Exhibit 10.38  SETTLEMENT AGREEMENT AND MUTUAL GENERAL RELEASE  This Settlement Agreement and Mutual General
Release (Agreement) is made, entered into, and dated as of this
      day of July, 2003, among Peregrine Systems, Inc.
(PSI), Fujitsu Transaction Solutions, Inc. (Fujitsu), and Fleet Business
Credit LLC (Fleet) (collectively, the parties), with reference to the
following:  RECITALS  A.On September 29, 2000, PSI and Fujitsu-ICL
Systems Inc.s e-Business Services division, Fujitsus predecessor-in-interest
(ICL), entered into a certain Schedule A. numbered 00SS092201A
(Schedule A), pursuant to which PSI agreed to (i) license to ICL generally
available and deliverable ServiceCenter, AssetCenter, InfraTooIs and Get. It
software products (the Schedule A Licenses), in exchange for ICLs payment of
a non-cancellable license fee of $3,000,000.00; and (ii) provide twelve (12)
months of maintenance services for the Schedule A Licenses, in exchange for
ICLs payment of $600,000.00.  B.Effective on October 3, 2000, PSI and ICL
entered into a Professional Services Agreement (e-Business Services) No.
PSI00l, as supplemented by that certain Statement of Work of even date
(collectively, the Professional Services Agreement), pursuant to which Fujitsu
agreed to provide PSI with general consulting services, as described therein,
in exchange for PSIs agreement to pay Fujitsu $3,600,000.00.  C.Effective September 28, 2001, PSI and Fujitsu
entered into a Master Software License Agreement Number SP-US-003119V01 (the
License Agreement), a Strategic Alliance Agreement, attached as Exhibit B to
the License Agreement (the Strategic Alliance Agreement) and an Addendum 1 to
the Professional Services Agreement with an effective date of September 28,
2001 (Addendum 1). Pursuant to the License Agreement, PSI agreed to license
to Fujitsu certain deliverable products in exchange for Fujitsus payment to
PSI of a license fee of $6,000,000.00 (the License Fee).  Pursuant to the Strategic Alliance
Agreement, PSI and Fujitsu were to attempt to develop jointly retail specific
versions of certain PSI products (the Integrated Offering Project) on the
terms and conditions set forth in the Strategic Alliance Agreement and in
Statements of Work to be agreed upon between the parties. Fujitsu contends that
the License Agreement, Strategic Alliance Agreement, Addendum 1 and other
contemporaneously executed documents (the foregoing, together with Schedule A
and the Professional Services Agreement, collectively, the Agreements)
constitute a single transaction. The other parties dispute that contention.  D.On September 22, 2002 (the Petition Date),
PSI and its wholly-owned subsidiary Peregrine Remedy, Inc. (collectively, with
PSI, the Debtors), filed petitions for relief under chapter 11 of the
Bankruptcy Code, 11 U.S.C. §§ 101, et seq. (the Bankruptcy Code), in
the United States Bankruptcy Court for the District of Delaware (the Court),
commencing the Debtors bankruptcy cases, jointly administered under Case No.
02-12740 (the Cases).  
   E.On December 20, 2002, Fujitsu filed a Proof
of Claim in the Cases, asserting a liability of $15,000,000+ (the Claim).
