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EXECUTION COPY  

FIFTH AMENDMENT TO CREDIT AGREEMENT  

    This FIFTH AMENDMENT TO CREDIT AGREEMENT (this "Amendment"), made and entered into as of July 31, 2000,
is by and between Health Risk Management, Inc., a Minnesota corporation (the "Borrower"), and U.S. Bank National Association, a national banking association (the "Lender"). 

RECITALS  

    1.  The
Bank and the Borrower entered into a Credit Agreement dated as of May 1, 1998 as amended by a First Amendment dated as of January 27, 1999, a
Second Amendment dated as of June 30, 1999, a Third Amendment dated as of December 21, 1999 and a Fourth Amendment dated as of April 10, 2000 (as amended, the "Credit Agreement");
and 

    2.  The
Borrower desires to amend certain provisions of the Credit Agreement, and the Bank has agreed to make such amendments, subject to the terms and conditions set
forth in this Amendment. 

AGREEMENT  

    NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged,
the parties hereto hereby covenant and agree to be bound as follows: 

    Section 1.  Capitalized Terms.  Capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned to them in the Credit Agreement, unless the context shall otherwise require. 

    Section 2.  Amendments.  The Credit Agreement is hereby amended as
follows: 

    2.1  Definitions.  The definition of "Revolving Credit
Commitment" contained in Section 1.1 of the Credit Agreement is amended to read in its entirety as follows: 

    "Revolving Credit Commitment": The maximum unpaid principal amount of Revolving Loans which may from time to time be outstanding
hereunder, being initially $2,900,000, as the same may be reduced from time to time pursuant to Section 4.3 and, as the context may require, the agreement of the Bank to make Revolving Loans to
the Borrower subject to the terms and conditions of this Agreement 

    2.2  Mandatory Prepayments.  The Credit Agreement is amended to add the following
Section 4.5(c): 

    (c) Within
ten Business Days prior to (A) the issuance of any equity securities of the Borrower or any Subsidiary or (B) the incurrence of any
subordinated debt by the Borrower or any Subsidiary which is subordinated in right of payment to the payment of the Borrower's obligations under the Credit Agreement in a manner and to an extent that
the Bank has approved in writing ("Subordinated Debt"), the Borrower shall give the Bank written notice of (i) such issuance of equity securities or incurrence of Subordinated Debt and
(ii) the amount of the net proceeds which the Borrower expects to receive in connection with such issuance of equity securities or incurrence of Subordinated Debt. Immediately following the
receipt of any proceeds in connection with such issuance of equity securities or incurrence of Subordinated Debt, the Borrower shall pay to the Bank such portion of such proceeds designated by the
Bank in its sole discretion, net of the actual cash expenses paid by the Borrower or any Subsidiary in connection with such issuance or incurrence. Any payments to the Bank under this Section will be
applied first to the installments scheduled under the Term Note (in inverse order of their maturities), and then to amounts outstanding under the Revolving Note. 

    2.3  Required Refinancing and Equity Investment.  The Credit Agreement is amended
to add the following Section 7.14: 

    Section 7.14  Required Refinancing and Equity Investment. By not later than August 31, 2000, the Borrower
will (i) complete the refinancing of not less than $1,500,000 of trade payables from the Borrower to its trade creditors by converting said payables into stock of the Borrower, and
(ii) raise net proceeds of not less than $2,000,000 in the form of an equity investment from an existing shareholder or shareholders of the Borrower. The Borrower will furnish to the Bank
written notice of completion of such events. 

    2.4  New Revolving Note.  Exhibit A to the Credit Agreement is hereby
amended to read as set forth on Exhibit A attached to this Amendment. 

    Section 3.  Effectiveness of Amendments.  The amendments contained in this
Amendment shall become effective upon delivery by the Borrower of, and compliance by the Borrower with, the following: 

    3.1 This Amendment and the Third Amended and Restated Revolving Note in the form of Exhibit A hereto (the
"Note"), each duly executed by the Borrower. 

    3.2 A copy of the resolutions of the Board of Directors of the Borrower authorizing the execution, delivery and
performance of this Amendment and the Note certified as true and accurate by its Secretary or Assistant Secretary, along with a certification by such Secretary or Assistant Secretary
(i) certifying that there has been no amendment to the Articles of Incorporation or Bylaws of the Borrower since true and accurate copies of the same were previously delivered to the Bank, and
(ii) identifying each officer of the Borrower authorized to execute this Amendment, the Note and any other instrument or agreement executed by the Borrower in connection with this Amendment
(collectively, the "Amendment Documents"), and certifying as to specimens of such officer's signature and such officer's incumbency in such offices as such officer holds. 

