FORM OF DIRECTOR INSURANCE, INDEMNIFICATION AND EXCULPATION AGREEMENT
Exhibit 99.2
FORM OF DIRECTOR
INSURANCE, INDEMNIFICATION AND EXCULPATION AGREEMENT
INSURANCE, INDEMNIFICATION AND EXCULPATION AGREEMENT
AGREEMENT, dated as of , between BackWeb Technologies Ltd., an Israeli
company (the “Company”), and [insert name of director], a director of the Company (the
“Indemnitee”).
WHEREAS, Indemnitee is an Office Holder of the Company; and
WHEREAS, both the Company and Indemnitee recognize the increased risk of
litigation and other claims being asserted against Office Holders
of public companies; and
WHEREAS, the Articles of Association of the Company authorize the Company
to insure, indemnify and exculpate directors; and
WHEREAS, in recognition of Indemnitee’s need for substantial protection
against personal liability in order to assure Indemnitee’s
continued service to the Company in an effective manner and
Indemnitee’s reliance on the aforesaid Articles of Association
and, in part, to provide Indemnitee with specific contractual
assurance that the protection promised by the Articles of
Association will be available to Indemnitee (regardless of, among
other things, any amendment to or revocation or any change in the
composition of the Company’s Board of Directors or acquisition of
the Company), the Company wishes to provide in this Agreement for
the insurance, indemnification and exculpation of Indemnitee to
the fullest extent permitted by law from time to time and as set
forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and of Indemnitee continuing to
serve the Company directly or, at its request, with another enterprise, and intending to be legally
bound hereby, the parties hereto agree as follows:
1. CERTAIN DEFINITIONS.
1.1 Change in Control: shall be deemed to have occurred if: (i) any “person” (as
such term is used in Section 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended),
other than a trustee or other fiduciary holding securities under an employee benefit plan of the
Company or a corporation owned directly or indirectly by the shareholders of the Company in
substantially the same proportions as their ownership of shares of the Company, is or becomes the
“beneficial owner” (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities
of the Company representing 20% or more of the total voting power represented by the Company’s then
outstanding voting securities; or (ii) during any period of two consecutive years, individuals who
at the beginning of such period constitute the Board of Directors of the Company and any new
director whose election by the Board of Directors or nomination for election by the Company’s
shareholders was approved by a majority of the directors then still in office who either were
directors at the beginning of the period of whose election or nomination for election was
previously so approved, cease for any reason to constitute a majority thereof; or (iii) the
shareholders 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 51% 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 shareholders of the
Company
approve a plan of complete liquidation of the Company or an agreement for the sale or disposition
by the Company of all or substantially all the Company’s assets.
1.2 Expense: includes reasonable legal costs, including attorneys’ fees, expended
by an Office Holder or for which an Office Holder has been charged by a court, or in connection
with an investigation or other proceeding by a competent authority.
1.3 Office Holder: as such term is defined in the Companies Law — 5759-1999.
2. INDEMNIFICATION AND ADVANCEMENT OF EXPENSES.
2.1 The Company hereby undertakes to indemnify the Indemnitee to the fullest extent
permitted by applicable law from time to time, for any liability and Expense that may be imposed on
Indemnitee due to an act performed or failure to act by him in his capacity as an Office Holder of
the Company or any subsidiary of the Company or any entity in which Indemnitee serves as an Office
Holder at the request of the Company either prior to or after the date hereof, for any event
against which indemnification is available or permitted by law to be provided to an Office Holder
(“Indemnifiable Events”), including without limitation the following:
2.1.1 monetary liability imposed on an Office Holder in favor of a third party
in a judgment, including a settlement or an arbitral award confirmed by a
court;
2.1.2 reasonable legal costs, including attorney’s fees, expended by the
Indemnitee as a result of an investigation or proceeding instituted against the
Indemnitee by a competent authority, provided that such investigation or
proceeding concludes without the filing of an indictment against the Indemnitee
and either (A) no financial liability was imposed on the Indemnitee in lieu of
criminal proceedings, or (B) financial liability was imposed on the Indemnitee
in lieu of criminal proceedings but the alleged criminal offense does not
require proof of criminal intent; and
2.1.3 reasonable legal costs, including attorney’s fees, expended by the
Indemnitee or for which the Indemnitee is charged by a court, (a) in an action
brought against the Indemnitee by or on behalf of the Company or a third party,
or (b) in a criminal action in which the Indemnitee is found innocent, or (c)
in a criminal action in which the Indemnitee is convicted and in which a proof
of criminal intent is not required.
