EXHIBIT 10.20
                                                                   -------------

                            INDEMNIFICATION AGREEMENT


         Agreement dated as of __________, ____, BETWEEN Precise Software
Solutions, Inc., a Delaware corporation (the "Company", which for the purposes
of this Agreement shall include any Subsidiary as defined herein), Precise
Software Solutions, Limited, and _________________ (the "Indemnitee").

         WHEREAS, the Company desires to attract and retain highly qualified
individuals, such as the Indemnitee, to serve the Company;

         WHEREAS, the Indemnitee is currently providing valuable services to the
Company and the Company desires the Indemnitee to continue to do so;

         WHEREAS, the Company and the Indemnitee recognize the significant risk
of personal liability for Agents (as defined herein) which arises from corporate
litigation practices;

         WHEREAS, the Company and the Indemnitee further recognize that
liability insurance for the Company's Agents, when available, is often available
only at significant expense and provides for coverage of limited scope and that
competent and experienced persons are often unable or unwilling to serve as
Agents unless they are protected by comprehensive liability insurance or
indemnification;

         WHEREAS, the Company's Certificate of Incorporation ("Charter") and
By-Laws do not prohibit or restrict contracts between the Company and its Agents
with respect to indemnification of such Agents; and

         WHEREAS, in view of such considerations, the Company desires to
provide, independent from the indemnification to which the Indemnitee is
otherwise entitled by law and under the Company's Charter and By-Laws,
indemnification to the Indemnitee and the Expense Advances (as defined herein),
all as set forth in this Agreement to the maximum extent permitted by law;

         NOW, THEREFORE, to induce the Indemnitee to continue to serve the
Company and in consideration of these premises and the mutual agreements set
forth in this Agreement, as well as other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and the
Indemnitee hereby agree as follows:

         1. DEFINITIONS. For the purposes of this Agreement,

                  (a) AGENT. "Agent" means any person who (i) is or was a
director, officer, employee, trustee or other agent or fiduciary of the Company;
(ii) is or was serving at the request, for the convenience, or to represent the
interests of the Company or a Company employee benefit plan, its participants or
its beneficiaries, as a director, officer, employee, trustee or other agent or
fiduciary of another corporation, limited liability company, partnership, joint
venture, trust or
<PAGE>

                                      -2-

other entity (including, without limitation, any employee benefit plan); or
(iii) was a director, officer, employee, trustee or other agent or fiduciary of
a corporation, limited liability company, partnership, joint venture, trust or
other entity which was a predecessor of the Company, or was a director, officer,
employee, trustee or other agent or fiduciary of any other such entity at the
request of such predecessor. The use of the term "Agent" shall not be construed
to alter the legal relationship between an Agent, as defined herein, and the
Company.

                  (b) CLAIM. "Claim" means any threatened, pending or completed
action, suit, proceeding or alternative dispute resolution mechanism, or any
hearing, inquiry or investigation, whether conducted by the Company or any other
party, which the Indemnitee believes in good faith might lead to the institution
of any such action, suit, proceeding, alternative dispute resolution mechanism,
hearing, inquiry or investigation, whether civil, criminal, administrative,
investigative or any other type whatsoever, with respect to an Indemnifiable
Event.

                  (c) EXPENSES. "Expenses" means all costs and liabilities of
any type or nature whatsoever (including, without limitation, all attorneys'
fees and related disbursements and other out-of-pocket costs, judgments, fines,
penalties and amounts paid in settlements) paid or incurred by or imposed upon
the Indemnitee in the investigation, defense, settlement or appeal of, or
otherwise in connection with, a Claim (including, without limitation, being a
witness) or in establishing or enforcing a right to indemnification under this
Agreement, the Company's Charter or By-Laws, Section 145 of the General
Corporation Law of the State of Delaware or otherwise, and any federal, state,
local or foreign taxes imposed on the Indemnitee as a result of the actual or
deemed receipt of any payments under this Agreement.

                  (d) EXPENSE ADVANCE. "Expense Advance" means a payment to the
Indemnitee of Expenses in advance of the settlement of or final judgment on any
Claim.

