintenance............................ 30 30
Professional services.................. 32 30
Total revenues....................... 35 31
Costs and expenses:
Professional services.................. 41 31
Product development and support........ 82 112
Sales and marketing.................... 55 65
General and administrative............. 27 23
Restructuring costs.................... -- --
Merger costs........................... * *
Acquired in-process technology......... 260 (63)
Total costs and expenses............. 90 43
Operating income (loss).................. * *
Other income............................. 40 (60)
Income (loss) before income taxes........ * *
Income taxes............................. * *
Net income (loss)........................ *% *%
</TABLE>

- ------------------------------
*Not meaningful.

REVENUES

The Company's revenues are currently derived from three sources: (1) license
fees for licensing the Company's proprietary software products, (2) maintenance
fees for maintaining, supporting, and providing current upgrades of the
Company's software products, and (3) revenues from professional services, which
consist of consulting services and educational programs. Total revenues from all
sources for fiscal 1995 were $304,676,000, an increase of $79,237,000 or 35%
from 1994 total revenues

14
<PAGE>
of $225,439,000. Total revenues in 1994 increased $50,059,000 or 29% over 1993
revenues of $175,380,000. Total revenues for the first three months of 1996 were
$82,471,000, an increase of $19,411,000 or 31% over total revenues of
$63,060,000 for the same period in 1995.

Revenue from customers in North America represented 84%, 82%, 76%, and 77%
of the Company's total revenues in 1993, 1994, 1995, and the first three months
of 1996, respectively. Revenue from international customers represented 16%,
18%, 24%, and 23% of the Company's total revenues in 1993, 1994, 1995, and the
first three months of 1996, respectively. International revenue is generated by
the Company's subsidiaries and by international affiliates, which are
independent organizations that contract with the Company to support and promote
the Company's software products and professional services. The Company typically
recognizes as revenue the equivalent of 50% of the license fees and maintenance
fees of the products licensed through the majority of its international
affiliates.

SOFTWARE PRODUCTS. Software products revenue represented 50%, 51%, 52%, and
48% of total revenues in 1993, 1994, 1995, and the first three months of 1996,
respectively. In 1995, software products revenue was $158,597,000, a 39%
increase over 1994. From 1993 to 1994, software products revenue increased 29%
from $88,063,000 to $113,749,000. For the first three months of 1996, software
products revenue increased 32% to $39,355,000 from $29,891,000 for the
comparable prior-year period. The Company believes the growth in software
products revenue over the past two years has resulted from the continued
marketplace acceptance of its products, as well as the Company's aggressive
expansion of its sales and marketing efforts. The Company's database management,
systems management, application lifecycle, business intelligence, and data
warehousing business units represented 47%, 24%, 12%, 11%, and 6%, respectively,
of total software products revenue in 1994, 32%, 34%, 12%, 7%, and 15%,
respectively, of total software products revenue in 1995, and 30%, 34%, 16%,
12%, and 8%, respectively, of total software products revenue for the first
three months of 1996.

MAINTENANCE. Maintenance revenue in 1995 increased 30% over 1994 to
$76,498,000, and 1994 maintenance revenue of $58,837,000 represented an increase
of 26% over 1993 maintenance revenue of $46,856,000. Maintenance revenue for the
first three months of 1996 increased 30% to $22,536,000 from $17,360,000 for the
comparable prior-year period. Maintenance revenue is derived from recurring fees
charged to perpetual license customers and maintenance fees implicit in software
product sales. The increases during 1994, 1995, and the first three months of
1996 are primarily attributable to expansion of the Company's installed customer
base, which supports recurring fees for maintenance and, to a lesser extent,
increased revenues associated with maintenance fees implicit in certain software
product sales. Management believes that maintenance revenue should continue to
increase as the installed base of the Company's software products increases and
matures.

PROFESSIONAL SERVICES. Professional services revenue is associated with the
Company's consulting services business and educational programs. In 1995,
professional services revenue was $69,581,000, a 32% increase over 1994. From
1993 to 1994, professional services revenue increased 31% from $40,461,000 to
$52,853,000. Professional services revenue for the first three months of 1996
increased 30% to $20,580,000 from $15,809,000 for the comparable prior-year
period. The growth in revenue is due primarily to the expansion in professional
services personnel, as well as the addition of established consulting practices
through various acquisitions during 1995 and 1996.

COSTS AND EXPENSES

Total expenses for 1995, excluding merger costs and acquired in-process
technology charges, were $313,526,000, an increase of $110,458,000 or 54%,
compared to $203,068,000 for 1994. Total expenses for 1994, excluding acquired
in-process technology charges, increased 24%, compared to 1993 total expenses of
$163,309,000. Total expenses for the first three months of 1996, excluding
merger costs and acquired in-process technology charges, were $102,079,000, an
increase of $40,500,000 or 66%, compared to $61,579,000 for the prior-year
period. During 1995 and the first three months of 1996, the Company incurred
significant costs in supporting its development laboratories and in building the
infrastructure to support the significantly larger combined Company that is the
result of recent

15
<PAGE>
acquisitions. These costs were primarily associated with the hiring of product
developers, technical writers, and in-house and field technical support
personnel; expanding the inside and outside sales forces; informing customers of
the Company's technical strategy; training all personnel in open systems issues
and new products; accelerated hiring of key management personnel; and augmenting
internal support systems. Management believes that these investments were
required in order to fully exploit the market opportunity for the newly acquired
products and to adequately manage the significantly larger enterprise.

PROFESSIONAL SERVICES. Costs of professional services increased to
$60,341,000 in 1995, from $42,858,000 in 1994 and $31,855,000 in 1993. For the
first three months of 1996, costs of professional services increased to
$18,750,000 from $14,367,000 for the prior-year period. Costs of professional
services as a percentage of professional services revenue were 79%, 81%, 87%,
and 91% in 1993, 1994, 1995, and the first three months of 1996, respectively.
The increase in these expenses in 1994, 1995, and the first three months of 1996
is related to salaries and other direct employment expenses as a result of the
Company's rapid hiring to support this business. The increase in these expenses
as a percentage of professional services revenue in 1995 and the first three
months of 1996 is primarily attributable to investments in the North American
education services business. These increased costs were associated with the
opening of numerous training facilities across the country, as well as the
hiring of sales personnel and instructors and investment in the development of a
computer-based training curriculum.

PRODUCT DEVELOPMENT AND SUPPORT. Product development and support expenses
increased to $94,027,000 in 1995, from $51,781,000 in 1994, and $43,467,000 in
1993. For the first three months of 1996, product development and support
expenses increased to $37,690,000 from $17,740,000 for the prior-year period.
The increases in these expenses in 1994, 1995, and the first three months of
1996 are primarily attributable to the hiring of additional product developers,
in-house as well as field technical support personnel, and technical writers;
increased allocated charges for office space and overhead; and increased
hardware and software costs relating to the product development effort. Also
contributing to the increase in 1995 and the first three months of 1996 were
higher bonus and royalty expenses associated with increased software products
revenue. The costs of producing software documentation for an expanding product
line and growing customer base also contributed to the increases in 1994, 1995,
and the first three months of 1996.

The Company is investing heavily in the development of systems software
products for enterprise-wide information systems that integrate mainframes,
minicomputers, workstations, PCs, and client/server networks. As a result, the
Company expects that significant hiring of development and support personnel
will continue. The Company believes that these actions are required in order to
strengthen its competitive position in the open enterprise marketplace, enhance
existing products, and satisfactorily support the Company's growing customer
base.

In 1993, 1994, 1995, and the first three months of 1996, the Company
capitalized $4,790,000, $5,987,000, $13,591,000, and $5,513,000, respectively,
of internal software development costs, net of related amortization expense, in
accordance with Statement of Financial Accounting Standards (SFAS) No. 86.
Product development and support costs plus capitalized internal software
development costs, net of related amortization expense, was $48,257,000 in 1993,
$57,768,000 in 1994, $107,618,000 in 1995, and $43,203,000 in the first three
months of 1996, which amounted to 36%, 33%, 46%, and 70%, respectively, of
software product and maintenance revenue during those periods.

SALES AND MARKETING. Sales and marketing expenses increased to $117,906,000
in 1995, from $75,885,000 in 1994 and $59,802,000 in 1993. For the first three
months of 1996, sales and marketing expenses increased to $37,167,000 from
$22,557,000 for the prior-year period. Sales and marketing expenses as a
percentage of total revenues were 34%, 34%, 39%, and 45% in 1993, 1994, 1995,
and the first three months of 1996, respectively. The increase in these expenses
as a percentage of total revenues in 1995, as compared to 1994 and 1993, is
primarily attributable to costs associated with the significant expansion of the
outside sales force and telemarketing organizations in the U.S. and in

16
<PAGE>
international subsidiaries. Also contributing to the increase were higher
commission expenses associated with a 39% increase in software products revenue,
increased by the expanded outside sales force, higher costs for sponsorship of
seminars and user groups, and increased allocated charges for office space and
overhead. The Company believes the large investment in sales and marketing made
during 1995 and the first three months of 1996 was necessary in order to build
the sales organization required to distribute the Company's products and exploit
significant new market opportunities.

GENERAL AND ADMINISTRATIVE. General and administrative expenses increased
to $41,252,000 in 1995, from $32,544,000 in 1994, and $23,526,000 in 1993. For
the first three months of 1996, general and administrative expenses increased to
$8,472,000 from $6,915,000 for the prior-year period. General and administrative
expenses as a percentage of total revenues were 13%, 14%, 14%, and 10% in 1993,
1994, 1995, and the first three months of 1996, respectively. The increase in
these expenses during 1995 and the first three months of 1996 is primarily
related to salaries and other direct employment expenses attributable to an
expanded administrative staff in the U.S., as well as the addition of
administrative staff in the Company's newly established international
subsidiaries, amortization of cost in excess of net assets acquired related to
the Company's acquisitions accounted for as purchases, and increased
professional fees. The increase in 1994 is primarily due to additional expenses
associated with increased staffing in administrative functions and increased
professional fees.

RESTRUCTURING COSTS. In 1993, total restructuring costs of $4,659,000 were
incurred by Trinzic and Locus. In connection with its stabilization of its KBMS
software product, Trinzic recorded restructuring costs of $2,844,000, consisting
of $1,509,000 for the write-off of capitalized software development costs and
$1,335,000 for the discontinuation of the data center used for development
activities and for employee severance payments. In connection with a reduction
of its presence in Europe and its work force in the U.S., Locus recorded a
$1,815,000 charge to income for repositioning operations. The charge was
primarily composed of amounts needed for reductions in work force and a loss on
subleasing the unused portion of its corporate facility.

ACQUIRED IN-PROCESS TECHNOLOGY. Acquired in-process technology charges were
$88,493,000, $24,594,000, and $8,735,000, in 1995, 1994, and 1993, respectively.
For the first three months of 1996, acquired in-process technology charges were
$7,005,000 as compared to $18,799,000 for the prior-year period. These charges
relate to numerous acquisitions of software companies and product technologies
made in support of the Company's goal to become the leading provider of open
enterprise software products and services. The acquisitions were accounted for
under the purchase method and portions of the purchase prices were allocated to
acquired in-process technology. See note 2 to the Company's consolidated
financial statements for a more detailed discussion of these acquisitions.

Prior to completing these acquisitions, in order to determine the fair
market value of the organizations and technologies to be acquired, the Company
conducted reviews which included an evaluation of existing products, research
and development in process (projects that had reached technological feasibility
and had no alternative future use), customers, financial and other matters.
These acquisitions were made primarily for the research and development in
process and were not completed for the existing earnings, cash flow, or net
assets. The acquired in-process research and development represent unique and
emerging technologies, the application of which is limited to the Company's open
enterprise systems software strategy. Accordingly, these acquired technologies
have no alternative future use. The Company believes it has budgeted adequate
research and development resources to complete the contemplated projects over
time periods ranging from six months to two years from the dates of acquisition.
It is anticipated that existing sources of liquidity and cash generated from
operations will be sufficient to fund these projects for the foreseeable future.
The Company expects to continue to incur charges for acquired in-process
technology in connection with future acquisitions, which will reduce operating
and net income for the periods in which the acquisitions are consummated.

17
<PAGE>
MERGER COSTS. Merger costs were $30,819,000 in 1995 and $5,714,000 for the
first three months of 1996. Merger costs relate to acquisitions accounted for as
poolings of interests and include investment banking and other professional
fees, write downs of certain assets, employee severance payments, costs of
closing excess office facilities, and various other expenses. The Company
expects to incur similar costs and expenses in connection with future
acquisitions accounted for as poolings of interests. These costs will be
expensed in the periods in which the transactions are consummated.

OTHER INCOME

Other income was $4,281,000 in 1995, as compared to $3,052,000 in 1994, and
$2,057,000 in 1993. For the first three months of 1996, other income was
$544,000 as compared to $1,346,000 for the prior-year period. The increase in
1995 over 1994 and 1994 over 1993 is primarily attributable to interest earned
on higher cash and investment balances maintained during the respective year as
compared to the prior year. The decrease for the first three months of 1996 as
compared to the prior-year period is primarily due to the net expenses
recognized from the sale of certain receivables.

INCOME TAXES

The Company recognized an income tax benefit of $11,948,000 in 1995, and
income tax expense of $3,473,000 in 1994 and $4,768,000 in 1993. For the
three-month period ended March 31, 1996, the Company recognized an income tax
benefit of $7,279,000 as compared to $1,966,000 for the prior-year period.

The exercise of certain stock options results in income tax benefits to the
Company. The benefit is equal to the difference between the market price at the
date of exercise and the option price at the applicable tax rate. The benefit
does not flow through the statement of operations, but is credited directly to
paid-in capital. As a result of stock option exercises during 1993, 1994, 1995,
and the first three months of 1996, $3,705,000, $108,000, $0, and, $0,
respectively, were credited to paid-in capital. The Company has available
approximately $131,800,000 of net operating loss carryforwards and $7,500,000 of
tax credit carryforwards for Federal income tax purposes expiring through the
year 2010. Some of the Company's tax carryforwards are subject to limitations as
to the amounts which may be used in future years.

In order to take advantage of lower U.S. income tax rates on income derived
from export transactions, the Company utilizes PLATINUM TECHNOLOGY
International, Inc. as a Foreign Sales Corporation. The Foreign Sales
Corporation reduced the Company's effective tax rate by 10.8%, 10.3%, and 0.2%
in 1993, 1994, and 1995, respectively. The lower deduction in 1995 resulted
primarily from the net loss in 1995, and the impact of terminating distribution
agreements with PLATINUM affiliates and establishing foreign subsidiaries in
their place.

INFLATION

To date, inflation has not had a material impact on the Company's revenues
or income.

LIQUIDITY AND CAPITAL RESOURCES

As of March 31, 1996, the Company held approximately $93,354,000 of cash,
cash equivalents, and investments, as compared to $132,775,000 as of December
31, 1995, $124,563,000 as of December 31, 1994, and $69,554,000 as of December
31, 1993. In October 1995, in connection with a public offering of 10,840,155
shares of common stock, the Company received aggregate proceeds, net of issuance
costs, of approximately $189,320,000. These proceeds have been offset primarily
by approximately $103,085,000 in payments relating to acquisitions,
approximately $38,207,000 in capital expenditures, and approximately $26,037,000
used in operations.

The Company had trade and installment accounts receivable, net of
allowances, of $126,999,000, $126,539,000, $74,017,000, and $55,299,000 at March
31, 1996 and December 31, 1995, 1994, and 1993, respectively. The Company sells
software products and services to customers in diversified industries and
geographic regions and, therefore, has no significant concentration of credit
risk. Historically, a substantial amount of the Company's revenues have been
recorded in the third month

18
<PAGE>
of any given quarter, with a concentration of such revenues in the last week of
the third month. This trend results in a high balance of accounts receivable
relative to reported revenues at the end of any quarterly reporting period.

The Company had long-term acquisition-related payables of $8,026,000,
$9,756,000, and $8,450,000 and other long-term obligations of $877,000,
$1,586,000, and $625,000 as of March 31, 1996 and December 31, 1995 and 1994,
respectively. The Company currently has total secured and unsecured bank lines
of credit of $25,000,000 under which borrowings bear interest at rates ranging
from the bank's prime rate to LIBOR plus 1%. The Company had approximately
$1,000,000 and $540,000 of short-term borrowings under these lines of credit at
March 31, 1996 and December 31, 1995, respectively. These borrowings will be
used for general corporate purposes, including short-term working capital
requirements and acquisition-related payments. The Company is in the process of
increasing its lines of credit.

The Company's sources of liquidity have been cash generated from operations
and funds from capital markets, including bank facilities. The Company believes
the funding available to it from these sources will be sufficient to satisfy its
working capital requirements for the foreseeable future. The Company's capital
requirements are dependent on management's business plans regarding the levels
and timing of investments in existing and newly-acquired businesses and
technologies. These plans and the related capital requirements may change, based
upon various factors, such as the Company's strategic opportunities,
developments in the Company's markets, the timing of closing and integrating
acquisitions, and the conditions of financial markets.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

Statement of Financial Accounting Standards (SFAS) No. 121, "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed
Of," was issued in 1995 and implementation of SFAS No. 121 is required in the
fiscal year commencing January 1, 1996. SFAS No. 121 established accounting
standards for the impairment of long-lived assets, certain identifiable
intangibles, and goodwill relating to those assets to be held and used and for
long-lived assets and certain identifiable intangibles to be disposed of. SFAS
No. 121 is not expected to have a significant impact on the Company's
consolidated financial statements.

SFAS No. 123, "Accounting for Stock-Based Compensation," was issued in 1995
and implementation of SFAS No. 123 is required in the fiscal year commencing
January 1, 1996. SFAS No. 123 established financial accounting and reporting
standards for stock-based compensation plans. SFAS No. 123 is not expected to
have a significant impact on the Company's consolidated financial statements.

19
<PAGE>
QUARTERLY COMPARISONS

The following tables set forth an unaudited summary of certain quarterly
financial data. This quarterly information has been prepared on the same basis
as the annual consolidated financial statements and, in management's opinion,
reflects all adjustments necessary for a fair presentation of the information
for the periods presented. The operating results for any quarter are not
necessarily indicative of results for any future period.

The Company has experienced a seasonal pattern in its operating results with
the fourth quarter typically having the highest total revenues and operating
income. For example, 32% and 33% in 1994 and 1995, respectively, of the
Company's total revenues were generated in the fourth quarter. Further, revenues
for the fourth quarter of 1994 were higher than for the first quarter of 1995
and revenue for the fourth quarter of 1995 were higher than revenues for the
first quarter of 1996. Since operating expenses continued to increase in the
first quarter, the Company realized substantially lower operating margins and
net income for this period. The Company expects this pattern to continue for the
foreseeable future. The Company believes the seasonality of its revenue results
primarily from the budgeting cycles of its software product customers and the
structure of the Company's sales commission and bonus programs. In addition, the
Company's software products revenue may vary significantly from quarter to
quarter depending upon other factors such as the timing of new product
announcements and releases by the Company and its competitors. The Company
operates with relatively little backlog and substantially all of its software
product revenue in each quarter results from sales made in that quarter.
<TABLE>
<CAPTION>
QUARTER ENDED
----------------------------------------------------------------------------------------------
MAR. 31, JUNE 30, SEPT. 30, DEC. 31, MAR. 31, JUNE 30, SEPT. 30,
1994 1994 1994 1994 1995 1995 1995
----------- ----------- ------------ ------------ ------------ ------------ ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
Total revenues, as previously
reported....................... $ 39,686 $ 48,266 $ 50,885 $ 63,660 $ 55,481 $ 64,573 $ 64,641
Adjustments(1).................. 5,466 5,698 5,754 6,024 7,579 7,223 7,146
Total revenues.................. 45,152 53,964 56,639 69,684 63,060 71,796 71,787
Operating income (loss), as
previously reported............ 1,544 5,334 (8,096)(2) 2,596(3) (17,688)(4) (4,002)(5) (38,401)(6)
Adjustments(1).................. 166 (1,069) (1,211) (1,487) 370 398 267
Operating income (loss)......... 1,710 4,265 (9,307)(2) 1,109(3) (17,318)(4) (3,604)(5) (38,134)(6)
Net income (loss), as previously
reported....................... 1,290 3,966 (7,445)(2) 2,804(3) (14,438)(4) (2,559)(5) (28,900)(6)
Adjustments(1).................. 165 (1,033) (1,165) (1,226) 432 248 156
Net income (loss)............... 1,455 2,933 (8,610)(2) 1,578(3) (14,006)(4) (2,311)(5) (28,744)(6)
Net income (loss) per share, as
previously reported............ .04 .11 (.22)(2) .07(3) (.38)(4) (.07)(5) (.76)(6)
Net income (loss) per share..... .04 .07 (.23)(2) .04(3) (.34)(4) (.06)(5) (.70)(6)
Shares used in computing net
income (loss) per share, as
previously reported............ 35,827 35,995 33,521 38,175 37,520 37,902 38,117
Shares used in computing net
income (loss) per share........ 39,045 39,213 36,739 41,385 40,738 41,120 41,335
Common Stock Prices(9)
High.......................... $ 14.750 $ 14.250 $ 21.000 $ 23.250 $ 25.000 $ 20.250 $ 25.250
Low........................... 10.000 11.500 12.500 18.625 19.000 15.000 18.125

DEC. 31, MAR. 31,
1995 1996
------------ ------------

<S> <C> <C>
Total revenues, as previously
reported....................... $ 91,226
Adjustments(1).................. 6,807
Total revenues.................. 98,033 $ 82,471
Operating income (loss), as
previously reported............ (68,865)(7)
Adjustments(1).................. (241)
Operating income (loss)......... (69,106)(7) (32,327)(8)
Net income (loss), as previously
reported....................... (66,577)(7)
Adjustments(1).................. (295)
Net income (loss)............... (66,872)(7) (24,504)(8)
Net income (loss) per share, as
previously reported............ (1.40)(8)
Net income (loss) per share..... (1.31)(8) (.45)(8)
Shares used in computing net
income (loss) per share, as
previously reported............ 47,697
Shares used in computing net
income (loss) per share........ 50,907 54,915
Common Stock Prices(9)
High.......................... $ 20.625 $ 18.375
Low........................... 14.500 11.875
</TABLE>

- ------------------------------
(1) Adjustments reflect the effect of acquisitions accounted for as poolings of
interests on the amounts previously reported in the Company's annual report
on Form 10-K. See note 2 to the consolidated financial statements for a more
detailed discussion of these transactions.

(2) Reflects a pre-tax charge for acquired in-process technology of $14,564,000
relating to the Company's acquisition of all of the outstanding capital
stock of Dimeric Development Corporation, and the net assets of Aston Brooke
Software, Inc.

(3) Reflects a pre-tax charge for acquired in-process technology of $10,030,000
relating to the Company's acquisition of the net assets of AutoSystems
Corporation.

(4) Reflects a pre-tax charge for acquired in-process technology of $18,799,000
relating primarily to the Company's acquisitions of the all capital stock of
SQL Software Corporation, Viatech Development, Inc., BrownStone Solutions,
Inc., and Reltech Group, Inc.

(5) Reflects a pre-tax charge for acquired in-process technology of $1,354,000
relating to the purchase of certain product technologies. Also reflects a
pre-tax charge of $2,152,000 relating to merger costs for acquisitions
accounted for as poolings of interests.

(6) Reflects a pre-tax charge for acquired in-process technology of $5,300,000
relating to the acquisition of Advanced Software Concepts, Inc. Also
reflects a pre-tax charge of $22,612,000 relating to merger costs for
acquisitions accounted for as poolings of interests.

(7) Reflects a pre-tax charge for acquired in-process technology of $63,040,000
relating primarily to the acquisition of ProtoSoft, Inc., BMS Computer,
Inc., AIB Software Corporation, and Protellicess Software, Inc. Also
reflects a pre-tax charge of $6,055,000 relating to merger costs for
acquisitions accounted for as poolings of interests.

(8) Reflects a pre-tax charge for acquired in-process technology of $7,005,000
relating to the Company's acquisition of all of the outstanding capital
stock of Advanced Systems Technologies, Inc. and the purchase of certain
product technologies. Also reflects a pre-tax charge of $5,714,000 relating
to merger costs for acquisitions accounted for as poolings of interests.

(9) Closing sales prices reported on the Nasdaq National Market.

20
<PAGE>
BUSINESS

OVERVIEW

PLATINUM TECHNOLOGY, INC. develops, markets and supports systems software
products, and offers related consulting services and educational programs, for
administering the prevailing complex, heterogeneous computing environment known
as the open enterprise environment. These products and services increase the
performance and interoperability of computing systems and databases in the OEE
by providing users in large and data intensive organizations with more efficient
and productive access to and use of critical information. The Company offers
systems software products in five primary categories: systems management, data
warehousing, business intelligence, application lifecycle and database
management. The Company markets its products and services principally through a
worldwide direct distribution network, as well as strategic indirect channels
and PLATINUM affiliates, which are independent organizations that contract with
the Company to promote and support its software products and services.

The Company's goal is to become a leading provider of software products for
the growing open enterprise systems market by offering a comprehensive set of
"best of breed" point products, an open systems architecture to fully integrate
these products referred to as the PLATINUM Open Enterprise Management System,
and complementary consulting and educational services. To achieve this goal, the
Company identified key open systems technologies and skill sets, and through a
combination of leveraging its core competencies and an aggressive acquisition
program, has assembled the capabilities to create complete open enterprise
systems solutions.

Since mid-1994, the Company has acquired numerous businesses which supply
open enterprise systems and data warehouse products and related services and has
completed several product acquisitions. During 1995, the Company acquired 14
businesses whose products and services complement the Company's existing
products and enhance the ability of POEMS to integrate proprietary and non-
proprietary software products. In the first three months of 1996, the Company
acquired Prodea Software Corporation, a leading provider of data warehousing and
business intelligence tools and Advanced Systems Technologies, Inc., a developer
of performance management tools, and the Company has also completed the
acquisitions of Paradigm Systems Corporation and Axis Systems International,
Inc., two providers of professional services for the OEE. The Company believes
that acquisitions are, and will continue to be, an essential part of the
Company's strategy to compete effectively in its rapidly evolving marketplace.

MARKET OVERVIEW

Large organizations historically used proprietary mainframe computers to
implement enterprise-wide software applications managing mission-critical
business, accounting and financial functions. Within these highly centralized
and homogeneous environments, relational database management systems ("RDBMSs"),
including DB2, emerged as an effective and powerful method of storing and
accessing information.

In recent years, the increasing performance and declining cost of PCs and
workstations, together with improvements in network connectivity, relational
database software and application lifecycle tools, and the proliferation of
off-the-shelf applications, have contributed to a shift by organizations from
centralized, host-based computing systems to more distributed, heterogeneous
environments that support the integration of a wide variety of "client" and
"server" applications sharing data and

21
<PAGE>
networked resources over local area networks ("LANs"). Although client/server
computing has been employed for several years, only recently have organizations
begun to implement enterprise-wide (as opposed to departmental),
mission-critical applications in distributed, open environments.

These environments typically differ from host-based models in three
principal respects. First, they are often widely distributed, encompassing
multiple end-users, processors and systems with varying application software and
databases spread across numerous locations. Second, they are frequently
heterogeneous, consisting of various computing platforms (including mainframes,
minicomputers, workstations and PC/LANs), RDBMSs, operating systems (including
MVS, UNIX and Windows) and applications. Finally, these open environments are
dynamic; users as well as hardware and software resources are frequently added,
removed or changed and new applications are continually being developed and
deployed.

