Document:

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                                                                  EXECUTION COPY
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                                  $287,500,000

                 5 1/2% CONVERTIBLE SUBORDINATED NOTES DUE 2007

                          REGISTRATION RIGHTS AGREEMENT

                          Dated as of November 14, 2000

                                  by and among

                             PEREGRINE SYSTEMS, INC.

                                       and

                         BANC OF AMERICA SECURITIES LLC

                            BEAR, STEARNS & CO. INC.

                       PRUDENTIAL SECURITIES INCORPORATED

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     This Registration Rights Agreement (this "AGREEMENT") is made and entered
into as of November 14, 2000 by and among Peregrine Systems, Inc., a Delaware
corporation (the "COMPANY"), and Banc of America Securities LLC, Bear, Stearns &
Co. Inc., and Prudential Securities Incorporated (each an "INITIAL PURCHASER"
and collectively, the "INITIAL PURCHASERS"). The Company proposes to issue and
sell to the Initial Purchasers (the "INITIAL PLACEMENT") $250,000,000 in
aggregate principal amount of its 5 1/2% Convertible Notes due 2007 (the "FIRM
CONVERTIBLE NOTES"). The Company also proposes to issue and sell to the Initial
Purchasers not more than $37,500,000 in agregate principal amount of its 5 1/2%
Convertible Subordinated Notes due 2007 (the "ADDITIONAL CONVERTIBLE NOTES" and,
together with the Firm Convertible Notes, the "NOTES"). As an inducement to the
Initial Purchasers to enter into the purchase agreement, dated as of November 9,
2000 (the "PURCHASE AGREEMENT"), and in satisfaction of a condition to the
Initial Purchasers' obligations thereunder, the Company agrees with the Initial
Purchasers, (i) for the benefit of the Initial Purchasers and (ii) for the
benefit of the holders from time to time of the Notes whose names appear in the
register maintained by the Registrar in accordance with the provisions of the
Indenture (as defined in Section 1 hereof) (including the Initial Purchasers),
as follows:

SECTION 1         DEFINITIONS

     Capitalized terms used herein without definition shall have their
respective meanings set forth in the Purchase Agreement. As used in this
Agreement, the following capitalized defined terms shall have the following
meanings:

     "ACT" means the Securities Act of 1933, as amended, and the rules and
regulations of the Commission promulgated thereunder.

     "AFFILIATE" of any specified person means any other person which, directly
or indirectly, is in control of, is controlled by, or is under common control
with, such specified person. For purposes of this definition, control of a
person means the power, direct or indirect, to direct or cause the direction of
the management and policies of such person whether by contract or otherwise; and
the terms "controlling" and "controlled" have meanings correlative to the
foregoing.

     "AGREEMENT" means this Registration Rights Agreement.

     "CLOSING" has the meaning set forth in Section 3(a) hereof.

     "COMMISSION" means the Securities and Exchange Commission.

     "COMMON STOCK" means the common stock of the Company, par value $0.001 per
share, issuable upon the conversion of the Notes

     "DAMAGES PAYMENT DATE" means each Interest Payment Date. For purposes of
this Agreement, if no Notes are outstanding, "Damages Payment Date" shall mean
each May 15 and November 15.

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     "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the Commission promulgated thereunder.

     "HOLDER" has the meaning set forth in Section 2 hereof.

     "INDENTURE" means the Indenture, dated as of November 14, 2000, between the
Company and the Trustee, relating to the Notes, as the same may be amended from
time to time in accordance with the terms thereof.

     "INITIAL PLACEMENT" has the meaning set forth in the preamble hereto.

     "INTEREST PAYMENT DATE" has the meaning set forth in the Indenture.

     "LOSSES" has the meaning set forth in Section 7(d) hereof.

     "MAJORITY HOLDERS" means the Holders of a majority of the aggregate
principal amount of securities registered under a Shelf Registration Statement.

     "PROSPECTUS" means the prospectus included in any Shelf Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A under the Act), as amended or
supplemented by any prospectus supplement, with respect to the terms of the
offering of any portion of Transfer Restricted Securities covered by such Shelf
Registration Statement, and all amendments and supplements to the Prospectus,
including post-effective amendments and including all information incorporated
by reference into such Prospectus.

     "REGISTRATION DEFAULT" has the meaning set forth in Section 3(d).

     "SHELF REGISTRATION" means a registration effected pursuant to Section 3
hereof.

     "SHELF REGISTRATION PERIOD" has the meaning set forth in Section 3(b)
hereof.

     "SHELF REGISTRATION STATEMENT" means a "shelf" registration statement of
the Company pursuant to the provisions of Section 3 hereof that covers some or
all of the Transfer Restricted Securities as applicable, on an appropriate form
under Rule 415 under the Act, or any similar rule that may be adopted by the
Commission, amendments and supplements to such registration statement, including
post-effective amendments, and in each case, including the Prospectus contained
therein, all exhibits thereto and all material incorporated therein by
reference.

     "SPECIAL INTEREST" has the meaning set forth in Section 3(d) hereof.

     "SUPPLEMENTAL DELAY PERIOD" means any period commencing on the date of
receipt by a Holder of Transfer Restricted Securities of any notice from the
Company of the existence of any fact or event of the kind described in Section
4(b)(2) hereof and ending on the date of receipt by such Holder of an amended or
supplemented Shelf Registration Statement or Prospectus, as contemplated by
Section 4(h) hereof, or the receipt by such Holder of written notice from the

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Company (the "ADVICE") that the use of the Prospectus may be resumed, and the
receipt of copies of any additional or supplemental filings that are
incorporated by reference in the Prospectus.

     "TRANSFER RESTRICTED SECURITIES" means each Note and the Common Stock
issuable upon conversion thereof until (i) the date on which such Note or the
Common Stock issuable upon conversion thereof has been effectively registered
under the Act and disposed of in accordance with the Shelf Registration
Statement, (ii) the date on which such Note or Common Stock issuable upon
conversion thereof is distributed to the public pursuant to Rule 144 under the
Act (or any similar provision then in effect) or is salable pursuant to Rule
144(k) under the Act or (iii) the date on which such Note or the Common Stock
issuable upon conversion thereof ceases to be outstanding.

     "TRUSTEE" means the trustee with respect to the Notes under the Indenture.

     "UNDERWRITER" means any underwriter of Notes in connection with an offering
thereof under a Shelf Registration Statement.

SECTION 2                  HOLDERS

     A person is deemed to be a holder of Transfer Restricted Securities (each,
a "HOLDER") whenever such person becomes the registered holder of such Transfer
Restricted Securities and includes broker-dealers that hold Transfer Restricted
Securities (i) as a result of market making activities and other trading
activities and (ii) which were acquired directly from the Company or an
Affiliate of the Company.

SECTION 3                  SHELF REGISTRATION

     (a) The Company shall within 90 days of the date of the first closing of
the sale of the Notes (the "CLOSING"), use commercially reasonable efforts to
file with the Commission, and thereafter shall use commercially reasonable
efforts to cause to be declared effective under the Act on or prior to 180 days
after the Closing, a Shelf Registration Statement relating to the offer and sale
of the Transfer Restricted Securities by the Holders from time to time in
accordance with the methods of distribution elected by such Holders and set
forth in such Shelf Registration Statement.