2.2 The indemnification undertaking made by the Company shall be only with respect to such
events as are described in Schedule A hereto. The maximum amount payable by the Company under this
Agreement for each event described in Schedule A shall be as set forth in Schedule A. The
indemnification provided herein shall not be subject to the limitations imposed by this Section 2.2
and Schedule A if and to the extent such limits are no longer required by law.
2.3 If so requested by Indemnitee, the Company shall advance an amount (or amounts)
estimated by it to cover Indemnitee’s Expenses, including attorneys’ fees, with respect to which
Indemnitee is entitled to be indemnified under Paragraph 2.1 above. The advances to be made
hereunder shall be paid by the Company to Indemnitee as soon as practicable but in any event no
later than fifteen (15) days after written demand by such Indemnitee therefor to the Company.
2.4 The Company’s obligation to indemnify Indemnitee and advance Expenses in accordance
with this Agreement shall be for such period as Indemnitee shall be subject to any possible claim
or threatened, pending or completed action, suit or proceeding or any inquiry or investigation,
whether civil, criminal or investigative, arising out of the Indemnitee’s service in the foregoing
positions, whether or not Indemnitee is still serving in such positions.
2.5 The Company undertakes that as long as it may be obligated to provide indemnification
and advance Expenses under this Agreement, the Company will purchase and maintain in effect
directors and Office Holders liability insurance to cover the liability of Indemnitee, providing
coverage in amounts as determined by the Board of Directors of the Company in its sole discretion;
provided, that, the Company shall have no obligation to obtain or maintain directors and officers
insurance if the Company determines in good faith that such insurance is not reasonably available,
the premium costs for such insurance are disproportionate to the amount of coverage provided, or
the coverage provided by such insurance is so limited by exclusions that it provides an
insufficient benefit. The Company undertakes to give prompt written notice of the commencement of
any claim hereunder to the insurers in accordance with the procedures set forth in each of the
policies.
3. GENERAL LIMITATIONS ON INDEMNIFICATION.
3.1 If, when and to the extent that the Indemnitee would not be permitted to be so
indemnified under applicable law, the Company shall be entitled to be reimbursed by Indemnitee (who
hereby agrees to reimburse the Company) for all such amounts theretofore paid (unless Indemnitee
has commenced legal proceedings in a court of competent jurisdiction to secure a determination that
Indemnitee should be indemnified under applicable law, in which event Indemnitee shall not be
required to so reimburse the Company until a final judicial determination is made with respect
thereto as to which all rights of appeal therefrom have been exhausted or lapsed) and shall not be
obligated to indemnify or advance any additional amounts to Indemnitee (unless there has been a
determination by a court or competent jurisdiction that the Indemnitee
would be permitted to be so indemnified under this Agreement).
3.2 The Company undertakes that in the event of a Change in Control of the Company, the
Company’s obligations under this Agreement shall continue to be in effect following such Change in
Control, and the Company shall take all necessary action to ensure that the party acquiring control
of the Company shall independently undertake to continue in effect such Agreement, to maintain the
provisions of the Articles of Association allowing indemnification and to indemnify Indemnitee in
the event that the Company shall not have sufficient funds or otherwise shall not be able to
fulfill its obligations hereunder.
4. NO MODIFICATION.
4.1 No supplement, modification or amendment of this Agreement shall be binding unless
executed in writing by both of the 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. Any waiver shall be in writing.
5. SUBROGATION.
5.1 In the event of payment 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 papers
required and shall do everything that may be necessary to secure such rights, including the
execution of such documents necessary to enable the Company effectively to bring suit to enforce
such rights.
6. REIMBURSEMENT.
6.1 The Company shall not be liable under this Agreement to make any payment in connection
with any claim made against Indemnitee to the extent Indemnitee has otherwise actually received
payment (under any insurance policy or otherwise) of the amounts otherwise indemnifiable hereunder.
Any amounts paid to Indemnitee under such insurance policy or otherwise after the Company has
indemnified the Indemnitee for such liability or Expense shall
be repaid to the Company promptly
upon receipt by Indemnitee.
7. EFFECTIVENESS.
7.1 Subject to the receipt of all the required approvals in accordance with the Israeli
Law, including the approvals of the audit committee, the Board of Directors and to the same extent
required, by the shareholders of the Company, this Agreement shall be in full force and effect as
of the date hereof.
