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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D/A
AMENDMENT NO. 1
UNDER THE SECURITIES EXCHANGE ACT OF 1934
DATAWORKS CORPORATION
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(Name of Issuer)
COMMON STOCK
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(Title of Class of Securities)
72764R105
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(CUSIP Number)
L. GEORGE KLAUS, CHIEF EXECUTIVE OFFICER
PLATINUM SOFTWARE CORPORATION
195 TECHNOLOGY DRIVE
IRVINE, CALIFORNIA 92618
(949) 453-4000
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(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
October 13, 1998
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
NOTE: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
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SCHEDULE 13D/A
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CUSIP NO. 72764R105 PAGE 2 OF 21 PAGES
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Platinum Software Corporation
I.R.S. Identification No.: 33-0277592
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
N/A
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
00
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
N/A
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
STATE OF DELAWARE
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NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY N/A
OWNED BY ----------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON 1,876,583(1)
WITH ----------------------------------------------------------
9 SOLE DISPOSITIVE POWER
N/A
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10 SHARED DISPOSITIVE POWER
N/A
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,876,583(1)
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES* [ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
12.7%(1)
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14 TYPE OF REPORTING PERSON*
CO
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
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SCHEDULE 13D/A
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CUSIP NO. 72764R105 PAGE 3 OF 21 PAGES
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Neither the filing of this Schedule 13D/A nor any of its contents shall be
deemed to constitute an admission by Platinum Software Corporation that it is
the beneficial owner of any of the Common Stock referred to herein for purposes
of Section 13(d) of the Securities Exchange Act of 1934, as amended (the "Act"),
or for any other purpose, and such beneficial ownership is expressly disclaimed.
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(1) Based solely on information provided by DataWorks Corporation, and includes
314,942 shares of DataWorks Common Stock underlying stock options
exercisable within 60 days of October 13, 1998.
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SCHEDULE 13D/A
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CUSIP NO. 72764R105 PAGE 4 OF 21 PAGES
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ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Pursuant to an Agreement and Plan of Reorganization dated October 13,
1998, (the "Reorganization Agreement"), among Platinum, Zoo Acquisition
Corp., a Delaware corporation and wholly-owned subsidiary of Platinum
("Merger Sub") and DataWorks, and subject to the conditions set forth
therein (including approval by stockholders of Platinum and DataWorks),
Merger Sub will merge with and into DataWorks and DataWorks will become
a wholly-owned subsidiary of Platinum (such events constituting the
"Merger"). Once the Merger is consummated, Merger Sub will cease to
exist as a corporation and all of the business, assets, liabilities and
obligations of Merger Sub will be merged into DataWorks with DataWorks
remaining as the surviving corporation (the "Surviving Corporation"). As
a result of the Merger, each outstanding share of DataWorks Common
Stock, other than shares owned by Merger Sub, Platinum or any
wholly-owned subsidiary of Platinum, will be converted into the right to
receive 0.794 of a share (the "Exchange Ratio") of Platinum Common
Stock, and each outstanding option to purchase DataWorks Common Stock
under DataWorks' stock option plans (each, a "DataWorks Common Stock
Option") will be assumed by Platinum (each, an "Assumed Option") and
certain outstanding warrants to purchase DataWorks Common Stock (each, a
"DataWorks Warrant") will be assumed by Platinum (each, an "Assumed
Warrant"). Each Assumed Option and each Assumed Warrant will become an
option or warrant, as the case may be, to purchase that number of shares
of Platinum Common Stock as is equal (subject to rounding) to the number
of shares of DataWorks Common Stock that was subject to such option or
warrant, as the case may be, immediately prior to the Merger, multiplied
by the Exchange Ratio. The exercise price of each Assumed Option and
each Assumed Warrant will be equal to the quotient determined by
dividing the exercise price per share of DataWorks Common Stock at which
such DataWorks Common Stock Option and each DataWorks Warrant was
exercisable immediately prior to the effective time of the Merger by the
Exchange Ratio, rounded up to the nearest whole cent. The Reorganization
Agreement was amended on October 30, 1998 to allow Platinum and
DataWorks to take certain actions which would cause the Merger to be
accounted for as a purchase rather than a pooling of interests. A copy
of this amendment (the "Amendment") is included as Exhibit 3 to this
Schedule 13D. The foregoing summary of the Merger is qualified in its
entirety by reference to the copy of the Reorganization Agreement
included as Exhibit 1 to this Schedule 13D and the Amendment thereto
filed as Exhibit 3 to this Schedule 13D, each of which is incorporated
herein in its entirety by reference.
ITEM 4. PURPOSE OF TRANSACTION.
(a) - (g) The following is a brief summary of the material provisions of
the Reorganization Agreement and the Amendment thereto, copies of which are
attached as Exhibit 1 and Exhibit 3, respectively, to this
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SCHEDULE 13D/A
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CUSIP NO. 72764R105 PAGE 5 OF 21 PAGES
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Schedule 13D and are incorporated herein by reference. This summary is qualified
in its entirety by reference to the full and complete text of the Reorganization
Agreement and the Amendment.
EFFECTIVE TIME
Subject to the provisions of the Reorganization Agreement, Platinum,
DataWorks and Merger Sub shall cause the Merger to be consummated by filing a
Certificate of Merger, with the Secretary of State of the State of Delaware in
accordance with the relevant provisions of Delaware law as soon as practicable
on or after the Closing Date. The closing of the Merger (the "Closing") shall
take place at the offices of Wilson Sonsini Goodrich & Rosati, Professional
Corporation at a time and date to be specified by the parties, which shall be no
later than the second business day after the satisfaction or waiver of the
conditions set forth in the Reorganization Agreement, or at such other time,
date and location as the parties to the Reorganization Agreement agree in
writing.
MANNER AND BASIS OF CONVERTING SHARES
At the Effective Time, by virtue of the Merger and without any action on
the part of Merger Sub, DataWorks or the holders of any of the following
securities each share of DataWorks Common Stock (including, with respect to each
such share of DataWorks Common Stock and the associated Rights (as defined in
that certain Rights Agreement (the "DataWorks Rights Plan") dated as of on or
about October 13, 1998, between DataWorks and ChaseMellon Shareholder Services,
L.L.C., as Rights Agent)) issued and outstanding immediately prior to the
Effective Time, other than any shares of the DataWorks Common Stock held by
DataWorks or owned by Platinum, Merger Sub or any direct or indirect
wholly-owned subsidiary to be canceled, will be canceled and extinguished and
automatically converted into the right to receive 0.794 (the "EXCHANGE RATIO")
shares of Common Stock of Platinum upon surrender of the certificate
representing such share of the DataWorks Common Stock in the manner provided
below (or in the case of a lost, stolen or destroyed certificate, upon delivery
of an affidavit).
If any shares of the DataWorks Common Stock outstanding immediately
prior to the Effective Time are unvested or are subject to a repurchase option,
risk of forfeiture or other condition under any applicable restricted stock
purchase agreement or other agreement with DataWorks, then the shares of
Platinum Common Stock issued in exchange for such shares of DataWorks Common
Stock will also be unvested to the same extent and/or be subject to the same
repurchase option, risk of forfeiture or other condition, as applicable, and the
certificates representing such shares of Platinum Common Stock may accordingly
be marked with appropriate legends.
Each share of DataWorks Common Stock held by DataWorks or owned by
Merger Sub, Platinum or any direct or indirect wholly-owned subsidiary of
DataWorks or of Platinum immediately prior to the Effective Time shall be
canceled and extinguished without any conversion thereof.
