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TUFIN SOFTWARE TECHNOLOGIES LTD.
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By:
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/s/ Reuven Kitov
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Name:
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Reuven Kitov
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Title:
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CEO & Chairman of the Board of Directors
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Exhibit
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Description
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(1) |
The Merger Proposal. To approve (a) the merger agreement; (b) the merger itself; (c) the consideration to be received by the
shareholders of Tufin in the merger, consisting of $13.00 per share in cash, without interest and less any applicable withholding taxes, for each ordinary share, par value NIS 0.015 per share, of Tufin (each, a “Tufin ordinary
share”) owned immediately prior to the effective time of the merger (the “merger consideration”); (d) the cancellation of all outstanding equity awards of Tufin and the treatment thereof in accordance with the terms of the merger
agreement; and (e) all other transactions and arrangements contemplated by the merger agreement. We refer to these proposals collectively as the “merger proposal.”
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(2) |
The Adjournment Proposal. To approve the adjournment of the meeting to a later date or dates, if necessary, to solicit additional
proxies if there are insufficient votes to approve the merger proposal at the time of the meeting. We refer to this proposal as the “adjournment proposal.”
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Very truly yours,
Reuven Kitov
Chief Executive Officer and Chairman of the Board of Directors
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(1) |
The Merger Proposal. To approve (a) the merger agreement; (b) the merger itself; (c) the consideration to be received by the
shareholders of Tufin in the merger, consisting of $13.00 per share in cash, without interest and less any applicable withholding taxes, for each ordinary share, par value NIS 0.015 per share, of Tufin (each, a “Tufin ordinary
share”) owned immediately prior to the effective time of the merger (the “merger consideration”); (d) the cancellation of all outstanding equity awards of Tufin and the treatment thereof in accordance with the terms of the merger
agreement; and (e) all other transactions and arrangements contemplated by the merger agreement. We refer to these proposals collectively as the “merger proposal.”
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(2) |
The Adjournment Proposal. To approve the adjournment of the meeting to a later date or dates, if necessary, to solicit additional
proxies if there are insufficient votes to approve the merger proposal at the time of the meeting. We refer to this proposal as the “adjournment proposal.”
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TUFIN SOFTWARE TECHNOLOGIES LTD.
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By:
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/s/ Reuven Kitov
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Name:
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Reuven Kitov
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Title:
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CEO & Chairman of the Board of Directors
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(1) |
The Merger Proposal. To approve (a) the merger agreement; (b) the merger itself; (c) the consideration to be received by the
shareholders of Tufin in the merger, consisting of $13.00 per share in cash, without interest and less any applicable withholding taxes, for each ordinary share, par value NIS 0.015 per share, of Tufin (each, a “Tufin ordinary
share”) owned immediately prior to the effective time of the merger (the “merger consideration”); (d) the cancellation of all outstanding equity awards of Tufin and the treatment thereof in accordance with the terms of the merger
agreement; and (e) all other transactions and arrangements contemplated by the merger agreement. We refer to these proposals collectively as the “merger proposal.”
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(2) |
The Adjournment Proposal. To approve the adjournment of the meeting to a later date or dates, if necessary, to solicit additional
proxies if there are insufficient votes to approve the merger proposal at the time of the meeting. We refer to this proposal as the “adjournment proposal.”
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1 |
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9 |
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11 |
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The Companies
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11 |
Tufin’s Reasons for the Merger; Recommendation of Tufin’s Board of Directors
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11 |
Opinion of Tufin’s Financial Advisor
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12 |
Interests of Certain Persons; Share Ownership of Tufin’s Directors and Executive Officers
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12 |
The Merger Agreement
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14 |
Structure of the Merger
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14 |
Consideration
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14 |
Treatment of Options and RSUs Outstanding Under Our Equity Plans
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14 |
The Special General Meeting of Tufin’s Shareholders
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15 |
Conditions to the Closing of the Merger
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15 |
Financing of the Merger
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16 |
Termination of the Merger Agreement
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19 |
No Solicitation of Acquisition Proposals
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20 |
Termination Fees
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20 |
Expenses
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21 |
Absence of Appraisal Rights
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21 |
Regulatory Approvals
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21 |
Certain Material U.S. Federal and Israeli Income Tax Consequences
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21 |
22 |
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23 |
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General; Date; Time and Place
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23 |
Purpose of the Special General Meeting
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23 |
Shareholders Entitled to Vote; Record Date
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23 |
Recommendation of Tufin’s Board of Directors
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23 |
Quorum and Voting
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24 |
Voting Results
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25 |
Voting of Proxies and Voting Instruction Forms
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25 |
Revoking or Changing Your Vote
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26 |
The Proxy
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26 |
Required Vote for the Merger Proposal
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26 |
Required Vote for the Adjournment Proposal
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27 |
Share Ownership of Tufin Directors and Executive Officers
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27 |
Solicitation of Proxies
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27 |
Attending the Tufin Special General Meeting
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27 |
Contact for Questions and Assistance in Voting
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28 |
Other Matters
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28 |
29 |
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30 |
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Background of the Merger
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30 |
Reasons for Approval of the Merger
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36 |
Opinion of Tufin’s Financial Advisor
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41 |
Certain Unaudited Financial Projections
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46 |
Interests of Certain of Tufin’s Executive Officers and Directors in the Merger
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48 |
No Appraisal Rights
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49 |
Effects of the Merger on Tufin Ordinary Shares
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49 |
Effects of the Merger on Equity Plans
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49 |
Delisting and Deregistration of Tufin Ordinary Shares
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51 |
Procedures for Receiving the Merger Consideration
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51 |
Certain Material U.S. Federal and Israeli Income Tax Consequences
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51 |
Accounting Treatment of the Merger
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59 |
Regulatory Matters
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59 |
62 |
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Explanatory Note Regarding the Merger Agreement
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62 |
The Merger
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62 |
Closing and Effective Time of the Merger
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63 |
Articles of Association; Directors and Officers
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63 |
The Merger Consideration and the Conversion of Share Capital
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63 |
Treatment of Equity Awards
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63 |
Paying Agent; Exchange Fund; Payment Procedures
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65 |
Representations and Warranties
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68 |
Conduct of Business Pending the Merger
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72 |
The Go-Shop Period; Solicitation of Other Offers
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75 |
The No-Shop Period; No Solicitation of Other Offers
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77 |
The Board of Directors’ Recommendation; Company Board Recommendation Change
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79 |
Employee Benefits
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81 |
Efforts to Close the Merger
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82 |
Financing; Cooperation with Debt Financing
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82 |
Indemnification and Insurance
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85 |
Other Covenants
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85 |
Conditions to the Closing of the Merger
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86 |
Financing of the Merger
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87 |
Termination of the Merger Agreement
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90 |
Specific Performance
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92 |
Limitations of Liability
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93 |
Fees and Expenses
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93 |
Amendment
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94 |
Governing Law
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94 |
The Voting Agreements
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94 |
95 |
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97 |
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A - 1 |
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B - 1 |
A: |
Tufin and Buyer have entered into a merger agreement pursuant to which Buyer will acquire Tufin through the merger of Merger Sub with and into Tufin, subject to certain conditions. Upon the completion of the merger, Tufin, as the
surviving company, will become a direct wholly owned subsidiary of Buyer. Tufin is holding the special general meeting of its shareholders (the “special general meeting” or the “meeting”) to obtain shareholder approval of the merger
agreement, the transactions contemplated under the merger agreement, including the merger, and the merger consideration. We cannot complete the merger unless our shareholders approve the merger proposal. We have included in this proxy
statement important information about the merger, the merger agreement and the special general meeting. You should read this information carefully and in its entirety. We have attached a copy of the merger agreement as Annex A
to this proxy statement. The enclosed voting materials allow you to vote your shares without personally attending the special general meeting. Your vote is very important and we encourage you to vote
by proxy or voting instruction form as soon as possible.
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The special general meeting is scheduled to be held at the principal executive offices of Tufin, located at 5 HaShalom Road, ToHa Tower, Tel Aviv 6789205, Israel, at 6:00 p.m. Israel Time (11:00 a.m. Eastern Time), on June 7, 2022.
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Tufin has fixed May 9, 2022 as the record date for the special general meeting. Only holders of record of Tufin ordinary shares (including shares held through a bank, broker
or other nominee that is a shareholder of record of Tufin) at the close of business on the record date are entitled to vote at the meeting or any adjournment, postponement or other delay thereof.
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Q: |
What matters will be voted on at the special general meeting?
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You will be asked to consider and vote on a proposal to approve the acquisition of Tufin by Buyer, including approval of (a) the merger agreement; (b) the merger transaction itself; (c) the consideration to be received by the
shareholders of Tufin in the merger, consisting of $13.00 per share in cash, without interest and less any applicable withholding taxes, for each ordinary share, par value NIS 0.015 per share, of Tufin (each, a “Tufin ordinary share”)
owned immediately prior to the effective time of the merger (the “merger consideration”); (d) the cancellation of all outstanding equity awards of Tufin and the treatment thereof in accordance with the terms of the merger agreement; and
(e) all other transactions and arrangements contemplated by the merger agreement. We refer to these proposals collectively as the “merger proposal.”
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Q: |
What will I receive in the merger?
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Upon the completion of the merger, you will be entitled to receive the merger consideration. You will not receive any shares in Buyer or in the surviving company.
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The Board unanimously recommends that you vote (1) “FOR” the merger proposal and (2) “FOR” the adjournment proposal.
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The approval of each of the merger proposal and the adjournment proposal requires the affirmative vote of the holders of at least a majority of the ordinary shares of Tufin represented at the special general meeting (or any
adjournment or postponement thereof), in person, by proxy or by electronic voting, and voting on such proposal (excluding abstentions and broker non-votes). In the case of the merger proposal, the foregoing majority must be achieved
after excluding any votes of Tufin ordinary shares held by (a) Buyer, Merger Sub or any person or entity holding, directly or indirectly, 25% or more of the total outstanding voting power of Buyer or Merger Sub, or the right to appoint
25% or more of the directors of Buyer or Merger Sub; (b) a person or entity acting on behalf of Buyer, Merger Sub or a person or entity described in clause (a) above; or (c) a family member of, or an entity controlled by, Buyer, Merger
Sub or any of the foregoing. Each of (a), (b) and (c) above are referred to as a “Buyer Affiliate.” In order for your vote to be counted in respect of the
merger proposal or the adjournment proposal, you must affirm on the proxy card or voting instruction form that you are not a Buyer Affiliate (by indicating “YES” in Item 1A of the proxy card or voting instruction form). If you do not
so affirm, your vote will not count towards the tally for the merger proposal or the adjournment proposal.
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A: |
Pursuant to Tufin’s articles of association, the presence (in person, by proxy or by electronic voting) of any two or more shareholders holding, in the aggregate, at least
one-third of the voting rights in the Company constitutes a quorum for purposes of the meeting. If a quorum is not present within 30 minutes from the time appointed for the meeting, the meeting will stand adjourned either (a) to the
same day in the following week at the same time and place (in which case Tufin will not be obligated to give notice to the shareholders of the adjourned meeting), or (b) to such other day, time and place as the Board may indicate in a
notice to the shareholders (which may be earlier or later than the date pursuant to clause (a) above). At such adjourned general meeting any number of shareholders shall constitute a quorum for the business for which the original
general meeting was called.
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A: |
We are working towards completing the merger as quickly as reasonably possible. Several conditions must be satisfied or waived before the merger is completed. See the section of this proxy statement entitled “The Merger Agreement—Conditions to the Closing of the Merger” for a summary description of these conditions. We expect to complete the merger during the second quarter of 2022. Because the merger
may be subject to governmental and regulatory approvals and other conditions, some of which are beyond Buyer’s and Tufin’s control, the exact timing cannot be predicted with certainty.
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No. Under Israeli law, holders of Tufin ordinary shares are not entitled to statutory appraisal rights in connection with the merger.
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Q: |
Will I continue to be able to trade my Tufin ordinary shares on the New York Stock Exchange following the special general meeting?
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A: |
Tufin shareholders are expected to be able to trade their Tufin ordinary shares on the New York Stock Exchange (the “NYSE”) until the closing date of the merger.
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A: |
At the effective time of the merger, by virtue of the merger and without any action on the part of Buyer, Merger Sub, Tufin or the holder thereof, each option to acquire Tufin ordinary shares (a “Tufin Option”) that is vested,
outstanding and unexercised immediately prior to the effective time of the merger (including any Tufin Option that vests pursuant to its terms in connection with the consummation of the merger), will be automatically canceled in
exchange for the right to receive an amount in cash equal to the product of (a) the excess of $13.00 over the exercise price per Tufin ordinary share of such Tufin Option, and (b) the number of Tufin ordinary shares covered by such
Tufin Option immediately prior to the effective time of the merger, less applicable withholding taxes (the “Option Consideration”).
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Q: |
What effects will the proposed merger have on Tufin?
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A: |
As a result of the proposed merger, Tufin will cease to be a publicly traded company and will become an indirect, wholly owned subsidiary of Buyer. Following the completion of the proposed merger, the registration of Tufin ordinary
shares and our reporting obligations under the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”), will be terminated upon notification to the SEC. In addition, upon the completion of the proposed merger, Tufin
ordinary shares will no longer be listed on any stock exchange, including the NYSE.
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A: |
If the merger agreement is not approved by our shareholders or if the merger is not completed for any other reason, our shareholders will not receive any merger consideration for their Tufin ordinary shares. Instead, we will remain
a publicly traded company and Tufin ordinary shares will continue to be listed on the NYSE. Under certain circumstances related to the termination of the merger agreement, as specified therein, we may be required to pay to Buyer a
termination fee. Please see “The Merger Agreement—Termination of the Merger Agreement—Termination Fee” for a summary description of these circumstances.
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A: |
Beneficial Owners: If you hold your shares in “street name” through a broker, bank or other nominee on the NYSE, please vote in
accordance with the instructions on the nominee’s voting instruction form. If you receive a physical voting instruction form, you may complete it and mail it in the self-addressed envelope that is enclosed. If you received an email
copy of the voting instruction form, or if you otherwise desire to submit voting instructions by telephone or over the internet (at www.proxyvote.com), please follow the directions that you
received. The deadline for receipt of your voting instructions will be 11:59 p.m. Eastern Time on June 6, 2022 (i.e., 6:59 a.m. Israel Time on June 7, 2022).
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Q: |
What happens if I do not indicate how to vote on the proxy card or voting instruction form?
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A: |
If you are a registered shareholder and provide specific instructions (by marking a box on your proxy card) with regard to the merger proposal and the adjournment proposal, your shares will be voted as you instruct. If you sign and
return your proxy card without giving specific instructions, your shares will not be voted on the merger proposal or the adjournment proposal, unless you provide the required confirmation under Item 1A of the proxy card that you are not
a Buyer Affiliate (in which case your proxy card will be voted “FOR” the merger proposal and “FOR” the adjournment proposal, as recommended by the Board).
