UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549 
 

 
FORM 6-K 
 

 
REPORT OF FOREIGN PRIVATE ISSUER
Pursuant to Section 13(a)-16 or 15(d)-16
of the Securities Exchange Act of 1934
 
For the month of May 2022
 
Commission File Number: 001-38866 


 
TUFIN SOFTWARE TECHNOLOGIES LTD.
(Translation of registrant’s name into English) 
 

 
Tufin Software Technologies Ltd.
 
5 HaShalom Road, ToHa Tower
Tel Aviv 6789205, Israel
(Address of principal executive offices)


 
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F ☒      Form 40-F ☐
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

Yes ☐      No ☒
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

Yes ☐      No ☒

 
CONTENTS
 
Pursuant to the notice of the special general meeting of shareholders (the “Special Meeting”) of Tufin Software Technologies Ltd. (the “Company”) that was published on May 3, 2022 and was attached as Exhibit 99.1 to the Company’s Report of Foreign Private Issuer on Form 6-K, furnished to the Securities and Exchange Commission (the “SEC”) on May 3, 2022, the Company hereby furnishes the proxy statement and form of proxy card for the Special Meeting. The Special Meeting is scheduled to be held on June 7, 2022 at 6:00 p.m. Israel Time (11:00 a.m. Eastern Time) at the principal executive offices of the Company, located at 5 HaShalom Road, ToHa Tower, Tel Aviv 6789205, Israel. Copies of the proxy statement and form of proxy card are attached to this Report of Foreign Private Issuer on Form 6-K as Exhibits 99.1 and 99.2, respectively.
 
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
 
Information provided in this Report of Foreign Private Issuer on Form 6-K contains forward-looking statements, within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act that involve risks and uncertainties.  Forward-looking statements include, but are not limited to: statements about the expected timing of the acquisition, the satisfaction or waiver of any conditions to the proposed acquisition, and about the Company’s business and future prospects.  In this context, forward-looking statements often contain words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “could,” “seek,” “see,” “will,” “may,” “would,” “might,” “potentially,” “estimate,” “continue,” “expect,” “target” and similar expressions or the negatives of these words or other comparable terminology that convey uncertainty of future events or outcomes.  Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those expressed or implied by the forward-looking statements contained herein, including, but not limited to: (1) the Company may be unable to obtain required regulatory approvals or satisfy other conditions to the closing of the proposed merger; (2) the proposed merger may involve unexpected costs, liabilities or delays; (3) the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement; (4) the ability to recognize benefits of the proposed merger; (5) risks that the proposed merger disrupts current plans and operations and the potential difficulties in employee retention as a result of the proposed merger; (6) impact of the merger on relationships with the Company’s commercial counter-parties, including, but not limited to, its distribution partners; (7) the significant transaction costs associated with the proposed merger and (8) other risks that may imperil the consummation of the merger, which may result in the merger not being consummated within the expected time period or at all.  These forward-looking statements speak only as of the date on which such statements are made and the Company undertakes no obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise.  For additional information about other risks to which the Company is subject, please see the Company’s filings or furnishings, as applicable, with the SEC, including its most recent annual report on Form 20-F and subsequent Reports of Foreign Private Issuer on Form 6-K.
 

ADDITIONAL INFORMATION AND WHERE TO FIND IT
 
In connection with the Special Meeting, the Company will send to its shareholders of record as of the record date, and will forward for distribution to beneficial shareholders who hold ordinary shares of the Company through a bank, broker or other nominee serving as a record holder as of the record date, the proxy statement describing the proposals, including the merger proposal, to be voted upon at the Special Meeting, as well as logistical information related to the Special Meeting. Along with a proxy statement, the Company will also send and forward a proxy card or voting instruction form enabling shareholders to submit their votes on such proposals.

This communication is not a substitution for the proxy statement, proxy card or for any other documents that the Company may furnish to the SEC or send to shareholders in connection with the proposed merger. INVESTORS ARE URGED TO READ THE PROXY STATEMENT, PROXY CARD AND ANY OTHER RELEVANT MATERIALS  FURNISHED TO THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BEFORE MAKING ANY VOTING OR INVESTMENT DECISION WITH RESPECT TO THE PROPOSED MERGER BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE COMPANY AND THE PROPOSED MERGER.  The proxy statement, proxy card and certain other relevant materials (when they become available) and any other documents submitted by the Company to the SEC may be obtained free of charge at the SEC’s website at http://www.sec.gov, the Company’s website at investors@tufin.com, or by directing the request to the following address:  Tufin Software Technologies Ltd., 5 HaShalom Road, ToHa Tower, Tel Aviv 6789205, Israel, Attn: Ms. Noa Farkas Gluck, General Counsel.
 
This Report of Foreign Private Issuer on Form 6-K is hereby incorporated by reference in the Company’s registration statements on Form F-3 (File No. 333-239715) and Form S-8 (File Nos. 333-231985, 333-237291, 333-253994 and 333-264612).



SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
 
 
TUFIN SOFTWARE TECHNOLOGIES LTD.
 
 
 
 
 
 
By:
/s/ Reuven Kitov
 
 
Name:
Reuven Kitov
 
 
Title:
CEO & Chairman of the Board of Directors
 

Date: May 13, 2022
 

EXHIBIT INDEX
 
Exhibit
Number
Description
 
 



Exhibit 99.1


TUFIN SOFTWARE TECHNOLOGIES LTD.
5 HaShalom Road, ToHa Tower
Tel Aviv 6789205, Israel
May 13, 2022
 
Dear Tufin Software Technologies Ltd. Shareholders:
 
We cordially invite you to attend a special general meeting of shareholders (the “special general meeting” or the “meeting”) of Tufin Software Technologies Ltd., a company organized under the laws of the State of Israel (“Tufin” or the “Company”), to be held on June 7, 2022 at 6:00 p.m. Israel Time (11:00 a.m. Eastern Time) at the principal executive offices of Tufin, located at 5 HaShalom Road, ToHa TowerTel Aviv 6789205, Israel.
 
As previously announced, Tufin entered into an Agreement and Plan of Merger, dated as of April 5, 2022, a copy of which is attached as Annex A to this proxy statement (as it may be amended from time to time, the “merger agreement”) with Talon MidCo 3 Limited, a private company incorporated in England and Wales (“Buyer”), and Talon Merger Sub Ltd., a company organized under the laws of the State of Israel and a wholly owned subsidiary of Buyer (“Merger Sub”), pursuant to which, subject to the satisfaction or waiver of the conditions set forth therein, Merger Sub will merge with and into Tufin, with Tufin surviving the merger (the “surviving company”) and becoming a direct wholly owned subsidiary of Buyer (the “merger”).  Buyer and Merger Sub are subsidiaries of investment funds (the “T/R Funds”) advised by Turn/River Capital Management LP, a U.S.-based private equity firm (“Turn/River”).
 
The meeting will be held for the following purposes:
 

(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.”
 

(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.”
 
Your shares can be voted at the special general meeting only if you are present or represented by a valid proxy or proxy card.  Only shareholders of record as of the close of business on May 9, 2022, the record date, are entitled to notice of the meeting and to vote at the meeting or any adjournment, postponement or other delay thereof.  You are also entitled to vote at the meeting if you hold Tufin ordinary shares through a bank, broker or other nominee which is one of our shareholders of record at the close of business on May 9, 2022, or which appears in the participant listing of a securities depository on that date.  Even if you plan to attend the special general meeting, we request that you submit your proxy or voting instruction form in advance.
 
Tufin’s board of directors (the “Board”), after considering the factors to be more fully described in the proxy statement, has unanimously (i) determined that the terms of the merger agreement and the merger and the other transactions contemplated by the merger agreement (collectively, the “transactions”) are fair to, and in the best interests of, Tufin shareholders; (ii) 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; and (iii) authorized and approved in all respects, the merger agreement, the delivery and performance of the merger agreement and the consummation of the transactions, upon the terms and subject to the conditions set forth in the merger agreement.  Accordingly, the Board unanimously recommends that you vote (1) “FOR” the merger proposal and (2) “FOR” the adjournment proposal, which will be described in a proxy statement to be made available to Tufin shareholders in connection with the meeting.
 

Your vote is very important, regardless of the number of Tufin ordinary shares that you own.  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.
 
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.
 
If you are a record shareholder, your signed proxy card must be received at our offices at least four hours prior to the designated time for the special general meeting (i.e., by 2:00 p.m. Israel Time (7:00 a.m. Eastern Time) on June 7, 2022) to be validly included in the tally of Tufin ordinary shares voted at the special general meeting.  If submitted to our proxy tabulator, Broadridge Financial Solutions, Inc., located at 51 Mercedes Way, Edgewood, NY 11717, a signed proxy card must be received by 11:59 p.m. Eastern Time on June 6, 2022 (i.e., 6:59 a.m. Israel Time on June 7, 2022) to be counted towards the tally of Tufin ordinary shares so voted.  In the alternative, a proxy card may be presented in person to the chairperson of the special general meeting at such meeting in order to be counted towards the tally of votes at the meeting.  If you are a registered shareholder and attend the special general meeting, you may vote in person, and if you so vote, your proxy will not be used.
 
If your Tufin ordinary shares are held in a stock brokerage account or by a bank, broker or other nominee, you are considered the “beneficial holder” of the Tufin ordinary shares held for you in what is known as “street name.” If that is the case, you may instruct your bank, broker or other nominee how to vote by completing and returning the voting instruction form provided by your bank, broker or other nominee, or by providing voting instructions via the internet (at www.proxyvote.com) or via telephone (as per the directions on the enclosed voting instruction form).  If you plan to attend the meeting and vote in person, you will be required to present a “legal proxy” from your bank, broker or other nominee, along with an account statement showing ownership of your Tufin ordinary shares as of the record date, in order to be given a ballot to vote the shares in person at the meeting.
 
In accordance with the Israeli Companies Law, 5759-1999, and the regulations promulgated thereunder, a shareholder may submit a written position statement in English to us, expressing its position on the merger proposal and the adjournment proposal, no later than May 31, 2022, at the following address:  Tufin Software Technologies Ltd., 5 HaShalom Road, ToHa Tower, Tel Aviv 6789205, Israel, Attn: Ms. Noa Farkas Gluck, General Counsel.  We will publish timely delivered position statements by way of furnishing a report on Form 6-K to the SEC.
 
Additionally, in accordance with, and subject to, the provisions of the Companies Law and the regulations promulgated thereunder, certain of our shareholders may present proposals for consideration at the meeting by submitting their proposals in writing to the Company no later than May 10, 2022, provided that such proposal is appropriate for consideration by shareholders at the meeting.  Such proposals should be submitted in writing to us at the following address: Tufin Software Technologies Ltd., 5 HaShalom Road, ToHa Tower, Tel Aviv 6789205, Israel, Attn: Ms. Noa Farkas Gluck, General Counsel.  If the Board determines that a shareholder proposal has been duly and timely received and is appropriate for inclusion in the agenda of the meeting, we will publish a revised agenda for the meeting in accordance with the provisions of the Companies Law and the regulations promulgated thereunder by way of issuing a press release or furnishing a report on Form 6-K to the SEC.  However, the record date for the meeting will not change.
 

Enclosed with this letter you will find an attached notice of the special general meeting and proxy statement, along with a separate proxy card or voting instruction form.  The accompanying proxy statement provides you with detailed information about the proposed merger and the special general meeting.  Please give this material your careful attention.  You also may obtain more information about Tufin from documents we have filed with or furnished to the SEC.
 
You may direct any questions about the merger to, and request additional copies of the enclosed proxy materials from, our proxy solicitor at:
 
Morrow Sodali LLC
333 Ludlow Street, 5th Floor, South Tower
Stamford, CT 06902
Shareholders call toll free: 800-662-5200
Banks and brokers call collect: 203-658-9400
Email: tufn@investor.morrowsodali.com
 
Thank you for your cooperation and continued support.
 
 
Very truly yours,
 
Reuven Kitov
Chief Executive Officer and
Chairman of the Board of Directors

Neither the SEC nor any state securities commission has approved or disapproved the transactions contemplated hereunder or determined if the accompanying document is accurate or adequate.  Any representation to the contrary is a criminal offense.
 
This document is dated May 13, 2022, and is first being mailed to shareholders on or about May 13, 2022.
 

 
TUFIN SOFTWARE TECHNOLOGIES LTD.
5 HaShalom Road, ToHa Tower
Tel Aviv 6789205, Israel

NOTICE OF SPECIAL GENERAL MEETING OF SHAREHOLDERS
 
TO BE HELD ON JUNE 7, 2022
 
As originally published on May 3, 2022
 
Notice is hereby given that a special general meeting of shareholders (the “special general meeting” or the “meeting”) of Tufin Software Technologies Ltd., a company organized under the laws of the State of Israel (“Tufin” or the “Company”), will be held on June 7, 2022, at 6:00 p.m. Israel Time (11:00 a.m. Eastern Time), at the principal executive offices of Tufin, located at 5 HaShalom Road, ToHa Tower, Tel Aviv, Israel 6789205.
 
As previously announced, Tufin entered into an Agreement and Plan of Merger, dated as of April 5, 2022, a copy of which was attached as Exhibit 99.1 to Tufin’s Report of Foreign Private Issuer on Form 6-K that was furnished to the U.S. Securities and Exchange Commission (the “SEC”) on April 6, 2022 (as it may be amended from time to time, the “merger agreement”) with Talon MidCo 3 Limited, a private company incorporated in England and Wales (“Buyer”), and Talon Merger Sub Ltd., a company organized under the laws of the State of Israel and a wholly owned subsidiary of Buyer (“Merger Sub”), pursuant to which, subject to the satisfaction or waiver of the conditions set forth therein, Merger Sub will merge with and into Tufin, with Tufin surviving the merger (the “surviving company”) and becoming a direct wholly owned subsidiary of Buyer (the “merger”).  Buyer and Merger Sub are subsidiaries of investment funds (the “T/R Funds”) advised by Turn/River Capital Management LP, a U.S.-based private equity firm (“Turn/River”).
 
The meeting will be held for the following purposes:


(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.”
 

(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.”
 
Your shares can be voted at the special general meeting only if you are present or represented by a valid proxy or proxy card.  Only shareholders of record as of the close of business on May 9, 2022, the record date, are entitled to notice of the meeting and to vote at the meeting or any adjournment, postponement or other delay thereof.  You are also entitled to vote at the meeting if you hold Tufin ordinary shares through a bank, broker or other nominee which is one of our shareholders of record at the close of business on May 9, 2022, or which appears in the participant listing of a securities depository on that date.  Even if you plan to attend the special general meeting, we request that you submit your proxy or voting instruction form in advance.


Tufin’s board of directors (the “Board”), after considering the factors to be more fully described in the proxy statement, has unanimously (i) determined that the terms of the merger agreement and the merger and the other transactions contemplated by the merger agreement (collectively, the “transactions”) are fair to, and in the best interests of, Tufin shareholders; (ii) 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; and (iii) authorized and approved in all respects, the merger agreement, the delivery and performance of the merger agreement and the consummation of the transactions, upon the terms and subject to the conditions set forth in the merger agreement.  Accordingly, the Board unanimously recommends that you vote (1) “FOR” the merger proposal and (2) “FOR” the adjournment proposal, which will be described in a proxy statement to be made available to Tufin shareholders in connection with the meeting.

Your vote is very important, regardless of the number of Tufin ordinary shares that you own.  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.

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.

If you are a record shareholder, your signed proxy card must be received at our offices at least four hours prior to the designated time for the special general meeting (i.e., by 2:00 p.m. Israel Time (7:00 a.m. Eastern Time) on June 7, 2022) to be validly included in the tally of Tufin ordinary shares voted at the special general meeting.  If submitted to our proxy tabulator, Broadridge Financial Solutions, Inc., located at 51 Mercedes Way, Edgewood, NY 11717, a signed proxy card must be received by 11:59 p.m. Eastern Time on June 6, 2022 (i.e., 6:59 a.m. Israel Time on June 7, 2022) to be counted towards the tally of Tufin ordinary shares so voted.  In the alternative, a proxy card may be presented in person to the chairperson of the special general meeting at such meeting in order to be counted towards the tally of votes at the meeting.  If you are a registered shareholder and attend the special general meeting, you may vote in person, and if you so vote, your proxy will not be used.

If your Tufin ordinary shares are held in a stock brokerage account or by a bank, broker or other nominee, you are considered the “beneficial holder” of the Tufin ordinary shares held for you in what is known as “street name.” If that is the case, you may instruct your bank, broker or other nominee how to vote by completing and returning the voting instruction form provided by your bank, broker or other nominee, or by providing voting instructions via the internet (at www.proxyvote.com) or via telephone (as per the directions on the enclosed voting instruction form).  If you plan to attend the meeting and vote in person, you will be required to present a “legal proxy” from your bank, broker or other nominee, along with an account statement showing ownership of your Tufin ordinary shares as of the record date, in order to be given a ballot to vote the shares in person at the meeting.

In accordance with the Israeli Companies Law, 5759-1999, and the regulations promulgated thereunder, a shareholder may submit a written position statement in English to us, expressing its position on the merger proposal and the adjournment proposal, no later than May 31, 2022, at the following address:  Tufin Software Technologies Ltd., 5 HaShalom Road, ToHa Tower, Tel Aviv 6789205, Israel, Attn: Ms. Noa Farkas Gluck, General Counsel.  We will publish timely delivered position statements by way of furnishing a report on Form 6-K to the SEC.


Additionally, in accordance with, and subject to, the provisions of the Companies Law and the regulations promulgated thereunder, certain of our shareholders may present proposals for consideration at the meeting by submitting their proposals in writing to the Company no later than May 10, 2022, provided that such proposal is appropriate for consideration by shareholders at the meeting.  Such proposals should be submitted in writing to us at the following address: Tufin Software Technologies Ltd., 5 HaShalom Road, ToHa Tower, Tel Aviv 6789205, Israel, Attn: Ms. Noa Farkas Gluck, General Counsel.  If the Board determines that a shareholder proposal has been duly and timely received and is appropriate for inclusion in the agenda of the meeting, we will publish a revised agenda for the meeting in accordance with the provisions of the Companies Law and the regulations promulgated thereunder by way of issuing a press release or furnishing a report on Form 6-K to the SEC.  However, the record date for the meeting will not change.

The Company intends to furnish copies of the proxy statement for the meeting, describing the matters to be voted on at the meeting, along with the proxy card and other documents to the SEC on Form 6-K on or about May 13, 2022.  Once available, such proxy statement, proxy card and other documents may be obtained for free from the SEC’s website at www.sec.gov, the Company’s website at investors@tufin.com, or by directing the request to the following address:  Tufin Software Technologies Ltd., 5 HaShalom Road, ToHa Tower, Tel Aviv 6789205, Israel, Attn: Ms. Noa Farkas Gluck, General Counsel.  The contents of Tufin’s website are not deemed to be incorporated by reference into this Form 6-K or the proxy statement (once available).

This communication is not a substitution for the proxy statement or for any other documents that Tufin may furnish to the SEC or send to shareholders in connection with the proposed merger.  INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FURNISHED TO THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED MERGER.
 
 
TUFIN SOFTWARE TECHNOLOGIES LTD.
 
       
 
By:
/s/ Reuven Kitov
 
 
Name:
Reuven Kitov
 
 
Title:
CEO & Chairman of the Board of Directors
 


 
PROXY STATEMENT

SPECIAL GENERAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 7, 2022

INTRODUCTION
 
We are furnishing this proxy statement to our shareholders in connection with the solicitation by our board of directors (the “Board”) of proxies to be used at a special general meeting of shareholders, as may be adjourned or postponed from time to time (the “special general meeting” or the “meeting”), to be held at our principal executive offices located at 5 HaShalom Road, ToHa Tower, Tel Aviv 6789205, Israel, on June 7, 2022 at 6:00 p.m. Israel Time (11:00 a.m. Eastern Time), and thereafter, as it may be adjourned from time to time.  We are first mailing this proxy statement, the accompanying notice, the letter to shareholders and the proxy card on or about May 13, 2022, to the holders of our ordinary shares entitled to vote at the special general meeting.
 
As previously announced, Tufin entered into an Agreement and Plan of Merger, dated as of April 5, 2022, a copy of which is attached as Annex A (as it may be amended from time to time, the “merger agreement”) with Talon MidCo 3 Limited, a private company incorporated in England and Wales (“Buyer”), and Talon Merger Sub Ltd., a company organized under the laws of the State of Israel and a wholly owned subsidiary of Buyer (“Merger Sub”), pursuant to which, subject to the satisfaction or waiver of the conditions set forth therein, Merger Sub will merge with and into Tufin, so that Tufin will be the surviving company (the “surviving company”) and will become a direct wholly owned subsidiary of Buyer (the “merger”).  Buyer and Merger Sub are subsidiaries of investment funds (the “T/R Funds”) advised by Turn/River Capital Management LP, a U.S.-based private equity firm (“Turn/River”).
 
The meeting will be held for the following purposes:
 

(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.”
 

(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.”
 
We currently know of no other business to be transacted at the special general meeting, other than as set forth above; but, if any other matter is properly presented at the meeting, the persons named in the enclosed proxy card will vote upon such matters in accordance with their best judgment.
 
OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE (1) “FOR” THE MERGER PROPOSAL AND (2) “FOR” THE ADJOURNMENT PROPOSAL.
 
Quorum
 
Your shares can be voted at the special general meeting only if you are present or represented by a valid proxy or proxy card.  Only shareholders of record as of the close of business on May 9, 2022, the record date, are entitled to notice of the meeting and to vote at the meeting or any adjournment, postponement or other delay thereof.  You are also entitled to vote at the meeting if you hold Tufin ordinary shares through a bank, broker or other nominee which is one of our shareholders of record at the close of business on May 9, 2022, or which appears in the participant listing of a securities depository on that date.  Even if you plan to attend the special general meeting, we request that you submit your proxy or voting instruction form in advance.
 

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.
 
 Proxies and Voting Instructions
 
Shareholders of record may elect to vote their shares once, by attending the special general meeting in person or by executing and delivering to Tufin or its transfer agent a proxy card.  If your Tufin ordinary shares are held in a stock brokerage account or by a bank, broker or other nominee, you are considered the “beneficial holder” of the Tufin ordinary shares held for you in what is known as “street name.” If that is the case, you may instruct your bank, broker or other nominee how to vote by completing and returning the voting instruction form provided by your bank, broker or other nominee, or by providing voting instructions via the internet (at www.proxyvote.com) or via telephone (as per the directions on the enclosed voting instruction form).  If you plan to attend the meeting and vote in person, you will be required to present a “legal proxy” from your bank, broker or other nominee, along with an account statement showing ownership of your Tufin ordinary shares as of the record date, in order to be given a ballot to vote the shares in person at the meeting.
 
Proxies are being solicited by the Board and are being mailed to shareholders of record together with this proxy statement.  Certain of our officers, directors, employees and agents may solicit proxies by telephone, facsimile, electronic mail or other personal contact.  However, such parties will not receive additional compensation therefor.  We will bear the cost of the solicitation of proxies, including the cost of preparing, assembling and mailing the proxy materials, and will reimburse the reasonable expenses of brokerage firms and others for forwarding such proxy materials to the beneficial owners of our shares.
 
All Tufin ordinary shares represented by properly executed proxies received by our proxy tabulator, Broadridge Financial Solutions, Inc., no later than 11:59 p.m. Eastern Time on June 6, 2022 (i.e., 6:59 a.m. Israel Time on June 7, 2022), or at our offices at least four hours prior to the designated time for the special general meeting (i.e., by 2:00 p.m. Israel Time (7:00 a.m. Eastern Time) on June 7, 2022), will, unless such proxies have been previously revoked or superseded, be voted at the meeting in accordance with the directions indicated thereon.  If a shareholder of record signs, dates and returns the proxy card without indicating how the shareholder intends to vote, then if the shareholder confirms in the appropriate place on the proxy card that it is not Buyer or certain related parties, the shareholder’s shares will be voted “FOR” the merger proposal and “FOR” the adjournment proposal, in accordance with the recommendation of the Board, and if the shareholder does not confirm in the appropriate place on the proxy card that it is not Buyer or certain related parties, the shareholder’s shares will not be voted on the merger proposal or the adjournment proposal.
 
A shareholder of record returning a proxy may revoke it at any time prior to the commencement of the special general meeting by communicating such revocation in writing to us or by executing and delivering a later-dated proxy.  In addition, any registered shareholder who has executed a proxy and is present at the meeting may vote in person instead of by proxy, thereby canceling any proxy previously given, whether or not written revocation of such proxy has been given.  Any written notice revoking a proxy should be sent to us at our principal executive offices located at Tufin Software Technologies Ltd., 5 HaShalom Road, ToHa Tower, Tel Aviv 6789205, Israel, Attn: Ms. Noa Farkas Gluck, or via email to investors@tufin.com.  A beneficial owner who holds shares in a stock brokerage account or through a bank, broker or other nominee should follow the directions of, or contact, the bank, broker or nominee if he, she or it desires to revoke or modify previously submitted voting instructions.
 
ii

Required Vote
 
Provided that a quorum is present, 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.
 
