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Sample Business Contracts

1997 Employee Stock Purchase Plan - Peregrine Systems Inc.

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                            PEREGRINE SYSTEMS, INC.

                       1997 EMPLOYEE STOCK PURCHASE PLAN


    1.   PURPOSE.  The purpose of the Plan is to provide employees of the
Company and its Designated Subsidiaries with an opportunity to purchase Common
Stock of the Company through accumulated payroll deductions.  It is the
intention of the Company to have the Plan qualify as an "Employee Stock Purchase
Plan" under Section 423 of the Internal Revenue Code of 1986, as amended.  The
provisions of the Plan, accordingly, shall be construed so as to extend and
limit participation in a manner consistent with the requirements of that section
of the Code.

    2.   DEFINITIONS.

         (a)  "BOARD" shall mean the Board of Directors of the Company.

         (b)  "CODE" shall mean the Internal Revenue Code of 1986, as amended.

         (c)  "COMMON STOCK" shall mean the Common Stock of the Company.

         (d)  "COMPANY" shall mean Peregrine Systems, Inc., a Delaware
corporation, and any Designated Subsidiary of the Company.

         (e)  "COMPENSATION" shall mean all base straight time gross earnings
and commissions, exclusive of payments for overtime, shift premium, incentive
compensation, incentive payments, bonuses and other compensation.

         (f)  "DESIGNATED SUBSIDIARY" shall mean any Subsidiary which has been
designated by the Board from time to time in its sole discretion as eligible to
participate in the Plan.

         (g)  "EMPLOYEE" shall mean any individual who is an Employee of the
Company for tax purposes and whose customary employment with the Company is at
least twenty (20) hours per week and more than five (5) months in any calendar
year.  For purposes of the Plan, the employment relationship shall be treated as
continuing intact while the individual is on sick leave or other leave of
absence approved by the Company.  Where the period of leave exceeds 90 days and
the individual's right to reemployment is not guaranteed either by statute or by
contract, the employment relationship shall be deemed to have terminated on the
91st day of such leave.

         (h)   "ENROLLMENT DATE" shall mean the first day of each Offering
Period.

         (i)  "EXERCISE DATE" shall mean the last day of each Offering Period.

         (j)  "FAIR MARKET VALUE" shall mean, as of any date, the value of
Common Stock determined as follows:

<PAGE>

              (1)  If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the Nasdaq
National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its
Fair Market Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system for
the last market trading day prior to the time of determination, as reported in
THE WALL STREET JOURNAL or such other source as the Administrator deems
reliable, or;

              (2)  If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, its Fair Market Value
shall be the mean of the closing bid and asked prices for the Common Stock on
the date of such determination, as reported in The Wall Street Journal or such
other source as the Board deems reliable, or;

              (3)  In the absence of an established market for the Common
Stock, the Fair Market Value thereof shall be determined in good faith by the
Board.

              (4)  For purposes of the Enrollment Date of the first Offering
Period under the Plan, the Fair Market Value shall be the initial price to the
public as set forth in the final prospectus included within the registration
statement in Form S-1 filed with the Securities and Exchange Commission for the
initial public offering of the Company's Common Stock (the "Registration
Statement").

         (k)  "HOLDING PERIOD" shall mean that period of time beginning on an
Exercise Date on which shares are purchased by participants under the Plan and
ending twelve (12) calendar months thereafter.

         (l)  "OFFERING PERIOD" shall mean a period of three (3) months 
during which an option granted pursuant to the Plan may be exercised, 
commencing on the first Trading Day on or after May 1 and terminating on the 
last Trading Day in the period ending the following July 31, or commencing on 
the first Trading Day on or after August 1 and terminating on the last 
Trading Day in the period ending the following October 31, or commencing on 
the first Trading Day on or after November 1 and terminating on the last 
Trading Day in the period ending the following January 31, or commencing on 
the first Trading Day on or after February 1 and terminating on the last 
Trading Day in the period ending the following April 30; provided, however, 
that the first Offering Period under the Plan shall commence with the first 
Trading Day on or after the date on which the Securities and Exchange 
Commission declares the Company's Registration Statement effective and shall 
terminate on the last Trading Day on or before July 31, 1997.  The 
duration of Offering Periods may be changed pursuant to Section 4 of this 
Plan.