At the Effective Time, all options to purchase DataWorks Common Stock
then outstanding under DataWorks' 1995 Equity Incentive Plan, 1995 Non-Employee
Directors' Stock Option Plan, the Interactive 1997 Nonstatutory Stock Option
Plan and the Interactive 1995 Stock Option Plan (the "DataWorks Stock Option
Plans") shall be assumed by Platinum. At the Effective Time, rights outstanding
under DataWorks' 1995 Employee Stock Purchase Plan (the "DataWorks Purchase
Plan") shall be treated as described below. At the Effective Time, certain
warrants issued by DataWorks (the "Warrants") shall be, in connection with the
Merger, assumed by Platinum as described below.
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SCHEDULE 13D/A
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CUSIP NO. 72764R105 PAGE 6 OF 21 PAGES
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At the Effective Time, each outstanding DataWorks Option, whether or not
exercisable and regardless of the respective exercise prices thereof, will be
assumed by Platinum. Each DataWorks Option so assumed by Platinum under the
Reorganization Agreement will continue to have, and be subject to, the same
terms and conditions set forth in the applicable DataWorks Stock Option Plan
immediately prior to the Effective Time (including, without limitation, any
repurchase rights, vesting provisions and vested status of any such DataWorks
Option), except that (i) each DataWorks Option will be exercisable (or will
become exercisable in accordance with its terms) for that number of whole shares
of Platinum Common Stock equal to the product of the number of shares of
DataWorks Common Stock that were issuable upon exercise of such DataWorks Option
immediately prior to the Effective Time multiplied by the Exchange Ratio,
rounded down to the nearest whole number of shares of Platinum Common Stock and
(ii) the per share exercise price for the shares of Platinum Common Stock
issuable upon exercise of such assumed DataWorks Option will be equal to the
quotient determined by dividing the exercise price per share of DataWorks Common
Stock at which such DataWorks Option was exercisable immediately prior to the
Effective Time by the Exchange Ratio, rounded up to the nearest whole cent. It
is intended that DataWorks Options assumed by Platinum shall qualify following
the Effective Time as incentive stock options as defined in Section 422 of the
Code to the extent DataWorks Options qualified as incentive stock options
immediately prior to the Effective Time.
Rights outstanding under the DataWorks Purchase Plan shall be treated in
a manner reasonably acceptable to Platinum and DataWorks.
At the Effective Time, the Warrants will be assumed by Platinum. Each
Warrant so assumed by Platinum under the Reorganization Agreement will continue
to have, and be subject to, the same terms and conditions set forth in the
applicable warrant agreement immediately prior to the Effective Time (including,
without limitation, any repurchase rights or vesting provisions), except that
(i) each Warrant will be exercisable (or will become exercisable in accordance
with its terms) for that number of whole shares of Platinum Common Stock equal
to the product of the number of shares of DataWorks Common Stock that were
issuable upon exercise of such Warrant immediately prior to the Effective Time
multiplied by the Exchange Ratio, rounded down to the nearest whole number of
shares of Platinum Stock and (ii) the per share exercise price for the shares of
Platinum Common Stock issuable upon exercise of such assumed Warrant will be
equal to the quotient determined by dividing the exercise price per share of
DataWorks Common Stock at which such Warrant was exercisable immediately prior
to the Effective Time by the Exchange Ratio, rounded up to the nearest whole
cent.
The Exchange Ratio shall be adjusted to reflect appropriately the effect
of any stock split, reverse stock split, stock dividend (including any dividend
or distribution of securities convertible into Platinum Common Stock or
DataWorks Common Stock), reorganization, recapitalization, reclassification or
other like change with respect to Platinum Common Stock or DataWorks Common
Stock occurring on or after the date hereof and prior to the Effective Time.
As soon as practicable after the Effective Time, Platinum shall cause
the Exchange Agent to mail to each DataWorks stockholder of record (as of the
Effective Time) a letter of transmittal with instructions to be used by such
stockholder in surrendering certificates which, prior to the Merger, represented
shares of DataWorks Common Stock and cash in lieu of any fractional shares.
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SCHEDULE 13D/A
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CUSIP NO. 72764R105 PAGE 7 OF 21 PAGES
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CONDUCT FOLLOWING THE MERGER
Once the Merger is consummated, Merger Sub will cease to exist as a
corporation, and all of the business, assets, liabilities and obligations of
Merger Sub will be merged into DataWorks with DataWorks remaining as the
Surviving Corporation.
Pursuant to the Reorganization Agreement, the Certificate of
Incorporation of Merger Sub in effect immediately prior to the Effective Time
will become the Certificate of Incorporation of the Surviving Corporation and
the Bylaws of Merger Sub will become the Bylaws of the Surviving Corporation.
The Board of Directors of the Surviving Corporation will consist of the
directors who are serving as directors of Merger Sub immediately prior to the
Effective Time. The officers of DataWorks immediately prior to the Effective
Time will remain as officers of the Surviving Corporation, until their
successors are duly elected or appointed or qualified.
Pursuant to the Reorganization Agreement, the Platinum Board will take
all actions necessary to cause Stuart Clifton to be elected to the Platinum
Board immediately after the Effective Time.
CONDUCT OF PLATINUM'S AND DATAWORKS' BUSINESS PRIOR TO THE MERGER
Pursuant to the Reorganization Agreement, until the earlier of the
termination of the Reorganization Agreement pursuant to its terms or the
Effective Time, DataWorks (and each of its subsidiaries) agrees, except (i) as
indicated in the DataWorks disclosure schedules or (ii) to the extent that
Platinum shall otherwise consent in writing (including the consent set forth in
the Amendment), to carry on its business in all material respects, in the usual,
regular and ordinary course, in substantially the same manner as heretofore
conducted and in compliance with all applicable laws and regulations, to pay its
debts and taxes when due subject to good faith disputes over such debts or
taxes, to pay or perform other material obligations when due, and use its
commercially reasonable efforts consistent with past practices and policies to
preserve intact its present business organization, keep available the services
of its present officers and employees and preserve its relationships with
customers, suppliers, distributors, licensors, licensees, and others with which
it has business dealing. In addition, DataWorks will promptly notify the other
of any material event involving its business or operations. In addition, except
as permitted by the terms of the Reorganization Agreement or as provided in the
DataWorks disclosure schedules, without the prior written consent of Platinum,
DataWorks shall not do any of the following, and shall not permit its
subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or change the
period of exercisability of options or restricted stock, or reprice options
granted under any employee, consultant, director or other stock plans or
authorize cash payments in exchange for any options granted under any of such
plans;
(b) Grant any severance or termination pay to any officer or employee
except pursuant to agreements outstanding, or policies existing, on the date
hereof and as disclosed in the DataWorks schedules, or adopt any new severance
plan;
(c) Transfer or license to any person or entity or otherwise extend,
amend or modify in any material respect any rights to the Platinum Intellectual
Property, or enter into grants to future patent rights, other than non-exclusive
licenses in the ordinary course of business and consistent with past practice;
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SCHEDULE 13D/A
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CUSIP NO. 72764R105 PAGE 8 OF 21 PAGES
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(d) Declare, set aside or pay any dividends on or make any other
distributions (whether in cash, stock, equity securities or property) in respect
of any capital stock or split, combine or reclassify any capital stock or issue
or authorize the issuance of any other securities in respect of, in lieu of or
in substitution for any capital stock;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any
shares of capital stock of DataWorks or it subsidiaries, except repurchases of
unvested shares at cost in connection with the termination of the employment
relationship with any employee pursuant to stock option or purchase agreements
in effect on the date hereof;
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber, any
shares of DataWorks capital stock or any securities convertible into shares of
DataWorks capital stock, or subscriptions, rights, warrants or options to
acquire any shares of DataWorks capital stock or any securities convertible into
shares of DataWorks capital stock, or enter into other agreements or commitments