     (b) The Company shall use commercially reasonable efforts to keep the Shelf
Registration Statement continuously effective in order to permit the Prospectus
forming part thereof to be usable by Holders for a period of two years from the
Closing or such shorter period that will terminate when (i) all the Transfer
Restricted Securities covered by the Shelf Registration Statement have been sold
pursuant to the Shelf Registration Statement, (ii) the date on which, in the
opinion of counsel to the Company, all of the Transfer Restricted Securities
then held by the Holders may be sold without restrictions by such Holders in the
public United States securities markets in the absence of a registration
statement covering such sales or (iii) the date on which there ceases to be
outstanding any Transfer Restricted Securities (in any such case, such period
being called the "SHELF REGISTRATION PERIOD").

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     (c) Upon (i) the occurrence of any event or the existence of any fact as a
result of which the Shelf Registration Statement shall contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading, or
any Prospectus shall contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, or (ii) the existence of any pending corporate development that,
in the reasonable discretion of the Company, makes it appropriate to suspend the
availability of the Shelf Registration Statement and related Prospectus, or
(iii) the issuance by the Commission of a stop order suspending the
effectiveness of the Shelf Registration Statement or the initiation of
proceedings with respect to the Shelf Registration Statement, the Company shall
be entitled to suspend the availability of the Shelf Registration Statement or
any Prospectus during a Supplemental Delay Period, without incurring or accruing
any obligation to pay Special Interest, no more than one (1) time in any three
month period or four (4) times in any twelve month period, and any Supplemental
Delay Period shall, without incurring any obligation to pay Special Interest,
not exceed 30 days; provided, however, that in the case of corporate development
relating to an acquisition or a probable acquisition or financing,
recapitalization, business combination or other similar transaction, the Company
may, without incurring any obligation to pay Special Interest, deliver to the
Holders a second notice to the effect set forth above, which shall have the
effect of extending the Supplemental Delay Period by up to an additional 30
days, or such shorter period of time as is specified in such second notice;
provided, however, that the aggregate duration of any Supplemental Delay Periods
shall not exceed 30 days in any period of three consecutive months (or 60 days
in any period of three consecutive months in the event the Company has delivered
a second notice as required above) or 90 days in any period of twelve
consecutive months.

     (d) If:

          (i) the Shelf Registration Statement is not filed with the Commission
     on or prior to 90 days after the Closing;

          (ii) the Shelf Registration Statement has not been declared effective
     by the Commission on or prior to 180 days after the Closing; or

          (iii) the Shelf Registration Statement is filed and declared effective
     but, during the Shelf Registration Period, shall thereafter cease to be
     effective or fail to be usable for its intended purpose or if the Company
     suspends the use of the Prospectus forming a part thereof; except under the
     circumstances and for the time periods set forth in Section 3(c) above,

(each  such  event  referred  to in  foregoing  clauses  (i)  through  (iii),  a
"REGISTRATION  DEFAULT"),  the Company hereby agrees to pay additional  interest
("SPECIAL INTEREST") with respect to the Transfer Restricted Securities from and
including the day following the Registration Default to but excluding the day on
which the Registration Default has been cured, which shall accrue as follows:

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                           (A) in respect of the Notes, to each Holder of Notes
                  at the rate of an additional 0.5% per year of the principal
                  amount of the Notes held by such Holders; and

                           (B) in respect of any shares of Common Stock issued
                  upon conversion of Notes, to each holder of such shares of
                  Common Stock at the rate of an additional 0.5% per year of the
                  principal amount of the Notes formerly held by such holders
                  that were converted into such shares of Common Stock.

         (e) All accrued Special Interest shall be paid in arrears to Holders by
the Company on each Damages Payment Date by wire transfer of immediately
available funds pursuant to the notice requirements of Section 4(l). Following
the cure of all Registration Defaults relating to any particular Note or share
of Common Stock issued upon conversion of Notes, the accrual of Special Interest
with respect to such Note or such share of Common Stock shall cease.

SECTION 4                  REGISTRATION PROCEDURES

         In  connection  with any Shelf  Registration  Statement,  the following
provisions shall apply:

     (a) The Company shall ensure that (i) any Shelf Registration Statement and
any amendment thereto and any Prospectus forming part thereof and any amendment
or supplement thereto complies in all material respects with the Act and the
rules and regulations thereunder, (ii) any Shelf Registration Statement and any
amendment thereto does not, when it becomes effective, contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading and
(iii) except as permitted by Section 3, any Prospectus forming part of any Shelf
Registration Statement, and any amendment or supplement to such Prospectus, does
not include an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements, in the light of the
circumstances under which they were made, not misleading.

     (b) (1) The Company shall advise the Initial Purchasers and the Holders of
Transfer Restricted Securities named in any Shelf Registration Statement that
have provided in writing to the Company a telephone or facsimile number and
address for notices, and, if requested by the Initial Purchasers or any such
Holder, confirm such advice in writing when a Shelf Registration Statement and
any amendment thereto has been filed with the Commission and when the Shelf
Registration Statement or any post-effective amendment thereto has become
effective.

     (2) The Company shall advise the Initial Purchasers and the Holders of
Transfer Restricted Securities named in any Shelf Registration Statement, which
have provided in writing to the Company a telephone or facsimile number and
address for notices, and, if requested by the Initial Purchasers or any such
Holder, confirm such advice in writing:

          (i) of any request by the Commission for amendments or supplements to
     the Shelf Registration Statement or the Prospectus included therein or for
     additional information;

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          (ii) of the initiation by the Commission of proceedings relating to a
     stop order suspending the effectiveness of the Shelf Registration
     Statement;

          (iii) of the issuance by the Commission of any stop order suspending
     the effectiveness of the Shelf Registration Statement;

          (iv) of the receipt by the Company of any notification with respect to
     the suspension of the qualification of the securities included therein for
     sale in any jurisdiction or the initiation or threatening of any proceeding
     for such purpose; and

          (v) of the existence of any fact and the happening of any event
     (including, without limitation, pending negotiations relating to, or the
     consummation of, a transaction or the occurrence of any event which would
     require additional disclosure of material non-public information by the
     Company in the Shelf Registration Statement as to which the Company has a
     bona fide business purpose for preserving confidential or which renders the
     Company unable to comply with Commission requirements) that, in the opinion
     of the Company, makes untrue any statement of a material fact made in its
     Shelf Registration Statement, the Prospectus or any amendment or supplement
     thereto or any document incorporated by reference therein or requires the
     making of any changes in the Shelf Registration Statement or the Prospectus
     so that, as of such date, the statements therein are not misleading and do
     not omit to state a material fact required to be stated therein or
     necessary to make the statements therein (in the case of the Prospectus, in
     light of the circumstances under which they were made) not misleading.

         Such advice may be accompanied by an instruction to suspend the use of
the Prospectus until the requisite changes have been made.

     (c) The Company shall use commercially reasonable efforts to obtain the
withdrawal of any order suspending the effectiveness of any Shelf Registration
Statement at the earliest possible time.

