Exhibit 10.16     PEREGRINE SYSTEMS LIMITED   Terms and Conditions of
Employment   Alan Kerr  1 
   TERMS AND
CONDITIONS OF EMPLOYMENT  Full Name:
  Alan KerrAddress:
  The Great BarnWokingham RoadHurstBerkshireRG10 0RX  The standard terms and conditions of employment with
Peregrine Systems Limited (the Company) of Ambassador House, Paradise Road,
Richmond, Surrey TW9 1SQ are set out below. 
Details of your individual terms, including remuneration, are set out in
the letter offering you employment.  Your terms and conditions may be subject to change
from time to time in which case you will be advised of the Companys intention
with due notice either individually in writing or by general e-mail.  There are no collective agreements that
affect the terms and conditions of your employment with Peregrine Systems.   DUTIES  You will perform all acts, duties and obligations and
comply with such orders as may be designated by the Company which are
reasonably consistent with the position that you hold.  The Company may require you to undertake
different or additional duties, however, you will not be assigned duties which
you cannot reasonably perform.   RULES,
POLICIES AND PROCEDURES  During your employment you will be required to comply
with the Companys rules, policies and procedures which may vary from time to
time and to comply with the Companys lawful and reasonable instructions.  Copies of the Companys Disciplinary Rules and
Procedure and Grievance Procedure, which do not form part of your contract of
employment, may be obtained from your Manager or from the Company Intranet.   HOURS
OF WORK  Your normal working hours are 37.5 hours per week from
9.00am to 5.30pm Monday to Friday.  This
includes one hour for lunch which is to be taken between 12.00 noon and 2.00pm
at the discretion of your Manager.  2 
   You are expected to work such hours as are reasonably
necessary to perform your duties and to meet the needs of the business.  There is no entitlement to be paid
additional remuneration for any additional hours worked as this obligation has
already been taken into account by the Company in determining salary levels.  The Company reserves the right to change your start
and finish times and the days on which you work.  By signing these terms and conditions you agree to
waive the provisions of the Working Time Regulations 1998 and consent to work
in excess of 48 hours per week (averaged over 17 weeks) if required.  You may withdraw this consent at any time by
giving 7 days notice in writing to your Manager.  The Company will not penalise you in any way if you decide not to
opt out or exercise your right to withdraw your consent to opt out.   PLACE
OF WORK  The Company may require you to work at any premises
that the Company may subsequently acquire within reasonable travelling distance
of your home.  During the course of your
employment you will also be required to work at various premises belonging to
the Companys customers, and to travel both within the UK and abroad.   REMUNERATION,
EXPENSES AND DEDUCTIONS  Your salary is as stated in your offer letter.  Any subsequent changes will be discussed
with you and notified to you in writing. 
Salaries are normally reviewed annually though there is no guarantee
that there will be an increase.  You will be reimbursed for any reasonable expenses
incurred by you in carrying out your duties, subject both to your producing
receipts when requested to do so and to complying with relevant company
policies that are in force at the time.  By signing these terms and conditions you agree that
the Company will be entitled at any time during your employment, or in any
event on the termination of your employment, to deduct from your remuneration,
or from your expenses reimbursement, any monies due from you to the Company.   HOLIDAY
ENTITLEMENT  The Companys holiday year runs from 1 April to 31
March.  In addition to U.K. Public
Holidays you are entitled to 25 days holiday in each complete holiday year
worked.  This includes your statutory
holiday entitlement under the Working Time Regulations 1998 which shall be
considered to have been taken first.  3 
   Holiday entitlement in the first and final years of
employment will be calculated on a pro rata basis with holidays accruing at the
rate of 2.08 days per completed month of employment.  The total will be rounded up to the nearest half day.  If on the termination of your employment you have taken
holiday in excess of your accrued entitlement, this excess will be deducted
from any monies due to you.  If you have
holiday entitlement which you have accrued but not taken the Company may, at
its discretion, require you to take your holiday during your notice period or
may pay you a sum in lieu of accrued holiday.  You must obtain the prior approval of your Manager
before booking holiday dates. It is not usual for the Company to grant leave of
more than 2 weeks at any one time.  In the event of your having any unused holiday at the
end of the holiday year you may carry over up to 5 days into the first three
months of the next holiday year with the prior approval of your Manager.  Any carried over holiday which is not taken
by 30 June will be lost.   SICKNESS
ABSENCE AND SICK PAY  If you are unable to come to work for any reason you
must inform your Manager, or another appropriate person within the Company, as
soon as possible on the first day of absence. 