Proposed Resolution
 
It is proposed that the following resolution be adopted at the special general meeting pursuant to the merger proposal:
 
RESOLVED, that pursuant to Section 320 of the Israeli Companies Law, 5759-1999 (the “Companies Law”), the merger of Talon Merger Sub Ltd., a company formed under the laws of the State of Israel (“Merger Sub”) and a direct wholly owned subsidiary of Talon MidCo 3 Limited, a private company incorporated in England and Wales (“Buyer”), with and into Tufin Software Technologies Ltd. (“Tufin”), including: (a) the Agreement and Plan of Merger, dated as of April 5, 2022 (as it may be amended from time to time, the “merger agreement”), by and among Tufin, Merger Sub and Buyer; (b) the merger transaction pursuant to Sections 314 through 327 of the Companies Law, whereby Merger Sub will merge with and into Tufin, with Tufin surviving and becoming a direct wholly owned subsidiary of Buyer (the “merger”); (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; (e) the cancellation of all outstanding vested equity awards in Tufin held by individuals who are not Board members in exchange for the merger consideration in accordance with the terms of the merger agreement; (f) the conversion of all outstanding unvested equity awards of Tufin held by individuals (and certain awards promised, but not yet granted, to individuals) who are not Board members into time-vesting cash awards in accordance with the terms of the merger agreement; and (g) all other transactions and arrangements contemplated by the merger agreement as described in the proxy statement, dated May 13, 2022, sent by Tufin to its shareholders in respect of this meeting, be, and each of the foregoing hereby is, approved in all respects by Tufin’s shareholders.”

Additionally, it is proposed that the following resolution be adopted at the special meeting pursuant to the adjournment proposal:

RESOLVED, that the meeting be adjourned to a later date or dates if the Board deems necessary or appropriate, including to solicit additional proxies if there are insufficient votes to approve the merger proposal at the time of the meeting.”

OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE PROPOSED RESOLUTIONS.
 
iii

ADDITIONAL SOURCES OF INFORMATION
 
This document incorporates important additional information about Tufin from documents that are not included in or delivered with this document.
 
Documents relating to Tufin incorporated by reference into this document are available from Tufin without charge, excluding exhibits.  You may obtain documents relating to Tufin which are incorporated by reference in this document, and may direct any questions about the merger or request additional copies of this document, by requesting them in writing or by telephone from:
 
Tufin Software Technologies Ltd.
5 HaShalom Road, ToHa Tower
Tel Aviv 6789205, Israel
Attention: Ms. Noa Farkas Gluck, General Counsel 
Phone: +972 (3) 612-8118
Email: investors@tufin.com

For a more detailed description of the information incorporated by reference into this document and how you may obtain it, see “Where You Can Find More Information” beginning on page 97.
 
iv

TABLE OF CONTENTS
 
1
9
11
The Companies
11
Tufin’s Reasons for the Merger; Recommendation of Tufin’s Board of Directors
11
Opinion of Tufin’s Financial Advisor
12
Interests of Certain Persons; Share Ownership of Tufin’s Directors and Executive Officers          
12
The Merger Agreement
14
Structure of the Merger
14
Consideration
14
Treatment of Options and RSUs Outstanding Under Our Equity Plans
14
The Special General Meeting of Tufin’s Shareholders
15
Conditions to the Closing of the Merger
15
Financing of the Merger
16
Termination of the Merger Agreement
19
No Solicitation of Acquisition Proposals
20
Termination Fees
20
Expenses
21
Absence of Appraisal Rights
21
Regulatory Approvals
21
Certain Material U.S. Federal and Israeli Income Tax Consequences
21
22
23
General; Date; Time and Place
23
Purpose of the Special General Meeting
23
Shareholders Entitled to Vote; Record Date
23
Recommendation of Tufin’s Board of Directors
23
Quorum and Voting
24
Voting Results
25
Voting of Proxies and Voting Instruction Forms
25
Revoking or Changing Your Vote
26
The Proxy
26
Required Vote for the Merger Proposal
26
Required Vote for the Adjournment Proposal
27
Share Ownership of Tufin Directors and Executive Officers
27
Solicitation of Proxies
27
Attending the Tufin Special General Meeting
27
Contact for Questions and Assistance in Voting
28
Other Matters
28
29
30
Background of the Merger
30
Reasons for Approval of the Merger
36

v

Opinion of Tufin’s Financial Advisor
41
Certain Unaudited Financial Projections
46
Interests of Certain of Tufin’s Executive Officers and Directors in the Merger
48
No Appraisal Rights
49
Effects of the Merger on Tufin Ordinary Shares
49
Effects of the Merger on Equity Plans
49
Delisting and Deregistration of Tufin Ordinary Shares
51
Procedures for Receiving the Merger Consideration
51
Certain Material U.S. Federal and Israeli Income Tax Consequences
51
Accounting Treatment of the Merger
59
Regulatory Matters
59
62
Explanatory Note Regarding the Merger Agreement
62
The Merger
62
Closing and Effective Time of the Merger
63
Articles of Association; Directors and Officers
63
The Merger Consideration and the Conversion of Share Capital
63
Treatment of Equity Awards
63
Paying Agent; Exchange Fund; Payment Procedures
65
Representations and Warranties
68
Conduct of Business Pending the Merger
72
The Go-Shop Period; Solicitation of Other Offers
75
The No-Shop Period; No Solicitation of Other Offers
77
The Board of Directors’ Recommendation; Company Board Recommendation Change
79
Employee Benefits
81
Efforts to Close the Merger
82
Financing; Cooperation with Debt Financing
82
Indemnification and Insurance
85
Other Covenants
85
Conditions to the Closing of the Merger
86
Financing of the Merger
87
Termination of the Merger Agreement
90
Specific Performance
92
Limitations of Liability
93
Fees and Expenses
93
Amendment
94
Governing Law
94
The Voting Agreements
94
95
97
A - 1
B - 1

vi

QUESTIONS AND ANSWERS ABOUT THE SPECIAL GENERAL MEETING AND THE MERGER
 
The following are some of the questions regarding the merger agreement, the merger and the special general meeting that you, as a shareholder of Tufin, may have, and answers to those questions.  These questions and answers, as well as the summary following the questions and answers, are not meant to be a substitute for the information contained in the remainder of this document, its annexes and the additional documents referred to herein, and this information is qualified in its entirety by the more detailed descriptions and explanations contained elsewhere in this document, its annexes and the additional documents referred to herein.  We urge you to carefully read this document in its entirety prior to making any voting decision regarding the merger.
 
Except as otherwise specifically noted in this proxy statement, “we,” “our,” “us” and similar words in this proxy statement refer to Tufin Software Technologies Ltd. and its subsidiaries.  In addition, we refer to Tufin Software Technologies Ltd. as “Tufin” or the “Company,” to Talon MidCo 3 Limited as “Buyer,” and to Talon Merger Sub Ltd. as “Merger Sub.” All references to the “merger” refer to the merger of Merger Sub with and into Tufin, so that Tufin will be the surviving company and will become a direct wholly owned subsidiary of Buyer, and all references to the “merger agreement” refer to the Agreement and Plan of Merger, dated as of April 5, 2022, as it may be amended from time to time, by and among Tufin, Buyer and Merger Sub, a copy of which is attached as Annex A to this proxy statement and is incorporated by reference herein.  Tufin, following the completion of the merger, is sometimes referred to in this proxy statement as the “surviving company.” All references to “dollars” or “$” refer to United States dollars.
 
Q:          Why am I receiving this proxy statement?
 
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.
 
Q:          When and where will the special general meeting be held?
 
A:
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.
 
Q:          Who is entitled to vote at the special general meeting?
 
A:
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.
 
Q:
What matters will be voted on at the special general meeting?
 
A:
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.”
 

You will also be asked to consider and vote on a 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.”
 
We do not currently expect there to be any other matters on the agenda at the meeting; however, if any other matter is properly presented at the meeting, including the adjournment or postponement thereof, the persons named in the enclosed proxy card will vote upon such matters in accordance with their discretion.
 
Q:
What will I receive in the merger?
 
A:
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.
 
Q:          What is the recommendation of the Board?
 
A:
The Board unanimously recommends that you vote (1) “FOR” the merger proposal and (2) “FOR” the adjournment proposal.
 
Q:          What vote of Tufin shareholders is required to complete the merger?
 
A:
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.
 
Q:          What is the quorum required for the meeting?
 
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.
 
Q:          When do you expect the merger to be completed?
 
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.
 
2

Q:          Am I entitled to appraisal rights?
 
A:
No. Under Israeli law, holders of Tufin ordinary shares are not entitled to statutory appraisal rights in connection with the merger.
 
Q:
Will I continue to be able to trade my Tufin ordinary shares on the New York Stock Exchange following the special general meeting?
 
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.
 
Q:          What will happen to outstanding Tufin options and RSUs?
 
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”).
 
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 Tufin Option (other than a Tufin Option held by a non-employee director of Tufin) that is outstanding immediately prior to the effective time of the merger and that is scheduled to vest after the closing date of the merger (as of immediately prior to the effective time of the merger), will be automatically canceled and converted into a contingent right to receive an amount in cash (without interest) (“Contingent Cash Award”) equal to the Option Consideration with respect to such Tufin Option.  Such Contingent Cash Award will (A) in the case of any portion of such Contingent Cash Award relating to a Tufin Option that would have otherwise vested on or prior to December 31, 2022, 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 with or service to Buyer and its affiliates (including the surviving company and its subsidiaries) though the applicable vesting dates, and (B) in the case of any portion of such Contingent Cash Award relating to a Tufin Option that would have otherwise vested following December 31, 2022, 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 with or service to Buyer and its affiliates (including the surviving company and its subsidiaries) through the applicable accelerated vesting date.  Except as set forth above, each such Contingent Cash Award will remain subject to the same terms and conditions as were applicable to the Tufin Option from which it was converted immediately prior to the effective time of the merger (except for any terms rendered inoperative by reason of the transactions contemplated by the merger agreement or other ministerial changes).
 
At the effective time of the merger and without any action on the part of Buyer, Merger Sub, Tufin, or the holder thereof, each Tufin Option held by a non-employee director of Tufin that is unvested and outstanding immediately prior to the effective time of the merger will, in each case, be canceled and converted into the right to receive an amount in cash, without interest, equal to the Option Consideration with respect to such Tufin Option.
 
Notwithstanding the foregoing, at the effective time of the merger and without any action on the part of Buyer, Merger Sub, Tufin, or the holder thereof, any Tufin Option (vested or unvested) that has a per share exercise price that is equal to or greater than $13.00 will be automatically canceled without payment of any consideration.
 
3

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 RSU that is vested and outstanding immediately prior to the effective time of the merger will be automatically canceled in exchange for the right of the holder thereof to receive a cash payment equal to the product of  (a) $13.00 and (b) the number of Tufin ordinary shares covered by such RSU, less applicable withholding taxes (the “RSU Consideration”).
 
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 (i) RSU award (other than, in each case, a RSU award held by non-employee director of Tufin) that is outstanding and unvested immediately prior to the effective time of the merger will be automatically canceled, and (ii) potential award of 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 be voided at the effective time of the merger, in each case, and converted into a contingent right to receive a Contingent Cash Award equal to the RSU Consideration with respect to such RSU award or Deemed RSU.  Such Contingent Cash Award will (A) in the case of any portion of such Contingent Cash Award relating to a RSU award or Deemed RSU that would have otherwise vested on or prior to December 31, 2022, vest and become payable pursuant to the same vesting schedule applicable to the RSU award or Deemed RSU from which it was converted, subject to the holder’s continued employment with or service to Buyer and its affiliates (including the surviving company and its subsidiaries) though the applicable vesting dates and (B) in the case of any portion of such Contingent Cash Award relating to a RSU award or Deemed RSU that would have otherwise vested following December 31, 2022, vest and become payable as of the applicable accelerated vesting date, subject to the holder’s continued employment with Buyer and its affiliates (including the surviving company and its subsidiaries) through the applicable accelerated vesting date.  Except as set forth above, each such Contingent Cash Award will remain subject to the same terms and conditions as were applicable to the RSU award or Deemed RSU from which it was converted immediately prior to the effective time of the merger (except for any terms rendered inoperative by reason of the transactions contemplated by the merger agreement or other ministerial changes).
 
At the effective time of the merger, each RSU award held by a non-employee director of Tufin that is unvested and outstanding immediately prior to the effective time of the merger will, in each case, without any action on part of Buyer, Merger Sub, Tufin or the holder thereof, automatically be canceled and converted into the right to receive an amount in cash, without interest, equal to the RSU Consideration with respect to such RSU award.
 
Q:
What effects will the proposed merger have on Tufin?
 
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.
 
Q:          What happens if the merger is not completed?
 
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.
 
4

Q:          How can I vote?
 
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).
 
Alternatively, if you wish to attend the special general meeting and vote in person, you must obtain a “legal proxy” from the bank, broker or other nominee that holds your shares, giving you the right to vote the shares at the special general meeting.  In that case, you must also bring a statement from your bank, broker or other nominee that shows that you owned Tufin ordinary shares as of the record date.
 
Registered Shareholders: If you are a shareholder of record, that is, if your shares are registered directly in your name with our transfer agent, American Stock Transfer & Trust Company, LLC (the “transfer agent”), these proxy materials are being sent directly to you by our transfer agent.  You can vote your shares by attending the special general meeting or by completing and signing a proxy card.  The form of proxy card that has been mailed to you, and that can be completed, signed and returned in the envelope that was enclosed with it, provides the primary means for authorizing the voting of your Tufin ordinary shares.  If you have lost or misplaced the proxy card mailed to you, you may print a copy of the proxy card from the Investor Relations page on Tufin’s website at https://investors.tufin.com, and may complete and sign that proxy card (indicating the name of the registered shareholder) and return it to Ms. Noa Farkas Gluck, General Counsel via e-mail to investors@tufin.com.  We reserve the right to require further identifying information from you if you submit your proxy card in that manner.
 
All votes from record shareholders should be received by our proxy tabulator, Broadridge Financial Solutions, Inc., by 11:59 p.m. Eastern Time on June 6, 2022 (i.e., 6:59 a.m. Israel Time on June 7, 2022) (or such earlier deadline as may be indicated on the proxy card), or received at our offices at least four hours prior to the designated time for the special general meeting (i.e., by 2:00 p.m. Israel Time (7:00 a.m. Eastern Time) on June 7, 2022) to be validly included in the tally of Tufin ordinary shares voted at the special general meeting.
 
Q:
What happens if I do not indicate how to vote on the proxy card or voting instruction form?
 
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.
 
5

Q:
If my shares are held in “street name” by my bank, broker or other nominee, will my broker vote my shares for me?
 
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.
 
Q:
Do Tufin’s executive officers and directors have any interests in the merger?
 
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.
 
Q:
Can I change my vote after I have signed and returned my proxy card or voting instruction form?
 
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)).
 
Registered Shareholders: Registered shareholders may revoke the authority granted by their execution of proxies at any time before the effective exercise thereof by filing with us a written notice of revocation or duly executed proxy bearing a later date, or by voting in person at the special general meeting.  Shares represented by any proxy in the enclosed form (including a proxy serving as revocation of an earlier proxy), or shares that are subject to a written revocation, if the proxy or revocation is properly executed and received by our proxy tabulator, Broadridge Financial Solutions, Inc., by 11:59 p.m. Eastern Time on June 6, 2022 (i.e., 6:59 a.m. Israel Time on June 7, 2022), or received at our offices at least four hours prior to the designated time for the special general meeting (i.e., by 2:00 p.m. Israel Time (7:00 a.m. Eastern Time) on June 7, 2022) will be voted (or not voted, as appropriate) as indicated therein with respect to the merger proposal and the adjournment proposal and as determined by the Board concerning any other matter that may be presented to the special general meeting, as described above.
 
Q:
If I purchased my Tufin ordinary shares after the record date, may I vote these shares at the Tufin special general meeting?
 
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.
 
Q:          What happens if I sell my shares before the special general meeting?
 
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?
 
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.
 
Q:          Will the merger consideration payable to me be subject to Israeli tax withholding?
 
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.
 
We intend to submit an application for a tax ruling issued by the ITA, providing, among others, that non-Israeli shareholders who hold less than 5% of the issued and outstanding Tufin ordinary shares and which were purchased after April 9, 2019 (the date on which Tufin listed its shares on the NYSE) will be exempted from Israeli withholding tax to the extent that such shareholders provide the paying agent with certain declarations and supporting documents regarding their residency and the date on which the shares were purchased.  In addition, shareholders whose consideration exceeds a certain threshold may be required to provide certain additional supporting documents such as residency certificates.  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.
 
Q:
Will the merger consideration paid to U.S. holders of Tufin ordinary shares be subject to U.S. federal income tax?
 
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.”
 
Q:
Will the merger consideration paid to Israeli holders of Tufin ordinary shares be subject to Israeli tax?
 
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:          How can I obtain additional information about Tufin?
 
Our Annual Report on Form 20-F and other SEC filings may be accessed on the Internet at www.sec.gov or on the investor relations page of Tufin’s website at https://investors.tufin.com.  The information provided on our website is not part of this proxy statement and therefore is not incorporated by reference herein.  For a more detailed description of the information available, please refer to “Where You Can Find Additional Information.
 
Q:
What should I do if I have questions about the special general meeting, the merger or this document?
 
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:
 
Tufin Software Technologies Ltd.
5 HaShalom Road, ToHa Tower
Tel Aviv 6789205, Israel
Attention: Ms. Noa Farkas Gluck, General Counsel 
Phone: +972 (3) 612-8118
Email: investors@tufin.com

If your bank, broker or other nominee holds your shares, you may also call your bank, broker or other nominee for additional information.
 
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RISK FACTORS
 
In addition to the other information included in this proxy statement, including the matters addressed under the caption entitled “Cautionary Statement Regarding Forward-Looking Statements” on page 22, you should consider carefully the following risk factors in determining how to vote at the special general meeting.  The following is not intended to be an exhaustive list of the risks related to the merger and you should read and consider the risk factors described under Part 1, Item 3.D, “Key Information—Risk Factors” of Tufin’s Annual Report on Form 20-F for the year ended December 31, 2021, filed with the SEC on March 7, 2022 and incorporated by reference into this proxy statement.
 
The merger may not be completed, due to the failure of the parties to achieve the closing conditions or otherwise; such a failure could negatively impact our share price, business, financial condition, results of operations or prospects.
 
The merger is subject to the satisfaction or waiver of certain closing conditions described in the section entitled “The Merger Agreement—Conditions to the Closing of the Merger” beginning on page 86, including, among others, that:
 

the merger agreement has been adopted by the requisite affirmative vote of Tufin shareholders;
 

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;
 

no laws or court orders make the merger illegal or otherwise prohibit the merger; and
 

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.
 
No assurance can be given that each of the conditions will be satisfied.  In addition, the merger agreement may be terminated under the circumstances described in the section entitled “The Merger Agreement—Termination of the Merger Agreement” beginning on page 90.  If the conditions are not satisfied or waived in a timely manner and the merger is delayed, payment of the merger consideration will also be delayed.
 
If the merger is not completed (including in the case the merger agreement is terminated), our ongoing business may be adversely affected.  Under such a scenario, our directors, senior management and other employees will have expended extensive time and effort and will have experienced significant distractions from their work, and we will have incurred significant transaction costs, during the pendency of a failed transaction.  In addition, our continuing business relationships with business partners and employees, and the market’s perceptions of our prospects, could be adversely affected, which could have a material adverse impact on the trading price of Tufin ordinary shares.
 
We also could be subject to litigation related to any failure to complete the merger.  If these risks materialize, our financial condition, results of operations or prospects could be materially adversely affected.
 
Some of our directors and officers have interests that may differ from the interests of our shareholders, and these persons may have conflicts of interest in recommending to our shareholders to approve the merger proposal.
 
Certain of Tufin’s officers and directors may have interests in the transactions contemplated by the merger agreement that are different from, or are in addition to, those of Tufin’s other shareholders.  Such interests are described in the section entitled “The Merger—Interests of Certain of Tufin’s Executive Officers and Directors in the Merger” beginning on page 48.  These interests include, among other things, the purchase of a run-off directors’ and officers’ liability insurance policy for a period of seven years, and the payment of cash consideration in exchange for unvested equity awards.
 
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The fact that there is a merger pending could materially harm our business and results of operations.
 
While the merger is pending, we are subject to a number of risks that may harm our business and results of operations, including:
 

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;
 

potential diversion of public attention from our promotion of our brand and products in a manner that appeals to new and existing customers;
 

the fact that we have and will continue to incur expenses related to the merger prior to its closing; and
 

our potential inability to respond effectively to competitive pressures, industry developments and future opportunities.
 
Our current and prospective employees may be uncertain about their future roles and relationships with Tufin following the completion of the merger.  This uncertainty may materially adversely affect our ability to attract and retain key personnel.
 
Our obligation to pay a termination fee under certain circumstances and the restrictions on our ability to solicit or engage in negotiations with respect to other potential acquisition proposals may discourage other potential transactions that may be favorable to our shareholders.
 
If Tufin terminates the merger agreement to enter into a definitive agreement with any Exempted Person (as defined in this proxy statement below) prior to May 15, 2022 in respect to a Superior Proposal (as defined in this proxy statement below), Tufin will be required to pay a termination fee of $10.0 million to Buyer, so long as Tufin had complied in all material respects with the non-solicitation provisions set forth in the merger agreement with respect to such Superior Proposal.  For more information, please see the section of this proxy statement entitled “The Merger AgreementThe Board of Directors’ Recommendation; Company Board Recommendation Change.” Similarly, Tufin will be required to pay a termination fee of $17.2 million if the merger agreement is terminated in any of the following conditions: (A) (i) (a) by either Buyer or Tufin because the merger has not been consummated by 11:59 Eastern time on October 5, 2022 (such date referred to as 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 (as defined in this proxy statement below) 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%”); (B) by Buyer, because the Board has effected a Company Board Recommendation Change; or (C) 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 (as defined in this proxy statement below).
 
If the merger is not consummated by the Termination Date, subject to certain exceptions, either we or Buyer may, under certain circumstances that may be beyond our control, choose not to proceed with the merger.
 
The merger is subject to the satisfaction or waiver of certain closing conditions described in the section entitled “The Merger Agreement—Conditions to the Closing of the Merger” beginning on page 86 and set forth in the merger agreement.  The fulfillment of certain of these conditions is beyond our control, such as the receipt of our shareholders’ approval of the merger, the expiration or termination of the waiting period under the United States Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder (the “HSR Act”); approvals, consents and waivers or clearances have been received or waiting periods have expired under certain foreign investment laws; and the receipt of approval from the Israeli Investment Center of the Israeli Ministry of Economy and Industry.  If the merger has not been completed by the Termination Date, either Tufin or Buyer may generally terminate the merger agreement, notwithstanding the prior receipt of the approval of the merger by Tufin’s shareholders, except that the right to terminate the merger agreement would not be available to a party that is in material breach of the merger agreement or whose actions or omissions, which constitute a breach of the merger agreement, are a principal cause of, or primarily result in, the failure of the merger to be completed on or before that date.

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SUMMARY
 
This summary highlights selected information from this document and may not contain all of the information that is important to you.  To understand the merger fully, you should read carefully this entire document, its annexes and the documents we refer to.  See “Where You Can Find More Information.” The merger agreement is attached as Annex A to this proxy statement and is incorporated by reference herein.  We encourage you to read it in its entirety, as it is the most important legal document that governs the merger.
 
The Companies
 
Tufin Software Technologies Ltd.
 
5 HaShalom Road, ToHa Tower, Tel Aviv 6789205, Israel
 
We are pioneering a policy-centric approach to security and information technology (“IT”) operations.  We transform enterprises’ security operations by helping them visualize, define and enforce a unified security policy across complex, heterogeneous IT and cloud environments.  Our products govern how individuals, systems and applications are permitted to communicate and provide policy-based security automation, enabling customers to reduce the time to securely implement complex network changes from days to minutes.  Our solutions increase business agility, eliminate errors from manual processes and ensure continuous compliance through a single console.  Since our inception, our solutions have been purchased by over 2,000 customers in over 70 countries, including approximately 19% of the Global 2000.
 
Talon MidCo 3 Limited
 
 SW1Y 4LB, London, England
 
Buyer was formed on March 28, 2022, solely for the purpose of engaging in the transactions contemplated by the merger agreement, and has not engaged in any business activities other than in connection with the transactions contemplated by the merger agreement and arranging of the equity financing and debt financing in connection with the merger.
 
Talon Merger Sub Ltd.
 
 18 Raoul Wallenberg Street, Tel Aviv, Israel
 
Merger Sub is a newly formed, wholly owned subsidiary of Buyer.  Buyer formed this subsidiary as an Israeli company solely to effect the merger, and this subsidiary has not conducted any business during any period of its existence, except for activities related to its formation and activities undertaken in connection with the transactions contemplated by the merger agreement.  Upon consummation of the merger, Merger Sub will merge with and into Tufin and will cease to exist.
 
Buyer and Merger Sub are subsidiaries of investment funds (the “T/R Funds”) advised by Turn/River Capital Management LP, a U.S.-based private equity firm (“Turn/River”).
 
See “The Companies.
 
Tufin’s Reasons for the Merger; Recommendation of Tufin’s Board of Directors
 
After careful consideration, the Board has:
 

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;
 

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;
 

11

 

approved the merger agreement, the merger and the other transactions contemplated by the merger agreement; and
 

determined to recommend that Tufin’s shareholders approve the merger agreement, the merger and the other transactions contemplated by the merger agreement.
 
The Board unanimously recommends that you vote (1) “FOR” the merger proposal and (2) “FOR” the adjournment proposal.
 
In reaching its decision to approve the merger proposal and to recommend that Tufin shareholders vote to approve the merger proposal, the Board consulted with Tufin’s management and Tufin’s financial and legal advisors and considered a number of strategic, financial and other factors, as described under “The Merger—Reasons for Approval of the Merger—Recommendation.”
 