         (m)  "OFFICER" means a person who is an officer of the Company within
the meaning of Section 16 of the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.

         (n)  "PLAN" shall mean this Employee Stock Purchase Plan.

         (o)  "PURCHASE PRICE" shall mean an amount equal to 85% of the Fair
Market Value of a share of Common Stock on the Enrollment Date or on the
Exercise Date, whichever is lower.



                                      -2-

<PAGE>


         (p)  "RESERVES" shall mean the number of shares of Common Stock
covered by each option under the Plan which have not yet been exercised and the
number of shares of Common Stock which have been authorized for issuance under
the Plan but not yet placed under option.

         (q)  "SUBSIDIARY" shall mean a corporation, domestic or foreign, of
which not less than 50% of the voting shares are held by the Company or a
Subsidiary, whether or not such corporation now exists or is hereafter organized
or acquired by the Company or a Subsidiary.

         (r)  "TRADING DAY" shall mean a day on which national stock exchanges
and the Nasdaq System are open for trading.

    3.   ELIGIBILITY.

         (a)  Any Employee who shall be employed by the Company on a given
Enrollment Date and who is not an Officer on such date shall be eligible to
participate in the Plan.

         (b)  Any provisions of the Plan to the contrary notwithstanding, no
Employee shall be granted an option under the Plan (i) to the extent that,
immediately after the grant, such Employee (or any other person whose stock
would be attributed to such Employee pursuant to Section 424(d) of the Code)
would own capital stock of the Company and/or hold outstanding options to
purchase such stock possessing five percent (5%) or more of the total combined
voting power or value of all classes of the capital stock of the Company or of
any Subsidiary, or (ii) to the extent that his or her rights to purchase stock
under all employee stock purchase plans of the Company and its subsidiaries
accrue at a rate which exceeds Twenty-Five Thousand Dollars ($25,000) worth of
stock (determined at the fair market value of the shares at the time such option
is granted) for each calendar year in which such option is outstanding at any
time.

    4.   OFFERING PERIODS.  The Plan shall be implemented by consecutive
Offering Periods with a new Offering Period commencing on the first Trading Day
on or after May 1, August 1, November 1 and February 1 of each year, or 
on such other date as the Board shall determine, and continuing thereafter 
until terminated in accordance with Section 21 hereof; provided, however, 
that the first Offering Period under the Plan shall commence with the first 
Trading Day on or after the date on which the Securities and Exchange 
Commission declares the Company's Registration Statement effective and shall 
terminate on the last Trading Day on or before July 31, 1997.  The Board 
shall have the power to change the duration of Offering Periods (including 
the commencement dates thereof) with respect to future offerings without 
stockholder approval if such change is announced at least five (5) days prior 
to the scheduled beginning of the first Offering Period to be affected 
thereafter.

    5.   PARTICIPATION.

         (a)  An eligible Employee may become a participant in the Plan by
completing a subscription agreement authorizing payroll deductions in the form
of EXHIBIT A to this Plan and filing it with the Company's payroll office prior
to the applicable Enrollment Date.



                                      -3-

<PAGE>


         (b)  Payroll deductions for a participant shall commence on the first
payroll following the Enrollment Date and shall end on the last payroll in the
Offering Period to which such authorization is applicable, unless sooner
terminated by the participant as provided in Section 11 hereof.

    6.   PAYROLL DEDUCTIONS.

         (a)  At the time a participant files his or her subscription
agreement, he or she shall elect to have payroll deductions made on each pay day
during the Offering Period in an amount not exceeding fifteen percent (15%) of
the Compensation which he or she receives on each pay day during the Offering
Period.