If you are a beneficial owner and return your voting instruction form but do not specify voting instructions for the merger proposal or the adjournment proposal, your bank, broker or other nominee will not be permitted to cast a vote
with respect to the merger proposal or the adjournment proposal, as applicable (commonly referred to as a “broker non-vote”). Banks, brokers or other nominees that hold shares in “street name” for clients typically have authority to
vote on “routine” proposals even when they have not received instructions from beneficial owners. The proposals for the special general meeting will not be treated as routine proposals, because, among other things, our proxy statement
is prepared in compliance with the Companies Law, 5759-1999, of the State of Israel (the “Companies Law”) rather than the rules applicable to domestic U.S. reporting companies. Therefore, in that circumstance, the shares held by you
will be included in determining the presence of a quorum at the meeting, but will not be considered “present” for the purpose of voting on the merger proposal or the adjournment proposal. Such shares therefore have no impact on the
outcome of the voting on the merger proposal or the adjournment proposal. If your shares are held of record by a bank, broker or other nominee, we urge you to give instructions to your bank, broker or other nominee as to how your
shares should be voted so that you thereby participate in the voting on this important matter.
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Q: |
If my shares are held in “street name” by my bank, broker or other nominee, will my broker vote my shares for me?
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A: |
As described in the answer to the previous question, your banker, broker or other nominee will not be able to vote your shares without instructions from you. You should instruct your bank, broker or
other nominee to vote your shares by following the directions provided by your bank, broker or other nominee. Without instructions, your shares will not be counted as voted at the special general meeting.
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Q: |
Do Tufin’s executive officers and directors have any interests in the merger?
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A: |
Yes. Tufin’s executive officers and directors have interests in the merger that may be different from, or are in addition to, those of Tufin shareholders generally. For detailed information, please see “Summary—Interests of Certain Persons; Share Ownership of Tufin’s Directors and Executive Officers” and “The Merger—Interests of Certain of Tufin’s Executive Officers and Directors in
the Merger.”
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Q: |
Can I change my vote after I have signed and returned my proxy card or voting instruction form?
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A: |
Beneficial Owners: If your shares are held in a stock brokerage account or by a bank or other nominee, in order to change your voting
instructions, you must follow the relevant directions from your broker, bank or other nominee, and must do so prior to the deadline for submitting voting instructions (i.e., by 11:59 p.m. Eastern Time on June 7, 2022 (6:59 a.m. Israel
Time on June 7, 2022)).
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Q: |
If I purchased my Tufin ordinary shares after the record date, may I vote these shares at the Tufin special general meeting?
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A: |
No. A shareholder is not entitled to vote Tufin ordinary shares purchased after the record date because the shareholder was not the record holder of those shares on the record date. Only holders of record of Tufin ordinary shares (including shares held through a bank, broker or other nominee that is a shareholder of record of Tufin) at the close of business on the record date are entitled
to vote at the meeting or any adjournment or postponement thereof. However, such shareholder’s Tufin ordinary shares will be automatically converted into and represent the right to receive $13.00 per Tufin ordinary share in cash,
without interest and less any applicable withholding taxes.
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A: |
The record date for the special general meeting is earlier than the date of the special general meeting and the date that the merger is expected to be completed. If you transfer your Tufin ordinary shares after the record date but
before the special general meeting, you will retain your right to vote at the special general meeting, but will have transferred the right to receive the merger consideration with respect to such Tufin ordinary shares. In order to
receive the merger consideration, you must hold your Tufin ordinary shares through the completion of the merger.
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Q: |
Should I send in my Tufin share certificates now? When can I expect to receive the merger consideration for my shares?
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A: |
No. Please do not send your Tufin share certificates with your proxy card or voting instruction form. Prior to the effective time of
the merger, Buyer will select a bank or trust company reasonably acceptable to Tufin to act as the paying agent for the merger (the “paying agent”). After the merger is completed, the paying agent will send you a letter of
transmittal with detailed instructions regarding the surrender of your Tufin share certificates for the merger consideration.
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A: |
As further detailed below under “The Merger—Certain Material U.S. Federal and Israeli Income Tax Consequences—Certain Material Israeli Tax Consequences,” according to Israeli law, any consideration payable to holders of the company’s shares, options or RSUs (“Equity Holder”), including Equity Holder who is not a resident
of the State of Israel, is subject to withholding at the source of Israeli tax in accordance with the rates prescribed by Israeli law from the payment of the merger consideration, unless such shareholder provides Buyer with a valid
certificate issued by the Israeli Tax Authority (the “ITA”) exempting such shareholder from Israeli withholding tax on the payment of the merger consideration, or entitling such shareholder to a reduced rate of Israeli withholding tax
on such payment in form and substance reasonably satisfactory to Buyer.
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Q: |
Will the merger consideration paid to U.S. holders of Tufin ordinary shares be subject to U.S. federal income tax?
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A: |
The receipt of merger consideration by Tufin shareholders that are U.S. holders will be a taxable event for U.S. federal income tax purposes. For more details, see “The Merger—Certain Material U.S.
Federal and Israeli Income Tax Consequences—Certain Material U.S. Federal Income Tax Consequences.”
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Q: |
Will the merger consideration paid to Israeli holders of Tufin ordinary shares be subject to Israeli tax?
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A: |
The receipt of merger consideration by Tufin shareholders that are subject to Israeli taxes will be a taxable event. For more details, see “The Merger—Certain Material U.S. Federal and Israeli
Income Tax Consequences—Certain Material Israeli Tax Consequences.”
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Q: |
What should I do if I have questions about the special general meeting, the merger or this document?
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A: |
If you have any questions about the special general meeting, the merger or this document, or if you need additional copies of this document or the enclosed proxy card, you should contact:
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the merger agreement has been adopted by the requisite affirmative vote of Tufin shareholders;
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the applicable waiting period under the HSR Act has expired or been terminated and approvals, consents and waivers or clearances have been received or waiting periods have expired under certain foreign investment laws;
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no laws or court orders make the merger illegal or otherwise prohibit the merger; and
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50 days have elapsed since the day of the filing of the merger proposal with the Israeli Companies’ Registrar and 30 days have elapsed since the day of approval of the merger by the shareholders of each of Tufin and Merger Sub, each
in accordance with Israeli law.
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the diversion of management and employee attention from implementing our growth strategy in our existing markets, including the United States and Israel, or in new markets that we are targeting;
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potential diversion of public attention from our promotion of our brand and products in a manner that appeals to new and existing customers;
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the fact that we have and will continue to incur expenses related to the merger prior to its closing; and
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our potential inability to respond effectively to competitive pressures, industry developments and future opportunities.
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determined that the merger agreement, the merger and the other transactions contemplated by the merger agreement are advisable, fair to and in the best interests of Tufin and its shareholders;
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determined that, considering the financial position of the merging companies, no reasonable concern exists that the surviving company will be unable to fulfill the obligations of Tufin to its creditors;
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• |
approved the merger agreement, the merger and the other transactions contemplated by the merger agreement; and
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determined to recommend that Tufin’s shareholders approve the merger agreement, the merger and the other transactions contemplated by the merger agreement.
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• |
Each outstanding, unexercised and vested option to acquire Tufin ordinary shares (each, a “Tufin Option”) (including any Tufin Option that vests in connection with the consummation of the merger pursuant to its terms)—including
Tufin Options held by Tufin officers and directors—will be canceled in exchange for the right to receive cash consideration (without interest) equal to the product of (a) the excess of $13.00 over the exercise price per Tufin
ordinary share of such Tufin Option, and (b) the number of Tufin ordinary shares covered by such Tufin Option immediately prior to the effective time of the merger, less applicable withholding taxes (the “Option Consideration”).
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• |
Each outstanding, unexercised and unvested Tufin Option, other than those held by Tufin non-employee directors—including Tufin Options held by Tufin officers—will be canceled at the effective time of the merger and converted
into a contingent right to receive an amount in cash (without interest) (a “Contingent Cash Award”) equal to the Option Consideration with respect to such Tufin Option from which it was converted. Any portion of a Contingent Cash
Award relating to a Tufin Option that would have vested pursuant to its terms on or prior to December 31, 2022 will vest and become payable pursuant to the same vesting schedule applicable to the Tufin Option from which it was
converted (subject to the holder’s continued employment or service with Tufin or one of its subsidiaries or affiliates through the applicable vesting date). Any portion of a Contingent Cash Award relating to a Tufin Option that
would have vested pursuant to its terms following December 31, 2022 will vest and become payable as of the June 30th or December 31st immediately preceding the original vesting date (each, an “accelerated vesting date”) applicable
to such Tufin Option (subject to the holder’s continued employment or service with Tufin or one of its subsidiaries or affiliates through the applicable accelerated vesting date).
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• |
Each outstanding, unexercised and unvested Tufin Option held by a non-employee director will be canceled at the effective time of the merger in exchange for the right to receive the Option Consideration.
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• |
Notwithstanding the foregoing, if the exercise price per Tufin ordinary share subject to any Tufin Option (whether vested or unvested) is equal to or greater than $13.00, such Tufin Option will be canceled for no consideration
as of the effective time of the merger.
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• |
Each outstanding vested Tufin RSU—including Tufin RSUs held by Tufin officers and directors—will be canceled at the effective time of the merger in exchange for the right to receive a lump sum cash payment (without interest)
equal to the RSU Consideration.
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• |
Each (i) outstanding and unvested restricted stock unit award (each, a “Tufin RSU”), other than a Tufin RSU held by a non-employee director of Tufin—including Tufin RSUs held by Tufin officers—and (ii) potential award of Tufin
RSUs that has been promised but not granted to an individual pursuant to a written agreement entered into prior to the consummation of the merger (each, a “Deemed RSU”) will, at the effective time of the merger, in each case,
automatically be canceled and converted into a Contingent Cash Award equal to the product of (a) $13.00 and (b) the number of Tufin ordinary shares covered by such Tufin RSU, less applicable withholding taxes (the “RSU
Consideration”) with respect to such Tufin RSU or Deemed RSU from which it was converted. Any portion of a Contingent Cash Award relating to a Tufin RSU or Deemed RSU that would have vested pursuant to its terms on or prior to
December 31, 2022 will vest and become payable pursuant to the same vesting schedule applicable to the Tufin RSU or Deemed RSU from which it was converted (subject to the holder’s continued employment or service with Tufin or one
of its subsidiaries or affiliates through the applicable vesting date). Any portion of a Contingent Cash Award relating to a Tufin RSU or Deemed RSU that would have vested pursuant to its terms following December 31, 2022 will
vest and become payable as of the applicable accelerated vesting date immediately preceding the original vesting date applicable to such Tufin RSU or Deemed RSU (subject to the holder’s continued employment or service with Tufin
or one of its subsidiaries or affiliates through the applicable accelerated vesting date).
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• |
Each outstanding and unvested Tufin RSU held by a non-employee director of Tufin will be canceled at the effective time of the merger in exchange for the right to receive the RSU Consideration.
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• |
Our executive officers and directors will also benefit from the indemnification provisions contained in the merger agreement with respect to their acts or omissions as executive officers or directors of Tufin prior to or at the
effective time of the merger. In accordance with the merger agreement and subject to the approval of the merger proposal at the special general meeting, Tufin intends to acquire a run-off directors’ and officers’ liability
insurance for seven years, commencing at the effective time of the merger.
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• |
the adoption of the merger agreement by the requisite affirmative vote of Tufin shareholders;
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• |
the expiration or termination of the applicable waiting period under the HSR Act and the receipt of approvals, consents and waivers or clearances or expirations of waiting periods under certain foreign investment laws;
|
• |
the absence of any laws or court orders making the merger illegal or otherwise prohibiting the Merger; and
|
• |
the elapse of 50 days after the day of the filing of the merger proposal with the Israeli Companies’ Registrar and the elapse of 30 days after the day of approval of the merger by the shareholders of each of Tufin and Merger
Sub, each in accordance with Israeli law.
|
• |
accuracy of the representations and warranties of Tufin in the merger agreement, subject to certain qualifiers;
|
• |
performance in all material respects by Tufin of its obligations under the merger agreement;
|
• |
absence of the occurrence of any event, change, effect or development that, individually or in the aggregate, has had or would reasonably be expected to have a material adverse effect with respect to Tufin and its subsidiaries,
taken as a whole, since the execution and delivery of the merger agreement; and
|
• |
delivery of an officer’s certificate by Tufin certifying that the above conditions have been satisfied.
|
• |
accuracy of the representations and warranties of Buyer and Merger Sub in the merger agreement, subject to certain qualifiers;
|
• |
performance in all material respects by Buyer and Merger Sub of their obligations under the merger agreement; and
|
• |
delivery of an officer’s certificate by Buyer and Merger Sub certifying that the above conditions have been satisfied.
|
• |
$200.0 million senior secured first lien term loan facility; and
|
• |
$10.0 million senior secured first lien revolving credit facility (not all of which is expected to be drawn at the closing of the merger).
|
• |
the absence of a Company Material Adverse Effect (as defined in the merger agreement) since April 5, 2022 that is continuing;
|
• |
the consummation (or substantially simultaneous consummation with the debt financing) of the merger in accordance with the merger agreement as in effect on April 5, 2022 without any amendment, modification or waiver of any of
the provisions thereof that would be materially adverse to the interests of the lenders in their capacity as such without the consent of the initial lenders;
|
• |
subject to certain limitations and exceptions, the accuracy in all material respects as of the closing of the merger of certain specified representations and warranties in the merger agreement and certain specified
representations and warranties in the loan documents;
|
• |
the equity financing shall have occurred or, substantially concurrently with the initial funding of the debt financing, shall occur;
|
• |
the payment of applicable invoiced fees and expenses;
|
• |
the delivery of certain audited and unaudited financial statements of Tufin and its subsidiaries;
|
• |
the delivery of certain customary closing documents (including a customary solvency certificate and documents and instruments necessary to create and perfect certain security interests); and
|
• |
the receipt by the lenders of certain documentation and other information about the borrowers and guarantors required under applicable “know your customer” and anti-money laundering rules and regulations (including the PATRIOT
Act).
|
• |
the closing of the merger;
|
• |
the valid termination of the merger agreement in accordance with its terms, other than a termination pursuant to which Tufin would be entitled to a Buyer Termination Fee under the merger agreement; in which case the guarantee
shall terminate 60 days after such termination unless Tufin has commenced a legal proceeding against Buyer or the T/R Funds alleging the Buyer Termination Fee is due and owing prior to such 60th day; provided that if the merger
agreement has been so terminated and such legal proceeding has been filed, the T/R Funds, as the guarantor entities under the guarantee, will have no further liability or obligation under the guarantee from and after the earliest
of (w) the closing of the merger, (x) a final, non-appealable resolution of such legal proceeding, (y) a written agreement among the T/R Funds as the guarantor entities under the guarantee and Tufin terminating the obligations and
liabilities of the T/R Funds, as the guarantor entities under the guarantee, pursuant to the guarantee and (z) payment of the guaranteed obligations then payable by the T/R Funds or Buyer.