Opinion of Tufin’s Financial Advisor
 
Pursuant to an engagement letter, Tufin retained J.P. Morgan Securities LLC (“J.P. Morgan”) as its financial advisor in connection with the proposed merger.
 
At the meeting of the Board on April 5, 2022, J.P. Morgan rendered its oral opinion to the Board that, as of such date 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.  J.P. Morgan confirmed its April 5, 2022 oral opinion by delivering its written opinion to the Board, dated April 5, 2022, that, as of such date, the 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.
 
The full text of the written opinion of J.P. Morgan dated April 5, 2022, which sets forth, among other things, the assumptions made, matters considered and limits on the review undertaken, is attached as Annex B to this proxy statement and is incorporated herein by reference.  The summary of the opinion of J.P. Morgan set forth in this proxy statement is qualified in its entirety by reference to the full text of such opinion.  Tufin shareholders are urged to read the opinion in its entirety.
 
J.P. Morgan’s written opinion was addressed to the Board (in its capacity as such) in connection with and for the purposes of its evaluation of the proposed merger, was directed only to the consideration to be paid in the proposed merger and did not address any other aspect of the proposed merger.  J.P. Morgan expressed no opinion as to the fairness of the consideration to the holders of any other class of securities, creditors or other constituencies of Tufin or as to the underlying decision by Tufin to engage in the proposed merger.  The issuance of J.P. Morgan’s opinion was approved by a fairness committee of J.P. Morgan.  The opinion does not constitute a recommendation to any shareholder of Tufin as to how such shareholder should vote with respect to the proposed merger or any other matter.
 
For more information, please see the section of this proxy statement entitled “The Merger—Opinion of Tufin’s Financial Advisor.”
 
Interests of Certain Persons; Share Ownership of Tufin’s Directors and Executive Officers
 
When considering the recommendation by the Board to vote “FOR” the merger proposal, you should be aware that executive officers and directors of Tufin have interests in the merger that are in addition to, and may be different from, your interests, including:
 
Treatment of Equity Awards
 

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”).
 

12



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).
 

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.
 

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 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).
 

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.
 
Indemnification and Insurance.
 

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.
 

13

 
As of the record date for the special general meeting, the directors and executive officers of Tufin, as a group, beneficially owned in the aggregate approximately 12.3% of the outstanding Tufin ordinary shares.  See “—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.
 
The Merger Agreement
 
The merger agreement is attached as Annex A to this proxy statement and is incorporated by reference herein.  You should read the merger agreement carefully in its entirety.  It is the most important legal document governing the merger.  See “The Merger Agreement.
 
Structure of the Merger
 
The merger is being effected as a merger between Tufin and Merger Sub under the Companies Law.  In the merger, Merger Sub, a direct wholly owned subsidiary of Buyer, will be merged with and into Tufin.  Tufin will be the surviving company of the merger and will become a direct wholly owned subsidiary of Buyer.  See “The Merger Agreement—The Merger.”
 
Consideration
 
If the merger is completed, each holder of Tufin ordinary shares at the effective time of the merger will be entitled to receive $13.00 per Tufin ordinary share in cash, without interest and less any applicable withholding taxes (the “merger consideration”).  See “The Merger—Effects of the Merger on Tufin Ordinary Shares,” and “The Merger Agreement—The Merger Consideration and the Conversion of Share Capital.
 
Treatment of Options and RSUs Outstanding Under Our Equity Plans
 
As of the effective time of the merger, our existing equity plans will terminate, and all rights under any provision of any other plan, program or arrangement providing for the issuance or grant of any other interest in respect of the share capital of Tufin or any of its subsidiaries will be canceled.
 
At the effective time of the merger, each vested Tufin Option (including any Tufin Option that vests in connection with the consummation of the merger pursuant to its terms) will be canceled in exchange for the holder’s right to receive the Option Consideration, and each vested Tufin RSU will be canceled in exchange for the holder’s right to receive the RSU Consideration.  In addition, at the effective time of the merger, each unvested Tufin Option held by a Tufin non-employee director will be canceled in exchange for such non-employee director’s right to receive the Tufin Option Consideration, and each unvested Tufin RSU held by a Tufin non-employee director will be canceled in exchange for such non-employee director’s right to receive the RSU Consideration.
 
In addition, at the effective time of the merger, each unvested Tufin Option (other than any Tufin Option held by a Tufin non-employee director), each unvested Tufin RSU (other than any Tufin RSU held by a Tufin non-employee director), and each Deemed RSU shall be canceled and converted into a Contingent Cash Award.  Each Contingent Cash Award in respect of a Tufin Option will entitle the holder to a future contingent right to receive the Option Consideration for the Tufin Option from which it was converted, and each Contingent Cash Award in respect of a converted Tufin RSU or Deemed RSU will entitle the holder to a future contingent right to receive the RSU Consideration for the Tufin RSU or Deemed RSU from which it was converted.  Any portion of a Contingent Cash Award 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, Tufin RSU, or Deemed RSU (as applicable) 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 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, Tufin RSU or Deemed RSU, as applicable (subject to the holder’s continued employment or service with Tufin or one of its subsidiaries or affiliates through the applicable accelerated vesting date).
 

14

 
Notwithstanding the foregoing, if the exercise price per Tufin ordinary share subject to any Tufin Option is equal to or greater than $13.00, such Tufin Option will be canceled for no consideration upon the consummation of the merger.  See “The Merger—Effects of the Merger on Equity Plans.”
 
The Special General Meeting of Tufin’s Shareholders
 
Date, Time, Place and Agenda.  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.  The meeting is being held for the purpose of considering proposals to approve the acquisition of Tufin by Buyer, including approval of the merger proposal and the adjournment proposal.
 
We do not currently expect there to be any other matters on the agenda at the special general meeting; however, if any other matter is properly presented at the special general meeting, including voting on the adjournment or postponement of the special general meeting, the persons named in the enclosed proxy card will vote upon such matters in accordance with their discretion.
 
Record Date.  Tufin has fixed May 9, 2022 as the record date for the special general meeting.  If you were a Tufin shareholder at the close of business on the record date, you are entitled to vote on matters that come before the Tufin special general meeting.  There are 38,495,358 Tufin ordinary shares entitled to be voted at the special general meeting.
 
Required Vote.  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.  See “The Special General Meeting.
 
Conditions to the Closing of the Merger
 
The parties will complete the merger only if the parties satisfy or waive several conditions.  The conditions include, among others:
 
Conditions to Each Party’s Obligations.
 

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, 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.
 

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Conditions to Buyer’s and Merger Sub’s Obligations.
 

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.
 
Conditions to Tufin’s Obligations.
 

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.
 
See “The Merger Agreement—Conditions to the Closing of the Merger.”
 
Financing of the Merger
 
Tufin anticipates that the total amount of funds necessary to complete the merger and the related transactions, and to pay the fees and expenses required to be paid at the closing of the merger by Buyer and Merger Sub under the merger agreement, will be approximately $570.0 million.  This amount includes funds needed to: (1) pay Tufin shareholders the amounts due under the merger agreement for their Tufin ordinary shares, (2) pay the RSU Consideration, (3) pay the Option Consideration and (4) to pay all associated fees, costs and expenses of Buyer and Merger Sub arising in connection with the merger (collectively, the “required amounts”).
 
The T/R Funds have committed to contribute or cause to be contributed to Buyer at the closing of the Merger an aggregate amount in cash equal to $360.0 million, subject to the terms and conditions set forth in an equity commitment letter provided by such funds, dated as of April 5, 2022 (the “equity commitment letter”).  In addition, in connection with the merger agreement, Merger Sub entered into a debt commitment letter, dated as of April 5, 2022, in an aggregate principal amount of $210.0 million (as amended, supplemented, amended and restated or otherwise modified, the “debt commitment letter” and together with the equity commitment letter, the “financing letters”).  In connection with the merger agreement, Buyer and Merger Sub have delivered to Tufin copies of the financing letters.  Notwithstanding anything in the merger agreement to the contrary, in no event shall the receipt or availability of any funds or financing (including the financing contemplated by the financing letters) by or to Buyer or any of its affiliates or any other financing transaction be a condition to any of the obligations of Buyer and Merger Sub under the merger agreement.
 
Equity Financing
 
Pursuant to the equity commitment letter, the T/R Funds have committed to contribute or cause to be contributed to Buyer at the closing of the merger an aggregate amount in cash equal to $360.0 million for the purpose of funding the required amounts.  The obligations of the T/R Funds to provide the equity financing under the equity commitment letter is subject to a number of conditions, including, but not limited to: (i) satisfaction or written waiver by Tufin, Buyer and Merger Sub, as applicable, of each of the conditions to the obligations of Tufin, Buyer and Merger Sub to consummate the merger set forth in the merger agreement (other than those conditions that by their terms are to be satisfied at the closing of the merger, but subject to the satisfaction or waiver (to the extent permitted hereunder) of such conditions) and (ii) the prior or substantially concurrent receipt of the debt financing contemplated by the debt commitment letter or confirmation that the debt financing contemplated by the debt commitment letter will be funded at the closing of the merger if the equity financing under the equity commitment letter is consummated at the closing of the merger.  The equity financing described in the preceding sentence is referred to as the “equity financing.”


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The obligation of the T/R Funds to fund the equity commitment will automatically and immediately terminate upon the earliest to occur of: (i) the consummation of the closing of the merger and the payment by Buyer required amounts, (ii) the valid termination of the merger agreement in accordance with its terms, (iii) a court declining to specifically enforce the obligations of Buyer to consummate the merger pursuant to a claim for specific performance brought against Buyer in accordance with the merger agreement, or (iv) the assertion of a claim or legal proceeding by Tufin or any of its affiliates or any of their representatives (as defined in the equity commitment letter), under or in respect of the merger agreement, the guarantee (as defined below) or the transactions contemplated thereby against Buyer, the T/R Funds, or any of their affiliates, subject to the exceptions, terms and conditions of the merger agreement, the equity commitment letter and the guarantee.
 
Tufin is an express third-party beneficiary of the equity commitment letter solely with respect to enforcing Buyer’s right to cause the commitment under the equity commitment letter by the T/R Funds to be funded to Buyer in accordance with the equity commitment letter, and to cause Buyer to enforce its rights against the T/R Funds to perform its funding obligations under the equity commitment letter, in each case subject to (i) the limitations and conditions set forth in the equity commitment letter and (ii) the terms and conditions of the merger agreement.
 
Debt Financing
 
The debt commitment letter provides that the lenders party thereto will provide, upon the terms and subject to the conditions set forth in the debt commitment letter, in the aggregate $210.0 million in debt financing, consisting of the following:
 

$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 debt financing described above is referred to as the “debt financing.” The proceeds of the debt financing borrowed on the closing date will be used on the closing date (i) to finance (or to replenish balance sheet cash used to finance) a portion of the required amounts on the closing date of the merger and to pay fees, premiums, expenses and other transaction costs incurred in connection therewith, (ii) for working capital purposes and to cash collateralize any existing letters of credit (if any) of Tufin or its subsidiaries permitted to remain outstanding after the closing date pursuant to the merger agreement (iii) for other general corporate purposes, (iv) to finance purchase price adjustments under the merger agreement (if any) and (v) to fund any other payments contemplated by the merger agreement.
 
The obligations of the lenders party to the debt commitment letter to provide the debt financing under the debt commitment letter are subject to the following conditions:
 

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;
 

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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).
 
As of the date hereof, the documentation governing the debt financing contemplated by the debt commitment letter has not been finalized and, accordingly, the actual terms of the debt financing may differ from those described in this proxy statement.
 
Guarantee
 
Pursuant to the limited guaranty delivered by the T/R Funds in favor of Tufin, dated as of April 5, 2022 (the “guarantee”), the T/R Funds have collectively agreed to guarantee the due and punctual payment of: (i) the aggregate amount of the Buyer Termination Fee (as defined under the caption “The Merger Agreement—Termination of the Merger Agreement—Termination Fee”) solely if and when any of the Buyer Termination Fee is payable pursuant to the merger agreement; (ii) enforcement expenses due by Buyer pursuant to legal proceedings as a result of certain defaults under the merger agreement, not to exceed $1.5 million in the aggregate; and (iii) the reimbursement obligations of Buyer pursuant to the indemnification obligations to Tufin and its representatives in connection with debt financing as well as other specified fees and expenses.  The obligations set forth in the preceding sentence are referred to as the “guaranteed obligations.” The obligations of the T/R Funds under the guarantee are subject to an aggregate cap equal to $36.9 million.
 
Subject to specified exceptions, the guarantee will terminate upon the earliest of:
 

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.
 
See “The Merger Agreement—Financing of the Merger.”
 

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Termination of the Merger Agreement
 
Buyer and Tufin may terminate the merger agreement by mutual written agreement at any time prior to the effective time of the merger, notwithstanding the prior receipt of the approval of the merger by Tufin’s shareholders.  In addition, either Buyer or Tufin may terminate the merger agreement if any of the following occurs:
 

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.
 
In addition, Tufin may terminate the merger agreement 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 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.
 
Buyer may terminate the merger agreement 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 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.  See “The Merger Agreement—Termination of the Merger Agreement.”
 
 
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No Solicitation of Acquisition Proposals
 
The merger agreement contains detailed provisions restricting Tufin’s right to solicit acquisition proposals.  See “The Merger Agreement—The Go-Shop Period; Solicitation of Other Offers” and “The Merger Agreement—The No-Shop Period; No Solicitation of Other Offers.”
 
Termination Fees
 
Buyer will be entitled to receive a termination fee of $10.0 million if Tufin terminates the merger agreement to enter into a definitive agreement with any Exempted Person prior to the Cut-Off Time in respect of a Superior Proposal.
 
Buyer will be entitled to receive a termination fee of $17.2 million from Tufin if the merger agreement is terminated:
 

(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.
 
Tufin will be entitled to receive a termination fee of $34.4 million from Buyer (the “Buyer Termination Fee”) if the merger agreement is terminated:
 

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.
 
See “The Merger Agreement—Termination Fees.

 
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Expenses
 
All fees and expenses incurred in connection with the merger agreement and the transactions contemplated by the merger agreement will be paid by the party or parties incurring such fees and expenses, whether or not the merger is consummated.  See “The Merger Agreement—Fees and Expenses.”
 
Absence of Appraisal Rights
 
Under Israeli law, holders of Tufin ordinary shares are not entitled to statutory appraisal rights in connection with the merger.
 
Regulatory Approvals
 
Under the merger agreement, Buyer and Tufin are required to (a) file the Notification and Report Form with the Federal Trade Commission (the “FTC”) and the Antitrust Division of the United States Department of Justice (the “DOJ”), as required by the HSR Act, as promptly as reasonably practicable after April 5, 2022 and no later than 10 business days (as defined in the merger agreement) following April 5, 2022 and (b) file with the applicable governmental authorities the requisite foreign investment filings in France, Germany, and Romania as promptly as reasonably practicable after April 5, 2022 and in any event before the expiration of any applicable legal deadline.  Each of Buyer and Tufin are furthermore required to (w) cooperate and coordinate with one other in the making of such filings, (x) supply the other with any information that may be required in order to make such filings, (y) supply any additional information that reasonably may be required or requested by the FTC, the DOJ, or the applicable governmental authorities of any jurisdiction in which a filing is made under the foreign investment laws and (z) use reasonable best efforts to take all action necessary to cause the expiration or termination of the applicable waiting periods under the HSR Act, and to obtain any other approvals, clearances or expirations of waiting periods under the foreign investment laws of France, Germany, and Romania, and to avoid any impediment to the consummation of the merger under any antitrust laws or foreign investment laws, including using reasonable best efforts to take all such action as reasonably may be necessary to resolve such objections, if any, as the FTC, the DOJ, or any other governmental authority or person may assert under any applicable antitrust laws or foreign investment laws with respect to the merger.  Pursuant to the requirements of the HSR Act, the required Notification and Report Forms with respect to the merger were filed with the DOJ and the FTC on April 20, 2022, and the 30-calendar day waiting period with respect to the merger commenced on April 20, 2022.  See “The Merger—Regulatory Matters.”
 
Certain Material U.S. Federal and Israeli Income Tax Consequences
 
The receipt by a U.S. holder of cash in exchange for Tufin ordinary shares in connection with the merger will be a taxable transaction for U.S. federal income tax purposes.  Generally, a U.S. holder will recognize gain or loss equal to the difference between the amount of cash it receives in connection with the merger and its aggregate adjusted tax basis in Tufin ordinary shares that it exchanges therefor.  The sale of shares, including shares received upon exercise or settlement, respectively, of Tufin Options, RSUs or Deemed RSUs in connection with or following the merger may also be subject to Israeli taxes.
 
See the section of this proxy statement entitled “The Merger—Certain Material U.S. Federal and Israeli Income Tax Consequences” for a summary discussion of certain material U.S. federal income tax consequences in connection with the merger and certain material Israeli tax consequences in connection with the merger.  You should consult your tax advisor about the particular tax consequences of the merger to you.


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CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS
 
This document and the documents incorporated by reference into this document contain forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.  These forward-looking statements include, without limitation, statements contained in the sections of this proxy statement entitled “Questions and Answers about the Merger,” “Summary” and “The Merger” and in statements containing words such as “believes,” “estimates,” “anticipates,” “intends,” “continues,” “contemplates,” “expects,” “may,” “will,” “could,” “should” or “would” or other similar words or phrases.  These statements, which are based on information currently available to us, are not guarantees and involve risks and uncertainties that could cause actual results to materially differ from those expressed in, or implied by, these statements.  These forward-looking statements speak only as of the date on which the statements were made and we expressly disclaim any obligation to release publicly any updates or revisions to any forward-looking statement included in this document or elsewhere.  In addition to other factors and matters contained or incorporated in this document, these statements are subject to risks, uncertainties and other factors, including, among others:
 

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.
 
Because these forward-looking statements involve risks and uncertainties, actual results could differ materially from those expressed or implied by the forward-looking statements in this document and the documents incorporated by reference into this document.  The business, financial condition or results of operations of Tufin—whether prior to or following its acquisition by Buyer—could be materially adversely affected by any of these factors.  Tufin does not undertake any obligation to revise or update any forward-looking statements to reflect any event or circumstance that arises after the date of this document, except as required by law.  The cautionary statements made in this document should be read as being applicable to all related forward-looking statements wherever they appear in this document and the documents incorporated by reference into this document.
 
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THE SPECIAL GENERAL MEETING
 
General; Date; Time and Place
 
This document is furnished in connection with the solicitation of proxies by the Board for use at Tufin’s special general meeting.  The special general meeting will be held at the principal executive offices of Tufin, located at 5 HaShalom Road, ToHa Tower, Tel Aviv 6789205, Israel, on June 7, 2022 at 6:00 p.m. Israel Time (11:00 a.m. Eastern Time), unless it is postponed or adjourned.
 
Purpose of the Special General Meeting
 
At the special general meeting, holders of Tufin ordinary shares will be asked to consider and approve the acquisition of Tufin by Buyer, through a reverse triangular merger, and in connection therewith you will be asked to vote for the 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.”
 
You also will be asked to consider and, as applicable, vote upon, any other business that may properly come before the special general meeting or any adjournment or postponement of the special general meeting, including voting on the adjournment or postponement of such meetings.  Tufin currently does not contemplate that any other matters will be considered at the special general meeting.
 
Shareholders Entitled to Vote; Record Date
 
Shareholders of record who held Tufin ordinary shares at the close of business on May 9, 2022 (the “record date”) are entitled to vote at the special general meeting.  Shareholders who, as of the record date, held Tufin ordinary shares in a stock brokerage account or through a bank, broker or other nominee which is a shareholder of record of Tufin or which appears in the participant list of a securities depository, are considered to be beneficial owners of shares held in street name.  These proxy materials are being forwarded to beneficial owners by their bank, broker or other nominee that is considered the holder of record.  Beneficial owners have the right to direct how their shares should be voted and are also invited to attend the special general meeting, but may not vote their shares in person at the meeting without obtaining, prior to the meeting, a legal proxy from such bank, broker or other nominee that authorizes them to vote their shares, and an account statement showing that they held the shares in their account as of the record date.
 
Alternatively, all of the above-described categories of shareholders as of the record date may vote their shares or direct how their shares are voted in other manners—without attending the special general meeting—as detailed below.
 
As of the record date, there were 38,495,358 Tufin ordinary shares issued, outstanding and entitled to vote at the special general meeting.
 
Recommendation of Tufin’s Board of Directors
 
After careful consideration, the Board has:
 

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;
 
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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.
 
Accordingly, the Board unanimously recommends that you vote (1) “FOR” the merger proposal and (2) “FOR” the adjournment proposal.
 
Quorum and Voting
 
Pursuant to Tufin’s amended and restated 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.
 
Banks, brokers and other nominees who 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, absent specific instructions from the beneficial owner of the shares to the contrary.  However, banks, brokers and other nominees are not allowed to exercise their voting discretion with respect to the approval of non-routine matters, such as the adoption and approval of a merger.  On the merger proposal or adjournment proposal, if a beneficial owner does not provide instructions to his, her or its bank, broker or other nominee, the shares will not be voted (referred to as a “broker non-vote”).  Broker non-votes and abstentions will be treated as neither a vote “for” nor “against” any matter, although they will be counted as present in determining whether a quorum is present.
 
With respect to the merger proposal and the adjournment proposal to be submitted to the shareholders for consideration at the special general meeting, only Tufin ordinary shares that are voted on each of the merger proposal and the adjournment proposal will be counted towards determining whether such proposal is approved.  Tufin ordinary shares present at the special general meeting that are not voted on the merger proposal or the adjournment proposal, or Tufin ordinary shares present by proxy where their holder properly withheld authority to vote on the merger proposal or the adjournment proposal (including broker non-votes), will not be counted in determining whether such proposal is approved by shareholders.
 
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Each Tufin ordinary share is entitled to one vote on the merger proposal, the adjournment proposal or any other item that comes before the special general meeting.  If two or more persons are registered as joint holders of any Tufin ordinary share, the right to attend the special general meeting will be conferred upon each of such joint owners, but the right to vote at the special general meeting and/or the right to be counted as part of the quorum thereat will be conferred exclusively upon the more senior among the joint holders attending the special general meeting, in person or by proxy.  For this purpose, seniority will be determined by the order in which the names appear in Tufin’s shareholder register.
 
Voting Results
 
The preliminary voting results will be announced at the special general meeting.  The final voting results will be tallied by Tufin’s corporate secretary based on the information provided by Morrow Sodali LLC (the “proxy solicitor”) and will be published following the special general meeting on a Report of Foreign Private Issuer on Form 6-K.
 
Voting of Proxies and Voting Instruction Forms
 
Shares Held by Registered Shareholders
 
If you are a registered shareholder, your signed proxy card must be received at our offices at least four hours prior to the designated time for the special general meeting (i.e., by 2:00 p.m. Israel Time (7:00 a.m. Eastern Time) on June 7, 2022) to be validly included in the tally of Tufin ordinary shares voted at the special general meeting.  If submitted to our proxy solicitor, our proxy tabulator, Broadridge Financial Solutions, Inc., located at 51 Mercedes Way, Edgewood, NY 11717, a signed proxy card must be received by 11:59 p.m. Eastern Time on June 6, 2022 (i.e., 6:59 a.m. Israel Time on June 7, 2022) to be counted towards the tally of Tufin ordinary shares so voted.  In the alternative, a proxy card may be presented in person to the chairperson of the special general meeting at such meeting in order to be counted towards the tally of votes at the meeting.  If you are a registered shareholder and attend the special general meeting, you may vote in person, and if you so vote, your proxy will not be used.
 
Even if you plan to attend the special general meeting, if you hold your shares in your own name as the shareholder of record, please vote your shares using a proxy.  DO NOT enclose or return your share certificate(s) with your proxy.  Properly executed proxies that do not contain voting instructions will not be voted in respect of the merger proposal or the adjournment proposal (unless the required confirmation is provided under Item 1A of the proxy card that the shareholder is not a Buyer Affiliate, in which case the proxy will be voted in favor of the merger).
 
Shares Held in Street Name
 
If your Tufin ordinary shares are held in a stock brokerage account or by a bank, broker or other nominee, you are considered the “beneficial holder” of the Tufin ordinary shares held for you in what is known as “street name.” If that is the case, you may instruct your bank, broker or other nominee how to vote by completing and returning the voting instruction form provided by your bank, broker or other nominee, or by providing voting instructions via the internet (at www.proxyvote.com) or via telephone (as per the directions on the enclosed voting instruction form).  If you plan to attend the meeting and vote in person, you will be required to present a “legal proxy” from your bank, broker or other nominee, along with an account statement showing ownership of your Tufin ordinary shares as of the record date, in order to be given a ballot to vote the shares in person at the meeting.
 
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Revoking or Changing Your Vote
 
Shares Held by Registered Shareholders
 
If you are a record shareholder, any proxy that you give pursuant to this solicitation may be revoked by you at any time before it is voted.  Proxies may be revoked in one of three ways:
 

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.
 
Any written notice of revocation or subsequent proxy submitted to us in advance of the special general meeting should be delivered to our principal executive offices, located at 5 HaShalom Road, ToHa Tower, Tel Aviv 6789205, Israel, Attention Ms. Noa Farkas Gluck, General Counsel, or hand-delivered to our Chairman of the Board at or before the taking of the vote at the special general meeting.
 
Shares Held in Street Name
 
If your shares are held on the NYSE via a stock brokerage account or by a bank or other nominee, in order to change your voting instructions, you must follow the directions from your broker, bank or other nominee to change those instructions.
 