     (d) The Company shall use commercially reasonable efforts to furnish to
each selling Holder named in any Shelf Registration Statement who so requests in
writing and who has provided to the Company an address for notices, without
charge, at least one conformed copy of such Shelf Registration Statement and any
post-effective amendment thereto, including financial statements and, if the
Holder so requests in writing, all exhibits and schedules (including those
incorporated by reference).

     (e) The Company shall, during the Shelf Registration Period, deliver to
each Holder of Transfer Restricted Securities named in any Shelf Registration
Statement and who has provided to the Company an address for notices, without
charge, as many copies of the Prospectus (including each preliminary Prospectus)
contained in such Shelf Registration Statement and any amendment or supplement
thereto as such Holder may reasonably request; subject to any notice by the
Company in accordance with Section 5(b) hereof, the Company consents to the use
of the Prospectus or any amendment or supplement thereto by each of the selling
Holders for the purposes of offering and resale of the Transfer Restricted
Securities

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covered by the Prospectus in accordance with the applicable regulations
promulgated under the Act and any restrictions set forth in the Prospectus.

     (f) Prior to any offering of Transfer Restricted Securities pursuant to any
Shelf Registration Statement, the Company shall register or qualify or cooperate
with the Holders of Transfer Restricted Securities named therein and their
respective counsel in connection with the registration or qualification of such
Transfer Restricted Securities for offer and sale under the securities or blue
sky laws of such jurisdictions of the United States as any such Holders
reasonably request in writing not later than the date that is five business days
prior to the date upon which this Agreement specifies that the Shelf
Registration Statement shall become effective; PROVIDED, HOWEVER, that the
Company will not be required to qualify generally to do business in any
jurisdiction where it is not then so qualified or to take any action which would
subject it to general or unlimited service of process or to taxation in any such
jurisdiction where it is not then so subject.

     (g) The Company shall cooperate with the Holders of Transfer Restricted
Securities to facilitate the timely preparation and delivery of certificates
representing Transfer Restricted Securities to be sold pursuant to any Shelf
Registration Statement free of any restrictive legends and in such denominations
and registered in such names as Holders may request in writing.

     (h) Except to the extent otherwise permitted under Section 3, upon the
occurrence of any event contemplated by paragraph 4(b)(2)(v) hereof, the Company
shall promptly prepare a post-effective amendment to any Shelf Registration
Statement or an amendment or supplement to the related Prospectus or file any
other required document so that as thereafter delivered to purchasers of the
Transfer Restricted Securities covered thereby, the Prospectus will not include
an untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.

     (i) Not later than the effective date of any such Shelf Registration
Statement hereunder, the Company shall cause to be provided a CUSIP number for
the Notes registered under such Shelf Registration Statement, and provide the
applicable trustee with certificates for such Notes in a form eligible for
deposit with The Depository Trust Company.

     (j) The Company shall make generally available to its security holders in a
regular filing on Form 10-Q or 10-K an earnings statement satisfying the
provisions of Rule 158 (which need not be audited) for the twelve-month period
commencing after effectiveness of the Shelf Registration Statement.

     (k) The Company shall cause the Indenture to be qualified under the Trust
Indenture Act prior to the effectiveness of the Shelf Registration Statement.

     (l) The Company may require each Holder of Transfer Restricted Securities,
which are to be sold pursuant to any Shelf Registration Statement, to furnish to
the Company within 20 business days after written request for such information
has been made by the Company, such information regarding the Holder and the
distribution of such securities as the Company may from time to time reasonably
require for inclusion in such Shelf Registration Statement and such

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other information as may be necessary or advisable in the reasonable opinion of
the Company and its counsel, in connection with such Shelf Registration
Statement. No Holder of Transfer Restricted Securities shall be entitled to the
benefit of any Special Interest (as set forth in the Notes) under the Indenture
and the Notes or be entitled to use the Prospectus unless and until such Holder
shall have furnished the information required by this Section 4(l) and all such
information required to be disclosed in order to make the information previously
furnished to the Company by such Holder not materially misleading.

     (m) The Company shall, if requested, promptly incorporate in a Prospectus
supplement or post-effective amendment to a Shelf Registration Statement, such
information as the Majority Holders reasonably agree should be included therein
in order to effect their distribution of the Notes and shall make all required
filings of such Prospectus supplement or post-effective amendment as soon as
notified of the matters to be incorporated in such Prospectus supplement or
post-effective amendment; PROVIDED, HOWEVER, that the Company shall not be
required to take any action pursuant to this Section 4(m) that would, in the
opinion of counsel for the Company, violate applicable law or to include
information the disclosure of which at the time would have a material adverse
effect on the business or operations of the Company and/or its subsidiaries, as
determined in good faith by the Company.

     (n) In the case of any Shelf Registration Statement, the Company shall:

          (i) make available at reasonable times prior to the effectiveness of
     the related Shelf Registration Statement for inspection by representatives
     of the Holders of Transfer Restricted Securities to be registered
     thereunder and any attorney, accountant or other agent retained by such
     Holders, at the office where normally kept during normal business hours,
     all financial and other records, pertinent corporate documents and
     properties of the Company and its subsidiaries, and cause the Company's
     officers, directors and employees to supply all relevant information
     reasonably requested by the Holders' attorneys, accountants or other agents
     in connection with any such Shelf Registration Statement as is customary
     for similar due diligence examinations; PROVIDED, HOWEVER, that the
     foregoing inspection and information gathering shall be coordinated by one
     counsel designated by the Holders and that such persons shall first agree
     in writing with the Company that any information that is designated in
     writing by the Company, in good faith, as confidential at the time of
     delivery of such information shall be kept confidential by such person,
     unless such disclosure is made in connection with a court proceeding or
     required by law, or such information becomes available to the public
     generally or through a third party without an accompanying obligation of
     confidentiality; and

          (ii) upon the effectiveness of such Shelf Registration Statement and
     the effectiveness of each post-effective amendment thereto, deliver such
     documents and certificates as may be reasonably requested by the Majority
     Holders, including those to evidence compliance with Section 4(h).

          (iii) The Company may offer securities of the Company other than the
     Notes under the Shelf Registration Statement, except where such offer would
     conflict with the terms of the Purchase Agreement.

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SECTION 5         HOLDERS' AGREEMENTS

     Each Holder of Transfer Restricted Securities severally but not jointly, by
the acquisition of such Transfer Restricted Securities, agrees:

     (a) To furnish the information required to be furnished pursuant to Section
4(1) hereof within the time period set forth therein.

     (b) That upon receipt of a notice of the commencement of a Supplemental
Delay Period, it will keep the fact of such notice confidential, forthwith
discontinue disposition of its Transfer Restricted Securities pursuant to the
Shelf Registration Statement, and will not deliver any Prospectus forming a part
thereof until receipt of the amended or supplemented Shelf Registration
Statement or Prospectus, as applicable, as contemplated by Section 4(h) hereof,
or until receipt of the Advice.

     (c) If so directed by the Company in a notice of the commencement of a
Supplemental Delay Period, each Holder of Transfer Restricted Securities will
deliver to the Company (at the Company's expense) all copies, other than
permanent file copies then in such Holder's possession, of the Prospectus
covering the Transfer Restricted Securities.