You must then keep the Company informed of your progress and likely date
of return on a regular basis.  For absences of up to 7 days a self  certificate will
be accepted.  For absences of more than
seven consecutive days, including weekends, you must obtain a medical
certificate from your doctor and send this to the Company.  Providing that you meet the requirements in respect of
certification and the Company is satisfied that your absence is due to genuine
incapacity for work, the Company will pay you up to 15 working days Company
Sick Pay (including Statutory Sick Pay where payable) during the year from 1
April to 31 March.  You will receive Statutory Sick Pay (SSP) when you
qualify for it.  Details of the SSP
Scheme may be obtained from the Human Resources Department.  If at any time during your employment your health
gives cause for concern you may be required by the Company to undergo a medical
examination by a doctor nominated by the Company.  The Company may ask for a medical report from the doctor carrying
out the examination and you will be asked to sign a medical consent form to
confirm your agreement to this.  4 
   PENSION
AND OTHER BENEFITS  The Company reserves the right to terminate its
participation in any of its benefit schemes or to substitute another scheme or
to alter the benefits available to you under any of the schemes.   DATA
PROTECTION  In accordance with the Data Protection Act 1998 the
Company is required to obtain your consent to process personal data held on
your personnel file and the Companys computer systems.  From time to time the Company will wish to process
personal information for administration and business management purposes.  Such processing will take place in
accordance with the provisions of the Data Protection Acts 1984 and 1998.  As part of an international organisation we
may on occasion wish to make your personal records available to other parts of
Peregrine Systems which may be located in the United States or other parts of
the world.  By signing these Terms and
Conditions of Employment you are giving your consent to these uses.   EXCLUSIVITY
OF SERVICE  You are required to devote your full time, attention
and abilities to your job duties during working hours, and to act in the best
interests of the Company at all times. 
You must not, without the written consent of the Company, be in any way
directly or indirectly engaged or concerned in any other business or
undertaking where this is or is likely to be in conflict with the interests of
the Company or where this may adversely affect the efficient discharge of your
duties.  However, you may hold up to 5%
of any class of securities for investment purposes in any company which is
quoted on a recognised Stock Exchange. 
If the holding is to exceed 5%, the prior approval of the Board of
Directors of the Company should be obtained. 
Subject to this clause, and to the Companys prior written consent you
may perform duties of a non-executive director for another company which is not
a competitor of the Company.   CONFIDENTIAL
INFORMATION  You shall neither during your employment (except in
the proper performance of your duties) nor at any time after the termination
thereof, directly or indirectly  use for your own purposes or those of any other person, company,
business entity or other organisation whatsoever, or  5 
   disclose to any person, company, business entity or other
organisation whatsoever, any trade secrets or confidential business information
relating or belonging to the Company including but not limited to any such
information relating to customers, customer lists or requirements, price lists
or pricing structures, marketing and sales information, business plans or
dealings, employees or officers, financial information and plans, designs,
formulae, specific technical information, research activities, any document
marked Confidential, or any information which you have been told is
confidential or which you might reasonably expect the Company would regards as
confidential, or any information which has been given to the Company in
confidence by customers, suppliers and other persons.  You shall not at any time during your employment with
the Company make any notes or memoranda relating to any matter within the scope
of the Companys business dealings or affairs otherwise than for the benefit of
the Company.   COMPUTER
SYSTEMS AND FACILITIES  Internet access, including e-mail facilities, are
essential elements of Peregrines day to day business operations and employees
granted access to these facilities are required to use them in a responsible
way and to follow the Companys guidelines on such use.  The Company
will audit and monitor use of the systems to ensure proper and effective
business use.   You should not expect privacy
in the use of Company Internet, e-mail and fax facilities.  All e-mail is stored and the Company may
inspect e-mail (including personal e-mails) at any time.  By accepting employment with the Company you consent
to such monitoring and inspections.   INTELLECTUAL PROPERTY  You shall disclose to the Company any idea, design,
work or invention made in the course of your employment, whether or not in the
course of your duties.  All ideas,
designs, works and inventions of any nature whatsoever in connection with the
business of the Company, made by you, or which you have played a part in making
during the course of your employment shall be the exclusive property of
Peregrine Systems Limited.  All patents, copyright and other intellectual property
rights throughout the world in respect of such ideas, designs, works or
inventions shall also be the exclusive property of the Company.  In accepting employment with the Company you
irrevocably waive in favour of Peregrine Systems Limited any and all moral
rights which you may have in any copyright work created by you pursuant to your
employment with the Company.  6 
   You will, at the request and expense of the Company,
do such things and execute such documents as may be necessary to give the
Company the full benefit of such ideas, designs, works and inventions.  The Company will pay you such compensation as it will
determine in its discretion, subject to Section 40 of the Patents Act 1977.   DISCIPLINE  You will be expected to maintain a good standard of
work performance and conduct at all times. 