The Proxy
 
Mr. Jack Wakileh, Chief Financial Officer, and Ms. Noa Farkas Gluck, General Counsel, will serve as proxy for shareholders of Tufin under the enclosed form of proxy with respect to the matter to be voted upon at the special general meeting.
 
Required Vote for the Merger Proposal
 
The approval of the merger 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 the merger proposal (excluding abstentions and broker non-votes).  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 count in respect of the merger proposal, you must affirm in your 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.
 
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Required Vote for the Adjournment Proposal
 
The approval of 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 the adjournment proposal (excluding abstentions and broker non-votes).  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 count in respect of the adjournment proposal, you must affirm in your 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 adjournment proposal.
 
Share Ownership of Tufin Directors and Executive Officers
 
As of the record date for the special general meeting, directors and executive officers of Tufin beneficially owned, in the aggregate, approximately 12.3% of the outstanding Tufin ordinary shares.
 
Solicitation of Proxies
 
In addition to solicitation by mail, directors, officers and employees of Tufin may solicit proxies for the special general meeting from Tufin’s shareholders personally or by telephone, facsimile and other electronic means without compensation other than reimbursement for their actual expenses.  Arrangements also will be made with bankers, brokers and other nominees and fiduciaries for the forwarding of solicitation material to the beneficial owners of Tufin ordinary shares held of record by those persons, and Tufin will, if requested, reimburse the record holders for their reasonable out-of-pocket expenses in so doing.
 
Tufin has retained Morrow Sodali LLC, a proxy solicitation firm (the “proxy solicitor”), to perform various solicitation services in connection with the special general meeting of shareholders.  Tufin will pay the proxy solicitor a customary fee, plus phone and other related expenses, in connection with its solicitation services.  The proxy solicitor has engaged certain of its employees to assist us in connection with the solicitation of proxies.
 
Please do not send in any Tufin share certificates with your proxy cards or voting instruction forms.
 
Attending the Tufin Special General Meeting
 
Only Tufin’s shareholders, including joint holders, who held shares of record as of the close of business on May 9, 2022 and other persons holding valid proxies for the special general meeting are entitled to attend and vote at the special general meeting or any adjournment or postponement thereof.  All shareholders and their proxies should be prepared to present a valid photo identification.  In addition, if you are a registered holder, your name is subject to verification against the list of registered holders on the record date prior to being admitted to the special general meeting.  Tufin’s shareholders who are not registered holders but hold shares in a stock brokerage account or through a bank, broker or other nominee in “street name” and wish to attend the meeting should be prepared to provide proof of beneficial ownership as of the record date, such as a recent account statement as of May 9, 2022, or similar evidence of ownership.  A “street name” holder who wishes to vote his, her or its Tufin ordinary shares at the meeting will be required to present a “legal proxy” from the bank, broker or other nominee through which the shares are held.  If you do not provide photo identification or the foregoing documentation, or comply with the other procedures outlined above upon request, you will not be admitted to the special general meeting.
 
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Contact for Questions and Assistance in Voting
 
If you have a question about the merger or how to vote or revoke a proxy you should contact:
 
Tufin Software Technologies Ltd.
5 HaShalom Road, ToHa Tower
Tel Aviv 6789205, Israel
Attention: Ms. Noa Farkas Gluck, General Counsel 
Phone: +972 (3) 612-8118
Email: investors@tufin.com

You may also contact our proxy solicitor with any questions that you may have at:
 
Morrow Sodali LLC
333 Ludlow Street, 5th Floor, South Tower
Stamford, CT 06902
Shareholders call toll free: 800-662-5200
Banks and brokers call collect: 203-658-9400
Email: tufn@investor.morrowsodali.com

Other Matters
 
Tufin is not aware of any other business to be acted upon at the special general meeting.  If, however, other matters are properly brought before the special general meeting or any adjournment or postponement of the special general meeting, the persons named as proxy holders will each have discretion to act on those matters, including to vote in their discretion to adjourn or postpone the special general meeting or any adjournment or postponement thereof.
 
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THE COMPANIES
 
Tufin Software Technologies Ltd.
 
We are pioneering a policy-centric approach to security and information technology (“IT”) operations.  We transform enterprises’ security operations by helping them visualize, define and enforce a unified security policy across complex, heterogeneous IT and cloud environments.  Our products govern how individuals, systems and applications are permitted to communicate and provide policy-based security automation, enabling customers to reduce the time to securely implement complex network changes from days to minutes.  Our solutions increase business agility, eliminate errors from manual processes and ensure continuous compliance through a single console.  Since our inception, our solutions have been purchased by over 2,000 customers in over 70 countries, including approximately 19% of the Global 2000.
 
Tufin’s mailing address and executive offices are located at 5 HaShalom Road, ToHa Tower, Tel Aviv 6789205, Israel
 
Additional information concerning Tufin is included in Tufin’s reports filed or furnished under the Exchange Act that are incorporated by reference into this document.  See “Where You Can Find More Information.”
 
Talon MidCo 3 Limited
 
Buyer was formed on March 28, 2022, solely for the purpose of engaging in the transactions contemplated by the merger agreement, and has not engaged in any business activities other than in connection with the transactions contemplated by the merger agreement and arranging of the equity financing and debt financing in connection with the merger.
 
Buyer’s mailing address and executive offices are located at SW1Y 4LB, London, England.
 
Talon Merger Sub Ltd.
 
Merger Sub is a newly formed, wholly owned subsidiary of Buyer.  Buyer formed this subsidiary as an Israeli company solely to effect the merger, and this subsidiary has not conducted any business during any period of its existence, except for activities related to its formation and activities undertaken in connection with the transactions contemplated by the merger agreement.  Upon consummation of the merger, Merger Sub will merge with and into Tufin and will cease to exist.
 
Merger Sub’s mailing address and executive offices are located at 18 Raoul Wallenberg Street, Tel Aviv, Israel.
 
Buyer and Merger Sub are subsidiaries of investment funds (the “T/R Funds”) advised by Turn/River Capital Management LP, a U.S.-based private equity firm (“Turn/River”).
 
Turn/River specializes in growth capital investments, founder liquidity, buyouts, spin-outs, and recapitalizations of technology, web and SaaS companies.  Its strategy is to combine rigorous, iterative marketing, sales and operational execution with flexible capital to help companies double and triple their growth and build value for everyone.  At the effective time (as defined in the section of this proxy statement entitled “The Merger”), the surviving company (as defined in the section of the proxy statement entitled “The Merger”), will be indirectly owned by the T/R Funds and certain of their affiliates.
 
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THE MERGER
 
Background of the Merger
 
Tufin completed its initial public offering and listed on the NYSE in April 2019.  Since that time, the Board, together with Tufin’s senior management, has regularly considered, evaluated and discussed different strategies for improving its competitive position and maximizing shareholder value.  As a part of these activities, Tufin, from time to time, has considered various strategic alternatives in pursuing its business plan, including acquisitions, mergers, collaborations and business combinations, including but not limited to a sale of Tufin.  These activities included consideration of, among other things, some of the challenges that Tufin faced as a result of rapidly scaling its business and also due to the impact of the COVID-19 pandemic starting in the beginning of 2020.
 
On December 14, 2020, entities affiliated with Catalyst Investments L.P. (“Catalyst”), then a holder of 12.6% of Tufin’s ordinary shares with two Board representatives, and Marker LLC (“Marker”), then a holder of 12.5% of Tufin’s ordinary shares with two Board representatives, each filed a Schedule 13D with the SEC disclosing their agreement to cooperate for the purpose of managing their respective investments in Tufin.  Their disclosure included, among other things, the stated desire on the part of Catalyst and Marker to engage a financial advisor to advise each of Marker and Catalyst with respect to, and solicit indications of interest from third parties regarding, (A) a potential sale of all or a portion of their respective investments in Tufin, either individually or together with each other or one or more other shareholders of Tufin, or (B) a strategic transaction involving Tufin.
 
On December 16, 2020, the Board met to discuss the Schedule 13Ds filed by Catalyst and Marker.  The members of the Board that were not affiliated with Catalyst and Marker reiterated their support for Tufin’s long-term strategy and believed that pursuing that strategy independently was in the best interests of Tufin and its shareholders.  Those board members requested that management continue to engage with Tufin’s public shareholders to articulate key elements of the strategy and receive feedback.  Tufin published a statement to that effect on December 16, 2020.
 
Between December 19, 2020 and December 23, 2020, Tufin’s management reached out to 13 of Tufin’s top 25 shareholders, which collectively at that time held approximately 37% of Tufin’s ordinary shares.
 
On December 23, 2020, a holder of over 3% of Tufin’s ordinary shares sent a letter to Mr. Kitov, addressing the Board, recommending that the Board form an independent committee to evaluate strategic alternatives for the Company and retain a third-party advisory firm to assist this committee.
 
On December 23, 2020, the Board, acting by written consent (excluding the directors affiliated with Catalyst and Marker), formed an Advisory Committee consisting of Reuven Kitov and three independent directors, Dafna Gruber, Peter Campbell and Tom Schodorf.  The Advisory Committee was authorized to determine Tufin’s position and response to the positions outlined in the Schedule 13Ds filed by Catalyst and Marker.
 
On December 25, 2020, Mr. Kitov sent an email to the Board updating them on the results of such outreach.  He reported that eight of Tufin’s top 25 shareholders, holding collectively at that time approximately 32% of Tufin’s ordinary shares, had responded to the outreach and engaged in discussions with Tufin.  Mr. Kitov further reported that, of those shareholders, the holders of approximately 95% of the shares represented by those shareholders were generally supportive of Tufin’s current management and strategy.  The other shareholders who engaged in discussions with Tufin’s management at that time expressed concerns regarding Tufin’s management and strategy.
 
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On December 28, 2020, Catalyst’s representatives on the Board sent a message to the Board on the shareholder engagement process.  They stated that representatives of Catalyst and Marker had received unsolicited calls from certain shareholders requesting that Tufin form an independent board committee to review strategic alternatives and that Tufin engage an investment bank to assist in that process.  They stated that Catalyst supported such steps.
 
On January 14, 2021, Tufin held a board meeting to review its 2021 budget, discuss the prospect of a registered offering to facilitate the sale of Tufin ordinary shares held by Catalyst and Marker and receive a further update on shareholder feedback (including with respect to the requests of certain shareholders to pursue strategic options).  The Board also discussed and reviewed Tufin’s corporate strategy over the following three years, including its intention to transition to a subscription-based revenue model and the timing of the announcement of the potential transition, as well as plans to deploy additional cloud-based strategies.  Later that day, Tufin issued a press release announcing the appointment of a new Chief Revenue Officer and also indicated that its revenue for the fourth quarter of 2020 exceeded the guidance previously issued by Tufin.
 
On February 12, 2021, Tufin issued its fourth quarter 2020 and full fiscal year 2020 results of operations.  Despite exceeding its previously-issued guidance, Tufin’s share price declined from a closing price of $18.51 per share on February 11, 2021 to $13.30 on February 13, 2021.
 
On March 4, 2021, a representative of Marker informed the Company that Catalyst and Marker did not intend to pursue a registered offering to dispose of their Tufin ordinary shares as a result of the decline in share price during the first quarter of 2021.  The representative of Marker also informed Tufin that it intended to terminate its coordination with Catalyst and planned to effect a distribution in kind of its Tufin ordinary shares to its investors.
 
Between March 31, 2021 and April 8, 2021, Mr. Kitov contacted certain members of the Board to discuss the possibility of pursuing a strategic transaction.
 
On April 7, 2021, Mr. Kitov was approached by a strategic acquirer seeking a potential business combination as a precursor to being acquired by a larger entity. Mr. Kitov conducted an initial introductory discussion with this strategic acquirer on April 12, 2021.
 
On April 18, 2021, Tufin held a board meeting to review its first quarter results. Members of Tufin’s senior management, its U.S. legal counsel, White & Case LLP (“White & Case”), and its Israeli legal counsel, Meitar Law Offices (“Meitar”), also attended this meeting. Management informed the Board that the first quarter results were below the midpoint of Tufin’s previously announced first quarter guidance, and the Board considered the implications of Tufin’s first quarter results. Mr. Kitov informed the Board of the communication he received from the potential acquirer on April 7, 2021 and the introductory discussion as described above. The Board was supportive of engaging an investment bank to help the company examine strategic alternatives. Mr. Kitov proposed to invite J.P. Morgan to make a presentation to the Board given their familiarity with Tufin and the software industry.
 
On April 26, 2021, the Board held a meeting with members of Tufin’s senior management and representatives from J.P. Morgan to discuss strategic alternatives. J.P Morgan presented the current status of M&A activity, and public data regarding Tufin’s status as it related to stock price performance and the public markets. J.P Morgan also presented benchmarks of other security companies and transactions, and identified certain strategic alternatives for the board to consider. The Board discussed various alternatives and decided to engage J.P. Morgan as its financial advisor and initiate a process to explore a potential sale of Tufin. The Board selected J.P. Morgan based on its qualifications and its experience in the software industry, as well as its familiarity with Tufin and other Israeli companies. Tufin also subsequently engaged White & Case and Meitar to assist in the process. The Board expressed its interest in J.P. Morgan working with Mr. Kitov to identify parties that would be potentially interested in pursuing a transaction with Tufin and to contact such parties to gauge their interest.
 
On May 6, 2021, Tufin and J.P. Morgan signed the engagement letter which provided that J.P. Morgan would provide Tufin with financial advisory services in connection with the potential sale or merger of all or part of Tufin.
 
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On May 11, 2021, Mr. Kitov and representatives from J.P. Morgan met to discuss a list of potential parties that J.P. Morgan would approach for a potential strategic transaction.
 
Beginning May 12, 2021 through July 2021, at the direction of the Board, J.P. Morgan contacted 20 potential financial acquirers and 17 potential strategic acquirers, including the party that contacted Mr. Kitov on April 7, 2021, of which eight potential financial acquirers and three potential strategic acquirers signed non-disclosure agreements including a customary standstill provision. These 11 potential financial and strategic acquirers were provided access to a virtual data room containing business and financial information and also conducted meetings with Tufin management over the course of this period.
 
On July 9, 2021, the Board met with members of Tufin’s senior management and representatives of J.P. Morgan. Representatives of J.P. Morgan gave a presentation to the Board as to the status of its outreach with potential acquirers. White & Case and Meitar also attended this meeting. J.P. Morgan conveyed to the Board that, of the 37 parties contacted, one potential strategic acquirer and four potential financial acquirers remained interested in pursuing a potential transaction involving the acquisition of Tufin. The Board also discussed outreach to additional parties and instructed J.P. Morgan to conduct additional outreach to potentially interested parties in consultation with management.
 
On July 14, 2021, Mr. Kitov and representatives from J.P. Morgan discussed a list of additional potential acquirers from whom J.P. Morgan would solicit interest in a potential strategic transaction.
 
On July 19, 2021, at the direction of the Board, J.P. Morgan commenced outreach to eight additional parties, four of which were strategic acquirers and four of which were financial acquirers.
 
On August 5, 2021, the Board held a meeting with members of Tufin’s senior management and representatives from J.P. Morgan, White & Case and Meitar.  J.P. Morgan provided an update on its outreach to existing and new potential acquirers.  J.P. Morgan informed the Board that at that time, no potential acquirer had submitted a proposal to acquire Tufin, but also informed the Board that five potential parties were still in discussions with management.
 
During the period from August 5, 2021 through November 5, 2021, J.P. Morgan continued to contact potentially interested parties. Tufin’s senior management conducted meetings with certain of these parties to further explain Tufin’s operational positioning, its financial position and their potential acquisition strategies and investment thesis of Tufin. These discussions, however, did not lead to any acquisition proposals.
 
On November 5, 2021, Turn/River contacted representatives of J.P. Morgan and expressed interest in a meeting with Tufin.

On November 8, 2021, the Board held a meeting with members of Tufin’s management and representatives from Meitar and J.P. Morgan.  J.P. Morgan made a presentation to the Board summarizing its outreach efforts.  J.P. Morgan informed the Board that it had reached out to a total of 45 potential acquirers and also received additional inbound inquiries from two potential financial acquirers, Party A and Turn/River.
 
On November 16, 2021, Mr. Kitov held an introductory meeting with representatives of Party A. There were no additional discussions or meetings with Party A.
 
On December 10, 2021, Tufin and Turn/River executed a confidentiality agreement that included a customary standstill provision with a term of 12 months from the date of the confidentiality agreement and which terminated upon entry into a definitive agreement which would result in a change of control of Tufin.

On December 12, 2021, Tufin provided virtual data room access containing business and financial information to Turn/River.

On December 20, 2021, Turn/River delivered a written non-binding indication of interest proposing an all-cash acquisition of Tufin at $12.50 per Tufin ordinary share, subject to the completion of due diligence and requesting exclusivity.  On this day, J.P. Morgan also conveyed to Tufin that a strategic acquirer, Party B, expressed interest in learning more about Tufin.

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On December 21, 2021, Party B signed a confidentiality agreement with Tufin.  Later that day, Mr. Kitov held an introductory call with the chief executive officer of Party B.

On January 3, 2022, at a Board meeting, J.P. Morgan provided an update to the Board and members of Tufin’s senior management on its discussions with Turn/River, its preliminary financial analysis of the Turn/River proposal and a summary of the outreach process.  White & Case and Meitar also attended this meeting.  J.P. Morgan indicated that Turn/River had not yet reviewed Tufin’s results for the fourth quarter of 2021 and that their offer may increase once they had access to those results.  Accordingly, the Board agreed to inform Turn/River that Tufin would proceed with due diligence but would not agree to grant Turn/River exclusivity at the per share price currently being offered by Turn/River.
 
On January 14, 2022, Party B informed J.P. Morgan that it was not interested in further exploring a potential transaction regarding the acquisition of Tufin.
 
On January 19, 2022, Tufin’s chief financial officer, Jack Wakileh, presented Tufin’s preliminary fourth quarter 2021 results to Turn/River.
 
On January 20, 2022, Turn/River delivered a revised written non-binding indication of interest increasing its acquisition proposal of Tufin to $13.10 per Tufin ordinary share and requesting exclusivity.
 
On January 26, 2022, the Board and members of Tufin’s management held a meeting at which J.P. Morgan presented an update on the negotiation with Turn/River. White & Case and Meitar also attended this meeting. J.P. Morgan conveyed the fact that the offer from Turn/River was the only offer that had been received by Tufin as a result of the eight months of outreach to potential acquirers of Tufin that had been conducted up until that date. As a result of the fact that interest from other bidders was unlikely based on that past outreach, the Board ultimately determined not to initiate another formal process at that stage and instead to require a customary “go-shop” provision if the parties ultimately reached a deal regarding the sale of Tufin, which would allow Tufin to solicit additional bids for a specified period of time following the signing of any definitive agreement with respect to a transaction, particularly given the familiarity that likely bidders already had with Tufin after the outreach to potential bidders in 2021 and the beginning of 2022. Additionally, the Board directed J.P. Morgan to reach out informally to certain potential acquirers who had expressed interest in acquiring Tufin in the past and could act expeditiously if they were interested in a potential transaction at this time.
 
At the meeting on January 26, 2022, the Board established a sub-committee in order to respond efficiently to further negotiations with Turn/River.  The sub-committee consisted of Mr. Kitov and three independent directors, Tom Schodorf, Peter Campbell and Yuval Shachar.  Immediately following the meeting of the full Board, J.P. Morgan participated in a video conference meeting with the newly formed sub-committee to discuss how to respond to Turn/River’s proposal of $13.10.
 
Between January 26, 2022 and January 30, 2022, at the direction of the Board, J.P. Morgan subsequently reached out to seven strategic parties, six of which had been previously contacted and one of which had not been previously contacted. However, none of the parties contacted were interested in pursuing a transaction with Tufin at this time.
 
On January 28, 2022, Turn/River delivered a revised written indication of interest, agreeing to increase its acquisition proposal of Tufin to $13.50 per Tufin ordinary share and requesting exclusivity.
 
On February 3, 2022, Tufin signed an exclusivity agreement with Turn/River which provided Turn/River exclusivity regarding the negotiation of a potential acquisition of Tufin through March 5, 2022.
 
On February 15, 2022, representatives of Kirkland & Ellis LLP (“Kirkland”), US legal counsel to Turn/River, sent to representatives of White & Case a proposed draft of the merger agreement.
 
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On February 21, 2022, representatives of White & Case, Meitar and J.P. Morgan met via conference call with Tufin’s senior management to discuss certain terms of the draft merger agreement, including (i) the treatment of equity awards, (ii) the request that Catalyst, Marker, Mr. Kitov and Mr. Reuven Harrison provide Voting Agreements (as defined in this proxy statement below) (which request Tufin determined at that stage of the negotiations to decline), (iii) certain portions of the go-shop and no-shop provisions, (iv) the amount of the termination fees and circumstances under which they would be paid, (v) the payment of Turn/River expenses in the case of a failure to obtain the requisite shareholder vote to adopt the merger agreement and (vi) the definition of what would constitute a superior proposal.
 
On March 1, 2022, Tufin agreed to extend Turn/River’s exclusivity, which was due to expire on March 5, 2022, until March 16, 2022.  Also on March 1, 2022, representatives of White & Case sent to representatives of Kirkland a revised draft of the merger agreement.
 
On March 7, 2022, representatives of Kirkland sent a revised draft of the merger agreement to representatives of White & Case.
 
On March 9, 2022, representatives of White & Case, Meitar and J.P. Morgan met via conference call with Tufin’s senior management to discuss certain provisions of the revised draft merger agreement, including (i) the treatment of equity awards, (ii) the request that Mr. Kitov and Mr. Harrison provide Voting Agreements (which agreements Tufin, Mr. Kitov and Mr. Harrison had subsequently determined to agree to provide), (iii) certain portions of the go-shop and no-shop provisions, (iv) the amount of the termination fees and circumstances under which they would be paid, (v) the payment of Turn/River expenses in the case of a failure to obtain the requisite shareholder vote to adopt the merger agreement and (vi) the definition of what would constitute a superior proposal.
 
On March 13, 2022, representatives of White & Case sent to representatives of Kirkland a revised draft of the merger agreement.
 
On March 15, 2022, Tufin agreed to extend exclusivity, which was due to expire on March 16, 2022, until March 23, 2022.
 
On March 15, 2022, representatives of White & Case and representatives of Kirkland held a call to discuss certain open issues related to the merger agreement, including (i) the definition of what would constitute a superior proposal, (ii) certain portions of the go-shop and no-shop provisions and (iii) the circumstances under which Turn/River would be obligated to pay a termination fee.
 
On March 21, 2022, representatives of Kirkland sent a revised draft of the merger agreement, as well as proposed drafts of the equity commitment letter and limited guarantee, to representatives of White & Case.
 
On March 23, 2022, representatives of White & Case, Meitar and J.P. Morgan held a call with Tufin’s senior management to discuss timing with respect to signing a definitive agreement and certain provisions of the merger agreement, including (i) the modified treatment of equity awards, (ii) certain portions of the go-shop and no-shop provisions, (iii) the amount of the termination fees and circumstances under which they would be paid, (iv) the payment of Turn/River expenses in the case of a failure to obtain the requisite shareholder vote and (v) the definition of what would constitute a superior proposal. In addition, the attendees discussed a request by Turn/River that the purchase price be reduced from $13.50 per Tufin ordinary share to $13.00 per Tufin ordinary share. The reason given by Turn/River for this request was a deterioration in market conditions.
 
On March 23, 2022, the parties agreed to extend exclusivity, which was due to expire on March 23, 2022, until April 1, 2022.
 
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On March 28, 2022, a proposed draft of the form of Voting Agreement was sent by representatives of Kirkland to representatives of White & Case.
 
On March 29, 2022, Tufin held a special Board meeting to receive an update on the potential sale of Tufin to Turn/River. Members of Tufin’s senior management and representatives of J.P. Morgan, White & Case and Meitar also attended this meeting. During this meeting, representatives of White & Case and Meitar provided an overview to the Board of its fiduciary duties in the context of a potential sale transaction. At this meeting, Mr. Kitov updated the Board regarding Turn/River’s due diligence review of Tufin, noting that such review was substantially complete. Mr. Kitov also provided the Board with an update regarding the status of negotiations of the terms and conditions of the merger agreement and related ancillary agreements. Representatives of White & Case and Meitar provided the Board with a summary of, and answered the Board’s questions regarding, the material terms of the merger agreement and the structure of the proposed transaction, including the form of financing, the go-shop and no-shop provisions, the treatment of equity awards, conditions to close, termination provisions and termination fees and also discussed certain issues still to be resolved. In addition, representatives of White & Case summarized for the Board the terms of the Voting Agreements and of certain rights that both Mr. Kitov and Mr. Harrison would receive thereunder. Also at this meeting, representatives of J.P. Morgan presented to the Board a preliminary financial analysis of the proposed transaction. The Board was also informed by J.P. Morgan that J.P. Morgan had no prior relationship with Turn/River. The attendees then discussed the proposed revised purchase price of $13.00 per Tufin ordinary share proposed by Turn/River and determined to accept that revised purchase price and move forward with the proposed transaction.
 
On March 29, 2022, representatives of White & Case sent representatives of Kirkland a revised draft of the merger agreement.
 
On March 29, 2022 and March 30, 2022, representatives of White & Case and Kirkland exchanged drafts of certain of the ancillary agreements related to the proposed transactions and on March 30, 2022, representatives of White & Case and Kirkland held a call to discuss the transaction documents.
 