    3.3 Certified copies of all documents evidencing any necessary corporate action, consent or governmental or regulatory
approval (if any) with respect to this Amendment. 

    3.4 A reaffirmation of the Security Agreement in the form of Exhibits B-1 through B-3 attached
to this Amendment, duly executed by each of Health Resource Management, Ltd., HRM Claim Management, Inc., and Institute for Healthcare Quality, Inc.. 

    3.5 The Borrower shall have paid an Amendment and Waiver Fee of $5,000. 

    3.6 The Borrower shall have satisfied such other conditions as specified by the Bank, including payment of all unpaid
legal fees and expenses incurred by the Bank through the date of this Amendment in connection with the Credit Agreement and the Amendment Documents. 

    Section 4.  Defaults and Waivers.  

    4.1  Events of Default and Unmatured Events of Default.  The Borrower defaulted
under Section 8.18 of the Credit Agreement by (i) permitting its Consolidated Net Income to be less than $500,000 as at March 31, 2000 for the fiscal quarter ended on that date,
and (ii) permitting its Consolidated Net Income to be less than $750,000 as at June 30, 2000 for the fiscal quarter ended on that date. 

    4.2  Waiver.  Upon the date on which this Amendment becomes effective, the Bank
hereby waives the Borrower's Defaults and Events of Default described in the preceding Section 4.1 (the "Existing Defaults"). The waiver of the Existing Defaults set forth above is limited to
the express terms thereof, and nothing herein shall be deemed a waiver by the Bank of any other term, condition, representation or covenant applicable to the Borrower under the Credit Agreement 

2

(including but not limited to any future occurrence similar to the Existing Defaults) or any of the other agreements, documents or instruments executed and delivered in connection therewith, or of the
covenants described therein. The waivers set forth herein shall not constitute a waiver by the Bank of any other Default or Event of Default, if any, under the Credit Agreement, and shall not be, and
shall not be deemed to be, a course of action with respect thereto upon which the Borrower may rely in the future, and the Borrower hereby expressly waives any claim to such effect. 

    Section 5.  Representations, Warranties, Authority, No Adverse Claim.  

    5.1  Reassertion of Representations and Warranties, No Default.  The Borrower
hereby represents that on and as of the date hereof and after giving effect to this Amendment (a) all of the representations and warranties contained in the Credit Agreement are true, correct
and complete in all respects as of the date hereof as though made on and as of such date, except for changes permitted by the terms of the Credit Agreement, and (b) there will exist no Default
or Event of Default under the Credit Agreement as amended by this Amendment on such date which has not been waived by the Bank. 

    5.2  Authority, No Conflict, No Consent Required.  The Borrower represents and
warrants that the Borrower has the power and legal right and authority to enter into the Amendment Documents and has duly authorized as appropriate the execution and delivery of the Amendment
Documents and other
agreements and documents executed and delivered by the Borrower in connection herewith or therewith by proper corporate, and none of the Amendment Documents nor the agreements contained herein or
therein contravenes or constitutes a default under any agreement, instrument or indenture to which the Borrower is a party or a signatory or a provision of the Borrower's Articles of Incorporation,
Bylaws or any other agreement or requirement of law, or result in the imposition of any Lien on any of its property under any agreement binding on or applicable to the Borrower or any of its property
except, if any, in favor of the Bank. The Borrower represents and warrants that no consent, approval or authorization of or registration or declaration with any Person, including but not limited to
any governmental authority, is required in connection with the execution and delivery by the Borrower of the Amendment Documents or other agreements and documents executed and delivered by the
Borrower in connection therewith or the performance of obligations of the Borrower therein described, except for those which the Borrower has obtained or provided and as to which the Borrower has
delivered certified copies of documents evidencing each such action to the Bank. 

    5.3  No Adverse Claim.  The Borrower warrants, acknowledges and agrees that no
events have been taken place and no circumstances exist at the date hereof which would give the Borrower a basis to assert a defense, offset or counterclaim to any claim of the Bank with respect to
the Borrower's obligations under the Credit Agreement as amended by this Amendment. 

