Exhibit 10.17

 

PORTAL SOFTWARE, INC.

INDEMNIFICATION AGREEMENT

 

THIS INDEMNIFICATION AGREEMENT (this “Agreement”) is made and entered into this
«Day» day of «MoYear» by and between Portal Software, Inc., a Delaware
corporation (the “Company”), and «Name» (“Indemnitee”).

 

WHEREAS, Indemnitee, a member of the Board of Directors (the “Board”) or an
officer, employee or agent of the Company, performs a valuable service in such
capacity for the Company;

 

WHEREAS, both the Company and the Indemnitee recognize the increased risk of
litigation and other claims being asserted against officers, directors,
employees and agents of public companies;

 

WHEREAS, the stockholders of the Company have adopted Bylaws (the “Bylaws”)
providing for the indemnification of the officers, directors, employees and
agents of the Company to the maximum extent authorized by the Code (as defined
below);

 

WHEREAS, the Bylaws and the Code, by their non-exclusive nature, permit
contracts between the Company and the members of its Board, officers, employees
or agents with respect to indemnification of such directors, officers, employees
or agents;

 

WHEREAS, in accordance with the authorization as provided by the Code, the
Company either has purchased and presently maintains or intends to purchase and
maintain a policy or policies of Directors and Officers Liability Insurance (“D
& O Insurance”) covering certain liabilities which may be incurred by its
directors and officers in the performance of their duties as directors and
officers of the Company;

 

WHEREAS, as a result of developments affecting the terms, scope and availability
of D & O Insurance there exists general uncertainty as to the extent of
protection afforded members of the Board or officers, employees or agents by
such D & O Insurance and by statutory and bylaw indemnification provisions; and

 

WHEREAS, in recognition of the Indemnitee’s need for (i) substantial protection
against personal liability, and (ii) specific contractual assurance that the
protection promised by the Bylaws will be available to the Indemnitee,
regardless of, among other things, any amendment to or revocation of the Bylaws
or any change in the composition of the Board or acquisition transaction
relating to the Company, the Company wishes to provide for the indemnification
of the Indemnitee and to advance expenses to the Indemnitee to the fullest
extent permitted by law and as set forth in this Agreement, and, to the extent
such insurance is

 

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maintained by the Company, to provide for the continued coverage of the
Indemnitee under the Company’s D & O Insurance;

 

NOW, THEREFORE, in consideration of Indemnitee’s continued service as a
director, officer, employee or agent after the date hereof, and for other good
and valid consideration, the receipt and adequacy of which is hereby
acknowledged, the parties hereto agree as follows:

 

1.    Certain Definitions.

 

(a) A “Change in Control” shall be deemed to have occurred if:

 

(i) any “person,” as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder (the “Exchange Act”), other than (a) a trustee or other fiduciary
holding securities under an employee benefit plan of the Company; (b) a
corporation owned, directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of stock of the Company;
or (c) any current beneficial stockholder or group, as defined by Rule 13d-5 of
the Exchange Act, including the heirs, assigns and successors thereof and any
“person” formed primarily for such current beneficial stockholder’s or group’s
or his, her or its spouse’s or lineal descendants’ estate planning purposes, of
beneficial ownership, within the meaning of Rule 13d-3 of the Exchange Act, of
securities possessing more than 50% of the total combined voting power of the
Company’s outstanding securities; hereafter becomes the “beneficial owner,” as
defined in Rule 13d-3 of the Exchange Act, directly or indirectly, of securities
of the Company representing 20% or more of the total combined voting power
represented by the Company’s then outstanding Voting Securities; or

 

(ii) the stockholders of the Company approve a merger or consolidation of the
Company with any other corporation, other than a merger or consolidation which
would result in the Voting Securities of the Company outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or by
being converted into Voting Securities of the surviving entity) at least 80% of
the total voting power represented by the Voting Securities of the Company or
such surviving entity outstanding immediately after such merger or
consolidation, or the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company, in one transaction or a series of transactions, of all or substantially
all of the Company’s assets.

 

(b) “Code” shall mean the General Corporation Law of the State of Delaware, as
the same exists or may hereafter be amended or interpreted; provided, however,
that in the case of any such amendment or interpretation, only to the extent
that such amendment or interpretation permits the Company to provide
indemnification rights that are no less broad than were permitted prior thereto
to the extent not otherwise prohibited by such amendment.

