Exhibit 10.34  FORBEARANCE AGREEMENT  This
Forbearance Agreement (as amended, supplemented or otherwise modified from time
to time, Agreement) is entered into as of the 26th day of August,
2002, by and among Peregrine Systems, Inc., a Delaware corporation (Peregrine),
and each of its Subsidiaries on the signature pages hereto (Peregrine, together
with such Subsidiaries, each, a Peregrine Party, collectively, the Peregrine
Parties), Fleet Business Credit, LLC, a Delaware limited liability
company, as successor to Sanwa Business Credit Corporation (Fleet),
Wells Fargo HSBC Trade Bank, N.A., a national banking association (the Trade
Bank), and Silicon Valley Bank, a California state bank (SVB;
together with Fleet and the Trade Bank, each, a Purchaser,
collectively Purchasers), and Fleet, as agent for the Purchasers (in
such capacity, together with its successors in such capacity, Purchaser
Agent). This Agreement is made with reference to the following facts which
each of the parties hereto acknowledges to be true and correct:  A.Peregrine and certain of the other Peregrine
Parties are currently obligated to the Purchasers pursuant to their respective
Purchase Documents (as defined below). Such Peregrine Parties have defaulted on
the Purchase Documents and desire, inter  alia: (i) to repay the
Purchase Obligations (as defined below) in accordance with the terms set forth
in the Purchase Documents as modified by this Agreement; and (ii) that the
Purchasers temporarily forbear from exercising their rights and remedies as to
any Existing Default (as hereinafter defined) under the Purchase Documents.  B.The Purchasers are willing to temporarily
forbear from exercising their respective rights and remedies as to any Existing
Default only in accordance with the terms and conditions set forth in this
Agreement.  C.IT IS THE INTENT OF THE PARTIES HERETO THAT
THIS AGREEMENT ADDRESS THE DEBTS AND/OR OBLIGATIONS OF THE PEREGRINE PARTIES TO
PURCHASERS THAT ARE FULLY DESCRIBED HEREIN OR THAT ARISE UNDER OR IN CONNECTION
WITH THE PURCHASE DOCUMENTS. THIS AGREEMENT DOES NOT PERTAIN TO ANY OTHER
INDEBTEDNESS AND/OR OBLIGATIONS OF ANY PEREGRINE PARTY (OR ANY OTHER PERSONS)
TO ANY PURCHASER NOT SPECIFICALLY ADDRESSED IN THIS AGREEMENT. ALL TERMS AND
PROVISIONS OF ANY AGREEMENTS (INCLUDING, BUT NOT LIMITED TO, THE PURCHASE
DOCUMENTS) BETWEEN ANY PEREGRINE PARTY, ON THE ONE HAND, AND ANY PURCHASER, ON
THE OTHER HAND, NOT SPECIFICALLY MODIFIED HEREIN, SHALL REMAIN IN FULL FORCE
AND EFFECT IN ACCORDANCE WITH THEIR ORIGINAL TERMS.  NOW, THEREFORE,in consideration of: (i) the above recitals and the mutual promises
contained in this Agreement; (ii) the execution of this Agreement and all
documents, instruments and agreements required to be executed in accordance
with this Agreement; (iii) the satisfaction of all Conditions Precedent set
forth in Section VII below; and (iv) for other and further valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, it
is hereby agreed as follows:  
   I.Defined Terms.  A.  All capitalized terms not otherwise defined
in this Agreement shall, as to each Purchaser, have the meanings given for said
terms in such Purchasers Purchase Documents as hereinafter defined.  B.  As used herein, the following terms shall have
the following definitions:  Acceptable
Plan of Reorganization means a plan of reorganization of Peregrine in a
Chapter 11 Proceeding that treats the claims of each Purchaser on the same
terms and conditions in all material respects as set forth in this Agreement
(provided that such Plan may include a waiver of the Existing Defaults on a
post-effective-date basis).  Aggregate
Proceeds shall mean, with respect to any Disposition by any Peregrine
Party or any of their respective Subsidiaries, the sum of (a) the aggregate
cash or cash equivalents received by such Peregrine Party or such Subsidiary,
(b) the face value of any promissory notes received by such Peregrine Party or
such Subsidiary, (c) the market value of any publicly traded, readily marketable
securities received by such Peregrine Party or such Subsidiary, and (d) the
value (as mutually agreed by Purchasers and the Peregrine Parties in good
faith) of all other consideration received by such Peregrine Party or such
Subsidiary.  Bankruptcy
Code means the United States Bankruptcy Code, as in effect from time to
time.  Bankruptcy
Court shall mean any bankruptcy court in which any proceeding under the
Bankruptcy Code may be commenced by, or against, any Peregrine Party.  Business
Day means any weekday that commercial banks in general are open for the
transaction of commercial banking business in California and Illinois, and that
each Purchaser is open for business at its principal place of business.  Canadian
Guaranty means, collectively, one or more guarantees executed and
delivered by the Canadian Peregrine Parties in favor of Purchaser Agent, in
form and substance reasonably satisfactory to Purchasers, as such agreements
may be amended, supplemented or modified from time to time.  Canadian Peregrine Parties means Peregrine Systems of Canada,
Inc., a corporation organized under the laws of Canada, Peregrine Nova Scotia
Company, a Nova Scotia unlimited liability company, Peregrine Systems Ltd., a
corporation organized under the laws of Ontario, Peregrine Ottawa Nova Scotia
Company, a Nova Scotia unlimited liability company, Peregrine Networks Canada
Inc., a corporation organized under the laws of Canada, Loran International
Technologies Inc., a corporation organized under the laws of Canada, Loran
Network Systems Inc., a corporation organized under the laws of Canada, Remedy
Canada Ltd., a corporation organized under the laws of Ontario, Extricity
(Canada) Corp., a Nova Scotia unlimited liability company and Canadian
Peregrine Party means any one of them.  Canadian
Security Agreement means, collectively, one or more security agreements
executed and delivered by Canadian Peregrine Parties in favor of Purchaser
Agent, in form and  2 
   substance reasonably
satisfactory to Purchasers, as such agreements may be amended, supplemented or
modified from time to time.  Canadian
Security Documents means, collectively, such instruments, agreements, and
documents governed by the laws of Canada or any political subdivision thereof,
as Purchasers may require in order to secure the obligations of Canadian
Peregrine Parties, including the Canadian Security Agreement, the Hypothec, and
the Canadian Guaranty, in each case, as may be amended, supplemented or modified
from time to time.  Chapter
11 Proceeding means any proceeding under Chapter 11 of the Bankruptcy Code
commenced by or against any Person.  Code
means the Uniform Commercial Code as in effect in the State of California from
time to time.  Collateral
means all present and future assets of any Peregrine Party securing all or any
portion of the Purchase Obligations or the obligations of the Peregrine Parties
under this Agreement or the other Forbearance Documents.  Copyright
Security Agreement means, collectively, one or more copyright security
agreements executed and delivered by Purchaser Agent and each Peregrine Party
that owns any interest in copyrights, the form and substance of which are
reasonably satisfactory to Purchasers, as such agreements may be amended,
supplemented or modified from time to time.  Disposition
means any sale or other disposition by any Person of any of such Persons
assets (including, without limitation, any sale or other disposition of the
Stock in any of such Persons Subsidiaries) other than Excluded Dispositions.  Effective
Date shall have the meaning ascribed therein in Section VII of this
Agreement.  Excluded
Dispositions means (a) sales or other dispositions by any Peregrine Party
or any of its Subsidiaries of equipment that is substantially worn, damaged,
obsolete or no longer usable by such Peregrine Party or such Subsidiary in the
ordinary course of business, (b) sales by any Peregrine Party or its
Subsidiaries of inventory to buyers in the ordinary course of business, (c) the
use or transfer of money or cash equivalents by any Peregrine Party or its
Subsidiaries in a manner that is not prohibited by the terms of this Agreement
or the other Forbearance Documents, and (d) the licensing by any Peregrine Party
or its Subsidiaries of patents, trademarks, copyrights, and other intellectual
property rights in the ordinary course of business consistent with historical
practices.  Existing
Defaults shall have the meaning ascribed thereto in Section II.B. of this Agreement.  Filing
Date shall mean, with respect to any Chapter 11 Proceeding filed by or
against any Peregrine Party, the date on which the petition is filed with the
Bankruptcy Court with respect thereto.  3 
   Fleet
Purchase Documents means those agreements, instruments and documents set
forth on Schedule B attached hereto relative to the purchase by Fleet of
certain accounts and payments from Peregrine, as the same may be amended,
supplemented or otherwise modified from time to time.  Forbearance
Documents means this Agreement, the Peregrine Party Guaranty, the
Peregrine Party Security Agreement, the Canadian Guaranty, the Canadian
Security Agreement, the Hypothec, the other Canadian Security Documents, the
Copyright Security Agreement, the Intercreditor Agreement, the Patent Security
Agreement, the Intercompany Subordination Agreement, the Promissory Notes, and
any other agreement, instrument or document entered into between any Peregrine
Party and any Purchaser or executed by any Peregrine Party in connection with
this Agreement, in each case, as may be amended, supplemented or modified from
time to time.  Hypothec
means the security document made by one or more of the Canadian Peregrine
Parties in favor of Purchaser Agent, in form and substance (including being
governed by the laws of Quebec) reasonably satisfactory to Purchasers, as may
be amended, supplemented or modified from time to time.  Indebtedness
means, with respect to any person (a) all obligations of such Person for
borrowed money, (b) all obligations of such Person evidenced by bonds,
debentures, notes, or other similar instruments and all reimbursement or other
obligations in respect of letters of credit, bankers acceptances, interest rate
swaps, or other financial products, (c) all obligations of such Person secured
by a lien or security interest on any assets of such Person (other than
purchase money indebtedness or equipment leases, to the extent such
indebtedness does not exceed the purchase price of the asset securing such
indebtedness), (d) all obligations or liabilities of others secured by a
security interest or lien on any asset of such Person, irrespective of whether
such obligation or liability is assumed, unless such security interest or lien
is expressly subordinated to the Purchaser Agent Liens, and (e) any obligation
of such Person guaranteeing or intended to guarantee (whether directly or
indirectly guaranteed, endorsed, co-made, discounted, or sold with recourse)
any Indebtedness of any other Person. Ordinary course account payables of a
person not subject to extraordinary payment terms and not evidenced by a note
or deferred repayment agreement shall not be included as Indebtedness of such
Person.  Indenture
means the Indenture dated as of November 14, 2000, between Peregrine and the
Indenture Trustee.  Indenture
Trustee means State Street Bank and Trust Company, N.A.  Intercompany
Subordination Agreement means a subordination agreement executed and
delivered by the Peregrine Parties and Purchaser Agent, the form and substance
of which is reasonably satisfactory to the Purchasers, as may be amended,
supplemented or modified from time to time.  Intercreditor
Agreement means that certain Intercreditor Agreement, dated as of the date
hereof, among the Purchasers and the Lender Group Agent, and any other
agreement between the Purchasers and any subsequent secured lender to any
Peregrine Party relative to the  4 
   relative priorities of the
Purchaser Agent Liens and the liens of such subsequent secured lender, in each
case, as may be amended, supplemented or modified from time to time.  Interpurchaser
Agreement means that certain Interpurchaser Agreement, dated as of the date
hereof, among the Purchasers, as may be amended, supplemented or modified from
time to time.  Lender
Group means the Lender Group as defined in the Lender Group Credit
Agreement as in effect on the date hereof.  Lender
Group Agent means Foothill Capital Corporation, in its capacity as
arranger and administrative agent under the Lender Group Credit Agreement,
together with any successors in such capacity.  Lender
Group Credit Agreement means that certain Loan and Security Agreement,
dated as of June 12, 2002, among Peregrine, the Subsidiaries of Peregrine that
are signatories thereto, the lenders signatory thereto, and Lender Group Agent,
as amended by that certain Amendment Number 1 to Loan and Security Agreement,
dated as of June 21, 2002, and as otherwise amended, supplemented or modified
from time to time.  Lender
Group Loan Documents means the Loan Documents as defined in the Lender
Group Credit Agreement.  Lender
Group Obligations means the liabilities and obligations of the Peregrine Parties
to the Lender Group under the Lender Group Loan Documents.  Material
Adverse Change shall have the meaning ascribed thereto in the Lender Group
Credit Agreement as in effect on the date hereof.  Maturity
Date shall mean July 31, 2006.  Monetary
Default shall mean any failure by any Peregrine Party to pay any amount
(whether of principal, interest or otherwise) owing by such Peregrine Party to
any Purchaser when and as such amount shall be due after giving effect to any
applicable cure periods, but excluding any Existing Default.  Net
Available Proceeds means: (a) with respect to any Disposition by any
Peregrine Party or any Subsidiary of any Peregrine Party after the Effective
Date, an amount (but in no event less than $0) equal to the result of (i) the
Net Cash Proceeds received by such Peregrine Party or such Subsidiary from such
Disposition, plus (ii) the aggregate amount of Net Cash Proceeds
received by the Peregrine Parties or any of their respective Subsidiaries from
other Dispositions after the Effective Date, plus (iii) the aggregate
amount of Indebtedness incurred by the Peregrine Parties or any of their
respective Subsidiaries after the Effective Date (without regard to any
repayments thereof other than repayments of Indebtedness (excluding
Indebtedness owing under the Lender Group Credit Agreement) of any Peregrine
Party or any Subsidiary Party made contemporaneously with incurring, and out of
the proceeds of, Indebtedness subsequently incurred by such Peregrine Party or
such Subsidiary) plus (iv) the then outstanding balance owing by the
Peregrine Parties under the Lender Group Credit Agreement to the extent  5 
   that it remains outstanding
after giving effect to such Disposition, minus (v) $184,000,000; and (b)
without duplication with respect to any Net Cash Proceeds of incurred
Indebtedness included under clause (a), with respect to any Indebtedness
incurred by any Peregrine Party or any Subsidiary of any Peregrine Party after
the Effective Date, an amount (but in no event less than $0) equal to the
result of (i) the amount of such Indebtedness (net of the aggregate amount of
Indebtedness (excluding Indebtedness owing under the Lender Group Credit
Agreement) of such Peregrine Party or such Subsidiary repaid contemporaneously
with incurring, and out of the proceeds of such Indebtedness), plus (ii)
the aggregate amount of all other Indebtedness incurred by the Peregrine
Parties or any of their respective Subsidiaries after the Effective Date
(without regard to any repayments thereof other than repayments of Indebtedness
(excluding Indebtedness owing under the Lender Group Credit Agreement) of any
Peregrine Party or Subsidiary of any Peregrine Party made contemporaneously
with such party incurring, and out of the proceeds of, Indebtedness
subsequently incurred by such Peregrine Party or such Subsidiary), plus
(iii) the aggregate Net Cash Proceeds received by the Peregrine Parties or any
of their respective Subsidiaries in Dispositions occurring after the Effective
Date plus (iv) the then outstanding balance owing by the Peregrine
Parties under the Lender Group Credit Agreement to the extent that it remains
outstanding after giving effect to incurrence of Indebtedness and application
of the proceeds thereof, minus (v) $184,000,000.  Net
Cash Proceeds means, with respect to any Disposition, the total cash
consideration received by the Person selling or otherwise disposing of its
assets net of customary and reasonable fees and expenses paid by such Person in
such Disposition and, with respect to any Disposition of assets other than
Stock, net of any purchase money indebtedness owing by such Person with respect
to such assets to the extent repaid by such Person in connection with such
Disposition.  New
Event of Default shall have the meaning set forth in Section IX hereof.  Notes
means Peregrines $270,000,000 of 5-1/2% Convertible Subordinated Notes due
2007 issued pursuant to the Indenture, together with any other instruments
issued, or other payment obligations incurred, by any Peregrine Party in full
or partial satisfaction thereof.  Past
Due Purchase Obligations means, with respect to each Purchaser, as of any
date of determination thereof, the aggregate amount of Purchase Obligations owing
to such Purchaser that, as of such date of determination, are due and payable
by Peregrine or any other Peregrine Party to such Purchaser and have not then
been paid to such Purchaser.  Patent
Security Agreement means, collectively, one or more patent security
agreements executed and delivered by any Peregrine Party that owns any interest
in any patents and Purchaser Agent, the form and substance of which are
reasonably satisfactory to Purchasers, as such agreements may be amended,
supplemented or modified from time to time.  Peregrine Party Guaranty means,
collectively, one or more guarantees executed and delivered by the Peregrine
Parties in favor of Purchaser Agent, in form and substance reasonably
satisfactory to Purchasers, as such agreements may be amended, supplemented or
modified from time to time.  6 
   Peregrine
Party Security Agreement means, collectively, one or more security
agreements executed and delivered by the Peregrine Parties in favor of
Purchaser Agent, in form and substance reasonably satisfactory to Purchasers,
as such agreements may be amended, supplemented or modified from time to time.  Person
means any natural person, corporation, limited liability company, limited
partnership, general partnership, limited liability partnership, joint venture,
trust, land trust, business trust, or other organization, irrespective of
whether it is a legal entity, and any government and any agency and any
political subdivision thereof.  Promissory
Note means, with respect to each Purchaser, collectively, one or more