of any character obligating it to issue any such shares or convertible
securities, other than the issuance delivery and/or sale of (i) stock options in
the ordinary course of business and consistent with past practice up to 200,000
shares, (ii) shares of the DataWorks Common Stock pursuant to the exercise of
stock options therefor outstanding as of the date of the Reorganization
Agreement or granted pursuant to the foregoing clause (i), (iii) shares of
DataWorks Common Stock issuable to participants in the DataWorks Employee Stock
Purchase Plan consistent with the terms thereof and (iv) shares of DataWorks
capital stock pursuant to exercise of the Warrants;
(g) Cause, permit or propose any amendments to the Certificate of
Incorporation and Bylaws of DataWorks or the similar governing instruments of
each of its subsidiaries;
(h) Acquire or agree to acquire by merging or consolidating with, or by
purchasing any equity interest in or a portion of the assets of, or by any other
manner, any business or any corporation, partnership, association or other
business organization or division thereof, or otherwise acquire or agree to
acquire any assets which are material, individually or in the aggregate, to the
business of DataWorks or enter into any material joint ventures, strategic
partnerships or alliances;
(i) Sell, lease, license, encumber or otherwise dispose of any
properties or assets which are material, individually or in the aggregate, to
the business of DataWorks, except sales of inventory in the ordinary course of
business consistent with past practice;
(j) Incur any indebtedness for borrowed money or guarantee any such
indebtedness of another person, issue or sell any debt securities or options,
warrants, calls or other rights to acquire any debt securities of DataWorks,
enter into any "keep well" or other agreement to maintain any financial
statement condition or enter into any arrangement having the economic effect of
any of the foregoing other than (i) in connection with the financing of ordinary
course trade payables consistent with past practice or (ii) pursuant to existing
credit facilities in the ordinary course of business;
(k) Adopt or amend any employee benefit plan or employee stock purchase
or employee stock option plan, or enter into any employment contract or
collective bargaining agreement (other than offer letters and letter agreements
entered into in the ordinary course of business consistent with past practice
with employees who are terminable "at will"), pay any special bonus or special
remuneration to any director or employee, or increase the salaries or wage rates
or fringe benefits (including rights to severance or indemnification) of its
directors, officers, employees or consultants other than pursuant to written
agreements with such persons disclosed in the DataWorks schedules or in the
ordinary course of business, consistent with past practice, or change in any
material respect any management policies or procedures;
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SCHEDULE 13D/A
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CUSIP NO. 72764R105 PAGE 9 OF 21 PAGES
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(l) Make any payments outside of the ordinary course of business in
excess of $250,000 other than in connection with the Merger or commitments
preexisting the date of the Reorganization Agreement;
(m) Modify, amend or terminate any DataWorks Contract or other material
contract or agreement to which DataWorks or any subsidiary thereof is a party or
waive, release or assign any material rights or claims thereunder;
(n) Enter into any contracts, agreements, or obligations relating to the
distribution, sale, license or marketing by third parties of DataWorks' products
or products licensed by DataWorks other than in the ordinary course of business
consistent with past practice but in no event will any exclusive rights be
granted or restrictions on DataWorks' business activities be agreed to;
(o) Materially revalue any of its assets or, except as required by GAAP,
make any change in accounting methods, principles or practices; and
(p) Agree in writing or otherwise to take any of the actions described
in (a) through (o) above.
Pursuant to the Reorganization Agreement, until the earlier of the
termination of the Reorganization Agreement pursuant to its terms or the
Effective Time, Platinum (and each of its subsidiaries) agrees, except (i) as
indicated in the Platinum disclosure schedules or (ii) to the extent that
DataWorks shall otherwise consent in writing (including the consent set forth in
the Amendment), carry on its business, in all material respects, in the usual,
regular and ordinary course, in substantially the same manner as heretofore
conducted and in compliance with all applicable laws and regulations, pay its
debts and taxes when due, subject to good faith disputes over such debts or
taxes, pay or perform other material obligations when due, and use its
commercially reasonable efforts consistent with past practices and policies to
preserve intact its present business organization, keep available the services
of its present officers and employees and preserve its relationships with
customers, suppliers, distributors, licensors, licensees, and others with which
it has business dealings. In addition, except as permitted by the terms of the
Reorganization Agreement or as provided in the Platinum disclosure schedules,
without the prior written consent of DataWorks, Platinum shall not do any of the
following and shall not permit its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or change the
period of exercisability of options or restricted stock, or reprice options
granted under any employee, consultant, director or other stock plans or
authorize cash payments in exchange for any options granted under any of such
plans;
(b) Transfer or license to any person or entity or otherwise extend,
amend or modify in any material respect any rights to the Platinum Intellectual
Property, or enter into grants to future patent rights, other than in the
ordinary course of business and consistent with past practice;
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SCHEDULE 13D/A
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CUSIP NO. 72764R105 PAGE 10 OF 21 PAGES
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(c) Declare, set aside or pay any dividends on or make any other
distributions (whether in cash, stock, equity securities or property) in respect
of any capital stock or split, combine or reclassify any capital stock or issue
or authorize the issuance of any other securities in respect of, in lieu of or
in substitution for any capital stock;
(d) Purchase, redeem or otherwise acquire, directly or indirectly, any
shares of capital stock of Platinum or its subsidiaries, except repurchases of
unvested shares at cost in connection with the termination of the employment
relationship with any employee pursuant to stock option or repurchase agreements
in effect on the date hereof;
(e) Issue, deliver, sell, authorize, pledge or otherwise encumber any
shares of capital stock or any securities convertible into shares of capital
stock, or subscriptions, rights, warrants or options to acquire any shares of
capital stock or any securities convertible into shares of capital stock, or
enter into other agreements or commitments of any character obligating it to
issue any such shares or convertible securities, other than the issuance,
delivery and/or sale of (i) stock options in the ordinary course of business and
consistent with past practice, (ii) shares of Platinum Common Stock pursuant to
the exercise of stock options therefor outstanding as of the date of the
Reorganization Agreement or granted pursuant to the foregoing clause (i), and
(iii) shares of Platinum Common Stock issuable to participants in the Platinum
Employee Stock Purchase Plan consistent with the terms thereof.
(f) Cause, permit or propose any amendments to the Certificate of
Incorporation and Bylaws of Platinum or the similar governing instruments of
each of its subsidiaries;
(g) Acquire or agree to acquire by (i) merging or consolidating with, or
(ii) purchasing any equity in or a portion of the assets of, or (iii) any other
manner, any business or any corporation, partnership, association or other
business organization or division thereof, for consideration in excess of $50
million in any individual acquisition or $100 million in the aggregate for all
such acquisitions;
(h) Incur any indebtedness for borrowed money or guarantee any such
indebtedness of another person, issue or sell any debt securities or options,
warrants, calls or other rights to acquire any debt securities of Platinum,
enter into any "keep well" or other agreement to maintain any financial
statement condition or enter into any arrangement having the economic effect of
any of the foregoing other than (i) in connection with the financing of ordinary
course trade payables consistent with past practice or (ii) pursuant to existing
credit facilities in the ordinary course of business.
(i) Sell, lease, license, encumber or otherwise dispose of any
properties or assets which are material, individually or in the aggregate, to
the business of Platinum, except sales of inventory in the ordinary course of
business consistent with past practice;
(j) Materially revalue any of its assets or, except as required by GAAP,
make any change in accounting methods, principles or practices; and
(k) Agree in writing or otherwise to take any of the actions described
in Section (a) through (j) above.