     (d) Sales of such Transfer Restricted Securities pursuant to a Shelf
Registration Statement shall only be made in the manner set forth in such
currently effective Shelf Registration Statement and in accordance with
applicable law.

SECTION 6         REGISTRATION EXPENSES

     The Company shall bear all expenses incurred in connection with the
performance of its obligations under Sections 3 and 4 hereof and will reimburse
the Holders for the reasonable fees and disbursements of one firm or counsel
designated by the Majority Holders to act as counsel for the Holders in
connection with any Shelf Registration Statement. Notwithstanding the foregoing
or anything in this Agreement to the contrary, each Holder shall pay all
underwriting discounts and commission of any Underwriters with respect to any
Transfer Restricted Securities sold by it.

SECTION 7         INDEMNIFICATION AND CONTRIBUTION

     (a) In connection with the Shelf Registration Statement and to the extent
permitted by law, the Company agrees to indemnify and hold harmless each Holder
of Transfer Restricted Securities covered thereby (including each Initial
Purchaser), the directors, officers, employees, partners, representatives and
agents of each such Holder and each person who controls any such Holder within
the meaning of either Section 15 of the Act or Section 20 of the Exchange Act
(each such person being sometimes hereinafter referred to as an "indemnified
party") against any and all losses, claims, damages, judgments or liabilities,
joint or several, to which they or any of them may become subject under the Act,
the Exchange Act or other Federal or state statutory law or regulation, at
common law or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of, or are based upon, any untrue
statement or alleged untrue statement of a material fact contained in the Shelf
Registration Statement as originally

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filed or in any amendment thereof, or in any Prospectus, or in any amendment
thereof or supplement thereto, or arise out of, or are based upon, the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and to
reimburse each such indemnified party, as incurred, for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, judgment, liability or action; PROVIDED,
HOWEVER, that (i) the Company will not be liable in any case to the extent that
any such loss, claim, damage or liability arises out of, or is based upon, any
such untrue statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any such Holder
specifically for inclusion therein and (ii) the Company will not be liable to
any indemnified party under this indemnity agreement with respect to the Shelf
Registration Statement or Prospectus to the extent that any such loss, claim,
damage or liability of such indemnified party results solely from an untrue
statement of a material fact contained in, or the omission of a material fact
from, the Shelf Registration Statement or Prospectus, which untrue statement or
omission was corrected in an amended or supplemented Shelf Registration
Statement or Prospectus, if the person alleging such loss, claim, damage or
liability was not sent or given, at or prior to the written confirmation of such
sale, a copy of the amended or supplemented Shelf Registration Statement or
Prospectus if the Company had previously furnished copies thereof to such
indemnified party and if delivery of a prospectus is required by the Act and was
not so made. This indemnity agreement will be in addition to any liability which
the Company may otherwise have.

     (b) Each Holder of Transfer Restricted Securities covered by a Shelf
Registration Statement (including each Initial Purchaser) severally agrees to
indemnify and hold harmless (i) the Company, (ii) each of its directors, (iii)
each of its officers who signs such Shelf Registration Statement and (iv) each
person who controls the Company within the meaning of either the Act or the
Exchange Act to the same extent as the foregoing indemnity from the Company to
each such Holder, but only with reference to written information relating to
such Holder furnished to the Company by or on behalf of such Holder specifically
for inclusion in the documents referred to in the foregoing indemnity. This
indemnity agreement will be in addition to any liability which any such Holder
may otherwise have. In no event shall any Holder, its directors, officers or any
person who controls such Holder be liable or responsible for any amount in
excess of the amount by which the total amount received by such Holder with
respect to its sale of Transfer Restricted Securities pursuant to a Shelf
Registration Statement exceeds (i) the amount paid by such Holder for such
Transfer Restricted Securities and (ii) the amount of any damages that such
Holder, its directors, officers or any person who controls such Holder has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission.

     (c) Promptly after receipt by an indemnified party under this Section 7 or
notice of the commencement of any action, the indemnified party will, if a claim
in respect thereof is to be made against the indemnifying party under this
Section 7, notify the indemnifying party in writing of the commencement thereof;
but the failure to so notify the indemnifying party (i) will not relieve it from
liability under paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses and (ii) will not, in any
event, relieve the indemnifying party

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from any obligations to any indemnified party other than the indemnification
obligation provided in paragraph (a) or (b) above. The indemnifying party shall
be entitled to assume the defense of any such claim and to appoint counsel of
the indemnifying party's choice at the indemnifying party's expense to represent
the indemnified party in any action for which indemnification is sought (in
which case the indemnifying party shall not thereafter be responsible for the
fees and expenses of any separate counsel retained by the indemnified party or
parties except as set forth below); PROVIDED, HOWEVER, that such counsel shall
be reasonably satisfactory to the indemnified party. Notwithstanding the
indemnifying party's election to appoint counsel to represent the indemnified
party in an action, the indemnified party shall have the right to employ
separate counsel (including local counsel), and the indemnifying party shall
bear the reasonable fees, costs and expenses of such separate counsel (and local
counsel) if (i) the use of counsel chosen by the indemnifying party to represent
the indemnified party would present such counsel with a conflict of interest,
(ii) the actual or potential defendants in, or targets of, any such action
include both the indemnified party and the indemnifying party, and the
indemnified party reasonably concluded that there may be legal defenses
available to it and/or other indemnified parties that are different from or
additional to those available to the indemnifying party, (iii) the indemnifying
party did not employ counsel satisfactory to the indemnified party to represent
the indemnified party within a reasonable time after notice of the institution
of such action or (iv) the indemnifying party authorized the indemnified party
to employ separate counsel at the expense of the indemnifying party. The
indemnifying party shall indemnify and hold harmless the indemnified party from
and against all losses, claims, damages and liabilities by reason of any
settlement of any action (i) effected with its written consent or (ii) effected
without its written consent if the settlement is entered into more than twenty
business days after the indemnifying party shall have received a request from
the indemnified party for reimbursement for the fees and expenses of counsel (in
any case where such fees and expenses are at the expense of the indemnifying
party) and, prior to the date of such settlement, the indemnifying party shall
have failed to comply with such reimbursement request. Notwithstanding the
immediately preceding sentence, if at any time an indemnified party shall have
requested an indemnifying party to reimburse the indemnified party for fees and
expenses of counsel, an indemnifying party shall not be liable for any
settlement of the nature contemplated by the immediately preceding sentence
effected without its consent if such indemnifying party (i) reimburses such
indemnified party in accordance with such request to the extent that it
considers such request to be reasonable and (ii) provides written notice to the
indemnified party substantiating the unpaid balance as unreasonable, in each
case, prior to the date of settlement. An indemnifying party shall not, without
the prior written consent of the indemnified parties, settle or compromise or
consent to the entry of any judgment with respect to any pending or threatened
claim, action, suit or proceeding for which indemnification or contribution may
be sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action), unless such settlement, compromise
or consent includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding and does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of the indemnified party.