promissory notes, in form and substance reasonably satisfactory to such
Purchaser, evidencing the Past Due Purchase Obligations owing to such Purchaser
by each Peregrine Party.  Purchase
Documents means the Fleet Purchase Documents, the SVB Purchase Documents,
and the Trade Bank Purchase Documents.  Purchase
Obligations means all debts, principal, interest (including any interest
that, but for the provisions of the Bankruptcy Code, would have accrued),
premiums, liabilities, obligations, fees, charges, costs, reimbursable expenses
of the Purchasers or Purchaser Agent (including any fees or expenses that, but
for the provisions of the Bankruptcy Code, would have accrued), guaranties,
covenants, and duties of any kind and description owing by the Peregrine
Parties to the Purchasers or Purchaser Agent pursuant to or evidenced by the
Purchase Documents (as modified by this Agreement or any other Forbearance
Document), this Agreement or any of the other Forbearance Documents and
irrespective of whether for the payment of money, whether direct or indirect,
absolute or contingent, due or to become due, now existing or hereafter
arising, and including all interest not paid when due and all expenses of the
Purchasers or Purchaser Agent that the Peregrine Parties are required to pay or
reimburse by the Purchase Documents, this Agreement, the other Forbearance
Documents, by law, or otherwise. Any reference in this Agreement or in the
other Forbearance Documents to the Purchase Obligations shall include all
amendments, changes, extensions, modifications, renewals replacements,
substitutions, and supplements, thereto and thereof, as applicable, both prior
and subsequent to any Insolvency Proceeding.  Purchased
Accounts means, with respect to each Purchaser, the accounts and other
rights to payment purchased by such Purchaser pursuant to such Purchasers
Purchase Documents.  Purchaser
Agent shall have the meaning ascribed thereto in the preamble hereto.  Purchaser
Agent Liens means the security interests and other liens granted to
Purchaser Agent for the benefit of Purchasers pursuant to the terms of the
Forbearance Documents.  Qualified
Offer means any good faith written offer by any Person that is not an
Affiliate of any Peregrine Party to purchase all or any portion of the
outstanding Stock or assets of Remedy provided that (a) prior to the receipt by
Peregrine of such offer, the Peregrine Parties shall have timely provided such
information regarding such offer, the Person making such offer, and all other
potential offers to each Purchaser as any Purchaser may request and as may be  7 
   reasonably necessary to
enable such Purchaser to determine within the time periods provided herein
whether to object to such offer, (b) such offer is only subject to such
contingencies as are reasonable and customary for similar transactions, (c)
such offer has been approved by the board of directors (or other governing
body) of the offeror, Peregrine and Remedy, (d) if the Net Cash Proceeds of
such offer would be less than $200,000,000, the offeror has made a reasonable
good faith cash deposit towards the purchase price and has sufficient
resources, or a commitment for financing enabling the offeror, to pay the
consideration set forth in such offer and Peregrine has received (and provided
to each Purchaser) reasonable evidence of the same, and (e) if the Net Cash
Proceeds of such offer would be greater than or equal to $200,000,000, any
terms of the offer relating to the making of a good faith cash deposit or the
lack of any requirement of a good faith cash deposit, and a determination of
the sufficiency of the offerors resources and/or financing or committed financing
to enable the offeror to pay the consideration set forth in such offer, shall
have been considered and approved by the board of directors (or other governing
body) of Peregrine and Remedy.  Remedy
means Peregrine Remedy, Inc., a Delaware corporation.  Stock
means all shares, options, warrants, interests, participations, or other
equivalents (regardless of how designated) of or in a Person, whether voting or
nonvoting, including common stock, preferred stock, or any other equity
security (as such term is defined in Rule 3al1-1 of the General Rules and
Regulations promulgated by the SEC under the Exchange Act).  Subsidiary
of a Person means a corporation, partnership, limited liability company, or
other entity in which that Person directly or indirectly owns or controls the
shares of Stock having ordinary voting power to elect a majority of the board
of directors (or appoint other comparable managers) of such corporation,
partnership, limited liability company, or other entity.  Supplemental
Senior Loan Obligations means all of the obligations, liabilities, and
Indebtedness of the Peregrine Parties in connection with any supplemental,
further or additional loan facilities extended to the Peregrine Parties by the
Lender Group or any other lender(s) other than the Lender Group Obligations.  SVB
Purchase Documents means those agreements, instruments and documents set
forth on Schedule C attached hereto relative to the purchase by SVB of
certain accounts and payments from Peregrine, as the same may be amended,
supplemented or otherwise modified from time to time.  Trade
Bank Purchase Documents means those agreements, instruments and documents
set forth on Schedule D attached hereto relative to the purchase by the
Trade Bank of certain accounts and payments from Peregrine, as the same may be
amended, supplemented or otherwise modified from time to time.  Trademark
Security Agreement means each trademark security agreement executed and
delivered by any Peregrine Party that owns any interest in any trademarks and
Purchaser Agent, the form and substance of which is reasonably satisfactory to
Purchasers, as may be amended, supplemented or modified from time to time.  8 
   II.Acknowledgment of Purchase Documents,
Existing Defaults, and Past Due Purchase Obligations. Peregrine hereby acknowledges, warrants and
represents that the following statements of facts regarding the Purchase
Documents are true, correct and complete:  A.  The Purchase Documents.  1.(a) As stated in the Fleet Purchase
Documents, Fleet has purchased certain accounts and other rights to payment,
(b) as of the date hereof the accounts and other rights to payment purchased by
Fleet that remain outstanding are set forth on Schedule E; (c) Peregrine
has defaulted on the Fleet Purchase Documents; (d) the Fleet Purchase Documents
have not been amended at any time on or before the date hereof except as
specifically set forth in Schedule B; (e) the Fleet Purchase Documents
constitute duly authorized, valid, binding and continuing agreements and
obligations of Peregrine to Fleet, enforceable in accordance with their
respective terms; and (f) Peregrine has no claims, cross-claims, counterclaims,
setoffs or defenses of any kind or nature which would in any way reduce or
offset its obligations to Fleet under the Fleet Purchase Documents as of the
date of execution of this Agreement.  2.(a) As stated in the SVB Purchase Documents,
the SVB has purchased certain accounts and other rights to payment, (b) as of
the date hereof the accounts and other rights to payment purchased by SVB that
remain outstanding are set forth on Schedule F; (c) Peregrine has
defaulted on the SVB Purchase Documents; (d) the SVB Purchase Documents have
not been amended at any time on or before the date hereof except as
specifically set forth in Schedule C; (e) the SVB Purchase Documents
constitute duly authorized, valid, binding and continuing agreements and
obligations of Peregrine to SVB, enforceable in accordance with their respective
terms; and (f) Peregrine has no claims, cross-claims, counterclaims, setoffs or
defenses of any kind or nature which would in any way reduce or offset its
obligations to SVB under the SVB Purchase Documents as of the date of execution
of this Agreement.  3.(a) As stated in the Trade Bank Purchase
Documents, the Trade Bank has purchased certain accounts and other rights to
payment, (b) as of the date hereof the accounts and other rights to payment
purchased by the Trade Bank that remain outstanding are set forth on Schedule
G; (c) Peregrine has defaulted on the Trade Bank Purchase Documents; (d)
the Trade Bank Purchase Documents have not been amended at any time on or
before the date hereof except as specifically set forth in Schedule D;
(e) the Trade Bank Purchase Documents constitute duly authorized, valid,
binding and continuing agreements and obligations of Peregrine to the Trade
Bank, enforceable in accordance with their respective terms; and (e) Peregrine
has no claims, cross-claims, counterclaims, setoffs or defenses of any kind or
nature which would in any way reduce or offset its obligations to the Trade
Bank under the Trade Bank Purchase Documents as of the date of execution of
this Agreement.  B.  The Existing Defaults.  As of August 1, 2002, defaults by Peregrine
existed under the Fleet Purchase Documents, the SVB Purchase Documents, and the
Trade Bank Purchase Documents (collectively, the Existing Defaults).  The Existing Defaults include, without
limitation, Peregrines failure to remit amounts received by Peregrine to each
Purchaser in  9 
   accordance with the terms of
the applicable Purchase Documents, certain representations and warranties of
Peregrine in the Purchase Documents failing to be true in all material respects
as of the date such representations and warranties were made, Peregrines sale
of one or more accounts or other rights to payment to more than one Purchaser
or third party, and Peregrines failure to comply with certain other terms and
conditions of the Purchase Documents. None of the Existing Defaults have been
cured by Peregrine (or any other Person) or waived by the applicable Purchaser
as of the date of execution of this Agreement.  C.  The Past Due Purchase Obligations.  As of the date hereof, the aggregate amount
of Past Due Purchase Obligations owing by the Peregrine Parties to each
Purchaser is the amount set forth on Schedule A as owing to such
Purchaser.  Fleet,
the Trade Bank, and the Peregrine Parties acknowledge that prior to the date
hereof, Fleet received $7,195,940 in respect of Purchase Obligations, all or a
portion of which amount may have been in respect of the Purchase Obligations
owing to Fleet or all or a portion of which amount may have been in respect of
the Purchase Obligations owing to the Trade Bank (which amount is referred to
herein as the Fleet/Trade Bank Amount). The Peregrine Parties, Fleet
and the Trade Bank agree to allocate the Fleet/Trade Bank Amount as follows:
$6,195,940 to Fleet for application of its Past Due Purchase Obligations
relating to IBM and $1,000,000 to the Trade Bank for application to its Past
Due Purchase Obligations relating to IBM.  III.Limited Scope of Agreement. 
Nothing contained in this Agreement shall be interpreted as or be deemed
a release or a waiver by any Purchaser of any of the terms or conditions of
such Purchasers Purchase Documents, or any other documents, instruments and
agreements between the parties hereto except as specifically provided in this
Agreement. Unless specifically modified herein, all other terms and provisions
of the Purchase Documents shall remain in full force and effect in accordance
with their original terms. This Agreement does not constitute a waiver or
release by any Purchaser of any obligations between any Peregrine Party and any
Purchaser, or a waiver by any Purchaser of any defaults by any Peregrine Party
under the Purchase Documents, unless expressly so provided herein, nor between
any Purchaser and any other Person.  IV.Purchasers Agreement to Forbear During
Forbearance Period.  Subject to the Peregrine Parties
satisfaction of all Conditions Precedent set forth in Section VII below, and so
long as no New Event of Default occurs, each of the Purchasers hereby agrees to
forbear from exercising its rights and remedies under its Purchase Documents,
including without limitation its right to begin legal enforcement of its
remedies under its Purchase Documents during the period from the date hereof
through the earlier of the close of business on the Maturity Date or the
occurrence of a New Event of Default (such period, the Forbearance Period).
If a New Event of Default should occur, each Purchasers agreement hereunder to
forbear from exercising its remedies, together with any and all of such
Purchasers other forbearances contained herein, shall immediately terminate
without further notice (whether any such New Event of Default shall occur under
such Purchasers Purchase Documents or any other Purchasers Purchase
Documents). Each Peregrine Party acknowledges and agrees that, immediately
after the Forbearance Period expires, if the Past Due Purchase Obligations and
all other Purchase Obligations of the Peregrine Parties have not been fully
performed and paid, each Purchaser may, without further notice, exercise all or
any of the rights and remedies contained in such  10 
   Purchasers Purchase
Documents, in the Forbearance Documents and available under applicable law with
respect to the Existing Defaults. Each Peregrine Party further acknowledges and
agrees that each Purchasers agreement to forbear during the Forbearance Period
concerns only the Existing Defaults, but not New Events of Default. The
foregoing to the contrary notwithstanding, (a) each Purchaser shall be
permitted to exercise all of its rights and remedies against the account
debtors or other obligors (other than the Peregrine Parties) on such
Purchasers Purchased Accounts, and (b) each Purchaser, shall be entitled to
make demand on the Peregrine Parties to repurchase any of such Purchasers
Purchased Accounts to the extent authorized by, and in accordance with the
terms of, such Purchasers Purchase Documents. Upon any Purchaser making a
demand on any Peregrine Party to repurchase any of such Purchasers Purchased
Accounts in accordance with clause (b) of the immediately preceding sentence,
the amount at which such Peregrine Party is obligated to repurchase such
Purchased Account shall be added to the then outstanding balance of such
Purchasers Promissory Note (or at such Purchasers option, such Peregrine
Party shall issue a new Promissory Note in favor of such Purchaser in such
amount) and, anything in such Purchasers Purchase Documents to the contrary
notwithstanding, such amount shall be payable on the terms and conditions set
forth in such Promissory Note. It is expressly agreed that each Purchaser can
continue to collect and enforce rights against the account debtors and other
obligors on any of such Purchasers Purchased Accounts and to keep all amounts
received with respect thereto, including with respect to Past Due Purchase
Obligations, regardless of any demand made on any Peregrine Party or the
execution or existence of any Promissory Note, provided that any sums so received
shall be credited, in accordance with Section V.E.l(b)(ii), against the
outstanding principal balance of any applicable Promissory Note executed with
respect to the Past Due Purchase Obligations related to such Payment; provided,
however, that Peregrine shall be permitted to retain payments from IBM in
respect of SOW #4901S9001 (excluding any payments in respect of the FPL Account
(as defined in Section V.O. hereof) solely to the extent permitted, and in
accordance with, Section V.O hereof. The foregoing notwithstanding, before
settling any Purchased Account for less than 100% of the principal amount
thereof, the affected Purchaser first shall notify Peregrine of the proposed
settlement terms and Peregrine may within three business days repurchase such Purchased
Account for cash in an amount equal to the present value (discounted at 6% per
annum) of the proposed settlement payments, provided that such Purchaser is
entitled under the terms of any Intercreditor Agreement with the Lender Group
or with the holders of any Supplemental Senior Loan Obligations to receive and
retain such repurchase price, and provided that, subject to the next sentence
of this paragraph, such Purchaser shall retain its lien on such repurchased
Purchased Account to secure the balance due such Purchaser with respect thereto
until paid in full (and Peregrine shall deliver to such Purchaser evidence of
any required consents, waivers or releases by the Lender Group or any holders
of any Supplemental Senior Loan Obligations needed to permit such Purchaser to
receive and retain such repurchase price and to retain a first priority
security interest in the repurchased Purchased Account). If, after repurchasing
such a Purchased Account, any Peregrine Party thereafter collects amounts with
respect thereto, such amounts may be retained by such Peregrine Party to the
extent necessary to recoup the repurchase price paid to the affected Purchaser,
and, if and after such repurchase price fully is recouped, thereafter any
excess collections shall be paid to such Purchaser for application to the Past
Due Purchase Obligations in accordance with Section V.E.(c)(iii) below.  11 
   V.Terms and Conditions of Forbearance.  As
additional consideration for each Purchasers agreement to enter into this
Agreement, the Peregrine Parties and the Purchasers agree to the following
terms and conditions which, to the extent that they are inconsistent with the
terms of any Purchase Document, shall modify such Purchase Document as
specifically set forth below; provided, however, that all terms and conditions
of the Purchase Documents not specifically modified in this Agreement shall
remain in full force and effect in accordance with their original terms:  A.  Reimbursement of Legal Fees.  The Peregrine Parties shall reimburse all
Purchasers for any and all reasonable legal fees and expenses incurred by
Purchasers (including, without limitation, legal fees and expenses incurred, or
to be incurred by or on behalf of, Purchasers during the pendency of any
proceeding under the Bankruptcy Code) in connection with the negotiation,
drafting, execution and administration of this Agreement and the other
Forbearance Documents, including the allocated costs of in-house counsel. Such
fees and expenses shall be reimbursed on or before the Effective Date for all
such fees and expenses accrued through the Effective Date and thereafter on a
monthly basis no later than 30 days after delivery by the applicable Purchaser
to Peregrine of an invoice for such fees and expenses.  The Peregrine Parties further agree to pay
to Purchaser Agent, on or before the commencement by, or against, Peregrine of
a proceeding under the Bankruptcy Code, $100,000 as an advance payment on
account for legal fees and expenses incurred, or to be incurred by or on behalf
of, Purchaser Agent during the pendency of any such proceeding.  B.  Forbearance Fee.  As additional consideration for the
Purchasers willingness to enter into this Agreement the Peregrine Parties
shall pay a forbearance fee (collectively, the Forbearance Fee) to Purchasers
in the following respective amounts:  Fleet:
  