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SCHEDULE 13D/A
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CUSIP NO. 72764R105 PAGE 11 OF 21 PAGES
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NO SOLICITATION
Under the terms of the Reorganization Agreement, until the earlier of
the Effective Time or termination of the Reorganization Agreement pursuant to
its terms, DataWorks and its subsidiaries will not, nor will they authorize or
permit any of their respective officers, directors, affiliates or employees or
any investment banker, attorney or other advisor or representative retained by
any of them to, directly or indirectly, (i) solicit, initiate, encourage or
induce the making, submission or announcement of any Acquisition Proposal (as
defined below), (ii) participate in any discussions or negotiations regarding,
or furnish to any person any non-public information with respect to, or take any
other action to facilitate any inquiries or the making of any proposal that
constitutes or may reasonably be expected to lead to, any Acquisition Proposal,
(iii) engage in discussions with any person with respect to any Acquisition
Proposal, except as to the existence of the provisions regarding
non-solicitation contained in the Reorganization Agreement, (iv) subject to the
following paragraph, approve, endorse or recommend any Acquisition Proposal or
(v) enter into any letter of intent or similar document or any contract
agreement or commitment contemplating or otherwise relating to any Acquisition
Transaction (as defined below); provided, however, that prior to the approval of
the Reorganization Agreement by the required DataWorks stockholder vote, the
non-solicitation provisions contained in the Reorganization Agreement shall not
prohibit DataWorks from furnishing nonpublic information regarding DataWorks and
its subsidiaries to, entering into a confidentiality agreement with or entering
into discussions with, any person or group in response to a Superior Offer (as
hereinafter defined) submitted by such person or group (and not withdrawn) if
(1) neither DataWorks nor any representative of DataWorks and its subsidiaries
shall have violated any of the restrictions regarding non-solicitation set forth
in the Reorganization Agreement, (2) the DataWorks Board concludes in good
faith, after consultation with its outside legal counsel, that such action is
required in order for the DataWorks Board to comply with its fiduciary
obligations to the DataWorks' stockholders under applicable law, (3) prior to
furnishing any such nonpublic information to, or entering into discussions with,
such person or group, DataWorks gives Platinum written notice of the identity of
such person or group and of DataWorks' intention to furnish nonpublic
information to, or enter into discussions with, such person or group and
DataWorks receives from such person or group an executed confidentiality
agreement containing customary limitations on the use and disclosure of all
nonpublic written and oral information furnished to such person or group by or
on behalf of DataWorks, and (4) contemporaneously with furnishing any such
nonpublic information to such person or group, DataWorks furnishes such
nonpublic information to Platinum (to the extent such nonpublic information has
not been previously furnished by Platinum to DataWorks). DataWorks and its
subsidiaries will immediately cease any and all existing activities, discussions
or negotiations with any parties conducted heretofore with respect to any
Acquisition Proposal. Without limiting the foregoing, it is understood that any
violation of the restrictions set forth in the preceding two sentences by any
officer, director or employee of DataWorks or any of its subsidiaries or any
investment banker, attorney or other advisor or representative of DataWorks or
any of its subsidiaries shall be deemed to be a breach of the non-solicitation
provisions contained in the Reorganization Agreement by DataWorks. In addition
to the foregoing, DataWorks shall provide Platinum with at least 24 hours prior
notice (or such lesser prior notice as provided to the members of the DataWorks
Board but in no event less than eight hours) of any meeting of the DataWorks
Board at which the DataWorks Board is reasonably expected to consider a Superior
Offer, together with such notice a copy of the definitive documentation relating
to such Superior Offer.
Notwithstanding the terms discussed in this section, nothing in the
Reorganization Agreement prevents the DataWorks Board from withholding,
withdrawing, amending or modifying its unanimous recommendation in favor of the
Merger if (i) a Superior Offer is made to DataWorks and is not withdrawn, (ii)
neither DataWorks nor any of its representatives shall have violated any of the
restrictions regarding confidentiality contained in the Reorganization
Agreement, and (iii) the DataWorks Board or any committee thereof concludes in
good faith, after consultation with its outside
<PAGE> 12
SCHEDULE 13D/A
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CUSIP NO. 72764R105 PAGE 12 OF 21 PAGES
- ------------------- -------------------
counsel, that, in light of such Superior Offer, the withholding, withdrawal,
amendment or modification of such recommendation is required in order for the
DataWorks Board to comply with its fiduciary obligations to the DataWorks'
stockholders under applicable law. Subject to applicable laws, no provision of
the Reorganization Agreement summarized in this paragraph shall limit DataWorks'
obligation to hold and convene the DataWorks Stockholders' Meeting (regardless
of whether the unanimous recommendation of the DataWorks Board shall have been
withdrawn, amended or modified).
In addition to the obligations of DataWorks described in this section,
DataWorks as promptly as practicable shall advise Platinum orally and in writing
of any request for non-public information which DataWorks reasonably believes
would lead to an Acquisition Proposal or of any Acquisition Proposal, or any
inquiry with respect to or which DataWorks reasonably should believe would lead
to any Acquisition Proposal, the material terms and conditions of such request,
Acquisition Proposal or inquiry, and the identity of the person or group making
any such request, Acquisition Proposal or inquiry. DataWorks will keep Platinum
informed in all material respects of the status and details (including material
amendments or proposed material amendments) of any such request, Acquisition
Proposal or inquiry.
"Acquisition Proposal" means any offer or proposal (other than an offer
or proposal by Platinum) relating to any Acquisition Transaction. "Acquisition
Transaction" means any transaction or series of related transactions other than
the transactions contemplated by the Reorganization Agreement involving: (A) any
acquisition or purchase from DataWorks by any person or "group" (as defined
under Section 13(d) of the Exchange Act and the rules and regulations
thereunder) of more than a 5% interest in the total outstanding voting
securities of DataWorks or any of its subsidiaries or any tender offer or
exchange offer that if consummated would result in any person or "group" (as
defined under Section 13(d) of the Exchange Act and the rules and regulations
thereunder) beneficially owning 5% or more of the total outstanding voting
securities of DataWorks or any of its subsidiaries or any merger, consolidation,
business combination or similar transaction involving DataWorks pursuant to
which the stockholders of DataWorks immediately preceding such transaction hold
less than 95% of the equity interests in the surviving or resulting entity of
such transaction; (B) any sale, lease (other than in the ordinary course of
business), exchange, transfer, license (other than in the ordinary course of
business), acquisition or disposition of more than 10% of the assets of
DataWorks; or (C) any liquidation or dissolution of DataWorks. "Superior Offer"
means an unsolicited, bona fide written offer made by a third party to
consummate any of the following transactions: (i) a merger, consolidation,
business combination, recapitalization, liquidation, dissolution or similar
transaction involving DataWorks pursuant to which the stockholders of DataWorks
immediately preceding such transaction hold less than 50% of the equity interest
in the surviving or resulting entity of such transaction; (ii) a sale or other
disposition by DataWorks of assets (excluding inventory and used equipment sold
in the ordinary course of business) representing in excess of 50% of the fair
market value of DataWorks business immediately prior to such sale, or (iii) the
acquisition by any person or group (including by way of a tender offer or an
exchange offer or issuance by DataWorks), directly or indirectly, of beneficial
ownership or a right to acquire beneficial ownership of shares representing in
excess of 50% of the voting power of the then outstanding shares of capital
stock of DataWorks in each case, on terms that the DataWorks Board of Directors
determines, in its reasonable judgment, after consultation with its financial
advisor, to be more favorable to the DataWorks' stockholders than the terms of
the Merger; provided, however, that any such offer shall not be deemed to be a
"Superior Offer" if any financing required to consummate the transaction
contemplated by such offer is not committed and is not likely in the judgment of
the DataWorks' Board to be obtained by such third party on a timely basis.
