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                                                                    EXHIBIT 4.16

                     INDEMNIFICATION/CONTRIBUTION AGREEMENT

      This  INDEMNIFICATION/CONTRIBUTION  AGREEMENT ("Agreement") is made this
3rd  day of May  1999  by and  between  Mustang  Software,  Inc.  ("Mustang"),
MurkWorks, Inc. ("MurkWorks") and Brad Clements ("Clements").

      WHEREAS, Mustang is in the process of preparing and plans to file with the
Securities and Exchange Commission a Registration Statement on Form S-3 (the
"Registration Statement") under which it will seek to register for resale on
behalf of certain selling shareholders, including MurkWorks, shares of Common
Stock of Mustang;

      WHEREAS, MurkWorks has provided and is providing to Mustang certain
information concerning itself and the plan of distribution it proposes to make
in connection with the sale of its Mustang shares included for resale in the
Registration Statement;

NOW THEREFORE, IT IS AGREED:

      (i) Mustang will indemnify and hold harmless MurkWorks and Clements for
any losses, claims, damages or liabilities to which MurkWorks or Clements may
become subject, and shall reimburse MurkWorks and Clements for any legal or
other expenses incurred by either of them in connection with any claim or
litigation as such expenses are incurred, except to the extent that any such
loss, claim, damage or liability arises out of or is based upon any statement or
omission in the Registration Statement or any prospectus forming a part thereof
made solely in reliance upon and in conformity with written information
furnished to Mustang by MurkWorks and Clements specifically for use in the
Registration Statement or prospectus;

      (ii) MurkWorks and Clements will indemnify and hold harmless Mustang, each
officer of Mustang who signed the Registration Statement, each director of
Mustang and each person, if any, who controls Mustang within the meaning of the
Securities Act of 1933 or the Securities Exchange Act of 1934 for any losses,
claims, damages or liabilities to which any of them may become subject, and
shall reimburse them for any legal or other expenses incurred by any of them in
connection with any claim or litigation as such expenses are incurred, to the
extent that any such loss, claim, damage or liability arises out of or is based
upon any statement or omission in the Registration Statement or any prospectus
forming a part thereof made in reliance upon and in conformity with written
information furnished to Mustang by MurkWorks or Clements specifically for use
in the Registration Statement or prospectus; and

      (iii) In the event that the foregoing indemnity is held to be unavailable
for any reason, the parties shall contribute to any such loss, claim, damage or
liability in such proportion as is appropriate to reflect the relative fault of
Mustang on the one hand and MurkWorks and Clements on the other in connection
with the statements or omissions which resulted in such losses, claims, damages
or liabilities.

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      (iv) This Agreement may be executed in any number of counterparts, each of
which so executed shall constitute one and the same Agreement.

IN WITNESS WHEREOF, the parties have signed this Agreement as of the date and
year first above written.

                                          MUSTANG SOFTWARE, INC

                                          By Donald M. Leonard
                                             -----------------------------------
                                             Donald M. Leonard,
                                             Vice President, Finance and
                                             Chief Financial Officer

                                          MURKWORKS, INC

                                          By /s/ Brad Clements
                                             -----------------------------------
                                             Brad Clements
                                             President

                                             /s/ Brad Clements
                                             -----------------------------------
                                             Brad Clements


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