While these open computing environments can provide price-performance
advantages and the potential for greater functionality than host-based systems,
organizations have found that traditional mainframe systems administration tools
and utilities are unable to address the complex requirements of these
environments. As a result, a market need has arisen for comprehensive, easy to
use, high-performance and cost-effective systems and data administration
solutions that offer the functionality traditionally associated with mainframe
solutions, but are designed for open enterprise environments.

The Company believes that the complexities of the new computing environment
are leading customers to seek and favor vendors that can offer, design and
implement integrated systems solutions.

PRODUCTS

The Company believes its products enable customers to more efficiently
operate and manage their information systems. The Company's products support the
three major software operating environments: MVS, UNIX and Windows, as well as
other software environments such as VMS (Digital Equipment Corporation's
operating system for VAX and Alpha Systems), OS/2 and OS/400 (the latter two
from IBM). Databases currently supported by the Company's products include the
DB2 family, Oracle, Sybase, Informix and Microsoft SQL Server. Software products
revenue constituted 50%, 51%, 52%, and 48% of total revenues of the Company for
each of 1993, 1994, 1995, and the three-month period ended March 31, 1996,
respectively.

The Company now offers system software products in five primary categories.
Certain products are included in more than one of these categories.

22
<PAGE>
SYSTEMS MANAGEMENT PRODUCTS. -- These products monitor and improve the
performance of enterprise-wide computing systems and perform system
administration tasks, such as job management and software distribution.

<TABLE>
<CAPTION>
JOB AND
PERFORMANCE PROCESS AUTOMATED DISTRIBUTION
REPOSITORY MANAGEMENT MANAGEMENT OPERATIONS MANAGEMENT
- -------------------- ---------------- ----------------- ------------------ ---------------
<S> <C> <C> <C> <C>
Repository Open DBVision AutoSys AutoAction (1) AutoXfer (1)
Enterprise Edition ServerVision AutoXpert (1) Zeph (1)
(1) SQL-Spy Z/Team (1)
Detector Zebb (1)
Zeke (1)
</TABLE>

<TABLE>
<CAPTION>
PC-UNIX FINANCE AND
SECURITY STORAGE PROBLEM INTEGRATION AND RESOURCE
MANAGEMENT MANAGEMENT RESOLUTION NETWORKING MANAGEMENT
- ------------------ ------------------------ -------------------- --------------------- ------------
<S> <C> <C> <C> <C>
AutoSecure (1) NetArchive-DNB (1) Apriori GT (1) Merge (1) CIMS (1)
NetArchive-HSM (1) Apriori LS (1) PC-Enterprise (1)
NetArchive-SVM (1) Apriori PLUS (1) PC-Interface (1)
AutoMedia (2)
Zela (1)
</TABLE>

- ------------------------
(1) Products acquired or first released by the Company in 1995 or early 1996.

(2) These products have not yet been released for sale to the Company's
customers. They are expected to be commercially released in 1996, but there
can be no assurance as to when they will be released.

DATA WAREHOUSE PRODUCTS. -- These products enable customers to create, use
and maintain data warehouses. A data warehouse is a data store that gives
end-users full access to periodically consolidated, historical data for making
business decisions and analyzing trends without jeopardizing the performance of
mission-critical operations.

<TABLE>
<CAPTION>
DATA EXTRACTION AND REFINEMENT DATA DISTRIBUTION REPOSITORY/DATA ANALYSIS
- --------------------------------------- ----------------- ----------------------------------------------
<S> <C> <C>
Fast Unload Fast Load Data Shopper (1)
InfoHub (1) InfoTransport Repository MVS Edition (1)
InfoRefiner (formerly Pipeline) InfoPump (1) Repository Open Enterprise Edition (1)
InfoSession (formerly Integrator)
</TABLE>

- ------------------------
(1) Products acquired or first released by the Company in 1995 or early 1996.

BUSINESS INTELLIGENCE PRODUCTS. -- These products enable end-users to
efficiently access and analyze data from a variety of sources, including data
warehouses and databases.

<TABLE>
<S> <C> <C>
Products for Managing QMF: Forest & Trees (1) PRF Tool Set:
Compile/QQF InfoBroker (2) Compile/PRF
Governor Facility InfoReports (1) Governor Facility for PRF
Governor Facility for QMF InfoReports Server Object Tracker for PRF
(1)
Object Administrator InfoQuery (1)
Object Tracker for QMF InfoBeacon (1)
Query Analyzer InfoSynergy (1)
</TABLE>

- ------------------------
(1) Products acquired or first released by the Company in 1995 or early 1996.

23
<PAGE>
APPLICATION LIFECYCLE PRODUCTS. -- These products are used to develop
applications to automate business processes to enable users to make consistent,
appropriate and effective judgments that support an organization's business
policies.

<TABLE>
<S> <C> <C>
AionDS (1) RuleServer (1) CCC/LCM (1)
Data Navigator SQL-Coder (1) CCC/Quik Trak (1)
Final Exam Test Advisor (1) SQL-Commander Enterprise Methods (1)
Final Exam Visual Advisor (1) SQL-Ease Enterprise MAP (1)
Final Exam Memory Advisor (1) SQL-Ease Workstation Enterprise Estimator (1)
ObjectPro (1) SQL - Modeler (1) Enterprise PM (1)
Plan Analyzer Plan Analyzer for Oracle Enterprise Forms Builder
(1) (1)
RC/UPDATE Paradigm Plus (1) Enterprise Status-Time (1)
RI Editor CCC/Harvest (1)
CCC/Manager (1)
</TABLE>

- ------------------------
(1) Products acquired or first released by the Company in 1995 or early 1996.

DATABASE MANAGEMENT PRODUCTS. -- These product offerings help customers more
efficiently use and maintain their RDBMSs, build and maintain database
applications, and analyze and generate reports from data. The Company offers
products for RDBMSs that reside on mainframes, midrange computers and PCs/LANs.
A number of these database management tools may also be used in the data
warehouse environment.

<TABLE>
<CAPTION>
DATABASE PERFORMANCE APPLICATION
ADMINISTRATION ANALYZERS UTILITIES DEVELOPMENT
- ----------------------------- ------------------------------- ---------------------------- --------------------
<S> <C> <C> <C>
Compare Facility Bind Analyzer Data Compressor Data Navigator
Database Mover (1) Database Analyzer Fast Check RC/UPDATE
DBRunner DBVision Fast Index RI Editor
Desktop DBA Dependency Analyzer Fast Load SQL-Coder (1)
EasyDBA Detector Fast Recover SQL-Commander
Enterprise DBA (1) Log Analyzer Fast Unload SQL-Ease
Guide for DB2 Log Analyzer for Merge/Modify SQL-Ease
Package/It SYBASE and Quick Copy Workstation
RC/MIGRATOR Microsoft SQL Server Quick Repartitioner (1) SQL-Modeler (1)
RC/QUERY Performance Estimator Rapid Reorg
RC/SECURE Plan Analyzer SQL-Archive (1)
RI Manager Recovery Analyzer SQL-Port
Viewer for DB2 Objects Server Vision (1) Tsreorg
Viewer for DB2 Plans SQL-Spy
and Packages Thread Terminator (1)
Viewer for DB2 Security
Viewer for I/O Configuration
</TABLE>

- ------------------------
(1) These products have not yet been released for sale to the Company's
customers. They are expected to be commercially released in 1996, but there
can be no assurance as to when they will be released.

PRODUCT LICENSES

The Company provides its software products to customers under non-exclusive,
non-transferable license agreements (including standard shrink-wrap licenses for
certain products). As is customary in the software industry, in order to protect
its intellectual property rights, the Company does not sell or transfer title to
its software products to customers. Under the Company's current standard form

24
<PAGE>
license agreement, licensed software may be used solely for the customers'
internal operations and only on designated hardware at specified sites, which
may be comprised of a stand-alone computer, a single network server with
multiple terminals or multiple network servers with multiple terminals.

Licenses for the Company's software are almost exclusively perpetual,
although annual and monthly licenses are also offered. License fees are
generally due upon execution by the customer of the applicable product
agreement. List prices are based upon the size of the processor, number of
servers and/or number of users, depending upon the type of license and product
being licensed. The Company's published list price includes discounts for
portfolio, enterprise and multi-site licenses. Licenses generally include more
than one product. Under the Company's current standard form license agreement,
maintenance is renewed on an annual basis by the customer paying the current
maintenance fee. See "Technical Support and Maintenance."

PRODUCT DEVELOPMENT

The Company is pursuing its strategy by continuing its emphasis on
developing new software products and enhancements in-house, acquiring products,
technologies and businesses complementary to the Company's existing product line
and forming alliances with leading technology companies. The Company has formed
separate in-house development teams to efficiently integrate acquired products
and technology into existing product lines. During 1993, 1994, 1995, and the
three-month period ended March 31, 1996, product development and support
expenses of the Company were $43,467,000, $51,781,000, $94,027,000 and
$37,690,000, respectively. As of March 31, 1996, the Company employed
approximately 1,350 persons in product development and support.

INTERNAL DEVELOPMENT. The Company will continue to rely to a large extent
on the internal development of products to expand its product line. The Company
believes its RDBMSs expertise and experience give it a competitive advantage in
developing products that address increasingly complex environments and that meet
evolving customer needs. In order to fully exploit acquired software development
personnel, and to access new sources of talent, the Company has established
approximately 20 independent development laboratories, generally at the
locations of newly-acquired companies. These development laboratories are
interconnected via video conferencing, e-mail, Lotus Notes and other
communication technologies and use various hardware, operating systems and
database systems which give the Company the ability to simulate the open
enterprise environments of its customers. Laboratories have responsibility for
their product lines and receive guidance from POEMS teams to foster
interoperability.

ACQUISITIONS. The Company continually reviews acquisition candidates with
leading-edge products and technologies that could enhance the Company's product
portfolio. The Company has particularly emphasized this approach to accelerate
the Company's expansion beyond the relational database management market. The
technologies associated with the products of the acquired businesses are being
incorporated into the Company's existing internally developed products and are
being used in developing new open enterprise systems products. In addition to
providing the Company with new products and technologies, these acquisitions
have provided the Company with experienced teams of open system product
developers who now staff the Company's independent development laboratories.

TECHNOLOGY RELATIONSHIPS. To reinforce its commitment to providing
solutions for the open enterprise environment, the Company has implemented its
PLATINUM Partner Program whereby the Company has established strategic and
technology relationships with several hardware, software, and database vendors.
The Company believes that in order to provide solutions for heterogeneous
computing environments, it will need to continue to establish and maintain key
relationships with leading technology companies, such as IBM, Hewlett-Packard,
Oracle, Sybase, Informix and Tivoli. These technical and marketing alliances
provide the Company early access to product information and pre-release
software.

25
<PAGE>
PROFESSIONAL SERVICES

As part of its strategy to provide complete solutions for the OEE, the
Company offers a range of professional services, including consulting services
and educational programs.

CONSULTING SERVICES. The Company is focusing significant effort on
developing and expanding its consulting services group. Primarily developed
through the acquisitions of Locus Computing Corporation, Reltech Group, Inc.,
Krystal Software S.A., Paradigm Systems Corporation and Axis Systems
International, Inc., this group provides consulting services to end-user
customers of computer systems, including those that desire to migrate from
information systems that use proprietary environments to open system
environments. Other services provided include (i) technology selection and
strategy, (ii) systems design and configuration, (iii) systems implementation,
(iv) data warehouse implementation, (v) systems troubleshooting and (vi) rapid
prototyping of open systems to ascertain feasibility. Customers for these
services include original equipment manufacturers, independent software vendors,
system integrators and end-users.

EDUCATIONAL PROGRAMS. The Company believes that its education services play
an important role in increasing market awareness of its software products among
application developers, database administrators and end-users. The Company
currently offers numerous instructor-led education courses, which run from one
to five days. These courses cover several key technology areas of the open
enterprise environment. Computer-based training courses are also provided, which
are self-led programs that users may complete in their own offices or homes. The
Company believes that this capability has further strengthened the Company's
position in the education market.

ACQUISITIONS. The Company continually reviews acquisition candidates that
are leading-edge service providers that could enhance the Company's service
offerings. The acquired service providers are being incorporated into the
Company's existing services organization and are being used to provide services
to the Company's existing customer base and to develop new business
opportunities based upon their experience.

SALES AND MARKETING

The Company employs a multi-faceted sales strategy. For software products,
the Company utilizes telemarketers, an inside sales force, an outside sales
force, PLATINUM affiliates, product seminars, user group participation, direct
mail, and print advertising. The Company's acquisition of Trinzic Corporation
has provided the Company with additional indirect sales channels, such as
distributors, VARs and OEM relationships, which the Company intends to utilize
for selected products.

NORTH AMERICAN SOFTWARE SALES. The Company's North American direct sales
force is currently organized in territories covering the United States and
Canada. To support the rapid expansion of the Company's product line, during
1995 the Company accelerated its sales force hiring and training process. The
Company now has approximately 200 individuals in its North American outside
sales force.

Generally, for North American software product licenses, the Company's
telemarketing specialists call prospective customers to identify and qualify
leads. Once a lead has been qualified, the prospective client is turned over to
an inside sales person to arrange a short-term, free trial of the Company's
products. Once a trial has been arranged, a direct sales person and a technical
field support person call on the prospective customer to assist it with trials,
demonstrate product features and close sales. The evaluation process allows a
user to test the products' overall effectiveness, performance and competitive
capabilities before entering into a license agreement. The Company also licenses
certain software products through the use of a telemarketing sales force and
shipment of such products under shrink-wrap license. During 1995, the Company
invested heavily in sales force automation tools to hone tracking, forecasting
and reporting across the various sales teams.

INTERNATIONAL SOFTWARE SALES. The Company generally markets its products
overseas through a network of wholly-owned subsidiaries. Generally, these
subsidiaries use an approach similar to that used by the Company in North
America. As of March 29, 1996, the Company had subsidiaries in

26
<PAGE>
Australia, Austria, Belgium, Brazil, Denmark, Finland, France, Germany, Hong
Kong, Indonesia, Italy, Japan, Korea, Malaysia, the Netherlands, Norway,
Singapore, South Africa, Spain, Sweden, Switzerland, Taiwan, Thailand and the
United Kingdom. The Company expects that it will establish other foreign
subsidiaries in the future to meet its strategic objectives. In a few countries,
primarily in South America, the Company markets its products through independent
PLATINUM affiliates.

PROFESSIONAL SERVICES. The Company's consulting services and educational
programs are marketed by separate direct sales forces.

USER GROUP LEADERSHIP. The Company believes that its sales and marketing
efforts have also been greatly enhanced by participation in domestic and
international user groups. The Company plays a major role in the activities of
International DB2 Users Group, the International Oracle Users Group, the
International Sybase Users Group, and other smaller user groups, and expects to
continue to do so in the future.

CUSTOMERS. The Company's primary customers consist of Fortune 1000
companies and similarly sized organizations worldwide that operate in
industrial, healthcare, technology, government, finance, consumer products and
other business sectors. A large majority of the Company's customers have
purchased multiple products from the Company.

No single customer accounted for 10% or more of the Company's revenues in
1995, 1994, 1993, or the three-month period ended March 31, 1996. The Company
does not believe that the loss of any single customer would have a material
adverse effect on the Company's business.

TECHNICAL SUPPORT AND MAINTENANCE

The Company's in-house technical support group, situated at various
locations throughout the U.S. and the world, provides pre-sale, installation and
post-sale support, including toll-free telephone support during regular business
hours, to current users and potential customers evaluating the Company's
products. The technical support group also offers seven-day, 24-hour toll-free
telephone service for an additional fee. The Company believes that effective
technical support during product evaluation substantially contributes to product
acceptance, and that post-sale support has been a substantial factor in customer
satisfaction to date and will continue to be so in the future.

The Company offers a maintenance program for its software products, which
consists of product enhancements, updated products and technical support.
Maintenance is typically provided without additional charge during the warranty
period defined in the license agreements. Under the Company's standard form
license agreement, customers renew maintenance support on an annual basis by
paying the current maintenance fee. Revenue from first year and recurring
maintenance charges is recognized ratably over the period the maintenance and
support services are to be provided.

COMPETITION

The Company operates in highly competitive markets and expects competition
to increase. The Company has encountered substantially enhanced competition and
many new competitors, including relational database vendors and systems software
companies, as it has moved from the relational database tool market to the much
larger open systems software market and as it has entered the consulting
services business. Many of the Company's current and prospective competitors
have significantly greater financial, technical and marketing resources than the
Company. In addition, many prospective customers may have the internal
capability to implement solutions to their problems.

The competitive factors affecting the market for the Company's software
products include the following: product functionality, integration, performance
and reliability; demonstrable economic benefits for users relative to cost;
quality of customer support and user documentation and ease of installation;
vendor reputation, experience and financial stability; and price.

The Company believes that it has competed effectively to date. The Company's
ability to remain competitive will depend, to a great extent, upon its ongoing
performance in the areas of product

27
<PAGE>
development and customer support. To be successful in the future, the Company
must respond promptly and effectively to the challenges of technological change
and its competitors' innovations by continually enhancing its own product
offerings. Performance in these areas will, in turn, depend upon the Company's
ability to attract and retain highly qualified technical personnel in a
competitive market for experienced and talented software developers. The Company
also expects to continue its strategy of identifying, acquiring and developing
open enterprise system management products and technology through the
acquisition of specific products and of businesses which have developed such
products and technologies.

In addition, the Company encounters competition from a broader range of
firms in the market for professional services. Many of the Company's current and
prospective competitors have significantly greater financial, technical and
marketing resources than the Company. The competitive factors affecting the
market for the Company's professional services include the following: breadth
and quality of services offered, vendor reputation and the ability to retain
qualified technical personnel.

INTELLECTUAL PROPERTY RIGHTS

The Company has historically relied upon a combination of contractual
rights, trademarks, trade secrets and copyright laws to establish and protect
its proprietary rights in its products. The Company also holds some patents and
believes that patents may become increasingly important to the industry. The
Company is taking actions to further protect its proprietary rights through the
use of software patents. The Company's license agreements restrict a customer's
use of the Company's software and prohibit disclosure to third persons.
Notwithstanding those restrictions, it may be possible for unauthorized persons
to obtain copies of the Company's software products. The Company believes that
because of the rapid pace of technological change in the computer software
industry, the legal protections for its products are less significant factors in
the Company's success than the knowledge, ability and experience of the
Company's employees, the frequency of product enhancements and the timeliness
and quality of support services provided by the Company. The Company registers
its product names and other trade marks in the United States and certain foreign
countries.

EMPLOYEES

As of March 31, 1996, the Company employed approximately 3,300 persons,
including 1,045 in sales, marketing and related activities, 1,350 in product
development and support, 600 in professional services, and 305 in management,
administration and finance. The Company's success is highly dependent on its
ability to attract and retain qualified employees. Competition for employees is
intense in the software industry. None of the Company's employees is represented
by a labor union or is the subject of a collective bargaining agreement. The
Company has never experienced a work stoppage and believes that its employee
relations are good.

PROPERTIES

The Company's principal administrative, marketing, training, and product
development and support facilities are located in Oakbrook Terrace, Illinois,
where the Company leases approximately 331,000 square feet under leases
terminating in December 2002 and where the Company plans to lease additional
space in the near future. The Company has recently leased an additional
approximately 153,000 square feet of administrative, marketing, sales and
product development space in Lisle, Illinois, near the Company's headquarters,
under leases terminating in October 2003. In addition, the Company leases sales
offices throughout the United States and Canada. The Company also leases space,
ranging in size from approximately 1,700 to 25,000 square feet, for 20 product
development laboratories throughout the United States. The Company plans to
expand certain of these product development facilities. The Company believes
that its existing space and planned expansions will be adequate to meet its
needs during 1996. The Company anticipates seeking additional space in the
future to accommodate its growth.

28
<PAGE>
LEGAL PROCEEDINGS

COMPUTER ASSOCIATES INTERNATIONAL, INC. V. ALTAI, INC., CASE NO. 89-08911
(E.D.N.Y.). In 1988, a complaint was filed against Altai, Inc. ("Altai"), now a
wholly-owned subsidiary of the Company, alleging copyright infringement and
misappropriation of trade secrets. In 1991, a judgment related solely to the
copyright infringement claims was awarded to Computer Associates International,
Inc. ("CAI"). The judgment was recorded in 1991 and paid during 1992. Altai
prevailed in a subsequent appeal of the alleged misappropriation of trade
secrets. On June 8, 1995, the Texas Supreme Court issued a decision finding in
favor of Altai with regards to the alleged misappropriation of trade secrets.
CAI subsequently requested a rehearing, and the Texas Supreme Court has
overruled the motion for rehearing, withdrawn the June 8, 1995 opinion and
substituted a new opinion in favor of Altai.

COMPUTER ASSOCIATES' INTERNATIONAL, INC, AND L'AGENCE POUR LA PROTECTION DES
PROGRAMMES V. LA SOCIETE FASTER, S.A.R.L. (COMMERCIAL COURT OF BOBIGNY, PARIS,
FRANCE). Altai is involved in a related suit in France which concerns only
copyright infringement claims identical to those on which Altai prevailed in the
U.S. The French appellate court granted Altai's request that the U.S. appellate
court's copyright ruling should bind the Commercial Court of Bobigny as a matter
of law. In January 1995, the French appellate court issued a decision rejecting
CAI's claim of copyright infringement. CAI's subsequent appeal is still pending.

BEACONWARE V. RELTECH GROUP, INC., PLATINUM TECHNOLOGY, INC. AND SOFTWARE
INTERFACES, INC. BeaconWare, a Maine software developer, has sued in the Maine
Superior Court the Company, Reltech Group, Inc. ("Reltech") and Software
Interfaces, Inc. ("SII"), two wholly-owned subsidiaries, seeking compensatory
and punitive damages and equitable relief, on tort and contract theories, with
respect to Reltech's alleged failure to market SQLPro, a BeaconWare query tool.
The suit was removed to the U.S. District Court for the District of Maine, on
the basis of diversity of citizenship. The District Court of Maine has granted
Reltech's motion to transfer the case to the District Court for the Eastern
District of Virginia and the parties have since commenced discovery. The Company
believes that BeaconWare's allegations are meritless and the Company intends to
vigorously defend the action.

The Company is also subject to certain other legal proceedings and claims
which have arisen in the ordinary course of business and which have not been
fully adjudicated. Management currently believes the ultimate outcome of such
matters and those described above will not have a material adverse effect on the
Company's results of operations or financial position.

29
<PAGE>
MANAGEMENT

DIRECTORS AND OFFICERS

The directors and executive officers of the Company, their ages at June 1,
1996, and their positions with the Company are as follows:

<TABLE>
<CAPTION>
NAME AGE POSITION
- ------------------------------------- ----------- ---------------------------------------------------------------------
<S> <C> <C>
Andrew J. Filipowski................. 45 President, Chief Executive Officer, and Chairman of the Board of
Directors
Paul L. Humenansky................... 39 Chief Operations Officer, Executive Vice President -- Product
Development and Director
Michael P. Cullinane................. 46 Executive Vice President, Chief Financial Officer, Treasurer and
Director
Thomas M. Slowey..................... 35 Executive Vice President -- Sales
Paul A. Tatro........................ 39 Executive Vice President -- International Operations
James E. Cowie (1)(2)................ 41 Director
Steven D. Devick (1)(2).............. 44 Director
Casey G. Cowell (1)(2)............... 43 Director
Gian Fulgoni (2)..................... 48 Director
</TABLE>

- ------------------------
(1) Member of the Compensation Committee of the Board of Directors

(2) Member of the Audit Committee of the Board of Directors

The Board of Directors consists of three classes, which serve staggered
three-year terms. Class I, the terms of whose members expire in 1999, is
comprised of Messrs. Cullinane and Humenansky. Class II, the terms of whose
members expire in 1997, is comprised of Messrs. Filipowski, Cowie and Devick.
Class III, the terms of whose members expire in 1998, is comprised of Messrs.
Cowell and Fulgoni. Directors hold office until their successors are elected and
qualified. The Board of Directors elects officers annually and such officers,
subject to the terms of certain employment agreements, serve at the discretion
of the Board. Messrs. Filipowski, Cullinane and Humenansky each have employment
agreements with the Company. See "-- Executive Compensation -- Employment
Agreements." There are no family relationships among any of the directors or
officers of the Company.

Mr. Filipowski, a founder of the Company, has been President, Chief
Executive Officer and Chairman of the Board of Directors since the Company's
formation in April 1987. Mr. Filipowski is also a director of Platinum
Entertainment, Inc. ("Platinum Entertainment"), a publicly-traded, integrated
music recording and publishing company, and intouch group, inc.

Mr. Humenansky, a founder of the Company, was appointed Chief Operations
Officer of the Company effective January 1993. Mr. Humenansky also serves as
Executive Vice President -- Product Development, a position he has held since
the Company's formation in April 1987. Mr. Humenansky is also a director of
Platinum Entertainment.

Mr. Cullinane joined the Company in March 1988 as Senior Vice President and
Chief Financial Officer, becoming Executive Vice President in March 1995. He has
also served as the Company's Treasurer since April 1989 and served as Secretary
from April 1989 until October 1995. Mr. Cullinane is also a director of Platinum
Entertainment.

Mr. Slowey has served as Executive Vice President -- Sales since joining the
Company in March 1988.

Mr. Tatro joined the Company in October 1987 as Director of Education and
was appointed Senior Vice President -- Field Support and Affiliates in January
1990, a position he held until March 1995, when he was elected Executive Vice
President -- International Operations.

30
<PAGE>
Mr. Cowie has been a General Partner of Frontenac Company, a Chicago-based
venture capital firm, since February 1989. Mr. Cowie is also a director of U.S.
Robotics, Inc., US Servis, Inc. and Open Environment Corporation.

Mr. Devick is currently the President, Chief Executive Officer and Chairman
of the Board of Directors of Platinum Entertainment, Inc., which he co-founded
in 1992. He is also the Chief Executive Officer of a number of other entities,
including DDE, Inc. (f/k/a Devick Enterprises, Inc.), and Platinum Development,
a real estate development firm, positions he has held for at least the preceding
five years.

Mr. Cowell is Chairman of the Board of Directors, Chief Executive Officer
and President of U.S. Robotics, Inc., a publicly-traded designer, manufacturer
and marketer of high performance data communications products and systems, which
he co-founded in 1976. Mr. Cowell is also a director of Platinum Entertainment,
Inc. and Eagle River Interactive, Inc.

Mr. Fulgoni is Chief Executive Officer and a director of Information
Resources, Inc. ("IRI"), which provides a variety of information services
(primarily to consumer packaged goods companies) and computer decision support
services. He was elected Chief Executive Officer in 1991. From 1991 to April
1995, Mr. Fulgoni served as Chairman of IRI, from 1989 to 1991 as Vice Chairman,
and from 1981 to 1989 as President.

DIRECTOR COMPENSATION

All non-employee directors of the Company are paid an annual fee of $2,500
and an attendance fee of $1,000 for each Board meeting attended and $500 for
each Committee meeting attended if such Committee meeting is not held in
conjunction with a meeting of the full board. In addition, each non-employee
director participates in the PLATINUM TECHNOLOGY, INC. Amended and Restated 1993
Directors' Stock Option Plan (the "Directors' Plan"), pursuant to which each
non-employee director is granted, on the date of each annual meeting of
stockholders after which such director continues to serve on the Board of
Directors, an option to purchase 10,000 shares of Common Stock at the fair
market value of the Common Stock on such date. See "-- Stock Option Plans." The
Company provides no retirement benefits to non-employee directors. Directors who
are also employees of the Company receive no additional compensation from the
Company for services rendered in their capacity as directors.

