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                                                                   EXHIBIT 10.26

                              ACCRUE SOFTWARE, INC.

                     SEPARATION AGREEMENT AND MUTUAL RELEASE

         This Separation Agreement ("AGREEMENT") is made by and between Accrue
Software, Inc., a Delaware corporation (the "COMPANY"), and Gregory Walker ("MR.
WALKER" or "EMPLOYEE").

         WHEREAS, Mr. Walker was employed by the Company pursuant to the terms
of an offer letter dated March 3, 1999 (the "OFFER LETTER"); and

         WHEREAS, the Company and Mr. Walker have mutually agreed to terminate
the employment relationship, to release each other from any claims arising from
or related to the employment relationship and to enter into a consulting
arrangement.

         NOW, THEREFORE, in consideration of the mutual promises made herein,
the Company and Mr. Walker (collectively referred to as the "PARTIES") hereby
agree as follows:

         1.    RESIGNATION AND TERMINATION OF EMPLOYMENT. Mr. Walker and the
Company acknowledge and agree that Mr. Walker resigned as Vice President and
Chief Financial Officer of the Company (and as an officer and/or director of any
other entity which was deemed to be an affiliate of the Company) and terminated
his employment with the Company effective on April 30, 2001 (the "RESIGNATION
DATE").

         2.    SEPARATION BENEFITS. In consideration for the release of claims
set forth below and other obligations under this Agreement, and provided this
Agreement is signed by Mr. Walker and not revoked under Section 7 herein, and
further provided that Mr. Walker remains in full compliance with his obligations
to the Company under this Agreement, the Company agrees to provide the following
separation benefits to Mr. Walker:

               (a)     The Company shall make a lump-sum payment to Mr. Walker
in the amount of $50,000, reduced by applicable tax withholding. This bonus
payment shall be made on the Effective Date of this Agreement (as defined in
Section 18 below);

               (b)     Following the Termination Date, the Company shall
continue to pay as severance to Mr. Walker his regular base salary for a
six-month period (the "Severance Period"). Each severance payment shall be
reduced by applicable tax withholding and shall be paid in accordance with the
Company's regular payroll schedule and practices. The first severance payment
shall be made on the first regular payroll date following the Effective Date of
this Agreement;

               (c)     The Company shall retain Mr. Walker as a consultant for
the period from May 1, 2001 through October 31, 2001 (the "CONSULTING PERIOD"),
to perform such services as may reasonably be requested in writing by the
Company (the "Consulting Arrangement"). The terms of the Consulting Arrangement
are more fully described in Exhibit A attached hereto;


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               (d)     If Mr. Walker accurately and timely elects to continue
his health insurance benefits under COBRA, as described in Section 3(a) below,
the Company shall pay the applicable COBRA premiums through the end of the
Consulting Period.

         3.    EMPLOYEE BENEFITS.


               (a)     Mr. Walker continued to receive the Company's life,
medical, dental and vision insurance benefits at Company expense until April 30,
2001, which date was the "qualifying event" date under the Consolidated Omnibus
Budget Reconciliation Act of 1985, as amended ("COBRA"). If Mr. Walker timely
and accurately elects to continue his health insurance benefits under COBRA
following such date, the Company shall pay the applicable COBRA premiums through
the end of the Consulting Period. Following such date, Mr. Walker has the right
to continue the COBRA coverage at his own expense.

               (b)     Except as otherwise provided above, Mr. Walker shall not
be entitled to participate in any of the Company's benefit plans or programs
offered to employees of the Company after the Resignation Date.

         4.    STOCK OPTIONS.

               (a)     VESTING. Mr. Walker and the Company acknowledge and agree
that Mr. Walker holds two stock options granted to him by the Company during his
employment: (i) an option granted to Mr. Walker on April 29, 1999 to purchase
260,000 shares of the Company's Common Stock under the terms of the Company's
1996 Stock Plan; and (ii) an option granted to Mr. Walker on April 17, 2000 to
purchase 30,000 shares of the Company's Common Stock under the terms of the
Company's 1996 Stock Plan (the details of which are provided on the Options and
Awards Summary attached hereto as Exhibit B) . Mr. Walker and the Company
further acknowledge and agree that, in accordance with the terms of the stock
option agreements issued to Mr. Walker (collectively, the "STOCK OPTION
AGREEMENTS"), the options shall continue to vest and become exercisable by Mr.
Walker through the end of the Consulting Period. Mr. Walker acknowledges and
agrees that any vested option shares must be exercised within the time period
following the end of the Consulting Period set forth in the Stock Option
Agreements.