    Section 6.  Affirmation of Credit Agreement, Further References.  The Bank
and the Borrower each acknowledge and affirm that the Credit Agreement, as hereby amended, is hereby ratified and confirmed in all respects and all terms, conditions and provisions of the Credit
Agreement, except as amended by this Amendment, shall remain unmodified and in full force and effect. All references in any document or instrument to the Credit Agreement are hereby amended and shall
refer to the Credit Agreement as amended by this Amendment. The Borrower confirms to the Bank that the Borrower's obligations under the Credit Agreement, as amended by this Amendment are and continue
to be secured by the security interest granted by the Borrower in favor of the Bank under the Security Agreement, and all of the terms, conditions, provisions, agreements, requirements, promises,
obligations, duties, covenants and representations of the Borrower under such documents and any and all other documents and agreements entered into with respect to the obligations under the Credit 

3

Agreement are incorporated herein by reference and are hereby ratified and affirmed in all respects by the Borrower. 

    Section 7.  Merger and Integration, Superseding Effect.  This Amendment,
from and after the date hereof, embodies the entire agreement and understanding between the parties hereto and supersedes and has merged into this Amendment all prior oral and written agreements on
the same subjects by and
between the parties hereto with the effect that this Amendment, shall control with respect to the specific subjects hereof and thereof. 

    Section 8.  Severability.  Whenever possible, each provision of this
Amendment and the other Amendment Documents and any other statement, instrument or transaction contemplated hereby or thereby or relating hereto or thereto shall be interpreted in such manner as to be
effective, valid and enforceable under the applicable law of any jurisdiction, but, if any provision of this Amendment, the other Amendment Documents or any other statement, instrument or transaction
contemplated hereby or thereby or relating hereto or thereto shall be held to be prohibited, invalid or unenforceable under the applicable law, such provision shall be ineffective in such jurisdiction
only to the extent of such prohibition, invalidity or unenforceability, without invalidating or rendering unenforceable the remainder of such provision or the remaining provisions of this Amendment,
the other Amendment Documents or any other statement, instrument or transaction contemplated hereby or thereby or relating hereto or thereto in such jurisdiction, or affecting the effectiveness,
validity or enforceability of such provision in any other jurisdiction. 

    Section 9.  Successors.  The Amendment Documents shall be binding upon the
Borrower and the Bank and their respective successors and assigns, and shall inure to the benefit of the Borrower and the Bank and the successors and assigns of the Bank. 

    Section 10.  Legal Expenses.  As provided in Section 10.2 of the
Credit Agreement, the Borrower agrees to reimburse the Bank, upon execution of this Amendment, for all reasonable out-of-pocket expenses (including attorneys' fees and legal
expenses of Dorsey & Whitney LLP, counsel for the Bank) incurred in connection with the Credit Agreement, including in connection with the negotiation, preparation and execution of the
Amendment Documents and all other documents negotiated, prepared and executed in connection with the Amendment Documents, and in enforcing the obligations of the Borrower under the Amendment
Documents, and to pay and save the Bank harmless from all liability for, any stamp or other taxes which may be payable with respect to the execution or delivery of the Amendment Documents, which
obligations of the Borrower shall survive any termination of the Credit Agreement. 

    Section 11.  Headings.  The headings of various sections of this Amendment
have been inserted for reference only and shall not be deemed to be a part of this Amendment. 

    Section 12.  Counterparts.  The Amendment Documents may be executed in
several counterparts as deemed necessary or convenient, each of which, when so executed, shall be deemed an original, provided that all such counterparts shall be regarded as one and the same
document, and either party to the
Amendment Documents may execute any such agreement by executing a counterpart of such agreement. 

    Section 13.  Governing Law.  THE AMENDMENT
DOCUMENTS SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF MINNESOTA, WITHOUT GIVING EFFECT TO CONFLICT OF LAW PRINCIPLES THEREOF, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS,
THEIR HOLDING COMPANIES AND THEIR AFFILIATES.

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    IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the date and year first above written. 

	BORROWER:	 	HEALTH RISK MANAGEMENT, INC.
	 