                  (e) INDEMNIFIABLE EVENT. "Indemnifiable Event" means any event
or occurrence, whether occurring before or after the date of this agreement,
related to the fact that the Indemnitee is, or was, an Agent or by reason of
anything done or not done, or allegedly done or not done, by the Indemnitee in
the capacity of an Agent.

                  (f) INDEPENDENT LEGAL COUNSEL. "Independent Legal Counsel"
means an attorney or firm of attorneys selected by the Indemnitee and approved
by the Company (which approval shall not be unreasonably withheld) which has not
otherwise provided services for the Company or the Indemnitee within the prior
three years (other than in connection with such matters).

                  (g) REVIEWING PARTY. "Reviewing Party" means the person or
body appointed by the Company's Board of Directors pursuant to Section 10(c) and
in accordance with applicable law, which person or body shall be either members
of the Company's Board of Directors who are not interested in the particular
Claim or Independent Legal Counsel.

                  (h) SUBSIDIARY. "Subsidiary" means any corporation, limited
liability company, partnership, joint venture, trust or other entity of which
more than 50% of the
<PAGE>

                                      -3-

outstanding voting securities are owned directly or indirectly by the Company,
by the Company and one or more other Subsidiaries, or by one or more other
Subsidiaries.

         2. AGREEMENT TO SERVE. The Indemnitee agrees to continue to serve the
Company as an Agent, at-will (or under separate agreement, if such agreement
exists), in the capacity in which the Indemnitee currently serves as such Agent
until such time as the Indemnitee tenders the Indemnitee's resignation in
writing; provided, however, that nothing contained in this Agreement is intended
to create, in either the Company or the Indemnitee, any right to continued
service by the Indemnitee.

         3. BASIC INDEMNIFICATION. Subject to the terms of this Agreement:

                  (a) CLAIMS OTHER THAN DERIVATIVE CLAIMS IN FAVOR OF THE
COMPANY. As to all Claims other than derivative Claims in favor of the Company,
the Company shall indemnify the Indemnitee against all Expenses.

                  (b) DERIVATIVE CLAIMS FOR JUDGMENT IN FAVOR OF THE COMPANY. As
to all derivative Claims in favor of the Company, the Company shall indemnify
the Indemnitee against all Expenses, provided that no indemnification shall be
made as to such derivative Claim if the Indemnitee has been finally adjudged to
be liable to the Company in connection with such Claim or any claim, issue or
matter therein, unless and only to the extent that the Court of Chancery of
Delaware or the court in which the Claim was brought shall determine that,
despite the adjudication of liability but in view of all the circumstances, the
Indemnitee is fairly and reasonably entitled to indemnity for such Expenses
which the Court of Chancery or such other court shall deem proper.

                  (c) STANDARD OF CONDUCT REQUIRED FOR ENTITLEMENT TO BASIC
INDEMNIFICATION. The Indemnitee shall be entitled to indemnification under
Sections 3(a) and (b) above if the Indemnitee acted in good faith and in a
manner the Indemnitee reasonably believed to be IN or not opposed to the best
interests of the Company, provided that in the case of any criminal action or
proceeding, the Indemnitee had no reasonable cause to believe the Indemnitee's
conduct was unlawful and, in the case of Section 3(b), subject to the exclusion
set forth therein. The termination of any Claim by judgment, order, settlement
(whether with or without court approval), conviction or upon a plea of nolo
contendere or its equivalent shall not, of itself, create a presumption that (i)
the Indemnitee did not act in good faith and in a manner which the Indemnitee
reasonably believed to be in or not opposed to the best interests of the
Company, (ii) the Indemnitee had reasonable cause to believe that the
Indemnitee's conduct was unlawful or (iii) a court determined that
indemnification is not permitted by applicable law or pursuant to Section 3(b).