  $
  786,280.57Trade Bank:
  
  $
  120,599.59SVB:
  
  $
  93,119.84
  The Forbearance Fee shall be
fully earned upon the effectiveness hereof and shall be payable on the earlier
to occur of a Monetary Default or the Maturity Date. The foregoing to the
contrary notwithstanding, if on or before the Maturity Date, the Purchase
Obligations owing to all Purchasers shall have been paid and performed in full
and no Monetary Default shall have occurred, then the Peregrine Parties shall
have no obligation to pay the Forbearance Fee, and each Purchaser shall waive
its Forbearance Fee.  C.  Distributions: Loans to Officers and
Directors.  Except to the extent
otherwise permitted in this Agreement, and other than distributions or
declaration and payment of dividends by a Peregrine Party to another Peregrine
Party, no Peregrine Party shall make any distribution or declare or pay any
dividends (in cash or other property, other than distribution by Peregrine of
its common stock) on, or purchase, acquire, redeem, or retire any of any
Peregrine Partys Stock, of any class, whether now or hereafter outstanding,
except that the Peregrine Parties and their Subsidiaries may convert any of
their convertible securities (including, without limitation, the convertible
subordinated notes issued pursuant to the Indenture) into other securities
pursuant to the terms of such convertible securities or otherwise in exchange
therefore,  12 
   provided that no such
conversion shall involve the payment of cash consideration (other than cash in
lieu of fractional shares). No Peregrine Party shall, directly or indirectly,
including through any Subsidiary, extend credit, arrange for the extension of
credit, or renew an extension of credit, in the form of a personal loan to or
for any director or officer of any Peregrine Party.  D.  Interest.  Interest on the Past Due Purchase Obligations shall accrue at a
per annum rate of 6.00%; provided, however, that upon the
occurrence and during the continuation of a New Event of Default, interest on
the Past Due Purchase Obligations shall accrue at a per annum rate of 9.00%.
Interest shall accrue commencing on August 1,2002 and shall be due and payable
on the first day of each calendar month, in arrears, until such time as the
Purchase Obligations shall have been paid in full in immediately available
funds. The foregoing to the contrary notwithstanding, upon the commencement of
the first, if any, Chapter 11 Proceeding filed by or against Peregrine, (a)
during the period from the Filing Date thereof through the date (the
Moratorium End Date) that is the earliest to occur of (1) 11 days after an
order shall be entered in such Chapter 11 Proceeding by the Bankruptcy Court
confirming an Acceptable Plan of Reorganization, (2) the date on which an order
shall be entered in such Chapter 11 Proceeding by the Bankruptcy Court
confirming any plan of reorganization other than an Acceptable Plan of
Reorganization, (3) the date on which a New Event of Default shall occur, or
(4) the date that is 6 months after such Filing Date, interest shall accrue
during the period from such Filing Date through the Moratorium End Date
(without compounding during such period) and on the Moratorium End Date shall
be added to the outstanding principal balance of the Promissory Note evidencing
such Past Due Purchase Obligations, (b) any interest accruing for any period
prior to such Filing Date and due and payable after such Filing Date shall be
payable in accordance with the immediately preceding sentence, and (c) after
the Moratorium End Date, interest shall accrue and be due and payable in
accordance with the immediately preceding sentence. Without limiting the
obligations of the Peregrine Parties to pay any amounts due hereunder or under
any of the Purchase Documents, any such amount not paid when due shall (to the
extent it is not already a part thereof, and without duplication) be added to
the applicable Purchasers Past Due Purchase Obligations on the due date
thereof, and shall thereafter accrue interest at the rate then applicable to
Past Due Purchase Obligations. All interest and fees chargeable under the
Forbearance Documents shall be computed on the basis of a 360 day year for the
actual number of days elapsed.  In
no event shall the interest rate or rates payable to any Purchaser under this
Agreement, plus any other amounts paid in connection herewith, exceed the highest
rate permissible under any law that a court of competent jurisdiction shall, in
a final determination, deem applicable. The Peregrine Parties and the
Purchasers, in executing and delivering this Agreement, intend legally to agree
upon the rate or rates of interest and manner of payment stated herein; provided,
however, that, anything contained herein to the contrary
notwithstanding, if, with respect to any Purchaser, said rate or rates of
interest or manner of payment exceeds the maximum allowable under applicable
law, then, ipso facto,as of the
date of this Agreement, as to such Purchaser only, the Peregrine Parties are
and shall be liable only for the payment of such maximum as allowed by law, and
payment received from the Peregrine Parties in excess of such legal maximum,
whenever received, shall be applied to reduce the Past Due Purchase Obligations
owing to such Purchaser.  13 
   E.  Repayment of the Past Due Purchase
Obligations.  1.  (a) On the Effective Date,
Peregrine shall (i) pay $3,000,000 in the aggregate to the Purchasers, such
payment to be paid to each Purchaser, as a payment against the Past Due
Purchase Obligations owing to such Purchaser, as follows: Fleet - $0.00, SVB
-$301,358.87, Trade Bank - $2,698,641.13; and (ii) pay to Fleet as a payment
against the Past Due Purchase Obligations all amounts received by any Peregrine
Party from IBM in respect of SOW# 4901S9001 that have not been remitted to
Fleet in an amount of up to $2,374,857.87. The then remaining balance of the
Past Due Purchase Obligations owing to each Purchaser shall be evidenced by a
Promissory Note.  (b)           (i) The principal
balance of each Promissory Note shall be amortized over three years commencing
on August 1,2003 as set forth in the below table:  Period
  
  Annual
  Amortization (as a
  percentage of the Adjusted
  Original Principal Balance (as
  hereinafter defined) of each
  Promissory NoteAugust 1, 2003
  through July 31, 2004
  
