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Code of Ethics

BACKWEB TECHNOLOGIES LTD.

General Policy

BackWeb strives to maintain the highest of business ethics. As a member of the BackWeb team, all of our employees, officers, and directors are expected to accept certain responsibilities, adhere to acceptable business principles, and exhibit a high degree of personal integrity at all times. BackWeb generally does not allow employees, officers, and directors to engage in activities which are contrary to the best interests of the Company or which adversely affect job performance. There are numerous situations that may cause or give the appearance of a conflict of interest, thus, the items we list below are not intended to be complete and include some of the more obvious examples we're concerned about.

Guidelines

(1) As part of the BackWeb family, all employees, officers, and directors are expected to represent the Company in a positive and ethical manner. You have an obligation both to avoid conflicts of interest and to refer questions and concerns about potential conflicts to your supervisor if you're unclear or uncertain about a particular situation. A conflict of interest exists when your loyalties are divided between the Company's interests and those of another, such as a competitor, supplier, or customer. Both the fact and appearance of a conflict should be avoided.

(2) All employees, officers, and directors are expected to devote your best efforts and attention to the performance of your job and to use good judgment, adhere to high ethical standards and avoid situations that create an actual or potential conflict between your personal interests and the interests of the Company. Employees may not to engage in activities competitive to BackWeb while employed with us, as provided in the Employee Invention Assignment and Confidentiality Agreement.

(3) Employees and officers (and members of their immediate families) should avoid investing directly or indirectly in any individual or organization that directly or indirectly engages in any business we are engaged in at the time of your (or your immediate family's) investment. We do not view these restrictions on investing as applying to direct or indirect investments in any publicly traded company, as long as the investment doesn't exceed 1 percent of the organization's total voting shares. We may ask you to sell an investment interest if we consider the investments to be in conflict with our best interests.

(4) All employees, officers and directors (and members of their immediate family) should not accept gifts valued at more than $100, or any special discounts or loans, from any person or company doing, or seeking to do, business with us. By "gifts" we mean accepting lavish entertainment, free long-distance travel, lodging, commissions, and/or kickbacks for doing business with that person or firm.

(5) Employees, officers and directors may not give, offer, or promise, directly or indirectly, anything of value to any representative of a customer, of a potential customer, or of a financial institution in connection with any transaction or business that we may have with such customer, potential customer, or financial institution. This policy does not apply to reasonable business gifts and entertaining, or to normal business negotiations.

(6) If you believe a conflict of interest may exist for you or someone else at BackWeb, you should notify your manager or an officer of BackWeb immediately. If a conflict of interest is determined to exist for you, you will be given reasonable time to remedy the situation as determined by the Company. It is the responsibility of every employee to cooperate with these practices. The Company will make every effort to help you determine a workable means of resolving the conflict. None of the terms in this section changes the at-will status of any person's employment or turns this document into a contract between us.

Standards of Conduct

All employees, officers and directors are expected to conduct themselves in a professional manner and to promote the best interests of the Company. Any behavior that unduly disrupts our operations, discredits the Company, or is offensive to our customers or fellow employees will not be tolerated.

Enforcement

Anyone violating these policies may be subject to disciplinary action, up to and including termination. Any waivers of this Code, including implicit waivers, for officers and directors of BackWeb, must be approved the Audit Committee of the Board of Directors and disclosed as required.

Obligations for the Chief Executive Officer and Senior Financial Officers

While we expect honest and ethical conduct from all of our employees, we have the highest expectations for our chief executive officer and senior financial officers. This special category includes the Company's chief executive officer, chief financial officer, controller or other principal accounting officer and other Company personnel perform similar functionality. These officers have important roles in the Company's governance, financial reporting and legal compliance that we expect them to fulfill with the highest degree of integrity at all times. They also serve as important examples for other employees, so we fully expect these employees to foster a culture of integrity and honesty. All of the provisions of this Code apply to the Company's chief executive officer and senior financial officers; this Section is designed to emphasize their additional responsibilities.

The job responsibilities of the Company's chief executive officer, chief financial officer, and senior financial officers include, and the performance evaluation criteria for each such employee will include, the obligations to:

Set a appropriate "tone at the top" by acting with honesty and integrity in accordance with this Code, including avoiding conflicts of interest, and take other steps to promote a culture throughout the Company in which all employees, officers and directors are encouraged to act honestly and with integrity, avoiding conflicts of interest;

Take all steps necessary to promote full, fair, accurate, timely and understandable disclosure in reports and documents that the Company files with or submits to the Securities and Exchange Commission and in other public communications that the Company makes from time to time;

Take all steps necessary to promote compliance with applicable governmental laws, rules and regulations, and with those of The NASDAQ Stock Market; and

Take all steps necessary to promote prompt internal reporting of violations of this Code to appropriate personnel, and to promote accountability for adherence to this Code.