                  (d) SUCCESS ON THE MERITS. To the extent that the Indemnitee
has been successful on the merits or otherwise (including, without limitation,
dismissal or withdrawal of a Claim with or without prejudice) in defense of any
Claim or in defense of any claim, issue or matter therein, the Company shall
indemnify the Indemnitee against Expenses in connection with such Claim.
<PAGE>

                                      -4-

         4. ADDITIONAL INDEMNIFICATION. The Company further agrees to indemnify
the Indemnitee in connection with any Claim and to make Expense Advances to the
Indemnitee, in each case to the fullest extent as may be provided for under the
Company's Charter, By-Laws, vote of the stockholders or disinterested directors
and/or applicable law notwithstanding that any such indemnification or Expense
Advance is not specifically authorized by the other provisions of this
Agreement. It is the intent of the parties hereto that (i) in the event of any
change, after the date of this Agreement, in any applicable law which expands
the right of a Delaware corporation to indemnify or make Expense Advances to an
Agent to a greater degree than would be afforded currently under the Company's
Charter, By-Laws, vote of the stockholders or disinterested directors and this
Agreement, the Indemnitee shall enjoy by this Agreement the greater benefits
afforded by such change and (ii) this Agreement be interpreted and enforced so
as to provide indemnification and Expense Advances under such circumstances as
set forth in this Agreement, if any, in which the providing of indemnification
or Expense Advances would otherwise be discretionary.

         5. EXCLUSIONS. Any other provision of this Agreement to the contrary
notwithstanding, the Company shall not be obligated to indemnify or provide
Expenses Advances to the Indemnitee:

                  (a) to the extent any such indemnification or Expense Advance
would be unlawful;

                  (b) to the extent that the Indemnitee actually received from
any other source (including an insurer) amounts otherwise payable hereunder; or

                  (c) to the extent based upon or attributable to the Indemnitee
gaining in fact a personal profit to which he was not legally entitled,
including without limitation profits made from the purchase and sale by the
Indemnitee of equity securities of the Company which are recoverable by the
Company pursuant to Section 16(b) of the Securities Exchange Act of 1934, and
profits arising from transactions in publicly traded securities of the Company
which were effected by the Indemnitee in violation of Section 10(b) of the
Securities Exchange Act of 1934, including Rule 10b-5 promulgated thereunder;

provided that notwithstanding the foregoing provisions of this Section 5, the
Indemnitee shall be entitled under Section 6 to receive Expense Advances with
respect to any Claim unless and until a court having jurisdiction over such
Claim shall have made a final determination (as to which all rights of appeal
therefrom shall have been exhausted or lapsed) that the Indemnitee is prohibited
from receiving indemnification with respect thereto.

         6. EXPENSE ADVANCES. Within five business days of receipt by the
Company of an undertaking (the "Undertaking"), substantially in the form
attached hereto as Exhibit 1, by or on behalf of the Indemnitee to repay the
amount of any Expense Advance with respect to any Claim if and to the extent
that it shall ultimately be determined that the Indemnitee is not entitled to
indemnification for such amount under the terms of this Agreement, the Company
shall make Expense Advances to the Indemnitee. The Undertaking shall be
unsecured and shall bear no interest.
<PAGE>

                                      -5-

         7. NON-EXCLUSIVITY; CONTINUATION.

                  (a) The indemnification and Expense Advances pursuant to this
Agreement shall not be deemed exclusive of any other rights to which the
Indemnitee may be entitled under the Company's Charter or By-Laws, any vote of
the Company's stockholders or disinterested directors, any other agreement, any
law or otherwise, both as to actions in the Indemnitee's official capacity and
as to actions in another capacity while an Agent. All agreements and obligations
of the Company contained in this Agreement shall continue as to the Indemnitee
while the Indemnitee is an Agent and after the Indemnitee has ceased to be an
Agent.

                  (b) The Company shall not adopt any amendment to the Charter
or By-Laws the effect of which would be to deny, diminish or encumber the
Indemnitee's rights to indemnity pursuant to the Charter, By-Laws, the Delaware
General Corporation Law or any other applicable law as applied to any act or
failure to act occurring in whole or in part prior to the date (the "Effective
Date") upon which the amendment was approved by the Board of Directors or the
Stockholders, as the case may be. In the event that the Company shall adopt any
amendment to the Charter or By-Laws the effect of which is to deny, diminish or
encumber the Indemnitee's rights to indemnity, such amendment shall apply only
to acts or failures to act occurring entirely after the Effective Date thereof
unless the Indemnitee shall have voted in favor of such adoption as a director
or holder of record of the Company's voting stock, as the case may be.
Notwithstanding anything contained in this Paragraph 7(b) to the contrary, any
amendment to the Charter or By-Laws described in this paragraph, the effect of
which would be to deny, diminish or encumber in any way Indemnitee's right to
indemnity under the Charter, By-Laws or this Agreement or under applicable law,
shall not affect Indemnitee's rights under this Agreement, which rights will
remain in full force and effect.