               (b)     CHANGE OF CONTROL. Mr. Walker acknowledges and agrees
that termination of his employment under this Agreement is not in connection
with a Change of Control of the Company, as such term is defined in certain
documents related to a Change of Control, including without limitation, the
Offer Letter, and the Stock Option Agreements (collectively, the "CHANGE OF
CONTROL DOCUMENTS"). Accordingly, in the event there is a Change of Control of
the Company following the Resignation Date, Mr. Walker shall not be entitled to
any of the benefits described in the Change of Control Documents.

               Except as set forth in this Section 4, the Stock Option
Agreements and the Change of Control Documents, Mr. Walker acknowledges that he
has no right, title or interest in or to any shares of the Company's capital
stock under the Offer Letter, the Stock Option Agreements, the Change of Control
Documents or any other agreement (oral or written) with the Company.


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         5.    NO OTHER PAYMENTS DUE. Mr. Walker and the Company agree that the
Company paid to Mr. Walker on or before the Resignation Date all salary, accrued
PTO and other sums as were then due to Mr. Walker. By executing this Agreement,
Mr. Walker hereby acknowledges receipt of all such payments as received and
acknowledges that, in light of the payment by the Company of all wages due to
Mr. Walker, California Labor Code Section 206.5 is not applicable to the Parties
hereto. That section provided in pertinent part as follows:

               No employer shall require the execution of any release of any
               claim or right on account of wages due, or to become due, or made
               as an advance on wages to be earned, unless payment of such wages
               has been made.

         6.    RELEASE OF CLAIMS. In consideration for the obligations of both
parties set forth in this Agreement, Mr. Walker and the Company, on behalf of
themselves, and their respective heirs, executors, officers, directors,
employees, investors, stockholders, administrators and assigns, hereby fully and
forever release each other and their respective heirs, executors, officers,
directors, employees, investors, stockholders, administrators, parent and
subsidiary corporations, predecessor and successor corporations and assigns, of
and from any claim, duty, obligation or cause of action relating to any matters
of any kind, whether presently known or unknown, suspected or unsuspected, that
any of them may possess arising from any omissions, acts or facts that have
occurred up until and including the date of this Agreement including, without
limitation:

               (a)     any and all claims relating to or arising from Mr.
Walker's employment relationship with the Company and the termination of that
relationship;

               (b)     any and all claims relating to, or arising from, Mr.
Walker's right to purchase, or actual purchase of shares of stock of the
Company;

               (c)     any and all claims for wrongful discharge of employment;
breach of contract, both express and implied; breach of a covenant of good faith
and fair dealing, both express and implied, negligent or intentional infliction
of emotional distress; negligent or intentional misrepresentation; negligent or
intentional interference with contract or prospective economic advantage;
negligence; and defamation;

               (d)     any and all claims for violation of any federal, state or
municipal statute, including, but not limited to, Title VII of the Civil Rights
Act of 1964, the Civil Rights Act of 1991, the Age Discrimination in Employment
Act of 1967, and the Americans with Disabilities Act of 1990;

               (e)     any and all claims arising out of any other laws and
regulations relating to employment or employment discrimination; and

               (f)     any and all claims for attorneys' fees and costs.

         The Company and Mr. Walker agree that the release set forth in this
Section 6 shall be and remain in effect in all respects as a complete general
release as to the matters released. This release does not extend to any
obligations incurred or specified under this Agreement.


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         7.    ACKNOWLEDGMENT OF WAIVER OF CLAIMS UNDER ADEA. Mr. Walker
acknowledges that he is waiving and releasing any rights he may have under the
Age Discrimination in Employment Act of 1967 ("ADEA") and that this waiver and
release is knowing and voluntary. Mr. Walker and the Company agree that this
waiver and release does not apply to any rights or claims that may arise under
ADEA after the Effective Date of this Agreement. Mr. Walker acknowledges that
the consideration given for this waiver and release Agreement is in addition to
anything of value to which Mr. Walker was already entitled. Mr. Walker further
acknowledges that he has been advised by this writing that (a) he should consult
with an attorney prior to executing this Agreement; (b) he has at least
twenty-one (21) days within which to consider this Agreement; (c) he has seven
(7) days following his execution of this Agreement to revoke the Agreement (the
"Revocation Period"). This Agreement shall not be effective until the Revocation
Period has expired. Nothing in this Agreement prevents or precludes Mr. Walker
from challenging or seeking a determination in good faith of the validity of
this waiver under the ADEA, nor does it impose any condition precedent,
penalties or costs for doing so, unless specifically authorized by federal law.

