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               [REGENT PACIFIC MANAGEMENT CORPORATION LETTERHEAD]


July 31, 1997


Mr. Charles P. Waite, Jr., Director
Mr. Steven M. Krausz, Director
Verity, Inc.
894 Ross Drive
Sunnyvale, CA 94089


Dear Messrs. Waite & Krausz:

RE:  Retainer Agreement between Regent Pacific Management Corporation and
     Verity, Inc.

I am writing this letter, pursuant to your request, to set forth the terms and
conditions upon which Regent Pacific Management Corporation, a California
corporation ("Regent Pacific"), will be engaged to perform certain management
services for Verity, Inc., a Delaware corporation, and its wholly owned and
controlled subsidiaries (collectively, "Verity"), under certain guarantees and
indemnities to be provided by the company and the board. This agreement is
contingent upon and subject to an indemnification and guarantee agreement, in a
form acceptable to Regent Pacific.

Included with these services will be the following work product, which Regent
Pacific will supply to Verity in accordance with the terms of this letter and
for the agreed-upon cash payments required by this letter:

1.      Regent Pacific agrees to provide a four person crisis team, to
        immediately assume the chief executive and general management
        responsibilities of Verity, and to develop and implement a restructuring
        and recovery plan for Verity. The goal of this assignment shall be to
        control the immediate crisis situation and redirect the company with
        respect to the potential financial and operational restructuring of the
        ongoing business of Verity.

2.      Regent Pacific shall provide the services of Gary J. Sbona, Chairman and
        Chief Executive Officer of Regent Pacific Management Corporation, who
        shall be a part of the crisis team and lead the engagement on behalf of
        Regent Pacific as the board-appointed President and Chief Executive
        Officer of Verity. Regent Pacific shall be appointed by the Board of
        Directors to provide General Management services to Verity. Both Regent
        Pacific and Mr. Sbona shall report to the Board of Directors of Verity
        and shall be solely accountable to the Board for fulfilling the
        obligations of this engagement.
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               [REGENT PACIFIC MANAGEMENT CORPORATION LETTERHEAD]


Mr. Charles P. Waite, Jr., Director
Mr. Steven M. Krausz, Director
July 31, 1997
Page 2


Regent Pacific's services do not include the following activities and/or work
product:

        With the exception of Gary J. Sbona, Regent Pacific personnel provided
        under the terms of this engagement shall not be appointed officers of
        Verity, and shall not accept or be held accountable for the fiduciary
        obligations of an officer or director of Verity.

Regent Pacific is prepared to begin our services this week, contingent upon:

1.      This duly executed retainer agreement on the part of Verity;

2.      The transfer of and receipt by Regent Pacific of the required initial
        payments of this retainer agreement;

3.      Duly executed indemnification agreement between Verity and Mr. Sbona and
        Verity and Regent Pacific in a form acceptable to Regent Pacific.

In addition to Mr. Sbona, the initial team assigned will be Stephen W. Young,
Thomas E. Gardner and James A. Garvey, Principals of Regent Pacific. You
understand that Regent Pacific retains the right to assign or interchange these
people with other people as the work progresses, in order to address your
requirements, as long as the fee paid for our services is not increased for the
included work product.

FEES: We have agreed to provide the work product included in this agreement for
a period of twelve months, including twenty-six (26) weeks of non-cancelable
services. This service shall be $50,000 per week payable in four (4) week
increments, each to be paid in advance of each Regent Pacific standard four-week
billing period. It is agreed and understood between us that the payments of such
cash fees are to be made immediately preceding the start of each four-week
billing period, and that failure to pay such periodic payments when due shall
constitute a breach of this agreement by Verity. It is further understood that
Regent Pacific's fees are to be paid in advance of the work to be performed, and
that the initial payment is to be paid on or before July 31, 1997. It is further
agreed that such cash payments are earned in full upon receipt by Regent
Pacific, by virtue of our accepting this agreement and the responsibilities it
entails, and are nonrefundable.
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                                                     [REGENT PACIFIC LETTERHEAD]
Mr. Charles P. Waite, Jr., Director
Mr. Steven M. Krausz, Director
July 31, 1997
Page 3