|
• |
the payment and full discharge of any guaranteed obligations that is or may become payable under the guarantee; or
|
• |
the funding of the equity financing.
|
• |
prior to the effective time of the merger, (i) any permanent injunction or other legal or regulatory restraint or prohibition preventing the consummation of the merger is in effect, that, prohibits, makes illegal or enjoins the
consummation of the merger and has become final and non-appealable; or (ii) any statute, rule or regulation is enacted, entered, enforced or deemed applicable to the merger that prohibits, makes illegal or enjoins the consummation
of the merger;
|
• |
the merger is not consummated by the Termination Date, provided, however, that, if all the conditions to closing, other than the regulatory approvals, have been satisfied (other than those conditions that by their nature are to
be satisfied by actions taken at the closing; provided that each such condition would be satisfied if the closing were to occur on such date) then either party may extend the Termination Date to January 5, 2023, by delivering
written notice to the other party; or
|
• |
the approval of the merger by the Tufin shareholders is not obtained upon the holding of a vote at the special general meeting, except the right to terminate the merger agreement is not available to any party whose action or
failure to act (which action or failure to act constitutes a breach by such party of the merger agreement) has been the primary cause of, or primarily resulted in, the failure to obtain the requisite Tufin shareholders’ approval
at the special general or any adjournment or postponement thereof.
|
• |
(i) (a) by either Buyer or Tufin because the merger has not been consummated by the Termination Date, subject to certain exceptions or (b) by Buyer because Tufin has breached its representations, warranties, covenants or
agreements in the merger agreement such that certain conditions set forth in the merger agreement are not satisfied and such breach is not capable of being cured, or is not cured, before the earlier of the Termination Date or the
date that is 30 calendar days following Buyer’s delivery of written notice of such breach (or such shorter period of time as remains prior to the Termination Date) (each of (a) and (b), an “Applicable Termination”); (ii) Tufin has
received an Acquisition Proposal (as defined in this section of this proxy statement below) or an Acquisition Proposal has been publicly made or announced since the date of the merger agreement; and (iii) Tufin enters into an
agreement providing for, or consummates, an Acquisition Transaction within 12 months following such Applicable Termination (provided that, for purposes of the termination fee, all references to “20%” and “80%” in the definition of
“Acquisition Transaction” are deemed to be references to “50%”);
|
• |
by Buyer, because the Board has effected a Company Board Recommendation Change; or
|
• |
by Tufin, to enter into a definitive agreement in respect of a Superior Proposal other than with an Exempted Person prior to the Cut-Off Time.
|
• |
by Tufin if Buyer or Merger Sub has breached or failed to perform any of their respective representations, warranties, covenants or other agreements set forth in the merger agreement such that certain conditions set forth in
the merger agreement are not satisfied, and such breach is not capable of being cured by the Termination Date, or is not cured, before the earlier of the Termination Date or the date that is 30 calendar days following Tufin’s
delivery of written notice of such breach (or such shorter period of time as remains prior to the Termination Date);
|
• |
by Tufin if prior to the effective time of the merger, (i) the closing obligations of Tufin have been and continue to be satisfied; (ii) Buyer and Merger Sub have failed to consummate the merger under the timing restrictions
set forth in the merger agreement; (iii) Tufin has irrevocably notified Buyer in writing that, if Buyer performs its obligations under the merger agreement and the equity financing contemplated by the equity commitment letters and
the debt financing is funded, Tufin is ready, willing and able to consummate, and will consummate, the merger; (iv) Tufin has provided at least five business days written notice that it intends to terminate the merger agreement;
and (v) the merger is not consummated by the end of such five business day period; or
|
• |
by Buyer because the merger has not been consummated by the Termination Date and at such time, Tufin could have terminated pursuant to either of the prior two bullets above.
|
• |
the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement;
|
• |
the outcome of any legal proceedings that may be instituted against Tufin or others relating to the merger agreement;
|
• |
the failure of the merger to close for any other reason;
|
• |
risks that the proposed transaction disrupts current plans and operations and the potential difficulties in employee retention as a result of the merger, and the effect of the announcement of the merger on our operating results and
business generally;
|
• |
the distraction of our management resulting from the proposed transaction; and
|
• |
other risks detailed in our filings with the SEC, including those set forth under the heading “Risk Factors” in our most recent annual report on Form 20-F. See the section of this proxy
statement entitled “Where You Can Find More Information” beginning on page 97 and “Risk Factors” beginning on page 9.
|
• |
determined that the merger agreement, the merger and the other transactions contemplated by the merger agreement are fair to, and in the best interests of, Tufin and its shareholders and that, considering the financial position of
the merging companies, no reasonable concern exists that the surviving company will be unable to fulfill the obligations of Tufin to its creditors;
|
• |
approved the merger agreement, the merger, the merger consideration and the other transactions and arrangements contemplated under the merger agreement; and
|
• |
determined to recommend that Tufin’s shareholders approve the merger agreement, the merger, the merger consideration, the cancellation of all outstanding equity awards in Tufin (whether vested or unvested) held by Board members in
exchange for cash consideration in accordance with the terms of the merger agreement and the treatment thereof, the cancellation of all outstanding vested equity awards in Tufin held by individuals who are not Board members in exchange
for cash consideration in accordance with the terms of the merger agreement, and the conversion of all outstanding unvested equity awards in Tufin held by individuals (and certain awards promised, but not yet granted, to individuals)
who are not Board members into time-vesting contingent cash awards in accordance with the terms of the merger agreement, all in accordance with the terms of the merger agreement; and
|
• |
the other transactions and arrangements contemplated under the merger agreement.
|
• |
you can send a written notice stating that you would like to revoke your proxy, which notice must be received in our offices at least four hours prior to the time set for beginning the special general meeting (i.e., by 2:00 p.m.
Israel Time (7:00 a.m. Eastern Time), on June 7, 2022);
|
• |
you can complete and submit a new proxy card dated later than the first proxy card, which must be received no later than the deadline applicable to a notice of revocation, as described above; or
|
• |
you can attend the special general meeting, and file a written notice of revocation or make an oral notice of revocation of your proxy with the chairperson of the special general meeting and then vote in person. Your attendance at
the special general meeting will not revoke your proxy in and of itself.
|
• |
the current and historical market prices of Tufin ordinary shares, including the market performance of Tufin ordinary shares relative to those of other participants in Tufin’s industry and general market indices, and the fact that
the per share merger consideration constituted a premium of 44% over Tufin’s closing share price of $9.03 on April 5, 2022 (the trading day prior to the public announcement of the merger), and a premium of 54% over Tufin’s 30-day
volume-weighted average share price through that date;
|
• |
the belief of the Board, after a thorough review of Tufin’s business, market trends, results of operations, competitive landscape, execution risks and financial condition, and discussions with Tufin’s management and advisors, that
the value offered to Tufin shareholders pursuant to the merger agreement is more favorable to Tufin shareholders than the potential long-term and sustainable value that might have resulted from remaining an independent public company,
considering (among other things):
|
o |
risks and uncertainties regarding the successful management of Tufin’s business model, as well as current and future growth, particularly with respect to the ongoing implementation of Tufin’s plans to transition to a term-based
subscription license business model over time;
|
o |
intense competition in the security policy management market;
|
o |
risks and uncertainties regarding growth in the market for enterprise security and network management products and Tufin’s ability to compete and increase positive market awareness of its brand, particularly with respect to the
market for security policy management;
|
o |
other relevant matters described in the “Risk Factors” section of the annual report on Form 20-F for the fiscal year ended December 31, 2021, filed with the SEC on March 7, 2022;
|
• |
the belief of the Board, based upon the course of negotiations with Turn/River (as described in more detail under the section of this proxy statement entitled “—Background of the Merger”),
that the merger consideration represents the highest price that any potential buyer was willing to pay and that the terms of the merger agreement include the most favorable terms to Tufin, in the aggregate, to which Buyer was willing to
agree;
|
• |
the potential risk of losing the favorable opportunity with Turn/River if Tufin sought to engage with additional potential acquirers prior to entry into the merger agreement and the potential negative effect that such a process might
have on Tufin’s business, especially in light of the “go-shop” provision Turn/River was willing to permit that would allow Tufin to solicit alternative acquisition proposals following announcement of entry into the merger agreement;
|
• |
the outreach conducted by J.P. Morgan prior to signing the merger agreement at the direction of the Board to over 46 potential strategic and financial acquirers and the resulting discussions with a number of such parties and with
three additional potential acquirers that reached out J.P. Morgan that did not yield offers higher than offer provided by Turn/River;
|
• |
the fact that Tufin did not receive any additional bids from potential acquirers as a result of the “go-shop” process;
|
• |
the high degree of certainty that the closing of the merger would be achieved in a timely manner, based on the terms of the merger agreement;
|
• |
the fact that the merger consideration received by Tufin shareholders will consist entirely of cash, which provides liquidity and certainty of value to shareholders, and the belief of the Board, based upon the Board’s extensive
knowledge of Tufin’s business, assets, financial condition and results of operations, its competitive position and its historical and projected financial performance, that this certainty of value was more favorable to Tufin shareholders
on a risk-adjusted basis than the potential value that might result from other alternatives reasonably available to Tufin, including remaining an independent, publicly traded company;
|
• |
the fact that Reuven Kitov and Reuven Harrison, Tufin’s co-founders, were supportive of the transaction and prepared to execute and deliver the Voting Agreements;
|
• |
the oral opinion of J.P. Morgan, subsequently confirmed in writing, rendered to the Board that, as of April 5, 2022, and based upon and subject to the factors and assumptions set forth in its opinion, the merger consideration to be
paid to the holders of Tufin ordinary shares in the proposed merger was fair, from a financial point of view, to such holders, as set forth in such opinion and as more fully described below in the section of this proxy statement
entitled “—Opinion of Tufin’s Financial Advisor”;
|
• |
the terms and conditions of the merger agreement and the other transaction documents, including the following:
|
o |
the right of Tufin, pursuant to a 30-day “go-shop” period, to solicit Acquisition Proposals (as defined in the section of this proxy statement entitled “The Merger Agreement—The Go-Shop Period;
Solicitation of Other Offers”) from, and participate in discussions and negotiations with, third parties regarding any Acquisition Proposal, with an additional ten days to negotiate a definitive agreement with qualifying
parties;
|
o |
the provision of the merger agreement allowing the Board to effect a Company Board Recommendation Change and to terminate the merger agreement, in certain circumstances relating to the presence of a Superior Proposal (or to effect a
Company Board Recommendation Change in response to an Intervening Event) subject to the applicable procedures, terms and conditions set forth in the merger agreement (including, if applicable, payment of a termination fee) (for more
information, see the section of this proxy statement entitled “The Merger Agreement—The Board of Directors’
Recommendation; Company Board Recommendation Change”);
|
o |
the absence of a financing condition in the merger agreement;
|
o |
the end date of October 5, 2022 (and subject to extension for regulatory purposes until January 5, 2023) allowing for sufficient time to complete the merger;
|
o |
the obligation of Buyer and Merger Sub to use reasonable best efforts to consummate the financing and the limited number and nature of the conditions to the debt and equity financing;
|
o |
Tufin’s ability to terminate the merger agreement in order to accept a Superior Proposal, subject to certain conditions of the merger agreement and paying Buyer a termination fee of either (i) $10.0 million if the merger agreement
had been terminated during the go-shop period (or, with respect to an Exempted Person (as defined in this proxy statement below), before the Cut-Off Time) or (ii) $17.2 million, in the case of any other such termination – amounts which
the Board believed, based upon the advice of its financial and legal advisors, were unlikely to deter third parties from making Acquisition Proposals; and
|
o |
the conditions to closing contained in the merger agreement, which are limited in number and scope, and which, in the case of the condition related to the accuracy of Tufin’s representations and warranties, is generally subject to a
Company Material Adverse Effect (as defined in the section of this proxy statement entitled “The Merger Agreement—Representations and Warranties”) qualification;
|
• |
the requirement that the merger agreement be adopted by the affirmative vote of the holders of a majority of the Tufin ordinary shares represented at the special general meeting;
|
• |
the fact that Tufin has sufficient operating flexibility to conduct its business in the ordinary course prior to the consummation of the merger;
|
• |
the fact that that Buyer has obtained committed debt financing for the transaction from a reputable financial institution and committed equity financing for the transaction from certain affiliated funds of Buyer that together provide
funding of an amount sufficient to pay the required amounts (including the merger consideration);
|
• |
Tufin’s ability, under circumstances specified in the merger agreement and the equity commitment letter, to specifically enforce Buyer’s obligation to enforce the financing commitments and to cause Buyer to cause the T/R Funds to
fund their respective contributions as contemplated by the merger agreement and the equity commitment letter;
|
• |
the fact that in the event of a failure of the merger to be consummated under certain circumstances, Buyer will pay Tufin a termination fee of $34.4 million, and the obligation to pay such amounts by the T/R Funds, pursuant to the
terms of the guarantee; and
|
• |
the fact that, in the absence of the merger, Tufin would continue to incur significant expenses by remaining a public company, including legal, accounting, transfer agent, printing and filing fees, and that those expenses could
adversely affect Tufin’s financial performance and the value of its shares.
|
• |
the fact that Tufin would no longer exist as an independent, publicly traded company, and, due to the nature of the merger as a cash transaction, Tufin shareholders would no longer participate in any future earnings or growth and
would not benefit from any potential future appreciation in value of Tufin — there is a possibility that, without the merger, the price of Tufin ordinary shares might increase in the future to a price in excess of the merger
consideration of $13.00 per Tufin ordinary share;
|
• |
the risks and costs to Tufin if the merger is not completed in a timely manner or at all, including the potential adverse effect on Tufin’s ability to attract and retain key personnel, the diversion of management and employee
attention and the potential disruptive effect on Tufin’s day-to-day operations and Tufin’s relationships with customers, suppliers and other third parties, any or all of which risks and costs, among other things, could adversely affect
Tufin’s overall competitive position and the trading price of Tufin ordinary shares;
|
• |
the requirement under certain circumstances that Tufin pay Buyer a termination fee following termination of the merger agreement, including if the merger agreement is terminated by Tufin in order to accept a Superior Proposal or by
Buyer because the Board effects a Company Board Recommendation Change;
|
• |
the risk that, if Buyer fails to complete the merger as a result of failure to obtain the debt financing or as a breach of the merger agreement in certain circumstances, remedies may be limited to the termination fee payable by Buyer
described above, which may be inadequate to compensate Tufin for the damage caused;
|
• |
the restrictions on the conduct of Tufin’s business prior to the consummation of the merger, which may delay or prevent Tufin from undertaking business opportunities that may arise before the completion of the merger and that, absent
the merger agreement, Tufin might have pursued;
|
• |
the fact that an all-cash transaction would be taxable to Tufin shareholders that are U.S. persons for U.S. federal income tax purposes;
|
• |
the fact that under the terms of the merger agreement, Tufin is unable to solicit other Acquisition Proposals following the expiration of the 30-day Go-Shop Period (other than for an additional ten-day period to negotiate a
definitive agreement with Exempted Persons as more fully described below in the section of this proxy statement entitled “The Merger Agreement—The Go-Shop Period; Solicitation of Other Offers”);
|
• |
the significant costs involved in connection with entering into the merger agreement and completing the merger (many of which are payable whether or not the merger is consummated);
|
• |
the risk that the merger might not be completed and the negative effect of the resulting public announcement of termination of the merger agreement on the trading price of Tufin ordinary shares;
|
• |
the fact that the completion of the merger requires certain regulatory clearances and consents, including under applicable antitrust laws and foreign investment laws, which clearances and consents could subject the merger to
unforeseen delays and risks;
|
• |
the fact that Tufin’s directors and officers may have interests in the merger that may be different from, or in addition to, those of other Tufin shareholders generally (see above under the caption “—Interests of Certain of Tufin’s
Executive Officers and Directors in the Merger”); and
|
• |
the possible loss of key management or other personnel of Tufin during the pendency of the merger.