<PAGE> 13
SCHEDULE 13D/A
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CUSIP NO. 72764R105 PAGE 13 OF 21 PAGES
- ------------------- -------------------
BREAK UP FEES
Platinum and DataWorks have agreed that if the Reorganization Agreement
is terminated by either Platinum or DataWorks, as applicable, due to (i) the
failure of the Merger to be consummated by February 28, 1999 for any reason;
provided, however, the right to terminate the Reorganization Agreement as a
result of such failure is not available to any party to the Reorganization
agreement whose action or failure to act has been a principal cause or resulted
in the failure of the Merger to occur on or before such date and such action or
failure constitutes a material breach of the Reorganization Agreement; (ii) the
failure of DataWorks to obtain the required approval of the stockholders of
DataWorks contemplated by the Reorganization Agreement by reason of the failure
to obtain the required vote at a meeting of the DataWorks stockholders duly
convened therefore or at any adjournment thereof; provided, however, that the
right to terminate the Reorganization Agreement as a result of such failure
shall not be available to DataWorks where the failure to obtain the DataWorks
stockholder approval shall have been caused by the action or failure to act of
DataWorks and such action or failure to act constitutes a material breach by
DataWorks of the Reorganization Agreement or (iii) a DataWorks Triggering Event
(as defined below), then DataWorks shall promptly, but in no event later than
two days after the date of such termination, pay Platinum a fee equal to $3.25
million in immediately available funds; provided, that in the case of
termination as a result of the failure of the Merger to be consummated by
February 28, 1999, such payment shall be made only if following October 13, 1998
and prior to the termination of the Reorganization Agreement, a third party has
publicly announced an Acquisition Proposal for an Acquisition Transaction and
within 12 months following the termination of the Reorganization Agreement
Platinum enters into or announces an intention to enter into a Company
Acquisition (as defined below).
Platinum and DataWorks have further agreed that if the Reorganization
Agreement is terminated by either Platinum or DataWorks, as applicable, due to
(i) the failure of Platinum to obtain the required approval of the stockholders
of Platinum contemplated by the Reorganization Agreement by reason of the
failure to obtain the required vote at a meeting of the Platinum stockholders
duly convened therefore or at any adjournment thereof; provided, however, that
the right to terminate the Reorganization Agreement as a result of such failure
shall not be available to Platinum where the failure to obtain the Platinum
stockholder approval shall have been caused by the action or failure to act of
Platinum and such action or failure to act constitutes a material breach by
Platinum of the Reorganization Agreement or (ii) a Platinum Triggering Event,
then Platinum shall promptly, but in no event later than two (2) days after the
date of such termination, pay to DataWorks a fee equal to $3.25 million in
immediately available funds.
Platinum and DataWorks have agreed that the fees described above shall
not be in lieu of damages incurred in the event of breach of the Reorganization
Agreement.
Except as set forth above, Platinum and DataWorks have agreed that all
fees and expenses incurred in connection with the Reorganization Agreement and
the transactions contemplated thereby shall be paid by the party incurring such
expenses whether or not the Merger is consummated; provided, however, that
Platinum and DataWorks shall share equally all fees and expenses, other than
attorneys' and accountants fees and expenses, incurred in relation to the
printing and filing (with the SEC) of the Joint Proxy Statement/Prospectus.
<PAGE> 14
SCHEDULE 13D/A
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CUSIP NO. 72764R105 PAGE 14 OF 21 PAGES
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"Company Acquisition" shall mean any of the following transactions
(other than the transactions contemplated by the reorganization Agreement); (i)
a merger, consolidation, business combination, recapitalization, liquidation,
dissolution or similar transaction involving DataWorks pursuant to which the
stockholders of DataWorks immediately preceding such transaction hold less than
50% of the aggregate equity interests in the surviving or resulting entity of
such transaction or (ii) a sale or other disposition by DataWorks of assets
(excluding inventory and used equipment sold in the ordinary course of business)
representing in excess of 50% of the aggregate fair market value of DataWorks'
business immediately prior to such sale. "DataWorks Triggering Event" shall be
deemed to have occurred if: (i) the DataWorks Board or any committee thereof
shall for any reason have withdrawn or shall have amended or modified in a
manner adverse to Platinum its unanimous recommendation in favor of, the
adoption and approval of the Reorganization Agreement or the approval of the
Merger; (ii) Platinum shall have failed to include in this Joint Proxy
Statement/Prospectus the unanimous recommendation of the DataWorks Board in
favor of the adoption and approval of the Reorganization Agreement and the
approval of the Merger; (iii) the DataWorks Board fails to reaffirm its
unanimous recommendation in favor of the adoption and approval of the
Reorganization Agreement and the approval of the Merger within ten (10) business
days after Platinum requests in writing that such recommendation be reaffirmed;
(iv) the DataWorks Board or any committee thereof shall have approved or
publicly recommended any Acquisition Proposal; or (v) a tender or exchange offer
relating to securities of DataWorks shall have been commenced by a Person
unaffiliated with Platinum and DataWorks shall not have sent to its
securityholders pursuant to Rule 14e-2 promulgated under the Securities Act,
within ten (10) business days after such tender or exchange offer is first
published sent or given, a statement disclosing that DataWorks recommends
rejection of such tender or exchange offer.
"Platinum Triggering Event" shall be deemed to have occurred if: (i) the
Platinum Board for any committee thereof shall for any reason have withdrawn or
shall have amended or modified in a manner adverse to DataWorks its unanimous
recommendation in favor of, the issuance of shares of Platinum Common Stock
pursuant to the Merger; (ii) Platinum shall have failed to include in the
Prospectus/Proxy Statement the unanimous recommendation of the Platinum Board in
favor of the issuance of shares of Platinum Common Stock pursuant to the Merger;
or (iii) the Platinum Board of fails to reaffirm its unanimous recommendation in
favor of the issuance of the shares of Platinum Common Stock pursuant to the
Merger within ten (10) business days after DataWorks requests in writing that
such recommendation be reaffirmed.
CONDITIONS TO THE MERGER
The respective obligations of each party to the Reorganization Agreement
to effect the Merger are subject to the satisfaction at or prior to the Closing
Date of the following conditions: (i) the Reorganization Agreement shall have
been approved and adopted, and the Merger shall have been duly approved, by the
requisite vote under applicable law, by the stockholders of DataWorks; (ii) the
issuance of the shares of Platinum Common Stock pursuant to the Merger shall
have been duly approved by the requisite vote under applicable Nasdaq rules by
the stockholders of Platinum; (iii) the SEC shall have declared the Registration
Statement effective and no stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been issued and no
proceeding for that purpose, and no similar proceeding in respect of this Joint
Proxy Statement/ Prospectus, shall have been initiated or threatened in writing
by the SEC; (iv) no Governmental Entity shall have enacted, issued, promulgated,
enforced or entered any statute, rule, regulation, executive order, decree,
injunction or other order (whether temporary, preliminary or permanent) which is
in effect and which has the effect of making the Merger illegal or otherwise
prohibiting consummation of the Merger and all waiting periods, if any, under
the HSR Act relating to the transactions contemplated hereby shall have expired
or terminated early and all material foreign antitrust approvals required to be
obtained prior to the Merger in connection with the transactions contemplated
hereby shall have been obtained; and (v) Platinum and DataWorks shall each have
received written opinions from their respective tax counsel (Wilson Sonsini
Goodrich & Rosati, Professional Corporation, and Cooley Godward LLP,
respectively), in form and
<PAGE> 15
SCHEDULE 13D/A
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CUSIP NO. 72764R105 PAGE 15 OF 21 PAGES
- ------------------- -------------------
substance reasonably satisfactory to them, to the effect that the Merger will
constitute a tax-free reorganization within the meaning of Section 368(a) of the
Code and such opinions shall not have been withdrawn; provided, however, that if
the counsel to either Platinum or DataWorks does not render such opinion, this
condition shall nonetheless be deemed to be satisfied with respect to such party
if counsel to the other party renders such opinion to such party. The parties to
the Reorganization Agreement have agreed to make representations as requested by
such counsel for the purpose of rendering the Tax Opinions and have further
agreed to confirm the accuracy and completeness of such representations as of
the Effective Time as requested by such counsel for the purpose of rendering
those opinions discussed in this paragraph.