EXECUTIVE COMPENSATION

The following table provides information concerning the annual and long-term
compensation for services in all capacities to the Company for the fiscal years
ended December 31, 1995, 1994 and 1993 of those persons who were at December 31,
1995 (i) the chief executive officer and (ii) the four other most highly
compensated (based upon combined salary and bonus) executive officers of the
Company (collectively, the "Named Officers").

31
<PAGE>
SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
AWARDS (1)
----------------
ANNUAL COMPENSATION SECURITIES
----------------------------------- UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) OPTIONS/SARS (#) COMPENSATION ($)(2)
- --------------------------------------- --------- ----------- ----------- ---------------- -------------------
<S> <C> <C> <C> <C> <C>
Andrew J. Filipowski, 1995 $ 520,000 $ -- 400,000 $ 53,236
President, Chief Executive 1994 435,000 983,245 400,000 45,591
Officer and Chairman 1993 363,000 -- 262,500 45,591
of the Board
Paul L. Humenansky, 1995 $ 330,000 $ -- 250,000 $ 3,628
Chief Operations Officer and 1994 275,000 541,679 250,000 4,800
Executive Vice President -- Product 1993 230,000 -- 175,000 4,800
Development
Michael P. Cullinane, 1995 $ 330,000 -- 150,000 $ 5,124
Executive Vice President, 1994 275,000 455,024 150,000 4,800
Chief Financial Officer 1993 230,000 -- 87,500 4,800
and Treasurer
Thomas A. Slowey, 1995 $ 210,000 $ -- 75,000 $ --
Executive Vice President -- 1994 175,000 465,637 75,000 --
Sales 1993 144,000 -- 50,000 --
Paul A. Tatro, 1995 $ 210,000 $ -- 75,000 $ --
Executive Vice President -- 1994 175,000 324,750 75,000 --
International Operations 1993 144,000 -- 50,000 --
</TABLE>

- ------------------------
(1) None of the Named Officers had any restricted stock holdings as of December
31, 1995.

(2) The amounts shown represent the full dollar value of premiums paid by the
Company with respect to whole life insurance.

The following table provides information on grants of stock options during
fiscal 1995 to the Named Officers. No stock appreciation rights were granted to
the Named Officers during fiscal 1995.

OPTION GRANTS IN 1995

<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
- ----------------------------------------------------------------------------------
NUMBER OF POTENTIAL REALIZABLE VALUE
SECURITIES AT ASSUMED ANNUAL RATES
UNDERLYING PERCENT OF TOTAL OF STOCK PRICE APPRECIATION
OPTIONS OPTIONS GRANTED EXERCISE OR FOR OPTION TERM (1)
GRANTED TO EMPLOYEES IN BASE PRICE EXPIRATION -----------------------------
NAME (#)(2) FISCAL YEAR (3) ($/SH) DATE 5% ($) 10% ($)
- ------------------------- ----------- ----------------- ----------- ---------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Andrew J. Filipowski 400,000 17.1% $ 18.25 10/25/05 $ 4,590,931 $ 11,634,320
Paul L. Humenansky 250,000 10.7% $ 18.25 10/25/05 $ 2,869,332 $ 7,271,450
Michael P. Cullinane 150,000 6.4% $ 18.25 10/25/05 $ 1,721,599 $ 4,362,870
Thomas A. Slowey 75,000 3.2% $ 18.25 10/25/05 $ 860,800 $ 2,181,435
Paul A. Tatro 75,000 3.2% $ 18.25 10/25/05 $ 860,800 $ 2,181,435
</TABLE>

- ------------------------
(1) Potential realizable value is presented net of the option exercise price but
before any federal or state income taxes associated with exercise. These
amounts represent certain assumed rates of appreciation only. Actual gains
are dependent on the future performance of the Common Stock and the option
holder's continued employment throughout the vesting period. The amounts
reflected in the table may not necessarily be achieved.

32
<PAGE>
(2) The options granted to the Named Officers in 1995 were granted pursuant to
the PLATINUM TECHNOLOGY, INC. Employee Incentive Compensation Plan and are
all non-qualified stock options. Subject to certain restrictions, those
options become exercisable in four equal annual installments, beginning on
October 25, 1996, the first anniversary of the date of grant.

(3) The percentages shown do not reflect options granted in 1995 by companies
acquired by the Company.

The following table provides information on option exercises in fiscal 1995
by the Named Officers and on the Named Officers' unexercised options at December
31, 1995. Included are options granted under the 1989 Stock Option Plan, the
Chief Executive Officer Stock Option Plan, the 1991 Stock Option Plan, the 1994
Stock Incentive Plan and the Employee Incentive Compensation Plan.

AGGREGATED OPTION EXERCISES IN 1995 AND YEAR-END 1995 OPTION VALUES

<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS
SHARES VALUE YEAR END 1995 (#) AT YEAR END 1995($)(1)
ACQUIRED ON REALIZED -------------------------- -----------------------------
NAME EXERCISE (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------- ------------ ----------- ----------- ------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Andrew J. Filipowski -- -- 1,426,250 831,250 $ 14,757,472 $ 2,305,540
Paul L. Humenansky 35,000 $ 409,375 335,000 525,000 $ 1,973,125 $ 1,503,125
Michael P. Cullinane 30,000 $ 540,000 442,750 306,250 $ 4,609,625 $ 829,688
Thomas A. Slowey 10,000 $ 182,475 182,250 168,750 $ 1,830,960 $ 510,938
Paul A. Tatro -- -- 117,266 168,750 $ 870,590 $ 510,938
</TABLE>

- ------------------------
(1) The value per option is calculated by subtracting the exercise price from
the closing price of the Common Stock on the Nasdaq National Market on
December 29, 1995, which was $18.375.

EMPLOYMENT AGREEMENTS

Effective March 1, 1991, the Company entered into employment agreements with
Messrs. Filipowski, Cullinane and Humenansky. Mr. Filipowski's employment
agreement provides for an initial base salary of $252,000 (which has been
increased annually) plus bonus compensation. Mr. Cullinane's employment
agreement provides for an initial base salary of $160,000 (which has been
increased annually) plus bonus compensation. Mr. Humenansky's employment
agreement provides for an initial base salary of $160,000 (which has been
increased annually) plus bonus compensation. The agreements provide that all
bonus arrangements for Messrs. Filipowski, Cullinane and Humenansky are
established by the Compensation Committee of the Board of Directors. All of the
employment agreements also provide for continuation of salary, bonuses and
fringe benefits for 18 months following the executive's termination of
employment with the Company for any reason other than "Good Cause" as defined in
such agreements, or for five years if the termination occurs within a certain
time period before or after a "Change in Control" of the Company. Under such
agreements, a "Change in Control" of the Company includes (a) certain
reorganizations, consolidations or mergers of the Company, (b) certain transfers
of all or substantially all of the assets of the Company, (c) the approval by
the Company's stockholders of a plan of liquidation or dissolution, (d) a change
in the Company's Board of Directors such that a majority of the members of the
Board are not "continuing" directors, or (e) a person's becoming the holder of
at least 51% of the combined voting power of the Company's outstanding voting
securities.

33
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Messrs. Cowell, Cowie and Devick are the members of the Company's
Compensation Committee. Messrs. Filipowski and Devick are executive officers of
Pt Group Inc. ("PGI") and Mr. Filipowski is the sole director of PGI. Mr. Devick
is an executive officer of Platinum Entertainment, Inc. ("PEI"), and Messrs.
Filipowski, Humenansky and Cullinane, all of whom are executive officers of the
Company, are directors of PEI. Messrs. Devick, Filipowski and Cullinane are also
members of the compensation committee of PEI.

STOCK OPTION PLANS

DIRECTORS' PLAN

The Board of Directors and the stockholders of the Company originally
adopted and approved the Directors' Stock Option Plan at the Company's 1994
Annual Meeting. The Directors' Stock Option Plan was amended and restated by the
Board in May 1996 and approved by the stockholders of the Company at the
Company's 1996 Annual Meeting. The Directors' Plan is administered by the
Company's Board of Directors. Options are granted under the Directors' Plan only
to non-employee directors of the Company. Options may be granted with respect to
a total of not more than 500,000 shares of Common Stock under the Directors'
Plan, subject to antidilution and other adjustment provisions. If an option
expires or is terminated or canceled unexercised as to any shares, such released
shares may again be optioned. As of April 22, 1996, options and awards covering
an aggregate 64,000 shares of Common Stock had been granted under the Directors'
Plan.

Under the Directors' Plan, on the date on which a person is first elected or
appointed a non-employee director, such director is granted an option to
purchase 10,000 shares of Common Stock. On the date of each annual meeting of
stockholders (or special meeting in lieu thereof) after which the person
continues as a non-employee director (other than the meeting in the year in
which the person is first elected or appointed as a non-employee director), such
non-employee director shall be granted an additional option to purchase 10,000
shares of Common Stock; provided, however, that no director may be granted
options to purchase an aggregate of more than 100,000 shares of Common Stock
under the Directors' Plan, excluding any shares covered by options granted to
the non-employee directors prior to the effective date of the Directors' Plan.

The exercise price for all options granted under the Directors' Plan shall
be the fair market value per share of the Common Stock on the date of grant.
Each option granted under the Directors' Plan becomes exercisable in equal
installments on each of the first three anniversaries of the date of its grant
and is exercisable for a period of ten years beginning on the date of its grant,
subject to earlier termination if the optionee's service as a director
terminates.

PURCHASE PLAN

The Board of Directors of the Company has adopted, and the stockholders of
the Company approved at the Company's 1996 Annual Meeting, the 1996 Stock
Purchase Plan (the "Purchase Plan"). The Purchase Plan is administered by a
committee of the Board of Directors made up of directors who are not eligible to
participate in the Purchase Plan (the "Purchase Plan Committee") and is operated
on an annual basis from March 1 to the last day of the following February (a
"Plan Year"). A total of 5,000,000 shares of Common Stock are available for
purchase under the Purchase Plan, subject to antidilution and other adjustment
provisions. No participant may purchase shares of Common Stock in any calendar
year under the Purchase Plan with an aggregate fair market value (generally
determined as of the beginning of the Plan Year) in excess of $25,000.

The Purchase Plan permits eligible employee participants to purchase Common
Stock through payroll deductions at a price per share which is equal to the
lesser of eighty-five percent (85%) of the fair market value of the Common Stock
on the commencement date, which is generally the beginning of the Plan Year, or
on the following purchase date. On each purchase date, which is generally
quarterly on the last day of February, May, August and November, each Purchase
Plan participant's accrued payroll deductions are automatically applied to the
purchase of Common Stock.

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<PAGE>
Employees eligible to participate in the Purchase Plan consist of all
persons employed by the Company and any subsidiaries designated by the Company
for participation in the Purchase Plan. The Purchase Plan excludes from
participation any employee whose customary employment is for 20 hours or less
per week or for not more than 5 months during a calendar year and any employee
who owns stock possessing 5% or more of the total combined voting power or value
of all classes of the Company's stock.

EMPLOYEE PLAN

The Employee Incentive Compensation Plan (the "Employee Plan") was
originally adopted in 1995 and amended in 1996 and approved by the stockholders
of the Company at the Company's 1995 Special Meeting and the Company's 1996
Annual Meeting, respectively. The Employee Plan permits the issuance of awards
in a variety of forms, including: (i) non-qualified and incentive stock options
for the purchase of Common Stock, (ii) stock appreciation rights ("SARs"), (iii)
restricted stock ("Restricted Stock"), (iv) deferred stock ("Deferred Stock"),
(v) bonus stock and awards in lieu of obligations, (iv) dividend equivalents,
(vii) other stock-based awards, and (viii) performance awards and cash incentive
awards. The persons eligible to participate in the Employee Plan are directors,
officers, employees and consultants of the Company or any subsidiary of the
Company. The Employee Plan is administered by the Compensation Committee, unless
the Board of Directors establishes a committee whose sole purpose is the
administration of the Employee Plan (in any case, the "Employee Plan
Committee"). No member of the Employee Plan Committee participates in the
Employee Plan. Subject to certain limitations described below, the Employee Plan
Committee in its discretion shall determine the persons to whom options and
awards shall be granted, the amount of options and awards to be granted to each
participant, the term, exercise, restriction, deferral and payment periods for
options and awards, and any other restrictions and limitations on options and
awards.

The Employee Plan provides for the award of up to 5,000,000 shares of Common
Stock, subject to antidilution and other adjustment provisions. During any
fiscal year of the Company, the number of shares underlying options or SARs,
shares of restricted stock, shares of deferred stock, shares as a bonus or in
lieu of the Company obligations and shares related to other stock-based awards
granted to any one participant shall not exceed 800,000 for each type of such
award, subject to adjustment in certain circumstances. The maximum aggregate
amount that may be paid out under the Employee Plan as final cash incentive
awards or other cash awards to any participant in any fiscal year is $5,000,000.
As of April 22, 1996, options and awards covering an aggregate 1,525,914 shares
of Common Stock had been granted under the Employee Plan.

The exercise price for stock options granted under the Employee Plan is
determined by the Employee Plan Committee, but in no event is it less than fair
market value of the Common Stock on the date of grant. When incentive stock
options are granted to an individual who owns Common Stock possessing more than
10% of the combined voting power of all classes of stock of the Company or any
parent or subsidiary of the Company, the option price shall not be less than
110% of fair market value. No stock option shall be exercisable later than the
tenth anniversary date of its grant. In the case of an incentive stock option
granted to a participant who owns more than 10% of the combined voting power of
all classes of stock of the Company or any parent or subsidiary of the Company,
such option shall not be exercisable later than the fifth anniversary date of
its grant. No incentive stock option shall be granted later than the tenth
anniversary date of the adoption of the Employee Plan.

An award of an SAR shall entitle a participant to receive Common Stock, cash
or a combination thereof. Upon exercise of an SAR, a participant receives an
amount in cash, shares of Common Stock, or both, equal to (i) the excess of the
fair market value of the Common Stock over the option price per share (if the
SAR is granted in conjunction with an option), multiplied by (ii) the number of
shares of Common Stock subject to the SAR. In the case of an SAR granted on a
stand-alone basis, the Employee Plan Committee shall determine the value to be
used in lieu of the option price. Restricted Stock awards are grants of shares
of Common Stock that are subject to certain restrictions and to a risk of
forfeiture. During the restriction period, the restricted stock may not be sold,
assigned, transferred,

35
<PAGE>
pledged or otherwise encumbered. Deferred Stock awards are grants of rights to
receive shares of Common Stock, cash or a combination thereof at the end of a
specified deferral period. During the deferral period, the Deferred Stock may
not be sold, assigned, transferred, pledged or otherwise encumbered. At the
expiration of the deferral period, the Employee Plan Committee may deliver to
the participant Common Stock, cash equal to the fair market value of such Common
Stock or a combination thereof for the shares covered by the Deferred Stock
awards.

The Employee Plan Committee is also authorized to grant shares of Common
Stock as a bonus free of restrictions, or to grant shares of Common Stock or
other awards in lieu of Company obligations to pay cash under other plans or
compensatory arrangements, subject to such terms as the Employee Plan Committee
may specify. The Employee Plan authorizes the Employee Plan Committee to grant
awards that are denominated or payable in, valued by reference to, or otherwise
based on or related to the Common Stock. Such awards might include convertible
or exchangeable debt securities, other rights convertible or exchangeable into
shares, purchase rights for shares, awards with value and payment contingent
upon performance of the Company or any other factors designated by the Employee
Plan Committee, and awards valued by reference to the book value of shares of
Common Stock or the value of securities of or the performance of specified
subsidiaries. The Employee Plan Committee shall determine the terms and
conditions of such awards, including consideration to be paid to exercise awards
in the nature of purchase rights, the period during which awards will be
outstanding and forfeiture conditions and restrictions on awards.

The right of a participant to exercise or receive a grant or settlement of
an award, and the timing thereof, may be subject to such performance conditions
as may be specified by the Employee Plan Committee. In addition, the Employee
Plan authorizes specific cash incentive awards, which represent a conditional
right to receive cash upon achievement of preestablished performance goals
during calendar years, quarters or other periods specified by the Employee Plan
Committee.

1994 PLAN

The 1994 Stock Incentive Plan (the "1994 Plan") was originally adopted in
1994 and amended in 1996 and approved by the stockholders of the Company at the
Company's 1994 Annual Meeting and the Company's 1996 Annual Meeting,
respectively. The 1994 Plan was replaced by the Employee Plan upon approval of
the Employee Plan at the Company's 1995 Special Meeting and, accordingly, no new
grants or awards are made under the 1994 Plan. The 1994 Plan permits the
issuance of stock options and awards, on substantially the same terms as under
the Employee Plan, in a variety of forms, including: (i) non-qualified and
incentive stock options for the purchase of Common Stock, (ii) SARs, (iii)
Restricted Stock, and (iv) Deferred Stock. The persons eligible to participate
in the 1994 Plan are officers, employees, consultants or advisors of the Company
or any subsidiary of the Company. The 1994 Plan is administered by the
Compensation Committee, unless the Board of Directors establishes a committee
whose sole purpose is the administration of the 1994 Plan (in any case, the
"1994 Plan Committee"). The 1994 Plan Committee is comprised of such number of
independent directors as is required for application of Rule 16b-3 under the
Securities Act. A member of the 1994 Plan Committee will not exercise any
discretion respecting himself or herself under the 1994 Plan.

The 1994 Plan provides for the award of up to 1,000,000 shares of Common
Stock, subject to antidilution and other adjustment provisions. During any
fiscal year of the Company, the number of shares underlying options or SARs,
shares of restricted stock, and shares of deferred stock granted to any one
participant shall not exceed 275,000 for each type of such award, subject to
adjustment in certain circumstances. As of April 22, 1996, options and awards
covering an aggregate 875,000 shares of Common Stock had been granted under the
1994 Plan.

36
<PAGE>
CERTAIN TRANSACTIONS

In May 1996, the Company purchased from Visigenic Software, Inc.
("Visigenic") 222,222 shares of Visigenic's Series C Preferred Stock (the
"Visigenic Shares") for an aggregate purchase price of $999,999. Concurrently
therewith, the Company agreed to transfer to Platinum Venture Partners I, L.P.
("Venture I") and Platinum Venture Partners II, L.P. ("Venture II") all of the
Company's right, title and interest to all of the appreciation, depreciation and
cash value of $100,000 and $150,000, respectively, of the Visigenic Shares in
exchange for the price per share paid by the Company. The Company retained all
voting and dispositive power with respect to all of the Visigenic Shares. A
portion of the equity interests in Venture I and Venture II are owned by certain
officers and directors of the Company. These percentage interests for Venture I
are as follows: Mr. Filipowski -- 8.3%; Mr. Cullinane -- 1.7%; Mr. Humenansky --
1.7%; Mr. Tatro -- 1.7%; Mr. Slowey -- 0.8%; Mr. Devick -- 3.3%; Mr. Cowell --
1.7%; Frontenac Company (of which Mr. Cowie is a general partner) -- 1.7%; and
Mr. Fulgoni -- 1.7%. Such percentage ownership interests for Venture II are as
follows: Mr. Filipowski -- 6.8%; Mr. Cullinane -- 0.7%; Mr. Humenansky -- 0.5%;
Mr. Cowell -- 1.4%; and Frontenac Company -- 4.5%. In addition, Platinum Venture
Partners, Inc. is the general partner of each of Venture I and Venture II and
Messrs. Filipowski, Cullinane, and Devick are the President and Chief Executive
Officer, Chief Financial Officer, and Chief Operating Officer, respectively, of
Platinum Venture Partners, Inc.

37
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT AND PRINCIPAL STOCKHOLDERS

The following table sets forth, as of June 18, 1996, certain information
regarding the beneficial ownership of the Company's Common Stock by (i) each
person known by the Company to own beneficially 5% or more of the outstanding
shares of Common Stock, (ii) each director, (iii) each of the Named Officers,
and (iv) all Company executive officers and directors as a group.

<TABLE>
<CAPTION>
SHARES BENEFICIALLY
OWNED (2)
------------------------
NAME(1) NUMBER PERCENT
- ----------------------------------------------------------------------- ----------- -----------
<S> <C> <C>
Andrew J. Filipowski (3)............................................... 3,668,005 6.4%
T. Rowe Price Associates, Inc. (4)..................................... 5,924,047 10.7
Merrill Lynch & Co., Inc. (5).......................................... 2,856,418 5.2
Michael P. Cullinane................................................... 442,750 *
Paul L. Humenansky (6)................................................. 355,000 *
Steven D. Devick....................................................... 98,384 *
Thomas M. Slowey....................................................... 182,250 *
Paul A. Tatro (7)...................................................... 158,266 *
Casey G. Cowell (8).................................................... 29,000 *
Gian Fulgoni........................................................... 16,000 *
James E. Cowie......................................................... 6,000 *
All Executive Officers and Directors as a Group
(9 persons)(3)(6)(7)(8)............................................... 4,955,655 8.6%
</TABLE>

- ------------------------------

* Represents less than 1% of the outstanding Common Stock.

(1) Unless otherwise indicated, the address of such person is c/o PLATINUM
TECHNOLOGY, INC., 1815 South Meyers Road, Oakbrook Terrace, Illinois 60181.

(2) Unless otherwise indicated below, the persons in the above table have sole
voting and investment power with respect to all shares shown as beneficially
owned by them. The numbers and percentages of shares owned by the Company's
directors and executive officers include shares issuable upon the exercise
by the respective individual of stock options that are exercisable within 60
days after June 18, 1996 in the following amounts: Mr. Filipowski --
1,426,250; Mr. Cullinane -- 442,750; Mr. Humenansky -- 335,000; Mr. Devick
-- 6,000; Mr. Slowey -- 182,250; Mr. Tatro -- 117,266; Mr. Fulgoni --
16,000; and Mr. Cowie -- 6,000.

(3) Includes 259,000 shares held by a foundation established by Mr. Filipowski
and as to which he disclaims beneficial ownership of the shares held by the
foundation.

(4) As reported on a Schedule 13G filed with the Commission on June 10, 1996
(the "Price 13G") by T. Rowe Price Associates, Inc. ("Price Associates").
According to the Price 13G, Price Associates has sole voting power with
respect to 221,800 shares and sole dispositive power with respect to all
5,924,047 shares. The address of Price Associates is 100 E. Pratt Street,
Baltimore, Maryland 21202.

(5) As reported on a Schedule 13G filed with the Commission on February 13, 1996
(the "Merrill 13G") by Merrill, Lynch & Co., Inc. ("ML&Co.") Merrill Lynch
Group, Inc. ("Merrill Group"), Princeton Services, Inc. ("PSI"), Merrill
Lynch Asset Management L.P. ("MLAM") and Merrill Lynch Growth Fund for
Investment & Retirement ("Merrill Fund"). According to the Merrill 13G, PSI
is the general partner of MLAM and Fund Asset Management, L.P., which each
may be deemed the beneficial owner of Common Stock by virtue of acting as
investment adviser to several investment companies, and PSI is a
wholly-owned direct subsidiary of Merrill Group, which is a wholly-owned
direct subsidiary of ML&Co. According to the Merrill 13G, ML&Co. has shared
voting and dispositive power with respect to (and beneficially owns) all
2,856,418 shares, each of ML Group and PSI has shared voting and dispositive
power with respect to (and beneficially owns) 2,853,752 shares, and each of
MLAM and Merrill Fund has shared voting power with respect to (and
beneficially owns) 2,713,352 shares. The address of each of ML&Co. and
Merrill Group is 250 Vesey Street, New York, New York 10281, and the address
of each of PSI, MLAM and Merrill Fund is 800 Scudders Mill Road, Plainsboro,
New Jersey 08536.

(6) Includes 20,000 shares held in trust for the benefit of Mr. Humenansky.

(7) Includes 39,000 shares held as co-trustee, with his wife, of trusts for
their benefit.

(8) Includes 23,000 shares held by MKW Partners for the benefit of the Mr.
Cowell.

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<PAGE>
DESCRIPTION OF CAPITAL STOCK

The authorized capital stock of the Company consists of 180,000,000 shares
of Common Stock, $.001 par value per share, and 10,000,000 shares of Class II
Preferred Stock, $.001 par value per share (the "Preferred Stock"). As of June
18, 1996, 55,287,069 shares of Common Stock were issued and outstanding and none
of the Preferred Stock was outstanding. The following description is a summary
and is qualified in its entirety by reference to the provisions of the Company's
Restated Certificate of Incorporation, as amended (the "Certificate"), and its
Bylaws (the "Bylaws"), copies of which have been filed as exhibits to the
Registration Statement of which this Prospectus forms a part.

COMMON STOCK

Holders of Common Stock are entitled to one vote for each share held of
record on all matters submitted to a vote of the stockholders. Holders of a
majority of the shares of Common Stock represented at a meeting can elect all of
the directors to be elected at that meeting. Holders of Common Stock are not
permitted to act by written consent. Subject to preferences that may be
applicable to any then outstanding Preferred Stock, holders of Common Stock are
entitled to receive ratably such dividends as may be declared by the Board of
Directors out of funds legally available therefor. See "Dividend Policy." In the
event of a liquidation, dissolution, or winding up of the Company, holders of
the Common Stock are entitled to share ratably in all assets remaining after
payment of liabilities and the liquidation preference of any then outstanding
Preferred Stock. Holders of Common Stock have no preemptive rights and have no
right to convert their Common Stock into any other securities. There are no
redemption or sinking fund provisions applicable to the Common Stock. All
outstanding shares of Common Stock are, and any shares of Common Stock which are
issued in connection with transactions contemplated by this Prospectus, when so
issued, will be, fully paid and nonassessable.

PREFERRED STOCK

The Board of Directors has the authority, without further action by the
stockholders, to issue up to 10,000,000 shares of Preferred Stock in one or more
series and to fix the voting powers, designations, preferences, and relative,
participating, optional, or other special rights, and qualifications,
limitations, and restrictions thereof, including dividend rights, conversion
rights, voting rights, terms of redemption, liquidation preferences, and the
number of shares constituting any series. Because the Board of Directors has the
power to establish the preferences and rights of the shares of any such series
of Preferred Stock, it may afford holders of any Preferred Stock preferences,
powers, and rights (including voting rights), senior to the rights of holders of
Common Stock, which could adversely affect the rights of holders of Common Stock
and could have the effect of delaying, deferring, or preventing a change in
control of the Company. Other than as described below, the Company has no
present plan to issue any shares of Preferred Stock.

PREFERRED STOCK PURCHASE RIGHTS

The registered holders of Common Stock have the right (a "Right") to
purchase from the Company, for each share of Common Stock owned, one
one-hundredth of a share of Class II Series A Junior Participating Preferred
Stock, par value $.01 per share (the "Preferred Rights Shares"), of the Company
at a price of $125.00 per one one-hundredth of a Preferred Rights Share (the
"Rights Purchase Price"), subject to adjustment. Each one one-hundredth of a
Preferred Rights Share is entitled to one vote, a dividend equal to the dividend
per share paid on the Common Stock, and a liquidation payment equal to the
liquidation payment per share paid on the Common Stock. The description and
terms of the Rights are set forth in a Rights Agreement (the "Rights Agreement")
between the Company and Harris Trust and Savings Bank, as Rights Agent (the
"Rights Agent").