|
• |
reviewed the merger agreement;
|
• |
reviewed certain publicly available business and financial information concerning Tufin and the industries in which it operates;
|
• |
compared the proposed financial terms of the proposed merger with the publicly available financial terms of certain transactions involving companies J.P. Morgan deemed relevant and the consideration received for such companies;
|
• |
compared the financial and operating performance of Tufin with publicly available information concerning certain other companies that J.P. Morgan deemed relevant and reviewed the current and historical market prices of Tufin ordinary
shares and certain publicly traded securities of such other companies;
|
• |
reviewed certain internal financial analyses and forecasts prepared by or at the direction of the management of Tufin relating to its business; and
|
• |
performed such other financial studies and analyses and considered such other information as J.P. Morgan deemed appropriate for the purposes of its opinion.
|
Announcement Date
|
Acquiror
|
Target
|
February 2020
|
Advent International Corp.
|
ForeScout Technologies, Inc.
|
August 2019
|
VMware, Inc.
|
Pivotal Software, Inc.
|
October 2018
|
Thoma Bravo, LP
|
Imperva, Inc.
|
May 2017
|
Vista Equity Partners Management LLC
|
Xactly Corp.
|
September 2016
|
Vista Equity Partners Management LLC
|
Infoblox, Inc.
|
August 2016
|
Genesys Cloud Services, Inc.
|
Interactive Intelligence Group, Inc.
|
June 2016
|
Thoma Bravo, LP
|
Qlik Technologies, Inc.
|
Management projections
|
||||||||||||
2022E
|
2023E
|
2024E
|
||||||||||
Revenue
|
$
|
132
|
$
|
159
|
$
|
202
|
||||||
EBITDA(a)
|
(24
|
)
|
(18
|
)
|
6
|
|||||||
EBIAT(b)
|
(29
|
)
|
(24
|
)
|
(1
|
)
|
||||||
Unlevered FCF(c)
|
(32
|
)
|
(36
|
)
|
(11
|
)
|
• |
Each outstanding, unexercised and vested Tufin Option (including any Tufin Option that vests in connection with the consummation of the merger pursuant to its terms)—including Tufin Options held by Tufin officers and directors—will
be canceled in exchange for the right to receive cash consideration (without interest) equal to the Option Consideration.
|
• |
Each outstanding, unexercised and unvested Tufin Option, other than those held by Tufin non-employee directors—including Tufin Options held by Tufin officers—will be canceled at the effective time of the merger and converted into a
Contingent Cash Award equal to the Option Consideration with respect to such Tufin Option from which it was converted. Any portion of a Contingent Cash Award relating to a Tufin Option that would have vested pursuant to its terms on or
prior to December 31, 2022 will vest and become payable pursuant to the same vesting schedule applicable to the Tufin Option from which it was converted (subject to the holder’s continued employment or service with Tufin or one of its
subsidiaries or affiliates through the applicable vesting date). Any portion of a Contingent Cash Award relating to a Tufin Option that would have vested pursuant to its terms following December 31, 2022 will vest and become payable as
of the applicable accelerated vesting date immediately preceding the original vesting date applicable to such Tufin Option (subject to the holder’s continued employment or service with Tufin or one of its subsidiaries or affiliates
through the applicable accelerated vesting date).
|
• |
Each outstanding, unexercised and unvested Tufin Option held by a Tufin non-employee director will be canceled at the effective time of the merger in exchange for the right to receive the Option Consideration.
|
• |
Notwithstanding the foregoing, if the exercise price per Tufin ordinary share subject to any Tufin Option (whether vested or unvested) is equal to or greater than $13.00, such Tufin Option will be canceled for no consideration as of
the effective time of the merger.
|
• |
Each outstanding vested Tufin RSU—including Tufin RSUs held by Tufin officers and directors—will be canceled at the effective time of the merger in exchange for the right to receive a lump sum cash payment (without interest) equal to
the RSU Consideration.
|
• |
Each (i) outstanding and unvested Tufin RSU, other than a Tufin RSU held by a non-employee director of Tufin—including Tufin RSUs held by Tufin officers—and (ii) Deemed RSU will, at the effective time of the merger, in each case, be
automatically canceled and converted into a Contingent Cash Award equal to the RSU Consideration with respect to such Tufin RSU or Deemed RSU from which it was converted. Any portion of a Contingent Cash Award relating to a Tufin RSU
or Deemed RSU that would have vested pursuant to its terms on or prior to December 31, 2022 will vest and become payable pursuant to the same vesting schedule applicable to the Tufin RSU or Deemed RSU from which it was converted
(subject to the holder’s continued employment or service with Tufin or one of its subsidiaries or affiliates through the applicable vesting date). Any portion of a Contingent Cash Award relating to a Tufin RSU or Deemed RSU that would
have vested pursuant to its terms following December 31, 2022 will vest and become payable as of the applicable accelerated vesting date immediately preceding the original vesting date applicable to such Tufin RSU or Deemed RSU (subject
to the holder’s continued employment or service with Tufin or one of its subsidiaries or affiliates through the applicable accelerated vesting date).
|
• |
Each outstanding and unvested Tufin RSU held by a non-employee director of Tufin will be canceled at the effective time of the merger in exchange for the right to receive the RSU Consideration.
|
• |
Our executive officers and directors will also benefit from the indemnification provisions contained in the merger agreement with respect to their acts or omissions as executive officers or directors of Tufin prior to or at the
effective time of the merger. In accordance with the merger agreement and subject to the approval of the merger proposal at the special general meeting, Tufin intends to acquire a run-off directors’ and officers’ liability insurance
for seven years commencing at the effective time of the merger.
|
• |
Each outstanding, unexercised and vested Tufin Option (including any Tufin Option that vests in connection with the consummation of the merger pursuant to its terms) will be canceled at the effective time of the merger in exchange
for the right to receive cash consideration (without interest) equal to the Option Consideration. The Option Consideration in respect of such vested Tufin Option will be paid by the surviving company promptly following the consummation
of the merger (but no later than the second regularly scheduled payroll date following the consummation of the merger) pursuant to the surviving company’s ordinary payroll processes (or, in the case of holders who are not current or
former employees, pursuant to the surviving company’s ordinary payment practices with respect to such individuals).
|
• |
Each outstanding, unexercised and unvested Tufin Option (other than a Tufin Option held by a non-employee director of Tufin), will be canceled at the effective time of the
merger and converted into a Contingent Cash Award equal to the Option Consideration with respect to such Tufin Option from which it was converted. Any portion of a Contingent Cash Award relating to a Tufin Option that would have
vested pursuant to its terms on or prior to December 31, 2022 will vest and become payable pursuant to the same vesting schedule applicable to the Tufin Option from which it was converted (subject to the holder’s continued employment
or service with Tufin or one of its subsidiaries or affiliates through the applicable vesting date). Any portion of a Contingent Cash Award relating to a Tufin Option that would have vested pursuant to its terms following December
31, 2022 will vest and become payable as of the applicable accelerated vesting date immediately preceding the original vesting date applicable to such Tufin Option (subject to the holder’s continued employment or service with Tufin or
one of its subsidiaries or affiliates through the applicable accelerated vesting date). Payments with respect to Contingent Cash Awards related to Tufin Options will be paid by the surviving company pursuant to its ordinary payroll
processes (or, in the case of holders who are not current or former employees, pursuant to the surviving company’s ordinary payment practices with respect to such individuals).
|
• |
Each outstanding, unexercised and unvested Tufin Option held by a non-employee director of Tufin will be canceled at the effective time of the merger in exchange for the
right to receive the Option Consideration. The Option Consideration in respect of such Tufin Options held by non-employee directors of Tufin will be paid by the surviving company as soon as practicable following the consummation of
the merger pursuant to its ordinary course payment practices for non-employee directors.
Notwithstanding the foregoing, if the exercise price per Tufin ordinary share for any Tufin Option (whether vested or unvested) is equal to or greater than $13.00, such Tufin Option will be canceled for
no consideration as of the effective time of the merger. Each outstanding and vested Tufin RSU, will be canceled at the effective time of the merger in exchange for the right to receive cash consideration (without interest) equal to
the RSU Consideration. The RSU Consideration in respect of such vested Tufin RSUs will be paid by the surviving company promptly following the consummation of the merger (but no later than the second regularly scheduled payroll date
following the consummation of the merger) pursuant to the surviving company’s ordinary payroll processes (or, in the case of holders who are not current or former employees, pursuant to the surviving company’s ordinary payment
practices with respect to such individuals).
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• |
Each (i) outstanding and unvested Tufin RSU (other than an Tufin RSU held by a non-employee director of Tufin) and (ii) Deemed RSU will, in each case, be automatically
canceled at the effective time and converted into a Contingent Cash Award equal to the RSU Consideration with respect to such Tufin RSU or Deemed RSU from which it was converted. Any portion of a Contingent Cash Award relating to a
Tufin RSU or Deemed RSU that would have vested pursuant to its terms on or prior to December 31, 2022 will vest and become payable pursuant to the same vesting schedule applicable to the Tufin RSU or Deemed RSU from which it was
converted (subject to the holder’s continued employment or service with Tufin or one of its subsidiaries or affiliates through the applicable vesting date). Any portion of a Contingent Cash Award relating to a Tufin RSU or Deemed RSU
that would have vested pursuant to its terms following December 31, 2022 will vest and become payable as of the applicable accelerated vesting date immediately preceding the original vesting date applicable to such Tufin RSU or Deemed
RSU (subject to the holder’s continued employment or service with Tufin or one of its subsidiaries or affiliates through the applicable accelerated vesting date). Payments with respect to Contingent Cash Awards related to Tufin RSUs
or Deemed RSUs will be paid by the surviving company pursuant to its ordinary payroll processes (or, in the case of holders who are not current or former employees, pursuant to the surviving company’s ordinary payment practices with
respect to such individuals).
|
• |
Each outstanding and unvested Tufin RSU held by a non-employee director of Tufin will be canceled at the effective time of the merger in exchange for the right to receive the
RSU Consideration. The RSU Consideration in respect of such Tufin RSUs held by non-employee directors of Tufin will be paid by the surviving company as soon as practicable following the consummation of the merger pursuant to its
ordinary course payment practices for non-employee directors.
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• |
an individual who is a citizen or resident of the United States;
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• |
a corporation (including any entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States, any state thereof or the District of Columbia;
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• |
an estate the income of which is subject to U.S. federal income taxation regardless of its source; or
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• |
a trust (a) if a court within the United States is able to exercise primary jurisdiction over its administration and one or more U.S. persons have authority to control all of its substantial decisions, or (b) if a valid election is
in effect under applicable U.S. Treasury regulations to treat the trust as a domestic trust.
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• |
such gain is effectively connected with your conduct of a trade or business in the United States (or, if required by an applicable income tax treaty, the gain is attributable to a permanent establishment or fixed base that you
maintain in the United States); or
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• |
you are an individual and have been present in the United States for 183 days or more in the taxable year of such exchange and certain other conditions are met.
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• |
at least 75% of its gross income is “passive income”; or
|
• |
at least 50% of the value of its assets (generally determined based on a quarterly average) during such year is attributable to assets that produce passive income or are held for the production of passive income.
|
• |
The first tax ruling (if obtained) shall provide, among others, that the cancellation of, and the consideration paid to the 102 trustee with respect to, the section 102 securities in accordance with the merger agreement, will not
result in a violation of the requirements under section 102 of the Ordinance, and that the statutory holding period applied with respect to section 102 securities will not recommence as a result of the merger, in order to preserve
preferential tax treatment under Section 102 of the Ordinance. Such tax ruling, if obtained, shall be subject to various terms and conditions (inter alia, that the consideration payable with respect to section 102 securities shall be
held by the 102 trustee at least until the lapse of the two year period from the date of issuance of the respective 102 options or 102 RSUs, as applicable) and shall not apply to 102 securities issued up to 90 days prior to the
execution of the merger agreement (April 5, 2022).
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• |
The second tax ruling (if obtained) shall provide, among others, that the ITA either exempts payments to be made to eligible brokers or financial institutions from any obligation to withhold Israeli tax at source or provides that no
such obligation exists, or otherwise provides detailed instructions on how such withholding at source is to be executed in connection with the merger. In addition, such a tax ruling (if obtained) shall confirm that non-Israeli
shareholders that purchased their Tufin ordinary shares on or after April 9, 2019 (the date on which Tufin listed its shares on the NYSE) and hold less than 5% of the outstanding Tufin ordinary shares will be exempted from withholding
to the extent that such shareholders will provide the paying agent with certain declarations and supporting documents (e.g., copy of passport) regarding their residency and the date on which the shares were purchased. In addition,
shareholders which their consideration exceeds certain threshold may be required to provide certain additional supporting documents. Such a tax ruling is also expected to include a process for exempting non Israeli holders of Tufin
Options and Tufin RSUs from Israeli withholding tax. We cannot assure you that our application will be accepted, or that the application will be accepted in accordance with the conditions described in this proxy statement. Pursuant to
the merger agreement, the paying agent, the 102 Trustee, the company and the Buyer are entitled to deduct and withhold from any consideration payable in the merger such amounts as may be required to be deducted or withheld therefrom
under the Ordinance and regulations promulgated thereunder, subject to providing the paying agent or Buyer a certificate issued by the ITA providing for a specific exemption or reduction with respect to Israeli tax withholding.
|
1. |
French Foreign Investment Approval. The French Ministry of Economic, Finance and Recovery shall have either (i) delivered a decision
which, pursuant to articles L. 151-3 et seq. and R. 151-1 et seq. of the French Code Monétaire et Financier,
authorizes the consummation of the Merger or (ii) confirmed in writing that the Merger does not fall within the scope of articles L.151-3 et seq. and R. 151-1 et seq. of the French Code Monétaire et Financier.
|
2. |
German Foreign Investment Approval. The German Ministry of Economics and Energy (Bundesministerium
für Wirtschaft und Klimaschutz - “BMWK”); (i) having cleared the Transactions pursuant to the Foreign Trade and Payments Ordinance (Außenwirtschaftsverordnung
- “AWV”) in connection with the Foreign Trade and Payments Act (Außenwirtschaftsgesetz - “AWG”); or (ii)
having granted a certificate of non-objection pursuant to Sec. 58 para. 1 AWV; or (iii) having declared in writing that it will not open an in-depth review period; or (iv) the applicable review periods pursuant to the AWV in
connection with the AWG having expired or elapsed without the BMWK having delivered a decision to either open formal review proceedings under the AWV or to prohibit the Transactions.
|
3. |
Romanian Foreign Investment Approval. If a review of the Transactions by the Romanian Competition Council is not required, (a) Parent
notifies the Transactions to CSAT (via the Romanian Competition Council) and (1) CSAT confirms (via the Competition Council), in essence, that it has not identified until that date elements concerning the Transactions that would be
likely to give rise to risks to national security; or (2) if the Transactions are considered for review from a state defense perspective, the parties are notified that a decision to propose the prohibition the Transactions to the
Romanian Government was not taken following the relevant review of the Transactions by CSAT from a state defense perspective, or (b) the above is applied mutatis mutandis in relation to the relevant foreign direct investment
authority, in accordance with the provisions (as applied in practice) of any newly enacted foreign investment or national security laws, rules and regulations to become effective in Romania, which may become applicable to the
Transactions.