         8. PARTIAL INDEMNIFICATION. If the Indemnitee is entitled under any
provision of this Agreement or otherwise to indemnification or Expense Advances
by the Company for a portion, but not all, of any Expenses incurred by the
Indemnitee, the Company shall indemnify or provide Expense Advances to the
Indemnitee (as the case may be) for the portion thereof to which the Indemnitee
is entitled.

         9. CONTRIBUTION. If indemnification is unavailable by reason of a court
decision described in Section 10(d) based on grounds other than that set forth
in Section 5, then in respect of any Claim in which the Company is jointly
liable with the Indemnitee (or would be if joined in such Claim), the Company
shall contribute to the amount of the Indemnitee's Expenses in such proportion
as is appropriate to reflect (i) the relative benefits received by the Company
on the one hand and by the Indemnitee on the other hand from the transaction
from which such Claim arose, and (ii) the relative fault of the Company on the
one hand and of the Indemnitee on the other hand in connection with the events
which resulted in such Expenses, as well as any other relevant equitable
considerations. The relative fault of the Company on the one hand and of the
Indemnitee on the other shall be determined by a mutually agreed upon
Independent Legal Counsel with reference to, among other things, the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent the circumstances resulting in such Expenses. The Company agrees that it
would not be just and equitable if contribution pursuant to this Section 9 were
determined by pro rata allocation or any other method of allocation which does
not take account of the foregoing equitable considerations.
<PAGE>

                                      -6-

         10. PROCEDURES.

                  (a) NOTICE. Promptly after receipt by the Indemnitee of notice
of the commencement, or the threat of commencement, of any Claim, the Indemnitee
shall, if the Indemnitee believes that indemnification or Expense Advances with
respect thereto may be sought from the Company by the Indemnitee pursuant to
this Agreement, notify the Company of the commencement or threat of commencement
thereof pursuant to a sworn statement in substantially in the form attached
hereto as Exhibit 2. Any failure of the Indemnitee to provide such notice to the
Company shall not, however, relieve the Company of any liability which it may
have to the Indemnitee unless and to the extent such failure causes material
adverse impact upon the interests of the Company. If, at the time it receives
such notice from the Indemnitee, the Company has directors' and officers'
liability insurance in effect, the Company shall give prompt notice of the
commencement, or the threat of commencement, of such Claim to the insurers in
accordance with the procedures set forth in the respective applicable insurance
policies. The Company shall thereafter take all necessary or desirable action to
cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as
a result of such Claim in accordance with the terms of such policies; provided
that no such payments by such insurers shall relieve the Company of any
liability or obligation which it may have to the Indemnitee except as and to the
extent expressly provided under this Agreement.

                  (b) ASSUMPTION OF DEFENSE. If the Company shall be obligated
to pay Expenses arising in connection with any Claim against the Indemnitee, the
Company shall be entitled to assume the defense of such Claim, with counsel
approved by the Indemnitee (whose approval shall not be unreasonably withheld),
upon the delivery to the Indemnitee of notice of its election to do so. After
delivery of such notice, approval of such counsel by the Indemnitee and the
retention of such counsel by the Company, the Company will not be liable to the
Indemnitee under this Agreement for any fees and expenses of counsel
subsequently incurred by the Indemnitee with respect to the same Claim; provided
that (i) the Indemnitee shall have the right to employ the Indemnitee's own
counsel in connection with any Claim at the Indemnitee's expense; (ii) if (A)
the employment of counsel by the Indemnitee shall have been previously
authorized by the Company, (B) the Indemnitee shall have reasonably concluded
that there may be a conflict of interest between the Company and the Indemnitee
in the conduct of such defense, or (C) the Company shall not, in fact, have
employed counsel to assume the defense of such Claim, in each such case the fees
and expenses of the Indemnitee's counsel shall be paid by the Company; and (iii)
the Company shall not settle any Claim in any manner which would impose any
penalty, limitation or unindemnified Expense on the Indemnitee without the
Indemnitee's consent. If the Reviewing Party is Independent Legal Counsel, then
the Indemnitee shall select such Independent Legal Counsel as determined in
Section 1(f).