     (d) In the event that the indemnity provided in paragraph (a) or (b) of
this Section 7 is unavailable or insufficient to hold harmless an indemnified
party for any reason, then each applicable indemnifying party, in lieu of
indemnifying such indemnified party, shall to the extent

                                       12
<PAGE>

permitted by law have a joint and several obligation to contribute to the
aggregate losses, claims, damages and liabilities (including legal or other
expenses reasonably incurred in connection with investigating or defending same)
(collectively "LOSSES") to which such indemnified party may be subject in such
proportion as is appropriate to reflect the relative benefits received by such
indemnifying party, on the one hand, and such indemnified party, on the other
hand, from the Initial Placement and the Shelf Registration Statement that
resulted in such Losses; PROVIDED, HOWEVER, that in no case shall any Initial
Purchaser be responsible, in the aggregate, for any amount in excess of the
purchase discount or commission applicable to such Note, as set forth in Section
2 of the Purchase Agreement. If the allocation provided by the immediately
preceding sentence is unavailable for any reason, the indemnifying party and the
indemnified party shall contribute in such proportion as is appropriate to
reflect not only such relative benefits, but also the relative fault of such
indemnifying party, on the one hand, and such indemnified party, on the other
hand, in connection with the statements or omissions which resulted in such
Losses, as well as any other relevant equitable considerations. Benefits
received by the Company shall be deemed to be equal to the sum of (x) the total
net proceeds from the Initial Placement (before deducting expenses) as set forth
in Section 2 of the Purchase Agreement and (y) the total amount of additional
interest that the Company was not required to pay as a result of registering the
securities covered by the Shelf Registration Statement that resulted in such
Losses. Benefits received by the Initial Purchasers shall be deemed to be equal
to the total purchase discounts and commissions as set forth in Section 2 of the
Purchase Agreement, and benefits received by any other Holders shall be deemed
to be equal to the value of the Transfer Restricted Securities sold by such
Holders under the Shelf Registration Statement. Relative fault shall be
determined by reference to whether any alleged untrue statement or omission
relates to information provided by the indemnifying party, on the one hand, or
by the indemnified party, on the other hand. The parties agree that it would not
be just and equitable if contribution were determined by pro rata allocation or
any other method of allocation that does not take account of the equitable
considerations referred to above. Notwithstanding the provisions of this
paragraph (d), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was guilty of such fraudulent misrepresentation. For purposes of this
Section 7, each person who controls a Holder within the meaning of either the
Act or the Exchange Act and each director, officer, employee and agent of such
Holder shall have the same rights to contribution as such Holder, and each
person who controls the Company within the meaning of either the Act or the
Exchange Act, each officer of the Company who shall have signed the Shelf
Registration Statement and each director of the Company shall have the same
rights to contribution as the Company, subject in each case to the applicable
terms and conditions of this paragraph (d). The obligations of each Holder and
each Initial Purchaser hereunder are several and not joint.

     (e) The provisions of this Section 7 shall remain in full force and effect,
regardless of any investigation made by or on behalf of any Holder or the
Company or any of the officers, directors or controlling persons referred to in
Section 7 hereof, and will survive the sale by a Holder of Transfer Restricted
Securities or Exchange Notes.

SECTION 8         RULE 144A AND RULE 144

                                       13
<PAGE>

     The Company agrees with each Holder, for so long as any Transfer Restricted
Securities remain outstanding and during any period in which the Company (i) is
not subject to Section 13 or 15(d) of the Exchange Act, to make available, upon
request of any Holder, to such Holder or beneficial owner of Transfer Restricted
Securities in connection with any sale thereof and any prospective purchaser of
such Transfer Restricted Securities designated by such Holder or beneficial
owner, the information required by Rule 144A(d)(4) under the Act in order to
permit resales of such Transfer Restricted Securities pursuant to Rule 144A, and
(ii) is subject to Section 13 or 15 (d) of the Exchange Act, to make all filings
required thereby in a timely manner in order to permit resales of such Transfer
Restricted Securities pursuant to Rule 144.

SECTION 9         MISCELLANEOUS

     (a) NO INCONSISTENT AGREEMENTS. The Company has not, as of the date hereof,
entered into, nor shall it, on or after the date hereof, enter into, any
agreement with respect to its securities that would prevent the Company from
satisfying or continuing to satisfy its obligations herein or that would
otherwise conflict with the provisions hereof. Without limiting the foregoing,
the Company may from time to time grant registration rights to holders of its
securities so long as such rights do not diminish the contractual obligations of
the Company to the Holders herein.

     (b) AMENDMENTS AND WAIVERS. The provisions of this Agreement, including the
provisions of this sentence, may not be amended, qualified, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the Company has obtained the written consent of the
Holders of at least a majority of the then outstanding aggregate principal
amount of Notes; PROVIDED, HOWEVER, that with respect to any matter that
directly or indirectly adversely affects the rights of any Initial Purchaser
hereunder, the Company shall obtain the written consent of each such Initial
Purchaser against which such amendment, qualification, supplement, waiver or
consent is to be effective. Notwithstanding the foregoing (except the foregoing
proviso), a waiver or consent to depart from the provisions hereof, with respect
to a matter, which relates exclusively to the rights of Holders whose securities
are being sold pursuant to a Shelf Registration Statement and does not directly
or indirectly adversely affect the rights of other Holders, may be given by the
Majority Holders, determined on the basis of Notes being sold rather than
registered under such Shelf Registration Statement.

     (c) NOTICES. All notices and other communications provided for or permitted
hereunder shall be made in writing by hand-delivery, first-class mail, telex,
telecopier, or air courier guaranteeing overnight delivery:

          (i) if to a Holder, at the most current address given by such holder
     to the Company in accordance with the provisions of this Section 9(c),
     which address initially is, with respect to each Holder, the address of
     such Holder maintained by the registrar under the Indenture

          (ii) with a copy in like manner to Banc of America Securities LLC;

                                       14
<PAGE>

          (iii) if to the Initial Purchasers, initially at the respective
     addresses set forth in the Purchase Agreement; and

          (iv) if to the Company, initially at its address set forth in the
     Purchase Agreement.

     All such notices and communications shall be deemed to have been duly given
when received.

     Upon the date of filing of a Shelf Registration Statement notice shall be
delivered to Banc of America Securities LLC, on behalf of the Initial Purchasers
in the form attached hereto as Exhibit A.

     The Initial Purchasers or the Company by notice to the other may designate
additional or different addresses for subsequent notices or communications.

     (d) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit of,
and be binding upon, the successors and assigns of each of the parties hereto,
including, without the need for an express assignment or any consent by the
Company thereto, subsequent Holders of Notes. The Company hereby agrees to
extend the benefits of this Agreement to any Holder of Notes and any such Holder
may specifically enforce the provisions of this Agreement as if an original
party hereto.

     (e) COUNTERPARTS. This agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original, and all of which taken
together shall constitute one and the same agreement.

     (f) HEADINGS. The headings in this agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

     (g) GOVERNING LAW. This agreement shall be governed by and construed in
accordance with the internal laws of the State of New York applicable to
agreements made and to be performed in said State (without reference to the
conflict of law rules thereof).

     (h) SEVERABILITY. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and the
remaining provisions hereof shall not be in any way impaired or affected
thereby, it being intended that all of the rights and privileges of the parties
shall be enforceable to the fullest extent permitted by law.