8. NOTIFICATION AND DEFENSE OF CLAIM.
8.1 Promptly after receipt by Indemnitee of notice of the commencement of any action, suit
or proceeding, Indemnitee will, if a claim in respect thereof is to be made against the Company
under this Agreement, notify the Company of the commencement hereof; but the omission so to notify
the Company will not relieve it from any liability which it may have the Indemnitee otherwise than
under this Agreement. With respect to any such action, suit or proceeding as to which Indemnitee
notifies the Company of the commencement thereof and without limitation of Section 2.1:
8.1.1 The Company will be entitled to participate therein at its own expense; and
8.1.2 Except as otherwise provided below, to the extent that it may wish, the Company
jointly with any other indemnifying party similarly notified will 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 legal or
other 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 counsel in such action, suit or
proceeding, but the fees and expenses of such counsel incurred after notice from the
Company of its assumption of the defense thereof shall be at the expense of Indemnitee
unless: (i) 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 the 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 action, in each of which cases the fees and expenses of counsel
shall be at the expense of the Company. The Company shall not be entitled to assume
the defense of any action, suit or proceeding brought by or on behalf of the Company
or as to which the Indemnitee shall have made the conclusion provided for in (ii)
above.
8.2 The Company shall not be liable to indemnify the Indemnitee under this Agreement for
any amounts paid in settlement of any action or claim effected without its written consent. The
Company shall not settle any action or claim in any manner which would impose any penalty or
limitation on the Indemnitee without the Indemnitee’s written consent. Neither the Company nor the
Indemnitee will unreasonably withhold their consent to any proposed settlement.
9. NON-EXCLUSIVITY.
9.1 The rights of the Indemnitee hereunder shall not be deemed exclusive of any other
rights he or she may have under the Company’s Articles of Association or applicable law or
otherwise, and to the extent that during the Indemnification Period the rights of the then existing
directors and Office Holders are more favorable to such directors or Office Holders than the rights
currently provided thereunder or under this Agreement to Indemnitee, Indemnitee shall be entitled
to the full benefits of such more favorable rights.
10. BINDING EFFECT.
10.1 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. This
Agreement shall continue in effect during the Indemnification Period, regardless of whether
Indemnitee continues to serve as an Office Holder or director of the Company or of any other
enterprise at the Company’s request.
11. SEVERABILITY.
11.1 The provisions of this Agreement shall be severable in the event that any provision
hereof (including any provision within a single section, paragraph or sentence) is held by a court
of competent jurisdiction to be invalid, void or otherwise unenforceable, and the remaining
provisions shall remain enforceable to the fullest extent permitted by law.
12. GOVERNING LAW, JURISDICTION.
12.1 This Agreement shall be governed by and construed and enforced in accordance with the
laws of the State of Israel. The parties hereto irrevocably submit to the exclusive jurisdiction of
the courts of Tel-Aviv in any action related to this Agreement.
13. ENTIRE AGREEMENT AND TERMINATION.
13.1 This Agreement represents the entire agreement between the parties; and there are no
other agreements, contracts or understandings between the parties with respect to the subject
matter of this Agreement. No termination or cancellation of this Agreement shall be effective
unless in writing and signed by both parties hereto.
| Signature: | ||||||
| [Name of director] | ||||||
| Signature: | ||||||
SCHEDULE A
1.
|
Negotiations, execution, delivery and performance of agreements on behalf of the Company | $ | 20,000,000 | |||
2.
|
Anti-competitive acts and acts of commercial wrongdoing | $ | 20,000,000 | |||
3.
|
Acts in regard of invasion of privacy including with respect to databases and acts in regard of slander | $ | 20,000,000 | |||
4.
|
Acts in regard of violation of copyrights, patents, designs and any other intellectual property rights | $ | 20,000,000 | |||
5.
|
Approval of corporate actions including the approval of the acts of the Company’s management, their guidance and their supervision | $ | 20,000,000 | |||
6.
|
Claims of failure to exercise business judgment and a reasonable level of proficiency, expertise and care in regard of the Company’s business | $ | 20,000,000 | |||
7.
|
Violations of securities laws of any jurisdiction, including without limitation, fraudulent disclosure claims, failure to comply with SEC disclosure rules and other claims relating to relationships with investors and the investment community | $ | 20,000,000 | |||
8.
|
Violations of laws requiring the Company to obtain regulatory and governmental licenses, permits and authorizations in any jurisdiction | $ | 20,000,000 | |||
9.
|
Claims in connection with publishing or providing any information, including any filings with governmental authorities, on behalf of the Company in the circumstances required under applicable laws | $ | 20,000,000 | |||
10.
|
Violations of any law or regulation governing domestic and international telecommunication in any jurisdiction | $ | 20,000,000 | |||
11.
|
Claims in connection with employment relationships with the Company’s or its subsidiaries’ employees | $ | 20,000,000 |