The Rights are not exercisable until the earlier of (i) the close of
business on the tenth business day after the first public announcement that a
person or group of affiliated or associated persons have acquired beneficial
ownership of 15% or more of the outstanding shares of Common Stock (an
"Acquiring Person"), or (ii) the close of business on the tenth business day (or
such later date as may be determined by action of the Board of Directors prior
to such time as any Person becomes an

39
<PAGE>
Acquiring Person) following the commencement of, or announcement of an intention
to make, a tender offer or exchange offer the consummation of which would result
in the beneficial ownership by such person or group of 15% or more of the
outstanding shares of Common Stock (the earlier of such dates being called the
"Distribution Date"). Until the Distribution Date, the Rights will be evidenced
by the certificates for the Common Stock, will be transferable only by the
transfer of the shares of Common Stock associated with such Rights and any
transfer of the shares of Common Stock (including a transfer to the Company)
will constitute a transfer of the Rights. As described below, after a person or
group becomes an Acquiring Person, the Rights may not be redeemed or amended.
The Rights will expire on January 5, 2006 (the "Final Expiration Date"), unless
the Final Expiration Date is extended or unless the Rights are redeemed earlier
by the Company, in each case, as described below. Until a Right is exercised,
the holder thereof, as such, will have no rights as a stockholder of the Company
as a result of the ownership of the Right, including, without limitation, the
right to vote or to receive dividends.

Until the Distribution Date (or earlier redemption or expiration of the
Rights), certificates for the Common Stock issued upon the transfer or new
issuance of shares of Common Stock will contain a legend incorporating the
Rights Agreement by reference. Until the Distribution Date (or earlier
redemption or expiration of the Rights), the surrender for transfer of any
certificates for shares of Common Stock will also constitute the transfer of
Rights associated with the shares of Common Stock represented by such
certificate. As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Rights Certificates") will be mailed to the
holders of record of shares of Common Stock as of the close of business on the
Distribution Date and such separate Rights Certificates alone will evidence the
Rights.

At any time after the Distribution Date, each holder of a Right (other than
those described in the next sentence) will thereafter have the right to receive,
upon exercise and in lieu of Preferred Rights Shares, shares of Common Stock
(or, in certain circumstances, cash, property or other securities of the
Company) having a value equal to two times the Rights Purchase Price. All Rights
that are, or (under certain circumstances specified in the Rights Agreement)
were, beneficially owned by any Acquiring Person will be void.

At any time after the first date of public announcement by the Company or an
Acquiring Person that an Acquiring Person has become such (a "Shares Acquisition
Date"), if (i) the Company is the surviving corporation in a merger with any
other company or entity, (ii) the Company is acquired in a merger or other
business combination transaction, or (iii) 50% or more of the Company's
consolidated assets or earning power are sold, each holder of a Right (other
than those whose rights have become void) will thereafter have the right to
receive, upon the exercise thereof at the then current Rights Purchase Price and
in lieu of Preferred Rights Shares, that number of shares of common stock of the
surviving or acquiring company which at the time of such transaction will have a
market value of two times the exercise price of such Right.

At any time after a person or group becomes an Acquiring Person and prior to
the acquisition by such person or group of 50% or more of the outstanding shares
of Common Stock, the Board of Directors of the Company may exchange the Rights
(other than Rights owned by such person or group which have become void), in
whole or in part, without any additional payment, for shares of Common Stock at
an exchange ratio equal to one share of Common Stock (or a share of a class or
series of the Company's preferred shares having equivalent rights, preferences
and privileges) per Right, subject to adjustment.

With certain exceptions, no adjustment in the Rights Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Rights Purchase Price. No fractional Rights Preferred Shares will be issued
(other than fractions which are integral multiples of one one-hundredth of a
Rights Preferred Share, which may, at the election of the Company, be evidenced
by depositary receipts) and in lieu thereof, an adjustment in cash will be made
based on the market price of the Rights Preferred Shares on the last trading day
prior to the date of exercise.

40
<PAGE>
At any time prior to the Shares Acquisition Date, the Board of Directors of
the Company may redeem all, but not less than all, of the Rights at a price of
$.01 per Right (the "Redemption Price"). The redemption of the Rights may be
made effective at such time, on such basis and with such conditions as the Board
of Directors in its sole discretion may establish. Immediately upon any
redemption of the Rights, the right to exercise the Rights will terminate and
the only right of the holders of Rights will be to receive the Redemption Price.

Any provisions of the Rights may be amended by the Board of Directors of the
Company prior to the Shares Acquisition Date. After the Shares Acquisition Date,
the provisions of the Rights Agreement may be amended by the Board of Directors
of the Company in order to cure any ambiguity or to make changes which do not
adversely affect the interests of holders of Rights (excluding the interests of
any Acquiring Person).

A copy of the Rights Agreement has been filed as an exhibit to the
Registration Statement of which this prospectus forms a part. A copy of the
Rights Agreement is available free of charge from the Company. This summary
description of the Rights does not purport to be complete and is qualified in
its entirety by reference to the Rights Agreement.

The Rights have certain anti-takeover effects. The Rights should not
interfere with any merger or business combination approved by the Board of
Directors of the Company because the Rights may be redeemed by the Company at
the Redemption Price prior to the time that a person or group has acquired
beneficial ownership of 15% or more of the outstanding shares of Common Stock.
However, by causing substantial dilution to a person or group that attempts to
acquire the Company on terms not approved by the Company's Board of Directors,
the Rights may interfere with certain acquisitions, including acquisitions that
may offer a premium over market price to some or all of the Company's
stockholders. The Board of Directors has stated that the Rights are not intended
to prevent an acquisition of the Company on terms that are favorable and fair to
all stockholders.

CERTAIN CERTIFICATE AND BYLAWS PROVISIONS

The Company's Certificate and Bylaws contain a number of provisions relating
to corporate governance and to the rights of stockholders. Certain of these
provisions relate to corporate governance and to the rights of stockholders.
Certain of these provisions may be deemed to have a potential "anti-takeover"
effect in that such provisions may delay, defer or prevent a change of control
of the Company. These provisions include (i) the classification of the Board of
Directors into three classes, each class serving for staggered three year terms;
(ii) restrictions on the removal of directors; (iii) a requirement that special
meetings of stockholders may be called only by the Board of Directors and that
stockholder action may be taken only at stockholder meetings and not by written
consent; (iv) the authority of the Board to issue series of Preferred Stock with
such voting rights and other powers as the Board of Directors may determine; (v)
a requirement that the affirmative vote of greater than 80% of the voting power
of shares entitled to vote generally for the election of directors is required
to amend provisions of the Certificate relating to (a) the classification of the
Board, (b) removal of directors, and (c) the inability of stockholders to call
special meetings and to take action by written consent; (vi) a requirement that
the Bylaws may only be amended (other than by the Board of Directors) by the
vote of the holders of 66 2/3% of the shares entitled to vote generally for the
election of directors; and (vii) notice requirements in the Bylaws relating to
nominations to the Board of Directors and to the raising of business matters at
stockholder meetings.

DELAWARE GENERAL CORPORATION LAW

The Company is subject to the provisions of Section 203 of the Delaware
General Corporation Law ("Section 203"). Pursuant to Section 203, with certain
exceptions, a Delaware corporation may not engage in any of a broad range of
business combinations, such as mergers, consolidations, and sales of assets,
with an "interested stockholder" for a period of three years from the date that
such person became an interested stockholder unless (i) the transaction that
results in the person's becoming an interested stockholder, or the business
combination, is approved by the board of directors of the corporation before the
person becomes an interested stockholder, (ii) upon consummation of the

41
<PAGE>
transaction which results in the stockholder becoming an interested stockholder,
the interested stockholder owns 85% or more of the voting stock of the
corporation outstanding at the time the transaction commenced (other than
certain excluded shares), or (iii) on or after the date the person becomes an
interested stockholder, the business combination is approved by the
corporation's board of directors and by holders of at least two-thirds of the
corporation's outstanding voting stock, excluding shares owned by the interested
stockholder, at a meeting of stockholders. Under Section 203, an "interested
stockholder" is defined as any person, other than the corporation and any direct
or indirect majority-owned subsidiaries of the corporation, that is (i) the
owner of 15% or more of the outstanding voting stock of the corporation or (ii)
an affiliate or associate of the corporation and the owner of 15% or more of the
outstanding voting stock of the corporation at any time within the three-year
period immediately prior to the date on which it is sought to be determined
whether such person is an interested stockholder.

Under certain circumstances, Section 203 makes it more difficult for a
person who would be an "interested stockholder" to effect various business
combinations with a corporation for a three-year period. The provisions of
Section 203 may encourage persons interested in acquiring the Company to
negotiate in advance with the Company's Board of Directors because the
stockholder approval requirement would be avoided if a majority of the Company's
directors then in office approve either the business combination or the
transaction which results in the person becoming an interested stockholder. Such
provisions also may have the effect of preventing changes in management of the
Company. It is possible that such provisions could make it more difficult to
accomplish transactions that stockholders may otherwise deem to be in their best
interests.

TRANSFER AGENT

The transfer agent and registrar for the Common Stock is Harris Trust and
Savings Bank, Chicago, Illinois.

SHARES ELIGIBLE FOR FUTURE SALE

As of June 18, 1996, the Company had 55,287,069 shares of Common Stock
outstanding. Of those shares, 49,658,729 are freely tradable (other than by an
"affiliate" of the Company as such term is defined in the Securities Act)
without restriction or registration under the Securities Act. The remaining
5,628,340 outstanding shares of Common stock were issued and sold in private
transactions ("Restricted Shares") and may not be resold unless registered under
the Securities Act or sold in accordance with an exemption therefrom, such as
Rule 144 thereunder.

In general, under Rule 144 as currently in effect, a holder of Restricted
Shares who beneficially owns shares that were not acquired from the Company or
an affiliate of the Company within the previous two years would be entitled to
sell in the public market within any three-month period a number of shares that
does not exceed the greater of (i) one percent of the then outstanding shares of
Common Stock or (ii) the average weekly trading volume of the Common Stock on
the Nasdaq National Market during the four calendar weeks immediately preceding
the date on which notice of the sale is filed with the Securities and Exchange
Commission. Sales pursuant to Rule 144 are also subject to certain other
requirements relating to manner of sale, notice, and the availability of current
public information about the Company. A person who is deemed not to have been an
affiliate of the Company at any time during the three months immediately
preceding a sale and who beneficially owns shares that were not acquired from
the Company or an affiliate of the Company within the past three years is
entitled to sell such shares under Rule 144(k) without regard to the foregoing
limitations.

The Company has registered under the Securities Act all shares reserved for
issuance under the Directors' Plan, the Purchase Plan, the Employee Plan, and
the 1994 Plan. All shares purchased in the future under such plans will be
available for resale in the public market without restriction, except that
affiliates must comply with the provisions of Rule 144 other than the holding
period requirement.

42
<PAGE>
EXPERTS

The consolidated financial statements of PLATINUM TECHNOLOGY, INC., as of
December 31, 1995 and 1994 and for each of the years in the three years ended
December 31, 1995, appearing in this Prospectus and the Registration Statement
relating to this Prospectus have been audited by KPMG Peat Marwick LLP,
independent certified public accountants, as set forth in their report thereon
appearing elsewhere herein and in the Registration Statement, and which is based
in part on the reports of Deloitte & Touche LLP, Coopers & Lybrand L.L.P.,
Arthur Andersen LLP, and Ernst & Young LLP, independent auditors. Such
consolidated financial statements are included herein in reliance on such
reports given on the authority of such firms as experts in auditing and
accounting.

The consolidated financial statements of ProtoSoft, Inc. as of December 31,
1994 and 1993 and for the year ended December 31, 1994, the ten months ended
December 31, 1993, and the year ended February 28, 1993, appearing in this
Prospectus and the Registration Statement relating to this Prospectus have been
audited by KPMG Peat Marwick LLP, independent certified public accountants, as
set forth in their report thereon appearing elsewhere herein and in the
Registration Statement. Such consolidated financial statements are included
herein in reliance on such report given on the authority of said firm as experts
in auditing and accounting.

The financial statements of Reltech Group, Inc. as of December 31, 1994 and
1993 and for each of the years in the three years ended December 31, 1994
appearing in this Prospectus and the Registration Statement relating to this
Prospectus have been so included in reliance upon the report of Price Waterhouse
LLP, independent accountants, given on the authority of said firm as experts in
auditing and accounting.

43
<PAGE>
INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
PLATINUM TECHNOLOGY, INC.
Consolidated Balance Sheets as of March 31, 1996 (unaudited) and December 31, 1995...................... F-2
Consolidated Statements of Operations for the three months ended March 31, 1996 (unaudited) and 1995
(unaudited)............................................................................................ F-3
Consolidated Statements of Cash Flows for the three months ended March 31, 1996 (unaudited) and 1995
(unaudited)............................................................................................ F-4
Notes to Consolidated Financial Statements (unaudited).................................................. F-5
Report of KPMG Peat Marwick LLP......................................................................... F-6
Consolidated Balance Sheets as of December 31, 1994 and 1995............................................ F-7
Consolidated Statements of Operations for the years ended December 31, 1993, 1994 and 1995.............. F-8
Consolidated Statements of Stockholders' Equity for the years ended December 31, 1993, 1994 and 1995.... F-9
Consolidated Statements of Cash Flows for the years ended December 31, 1993, 1994 and 1995.............. F-10
Notes to Consolidated Financial Statements.............................................................. F-11
RELTECH GROUP, INC.
Report of Price Waterhouse LLP.......................................................................... F-25
Balance Sheets at December 31, 1994 and 1993............................................................ F-26
Statements of Income for the three years ended December 31, 1994, 1993, and 1992........................ F-27
Statements of Changes in Stockholders' Equity for the three years ended December 31, 1994, 1993, and
1992................................................................................................... F-28
Statements of Cash Flows for the three years ended December 31, 1994, 1993, and 1992.................... F-29
Notes to Financial Statements........................................................................... F-30
PROTOSOFT, INC.
Report of KPMG Peat Marwick LLP......................................................................... F-33
Balance Sheets at December 31, 1994 and 1993............................................................ F-34
Statements of Operations for the year ended December 31, 1994, the ten months ended December 31, 1993,
and the year ended February 28, 1993................................................................... F-35
Statements of Stockholders' Equity for the year ended December 31, 1994, the ten months ended December
31, 1993, and the year ended February 28, 1993......................................................... F-36
Statements of Cash Flows for the year ended December 31, 1994, the ten months ended December 31, 1993,
and the year ended February 28, 1993................................................................... F-37
Notes to Financial Statements........................................................................... F-38
</TABLE>

F-1
<PAGE>
PLATINUM TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
ASSETS

<TABLE>
<CAPTION>
DECEMBER 31,
1995*
MARCH 31, ------------
1996
-----------
(UNAUDITED)
<S> <C> <C>
Current Assets:
Cash and cash equivalents........................................................... $ 74,588 $ 111,847
Short-term investment securities.................................................... 14,634 7,802
Trade accounts receivable, net of allowances of $2,479 and $2,695................... 104,176 115,876
Installment accounts receivable..................................................... 13,533 6,058
Accrued interest and other current expenses......................................... 7,830 10,545
Refundable income taxes............................................................. 409 355
----------- ------------
Total current assets.............................................................. 215,170 252,483
----------- ------------
Non-current investment securities..................................................... 4,132 13,126
Property and equipment................................................................ 56,402 51,004
Purchased and developed software...................................................... 58,348 52,268
Excess of cost over net assets acquired, net of accumulated amortization of $6,400 and
$5,100............................................................................... 36,149 35,494
Other assets.......................................................................... 47,705 33,813
----------- ------------
$ 417,906 $ 438,188
----------- ------------
----------- ------------

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Acquisition-related payables........................................................ $ 12,696 $ 12,518
Income taxes payable................................................................ 511 1,068
Accounts payable.................................................................... 15,059 16,001
Accrued commissions and bonuses..................................................... 6,356 8,598
Accrued royalties................................................................... 1,788 1,637
Other accrued liabilities........................................................... 28,793 27,700
Current maturities of long-term obligations......................................... 715 1,313
Deferred revenue.................................................................... 57,812 56,969
----------- ------------
Total current liabilities......................................................... 123,730 125,804
----------- ------------
Acquisition-related payables.......................................................... 8,026 9,756
Deferred revenue...................................................................... 6,528 3,795
Deferred rent......................................................................... 8,676 8,795
Long-term obligations, net of current maturities...................................... 877 1,586
Stockholders' equity:
Class II preferred stock, $.01 par value. Authorized 10,000, none outstanding....... -- --
Common stock, $.001 par value. Authorized 120,000, issued and outstanding 55,068 and
53,194............................................................................. 55 53
Paid-in capital..................................................................... 439,477 433,103
Notes receivable.................................................................... (315) (515)
Accumulated deficit................................................................. (169,165) (144,662)
Foreign currency translation adjustment............................................. 17 473
----------- ------------
Total stockholders' equity........................................................ 270,069 288,452
----------- ------------
$ 417,906 $ 438,188
----------- ------------
----------- ------------
</TABLE>

- ------------------------
* The consolidated balance sheet as of December 31, 1995 has been restated to
give retroactive effect for mergers accounted for using the
pooling-of-interests method.

See accompanying notes to consolidated financial statements.

F-2
<PAGE>
PLATINUM TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)

<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
-----------------------
1996 1995*
----------- ----------
<S> <C> <C>
Revenues:
Software products...................................................................... $ 39,355 $ 29,891
Maintenance............................................................................ 22,536 17,360
Professional services.................................................................. 20,580 15,809
----------- ----------
82,471 63,060
----------- ----------
Costs and expenses:
Professional services.................................................................. 18,750 14,367
Product development and support........................................................ 37,690 17,740
Sales and marketing.................................................................... 37,167 22,557
General and administrative............................................................. 8,472 6,915
Merger costs........................................................................... 5,714 --
Acquired in-process technology......................................................... 7,005 18,799
----------- ----------
114,798 80,378
----------- ----------
Operating loss........................................................................... (32,327) (17,318)
Other income............................................................................. 544 1,346
----------- ----------
Loss before income taxes................................................................. (31,783) (15,972)
Income taxes............................................................................. (7,279) (1,966)
----------- ----------
Net loss................................................................................. $ (24,504) $ (14,006)
----------- ----------
----------- ----------
Net loss per share....................................................................... $ (0.45) $ (0.34)
----------- ----------
----------- ----------
Shares used in computing per share amounts............................................... 54,915 40,738
----------- ----------
----------- ----------
</TABLE>

- ------------------------
* Results for the three months ended March 31, 1995, are restated for mergers
accounted for using the pooling-of-interests method of accounting.

See accompanying notes to consolidated financial statements.

F-3
<PAGE>
PLATINUM TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)

<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
-----------------------
1996 1995*
----------- ----------
<S> <C> <C>
Cash flows from operating activities:
Net loss.............................................................................. $ (24,504) $ (14,006)
Adjustments to reconcile net loss to net cash provided by (used in) operating
activities:
Depreciation and amortization....................................................... 7,216 3,183
Acquired in-process technology...................................................... 7,005 18,799
Changes in assets and liabilities, net of acquisitions:
Accounts receivable................................................................... (141) 7,582
Deferred income taxes................................................................. (7,681) 51
Accrued interest and other current assets............................................. 2,791 (1,309)
Accounts payable...................................................................... (1,038) 1,788
Accrued liabilities................................................................... (1,868) (5,664)
Deferred revenue...................................................................... 2,727 (965)
Income taxes payable.................................................................. (611) (1,309)
Other................................................................................. (438) (97)
----------- ----------
Net cash provided by (used in) operating activities................................... (16,542) 8,053
----------- ----------
Cash flows from investing activities:
Purchase of investment securities..................................................... (12,009) (17,484)
Sales of investment securities........................................................ 2,071 8,876
Maturities of investment securities................................................... 12,100 1,982
Purchases of property and equipment................................................... (8,266) (9,495)
Capitalized software development costs................................................ (7,995) (3,294)
Payments for acquisitions............................................................. (4,834) (24,261)
Other assets.......................................................................... (1,206) (122)
----------- ----------
Net cash used in investing activities............................................... (20,139) (43,798)
----------- ----------
Cash flows from financing activities:
Proceeds from exercise of stock options............................................... 593 115
Short-term borrowings................................................................. 1,000 72
Payments on borrowings................................................................ (2,371) (250)
Other................................................................................. 200 --
----------- ----------
Net cash used in financing activities............................................... (578) (63)
----------- ----------
Adjustment to conform fiscal years of pooled businesses................................. -- (259)
----------- ----------
Net decrease in cash and cash equivalents............................................... (37,259) (36,067)
Cash and cash equivalents at beginning of year.......................................... 111,847 78,458
Cash and cash equivalents at end of year................................................ $ 74,588 $ 42,391
----------- ----------
----------- ----------
</TABLE>

- ------------------------
* Cash flows for the three months ended March 31, 1995, are restated for
mergers accounted for using the pooling-of-interests method of accounting.

See accompanying notes to consolidated financial statements.

F-4
<PAGE>
PLATINUM TECHNOLOGY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

(1) BASIS OF PRESENTATION
The accompanying unaudited interim consolidated financial statements reflect
all adjustments which, in the opinion of management, are necessary for a fair
presentation of the results of the interim periods presented. All such
adjustments are of a normal recurring nature. Because the Company's acquisitions
of Prodea Software Corporation (Prodea), Paradigm Systems Corporation
(Paradigm), and Axis Systems International, Inc. (Axis) during the first quarter
of 1996 are being treated as poolings of interests for accounting purposes, all
consolidated financial statements for the periods prior to the acquisitions have
been restated to include the assets, liabilities and operating results of these
companies. All intercompany accounts and transactions have been eliminated.

These consolidated financial statements should be read in conjunction with
the Company's audited consolidated financial statements and notes thereto for
the year ended December 31, 1995, included elsewhere herein.

F-5
<PAGE>
INDEPENDENT AUDITORS' REPORT

The Stockholders and Board of Directors
PLATINUM TECHNOLOGY, INC.:

We have audited the accompanying consolidated balance sheets of PLATINUM
TECHNOLOGY, INC. and subsidiaries as of December 31, 1994 and 1995, and the
related consolidated statements of operations, stockholders' equity, and cash
flows for each of the years in the three-year period ended December 31, 1995.
These consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits. We did not audit the financial
statements of Trinzic Corporation, Altai, Inc., Answer Systems, Inc., Locus
Computing Corporation, and Softool Corporation, wholly-owned subsidiaries, which
statements reflect total assets constituting 20 percent in 1994, and total
revenues constituting 55 percent and 36 percent in 1993 and 1994, respectively,
of the related consolidated totals. Those statements were audited by other
auditors whose reports have been furnished to us and our opinion, in so far as
it relates to the amounts for Trinzic Corporation, Altai, Inc., Answer Systems,
Inc., Locus Computing Corporation, and Softool Corporation, is based solely on
the reports of the other auditors.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits and the reports of the other auditors provide a
reasonable basis for our opinion.

In our opinion, based on our audits and the reports of the other auditors,
the consolidated financial statements referred to above present fairly, in all
material respects, the financial position of PLATINUM TECHNOLOGY, INC. and
subsidiaries as of December 31, 1994 and 1995, and the results of their
operations and their cash flows for each of the years in the three-year period
ended December 31, 1995, in conformity with generally accepted accounting
principles.

KPMG Peat Marwick LLP

Chicago, Illinois
March 29, 1996

F-6
<PAGE>
PLATINUM TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
ASSETS

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------
1994 1995
----------- -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents............................................................. $ 78,458 $ 111,847
Short-term investment securities...................................................... 15,279 7,802
Trade accounts receivable, net of allowances of $1,522 and $2,695..................... 68,700 115,876
Installment accounts receivable....................................................... 1,251 6,058
Accrued interest and other current assets............................................. 6,543 10,545
Refundable income taxes............................................................... 3,000 355
----------- -----------
Total current assets................................................................ 173,231 252,483
----------- -----------
Non-current investment securities....................................................... 30,826 13,126
Property and equipment.................................................................. 21,732 51,004
Purchased and developed software........................................................ 22,872 52,268
Excess of cost over net assets acquired, net of accumulated amortization of $1,678 and
$5,100................................................................................. 10,651 35,494
Other assets............................................................................ 3,448 33,813
----------- -----------
$ 262,760 $ 438,188
----------- -----------
----------- -----------

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Acquisition-related payables.......................................................... $ 10,963 $ 12,518
Income taxes payable.................................................................. 1,427 1,068
Accounts payable...................................................................... 9,826 16,001
Accrued commissions and bonuses....................................................... 7,002 8,598
Accrued royalties..................................................................... 761 1,637
Other accrued liabilities............................................................. 13,548 27,700
Current maturities of long-term obligations........................................... 475 1,313
Deferred revenue...................................................................... 39,578 56,969
----------- -----------
Total current liabilities........................................................... 83,580 125,804
----------- -----------
Acquisition-related payables............................................................ 8,450 9,756
Deferred income taxes................................................................... 2,933 --
Deferred revenue........................................................................ 1,475 3,795
Deferred rent........................................................................... 6,860 8,795
Long-term obligations, net of current maturities........................................ 625 1,586
Stockholders' equity:
Class II preferred stock, $.01 par value. Authorized 10,000, none outstanding......... -- --
Common stock, $.001 par value. Authorized 120,000, issued and outstanding 38,266 and
53,194............................................................................... 38 53
Paid-in capital....................................................................... 190,441 433,103
Notes receivable...................................................................... (333) (515)
Accumulated deficit................................................................... (31,523) (144,662)
Foreign currency translation adjustment............................................... 214 473
----------- -----------
Total stockholders' equity.......................................................... 158,837 288,452
----------- -----------
$ 262,760 $ 438,188
----------- -----------
----------- -----------
</TABLE>

See accompanying notes to consolidated financial statements.

F-7
<PAGE>
PLATINUM TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------
1993 1994 1995
----------- ----------- ------------
<S> <C> <C> <C>
Revenues:
Software products....................................................... $ 88,063 $ 113,749 $ 158,597
Maintenance............................................................. 46,856 58,837 76,498
Professional services................................................... 40,461 52,853 69,581
----------- ----------- ------------
175,380 225,439 304,676
----------- ----------- ------------
Costs and expenses:
Professional services................................................... 31,855 42,858 60,341
Product development and support......................................... 43,467 51,781 94,027
Sales and marketing..................................................... 59,802 75,885 117,906
General and administrative.............................................. 23,526 32,544 41,252
Restructuring costs..................................................... 4,659 -- --
Merger costs............................................................ -- -- 30,819
Acquired in-process technology.......................................... 8,735 24,594 88,493
----------- ----------- ------------
172,044 227,662 432,838
----------- ----------- ------------
Operating income (loss)................................................... 3,336 (2,223) (128,162)
Other income.............................................................. 2,057 3,052 4,281
----------- ----------- ------------
Income (loss) before income taxes......................................... 5,393 829 (123,881)
Income taxes.............................................................. 4,768 3,473 (11,948)
----------- ----------- ------------
Net income (loss)......................................................... $ 625 $ (2,644) $ (111,933)
----------- ----------- ------------
----------- ----------- ------------
Net income (loss) per share............................................... $ 0.02 $ (0.07) $ (2.59)
----------- ----------- ------------
----------- ----------- ------------
Shares used in computing per share amounts................................ 37,971 39,890 43,267
----------- ----------- ------------
----------- ----------- ------------
</TABLE>

See accompanying notes to consolidated financial statements.