ADVANCE RETAINER: In the light of the uncertainty of the situation facing
Verity, Verity agrees to pay Regent Pacific an advance four (4) weeks retainer
for services which may be rendered and expenses which may be incurred in
connection with this engagement. The amount of that retainer is to be in the sum
of $200,000. The funds shall be deposited in an escrow account titled "Regent
Pacific Management Corporation, for the benefit of Verity". Immediately prior to
any cancellation by Verity prior to the expiration of the non-cancelable period
or, thereafter, without 60 days written notice, or immediately upon the filing
of any petition in bankruptcy by or against Verity, the retainer, plus any
interest earned thereon, shall become the property of Regent Pacific, free and
clear of any claims of Verity, and shall be transferred to Regent Pacific's
general account. In such an event the retainer shall be deemed earned in full by
virtue of Regent Pacific's undertaking this engagement and be nonrefundable.
This sum is in addition to and not in satisfaction of any damages which Regent
Pacific may otherwise recover against Verity for breach of this agreement, and
reflects Verity's agreement that the retainer represents the minimum fee for
Regent Pacific's acceptance of the agreement and the work undertaken,
irrespective of the amount of time actually spent by Regent Pacific in the
course of its employment. In the event that this agreement expires upon
completion of the term, or terminates in accordance with its cancellation
provisions, the escrow account, plus any interest, will be returned to Verity
within five business days after such expiration or termination.

TERM OF AGREEMENT: The term of this agreement shall be for twelve (12) months,
unless earlier terminated in accordance with this paragraph. Regent Pacific
hereby commits the availability of its resources to Verity under this agreement
for the full twelve (12) month term of the engagement. Verity may discharge
Regent Pacific at any time after the non-cancelable period provided that Verity
had delivered 60-day written notice of intent to cancel this agreement. Regent
Pacific may withdraw from this assignment at any time with Verity's consent or
for good cause without Verity's consent. Good cause includes Verity's breach of
this agreement (including Verity's failure to pay any invoice within five
working days of presentation), or any fact or circumstance that would render
our continuing participation in the assignment unethical or unlawful.

EXPENSE REIMBURSEMENT: In addition to the fees, any requests for compensation
will also include certain charges for costs and expenses. Such costs and
expenses will include, among others, charges for messenger services, air
couriers, word processing services, photocopying, travel expenses, postage,
long distance telephone, legal advice, and other charges customarily invoiced
by professional firms for reimbursement of out-

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               [REGENT PACIFIC MANAGEMENT CORPORATION LETTERHEAD]

Mr. Charles P. Waite, Jr., Director 
Mr. Steven M. Krausz, Director
July 31, 1997
Page 4

of-pocket expenses. Said expenses shall not include meal expenses except when
Regent Pacific professionals are engaged in business-related activities and
company travel.  Regent Pacific will periodically present invoices to Verity
for reimbursement of such charges, and Verity agrees to pay such invoices
within five (5) working days of presentation.

We will provide regular progress reviews to Verity and its Board of Directors at
approximately biweekly intervals, as the work progresses.  These progress
reviews will include a discussion of the alternatives available to Verity, the
performance of the company relative to the restructuring of the ongoing
business.  In addition, Regent Pacific requires, and Verity agrees, that the
Board of Directors of Verity will be available to Regent Pacific on a
reasonable consultation and communication basis and will meet with Regent
Pacific in person in regularly scheduled monthly board meetings to review the
status of the engagement.

During the progress of the work, should circumstances warrant, we may apply for
additions to the retainer fees, and attendant increases in the payments
scheduled above.  Should we seek such additional compensation in order to
continue the level of effort required by the undertaking, we will do so based
upon our professional guideline hourly rates.  We understand and acknowledge
that nothing in this agreement obligates Verity to pay such additional retainer
fees or other compensation unless the Verity Board of Directors shall have
agreed to make such payments after a written request by Regent Pacific.  As you
know, our professional guideline hourly rates range from $240 to $450.  Our
guideline hourly rates are adjusted periodically, typically on January 1 of
each year, to reflect the advancing experience, capabilities and seniority of
our professionals as well as general economic factors.