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• |
general economic conditions in Israel, the United States or any other country or region in the world, or changes in conditions in the global economy generally;
|
• |
conditions in the financial markets, credit markets or capital markets in the United States or any other country or region in the world, including (i) changes in interest rates or credit ratings in the United States or any other
country; (ii) changes in exchange rates for the currencies of any country; or (iii) any suspension of trading in securities (whether equity, debt, derivative or hybrid securities) generally on any securities exchange or over-the-counter
market operating in the United States or any other country or region in the world;
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• |
general conditions, including labor conditions in the industries in which Tufin or its subsidiaries generally conduct their business;
|
• |
regulatory, legislative or political conditions in the United States or any other country or region in the world;
|
• |
geopolitical conditions, outbreak of hostilities, acts of war, sabotage, terrorism or military actions (including any escalation or general worsening of any such hostilities, acts of war, sabotage, terrorism or military actions) in
the United States or any other country or region in the world;
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• |
earthquakes, hurricanes, tsunamis, tornadoes, floods, mudslides, wildfires or other natural disasters, pandemics (including SARS-CoV-2 or COVID-19), any evolutions or mutations thereof or related or associated epidemics, pandemics or
disease outbreaks, epidemics or other outbreaks of diseases, quarantine restrictions, weather conditions and other force majeure events in the United States or any other country or region in the world (or escalation or worsening of any
such events or occurrences, including, as applicable, subsequent wave(s));
|
• |
resulting from the negotiation, execution, announcement, pendency, performance or consummation of the merger agreement or the transactions contemplated thereby, including the impact thereof on the relationships, contractual or
otherwise, of Tufin or its subsidiaries with employees, suppliers, customers, partners, vendors or any other third person (except with respect to any representation or warranty contained in the merger agreement to the extent that such
representation or warranty expressly addresses consequences resulting from the execution of the merger agreement or the consummation or pendency of the transactions contemplated thereby);
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• |
the taking of any action expressly required to be taken pursuant to the merger agreement or the failure to take any action expressly prohibited from being taken pursuant to the merger agreement; provided, however, that any action
prohibited from being taken by the merger agreement will only be deemed expressly prohibited from being taken for purposes of this clause if Tufin has requested that Buyer consent to the taking of such action and Buyer unreasonably
withholds, conditions or delays its consent with respect to such action;
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• |
arising from any action taken or refrained from being taken, in each case to which Buyer has expressly approved, consented to or requested in writing following the date of the merger agreement;
|
• |
changes in U.S. Generally Accepted Accounting Principles or other accounting standards or in any applicable laws or regulations (or the official interpretation of any of the foregoing after the date of the merger agreement);
|
• |
actions required or recommended to be taken by any quarantine, “shelter in place,” “stay at home,” social distancing, vaccination, shut down, closure, sequester, safety or similar law, directive, mandate, guidelines or
recommendations promulgated by any governmental authority, including the Centers for Disease Control and Prevention and the World Health Organization, in each case, in connection with or in response to COVID-19 (“COVID-19 Measures”);
|
• |
the price or trading volume of Tufin ordinary shares, in and of itself, or any change in and of itself, in the credit ratings or ratings outlook of Tufin or any of its subsidiaries. It being understood that any cause of such change
in price, trading volume, credit ratings or ratings outlook may be deemed to constitute, in and of itself, a Company Material Adverse Effect and may be taken into consideration when determining whether a Company Material Adverse Effect
has occurred or would reasonably be expected to occur;
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• |
any failure, in and of itself, by Tufin or its subsidiaries to meet (i) any public estimates or expectations of Tufin’s revenue, earnings or other financial performance or results of operations for any period; or (ii) any internal
budgets, plans, projections or forecasts of its revenues, earnings or other financial performance or results of operations (it being understood that any cause of any such failure may be deemed to constitute, in and of itself, a Company
Material Adverse Effect and may be taken into consideration when determining whether a Company Material Adverse Effect has occurred or would reasonably be expected to occur if not otherwise excluded in the definition of Company Material
Adverse Effect);
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• |
the availability or cost of equity, debt or other financing to the guarantors under the merger agreement (the “guarantors”), Buyer, Merger Sub or the surviving company (it being understood that any cause of the unavailability of such
financing that is related to Tufin or its subsidiaries may be deemed to constitute, in and of itself, a Company Material Adverse Effect and may be taken into consideration when determining whether a Company Material Adverse Effect has
occurred or would reasonably be expected to occur if not otherwise excluded under the merger agreement);
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• |
the identity of Buyer, Merger Sub or the respective affiliates of the foregoing (including the guarantors), or the communication by Buyer, Merger Sub or their respective affiliates regarding their plans or intentions with respect to
Tufin or its subsidiaries; and
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• |
any legal proceeding commenced or threatened in writing against Buyer, Merger Sub or Tufin, or any of their subsidiaries or affiliates or otherwise relating to, involving or affecting such parties or any of their subsidiaries or
affiliates, in each case in connection with, arising from or otherwise relating to or regarding the merger agreement or other transactions contemplated by the merger agreement, including any legal proceeding alleging or asserting any
misrepresentation or omission in this proxy statement, any other communications to the Tufin stockholders, other than any legal proceedings among the guarantors, Buyer, Merger Sub and Tufin or with the agents, arrangers and lenders that
provide or arrange the debt financing;
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• |
due organization, valid existence, good standing and authority and qualification to conduct business with respect to Tufin;
|
• |
Tufin’s corporate power and authority to enter into and perform the merger agreement, the enforceability of the merger agreement and the absence of conflicts with laws, Tufin’s organizational documents and Tufin’s contracts;
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• |
the organizational documents of Tufin;
|
• |
the necessary approval of the Board;
|
• |
the rendering of J.P. Morgan’s opinion to the Board;
|
• |
the necessary vote of shareholders in connection with the merger agreement;
|
• |
the absence of any conflict, violation or material alteration of any organizational documents, existing contracts, applicable laws to Tufin or the resulting creation of any lien upon Tufin’s assets due to the performance by Tufin of
the merger agreement;
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• |
required consents, approvals and regulatory filings in connection with the merger agreement and performance thereof;
|
• |
the capital structure of Tufin;
|
• |
the absence of any undisclosed exchangeable security, option, warrant or other right convertible into Tufin ordinary shares;
|
• |
the SEC Reports of Tufin
|
• |
the financial statements of Tufin
|
• |
the absence of any undisclosed contract relating to the voting of, requiring registration of, or granting any preemptive rights, anti-dilutive rights or rights of first refusal or other similar rights with respect to any of Tufin’s
securities;
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• |
the subsidiaries of Tufin;
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• |
the accuracy and required filings of Tufin’s SEC filings and financial statements;
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• |
Tufin’s disclosure controls and procedures;
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• |
Tufin’s internal accounting controls and procedures;
|
• |
the absence of specified undisclosed liabilities;
|
• |
since December 31, 2021 through the date of the merger agreement, the conducting of business by Tufin in the ordinary course of business consistent with past practice and there has not occurred (i) any Company Material Adverse Effect
or (ii) any action taken by the Tufin or event that would have required the consent of Buyer pursuant to the terms of the merger agreement had such action or event occurred after the date of the merger agreement;
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• |
the existence and enforceability of specified categories of Tufin’s material contracts, and any notices with respect to termination or intent not to renew those material contracts therefrom;
|
• |
certain real property and tangible property owned or leased by Tufin or its subsidiaries;
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• |
environmental matters;
|
• |
trademarks, patents, copyrights and other intellectual property matters including data security requirements, information technology and privacy encryption technology;
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• |
tax matters;
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• |
employee benefit plans;
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• |
labor matters, including Israeli labor matters;
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• |
environmental matters;
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• |
Tufin’s compliance with laws, standards and requirements and possession of necessary permits;
|
• |
export control matters and compliance with applicable anti-corruption and anti-money laundering laws;
|
• |
litigation and regulatory matters;
|
• |
insurance matters;
|
• |
payment of fees to brokers in connection with the merger agreement;
|
• |
government grants and incentives; and
|
• |
the exclusivity and terms of the representations and warranties made to Buyer and Merger Sub.
|
• |
due organization, good standing and authority and qualification to conduct business with respect to Buyer and Merger Sub and availability of these documents;
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• |
Buyer’s and Merger Sub’s corporate authority to enter into and perform the merger agreement, the enforceability of the merger agreement and the absence of conflicts with laws, Buyer’s or Merger Sub’s organizational documents and
Buyer’s or Merger Sub’s contracts;
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• |
the absence of any conflict, violation or material alteration of any organizational documents, existing contracts, applicable laws or the resulting creation of any lien upon Buyer or Merger Sub’s assets due to the performance of the
merger agreement;
|
• |
required consents and regulatory filings in connection with the merger agreement;
|
• |
the absence of litigation, orders and investigations;
|
• |
accuracy of information to be provided in the proxy statement;
|
• |
payment of fees to brokers in connection with the merger agreement;
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• |
operations of Buyer and Merger Sub;
|
• |
the absence of any required consent of holders of voting interests in Buyer or Merger Sub;
|
• |
the delivery and enforceability of the guarantee, equity commitment letter and debt commitment letter that commit to provide the financing necessary for payment of the merger consideration and certain other payment obligations of
Buyer, and a certain redacted fee letter dated as of April 5, 2022;
|
• |
the commitments to provide financing to Buyer, the availability of Buyer’s financing and sufficiency of funds;
|
• |
the absence of any shareholder or management arrangements related to the merger;
|
• |
the solvency of Buyer and its subsidiaries following the consummation of the merger and the transactions contemplated by the merger agreement; and
|
• |
the exclusivity and terms of the representations and warranties made by Tufin.
|
• |
use commercially reasonable efforts to carry on its business, in all material respects, in the ordinary course of business consistent with past practice;
|
• |
pay all material taxes in the ordinary course of business when due and payable (taking into account applicable extensions for payment) except for any such taxes that are being contested in good faith and by appropriate proceedings
and for which adequate reserves have been established; and
|
• |
use its commercially reasonable efforts to (A) preserve intact its present business, (B) keep available the services of its officers and employees and (C) preserve its relationships with customers, suppliers, distribution partners,
licensors, licensees and other Persons with which it has significant business dealings.
|
• |
propose to adopt any amendments to or amend the organizational documents of itself or any of its subsidiaries (other than immaterial amendments to such organizational documents of Tufin’s subsidiaries);
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• |
authorize for issuance, issue, sell, deliver or agree or commit to issue, sell or deliver any securities of Tufin or its subsidiaries, whether through the issuance or granting of any restricted stock units, options, warrants, other
equity-based commitments, subscriptions or rights to purchase any similar securities or otherwise, except for the issuance and sale of Tufin ordinary shares pursuant to the exercise or settlement of Tufin Options or RSU awards
outstanding as of the merger agreement date in accordance with their respective terms;
|
• |
acquire, redeem, or amend any securities of Tufin or its subsidiaries;
|
• |
split, combine, or modify the terms of capital stock of Tufin; declare, set aside or pay any dividend or other distribution in respect of any shares of capital stock, or make any other actual, constructive or deemed distribution in
respect of the shares of capital stock;
|
• |
propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of itself or any of its subsidiaries, other than the transactions;
|
• |
incur or assume any long-term or short-term debt or issue any debt securities;
|
• |
assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for any material obligations of any other Person except obligations of any of its direct or indirect wholly owned
subsidiaries;
|
• |
make any loans, advances or capital contributions to or investments in any other Person;
|
• |
mortgage or pledge any of its or its Subsidiaries’ assets, tangible or intangible, or create or suffer to exist any Lien thereupon (other than Permitted Liens) other than mortgages, pledges or Liens created in connection with hedging
activities in the ordinary course of business consistent with past practice;
|
• |
enter into, adopt, amend, modify, renew or terminate any employee plan (except as required by employee plans in effect on the date of the merger agreement);
|
• |
increase or decrease the compensation, benefits, severance or termination pay of any consultant, director or to any officer or employee with a title of vice president whose annual compensation exceeds $400,000 (except as required by
employee plans in effect on the date of the merger agreement);
|
• |
modify, waive, release, or amend any non-competition, non-solicitation, non-disclosure, restrictive covenant or other similar agreement or obligation with any employee or independent contractor;
|
• |
pay or commit to pay any award, special bonus, remuneration, benefit or incentive compensation to any director, officer or employee whose annual base compensation exceeds $400,000.