F-8
<PAGE>
PLATINUM TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(IN THOUSANDS)

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------------------------------------------------
1993 1994 1995
---------------------- ---------------------- ----------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
--------- ----------- --------- ----------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
Common stock:
Balance at beginning of year............. 32,705 $ 33 33,552 $ 33 38,266 $ 38
Exercise of stock options................ 426 -- 1,186 1 803 1
Issuance of common stock................. 439 -- 3,629 4 14,125 14
Repurchase of common stock............... (18) -- (100) -- -- --
Adjustment to conform fiscal years of
pooled businesses....................... -- -- (1) -- -- --
--------- ----------- --------- ----------- --------- -----------
Balance at end of year................... 33,552 33 38,266 38 53,194 53
--------- ----------- --------- ----------- --------- -----------
--------- --------- ---------
Paid in capital:
Balance at beginning of year............. 112,818 121,729 190,440
Exercise of stock options................ 1,362 5,083 4,754
Income tax benefit related to stock
options................................. 3,705 108 --
Issuance of common stock................. 3,844 64,923 237,907
Repurchase of common stock............... -- (1,400) --
Adjustment to conform fiscal years of
pooled businesses....................... -- (2) 2
----------- ----------- -----------
Balance at end of year................... 121,729 190,441 433,103
----------- ----------- -----------
Notes receivable:
Balance at beginning of year............. (209) (247) (333)
Exercise of stock options................ (38) (7) --
Issuance of notes receivable............. -- (79) (200)
Repayment of note receivable............. -- -- 18
----------- ----------- -----------
Balance at end of year................... (247) (333) (515)
----------- ----------- -----------
Accumulated deficit:
Balance at beginning of year............. (28,874) (28,255) (31,523)
Net income (loss)........................ 625 (2,644) (111,933)
Stock dividend on common stock........... (2) -- --
Repurchase of stock options.............. (4) -- --
Other.................................... -- 1 18
Adjustment to conform fiscal years of
pooled businesses....................... -- (625) (1,224)
----------- ----------- -----------
Balance at end of year................... (28,255) (31,523) (144,662)
----------- ----------- -----------
Foreign currency translation adjustment:
Balance at beginning of year............. (197) (316) 214
Translation adjustment................... (119) 507 259
Adjustment to conform fiscal years of
pooled businesses....................... -- 23 --
----------- ----------- -----------
Balance at end of year................... (316) 214 473
----------- ----------- -----------
Total stockholders' equity............... $ 92,944 $ 158,837 $ 288,452
----------- ----------- -----------
----------- ----------- -----------
</TABLE>

See accompanying notes to consolidated financial statements.

F-9
<PAGE>
PLATINUM TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
1993 1994 1995
---------- ---------- ------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income (loss)........................................................ $ 625 $ (2,644) $ (111,933)
Adjustments to reconcile net income (loss) to net cash provided by (used
in) operating activities:
Depreciation and amortization.......................................... 8,466 12,218 20,984
Acquired in-process technology......................................... 8,735 24,594 88,493
Write-off of capitalized software and goodwill in connection with
product stabilization and mergers..................................... 1,509 -- 942
Noncash compensation................................................... -- 186 78
Changes in assets and liabilities, net of acquisitions:
Accounts receivable.................................................... (11,581) (18,718) (52,522)
Deferred income taxes.................................................. (1,201) 1,335 (12,986)
Refundable income taxes................................................ (211) (2,234) 2,615
Accrued interest and other current assets.............................. (235) (1,641) (3,313)
Accounts payable....................................................... 868 3,285 5,656
Deferred revenue....................................................... 7,127 9,492 18,342
Other.................................................................. 6,221 6,458 16,074
---------- ---------- ------------
Net cash provided by (used in) operating activities........................ 20,323 32,331 (27,570)
---------- ---------- ------------
Cash flows from investing activities:
Purchases of investment securities....................................... (17,815) (24,389) (60,763)
Sales of investment securities........................................... -- -- 75,187
Maturities of investment securities...................................... 15,271 18,910 10,753
Purchases of property and equipment...................................... (7,714) (13,492) (38,780)
Capitalized software development costs................................... (8,507) (10,898) (18,925)
Payments for acquisitions................................................ (1,308) (22,756) (103,085)
Other assets............................................................. (1,217) 1,549 (482)
---------- ---------- ------------
Net cash used in investing activities...................................... (21,362) (51,076) (136,095)
---------- ---------- ------------
Cash flows from financing activities:
Proceeds from issuance of common stock, net of issuance costs............ 4,477 65,909 194,420
Repurchase of common stock............................................... (4) (1,400) (2)
Proceeds from exercise of stock options.................................. 690 3,826 4,144
Income tax benefit from stock option exercises........................... 3,705 108 --
Short-term borrowings.................................................... 1,220 1,675 8,205
Payments on borrowings................................................... (2,035) (1,675) (7,296)
Other.................................................................... 92 (937) (214)
---------- ---------- ------------
Net cash provided by financing activities.................................. 8,145 67,506 199,257
---------- ---------- ------------
Adjustment to conform fiscal years of pooled businesses.................... -- 276 (2,203)
---------- ---------- ------------
Net increase in cash and cash equivalents.................................. 7,106 49,037 33,389
Cash and cash equivalents at beginning of year............................. 22,315 29,421 78,458
---------- ---------- ------------
Cash and cash equivalents at end of year................................... $ 29,421 $ 78,458 $ 111,847
---------- ---------- ------------
---------- ---------- ------------
</TABLE>

See accompanying notes to consolidated financial statements.

F-10
<PAGE>
PLATINUM TECHNOLOGY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF OPERATIONS. PLATINUM TECHNOLOGY, INC. and its subsidiaries
(collectively, the Company or PLATINUM) develop, market and support software
products, and offer related consulting services and educational programs, for
administering the prevailing complex, heterogeneous computing environment in
today's data intensive organizations. PLATINUM offers software solutions in five
primary categories: systems management, data warehousing, business intelligence,
application lifecycle, and database management. The Company markets and supports
it products and services principally through its own sales organization, as well
as a network of independent organizations (the affiliates).

USE OF ESTIMATES. In preparing the consolidated financial statements, the
Company's management makes estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates.

PRINCIPLES OF CONSOLIDATION. The consolidated financial statements include
the accounts of PLATINUM TECHNOLOGY, INC. and its subsidiaries. All intercompany
accounts and transactions have been eliminated in consolidation.

REVENUE RECOGNITION. Revenue from software product sales of perpetual and
fixed-term license agreements is recognized upon product delivery and customer
acceptance. Software product sales under extended payment terms are discounted
to present value using implicit interest rates. Revenue from maintenance fees
implicit in software product sales or separately priced maintenance agreements
is recognized on a straight-line basis over the maintenance period.

Professional services revenues are derived from the Company's consulting
services business and educational programs. These revenues are comprised of both
time and material contracts and fixed-price contracts. Time and material
contracts revenue is recognized as services are performed. Fixed-price contracts
revenue is recognized based on the percentage-of-completion method.

CASH EQUIVALENTS AND INVESTMENT SECURITIES. Cash equivalents are comprised
of certain highly liquid investments with original maturities of less than three
months. Investment securities generally consist of U.S. Treasury notes and
municipal bonds with original maturities generally ranging from two to five
years. The Company adopted the provisions of Statement of Financial Accounting
Standards (SFAS) No. 115, "Accounting for Certain Investments in Debt and Equity
Securities," on January 1, 1994. Under SFAS No. 115, the Company classifies its
investment securities as available-for-sale.

Available-for-sale securities are reported at fair value, with unrealized
gains and losses excluded from earnings and reported in a separate component of
stockholders' equity. Interest income is recognized when earned. At December 31,
1995, the amortized cost of these investments closely approximated fair market
value and accordingly, unrealized gains and losses were not material.

PROPERTY AND EQUIPMENT. Property and equipment are stated at cost.
Depreciation is computed using the straight-line method based on the estimated
useful lives, generally five to eight years, of the various classes of property
and equipment. Amortization of leasehold improvements is computed over the
shorter of the lease term or estimated useful life of the asset.

PURCHASED AND DEVELOPED SOFTWARE. Software development costs are accounted
for in accordance with SFAS No. 86, "Accounting for the Costs of Computer
Software to Be Sold, Leased, or Otherwise Marketed." Costs associated with the
planning and designing phase of software development, including coding and
testing activities necessary to establish technological feasibility, are

F-11
<PAGE>
PLATINUM TECHNOLOGY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
classified as product development and expensed as incurred. Once technological
feasibility has been determined, additional costs incurred in development,
including coding, testing, and documentation writing, are capitalized.

Amortization of purchased and developed software is provided on a
product-by-product basis over the estimated economic life of the software,
generally four to five years, using the straight-line method. This method
results in greater amortization than the method based on the ratio of current
year gross product revenue to current and anticipated future gross product
revenue. Amortization commences when a product is available for general release
to customers. Unamortized capitalized costs determined to be in excess of the
net realizable value of a product are expensed at the date of such
determination.

EXCESS OF COST OVER NET ASSETS ACQUIRED. Excess of cost over net assets
acquired is amortized on a straight-line basis over the expected period to be
benefited, generally seven to ten years. Adjustments to the carrying value of
excess over net assets acquired are made if the sum of expected future net cash
flows from the business acquired is less than book value.

INCOME TAXES. Income taxes are accounted for in accordance with SFAS No.
109 "Accounting for Income Taxes." Under the asset and liability method of SFAS
No. 109, deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases. Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. Under SFAS No. 109, the
effect on deferred tax assets and liabilities of a change in tax rates is
recognized in income in the period of enactment.

FAIR VALUE OF FINANCIAL INSTRUMENTS. The fair values of financial
instruments were not materially different from their carrying values.

EARNINGS PER SHARE. Net income per share is based on the weighted average
number of shares outstanding and includes the dilutive effect of unexercised
stock options using the treasury stock method. Net loss per share is based on
the weighted average number of shares outstanding and does not include the
effect of unexercised stock options.

FOREIGN CURRENCY TRANSLATION. The financial position and results of
operations of the Company's foreign subsidiaries are measured using the local
currency as the functional currency. Accordingly, assets and liabilities are
translated into U.S. dollars using current exchange rates as of the balance
sheet date. Revenues and expenses are translated at average exchange rates
prevailing during the year. Translation adjustments arising from differences in
exchange rates are included as a separate component of stockholders' equity.

SUPPLEMENTAL CASH FLOW DISCLOSURE. Net income tax refunds received by the
Company amounted to $(46,000), $(72,000), and $(933,000) in 1993, 1994 and 1995,
respectively. Cash paid for income taxes in 1993, 1994 and 1995 was $707,000 and
$3,914,000, and $615,000, respectively. Cash paid for interest in 1993, 1994,
and 1995 was $403,000, $272,000 and $784,000, respectively.

RECLASSIFICATIONS. Certain prior year balance sheet items have been
reclassified to conform to the 1995 presentation. In addition, certain prior
years' costs and expenses have been reclassified to conform to the 1995
presentation.

F-12
<PAGE>
PLATINUM TECHNOLOGY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(2) ACQUISITIONS
On June 15, 1995, the Company acquired all of the outstanding capital stock
of Software Interfaces, Inc. (SII), a leading provider of data access,
reporting, and data conversion utilities for relational and non-relational
database management systems. The Company issued 1,085,450 shares of its common
stock for all the outstanding shares of SII common stock. In addition, the
Company assumed stock options which converted into options to purchase 14,377
shares of common stock.

On August 9, 1995, the Company acquired all of the outstanding capital stock
and warrants of Answer Systems, Inc. (Answer), a pioneer in client/server help
desk solutions, in exchange for 1,567,946 shares of common stock. In addition,
the Company assumed stock options which converted into options to purchase
42,176 shares of common stock.

On August 16, 1995, the Company acquired all of the outstanding capital
stock of Locus Computing Corporation (Locus), a leading provider of consulting
services for information technology users and suppliers, in exchange for
1,452,445 shares of common stock. In addition, the Company assumed stock options
which converted into options to purchase 231,095 shares of common stock.

On August 23, 1995, the Company acquired all of the outstanding capital
stock of Altai, Inc. (Altai), a vendor of integrated automated operations
software for open computing, in exchange for 1,098,295 shares of common stock.
In addition, the Company assumed stock options which converted into options to
purchase 52,696 shares of common stock.

On August 25, 1995, the Company acquired all of the outstanding capital
stock of Trinzic Corporation (Trinzic), a major provider of data warehousing and
open systems tools and services, in exchange for 6,654,484 shares of common
stock. In addition, the Company assumed stock options which converted into
options to purchase 620,948 shares of common stock.

On November 17, 1995, the Company acquired all of the outstanding capital
stock of Softool Corporation (Softool), a leading provider of software change
and configuration management technology, in exchange for 1,452,708 shares of
common stock.

On February 8, 1996, the Company acquired all of the outstanding capital
stock of Prodea Software Corporation (Prodea), a leading provider of data
warehousing and business intelligence tools, in exchange for 2,126,913 shares of
common stock.

On March 26, 1996, the Company acquired all of the outstanding capital stock
of Paradigm Systems Corporation (Paradigm), a leading provider of professional
services, in exchange for 762,503 shares of common stock. In addition, the
Company assumed stock options which converted into options to purchase 55,228
shares of common stock.

On March 29, 1996, the Company acquired all of the outstanding capital stock
of Axis Systems International, Inc. (Axis), a leading provider of professional
services, in exchange for 319,926 shares of common stock. In addition, the
Company assumed stock options which converted into options to purchase 59,986
shares of common stock.

Each of the aforementioned transactions was accounted for as a pooling of
interests and, accordingly, the consolidated financial statements have been
restated as if the combining companies had been combined for all periods
presented. Merger costs relating to the acquisitions consummated in 1995
amounted to $30,819,000, of which $7,341,000 were included in other accrued
liabilities at December 31, 1995. These costs included investment banking and
other professional fees, write downs of certain assets, employee severance
payments, costs of closing excess of facilities, and various other expenses.

F-13
<PAGE>
PLATINUM TECHNOLOGY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(2) ACQUISITIONS (CONTINUED)
The following information reconciles total revenues and net income (loss) of
PLATINUM TECHNOLOGY, INC. as previously reported with the amounts presented in
the accompanying consolidated statements of operations for the three years ended
December 31, 1993, 1994 and 1995 (in thousands):

<TABLE>
<CAPTION>
1993 1994 1995
------------------------ ---------------------- ----------------------
NET INCOME NET INCOME NET INCOME
REVENUES (LOSS) REVENUES (LOSS) REVENUES (LOSS)
----------- ----------- --------- ----------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
PLATINUM (1).................... $ 62,165 3,002 95,749 (3,200) 275,921 (112,474)
SII............................. 3,397 59 3,716 303 -- --
Answer.......................... 6,414 700 7,122 314 -- --
Locus........................... 24,248 (2,647) 29,148 1,817 -- --
Altai........................... 13,485 566 14,556 732 -- --
Trinzic......................... 44,248 3,154 45,428 895 -- --
Softool......................... 6,807 1,111 6,778 (696) -- --
Prodea.......................... 4,446 (139) 2,868 (3,657) 5,804 159
Paradigm........................ 4,659 27 13,224 93 15,218 1
Axis............................ 5,511 147 6,850 305 7,733 381
Adjustments..................... -- (5,355) -- 450 -- --
----------- ----------- --------- ----------- --------- -----------
Total........................... $ 175,380 625 225,439 (2,644) 304,676 (111,933)
----------- ----------- --------- ----------- --------- -----------
----------- ----------- --------- ----------- --------- -----------
</TABLE>

- ------------------------
(1) Represents the historical results of PLATINUM TECHNOLOGY, INC. without
considering the effect of the poolings of interests transactions. All merger
costs and acquired in-process technology charges are reflected in PLATINUM.

The following information sets forth the 1995 results of the acquired
companies during the periods preceding their acquisition. The 1995 results
presented for SII, Answer, Locus, Altai, and Trinzic are for the six months
ended June 30, 1995. The 1995 Softool results are for the nine months ended
September 30, 1995. The 1995 Prodea, Paradigm and Axis results are for the year
ended December 31, 1995.

<TABLE>
<CAPTION>
NET INCOME
REVENUES (LOSS)
--------- -----------
(IN THOUSANDS)
<S> <C> <C>
SII................................................................... $ 1,318 (453)
Answer................................................................ 4,840 346
Locus................................................................. 15,469 231
Altai................................................................. 10,306 913
Trinzic............................................................... 22,585 (1,283)
Softool............................................................... 5,868 (509)
Prodea................................................................ 5,804 159
Paradigm.............................................................. 15,218 1
Axis.................................................................. 7,733 381
</TABLE>

The consolidated statement of operations for the year ended December 31,
1995 reflects the impact of Trinzic's operating results for the quarter ended
March 31, 1995, which are also included in the year ended December 31, 1994
statement of operations due to differences in reporting periods relative to
PLATINUM. The revenues and net income of Trinzic included more than once were
$12,553,000 and $215,000, respectively.

F-14
<PAGE>
PLATINUM TECHNOLOGY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(2) ACQUISITIONS (CONTINUED)
The consolidated statement of operations for the year ended December 31,
1995 reflects the impact of certain operating results included more than once,
due to the differences in reporting periods of Altai and Locus relative to that
of PLATINUM. The revenues and net income of Altai include more than once were
$2,514,000 and $441,000, respectively. The revenues and net income of Locus
included more than once were $3,197,000 and $568,000, respectively.

The consolidated statement of operations for the year ended December 31,
1994 reflects the impact of certain operating results also included in the year
ended December 31, 1993 statement of operations due to the differences in
reporting periods of certain companies relative to that of PLATINUM. The
following summarizes each company, the period included more than once, and
revenues and net income included in the statements of operations for both the
years ended December 31, 1994 and 1993:

<TABLE>
<CAPTION>
SIX MONTHS ENDED REVENUES NET INCOME
----------------- --------- -------------
(IN THOUSANDS)
<S> <C> <C> <C>
Altai.............................................. July 31, 1994 $ 7,143 267
Answer............................................. June 30, 1994 3,126 257
SII................................................ June 30, 1994 1,517 101
--------- ---
Total.............................................. $ 11,786 625
--------- ---
--------- ---
</TABLE>

The Company has also made a number of acquisitions that have been accounted
for under the purchase method. Accordingly, purchase prices have been allocated
to identifiable tangible and intangible assets acquired and liabilities assumed
based on their estimated fair values and amounts allocated to acquired
in-process technology have been expensed at the time of acquisition. Excess of
cost over net assets acquired is amortized on a straight-line basis over the
expected period to be benefited, generally seven to ten years. The accompanying
consolidated statements of operations reflect the results of operations of the
acquired companies since the dates the acquisitions were completed.

To determine the fair market value of the acquired in-process technology,
the Company considered the three traditional approaches of value: the cost
approach, the market approach, and the income approach. The Company relied
primarily on the income approach, whereupon fair market value is a function of
the future revenues expected to be generated by an asset, net of all allocable
expenses and a charge for the use of any contributory assets, and discounted to
present value based on the specific level of risk in achieving the forecasted
asset earnings. The income approach focuses on the income producing capability
of the acquired assets and best represents the present value of the future
economic benefits expected to be derived from these assets.

Technological feasibility for the acquired in-process technologies had not
been reached based on design and development activities in place requiring
further refinement and testing. The development activities required to complete
the acquired in-process technologies include additional coding, cross-platform
porting and validation, quality assurance procedures, and customer beta test.

The acquired technologies represent unique and emerging technologies, the
application of which is limited to the Company's open enterprise systems
software strategy. Accordingly, these acquired technologies have no alternative
future use.

Effective December 1993, the Company acquired all of the outstanding shares
of Datura Corporation, a developer of database management tools, for
approximately $6,000,000. Effective August 1994, the Company acquired all of the
outstanding shares of Dimeric Development, Inc., a developer of

F-15
<PAGE>
PLATINUM TECHNOLOGY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(2) ACQUISITIONS (CONTINUED)
database tools, for approximately $7,600,000. Effective September 1994, the
Company acquired the net assets of Aston Brooke Corporation, a developer of
performance management tools, for approximately $6,500,000.

Effective December 1994, the Company acquired the net assets of AutoSystems
Corporation for approximately $10,000,000. The Company may be required to make
additional payments of up to $8,000,000 over a period of six years, contingent
upon the results of AutoSystems' operations over the course of that period.
These additional payments will be charged to compensation expense in the periods
in which they are earned.

During 1994, the Company also acquired certain software technologies with an
aggregate purchase price of approximately $1,900,000.

The Company also terminated its agreements with three of its former European
affiliates and established wholly-owned subsidiaries for these operations during
1994. Prior to their termination, these affiliates were independent
organizations that contracted with the Company to support and promote the
Company's software products and educational services. The aggregate amount paid
in these transactions was approximately $10,000,000.

Effective March 1995, the Company acquired the stock of SQL Software
Corporation, a provider of Windows-based development tools for managing multiple
relational databases, the assets of Viatech Development, Inc., a provider of
electronic distribution tools, and the assets of BrownStone Solutions Inc., a
vendor of repository technology. The aggregate purchase price for these
acquisitions was approximately $13,600,000. Also effective March 1995, the
Company acquired all of the capital stock of Reltech Group, Inc., a vendor of
repository technology, for approximately $17,300,000 (50% in cash and 50% in
common stock of the Company).

Effective July 1995, the Company purchased all the outstanding shares of
Advanced Software Concepts, Inc. (ASC), a leading provider of distributed
storage network management solutions for heterogeneous environments. The
aggregate purchase price was approximately $7,000,000. The Company may be
required to make additional payments of up to $3,000,000 contingent upon the
results of ASC's operations. These additional payments will be charged to
compensation expense in the periods in which they are earned.

Effective November 1995, the Company purchased substantially all of the
assets of ProtoSoft, Inc., a pioneer in portable, object-oriented analysis and
design software for building enterprise-wide applications and the developer of
Paradigm Plus, for approximately $41,000,000, (75% in cash and 25% in common
stock of the company).

Effective December 1995, the Company purchased all of the outstanding shares
of AIB Software Corporation, a leader in multi-platform application development
and testing tools, for approximately $11,200,000 (80% in common stock and 20% in
cash); Protellicess Software, Inc., a leader in enterprise project and process
management software, in exchange for approximately $15,000,000 of common stock;
and BMS Computer, Inc., a leader in integrated chargeback systems that provide
job accounting, chargeback, cost analysis, and resource reporting for
heterogeneous environments, for an aggregate purchase price of approximately
$6,900,000.

During 1995, the Company also acquired certain software technologies with an
aggregate purchase price of approximately $10,227,000.

Internationally, during 1995, the Company acquired Echo-Soft Technologies
Sarl, a software sales and consulting firm located in France, Krystal Software
SA, an international affiliate of the Company

F-16
<PAGE>
PLATINUM TECHNOLOGY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(2) ACQUISITIONS (CONTINUED)
in France, and Sequel UK Ltd., an international affiliate of the Company in the
United Kingdom. The Company also terminated its agreements with four other
international affiliates and established wholly-owned subsidiaries for these
operations. The aggregate price for these transactions was approximately
$11,563,000.

The following unaudited pro forma summary presents the Company's results of
operations as if the acquisitions accounted for as purchases had occurred at the
beginning of each period. This summary is provided for information purposes
only. It does not necessarily reflect the actual results that would have
occurred had the acquisitions been made as of those dates or of results that may
occur in the future.

<TABLE>
<CAPTION>
1994 1995
----------- ----------
(IN THOUSANDS)
<S> <C> <C>
Revenues............................................................. $ 239,831 326,686
Net loss............................................................. (4,453) (110,356)
Net loss per share................................................... (0.11) (2.55)
----------- ----------
----------- ----------
</TABLE>

The aggregate payments for acquisition-related payables in connection with
the acquisitions described above for each of the next five years subsequent to
December 31, 1995 are estimated to be as follows:

<TABLE>
<CAPTION>
(IN
THOUSANDS)
<S> <C>
1996................................................................. $ 12,518
1997................................................................. 6,921
1998................................................................. 1,990
1999................................................................. 820
2000 and thereafter.................................................. 25
-------------
$ 22,274
-------------
-------------
</TABLE>

(3) INVESTMENT SECURITIES
The amortized cost, gross unrealized holding gains, gross unrealized holding
losses and aggregate fair value of investment securities at December 31, 1995
were as follows:

<TABLE>
<CAPTION>
AMORTIZED GROSS UNREALIZED GROSS UNREALIZED
COST HOLDING GAINS HOLDING LOSSES FAIR VALUE
----------- ----------------- ----------------- -----------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Available-for-sale:
Current................................................... $ 7,802 6 (20) 7,788
Due after one year........................................ 13,126 86 (22) 13,190
-- --
----------- -----------
$ 20,928 92 (42) 20,978
-- --
-- --
----------- -----------
----------- -----------
</TABLE>

The scheduled maturities for investment securities at December 31, 1995 were
as follows:

<TABLE>
<CAPTION>
LESS THAN MORE THAN
1 YEAR 1-5 YEARS 5 YEARS TOTAL
----------- ----------- ----------- ---------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
U.S. Government bonds................................................ $ 2,015 -- 116 2,131
State and municipal bonds............................................ 5,276 1,490 5,620 12,386
Other................................................................ 511 1,100 4,800 6,411
----------- ----- ----------- ---------
$ 7,802 2,590 10,536 20,928
----------- ----- ----------- ---------
----------- ----- ----------- ---------
</TABLE>

F-17
<PAGE>
PLATINUM TECHNOLOGY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(3) INVESTMENT SECURITIES (CONTINUED)

Under the specific identification method, the gross realized gains and
losses on the sale of investment securities available-for-sale were
approximately $467,000 and $(135,000), respectively, for the year ended December
31, 1995.

The Company had historically reported its investment securities as
held-to-maturity. On July 1, 1995, the Company changed its classification of
investments from held-to-maturity to available-for-sale. The Company determined
that in order to pursue its acquisition strategy, certain of its investments
would be sold to meet cash requirements, and, as a result, sold certain of its
investments prior to their maturity. The impact of the change in classification
was not material to the consolidated financial statements as the amortized cost
approximated the fair value.

(4) PROPERTY AND EQUIPMENT

Property and equipment are summarized as follows:

<TABLE>
<CAPTION>
1994 1995
--------- ---------
(IN THOUSANDS)
<S> <C> <C>
Furniture and fixtures.............................................. $ 9,537 19,861
Computers and software.............................................. 26,494 37,497
Transportation...................................................... 73 8,034
Leasehold improvements.............................................. 6,272 13,889
--------- ---------
42,376 79,291
Less accumulated depreciation and amortization...................... 20,644 28,287
--------- ---------
$ 21,732 51,004
--------- ---------
--------- ---------
</TABLE>

(5) PURCHASED AND DEVELOPED SOFTWARE

Purchased and developed software consists of the following:

<TABLE>
<CAPTION>
1994 1995
--------- ---------
(IN THOUSANDS)
<S> <C> <C>
Purchased software.................................................. $ 5,002 24,809
Software development costs.......................................... 32,574 51,499
--------- ---------
37,576 76,308
Less accumulated amortization....................................... 14,704 24,040
--------- ---------
$ 22,872 52,268
--------- ---------
--------- ---------
</TABLE>

During the years ended December 31, 1993, 1994, and 1995 $8,507,000,
$10,898,000, and $19,867,000, respectively, of software development costs were
capitalized. The Company recognized amortization expense applicable to
internally developed capitalized software of $3,717,000, $4,911,000, and
$6,276,000, during 1993, 1994, and 1995, respectively. The Company recognized
amortization expense applicable to purchased software of $577,000, $859,000, and
$3,081,000, during 1993, 1994, and 1995, respectively. During 1995, the Company
wrote-off $942,000 of capitalized software costs related to certain Trinzic
product technologies.