 	 
 	 

By:	 
 	 

 
	 	 	 	 	

	 

 	 
 	 

Title:	 
 	 

 
	 	 	 	 	

	 

BANK:	 
 	 

U.S. BANK NATIONAL ASSOCIATION
	 

 	 
 	 

By:	 
 	 

 
	 	 	 	 	

	 

 	 
 	 

Title:	 
 	 

 
	 	 	 	 	

5<PAGE>

                                                                  EXHIBIT 10.40

                      FIRST AMENDMENT TO CREDIT AGREEMENT

     THIS FIRST AMENDMENT TO CREDIT AGREEMENT (the "Amendment"), dated and
effective as of December 31, 1999, is between PEREGRINE SYSTEMS, INC.
("Borrower"), a Delaware corporation, each of the banks or other lending
institutions which is a party hereto (individually, each a "LENDER", and
collectively the "LENDERS") and BANK OF AMERICA, N.A., formerly known as
NationsBank, N.A., as administrative agent for itself and the other Lenders (in
such capacity herein, the "ADMINISTRATIVE AGENT").

                                   RECITALS:

     A. Borrower, Administrative Agent, and the Lenders have entered into
that certain Credit Agreement dated as of July 30, 1999 (as amended,
restated, or modified from time to time, the "AGREEMENT").

     B. Borrower has requested that the Agreement be amended in certain
respects, and Administrative Agent and the Lenders are willing to comply with
such request subject to the terms and provisions of this Amendment.

     NOW, THEREFORE, in consideration of the premises herein contained and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

                                   ARTICLE 1

                                  DEFINITIONS

     Section 1.1 DEFINITIONS. Capitalized terms used in this Amendment, to the
extent not otherwise defined herein, shall have the same meanings as in the
Agreement, as amended hereby.

                                   ARTICLE 2

                                   AMENDMENTS

     Section 2.1 AMENDMENT TO SECTION 10.8. Section 10.8(a) of the Agreement is
hereby amended and restated in its entirety as follows:

                  (a) any of its Receivables, provided that Borrower or any
     other Loan Party may sell up to thirty percent (30%) of its Receivables
     in any Fiscal Quarter; PROVIDED, FURTHER, that Borrower or any other
     Loan Party may sell up to forty percent (40%) of its Receivables in any
     Fiscal Quarter if, on a pro forma basis, the Borrower would have
     satisfied SECTION 11.3 of this Agreement for the prior Fiscal Quarter
     had such Receivables been sold in such prior Fiscal Quarter.

FIRST AMENDMENT TO CREDIT AGREEMENT, Page 1

<PAGE>

                                   ARTICLE 3

                              CONDITIONS PRECEDENT

         Section 3.1 CONDITIONS. The effectiveness of this Amendment is subject
to the satisfaction of the following conditions precedent:

                  (a) The representations and warranties contained herein and in
         all other Loan Documents, as amended hereby, shall be true and correct
         in all material respects as of the date hereof as if made on the date
         hereof, except for such representations and warranties limited by their
         terms to a specific date;

                  (b) No Default or Event of Default shall have occurred and be
         continuing;

                  (c) Borrower and the Lenders shall have delivered to the
         Administrative Agent an executed original copy of this Amendment;

                  (d) All proceedings taken in connection with the transactions
         contemplated by this Amendment and all documentation and other legal
         matters incident thereto shall be satisfactory to the Administrative
         Agent.

                                   ARTICLE 4

                 RATIFICATIONS, REPRESENTATIONS AND WARRANTIES

         Section 4.1 RATIFICATIONS. The terms and provisions set forth in this
Amendment shall modify and supersede all inconsistent terms and provisions set
forth in the Agreement and except as expressly modified and superseded by this
Amendment, the terms and provisions of the Agreement and other Loan Documents
are ratified and confirmed and shall continue in full force and effect.
Borrower, Administrative Agent and the Lenders agree that the Agreement as
amended hereby and the other Loan Documents shall continue to be legal, valid,
binding and enforceable in accordance with their respective terms.

         Section 4.2 REPRESENTATIONS AND WARRANTIES. Borrower hereby
represents and warrants to Administrative Agent and the Lenders that (i) the
execution, delivery and performance of this Amendment and any and all other
Loan Documents executed and/or delivered in connection herewith have been
authorized by all requisite action on the part of Borrower and will not
violate the articles of incorporation or bylaws of Borrower; (ii) the
representations and warranties contained in the Agreement, as amended hereby,
and any other Loan Document, are true and correct on and as of the date
hereof as though made on and as of the date hereof (except to the extent that
such representations and warranties were expressly, in the Agreement, made
only in reference to a specific date); (iii) after giving effect to this
Amendment, no Default or Event of Default has occurred and

FIRST AMENDMENT TO CREDIT AGREEMENT, Page 2

<PAGE>

is continuing; and (iv) Borrower is in full compliance with all covenants and
agreements contained in the Agreement, as amended hereby, and the other Loan
Documents.