  20
  %August 1, 2004
  through July 31, 2005
  
  30
  %August 1, 2005
  through July 31, 2006
  
  30
  %
  (ii)Principal on each Promissory Note shall be
payable in monthly installments commencing on the first day of each period set
forth above and continuing on the first day of each calendar month during each
such period until paid in full, in an amount equal to (a) the Adjusted
Original Principal Balance (as hereinafter defined) of such Promissory Note
(as of the date on which such payment is due), multiplied by (b) a fraction,
(i) the numerator of which is the Annual Amortization for such period (as set
forth in the table above), and (ii) the denominator of which is 12. As used
herein the Adjusted Original Principal Balance of each Promissory Note shall
mean the original principal amount of each Promissory Note plus the
aggregate amount that is added to the original principal balance of such
Promissory Note after the date of such Promissory Note as a result of the
applicable Purchaser exercising its rights under its Purchase Documents to have
any Peregrine Party repurchase any of such Purchasers Purchased Accounts, plus
the amount of any accrued interest added to the principal balance of such
Promissory Note pursuant to Section V.D. on the Moratorium End Date minus
the aggregate amount that is subtracted from the original principal balance of
such Promissory Note after the date of such Promissory Note as a result of any
payments  14 
   received
by the applicable Purchaser from the account debtor or other obligor on any
Purchased Account the repurchase price of which is evidenced by such Promissory
Note.  (iii)The foregoing to the contrary
notwithstanding, on the Maturity Date, the then outstanding principal balance
of the Promissory Notes, together with all accrued and unpaid interest thereon,
and all other amounts due to each Purchaser hereunder and under the other
Forbearance Documents shall be paid in full.  (c)Mandatory Prepayments. (i) Immediately upon any Disposition by any
Peregrine Party or any of their respective Subsidiaries of any assets
(including, without limitation, any sale or other disposition of the Stock in
any Subsidiaries), the Peregrine Parties shall pay to Purchaser Agent, for the
benefit of the Purchasers, as a prepayment of the Past Due Purchase
Obligations, an amount equal to 50% of the Net Available Proceeds from such
Disposition.  (ii)Upon the issuance or incurrence by any
Peregrine Party or any of their respective Subsidiaries of any Indebtedness,
the Peregrine Parties shall pay to Purchaser Agent, for the benefit of the
Purchasers, as a prepayment of the Past Due Purchase Obligations, an amount
equal to 50% of the Net Available Proceeds of such Indebtedness.  (iii)Any excess collections on repurchased
Purchased Accounts, after recoupment by the Peregrine Parties of the repurchase
price thereof paid to the affected Purchaser in accordance with the last
sentence of Section IV hereof, shall be paid to the affected Purchaser as a
prepayment of the Past Due Purchase Obligations owing to such Purchaser.  (iv)Any prepayments of the Past Due Purchase
Obligations owing to any Purchaser pursuant to this section (c) or otherwise
under the Forbearance Documents shall be applied to the scheduled payments of
principal on the Promissory Note of such Purchaser in the inverse order of
their maturity.  2.  Any prepayment on the Past
Due Purchase Obligations made pursuant to this Section V.E or otherwise, shall
be apportioned among the Purchasers as the Purchasers shall agree amongst
themselves in their sole discretion, and as to each Purchaser, the amount so
received by such Purchaser, shall be allocated to such Purchasers Past Due
Purchase Obligations in such order and in such manner as such Purchaser shall
determine in its sole discretion.  F.  Reporting Requirements.  1.  So long as the Peregrine
Parties have any obligation to provide any reports, financial or otherwise, to
the Lender Group or to any lender under any other senior secured credit
facility, then the Peregrine Parties shall provide the same reports to each of
the Purchasers as and when such reports are required to be delivered to the
Lender Group or to such lender; provided, however, that if any
such report is not provided to the Lender Group or to such lender then the
Peregrine Parties shall not be required to deliver such report to the
Purchasers until the earlier of (a) the date on which such report is provided  15 
   to
the Lender Group or such lender or (b) the date that is two calendar days after
the date on which the Lender Group or such lender shall have declared such
failure to deliver such report as an Event of Default or shall have advised
any Peregrine Party in writing that the failure to deliver such report is a
default (or one of one or more defaults) under the Lender Group Credit
Agreement or under such other senior secured credit facility entitling the
Lender Group or such lender to exercise its rights and remedies.  2.  In any event, the Peregrine Parties shall
deliver to each Purchaser:  (1)  as soon as available, consolidated financial
statements of Peregrine and its Subsidiaries for each Peregrines fiscal year
commencing with the fiscal year ended March 31,2002, audited by independent
certified public accountants reasonably acceptable to Purchasers and certified,
without any qualifications, by such accountants to have been prepared in
accordance with GAAP (such audited financial statements to include a balance
sheet, income statement, statement of cash flows, and, if prepared, such
accountants letter to management);  (2)  as soon as available, but in any event
within 30 days (45 days in the case of a month that is the end of one of the
first 3 fiscal quarters in a fiscal year and 60 days in the case of a month
that is the end of the last fiscal quarter in a fiscal year) after the end of
each month during each of Peregrines fiscal years:  (i)commencing with the month of October 2002, a
company prepared consolidated balance sheet, income statement, and statement of
cash flow covering Peregrines and its Subsidiaries operations during such
period,  (ii)commencing with the financial statements
delivered for the month of October 2002, a certificate signed by the chief
financial officer of Peregrine to the effect that: (a) the financial statements
delivered hereunder have been prepared in accordance with GAAP (except for the
lack of footnotes and being subject to year-end audit adjustments) and fairly
present in all material respects the financial condition of Peregrine and its
Subsidiaries, (b) the representations and warranties of the Peregrine Parties
contained in this Agreement and the other Forbearance Documents are true and
correct in all material respects on and as of the date of such certificate, as
though made on and as of such date (except to the extent that such
representations and warranties relate solely to an earlier date), and (c) there
does not exist any condition or event that constitutes a New Event of Default
or which, with the passage of time, the giving of notice or both, would
constitute a New Event of Default (or, to the extent of any non-compliance,
describing such non-compliance as to which he or she may have knowledge and
what action the Peregrine Parties have taken, are taking, or propose to take
with respect thereto).  (3)  as soon as available, but in any event
within 30 days after the end of each month during each of Peregrines fiscal
years:  16 
   (i)a report summarizing the Indebtedness
incurred, and Dispositions made, by the Peregrine Parties or any of their
respective Subsidiaries since the last such report, and a calculation of the
Net Available Proceeds of any such Indebtedness or from any such Disposition,
together with such supporting documentation as the Purchasers may reasonably
request.  (4)  on a weekly basis, on the third Business Day
of each week:  (i)rolling 13 week projected cash flows
(including 3 week historical actual cash flows) as of the last Business Day of
the immediately preceding week.  (5)  if and when filed by any Peregrine Party:  (i)10-Q quarterly reports, Form 10-K annual
reports, and Form 8-K current reports,  (ii)any other filings made by any Peregrine Party
with the SEC,  (iii)copies of the Peregrine Parties federal income
tax returns, and any amendments thereto, filed with the Internal Revenue
Service, and  (iv)any other information that is provided by
Peregrine to its shareholders generally;  (6)  if and when filed by any Peregrine Party and
as requested by Purchasers, satisfactory evidence of payment of applicable
excise taxes, if any, in each jurisdiction in which any Peregrine Party
conducts business or is required to pay any such excise tax, where (i) any
Peregrine Partys failure to pay any such applicable excise tax would result in
a Lien on the properties or assets of any Peregrine Party, or (ii) any
Peregrine Partys failure to pay any such applicable excise tax reasonably
could be expected to result in a Material Adverse Change;  (7)  as soon as a Peregrine Party has knowledge
of any event or condition that constitutes a New Event of Default or which,
with the passage of time, the giving of notice or both, would constitute a New
Event of Default, notice thereof and a statement of the curative action that
Peregrine Parties propose to take with respect thereto; and  (8)  upon the request of Purchasers, any other
report reasonably requested relating to the financial condition of the
Peregrine Parties.  In
addition to the financial statements referred to above, the Peregrine Parties
agree to deliver financial statements prepared on both a consolidated and
consolidating basis to the extent available, provided that the Peregrine
Parties shall not be required to prepare consolidating financial statements
solely for the purpose of this Agreement if they are not already prepared for
some other purpose.  17 
   3.  The Peregrine Parties agree
that their independent certified public accountants are authorized to
communicate with Purchasers and to release to Purchasers whatever financial
information concerning the Peregrine Parties that Purchasers reasonably may
request.  Each Peregrine Party waives
the right to assert a confidential relationship, if any, it may have with any
accounting firm or service bureau in connection with any information requested
by Purchasers pursuant to or in accordance with this Agreement, and agree that
Purchasers may contact directly any such accounting firm or service bureau in
order to obtain such information. The foregoing notwithstanding: Purchasers
shall not be entitled to disclosure of the confidential SEC report prepared
during 2002 with respect to the Peregrine Parties, and any other confidential
information furnished to Purchasers pursuant to this paragraph shall be
pursuant to confidentiality terms substantially in accordance with those
previously negotiated and agreed to between Purchasers and Peregrine.  4.  The Purchasers agree that
PriceWaterhouseCoopers is an acceptable independent certified public accounting
firm for the Peregrine Parties.  G.  Performance under Purchase Documents.  All amounts received by any Peregrine Party
with respect to any Purchasers Purchased Accounts shall be remitted to the
appropriate Purchaser immediately upon receipt thereof by such Peregrine Party
in the same form so received, together with any necessary endorsements thereto,
and an appropriate accounting with respect to the same, and until so remitted
to the appropriate Purchaser shall be held in trust for the benefit of such
Purchaser and not commingled with any assets of any Peregrine Party. In the
event of any voluntary or involuntary bankruptcy, reorganization, or other
insolvency with respect to any Peregrine Party, each Peregrine Party waives any
right to use, and agrees not to use, and not seek an order permitting the use
of, any Purchasers Purchased Accounts (including without limitation any
proceeds of any accounts or rights to payment or other cash collateral) in any
such proceeding, whether under Section 363 of the Bankruptcy Code or any other
provision of applicable law.  H.  Loans and Contributions to Subsidiaries.  Other than intercompany loans made in the
ordinary course of business consistent with past practices, Peregrine shall not
make any loans or other contributions of any of its assets to any of its
Subsidiaries without the prior written consent of the Purchasers, not to be
unreasonably withheld or delayed. Without limitation of the foregoing, for the
sake of clarity, any intercompany loans to Subsidiaries of Peregrine of the
types provided for in the cash flow projections delivered by Peregrine to the
Purchasers during the early part of August, 2002, for expenses such as
reduction in force payments for European Subsidiaries, will be deemed to be in
the ordinary course of business consistent with past practices up to an amount
not to exceed the Specified Amount (as defined below) at any time in the
aggregate outstanding net of any repayments or contributions from such
Subsidiaries after the effective date of this Agreement. As used above,
Specified Amount means (a) $30,000,000 during the first year following the
effective date hereof, (b) $35,000,000 during the second year following the
effective date hereof, (c) $40,000,000 during the third year following the
effective date hereof, (d) $45,000,000 during the fourth year following the
effective date hereof, and (e) $50,000,000 thereafter.  18 
   I.  Acceptable Plan of Reorganization; DIP
Financings and Use of Cash Collateral. 
If Peregrine proposes an Acceptable Plan of Reorganization for
confirmation, the Purchasers agree to vote in favor of confirmation of such
Acceptable Plan of Reorganization. If any Peregrine Party seeks debtor in
possession financing or use of cash collateral, the Purchasers agree to consent
to same on the terms provided for in the Intercreditor Agreement so long as any
proposed use of cash collateral does not violation Section V.G. hereof.  J.  Change Name.  Other than pursuant to an Acceptable Plan of
Reorganization that fails only to satisfy this Section and does not adversely
impact the liens of the Purchasers or the economic benefits to the Purchasers
intended to be conferred by the Forbearance Documents, no Peregrine Party will,
nor permit any of its Subsidiaries to, change its FEIN, organizational
identification number, corporate structure or identity, or add any new
fictitious name. No Peregrine Party will, nor permit any of its Subsidiaries
to, change its name unless, as soon as practicable and, in any event, within 10
days after the effective date thereof, such Peregrine Party gives written
notice of such name change to each Purchaser and at the time of such written
notification, such Peregrine Party provides copies of any documents effecting
such name change and other evidence as to the effectiveness of such name change
as Purchasers may reasonably request and such other documents as Purchaser
Agent reasonably request in order to perfect and continue the Purchaser Agent
Liens. In addition, prior to the Filing Date, the Purchasers will consent to
any matter that requires their consent under this Section if the Lender Group
Agent has consented thereto and if such matter does not adversely impact the
liens of the Purchasers or the economic benefits to the Purchasers intended to
be conferred by the Forbearance Documents.  K.  Prepayments.  The Peregrine Parties will not prepay,
redeem, defease, purchase, or otherwise acquire any Indebtedness of any
Peregrine Party under any Note (a Note Prepayment), except that the Peregrine
Parties may make a Note Prepayment of any of the Notes if:  (1)  prior to the making of such Note Prepayment,
the Peregrine Parties shall have paid to Fleet in full the amounts set forth in
Section V.O.;  (2)  at the time such Note Prepayment is made, no
Monetary Default shall have occurred and be continuing;  (3)  upon the later of the date on which the
Peregrine Parties shall have reached an agreement with the holders of such
Notes as to the making of such Note Prepayment or, if such Note Prepayment is
to be made from the proceeds of any Disposition, the date on which such
Disposition shall be consummated, after giving effect to all Note Prepayments
to be made on all Notes and after repaying in full all of the outstanding
obligations of the Peregrine Parties under the Lender Group Credit Agreement or
any other secured credit facility of Peregrine (regardless of whether such Note
Prepayments and such repayment is made concurrently with such Disposition)
Peregrine shall have unrestricted cash on hand of not less than $40,000,000;  (4)  (a) such Note Prepayment shall be made upon
confirmation of an Acceptable Plan of Reorganization, or (b) on the date of
such Note Prepayment, after giving effect to all Note Prepayments to be made on
the Notes and after repaying in full  19 
   all
of the outstanding obligations of the Peregrine Parties under the Lender Group
Credit Agreement or any other secured credit facility of Peregrine (regardless
of whether such Note Prepayments is made concurrently with such repayment),
Peregrine shall have unrestricted cash of not less than $40,000,000, or (c)
Peregrine shall have provided projections reasonably satisfactory to Purchasers
evidencing that Peregrine shall have sufficient liquidity to fund its
operations through the Maturity Date after giving effect to such Note
Prepayment and the repayment in full all of the outstanding obligations of the
Peregrine Parties under the Lender Group Credit Agreement or any other secured
credit facility of Peregrine, which projections shall be certified by the chief
financial officer of Peregrine as being such chief financial officers good
faith belief as to Peregrines projected performance during the period covered
thereby and being based on reasonable assumptions;  (5)  if, pursuant to the terms of such Note
Prepayment, any portion of the outstanding obligations under the Notes is to be
paid over time, then such obligations shall be and remain unsecured (or, if
secured, shall be secured by a lien junior to that of Purchasers on
intercreditor subordination terms reasonably acceptable to Purchasers as
determined by the Bankruptcy Court in the event of any disagreement as to the
reasonableness thereof) and the agreements or instruments evidencing such
obligations shall expressly provide that the obligations evidenced by such
agreements or instruments is expressly subordinated in right of repayment to
the Past Due Purchase Obligations, and that the Purchasers may block payments
upon a New Event of Default, all on terms and conditions reasonably
satisfactory to the Purchasers as determined by the Bankruptcy Court in the
event of any disagreement as to the reasonableness thereof;  (6)  prior to the making of any Note Prepayment
Peregrine shall have provided to each Purchaser copies of all agreements
related to all Note Prepayments to be made on the Notes; and  (7)  each Purchaser shall have the right to have
all or any portion of its then outstanding Past Due Purchase Obligations repaid
and/or restructured on the same terms and conditions as such Note Prepayment
contemporaneously with the making of such Note Prepayment.  L.  Right to Inspect.  Each Purchaser (through any of their
respective officers, employees, or agents) shall have the right, from time to
time hereafter during normal business hours, and, so long as no New Event of
Default shall have occurred and be continuing, upon reasonable notice, to
inspect the books and records of each Peregrine Party and to check, test, and
appraise the Collateral in order to verify the Peregrine Parties compliance
with the terms of the Purchase Documents and the Forbearance Documents, the
Peregrine Parties financial condition or the amount, quality, value, condition
of, or any other matter relating to, the Collateral.  20 
   M.  Security Interest Priority.  The Purchaser Agent Liens shall be subject,
in priority, only to the security interests of Lender Group Agent, for the
benefit of the Lender Group, and Permitted Liens (as defined in the Lender
Group Credit Agreement as in effect on the date hereof). Purchasers further
agree to subordinate, on substantially the same terms as the Intercreditor
Agreement, the Purchaser Agent Liens to any security interest granted to one or
more lenders provided that at no time shall the aggregate amount of
Indebtedness or other obligations of the Peregrine Parties secured by security
interests that are senior to the Purchaser Agent Liens (whether contractually,
by operation of law, or otherwise) exceed the result of $250,000,000, minus
the Aggregate Proceeds of Dispositions received by the Peregrine Parties or any
of their respective Subsidiaries after August 6, 2002. For purposes of the
immediately preceding sentence, any and all Indebtedness of any Peregrine Party
or any Subsidiary of any Peregrine Party, if the assets of such Peregrine Party
or such Subsidiary are not encumbered by the Purchaser Agent Liens, shall be
deemed to be secured by security interests that are senior to the Purchaser
Agent Liens.  N.  Guarantees and Collateral.  It is the intention of the parties hereto
that (1) all of Peregrines Subsidiaries, now existing or hereafter arising (in
which case, any such hereafter arising Subsidiary shall be a Peregrine Party)
that is a guarantor or direct obligor in any credit facility in which Peregrine
is an obligor, execute guarantees in favor of each Purchaser in respect of the
Purchase Obligations owing to such Purchasers, (2) the Peregrine Parties that
have granted a security interest in any of their assets in connection with any
credit facility in which Peregrine is an obligor, grant a security interest in
their respective assets (to the same extent as the security interest granted in
connection with such credit facility) in favor of Purchasers Agent to further
secure the Purchase Obligations, and (3) the Purchaser Agent Liens be subject,
in priority, only to the security interests of Lender Group Agent, for the
benefit of the Lender Group, Permitted Liens (as defined in the Lender Group
Credit Agreement as in effect on the date hereof) and, solely to the extent
required hereunder, liens granted in connection with any other secured credit
facility. The Peregrine Parties agree to execute any and all agreements or
other documents necessary to effectuate this intent. The foregoing to the
contrary notwithstanding if, at any time, the obligations of the Peregrine
Parties owing to the Lender Group shall be repaid in full and the Lender Group
shall release the guarantees of any of Peregrines Subsidiaries (other than
Remedy) and/or security interests in the assets of any of Peregrines
Subsidiaries (other than Remedy) securing the obligations of the Peregrine
Parties owing to the Lender Group then, provided that no New Event of Default
shall then have occurred and be continuing, the guarantees of Peregrines
Subsidiaries (other than Remedy) and the Purchaser Agent Liens in the assets of
Peregrines Subsidiaries (other than Remedy) shall be released to the same