The increase in purchased software costs in 1995, as compared to 1994, is
primarily attributable to the Company's acquisitions and purchases of certain
product technologies.

F-18
<PAGE>
PLATINUM TECHNOLOGY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(6) INSTALLMENT ACCOUNTS RECEIVABLE

Installment accounts receivable consist of the following:

<TABLE>
<CAPTION>
1994 1995
--------- ---------
(IN THOUSANDS)
<S> <C> <C>
Current installment receivables..................................... $ 2,110 8,682
Allowance for uncollectible amounts................................. (17) (103)
Unamortized discount and maintenance fees........................... (842) (2,521)
--------- ---------
1,251 6,058
Non-current installment receivables................................. 11,350 1,777
Allowance for uncollectible amounts................................. (101) (11)
Unamortized discount and maintenance fees........................... (6,644) (1,239)
--------- ---------
$ 4,605 527
--------- ---------
--------- ---------
</TABLE>

Non-current installment receivables are classified in other assets in the
consolidated balance sheets.

(7) EMPLOYEE BENEFIT PLANS
The Company has various defined contribution retirement plans (401(k) and
profit sharing) for qualified employees. Employer contributions made under the
plans totaled $107,000, $241,000, and $406,000, in 1993, 1994, and 1995,
respectively.

(8) LINES OF CREDIT
At December 31, 1995, the Company had $33,300,000 in secured and unsecured
bank lines of credit under which borrowings bear interest ranging from the
bank's prime rate to the bank's prime rate plus 2 1/2%. Certain of these lines
of credit are subject to limitations based on levels of accounts receivable, and
certain other financial ratios. At December 31, 1995, total borrowings under
these lines of credit were approximately $1,407,000.

F-19
<PAGE>
PLATINUM TECHNOLOGY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(9) STOCK OPTIONS
The Company has several stock option plans, including the plans assumed in
certain acquisitions described in note 2. Stock option transactions for the
three-year period ended December 31, 1995, for all plans, are summarized below.

<TABLE>
<CAPTION>
SHARES PRICE
------------ ----------------
<S> <C> <C>
Outstanding on December 31, 1992................................................. 5,648,935 $ 0.0025-57.30
Granted.......................................................................... 1,294,576 1.3825-33.73
Exercised........................................................................ (393,674) 0.0025-11.26
Canceled......................................................................... (138,532) 0.25-57.30
------------ ----------------
Outstanding on December 31, 1993................................................. 6,411,305 0.0025-57.30
Granted.......................................................................... 2,273,991 0.07-22.13
Exercised........................................................................ (1,084,377) 0.0025-20.50
Canceled......................................................................... (325,615) 0.07-57.30
------------ ----------------
Outstanding on December 31, 1994................................................. 7,275,304 0.0025-57.30
Granted.......................................................................... 1,960,711 0.07-23.75
Exercised........................................................................ (746,617) 0.0025-20.50
Canceled......................................................................... (1,116,118) 0.07-33.72
------------ ----------------
Outstanding on December 31, 1995................................................. 7,373,280 $ 0.0025-57.30
------------ ----------------
------------ ----------------
Exercisable on December 31, 1995................................................. 3,789,621 $ 0.0025-57.30
------------ ----------------
------------ ----------------
</TABLE>

(10) INCOME TAXES
Income tax expense (benefit) for the years ended December 31, 1993, 1994,
and 1995 consists of the following:

<TABLE>
<CAPTION>
1993 1994 1995
--------- --------- ---------
(IN THOUSANDS)
<S> <C> <C> <C>
Current:
Federal.......................................................................... $ 4,371 1,084 315
State............................................................................ 1,592 190 133
Foreign.......................................................................... 630 836 472
Deferred:
Federal.......................................................................... (1,424) 428 (7,991)
State............................................................................ (401) 935 (4,877)
--------- --------- ---------
$ 4,768 3,473 (11,948)
--------- --------- ---------
--------- --------- ---------
</TABLE>

F-20
<PAGE>
PLATINUM TECHNOLOGY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(10) INCOME TAXES (CONTINUED)
The reconciliation of income taxes computed using the Federal statutory rate
of 35% to the income tax provision is as follows:

<TABLE>
<CAPTION>
1993 1994 1995
--------- --------- ---------
(IN THOUSANDS)
<S> <C> <C> <C>
Statutory tax...................................................................... $ 1,888 290 (43,358)
State income tax, net of federal tax benefit....................................... 94 568 (4,836)
Research and experimentation credits............................................... (542) (1) (1,213)
Foreign tax credit................................................................. (510) (60) (239)
Foreign taxes...................................................................... 1,964 1,423 240
Foreign sales corporation.......................................................... (565) (401) (294)
Municipal interest................................................................. (289) (431) (554)
Utilization of net operating losses................................................ (229) (302) --
Stock acquisitions................................................................. 2,205 2,626 11,450
Change in valuation allowance...................................................... 1,111 (2,293) 22,856
Change in tax accounting method.................................................... -- 1,596 176
Nondeductible merger costs......................................................... -- -- 4,625
Other.............................................................................. (359) 458 (801)
--------- --------- ---------
Effective tax...................................................................... $ 4,768 3,473 (11,948)
--------- --------- ---------
--------- --------- ---------
</TABLE>

The tax effects of temporary differences and carryforwards which give rise
to deferred tax assets and liabilities at December 31, 1995 and 1994 are as
follows:

<TABLE>
<CAPTION>
1994 1995
--------- ---------
(IN THOUSANDS)
<S> <C> <C>
Deferred tax assets:
Deferred revenue......................................................................... $ 6,956 5,804
Allowance for doubtful accounts.......................................................... 372 964
Net operating loss carryforwards......................................................... 15,325 53,685
Foreign net operating losses............................................................. -- 3,006
General business, AMT, and state tax credits............................................. 5,770 6,365
Foreign tax credits...................................................................... 1,333 1,270
Accrued expenses and reserves............................................................ 1,260 856
Rent abatement........................................................................... 17 2,143
Purchased research and development....................................................... 1,169 --
Other.................................................................................... 561 1,153
--------- ---------
Total gross deferred tax assets............................................................ 32,763 75,246
Less valuation allowance................................................................. (24,472) (47,328)
--------- ---------
Net deferred tax assets.................................................................... 8,291 27,918
--------- ---------
Deferred tax liabilities:
Capitalized software, net................................................................ 7,297 12,566
Installment sales........................................................................ 654 1,175
Acquired technology...................................................................... -- 2,952
Other.................................................................................... 979 766
--------- ---------
Total gross deferred liabilities........................................................... 8,930 17,459
--------- ---------
Net deferred tax asset (liability)......................................................... $ (639) 10,459
--------- ---------
--------- ---------
</TABLE>

F-21
<PAGE>
PLATINUM TECHNOLOGY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(10) INCOME TAXES (CONTINUED)
The net change in the total valuation allowance during 1993, 1994, and 1995
was an increase of $1,111,000, a decrease of $2,293,000, and an increase of
$22,856,000, respectively. The Company has reduced the deferred tax assets by a
valuation allowance to reflect the estimated amount of deferred tax assets which
will more likely than not be realized. The net deferred tax asset at December
31, 1995, reflects management's estimate of the amount which will be realized as
a result of future profitability.

The exercise of certain stock options results in state and Federal income
tax benefits to the Company. The benefit is equal to the difference between the
market price at the date of exercise and the option price at the applicable tax
rate. The current tax benefit does not flow through the statement of operations,
but is credited directly to paid-in capital. As a result of stock option
exercises during 1993, 1994, and 1995, $3,705,000, $108,000, and $-0-,
respectively, were credited to paid-in capital.

At December 31, 1995, the Company has approximately $133,000,000 of net
operating loss carryforwards and $7,470,000 of tax credit carryforwards, which
are available to reduce future Federal income taxes, if any, through the year
2010. The Company's ability to utilize the net operating loss carryforwards and
available tax credits may be limited due to the changes in ownership as a result
of business combinations.

(11) COMMITMENTS AND CONTINGENCIES

OPERATING LEASES. The Company leases office space, computer and
telecommunications equipment under long-term lease agreements expiring through
the year 2003. Total future minimum lease payments under noncancelable leases
are as follows:

<TABLE>
<CAPTION>
(IN
THOUSANDS)
<S> <C>
1996....................................................... $ 23,555
1997....................................................... 23,046
1998....................................................... 20,823
1999....................................................... 16,228
2000 and thereafter........................................ 37,518
-------------
$ 121,170
-------------
-------------
</TABLE>

Total rent expense under all operating leases amounted to $9,992,000,
$11,875,000, and $14,869,000 in 1993, 1994, and 1995, respectively.

RECEIVABLES SOLD WITH RECOURSE. At December 31, 1995, certain accounts
receivable sold with recourse were outstanding. The Company's maximum exposure
under the recourse provisions was approximately $5,177,000. A portion of these
receivables are secured by security interests in the related software. The fair
market value of the recourse obligation at December 31, 1995 was not
determinable.

LITIGATION. The Company is subject to certain legal proceedings and claims
which have arisen in the ordinary course of business and have not been fully
adjudicated. Management currently believes the ultimate outcome of these matters
will not have a material adverse effect on the Company's results of operations
or financial position.

F-22
<PAGE>
PLATINUM TECHNOLOGY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(12) OTHER INCOME (EXPENSE)
Other income (expense) for the years ended December 31, 1993, 1994 and 1995
is comprised of the following:

<TABLE>
<CAPTION>
1993 1994 1995
--------- --------- ---------
(IN THOUSANDS)
<S> <C> <C> <C>
Interest income.................................................................... $ 2,501 2,843 4,956
Interest expense................................................................... (435) (275) (745)
Foreign exchange gain (loss)....................................................... (85) 282 66
Other.............................................................................. 76 202 4
--------- --------- ---------
$ 2,057 3,052 4,281
--------- --------- ---------
--------- --------- ---------
</TABLE>

(13) RESTRUCTURING COSTS
In 1993, total restructuring costs of $4,659,000 were incurred by Trinzic
and Locus. In connection with the stabilization of its KBMS software product,
Trinzic recorded restructuring costs of $2,844,000, consisting of $1,509,000 for
the write-off of capitalized software developments costs and $1,335,000 for the
discontinuation of the data center used for development activities and for
employee severance payments. Trinzic did not complete development of new
releases or release updates of this product beyond the existing version level
and has not renewed current maintenance arrangements beyond the remaining
contract terms. Locus recorded a $1,815,000 charge to income for the
repositioning of its operations. This resulted from Locus' decision to
significantly reduce its presence in Europe and to reduce its work force in the
United States to become more competitive. The charge was primarily composed of
amounts needed for reductions in work force and a loss on subleasing the unused
portion of its corporate facility.

(14) SEGMENT AND GEOGRAPHIC INFORMATION
The Company operates in one industry segment. The Company markets and
services its products in the United States and in foreign countries through its
direct sales organization and affiliates (which are non-controlled product
representatives).

The following table presents information about the Company by geographic
area. Export sales and certain income and expense items are reported in the
geographic area where the final sale is made rather than where the transaction
originates.

<TABLE>
<CAPTION>
NORTH
AMERICA EUROPE OTHER TOTAL
------------ --------- --------- ------------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
1993:
Revenues..................................................... $ 149,714 22,643 3,023 175,380
Operating income (loss)...................................... (3,760) 6,526 570 3,336
Identifiable assets.......................................... 161,552 7,078 1,252 169,882
1994:
Revenues..................................................... $ 186,075 32,622 6,742 225,439
Operating income (loss)...................................... (12,656) 9,679 754 (2,223)
Identifiable assets.......................................... 240,606 19,863 2,291 262,760
1995:
Revenues..................................................... $ 233,056 55,663 15,957 304,676
Operating income (loss)...................................... (141,930) 9,684 4,084 (128,162)
Identifiable assets.......................................... 377,112 53,828 7,248 438,188
</TABLE>

F-23
<PAGE>
PLATINUM TECHNOLOGY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(14) SEGMENT AND GEOGRAPHIC INFORMATION (CONTINUED)
The revenue and operating income amounts above exclude the effect of
intercompany royalties. The North America operating losses in 1993, 1994, and
1995, include all merger costs, restructuring costs and acquired in-process
technology charges.

No single customer accounted for 10% or more of revenues in 1993, 1994, or
1995.

(15) SUBSEQUENT EVENTS
On January 17, 1996, the Company acquired all of the outstanding capital
stock of Advanced Systems Technologies, Inc., a developer of performance
management tools, in exchange for approximately $6,000,000 (344,640 shares) of
the Company's common stock. This acquisition will be accounted for under the
purchase method and a significant portion of the purchase price will be charged
to acquired in-process technology in the first quarter of 1996.

F-24
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS

To the Stockholders of RELTECH Group, Inc.

In our opinion, the accompanying balance sheets and related statements of
income, of changes in stockholders' equity and of cash flows present fairly, in
all material respects, the financial position of RELTECH Group, Inc. at December
31, 1994 and 1993, and the results of its operations and its cash flows for each
of the three years in the period ended December 31, 1994, in conformity with
generally accepted accounting principles. These financial statements are the
responsibility of the Company's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.

PRICE WATERHOUSE LLP

Washington, D.C.
March 20, 1995

F-25
<PAGE>
RELTECH GROUP, INC.

BALANCE SHEETS

ASSETS

<TABLE>
<CAPTION>
DECEMBER 31,
----------------------------
1994 1993
------------- -------------
<S> <C> <C>
Current Assets:
Cash........................................................................... $ 15,479 $ 9,251
Accounts receivable............................................................ 4,651,748 2,835,826
Prepaid expenses............................................................... 99,400 86,904
Refundable income taxes........................................................ 71,428 104,628
Notes receivable, current...................................................... 89,258 61,389
------------- -------------
Total current assets......................................................... 4,927,313 3,097,998
Notes receivable, non-current.................................................... 41,882 21,667
Furniture and equipment, net..................................................... 289,388 322,058
------------- -------------
Total assets................................................................. $ 5,258,583 $ 3,441,723
------------- -------------
------------- -------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses.......................................... $ 271,323 $ 266,562
Deferred maintenance fees...................................................... 1,553,930 868,000
Deferred income taxes.......................................................... 1,039,700 692,900
------------- -------------
Total liabilities............................................................ 2,864,953 1,827,462
------------- -------------
Commitments
Stockholders' equity:
Common stock, no par value, 3,090,000 shares authorized, 2,090,000 shares
issued and outstanding........................................................ 10,450
Common stock, $1 par value, 10,450 shares authorized and outstanding........... 10,450
Retained earnings.............................................................. 2,383,180 1,603,811
------------- -------------
Total stockholders' equity................................................... 2,393,630 1,614,261
------------- -------------
Total liabilities and stockholders' equity................................... $ 5,258,583 $ 3,441,723
------------- -------------
------------- -------------
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-26
<PAGE>
RELTECH GROUP, INC.

STATEMENTS OF INCOME

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------------------------
1994 1993 1992
------------- ------------- -------------
<S> <C> <C> <C>
Sales:
Product licenses and maintenance fees
Domestic......................................................... $ 4,742,614 $ 3,452,309 $ 3,105,535
Foreign.......................................................... 1,291,247 558,437 100,446
------------- ------------- -------------
6,033,861 4,010,746 3,205,981
Consulting services................................................ 2,113,061 1,769,026 1,562,768
------------- ------------- -------------
Total sales...................................................... 8,146,922 5,779,772 4,768,749
------------- ------------- -------------
Operating expenses:
Cost of sales
Product licenses and maintenance................................. 1,461,779 764,500 500,575
Consulting service............................................... 1,209,612 1,042,622 828,662
------------- ------------- -------------
2,671,391 1,807,122 1,329,237
Selling and marketing.............................................. 2,452,978 1,144,929 848,253
General and administrative......................................... 699,346 555,313 670,532
Research and development........................................... 1,212,642 1,287,378 805,439
------------- ------------- -------------
Total operating expenses......................................... 7,036,357 4,794,742 3,653,461
------------- ------------- -------------
Income from operations............................................... 1,110,565 985,030 1,115,288
Other income, net.................................................... 48,804 35,352 24,447
------------- ------------- -------------
Income before income taxes........................................... 1,159,369 1,020,382 1,139,735
Income tax provision................................................. (380,000) (305,000) (434,700)
------------- ------------- -------------
Net income........................................................... $ 779,369 $ 715,382 $ 705,035
------------- ------------- -------------
------------- ------------- -------------
</TABLE>

The accompanying notes are an integral part of these financial statements

F-27
<PAGE>
RELTECH GROUP, INC.
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
COMMON SHARES
---------------------- COMMON COMMON
ISSUED ISSUED (NO STOCK ($1 STOCK (NO RETAINED
($1 PAR) PAR) PAR) PAR) EARNINGS TOTAL EQUITY
--------- ----------- ---------- --------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Balance at January 1, 1992........ 10,450 $ 10,450 $ 183,394 $ 193,844
Net Income...................... 705,035 705,035
--------- ----------- ---------- --------- ------------- -------------
Balance at December 31, 1992...... 10,450 $ 10,450 $ 888,429 $ 898,879
--------- ----------- ---------- --------- ------------- -------------
--------- ----------- ---------- --------- ------------- -------------
Net Income...................... 715,382 715,382
--------- ----------- ---------- --------- ------------- -------------
Balance at December 31, 1993...... 10,450 $ 10,450 $ 1,603,811 $ 1,614,261
--------- ----------- ---------- --------- ------------- -------------
--------- ----------- ---------- --------- ------------- -------------
Conversion of Common Shares..... (10,450) 2,090,000 (10,450) 10,450
Net income...................... 779,369 779,369
--------- ----------- ---------- --------- ------------- -------------
Balance at December 31, 1994...... 2,090,000 $ $ 10,450 $ 2,383,180 $ 2,393,630
--------- ----------- ---------- --------- ------------- -------------
--------- ----------- ---------- --------- ------------- -------------
</TABLE>

The accompanying notes are an integral part of these financial statements

F-28
<PAGE>
RELTECH GROUP, INC.
STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------------
1994 1993 1992
-------------- -------------- --------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income...................................................... $ 779,369 $ 715,382 $ 705,035
Adjustments to reconcile net income to cash provided by
operating activities:
Depreciation.................................................. 97,929 82,794 42,668
Loss on disposal of asset..................................... 10,749
Loss on sale of investments................................... 13,980
Increase in accounts and notes receivable..................... (1,864,006) (1,071,973) (1,053,462)
Increase in prepaid expenses.................................. (12,496) (23,862) (31,255)
Decrease (increase) in refundable income taxes................ 33,200 (104,628)
Increase in accounts payable and accrued expenses............. 4,761 216,070 83,926
Increase in deferred maintenance fees......................... 685,930 311,000 335,000
Increase in deferred income taxes............................. 346,800 283,500 317,200
Decrease in income taxes payable.............................. -- (81,023) --
-------------- -------------- --------------
Net cash provided by operating activities................... 96,216 327,260 399,112
-------------- -------------- --------------
Cash flows from investing activities:
Purchase of furniture and equipment............................. (76,008) (104,126) (200,414)
Purchase of investments......................................... (1,100,000)
Proceeds from sale of investments............................... 1,086,020
-------------- -------------- --------------
Net cash used in investing activities....................... (89,988) (104,126) (200,414)
-------------- -------------- --------------
Cash flows from financing activities:
Repayments on notes payable..................................... (263,985) (163,654)
-------------- -------------- --------------
Net cash used in financing activities....................... (263,985) (163,654)
-------------- -------------- --------------
Net increase (decrease) in cash................................... 6,228 (40,851) 35,044
Cash, beginning of year........................................... 9,251 50,102 15,058
-------------- -------------- --------------
Cash, end of year................................................. $ 15,479 $ 9,251 $ 50,102
-------------- -------------- --------------
-------------- -------------- --------------
</TABLE>

The accompanying notes are an integral part of these financial statements

F-29
<PAGE>
RELTECH GROUP, INC.
NOTES TO FINANCIAL STATEMENTS

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION. Reltech Group, Inc. (the Company) is a South Carolina
corporation which develops and markets computer software to customers throughout
the world and provides computer consulting services to customers within the
United States.

REVENUE RECOGNITION. Revenue for product licensing agreements is recorded
when the software is shipped and accepted by the customer. The initial product
license agreement includes one year of maintenance services which are unbundled
from the initial product license agreement and are recognized as revenue ratably
over the one-year license period. Product maintenance fees beyond the initial
maintenance period are deferred and recognized as revenue ratably over the
applicable maintenance period. Services revenue is recognized as the consulting
services are performed.

ACCOUNTS RECEIVABLE. The Company's customers are in a wide variety of
industries, and the Company extends credit to its customers under normal payment
terms. The Company considers accounts receivable to be fully collectible;
accordingly, no allowances for doubtful accounts have been provided. Bad debts,
if any, are recorded as direct charges to operations in the period they are
determined to be uncollectible.

FURNITURE AND EQUIPMENT. Furniture and equipment are stated at cost.
Depreciation is provided for financial reporting purposes using the
straight-line method over the estimated useful life of the assets of five years.

SOFTWARE DEVELOPMENT COSTS. The Company incurs certain costs to develop
computer software. All costs incurred in the development of new software
products and enhancements to existing products are expensed in the period
incurred. No software development costs have been capitalized because the
Company has determined that the process of establishing technological
feasibility of its new products was completed approximately upon the release of
the products to its customers.

INCOME TAXES. The Company provides for income taxes using the asset and
liability approach. The asset and liability approach requires the recognition of
deferred tax liabilities and assets for the expected future tax consequences of
temporary differences between the carrying amounts and tax bases of other assets
and liabilities. The income tax provision is based upon the income taxes
currently payable plus the tax liability associated with temporary differences.

RECLASSIFICATIONS. Certain amounts in the 1993 and 1992 financial
statements have been reclassified to conform with the 1994 presentation.

(2) FURNITURE AND EQUIPMENT
Furniture and equipment consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------
1994 1993
------------ ------------
<S> <C> <C>
Furniture............................................................................. $ 218,122 $ 214,482
Automobiles........................................................................... 104,396 104,396
Equipment............................................................................. 156,551 110,224
------------ ------------
479,069 429,102
Less: accumulated depreciation........................................................ (189,681) (107,044)
------------ ------------
$ 289,388 $ 322,058
------------ ------------
------------ ------------
</TABLE>

F-30
<PAGE>
RELTECH GROUP, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(3) INCOME TAXES
The provision for income taxes consists of the following:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------
1994 1993 1992
----------- ----------- -----------
<S> <C> <C> <C>
Current:
Federal.................................................................. $ 19,500 $ 15,000 $ 99,500
State.................................................................... 13,700 6,500 18,000
----------- ----------- -----------
33,200 21,500 117,500
----------- ----------- -----------
Deferred:
Federal.................................................................. 292,000 218,500 267,400
State.................................................................... 54,800 65,000 49,800
----------- ----------- -----------
346,800 283,500 317,200
----------- ----------- -----------
$ 380,000 $ 305,000 $ 434,700
----------- ----------- -----------
----------- ----------- -----------
</TABLE>

A reconciliation of the statutory federal income tax rate to the Company's
effective income tax rate is:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------
1994 1993 1992
----------- ----------- -----------
<S> <C> <C> <C>
Statutory federal income tax rate................................... 34% 34% 34%
State income taxes, net of federal income tax benefit............... 4 4 4
Research and experimentation credits................................ (7) (11) --
Other............................................................... 2 3 --
-- -- --
33% 30% 38%
-- -- --
-- -- --
</TABLE>

Deferred tax liabilities (assets) are comprised of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
----------------------------
1994 1993
------------- -------------
<S> <C> <C>
Accounts receivable................................................................. $ 1,817,000 $ 1,118,200
Prepaid expenses.................................................................... 38,000 33,000
Depreciation........................................................................ 25,500 31,500
------------- -------------
Gross deferred tax liabilities.................................................... 1,880,500 1,182,700
------------- -------------
Deferred maintenance fees........................................................... (590,500) (335,500)
Accounts payable and accrued expenses............................................... (103,000) (69,300)
Research and experimentation credit................................................. (96,300) (85,000)
Purchased software capitalized for tax purposes..................................... (51,000) --
------------- -------------
Gross deferred tax assets......................................................... (840,800) (489,800)
------------- -------------
Net deferred tax liabilities...................................................... $ 1,039,700 $ 692,900
------------- -------------
------------- -------------
</TABLE>

The Company files its tax returns on the cash basis. Cash paid for income
taxes in 1994 and 1993 was approximately $33,200 and $124,800, respectively.

Research and experimentation credits expire in the years 2007 through 2009.

F-31
<PAGE>
RELTECH GROUP, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(4) COMMITMENTS
The Company leases certain office space used in its operations. During 1992,
the Company entered into a five-year lease agreement for new office space which
commenced in January 1993. Rent expense for 1994, 1993 and 1992 was
approximately $128,500, $115,000 and $92,000, respectively. The following is a
schedule of the future minimum lease payments under the operating lease:

<TABLE>
<CAPTION>
YEAR ENDING
DECEMBER 31,
- -----------------------------------------------------------------------
<S> <C>
1995................................................................... $130,200
1996................................................................... 134,073
1997................................................................... 138,100
-----------
$402,373
-----------
-----------
</TABLE>

(5) STOCKHOLDERS' EQUITY
Effective June 30, 1994, the Company declared a stock conversion for common
stock in the ratio of 200 shares of no par common stock for each share of $1 par
common stock held by stockholders of record on June 30, 1994. In addition, the
Company authorized an additional 1,000,000 shares of common stock with no par
value.

In June 1994, the Company adopted a Stock Option Plan (the Plan) which
reserves 230,300 shares for granting of options and provides for the issuance of
stock options to purchase shares of common stock at 10 cents per share. Options
granted pursuant to the Plan vest only at the time of a change of a controlling
interest in the Company as defined in the Plan (see Note 6). At December 31,
1994, 230,300 options were outstanding.

(6) SUBSEQUENT EVENT
In March 1995, the Company executed a letter of intent to enter into an
agreement and plan of merger ("the Agreement") with PLATINUM TECHNOLOGY, INC.
Management anticipates that the Agreement will provide for the Company to be
merged into a subsidiary of PLATINUM TECHNOLOGY, INC. prior to April 30, 1995.

(7) CONSUMMATION OF SALE (UNAUDITED SUBSEQUENT EVENTS)
On March 31, 1995, PLATINUM TECHNOLOGY, INC. acquired all of the outstanding
shares of capital stock of Reltech Group, Inc. from the two shareholders of the
Company, in exchange for $7,000,000 in cash and 318,453 shares of PLATINUM
TECHNOLOGY, INC. common stock, $.001 par value per share (PLATINUM Common
Stock). The purchase price is expected to be adjusted upward by an amount equal
to the Company's tangible net worth; the adjustment amount will be paid 50% in
cash and 50% in PLATINUM Common Stock.

On March 31, 1995, the Company terminated its Stock Option Plan in exchange
for cash and notes payable to vested participants totaling approximately
$1,800,000 in lieu of issuing common stock options.