In addition, the obligation of DataWorks to consummate and effect the
Merger is subject to the satisfaction at or prior to the Closing Date of each of
the following conditions, any of which may be waived, in writing, exclusively by
DataWorks: (i) each representation and warranty of Platinum and Merger Sub
contained in the Reorganization Agreement shall have been true and correct as of
October 13, 1998 and as of the Closing date (subject to certain materiality
qualifications) and DataWorks shall have received a certificate with respect to
the foregoing signed on behalf of Platinum by an authorized officer of Platinum;
(ii) Platinum and Merger Sub shall have performed or complied in all material
respects with all agreements and covenants required by the Reorganization
Agreement to be performed or complied with by them on or prior to the Closing
Date, and DataWorks shall have received a certificate to such effect signed on
behalf of Platinum by an authorized officer of Platinum; (iii) no material
adverse effect with respect to Platinum shall have occurred since the date of
the Reorganization Agreement; (iv) each of the Platinum Affiliates shall have
entered into an affiliate agreement and each of such agreements will be in full
force and effect as of the Effective Time; and (v) the shares of Platinum Common
Stock to be issued in the Merger shall have been authorized for listing on the
Nasdaq National Market, subject to notice of issuance.
Further, the obligations of Platinum and Merger Sub to consummate and
effect the Merger are subject to the satisfaction at or prior to the Effective
Time of each of the following conditions, any of which may be waived, in
writing, exclusively by Platinum: (i) each representation and warranty of
DataWorks contained in the Reorganization Agreement shall be true and correct as
of October 13, 1998 and as of the Closing Date (subject to certain materiality
qualifications) and Platinum shall have received a certificate with respect to
the foregoing signed on behalf of DataWorks by an authorized officer of
DataWorks; (ii) DataWorks shall have performed or complied in all material
respects with all agreements and covenants required by the Reorganization
Agreement to be performed or complied with by it at or prior to the Closing
Date, and Platinum shall have received a certificate to such effect signed on
behalf of DataWorks by the Chief Executive Officer and Chief Financial Officer
of DataWorks; (iii) no material adverse effect with respect to DataWorks and its
subsidiaries shall have occurred since the date of the Reorganization Agreement;
(iv) each of the DataWorks Affiliates shall have entered into affiliate
agreements and each of such agreements will be in full force and effect as of
the Effective Time; and (v) all necessary actions shall have been taken to
extinguish and cancel all outstanding Rights under the DataWorks Rights Plan or
render such Rights inapplicable to the Merger and the other transactions
contemplated by the Reorganization Agreement.
<PAGE> 16
SCHEDULE 13D/A
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CUSIP NO. 72764R105 PAGE 16 OF 21 PAGES
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TERMINATION OF THE REORGANIZATION AGREEMENT
The Reorganization Agreement provides that it may be terminated at any
time prior to the Effective Time, whether before or after the requisite
approvals of the stockholders of Platinum or DataWorks: (i) by mutual written
consent duly authorized by the Platinum and DataWorks Boards; (ii) by either
DataWorks or Platinum if the Merger shall not have been consummated by February
28, 1999 for any reason; provided, however, that the right to terminate the
Reorganization Agreement pursuant to this right of termination shall not be
available to any party whose action or failure to act has been a principal cause
of or resulted in the failure of the Merger to occur on or before such date and
such action or failure to act constitutes a material breach of the
Reorganization Agreement; (iii) by either DataWorks or Parent if a Governmental
Entity shall have issued an order, decree or ruling or taken any other action,
in any case having the effect of permanently restraining, enjoining or otherwise
prohibiting the Merger, which order, decree, ruling or other action is final and
nonappealable; (iv) by DataWorks or Platinum if the required approval of the
stockholders of Platinum contemplated by the Reorganization Agreement shall not
have been obtained by reason of the failure to obtain the required vote at a
meeting of Platinum stockholders duly convened therefor or at any adjournment
thereof; provided, however, that the right to terminate the Reorganization
Agreement pursuant to this right of termination shall not be available to
Platinum where the failure to obtain Platinum stockholder approval shall have
been caused by the action or failure to act of Platinum and such action or
failure to act constitutes a material breach by Platinum of the Reorganization
Agreement; (v) by DataWorks or Platinum if the required approval of the
stockholders of DataWorks contemplated by the Reorganization Agreement shall not
have been obtained by reason of the failure to obtain the required vote at a
meeting of DataWorks stockholders duly convened therefore or at any adjournment
thereof; provided, however, that the right to terminate the Reorganization
Agreement pursuant to this right of termination shall not be available to
DataWorks where the failure to obtain the DataWorks stockholder approval shall
have been caused by the action or failure to act of DataWorks and such action or
failure to act constitutes a material breach by DataWorks of the Reorganization
Agreement; (vi) by Platinum (at any time prior to the adoption and approval of
the Reorganization Agreement and the Merger by the required vote of the
stockholders of DataWorks) if a DataWorks Triggering Event shall have occurred;
(vii) by DataWorks (at any time prior to the adoption and approval of the
Reorganization Agreement and the Merger by the required vote of the stockholders
of Platinum) if a Platinum Triggering Event shall have occurred; (viii) by
DataWorks, upon a breach of any representation, warranty, covenant or agreement
on the part of Platinum set forth in the Reorganization Agreement, or if any
representation or warranty of Platinum shall have become untrue (provided that
if such inaccuracy in Platinum's representations and warranties or breach by
Platinum is curable by Platinum through the exercise of commercially reasonable
efforts, then DataWorks may not terminate the Reorganization Agreement provided
Platinum continues to exercise such commercially reasonably efforts to cure such
breach); (ix) by Platinum, upon a breach of any representation, warranty,
covenant or agreement on the part of DataWorks set forth in the Reorganization
Agreement, or if any representation or warranty of DataWorks shall have become
untrue (provided that if such inaccuracy in DataWorks' representations and
warranties or breach by DataWorks is curable by DataWorks through the exercise
of commercially reasonable efforts, then Platinum may not terminate the
Reorganization Agreement provided DataWorks continues to exercise such
commercially reasonably efforts to cure such breach).
Indemnification
From and after the Effective Time, Platinum will cause the Surviving
Corporation to fulfill and honor in all respects the obligations of DataWorks
pursuant to any indemnification agreements between DataWorks and its directors
and officers as of the Effective Time (the "Indemnified Parties") and any
<PAGE> 17
SCHEDULE 13D/A
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CUSIP NO. 72764R105 PAGE 17 OF 21 PAGES
- ------------------- -------------------
indemnification provisions under DataWorks Certificate of Incorporation or
Bylaws as in effect on the date hereof. The Certificate of Incorporation and
Bylaws of the Surviving Corporation will contain provisions with respect to
exculpation and indemnification that are at least as favorable to the
Indemnified Parties as those contained in the Certificate of Incorporation and
Bylaws of DataWorks as in effect on the date hereof, which provisions will not
be amended, repealed or otherwise modified for a period of six years from the
Effective Time in any manner that would adversely affect the rights thereunder
of individuals who, immediately prior to the Effective Time, were directors,
officers, employees or agents of DataWorks, unless such modification is required
by law.