extent as the Lender Group shall have released such guarantees and security
interests; provided,  however, if, at any time after the date
hereof, any of Peregrines Subsidiaries shall guarantee any obligations of
Peregrine, shall be a direct obligor under any credit facility or loan in which
Peregrine is an obligor, or shall grant a security interests in such
Subsidiarys assets to secure such a guarantee, such Subsidiarys obligations
under such a credit facility or loan, or any obligations of Peregrine then
Purchasers shall be given a similar guarantee and security interest, subject to
the agreement to subordinate such a security interest contained herein. The
foregoing notwithstanding, in the event of a permitted sale of all or a
substantial part of the stock of Remedy, if the Lender Group is releasing any
guarantees given by Remedy and releasing its liens on the assets of Remedy, and
if the release by the Purchasers of their guarantee given by Remedy and their
lien on the assets of Remedy is necessary for such sale to proceed, then the
Purchasers shall release their guarantee  21 
   given by Remedy and any
liens they hold on the assets of Remedy in connection with the consummation of
such sale, and also shall release any liens they hold on the stock of Remedy
being sold, but shall be entitled to retain their security interest in any
stock of Remedy not sold.  O.  Sales to IBM.  Other than sales of the products and
business of the former Peregrine Extricity, Inc. (which has been merged with
and into Peregrine) to International Business Machines Corporation (IBM) and
sales of professional consulting services to IBM, any and all sales by any
Peregrine Party to IBM prior to the Filing Date shall be deemed as sales under
SOW# 4901S9001 and all accounts and other rights to payment arising from such
sales shall be Purchased Accounts of Fleet. Prior to the Filing Date, no
Peregrine Party shall enter into any agreement with IBM, the scope of which (or
any portion thereof) is within the scope of SOW #4901S9001. Without affecting
Peregrines obligation to pay to Fleet the amount of Past Due Purchase
Obligations owing to Fleet arising out of SOW#4901S9001, each Peregrine Party
shall immediately remit to Fleet any amount received by such Peregrine Party in
respect of SOW#4901S9001 until such time as the aggregate amount of payments
received by Fleet after August 1, 2002, in respect of SOW#4901S9001 (excluding
any payments in respect of the FPL Account as hereinafter defined) equals or
exceeds $2,374,857.87, from and after which time (i) so long as no New Event of
Default shall have occurred and be continuing, Peregrine shall be entitled to
retain all further amounts paid in respect of SOW#4901S9001 (excluding any
amounts paid in respect of the FPL Account), (ii) notwithstanding whether any
New Event of Default shall have occurred and be continuing and notwithstanding
the foregoing clause (i); so long as any obligations of any Peregrine
Party to the Lender Group remain outstanding, all further amounts paid in
respect of SOW #4901S9001 (excluding any amounts paid in respect of the FPL
Account) may be remitted by the Peregrine Parties to the Lender Group or the
Lender Group Agent as a payment against such obligations in accordance with the
terms of the Lender Group Loan Documents, and (iii) the prohibition set forth
in the immediately preceding sentence shall cease to be of any force or effect.
Each Peregrine Party acknowledges that all amounts that have been, or may
hereafter be, remitted by or on behalf of any Peregrine Party to Fleet in
respect of SOW #4901S9001 are, or will be, and shall remain the property of
Fleet and each Peregrine Party hereby waives any right to all or any portion of
such amounts. For the avoidance of doubt, by entering into this Agreement,
Fleet acknowledges its prior receipt, during August of 2002, of the
$2,374,857.87 of payments referred to above.  The
parties hereto acknowledge and agree that the amount owing from IBM with respect
to the Florida Power and Light Company receivable (the FPL Account) is and
shall remain a Purchased Account of Fleet and the Trade Bank and that Fleet and
the Trade Bank have agreed that, without affecting Peregrines obligation to
pay to the Trade Bank the amount of Past Due Purchase Obligations owing to the
Trade Bank arising out of the FPL Account, Fleet shall be entitled to receive
any and all amounts paid in respect of the FPL Account. Accordingly, (i) in
accordance with Section V.G., any payment received by any Peregrine Party with
respect to the FPL Account shall be remitted to Fleet immediately upon receipt
thereof, and (ii) the foregoing paragraph shall not apply to any payment
received by any Peregrine Party in respect of the FPL Account  VI.Trade Creditors. 
Pursuant to an Acceptable Plan of Reorganization, the Peregrine Parties
may propose to repay trade creditors on a deferred basis, including without
limitation on a basis similar or identical to the basis of repayment of the
Notes. Without limitation, the Peregrine  22 
   Parties may secure any
obligations to such trade creditors with a lien junior to that of Purchasers on
intercreditor subordination terms reasonably acceptable to Purchasers as
determined by the Bankruptcy Court in the event of any disagreement as to the
reasonableness thereof  VII.Conditions Precedent. This Agreement shall not be binding upon
any Purchaser unless and until each of the following conditions precedent (each
a Condition Precedent) are fulfilled, to the satisfaction of each of
the Purchasers on or before August 26, 2002, or are waived in writing by each
of the Purchasers (the date on which all such conditions precedent have been so
fulfilled or waived, the Effective Date):  A.  the applicable Peregrine Parties shall have
executed and delivered each of the following to the Purchasers, and the same
shall be in form and substance reasonably satisfactory to the Purchasers:  1.  this Agreement;  2.  the Promissory Notes;  3.  the Peregrine Party
Guaranty;  4.  the Peregrine Party Security
Agreement;  5.  the Canadian Guaranty;  6.  the Canadian Security
Agreement;  7.  the Hypothec;  8.  the other Canadian Security
Documents;  9.  the Copyright Security
Agreement,  10. the Patent Security Agreement;  11. the Trademark Security Agreement;  12. the Intercompany Subordination Agreement; and  13. the Intercreditor Agreement;  B.  Peregrine shall have timely complied with
and performed all of the acts and/or conditions specifically identified as
conditions precedent in this Agreement;  C.  Peregrine shall have reimbursed the
Purchasers for all reasonable costs and expenses, including reasonable
attorneys fees of the Purchasers in-house and outside counsel, incurred in connection
with the negotiation, drafting, and execution of this Agreement and the other
Forbearance Documents, provided that Peregrine does not waive the right to
object within 30 days of receipt of any statement to the reasonableness of the
costs and expenses covered by such statement;  23 
   D.  Each Purchaser shall have fully and
completely executed the Interpurchaser Agreement, this Agreement and all other
documents described above in Section VII.A which require such Purchasers
signatures to become effective;  E.  [Intentionally omitted;]  F.  Peregrine shall have delivered to the
Purchasers evidence, satisfactory to the Purchasers, that Peregrine shall have
delivered to Peregrines D&O insurance carriers copies of all demands and
default letters delivered to any Peregrine Party by any Purchaser;  G.  the Peregrine Parties shall have paid all
amounts required to be paid to the Purchasers on or before the Effective Date
pursuant to Section V.E.I (a) and Section V.O.; and  H.  Peregrine shall have delivered to the
Purchasers a copy of the fully executed Lender Group Loan Documents (including
any and all amendments thereto), certified by an officer of Peregrine as being
true, correct, and complete.  Retention
of funds hereunder by the Purchasers for more than 30 days shall be deemed an
acknowledgement of satisfaction or waiver of the foregoing conditions precedent
except for conditions F and G.  The
Peregrine Parties covenant to use their best efforts to satisfy all conditions
precedent hereunder not satisfied as of the date hereof, as conditions
subsequent, as soon as possible thereafter, and in any event before the Filing
Date. The Peregrine Parties covenant to deliver final versions of Schedules I
and J hereto to the Purchasers no later than September 6, 2002.  VIII.Release of Claims: Covenant Not to Sue.  A.  Each of the Peregrine Parties represents and
agrees that it has diligently and thoroughly investigated the existence of any
Claim (as defined below), and, to its knowledge and belief, no Claim exists and
no facts exist that could give rise to or support a Claim. As additional
consideration for the Purchasers entering into this Agreement, except as
specifically set forth below with respect to the Excluded Claim (as defined
below), each Peregrine Party, by its execution of this Agreement and each of
their respective agents, employees, directors, officers, successors and assigns
(each a Releasing Party), upon the effectiveness hereof, each hereby
releases and forever discharges each Purchaser and each Purchasers agents,
employees, directors, officers, attorneys, branches, successors and assigns
(each a Released Party) from all damages, losses, claims, demands,
liabilities, obligations, actions and causes of action whatsoever (collectively
Claims) that the Releasing Parties or any of them may, as of the date
hereof, have or claim to have against any or all of the Released Parties, in
each case whether currently known or unknown or with respect to which the facts
are known (or should have been known), that could give rise to or support a
Claim and of every nature and extent whatsoever on account of or in any way
relating to, arising out of or based upon any matter, cause or thing occurred,
done, omitted or suffered to be done prior to the date hereof, including (but
not limited to) any Claim on account of or in any way relating to, arising out
of or based upon any Purchase Document or this Agreement or the negotiation or
documentation hereof or any amendments under the Purchase Documents effected by
this Agreement or the transactions contemplated by the Purchase Documents or
hereby, or any action or omission in connection with any of the foregoing,
including all such losses or damages of any kind heretofore sustained or that
may arise as a consequence of the dealings between the parties up to the date
hereof in connection  24 
   with or in any way related
to any Purchase Document or this Agreement. Each Releasing Party further
covenants and agrees that it has not heretofore assigned, and will not
hereafter sue any Released Party upon, any Claim released or purported to be
released under this section, and each Releasing Party will indemnify and hold
harmless the Released Parties against any loss or liability on account of any
actions brought by such Releasing Party or its assigns or prosecuted on behalf
of such Releasing Party and relating to any Claim released or purported to be
released under this section. It is further understood and agreed that any and
all rights under the provisions of Section 1542 of the California Civil Code
are expressly waived by each of the Releasing Parties. Section 1542 of the
California Civil Code provides as follows:  A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR.  The above release is fully
effective on the date of this Agreement, without regard to satisfaction of any
conditions precedent set forth in this Agreement. On the Effective Date, the
above release shall be deemed to have been made again by each of the Peregrine
Parties with respect to any Claim arising on or before the Effective Date. The
foregoing notwithstanding, this release does not cover the Excluded Claim,
defined as any claim of Peregrine against Fleet arising out of or related to
Peregrines payment to Fleet during the 90-day period prior to the date hereof
of approximately $450,000 relating to a payment by Citigroup to Peregrine that
Fleet contends was assigned by Peregrine to Fleet but that Peregrine may
contend related to an obligation of Citigroup to Peregrine that was not assigned
by Peregrine to Fleet.  B.  Each Purchaser, by its execution of this
Agreement, hereby agrees, upon the effectiveness hereof, not to sue any person
that as of the date hereof is a director or officer of any Peregrine Party and
was not a director or officer of any Peregrine Party on or before May 31, 2002
(each, a New Director/Officer) with respect to any Claims that such Purchaser
may, as of May 31, 2002, have or claim to have against any or all of the New
Director/Officers solely in such New Director/Officers capacity as a director
or officer of a Peregrine Party, in each case whether currently known or
unknown or with respect to which the facts are known (or should have been
known), that could give rise to or support a Claim and of every nature and extent
whatsoever on account of or in any way relating to, arising out of or based
upon any matter, cause or thing occurred, done, omitted or suffered to be done
with respect to such Purchasers Purchase Documents prior to May 31, 2002. Each
Purchaser hereby expressly reserves any and all rights such Purchaser may have
against any person other than the New Director/Officers.  IX.New Events of Default.  A New
Event of Default shall occur herein if any one or more of the following
events occur:  A.  Any Peregrine Party shall fail to pay in
full when due any payment due after the Effective Date under any Purchase
Document as modified by this Agreement, this Agreement or any other Forbearance
Document, and the same shall remain unpaid for a period of more than 5 Business
Days after the due date thereof, provided, however, that if any
such failure shall be  25 
   waived by the applicable
Purchaser or cured to the satisfaction of such Purchaser, then such failure
shall, effective as of such waiver or cure, cease to be a New Event of Default
hereunder;  B.  Any representation or warranty expressly
made under this Agreement, any other Forbearance Document, or any certificate
or statement furnished or made to the Purchasers pursuant thereto, shall prove
to be untrue or misleading in any material respect as of the date on which such
representation or warranty is made;  C.  Any Peregrine Party shall (1) claim, or take
any action asserting, that any of the Purchase Documents, this Agreement or any
of the other Forbearance Documents are not legal, valid, binding agreements
enforceable against any party executing same, (2) attempt in any way to
terminate or declare ineffective or inoperative (i) any of the Purchase
Documents, (ii) this Agreement or any of the other Forbearance Documents, or
(iii) any of the liens, security interests, rights, titles, interests,
remedies, powers or privileges created or intended to be created under the
Purchase Documents, this Agreement or any of the other Forbearance Documents,
(3) cease to give or provide, the liens, security interests, rights, titles,
interests, remedies, powers or privileges created or intended to be created
under the Purchase Documents, this Agreement or any other Forbearance Document,
or (4) except with respect to the Excluded Claim, bring an avoidance action, or
any other action, against any Purchaser or Purchaser Agent with respect to any
conduct that occurred on or prior to the effective date hereof or that is
contemplated hereunder;  D.  A default by any Peregrine Party, other than
the Existing Defaults, in the performance of any term, condition, covenant or
agreement contained in any Purchase Document (after giving effect to any
applicable cure periods), provided,  however, that, no event that
shall have occurred prior to August 1, 2002 or condition of any Peregrine Party
in existence as of August 1, 2002 shall give rise to a New Event of Default, further
provided, that, if any such default shall be waived by the applicable Purchaser
or cured to the satisfaction of such Purchaser, then such default shall,
effective as of such waiver or cure, cease to be a New Event of Default
hereunder, unless such default otherwise constitutes a New Event of Default;  E.  A default by any Peregrine Party hi the
performance of any term, condition, covenant or agreement contained in this
Agreement or any other Forbearance Document other than any such term,
condition, covenant or agreement specifically referred to elsewhere in this
Section IX; provided, however that if such default is curable
within 15 calendar days then such default shall not constitute an New Event of
Default unless such default shall not be cured within 15 calendar days after
any Purchaser shall have given notice of such default to Peregrine;  F.  Any Peregrine Party shall do any of the
following acts, or violate any other term or provision of this Agreement: (1)
apply for or consent to the appointment of a receiver, trustee, custodian,
intervenor or liquidator of all or a substantial part of its assets; (2) file a
voluntary petition in bankruptcy court (other than a Chapter 11 Proceeding) or
admit in writing that it is unable to pay its debts as they become due; (3)
make a general assignment for the benefit of creditors; (4) file a petition or
answer seeking reorganization or otherwise take advantage of any bankruptcy or
insolvency laws (other than a Chapter 11 Proceeding); or (5) file an answer
admitting any of the material allegations of, or consent to, or default in
answering a petition filed  26 
   against
it in, any bankruptcy, reorganization or insolvency proceeding (other than a
Chapter 11 Proceeding);  G.  If, after August 26, 2002, one or more
judgments or other claims involving an aggregate amount of $250,000, or more,
in excess of the amount covered by insurance, becomes a lien or encumbrance
upon any of the Peregrine Parties assets and the same is not released,
discharged, bonded against, or stayed pending appeal before the earlier of 30
days after the date it first arises or 5 days prior to the date on which such
asset is subject to being forfeited by the applicable Peregrine Party;  H.  Any of the following acts or events occur:
(1) an order for relief, judgment or decree shall be entered by any court of
competent jurisdiction or other competent authority approving a petition
seeking reorganization of any Peregrine Party other than an Acceptable Plan of
Reorganization, (2) an order shall be entered by any court of competent jurisdiction
or other competent authority appointing a receiver, custodian, trustee,
intervenor or liquidator for any Peregrine Party as to all or substantially all
of such Peregrine Partys assets, and such order, judgment or decree shall
continue unstayed and in effect for a period of thirty (30) days, (3) an
involuntary petition seeking bankruptcy, reorganization or receivership shall
be filed against any Peregrine Party other than a petition under Chapter 11 of
the Bankruptcy Code which is not dismissed within thirty (30) days of the
filing thereof, or (4) any Peregrine Party shall file a plan for reorganization
in any proceeding against any Peregrine Party under the Bankruptcy Code other
than an Acceptable Plan of Reorganization;  I.  The Purchaser Obligations shall have not
been paid in immediately available funds and performed in full on or before the
Maturity Date;  J.  Any Event of Default under, and as defined
in the Lender Group Credit Agreement shall occur, or default in respect of any
secured Indebtedness of any Peregrine Party shall occur, as a result of which
default the holder of such Indebtedness has accelerated such Indebtedness or
has begun exercising any of its foreclosure or collection rights and remedies
against any collateral securing such Indebtedness, provided, however,
that if any such Event of Default or default shall be waived or cured, then
such Event of Default or default shall, effective as of such waiver or cure,
cease to be a New Event of Default hereunder, unless the event giving rise to
such Event of Default or default otherwise is a New Event of Default;  K.  [Intentionally Omitted];  L.  [Intentionally Omitted];  M.  Except with respect to any payment governed
by Section V.K. or pursuant to an Acceptable Plan of Reorganization, on or
before the date that is 10 calendar days before the earlier of (i) the date on
which any Peregrine Party makes any payment of principal or interest on the
Notes or (ii) the date that is 10 calendar days before the last day during any
applicable grace period on which such payment could be made without causing a
default under the Notes, the Peregrine Parties shall have failed to deliver to
the Purchasers evidence reasonably satisfactory to the Purchasers that, after
giving effect to such payment of principal or interest, the Peregrine  27 
   Parties will be able to
repay the Past Due Purchase Obligations in accordance with the terms of the
Forbearance Documents; or  N.  Except with respect to any payment governed
by Section V.K. or pursuant to an Acceptable Plan of Reorganization, any
Peregrine Party shall make any payment of principal or interest on the Notes
(including, without limitation, the interest payment due on November 15, 2002)
unless (a) such payment is made on the last day during any applicable grace
period on which such payment could be made without causing a default under the
Notes, (b) at the time of such payment, no New Event of Default shall have
occurred and be continuing or would result therefrom, (c) with respect to such
interest payment, (i) the Peregrine Parties shall have delivered to the
Purchasers the evidence required pursuant to Section IX.M, and (ii) after
giving effect to such payment, the Peregrine Parties will be able to repay the
Past Due Purchase Obligations in accordance with the terms of the Forbearance
Documents.  X.Remedies. If a New Event of Default shall occur, the Purchasers agreement to
temporarily forbear under this Agreement shall immediately and automatically cease
so long as such New Event of Default or any other New Event of Default shall be
continuing, and the Purchasers may, without regard to whether any Purchaser has
already done any of the following as a result of the Existing Defaults,
exercise, at their election, and without notice, demand, protest or presentment
(which notice, demand, protest and presentment are expressly waived) in
addition to all rights and remedies granted to the Purchasers in their
respective Purchase Documents or this Agreement, do any or all of the
following:  A.  The Purchasers may exercise all of the
rights and remedies available under their respective Purchase Documents, this
Agreement, the other Forbearance Documents, and applicable law;  B.  The Purchasers may declare any or all of the
Past Due Purchase Obligations immediately due and payable;  C.  The Purchasers may proceed to enforce their
respective Purchase Documents, this Agreement and the other Forbearance
Documents, and exercise any or all of the rights and remedies afforded to the
Purchasers by, inter  alia, the California Commercial Code, the