|
• |
hire, engage, promote, layoff or terminate any employee or independent contractor whose annual compensation exceeds $400,000;
|
• |
forgive any loans to any of its employees, officers or directors or any employees, officers or directors of Tufin or its subsidiaries or affiliates;
|
• |
make any deposits or contributions of cash or other property or take any other action to fund or in any other way secure the payment of compensation or benefits under Tufin’s or its subsidiaries employee benefit plans;
|
• |
negotiate, modify, enter into, amend, extend or terminate, any collective bargaining agreement or recognize or certify any labor union, labor organization, works council or group of employees as the bargaining representative for any
employees of Tufin or any of its subsidiaries;
|
• |
implement or announce any employee layoffs, plant closings, reductions in force, furloughs, temporary layoffs, salary or wage reductions, work schedule changes or other such actions that could implicate the WARN Act;
|
• |
except as otherwise permitted pursuant to the capital expenditure allowance set forth in the merger agreement, acquire, sell, lease, license or dispose of any material property or assets of Tufin or any of its subsidiaries in any
single transaction or series of related transactions, except for (A) transactions pursuant to existing contracts (B) transactions in the ordinary course of business consistent with past practice or (C) non-exclusive licenses of
intellectual property rights granted in the ordinary course of business;
|
• |
make any material change to accounting principles or practices;
|
• |
make or change any material tax election, adopt or change any material tax accounting method, settle or compromise any material tax liability outside the ordinary course of business, enter into any closing agreement related to any
material taxes, amend any material tax return, or consent to the extension or waiver of the limitations period applicable to a material tax claim or assessment
|
• |
except in the ordinary course of business consistent with past practice, enter into any material contract, amend in any material respect any material contract, or grant any release or relinquishment of any material rights under any
material contract;
|
• |
enter into, amend or renew any Tufin real property leases, providing for aggregate annual payments by Tufin of an amount in excess of $500,000, or modify, amend or exercise any right to renew any Tufin real property lease;
|
• |
fail to maintain or allow to lapse, dispose of or abandon, including by failure to pay the required fees in any jurisdiction, any material intellectual property used in or held for use in any of Tufin’s or its subsidiaries’ business,
or grant permission to enter into the public domain any material trade secrets included in any of Tufin’s or its subsidiaries’ intellectual property;
|
• |
grant any exclusive rights with respect to or divest any of Tufin’s or its subsidiaries material intellectual property;
|
• |
acquire any other Person (as defined in the merger agreement) or any equity interest therein for consideration in excess of $200,000;
|
• |
authorize, incur or commit to incur any new capital expenditure(s) that in the aggregate exceeds, in any given quarter, 110% of the amount set forth in the capital expenditure budget, as provided in the confidential disclosure letter
to the merger agreement; provided however that the foregoing shall not limit any maintenance capital expenditures or capital expenditures required pursuant to existing contracts;
|
• |
settle or compromise any pending or threatened litigation involving Tufin or pay, discharge or satisfy or agree to pay, discharge or satisfy any liability, except (among other exceptions) to the extent reflected or reserved against
in Tufin’s audited financial statements or covered by existing insurance policies;
|
• |
revalue in any material respect any of its properties or assets, including writing-off notes or accounts receivable other than in the ordinary course of business consistent with past practice;
|
• |
grant any material refunds, credits, rebates, allowances to customers or distribution partners in an amount in excess of $300,000 other than refunds or rebates granted in the ordinary course of business consistent with past practice;
|
• |
enter into any contract or other arrangement or understanding that would be required to be disclosed under Item 404(a) of Regulation S-K;
|
• |
convene any special general meeting of Tufin’s shareholders (or any postponement or adjournment thereof);
|
• |
enter into or adopt any “poison pill” or similar stockholder rights plan; or
|
• |
enter into agreements or otherwise make a commitment to do any of the foregoing, or publicly announce an intention, enter into a formal or informal agreement or otherwise authorize or make a commitment to do any of the foregoing.
|
(1) |
any direct or indirect purchase or other acquisition by any third person or “group” (as defined pursuant to Section 13(d) of the Exchange Act) of persons, whether from Tufin or any other person(s), of
securities representing more than 20% of the total outstanding voting power of Tufin after giving effect to the consummation of such purchase or other acquisition, including pursuant to a tender offer or exchange offer by any person or
“group” of persons that, if consummated in accordance with its terms, would result in such person or “group” of persons beneficially owning more than 20% of the total outstanding voting power of Tufin after giving effect to the
consummation of such tender or exchange offer;
|
(2) |
any direct or indirect purchase, exclusive license or other acquisition by any third person or “group” (as defined pursuant to Section 13(d) of the Exchange Act) of persons of assets constituting or
accounting for more than 20% of the consolidated assets, revenue or net income of Tufin and its subsidiaries, taken as a whole (measured by the fair market value thereof as of the date of such purchase or acquisition); or
|
(3) |
any merger, consolidation, business combination, recapitalization, reorganization, liquidation, dissolution or other transaction involving Tufin pursuant to which (x) any third person or “group” (as
defined pursuant to Section 13(d) of the Exchange Act) of persons would hold securities representing more than 20% of the total outstanding voting power of Tufin outstanding after giving effect to the consummation of such transaction or
(y) the stockholders of Tufin immediately preceding such transaction hold less than 80% of the equity interests of the surviving or resulting entity of such transaction.
|
• |
solicit, initiate, propose or induce the making, submission or announcement of, or knowingly encourage, facilitate or assist any inquiry, offer or proposal that constitutes or would reasonably be expected to lead to an Acquisition
Proposal;
|
• |
furnish to any third person any non-public information relating to Tufin or its subsidiaries or afford to any third person access to the business, properties, assets, books, records or other non-public information, or to any
personnel, of Tufin or its subsidiaries, in any such case with the intent to induce, or that could reasonably be expected to result in, the making, submission or announcement of, or to knowingly encourage, facilitate or assist an
Acquisition Proposal or any inquiries or the making of any proposal or offer that would reasonably be expected to lead to an Acquisition Proposal;
|
• |
participate or engage in discussions, communications or negotiations with any third person with respect to an Acquisition Proposal or inquiry;
|
• |
approve, endorse or recommend any proposal that constitutes, or would reasonably be expected to lead to, an Acquisition Proposal; or
|
• |
enter into any letter of intent, agreement in principle, memorandum of understanding, merger agreement, acquisition agreement or other contract relating to an Acquisition Transaction, other than an Acceptable Confidentiality
Agreement; provided that Tufin may contact any third person with respect to an Acquisition Proposal solely for the purpose of requesting a clarification of any ambiguous terms and conditions thereof so as to determine whether the
Acquisition Proposal constitutes or could reasonably be expected to lead to a Superior Proposal.
|
• |
withhold, withdraw, amend, qualify or modify, or publicly propose to withhold, withdraw, amend, qualify or modify, the recommendation of the Board to approve the merger, in each case, in a manner adverse to Buyer (it being understood
that it will be considered a modification adverse to Buyer if (i) any Acquisition Proposal structured as a tender or exchange offer is commenced and the Board fails to publicly recommend against acceptance of such tender or exchange
offer by shareholders within 10 business days of commencement thereof pursuant to Rule 14d-2 of the Exchange Act or (ii) any Acquisition Proposal is publicly announced (other than by the commencement of a tender or exchange offer) and
the Board fails to issue a public press release within 10 business days of such public announcement providing that the Board reaffirms the Tufin recommendation);
|
• |
formally or publicly adopt, authorize, approve, agree to, accept, endorse, recommend, declare advisable or submit to a vote of the Tufin shareholders (or publicly propose to adopt, authorize, approve, agree to, accept, endorse,
recommend, submit to vote of the Tufin shareholders or otherwise declare advisable) an Acquisition Proposal;
|
• |
fail to publicly reaffirm the recommendation of the Board of Directors to approve the Merger within four business days after Buyer so requests in writing (it being understood that Tufin will have no obligation to make such
reaffirmation on more than two separate occasions);
|
• |
fail to include the recommendation of the Board to approve the merger in this proxy statement; or
|
• |
formally resolve to effect or publicly announce an intention or resolution to take any of the foregoing actions.
|
• |
Tufin has provided prior written notice to Buyer at least four business days in advance to the effect that the Board (or a committee thereof) intends to effect a Company Board Recommendation Change pursuant to the terms of the merger
agreement, which notice must specify the basis for such Company Board Recommendation Change, including a description of the Intervening Event in reasonable detail;
|
• |
prior to effecting such Company Board Recommendation Change, Tufin and its representatives, during such four business-day period, must have (i) negotiated with Buyer and its representatives in good faith (to the extent that Buyer
desires to so negotiate) to allow Buyer to offer such adjustments to the terms and conditions of the merger agreement, the guarantee, the debt commitment letter and/or the equity commitment letter to obviate the need to effect a Company
Board Recommendation Change in response to such Intervening Event; and (ii) taken into account any adjustments to the terms and conditions of the merger agreement, the guarantee, the debt commitment letter and/or the equity commitment
letters proposed in good faith by Buyer and other information provided by Buyer in response to the notice described in the foregoing clause directly above, in each case that are offered in writing by Buyer no later than 11:59 p.m.
(Eastern time) on the last day of the four business-day period, in a manner that would constitute a binding agreement between the parties if accepted by Tufin; and
|
• |
following the four business-day notice period described above, the Board (or a committee thereof) (after consultation with its outside legal counsel and taking into account Buyer’s proposed revisions to the terms and conditions of
the merger agreement, the guarantee, the debt commitment letter and/or the equity commitment letters) shall have determined in good faith that the failure of the Board (or a committee thereof) to make such a Company Board Recommendation
Change would reasonably be expected to be inconsistent with its fiduciary duties pursuant to applicable law; provided, that each time material modifications to the Intervening Event occur, Tufin must notify Buyer of such modification
and the four-business-day period described above will recommence and be extended for two business days from the day of such notification.
|
• |
the Board (or a committee thereof) determines in good faith (after consultation with outside legal counsel) that the failure to do so would reasonably be expected to be inconsistent with its fiduciary duties pursuant to applicable
law;
|
• |
Tufin and its representatives have complied with its obligations under the merger agreement;
|
• |
Tufin has provided prior written notice to Buyer at least three business days in advance to the effect that the Board (or a committee thereof) has (i) received a bona fide Acquisition Proposal that has not been withdrawn; (ii)
concluded in good faith that such Acquisition Proposal constitutes a Superior Proposal; and (iii) resolved to effect a Company Board Recommendation Change or to terminate the merger agreement absent any revision to the terms and
conditions of the merger agreement, which notice will specify the basis for such Company Board Recommendation Change or termination, including the identity of the person or “group” of persons making such Acquisition Proposal, the
material terms thereof and copies of all relevant and material documents relating to such Acquisition Proposal;
|
• |
prior to effecting such Company Board Recommendation Change or termination, Tufin and its representatives, during the three business-day notice period described above, have: (i) negotiated with Buyer and its representatives in good
faith (to the extent that Buyer desires to so negotiate) to offer such adjustments to the terms and conditions of the merger agreement, the guarantee, the debt commitment letter and/or the equity commitment letter so that such
Acquisition Proposal would cease to constitute a Superior Proposal; and (ii) taken into account any adjustments to the terms and conditions of the merger agreement, the guarantee, the debt commitment letter and/or the equity commitment
letter that are offered in writing by Buyer, no later than 11:59 p.m. (Eastern time) on the last day of the three-day notice period described above, in a manner that would constitute a binding agreement between the parties if accepted
by Tufin, provided, however, that in the event of any material modifications to such Acquisition Proposal (it being understood that any change to the financial terms of such proposal shall be deemed a material modification), Tufin will
be required to deliver a new written notice to Buyer and to comply with the requirements of this clause (it being understood that the “notice period” in respect of such new written notice will be two business days);
|
• |
following the three business-day notice period described above, including any subsequent notice period as provided above, the Board (or a committee thereof) (after consultation with its financial advisor and outside legal counsel and
taking into account Buyer’s proposed revisions to the terms and conditions of the merger agreement, the guarantee, the debt commitment letter and/or the equity commitment letter and any other information provided by Buyer) shall have
determined that the failure of the Board (or a committee thereof) to make such a Company Board Recommendation Change or to terminate the merger agreement would reasonably be expected to be inconsistent with its fiduciary duties pursuant
to applicable law; and
|
• |
in the event of any termination of the merger agreement in order to cause or permit Tufin and its subsidiaries to enter into an acquisition agreement with respect to such Acquisition Proposal, Tufin will have validly terminated the
merger agreement in accordance with the terms of the merger agreement, so long as Tufin has complied in all material respects with the non-solicitation provisions set forth in the merger agreement with respect to such Superior Proposal,
including paying to Buyer a termination fee of either (i) $10.0 million if the merger agreement had been terminated before the Cut-Off Time for the purposes of entering into a definitive agreement in respect of a Superior Proposal with
any Exempted Person, or (ii) $17.2 million, in the case of any other such termination.
|
• |
the adoption of the merger agreement by the requisite affirmative vote of Tufin shareholders;
|
• |
the expiration or termination of the applicable waiting period under the HSR Act and the receipt of approvals, clearances or expirations of waiting periods under certain foreign investment laws;
|
• |
the absence of any restraining orders, preliminary or permanent injunctions or other judgments or court orders making the merger illegal or otherwise prohibiting the Merger; and
|
• |
the elapse of 50 days after the day of the filing of the merger proposal with the Israeli Companies’ Registrar and the elapse of 30 days after the day of approval of the merger by the shareholders of each of Tufin and Merger Sub,
each in accordance with Israeli law.
|
• |
the representations and warranties of Tufin relating to organization and qualification, authority, approvals and enforceability, conflict or non-contravention with, and correctness and effectiveness of articles of association,
certain aspects of Tufin’s capitalization being true and correct as of the closing of the merger, and no brokers being true and correct in all material respects as of the closing date as if made at and as of such time
|
• |
the representations and warranties of Tufin relating to the absence of any Company Material Adverse Effect since December 31, 2021 being true and correct in all respects as of the closing of the merger;
|
• |
the representations and warranties of Tufin relating to certain aspects of Tufin’s capitalization being true and correct in all but de minimis respects as of the closing of the merger; and
|
• |
the other representations and warranties of Tufin set forth elsewhere in the merger agreement being true and correct as of the date on which the closing occurs as if made at and as of such time, except for such failures to be true
and correct that would not have a Company Material Adverse Effect;
|
• |
Tufin having performed and complied in all material respects with all covenants, obligations and conditions of the merger agreement required to be performed and complied with by Tufin;
|
• |
the receipt by Buyer and Merger Sub of a certificate of Tufin, validly executed for and on behalf of Tufin and in its name by a duly authorized officer thereof, certifying that the conditions described in the preceding five bullets
have been satisfied; and
|
• |
the absence of any Company Material Adverse Effect having occurred after the date of the merger agreement that is continuing.
|
• |
the representations and warranties of Buyer and Merger Sub set forth in the merger agreement being true and correct on and as of the date on which the closing of the merger occurs with the same force and effect as if made on and as
of such date, except for any failure to be so true and correct that would not, individually or in the aggregate, prohibit, prevent or materially delay the consummation of the merger or the ability of Buyer and Merger Sub to fully
perform their respective covenants and obligations pursuant to the merger agreement;
|
• |
Buyer and Merger Sub having performed and complied in all material respects with all covenants, obligations and conditions of the merger agreement required to be performed and complied with by Buyer and Merger Sub at or prior to the
closing of the merger; and
|
• |
the receipt by Tufin of a certificate of Buyer and Merger Sub, validly executed for and on behalf of Buyer and Merger Sub and in their respective names by a duly authorized officer thereof, certifying that the conditions described in
the preceding two bullet have been satisfied.
|
• |
$200.0 million senior secured first lien term loan facility; and
|
• |
$10.0 million senior secured first lien revolving credit facility (not all of which is expected to be drawn at the closing of the merger).