                                   ARTICLE 5

                                 MISCELLANEOUS

         Section 5.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made in this Amendment or any other Loan Document
including any Loan Document furnished in connection with this Amendment shall
survive the execution and delivery of this Amendment and the other Loan
Documents, and no investigation by Administrative Agent or any Lender shall
affect the representations and warranties or the right of Administrative Agent
or any Lender to rely upon them.

         Section 5.2 REFERENCE TO AGREEMENT. Each of the Loan Documents,
including the Agreement and any and all other agreements, documents, or
instruments now or hereafter executed and delivered pursuant to the terms
hereof or pursuant to the terms of the Agreement as amended hereby, are
hereby amended so that any reference in such Loan Documents to the Agreement
shall mean a reference to the Agreement as amended hereby.

         Section 5.3 EXPENSES OF ADMINISTRATIVE AGENT. As provided in the
Agreement, Borrower agrees to pay on demand all reasonable costs and expenses
incurred by Administrative Agent in connection with the preparation,
negotiation, and execution of this Amendment and the other Loan Documents
executed pursuant hereto.

         Section 5.4 SEVERABILITY. Any provision of this Amendment held by a
court of competent jurisdiction to be invalid or unenforceable shall not impair
or invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.

         Section 5.5 APPLICABLE LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA AND THE
APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.

         Section 5.6 SUCCESSORS AND ASSIGNS. This Amendment is binding upon and
shall inure to the benefit of Administrative Agent, the Lenders, and Borrower
and their respective successors and assigns, except Borrower may not assign or
transfer any of its rights or obligations hereunder without the prior written
consent of all the Lenders.

         Section 5.7 COUNTERPARTS. This Amendment may be executed in one or more
counterparts, and on telecopy counterparts each of which when so executed shall
be deemed to be an original, but all of which when taken together shall
constitute one and the same agreement.

         Section 5.8 EFFECT OF WAIVER. No consent or waiver, express or implied,
by Administrative Agent or any Lender to or for any breach of or deviation from
any covenant, condition or duty by

FIRST AMENDMENT TO CREDIT AGREEMENT, Page 3

<PAGE>

Borrower or any Loan Party shall be deemed a consent or waiver to or of any
other breach of the same or any covenant, condition or duty.

         Section 5.9 HEADINGS. The headings, captions, and arrangements used in
this Amendment are for convenience only and shall not affect the interpretation
of this Amendment.

         Section 5.10 ENTIRE AGREEMENT. THIS AMENDMENT AND ALL OTHER
INSTRUMENTS, DOCUMENTS AND AGREEMENTS EXECUTED AND DELIVERED IN CONNECTION WITH
THIS AMENDMENT EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO AND
SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS AND
UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THIS AMENDMENT, AND MAY NOT
BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT
ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO ORAL
AGREEMENTS AMONG THE PARTIES HERETO.

                  [remainder of page intentionally left blank]

FIRST AMENDMENT TO CREDIT AGREEMENT, Page 4

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Amendment effective as of the date first written above.

BORROWER:                        PEREGRINE SYSTEMS, INC.

                                 By:
                                     -----------------------------------------

                                 Name:
                                      ----------------------------------------

                                 Title:
                                       ---------------------------------------

ADMINISTRATIVE AGENT:            BANK OF AMERICA, N.A.,
                                 as Administrative Agent

                                 By:
                                     -----------------------------------------

                                 Name:
                                      ----------------------------------------

                                 Title:
                                       ---------------------------------------

LENDERS                          BANK OF AMERICA, N.A.,
                                 as Lenders

                                 By:
                                     ------------------------------------------

                                 Name:
                                      -----------------------------------------

                                 Title:
                                       ----------------------------------------

                                 BANKBOSTON, N.A.,

                                 By:
                                     ------------------------------------------

                                 Name:
                                      -----------------------------------------

                                 Title:
                                       ----------------------------------------

FIRST AMENDMENT TO CREDIT AGREEMENT, Page 5
<PAGE>

                                                                  EXHIBIT 10.40

                      FIRST AMENDMENT TO CREDIT AGREEMENT

     THIS FIRST AMENDMENT TO CREDIT AGREEMENT (the "Amendment"), dated and
effective as of December 31, 1999, is between PEREGRINE SYSTEMS, INC.
("Borrower"), a Delaware corporation, each of the banks or other lending
institutions which is a party hereto (individually, each a "LENDER", and
collectively the "LENDERS") and BANK OF AMERICA, N.A., formerly known as
NationsBank, N.A., as administrative agent for itself and the other Lenders (in
such capacity herein, the "ADMINISTRATIVE AGENT").