California Civil Code, the California Code of Civil Procedure or otherwise
possessed by such Purchaser under applicable law or otherwise;  D.  The Purchasers may, to the fullest extent
permitted by law: (1) sell the Collateral or any interest therein at public or
private sale for cash or upon credit and for immediate or future delivery and
for such price and on such terms as the Purchasers shall deem appropriate, and
negotiate, endorse, assign, transfer and deliver to the purchaser or purchasers
thereof (which may be the Purchasers or any one or more of them) the Collateral
so sold, and each purchaser at any sale shall hold the property sold absolutely
free from any claim or right on the part of any Peregrine Party; and/or (2)
obtain specific performance by any Peregrine Party of any covenant or
undertaking of such party herein; and/or (3) obtain specific performance by any
party to the Purchase Documents of any covenant or undertaking of such party in
the Purchase Documents; and/or (4) without notice to any Peregrine Party,
proceed by suit or suits at law or in equity to  28 
   foreclose its security
interest and sell the Collateral or any portion thereof pursuant to judgment or
decree of a court or courts having competent jurisdiction;  E.  The Purchasers may institute legal
proceedings for the appointment of a receiver or receivers with respect to any
or all of the Collateral pending foreclosure hereunder or for the sale of any
or all of the Collateral under the order of a court of competent jurisdiction
or under other legal process;  F.  Without notice to or demand upon any
Peregrine Party, the Purchasers may make such payments and do such acts as the
Purchasers may deem necessary to protect their security interest in the
Collateral, and, in exercising any such powers or authority, to pay all
expenses incurred in connection therewith;  G.  Proceed separately against the Collateral,
independent of the exercise of any and all of its rights against any Peregrine
Party, and vice versa; and  H.  Enforce any of the rights and remedies
available to them under the Purchase Documents, this Agreement, the other
Forbearance Documents, or available under applicable law.  All
rights and remedies granted to the Purchasers hereunder, under the Purchase
Documents and under the other Forbearance Documents are cumulative, and the
Purchasers shall have the right to exercise any one or more of such rights and
remedies alternatively, successively or concurrently as the Purchasers may, in
their sole and absolute discretion, deem advisable.  XI.Revival Clause. If the incurring of any debt or the payment
of money or transfer of property made to the Purchasers by or on behalf of any
Peregrine Party should for any reason subsequently be declared to be
fraudulent or preferential within the meaning of any state or federal law
relating to creditors rights, including, without limitation, fraudulent
conveyances, preferences or otherwise voidable or recoverable payments of money
or transfers of property, in whole or in part, for any reason (collectively, Voidable
Transfers) under the Bankruptcy Code or any other federal or state law,
and the Purchasers are required to repay or restore any such Voidable Transfer
or the amount or any portion thereof, or upon the advice of their in-house
counsel or outside counsel are advised to do so, then, as to such Voidable
Transfer or the amount repaid or restored (including all reasonable costs,
expenses and attorneys fees of the Purchasers related thereto), the
obligations of the Peregrine Parties under the Purchase Documents, this
Agreement, and the other Forbearance Documents, and all of the Purchasers
rights and remedies under the Purchase Documents, this Agreement and the other
Forbearance Documents shall automatically be revived, reinstated and restored
and shall exist as though such Voidable Transfer had never been made, to the
extent of any harm to the Purchasers.  XII.Representations and Warranties. 
Each Peregrine Party hereby represents and warrants that:  A.  [Intentionally Omitted];  29 
   B.  Litigation.  To the best knowledge of each Peregrine Party, there is no
material litigation or other proceeding currently pending against any Peregrine
Party except as set forth on Schedule I attached hereto;  C.  Contractual Obligations.  No Peregrine Party is in default of or bound
by any contractual obligation in any respect which would adversely affect such
Peregrine Partys ability to perform its obligations under this Agreement or
the Purchase Documents; and  D.  Past Due Purchase Obligations.  Except as set forth on Schedule H,
(1) no Peregrine Party has received any payment in respect of any Purchased
Account of any Purchaser and failed to remit the full amount of such payment to
the applicable Purchaser, and (2) no Purchased Account of any Purchaser is also
a Purchased Account of any other Purchaser or other Person.  E.  Lender Group Credit Agreement.  Other than that certain Amendment Number 1
to Loan and Security Agreement, dated as of June 21, 2002 (a true, correct and
complete copy of which has been delivered to the Purchasers), as of the date
hereof, there have been no other amendments, modifications or supplements to
the Lender Group Credit Agreement.  F.  Indebtedness.  As of the date hereof, except as set forth
on Schedule J, there is no outstanding Indebtedness of any Peregrine
Party.  G.  Dispositions.  During the period from July 1, 2002 through
the Effective Date, no Peregrine Party has made any Disposition except as set
forth on Schedule K.  XIII.[Intentionally Omitted.].  XIV.Certain Dispositions.  A.
Disposition of Remedy.  1.  Except for any Disposition
made in accordance with the provisions of Sections XTV.A.2, 3 or 4 below, with
respect to any Disposition of all or any portion of the assets, or all or any
portion of the issued and outstanding Stock, of Remedy that is to be
consummated pursuant to an order of the Bankruptcy Court during the pendency of
a proceeding under the Bankruptcy Code of any Peregrine Party, then, anything
herein (other than Sections XTV.A.2, 3 or 4 below) or in any of the other
Forbearance Documents to the contrary notwithstanding, each Purchaser shall
retain, and expressly reserves, any right it may have, under the Bankruptcy
Code or otherwise, to object to any such Disposition.  2.  With respect to any
Disposition of all or substantially all of the assets of Remedy or of all of
the issued and outstanding Stock of Remedy:  (1)
If the Net Cash Proceeds to be received from any such Disposition equal or
exceed $200,000,000, then, provided that, at the time such Disposition is
consummated, the Peregrine Parties shall have remitted to Purchaser Agent, the
full amount of proceeds from such Disposition that are required to be remitted
to Purchaser Agent pursuant to Section V.E.1.(c)(i), (a) such Disposition may
be  30 
   made
without the prior consent of the Purchasers, (b) if such Disposition is a
Disposition of all of the issued and outstanding Stock of Remedy, the
Purchasers agree that the Purchaser Agent Liens in such Stock shall be released
upon the consummation of such Disposition, (c) if such Disposition is a
Disposition of all or substantially all of the assets of Remedy, the Purchasers
agree that the Purchaser Agent Liens in the assets so sold or disposed of shall
be released upon the consummation of such Disposition, and (d) except as
otherwise provided in Section V.N. above, the Purchaser Agent Liens shall
remain attached to any Stock or assets of Remedy that are not sold or otherwise
disposed of and in the proceeds of any such Disposition. In connection with any
proposed Disposition referred to in the immediately preceding sentence, upon
receipt of an offer from the proposed acquirer, and without limiting the
Peregrine Parties obligations to provide information regarding such proposed
Disposition prior to receipt of such offer, Peregrine shall notify each
Purchaser in writing that Peregrine has received an offer, identify whether
such offer constitutes a Qualified Offer, together with a copy of such offer,
evidence reasonably satisfactory to each Purchaser that such offer constitutes
a Qualified Offer (if such offer is a Qualified Offer), and such other
information regarding such offer and the offeror as any Purchaser may
reasonably request from time to time.  (2)
If the Net Cash Proceeds to be received from such Disposition are less than
$200,000,000 then such Disposition shall not be made without the prior written
consent of Purchasers; provided, however, that if any such
Disposition is to be made pursuant to a Qualified Offer each Purchaser hereby
acknowledges, solely for the benefit of the Lender Group, that the withholding
of such consent may be subject to such Purchasers obligation to acquire all of
the right, title, and interest of the Lender Group in the Senior Loan
Obligations (as defined in the Intercreditor Agreement) owing under the Lender
Group Loan Documents, the Commitments (as such term is used in the
Intercreditor Agreement), and the Lender Group Credit Documents. In connection
with any proposed Disposition referred to in the immediately preceding
sentence, upon receipt of an offer from the proposed acquirer, and without
limiting the Peregrine Parties obligations to provide information regarding
such proposed Disposition prior to receipt of such offer, Peregrine shall
notify each Purchaser in writing that Peregrine has received such offer,
identify whether such offer constitutes a Qualified Offer, together with a copy
of such offer, evidence reasonably satisfactory to each Purchaser that such
offer constitutes a Qualified Offer (if such offer is a Qualified Offer), a
calculation of the then outstanding amount of the Lender Group Obligations and
a detail of the amounts that will be required to be paid to the Lender Group
(including any prepayment premiums and other fees) if the Lender Group
Obligations were to be paid in full upon the consummation of such Disposition,
and such other information regarding such offer and the offeror as any
Purchaser may reasonably request from time to time. No Disposition may be made
pursuant to this Section XIV.A.2.(2) unless, at the time such Disposition is
consummated, the Peregrine Parties shall have remitted to Purchaser Agent, the
full amount of proceeds from such Disposition that are required to be remitted
to Purchaser Agent pursuant to Section V.E.l.(c)(i).  31 
   3.  With respect to any
Disposition of less than all of the issued and outstanding Stock of Remedy:  (1)
If, based solely upon the cash consideration to be received by Peregrine in
such Disposition, the valuation of Remedy is at least $200,000,000, then,
provided that, at the time such Disposition is consummated, the Peregrine
Parties shall have remitted to Purchaser Agent, the full amount of proceeds
from such Disposition that are required to be remitted to Purchaser Agent
pursuant to Section V.E.1.(c)(i), (a) such Disposition may be made without the
prior consent of the Purchasers, (b) the Purchasers agree that the Purchaser
Agent Liens in the Stock of Remedy that is sold and, to the extent necessary to
consummate such Disposition, in Remedys assets shall be released upon the
consummation of such Disposition, provided,however, that
Purchaser Agent Liens shall remain attached to the Stock of Remedy that is not
sold or otherwise disposed of and in the proceeds of such Disposition. In connection
with any proposed Disposition referred to in the immediately preceding
sentence, upon receipt of an offer from the proposed acquirer, and without
limiting the Peregrine Parties obligations to provide information regarding
such proposed Disposition prior to receipt of such offer, Peregrine shall
notify each Purchaser in writing that Peregrine has received an offer, identify
whether such offer constitutes a Qualified Offer, together with a copy of such
offer, evidence reasonably satisfactory to each Purchaser that such offer
constitutes a Qualified Offer (if such offer is a Qualified Offer), and such
other information regarding such offer and the offeror as any Purchaser may
reasonably request from time to time.  (2)
If, based solely upon the cash consideration to be received by Peregrine or
Remedy in such Disposition, the valuation of Remedy is less than $200,000,000,
then such Disposition shall not be made without the prior written consent of
the Purchasers; provided, however, that if any such Disposition
is to be made pursuant to a Qualified Offer each Purchaser hereby acknowledges,
solely for the benefit of the Lender Group, that the withholding of such
consent may be subject to such Purchasers obligation to acquire all of the
right, title, and interest of the Lender Group in the Senior Loan Obligations
(as defined in the Intercreditor Agreement) owing under the Lender Group Loan
Documents, the Commitments (as such term is used in the Intercreditor
Agreement), and the Lender Group Credit Documents. In connection with any
proposed Disposition referred to in the immediately preceding sentence, upon
receipt of an offer from the proposed acquirer, and without limiting the
Peregrine Parties obligations to provide information regarding such proposed
Disposition prior to receipt of such offer, Peregrine shall notify each
Purchaser in writing that Peregrine has received an offer, identify whether
such offer constitutes a Qualified Offer, together with a copy of such offer,
evidence reasonably satisfactory to each Purchaser that such offer constitutes
a Qualified Offer (if such offer is a Qualified Offer), a calculation of the
then outstanding amount of the Lender Group Obligations and a detail of the
amounts that will be required to be paid to the Lender Group (including any
prepayment premiums and other fees) if the Lender Group Obligations were to be
paid in full upon the consummation of such Disposition,  32 
   and
such other information regarding such offer and the offeror as any Purchaser
may reasonably request from time to time. No Disposition may be made pursuant
to this Section XIV.A.3.(2) unless, at the time such Disposition is
consummated, the Peregrine Parties shall have remitted to Purchaser Agent, the
full amount of proceeds from such Disposition that are required to be remitted
to Purchaser Agent pursuant to Section V.E.1.(c)(i).  4.  With respect to any
Disposition of less than substantially all of the assets of Remedy:  (1)
If the Net Cash Proceeds to be received from any such Disposition equal or
exceed $200,000,000, then, provided that, at the time such Disposition is
consummated, the Peregrine Parties shall have remitted to Purchaser Agent, the
full amount of proceeds from such Disposition that are required to be remitted
to Purchaser Agent pursuant to Section V.E.1.(c)(i), (a) such Disposition may
be made without the prior consent of the Purchasers, and (b) the Purchaser
Agent Liens shall remain attached to any assets of Remedy that are not sold or
otherwise disposed of and in the proceeds of any such Disposition. In
connection with any proposed Disposition referred to in the immediately
preceding sentence, upon receipt of an offer from the proposed acquirer, and
without limiting the Peregrine Parties obligations to provide information
regarding such proposed Disposition prior to receipt of such offer, Peregrine
shall notify each Purchaser in writing that Peregrine has received an offer,
identify whether such offer constitutes a Qualified Offer, together with a copy
of such offer, evidence reasonably satisfactory to each Purchaser that such
offer constitutes a Qualified Offer (if such offer is a Qualified Offer), and
such other information regarding such offer and the offeror as any Purchaser
may reasonably request from time to time.  (2)
If the Net Cash Proceeds to be received from such Disposition are less than
$200,000,000 then such Disposition shall not be made without the prior written
consent of Purchasers; provided, however, that if any such
Disposition is to be made pursuant to a Qualified Offer each Purchaser hereby
acknowledges, solely for the benefit of the Lender Group, that the withholding
of such consent may be subject to such Purchasers obligation to acquire all of
the right, title, and interest of the Lender Group in the Senior Loan
Obligations (as defined in the Intercreditor Agreement) owing under the Lender
Group Loan Documents, the Commitments (as such term is used in the
Intercreditor Agreement), and the Lender Group Credit Documents. In connection
with any proposed Disposition referred to in the immediately preceding
sentence, upon receipt of an offer from the proposed acquirer, and without
limiting the Peregrine Parties obligations to provide information regarding such
proposed Disposition prior to receipt of such offer, Peregrine shall notify
each Purchaser in writing that Peregrine has received such offer, identify
whether such offer constitutes a Qualified Offer, together with a copy of such
offer, evidence reasonably satisfactory to each Purchaser that such offer
constitutes a Qualified Offer (if such offer is a Qualified Offer), a
calculation of the then outstanding amount of the Lender Group Obligations and
a detail of the amounts that will be required to be paid to the Lender Group  33 
   (including
any prepayment premiums and other fees) if the Lender Group Obligations were to
be paid in full upon the consummation of such Disposition, and such other
information regarding such offer and the offeror as any Purchaser may
reasonably request from time to time. No Disposition may be made pursuant to
this Section XIV.A.4.(2) unless, at the time such Disposition is consummated,
the Peregrine Parties shall have remitted to Purchaser Agent, the full amount
of proceeds from such Disposition that are required to be remitted to Purchaser
Agent pursuant to Section V.E.1.(c)(i).  B.  Disposition of Other Peregrine Parties.  With respect to any Disposition of all or
any portion of the Stock or assets of any Subsidiary of Peregrine other than
Remedy, if the Lender Group, or any other lender having a security interest in
the Stock or assets being sold senior to the Purchaser Agent Liens in such
Stock or assets releases its security interest in such Stock or assets upon the
consummation of such Disposition, such Disposition may be made without the
prior consent of Purchasers and the Purchaser Agent Liens in such Stock or
other assets shall be released upon consummation of such Disposition, provided,
however, that, except as provided in the next sentence below, Purchaser
Agent Liens shall remain attached to any Stock or assets of such Subsidiary
that is not sold or otherwise disposed of and in the proceeds of such
Disposition. The foregoing notwithstanding, in the event of a permitted sale of
all or a substantial part of the stock of a Subsidiary of Peregrine other than
Remedy, if the Lender Group is releasing any guarantees given by such
Subsidiary and releasing its liens on the assets of Subsidiary, and if the
release by the Purchasers of their guarantee given by such Subsidiary and their
lien on the assets of such Subsidiary is necessary for such sale to proceed,
then the Purchasers shall release their guarantee given by such Subsidiary and
any liens they hold on the assets of such Subsidiary in connection with the
consummation of such sale, and also shall release any liens they hold on the
stock of such Subsidiary being sold, but shall be entitled to retain their
security interest in any stock of such Subsidiary that is not sold.  C.  Other Alternative Structures.  Peregrine has indicated to the Purchasers
that it may propose an alternative structure involving the partial disposition
of interests related to Remedy. Specifically, Peregrine has indicated that it
may propose a combined transaction with a single entity that involves (a)
borrowing against the assets of Remedy in an amount not to exceed $175,000,000,
and (b) sale of common stock in Peregrine. Such an alternative structure would
involve the sale of at least 50% of such common stock in Peregrine. For
purposes of any such alternative transaction, the value of Remedy will be
deemed to be $250,000,000. In such event, the Net Cash Proceeds of Disposition
shall be equal to the sum of (a) the amount borrowed by Remedy, plus (b) the
percentage of shares outstanding in Peregrine that are sold to the purchaser
(not less than 50%) multiplied by the difference between $250,000,000 (the
deemed value of Remedy) and the amount borrowed by Remedy.  The actual proceeds paid by the purchaser
for the stock in Peregrine plus the amount borrowed by Remedy shall be compared
to the Net Cash Proceeds of Disposition. If such combined amount exceeds the
Net Cash Proceeds of Disposition by more than $37,500,000, then such excess
shall also be deemed Net Cash Proceeds of Disposition and 50% shall be paid as
additional proceeds to the Purchasers and be applied as Net Available Proceeds.
In no event shall any proceeds received for shares of Peregrine stock or of
borrowings by Remedy be paid to holders of equity interests of Peregrine
directly or indirectly on account of such equity interests. As a part of such
an alternative transaction, the Purchasers shall release their guarantee given
by Remedy and their lien on the assets of Remedy, but shall  34 
   retain their security
interest in all of the stock of Remedy. For the sake of clarity, the
$37,500,000 amount deemed received on account of the Peregrine stock pursuant
to this paragraph will not be charged against the $250,000,000 aggregate
Disposition/Indebtedness basket provide for elsewhere in this Agreement. This
paragraph does not in any way limit any Peregrine Partys right to make a
Disposition permitted by any other provision of this Agreement.  D.  Qualified Offers for Net Cash Proceeds in
excess of $200,000,000.  In
connection with any Qualified Offer that would yield Net Cash Proceeds in
excess of $200,000,000, the foregoing notwithstanding, the Peregrine Parties do
not have to provide a copy of such Qualified Offer if and to the extent they
are prohibited from doing so by binding confidentiality agreements.  E.  Dispositions of Assets.  Subject to the provisions hereof relating to
turnover of certain Net Cash Proceeds, the Peregrine Parties may make
Dispositions for Net Cash Proceeds in the aggregate of up to that amount at any
time equal to the difference between $250,000,000 minus the aggregate
amount of Indedbtedness secured by senior liens contemplated by Section V.M.,
without prior consent of the Purchasers.  XV.Notices.  Unless
otherwise provided in this Agreement, all notices or demands to any Peregrine
Party, to any Purchaser, or to Purchaser Agent relating to this Agreement or
any other Forbearance Document shall be in writing and (except for financial
statements and other informational documents which may be sent by first-class
mail, postage prepaid) shall be personally delivered or sent by registered or
certified mail (postage prepaid, return receipt requested), overnight courier,
or telefacsimile to any Peregrine Party in care of Peregrine, to each
Purchaser, or to Purchaser Agent, as the case may be, at its address set forth
below:  If to any PeregrineParty:
  