On March 31, 2022, Tufin held a special Board meeting to receive an update on the potential sale of Tufin to Turn/River as well as timing of signing definitive documentation regarding the proposed transaction.  Members of Tufin’s senior management and representatives of J.P. Morgan, White & Case and Meitar also attended this meeting.  During this meeting, representatives of White & Case and Meitar again provided an overview to the Board of its fiduciary duties in the context of a potential sale transaction.  Representatives of White & Case also reviewed changes in the documents from those previously discussed with the Board.  The Board determined to continue to move forward towards an agreement with Turn/River.
 
On April 1, 2022, the parties agreed to extend exclusivity, which was due to expire on April 1, 2022, until April 4, 2022.
 
On April 3, 2022, Tufin held a special Board meeting to receive an update on the negotiations with Turn/River.  Members of Tufin’s senior management and representatives of J.P. Morgan, White & Case and Meitar also attended this meeting.  During this meeting, representatives of White & Case and Meitar again provided an overview to the Board of its fiduciary duties in the context of a potential sale transaction and reviewed certain issues still to be resolved.  The Board, as well as representatives of senior management, representatives of White & Case and representatives of J.P. Morgan discussed the financing aspects of the proposed transaction.  The Board determined to continue to move forward towards an agreement with Turn/River.
 
Between March 31, 2022 and April 5, 2022, representatives of White & Case, Meitar and Kirkland negotiated and finalized the terms of the merger agreement, including the definition of superior proposal, treatment of equity awards, interim operating covenants, go-shop and no-shop provisions, termination procedures and relevant fees and payments, and the equity commitment letter, limited guarantee, debt commitment letter and disclosure schedules.  In addition, representatives of Kirkland, Mr. Kitov and Mr. Harrison negotiated and finalized the terms of the Voting Agreements to be executed by Mr. Kitov and Mr. Harrison.
 
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On April 5, 2022, Tufin held a special Board meeting to receive an update on the proposed transaction as well as timing of signing definitive documentation regarding the proposed transaction. Members of Tufin’s senior management and representatives of J.P. Morgan, White & Case and Meitar also attended this meeting. During this meeting, representatives of White & Case and Meitar again provided an overview to the Board of its fiduciary duties in the context of a potential sale transaction. Representatives of White & Case and Meitar reviewed the proposed terms of the merger agreement, Voting Agreements, equity commitment letter, limited guarantee and debt commitment letter. Thereafter, representatives of J.P. Morgan then reviewed their financial analyses of the merger consideration summarized below in the section entitled “— Opinion of Tufin’s Financial Advisor” beginning on page 41 of this proxy statement. The representatives of J.P. Morgan then rendered to the Board J.P. Morgan’s oral opinion, subsequently confirmed in writing on the same day, that, as of April 5, 2022, and based upon and subject to the factors and assumptions set forth in its opinion, the merger consideration of $13.00 per share in cash 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. After further deliberation and discussion, the Board unanimously determined that the merger agreement and the consummation of the merger and the transactions were advisable, fair and in the best interests of Tufin and its shareholders and authorized and approved entry into the merger agreement.
 
On April 5, 2022, each of Tufin, Parent and Merger Sub executed and delivered the merger agreement, effective as of that date, along with all other ancillary agreements.
 
On April 6, 2022, Tufin and Turn/River issued a joint press release announcing the execution of the merger agreement.
 
Since the execution of the Agreement, in connection with the Go-Shop Period provided for in the Agreement, which expired at 11:59 p.m. Eastern Time on May 5, 2022, at the direction of the Board of Directors, representatives of J.P. Morgan and Tufin’s management contacted and sought to engage in discussions with 26 potential financial acquirers and 25 potential strategic acquirers of which two potential financial acquirers and one potential strategic acquirer signed Acceptable Confidentiality Agreements (as defined in this proxy statement below). Such potential strategic parties included all parties that had previously been contacted as part of the initial outreach to potential financial acquirers and potential strategic acquirers in connection with the transaction (including Party A and Party B), as well as four additional parties that had not been approached before. At the expiration of the Go-Shop Period, none of the parties contacted, including the parties that entered into Acceptable Confidentiality Agreements, had made an Acquisition Proposal.

Reasons for Approval of the Merger
 
The Board unanimously determined that the merger, the merger agreement and the other transactions are advisable, fair to, and in the best interests of Tufin and its shareholders.  As required under the Companies Law, the Board determined that considering the financial position of the merging companies, no reasonable concern exists that Tufin will be unable to fulfill its obligations to its creditors existing as of immediately prior to the closing of the merger, and approved the merger, the merger agreement and the other transactions contemplated by the merger agreement, and determined to recommend that the Tufin shareholders approve the merger, the merger agreement and the other transactions contemplated by the merger agreement.
 
In its evaluation of the merger agreement and the merger, the Board consulted with members of Tufin’s senior management team and representatives of Tufin’s outside legal counsel and financial advisors and assessed various matters relevant to its decision.
 
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In reaching its decision to approve the merger agreement, the merger and the other transactions, and to recommend that Tufin shareholders approve the merger agreement and the merger, the Board considered a variety of factors, including those described below, which are not intended to be exhaustive and are not presented in any relative order of importance:
 

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;
 
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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 AgreementThe 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
 
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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 Board also considered a number of uncertainties and risks concerning the merger, including the following (which factors are not necessarily presented in order of relative importance):
 

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;
 
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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.
 
The foregoing discussion of reasons for the recommendation to adopt the merger agreement is not meant to be exhaustive but addresses the material information and factors considered by the Board in connection with its recommendation.  In view of the wide variety of factors considered by the Board in connection with its evaluation of the merger and the complexity of these matters, the Board did not find it practicable to, and did not, quantify or otherwise assign relative weights to the specific factors considered in reaching its determination and recommendation.  Rather, in considering the information and factors described above, individual members of the Board each applied his or her own personal business judgment to the process and may have given differing weights to differing factors.  The Board based its unanimous recommendation on the totality of the information presented.  The explanation of the factors and reasoning set forth above contain forward-looking statements that should be read in conjunction with the section of this proxy statement entitled “Cautionary Statements Regarding Forward-Looking Statements.”
 
Recommendation
 
The Board unanimously recommends that you vote (1) “FOR” the merger proposal and (2) “FOR” the adjournment proposal.
 
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Opinion of Tufin’s Financial Advisor
 
 Pursuant to an engagement letter, Tufin retained J.P. Morgan as its financial advisor in connection with the proposed merger.
 
At the meeting of the Board on April 5, 2022, J.P. Morgan rendered its oral opinion to the Board that, as of such date 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.  J.P. Morgan confirmed its April 5, 2022 oral opinion by delivering its written opinion to the Board, dated April 5, 2022, that, as of such date, the 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.
 
The full text of the written opinion of J.P. Morgan dated April 5, 2022, which sets forth, among other things, the assumptions made, matters considered and limits on the review undertaken, is attached as Annex B to this proxy statement and is incorporated herein by reference.  The summary of the opinion of J.P. Morgan set forth in this proxy statement is qualified in its entirety by reference to the full text of such opinion.  Tufin shareholders are urged to read the opinion in its entirety.
 
J.P. Morgan’s written opinion was addressed to the Board (in its capacity as such) in connection with and for the purposes of its evaluation of the proposed merger, was directed only to the consideration to be paid in the proposed merger and did not address any other aspect of the proposed merger.  J.P. Morgan expressed no opinion as to the fairness of the consideration to the holders of any other class of securities, creditors or other constituencies of Tufin or as to the underlying decision by Tufin to engage in the proposed merger.  The issuance of J.P. Morgan’s opinion was approved by a fairness committee of J.P. Morgan.  The opinion does not constitute a recommendation to any shareholder of Tufin as to how such shareholder should vote with respect to the proposed merger or any other matter.
 
In arriving at its opinions, J.P. Morgan, among other things:
 

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.
 
In addition, J.P. Morgan held discussions with certain members of the management of Tufin with respect to certain aspects of the proposed merger, and the past and current business operations of Tufin, the financial condition and future prospects and operations of Tufin, and certain other matters J.P. Morgan believed necessary or appropriate to its inquiry.
 
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In giving its opinion, J.P. Morgan relied upon and assumed the accuracy and completeness of all information that was publicly available or was furnished to or discussed with J.P. Morgan by Tufin or otherwise reviewed by or for J.P. Morgan, and J.P. Morgan did not independently verify (and did not assume responsibility or liability for independently verifying) any such information or its accuracy or completeness.  J.P. Morgan did not conduct or was not provided with any valuation or appraisal of any assets or liabilities, nor did J.P. Morgan evaluate the solvency of Tufin, Buyer or Turn/River under any applicable laws relating to bankruptcy, insolvency or similar matters.  In relying on financial analyses and forecasts provided to J.P. Morgan or derived therefrom, J.P. Morgan assumed that they were reasonably prepared based on assumptions reflecting the best currently available estimates and judgments by management as to the expected future results of operations and financial condition of Tufin to which such analyses or forecasts relate.  J.P. Morgan expressed no view as to such analyses or forecasts or the assumptions on which they were based.  J.P. Morgan also assumed that the proposed merger and the other transactions contemplated by the merger agreement will be consummated as described in the merger agreement.  J.P. Morgan also assumed that the representations and warranties made by Tufin and Buyer in the merger agreement and the related agreements were and will be true and correct in all respects material to its analysis.  J.P. Morgan is not a legal, regulatory or tax expert and relied on the assessments made by advisors to Tufin with respect to such issues.  J.P. Morgan further assumed that all material governmental, regulatory or other consents and approvals necessary for the consummation of the proposed merger will be obtained without any adverse effect on Tufin or on the contemplated benefits of the proposed merger.
 
The projections furnished to J.P. Morgan were prepared by Tufin’s management.  Tufin does not publicly disclose internal management projections of the type provided to J.P. Morgan in connection with J.P. Morgan’s analysis of the proposed merger, and such projections were not prepared with a view toward public disclosure.  These projections were based on numerous variables and assumptions that are inherently uncertain and may be beyond the control of Tufin’s management, including, without limitation, factors related to general economic and competitive conditions and prevailing interest rates.  Accordingly, actual results could vary significantly from those set forth in such projections.  For more information regarding the use of projections and other forward-looking statements, please refer to the section entitled “—Certain Unaudited Financial Projections” beginning on page 46 of this proxy statement.
 
J.P. Morgan’s opinion was necessarily based on economic, market and other conditions as in effect on, and the information made available to J.P. Morgan as of, the date of such opinion.  J.P. Morgan’s opinion noted that subsequent developments may affect J.P. Morgan’s opinion, and that J.P. Morgan does not have any obligation to update, revise, or reaffirm such opinion.  J.P. Morgan’s opinion is limited to the fairness, from a financial point of view, of the consideration to be paid to the holders of Tufin ordinary shares in the proposed merger, and J.P. Morgan has expressed no opinion as to the fairness of any consideration to the holders of any other class of securities, creditors or other constituencies of Tufin or the underlying decision by Tufin to engage in the proposed merger.  Furthermore, J.P. Morgan expressed no opinion with respect to the amount or nature of any compensation to any officers, directors, or employees of any party to the proposed merger, or any class of such persons relative to the consideration in the proposed merger or with respect to the fairness of any such compensation.
 
The terms of the merger agreement, including the merger consideration, were determined through arm’s length negotiations between Tufin and Buyer, and the decision to enter into the merger agreement on Tufin’s part was solely that of the Board.  J.P. Morgan’s opinion and financial analyses were only one of the many factors considered by the Board in its evaluation of the proposed merger and should not be viewed as determinative of the views of the Board or Tufin’s management with respect to the proposed merger or the merger consideration.
 
In accordance with customary investment banking practice, J.P. Morgan employed generally accepted valuation methodology in rendering its opinion to the Board on April 5, 2022 and contained in the presentation delivered to the Board on such date in connection with the rendering of such opinion and does not purport to be a complete description of the analyses or data presented by J.P. Morgan.  Some of the summaries of the financial analyses include information presented in tabular format.  The tables are not intended to stand alone, and in order to more fully understand the financial analyses used by J.P. Morgan, the tables must be read together with the full text of each summary.  Considering the data set forth below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of J.P. Morgan’s analyses.
 
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Public Trading Multiples Analysis
 
Using publicly available information, J.P. Morgan compared selected financial data of Tufin with similar data for selected publicly traded companies engaged in businesses which J.P. Morgan judged to be analogous to the business of Tufin.  The companies selected by J.P. Morgan were CyberArk Software Ltd., Mandiant, Inc., Ping Identity Holding Corp., SecureWorks Corp., Cognyte Software Ltd., Domo, Inc., LivePerson, Inc., 8x8, Inc., Sumo Logic, Inc., Yext, Inc., Ooma, Inc., eGain Corporation and Weave Communications, Inc. These companies were selected, among other reasons, because they are publicly traded companies with operations and business that, for purposes of J.P. Morgan’s analyses, may be considered sufficiently similar to those of Tufin based on business sector participation, operational characteristics and financial metrics.  However, none of the selected companies reviewed is identical to Tufin and certain of these companies have financial and operating characteristics that are materially different from those of Tufin.  The analyses necessarily involve complex considerations and judgments concerning differences in financial and operational characteristics of the companies involved and other factors that could affect the companies differently than they would affect Tufin.
 
With respect to the selected companies, J.P. Morgan calculated the ratio of firm value to revenue for the calendar year 2022 for each company based on publicly available financial information and Wall Street estimates per FactSet Research Systems as of April 4, 2022, which is referred to as “FV/CY2022E Revenue.”
 
Based on the results of this analysis, J.P. Morgan selected a FV/CY2022E Revenue multiple reference range of 2.0x to 4.0x.  J.P. Morgan then applied that range to the estimated revenue for Tufin for calendar year 2022, provided by Tufin’s management in its management projections, which was adjusted by adding Tufin’s net cash balance of $89.4 million as of December 31, 2021.  This analysis indicated a range of implied equity values per share of Tufin ordinary shares, rounded to the nearest $0.25, of $8.00 to $14.00, compared to (i) the merger consideration and (ii) the closing price of Tufin ordinary shares as of April 4, 2022 of $9.27 per share.
 
Discounted Cash Flow Analysis
 
J.P. Morgan conducted a discounted cash flow analysis for the purpose of determining the fully diluted equity value per share for Tufin ordinary shares.  J.P. Morgan calculated the unlevered free cash flows that Tufin is expected to generate during fiscal year 2022 through fiscal year 2029 based upon certain unaudited financial projections and extrapolations therefrom prepared by Tufin’s management.  J.P. Morgan also calculated a range of terminal values for Tufin by applying terminal growth rates ranging from 3.0% to 4.0% to the unlevered free cash flows of Tufin at the end of fiscal year 2029.  The unlevered free cash flows and the range of terminal values were then discounted to present values using a discount rate range of 11.25% to 13.25% which was chosen by J.P. Morgan based upon an analysis of the weighted average cost of capital of Tufin.  The present value of the unlevered free cash flows and the range of terminal values were then adjusted by adding Tufin’s net cash balance of $89.4 million as of December 31, 2021.  Based on the results of this analysis, J.P. Morgan arrived at a range of implied equity values per share for Tufin ordinary shares, rounded to the nearest $0.25, of $11.75 to $17.00, compared to (i) the merger consideration and (ii) the closing price of Tufin ordinary shares as of April 4, 2022 of $9.27 per share.
 
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Selected Transaction Analysis
 
Using publicly available information, J.P. Morgan examined selected transactions involving companies that engaged in businesses that J.P. Morgan judged to be reasonably analogous to the business of Tufin or aspects thereof.  None of the selected transactions reviewed was identical to the proposed merger.  Certain of these transactions may have characteristics that are materially different from those of the proposed merger.  However, the selected transactions were chosen because certain aspects of these transactions, for purposes of J.P. Morgan’s analysis, may be considered similar to the proposed merger.  The analyses necessarily involve complex considerations and judgments concerning differences in financial and operational characteristics of the companies involved and other factors that could affect these transactions differently than they would affect the proposed merger.  For each of the selected transactions, J.P. Morgan calculated the ratio of the target company’s firm value to the public estimates of revenue for the 12-month period following the announcement of the applicable transaction, which is referred to as “FV/NTM Revenue.” Specifically, J.P. Morgan reviewed the following transactions:

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.

Based on the results of this analysis, J.P. Morgan selected a FV/NTM Revenue multiple reference range of 3.0x to 4.5x.  J.P. Morgan then applied that range to the estimated revenue for Tufin for calendar year 2022, provided by Tufin’s management in its management projections, which was adjusted by adding Tufin’s net cash balance of $89.4 million as of December 31, 2021.  This analysis indicated a range of implied equity values per share of Tufin ordinary shares, rounded to the nearest $0.25, of $11.00 to $15.50, compared to (i) the merger consideration and (ii) the closing price of Tufin ordinary shares as of April 4, 2022 of $9.27 per share.
 
Other Information
 
52-Week Historical Trading Range.  For reference purposes only and not as a component of its fairness analyses, J.P. Morgan reviewed the trading range for Tufin ordinary shares for the 52-week period ended April 4, 2022.  J.P. Morgan noted that the low and high closing share prices during this period were $7.91 and $11.41 per share of Tufin ordinary shares, respectively.
 
6-Month Historical Trading Range.  For reference purposes only and not as a component of its fairness analyses, J.P. Morgan reviewed the trading range for Tufin ordinary shares for the 6-month period ended April 4, 2022.  J.P. Morgan noted that the low and high closing share prices during this period were $7.91 and $10.86 per share of Tufin ordinary shares, respectively.
 
Discounted Equity Research Analyst Price Targets.  For reference purposes only and not as a component of its fairness analyses, J.P. Morgan reviewed certain publicly available equity research analyst share price targets for Tufin ordinary shares.  J.P. Morgan noted that the range of such price targets for Tufin ordinary shares, discounted one year at cost of equity of 12.25% and rounded to the nearest $0.25, was $9.00 to $13.25 per share.
 
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Miscellaneous
 
The foregoing summary of certain material financial analyses does not purport to be a complete description of the analyses or data presented by J.P. Morgan.  The preparation of a fairness opinion is a complex process and is not necessarily susceptible to partial analysis or summary description.  J.P. Morgan believes that the foregoing summary and its analyses must be considered as a whole and that selecting portions of the foregoing summary and these analyses, without considering all of its analyses as a whole, could create an incomplete view of the processes underlying the analyses and its opinion.  As a result, the ranges of valuations resulting from any particular analysis or combination of analyses described above were merely utilized to create points of reference for analytical purposes and should not be taken to be the view of J.P. Morgan with respect to the actual value of Tufin.  The order of analyses described does not represent the relative importance or weight given to those analyses by J.P. Morgan.  In arriving at its opinion, J.P. Morgan did not attribute any particular weight to any analyses or factors considered by it and did not form an opinion as to whether any individual analysis or factor (positive or negative), considered in isolation, supported or failed to support its opinion.  Rather, J.P. Morgan considered the totality of the factors and analyses performed in determining its opinion.
 
Analyses based upon forecasts of future results are inherently uncertain, as they are subject to numerous factors or events beyond the control of the parties and their advisors.  Accordingly, forecasts and analyses used or made by J.P. Morgan are not necessarily indicative of actual future results, which may be significantly more or less favorable than suggested by those analyses.  Moreover, J.P. Morgan’s analyses are not and do not purport to be appraisals or otherwise reflective of the prices at which businesses actually could be acquired or sold.  None of the selected companies reviewed as described in the above summary is identical to Tufin, and none of the selected transactions reviewed was identical to the proposed merger.  However, the companies selected were chosen because they are publicly traded companies with operations and businesses that, for purposes of J.P. Morgan’s analysis, may be considered similar to those of Tufin.  The transactions selected were similarly chosen because their participants, size and other factors, for purposes of J.P. Morgan’s analysis, may be considered similar to the proposed merger.  The analyses necessarily involve complex considerations and judgments concerning differences in financial and operational characteristics of the companies involved and other factors that could affect the companies compared to Tufin and the transactions compared to the proposed merger.
 
As a part of its investment banking business, J.P. Morgan and its affiliates are continually engaged in the valuation of businesses and their securities in connection with mergers and acquisitions, investments for passive and control purposes, negotiated underwritings, secondary distributions of listed and unlisted securities, private placements, and valuations for corporate and other purposes.  J.P. Morgan was selected by the Board to advise Tufin with respect to the proposed merger on the basis of, among other things, such experience and its qualifications and reputation in connection with such matters and its familiarity with Tufin and the industries in which it operates.
 
For services rendered in connection with the proposed merger, Tufin has agreed to pay J.P. Morgan an aggregate fee of approximately $10 million, $1.0 million of which became payable to J.P. Morgan upon delivery of its opinion, and the remainder of which will be payable only upon the consummation of the proposed merger.  In addition, Tufin has agreed to reimburse J.P. Morgan for its expenses incurred in connection with its services, including the fees and disbursements of counsel, and will indemnify J.P. Morgan against certain liabilities arising out of J.P. Morgan’s engagement.  During the two-year period preceding the delivery of its opinion, J.P. Morgan did not recognize any fees from Tufin, Buyer or Turn/River.  In addition, J.P. Morgan and its affiliates hold, on a proprietary basis, less than 1% of the outstanding Tufin ordinary shares.  In the ordinary course of their businesses, J.P. Morgan and its affiliates may actively trade the debt and equity securities or financial instruments (including derivatives, bank loans or other obligations) of Tufin for their own accounts or for the accounts of customers and, accordingly, they may at any time hold long or short positions in such securities or other financial instruments.
 
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Certain Unaudited Financial Projections
 
Tufin does not, as a matter of course, make public projections as to future performance or earnings beyond the current fiscal year and generally does not make public projections for extended periods due to, among other things, the inherent difficulty of predicting financial performance for future periods and the likelihood that the underlying assumptions and estimates may not be realized.  However, Tufin’s management prepared internal unaudited financial projections for the Board in connection with its consideration of the merger and for J.P. Morgan in connection with J.P. Morgan’s financial analyses of the merger, and such projections were not prepared with a view toward public disclosure.  Certain financial projections for calendar year 2022 were provided to Turn/River.  These projections were based on numerous variables and assumptions that are inherently uncertain and may be beyond the control of Tufin’s management, including, without limitation, factors related to general economic and competitive conditions and prevailing interest rates.  Accordingly, actual results could vary significantly from those set forth in such projections.
 
The tables below presents selected non-GAAP financial measures of the unaudited financial projections (see the note below regarding “Non-GAAP Measures”), which are long-term financial projections from calendar year 2022 through calendar year 2024, as prepared by Tufin’s management and provided to and approved by the Board in its evaluation of the merger and as provided to Tufin’s financial advisor, J.P. Morgan, for its use and reliance in connection with its financial analyses and fairness opinion presented to the Board at the meeting held on April 5, 2022 and as described above under the heading “—Opinion of Tufin’s Financial Advisor” (such set of long-term financial projections is referred to in this proxy statement as the “Tufin projections”).
 
Cautionary Statements

The Tufin projections contain certain statements that are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.  The Tufin projections, while presented with numerical specificity, are necessarily based on a variety of estimates and assumptions and thus are subjective in many respects and subject to interpretation.  Those estimates and assumptions concern future events and conditions that may not be realized and are inherently subject to significant business, economic, competitive, industry, regulatory, market and financial uncertainties and contingencies, all of which are difficult to predict and many of which are subject to significant economic and competitive uncertainties and beyond Tufin’s control.  Because the Tufin projections cover multiple years, such information by its nature becomes less predictive with each successive year.  Moreover, events and circumstances occurring subsequent to the date on which the Tufin projections were prepared may be different from those assumed, or, alternatively, may have been unanticipated, and thus the occurrence of these events may affect financial results in a materially adverse or materially beneficial manner.  Accordingly, no assurance can be given concerning the accuracy of the Tufin projections or Tufin’s ability to achieve the projected results.  Actual financial results may differ materially from the expectations expressed or implied by the Tufin projections.
 
Other than providing earnings guidance for the current fiscal year, at the end of each fiscal quarter, with respect to the next fiscal quarter and the full fiscal year, Tufin generally does not make public disclosures, or include in its reports filed with, or furnished to, the SEC, information about its anticipated financial position, results of operations or other prospective financial statement information, or assumptions or estimates about prospective financial statement information, such as the Tufin projections described below, and does not plan to do so unless otherwise required by applicable law.  The Tufin projections were not prepared with a view towards public disclosure, to comply with the guidelines for prospective financial statements published by the American Institute of Certified Public Accountants or the rules and regulations of the SEC, and by their nature are not financial statements prepared in accordance with GAAP.  Tufin’s independent accountants have neither examined nor compiled the Tufin projections and accordingly do not express an opinion or any other form of assurance with respect to the Tufin projections, assume no responsibility for the Tufin projections and disclaim any association with the Tufin projections.
 
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Tufin has not updated and does not intend to update, or otherwise revise, the Tufin projections or underlying assumptions to reflect circumstances existing since their preparation or to reflect the occurrence of future events, even if any or all of the assumptions on which the Tufin projections were based are shown to be in error.  Furthermore, Tufin does not intend to update or revise the Tufin projections to reflect changes in general economic or industry conditions.  Accordingly, no undue reliance should be placed on any such assumptions or the Tufin projections.

 Summary of Tufin Projections

 Subject to the foregoing qualifications, the following table presents a summary of the Tufin projections for the fiscal years 2022 through 2024 as provided to the Board and to JP. Morgan.