F-32
<PAGE>
INDEPENDENT AUDITORS' REPORT

Board of Directors and Stockholders
ProtoSoft, Inc.:

We have audited the accompanying balance sheets of ProtoSoft, Inc., as of
December 31, 1994 and 1993, and the related statements of operations,
stockholders' equity, and cash flows for the year ended December 31, 1994, the
ten months ended December 31, 1993, and the year ended February 28, 1993. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of ProtoSoft, Inc. as of
December 31, 1994 and 1993, and the results of its operations and its cash flows
for the year ended December 31, 1994, the ten months ended December 31, 1993,
and the year ended February 28, 1993, in conformity with generally accepted
accounting principles.

KPMG Peat Marwick LLP

Houston, Texas
January 12, 1996

F-33
<PAGE>
PROTOSOFT, INC.
BALANCE SHEETS
DECEMBER 31, 1994 AND 1993
ASSETS

<TABLE>
<CAPTION>
1994 1993
------------- -------------
<S> <C> <C>
Current Assets:
Cash and cash equivalents......................................................... $ 1,166,758 $ 112,892
Accounts receivable, net.......................................................... 1,734,005 886,063
Other current assets.............................................................. 238 238
------------- -------------
Total current assets............................................................ 2,901,001 999,193
Property and equipment, net....................................................... 36,698 42,958
------------- -------------
$ 2,937,699 $ 1,042,151
------------- -------------
------------- -------------

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable.................................................................. $ 11,876 $ 4,797
Other accrued liabilities......................................................... 69,540 3,505
Deferred revenue.................................................................. 619,557 133,878
------------- -------------
Total current liabilities....................................................... 700,973 142,180
------------- -------------
Stockholders' equity:
Common stock, no par value. Authorized, 10,000,000 shares; issued and outstanding,
5,000,000 shares................................................................. 1,000 1,000
Retained earnings................................................................. 2,235,726 898,971
------------- -------------
Total stockholders' equity...................................................... 2,236,726 899,971
------------- -------------
$ 2,937,699 $ 1,042,151
------------- -------------
------------- -------------
</TABLE>

See accompanying notes to financial statements

F-34
<PAGE>
PROTOSOFT, INC.
STATEMENTS OF OPERATIONS
For the twelve months ended December 31, 1994, ten months ended
December 31, 1993, and twelve months ended February 28, 1993

<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31, FEBRUARY 28,
1994 1993 1993
------------- ------------- -------------
<S> <C> <C> <C>
Revenue:
Software products.................................................. $ 5,655,910 $ 2,735,345 $ 1,013,453
Maintenance........................................................ 443,631 117,706 19,175
------------- ------------- -------------
Total revenue.................................................... 6,099,541 2,853,051 1,032,628
Costs and expenses:
Wages and salaries................................................. $ 1,040,264 $ 430,434 $ 694,990
General and administrative......................................... 970,047 523,627 277,797
------------- ------------- -------------
Total expenses................................................... 2,010,311 954,061 972,787
------------- ------------- -------------
Operating income..................................................... 4,089,230 1,898,990 59,841
Interest income...................................................... 37,764 41,208 6,721
------------- ------------- -------------
Income before income taxes........................................... 4,126,994 1,940,198 66,562
Income tax expense................................................... -- -- 19,790
------------- ------------- -------------
Net income....................................................... $ 4,126,994 1,940,198 46,772
------------- ------------- -------------
------------- ------------- -------------
Net income per share............................................. $ .83 .39 .01
------------- ------------- -------------
------------- ------------- -------------
Pro forma earnings data (unaudited):
Net income as reported............................................. $ 4,126,994 $ 1,940,198 $ 46,772
Pro forma adjustment for federal income tax expense................ 1,403,178 659,667 --
------------- ------------- -------------
Pro forma net income............................................. $ 2,723,816 $ 1,280,531 $ 46,772
------------- ------------- -------------
------------- ------------- -------------
Pro forma net income per share................................... $ .54 $ .26 $ .01
------------- ------------- -------------
------------- ------------- -------------
Shares used in computing per share amounts........................... 5,000,000 5,000,000 5,000,000
------------- ------------- -------------
------------- ------------- -------------
</TABLE>

See accompanying notes to financial statements.

F-35
<PAGE>
PROTOSOFT, INC.
STATEMENTS OF STOCKHOLDERS' EQUITY
For the twelve months ended December 31, 1994, ten months ended
December 31, 1993, and twelve months ended February 28, 1993

<TABLE>
<CAPTION>
NO PAR COMMON RETAINED
STOCK EARNINGS TOTAL EQUITY
------------- ------------ ------------
<S> <C> <C> <C>
Balance at February 28, 1992......................................... $ 1,000 $ (13,057) $ (12,057)
Net income........................................................... -- 46,772 46,772
------------- ------------ ------------
Balance at February 28, 1993......................................... 1,000 33,715 34,715
Net income........................................................... -- 1,940,198 1,940,198
Dividends paid to stockholders....................................... -- (1,074,942) (1,074,942)
------------- ------------ ------------
Balance at December 31, 1993......................................... 1,000 898,971 899,971
Net income........................................................... -- 4,126,994 4,126,994
Dividends paid to stockholders....................................... -- (2,790,239) (2,790,239)
------------- ------------ ------------
Balance at December 31, 1994......................................... $ 1,000 $ 2,235,726 $ 2,236,726
------------- ------------ ------------
------------- ------------ ------------
</TABLE>

See accompanying notes to financial statements.

F-36
<PAGE>
PROTOSOFT, INC.
STATEMENTS OF CASH FLOWS
For the twelve months ended December 31, 1994, ten months ended
December 31, 1993, and twelve months ended February 28, 1993

<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31, FEBRUARY 28,
1994 1993 1993
-------------- -------------- --------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income...................................................... $ 4,126,994 $ 1,940,198 $ 46,772
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation.................................................. 36,466 30,458 18,273
Changes in assets and liabilities:
Increase in accounts receivable............................. (847,942) (886,063) --
Increase (decrease) in accounts payable..................... 7,079 4,797 (5,431)
Increase (decrease) in other accrued liabilities............ 66,035 (7,179) 9,404
Increase in deferred revenue................................ 485,679 94,767 39,111
-------------- -------------- --------------
Net cash provided by operating activities................... 3,874,311 1,176,978 108,129
-------------- -------------- --------------
Cash flows from investing activities -- purchases of property and
equipment........................................................ (30,206) (50,140) (55,411)
-------------- -------------- --------------

Cash flows from financing activities -- dividends paid............ (2,790,239) (1,074,942) --
-------------- -------------- --------------
Net increase in cash........................................ 1,053,866 51,896 52,718
Cash, beginning of period......................................... 112,892 60,996 8,278
-------------- -------------- --------------
Cash, end of period............................................... $ 1,166,758 $ 112,892 $ 60,996
-------------- -------------- --------------
-------------- -------------- --------------
</TABLE>

See accompanying notes to financial statements.

F-37
<PAGE>
PROTOSOFT, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1994, December 31, 1993 and February 28, 1993

(1) ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF BUSINESS. The Company is engaged in the development, marketing,
and support activities of object oriented computer application software. The
Company's operations are principally in the computer software industry.

REVENUE RECOGNITION. Revenue from software product sales is recognized upon
contract execution, product delivery, and customer acceptance. Revenue from
separately priced software maintenance agreements is recognized on a
straight-line basis over the maintenance period of twelve months.

PROPERTY AND EQUIPMENT. Property and equipment are stated at cost.
Depreciation is computed using accelerated methods based on the estimated useful
lives, generally five to seven years, of the various classes of property.

INCOME TAXES. Effective March 1, 1993, the Company elected to be taxed as
an S Corporation. Under this election, the Company's taxable income is taxed to
the stockholders on their individual income tax returns. The provision for
income taxes for the year ended February 28, 1993 reflects the Company's
previous election to be taxed as a C Corporation.

Pro forma income taxes, reflecting federal taxes that would have been
incurred had the Company been subject to such taxes during the year ended
December 31, 1994 and the ten months ended December 31, 1993, are presented
below net income in the accompanying statements of income, pursuant to the rules
and regulations of the Securities and Exchange Commission.

EARNINGS PER SHARE. Net income per share is based on the weighted average
number of shares outstanding.

CASH AND CASH EQUIVALENTS. Cash and interest-bearing deposits with original
maturities of less than three months are included in cash and cash equivalents.

(2) RESEARCH AND DEVELOPMENT COSTS
Research and development costs are charged to expense as incurred. Software
development costs that qualify for capitalization under Statement of Financial
Accounting Standards No. 86, ACCOUNTING FOR THE COSTS OF COMPUTER SOFTWARE TO BE
SOLD, LEASED, OR OTHERWISE MARKETED, are not material.

(3) STOCK SPLIT
On December 31, 1993, the Company's Board of Directors approved an increase
in the number of authorized shares to 10,000,000 common shares. In addition, the
Board of Directors declared a 5,000 to 1 stock split, effective January 1, 1994.
All share and net income per share data have been adjusted in the financial
statements to reflect this transaction.

F-38
<PAGE>
PROTOSOFT, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

(4) COMMITMENTS
The Company leases office space under several long-term lease agreements.
Future minimum rental payments under the noncancelable long-term leases are as
follows:

<TABLE>
<CAPTION>
FISCAL
YEAR AMOUNT
- ----------------------------------------------------------------------- -----------
<S> <C>
1995................................................................... $ 129,811
1996................................................................... --
1997................................................................... --
1998................................................................... --
Thereafter............................................................. --
-----------
$ 129,811
-----------
-----------
</TABLE>

Total rent expense under all operating leases for the year ended December
31, 1994, the ten months ended December 31, 1993 and the year ended February 28,
1993 was $78,132, $37,350, and $21,125, respectively.

(5) SUBSEQUENT EVENTS
On November 16, 1995, the assets of the Company were purchased for
approximately $40 million ($30 million in cash and $10 million in stock) by
PLATINUM TECHNOLOGY, INC.

F-39
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following table sets forth the estimated expenses to be borne by the
Company in connection with the registration, issuance, and distribution of the
securities being registered hereby, other than underwriting discounts and
commissions. All amounts are estimates except the SEC registration fee, the NASD
filing fee, and the Nasdaq listing fee.

<TABLE>
<S> <C>
Securities and Exchange Commission registration fee.............. $ 23,492
Nasdaq listing fee............................................... 95,000
Blue Sky fees and expenses....................................... 5,000
Printing and engraving expenses.................................. 25,000
Legal fees and expenses.......................................... 25,000
Accounting fees and expenses..................................... 50,000
Miscellaneous.................................................... 6,508
---------
Total........................................................ $ 230,000
---------
---------
</TABLE>

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Article Ten of the Company's Restated Certificate of Incorporation provides
that the Company shall indemnify its directors to the full extent permitted by
the Delaware General Corporation Law and may indemnify its officers to such
extent, except that the Company shall not be obligated to indemnify any such
person (i) with respect to proceedings, claims or actions initiated or brought
voluntarily by any such person and not by way of defense, or (ii) for any
amounts paid in settlement of an action indemnified against by the Company
without the prior written consent of the Company. With the approval of its
stockholders, the Company has entered into indemnity agreements with each of its
directors and certain of its officers. These agreements may require the Company,
among other things, to indemnify such officers and directors against certain
liabilities that may arise by reason of their status or service as directors or
officers, to advance expenses to them as they are incurred, provided that they
undertake to repay the amount advanced if it is ultimately determined by a court
that they are not entitled to indemnification, and to obtain directors' and
officers' liability insurance if available on reasonable terms.

In addition, Article Nine of the Company's Restated Certificate of
Incorporation provides that a director of the Company shall not be personally
liable to the Company or its stockholders for monetary damages for breach of his
or her fiduciary duty as a director, except for liability (i) for any breach of
the director's duty of loyalty to the Company or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the General Corporation Law
of the State of Delaware, or (iv) for any transaction from which the director
derives an improper personal benefit.

Reference is made to Section 145 of the General Corporation Law of the State
of Delaware which provides for indemnification of directors and officers in
certain circumstances.

The Company has purchased an insurance policy under which it is entitled to
be reimbursed for certain indemnity payments it is required or permitted to make
to its directors and officers.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES

In March 1995, the Company issued 318,453 shares of Common Stock and paid
approximately $9.8 million in cash to the stockholders of RELTECH Group, Inc.
("Reltech"), a vendor of repository technology, in connection with a merger with
Reltech. Such securities were issued without registration under the Securities
Act, in reliance upon the exemption in Section 4(2) of the Securities Act.

In June 1995, the Company issued 1,085,450 shares of Common Stock to the
stockholders of Software Interfaces, Inc. ("SII"), a leading provider of data
access, reporting, and data conversion

II-1
<PAGE>
utilities for relational and non-relational database management systems, in
exchange for all of the outstanding capital stock of SII in connection with a
merger with SII. Such securities were issued without registration under the
Securities Act, in reliance upon the exemption in Section 4(2) of the Securities
Act.

In November 1995, the Company issued 1,452,708 shares of Common Stock to the
stockholders of Softool Corporation ("Softool"), a leading provider of software
change and configuration management technology, in exchange for all of the
outstanding capital stock of Softool in connection with a merger with Softool.
Such securities were issued without registration under the Securities Act, in
reliance upon the exemption in Section 4(2) of the Securities Act.

In November 1995, the Company issued 582,121 shares of Common Stock and paid
approximately $30.0 million in cash to the stockholders of ProtoSoft, Inc.
("ProtoSoft"), a provider of portable, object-oriented analysis and design
software for building enterprise-wide applications, in exchange for
substantially all of the assets of ProtoSoft. Such securities were issued
without registration under the Securities Act, in reliance upon the exemption in
Section 4(2) of the Securities Act.

In December 1995, the Company issued 478,045 shares of Common Stock and paid
approximately $2.2 million in cash to the stockholders of AIB Software
Corporation ("AIB"), a leading provider of multi-platform application
development and testing tools, in exchange for all of the outstanding capital
stock of AIB. Such securities were issued without registration under the
Securities Act, in reliance upon the exemption in Section 4(2) of the Securities
Act.

In December 1995, the Company issued 822,077 shares of Common Stock to the
stockholders of Protellicess Software, Inc. ("Protellicess"), a provider of
enterprise project and process management software, in exchange for all of the
outstanding capital stock of Protellicess. Such securities were issued without
registration under the Securities Act, in reliance upon the exemption in Section
4(2) of the Securities Act.

In January 1996, the Company issued 344,640 shares of Common Stock and paid
approximately $217,000 in cash to the stockholders of Advanced System
Technologies, Inc. ("AST"), a developer of performance management tools, in
exchange for all of the outstanding capital stock of AST in connection with a
merger with AST. Such securities were issued without registration under the
Securities Act, in reliance upon the exemption in Section 4(2) of the Securities
Act.

In February 1996, the Company issued 2,126,913 shares of Common Stock to the
stockholders of Prodea Software Corporation ("Prodea"), a leading provider of
data warehousing and business intelligence tools, in exchange for all of the
outstanding capital stock of Prodea in connection with a merger with Prodea.
Such securities were issued without registration under the Securities Act, in
reliance upon Regulation D under the Securities Act.

In March 1996, the Company issued 125,000 shares of Common Stock to the
stockholders of Browning and Clements, Inc. ("B&C") in exchange for all of the
outstanding capital stock of B&C in connection with a merger with B&C. Such
securities were issued without registration under the Securities Act, in
reliance upon the exemption in Section 4(2) of the Securities Act.

In March 1996, the Company issued 762,503 shares of Common Stock to the
stockholders of Paradigm Systems Corporation ("Paradigm"), a leading provider of
professional services, in exchange for all of the outstanding capital stock of
Paradigm in connection with a merger with Paradigm. Such securities were issued
without registration under the Securities Act, in reliance upon the exemption in
Section 4(2) of the Securities Act.

In March 1996, the Company issued 319,926 shares of Common Stock to the
stockholders of Axis Systems International, Inc. ("Axis"), a leading provider of
professional services, in exchange for all of the outstanding capital stock of
Axis in connection with a merger with Axis. Such securities were issued without
registration under the Securities Act, in reliance upon the exemption in Section
4(2) of the Securities Act.

II-2
<PAGE>
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) Exhibits
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT PAGE
- ----------- ---------------------------------------------------------------------------------------- ---------
<S> <C> <C>

<CAPTION>
2.1 Agreement and Plan of Reorganization, dated as of March 7, 1995, among the Company and
Trinzic Corporation ("Trinzic"), and the related Agreement of Merger, incorporated by
reference to Exhibit 2.1 of the Company's Annual Report on Form 10-K (as amended) for
the year ended December 31, 1994 (the "1994 10-K").
<S> <C> <C>
2.2 Agreement and Plan of Merger by and among the Company, RELTECH Acquisition Corp.,
RELTECH Group, Inc. and the Shareholders of Reltech Group, Inc., dated as of March 31,
1995, incorporated by reference to Exhibit 2.1 to the Company's Current Report on Form
8-K dated March 31, 1995.
2.3 Agreement and Plan of Reorganization, dated as of April 21, 1995, between the Company
and Altai, Inc. ("Altai"), and the related Articles of Merger and Plan of Merger,
incorporated by reference to Exhibit 2.1 to the Company's Quarterly Report on Form 10-Q
for the quarter ended March 31, 1995.
2.4 Agreement and Plan of Reorganization by and among the Company, Answer Acquisition Corp.
and Answer Systems, Inc. ("Answer"), dated as of May 16, 1995, and the related
Agreement of Merger, incorporated by reference to Exhibit 2.3 to the Company's
Registration Statement on Form S-4, Registration No. 33-94410 (the "1995 S-4").
2.5 Agreement and Plan of Reorganization by and among the Company, PTI Acquisition Corp. and
Locus Computing Corporation ("Locus"), dated as of June 14, 1995, and the related
Agreement of Merger, incorporated by reference to Exhibit 2.4 to the 1995 S-4.
2.6 Agreement and Plan of Reorganization by and among the Company, SII Acquisition Corp.,
Software Interfaces, Inc. and the Shareholders of Software Interfaces, Inc., dated as
of June 15, 1995, incorporated by reference to Exhibit 2.1 to the Company's Current
Report on Form 8-K dated June 15, 1995.
2.7 Agreement and Plan of Reorganization by and among the Company, Softool Acquisition
Corp., Softool Corporation and the Shareholders of Softool Corporation, dated as of
November 17, 1995, incorporated by reference to Exhibit 2.1 of the Company's Current
Report on Form 8-K dated November 17, 1995.
2.8 Asset Purchase Agreement by and among the Company, ProtoSoft, Inc. and Anthony Lekkos,
Ph.D., the majority shareholder of ProtoSoft, Inc., dated as of November 17, 1995,
incorporated by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K
dated November 17, 1995.
2.9 Agreement and Plan of Reorganization dated as of January 16, 1996, as amended by
Amendment No. 1 thereto dated as of January 31, 1996, by and among the Company, PS
Acquisition Corporation and Prodea Software Corporation, and the related Agreement of
Merger, incorporated by reference to Exhibits 2.1 and 2.2, respectively, to the
Company's Current Report on Form 8-K dated February 8, 1996.
</TABLE>

II-3
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT PAGE
- ----------- ---------------------------------------------------------------------------------------- ---------
<S> <C> <C>
3.1(a) Restated Certificate of Incorporation of the Company, incorporated by reference to
Exhibit 3.1 to the Company's Registration Statement on Form S-1, Registration Statement
No. 33-39233 (the "IPO S-1 Registration Statement").
3.1(b) Certificate of Amendment of Restated Certificate of Incorporation of the Company, dated
August 24, 1995, incorporated by reference to Exhibit 4.11 to the Company's
Registration Statement on Form S-8, Registration No. 33-96762 (the "1995 S-8").
3.1(c) Certificate of Amendment of Restated Certificate of Incorporation of the Company, dated
May 28, 1996, as amended.
3.1(d) Conformed copy of Certificate of Incorporation of the Company, as amended
3.2 Bylaws of the Company, incorporated by reference to Exhibit 3.2 to the IPO S-1
Registration Statement.
4.1 Specimen stock certificate representing Common Stock, incorporated by reference to
Exhibit 4.1 to the IPO S-1 Registration Statement.
4.2 Rights Agreement dated as of December 21, 1995 between the Company and Harris Trust and
Savings Bank, incorporated by reference to Exhibit 1 to the Company's Registration
Statement on Form 8-A, filed December 26, 1995.
4.3 Certificate of Designations of the Class II Series A Junior Participating Preferred
Stock, incorporated by reference to Exhibit 4.3 to the Company's Annual Report on Form
10-K for the year ended December 31, 1995 (the "1995 10-K").
5.1 Opinion of Bell, Boyd & Lloyd
10.1 1989 Stock Option Plan, incorporated by reference to Exhibit 10.1 to the IPO S-1
Registration Statement.
10.2 Forms of Stock Option Agreements, incorporated by reference to Exhibit 10.2 to the IPO
S-1 Registration Statement.
10.3 Chief Executive Stock Option Plan, incorporated by reference to Exhibit 10.3 to the IPO
S-1 Registration Statement.
10.4 Chief Executive Stock Option Agreement, incorporated by reference to Exhibit 10.4 to the
IPO S-1 Registration Statement.
10.5 1991 Stock Option Plan, incorporated by reference to Exhibit 10.5 to the IPO S-1
Registration Statement.
10.6 Employment Agreement between Andrew J. Filipowski and the Company, incorporated by
reference to Exhibit 10.6 to the IPO S-1 Registration Statement.
10.7 Employment Agreement between Paul L. Humenansky and the Company, as amended,
incorporated by reference to Exhibit 10.7 to the Company's Registration Statement on
Form S-1, Registration No. 33-43345.
10.8 Employment Agreement between Michael P. Cullinane and the Company, incorporated by
reference to Exhibit 10.8 to the IPO S-1 Registration Statement.
</TABLE>

II-4
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT PAGE
- ----------- ---------------------------------------------------------------------------------------- ---------
<S> <C> <C>
10.9 Form of Indemnification Agreement between the Company and each of Andrew J. Filipowski,
Michael P. Cullinane, Paul L. Humenansky, Casey G. Cowell, James E. Cowie, Steven D.
Devick and Gian Fulgoni, incorporated by reference to Exhibit 10.10 to the IPO S-1
Registration Statement.
10.10 Forms of Affiliate Agreements, incorporated by reference to Exhibit 10.11 to the IPO S-1
Registration Statement.
10.11 Form of Master Product License Agreement, incorporated by reference to Exhibit 10.11 to
the 1995 10-K.
10.12 Office Lease, dated May 6, 1992, between the Company and LaSalle National Trust N.A. as
Trustee (the "Oakbrook Terrace Lease"), incorporated by reference to Exhibit 10.20 to
the Company's Annual Report on Form 10-K for the year ended December 31, 1992.
10.13 PLATINUM TECHNOLOGY, INC. 1993 Directors' Stock Option Plan, incorporated by reference
to Exhibit 10.18 to the Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1994 (the "June 1994 10-Q").
10.14 PLATINUM TECHNOLOGY, INC. 1994 Stock Incentive Plan, incorporated by reference to
Exhibit 10.19 to the June 1994 10-Q.
10.15 PLATINUM TECHNOLOGY, INC. Chief Executive Officer Bonus Compensation Plan, incorporated
by reference to Exhibit 10.20 to the June 1994 10-Q.
10.16 Amendments to the PLATINUM TECHNOLOGY, INC. 1994 Stock Incentive Plan, incorporated by
reference to Exhibit 4.3 to the Company's Registration Statement on Form S-8,
Registration No. 33-85798 (the "1994 S-8").
10.17 Form of Option Agreement under the PLATINUM TECHNOLOGY, INC. 1993 Directors' Stock
Option Plan, incorporated by reference to Exhibit 4.4 to the 1994 S-8.
10.18 Form of Option Agreement under the PLATINUM TECHNOLOGY, INC. 1994 Stock Incentive Plan,
incorporated by reference to Exhibit 4.5 to the 1994 S-8.
10.19 Amendment Number One, dated as of May 3, 1993, to the Oakbrook Terrace Lease,
incorporated by reference to Exhibit 10.19 to the 1994 10-K.
10.20 Amendment Number Two, dated as of October 26, 1993, to the Oakbrook Terrace Lease,
incorporated by reference to Exhibit 10.20 to the 1994 10-K.
10.21 Amendment Number Three, dated as of December 22, 1994, to the Oakbrook Terrace Lease,
incorporated by reference to Exhibit 10.21 to the 1994 10-K.
10.22 Office Lease, dated August 8, 1994, between the Company and L.J. Sheridan & Co. as court
appointed receiver, incorporated by reference to Exhibit 10.22 to the 1994 10-K.
10.23 PLATINUM TECHNOLOGY, INC. Employee Incentive Compensation Plan, incorporated by
reference to Exhibit 10.23 to the 1995 S-4.
10.24 Lease Agreement, dated as of March 30, 1995, between the Company and Lisle Property
Venture, Inc. (the "Lisle Lease"), incorporated by reference to Exhibit 10.24 to the
1995 S-4.
</TABLE>

II-5
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT PAGE
- ----------- ---------------------------------------------------------------------------------------- ---------
<S> <C> <C>
10.25 First Amendment, dated as of September 15, 1995, to the Lisle Lease, incorporated by
reference to Exhibit 10.25 to the 1995 10-K.
10.26 Second Amendment, dated as of September 15, 1995, to the Lisle Lease, incorporated by
reference to Exhibit 10.26 to the 1995 10-K.
10.27 Third Amendment, dated as of January 3, 1996, to the Lisle Lease, incorporated by
reference to Exhibit 10.27 to the 1995 10-K.
10.28 Lease Agreement, dated as of October 31, 1995, between Lisle Property Venture, Inc. and
the Company, incorporated by reference to Exhibit 10.28 to the 1995 10-K.
10.29 Amendment Number Four, dated as of March 9, 1995, to the Oakbrook Terrace Lease,
incorporated by reference to Exhibit 10.29 to the 1995 10-K.
10.30 Loan Agreement, dated as of December 31, 1995, between the Company and American National
Bank and Trust Company of Chicago, incorporated by reference to Exhibit 10.30 to the
1995 10-K.
21 Subsidiaries of the Company, incorporated by reference to Exhibit 21 to the 1995 10-K.
23.1 Consent of KPMG Peat Marwick LLP with respect to the Company's financial statements.
23.2 Consent of Deloitte & Touche LLP with respect to Trinzic's financial statements.
23.3 Consent of Ernst & Young LLP with respect to Altai's financial statements.
23.4 Consent of Coopers & Lybrand L.L.P. with respect to Answer's financial statements.
23.5 Consent of Arthur Andersen LLP with respect to Locus' financial statements.
23.6 Consent of Arthur Andersen LLP with respect to Softool's financial statements.
23.7 Consent of Price Waterhouse LLP with respect to Reltech's financial statements.
23.8 Consent of KPMG Peat Marwick LLP with respect to ProtoSoft's financial statements.
23.9 Consent of Bell, Boyd & Lloyd (contained in Exhibit 5.1).
24.1 Powers of Attorney (included on the signature page of this registration statement).
99.1 Report of Deloitte & Touche LLP on Trinzic's financial statements.
99.2 Report of Ernst & Young on Altai's financial statements.
99.3 Report of Coopers & Lybrand L.L.P. on Answer's financial statements.
99.4 Report of Arthur Andersen LLP on Locus' financial statements.
99.5 Report of Arthur Andersen LLP on Softool's financial statements.
</TABLE>

(b) Financial Statement Schedules

<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Report of Independent Public Accountants.............................................................. S-1
Schedule II -- Valuation and Qualifying Accounts...................................................... S-2
</TABLE>

II-6
<PAGE>
All other schedules for which provision is made in the applicable accounting
regulations of the Securities and Exchange Commission have been omitted because
they are not required under the related instructions, are not applicable, or the
information has been provided in the consolidated financial statements or the
notes thereto.