It is our firm's practice to charge our clients for services rendered based
upon not only the total number of hours charged at guideline hourly rates, but
also upon such other factors as: the complexity of the problems presented to
us; the amount at issue; the results accomplished; the skill we exercised in
accomplishing those results; the intent to which our services were rendered
after normal business hours or on other-than-normal business days; delay in
receipt of our compensation; and the extent to which we were at risk in being
paid.  To the extent that Regent Pacific's request for compensation exceeds
the total number of hours charged at guideline hourly rates, Regent Pacific
will consult with Verity before making that request.

Because of the breadth and nature of our practice, from time to time our firm
may work for one client whose interest may be opposed to that of another
client, for which
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               [REGENT PACIFIC MANAGEMENT CORPORATION LETTERHEAD]

Mr. Charles P. Waite, Jr., Director
Mr. Steven M. Krausz, Director
July 31, 1997
Page 5


we work in an unrelated matter. Please be assured that, despite any potential
difference in the interests of our clients, we strictly preserve all client
confidences and zealously pursue the interests of each of our clients. Verity
agrees that it does not consider such concurrent work in unrelated matters of
Verity and any other client of Regent Pacific to be inappropriate, and
therefore waives any objections to any such present or future concurrent
assignments provided, however, that such waiver shall not apply to any willful
misconduct or breach of confidentiality obligations of Regent Pacific
hereunder.

Except in the case of willful misconduct or gross negligence, Verity shall
indemnify, defend, and hold Regent Pacific, its officers, directors,
principals, associates, affiliates, employees, agents, and counsel, harmless
against any damages, costs, fines, penalties, liabilities, attorneys' and other
professional fees and disbursements, suffered, incurred by, or asserted
against, Regent Pacific, its officers, directors, principals, associates,
affiliates, employees, agents, and/or counsel, including any amounts incurred
or paid in settlement or any judgment of any action, suit, or proceeding
brought under any statute, at common law, or otherwise, which arises under or in
connection with the performance by Regent Pacific of services pursuant to this
agreement and any amendment or modification thereto. The obligations of Verity
under this paragraph are hereinafter collectively referred to as "Indemnity
Obligations." The Indemnity Obligations shall survive, for a period of five (5)
years, any termination of Regent Pacific's services under this agreement and
any amendment or modification thereto. Verity agrees to promptly tender any
payments due to Regent Pacific, its officers, directors, principals,
associates, affiliates, employees, agents, and/or counsel, under or in respect
of the Indemnity Obligations, within three (3) business days following written
demand by Regent Pacific, its officers, directors, principals, associates,
affiliates, employees, agents, and/or counsel. Verity's Indemnity Obligations
shall not apply to amounts paid in settlement of any loss, claim, damage,
liability, or action if such settlement is effected without the consent of
Verity, which consent shall not be unreasonably withheld.

CONFIDENTIAL INFORMATION: Regent Pacific and its team of crisis managers shall
have access under this agreement to certain proprietary and/or confidential
information with respect to Verity's business. Regent Pacific hereby agrees to
protect such confidential information as though it were Regent Pacific's own
confidential information, in accordance with the following terms and
conditions:

1.      Verity shall permit Regent Pacific to review financial and proprietary
        information necessary to Regent Pacific's participation in Verity's
        management.

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                                                    [REGENT PACIFIC LETTERHEAD]

Mr. Charles P. Waite, Jr., Director
Mr. Steven M. Krausz, Director
July 31, 1997
Page 6

2.      Verity shall permit, and Regent Pacific shall require, review of all
        Verity Board of Directors minutes and all executive actions taken within
        the three months prior to the execution of this agreement.

3.      Regent Pacific shall maintain the confidentiality of all such
        information and prevent the unauthorized disclosure thereof.  No such
        information shall be made available for the use of any other party or be
        divulged to others unless it:

        a.      is independently developed by Regent Pacific, provided that the
                person or persons developing same have had no access to
                confidential information received from Verity;

        b.      is or becomes publicly available; or

        c.      is rightfully and lawfully received by Regent Pacific from an
                independent third party.