Unaudited Financial Projections
Years Ending December 31,
(in millions)
 
   
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
)

________________
 
(a) EBITDA, a non-GAAP term, is defined as earnings before interest, tax, depreciation and amortization  (and excluding stock-based compensation expense).
 
(b) EBIAT, a non-GAAP term, is defined as earnings before interest and after tax (and excluding stock-based compensation expense).
 
(c) Unlevered FCF, a non-GAAP term, is defined as EBIAT, plus depreciation and amortization, less capital expenditure, less change in net working capital, less stock-based compensation expense.  The unlevered free cash flow amounts calculated by J.P. Morgan were approved for J.P. Morgan’s use by Tufin management.
 
Non-GAAP Measures

The Tufin projections include forecasts of non-GAAP measures such as EBITDA, EBIAT and unlevered free cash flow, among other things.  Reconciliations of the Tufin projections to GAAP are not provided because there is inherent difficulty and uncertainty in estimating or predicting the various components of each corresponding GAAP measure, which components could significantly impact such financial measure.  In addition, when planning, forecasting and analyzing future periods, Tufin does so primarily on a non-GAAP basis without preparing a GAAP analysis since such an analysis would require estimates for various reconciling items that would be difficult to predict with reasonable accuracy.
 
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Interests of Certain of Tufin’s Executive Officers and Directors in the Merger
 
When considering the recommendation by the Board to vote “FOR” the merger proposal, you should be aware that executive officers and directors of Tufin have interests in the merger that are in addition to, and may be different from, your interests, including:

Treatment of Equity Awards
 

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.
 
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Indemnification and Insurance.
 

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.
 
As of the record date for the special general meeting, the directors and executive officers of Tufin, as a group, beneficially owned in the aggregate approximately 12.3% of the outstanding Tufin ordinary shares.
 
No Appraisal Rights
 
Under Israeli law, holders of Tufin ordinary shares are not entitled to statutory appraisal rights in connection with the merger.
 
Effects of the Merger on Tufin Ordinary Shares
 
Under the merger agreement, at the effective time of the merger, each outstanding Tufin ordinary share 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.  As of the effective time of the merger, each holder of a certificate representing Tufin ordinary shares will cease to have any rights as a shareholder, except the right to receive $13.00 per Tufin ordinary share in cash, without interest and less any applicable withholding taxes, upon the surrender of such ordinary share in accordance with the terms of the merger agreement.
 
At the effective time of the merger, current Tufin shareholders will cease to have ownership interests in Tufin or rights as Tufin shareholders.  Therefore, such current shareholders of Tufin will not participate in any future earnings or growth of Tufin and will not benefit from any appreciation in value of Tufin.
 
Effects of the Merger on Equity Plans
 
As of the effective time of the merger, our existing equity plans will terminate and all rights under any provision of any other plan, program or arrangement providing for the issuance or grant of any other interest in respect of the share capital of Tufin or any of its subsidiaries will be canceled.
 

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).
 
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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).
 

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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Delisting and Deregistration of Tufin Ordinary Shares
 
If the merger is completed, Tufin ordinary shares will be delisted from, and will no longer be traded on, the NYSE, and deregistered under the Exchange Act.  As such, we would no longer be required to file periodic reports with the SEC.
 
Procedures for Receiving the Merger Consideration
 
After the completion of the merger, the paying agent to be engaged for such purpose will provide instructions to each holder of record of Tufin ordinary shares that will explain how to surrender share certificates.  Each shareholder will receive cash for his, her or its shares from the paying agent after complying with these instructions.  If your Tufin ordinary shares are held in “street name” on the NYSE by your bank, broker or other nominee, you will receive instructions from your bank, broker or other nominee as to how to effect the surrender of the “street name” shares and receive cash for those shares.  YOU SHOULD NOT FORWARD YOUR SHARE CERTIFICATES TO THE PAYING AGENT WITHOUT A LETTER OF TRANSMITTAL, AND YOU SHOULD NOT RETURN YOUR SHARE CERTIFICATES WITH THE ENCLOSED PROXY.  See “The Merger Agreement—Paying Agent; Exchange Fund; Payment Procedures.”
 
Certain Material U.S. Federal and Israeli Income Tax Consequences
 
Tax matters are very complicated, and the tax consequences of the receipt of the merger consideration to you will depend on your particular situation.  You are encouraged to consult your tax advisor regarding the specific tax consequences of the merger to you, including tax return reporting requirements, the applicability of federal, state, local and foreign tax laws and the effect of any proposed change in such tax laws.  This discussion is not intended to be a complete analysis or description of all potential tax consequences of the merger consideration and the merger.
 
Certain Material U.S. Federal Income Tax Consequences
 
The following is a general summary of certain material U.S. federal income tax consequences of the merger to U.S. holders and non-U.S. holders (each as defined below).  This summary is based upon currently existing provisions of the Internal Revenue Code of 1986, as amended (the “Code”), U.S. Treasury regulations promulgated thereunder, and administrative and judicial interpretations thereof, all as in effect and available on the date hereof and all of which are subject to change, possibly with retroactive effect.
 
This discussion is limited to Tufin shareholders who hold their Tufin ordinary shares as capital assets within the meaning of Section 1221 of the Code.  No ruling has been or will be sought from the U.S. Internal Revenue Service (the “IRS”), and there can be no assurances that the IRS will not take a different position concerning the tax consequences of the merger or that such a position would not be sustained.  No opinion of counsel has been or will be rendered as to the U.S. federal income tax consequences of the merger.  This summary does not discuss all aspects of U.S. federal income taxation that may be important to particular shareholders in light of their individual circumstances or the U.S. federal income tax consequences to shareholders subject to special treatment under U.S. federal income tax laws, such as (but not limited to) banks and other financial institutions, regulated investment companies, real estate investment trusts, grantor trusts, partnerships (including entities classified as partnerships for U.S. federal income tax purposes) or other pass-through entities, insurance companies, dealers or traders in securities or commodities or currencies, tax-exempt entities or organizations (including an “individual retirement account” or a “Roth IRA” as defined in Section 408 or 408A of the Code), S corporations, certain former citizens or certain former long-term residents of the United States, persons subject to the alternative minimum tax, U.S. holders who own (directly, indirectly or through attribution) 10% or more of the voting power or value of Tufin ordinary shares, persons who own Tufin ordinary shares through a partnership (including an entity classified as a partnership for U.S. federal income tax purposes) or other pass-through entity, persons that hold Tufin ordinary shares as part of a “straddle,” “hedge,” “conversion transaction” or other integrated investment, persons who acquired their Tufin ordinary shares upon the exercise of options, warrants or otherwise received them as consideration for services performed, holders that acquired Tufin ordinary shares as a result of holding or owning Tufin preferred shares, or U.S. holders that have a functional currency other than the U.S. dollar, all of whom may be subject to U.S. federal income tax rules that differ significantly from those summarized below.  This summary also does not discuss U.S. federal income tax consequences to a holder of options or warrants to acquire Tufin ordinary shares.  In addition, this summary does not discuss any non-U.S. or U.S. state or local tax consequences, or any U.S. tax consequences (e.g., estate or gift tax) other than U.S. federal income tax consequences.
 
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As used herein, the term “U.S. holder” means a beneficial owner of Tufin ordinary shares that is, for U.S. federal income tax purposes:
 

an individual who is a citizen or resident of the United States;
 

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;
 

an estate the income of which is subject to U.S. federal income taxation regardless of its source; or
 

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.
 
As used herein, the term “non-U.S. holder” means a beneficial owner of Tufin ordinary shares that is a non-resident alien individual (other than certain former citizens and certain former long-term residents of the United States), a non-U.S. corporation, or an estate or trust that is not a U.S. holder.
 
If a partnership (or any other entity treated as a partnership for U.S. federal income tax purposes) is a beneficial owner of Tufin ordinary shares, the U.S. federal income tax treatment of a partner in the partnership generally will depend upon the status of the partner and the activities of the partnership.  Partnerships that are beneficial owners of Tufin ordinary shares, and partners in such partnerships, are urged to consult their tax advisors regarding the U.S. federal, state, local and non-U.S. tax consequences of the merger.
 
TUFIN SHAREHOLDERS ARE URGED TO CONSULT THEIR TAX ADVISORS AS TO THE PARTICULAR U.S. FEDERAL INCOME AND WITHHOLDING TAX CONSEQUENCES OF THE MERGER TO THEM AND THE EFFECTS OF APPLICABLE STATE, LOCAL, NON-U.S.  OR OTHER TAX LAWS AND POSSIBLE CHANGES IN SUCH TAX LAWS.
 
Receipt of Cash in Exchange for Tufin Ordinary Shares
 
The receipt by a U.S. holder of cash in exchange for Tufin ordinary shares in connection with the merger will be a taxable transaction for U.S. federal income tax purposes.  Generally, subject to the discussion below regarding the potential status of Tufin as a passive foreign investment company (a “PFIC”; see “—Passive Foreign Investment Company”), for U.S. federal income tax purposes, a U.S. holder will recognize gain or loss equal to the difference, if any, between the amount of cash it receives in connection with the merger (determined before deduction for any Israeli tax) and its aggregate adjusted tax basis in Tufin ordinary shares that it exchanges therefor, and such gain or loss will be capital gain or loss.  Gain or loss will be calculated separately for each block of Tufin ordinary shares (i.e., shares acquired at the same cost in a single transaction) exchanged for cash in the merger.  Subject to the discussion below under “—Passive Foreign Investment Company,” a U.S. holder’s adjusted tax basis in its Tufin ordinary shares generally will equal the purchase price that it paid for such shares.
 
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Subject to the discussion below under “—Passive Foreign Investment Company,” any gain or loss recognized by a U.S. holder would be long-term capital gain or loss if the Tufin ordinary shares surrendered were held for more than one year as of the effective date of the merger and would be short-term capital gain or loss if the Tufin ordinary shares surrendered were held for one year or less as of the effective date of the merger.  Subject to application of the net investment income tax described below under “—Medicare Tax,” in the case of certain non-corporate U.S. holders, long-term capital gains are generally subject to a maximum U.S. federal income tax rate of 20%.  Certain limitations apply to the use of capital losses.
 
Any gain or loss that a U.S. holder recognizes on the exchange of its Tufin ordinary shares in connection with the merger will be treated as U.S. source income or loss for foreign tax credit limitation purposes.  Accordingly, because a U.S. holder may use foreign tax credits to offset only the portion of U.S. federal income tax liability that is attributed to its foreign source income, U.S. holders may be unable to claim a foreign tax credit with respect to the Israeli tax, if any, on gains from the exchange of Tufin ordinary shares.  U.S. holders should consult their tax advisors as to whether the Israeli tax on gains may be creditable against their U.S. federal income tax on foreign-source income from other sources as well as regarding the potential benefits of the Convention between the Government of the United States of America and the Government of Israel with Respect to Taxes on Income (the “Treaty”).
 
Subject to the discussion below under “—Backup Withholding” if you are a non-U.S. holder, you generally will not be subject to U.S. federal income or withholding tax on any gain realized on the exchange of your Tufin ordinary shares unless:
 

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
 

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.
 
Passive Foreign Investment Company
 
A non-U.S. corporation generally will be classified as a PFIC for U.S. federal income tax purposes in any taxable year in which, after applying certain look-through rules with respect to the income and assets of subsidiaries, either:
 

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.
 
Passive income for this purpose generally includes, among other things, dividends, interest, royalties, rents and gains from commodities transactions and from the sale or exchange of property that gives rise to passive income.  Assets that produce or are held for the production of passive income may include cash, even if held as working capital or raised in a public offering, marketable securities and other assets that may produce passive income.  In determining whether a non-U.S. corporation is a PFIC, a proportionate share of the income and assets of each corporation in which it owns, directly or indirectly, at least a 25% interest (by value) is taken into account.
 
Tufin’s status as a PFIC will depend on the nature and composition of its income and the nature, composition and value of its assets from time to time.  The 50% passive asset test described above generally is based on the fair market value of each asset, with the value of goodwill and going concern value determined in large part by reference to the market value of Tufin’s ordinary shares, which may be volatile.  If Tufin is a controlled foreign corporation, as defined under Section 957(a) of the Code (a “CFC”) and not publicly traded for the relevant taxable year, however, the test shall be applied based on the adjusted tax bases of its assets.
 
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Certain Treasury Regulations published on January 15, 2021 (the “New Regulations”) modify certain of the rules described above.  Such modifications include, for example, permitting asset value to be determined more frequently than on a quarterly basis and treating a non-U.S. corporation as publicly traded for a taxable year if the stock of such corporation is publicly traded, other than in de minimis quantities, for at least twenty trading days during such taxable year.  The New Regulations generally apply to taxable years of shareholders beginning on or after January 14, 2021.  U.S. holders should consult their tax advisors regarding the impact and applicability of the New Regulations, including the option to apply the New Regulations to open taxable years beginning before January 14, 2021.  Previously, certain proposed Treasury Regulations published on July 11, 2019 (the “Proposed Regulations”) generally would have required the assets of a non-U.S. corporation to be determined on the basis of value (rather than adjusted tax basis) for a taxable year if such corporation were publicly traded for a majority of the days during such taxable year, even if such corporation were a CFC.  Taxpayers generally were permitted to choose whether or not to apply the Proposed Regulations to open taxable years, provided (if they chose to apply them) they applied them consistently and in their entirety.
 
If the Proposed Regulations or the New Regulations are applied to the determination of whether we are a PFIC for the taxable year ending December 31, 2019 (the year of Tufin’s initial public offering), then based on our determination that Tufin ordinary shares are properly treated as being publicly traded under the rules therein for such taxable year and our estimates of the fair market values of Tufin’s assets and the nature and composition of Tufin’s income, we believe that Tufin should not be classified as a PFIC in such taxable year. Based on our determination that Tufin ordinary shares are also properly treated as being publicly traded for the taxable years ended December 31, 2020 and December 31, 2021, and our estimates of the fair market values of Tufin’s assets and the nature and composition of Tufin’s income, we believe that Tufin should not be classified as a PFIC in such taxable years.  However, we believe that Tufin may be classified as a PFIC in one or more taxable years prior to 2019.  Because PFIC status is based on Tufin’s income, assets and activities for the entire taxable year, it is not possible to determine whether Tufin will be classified as a PFIC for the current taxable year until after the close of the taxable year.  These determinations are, however, subject to uncertainty.  In particular, the determination of whether Tufin is, or will be, a PFIC for any taxable year depends, in part, on the application of complex U.S.  federal income tax rules, which are subject to differing interpretations.  It is possible that the IRS will disagree with the interpretation on which our belief about Tufin’s PFIC status is based, and no ruling from the IRS concerning Tufin’s PFIC status has been obtained or is currently planned to be requested.  Accordingly, no assurances can be made regarding Tufin’s PFIC status in any taxable year. Our U.S.  counsel expresses no opinion with respect to Tufin’s PFIC status for any taxable year, and also expresses no opinion with respect to our predictions or past determinations regarding Tufin’s PFIC status in the past or in the future.
 
If you are a U.S. holder and if Tufin has been classified as a PFIC for any taxable year or portion thereof that is included in your holding period, then subject to the discussion below, any gain realized on the exchange of your Tufin ordinary shares in connection with the merger generally will be treated as ordinary income and will be subject to tax as if  (a) the gain had been realized ratably over your holding period, (b) the amount deemed realized in each year had been subject to tax in each year of that holding period at the highest marginal tax rate for such year in effect for individuals or corporations, as applicable (other than income allocated to (i) the current taxable year or (ii)  any taxable year (a) before Tufin became a PFIC or (b) after Tufin ceased to be a PFIC and a “deemed sale” election was made (as described below) with respect to any Tufin ordinary shares held while Tufin was a PFIC, in each case, which would be subject to tax at such U.S. holder’s regular ordinary income rate for the current year and would not be subject to the interest charge discussed below), and (c) the interest charge generally applicable to underpayments of tax had been imposed on the taxes deemed to have been payable in those years, which interest charge is not deductible by non-corporate U.S. holders.
 
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If Tufin is a PFIC for any taxable year during which a U.S. holder holds Tufin ordinary shares, then with respect to such Tufin ordinary shares held while Tufin was a PFIC, Tufin must generally continue to be treated as a PFIC by such U.S. holder for all succeeding taxable years during which such U.S. holder holds such Tufin ordinary shares, unless Tufin ceased to meet the requirements for PFIC status and such U.S. holder made a “deemed sale” election with respect to such Tufin ordinary shares.  After the deemed sale election, a U.S. holder’s Tufin ordinary shares with respect to which the deemed sale election was made will not be treated as shares in a PFIC, unless Tufin subsequently again became a PFIC.  Each U.S. holder is strongly urged to consult its tax advisors as to the possibility and consequences of making a deemed sale election as we believe Tufin may have ceased to be a PFIC in 2019 if Tufin were previously classified as such.
 
If Tufin is a PFIC for any taxable year during which a U.S. holder holds Tufin ordinary shares and any of Tufin’s non-U.S. subsidiaries is also a PFIC (i.e., a lower-tier PFIC), such U.S. holder would be treated as owning a proportionate amount (by value) of the shares of the lower-tier PFIC and would be subject to the rules described above with respect to its indirect disposition of shares of the lower-tier PFIC.  Each U.S. holder is advised to consult its tax advisors regarding the application of the PFIC rules to any of Tufin’s subsidiaries.
 
The tax consequences that would apply if Tufin were a PFIC in any taxable year would be different from those described above if a valid, timely “mark-to-market” election is in effect for a U.S. holder with respect to its Tufin ordinary shares.  If Tufin is a PFIC for the taxable year in which the merger is effected and a U.S. holder has made a valid, timely mark-to-market election with respect to its Tufin ordinary shares, any gain such U.S. holder recognizes on the exchange of its Tufin ordinary shares in connection with the merger will be treated as ordinary income and any loss will be treated as ordinary loss, but only to the extent of the net amount of previously included income as a result of the mark-to-market election.  Any loss recognized in excess of the net amount previously included as income as a result of the mark-to-market election generally will be capital loss and will be long-term capital loss if Tufin ordinary shares have been held for more than one year.  The deductibility of capital losses is subject to limitations.  A U.S. holder’s tax basis in its Tufin ordinary shares would be adjusted to reflect the amount included in gross income or allowed as a deduction because of other income or loss inclusions as a result of such mark-to-market election.  Although a mark-to-market election does not apply to Tufin ordinary shares for any taxable year during which Tufin is not a PFIC, such election will remain in effect with respect to any subsequent taxable year in which Tufin is a PFIC.  U.S. holders should consult their tax advisors regarding the application of the mark-to-market election under their particular circumstances.
 
If a U.S. holder has made a valid, timely qualified electing fund (“QEF”) election with respect to its Tufin ordinary shares, the tax consequences that would apply if we were a PFIC in any taxable year would be different than described above.  In general, if a U.S. holder makes a valid, timely QEF election, it is subject to the following rules: (a) such U.S. holder will include in its income in each of its taxable years in which or with which a taxable year of Tufin ends its pro rata share of Tufin’s net capital gain (as long-term capital gain) and ordinary earnings (as ordinary income), regardless of whether Tufin distributed such net capital gain or ordinary earnings to such U.S. holder; (b) such U.S. holder’s tax basis in its Tufin ordinary shares will be increased by the amount of such income inclusions; (c) distributions of previously included earnings and profits will not be taxable to such U.S. holder; (d) such U.S. holder’s tax basis in its Tufin ordinary shares will be decreased by the amount of such distributions; and (e) any gain such U.S. holder recognizes on the exchange of its Tufin ordinary shares in connection with the merger will be treated as capital gain or loss.
 
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A QEF election applies to the taxable year for which such QEF election is timely made and to all subsequent taxable years, unless such QEF election is invalidated or terminated or the IRS consents to revocation of such QEF election.  If a U.S. holder made a QEF election in any taxable year in which Tufin is classified as a PFIC and, in a subsequent taxable year, Tufin ceased to be a PFIC, the QEF election will remain in effect (although it will not be applicable) during those taxable years in which Tufin is not classified as a PFIC (and would again be applicable in taxable years in which Tufin is classified as a PFIC).
 
A QEF election is made on a shareholder-by-shareholder basis and may be revoked only with the consent of the IRS.  A U.S. holder generally makes a QEF election by attaching a completed IRS Form 8621 (Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund), including the information provided in a PFIC annual information statement, to a timely filed U.S. federal income tax return for the taxable year of such U.S. holder to which the election relates.  If a U.S. holder owns PFIC stock indirectly through another PFIC, separate QEF elections must be made for the PFIC in which such U.S. holder is a direct shareholder and the lower-tier PFIC for the QEF rules to apply to both PFICs.
 
Retroactive QEF elections generally may be made only by filing a protective statement with a U.S. holder’s U.S. federal income tax return and if certain other conditions are met or with the consent of the IRS.  U.S. holders should consult their tax advisors regarding the availability and tax consequences of a retroactive QEF election under their particular circumstances.
 
To comply with the requirements of a QEF election, a U.S. holder must receive a PFIC annual information statement from Tufin.  Tufin will use commercially reasonable efforts to make available to U.S. holders such information with respect to Tufin as is necessary for U.S. holders to make QEF elections with respect to Tufin for any taxable year in which Tufin determines that it is classified as a PFIC.  Tufin may elect to provide such information on its website.  U.S. holders should consult their tax advisors regarding the application of the QEF election under their particular circumstances.
 
Each U.S. holder who is a shareholder of a PFIC must file an annual information report on IRS Form 8621 containing such information as the U.S. Treasury Department may require.  The failure to file IRS Form 8621 could result in the imposition of penalties and the extension of the statute of limitations with respect to U.S. federal income tax.
 
U.S. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS REGARDING THE POTENTIAL APPLICATION OF THE PFIC RULES TO THE RECEIPT OF CASH PURSUANT TO THE MERGER.
 
Medicare Tax
 
U.S. holders that are individuals, estates or trusts and whose income exceeds certain thresholds generally will be subject to an additional 3.8% net investment income tax on any capital gains arising from the exchange of their Tufin ordinary shares pursuant to the merger.  U.S. holders are urged to consult their tax advisers regarding the application of the net investment income tax to them as a result of the merger.
 
Backup Withholding
 
If you are a U.S. holder, the payment of cash pursuant to the merger in exchange for Tufin ordinary shares may be subject to information reporting and backup withholding, at applicable rates.  Backup withholding will not apply, however, to a U.S. holder who (a) furnishes a current taxpayer identification number and certifies that the holder is not subject to backup withholding on IRS Form W-9 or a substantially similar form, or (b) is otherwise exempt from backup withholding.  If a U.S. holder does not provide its correct taxpayer identification number on IRS Form W-9 or a substantially similar form, such holder may be subject to penalties imposed by the IRS.  Amounts withheld, if any, are generally not an additional tax and may be refunded or credited against such U.S. holder’s U.S. federal income tax liability, provided that such holder furnishes the required information to the IRS.  The backup withholding tax rate is currently 24%.
 
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Information returns may be required to be filed with the IRS in connection with, and a non-U.S. holder may be subject to backup withholding on amounts received in respect of, a non-U.S. holder’s exchange of Tufin ordinary shares, unless such non-U.S. holder furnishes to the applicable withholding agent the required certification as to its non-U.S. status, such as by providing a valid IRS Form W-8BEN, IRS Form W-8BEN-E or IRS Form W-8ECI, as applicable, or the non-U.S. holder otherwise establishes an exemption.
 
THE FOREGOING DISCUSSION IS NOT INTENDED TO BE LEGAL OR TAX ADVICE TO ANY PARTICULAR SHAREHOLDER.  TAX MATTERS ARE VERY COMPLICATED, AND THE TAX CONSEQUENCES OF THE MERGER TO TUFIN SHAREHOLDERS WILL DEPEND ON THEIR PARTICULAR SITUATION.  TUFIN SHAREHOLDERS ARE ENCOURAGED TO CONSULT THEIR TAX ADVISORS REGARDING THE SPECIFIC TAX CONSEQUENCES OF THE MERGER, INCLUDING TAX RETURN REPORTING REQUIREMENTS, THE APPLICABILITY OF FEDERAL, STATE, LOCAL AND FOREIGN TAX LAWS AND THE EFFECT OF ANY PROPOSED CHANGE IN SUCH TAX LAWS.
 
 Certain Material Israeli Tax Consequences
 
The following is a summary discussion of certain Israeli tax considerations in connection with the merger.  The following summary is presented for general information purposes only and is based upon current Israeli tax law.  No assurance can be given that new or future legislation, regulations or interpretations will not significantly change the tax considerations described below, and any such change may apply retroactively.  This summary does not discuss all material aspects of Israeli tax consequences that may apply to particular holders of Tufin ordinary shares in light of their particular circumstances, such as investors subject to special tax rules or other investors referred to below.
 
Tax matters are very complicated, and the Israeli tax consequences of the merger to Tufin shareholders will depend on their particular situation.  You are encouraged to consult your tax advisors regarding the specific Israeli tax consequences of the merger applicable to you, including tax return reporting requirements, the applicability of federal, state, local and foreign tax laws and the effect of any proposed change in the tax laws.  This discussion is not intended to be a complete analysis or description of all potential tax consequences of the merger.
 
In general, under the Israeli Income Tax Ordinance (New Version) 1961, as amended (the “Ordinance”), capital gain tax is imposed on the disposition of capital assets by an Israeli resident, and on the disposition of such assets by a non-Israel resident if those assets are either (a) located in Israel, (b) are shares or a right to a share in an Israeli resident corporation or (c) represent, directly or indirectly, rights to assets located in Israel, unless a specific exemption is available under the Israeli tax rules or a treaty for the prevention of double taxation between Israel and the transferor’s country of residence provides otherwise (subject to the receipt in advance of a valid certificate from the ITA allowing for an exemption).
 