     (i) NOTES HELD BY THE COMPANY, ETC. Whenever the consent or approval of
Holders of a specified percentage of principal amount of Notes is required
hereunder, Notes held by the Company or its Affiliates (other than subsequent
Holders of Notes if such subsequent Holders are deemed to be Affiliates solely
by reason of their holdings of such Notes) shall not be counted in determining
whether such consent or approval was given by the Holders of such required
percentage.

                                       15
<PAGE>

     (j) ENTIRE AGREEMENT. This Agreement is intended by the parties as a final
expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto with respect
to the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted with respect to the Transfer
Restricted Securities. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.

                                                   PEREGRINE SYSTEMS, INC.

                                     By: /s/ E. P. DELLER
                                      -----------------------------------------
                                     Name:  Eric Paul Deller
                                     Title: Vice President & General Counsel

                                       16
<PAGE>

BANC OF AMERICA SECURITIES LLC
BEAR, STEARNS & CO. INC.
PRUDENTIAL SECURITIES INCORPORATED

BY:      BANC OF AMERICA SECURITIES LLC

By:  /s/ ERIC RISLEY
    -------------------------------------------------
     Name:  Eric Risley
     Title: Managing Director

                                       17
<PAGE>

                                    EXHIBIT A

                               NOTICE OF FILING OF

                          SHELF REGISTRATION STATEMENT

To:      Banc of America Securities LLC

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

         New York, New York  _____

         Attention:  _______________________________________

         Fax: ______________

From:    Peregrine Systems, Inc.

         5 1/2% Convertible Subordinated Notes due 2007

Date:    _________________, 200_

         For your information only (NO ACTION REQUIRED):

Today, _______________, ____, we filed a Shelf Registration Statement with the
Securities and Exchange Commission.

                                       18<PAGE>

                    AMENDED AND RESTATED EMPLOYMENT AGREEMENT

                              RE: J. MICHAEL MOORE

         THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the "Agreement") is
entered into by and between Diversified Corporate Resources, Inc., a Texas
corporation (herein referred to as the "Company"), and J. Michael Moore
(herein referred to as the "Executive").

                              W I T N E S S E T H:

         WHEREAS, the parties hereto previously entered into that certain
Employment Agreement Re: J. Michael Moore dated as of January 1, 1997 (the
"Prior Agreement"); and

         WHEREAS, the Prior Agreement was amended by the certain First
Amendment to Employment Agreement Re: J. Michael Moore (the "First
Amendment"); and

         WHEREAS this Agreement constitutes an amendment and restatement of
the Prior Agreement as amended by the First Amendment; and

         WHEREAS, the Company desires to continue to employ the Executive and
the Executive desires to continue to be employed by the Company; and

         WHEREAS, the purpose of this document is to set forth the terms and
conditions of such employment.

         NOW THEREFORE, for and in consideration of the mutual advantages and
benefits accruing respectively to the parties hereto, the mutual promises
hereinafter made and the acts to be performed by the respective parties
hereto, the Company and the Executive do hereby contract and agree as follows:

         1. EMPLOYMENT. The Company hereby employs the Executive as the Chief
Executive Officer of the Company, and the Executive hereby accepts such
employment, to perform the duties

                                       1

<PAGE>

and render services as herein set forth. Such employment shall continue
during the term of this Agreement.

         2. TERM. Except in the case of earlier termination as herein
specifically provided, the Executive's employment with the Company pursuant
to this Agreement shall be for the period beginning June 15, 2000 and ending
December 31, 2001 (the "Termination Date").

         3. BASE COMPENSATION. As base compensation for the services of
Executive during the term hereof, the Company shall pay the Executive a
salary at an annual rate to be fixed from time to time by the Board of
Directors of the Company but in no event less than $250,000.00 plus any
additional compensation which the Board of Directors of the Company may from
time to time determine. The Executive's salary hereunder shall be paid in
equal semi-monthly installments (subject to reduction for such payroll and
withholding deductions as may be required by law), and may be paid, in whole
or in part, by one or more of the subsidiaries (the "Subsidiaries") of the
Company.

         In addition to the Executive's base salary, the Executive shall be
entitled to each of the following (at the Company's expenses unless otherwise
indicated): (a) the right to receive an annual bonus pursuant to (i) the
Executive Stock Bonus Plan adopted by the Compensation Committee of the Board
of Directors of the Company (the "Compensation Committee") on December 8,
1999 and (ii) such other bonus plan(s) which the Board of Directors of the
Company may hereafter adopt with respect to the Executive, (b) health
insurance coverage now or hereafter in effect which shall provide for payment
of health, dental and related expenses incurred during the term of this
Agreement with respect to the Executive (including long-term disability
coverage paid for the Executive), the Executive's spouse or the Executive's
children, and which shall contain such benefits and options as shall be made
available to other executives of the Company and/or the Subsidiaries, (c) the
right to

                                       2

<PAGE>

participate in any and all 401(k) plans and Section 125 plans now in effect
or hereafter adopted by the Company, (d) the right to participate in the
Executive Stock Option Plan adopted by the Compensation Committee on December
8, 1999, (e) an automobile allowance of $1,000.00 per month, (f) payment or
reimbursement of (i) an initiation fee of approximately $3,400 related to the
fee for the Executive to join a country club selected by the Executive, and
(ii) monthly dues payable with respect to such club membership in the initial
amount of $350.00 per month, and (f) the right to all fringe benefits
generally made available to other executives and/or employees of the Company.

         In addition to the foregoing, the Executive shall be entitled to (a)
such vacation leave as shall be permitted by the Company's standard policies,
or (b) if such standard policies provide for a lesser amount of vacation
leave, minimum annual vacation leave of three (3) weeks per year with full
pay, and thirty (30) days per year of sick leave with full pay (this number
of days of sick leave may be extended if the Board of Directors of the
Company approves).

         The Executive shall also be entitled to receive such fees and/or
compensation as shall be granted to the Executive by the Board of Directors
of the Company in connection with the Executive serving as a member of the
Board of Directors of the Company, and/or any and all of the subsidiaries of
the Company.

         4. DUTIES AND SERVICES. During the term of this Agreement, the
Executive agrees to (a) do his utmost to enhance and develop the best
interests and welfare of the Company, (b) give his best efforts and skill to
advancing and promoting the growth and success of the Company, and (c)
perform such duties or render such services as the Board of Directors of the
Company may, from time to time, reasonably confer upon or impose on the
Executive. It is understood that the Executive shall report directly to the
Board of Directors of the Company.

