Exhibit
10.36  SETTLEMENT AGREEMENT  This
Settlement Agreement (this Agreement) is made effective as of the 19th day of
January, 2003, between Peregrine Systems, Inc. (Peregrine) and Peregrine
Remedy, Inc. (Remedy and with Peregrine, collectively, the Debtors), on the
one hand, and Motive Communications, Inc. (Motive), on the other hand. The
parties agree as follows:  1.Recitals.  1.1On September 22, 2002  (the  Petition Date),  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 Bankruptcy Court),
commencing the Debtors bankruptcy cases, jointly administered under Case No.
02-12740 (the Cases);  1.2As of the Petition Date, Peregrine and Motive were parties to a
Software Source Code License Agreement (License Agreement);  1.3As of the Petition Date, there was pending an action brought by Motive
against Peregrine and Remedy (and others) styled Motive Communications, Inc. v Peregrine Systems, Inc., Peregrine
Remedy, Inc., Stephen P. Gardner and Malthew Glass,No. GN 203283 in
261st District Court for Travis County, Texas (the State Action);  1.4On October 23, 2002, Motive filed a Complaint against Debtors in the
Bankruptcy Court initiating an adversary proceeding (the Adversary
Proceeding) to impose a constructive trust on $27,000,000 of the proceeds of
the sale of assets of Remedy (the Sale);  1.5On November 4, 2002, the Bankruptcy Court ordered $27,000,000 of the
proceeds of the Sale to be escrowed (the Escrow) pending the outcome of the
Adversary Proceeding;  1.6Peregrine rejected the License Agreement;  1.7On December 3, 2002, the State Action was removed by Defendant Stephen
P. Gardner to the United States Bankruptcy Court for the Western District of
Texas and Defendant Gardner filed a motion to transfer the State Action to the
Bankruptcy Court, and on January 2, 2003, Motive filed a motion to remand the
State Action to the state District Court in Texas;  1.8On December 19, 2002, Motive filed proofs of claim against each of the
Debtors in the amount of $27,000,000; and filed an unrelated proof of claim for
$275,157.47 against Peregrine (the Unrelated Claim);  1.9Debtors have filed a Motion to Dismiss the Adversary Proceeding and
Motive has filed Objections thereto;  
   2.Agreements.  2.1The Effective Date (the Effective Date) of any plan of reorganization
filed or supported by Debtors shall be the eleventh (11th) day
following entry of an order confirming such plan and Debtors shall actively
oppose any other effective date in any plan of reorganization. On the Effective
Date of a Plan of Reorganization (the Plan) confirmed by the Bankruptcy Court
and providing for the actions and payments specified in this 2.1:  a.Prior to payment in respect of any unsecured
nonpriority claims, Debtors (or one of them) shall pay Motive four million
dollars ($4,000,000) in cash out of the Escrow and re-transfer to Motive
subject to no liens, encumbrances and adverse interests (with full warranty of
title) one million six hundred sixty-six thousand six hundred sixty-seven
(1,666,667) shares of common stock of Motive currently registered in the name
of Peregrine;  b.Peregrine shall agree to pay to Motive,
without interest, five million
dollars ($5,000,000) cash in regular, equal annual payments over the period
ending four years after the Effective Date, commencing on the end of the first
year after the Effective Date, and the Plan shall provide that this obligation
is general unsecured debt and has priority over payments with respect to
prepetition equity of either of the Debtors;  c.The Plan will provide that the Escrow shall
be terminated upon the Effective Date after giving effect to the payment and
re-transfer referred to in § 2.1 (a) above;  d.The Plan will provide that on the Effective
Date, Debtors will release, acquit, and forever discharge, both for themselves
and their successors and assigns, Motive and its subsidiaries and affiliates,
and their present and former agents, successors, employees, and attorneys from
any and all claims, or causes of action of any nature whatsoever, whether in
contract or in tort, at law or in equity, known or unknown, including all
reasonable attorneys fees and cost incurred relating thereto (other than such
claims and matters as relate solely to the Unrelated Claim); provided, however,
that nothing herein shall be deemed to release any covenants, obligations, or
agreements undertaken under or pursuant to this Agreement;  e.The Plan will provide that on the Effective
Date, Motive will release, acquit, and forever discharge, both for itself and
its subsidiaries and affiliates, and their successors and assigns, the Debtors
and their respective present and former agents, successors, employees, and
attorneys from any and all claims, or causes of action of any nature
whatsoever, whether in contract or in tort, at law or in equity, known or
unknown, including all reasonable attorneys fees and cost incurred relating
thereto (other than claims and matters as relate solely to the Unrelated
Claim); provided, however, that nothing herein shall be deemed to release any
covenants, obligations, or agreements undertaken under or pursuant to this
Agreement;  f.Motive and Debtors shall dismiss with
prejudice the State Action and Motive shall dismiss with prejudice the
Adversary Proceeding and withdraw or modify its proofs of claim (other than the
Unrelated Claim) to the extent that those proofs of claim seek payment inconsistent
with the provisions of § 2.1a and b hereof; and  2 
   g.Motive will re-transfer to Peregrine, subject
to no liens, encumbrances and adverse interests (with full warranty of title)
one million (1,000,000) shares of common stock of Peregrine currently
registered in the name of Motive.  2.2From the date of this Agreement until the earlier of (i) the Effective
Date or (ii) the earliest to occur of any of the Change of Circumstances
specified in 2.3 of this Agreement:  a.Debtors and Motive shall seek a stay of ,and
neither either of Debtors nor Motive will pursue or schedule any hearing on,
the State Action or the Adversary Proceeding, nor will any of them file claims
against any other based on the facts alleged in either of the State Action or
the Adversary Proceeding.  b.The Escrow will remain in full force and
effect.  2.3Debtors shall not file or support (and shall actively oppose) any plan
of reorganization that does not include the actions and payments specified in