  PEREGRINE SYSTEMS, INC.3611 Valley Centre DriveSan Diego, California
  92130Attn:  Kathy Vizas, Esq.Fax No. 858-481-1751with copies to:
  
  PACHULSKI, STANG, ZIEHL,
  YOUNG & JONES10100 Santa Monica
  Boulevard, 11th FloorLos Angeles, California
  90067-4100Attn: Richard Pachulski,
  Esq.Fax No. 310-201-0760If to Purchaser Agent:
  
  FLEET BUSINESS CREDIT, LLCOne South Wacker Drive,
  Suite 3800Chicago, IL 60606Attn: Stuart SchwartzFax No. 312-782-6486  35 
   with copies to:
  
  FLEET BUSINESS CREDIT, LLCOne South Wacker Drive,
  Suite 3800Chicago, IL 60606Attn: General CounselFax No. 312-853-1433and copies to:
  
  KAYE SCHOLER LLP1999 Avenue of the Stars,
  Suite 1600Los Angeles, CA 90067Attn: Jeffrey S. Turner,
  Esq.Fax No. 310-229-1950If to Fleet:
  
  FLEET BUSINESS CREDIT, LLCOne South Wacker DriveChicago, IL 60606Attn: Stuart SchwartzFax No. 312-782-6486with copies to:
  
  FLEET BUSINESS CREDIT, LLCOne South Wacker DriveChicago, IL 60606Attn: General CounselFax No. 312-853-1433and copies to:
  
  KAYE SCHOLER LLP1999 Avenue of the Stars,
  Suite 1600Los Angeles, CA 90067Attn: Jeffrey S. Turner,
  Esq.Fax No. 310-229-1950If to SVB:
  
  SILICON VALLEY BANK38 Technology Drive, Suite
  150Irvine, CA 92618Attn: Maria JohnsonFax No. 949-789-1930with copies to:
  
  LEVY SMALL & LALLAS815 Moraga DriveLos Angeles, CA 90049Attn: Leo Plotkin, Esq.Fax No. 310-471-7990If to Trade Bank:
  
  WELLS FARGO HSBC TRADE
  BANK, N.A.333 South Grand Avenue,
  Suite 940Los Angeles, CA 90071Attn: Charles WarnerFax No. 213-253-5913  36 
   with copies to:
  