The Claim was assigned number 681. Pursuant to the Claim, Fujitsu asserts that
PSI is obligated to it on account of the following liabilities:  1.$2,338,525.00, representing the value of
software to which Fujitsu contends it is presently entitled pursuant to the
Agreements;  2.$500,000.00, representing funds allegedly
received by PSI from Johnson & Johnson as the proceeds of the sale of
software allegedly owned by Fujitsu, which amount Fujitsu contends is due it
pursuant to the Agreements;  3.$378,080.00, arising from PSIs alleged
breach of the Strategic Alliance Agreement/License Agreement and representing
the value of time allegedly spent by Fujitsu employees and/or consultants in
connection with Fujitsus performance under the Strategic Alliance
Agreement/License Agreement;  4.$801,999.00, resulting from PSIs alleged
breach of the Strategic Alliance Agreement/License Agreement and representing
costs allegedly incurred by Fujitsu in the Integrated Offering contemplated in
the Strategic Alliance Agreement/License Agreement;  5.$297,384.00, arising from PSIs alleged
breach of the Strategic Alliance Agreement/License Agreement and representing
payments allegedly made to PSI under the Strategic Alliance Agreement/License
Agreement, less the value of software actually delivered by PSI;  6.$84,600.00, plus an undetermined amount,
resulting from PSIs alleged breach of the Strategic Alliance Agreement/License
Agreement and representing costs required to be expended in the development of
an alternative to the Integrated Offering;  7.An undertermined amount in excess of
$10,828,000 representing an estimate of damages, including, but not limited to,
lost profits and loss of market position, and potential punitive damages,
resulting from [PSIs] intentional or negligent misrepresentations in
connection with, and inducing [Fujitsu] to enter, the Agreements; and  8.An undetermined amount resulting from PSIs
alleged breach of the Strategic Alliance Agreement/License Agreement and
representing an estimate for damages resulting from PSIs allegedly wrongful
pledge, assignment or transfer of any alleged account receivable purportedly
due from Fujitsu to PSI, to a third party, and any attempt by that third party
to enforce the alleged account receivable.  F.On May 29, 2003, the Debtors filed the Debtors
Objection to Claim of Fujitsu Transaction Solutions. Inc. (Claim No. 681)
(the Objection to Claim), pursuant to which PSI denied the Claim as follows:  2 
   1.Fujitsu fails to provide anybasis for its claim of entitlement to a
certain value of software from PSI;  2.No contractual or other legal basis exists
that would give rise to PSIs obligation to pay to Fujitsu $500,000.00
allegedly received by PSI from Johnson & Johnson;  3.PSI denies any allegation of breach by
Fujitsu. Under the Strategic Alliance Agreement, PSI and Fujitsu were to work
together on the Integrated Offering Project after first agreeing on specific
development details (e.g., personnel, time period, completion schedule, etc.)
to be memorialized in mutually agreed Statements of Work. No Statement of Work
for the initial phase of development or any other phases was ever prepared.
Accordingly, no actual performance obligations ever materialized;  4.The over $10 million in estimated damages
alleged are barred by, among other things, sections 10 and 23 of the License
Agreement;  5.Fujitsu fails to allege or document any
efforts by Fleet to collect any account receivable, any damages arising
therefrom or any basis for a right of reimbursement from PSI. To the extent PSI
were to be found co-liable with Fujitsu to Fleet on account of such account
receivable, section 502(e)(l)(B) of the Bankruptcy Code provides for the
disallowance of such claim.  Fujitsu disputes the allegations set forth in the Objection to Claim.  G.PSI asserts that Fujitsu is in breach of the
License Agreement and is obligated to PSI on account of the unpaid License Fee.
Fujitsu disputes this assertion.  H.Fleet contends that PSI has assigned the
License Fee to Fleet and that Fleet is entitled to collect the License Fee from
Fujitsu. Fujitsu disputes Fleets contentions.  I.Except as otherwise expressly provided
herein, the parties each desire to settle all disputes between or among each of
them, as well as any and all issues or claims which could have been or might be
asserted against any other party arising directly or indirectly from the
Professional Services Agreement, License Agreement, Integrated Offering
Project, License Fee, Strategic Alliance Agreement, Claim and Objection to
Claim. The parties hereto believe this Agreement represents a fair and
reasonable compromise of disputed issues among them.  THEREFORE,
to avoid the substantial expense and inconvenience of litigation, and in
consideration of the promises and agreements hereinafter set forth, IT IS
HEREBY AGREED, by and between the undersigned, as follows:  3 
   AGREEMENT  1.Stipulation.  Fujitsu
shall have an allowed general unsecured claim in the amount of $2,838,525.00
(the Settled Claim), which amount is calculated by combining the elements of
Fujitsus Claim described in paragraphs E. 1 and E. 2., above. On account of,
and in full and final satisfaction of such Settled Claim, upon the Effective
Date of the Fourth Amended Plan of Reorganization of Peregrine Systems Inc.