2.1 of this Agreement or that provides for installment payments on any general
unsecured nonpriority debt (other than unsecured debt in such classes as may be
established therein under §1122(b) of the Bankruptcy Code) more frequent than the
frequency of installments paid to Motive thereunder. If at any time a plan of
reorganization other than one providing for the actions and payments specified
in § 2.1 of this Agreement is confirmed or if either of the Cases is converted
to a proceeding under Chapter 7 of the Bankruptcy Code (each of which being a
Change of Circumstances):  a.The Escrow shall be maintained on its terms
and Debtors shall not seek or support (and shall actively oppose) any
modification thereof until the claims of Motive against Debtors have been
finally adjudicated, subject to any intervening order(s) of the Bankruptcy
Court.  b.No further stay of action of the State Action
and the Adversary Proceeding will apply, and any of Debtors or Motive may file
claims based on the facts alleged in either of the State Action or the
Adversary Proceeding.  c.The Debtors and Motive shall cooperate to
ensure to the best of their abilities that the Debtors and Motive shall have
all rights, remedies, claims and defenses available to them, both procedural
and substantive, that they would have had but for 2.2.a. of this Agreement,
such cooperation shall include not asserting defenses based upon statute of
limitations, laches or the like, all of which are waived and abandoned.  2.4Debtors shall cause to be filed with the Bankruptcy Court on January
20, 2003 a plan of reorganization incorporating the provisions of § 2.1 above,
and will promptly (but no later than January 23, 2003) seek and announce an
indefinite adjournment of the hearing on Debtors motion to dismiss the
Adversary Proceeding currently set for January 28, 2003 before the Bankruptcy
Court.  2.5Motive agrees to support the Plan, provided that the Plan incorporates
the provisions of § 2.1, above and no Change of Circumstances specified in §
2.3,  3 
   above, has occurred, and
neither of the Debtors has violated § 2.2, above. Subject to (x) the Bankruptcy
Courts determination that the Debtors have provided adequate information in
respect of the Plan of the provisions described in § 2.1 above to be included
therein, and (y) the Debtors subsequent solicitation of Motives vote in
respect of the Plan pursuant to section 1125 of the Bankruptcy Code through the
dissemination to Motive of the Plan and a disclosure statement describing such
Plan approved by the Bankruptcy Court, Motive shall express such support by
voting all of its claims against either of the Debtors in favor of confirmation
of the Plan.  2.6Motive and Debtors will cooperate in good faith with each other to
resolve customer support issues regarding Motive products as sold by Peregrine
to third-party customers under the Distribution Agreement and License
Agreement, it being understood that in connection with such cooperation Motive
will receive such reasonable compensation as is consistent with undertakings by
Motive hereunder, and that the undertakings of Motive and the Debtors in this §
2.6 do not affect the undertakings set out in § 2.1 above.  3.Representations.  3.1Each party represents that, subject to the Bankruptcy Courts
confirmation of the Plan, it is authorized to enter into, deliver and perform
its undertakings set out in this Agreement and is not under any impediment,
legal or otherwise, that would impair the effectiveness of this Agreement and
the enforceability of any covenant or duty contained in it. Any agent signing
this Agreement on behalf of any party hereby binds himself/herself personally
to this specific section and its representations and warranties.  3.2Each party represents to the other that this Agreement constitutes its
legally valid and binding obligation, enforceable in accordance with its terms.  3.3Each party represents that before executing this Agreement, it has been
informed of the terms, contents, conditions, and effect of this Agreement.  Each party further represents that, in
making this settlement, it has had the benefit and advice of counsel of its own
choosing.  3.4Motive represents and warrants that it has not heretofore assigned or
transferred, or purported to assign or transfer, to any person, firm, or
corporation any claim herein treated or released.  Motive agrees to indemnify and hold harmless the Debtors against
any claim based on, arising out of or in connection with any such transfer or
assignment or proposed transfer or assignment.  4.General Provisions.  4.1Each party understands and acknowledges that the consideration
described in this Agreement is all that is to be received in satisfaction of
any claims under this Agreement.  4 
   4.2This Agreement constitutes the entire understanding and agreement
between the parties hereto with respect to the subject matter hereof, and shall
not be modified except by a written agreement signed by the party against which
an additional understanding or agreement is asserted. No party, nor any partys
representative or attorney shall be deemed the drafter of this Agreement for
the purpose of construing or interpreting its provisions in any judicial
proceeding.  4.3This Agreement is to be construed, interpreted and enforced under the
laws of the State of Delaware and of the United States, without regard to
conflict of laws jurisprudence.  4.4The parties agree that the Bankruptcy Court 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.  4.5This Agreement is binding upon and inures to the benefit of the parties
to this Agreement and their respective representatives, successors and assigns.  4.6This Agreement may be executed in multiple counterparts, each of which
shall be deemed to be an original and all of which, when taken together, shall
constitute one instrument, and is effective as of the date first mentioned
above, and copies containing facsimile signatures shall be deemed to be
originals.  PEREGRINE SYSTEMS, INC.
  MOTIVE COMMUNICATIONS, INC.By:
  /s/ Gary G.  Greenfield
  
  By:
  /s/ [ILLEGIBLE]Name:
  Gary G.  Greenfield
  
  Name:
  /s/ [ILLEGIBLE]Title:
  Chief Executive
  Officer
  
  Title:
  Chief Operating
  OfficerPEREGRINE REMEDY, INC.By:
  /s/ Gary G.  GreenfieldName:
  Gary G.  GreenfieldTitle:
  Chief Executive
  Officer  5