|
• |
the absence of a Company Material Adverse Effect since April 5, 2022 that is continuing;
|
• |
the consummation (or substantially simultaneous consummation with the debt financing) of the merger in accordance with the merger agreement as in effect on April 5, 2022 without any amendment, modification or waiver of any of the
provisions thereof that would be materially adverse to the interests of the lenders in their capacity as such without the consent of the initial lenders;
|
• |
subject to certain limitations and exceptions, the accuracy in all material respects as of the closing of the merger of certain specified representations and warranties in the merger agreement and certain specified representations
and warranties in the loan documents;
|
• |
the equity financing shall have occurred or, substantially concurrently with the initial funding of the debt financing, shall occur;
|
• |
the payment of applicable invoiced fees and expenses;
|
• |
the delivery of certain audited and unaudited financial statements of Tufin and its subsidiaries;
|
• |
the delivery of certain customary closing documents (including a customary solvency certificate and documents and instruments necessary to create and perfect certain security interests); and
|
• |
the receipt by the lenders of certain documentation and other information about the borrowers and guarantors required under applicable “know your customer” and anti-money laundering rules and regulations (including the PATRIOT Act).
|
• |
the closing of the merger;
|
• |
the valid termination of the merger agreement in accordance with its terms, other than a termination pursuant to which Tufin would be entitled to a Buyer Termination Fee under the merger agreement; in which case the guarantee shall
terminate 60 days after such termination unless Tufin has commenced a legal proceeding against Buyer or the T/R Funds alleging the Buyer Termination Fee is due and owing prior to such 60th day; provided that if the merger agreement has
been so terminated and such legal proceeding has been filed, the T/R Funds, as the guarantor entities under the guarantee, will have no further liability or obligation under the guarantee from and after the earliest of (w) the closing
of the merger, (x) a final, non-appealable resolution of such legal proceeding, (y) a written agreement among the T/R Funds as the guarantor entities under the guarantee and Tufin terminating the obligations and liabilities of the T/R
Funds, as the guarantor entities under the guarantee, pursuant to the guarantee and (z) payment of the guaranteed obligations then payable by the T/R Funds or Buyer.
|
• |
the payment and full discharge of any guaranteed obligations that is or may become payable under the guarantee; or
|
• |
the funding of the equity financing.
|
• |
by mutual written agreement of Tufin and Buyer;
|
• |
by either Tufin or Buyer if:
|
(a) |
prior to the effective time of the merger, (i) any permanent injunction or other legal or regulatory restraint or prohibition preventing the consummation of the merger is in effect, that, prohibits, makes illegal or enjoins the
consummation of the merger and has become final and non-appealable; or (ii) any statute, rule or regulation is enacted, entered, enforced or deemed applicable to the merger that prohibits, makes illegal or enjoins the consummation of
the merger;
|
(b) |
the merger has not been consummated by Termination Date, provided, however, that, if all the conditions to closing, other than the regulatory approvals, have been satisfied (other than those conditions that by their nature are to be
satisfied by actions taken at the closing; provided that each such condition would be satisfied if the closing were to occur on such date) then either party may extend the Termination Date to January 5, 2023, by delivering written
notice to the other party; or
|
(c) |
Tufin shareholders fail to adopt the merger agreement at the Special General Meeting or any adjournment or postponement thereof, except the right to terminate the merger agreement is not available to any party whose action or failure
to act (which action or failure to act constitutes a breach by such party of the merger agreement) has been the primary cause of, or primarily resulted in, the failure to obtain the requisite Tufin shareholders’ approval at the Special
General Meeting or any adjournment or postponement thereof.
|
• |
by Buyer if:
|
(a) |
Tufin has breached or failed to perform any of its representations, warranties, covenants or other agreements set forth in the merger agreement such that certain conditions set forth in the merger agreement are not satisfied and such
breach is not capable of being cured by the Termination Date, or is not cured, before the earlier of the Termination Date or the date that is at least 30 calendar days following Buyer’s delivery of written notice of such breach (or such
shorter period of time as remains prior to the Termination Date); or
|
(b) |
The Board effects a Company Board Recommendation Change.
|
• |
by Tufin if:
|
(a) |
Buyer or Merger Sub has breached or failed to perform any of its respective representations, warranties, covenants or other agreements set forth in the merger agreement such that certain conditions set forth in the merger agreement
are not satisfied, and such breach is not capable of being cured by the Termination Date, or is not cured, before the earlier of the Termination Date or the date that is at least 30 calendar days following Tufin’s delivery of written
notice of such breach (or such shorter period of time as remains prior to the Termination Date);
|
(b) |
prior to the adoption of the merger agreement by the Tufin shareholders, so long as (i) Tufin has received a Superior Proposal, (ii) the Board (or a committee thereof) has authorized Tufin to enter into a definitive agreement with
respect to a Superior Proposal, (iii) Tufin has complied with its obligations under the merger agreement, and (iv) substantially concurrently with (but no later than the date of) such termination Tufin pays to Buyer a termination fee of
either (i) $10.0 million if the merger agreement had been terminated before the Cut-Off Time for the purposes of entering into a definitive agreement in respect of a Superior Proposal with respect to an Exempted Person or (ii) $17.2
million, in the case of any other such termination; or
|
(c) |
prior to the effective time of the merger, (i) the closing obligations of Tufin have been and continue to be satisfied; (ii) Buyer and Merger Sub have failed to consummate the merger under the timing restrictions set forth in the
merger agreement; (iii) Tufin has irrevocably notified Buyer in writing that Tufin is ready, willing and able to consummate, and will consummate, the merger; (iv) Tufin has provided at least five business days written notice that it
intends to terminate the merger agreement; and (v) the merger is not consummated by the end of such five-business day period.
|
• |
(i) (a) by either Buyer or Tufin because the merger has not been consummated by the Termination Date, subject to certain exceptions or (b) by Buyer because Tufin has breached its representations, warranties, covenants or agreements
in the merger agreement such that certain conditions set forth in the merger agreement are not satisfied and such breach is not capable of being cured, or is not cured, before the earlier of the Termination Date or the date that is 30
calendar days following Buyer’s delivery of written notice of such breach (or such shorter period of time as remains prior to the Termination Date) (each of (a) and (b), an “Applicable Termination”); (ii) Tufin has received an
Acquisition Proposal or an Acquisition Proposal has been publicly made or announced since the date of the merger agreement; and (iii) Tufin enters into an agreement providing for, or consummates, an Acquisition Transaction within 12
months following such Applicable Termination (provided that, for purposes of the termination fee, all references to “20%” and “80%” in the definition of “Acquisition Transaction” are deemed to be references to “50%”);
|
• |
by Buyer, because the Board has effected a Company Board Recommendation Change; or
|
• |
by Tufin, to enter into a definitive agreement in respect of a Superior Proposal other than with an Exempted Person prior to the Cut-Off Time.
|
• |
by Tufin if Buyer or Merger Sub has breached or failed to perform any of their respective representations, warranties, covenants or other agreements set forth in the merger agreement such that certain conditions set forth in the
merger agreement are not satisfied, and such breach is not capable of being cured by the Termination Date, or is not cured, before the earlier of the Termination Date or the date that is 30 calendar days following Tufin’s delivery of
written notice of such breach (or such shorter period of time as remains prior to the Termination Date);
|
• |
by Tufin if prior to the effective time of the merger, (i) the closing obligations of Tufin have been and continue to be satisfied; (ii) Buyer and Merger Sub have failed to consummate the merger under the timing restrictions set
forth in the merger agreement; (iii) Tufin has irrevocably notified Buyer in writing that, if Buyer performs its obligations under the merger agreement and the equity financing contemplated by the equity commitment letter and the debt
financing is funded, Tufin is ready, willing and able to consummate, and will consummate, the merger; (iv) Tufin has provided at least five business days written notice that it intends to terminate the merger agreement; and (v) the
merger is not consummated by the end of such five business day period; or
|
• |
by Buyer because the merger has not been consummated by the Termination Date and at such time, Tufin could have terminated pursuant to either of the prior two bullets above.
|
• |
each person or entity who is known by us to beneficially own more than 5% of the outstanding Tufin ordinary shares;
|
• |
each of our directors and executive officers individually; and
|
• |
all of our directors and executive officers as a group.
|
Shares Beneficially Owned
|
||||||||
Name of Beneficial Owner
|
Number
|
%
|
||||||
Directors and Executive Officers
|
||||||||
Reuven Kitov (1)
|
1,971,853
|
5.1
|
%
|
|||||
Reuven Harrison
|
1,673,116
|
4.3
|
%
|
|||||
Jack Wakileh
|
*
|
*
|
||||||
Yoram Gronich
|
*
|
*
|
||||||
Shay Dayan
|
*
|
*
|
||||||
Raymond Brancato
|
*
|
*
|
||||||
Ohad Finkelstein (2)
|
500,280
|
1.3
|
%
|
|||||
Yuval Shachar (3)
|
623,147
|
1.6
|
%
|
|||||
Yair Shamir
|
*
|
*
|
||||||
Edouard Cukierman
|
*
|
*
|
||||||
Peter Campbell
|
*
|
*
|
||||||
Dafna Gruber
|
*
|
*
|
||||||
Tom Schodorf
|
*
|
*
|
||||||
Brian Gumbel
|
*
|
*
|
||||||
All directors and executive officers as a group (14 persons) (4)
|
4,727,261
|
12.3
|
%
|
|||||
Principal Shareholders
|
||||||||
EVR Research LP (5)
|
2,360,000
|
6.1
|
%
|
|||||
Beryl Capital Management LLC (6)
|
3,159,797
|
8.2
|
%
|
_____________________
|
|||
*
|
Less than 1%.
|
(1)
|
Includes 639,350 shares held in trust for family members over which Reuven Kitov is the beneficial owner.
|
||
(2)
|
Includes 473,968 shares Ohad Finkelstein may be deemed to beneficially own through entities affiliated with Marker LLC and 10,638 shares issuable upon the exercise of options
exercisable within 60 days of May 9, 2022.
|
||
(3)
|
Includes 473,968 shares Yuval Shachar may be deemed to beneficially own through entities affiliated with Marker LLC and 60,360 shares issuable upon the exercise of options exercisable
within 60 days of May 9, 2022.
|
||
(4)
|
See notes 1 through 3 above. Includes 4,447,559 ordinary shares and 279,702 shares issuable upon the exercise of options exercisable within 60 days of May 9, 2022.
|
||
(5)
|
The information in the table above concerning the number of ordinary shares beneficially owned by EVR Master Fund, LP was obtained from a Schedule 13G/A filed with the SEC by EVR Research LP and EVR Master
Fund, LP on February 28, 2022 reporting beneficial ownership as of February 16, 2022, and includes 1,630,000 ordinary shares and call options exercisable into 730,000 ordinary shares held by EVR Master Fund, LP. EVR Research LP, as the
investment manager of EVR Master Fund, LP and certain other funds, may be deemed an indirect beneficial owner of the ordinary shares. Benjamin Wolf Joffe is the managing member of the general partner of EVR Research LP and exercises
investment discretion with respect to these ordinary shares held directly by EVR Master Fund, LP and certain other funds. The address of EVR Research LP is 411 Libbie Avenue, Suite 3, Richmond, VA 23226, and the address for EVR Master
Fund, LP is 411 Libbie Avenue, Suite 3, Richmond, VA 23226.
|
||
(6)
|
The information in the table above concerning the number of ordinary shares beneficially owned by Beryl Capital Management LLC was obtained from a Schedule 13G filed with the SEC by Beryl Capital Management
LLC (“Beryl”), Beryl Capital Management LP (“Beryl GP”), Beryl Capital Partners II LP (the “Partnership”) and David A. Witkin (collectively, the “Filers”) on May 10, 2022 reporting beneficial ownership as of April 29, 2022. Beryl is
the investment adviser to the Partnership and other private investment funds (collectively, the “Funds”) and other accounts. Beryl is the general partner of Beryl GP, which is also the general partner of one or more of the Funds. Mr.
Witkin is the control person of Beryl and Beryl GP. The Funds hold the ordinary shares for the benefit of their investors, and the Funds and Beryl’s other clients have the right to receive or the power to direct the receipt of
dividends from, or the proceeds from the sale of, the Stock. Other than the Partnership, no individual client’s holdings of the Stock are more than five percent of the outstanding Stock. The Filers hold 3,159,797 ordinary shares. Such securities are held in part by the Partnership, which beneficially owns 2,790,772 ordinary shares. The address of each of the Filers is 1611 S. Catalina Ave.,
Suite 309, Redondo Beach, CA 90277.