This agreement is made under the laws of the State of California.  If any legal
action arises under this Agreement or by reason of an asserted breach of it,
the prevailing party shall be entitled to recover all costs and expenses,
including reasonable attorney's fees, incurred in enforcing or attempting to
enforce the terms of this agreement.

NON-SOLICITATION: in recognition of the fact that the Regent Pacific individuals
that we provide to Verity under this agreement may perform similar services
from time to time for others, this agreement shall not prevent Regent Pacific
from performing such similar services or restrict Regent Pacific from using
such individuals.  Verity agrees that it shall not, except by mutual agreement
between the parties, during the term of this agreement nor for a period of
three (3) years after its termination, solicit for employment nor employ,
whether as employee or independent contractor or agent, any person who performs
services under this agreement.  It is agreed that in the event of a breach of
this paragraph by Verity, it would be impractical or extremely difficult to fix
actual damages and, therefore, Regent Pacific and Verity agree that either
party in breach of this paragraph shall pay to Regent Pacific $250,000 per
individual solicited or employed as employee, independent contractor or agent,
as Liquidated Damages and not as a penalty, which is agreed by Regent Pacific 
and Verity to represent reasonable compensation for the foreseeable loss that
will, in all likelihood, be incurred because of such breach.

<PAGE>   7
               [REGENT PACIFIC MANAGEMENT CORPORATION LETTERHEAD]

Mr. Charles P. Waite, Jr., Director
Mr. Steven M. Krausz, Director
July 31, 1997
Page 7


It is our policy to provide such additional services as you may request, in
addition to those covered in this letter, when qualified individuals are
available to fulfill your request. In such instances, the additional services
will be provided and paid for in accordance with Regent Pacific's guideline
hourly rates as contained in Regent Pacific's published fee schedules, a copy
of which is enclosed with this agreement.

This constitutes the entire understanding between Regent Pacific and Verity
regarding our services. Further, this agreement supersedes and replaces any
prior agreement(s) between the parties. By executing this agreement you
acknowledge that you have read it carefully and understand all of its terms.
This agreement cannot be modified except by further written agreement signed by
each party.

If you have any questions about the foregoing, please call me. If Verity is in
agreement with foregoing, and it accurately represents your understanding of
the agreement between Verity and our firm, please approve the enclosed copy of
this letter, and return the approved copy to me, along with the advance
retainer of $200,000 and the first four (4) week service fee of $200,000. Said
payments may be wire-transferred to the account of Regent Pacific Management
Corporation at Comerica Bank, 333 West Santa Clara Street, San Jose, CA 95113,
Account #8507884362, Routing number 121137522. Our contact there is Anne Osborn
at (408) 556-5367. If there are any questions with regard to the terms set form
herein, kindly contact me immediately. In order to maintain continuity in
scheduling of our resources, we ask that we receive your affirmative response
as soon as possible. In any event, this offer to provide our services will
expire on July 31, 197, unless accepted by you prior to that date, or extended
in writing by an officer of Regent Pacific. Please understand that we can
assume no responsibility in
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               [REGENT PACIFIC MANAGEMENT CORPORATION LETTERHEAD]

Mr. Charles P. Waite, Jr., Director
Mr. Steven M. Krausz, Director
July 31, 1997
Page 8


connection with the services to be provided under this agreement until the
signed copy has been returned and the required funds as agreed to by us have
been received.

Very truly yours,

REGENT PACIFIC MANAGEMENT CORPORATION



Gary J. Sbona
Chairman and Chief Executive Office



THE FOREGOING IS HEREBY APPROVED AND AGREED TO:

DATED: July 31, 1997

VERITY, INC.
(Signifies full agreement with all terms and conditions)


BY: /s/ CHARLES P. WAITE, JR.
    ---------------------------------------------    
    Name: Charles P. Waite, Jr.   Title: Director
    On Behalf of the Board of Directors


BY:
    ---------------------------------------------
    Name: Steven M. Krausz        Title: Director
    On Behalf of the Board of Directors