 

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(c) “Expense” shall mean attorneys’ fees and all other costs, expenses and
obligations paid or incurred in connection with investigating, defending, being
a witness in or participating in (including on appeal), or preparing for any of
the foregoing, any Proceeding relating to any Indemnifiable Event.

 

(d) “Indemnifiable Event” shall mean any event or occurrence that takes place
either prior to or after the execution of this Agreement, related to the fact
that the Indemnitee is or was a director or officer of the Company, or is or was
serving at the request of the Company as a director, officer, employee, or agent
of another corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit plans, or by
reason of anything done or not done by the Indemnitee in any such capacity.

 

(e) “Proceeding” shall mean any threatened, pending or completed action, suit,
investigation or proceeding, and any appeal thereof, whether civil, criminal,
administrative or investigative (including an action by or in the right of the
Company) to which Indemnitee is, was or at any time becomes a party, or is
threatened to be made a party, and/or any inquiry or investigation whether
conducted by the Company or any other party, that the Indemnitee in good faith
believes might lead to the institution of any such action.

 

(f) “Reviewing Party” shall mean any appropriate person or body consisting of a
member or members of the Company’s Board or any other person or body appointed
by the Board (including the special independent counsel referred to in Section
9) who is not a party to the particular Proceeding with respect to which the
Indemnitee is seeking indemnification.

 

(g) “Voting Securities” shall mean any securities of the Company which vote
generally in the election of directors.

 

2.     Indemnification of Indemnitee.    In the event the Indemnitee was or is a
party to or is involved (as a party, witness or otherwise) in any Proceeding by
reason of (or arising in part out of) an Indemnifiable Event, whether the basis
of the Proceeding is the Indemnitee’s alleged action in an official capacity as
a director or officer or in any other capacity while serving as a director or
officer, the Company shall indemnify the Indemnitee to the fullest extent
permitted by the Code against any and all Expenses, liability and loss
(including judgments, fines, ERISA excise taxes or penalties, and amounts paid
or to be paid in settlement, and any interest, assessments, or other charges
imposed thereon, and any federal, state, local, or foreign taxes imposed on any
director or officer as a result of the actual or deemed receipt of any payments
under this Agreement) (collectively, “Liabilities”) reasonably incurred or
suffered by such person in connection with such Proceeding. The Company shall
provide indemnification pursuant to this Section 2 as soon as practicable, but
in no event later than 30 days after it receives written demand from the
Indemnitee.

 

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3.    Limitations on Indemnity.    Notwithstanding anything in this Agreement to
the contrary including the right of the Reviewing Parties to deny
indemnification pursuant to the terms of Section 7 hereof, the Indemnitee shall
not be entitled to indemnification pursuant to this Agreement in the event of
the following:

 

(a) on account of any suit in which judgment is rendered against Indemnitee for
an accounting of profits made from the purchase or sale by Indemnitee of
securities of the Company pursuant to the provisions of Section 16(b) of the
Exchange Act or similar provisions of any federal, state or local statutory law;

 

(b) on account of Indemnitee’s conduct which is finally adjudged to have been
knowingly fraudulent or deliberately dishonest or to constitute willful
misconduct, including, but not limited to, misappropriation of corporate assets,
breach of Indemnitee’s duty of loyalty or conduct which resulted in profit to
which Indemnitee is not entitled); and

 

(c) on account of any Proceeding (other than an Enforcement Proceeding referred
to in Section 8 hereof) initiated by the Indemnitee unless such Proceeding was
authorized in the specific case by action of the Board of Directors.

 

4.    Partial Indemnity.    If the Indemnitee is entitled under any provision of
this Agreement to indemnification by the Company for some or a portion of the
Expenses and Liabilities, but not, however, for all of the total amount thereof,
the Company shall nevertheless indemnify the Indemnitee for the portion thereof
to which the Indemnitee is entitled. In connection with any determination by the
Reviewing Party or otherwise as to whether the Indemnitee is entitled to be
indemnified hereunder, the burden of proof shall be on the Company to establish
that the Indemnitee is not so entitled

 

5.    Notification and Defense of Claim.    Not later than thirty (30) days
after receipt by Indemnitee of notice of the commencement of any Proceeding,
Indemnitee shall, if a claim in respect thereof is to be made against the
Company under this Agreement, notify the Company of the commencement thereof;
but Indemnitee’s omission to so notify the Company will not relieve the Company
from any liability which it may have to Indemnitee under this Agreement or
otherwise. With respect to any such Proceeding as to which Indemnitee notifies
the Company of the commencement thereof:

 

(a) The Company will be entitled to participate therein at its own expense.