  WELLS FARGO HSBC TRADE
  BANK, N.A.333 South Grand Avenue,
  Suite 1040Los Angeles, CA 90071Attn: Christine Kenmore,
  Esq.Fax No. 213-626-4812and copies to:
  
  PILLSBURY WINTHROP LLP650 Town Center Drive, 7th
  FloorCosta Mesa, CA 92626Attn: Craig A. Barbarosh,
  Esq.Fax No. 714-436-2800 
 Purchaser Agent, Purchasers and Peregrine
Parties may change the address at which they are to receive notices hereunder,
by notice in writing in the foregoing manner given to the other party. All
notices or demands sent in accordance with this section, other than notices by
Purchaser Agent in connection with enforcement rights against the Collateral
under the provisions of the Code and other than notices by any Peregrine Party
regarding a change of any Peregrine Partys name, shall be deemed received on
the earlier of the date of actual receipt or 3 Business Days after the deposit
thereof in the mail. Each Peregrine Party acknowledges and agrees that notices
sent by the Purchasers or Purchaser Agent in connection with the exercise of
enforcement rights against Collateral under the provisions of the Code shall be
deemed sent when deposited in the mail or personally delivered, or, where
permitted by law, transmitted by telefacsimile or any other method set forth
above. Any notice by any Peregrine Party regarding a change of any Peregrine
Partys name shall be deemed received only upon the actual receipt thereof.  XVI.Authority.  Each Peregrine Party
represents and warrants to the Purchasers that:  (A) it has authority to execute this Agreement; (B) the
execution, delivery and performance of this Agreement does not require the
consent or approval of any other Person; (C) this Agreement is a valid, binding
and legal obligation of such Peregrine Party enforceable in accordance with its
terms, and does not contravene or conflict with any other agreement, indenture
or undertaking to which such Peregrine Party is a party; and (D) such Peregrine
Party is the sole and lawful owner of all right, title, and interest in and to
every claim and other matter which such Peregrine Party purports to settle or
compromise herein.  XVII.Payment of Expenses.  In
the event any action (whether or not in a court proceeding) shall be required
to interpret, implement, modify, or enforce the terms and provisions of this
Agreement, any of the Purchase Documents, any of the other Forbearance
Documents, and/or to declare rights under same, the prevailing party in such
action shall recover from the losing party all of its reasonable fees and
costs, including, but not limited to, the reasonable attorneys fees and costs
(if applicable) of each Purchasers outside counsel and the allocated costs of
each Purchasers in-house counsel.  XVIII.Governing Law. 
This Agreement shall be construed and interpreted in accordance with and
shall be governed by the laws of the State of California, without regard to the
conflict of laws principles thereof.  37 
   XIX.Successors.Assignment.  This Agreement
shall be binding on and inure to the benefit of all of the parties hereto, and
upon the heirs, executors, administrators, legal representatives, successors
and assigns of the parties hereto, and each of them. The terms and provisions
of this Agreement are for the exclusive benefit of the Peregrine Parties and
the Purchasers, and may not be transferred, assigned, pledged, set over or
negotiated by any Peregrine Party to any Person without the prior express
written consent of the Purchasers. 
Notwithstanding any other provisions contained herein, each Purchaser
may sell, transfer, negotiate, assign or grant participations in all or a
portion of its rights in any of the Purchase Documents, this Agreement and the
other Forbearance Documents to any Person without prior notice to any Peregrine
Party, provided, however, that any such assignee shall be bound by the terms
and provisions of the Purchase Documents, this Agreement, the intercreditor
Agreement, and the other Forbearance Documents.  XX.Complete Agreement of Parties. 
This Agreement, together with the other Waiver Documents, the Purchase
Documents and the confidentiality agreements executed by each of the Purchasers
and Peregrine prior to the date hereof, constitutes the entire agreement
between the Purchasers, on the one hand, and the Peregrine Parties, on the
other hand, arising out of, related to or connected with the subject matter of
this Agreement.  Any supplements,
modifications, waivers or terminations of this Agreement shall not be binding unless
executed in writing by the parties to be bound thereby.  No waiver of any provision of this Agreement
shall constitute a waiver of any other provisions of this Agreement (whether
similar or not), nor shall such waiver constitute a continuing waiver unless
otherwise expressly so provided.  XXI.Execution In Counterparts: Facsimile
Execution.  This Agreement may be executed in any number
of counterparts each of which, when so executed and delivered, shall be deemed
an original, and all of which together shall constitute but one and the same
agreement. Delivery of an executed counterpart of this Agreement by facsimile
shall be equally as effective as delivery of a manually executed counterpart.
Any party hereto delivering an executed counterpart of this Agreement by
facsimile shall also deliver a manually executed counterpart, but the failure
to so deliver a manually executed counterpart shall not effect the validity,
enforceability or binding effect hereof.  XXII.Contradictory Terms/Severability. 
Subject to the provisions of Section XXVII hereof, in the event that any
term or provision of this Agreement contradicts any term or provision of any
other document, instrument or agreement between the parties including, but not
limited to, any of the Purchase Documents, the terms of this Agreement shall
control.  If any provision of this
Agreement shall be invalid, illegal or otherwise unenforceable, such provision
shall be severable from all other provisions of this Agreement, and the
validity, legality and enforceability of the remaining provisions of this
Agreement shall not be adversely affected or impaired, and shall thereby remain
in full force and effect.  XXIII.Headings.  All headings contained herein
are for convenience purposes only, and shall not be considered when
interpreting this Agreement.  XXIV.Further Assurances.  The
parties hereto shall cooperate with each other in carrying out the terms and
intent of this Agreement, and shall execute such other documents, instruments
and agreements as are reasonably required to effectuate the terms and intent of
this Agreement.  38 
   Without limiting the generality of the foregoing, each Peregrine Party
shall cooperate with the Purchasers in the collection of the accounts and other
rights to payment purchased by the Purchasers from any Peregrine Party, which
cooperation shall include, but not be limited to contacting the account debtors
or other Persons obligated on such accounts or other rights to payment and directing
that payment be made directly to the applicable Purchaser, providing the
Purchasers with information and copies of documents relating to such accounts
and rights to payment, giving the Purchasers access to the Peregrine Parties
personnel, books and records, and otherwise consulting with and assisting the
Purchasers in the collection of such accounts and rights to payment.  XXV.Course of Dealing: Waivers.  No
course of dealing on the part of the Purchasers, or their respective officers,
nor any failure or delay in the exercise of any right(s) by the Purchasers,
shall operate as a waiver thereof, and any single or partial exercise of any
such right(s) shall not preclude any later exercise of any such right(s). The
Purchasers failure at any time to require strict performance by the Peregrine
Parties of any provision shall not affect any right(s) of the Purchasers
thereafter to demand strict compliance and performance. Any suspension or
waiver of a right(s) must be in writing signed by the Purchasers.  XXVI.Consultation with Counsel. 
Each party hereto acknowledges that it is freely and voluntarily
entering into this Agreement. Moreover, each party hereto also acknowledges
that it has been represented by counsel of its own choice at each stage in the
negotiation of this Agreement, or has knowingly and voluntarily elected not to
be represented by counsel at each stage in the negotiation of this Agreement.
To the extent any party was represented by counsel, said party acknowledges
that:  (A) it has relied on such
counsels advice throughout all of the negotiations which preceded the
execution of this Agreement, and in connection with the preparation and
execution of this Agreement; (B) such counsel has read and approved this
Agreement; and (C) such counsel has advised such party concerning the validity
and effectiveness of this Agreement, and the transactions to be consummated in
accordance therewith.  THE PARTIES
HERETO, AND EACH OF THEM, HEREBY IRREVOCABLY WAIVE ALL RIGHT TO TRIAL BY JURY
IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO ANY OF
THE PURCHASE DOCUMENTS, THIS AGREEMENT, THE OTHER WAIVER DOCUMENTS, OR THE
TRANSACTIONS CONTEMPLATED THEREBY OR HEREBY.  Rights and Remedies Subject to the Intercreditor Agreement; Etc. Each of the Purchasers hereby acknowledges
and agrees, solely for the benefit of the Lender Group, that all of their
respective rights and remedies under this Agreement and the other Forbearance
Documents are subject to the terms of the Intercreditor Agreement, and in the
event of any conflict or inconsistency between the terms of this Agreement and
the terms of the Intercreditor Agreement, as between the Purchasers and the
Lender Group, the terms of the Intercreditor Agreement shall control.  39 
   Further,
the fact that certain actions are authorized and allowed hereunder, or the fact
that the Purchasers are entitled to certain rights and remedies hereunder that
are not permitted to be exercised under the Intercreditor Agreement, is merely
reflective of the fact that the term of this Agreement is longer than the term
of the Lender Group Credit Agreement, and that actions prohibited under the
terms of the Intercreditor Agreement may be taken by Purchasers after the termination
of the Intercreditor Agreement. Any actions authorized or allowed hereunder
shall not be used or relied upon in the interpretation or construction of the
Intercreditor Agreement except to the extent expressly incorporated into or
referred to in the Intercreditor Agreement. This Section XXVII is solely for
the benefit of the Lender Group, and no Peregrine Party is intended to have,
nor shall be deemed to have, any right to enforce the provisions of this
Section XXVII. Subject to the foregoing, in the event of any conflict or
inconsistency between the terms and provisions of this Agreement and those of
any other Forbearance Document (including, without limitation, any conflicts or
inconsistencies regarding the parties respective rights and obligations with
respect to the release or termination of liens or security interests, the terms
and conditions under which the Peregrine Parties may pledge, encumber or grant
security interests in any of the collateral or dispose of collateral, and the
disposition of the proceeds of any Disposition or financing transaction), the
terms and provisions of the Forbearance Agreement shall govern and control;
provided that, for the sake of clarity, the parties agree that the inclusion of
additional rights, remedies, powers or privileges in other Forbearance
Documents that are not inconsistent with the provisions of the Forbearance
Agreement will not be deemed a conflict.  [Remainder of page intentionally left blank.]  40 
   IN WITNESS
WHEREOF, the parties
hereto have caused this Agreement to be executed and delivered as of the date
first written above.  The
  Purchasers:
  FLEET
  BUSINESS CREDIT, LLC,a Delaware limited
  liability company, as aPurchaser and as Purchaser
  AgentBy:
  /s/ [ILLEGIBLE]Its:
  First V.P.SILICON
  VALLEY BANKa California state bankBy:
  /s/ [ILLEGIBLE]Its:
  Senior Vice PresidentWELLS
  FARGO HSBC TRADE BANK, N.A.,a National Banking
  AssociationBy:
  /s/ [ILLEGIBLE]Its:
  VP  S-1 
   The
  Peregrine Parties:
  PEREGRINE
  SYSTEMS, INC,a Delaware corporationBy.
  /s/ Gary GreenfieldIts:
  CEOPEREGRINE
  REMEDY, INC,a Delaware corporationBy:
  /s/ Gary GreenfieldIts:
  PRESIDENTHARBINGERHOLDINGS,
  INC,a California corporationBy:Its:PEREGRINE
  E-MARKETS, INC.,a Delaware corporationBy:Its:TELCO
  RESEARCH CORPORATION,a Tennessee corporationBy:
  /s/ Gary GreenfieldIts:
  CEO and PRESIDENTPEREGRINE
  CONNECTIVITY, INC,a Georgia corporationBy:Its:  S-2 
   PEREGRINE
  DIAMOND, INC.,a Delaware corporationBy:
  /s/ Gary GreenfieldIts:
  CEO and PRESIDENTPEBEGRINE
  CALIFORNIA PADRES, INC.,a Delaware corporationBy:
  /s/ Gary GreenfieldIts:
  CEO and PRESIDENTPEREGRINE
  ONTARIO BLUE JAYS, INC.,a Delaware corporationBy:
  /s/ Gary GreenfieldIts:
  CEO and PRESIDENTBALLGAME
  ACQUISITION
  CORPORATION,a
  Delaware corporationBy:
  /s/ Gary GreenfieldIts:
  CEO and PRESIDENTOCTOBER
  ACQUISITIONCORPORATION,a Delaware
  corporationBy:
  /s/ Gary GreenfieldIts:
  CEO and PRESIDENT  S-3 
   PEREGRINE
  BODHA, INC,a California corporationBy:
  /s/ Gary GreenfieldIts:
  CEO and PRESIDENTPEREGRINE
  FEDERAL SYSTEMS, INC,an Illinois corporationBy:
  /s/ Gary GreenfieldIts:
  CEO and PRESIDENTLORAN
  NETWORK SYSTEMS, LLC,a Delaware limited
  liability companyBy:
  /s/ Gary GreenfieldIts:
  DIRECTORPEREGRINE
  SYSTEMS OF CANADA, INC.,a corporation organized
  under the laws of CanadaBy:
  /s/ Gary GreenfieldIts:
  PRESIDENTPEREGRINE
  NOVA SCOTIA COMPANY,a Nova Scotia unlimited
  liability company.By:
  /s/ Gary GreenfieldIts:
  PRESIDENT  S-4 
   PEREGRINE
  SYSTEMS LTD.,a corporation organized
  under the laws of OntarioBy:
  /s/ Gary GreenfieldIts:
  PRESIDENTPEREGRINE
  OTTAWA NOVA SCOTIA
  COMPANY,a Nova
  Scotia unlimited liability
  companyBy:
  /s/ Gary GreenfieldIts:
  PRESIDENTPEREGRINE
  NETWORKS CANADA INC.,a corporation organized
  under the laws of CanadaBy:
  /s/ Gary GreenfieldIts:
  PRESIDENTLORAN
  INTERNATIONAL
  TECHNOLOGIES INC.,a
  corporation
  organized under the laws of CanadaBy:
  /s/ Gary GreenfieldIts:
  PRESIDENTLORAN
  NETWORK SYSTEMS INC.,a corporation organized
  under the laws of CanadaBy:
  /s/ Gary GreenfieldIts:
  PRESIDENT  S-5 
   REMEDY
  CANADA LTD.,a corporation organized under
  the laws of OntarioBy:
  /s/ Gary GreenfieldIts:
  PRESIDENTEXTRICITY
  (CANADA) CORP.,a Nova Scotia unlimited
  liability companyBy:
  /s/ Gary GreenfieldIts:
  PRESIDENT  S-6