and Peregrine Remedy Inc. dated May 29, 2003, or subsequent iteration
thereof (the Plan), PSI shall pay to Fujitsu a single cash payment of
$1,500,000.00 in accordance with instructions given by Fujitsu, and PSI shall
provide the Products and associated maintenance and support services described
in the immediately following paragraph.  Fujitsu
shall have the right to acquire from PSI up to $800,000.00 of PSIs generally
available products (the Products) and associated maintenance and support services,
for Fujitsus internal use only, including in providing services to Fujitsu
customers, but Fujitsu shall not be entitled to distribute or sublicense the
Products to Fujitsu customers. For clarification, Fujitsu shall not be entitled
to provide application service provider (ASP) or other hosting services,
managed operations services or outsourcing services using the Products unless
the customers have licensed the Products directly from PSI and PSI has
consented to the arrangement in accordance with its standard procedures for
doing so for other providers of such services, provided, however, that Fujitsu
shall be entitled to allow its customers Casual User use and/or access to the
Products, but only to the same extent as Fujitsu allows its customers use
and/or access to Fujitsus systems (of which the Products would be a part) in
the course of performing services to such customers. Casual User means (i)
for PSIs ServiceCenter product, the right to open problem tickets, query the
status of open tickets, and query ServiceCenters IR Expert function to
access documented solutions to known problems, and (ii) for PSIs AssetCenter
product, the right to view and query the data maintained in AssetCenter, but
not to input, change or manipulate the data in any way. Products and associated
maintenance and support services shall be acquired by Fujitsu and provided by
PSI as follows:  a.The Products shall be priced at a forty
percent (40%) discount from PSIs list price and licensed to Fujitsu on PSIs
standard end user terms;  b.PSI shall provide maintenance and support
services to Fujitsu on substantially similar terms as those offered to other
PSI customers;  c.Fujitsu shall pay PSI for maintenance and
support services at ten percent (10%) of the then current list price; and  d.Fujitsu must order all Products within five
(5) years of the date of this Agreement.  4 
   Fujitsu
shall have no liability to PSI, to Fleet or to any other person or entity on
account of the License Fee or Schedule A,or
any portion thereof, or any amounts related thereto.  Fujitsu
shall withdraw its bid to sell PSI products to Nordstrom, Inc., or its
affiliates (Nordstrom). Fujitsu expressly consents to PSIs solicitation of
and pursuit of a business transaction with Nordstrom in PSIs sole and absolute
discretion.  The
Professional Services Agreement, Schedule A, License Agreement, Strategic
Alliance Agreement and all other agreements and other rights and obligations of
and between PSI and Fujitsu, including, without limitation, Fujitsus right to
resell, sublicense, host or outsource PSI products, other than those set forth
in this Agreement, are deemed terminated, null and void and of no further force
and effect.  This
Agreement is subject to and contingent upon approval by the Court in the Cases
and is of no force and effect if not so approved. This Agreement is also
subject to and contingent upon confirmation of the Plan, including any
subsequent iteration or amendment of the Plan. In the event that the Plan is
amended and such amendment materially and adversely changes the treatment
presently proposed to be afforded to Fleet, is denied confirmation and is not
subject to further amendment or reconsideration, is withdrawn without proposal
of an amendment or subsequent iteration, or the Cases are dismissed or
converted to cases under Chapter 7 without confirmation of the Plan, then this
Agreement shall be of no further force and effect and the Stipulation,
including the releases and waivers in the Agreement, shall be of no force and
effect. Fujitsu, Fleet and PSI shall be restored to all legal and equitable
rights, claims, defenses and positions that they held with regard to the
matters referred to in the Recitals, as if the Agreement had never been
executed.  Pending
approval by the Court of this Agreement and confirmation of the Plan, the
Objection to Claim shall be taken off calendar without prejudice, with all
rights, claims, defenses and positions of the parties being preserved in the