For a period of six years after the Effective Time, Platinum will cause
the Surviving Corporation to use its commercially reasonable efforts to maintain
in effect, if available, directors' and officers' liability insurance covering
those persons who are currently covered by DataWorks' directors' and officers'
liability insurance policy on terms comparable to those applicable to the
current directors and officers of DataWorks; provided, however, that in no event
will Platinum or the Surviving Corporation be required to expend in excess of
150% of the annual premium currently paid by DataWorks for such coverage (or
such coverage as is available for such 150% of such annual premium).
VOTING AGREEMENTS
DataWorks Voting Agreements. Pursuant to certain agreements (each a
"DataWorks Voting Agreement" and, collectively, the "DataWorks Voting
Agreements") certain stockholders of DataWorks (each a "DataWorks Voting
Agreement Stockholder"), who beneficially own an aggregate of 1,876,583
outstanding shares of DataWorks Common Stock (representing approximately 12.7%
of shares of DataWorks Common Stock as of October 13, 1998) have agreed that,
prior to the termination of the DataWorks Voting Agreement pursuant to its
terms, they will vote their shares of DataWorks Common Stock in favor of the
approval of the Reorganization Agreement and the Merger. The DataWorks Voting
Agreement Stockholders have also delivered to Platinum irrevocable proxies with
respect to the matters covered by the DataWorks Voting Agreements. In addition,
the DataWorks Voting Agreement Stockholders have agreed not to transfer any
securities of DataWorks owned by them, unless such transfer is in accordance
with the DataWorks Affiliate Agreement between the DataWorks Voting Agreement
Stockholder and Platinum, and provided that the proposed transferee of such
DataWorks securities shall have (i) executed a counterpart of the DataWorks
Voting Agreement and an irrevocable proxy and (ii) agreed to hold such DataWorks
securities subject to all of the terms and provisions of the DataWorks Voting
Agreement.
Platinum Voting Agreements. Pursuant to certain agreements (each a
"Platinum Voting Agreement" and, collectively, the "Platinum Voting Agreements")
certain stockholders of Platinum (each a "Platinum Voting Agreement
Stockholder"), who beneficially own an aggregate of 5,558,116 outstanding shares
of Platinum Common Stock and Platinum Series C Preferred Stock on an
as-converted basis (representing approximately 18.9% of the shares of Platinum
Common Stock as of October 13, 1998) have agreed that, prior to the termination
of the Platinum Voting Agreement pursuant to its terms, they will vote their
shares of Platinum Common Stock and Platinum Series C Preferred Stock on an
as-converted basis in favor of the issuance of the shares of Platinum Common
Stock to the stockholders of DataWorks pursuant to the Reorganization Agreement.
The Platinum Voting Agreement Stockholders have also delivered to DataWorks
irrevocable proxies with respect to the matters covered by the Platinum Voting
Agreements. In addition, the Platinum Voting Agreement Stockholders have also
agreed not to transfer any securities of Platinum owned by them, unless such
transfer is in accordance with the Platinum Affiliate Agreement between the
Platinum Voting Agreement Stockholder and Platinum, and provided that the
proposed transferee of such Platinum securities shall have (i) executed a
counterpart of the Platinum Voting Agreement and an irrevocable proxy and (ii)
agreed to hold such Platinum securities subject to all of the terms and
provisions of the Platinum Voting Agreement.
<PAGE> 18
SCHEDULE 13D/A
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CUSIP NO. 72764R105 PAGE 18 OF 21 PAGES
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DATAWORKS AFFILIATE AGREEMENTS
DataWorks Affiliate Agreements. Pursuant to certain agreements (each a
"DataWorks Affiliate Agreement"), certain individuals and entities that may be
deemed affiliates of DataWorks (each, a "DataWorks Affiliate") have agreed not
to effect any sale, transfer or other disposition of the Platinum Common Stock
received by such DataWorks Affiliate in the Merger unless: (i) such sale,
transfer or other disposition is made in conformity with the volume and other
requirements of Rule 145 under the Securities Act of 1933, as amended, as
evidenced by a broker's letter and a representation letter executed by the
DataWorks Affiliate (reasonably satisfactory in form and content to Platinum),
each stating that such requirements have been met; (ii) legal counsel reasonably
satisfactory to Platinum shall have advised Platinum in a written opinion letter
(reasonably satisfactory in form and content to Platinum), upon which Platinum
may rely, that such sale, transfer or other disposition will be exempt from
registration under the Securities Act; (iii) such sale, transfer or other
disposition is effected pursuant to an effective registration statement under
the Securities Act; or (iv) an authorized representative of the SEC shall
rendered written advice to such DataWorks Affiliate to the effect that the SEC
would take no action, or that the staff of the SEC would not recommend that the
SEC take action, with respect to such proposed sale, transfer or other
disposition, and a copy of such written advice and all other related
communications with the SEC shall have been delivered to Platinum.
<PAGE> 19
SCHEDULE 13D/A
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CUSIP NO. 72764R105 PAGE 19 OF 21 PAGES
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(h) - (i) If the Merger is consummated as planned, the DataWorks Common
Stock will be deregistered under the Act and delisted from The
Nasdaq National Market.
(j) Other than described above, Platinum currently has no plan or
proposals which relate to, or may result in, any of the matters
listed in Items 4(a) - (i) of Schedule 13D (although Platinum
reserves the right to develop such plans).
<PAGE> 20
SCHEDULE 13D/A
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CUSIP NO. 72764R105 PAGE 20 OF 21 PAGES
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ITEM 7. MATERIALS TO BE FILED AS EXHIBITS.
The following documents are filed as exhibits:
1.(F) Agreement and Plan of Reorganization, dated October 13, 1998 by
and among Platinum, Merger Sub, and DataWorks.
2.(F) Form of Voting Agreement, dated October 13, 1998, by and among
Platinum and certain stockholders of DataWorks - See Exhibit A-1
to the Merger Agreement filed as Exhibit 1 to this Schedule 13D.
3. Amendment No. 1 to Agreement and Plan of Reorganization, dated
October 30, 1998, by and among Platinum, Merger Sub and
DataWorks.
- -----------
(F) Previously Filed.
<PAGE> 21
SCHEDULE 13D/A
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CUSIP NO. 72764R105 PAGE 21 OF 21 PAGES
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: November 2, 1998
PLATINUM SOFTWARE CORPORATION
By: /s/ PERRY TARNOFSKY
-----------------------------
<PAGE> 22
SCHEDULE A
DIRECTORS AND EXECUTIVE OFFICERS OF
PLATINUM SOFTWARE CORPORATION
<TABLE>
<CAPTION>
Present Principal Occupation Including
Name and Title Name of Employer
- -------------- --------------------------------------
<S> <C>
L. George Klaus Platinum Software Corporation
President, Chief Executive Officer 195 Technology Drive
and Chairman of the Irvine, CA 92718-2402
Board of Directors
Donald R. Dixon President
Director Trident Capital Partners Fund I, LP
2480 Sand Hill Road
Suite 100
Menlo Park, CA 94025
L. John Doerr General Partner
Director Kleiner, Perkins Caufield & Byers VII
2750 Sand Hill Road
Menlo Park, CA 94025
W. Douglas Hajjar Platinum Software Corporation
Director 195 Technology Drive
Irvine, CA 92718-2402
Arthur J. Marks General Partner
Director New Enterprise Associates VI
Limited Partnership
Arthur J. Marks
1119 St. Paul Street
Baltimore, MD 21202
William R. Pieser Platinum Software Corporation
Executive Vice President, 195 Technology Drive
Product Operations and Marketing Irvine, CA 92718-2402
Ken Lally Platinum Software Corporation
Executive Vice President, 195 Technology Drive
Field and Customer Operations Irvine, CA 92718-2402
</TABLE>
<PAGE> 23
SCHEDULE B
<TABLE>
<CAPTION>
Stockholder Shares Beneficially Owned
- ----------- -------------------------
<S> <C>
Stuart W. Clifton 1,040,422
Norman R. Farquhar 134,854
Bradley J. Thies 0
Rick E. Russo 37,412
Nathan W. Bell 299,555
Tony N. Domit 16,309
Ronald S. Parker 34,979
Roy Thiele-Sardina 16,109
William P. Folley III 296,943
---------
Total: 1,876,583(1)
=========
</TABLE>
<PAGE> 24
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
1. Agreement and Plan of Reorganization, dated October 13, 1998 by and
among Platinum, Merger Sub, and DataWorks.