Under the Ordinance and regulations promulgated thereunder, the tax rate applicable to real capital gains (after adjustment for inflation surplus) derived from the disposition of Tufin ordinary shares in the merger is 25% for individuals, unless such shareholder claims a deduction for certain financing expenses in connection with such shares, in which case the gain will generally be taxed at a rate of 30%.  Additionally, if such individual is considered a “Significant Shareholder” at any time during the 12-month period preceding such disposition the tax rate will be 30%.  A “Significant Shareholder” is, generally, a shareholder who holds directly or indirectly, alone or together with such person’s relative or another person who collaborates with such person on a permanent basis, at least 10% of any means of control (including, among other things, the right to receive profits of Tufin, voting rights, the right to receive Tufin’s liquidation proceeds and the right to appoint a director) in Tufin.  Israeli law distinguishes between real capital gain and inflationary surplus.  Please consult with your tax advisor as to the method you should use to determine the inflationary surplus.  The real capital gain is the excess of the total capital gain over the inflationary surplus.  Real capital gains derived by companies are generally taxed at the ordinary corporate tax rate (the ordinary corporate tax rate in Israel in 2022 and thereafter is 23%).  The foregoing tax rates will not apply to individual shareholder dealing in securities or to an individual shareholder for whom such income is otherwise taxable as ordinary business income, currently, at a rate of 23% for corporations and a marginal tax rate of up to 47% for individuals.  Additional tax of 3%, shall be imposed on individuals whose annual taxable income exceeds a certain threshold (NIS 663,240 for 2022).
 
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Under the Treaty, Israeli capital gains tax generally will not apply to the disposition of shares of an Israeli company by a U.S. holder who is entitled to claim the benefits afforded to such a resident by the Treaty (a “U.S. Treaty Resident”) and holds the shares as a capital asset.  However, such exemption will not apply if  (a) the U.S. Treaty Resident has held, directly or indirectly, shares representing 10% or more of the voting power in Tufin during any part of the 12-month period preceding the disposition, subject to specified conditions, (b) the capital gains from such disposition may be attributed to a permanent establishment of such U.S. Treaty Resident maintained in Israel; (c) the seller, being an individual, is present in Israel for a period or periods of 183 days or more in the aggregate at the taxable year; (d) the capital gains arising from such sale, exchange or disposition is attributed to real estate located in Israel; or (e) the capital gains arising from such sale, exchange or disposition is attributed to royalties.  In any such case, the sale, exchange or disposition of such shares would be subject to Israeli tax, to the extent applicable; however, under the Treaty, a U.S. Treaty Resident would generally be permitted to claim a credit for the tax against the U.S. federal income tax imposed with respect to the sale, exchange or disposition, subject to the limitations in U.S. laws applicable to foreign tax credits.  Eligibility to benefit from tax treaties is conditioned upon the holder of Tufin ordinary shares presenting a valid certificate from the ITA providing for such an exemption prior to the applicable payment for such shares.
 
In addition, Israeli law generally exempts non-residents of Israel (whether an individual or a corporation) from Israeli capital gains tax on the sale of shares traded on certain stock exchanges, such as the NYSE provided, among other things, that (a) such gains were not derived from a permanent business or business activity that the non-Israeli resident maintains in Israel, and (b) such shareholders are not subject to the Israeli Income Tax Law (Inflationary Adjustments) 5745-1985; (c) the shares were purchased by the seller following the listing of the company in the stock exchange.  These provisions dealing with capital gain are not applicable to a person whose gains from selling or otherwise disposing of the shares are deemed to be business income.  A non-Israeli corporation will not be entitled to the foregoing exemptions if an Israeli resident or Israeli residents (x) hold more than 25% of any means of control in such non-Israeli corporation or (y) is the beneficiary of or is entitled to 25% or more of the revenues or profits of such non-Israeli corporation, whether directly or indirectly.  Tufin shareholders who acquired their Tufin ordinary shares prior to Tufin’s initial public offering in April 2019 and who do not qualify for an exemption from Israeli capital gains tax under the Ordinance or an applicable tax treaty to which the State of Israel is a party, including the Treaty (which exemption requires the receipt in advance of a valid certificate from the ITA providing for such an exemption), may be subject to Israeli capital gains tax on the disposition of their Tufin ordinary shares in the merger.  Such shareholders should consult their tax advisors regarding the tax consequences of the merger to them.
 
Buyer and Tufin have agreed to request certain tax rulings from the ITA, as follows:


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.
 
No assurance can be made that any of the requests made in the tax ruling request will be granted by the ITA.
 
Accounting Treatment of the Merger
 
In accordance with U.S. generally accepted accounting principles, Buyer will account for the merger using the acquisition method of accounting pursuant to the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 805 - Business Combinations.
 
Regulatory Matters
 
In considering the various conditions that must be satisfied prior to the completion of the merger, Tufin specifically considered the various regulatory filings and approvals that would be necessary to complete the merger, including receipt of the regulatory approvals referred to below.  Tufin and Buyer have agreed to work towards receipt of all required regulatory approvals.
 
Antitrust Filing under the HSR Act
 
Under the HSR Act, certain transactions, including the merger, may not be consummated unless certain waiting period requirements have expired or been early terminated.  Pursuant to the requirements of the HSR Act, the required Notification and Report Forms with respect to the merger were filed with the Antitrust Division of the DOJ (the “Antitrust Division”) and the FTC, on April 20, 2022.  The initial 30-calendar day waiting period with respect to the merger commenced on April 20, 2022 and is set to expire on May 20, 2022 unless extended.
 
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If, within the initial 30-calendar day waiting period, either the Antitrust Division or the FTC requests additional information and documentary material concerning this merger, the waiting period will be extended and will expire at 11:59 p.m. Eastern Time on the 30th calendar day after the date both parties substantially comply with that request, unless the waiting period is earlier terminated by the FTC or the Antitrust Division.  If the 30th day falls on a weekend or federal holiday, the waiting period will expire on the next business day.  The parties may also negotiate a timing agreement with the FTC or the Antitrust Division in which the parties would agree not to consummate this merger before a specific date.
 
At any time before or after this merger is completed, any of the Antitrust Division, the FTC or private parties (including individual states) may bring legal actions under the antitrust laws.  Tufin does not believe that the consummation of the merger will result in a violation of any applicable antitrust laws, subject to the parties obtaining those regulatory approvals that are required.  However, there can be no assurance that a challenge to the merger on antitrust grounds will not be made, or if such a challenge is made, what the result will be.  The expiration or early termination of the waiting period under the HSR Act, or receipt of approval of the merger following a legal action under U.S. antitrust laws, is a condition to the closing of the merger.
 
Foreign Investment Filings
 
Tufin and Buyer have agreed under the merger agreement to file with the applicable governmental authorities the requisite foreign investment filings in France, Germany, and Romania as promptly as reasonably practicable after April 5, 2022, and in any event before the expiration of any applicable legal deadlines.
 

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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Israeli Companies’ Registrar
 
Each of Tufin and Merger Sub is required to file with the Israeli Companies’ Registrar a merger proposal setting forth specified details with respect to the merger, within three days of calling the special general meeting to approve the merger.  Tufin and Merger Sub have filed the required merger proposals with the Israeli Companies’ Registrar.
 
After the shareholders’ vote, each of Tufin and Merger Sub must file a notice with the Israeli Companies’ Registrar regarding the approval of the merger by the Tufin shareholders no later than three business days after the date on which such approval is received.  Merger Sub has filed the required notice regarding the approval of the merger by the sole shareholder of Merger Sub.
 
Assuming that the shareholders of Tufin approve the merger proposal (and all the other conditions set forth in the merger agreement have been satisfied) and that all of the statutory procedures and requirements have been complied with, including the submission of all required approvals to the Israeli Companies’ Registrar, and so long as least 30 days have elapsed after the approval of the merger by the Tufin shareholders and at least 50 days have passed from the date of the filing of the merger proposals with the Israeli Companies’ Registrar, the merger will become effective upon the issuance of a certificate of merger following a request by Tufin and Merger Sub, and upon request the Israeli Companies’ Registrar will be required to register the merger in the Israeli Companies’ register.
 
Israeli Tax Rulings
 
Buyer and Tufin have agreed to request certain rulings from the Israeli Tax Authority.  See “—Certain Material U.S. and Israeli Income Tax Consequences—Certain Material Israeli Tax Consequences.
 
Notice to Creditors
 
Pursuant to the Companies Law, a notification of the merger must be sent to the secured creditors of each merging company within three days after the applicable merging company’s merger proposal was filed with the Israeli Companies’ Registrar.  Non-secured creditors must be informed of the merger by publication in two daily newspapers in Israel on the day that the applicable merger proposal is submitted to the Israeli Companies’ Registrar and, with respect to Tufin, in one daily newspaper in New York within three days of the date that Tufin’s merger proposal is submitted to the Israeli Companies’ Registrar.  Both merging companies have notified their respective creditors of the merger in accordance with these requirements, to the extent applicable.  Both merging companies have also notified the Israeli Companies’ Registrar of the notices given to their respective creditors.
 
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THE MERGER AGREEMENT
 
The following is a summary of certain material provisions of the merger agreement.  The descriptions in this summary are not complete and do not purport to describe all of the terms of the merger agreement and may not contain all of the information that is important to you.  The following summary is qualified in its entirety by reference to the complete text of the merger agreement, a copy of which is attached as Annex A to this proxy statement and incorporated by reference herein.  You are urged to read the merger agreement carefully and in its entirety because it is the legal document that governs the merger.  This section entitled “The Merger Agreement” is not intended to provide you with any factual information about us.  Such information can be found elsewhere in this proxy statement and in the public filings we make with the SEC, as described in the section entitled “Where You Can Find More Information” beginning on page 97 of this proxy statement.
 
Explanatory Note Regarding the Merger Agreement
 
The below summary of the merger agreement has been provided solely to inform you of its terms.  The rights and obligations of Tufin, Buyer and Merger Sub are governed by the express terms of the merger agreement and not by this summary or any other information contained in this proxy statement.  The merger agreement contains customary representations and warranties that Tufin, Buyer and Merger Sub made to each other as of specific dates.  The assertions embodied in those representations and warranties were made solely for purposes of the merger agreement among Tufin, Buyer and Merger Sub and may be subject to important qualifications and limitations not reflected in the text of the merger agreement agreed to by Tufin, Buyer and Merger Sub in connection with the negotiated terms of the merger agreement.  In addition, some of those representations and warranties may not be accurate or complete as of any specified date, may change after the date of the merger agreement, may be subject to a contractual standard of materiality different from those generally applicable to shareholders or may have been used for purposes of allocating risk among Tufin, Buyer and Merger Sub rather than establishing matters as facts.  Investors and security holders are not third-party beneficiaries under the merger agreement and you should not rely on the covenants in the merger agreement as actual limitations on the respective businesses of Tufin, Buyer and Merger Sub, because the parties may take certain actions that are either expressly permitted in the confidential disclosure letter to the merger agreement or as otherwise consented to by the appropriate party, which consent may be given without prior notice to the public.  The merger agreement is described below, and included as Annex A, only to provide you with information regarding its terms and conditions, and not to provide any other factual information regarding Tufin, Buyer, Merger Sub or their respective businesses.  For the foregoing reasons, you should not read the representations and warranties given by the parties in the merger agreement or any description of the merger agreement as characterizations of the actual state of facts or conditions of Tufin, Buyer, Merger Sub or any of their respective subsidiaries or affiliates.
 
The Merger
 
Upon the terms and subject to the conditions of the merger agreement, and in accordance with Israeli law, at the effective time of the merger, Merger Sub, a wholly owned subsidiary of Buyer, will be merged with and into Tufin and, as a result of the merger, the separate corporate existence of Merger Sub will cease and Tufin will continue as the surviving company and will (a) become a wholly owned subsidiary of Buyer, (b) continue to be governed by the laws of the State of Israel, (c) maintain a registered office in the State of Israel and (d) succeed to and assume all of the rights, properties and obligations of Merger Sub and Tufin in accordance with the Companies Law.  The merger will be effected by way of a statutory merger pursuant to Sections 314-327 of the Companies Law, which requires, among other things, the approval of a simple majority of votes present or represented by proxy at a special general meeting of Tufin’s shareholders, excluding abstentions and broker non-votes and excluding the voting power of any Tufin ordinary shares that are held by Merger Sub or Buyer.
 
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Closing and Effective Time of the Merger
 
Unless otherwise agreed upon in writing by Tufin, Buyer and Merger Sub or unless the merger agreement is terminated in accordance with its provisions, the closing of the merger will take place on the date that is five business days after the satisfaction or waiver (to the extent permitted under the merger agreement) of the last to be satisfied or waived of the conditions precedent set forth in the merger agreement and described in the section entitled “—Conditions to the Closing of the Merger” beginning on page 86 of this proxy statement (other than those conditions that by their terms are to be satisfied at the closing of the merger, but subject to the satisfaction or waiver of those conditions (as permitted under the merger agreement)).  The merger will become effective upon the issuance by the Israeli Companies’ Registrar of the certificate of merger in accordance with Section 323(5) of the Companies Law (such time, the “effective time” of the merger).
 
Articles of Association; Directors and Officers
 
At the effective time of the merger, the articles of association of Tufin will be amended and restated so that they read in their entirety as set forth in Exhibit A in the merger agreement, and, as so amended, will be the articles of association of the surviving company, until thereafter amended in accordance with their terms, and as provided by applicable law.  The members of the board of directors of Merger Sub immediately prior to the effective time of the merger will be, from and after the effective time of the merger, the members of the board of directors of the surviving company, and the officers of Merger Sub immediately prior to the effective time of the merger shall, from and after the effective time of the merger, be the officers of the surviving company, in each case to hold office until the earlier of their respective death, resignation or removal or until their respective successors are duly elected, designated and qualified.
 
The Merger Consideration and the Conversion of Share Capital
 
At the effective time of the merger, unless otherwise mutually agreed by the parties to the merger agreement and the applicable holder, by virtue of the merger and without any action on the part of Tufin, Buyer, Merger Sub or the holders of any Tufin ordinary shares, each Tufin ordinary share outstanding immediately prior to the effective time of the merger (other than Tufin ordinary shares held as treasury stock of Tufin or owned by Buyer, Merger Sub or any direct or indirect wholly owned subsidiary of Buyer or Merger Sub, in each case as of immediately prior to the effective time of the merger (“Owned Tufin Shares”), which such Owned Tufin Shares will be canceled and extinguished without any conversion or consideration paid in respect thereof) will be cancelled and extinguished and automatically converted into and represent the right to receive $13.00 in cash without any interest thereon less applicable withholding taxes.
 
Each ordinary share of Merger Sub outstanding immediately prior to the effective time of the merger will be automatically converted into one ordinary share of the surviving company.
 
Each redeemable share of Merger Sub outstanding immediately prior to the effective time of the merger will be automatically converted into one share of the surviving company.
 
Treatment of Equity Awards
 
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 (each, 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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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 Tufin Option (other than a Tufin Option held by a non-employee director of Tufin) that is outstanding immediately prior to the effective time of the merger and that is scheduled to vest after the closing date of the merger (as of immediately prior to the effective time of the merger), will be automatically canceled and converted into a contingent right to receive an amount in cash (without interest) (“Contingent Cash Award”) equal to the Option Consideration with respect to such Tufin Option.  Such Contingent Cash Award will (A) in the case of any portion of such Contingent Cash Award relating to a Tufin Option that would have otherwise vested on or prior to December 31, 2022, 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 with or service to Buyer and its affiliates (including the surviving company and its subsidiaries) though the applicable vesting dates, and (B) in the case of any portion of such Contingent Cash Award relating to a Tufin Option that would have otherwise vested following December 31, 2022, 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 with or service to Buyer and its affiliates (including the surviving company and its subsidiaries) through the applicable accelerated vesting date.  Except as set forth above, each such Contingent Cash Award will remain subject to the same terms and conditions as were applicable to the Tufin Option from which it was converted immediately prior to the effective time of the merger (except for any terms rendered inoperative by reason of the transactions contemplated by the merger agreement or other ministerial changes).
 
At the effective time of the merger and without any action on the part of Buyer, Merger Sub, Tufin or the holder thereof, each Tufin Option held by a non-employee director of Tufin that is unvested and outstanding immediately prior to the effective time of the merger will, in each case, be canceled and converted into the right to receive an amount in cash, without interest, equal to the Option Consideration with respect to such Tufin Option.
 
Notwithstanding the foregoing, at the effective time of the merger and without any action on the part of Buyer, Merger Sub, Tufin or the holder thereof, any Tufin Option (vested or unvested) that has a per share exercise price that is equal to or greater than $13.00 will be automatically canceled for no consideration.
 
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 restricted stock unit award (each, a “Tufin RSU”) that is vested and outstanding immediately prior to the effective time of the merger will be automatically canceled in exchange for the right of the holder thereof to receive a cash payment 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”).
 
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 (i) Tufin RSU (other than a Tufin RSU held by a non-employee director of Tufin) that is outstanding and unvested immediately prior to the effective time of the merger, 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, in each case, be automatically canceled and converted into a contingent right to receive a Contingent Cash Award equal to the RSU Consideration with respect to such Tufin RSU or Deemed RSU.  Such Contingent Cash Award will (A) in the case of any portion of such Contingent Cash Award relating to a Tufin RSU or Deemed RSU that would have otherwise vested on or prior to December 31, 2022, 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 with or service to Buyer and its affiliates (including the surviving company and its subsidiaries) though the applicable vesting dates and (B) in the case of any portion of such Contingent Cash Award relating to a Tufin RSU or Deemed RSU that would have otherwise vested following December 31, 2022, vest and become payable as of the applicable accelerated vesting date, subject to the holder’s continued employment with Buyer and its affiliates (including the surviving company and its subsidiaries) through the applicable accelerated vesting date.  Except as set forth above, each such Contingent Cash Award will remain subject to the same terms and conditions as were applicable to the Tufin RSU or Deemed RSU from which it was converted immediately prior to the effective time of the merger (except for any terms rendered inoperative by reason of the transactions contemplated by the merger agreement or other ministerial changes).
 
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At the effective time of the merger, each Tufin RSU held by a non-employee director of Tufin that is unvested and outstanding immediately prior to the effective time of the merger will, in each case, without any action on part of Buyer, Merger Sub, Tufin or the holder thereof, automatically be canceled and converted into the right to receive an amount in cash, without interest, equal to the RSU Consideration with respect to such RSU award.
 
Paying Agent; Exchange Fund; Payment Procedures
 
Prior to the closing date of the merger, Buyer will select a transfer agent or such other bank or trust company, reasonably acceptable to Tufin, to act as the paying agent for the merger and enter into an agreement with the paying agent in form and substance reasonably acceptable to Tufin and, to the extent required pursuant to the provisions of certain withholding tax rulings under Israeli law, Buyer will also select a withholding agent to assist, among other things, in obtaining any requisite residency certificate and/or other declaration for Israeli tax withholding purposes, and/or a valid tax certificate issued by the ITA, as applicable, and enter into an agreement with the withholding agent in a form reasonably satisfactory to Tufin.  The surviving company (or, in the event of termination of the merger agreement, Buyer) is responsible for all fees and expenses of the paying agent and withholding agent.
 
At or prior to the closing, Buyer must deposit, or cause to be deposited, with the paying agent, for payment to the holders of Tufin ordinary shares (excluding Tufin ordinary shares issued upon exercise of options granted under Section 102(b)(2) and 102(b)(3) of the Ordinance (such options referred to as “102 Options”) or vesting of RSUs granted under Section 102(b)(2) and 102(b)(3) of the Ordinance (referred to as “102 RSUs,” and such shares issued upon the exercise of 102 Options and vesting of 102 RSUs, referred to as “102 Shares”), in respect of which payment will be transferred directly to the trustee appointed by Tufin in accordance with the provisions of the Ordinance (the “102 Trustee”)), an amount of cash equal to the aggregate merger consideration which holders of Tufin ordinary shares are entitled to receive pursuant to the merger agreement (the “Exchange Fund”).  The Exchange Fund will be invested by the paying agent, as directed by the Buyer or the surviving company in (i) obligation of or guaranteed by the United States, (ii) commercial paper obligation rated A-1 or P-1 or better by the applicable ratings agency or (iii) certificates of deposit or similar.  To the extent that the Exchange Fund diminishes for any reason below the level required for the paying agent to promptly pay the cash amounts to such holders of Tufin ordinary shares, Buyer will, or will cause the surviving company to, promptly replace or restore the amount of cash in the Exchange Fund so as to ensure that the Exchange Fund is at all times fully available for distribution and maintained at a level sufficient for the paying agent to the make the payments contemplated by the merger agreement.  Any income from investment of the Exchange Fund will be payable to Buyer or the surviving company, as Buyer directs.
 
Promptly following the effective time of the merger (and in any event within three business days following the effective time of the merger), Buyer and the surviving company will cause the paying agent to mail to each holder of record (as of immediately prior to the effective time of the merger) of (i) a certificate or certificates representing outstanding Tufin ordinary shares as of immediately prior to the effective time of the merger (other than 102 Shares and Owned Tufin Shares); and (ii) uncertificated Tufin ordinary shares (other than 102 Shares and Owned Tufin Shares) (a) a letter of transmittal, (b) a declaration and/or a valid tax certificate in which the beneficial owner of Tufin ordinary shares provides certain information necessary for Buyer to determine whether any amounts need to be withheld from the merger consideration payable to such beneficial holder pursuant to the terms of the Ordinance, the Code or any provision of state, local, Israeli or foreign law, and (c) instructions for use in effecting the surrender of the certificates in exchange for the merger consideration, in exchange for the share price payable in respect thereof pursuant to the terms of the merger agreement.
 
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Upon (i) surrender of certificates for cancellation to the paying agent, together with such letter of transmittal, duly completed and validly executed in accordance with the instructions thereto or (ii) receipt of an “agent’s message” by paying agent in the case of a book-entry transfer of uncertificated Tufin ordinary shares, the holders of such shares or book-entry shares will be entitled to receive in exchange therefor an amount in cash equal to the product obtained by multiplying (x) the aggregate number of Tufin ordinary shares represented by such certificate; by (y) the per share price, less applicable withholding taxes, and each certificate Tufin ordinary share or uncertificated Tufin ordinary share held in a book-entry account so surrendered will be canceled.
 
Any merger consideration payable in respect of 102 Shares will be transferred by the paying agent to the 102 Trustee for the benefit of the beneficial owners thereof, and such portion of the Exchange Fund will be released by the 102 Trustee to the beneficial holders of such 102 Shares, in accordance with the requirements of the Ordinance and the option tax ruling (as defined below), if obtained.
 
Payment of the merger consideration in respect of Tufin ordinary shares may be made to a person other than the person in whose name the certificates representing the Tufin ordinary shares or uncertificated Tufin ordinary shares or Tufin ordinary shares held in a book-entry account so surrendered are registered in the stock transfer books or ledger of Tufin only if the certificate representing such Tufin ordinary shares or uncertificated Tufin ordinary shares or Tufin ordinary shares held in a book-entry account is properly endorsed and otherwise in proper form for surrender and transfer, and subject to Buyer’s general obligation to pay or cause to be paid transfer taxes, the person requesting such payment pays to Buyer any transfer taxes required to be paid by reason of the payment of the applicable merger consideration or establishes to the satisfaction of Buyer that such taxes have been paid or are otherwise not payable.
 
If any cash deposited with the paying agent is not claimed within one year following the effective time of the merger, such cash will be delivered to Buyer upon demand, subject to tax withholding, if required by applicable law, and any holders of Tufin ordinary shares that were issued and outstanding immediately prior to the merger who have not previously surrendered their certificates or uncertificated Tufin ordinary shares pursuant to the exchange procedures in the merger agreement may thereafter look only to Buyer, and subject to the terms of the merger agreement, Buyer will remain liable for payment of any such holder’s claim for merger consideration.  Any amounts remaining unclaimed by holders of any such certificates or uncertificated Tufin ordinary shares two years after the effective time of the merger, or at such earlier date as is immediately prior to the time at which such amounts would otherwise escheat to, or become property of, any governmental authority, will, to the extent permitted by applicable law, become the property of the surviving company free and clear of any claims or interest of any such holders (and their successors, assigns or personal representatives) previously entitled thereto.
 
None of the paying agent, Buyer, Merger Sub, the surviving company or any other party to the merger agreement will be liable to a holder of Tufin ordinary shares for any amount properly paid to a public official pursuant to any applicable abandoned property, escheat or similar law.
 
In the event that any certificate representing Tufin ordinary shares has been lost, stolen or destroyed, the paying agent will issue in exchange therefor, upon the making of an affidavit of that fact by the holder thereof, the per share price payable in respect thereof pursuant to the terms of the merger agreement.  Buyer or the paying agent may, in its discretion and as a condition precedent to the payment of such per share price, require the owners claiming such certificate to be lost, stolen or destroyed to deliver a bond in such amount as it may direct as indemnity against any claim that may be made against Buyer, the surviving company or the paying agent with respect to such alleged lost, stolen or destroyed certificate.
 
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Required Tax Withholding
 
In general, each of the paying agent, the withholding agent, the Section 102 trustee, Buyer, Tufin, and their affiliates (each, a “Payor”) are entitled to deduct and withhold from any payments pursuant to the merger agreement such amounts as the applicable Payor reasonably determines are required by applicable tax law to be deducted or withheld therefrom.  To the extent that such amounts are so deducted, withheld and paid over to or deposited with the relevant governmental authority, such amounts will be treated for all purposes of the merger agreement as having been paid to the person to whom such amounts would otherwise have been paid.