event that the Objection to Claim is restored to the calendar. In the event
that this Agreement is not approved by the Bankruptcy Court, and/or the Plan is
not confirmed, PSI may restore the Objection to Claim to the Courts calendar
provided, however, that the hearing date shall be set so as to give Fujitsu
forty-five (45) days from service of the notice of hearing to file and serve
its response in opposition to the Objection to Claim. In the event that
approval of this Agreement can not be noticed for hearing at or before the
hearing on Plan confirmation, PSI and Fujitsu shall stipulate to an estimation
of Fujitsus Claim Number 681 in the amount of $2,838,525 for purposes of
voting on the Plan.  2.Release by PSI.  Save
and except for the obligations owing pursuant to this Agreement, PSI knowingly,
voluntarily, unconditionally, irrevocably and absolutely releases and
discharges Fujitsu and Fleet, and each of them; and any and all of Fujitsus
and Fleets parent and subsidiary corporations, divisions and affiliates, as
well as Fujitsus and Fleets respective employees, officers, directors,
agents, attorneys, predecessors-in-interest, successors-in-interest, and
assigns (collectively, the PSI Releasees), from any and all claims, demands,
damages, liabilities, obligations, costs and  5 
   expenses, including, without
limitation, attorneys and consultants fees, actions and causes of action,
whether sounding in contract, tort, equity or otherwise, which PSI has or may
have against the PSI Releases, or any of them, whether known or unknown,
suspected or unsuspected, arising directly or indirectly out of or in any way
connected with the Professional Services Agreement, Schedule A,License Agreement, License Fee,
Integrated Offering Project, Strategic Alliance Agreement, Claim, Settled Claim
and Objection to Claim.  3.Release by Fujitsu.  Save
and except for the obligations owing pursuant to this Agreement, Fujitsu,
knowingly, voluntarily, unconditionally, irrevocably and absolutely releases
and discharges PSI and Fleet and each of them; and any and all of PSIs and
Fleets respective parent and subsidiary corporations, divisions and
affiliates, as well as all of PSIs and Fleets respective employees, officers,
directors, agents, attorneys, predecessors-in-interest, successors-in-interest,
and assigns (collectively, the Fujitsu Releasees), from any and all claims,
demands, damages, liabilities, obligations, costs and expenses, including,
without limitation, attorneys and consultants fees, actions and causes of
action, whether sounding in contract, tort, equity or otherwise, which Fujitsu
has or may have against the Fujitsu Releasees, or any of them, whether known or
unknown, suspected or unsuspected, arising directly or indirectly out of or in
any way connected with the Professional Services Agreement, Schedule A, License
Agreement, License Fee, Integrated Offering Project, Strategic Alliance
Agreement, Claim, Settled Claim and Objection to Claim.  4.Release by Fleet.  Save
and except for the obligations owing pursuant to this Agreement, Fleet
knowingly, voluntarily, unconditionally, irrevocably and absolutely releases
and discharges FSI and Fujitsu, and each of them; and any and all of PSIs and
Fujitsus parent and subsidiary corporations, divisions and affiliates, as well
as all of PSIs and Fujitsus respective employees, officers, directors,
agents, attorneys, predecessors-in-interest, successors-in-interest, and
assigns (collectively, the Fleet Releasees), from any and all claims,
demands, damages, liabilities, obligations, costs and expenses, including,
without limitation, attorneys and consultants fees, actions and causes of
action, whether sounding in contract, tort, equity or otherwise, which PSI or
Fujitsu has or may have against the Fleet Releasees, or any of them, whether
known or unknown, suspected or unsuspected, arising directly or indirectly out
of or in any way connected with the Professional Services Agreement, Schedule
A, License Agreement, License Fee, Integrated Offering Project, Strategic
Alliance Agreement, Claim, Settled Claim and Objection to Claim.  5.Waiver of Unknown Claims.  The
parties hereto each understands and acknowledges that there are laws which may
invalidate releases of claims which are unknown to the releasing party. Each of
the parties hereto expressly acknowledges and agrees that it is hereby waiving
and relinquishing any and all rights  6 
   which it has or might have
against the parties released by it or him pursuant to this Agreement, or any of
them, under such laws.  In