2. Form of Voting Agreement, dated October 13, 1998, by and among
Platinum and certain stockholders of DataWorks - See Exhibit A-1 to
the Merger Agreement filed as Exhibit 1 to this Schedule 13D.
3. Amendment No. 1 to Agreement and Plan of Reorganization, dated
October 30, 1998, by and among Platinum, Merger Sub and DataWorks.
<PAGE> 1
AMENDMENT NO. 1 TO
AGREEMENT AND PLAN OF REORGANIZATION
This AMENDMENT No. 1 TO AGREEMENT AND PLAN OF REORGANIZATION is made and entered
into as of October 30, 1998, among Platinum Software Corporation, a Delaware
corporation ("PARENT"), Zoo Acquisition Corp., a Delaware corporation and a
wholly-owned subsidiary of Parent ("MERGER SUB"), and DataWorks Corporation, a
Delaware corporation (the "COMPANY").
RECITALS
A. Parent, Merger Sub and the Company are parties to that certain Agreement and
Plan of Reorganization dated as of October 13, 1998 (the "ORIGINAL AGREEMENT")
pursuant to which it is contemplated that Merger Sub will be merged with and
into the Company (the "MERGER").
B. The Original Agreement contemplates that the Merger shall be accounted for as
a pooling of interests.
C. Parent, Merger Sub and the Company expect to take certain actions that would
preclude the ability of Parent to account for the Merger as a pooling of
interests and wish therefore to amend the Original Agreement in contemplation
that the Merger will be accounted for under the rules of purchase accounting.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, and intending to be legal bound the parties
agree as follows.
1. Definitions. Capitalized terms used but not defined herein shall have the
meanings assigned thereto in the Original Agreement.
2. Pooling Representations, Covenants and Conditions. Sections 2.18, 3.16,
4.1(p), 4.2(k), 6.2(e) and 6.3(e) of the Original Agreement are hereby deleted
in their entirety. In addition, each cross-reference in the Original Agreement
to any of the foregoing sections is hereby deleted.
3. Treatment of Stock Purchase Plan. Section 5.9(c) of the Original Agreement is
hereby amended to read in its entirety as follows:
"Rights outstanding under the Company Purchase Plan shall be treated in a
manner reasonably acceptable to Parent and the Company."
4. Parent Option Repricing. The Company hereby consents to either:
(a) the issuance by Parent to holders of Parent Options, upon cancellation
of such Parent Options, new Parent Options with terms and conditions
substantially identical to the terms and conditions set forth in the canceled
Parent Options, except that such new Parent Options shall have an exercise price
equal to the fair market value of Parent Common Stock at the time of such
issuance (as determined in good faith by Parent with the Company's consent, not
to be unreasonably withheld) and such new Parent Options shall, subject to
reasonable exceptions relating to a change in control of Parent or termination
of the optionee, not be exercisable for twelve months following their issuance,
or
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(b) the amendment by Parent of Parent Options to provide only that, as
amended, such Parent Options shall have an exercise price equal to the fair
market value of Parent Common Stock at the time of such amendment (as determined
in good faith by Parent with the Company's consent, not to be unreasonably
withheld) and that, as amended, such Parent Options shall, subject to reasonable
exceptions relating to a change in control of Parent or termination of the
optionee, not be exercisable for twelve months following their amendment.
5. Company Option Repricing. Parent and Merger Sub hereby consent to the Company
taking one of the following actions on one occasion contemporaneous with any
issuance by Parent of new Parent Options or amendment of Parent Options pursuant
to the preceding Section 4:
(a) the issuance by the Company to holders of Company Options, upon
cancellation of such Company Options, new Company Options with terms and
conditions substantially identical to the terms and conditions set forth in the
canceled Company Options, except that such new Company Options shall have an
exercise price equal to the fair market value of Parent Common Stock at the time
of such issuance multiplied by the Exchange Ratio and such new Company Options
shall, subject to reasonable exceptions relating to a change in control of the
Company (other than the transactions contemplated by the Original Agreement) or
termination of the optionee, not be exercisable for twelve months following
their issuance, or
(b) the amendment by the Company of Company Options to provide only that,
as amended, such Company Options shall have an exercise price equal to the fair
market value of Parent Common Stock at the time of such amendment multiplied by
the Exchange Ratio and that, as amended, such Company Options shall, subject to
reasonable exceptions relating to a change in control of the Company (other than
the transactions contemplated by the Original Agreement) or termination of the
optionee, not be exercisable for twelve months following their amendment.
6. No Further Modifications. Except as amended hereby, the Original Agreement
shall remain in full force and effect. After the execution and delivery of this
Amendment No. 1 to Agreement and Plan of Reorganization, all references to the
Original Agreement shall mean the Original Agreement as amended hereby. No
deletion of a section of the Original Agreement pursuant to the terms hereof
shall have the effect of renumbering any remaining section of the Original
Agreement.
7. Counterparts. This Agreement may be executed in one or more counterparts, all
of which shall be considered one and the same agreement and shall become
effective when one or more counterparts have been signed by each of the parties
and delivered to the other parties, it being understood that all parties need
not sign the same counterpart.
8. Miscellaneous. This Agreement, the Original Agreement and the documents and
instruments and other agreements among the parties hereto as contemplated by or
referred to herein or therein (a) constitute the entire agreement among the
parties with respect to the subject matter hereof and supersede all prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter hereof, it being understood that the
Confidentiality Agreement shall continue in full force and effect until the
Closing and shall survive any termination of the Original Agreement; and (b) are
not intended to confer upon any other person any rights or remedies hereunder,
except as specifically provided in Sections 1.7, 5.9(a), 5.9(d) and 5.11 of the
Original Agreement.
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9. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, regardless of the laws that
might otherwise govern under applicable principles of conflicts of law thereof.
*****
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 to
Agreement and Plan of Reorganization to be executed by their duly authorized
respective officers as of the date first written above.
PLATINUM SOFTWARE CORPORATION
By: /S/ GEORGE KLAUS
--------------------------------------------------------
Name: George Klaus
------------------------------------------------------
Title: President and Chief Executive Officer
------------------------------------------------------
ZOO ACQUISITION CORP.
By: /S/ PERRY TARNOFSKY
--------------------------------------------------------
Name: Perry Tarnofsky
------------------------------------------------------------
Title: Secretary
------------------------------------------------------
DATAWORKS CORPORATION
By: /S/ STUART CLIFTON
--------------------------------------------------------
Name: Stuart Clifton
------------------------------------------------------
Title: President and Chief Executive Officer
------------------------------------------------------
**** AMENDMENT NO. 1 TO REORGANIZATION AGREEMENT ****
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