|
Tufin Documents Filed with
or Furnished to the SEC (SEC file number 001-38866) |
Date on which Filed with or Furnished to SEC
|
|
Annual Report on Form 20-F for Year Ended December 31, 2021
|
March 7, 2022
|
|
Reports of Foreign Private Issuer on Form 6-K
|
April 6, 2022 and May 3, 2022
|
|
By order of the Board of Directors,
/s/ Reuven Kitov
Reuven Kitov
Chief Executive Officer and Chairman of the Board of Directors
|
A - 2 | |||
|
1.1
|
Certain Definitions
|
A - 2
|
|
1.2
|
Additional Definitions
|
A - 16
|
|
1.3
|
Certain Interpretations
|
A - 18
|
ARTICLE II THE MERGER | A - 20 | ||
|
2.1 |
The Merger
|
A - 20
|
|
2.2 |
The Effective Time
|
A - 20
|
|
2.3 |
The Closing
|
A - 20
|
2.4 |
Effect of the Merger
|
A - 21 | |
2.5 |
Name and Articles of Association
|
A - 21 | |
2.6 |
Directors and Officers
|
A - 21 | |
2.7 |
Effect on Share Capital
|
A - 21 | |
2.8 |
Equity Awards
|
A - 22 | |
2.9 |
Exchange of Certificates
|
A - 26 | |
2.10 |
No Further Ownership Rights in Company Ordinary Shares
|
A - 27 | |
2.11 |
Lost, Stolen or Destroyed Certificates
|
A - 28 | |
2.12 |
Required Withholding
|
A - 28 | |
2.13 |
No Dividends or Distributions
|
A - 29 | |
2.14 |
Necessary Further Actions
|
A - 29 |
A - 30 | |||
|
3.1 |
Organization and Qualification
|
A - 30
|
|
3.2 |
Authority; Approvals and Enforceability
|
A - 30
|
|
3.3 |
Required Filings and Consents; Non-Contravention
|
A - 31
|
3.4 |
Articles of Association
|
A - 32 | |
3.5 |
Company Capitalization
|
A - 32 | |
3.6 |
Subsidiaries
|
A - 33 | |
3.7 |
Company SEC Reports
|
A - 34 | |
3.8 |
Company Financial Statements; Internal Controls
|
A - 34 | |
3.9 |
Undisclosed Liabilities
|
A - 36 | |
3.10 |
Subsequent Changes
|
A - 36 | |
3.11 |
Real Property
|
A - 36 | |
3.12 |
Tangible Property
|
A - 37 | |
3.13 |
Intellectual Property
|
A - 37 | |
3.14 |
Material Contracts
|
A - 41 | |
3.15 |
Tax Matters
|
A - 43 | |
3.16 |
Employee Benefit Matters
|
A - 46 | |
3.17 |
Labor Matters
|
A - 49 | |
3.18 |
Environmental Matters
|
A - 52 | |
3.19 |
Compliance with Laws
|
A - 53 | |
3.20 |
Permits
|
A - 54 | |
3.21 |
Legal Proceedings and Orders
|
A - 54 | |
3.22 |
Insurance
|
A - 55 | |
3.23 |
Takeover Statutes
|
A - 55 | |
3.24 |
Brokers, Finders and Financial Advisors
|
A - 55 | |
3.25 |
Government Grants and Incentives
|
A - 55 | |
3.26 |
No Other Representations
|
A - 55 |
A - 56 | |||
|
4.1 |
Organization and Qualification
|
A - 56
|
|
4.2 |
Authority; Approvals and Enforceability
|
A - 56
|
|
4.3 |
Required Filings and Consents; Non-Contravention
|
A - 56
|
4.4 |
Certificate of Incorporation and Bylaws
|
A - 57 | |
4.5 |
Legal Proceedings; Orders; Disclosure
|
A - 57 | |
4.6 |
Brokers, Finders and Financial Advisors
|
A - 58 | |
4.7 |
Operations of Parent and Merger Sub
|
A - 58 | |
4.8 |
No Parent Vote or Approval Required
|
A - 58 | |
4.9 |
Financing
|
A - 58 | |
4.10 |
Guarantee
|
A - 60 | |
4.11 |
Stockholder and Management Arrangements
|
A - 60 | |
4.12 |
Solvency
|
A - 61 | |
4.13 |
Exclusivity of Representations and Warranties; Investigation
|
A - 61 |
A - 63 | |||
5.1 |
Affirmative Obligations
|
A - 63 | |
5.2 |
Forbearance Covenants of the Company
|
A - 63 | |
5.3 |
No Solicitation
|
A - 66 |
A - 73 | |||
6.1 |
Required Action and Forbearance; Efforts
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A - 73 | |
6.2 |
Antitrust
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A - 74 | |
6.3 |
Company Shareholders Meeting
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A - 75 | |
6.4 |
Financing
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A - 77 | |
6.5 |
Cooperation With Debt Financing
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A - 80 | |
6.6 |
Tax Ruling
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A - 84 | |
6.7 |
Anti-Takeover Laws
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A - 85 | |
6.8 |
Access
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A - 85 | |
6.9 |
Directors’ and Officers’ Exculpation, Indemnification and Insurance
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A - 86 | |
6.10 |
Employee Matters
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A - 88 | |
6.11 |
Obligations of Merger Sub
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A - 89 | |
6.12 |
Public Statements and Disclosure
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A - 89 | |
6.13 |
Transaction Litigation
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A - 90 | |
6.14 |
Stock Exchange Delisting; Deregistration
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A - 90 | |
6.15 |
Additional Agreements
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A - 90 | |
6.16 |
Parent Vote
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A - 90 | |
6.17 |
No Control of the Other Party’s Business
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A - 91 | |
6.18 |
No Employment Discussions
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A - 91 | |
6.19 |
Merger Proposal; Certificate of Merger
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A - 91 | |
6.20 |
Marketable Securities
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A - 92 | |
6.21 |
Resignations
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A - 92 | |
6.22 |
Tax Matters
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A - 92 |
A - 93 | |||
7.1 |
Conditions to Each Party’s Obligations to Effect the Merger
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A - 93 | |
7.2 |
Conditions to the Obligations of Parent and Merger Sub
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A - 93 | |
7.3 |
Conditions to the Company’s Obligations to Effect the Merger
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A - 94 |
A - 95 | |||
8.1 |
Termination
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A - 95 | |
8.2 |
Manner and Notice of Termination; Effect of Termination
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A - 97 | |
8.3 |
Fees and Expenses
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A - 98 | |
8.4 |
Amendment
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A - 102 | |
8.5 |
Extension; Waiver
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A - 102 | |
8.6 |
No Liability of Financing Sources
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A - 102 |
A - 102 | |||
9.1 |
Survival of Representations, Warranties and Covenants
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A - 102 | |
9.2 |
Notices
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A - 103 | |
9.3 |
Assignment
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A - 104 | |
9.4 |
Confidentiality
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A - 104 | |
9.5 |
Entire Agreement
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A - 104 | |
9.6 |
Third-Party Beneficiaries
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A - 105 | |
9.7 |
Severability
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A - 105 | |
9.8 |
Remedies
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A - 105 | |
9.9 |
Governing Law
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A - 106 | |
9.10 |
Consent to Jurisdiction
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106 | |
9.11 |
WAIVER OF JURY TRIAL
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A - 107 | |
9.12 |
Company Disclosure Letter References
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A - 107 | |
9.13 |
Counterparts
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A - 108 | |
9.14 |
No Limitation
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A - 108 | |
9.15 |
Performance Guaranty
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A - 108 | |
9.16 |
Disclaimer
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A - 108 | |
9.17 |
Non-Recourse Parties
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A - 109 |
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A - 112
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A - 113
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Term
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Section Reference
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Accelerated Vesting Date
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2.8(a)(ii)
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Advisor
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3.2(b)
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Agreement
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Preamble
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Agreement
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Preamble
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Agreement Date
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Preamble
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Alternative Acquisition Agreement
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5.3(b)
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Alternative Debt Financing
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6.4(d)
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Applicable Termination
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8.3(b)(i)
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Articles
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3.3(a)
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Capitalization Date
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3.5(a)
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CBA
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3.14(a)(vii)
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Certificate of Merger
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2.2
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Certificates
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2.9(c)
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Chosen Courts
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9.10(a)
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Circular
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2.12(a)
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Closing
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2.3
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Closing Date
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2.3
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Companies Registrar
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2.2
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Company
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Preamble
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Company Board Recommendation
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3.2(b)
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Company Board Recommendation Change
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5.3(d)(i)
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Company Breach Notice Period
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8.1(e)
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Company Disclosure Letter
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Article III
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Company Environmental Permits
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3.18(c)
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Company In Licenses
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3.13(e)
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Company IP Licenses
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3.13(f)
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Company Out Licenses
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3.13(f)
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Company Real Property Leases
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3.11
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Company Related Parties
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8.3(g)
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Company SEC Reports
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3.7
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Company Shareholders Meeting
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6.3
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Company Subsidiary Documents
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3.4
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Company Termination Fee
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8.3(b)(i) and 8.3(b)(iii)
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Contingent Cash Award
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2.8(a)(ii)
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Covered Persons
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6.9(a)
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COVID-19 Measures
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1.1(r)(xi)
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Cut-Off Time
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5.3(a)
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Debt Commitment Letter
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4.9(b)
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Debt Financing
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4.9(b)
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Effective Time
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2.2
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Electronic Delivery
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9.13
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Equity Commitment Letter
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4.9(a)
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Equity Financing
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4.9(a)
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Event Notice Period
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5.3(e)(i)(1)
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Exchange Fund
|
2.9(b)
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Financing
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4.9(b)
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Financing Conditions
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4.9(c)
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Term
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Section Reference
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Financing Letters
|
4.9(b)
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Go-Shop Period
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5.3(a)
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Government Grants
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3.25
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Guarantee
|
Recitals
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Guarantors
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Recitals
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ICL
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Recitals
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Import Restrictions
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3.19(c)(i)
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Interim Period
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5.1
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Interim Section 102 Tax Ruling
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6.6(a)
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Intervening Event
|
5.3(e)(i)
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Israeli Employees
|
3.17(i)
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Known Allegation
|
3.17(g)
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|
Malicious Code
|
3.13(m)
|
|
Marks
|
1.1(yy)
|
|
Material Contract
|
3.14(a)
|
|
Maximum Premium
|
6.9(c)
|
|
Merger
|
Recitals
|
|
Merger Proposal
|
6.19(a)
|
|
Merger Sub
|
Preamble
|
|
No-Shop Period Start Date
|
5.3(a)
|
|
Notice Date
|
6.3
|
|
Option Consideration
|
2.8(a)(i)
|
|
Owned Company Shares
|
2.7(a)(iv)
|
|
Parent
|
Preamble
|
|
Parent Breach Notice Period
|
8.1(g)
|
|
Parent Plan
|
6.10(b)
|
|
Parent Related Parties
|
8.3(g)
|
|
Parent Termination Fee
|
8.3(c)
|
|
Party
|
Preamble
|
|
Patents
|
1.1(yy)
|
|
Payment Agent
|
2.9(a)
|
|
Payor
|
2.12(a)
|
|
Per Share Price
|
2.7(a)(iii)
|
|
Permits
|
3.20
|
|
Prohibited Financing Modifications
|
6.4(b)
|
|
Proposal Notice Period
|
5.3(e)(ii)(3)
|
|
Proxy Statement
|
6.3
|
|
Qualified Plan
|
3.16(d)
|
|
Reimbursement Obligations
|
6.5(a)(x)(J)
|
|
Representatives
|
5.3(a)
|
|
Required Amounts
|
4.9(f)
|
|
Requisite Shareholder Approval
|
3.2(c)
|
|
RSU Consideration
|
2.8(b)(i)
|
|
Sanctioned Countries
|
3.19(c)(i)
|
|
Sanctioned Person
|
3.19(c)(i)
|
Term
|
Section Reference
|
|
Section 102 Tax Ruling
|
6.6(a)
|
|
Section 14 Arrangement
|
3.17(i)
|
|
Severance Pay Law
|
3.17(i)
|
|
Surviving Company
|
2.1
|
|
Takeover Statutes
|
3.23
|
|
Termination Date
|
8.1(c)
|
|
Trade Controls
|
3.19(c)(i)
|
|
Transactions
|
Recitals
|
|
Uncertificated Shares
|
2.9(c)
|
|
Voting and Support Agreements
|
Recitals
|
|
Withholding Agent
|
2.9(a)
|
|
Withholding Drop Date
|
2.12(a)
|
|
Withholding Tax Ruling
|
6.6(b)
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TALON MIDCO 3 LIMITED
By: /s/ Dominic Ang
Name: Dominic Ang Title: Director TALON MERGER SUB LTD.
By: /s/ Dominic Ang
Name: Dominic Ang Title: Director |
|
TUFIN SOFTWARE TECHNOLOGIES LTD.
By: /s/ Reuven Kitov
Name: Reuven Kitov
Title: CEO & Chairman of the Board of Directors
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![]() |
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TUFIN SOFTWARE TECHNOLOGIES LTD.
5 HASHALOM ROAD, TOHA TOWER
TEL AVIV 6789205, ISRAEL
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VOTE BY INTERNET - www.proxyvote.com or scan the QR Barcode above
Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time on June 6,
2022 (i.e., 6:59 a.m. Israel Time on June 7, 2022). Have your proxy card in hand when you access the website and follow the instructions to obtain your records and to create an electronic voting instruction form.
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ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS
If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy
statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to
receive or access proxy materials electronically in future years.
|
VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time on June 6, 2022 (i.e., 6:59 a.m. Israel Time
on June 7, 2022). Have your proxy card in hand when you call and then follow the instructions.
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VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o
Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
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D86778-S46866
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KEEP THIS PORTION FOR YOUR RECORDS
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THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
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DETACH AND RETURN THIS PORTION ONLY
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TUFIN SOFTWARE TECHNOLOGIES LTD.
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THE BOARD OF DIRECTORS RECOMMENDS YOU VOTE “FOR” (1) THE MERGER PROPOSAL AND (2) ADJOURNMENT PROPOSAL,
EACH AS DESCRIBED BELOW. PLEASE SEE THE INSTRUCTIONS BELOW REGARDING ITEM 1A RELATING TO THE MERGER PROPOSAL.
|
|||||||||||||||||||
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOW
HERE ☒
Important instructions for Item 1A relating to the Merger Proposal:
IF YOU ARE NOT A BUYER AFFILIATED PARTY, PLEASE BE CERTAIN TO CHECK THE BOX “YES” IN ITEM 1A TO CONFIRM YOUR STATUS.
Under the Companies Law, your Ordinary Shares cannot be counted towards or against the majority required for
approval of the Merger Proposal unless you provide the foregoing important confirmation.
If you are a Buyer affiliated party, please check the box “NO” in Item 1A.
|
|||||||||||||||||||
For | Against | Abstain | |||||||||||||||||
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1. |
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The Merger Proposal. To approve the proposed acquisition of the Company by Talon MidCo 3 Limited, a
private company incorporated in England and Wales (“Buyer”), including the approval of (a) the Agreement and Plan of Merger, dated as of April 5, 2022 (the “merger
agreement”), pursuant to which Talon Merger Sub Ltd., a company organized under the laws of the State of Israel and a wholly owned subsidiary of Buyer (“Merger Sub”), will merge with and
into the Company, so that the Company will be the surviving company and will become a direct wholly owned subsidiary of Buyer (the “merger”); (b) the merger itself; (c) the consideration to be
received by the shareholders of the Company in the merger, consisting of $13.00 per share in cash, without interest and less any applicable withholding taxes, for each ordinary share, par value NIS 0.015 per share, of the Company owned
immediately prior to the effective time of the merger; (d) the cancellation of all outstanding equity awards of the Company and the treatment thereof in accordance with the terms of the merger agreement; and (e) all other transactions and
arrangements contemplated by the merger agreement. We refer to these proposals collectively as the “Merger Proposal.”
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☐ | ☐ | ☐ |
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||||||||||
Yes | No | ||||||||||||||||||
1A.
|
The undersigned confirms that he, she or it is not (a) Buyer, Merger Sub or any person or entity holding, directly or indirectly, 25% or more
of the total outstanding voting power of Buyer or Merger Sub, or the right to appoint 25% or more of the directors of Buyer or Merger Sub; (b) a person or entity acting on behalf of Buyer, Merger Sub or a person or entity described in
clause (a) above; or (c) a family member of, or an entity controlled by, Buyer, Merger Sub or any of the foregoing (each, a “Buyer affiliated party”). Check this box “YES” to confirm that you are not a Buyer affiliated party. Otherwise, check the box “NO” if you are a Buyer affiliated party. (THIS ITEM MUST BE COMPLETED)
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☐ | ☐ | ||||||||||||||||
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For | Against | Abstain |
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2. |
The Adjournment Proposal. To approve the adjournment of the Meeting to a later date or dates, if
necessary, to solicit additional proxies if there are insufficient votes to approve the Merger Proposal at the time of the meeting.
|
☐ | ☐ | ☐ | |||||||||||||||
Please sign exactly as
your name(s) appear(s) on this Proxy. If held in joint tenancy, the shareholder named first in the Company’s register must sign. Trustees, Administrators, etc., should include title and authority. Corporations should provide full
corporate name by duly authorized officer, giving full title as such. Partners should provide full partnership name by authorized person. PLEASE BE SURE TO RETURN THE ENTIRE PROXY ALONG WITH PROOF OF IDENTITY AS DESCRIBED IN THE
COMPANY’S PROXY STATEMENT.
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Signature [PLEASE SIGN WITHIN BOX]
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Date
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Signature (Joint Owners)
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Date
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D86779-S46866
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X+]Q?I7AYZ&O<%^XOTKW