connection with such waiver and relinquishment, each of the parties hereto
acknowledges that it is aware that it may later discover facts in addition to
or different from those which it currently knows or believes to be true with
respect to the subject matters of this Agreement, but that it is its intention
to hereby fully, finally, and forever release all of the matters and claims
identified in the releases contained herein which now exist, may exist, or
previously existed between it, him, and/or any of the parties released by this
Agreement, whether known or unknown, suspected or unsuspected. In furtherance
of such intent, the releases in this Agreement shall be and remain in effect as
full and complete releases, notwithstanding the discovery or existence of such
additional or different facts by the parties hereto, or by any person acting on
any of their respective behalves.  6.Promise Not To Prosecute.  Each
of the parties hereto agrees that it will never individually, collectively, or
in conjunction with any other person or entity, prosecute or allow to be
prosecuted on its behalf, or in any way commence, assist or aid, except as
required by due legal process, any lawsuit, charge or proceeding, in any
administrative agency, arbitration or court, whether state or federal, or any
claim or demand of any type related to any matter which has been released by it
or him as provided above, it being the intention of the parties that with the
execution of this Agreement, and upon compliance with the terms hereof, the
released parties, persons, and entities will be absolutely, unconditionally and
forever discharged of and from all obligations related in anyway to the matters
discharged and released herein. The parties hereto each further agrees that
should it prosecute or cause to be prosecuted any claim which has been released
by it pursuant to this Agreement, then any party against whom such claim is
asserted may raise all claims and defenses originally available to it or him,
notwithstanding the release executed herein. In the event of any breach of this
section, the aggrieved party or parties shall be entitled to recover from the
breaching party or parties not only the amount of any judgment which may be
awarded against the breaching party or parties, but also such other damages,
costs, and expenses as may be incurred by the aggrieved party or parties, or
any of them, including attorneys fees and expenses in defending against or
seeking to stop any lawsuit or proceeding brought in violation of this promise
not to sue.  7.No Admission Of Liability.  By
entering into this Agreement, none of the parties hereto makes any admission
that it engaged, or is now engaging, in any unlawful, improper, or negligent
conduct. It is understood that this settlement is not an admission of
liability, but is in compromise of disputed claims which remain untested; and
that the parties hereto each specifically deny liability for any wrongs alleged
by any other party, and intend merely to avoid litigation and the expenses
relating thereto by entering into this Agreement.  7 
   8.Modifications.  This
Agreement may be amended only by a written instrument executed by all parties
hereto.  9.Entire Agreement.  This
Agreement, together with the attachments hereto, constitute the entire
agreement between the parties hereto, superseding any and all prior agreements,
representations, and promises, whether oral or in writing.  10.Severability.  Should
it be determined by a court that any term of this Agreement is unenforceable,
that term shall be deemed to be deleted. However, the validity and
enforceability of the remaining terms shall not be affected by the deletion of
the unenforceable term.  11.No Waiver Of Breach.  A
waiver of the breach of any term or condition of this Agreement shall not be
deemed to constitute a waiver of any subsequent breach of the same or any other
term or condition.  12.Binding on Successors.  The
parties agree that this Agreement shall be binding on, and inure to the benefit
of, the parties or their successors, heirs and/or assigns.  13.No Assignment of Rights.  The
parties to this Agreement each warrant and represent that it has not assigned
or transferred to any person or entity not a party to this Agreement, any
matter released pursuant to this Agreement. The parties each further agree to
defend, indemnify and hold the other harmless from any and all claims based on or
arising out of any such assignment or transfer made, purported, or claimed.  14.Interpretation.  Each