         5. TERMINATION.

                                       3

<PAGE>

                  a. The Company may terminate the Executive's employment
pursuant to this Agreement at any time for "cause" as herein defined. The
term "cause" shall mean any of the following events: (i) the Executive's
conviction or plea of guilty to a crime involving moral turpitude, (ii) any
acts of dishonesty or theft on the part of the Executive which, in the
opinion of the Board of Directors of the Company, is detrimental to the best
interests of the Company, and (iii) intentional and material violation by the
Executive of any written policy of the Board of Directors of the Company
which is not corrected within ninety (90) days after receipt by the Executive
of a detailed written explanation from the Board of Directors of the Company.
Any decision by the Board of Directors of the Company to terminate the
Executive for cause must be approved by the favorable vote of seventy-five
percent (75%) of all members of the Board of Directors of the Company
excluding the Executive.

                  b. The Company may terminate the Executive as an employee
of the Company at any time during the term of this Agreement if a majority of
all of the members of the Board of Directors of the Company approves a
resolution authorizing such action and reflecting that such action is in the
best interests of the Company. However, unless the Executive's employment is
terminated for "cause" (as herein defined), any termination of the
Executive's employment shall not terminate the Company's obligations to pay
to the Executive the severance benefits as hereinafter set forth, or to
comply with the other requirements of this Agreement.

                  c. The Executive may terminate his employment with the
Company at any time by giving ninety (90) days written notice to the Company.

                  d. The Executive's employment by the Company shall
automatically terminate on the date of the Executive's death if the Executive
dies during the term of this Agreement.

                                       4

<PAGE>

                  e. If the Executive is incapacitated by an accident,
sickness or otherwise, so as to render him mentally or physically incapable
of performing the services required of him pursuant to this Agreement,
Executive's employment by the Company shall terminate at such time as the
Board of Directors of the Company determines (with at least seventy-five
percent of the directors other than the Executive voting in favor) that the
Executive is so disabled and that this Agreement should be terminated by
reason of such disability. Notwithstanding the foregoing, the Executive shall
have the right to contest any determination of disability by the Board of
Directors of the Company. In the event that the Executive does contest such
determination, such matter shall be resolved by arbitration pursuant to
Section 13(c) of this Agreement.

         6. SEVERANCE AND OTHER PAYMENTS.

                  a. If the Executive's employment pursuant to this Agreement
is terminated for "cause" (as herein defined) or due to the death or
disability (as determined pursuant to paragraph 5(e) of this Agreement) of
the Executive, the Company shall not be obligated to pay or provide any
severance compensation or benefits to the Executive.

                  b. If the Executive ceases to be employed by the Company
(either during the term of this Agreement or at any time subsequent to the
termination of this Agreement) for any reason other than pursuant to
Paragraphs 5(a), 5(c), 5(d) or 5(e) of this Agreement, the Company agrees to
pay to the Executive an amount equal to the base compensation which would
have been paid to the Executive during the period of time from the date of
the termination of the Executive's employment with the Company for a period
of twelve (12) months following the date the Executive ceases to be an
employee of the Company and the Subsidiaries (such time period is herein
referred to as the "Severance Period"). In addition to the foregoing
severance payment, the Executive and his family shall continue to participate
in the Company's group health plan, at no cost to the

                                       5

<PAGE>

Executive, during the Severance Period. Notwithstanding the foregoing, in the
event of a Special Change in Control of the Company (as hereinafter defined)
and if the Executive's employment with the Company is terminated for any
reason other than Voluntary Termination (as hereinafter defined) or
termination for cause as provided for herein during the twenty-four (24)
month period beginning on the Effective Date of such Special Change in
Control, (i) the Severance Period shall be extended by six (6) months so that
the Severance Period shall be eighteen (18) months following the date the
Executive ceases to be an employee of the Company and the Subsidiaries (such
extended time period is herein referred to as the "Extended Severance
Period"), and (ii) the payments to the Executive hereunder with respect to
the Extended Severance Period shall be at such times and in such amounts as
would have been paid to the Executive during the Extended Severance Period
had the Executive's employment not been terminated.

                  c. If the Executive's employment is terminated during the
term of this Agreement, for any reason other than cause, the Executive (i)
shall be entitled to receive a prorata share (based upon the number of months
employed during the calendar year in which employment with the Company is
terminated) of any bonus or incentive compensation which the Executive would
otherwise have been entitled to receive had he remained employed for the
entirety of the calendar year involved, and (ii) shall have twelve (12)
months to exercise any stock options heretofore or hereafter granted to the
Executive by the Board of Directors of the Company.

                  d. Commencing in June, 2000, and continuing during the time
of Executive's employment with the Company and all of the Subsidiaries, the
Company shall fund an annuity or deferred compensation program for the
Executive in the gross amount of $3,000.00 per month (subject to tax
withholdings, etc.). All amounts heretofore and hereafter funded pursuant to
this deferred compensation arrangement shall be paid to the Executive, at the
date of termination of the

                                       6

<PAGE>

Executive's employment with the Company, in the manner anticipated by the
deferred compensation program previously implemented by the Company for the
Executive. Notwithstanding the foregoing, in the event of a Special Change in
Control of the Company (as hereinafter defined) and if the Executive's
employment with the Company terminates for any reason other than Voluntary
Termination (as hereinafter defined) or termination for cause as provided for
herein during the twenty-four (24) month period beginning on the Effective
Date of such Special Change in Control, the Company's obligation to fund the
deferred compensation program shall extend until the expiration of the
Extended Severance Period.

         7. WORKING CONDITIONS. The Company will provide the Executive with a
private office and secretarial services.

         8. RELOCATION. In the event that the Board of Directors of the
Company relocates the primary office of the Executive outside of the Dallas,
Texas metropolitan area, the Company shall pay all moving expenses of the
Executive to the place of the new office. Absent the written consent of the
Executive, the Company shall not relocate the primary office of the Executive
to an office/location which is not the general corporate office of the
Company.

         9. TRAVEL AND ENTERTAINMENT. The Executive is authorized to incur
reasonable business expenses on behalf of the Company, including, but not by
way of limitation, expenditures of entertainment, gifts and travel; if any
expenses are of a kind or a cost in excess of the written policies
established by the Board of Directors of the Company, such expenses must be
expressly authorized by the Board of Directors of the Company. The Company
agrees to reimburse the Executive for all such expenses upon the Executive's
presentation of an itemized account of such expenditures. In addition to the
foregoing, the Executive is entitled to incur, and to be reimbursed by the
Company

                                       7

<PAGE>

for, various and sundry costs and expenses in connection with membership in,
and attendance at, meetings of one or professional organizations including,
but not by way of limitation, the CEO Club.

         10. NON-COMPETITION AGREEMENT. In the event that the termination of
employment of the Executive pursuant to this Agreement is effectuated by the
Executive electing to terminate his employment pursuant to this Agreement,
and subject to the condition that the Company shall pay the severance
compensation as provided in Paragraph 6(b) of this Agreement, the Executive
agrees that the Executive shall not, for a one year period of time following
the date of termination of this Agreement, within Dallas, Dallas County,
Texas or within a radius of fifty (50) miles from any business location of
the Company and its subsidiaries in the continental United States on the
Termination Date, enter into or engage generally in direct competition with
the Company either as an individual on his own or as a partner or joint
venturer, or as an employee or agent for any person, or as an officer,
director, shareholder or otherwise of any entity other than the Company or an
affiliate of the Company.

         11. NOTICES. All notices or other instruments or communications
provided for in this Agreement shall be in writing and signed by the party
giving same and shall be deemed properly given if delivered in person,
including delivery by overnight courier, or if sent by registered or
certified United States mail, postage pre-paid, addressed to such party at
the address listed below. Each party may, by notice to the other party,
specify any other address for the receipt of such notices, instruments or
communications. Any notice, instrument or communication sent by telegram
shall be deemed properly given only when received by the person to whom it is
sent.