                  (c) DETERMINATION OF ENTITLEMENT TO INDEMNIFICATION. In the
event of any demand by the Indemnitee for indemnification under this Agreement
or otherwise, the Board of Directors of the Company shall promptly designate
whether the Reviewing Party shall be members of the Company's Board of Directors
or Independent Legal Counsel. The Reviewing
<PAGE>

                                      -7-

Party shall determine that indemnification is proper if it finds that the
Indemnitee has met the required standard of conduct set forth in Section 3(c)
and that indemnification is not prohibited pursuant to Section 5. If the
Reviewing Party consists of members of the Company's Board of Directors, it
shall act by a majority vote. If the Reviewing Party is Independent Legal
Counsel, the determination of the Reviewing Party shall be rendered in the form
of a written legal opinion. Subject to Sections 10(d) and 11, any
indemnification under Sections 3 and 4 (unless ordered by a court or pursuant to
Section 3(d)) shall be made by the Company only as authorized in the specific
case and upon the determination of the Reviewing Party that the Indemnitee is
entitled to indemnification in the circumstances because the Indemnitee has met
the standard of conduct set forth in Section 3(c) and that indemnification is
not prohibited pursuant to Section 5. The Indemnitee's demand for
indemnification shall create a presumption that the Indemnitee is entitled to
indemnification and the Reviewing Party shall have 30 days from the date of
receipt of the Indemnitee's demand in which to render in writing and deliver to
the Indemnitee its determination. If the Reviewing Party makes no timely
determination, the Reviewing Party shall be deemed to have determined that the
Indemnitee is entitled to the indemnification demanded. If the Reviewing Party
determines, which determination shall be based upon clear and convincing
evidence sufficient to rebut the aforesaid presumption of entitlement, that the
Indemnitee is not entitled to indemnification, in whole or in part, in the
circumstances because the Indemnitee has not met the standard of conduct set
forth in Section 3(c) or because the indemnification is prohibited pursuant to
Section 5, the Indemnitee shall (i) be entitled to obtain a favorable
determination or to appeal such negative determination in the manner provided in
Sections 10(d) and 11 and (ii) not be required to reimburse the Company for any
Expense Advances or Expenses theretofore paid to or on behalf of the Indemnitee
until a final determination has been made with respect to the Indemnitee's legal
entitlement to indemnification (as to which all rights of appeal therefrom shall
have been exhausted or shall have lapsed).

                  (d) INDEMNITEE'S RIGHTS ON UNFAVORABLE DETERMINATION.
Notwithstanding a determination by a Reviewing Party or any forum listed in
Section 11 that the Indemnitee is not entitled to indemnification with respect
to a specific Claim, or any claim, issue or matter therein, the Indemnitee shall
have the right to apply to the Court of Chancery of Delaware or any other court
of competent jurisdiction for the purpose of determining and enforcing the
Indemnitee's right to indemnification pursuant to this Agreement or otherwise
and the Company hereby consents to service of process and agrees to appear in
any such proceeding. Such court shall find that the Indemnitee is entitled to
indemnification unless the Company shall prove by clear and convincing evidence
that (i) the Indemnitee did not meet the applicable standard of conduct required
to entitle the Indemnitee to such indemnification pursuant to Section 3(c) or
that indemnification is prohibited pursuant to Section 5, and (ii) the
requirements of Section 3(d) have not been met.

         11. APPEAL OF A REVIEWING PARTY'S DETERMINATION OF NO RIGHT TO
INDEMNIFICATION.

                  (a) The Indemnitee shall be entitled to select from the
following alternatives a forum in which the validity of a Reviewing Party's
determination that the Indemnitee is not entitled to indemnification will be
heard, which forum shall determine that the Indemnitee is entitled to such
indemnification unless such forum determines that there is clear and convincing
<PAGE>

                                      -8-

evidence that (i) the Indemnitee did not meet the applicable standard of conduct
required to entitle the Indemnitee to such indemnification pursuant to Section
3(c) or that indemnification is prohibited pursuant to Section 5, and (ii) the
requirements of Section 3(d) have not been met:

                  (A) those members of the Company's Board of Directors who are
disinterested parties with respect to the Claim, acting by a majority vote;

                  (B) Independent Legal Counsel, in a written opinion; or

                  (C) those stockholders of the Company who are disinterested
parties with respect to the Claim, acting by a majority vote.