 

(b) Except as otherwise provided below, to the extent that it may wish, the
Company shall, jointly with any other indemnifying party similarly notified, be
entitled to assume the defense thereof, with counsel reasonably satisfactory to
Indemnitee. After notice from the Company to Indemnitee of its election to
assume the defense thereof, the Company will not be liable to Indemnitee under
this Agreement for any Expenses subsequently incurred by Indemnitee in
connection with the defense thereof, other than reasonable costs of
investigation or as otherwise provided below. Indemnitee shall have the right to
employ its own counsel in such Proceeding, but the fees and expenses of such
counsel incurred after notice from the Company of the Company’s assumption of
the defense thereof shall be at the expense of Indemnitee unless (i)

 

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the employment of counsel by Indemnitee has been authorized by the Company; (ii)
Indemnitee shall have reasonably concluded that there may be a conflict of
interest between the Company and Indemnitee in the conduct of the defense of
such action; or (iii) the Company shall not in fact have employed counsel to
assume the defense of such Proceeding within thirty (30) days of receipt of
notice by the Company of the Proceeding; in each of which cases the fees and
expenses of Indemnitee’s separate counsel shall be paid by the Company. The
Company shall not be entitled to assume the defense of any Proceeding brought by
or on behalf of the Company or as to which Indemnitee shall have made the
conclusion provided for in clause (ii) above.

 

(c) The Company shall not be liable to indemnify Indemnitee under this Agreement
for any amounts paid in settlement of any Proceeding effected without its
written consent. The Company shall be permitted to settle any action except that
it shall not settle any action or claim in any manner which would impose any
penalty, any economic consequence or limitation on Indemnitee without
Indemnitee’s written consent. Neither the Company nor Indemnitee will
unreasonably withhold its consent to any proposed settlement.

 

6.    Advancement and Repayment of Expenses.

 

(a) In the event that Indemnitee employs his or her own counsel pursuant to
clauses (i) through (iii) of Section 5(b) above, the Company shall advance to
Indemnitee, prior to any final disposition of any Proceeding, any and all
Expenses, within thirty (30) days after receiving from Indemnitee copies of
invoices presented to Indemnitee for such Expenses; provided, however, that if
required by applicable corporate laws such Expenses shall be advanced only upon
delivery to the Company of an undertaking by or on behalf of the Indemnitee to
repay such amount if it is ultimately determined that the Indemnitee is not
entitled to be indemnified by the Company.

 

7.    Review Procedure for Indemnification.    Notwithstanding the foregoing,
(i) the obligations of the Company under Section 2 shall be subject to the
condition that the Reviewing Party shall not have determined (in a written
opinion, in any case in which the special independent counsel referred to in
Section 9 hereof is involved) that the Indemnitee would not be permitted to be
indemnified under applicable law or under Section 3 hereof as if final
adjudication had been rendered as provided for in Section 3, and (ii) the
obligation of the Company to advance Expenses pursuant to Section 6 above shall
be subject to the condition that, if, when and to the extent that the Reviewing
Party determines that the Indemnitee would not be permitted to be so indemnified
under applicable law, the Company shall be entitled to be reimbursed by the
Indemnitee (who hereby agrees to reimburse the Company) for all such amounts
theretofore paid; provided, however, that if the Indemnitee has commenced legal
proceedings in a court of competent jurisdiction pursuant to Section 8 below to
secure a determination that the Indemnitee should be indemnified under
applicable law, any determination made by the Reviewing Party that the
Indemnitee would not be permitted to be indemnified under applicable law shall
not be binding and the Indemnitee shall not be required to reimburse the Company
for any advanced Expenses until a final judicial determination is made with
respect thereto (as to which all rights of appeal therefrom have been exhausted
or have lapsed). The Indemnitee’s obligation to reimburse the Company for
advancement of Expenses pursuant to this Section 7 shall be unsecured and no
interest shall be charged thereon. If there has not been a Change in Control or
there has been a Change in Control approved by the Board,

 

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the Reviewing Party shall be selected by the Board, and if there has been such a
Change in Control, other than a Change in Control which has been approved by a
majority of the Company’s Board who were directors immediately prior to such
Change in Control, the Reviewing Party shall be the special independent counsel
referred to in Section 9 hereof.