         12.      CERTAIN CONDITIONS.

         a.       "Special Change in Control" means (i) any person or entity,
                  including a "group" as defined in Section 13(d)(3) of the
                  Securities Exchange Act of 1934, as amended (the "Exchange
                  Act"), other than the Company, a majority-owned subsidiary
                  thereof, or Executive and any

                                       8

<PAGE>

                  affiliate of the Executive, becomes the beneficial owner (as
                  defined pursuant to Schedule 13(d) under the Exchange Act) of
                  the Company's securities having twenty-five percent (25%) or
                  more of the combined voting power of the then outstanding
                  securities of the Company that may be cast for the election of
                  directors of the Company, or (ii) as the result of, or in
                  connection with, any cash tender or exchange offer, merger or
                  other business combination, sales of assets or contested
                  election, or any combination of the foregoing transactions,
                  less than a majority of the combined voting power of the then
                  outstanding securities of the Company or any successor
                  corporation or entity entitled to vote generally in the
                  election of the directors of the Company, or such other
                  corporation or entity after such transaction, are beneficially
                  owned (as defined pursuant to Section 13(d) of the Exchange
                  Act) in the aggregate by the holders of the Company's
                  securities entitled to vote generally in the election of
                  directors of the Company immediately prior to such
                  transaction, or (iii) during any period of two consecutive
                  years, individuals who at the beginning of any such period
                  constitute the Board of Directors of the Company cease for any
                  reason to constitute at least a majority thereof, unless the
                  election, or the nomination for election by the Company's
                  shareholders, of each director of the Company first elected
                  during such period was approved by a vote of at least
                  two-thirds of the directors of the Company then still in
                  office who were directors of the Company at the beginning of
                  any such period.

         b.       The "Effective Date" of such Special Change in Control shall
                  be the earlier of the date on which an event described in
                  Section 12(a) (i), (ii), or (iii) occurs, or if earlier, the
                  date of the occurrence of (i) the approval by shareholders of
                  an agreement by the Company, the consummation of which would
                  result in an event described in Section 12(a) (i), (ii), or
                  (iii), or (ii) the acquisition of beneficial ownership (as
                  defined pursuant to Section 13(d) of the Exchange Act),
                  directly or indirectly, by any entity, person or group (other
                  than the Company, a majority-owed subsidiary of the Company,
                  or the Executive and any affiliate of the Executive) of
                  securities of the Company representing five percent (5%) or
                  more of the combined voting power of the Company's outstanding
                  securities, provided, however, that the events described in
                  Section 12(b)(i) and (ii) will be considered the Effective
                  Date of a Special Change in Control if they are followed
                  within six (6) months by an event described in Section 12(a)
                  (i), (ii), or (iii).

         c.       "Voluntary Termination" shall mean Executive's resignation
                  from the Company unless such resignation is as a direct
                  proximate result of (i) without Executive's express written
                  consent, the assignment to Executive of any duties materially
                  inconsistent with his position, duties, responsibilities and
                  status (including his removal from the

                                       9

<PAGE>

                  Board of Directors) with the Company on the Effective Date of
                  the Special Change in Control, (ii) a reduction of Executive's
                  base compensation and bonus compensation (other than a
                  reduction in payments under the Company's incentive bonus
                  program based on a reduction in net profits of the Company)
                  to an amount that is greater than then percent (10%) lower
                  than such compensation on the Effective Date of the Special
                  Change in Control, (iii) relocation of Executive's principal
                  location of work to any location that is both (A) in excess of
                  fifty (50) miles from the location of Executive's principal
                  location of work on the Effective Date of the Special Change
                  in Control, and (B) in excess of the sum of the distance from
                  the Executive's principal residence on such Effective Date to
                  the location of the Executive's principal location of work on
                  such Effective Date, plus fifty (50) miles, (iv) failure by
                  the Company to require any successor (whether direct or
                  indirect, by purchase, merger, consolidation or otherwise) to
                  all or substantially all of the business and/or assets of the
                  Company, by agreement in form and substance reasonably
                  satisfactory to the Executive, expressly to assume and agree
                  to perform this Agreement in the same manner and to the same
                  extent that the Company would be required to perform this
                  Agreement if no such succession had taken place, or (v) any
                  material breach of this Agreement as in effect on the
                  Effective Date of the Special Change in Control by the
                  Company.

         13. MISCELLANEOUS.

                  a. Subject to the condition that this Agreement is not
assignable by either party without the prior written consent of the other
party, the terms and provisions of this Agreement shall inure to the benefit
of, and shall be binding on, the parties hereto and their respective heirs,
representatives, successors and assigns.

                  b. This Agreement supersedes all other agreements, either
oral or in writing, between the parties to this Agreement, with respect to
the employment of the Executive by the Company. This Agreement contains the
entire understanding of the parties and all of the covenants and agreement
between the parties with respect to such employment. Any such prior
agreements related to employment of the Executive by the Company are hereby
terminated without obligation

                                       10

<PAGE>

for any payments due thereunder, except for unpaid obligations which accrued
and become payable prior to the termination of any such agreements.

                  c. Any controversy between the parties to this Agreement
involving the construction or application of any of the terms, covenants, or
conditions of this Agreement (including, but not by way of limitation, the
determination of any amounts payable under the terms of this Agreement) shall
be submitted to arbitration if either party to this Agreement shall request
arbitration by notice in writing to the other party. In such event, the
parties to this Agreement shall, within thirty (30) days after this Paragraph
13(c) is invoked, both appoint one person as an arbitrator to hear and
determine the dispute, and if such arbitrators shall be unable to agree
within fifteen (15) days after selection of the second of the two, then the
two arbitrators so chosen shall, within fifteen (15) days, select a third
impartial arbitrator whose decision shall be final and conclusive upon the
parties to this Agreement. The decision of the third arbitrator shall be
rendered within fifteen (15) days after selection. The expenses of
arbitration proceedings conducted pursuant to this Agreement shall be borne
by the party incurring the cost; the expenses of a third arbitrator shall be
borne equally by the Company and the Executive.

                  d. In the event of any litigation between the parties
related to the compliance with the terms and conditions of this Agreement,
the parties hereto acknowledge and agree that (i) such litigation proceedings
must be held in Dallas County, Texas, and (ii) the prevailing party in such
litigation proceedings shall be entitled to recover, from the nonprevailing
party, reasonable attorneys' fees and expenses incurred in connection with
the dispute involved.

                  e. This Agreement has been made under and shall be governed
by the laws of the State of Texas.

                                       11

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the 15th day of June, 2000, but actually executed this ____
day of ______________, 2000.

                                     COMPANY:

                                     DIVERSIFIED CORPORATE RESOURCES, INC.

                                     By:
                                        ---------------------------------------
                                              M. Ted Dillard, President

                                     Address:   12801 North Central Expressway
                                                Suite 350
                                                Dallas, TX 75243

                                     EXECUTIVE:

                                     ------------------------------------------
                                     J. Michael Moore

                                     Address:   5919 Club Hill Place
                                                Dallas, Texas 75248

                                       12

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