         (b)  All payroll deductions made for a participant shall be credited
to his or her account under the Plan and shall be withheld in whole percentages
only.  A participant may not make any additional payments into such account.

         (c)  A participant may discontinue his or her participation in the
Plan as provided in Section 11 hereof, or may increase or decrease the rate of
his or her payroll deductions during the Offering Period by completing or filing
with the Company a new subscription agreement authorizing a change in payroll
deduction rate.  The Board may, in its discretion, limit the number of
participation rate changes during any Offering Period.  The change in rate shall
be effective with the first full payroll period following five (5) business days
after the Company's receipt of the new subscription agreement unless the Company
elects to process a given change in participation more quickly.  A participant's
subscription agreement shall remain in effect for successive Offering Periods
unless terminated as provided in Section 11 hereof.

         (d)  Notwithstanding the foregoing, to the extent necessary to comply
with Section 423(b)(8) of the Code and Section 3(b) hereof, a participant's
payroll deductions may be decreased to zero percent (0%) at any time during an
Offering Period.  Payroll deductions shall recommence at the rate provided in
such participant's subscription agreement at the beginning of the first Offering
Period which is scheduled to end in the following calendar year, unless
terminated by the participant as provided in Section 11 hereof.

         (e)  At the time the option is exercised, in whole or in part, or at
the time some or all of the Company's Common Stock issued under the Plan is
disposed of, the participant must make adequate provision for the Company's
federal, state, or other tax withholding obligations, if any, which arise upon
the exercise of the option or the disposition of the Common Stock.  At any time,
the Company may, but shall not be obligated to, withhold from the participant's
compensation the amount necessary for the Company to meet applicable withholding
obligations, including any withholding required to make available to the Company
any tax deductions or benefits attributable to sale or early disposition of
Common Stock by the Employee.



                                      -4-

<PAGE>


    7.   GRANT OF OPTION.  On the Enrollment Date of each Offering Period, each
eligible Employee participating in such Offering Period shall be granted an
option to purchase on the Exercise Date of such Offering Period (at the
applicable Purchase Price) up to a number of shares of the Company's Common
Stock determined by dividing such Employee's payroll deductions accumulated
prior to such Exercise Date and retained in the Participant's account as of the
Exercise Date by the applicable Purchase Price; provided that in no event shall
an Employee be permitted to purchase during each Offering Period more than
25,000 shares (subject to any adjustment pursuant to Section 20), and provided
further that such purchase shall be subject to the limitations set forth in
Sections 3(b) and 13 hereof. Exercise of the option shall occur as provided in
Section 8 hereof, unless the participant has withdrawn pursuant to Section 11
hereof.  The Option shall expire on the last day of the Offering Period.

    8.   EXERCISE OF OPTION.  Unless a participant withdraws from the Plan as
provided in Section 11 hereof, his or her option for the purchase of shares
shall be exercised automatically on the Exercise Date, and the maximum number of
full shares subject to option shall be purchased for such participant at the
applicable Purchase Price with the accumulated payroll deductions in his or her
account.  No fractional shares shall be purchased; any payroll deductions
accumulated in a participant's account which are not sufficient to purchase a
full share shall be retained in the participant's account for the subsequent
Offering Period, subject to earlier withdrawal by the participant as provided in
Section 11 hereof.  Any other monies left over in a participant's account after
the Exercise Date shall be returned to the participant. During a participant's
lifetime, a participant's option to purchase shares hereunder is exercisable
only by him or her.

    9.   HOLDING PERIOD.  Shares purchased by a participant shall be held in
the participant's account under the Plan during the Holding Period.  In the
event of a sale of all or substantially all of the Company's assets, or a merger
of the Company with or into another corporation, the Holding Period shall lapse.