 

8.    Enforcement.    If (a) the Reviewing Party determines that the Indemnitee
substantively would not be permitted to be indemnified in whole or in part under
applicable law and the Indemnitee objects to such determination within 30 days
of notice thereof, or (b) the Indemnitee has not otherwise been paid in full
pursuant to Sections 2 and 3 above within 30 days after a written demand has
been received by the Company, the Indemnitee shall have the right to commence
litigation in any court in the State of Delaware having subject matter
jurisdiction thereof and in which venue is proper to recover the unpaid amount
of the demand (an “Enforcement Proceeding”) and, if successful in whole or in
part, the Indemnitee shall be entitled to be paid any and all Expenses in
connection with such Enforcement Proceeding. The Company hereby consents to
service of process for such Enforcement Proceeding and to appear in any such
Enforcement Proceeding. Any and all determinations made by the Reviewing Party
shall be conclusive and binding on the Company and the Indemnitee unless the
Indemnitee objects within the time period set forth above and there is a final
adjudication in the Enforcement Proceeding.

 

9.    Change in Control.    The Company agrees that if there is a Change in
Control of the Company, other than a Change in Control which has been approved
by a majority of the Company’s Board who were directors immediately prior to
such Change in Control, then with respect to all matters thereafter arising
concerning the rights of the Indemnitee to indemnity payments and Expenses under
this Agreement or any other agreement or under applicable law or the Company’s
Certificate of Incorporation or Bylaws now or hereafter in effect relating to
indemnification for Indemnifiable Events, the Company shall seek legal advice
only from special independent counsel selected by the Indemnitee and approved by
the Company, which approval shall not be unreasonably withheld. Such special
independent counsel shall not have otherwise performed services for the Company
or the Indemnitee, other than in connection with such matters, within the last
five years. Such independent counsel shall not include any person who, under the
applicable standards of professional conduct then prevailing, would have a
conflict of interest in representing either the Company or the Indemnitee in an
action to determine the Indemnitee’s rights under this Agreement. Such counsel,
among other things, shall render its written opinion to the Company and the
Indemnitee as to whether and to what extent the Indemnitee would be permitted to
be indemnified under applicable law. The Company agrees to pay the reasonable
fees of the special independent counsel referred to above and to indemnify fully
such counsel against any and all expenses (including attorney’s fees), claims,
liabilities and damages arising out of or relating to this Agreement or the
engagement of special independent counsel pursuant to this Agreement.

 

10.    Liability Insurance.    To the extent the Company maintains an insurance
policy or policies providing D & O Insurance, the Indemnitee shall be covered by
such policy or policies, in accordance with its or their terms, to the maximum
extent of the coverage available for any director of officer of the Company.

 

11.    No Presumption.    For purposes of this Agreement, to the fullest extent
permitted by law, the termination of any Proceeding, action, suit or claim, by
judgment, order,

 

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settlement (whether with or without court approval) or conviction, or upon a
plea of nolo contendere, or its equivalent, shall not create a presumption that
the Indemnitee did not meet any particular standard of conduct or have any
particular belief or that a court has determined that indemnification is not
permitted by applicable law.

 

12.    Period of Limitations.    No legal action shall be brought and no cause
of action shall be asserted by or on behalf of the Company or any affiliate of
the Company against the Indemnitee, the Indemnitee’s spouse, heirs, executors or
personal or legal representatives after the expiration of three (3) years from
the date of accrual of such cause of action, or such longer period as may be
required by state law under the circumstances, and any claim or cause of action
of the Company or its affiliate shall be extinguished and deemed released unless
asserted by timely filing of a legal action within such period; provided,
however, that if any shorter period of limitations is otherwise applicable to
any such cause of action, such shorter period shall govern.

 

13.    Subrogation.    Provided that payment has been made under this Agreement,
the Company shall be subrogated to the extent of such payment to all of the
rights of recovery of Indemnitee, who shall execute all documents required and
shall do all acts that may be necessary to secure such rights and to enable the
Company effectively to bring suit to enforce such rights.