         8.    CIVIL CODE SECTION 1542. The Parties represent that they are not
aware of any claim by either of them other than the claims that are released by
this Agreement. Mr. Walker and the Company acknowledge that they are familiar
with the provisions of California Civil Code Section 1542, which provides as
follows:

               A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR
               DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF
               EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY
               AFFECTED HIS SETTLEMENT WITH THE DEBTOR.

         Mr. Walker and the Company, being aware of said Code section, agree to
expressly waive any rights they may have thereunder, as well as under any other
statute or common law principles of similar effect.

         9.    EMPLOYEE COVENANTS.

               (a)     GENERAL. Mr. Walker agrees that for all periods described
in this Agreement, he shall continue to conduct himself in a professional manner
that is supportive of the business of the Company.

               (b)     CONFIDENTIAL INFORMATION. Mr. Walker represents and
warrants that he has not breached his obligations to the Company under the terms
of the Proprietary Information and Assignment of Inventions Agreement he
executed on April 26, 1999 (the "PROPRIETARY AGREEMENT"), a copy of which is
attached hereto as Exhibit C. Mr. Walker understands and agrees that his
obligations to the Company under the Proprietary Agreement continue through the
Consulting Period and survive the termination of his relationship with the
Company under this Agreement.


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               (c)     CONFIDENTIALITY OF THIS AGREEMENT. The Parties each agree
to use their best efforts to maintain in confidence the existence of this
Agreement, the contents and terms of this Agreement, and the consideration for
this Agreement (hereinafter collectively referred to as "SEPARATION
INFORMATION"). Each Party hereto agrees to take every reasonable precaution to
prevent disclosure of any Separation Information to third parties, except as may
be or has been disclosed in a press release and except for disclosures required
by law or necessary to effectuate the terms of this Agreement. Mr. Walker
understands and acknowledges that Company may be required to file a copy of this
Agreement with the Securities and Exchange Commission and to disclose its terms
in Company's next proxy statement. The Parties agree to take every precaution to
disclose Separation Information only to those employees, officers, directors,
attorneys, accountants, governmental entities, and family members who have a
reasonable need to know of such Separation Information.

               (d)     SEC REPORTING. Mr. Walker will cooperate with the Company
in providing information with respect to all reports required to be filed by the
Company with the Securities and Exchange Commission as they relate to required
information with respect to Mr. Walker.

               (e)     NONCOMPETITION. During the period from the Resignation
Date through the end of the Consulting Period, Mr. Walker agrees that he shall
not engage in any employment, consulting or business relationship with any
company that is in competition with the Company, including without limitation
the following companies: Andromedia, Inc., net.Genesis Corporation, WebTrends
Corporation, Broadbase Software, Inc. and E.piphany, Inc.

         10.   AUTHORITY. The Company represents and warrants that the
undersigned has the authority to act on behalf of the Company and to bind the
Company and all who may claim through it to the terms and conditions of this
Agreement. Mr. Walker represents and warrants that he has the capacity to act on
his own behalf and on behalf of all who might claim through his to bind them to
the terms and conditions of this Agreement. Each Party warrants and represents
that there are no liens or claims of lien or assignments in law or equity or
otherwise of or against any of the claims or causes of action released herein.

         11.   NO REPRESENTATIONS. Neither Party has relied upon any
representations or statements made by the other Party hereto which are not
specifically set forth in this Agreement.

         12.   SEVERABILITY. In the event that any provision hereof becomes or
is declared by a court or other tribunal of competent jurisdiction to be
illegal, unenforceable or void, this Agreement shall continue in full force and
effect without said provision.