of the parties hereto has agreed to the use of the particular language of the
provisions of this Agreement, and any question of doubtful interpretation shall
not be resolved by any rule providing for interpretation against the party who
causes the uncertainty to exist or against the drafter of this Agreement.  15.Headings.  The
various headings of this Agreement are included for convenience only and shall
not affect the meaning or interpretation of this Agreement or any provision
hereof.  8 
   16.Enforcement.  In
the event legal action is commenced to enforce or interpret this Agreement or
for declaratory relief with respect thereto, the prevailing party or parties in
such action shall be entitled to recover from the losing party or parties the
attorneys fees and costs incurred by the prevailing party or parties in such
action.  17.Signatories Representations.  The
parties executing this Agreement and the Stipulation represent and warrant that
they have the authority to enter into this Agreement and the Stipulation on
their own behalf and/or on behalf of their employer and/or principal; and to
bind all persons or entities who may claim through them. The parties each
further warrants that it has neither filed nor caused to be filed any claims or
actions against any of the parties released herein which is not the subject of
the releases set forth above. The parties hereto covenant to defend, indemnify
and hold each other harmless from any liability, losses, claims, damages, costs
or expenses, including attorneys fees, arising from any breach of the
warranties set forth herein.  18.Counterparts.  This
Agreement may be executed in counterparts and shall be binding on all parties
when all have signed an original of this Agreement.  19.Governing Law.  This
Agreement shall be construed in accordance with the laws of the State of
California.  20.Jurisdiction.  The
parties agree that the Court presiding over the Cases shall have exclusive
jurisdiction regarding any dispute relating to this Agreement or the
interpretation of any provision hereof. The parties further agree not to
contest such exclusive jurisdiction.  21.Advice of Legal Counsel.  By
executing this Agreement, each party represents and acknowledges that it has
relied upon the legal advice of counsel of its own choice regarding the
settlement and compromise of this case and at all times relevant to and throughout
the negotiation of this Agreement and in connection with the preparation and
execution of this Agreement.  9 
   22.Signatures of Parties.  By
their signatures below, the parties represent that they have read the foregoing
Agreement and fully understand and agree to each and all of the terms and
conditions set forth herein.  WHEREFORE,
the parties to this Agreement, with the benefit of representation and advice of
counsel, have read the foregoing Agreement, fully understand each and every
provision contained herein, and have executed this Agreement on the date shown
below.  Dated:
  
  , 2003
  PEREGRINE SYSTEMS, INC.By:
  /s/ Ken SextonIts:
  Ken Sexton, CFODated:
  
  , 2003
  FUJITSU TRANSACTION SOLUTIONS,
  INC.By:Its:FLEET BUSINESS CREDIT LLCDated:
  
  , 2003By:Its:  10 
   By
their signatures below, the parties represent that they have read the foregoing
Agreement and fully understand and agree to each and all of the terms and
conditions set forth herein.  WHEREFORE,
the parties to this Agreement, with the benefit of representation and advice of
counsel, have read the foregoing Agreement, fully understand each and every
provision contained herein, and have executed this Agreement on the date shown
below.  Dated:
  
  , 2003
  PEREGRINE SYSTEMS, INC.By:Its:Dated:
  July 2
  , 2003
  FUJITSU TRANSACTION SOLUTIONS,
  INC.By:
  /s/ [ILLEGIBLE]Its:
  VP/Associate General Counsel/Assistant SecretaryFLEET BUSINESS CREDIT LLCDated:
  
  , 2003By:Its:  10 
   By
their signatures below, the parties represent that they have read the foregoing
Agreement and fully understand and agree to each and all of the terms and
conditions set forth herein.  WHEREFORE,
the parties to this Agreement, with the benefit of representation and advice of
counsel, have read the foregoing Agreement, fully understand each and every
provision contained herein, and have executed this Agreement on the date shown
below.  Dated:
  
  , 2003
  PEREGRINE SYSTEMS, INC.By:Its:Dated:
  
  , 2003
  FUJITSU TRANSACTION SOLUTIONS,
  INC.By:Its:FLEET BUSINESS CREDIT, LLCDated:
  
  , 2003By:
  /s/ [ILLEGIBLE]Its:
  Senior Vice
  President  10