 

14.    No Duplication of Payments.    The Company shall not be liable under this
Agreement to make any payment in connection with any claim made against
Indemnitee to the extent the Indemnitee has otherwise actually received payment
(under any insurance policy, Bylaws, vote, agreement or otherwise) of the
amounts otherwise indemnifiable hereunder.

 

15.    Continuation of Obligations.    All agreements and obligations of the
Company contained herein shall commence upon the date that Indemnitee first
became a member of the Board or an officer, employee or agent of the Company, as
the case may be, and shall continue during the period Indemnitee is a director,
officer, employee or agent of the Company (or is or was serving at the request
of the Company as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise)
and shall continue thereafter so long as Indemnitee shall be subject to any
possible claim or threatened, pending or completed action, suit or proceeding,
whether civil, criminal or investigative, by reason of the fact that Indemnitee
was a director, officer, employee or agent of the Company or serving in any
other capacity referred to herein.

 

16.    Survival of Rights.    The rights conferred on Indemnitee by this
Agreement shall continue after Indemnitee has ceased to be a director, officer,
employee or other agent of the Company and shall inure to the benefit of
Indemnitee’s heirs, executors and administrators.

 

17.    Non-Exclusivity of Rights.    The rights conferred on Indemnitee by this
Agreement shall be in addition to any other rights which Indemnitee may have or
hereafter acquire under any statute, provision of the Company’s Certificate of
Incorporation or Bylaws, agreement, vote of stockholders or directors, or
otherwise, both as to action in his or her official capacity and as to action in
another capacity while holding office; provided, however, that this Agreement
shall supersede and replace any prior indemnification agreements entered into by
and between the Company and Indemnitee and that any such prior indemnification
agreement shall

 

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be terminated upon the execution of this Agreement. To the extent that a change
in the Code permits greater indemnification by agreement than would be afforded
currently under the Company’s Certificate of Incorporation, Bylaws and this
Agreement, it is the intent of the parties hereto that the Indemnitee shall
enjoy by this Agreement the greater benefits so afforded by such change.

 

18.    Separability.    Each of the provisions of this Agreement is a separate
and distinct agreement and independent of the others, so that if any or all of
the provisions hereof (including any provision within a single section,
paragraph or sentence) shall be held to be invalid or unenforceable for any
reason, such invalidity or unenforceability shall not affect the validity or
enforceability of the other provisions hereof or the obligation of the Company
to indemnify the Indemnitee to the full extent provided by the Bylaws or the
Code.

 

19.    Governing Law.     This Agreement shall be interpreted and enforced in
accordance with the laws of the State of Delaware applicable to contracts made
and to be performed in such State without giving effect to the principles of
conflicts of laws.

 

20.    Binding Effect.    This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the parties hereto and their respective
successors, assigns, including any direct or indirect successor by purchase,
merger, consolidation or otherwise to all or substantially all of the business
and/or assets of the Company, spouses, heirs, and personal and legal
representatives. The Company shall require and cause any successor (whether
direct or indirect by purchase, merger, consolidation or otherwise) to all, or
substantially all, of the business and/or assets of the Company, by written
agreement in form and substance satisfactory to the Indemnitee, expressly to
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform if no such succession had
taken place; provided that it is specifically agreed that this Section 20 shall
not give indemnitee the right to consent to, or otherwise prevent the
consummation of a merger, consolidation or other corporate transaction.

 

21.    Amendment and Termination.    No amendment, modification, termination or
cancellation of this Agreement shall be effective unless it is in writing and is
signed by both parties hereto. No waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a waiver of any other provisions
hereof (whether or not similar), nor shall such waiver constitute a continuing
waiver. Except as specifically provided herein, no failure to exercise or any
delay in exercising any right or remedy hereunder shall constitute a waiver
thereof.

 

22.    Counterparts.    This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and as of
the day and year first above written.

 

PORTAL SOFTWARE, INC.

a Delaware corporation

 

 

By:                                     
                                        
                                                          

 

INDEMNITEE

 

                                                                              
                                                                   

«Name», «Title»

 

Address:                                    
                                        
                                                                 

 

                                                                              
                                                                   

 

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