                  (b) As soon as practicable, and in no event later than 30 days
after notice of the Indemnitee's choice of forum pursuant to Section 11(a), the
Company shall, at its own expense, submit to the selected forum in such manner
as the Indemnitee or the Indemnitee's counsel may reasonably request, the basis
for the determination that the Indemnitee is not entitled to indemnification,
and the Company shall act in the utmost good faith to assure the Indemnitee a
complete opportunity to defend against and appeal such determination.

         12. BINDING EFFECT; SUCCESSORS AND ASSIGNS. This Agreement shall bind
and inure to the benefit of the successors, heirs, personal and legal
representatives and assigns of the parties hereto, including any direct or
indirect successor by purchase, merger, consolidation or otherwise to all,
substantially all or a substantial part of the business or assets of the
Company. The Company shall require and cause any successor (whether direct or
indirect, and whether by purchase, merger, consolidation or otherwise) to all,
substantially all or a substantial part of the business 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.

         13. Expenses and Expense Advances to Enforce the Agreement. It is the
intent of the Company that the Indemnitee shall not be required to incur any
Expenses arising from any effort to enforce the Indemnitee's rights under this
Agreement, because incurring such Expenses would substantially detract from the
benefits intended to be extended to the Indemnitee hereunder. Accordingly, if it
should appear to the Indemnitee that the Company has failed to comply with any
of its obligations under this Agreement or if the Company or any other person or
entity (other than the Court of Chancery of Delaware or any other court of
competent jurisdiction in a final determination, as which all rights of appeal
therefrom shall have been exhausted or shall have lapsed) takes any action to
declare this Agreement or any provision hereof void or unenforceable, or
institutes any action, suit or proceeding designed (or having the effect of
being designed) to deny or recover from the Indemnitee the benefits intended to
be provided to the Indemnitee hereunder, the Company hereby irrevocably
authorizes the Indemnitee from time to time to retain counsel of the
Indemnitee's choice to represent the Indemnitee in connection with the
enforcement of the Indemnitee's rights under this Agreement. If the Indemnitee
is successful in whole or in part in enforcing the Indemnitee's rights under
this Agreement, the Company shall pay and be solely responsible for the
Expenses.
<PAGE>
                                      -9-

         14. NOTICES. All notices, requests, demands and other communications
under this Agreement shall be in writing and shall be deemed duly given (i) when
delivered by hand or (ii) if mailed by certified or registered mail with postage
prepaid, on the third business day after the mailing date.
Addresses for notice to either party shall be as shown on the signature page of
this Agreement or as subsequently modified by the addressee by such written
notice.

         15. SEVERABILITY. If any provision or provisions of this Agreement
shall be held to be invalid, illegal or unenforceable for any reason whatsoever,
(i) the validity, legality and enforceability of the remaining provisions of the
Agreement (including, without limitation, all portions of any paragraph of this
Agreement containing any such provision held to be invalid, illegal or
unenforceable, that are not themselves invalid, illegal or unenforceable) shall
not in any way be affected or impaired thereby, (ii) to the fullest extent
possible, the provisions of this Agreement (including, without limitation, all
portions of any paragraph of this Agreement containing any such provision held
to be invalid, illegal or unenforceable, that are not themselves invalid,
illegal or unenforceable) shall be construed so as to give effect to the intent
manifested by the provision held invalid, illegal or unenforceable and (iii) to
the fullest extent possible, any such provision held to be invalid, illegal or
unenforceable shall be reformed so as to be valid, legal and enforceable and to
give effect to the intent manifested by such provision.

         16. MODIFICATIONS, AMENDMENTS, AND WAIVERS. No modification or
amendment of this Agreement, or waiver of any of the provisions hereof, shall be
binding unless executed in writing by both of the parties hereto, in the case of
a modification or amendment, or by the waiving party, in the case of a waiver.
No waiver of any such provision shall be deemed to constitute a waiver of such
provision on any other occasion or a waiver of any other provision.