    10.  DELIVERY.  As promptly as practicable after each Exercise Date on
which a purchase of shares occurs, the Company shall credit each participant's
account under the Plan with the shares purchased upon exercise of his or her
option.  As promptly as practicable after expiration of the Holding Period, the
Company shall, in its discretion, either (a) arrange for the delivery to each
participant of a certificate representing the shares purchased upon exercise of
his or her option, or (b) credit the shares purchased to an account in the
participant's name with a brokerage firm selected by the Company to hold the
shares in street name.

    11.  WITHDRAWAL.

         (a)  A participant may withdraw all but not less than all the payroll
deductions credited to his or her account and not yet used to exercise his or
her option under the Plan at any time by giving written notice to the Company in
the form of EXHIBIT B to this Plan.  All of the participant's payroll deductions
credited to his or her account shall be paid to such participant promptly after
receipt of notice of withdrawal and such participant's option for the Offering
Period



                                      -5-

<PAGE>

shall be automatically terminated, and no further payroll deductions for the
purchase of shares shall be made for such Offering Period.  If a participant
withdraws from an Offering Period, payroll deductions shall not resume at the
beginning of the succeeding Offering Period unless the participant delivers to
the Company a new subscription agreement.

         (b)  A participant's withdrawal from an Offering Period shall not have
any effect upon his or her eligibility to participate in any similar plan which
may hereafter be adopted by the Company or in succeeding Offering Periods which
commence after the termination of the Offering Period from which the participant
withdraws.

    12.  TERMINATION OF EMPLOYMENT.  Upon a participant's ceasing to be an
Employee for any reason, he or she shall be deemed to have elected to withdraw
from the Plan and the payroll deductions credited to such participant's account
during the Offering Period but not yet used to exercise the option shall be
returned to such participant or, in the case of his or her death, to the person
or persons entitled thereto under Section 16 hereof, and such participant's
option shall be automatically terminated.  The preceding sentence
notwithstanding, a participant who receives payment in lieu of notice of
termination of employment shall be treated as continuing to be an Employee for
the participant's customary number of hours per week of employment during the
period in which the participant is subject to such payment in lieu of notice.

    13.  INTEREST.  No interest shall accrue on the payroll deductions of a
participant in the Plan.

    14.  STOCK.

         (a)  The maximum number of shares of the Company's Common Stock which
shall be made available for sale under the Plan shall be two hundred fifty 
thousand (250,000) shares, subject to adjustment upon changes in 
capitalization of the Company as provided in Section 20 hereof.  If, on a given
Exercise Date, the number of shares with respect to which options are to be
exercised exceeds the number of shares then available under the Plan, the
Company shall make a pro rata allocation of the shares remaining available for
purchase in as uniform a manner as shall be practicable and as it shall
determine to be equitable.

         (b)  The participant shall have no interest or voting right in shares
covered by his option until such option has been exercised.

         (c)  Shares to be delivered to a participant under the Plan shall be
registered in the name of the participant or in the name of the participant and
his or her spouse.

    15.  ADMINISTRATION.  The Plan shall be administered by the Board or a
committee of members of the Board appointed by the Board.  The Board or its
committee shall have full and exclusive discretionary authority to construe,
interpret and apply the terms of the Plan, to determine eligibility and to
adjudicate all disputed claims filed under the Plan.  Every finding, decision
and



                                      -6-

<PAGE>

determination made by the Board or its committee shall, to the full extent
permitted by law, be final and binding upon all parties.

    16.  DESIGNATION OF BENEFICIARY.

         (a)  A participant may file a written designation of a beneficiary who
is to receive any shares and cash, if any, from the participant's account under
the Plan in the event of such participant's death subsequent to an Exercise Date
on which the option is exercised but prior to delivery to such participant of
such shares and cash.  In addition, a participant may file a written designation
of a beneficiary who is to receive any cash from the participant's account under
the Plan in the event of such participant's death prior to exercise of the
option.  If a participant is married and the designated beneficiary is not the
spouse, spousal consent shall be required for such designation to be effective.

