Exhibit 10.56

SECOND AMENDMENT TO AMENDED EMPLOYMENT AGREEMENT

THIS SECOND AMENDMENT (this "Second Amendment") TO AMENDED EMPLOYMENT AGREEMENT (the "Original Agreement") is made and entered into this 30th day of July, 2004,
by and between Peregrine Systems, Inc., a Delaware corporation (the "Company" or "Peregrine") and Kenneth A. Sexton ("Employee").

RECITALS

A.    Company
and Employee are parties to the Original Agreement, which was made and entered into on March 6, 2003 effective as of June 24, 2002, and as approved
by the bankruptcy court on February 27, 2003, as amended by the First Amendment dated as of April 5, 2004 (the "First Amendment") (as so amended, the "Existing Agreement"), pursuant to
which Employee is employed as the Company's Executive Vice President and Chief Financial Officer.

B.    The
Company and Employee desire to modify certain terms of the Existing Agreement, as provided herein, and to continue the employment of Employee through the Termination
Date (defined below).

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

1.     All
defined terms used herein but not defined shall have the meaning set forth in the Existing Agreement.

2.     Subject
to Sections 7(B) and 7(D) of the Existing Agreement, the "Termination Date" shall be defined as 30 days after the latest to occur of (i) the date
that PricewaterhouseCoopers delivers to the Company an audit opinion with respect to fiscal 2004 and consent for inclusion in the Annual Report on Form 10-K for the year ended
March 31, 2004 (the "PWC Delivery Date"), (ii) the completion by Employee of the portions of the Company's Quarterly Reports on Form 10-Q for the quarters ended
June 30, 2003, September 30, 2003 and December 31, 2003 and Annual Report on Form 10-K for the year ended March 31, 2004 (the "Fiscal 2004 SEC Filings")
for which he is responsible, and (iii) Employee's delivery to the Company of all certifications and representation letters required under Section 4(a) of this Second Amendment. For
purposes of determining whether the PWC Delivery Date has occurred, if PricewaterhouseCoopers notifies the Company that it will not deliver an audit opinion solely as a result of the failure of a
Company officer, other than Employee, to provide necessary certifications or representation letters, such notification date shall be deemed to be the PWC Delivery Date. Notwithstanding the foregoing,
in no event shall the Termination Date be later than October 31, 2004. On the Termination Date, if the Company does not have "Cause" for termination as of the Termination Date (as such is
defined in the Existing Agreement), Employee's employment as Executive Vice President and Chief Financial Officer of the Company will be deemed terminated without "Cause" (the "Termination").

3.     The
provisions of the Existing Agreement are modified, not modified, or not applicable as follows:



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4.Additional Provisions.(a) Section 4(a) of the First Amendment is
amended to read in full as follows:



5.     The
Existing Agreement remains in full force and effect, as modified by this Second Amendment.

IN
WITNESS WHEREOF, this Second Amendment has been signed on the date first written above.

| |  | COMPANY:                              
| |  | --------------------------------------
| |  | Peregrine Systems, Inc.               
| |  | By:                                   
| |  | EMPLOYEE:                             
| |  | /s/KENNETH SEXTON8/30/04Kenneth Sexton

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