         17. CONSENT TO JURISDICTION. The Company and the Indemnitee each hereby
irrevocably consent to the non-exclusive jurisdiction of the Court of Chancery
of Delaware for any purpose in connection with any action or proceeding which
arises out of or relates to this Agreement.

         18. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the internal laws of Delaware, as applied to contracts between
Delaware residents entered into and to be performed entirely within Delaware.

         19. SUBROGATION. In the event of payment by the Company under this
Agreement, the Company shall be subrogated to the extent of such payment to all
of the rights of recovery of the Indemnitee, who agrees, at the sole expense of
the Company, to execute all papers reasonably required and to do all other acts
and things that may be reasonably necessary on the part of the Indemnitee to
secure such rights, including the execution of documents necessary to enable the
Company to bring suit to enforce such rights.

         20. INTEGRATION AND ENTIRE AGREEMENT. This Agreement sets forth the
entire understanding between the parties hereto and supersedes and merges all
previous written and oral negotiations, commitments, understandings and
agreements relating to the subject matter hereof.
<PAGE>

                                      -10-

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

         22. Guarantee of Precise Software Solutions, Limited. Precise Software
Solutions, Limited ("Precise Israel") hereby guarantees full payment and
performance of all obligations of the Company pursuant to this Agreement. This
guarantee is direct, absolute and unlimited and Precise Israel agrees to make
any and all payments and perform any and all obligations of the Company in
accordance with this Agreement, regardless of whether or not the Indemnitee has
pursued remedies against the Company; provided, however, in no event shall the
Indemnitee be entitled to receive payments in the aggregate from the Company
and/or Precise Israel which exceed the amounts required to be paid pursuant to
this Agreement. Precise Israel waives any defenses, counterclaims or right of
set-off that it may have pursuant to applicable law. Precise Israel agrees to be
bound by the terms of this Agreement, and is entitled to the rights of this
Agreement, as if it were the Company.
<PAGE>
                                      -11-

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.

PRECISE SOFTWARE SOLUTIONS,
INC.


By:________________________               ___________________________

Name:______________________               Indemnitee

Title:_____________________

Address: 690 Canton Street                Address:___________________
         Westwood, MA 02090
                                                  ___________________



ACKNOWLEDGED AND AGREED:

PRECISE SOFTWARE SOLUTIONS, LIMITED


By:________________________

Name:______________________

Title:_____________________
<PAGE>

                                                                       EXHIBIT 1
                                                                       ---------

                                   UNDERTAKING
                                   -----------

         1. This Undertaking is submitted pursuant to the Indemnification
Agreement dated as of ________________ between Precise Software Solutions, Inc.,
a Delaware corporation (the "Company"), Precise Software Solutions, Limited and
the undersigned (the "Agreement"). Capitalized terms used but not defined herein
shall have the respective meanings set forth in the Agreement.

         2. I am requesting certain Expense Advances in connection with a Claim.

         3. I hereby undertake to repay such Expense Advances if it shall
ultimately be determined that I am not entitled to be indemnified by the Company
therefor under the Agreement.

         4. The Expense Advances are, in general, all related to:


                                        Signed:
                                               ------------------------------

                                        Dated:
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<PAGE>

                                                                       EXHIBIT 2
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                            INDEMNIFICATION STATEMENT
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         I, [NAME], being first duly sworn, do depose and say as follows:

         1. This Indemnification Statement is submitted pursuant to the
Indemnification Agreement dated as of ____________ __, 1998 between Precise
Software Solutions, Inc., a Delaware corporation (the "Company"), Precise
Software Solutions, Limited, and the undersigned.

         2. I am requesting indemnification against Expenses (as defined in the
Agreement), all of which have been or will be incurred by me in connection with
an actual or threatened action, suit or proceeding to which I am a party or am
threatened to be made a party.

         3. With respect to all matters related to any such action, suit or
proceeding, I am entitled to be indemnified as herein contemplated pursuant to
the aforesaid Indemnity Agreement.

         4. Without limiting any other rights which I have or may have, I am
requesting indemnification against Expenses which have or may arise out of

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