         (b)  Such designation of beneficiary may be changed by the participant
at any time by written notice.  In the event of the death of a participant and
in the absence of a beneficiary validly designated under the Plan who is living
at the time of such participant's death, the Company shall deliver such shares
and/or cash to the executor or administrator of the estate of the participant,
or if no such executor or administrator has been appointed (to the knowledge of
the Company), the Company, in its discretion, may deliver such shares and/or
cash to the spouse or to any one or more dependents or relatives of the
participant, or if no spouse, dependent or relative is known to the Company,
then to such other person as the Company may designate.

    17.  TRANSFERABILITY.  Neither payroll deductions credited to a
participant's account nor any rights with regard to the exercise of an option or
to receive shares under the Plan may be assigned, transferred, pledged or
otherwise disposed of in any way (other than by will, the laws of descent and
distribution or as provided in Section 16 hereof) by the participant.  Any such
attempt at assignment, transfer, pledge or other disposition shall be without
effect, except that the Company may treat such act as an election to withdraw
funds from an Offering Period in accordance with Section 11 hereof.

    18.  USE OF FUNDS.  All payroll deductions received or held by the Company
under the Plan may be used by the Company for any corporate purpose, and the
Company shall not be obligated to segregate such payroll deductions.

    19.  REPORTS.  Individual accounts shall be maintained for each participant
in the Plan.  Statements of account shall be given to participating Employees at
least annually, which statements shall set forth the amounts of payroll
deductions, the Purchase Price, the number of shares purchased and the remaining
cash balance, if any.

    20.  ADJUSTMENTS UPON CHANGES IN CAPITALIZATION,  DISSOLUTION, LIQUIDATION,
         MERGER OR ASSET SALE.



                                      -7-

<PAGE>


         (a)  CHANGES IN CAPITALIZATION.  Subject to any required action by the
stockholders of the Company, the Reserves, the maximum number of shares each
participant may purchase per Offering Period (pursuant to Section 7), as well as
the price per share and the number of shares of Common Stock covered by each
option under the Plan which has not yet been exercised shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of shares of Common Stock effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration".  Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares of Common Stock subject to an option.

         (b)  DISSOLUTION OR LIQUIDATION.  In the event of the proposed
dissolution or liquidation of the Company, the Offering Period shall terminate
immediately prior to the consummation of such proposed action, unless otherwise
provided by the Board.

         (c)  MERGER OR ASSET SALE.  In the event of a proposed sale of all or
substantially all of the assets of the Company, or the merger of the Company
with or into another corporation, the Offering Period then in progress shall be
shortened by setting a new Exercise Date (the "New Exercise Date").   The New
Exercise Date shall be before the date of the Company's proposed sale or merger.
The Board shall notify each participant in writing, at least ten (10) business
days prior to the New Exercise Date, that the Exercise Date for the
participant's option has been changed to the New Exercise Date and that the
participant's option shall be exercised automatically on the New Exercise Date,
unless prior to such date the participant has withdrawn from the Offering Period
as provided in Section 11 hereof.

    21.  AMENDMENT OR TERMINATION.

         (a)  The Board of Directors of the Company may at any time and for any
reason terminate or amend the Plan.  Except as provided in Section 20 hereof, no
such termination can affect options previously granted, provided that an
Offering Period may be terminated by the Board of Directors on any Exercise Date
if the Board determines that the termination of the Plan is in the best
interests of the Company and its stockholders.  Except as provided in Section 20
hereof, no amendment may make any change in any option theretofore granted which
adversely affects the rights of any participant.  To the extent necessary to
comply with Section 423 of the Code (or any other applicable law, regulation or
stock exchange rule), the Company shall obtain shareholder approval in such a
manner and to such a degree as required.