ITEM 17. UNDERTAKINGS

The undersigned registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:

(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933.

(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
the registration statement. Notwithstanding the foregoing, any increase
or decrease in the volume of securities offered (if the total dollar
value of securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than a 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement.

(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.

(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.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers, and controlling persons of the
Company pursuant to the provisions described under Item 14 above or otherwise,
the Company 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 Company of expenses
incurred or paid by a director, officer, or controlling person of the Company in
the successful defense of any action, suit, or proceeding) is asserted against
the Company by such director, officer, or controlling person in connection with
the securities being registered, the Company will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.

II-7
<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Oakbrook Terrace, State
of Illinois, on July 8, 1996.

PLATINUM TECHNOLOGY, INC.

By: /S/ MICHAEL P. CULLINANE
-------------------------------------
Michael P. Cullinane
EXECUTIVE VICE PRESIDENT
AND CHIEF FINANCIAL OFFICER

POWER OF ATTORNEY

EACH PERSON WHOSE SIGNATURE APPEARS BELOW HEREBY APPOINTS MICHAEL P.
CULLINANE AND MICHAEL C. WYATT, AND EACH OF THEM SEVERALLY, ACTING ALONE AND
WITHOUT THE OTHER, HIS OR HER TRUE AND LAWFUL ATTORNEY-IN-FACT WITH AUTHORITY TO
EXECUTE IN THE NAME OF EACH SUCH PERSON AND TO FILE WITH THE SECURITIES AND
EXCHANGE COMMISSION, TOGETHER WITH ANY EXHIBITS THERETO AND OTHER DOCUMENTS
THEREWITH, ANY AND ALL AMENDMENTS (INCLUDING POST-EFFECTIVE AMENDMENTS) TO THIS
REGISTRATION STATEMENT NECESSARY OR ADVISABLE TO ENABLE THE REGISTRANT TO COMPLY
WITH THE SECURITIES ACT OF 1933, AS AMENDED, AND ANY RULES, REGULATIONS, AND
REQUIREMENTS OF THE SECURITIES AND EXCHANGE COMMISSION IN RESPECT THEREOF, WHICH
AMENDMENTS MAY MAKE SUCH OTHER CHANGES IN THE REGISTRATION STATEMENT AS THE
AFORESAID ATTORNEY-IN-FACT EXECUTING THE SAME DEEMS APPROPRIATE, AND ANY FILINGS
PURSUANT TO RULE 462(B) UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on July 8, 1996.

<TABLE>
<CAPTION>
SIGNATURE TITLE
- ------------------------------------------------------ ------------------------------------------------------

<S> <C>
PRINCIPAL EXECUTIVE OFFICER:

/S/ ANDREW J. FILIPOWSKI President, Chief Executive Officer and
------------------------------------------- Chairman of the Board of Directors
Andrew J. Filipowski

PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER:

/S/ MICHAEL P. CULLINANE Executive Vice President, Chief Financial Officer,
------------------------------------------- Treasurer, and Director
Michael P. Cullinane

A MAJORITY OF THE DIRECTORS:

/S/ ANDREW J. FILIPOWSKI
------------------------------------------- Director
Andrew J. Filipowski
</TABLE>

II-8
<PAGE>
<TABLE>
<S> <C>
/S/ PAUL L. HUMENANSKY
------------------------------------------- Director
Paul L. Humenansky

/S/ MICHAEL P. CULLINANE
------------------------------------------- Director
Michael P. Cullinane

/S/ CASEY G. COWELL
------------------------------------------- Director
Casey G. Cowell

/S/ JAMES E. COWIE
------------------------------------------- Director
James E. Cowie

/S/ STEVEN D. DEVICK
------------------------------------------- Director
Steven D. Devick

/S/ GIAN M. FULGONI
------------------------------------------- Director
Gian M. Fulgoni
</TABLE>

II-9
<PAGE>
REPORT OF INDEPENDENT AUDITORS

The Stockholders and Board of Directors of
PLATINUM TECHNOLOGY, INC.:

Under date of March 29, 1996, we reported on the consolidated balance sheets of
PLATINUM TECHNOLOGY, INC. and subsidiaries as of December 31, 1994 and 1995, and
the related consolidated statements of operations, stockholders' equity and cash
flows for each of the years in the three-year period ended December 31, 1995, as
contained in a registration statement on Form S-1 of PLATINUM TECHNOLOGY, INC.
Our report is based in part on the reports of other auditors. In connection with
our audits of the aforementioned consolidated financial statements, we also
audited the related consolidated financial statement schedule. The financial
statement schedule is the responsibility of the Company's management. Our
responsibility is to express an opinion on the financial statement schedule
based on our audits.

In our opinion, based on our audits and the reports of other auditors, such
consolidated financial statement schedule, when considered in relation to the
basic consolidated financial statements taken as a whole, presents fairly, in
all material respects, the information set forth therein.

KPMG Peat Marwick LLP

Chicago, Illinois
March 29, 1996

S-1
<PAGE>
SCHEDULE II
PLATINUM TECHNOLOGY, INC.
VALUATION AND QUALIFYING ACCOUNTS

<TABLE>
<CAPTION>
ALLOWANCE FOR DOUBTFUL ACCOUNTS BEGINNING BAD DEBT ENDING
FOR TRADE ACCOUNTS RECEIVABLE BALANCE EXPENSE BALANCE
- --------------------------------------------------------------------- ------------- ------------- -------------
<S> <C> <C> <C>
Year ended December 31, 1995......................................... $ 1,522,000 $ 1,173,000 $ 2,695,000
Year ended December 31, 1994......................................... 1,290,000 232,000 1,522,000
Year ended December 31, 1993......................................... 1,223,500 66,500 1,290,000
</TABLE>

S-2

<PAGE>

CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
OF
PLATINUM TECHNOLOGY, INC.

PLATINUM TECHNOLOGY, INC., a corporation organized and existing under and
by virtue of the General Corporation Law of the State of Delaware (the "Act"),
DOES HEREBY CERTIFY THAT:

1. In accordance with the provisions of Section 242 of the Act, an
amendment to the Restated Certificate of Incorporation of this
Corporation has been duly adopted by the Board of Directors of this
Corporation and by the stockholders of this Corporation at the Annual
Meeting of Stockholders.

2. Said amendment amends the first paragraph of Article Fourth of the
Restated Certificate of Incorporation so that, as amended, the first
paragraph of Article Fourth shall read in its entirety as follows:

"FOURTH: The total number of shares of capital stock of all classes
which the Corporation shall have authority to issue is 190,000,000
shares, which shall be divided as follows: (i) a class of 180,000,000
shares of Common Stock, par value $.001 per share (the "Common
Stock"), and (ii) a class of 10,000,000 shares of Class II Preferred
Stock, par value $.01 per share (the "Class II Preferred Stock")."

IN WITNESS WHEREOF, PLATINUM TECHNOLOGY, INC. has caused this Certificate
of Amendment to be signed this 24th day of May, 1996.

PLATINUM TECHNOLOGY, INC.

By: /s/ Michael C. Wyatt
----------------------------------
Michael C. Wyatt
Vice President, Secretary and
General Counsel

<PAGE>

(Conformed copy giving effect to all
amendments since the date of this
Restated Certificate of Incorporation)

RESTATED CERTIFICATE OF INCORPORATION
OF
PLATINUM TECHNOLOGY, INC.

(Original Certificate of Incorporation filed April 16, 1987)

PLATINUM TECHNOLOGY, INC. (the "Corporation"), a corporation organized and
existing under and by virtue of the General Corporation Law of the State of
Delaware (the "Law"), does hereby certify:

I. That the Board of Directors of the Corporation adopted a resolution
setting forth the Restated Certificate of Incorporation set forth below,
declaring its adoption advisable and submitting it to the stockholders entitled
to vote in respect thereof for their consideration.

II. That by written consent executed in accordance with Section 228 of the
Law, the holders of a majority of the outstanding stock entitled to vote
thereon, and the holders of a majority of the outstanding stock of each class
entitled to vote thereon as a class, have voted in favor of the adoption of the
Restated Certificate of Incorporation set forth below, and written notice of
such action has been given as provided in Section 228 (c) of the Law.

III. That the Restated Certificate of Incorporation of the Corporation set
forth below has been duly adopted in accordance with Sections 242 and 245 of the
Law:

FIRST: The name of the Corporation is PLATINUM technology, inc.

SECOND: The address of the registered office of the Corporation in the
State of Delaware is Corporation Trust Center, 1209 Orange Street, City of
Wilmington, County of New Castle. The name of the registered agent of the
Corporation at such address is The Corporation Trust Company.

THIRD: The nature of the business or purposes to be conducted or promoted
is to engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of the State of Delaware.

FOURTH: The total number of shares of capital stock of all classes which
the Corporation shall have authority to issue is 190,000,000 shares, which shall
be divided as follows: (i) a class of 180,000,000 shares of Common Stock, par
value $.001 per share (the "Common Stock"), and (ii) a class of 10,000,000
shares of Class II Preferred Stock, par value $.01 per share (the "Class II
Preferred Stock").

<PAGE>

The designations and the powers, preferences, and relative, participating,
optional, or other rights of the capital stock and the qualifications,
limitations, or restrictions thereof are as follows:

A. COMMON STOCK PROVISIONS.

1. VOTING RIGHTS. Except as otherwise required by law or expressly
provided herein, the holder of each share of the Common Stock shall have one
vote per share on each matter submitted to a vote of the stockholders of the
Corporation.

2. DIVIDED RIGHTS. The holders of the Common Stock shall be entitled
to receive dividends at such times and in such amounts as may be determined by
the Board of Directors of the Corporation.

3. LIQUIDATION RIGHTS. In the event of any liquidation, dissolution,
or winding up of the Corporation, whether voluntary or involuntary, after
payment or provision for payment of the debts and other liabilities of the
Corporation and the preferential amounts to which the holders of any outstanding
shares of Class II Preferred Stock shall be entitled upon dissolution,
liquidation, or winding up, the holders of the Common Stock shall be entitled to
share ratably in the remaining assets of the Corporation.

B. CLASS II PREFERRED STOCK.

The Class II Preferred Stock may be issued from time to time in one or
more series. Subject to the other provisions of this Restated Certificate of
Incorporation, the Board of Directors is authorized, subject to any limitations
prescribed by law, to provide for the issuance of and to issue shares of the
Class II Preferred Stock in series, and by filing a certificate pursuant to the
laws of the State of Delaware, to establish from time to time the number of
shares to be included in each such series, and to fix the designation, powers,
preferences, and rights of the shares of each such series and any
qualifications, limitations, or restrictions thereof. The number of authorized
shares of Class II Preferred Stock may be increased or decreased (but not below
the number of shares thereof then outstanding) by the affirmative vote of the
holders of a majority of the Common Stock, without a vote of the holders of any
Class II Preferred Stock, or of any series thereof, unless a vote of any such
holders is required pursuant to the certificate or certificates establishing
such series of Class II Preferred Stock.

C. GENERAL PROVISIONS.

1. VOTING. Except as provided by law or this Restated Certificate
of Incorporation with respect to voting by class or series, the holder of each
outstanding share of stock of the Corporation (regardless of class or series)
shall be entitled to one vote (except with respect to any greater or lesser vote
or no vote which may be fixed by this Restated Certificate of Incorporation or
by the resolution of the Board of Directors providing for the issue of a series
of Class II Preferred Stock, in which event the holder of each outstanding share
of such series shall be entitled to such vote or no vote as may be fixed in such
resolution), on each matter submitted to a vote at a meeting of stockholders.

2
<PAGE>

2. QUORUM AT STOCKHOLDERS' MEETINGS. At any meeting of
stockholders, the presence in person or by proxy of the holders of record of
outstanding shares of stock of the Corporation entitled to vote a majority of
the votes entitled to be voted at such meeting shall constitute a quorum for all
purposes, except as otherwise provided by this Restated Certificate of
Incorporation or required by applicable law.

FIFTH: The business and affairs of the Corporation shall be managed by or
under the direction of a Board of Directors consisting of not less than six nor
more than 11 directors. The exact number shall be determined from time to time
by resolution adopted by the affirmative vote of a majority of the directors in
office at the time of adoption of such resolution. Initially, the number of
directors shall be seven.

The directors shall be divided into three classes, Class I, Class II, and
Class III; with Class I and Class II each having two members and Class III
having three members. At the election of directors immediately following the
adoption of this Restated Certificate of Incorporation, Class I directors will
be elected for a one-year term, Class II directors will be elected for a two-
year term, and Class III directors will be elected for a three-year term. At
each annual meeting of stockholders after such election, successors to the class
of directors whose term expires at that annual meeting shall be elected for a
three-year term. If the number of directors is changed, any increase or
decrease shall be apportioned among the classes by the Board of Directors so as
to maintain the number of directors in each class as nearly equal as reasonably
possible, and any additional director of any class elected to fill a vacancy
resulting from an increase in such class shall hold office for a term that shall
coincide with the remaining term of that class. In no case will a decrease in
the number of directors shorten the term of an incumbent director even though
such decrease may result in an inequality of the classes until the expiration of
such term. A director shall hold office until the annual meeting of the year in
which his term expires and until his successor shall be elected and shall
qualify, subject, however, to prior death, resignation, retirement, or removal
from office. No director elected by the holders of the Common Stock may be
removed except for cause. Except as required by law or the provisions of this
Certificate of Incorporation, all vacancies on the board of directors and newly-
created directorships shall be filled by the board of directors. Any director
elected to fill a vacancy not resulting from an increase in the number of
directors shall have the same remaining term as that of his predecessor.

Notwithstanding the foregoing, whenever the holders of any one or more
classes or series of preferred stock issued by the Corporation shall have the
right, voting separately by class or series, to elect directors at an annual or
special meeting of stockholders, the election, term of office, filling of
vacancies, and other features of such directorship shall be governed by the
terms of this Restated Certificate of Incorporation and any resolutions of the
Board of Directors applicable thereto, and such directors so elected shall not
be divided into classes pursuant to this Article FIFTH. Notwithstanding
anything to the contrary contained in this Restated Certificate of
Incorporation, the affirmative vote of the holders of at least 80% of the voting
power of the shares entitled to vote generally in the election of directors
shall be required to amend, alter, or repeal, or to adopt any provision
inconsistent with, this Article FIFTH.

3
<PAGE>

SIXTH: (a) WRITTEN CONSENT. At any time after the first to occur of (i)
the closing of a public offering of securities of the Corporation registered
under the Securities Act of 1933, and (ii) August 15, 1991, any action required
or permitted to be taken by the stockholders of the Corporation must be effected
at a duly called annual or special meeting of stockholders of the Corporation
and may not be effected by any consent in writing by such stockholders.

(b) SPECIAL MEETINGS. Special meetings of stockholders of the Corporation
may be called upon not less than ten nor more than 60 days' written notice only
by the Board of Directors pursuant to a resolution approved by a majority of the
Board of Directors.

(c) AMENDMENT. Notwithstanding anything contained in this Restated
Certificate of Incorporation to the contrary, the affirmative vote of the
holders of at least 80% of the shares entitled to vote generally in the election
of directors shall be required to amend, alter, or repeal, or to adopt any
provision inconsistent with, this Article SIXTH.

SEVENTH: In furtherance and not in limitation of the powers conferred by
statute, the Board of Directors is expressly authorized to make, alter, or
repeal the By-Laws of the Corporation.

EIGHTH: Meetings of stockholders may be held within or without the State
of Delaware as the By-Laws may provide. The books of the Corporation may be
kept outside the state of Delaware at such place or places as may be designated
from time to time by the Board of Directors of the Corporation or in the By-Laws
of the Corporation. Election of directors need not be by written ballot unless
the By-Laws of the Corporation so provide.

NINTH: No director of the Corporation shall be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, provided, however, that this provision shall not eliminate
or limit the liability of a director (i) for any breach of the director's duty
of loyalty to the Corporation or its stockholders, (ii) for acts or omissions
not in good faith or which involve intentional misconduct or a knowing violation
of law, (iii) under Section 174 of the General Corporation Law of the State of
Delaware, or (iv) for any transaction from which the director derived an
improper personal benefit.

TENTH: The Corporation shall indemnify, in accordance with and to the full
extent now or hereafter permitted by law, any person who was or is a party or is
threatened to be made a party to any threatened, pending, or completed action,
suit, or proceeding, whether civil, criminal, administrative, or investigative
(including, without limitation, an action by or in the right of the
Corporation), by reason of his acting as a director of the Corporation (and the
Corporation, in the discretion of the Board of Directors, may so indemnify a
person by reason of the fact that he is or was an officer or employee of the
Corporation or is or was serving at the request of the Corporation in any other
capacity for or on behalf of the Corporation) against any liability or expense
actually and reasonably incurred by such person in respect thereof; provided
that the Corporation shall not be obligated to indemnify any such person (i)
with respect to proceedings, claims, or actions initiated or brought voluntarily
by any such person and not by way of defense, or (ii) for any amounts paid in
settlement of an action indemnified against by the Corporation without the prior
written consent of the Corporation to such settlement. Such

<PAGE>

indemnification is not exclusive of any other right to indemnification
provided by law, agreement, or otherwise.

ELEVENTH: No amendment to or repeal of Article NINTH or TENTH of this
Restated Certificate of Incorporation shall apply to or have any effect on the
rights of any individual referred to in Articles NINTH or TENTH for or with
respect to acts or omissions of such individual occurring prior to such
amendment or repeal.

TWELFTH: The By-Laws of the Corporation may be altered, amended, or
repealed or new By-Laws may be adopted by the board of directors or by the vote
of the holders of 66-2/3% of the shares entitled to vote generally for the
election of directors if notice of such alteration, amendment, repeal, or
adoption of new By-Laws is contained in the notice of such special meeting.

IN WITNESS WHEREOF, the Corporation has caused this Restated Certificate of
Incorporation to be signed by its Vice President and Assistant Secretary, all on
March 5, 1991.

PLATINUM TECHNOLOGY, INC.

By: /s/ Michael Cullinane
-----------------------------------
Michael Cullinane
Vice President

ATTEST:

- -------------------------------
Assistant Secretary

<PAGE>
[LETTERHEAD]

July 8, 1996

PLATINUM TECHNOLOGY, INC.
1815 South Meyers Road
Oakbrook Terrace, IL 60181

REGISTRATION STATEMENT ON FORM S-1

Ladies and Gentlemen:

We have represented PLATINUM TECHNOLOGY, INC., a Delaware corporation (the
"Company"), in connection with the registration statement on Form S-1 (the
"Registration Statement") filed under the Securities Act of 1933, as amended
(the "Act"), for the purpose of registering under the Act 5,000,000 shares of
common stock, $.001 par value per share, (the "Common Stock") of the Company,
which the Company may offer from time to time pursuant to Rule 415 under the
Act or otherwise. In this connection, we have examined originals, or copies
certified or otherwise identified to our satisfaction, of such documents,
corporate and other records, certificates and other papers, including the
Registration Statement and pertinent resolutions of the board of directors of
the Company, as we deemed it necessary to examine for the purpose of this
opinion.

Based upon such examination, on the existing provisions of the certificate
of incorporation of the Company and on the applicable laws of the State of
Delaware now in effect, it is our opinion that such of the shares of Common
Stock as are issued from time to time as contemplated by the Registration
Statement, will, upon issuance and delivery thereof against receipt by the
Company of the agreed consideration therefor, constitute legally issued, fully
paid and non-assessable shares of the Company's Common Stock, provided each such
issuance is duly authorized by the board of directors of the Company, or a duly
authorized committee of the board of directors, for a consideration (not less
than the par value of the shares) fixed by said board of directors or committee,
and determined by it to be adequate.

We consent to the filing of this opinion as an exhibit to the Registration
Statement. In giving this consent, we do not admit that we are within the
category of persons whose consent is required by Section 7 of the Securities
Act.

Very truly yours,

/s/ Bell, Boyd & Lloyd

<PAGE>

EXHIBIT 23.1

INDEPENDENT AUDITORS' CONSENT

We consent to the use of our report dated March 29, 1996, relating to the
consolidated balance sheets of PLATINUM TECHNOLOGY, INC. and subsidiaries as of
December 31, 1995 and 1994, and the related consolidated statements of
operations, stockholders' equity, and cash flows for each of the years in the
three-year period ended December 31, 1995, included herein and to the reference
to our firm under the heading "Selected Financial Data" and "Experts" in the
prospectus. Our report was based in part on the reports of other auditors.

KPMG PEAT MARWICK LLP
Chicago, Illinois
July 3, 1996

<PAGE>

EXHIBIT 23.2

CONSENT OF DELOITTE & TOUCHE LLP

We consent to the use in this Registration Statement of PLATINUM TECHNOLOGY,
INC. on Form S-1 of our report dated April 28, 1995 (relating to the
consolidated financial statements of Trinzic Corporation not presented
separately herein) and to the reference to us under the heading "Experts" in the
Prospectus, which is part of this Registration Statement.

DELOITTE & TOUCHE LLP
San Jose, California
July 3, 1996

<PAGE>

EXHIBIT 23.3

CONSENT OF INDEPENDENT AUDITORS

We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-1 No. 333-____) and related Prospectus of
PLATINUM TECHNOLOGY, INC. for the registration of 5,000,000 shares of its common
stock and to the use of our report dated September 2, 1994, with respect to the
consolidated statements of income, stockholders' equity, and cash flows of
Altai, Inc. for the years ended July 31, 1994 and 1993, which financial
statements are not separately presented in PLATINUM TECHNOLOGY, INC.'S
Registration Statement and Prospectus referred to above.

ERNST & YOUNG LLP
Fort Worth, Texas
July 5, 1996

<PAGE>

EXHIBIT 23.4

CONSENT OF INDEPENDENT ACCOUNTANTS

We consent to the inclusion in this registration statement on Form S-1 of our
report dated August 26, 1994 on our audit of the financial statements of Answer
Systems, Inc. for the year ended June 30, 1994. We also consent to the
reference to our firm under the caption "Experts."

COOPERS & LYBRAND L.L.P.

San Jose, California
July 3, 1996

<PAGE>

EXHIBIT 23.5

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our report
for Locus Computing Corporation dated March 20, 1995 in this Form S-1
registration statement and to all references to our Firm included in this
Registration Statement.

ARTHUR ANDERSEN LLP

Los Angeles, California
July 3, 1996

<PAGE>

EXHIBIT 23.6

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our report
for Softool Corporation dated September 29, 1995 in this Form S-1 registration
statement and to all references to our Firm included in this Registration
Statement.

ARTHUR ANDERSEN LLP

Los Angeles, California
July 3, 1996

<PAGE>

EXHIBIT 23.7

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the use in the Prospectus constituting part of this
Registration Statement on Form S-1 of our report dated March 20, 1995 relating
to the financial statements of RELTECH Group, Inc., which appears in such
Prospectus. We also consent to the reference to us under the heading "Experts"
in such Prospectus.

PRICE WATERHOUSE LLP
Washington, D.C.
July 3, 1996

<PAGE>

EXHIBIT 23.8

INDEPENDENT AUDITORS' CONSENT

We consent to the use of our report dated January 12, 1996, with respect to
the consolidated balance sheets of ProtoSoft, Inc. as of December 31, 1994 and
1993, and the related consolidated statements of operations, stockholders'
equity, and cash flows for each of the years in the year period ended December
31, 1994, the ten months ended December 31, 1993, and the year ended February
28, 1993, included herein and to the reference to our firm under the heading
"Experts" in the prospectus.

KPMG PEAT MARWICK LLP

Houston, Texas
July 3, 1996

<PAGE>

EXHIBIT 99.1

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders of
Trinzic Corporation

We have audited the accompanying consolidated balance sheet of Trinzic
Corporation and subsidiaries as of March 31, 1995 and the related consolidated
statements of operations, stockholders' equity, and cash flows for the years
ended March 31, 1995 and 1994 (not presented separately herein). These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of Trinzic Corporation and
subsidiaries as of March 31, 1995 and the results of their operations and their
cash flows for the years ended March 31, 1995 and 1994 in conformity with
generally accepted accounting principles.

DELOITTE & TOUCHE LLP
San Jose, California
April 28, 1995

<PAGE>

EXHIBIT 99.2

REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

Stockholders and Board of Directors
Altai, Inc.

We have audited the consolidated statements of income, stockholders' equity,
and cash flows of Altai, Inc. for the years ended July 31, 1994 and 1993 (not
presented separately herein). These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audits.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated results of operations and cash flows of
Altai, Inc. for the years ended July 31, 1994 and 1993, in conformity with
generally accepted accounting principles.

ERNST & YOUNG LLP

Fort Worth, Texas
September 2, 1994

<PAGE>

EXHIBIT 99.3

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors
Answer Systems, Inc.:

We have audited the statements of operations, common stock and other
shareholders' deficiency and cash flows of Answer Systems, Inc. for the year
ended June 30, 1994. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

We conducted our audit in accordance with our generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the results of operations and cash flows of Answer
Systems, Inc. for the year ended June 30, 1994, in conformity with generally
accepted accounting principles.

COOPERS & LYBRAND L.L.P.

San Jose, California
August 26, 1994

<PAGE>

EXHIBIT 99.4

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Shareholders and Board of Directors of
Locus Computing Corporation

We have audited the accompanying consolidated balance sheet of LOCUS
COMPUTING CORPORATION (a California corporation) AND SUBSIDIARIES as of January
31, 1995, and the related consolidated statements of operations, shareholders'
equity (deficit) and cash flows for each of the two years in the period ended
January 31, 1995 (not presented herein). These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Locus Computing Corporation and
subsidiaries as of January 31, 1995, and the results of their operations and
their cash flows for each of the two years in the period ended January 31, 1995
in conformity with generally accepted accounting principles.

As discussed further in Note 6, the Company's Articles of Incorporation allow
for a redemption privilege of the Series A preferred stock together with accrued
dividends on March 27, 1992. While the ultimate outcome is uncertain, it is the
belief of management that total redemption would not currently be allowed under
California law. Management has reached an agreement with the remaining Series A
preferred stockholders that the Company will make redemptions based on cash
flow, current profitability, and planned future profitability, as defined. As
there is no assurance that amounts will be redeemed in the next year, the
Company has not included the redemption amount in current liabilities at January
31, 1995 (see Note 6).

ARTHUR ANDERSEN LLP

Los Angeles, California
March 20, 1995

<PAGE>

EXHIBIT 99.5

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Softool Corporation:

We have audited the accompanying combined and consolidated balance sheets of
SOFTOOL CORPORATION (a California corporation) AND SUBSIDIARIES AND SOFTOOL
INTERNATIONAL CORPORATION (a California corporation) as of December 31, 1994,
and the related combined and consolidated statements of operations,
shareholders' equity and cash flows for each of the two years in the period
ended December 31, 1994 (not presented herein). These financial statements are
the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of SOFTOOL CORPORATION AND
SUBSIDIARIES AND SOFTOOL INTERNATIONAL CORPORATION as of December 31, 1994, and
the results of their operations and their cash flows for each of the two years
in the period ended December 31, 1994 in conformity with generally accepted
accounting principles.

ARTHUR ANDERSEN LLP

Los Angeles, California
August 29, 1995 (except with respect to
the matter discussed in Note 14, as to
which the date is November 17, 1995).