If standards fall below the reasonable levels acceptable to the Company,
you will be liable to disciplinary action which could ultimately result in
dismissal if satisfactory improvements are not forthcoming.   TERMINATION
OF EMPLOYMENT  Details of the notice necessary to terminate your
employment are contained in the letter offering you employment.  The Company reserves the right to terminate your
employment without notice, and without pay in lieu of notice, if it has
reasonable grounds to believe that you are guilty of gross misconduct or gross
negligence.  The Company reserves the right to pay compensation in
lieu of any notice of termination of employment (subject to a duty to mitigate
your loss) which it or you are required to give.  Where you have received pay in lieu of notice you will not be
entitled to any additional compensation in respect of any holiday that would
otherwise have accrued during the notice period.  The Company reserves the right to tell you not to
attend the office whilst working your notice period irrespective of whether
notice has been given by you or by the Company.  In these circumstances you will be paid your normal salary and
receive normal Company benefits during the notice period.  During any such period the Company may
require you to undertake duties at home, however, the Company is relieved of
any obligation to provide you with work and may require you not to have any
contact with customers of the Company or such employees as the Company may
determine.  You may not work for any
other Company during your notice period.   TERMINATION
THROUGH ILLNESS  It is necessary for the efficient operation of the
business that all employees attend work regularly.  If you are unable to achieve this for reasons of poor health the
Company may  7 
   not be able to continue your employment.  Your health will be reviewed regularly
during any absence from work due to sickness, injury or other incapacity and
the Company reserves the right to terminate your employment in such
circumstances.  However, no action would
be taken without consulting with you and establishing that no reasonable adjustments
can be made to accommodate your situation.   REQUIREMENTS
ON LEAVING THE COMPANY  Upon the termination of your employment, for whatever
reason, you will:  1.Immediately deliver up
to the Company all databases, lists of customers and clients, correspondence
and other documents, papers and property whether in hard copy or computer
readable form belonging to the Company which may have been prepared by you or
have come into your possession during your employment and you must not retain
any copies or extracts of them.  2.Return
all other Company property, which may include some or all of the following:
mobile phone, PC, laptop, keys and security pass.  The Company reserves the right to retain the sum of one thousand
pounds from your final payment until all Company property has been returned.  3.Cease
to represent yourself as being in any way connected with the business of the
Company.   RESTRICTIONS
AFTER THE TERMINATION OF EMPLOYMENT  You agree that for a period of six months immediately
after the effective date of the termination of your employment you will not,
either on your own behalf or on behalf of any other person or organisation,
either directly or indirectly:  Solicit, or assist in soliciting, or deal with, in competition with
the Company, the custom or business of any Customer or Prospective Customer
with whom you have had substantial personal contact or dealings on behalf of
the Company during the 12 months immediately preceding the effective date of
the termination of your employment.  This
also applies to organisations with whom employees reporting directly to you
have had personal contact or dealings on behalf of the Company during the
relevant period.  Solicit, or entice away, or accept into employment or otherwise
engage the services of, any person who is a Company Employee.  This applies where that person is a Company
Employee on the effective date of the termination of your employment or has
been a Company Employee in any part of the three months immediately preceding
the Termination Date  8 
   UNDERTAKING  You agree that in the event of receiving from any
person, company, business entity or other organisation an offer of employment
either during your employment with the Company or during the continuance in
force of any restrictions set out above you will immediately provide to such
person, company, business entity or other organisation a full and accurate
signed copy of these Terms and Conditions.   Note  Throughout
this Statement of Terms and Conditions of Employment references to the Company
should be taken as including reference to Associated Companies that are either
directly or indirectly controlled by the Company or directly or indirectly
control the Company.   Issued on behalf of Peregrine Systems by:Roddy TemperleyDate:Signed and Agreed by:Alan KerrDate:  9