         (b)  Without stockholder consent and without regard to whether any
participant rights may be considered to have been "adversely affected," the
Board (or its committee) shall be



                                      -8-

<PAGE>

entitled to change the Offering Periods, limit the frequency and/or number of
changes in the amount withheld during an Offering Period, establish the exchange
ratio applicable to amounts withheld in a currency other than U.S. dollars,
permit payroll withholding in excess of the amount designated by a participant
in order to adjust for delays or mistakes in the Company's processing of
properly completed withholding elections, establish reasonable waiting and
adjustment periods and/or accounting and crediting procedures to ensure that
amounts applied toward the purchase of Common Stock for each participant
properly correspond with amounts withheld from the participant's Compensation,
and establish such other limitations or procedures as the Board (or its
committee) determines in its sole discretion advisable which are consistent with
the Plan.

    22.  NOTICES.  All notices or other communications by a participant to the
Company under or in connection with the Plan shall be deemed to have been duly
given when received in the form specified by the Company at the location, or by
the person, designated by the Company for the receipt thereof.

    23.  CONDITIONS UPON ISSUANCE OF SHARES.  Shares shall not be issued with
respect to an option unless the exercise of such option and the issuance and
delivery of such shares pursuant thereto shall comply with all applicable
provisions of law, domestic or foreign, including, without limitation, the
Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as
amended, the rules and regulations promulgated thereunder, and the requirements
of any stock exchange upon which the shares may then be listed, and shall be
further subject to the approval of counsel for the Company with respect to such
compliance.

    As a condition to the exercise of an option, the Company may require the
person exercising such option to represent and warrant at the time of any such
exercise that the shares are being purchased only for investment and without any
present intention to sell or distribute such shares if, in the opinion of
counsel for the Company, such a representation is required by any of the
aforementioned applicable provisions of law.

    24.  TERM OF PLAN.  The Plan shall become effective upon the earlier to
occur of its adoption by the Board of Directors or its approval by the
stockholders of the Company.  It shall continue in effect for a term of ten (10)
years unless sooner terminated under Section 21 hereof.



                                      -9-

<PAGE>

                                   EXHIBIT A


                            PEREGRINE SYSTEMS, INC.

                       1997 EMPLOYEE STOCK PURCHASE PLAN

                            SUBSCRIPTION AGREEMENT



_____ Original Application                        Enrollment Date: __________
_____ Change in Payroll Deduction Rate
_____ Change of Beneficiary(ies)


1.  _____________________________________ hereby elects to participate in the
    Peregrine Systems, Inc. 1997 Employee Stock Purchase Plan (the "Employee
    Stock Purchase Plan") and subscribes to purchase shares of the Company's
    Common Stock in accordance with this Subscription Agreement and the
    Employee Stock Purchase Plan.

2.  I hereby authorize payroll deductions from each paycheck in the amount of
    ____% of my Compensation on each payday (from 0 to 15%) during the
    Offering Period in accordance with the Employee Stock Purchase Plan.
    (Please note that no fractional percentages are permitted.)

3.  I understand that said payroll deductions shall be accumulated for the
    purchase of shares of Common Stock at the applicable Purchase Price
    determined in accordance with the Employee Stock Purchase Plan.  I
    understand that if I do not withdraw from an Offering Period, any
    accumulated payroll deductions will be used to automatically exercise my
    option. I further understand that shares of Common Stock purchased for me
    under the Employee Stock Purchase Plan upon exercise of my option are
    subject to the Holding Period described in Section 9 of the Employee Stock
    Purchase Plan.

4.  I have received a copy of the complete Employee Stock Purchase Plan.  I
    understand that my participation in the Employee Stock Purchase Plan is in
    all respects subject to the terms of the Plan.  I understand that my
    ability to exercise the option under this Subscription Agreement is subject
    to stockholder approval of the Employee Stock Purchase Plan.

5.  Shares purchased for me under the Employee Stock Purchase Plan should be
    issued in the name(s) of (Employee or Employee and Spouse only):  ______
    ____________________________.