                                   RECITALS:

     A. Borrower, Administrative Agent, and the Lenders have entered into
that certain Credit Agreement dated as of July 30, 1999 (as amended,
restated, or modified from time to time, the "AGREEMENT").

     B. Borrower has requested that the Agreement be amended in certain
respects, and Administrative Agent and the Lenders are willing to comply with
such request subject to the terms and provisions of this Amendment.

     NOW, THEREFORE, in consideration of the premises herein contained and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

                                   ARTICLE 1

                                  DEFINITIONS

     Section 1.1 DEFINITIONS. Capitalized terms used in this Amendment, to the
extent not otherwise defined herein, shall have the same meanings as in the
Agreement, as amended hereby.

                                   ARTICLE 2

                                   AMENDMENTS

     Section 2.1 AMENDMENT TO SECTION 10.8. Section 10.8(a) of the Agreement is
hereby amended and restated in its entirety as follows:

                  (a) any of its Receivables, provided that Borrower or any
     other Loan Party may sell up to thirty percent (30%) of its Receivables
     in any Fiscal Quarter; PROVIDED, FURTHER, that Borrower or any other
     Loan Party may sell up to forty percent (40%) of its Receivables in any
     Fiscal Quarter if, on a pro forma basis, the Borrower would have
     satisfied SECTION 11.3 of this Agreement for the prior Fiscal Quarter
     had such Receivables been sold in such prior Fiscal Quarter.

FIRST AMENDMENT TO CREDIT AGREEMENT, Page 1

<PAGE>

                                   ARTICLE 3

                              CONDITIONS PRECEDENT

         Section 3.1 CONDITIONS. The effectiveness of this Amendment is subject
to the satisfaction of the following conditions precedent:

                  (a) The representations and warranties contained herein and in
         all other Loan Documents, as amended hereby, shall be true and correct
         in all material respects as of the date hereof as if made on the date
         hereof, except for such representations and warranties limited by their
         terms to a specific date;

                  (b) No Default or Event of Default shall have occurred and be
         continuing;

                  (c) Borrower and the Lenders shall have delivered to the
         Administrative Agent an executed original copy of this Amendment;

                  (d) All proceedings taken in connection with the transactions
         contemplated by this Amendment and all documentation and other legal
         matters incident thereto shall be satisfactory to the Administrative
         Agent.

                                   ARTICLE 4

                 RATIFICATIONS, REPRESENTATIONS AND WARRANTIES

         Section 4.1 RATIFICATIONS. The terms and provisions set forth in this
Amendment shall modify and supersede all inconsistent terms and provisions set
forth in the Agreement and except as expressly modified and superseded by this
Amendment, the terms and provisions of the Agreement and other Loan Documents
are ratified and confirmed and shall continue in full force and effect.
Borrower, Administrative Agent and the Lenders agree that the Agreement as
amended hereby and the other Loan Documents shall continue to be legal, valid,
binding and enforceable in accordance with their respective terms.

         Section 4.2 REPRESENTATIONS AND WARRANTIES. Borrower hereby
represents and warrants to Administrative Agent and the Lenders that (i) the
execution, delivery and performance of this Amendment and any and all other
Loan Documents executed and/or delivered in connection herewith have been
authorized by all requisite action on the part of Borrower and will not
violate the articles of incorporation or bylaws of Borrower; (ii) the
representations and warranties contained in the Agreement, as amended hereby,
and any other Loan Document, are true and correct on and as of the date
hereof as though made on and as of the date hereof (except to the extent that
such representations and warranties were expressly, in the Agreement, made
only in reference to a specific date); (iii) after giving effect to this
Amendment, no Default or Event of Default has occurred and

FIRST AMENDMENT TO CREDIT AGREEMENT, Page 2

<PAGE>

is continuing; and (iv) Borrower is in full compliance with all covenants and
agreements contained in the Agreement, as amended hereby, and the other Loan
Documents.