         13.   ARBITRATION. The Parties shall attempt to settle all disputes
arising in connection with this Agreement through good faith consultation. In
the event no agreement can be reached on such dispute within fifteen (15) days
after notification in writing by either Party to the other concerning such
dispute, the dispute shall be settled by binding arbitration to be conducted in
Contra Costa County, California before the American Arbitration Association
under its California Employment Dispute Resolution Rules, or by a judge to be
mutually agreed upon.


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The arbitration decision shall be final, conclusive and binding on both Parties
and any arbitration award or decision may be entered in any court having
jurisdiction. The Parties agree that the prevailing party in any arbitration
shall be entitled to injunctive relief in any court of competent jurisdiction to
enforce the arbitration award. The Parties further agree that the prevailing
Party in any such proceeding shall be awarded reasonable attorneys' fees and
costs. This Section 13 shall not apply to the Proprietary Agreement. THE PARTIES
HEREBY WAIVE ANY RIGHTS THEY MAY HAVE TO TRIAL BY JURY IN REGARD TO ARBITRABLE
CLAIMS.

         14.   INDEMNIFICATION. The Indemnification Agreement entered into by
Mr. Walker and the Company on April 26, 1999, a copy of which is attached hereto
as Exhibit D, shall remain in effect following the Termination Date in
accordance with the terms of such agreement.

         15.   ENTIRE AGREEMENT. This Agreement, and the exhibits hereto,
represent the entire agreement and understanding between the Company and Mr.
Walker concerning Mr. Walker's separation from the Company, and supersede and
replace any and all prior agreements and understandings concerning Mr. Walker's
relationship with the Company and his compensation by the Company.

         16.   NO ORAL MODIFICATION. This Agreement may only be amended in
writing signed by Mr. Walker and the Company.

         17.   GOVERNING LAW. This Agreement shall be governed by the laws of
the State of California, without regard to its conflicts of law provisions.

         18.   EFFECTIVE DATE. This Agreement is effective upon the expiration
of the Revocation Period described in Section 7 and such date is referred to
herein as the "EFFECTIVE DATE."

         19.   COUNTERPARTS. This Agreement may be executed in counterparts, and
each counterpart shall have the same force and effect as an original and shall
constitute an effective, binding agreement on the part of each of the
undersigned.

         20.   ASSIGNMENT. This Agreement may not be assigned by Mr. Walker or
the Company without the prior written consent of the other party.
Notwithstanding the foregoing, this Agreement may be assigned by the Company to
a corporation controlling, controlled by or under common control with the
Company without the consent of Mr. Walker.

         21.   VOLUNTARY EXECUTION OF AGREEMENT. This Agreement is executed
voluntarily and without any duress or undue influence on the part or behalf of
the Parties hereto, with the full intent of releasing all claims. The Parties
acknowledge that:

               (a)     they have read this Agreement;

               (b)     they have been represented in the preparation,
negotiation, and execution of this Agreement by legal counsel of their own
choice or that they have voluntarily declined to seek such counsel;


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               (c)     they understand the terms and consequences of this
Agreement and of the releases it contains; and

               (d)     they are fully aware of the legal and binding effect of
this Agreement.



         IN WITNESS WHEREOF, the Parties have executed this Separation Agreement
and Mutual Release on the respective dates set forth below.

                                        Accrue Software, Inc.

Dated as of June 12, 2001               By: /s/ JEFFREY WALKER
                                            ------------------------------------
                                        Title:  CEO


                                        Gregory Walker, an individual

Dated as of June 12, 2001               /s/ GREGORY WALKER
                                        ----------------------------------------
                                        Gregory Walker



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                                    EXHIBIT A

                         TERMS OF CONSULTING ARRANGEMENT

         SCOPE OF SERVICES: Consulting and advice related to finance, merger and
acquisition and business model issues.

         COMPENSATION: An hourly fee of $105, payable upon submission of monthly
invoices by Mr. Walker for services rendered to the Company during the preceding
month, and continued vesting of Mr. Walker's outstanding stock options.

         TERM: May 1, 2001 - October 31, 2001, subject to extension by mutual
written agreement of the Company and Mr. Walker.



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                                    EXHIBIT B

                           OPTIONS AND AWARDS SUMMARY


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                                    EXHIBIT C

                            CONFIDENTIALITY AGREEMENT


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                                    EXHIBIT D

                            INDEMNIFICATION AGREEMENT