6.  I understand that if I dispose of any shares received by me pursuant to the
    Plan within 2 years after the Enrollment Date (the first day of the
    Offering Period during which I purchased such shares), I will be treated
    for federal income tax purposes as having received ordinary income at the
    time of such disposition in an amount equal to the excess of the fair
    market value of the


    shares at the time such shares were purchased by me over the price which I
    paid for the shares.  I HEREBY AGREE TO NOTIFY THE COMPANY IN WRITING
    WITHIN 30 DAYS AFTER THE DATE OF ANY DISPOSITION OF SHARES AND I WILL MAKE
    ADEQUATE PROVISION FOR FEDERAL, STATE OR OTHER TAX WITHHOLDING OBLIGATIONS,
    IF ANY, WHICH ARISE UPON THE DISPOSITION OF THE COMMON STOCK.  The Company
    may, but will not be obligated to, withhold from my compensation the amount
    necessary to meet any applicable withholding obligation including any
    withholding necessary to make available to the Company any tax deductions
    or benefits attributable to sale or early disposition of Common Stock by
    me. If I dispose of such shares at any time after the expiration of the 2-
    year holding period, I understand that I will be treated for federal income
    tax purposes as having received income only at the time of such
    disposition, and that such income will be taxed as ordinary income only to
    the extent of an amount equal to the lesser of (1) the excess of the fair
    market value of the shares at the time of such disposition over the
    purchase price which I paid for the shares, or (2) 15% of the fair market
    value of the shares on the first day of the Offering Period.  The remainder
    of the gain, if any, recognized on such disposition will be taxed as
    capital gain.

7.  I hereby agree to be bound by the terms of the Employee Stock Purchase
    Plan.  The effectiveness of this Subscription Agreement is dependent upon
    my eligibility to participate in the Employee Stock Purchase Plan.

8.  In the event of my death, I hereby designate the following as my
    beneficiary(ies) to receive all payments and shares due me under the
    Employee Stock Purchase Plan:



NAME:  (Please print) _______________________________________________________
                     (First)         (Middle)          (Last)



_________________________    __________________________________________________
Relationship
                             __________________________________________________
                             (Address)


Employee's Social
Security Number:             _________________________________________________



Employee's Address:          _________________________________________________



                                      -2-

<PAGE>


                             _________________________________________________

                             _________________________________________________


I UNDERSTAND THAT THIS SUBSCRIPTION AGREEMENT SHALL REMAIN IN EFFECT THROUGHOUT
SUCCESSIVE OFFERING PERIODS UNLESS TERMINATED BY ME.



Dated: ___________________   _______________________________________________
                             Signature of Employee



                         _____________________________________________________
                         Spouse's Signature (If beneficiary other than spouse)



                                      -3-

<PAGE>


                                   EXHIBIT B


                            PEREGRINE SYSTEMS, INC.

                       1997 EMPLOYEE STOCK PURCHASE PLAN

                             NOTICE OF WITHDRAWAL


    The undersigned participant in the Offering Period of the Peregrine
Systems, Inc. 1997 Employee Stock Purchase Plan which began on ___________
19____ (the "Enrollment Date") hereby notifies the Company that he or she hereby
withdraws from the Offering Period.  He or she hereby directs the Company to pay
to the undersigned as promptly as practicable all the payroll deductions
credited to his or her account with respect to such Offering Period.  The
undersigned understands and agrees that his or her option for such Offering
Period will be automatically terminated.  The undersigned understands further
that no further payroll deductions will be made for the purchase of shares in
the current Offering Period and the undersigned shall be eligible to participate
in succeeding Offering Periods only by delivering to the Company a new
Subscription Agreement.


                                  Name and Address of Participant:

                                  ____________________________________

                                  ____________________________________

                                  ____________________________________



                                  Signature:

                                  ____________________________________


                                  Date: _______________________________