                                   ARTICLE 5

                                 MISCELLANEOUS

         Section 5.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made in this Amendment or any other Loan Document
including any Loan Document furnished in connection with this Amendment shall
survive the execution and delivery of this Amendment and the other Loan
Documents, and no investigation by Administrative Agent or any Lender shall
affect the representations and warranties or the right of Administrative Agent
or any Lender to rely upon them.

         Section 5.2 REFERENCE TO AGREEMENT. Each of the Loan Documents,
including the Agreement and any and all other agreements, documents, or
instruments now or hereafter executed and delivered pursuant to the terms
hereof or pursuant to the terms of the Agreement as amended hereby, are
hereby amended so that any reference in such Loan Documents to the Agreement
shall mean a reference to the Agreement as amended hereby.

         Section 5.3 EXPENSES OF ADMINISTRATIVE AGENT. As provided in the
Agreement, Borrower agrees to pay on demand all reasonable costs and expenses
incurred by Administrative Agent in connection with the preparation,
negotiation, and execution of this Amendment and the other Loan Documents
executed pursuant hereto.

         Section 5.4 SEVERABILITY. Any provision of this Amendment held by a
court of competent jurisdiction to be invalid or unenforceable shall not impair
or invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.

         Section 5.5 APPLICABLE LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA AND THE
APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.

         Section 5.6 SUCCESSORS AND ASSIGNS. This Amendment is binding upon and
shall inure to the benefit of Administrative Agent, the Lenders, and Borrower
and their respective successors and assigns, except Borrower may not assign or
transfer any of its rights or obligations hereunder without the prior written
consent of all the Lenders.

         Section 5.7 COUNTERPARTS. This Amendment may be executed in one or more
counterparts, and on telecopy counterparts each of which when so executed shall
be deemed to be an original, but all of which when taken together shall
constitute one and the same agreement.

         Section 5.8 EFFECT OF WAIVER. No consent or waiver, express or implied,
by Administrative Agent or any Lender to or for any breach of or deviation from
any covenant, condition or duty by

FIRST AMENDMENT TO CREDIT AGREEMENT, Page 3

<PAGE>

Borrower or any Loan Party shall be deemed a consent or waiver to or of any
other breach of the same or any covenant, condition or duty.

         Section 5.9 HEADINGS. The headings, captions, and arrangements used in
this Amendment are for convenience only and shall not affect the interpretation
of this Amendment.

         Section 5.10 ENTIRE AGREEMENT. THIS AMENDMENT AND ALL OTHER
INSTRUMENTS, DOCUMENTS AND AGREEMENTS EXECUTED AND DELIVERED IN CONNECTION WITH
THIS AMENDMENT EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO AND
SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS AND
UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THIS AMENDMENT, AND MAY NOT
BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT
ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO ORAL
AGREEMENTS AMONG THE PARTIES HERETO.

                  [remainder of page intentionally left blank]

FIRST AMENDMENT TO CREDIT AGREEMENT, Page 4

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Amendment effective as of the date first written above.

BORROWER:                        PEREGRINE SYSTEMS, INC.

                                 By:  /s/ MATT GLESS
                                     -----------------------------------------

                                 Name:    Matt Gless
                                      ----------------------------------------

                                 Title:   VP Finance
                                       ---------------------------------------

ADMINISTRATIVE AGENT:            BANK OF AMERICA, N.A.,
                                 as Administrative Agent

                                 By:  /s/ MATTHEW A. GABEL
                                     -----------------------------------------

                                 Name:    Matthew A. Gabel
                                      ----------------------------------------

                                 Title:   Vice President
                                       ---------------------------------------

LENDERS                          BANK OF AMERICA, N.A.,
                                 as Lenders

                                 By:  /s/ Signature
                                     ------------------------------------------

                                 Name:
                                      -----------------------------------------

                                 Title:    Vice President
                                       ----------------------------------------

                                 BANKBOSTON, N.A.,

                                 By:  /s/ JOHN B. DESMOND
                                     ------------------------------------------

                                 Name:    John B. Desmond
                                      -----------------------------------------

                                 Title:   Vice President
                                       ----------------------------------------

FIRST AMENDMENT TO CREDIT AGREEMENT, Page 5

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