The parties intend to comply with Income Tax Circular 19/2018 (Transaction for Sale of Rights in a Corporation that includes Consideration that will be transferred to the Seller at Future Dates) (the “Circular”), then, provided that an undertaking as required under Section 6.2.4.3 of the Circular is provided prior to the closing, (a) the Buyer shall not deduct or withhold any amount from the consideration transferred to the paying agent or the withholding agent for the purposes of withholding Israeli taxes; and (b) the payment of any consideration to any holder of shares (other than section 102 shares) shall be retained by the withholding agent for the benefit of such holder for a period of up to one hundred eighty (180) days from the closing date or an earlier date required in writing by such holder or as otherwise requested by the ITA (the “Withholding Drop Date”) and during which time, such holder may obtain or present to the paying agent or the withholding agent a Valid Withholding Certificate.  If no later than three (3) business days prior to the Withholding Drop Date a Valid Withholding Certificate is delivered to the paying agent or the withholding agent, the paying agent and the withholding agent shall act in accordance with the provisions of such Valid Withholding Certificate.  If such holder (i) does not provide paying agent or the withholding agent with a Valid Withholding Certificate, by no later than three (3) Business Days before the Withholding Drop Date, or (ii) submits a written request with paying agent or the withholding agent to release its portion of the consideration prior to the Withholding Drop Date and fails to submit a Valid Withholding Certificate at or before such time, then the amount to be withheld from such holder’s portion of the consideration shall be calculated according to the applicable withholding rate on the payment date.  In any event, if the withholding tax ruling (as further described under the “Certain Material Israeli Tax Consequences” chapter above) is obtained, the parties will act in accordance with such a ruling.

“Valid Withholding Certificate” means a valid certificate, ruling or any other written instructions regarding tax withholding, issued by the ITA in form and substance reasonably satisfactory to Buyer, that is applicable to the payments to be made pursuant to merger agreement stating that no withholding, or reduced rate of withholding, of Israeli tax is required with respect to such payments or providing other instructions regarding such payments or withholding.

 Any payments made to equity holders and holders of section 102 shares will be subject to deduction or withholding of Israeli tax on the fifteenth (15th) day of the calendar month following the month during which the closing of the merger occurs; unless the withholding tax ruling and the 102 tax ruling (with respect to holders of section 102 securities) (as further described under the “Certain Material Israeli Tax Consequences” chapter above) shall have been obtained before the fifteenth (15th) day of the calendar month following the month during which the closing of the merger occurs, and in such case, the Payor will act in accordance with the such rulings.

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Representations and Warranties
 
The merger agreement contains representations and warranties of Tufin, Buyer and Merger Sub.
 
Some of the representations and warranties in the merger agreement made by Tufin are qualified as to “materiality” or “Company Material Adverse Effect.” For purposes of the merger agreement, “Company Material Adverse Effect” means, with respect to Tufin, any change, event, effect, development, occurrence or circumstance that, individually or in the aggregate, is, has had, or would reasonably be expected to have a material adverse effect on (i) the ability of the Tufin or its Subsidiaries to perform their material obligations under the merger agreement, or to consummate the transactions or (ii) the business, assets, properties, condition (financial or otherwise) or results of operations of Tufin or its subsidiaries, taken as a whole, except that, solely with respect to clause (ii), no changes, events, effects or circumstances with respect to the following matters (by itself or when aggregated) will be deemed to be or constitute a Company Material Adverse Effect or will be taken into account when determining whether a Company Material Adverse Effect has occurred or would reasonably be expected to occur (subject to the limitations set forth below):
 

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;
 

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;
 

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);
 

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;
 

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);
 

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);
 

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
 

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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except, with respect to bullets 1-6 and 10-11 above, to the extent that such change, event, effect, development, occurrence or circumstance has had a disproportionate adverse effect on the Tufin and its Subsidiaries relative to other companies operating in the industry or industries in which the Tufin and its Subsidiaries conduct business, in which case only the incremental disproportionate adverse impact may be taken into account in determining whether a Company Material Adverse Effect has occurred or would reasonably be expected to occur.
 
In the merger agreement, Tufin has made customary representations and warranties to Buyer and Merger Sub that are subject, in some cases, to specified exceptions and qualifications contained in the merger agreement.  These representations and warranties relate to, among other things:
 

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;
 

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;
 

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;
 

the subsidiaries of Tufin;
 

the accuracy and required filings of Tufin’s SEC filings and financial statements;
 

Tufin’s disclosure controls and procedures;
 

Tufin’s internal accounting controls and procedures;
 
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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;
 

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;
 

environmental matters;
 

trademarks, patents, copyrights and other intellectual property matters including data security requirements, information technology and privacy encryption technology;
 

tax matters;
 

employee benefit plans;
 

labor matters, including Israeli labor matters;
 

environmental matters;
 

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.
 
In the merger agreement, Buyer and Merger Sub have made customary representations and warranties to Tufin that are subject, in some cases, to specified exceptions and qualifications contained in the merger agreement.  These representations and warranties relate to, among other things:
 

due organization, good standing and authority and qualification to conduct business with respect to Buyer and Merger Sub and availability of these documents;
 

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;
 

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;
 
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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;
 

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.
 
The representations and warranties of all parties contained in the merger agreement will not survive the consummation of the merger.
 
Conduct of Business Pending the Merger
 
The merger agreement provides that, except: (i) as contemplated by the merger agreement; (ii) as required by applicable law; (iii) as approved in writing in advance by Buyer (which approval will not be unreasonably withheld, conditioned or delayed); (iv) as disclosed in the confidential disclosure letter to the merger agreement; or (v) for any reasonable actions taken in good faith to respond to COVID-19 Measures, at all times during the period of time between the date of the signing of the merger agreement and the first to occur of the effective time of the merger and the termination of the merger agreement (the “Interim Period”), Tufin will and will cause each of its subsidiaries to:
 

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.
 
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In addition, Tufin has also agreed that, except: (i) as approved in writing in advance by Buyer (which approval will not be unreasonably withheld, conditioned or delayed); (ii) as disclosed in the confidential disclosure letter to the merger agreement; (iii) as required by applicable law; or (iv) as expressly contemplated by the terms of the merger agreement, during the Interim Period, Tufin will not, among other things (and subject to certain exceptions):
 

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);
 

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;
 
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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;
 
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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.
 
The Go-Shop Period; Solicitation of Other Offers
 
Under the merger agreement, from the date of the merger agreement until (i) the No-Shop Period Start Date (as defined in this section of this proxy statement below) or (ii) with respect to an Exempted Person, the Cut-Off Time (as defined in this section of this proxy statement below) (the “Go-Shop Period”), Tufin, its affiliates and their respective representatives had the right to: (A) solicit, initiate, encourage or facilitate the making, submission or announcement of any proposal or inquiry that constitutes or could reasonably be expected to lead to, an Acquisition Proposal (as defined in this section of this proxy statement below); (B) subject to the entry into, and solely in accordance with, an Acceptable Confidentiality Agreement (as defined in this section of this proxy statement below), furnish to any third person (and its representatives and prospective debt and equity financing sources and/or their respective representatives), any non-public information relating to Tufin or its subsidiaries or afford to any such third person (and its representatives, prospective debt and equity financing sources and/or their respective representatives) access to the business, properties, assets, books or records of Tufin and its subsidiaries, in any such case with the intent to induce the making, submission or announcement of an Acquisition Proposal, or any proposal or inquiry that is reasonably expected to lead to an Acquisition Proposal, provided that Tufin will provide to Buyer and its representatives any non-public information that has not been previously made available to Buyer prior to or substantially concurrently with the time it is provided to such third person, and neither Tufin nor its subsidiaries will provide any competitively sensitive non-public information to any third person who is or has an affiliate that is a competitor of Tufin or its subsidiaries except in accordance with customary “clean room” procedures and subject to a customary “clean team” agreement; (C) engage in discussions or negotiations with any third person (and its representatives and prospective debt and equity financing source and/or their respective representatives) with respect to an Acquisition Proposal (or any proposal or inquiry that is reasonably be expected to lead to an Acquisition Proposal); and (D) cooperate with or assist or participate in or facilitate any such proposals, inquiries, offers, discussions or negotiations, including that Tufin may grant a limited waiver under any “standstill provision” or similar obligation to allow such third person to submit an Acquisition Proposal on a confidential basis to the Board.
 
If Tufin had terminated the merger agreement for the purpose of entering into a definitive agreement with any Exempted Person (as defined in this section of this proxy statement below) prior to May 15, 2022 in respect of a Superior Proposal (as defined in this section of this proxy statement below), Tufin would have been required to pay a termination fee of $10.0 million to Buyer, so long as Tufin had complied in all material respects with the non-solicitation provisions set forth in the merger agreement with respect to such Superior Proposal.  For more information, please see the section of this proxy statement entitled “—The Board of Directors’ Recommendation; Company Board Recommendation Change.”
 
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For purposes of this proxy statement and the merger agreement:
 
“Acceptable Confidentiality Agreement” means an agreement with Tufin that is either (i) in effect as of the date of the merger agreement; or (ii) executed, delivered and effective after the date of the merger agreement, in either case containing provisions that require any counterparty thereto (and any of its affiliates and representatives named therein) that receive non-public information of or with respect to Tufin to keep such information confidential (subject to customary exceptions); provided, however, that, other than with respect to any immaterial provisions, the provisions contained therein are not less favorable to Tufin in any material respect than the terms of the confidentiality agreement between Tufin and Buyer (it being understood that such agreement need not contain any “standstill” or similar provisions that prohibit the making of any Acquisition Proposal).  For the avoidance of doubt, a joinder to an Acceptable Confidentiality Agreement pursuant to which a third party agrees to be bound by the confidentiality and use provisions of an Acceptable Confidentiality Agreement shall be an Acceptable Confidentiality Agreement.
 
“Acquisition Proposal” means any inquiry, offer or proposal relating to an Acquisition Transaction.
 
“Acquisition Transaction” means any transaction or series of related transactions (other than the merger) involving:
 

(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.
 
“Cut-Off Time” means May 15, 2022.
 
“Exempted Person” means any third person (i) who submits a written offer or proposal that constitutes a written Acquisition Proposal to Tufin or any of its representatives after the date of the merger agreement and prior to the No-Shop Period Start Date and (ii) whose Acquisition Proposal is determined by the Board, in good faith, prior to the start of the No-Shop Period Start Date (after consultation with its outside counsel and its financial advisor), to be, or could reasonably be expected to lead to, a Superior Proposal; provided, however, that such person shall immediately cease to be an Exempted Person (and the provisions of the merger agreement applicable to Exempted Persons shall cease to apply with respect to such person) if (1) such Acquisition Proposal is withdrawn by such third person or (2) such Acquisition Proposal, in the good faith determination of the Board (after consultation with its outside counsel and its financial advisor), no longer is, or would no longer be reasonably expected to lead to, a Superior Proposal.
 
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“No-Shop Period Start Date” means 11:59 p.m. Eastern Time on (i) May 5, 2022 or (ii) with respect to an Exempted Person, the Cut-Off Time.
 
“Superior Proposal” means any bona fide written Acquisition Proposal for an Acquisition Transaction that (i) was not the result or effect of a violation of the merger agreement and (ii) is on terms that the Board (or a committee thereof) has determined in good faith (after consultation with its financial advisor and outside legal counsel) is reasonably likely to be consummated in accordance with its terms, taking into account all legal, regulatory and financing aspects of the proposal (including certainty of closing), the identity of the person making the proposal and other aspects of the Acquisition Proposal that the Board (or a committee thereof) deems relevant and, if consummated, would be more favorable from a financial point of view to Tufin’s shareholders (in their capacity as such) than the transactions contemplated by the merger agreement (taking into account (A) any revisions to the merger agreement made or proposed in writing by Buyer prior to the time of such determination in accordance with the merger agreement and (B) all legal, regulatory, financial (including any termination fee amounts and conditions), timing, financing and other aspects of such proposal).  For purposes of the reference to an “Acquisition Proposal” in this definition, (x) all references to “20%” in the definition of “Acquisition Transaction” will be deemed to be references to “50%” and (y) “80%” in the definition of “Acquisition Transaction” will be deemed to be references to “50%.”
 
The No-Shop Period; No Solicitation of Other Offers
 
From the date of the No-Shop Period Start Date (or, with respect to an Exempted Person, the Cut-Off Time) until the earlier to occur of the termination of the merger agreement and the effective time of the merger, Tufin will and will cause its subsidiaries and its and their respective directors and officers to, and will instruct and use reasonable efforts to cause their other representative not to, directly or indirectly (and subject to certain exceptions):
 

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
 
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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.
 
In addition, Tufin has agreed to cease and cause to be terminated any discussions or negotiations with any third person and its representatives relating to any Acquisition Proposal or Acquisition Transaction (or any proposal or inquiry that is reasonably expected to lead to an Acquisition Proposal), request the prompt return or destruction of all non-public information concerning Tufin or its subsidiaries furnished to any person with whom a confidentiality agreement with respect to an Acquisition Proposal was entered into at any time within the 12-month period immediately preceding the No-Shop Period Start Date and will cease providing any further information with respect to Tufin or any Acquisition Proposal to any such third person or its representatives and will immediately terminate all access granted to any such third person or its representatives to any physical or electronic data room (or any other diligence access).  Tufin has also agreed to enforce, and not to waive, terminate or modify any provision of any standstill or confidentiality agreement that prohibits or purports to prohibit a proposal being made to the Board, unless the Board has determined in good faith, after consultation with outside counsel, that failure to take such action would reasonably be expected to be inconsistent with its fiduciary duties under applicable law.
 
Notwithstanding these restrictions, until the Cut-Off Time, Tufin may continue to engage in the activities delineated in the previous two paragraphs with respect to any Exempted Person (but only for so long as such person is and remains an Exempted Person), including with respect to any amended or modified Acquisition Proposal submitted by any Exempted Person following the No-Shop Period Start Date so long as the Board has determined in good faith that such amended or modified Acquisition Proposal is or would be reasonably be expected to lead to, a Superior Proposal.
 
Additionally, under certain specified circumstances, from the No-Shop Period Start Date until the adoption of the merger agreement by Tufin shareholders, Tufin and the Board may, directly or indirectly through one or more of their representatives, participate or engage in negotiations with, furnish any non-public information relating to Tufin or its subsidiaries pursuant to an Acceptable Confidentiality Agreement to any person (or its representatives) that had made or delivered to Tufin a bona fide written Acquisition Proposal, that did not result from a breach of Tufin’s non-solicitation obligations pursuant to the merger agreement if (and only if), subject to complying with certain procedures described in the subsequent paragraph, the Board (or a committee thereof) determines in good faith (after consultation with its financial advisor and its outside legal counsel) that such Acquisition Proposal either constitutes a Superior Proposal or would reasonably be expected lead to a Superior Proposal, and, in each case, the failure to take such actions in respect of such Acquisition Proposal would reasonably be expected to be inconsistent with the Board’s fiduciary duties pursuant to applicable law.
 
Both during the Go-Shop Period and after the No-Shop Period Start Date but prior to the adoption of the merger agreement by Tufin’s shareholders, Tufin is not entitled to terminate the merger agreement for the purpose of entering into an agreement in respect of a Superior Proposal unless it complies with certain procedures in the merger agreement, including, but not limited to, negotiating with Buyer in good faith over a three business-day period in an effort to amend the terms and conditions of the merger agreement, so that such Superior Proposal no longer constitutes a “Superior Proposal” relative to the transactions contemplated by the merger agreement, as amended pursuant to such negotiations.
 
As described in further detail and subject to the limitations described below, if Tufin terminates the merger agreement prior to the adoption of the merger agreement by Tufin shareholders for the purpose of entering into an agreement in respect of a Superior Proposal, Tufin must pay a $17.2 million termination fee to Buyer, so long as the Tufin has complied in all material respects with the non-solicitation provisions set forth in the merger agreement with respect to such Superior Proposal.
 
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The Board of Directors’ Recommendation; Company Board Recommendation Change
 
As described above, and subject to the provisions described below, the Board has made the recommendation that the holders of Tufin ordinary shares vote “FOR” the proposal to adopt the merger agreement.  The merger agreement provides that the Board will not effect a Company Board Recommendation Change (as defined in this section of this proxy statement below) except as described below.
 
The Board may not take any action described in the following (any such action, a “Company Board Recommendation Change”):
 

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.
 
For the avoidance of doubt, none of the following will constitute a Company Board Recommendation Change: a “stop, look and listen” communication by the Board (or a committee thereof) to Tufin shareholders pursuant to Rule 14d-9(f) promulgated under the Exchange Act (or any substantially similar communication), or (ii) the delivery by Tufin to Buyer of any notice related to an Intervening Event (as defined in this section of this proxy statement below) or Superior Proposal as set forth below.
 
Notwithstanding the restrictions described above, prior to the adoption of the merger agreement by shareholders, the Board may effect a Company Board Recommendation Change if (i) there has been an Intervening Event; or (ii) Tufin has received a bona fide Acquisition Proposal, whether during the Go-Shop Period or after the No-Shop Period Start Date, that has not been withdrawn and that the Board has concluded in good faith (after consultation with its financial advisor and outside legal counsel) is a Superior Proposal, in each case, to the extent a failure to effect a Company Board Recommendation Change would reasonably be expected to be inconsistent with the Board’s fiduciary obligations under applicable law.
 
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The Board may only effect a Company Board Recommendation Change for an Intervening Event if:
 

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.
 
In addition, the Board may only effect a Company Board Recommendation Change or authorize Tufin to terminate the merger agreement to enter into an agreement with respect to a Superior Proposal substantially concurrently with the termination of the merger agreement in response to a bona fide written Acquisition Proposal that the Board has concluded in good faith (after consultation with its financial advisor and outside legal counsel) is a Superior Proposal, in each case if and only if:
 

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;
 
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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.
 
For purposes of this proxy statement and the merger agreement, an “Intervening Event” means any material event, fact, circumstance, development or occurrence that was (i) not known to, or reasonably foreseeable by, the Board as of the date of the merger agreement but becomes known to the board after the date of the merger agreement; and (ii) does not relate to (A) any Acquisition Proposal (or any inquiry, offer or proposal that constitutes, or would reasonably be expected to lead to, an Acquisition Proposal), (B) the fact, in and of itself, that Tufin meets or exceeds any internal or published projections, forecasts, estimates or predictions of revenue, earnings or other financial or operating metrics for any period ending on or after the date of the merger agreement, or changes after the date of the merger agreement in the market price of Tufin ordinary shares or trading volume of the Tufin ordinary shares or credit rating of Tufin, it being understood that the underlying cause of any of the foregoing in clause (B) may be considered and taken into account, (C) any fact regarding Buyer or its affiliates or (D) any change in the composition of the Board.
 
Employee Benefits
 
With respect to each individual who is an employee of Tufin or one of its subsidiaries immediately prior to the effective time of the merger, and who continues to be an employee of Buyer or one of its subsidiaries (including the surviving company) following the effective time of the merger (each such individual, a “Continuing Employee”), for a period commencing at the effective time of the merger and ending on the one-year anniversary of the effective time of the merger (or, if sooner, on the date of such Continuing Employee’s termination of employment), Buyer will provide, or cause to be provided, to each Continuing Employee, (i) base salary and base wages, short-term cash incentive compensation opportunities, and commission opportunities, in each case, on a basis no less favorable than that in effect immediately prior to the effective time of the merger, and (ii) employee benefits (excluding equity or equity-based, defined benefit pension, severance, nonqualified deferred compensation and retiree or post-termination welfare benefits or compensation) that are substantially comparable in the aggregate to such employee benefits (excluding equity or equity-based, defined benefit pension, severance, nonqualified deferred compensation and retiree or post-termination welfare benefits or compensation) provided to such Continuing Employees immediately prior to the effective time of the merger.
 
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To the extent that service is relevant under any benefit plan, program or policy of Buyer or subsidiary of Buyer and/or the surviving company (including, following the closing of the merger, any employee benefit plan of Tufin or one of its subsidiaries in effect immediately prior to the effective time of the merger) then Buyer shall generally ensure that such employee benefit plan shall, for purposes of eligibility to participate, future vacation benefit accrual, and vesting (other than with respect to future equity awards), credit Continuing Employees for their years of service recognized by Tufin or its subsidiaries prior to the effective time of the merger with Tufin or its subsidiaries or their respective predecessors (although no such credit shall be provided if it results in a duplication of benefits, and such credit shall only be provided to the same extent that the applicable service was recognized prior to the effective time of the merger under the corresponding employee plan of Tufin or one of its subsidiaries).
 
With respect to any group health plans maintained by Buyer or its subsidiaries in which the Continuing Employees participate following the effective time of the merger (including, following the closing of the merger, any employee benefit plan of Tufin or one of its subsidiaries in effect immediately prior to the effective time of the merger) Buyer will, and will cause the surviving company and any of its subsidiaries to use commercially reasonable efforts to (i) cause there to be waived any eligibility requirements or pre-existing condition limitations or waiting period requirements under any such group health plans to the same extent waived or satisfied under any corresponding employee plan of Tufin or its subsidiaries in which such Continuing Employee participated immediately prior to the effective time of the merger, and (ii) give effect, in determining any deductible, co-insurance and maximum out-of-pocket limitations under such group health plans in the plan year in which the effective time of the merger occurs, to amounts paid by such Continuing Employees during the portion of the year prior to the effective time of the merger under the group health plans maintained by Tufin or its subsidiaries.
 
Efforts to Close the Merger
 
Under the merger agreement, Buyer, Merger Sub and Tufin agreed to use, and agreed to cause their respective affiliates to use, reasonable best efforts to take all actions, do all things and assist and cooperate with the other parties, in each case as necessary, proper and advisable pursuant to applicable law or otherwise to consummate the merger (other than in the case of executing and delivering contracts and other instruments, including obtaining any consents under material contracts listed on the confidential disclosure letter, in which case each of Buyer, Merger Sub and Tufin will use their respective commercially reasonable efforts).
 
Financing; Cooperation with Debt Financing
 
Pursuant to the merger agreement, each of Buyer and Merger Sub shall use their reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable to consummate and obtain the financing.
 
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If all or any portion of Buyer’s debt financing becomes unavailable on the terms and conditions contemplated by the debt commitment letter and such portion is necessary to fund the required amounts under the merger agreement on the closing date of the merger (after taking into account any available equity financing, other committed financing or other sources of cash then available), Buyer will promptly notify Tufin in writing and Buyer and Merger Sub will use their reasonable best efforts to arrange and obtain, prior to the Termination Date (as defined below), alternative debt financing from the same or alternative sources in an amount sufficient, together with the remaining available financing and cash or cash equivalents held by Buyer, Merger Sub and Tufin and its subsidiaries, to fund the required amount on the closing date of the merger and with terms and conditions not less favorable to Buyer and Merger Sub (or their respective affiliates) in the aggregate than the terms and conditions set forth in the debt commitment letter.
 
In connection with the efforts of Buyer and Merger Sub to arrange the financing, prior to the closing of the merger, Tufin will, and will cause its subsidiaries to and instruct its and their respective representatives to, use its and their reasonable best efforts to provide to Buyer and Merger Sub, in each case at Buyer’s sole cost and expense, but subject to reimbursement obligations of Buyer under the merger agreement, such customary cooperation as is reasonably requested by Buyer in connection with the arrangement of the debt financing, including: (i) causing senior management of Tufin, with appropriate seniority and expertise, to assist in preparation for and participate in a reasonable number of investor and lender meetings, presentations and accounting due diligence sessions in connection with the debt financing; (ii) providing assistance with the preparation by Buyer and the financing sources of the debt financing of offering documents, private placement memoranda, prospectuses, bank information memoranda, syndication memoranda, lender and investor presentations and other customary marketing documents required in connection with the debt financing; (iii) cooperating reasonably with the due diligence of the lenders party to the debt commitment letter, to the extent customary and reasonably requested; (iv) furnishing, or causing to be furnished to Buyer any financial or other pertinent information reasonably requested by Buyer in connection with Buyer’s preparation of the pro forma financial statements of Tufin and its subsidiaries required by the condition precedents set forth in the debt commitment letter and such other financial or other pertinent information as may be reasonably requested by the lenders party to the debt commitment letter to be included in any bank information memoranda or other customary marketing materials, including by providing such financial and other pertinent information regarding Tufin or its subsidiaries and their respective businesses; (v) (A) assisting in the preparation, execution and delivery of definitive financing documents, including any credit agreement, notes, the guarantee and collateral documents, pledge and security documents, customary closing certificates and documents and back-up therefor and for legal opinions in connection with the debt financing (including executing and delivering a solvency certificate from the chief financial officer or treasurer (or other comparable officer) of Tufin) and other customary documents as may reasonably be requested by Buyer or the lenders party to the debt commitment letter; (B) facilitating the pledge of or, grant of security interests in and obtain perfection of any liens on collateral in connection with the debt financing and (C) obtaining any customary evidence of insurance required in connection with the debt financing; (vi) providing all documentation and other information about Tufin and its subsidiaries as is reasonably requested under applicable “know your customer” and anti-money laundering rules and regulations including the USA PATRIOT Act and Customer Due Diligence Requirements for Financial Institutions issued by the U.S. Department of Treasury Financial Crimes Enforcement Network under the Bank Secrecy Act and providing a certification regarding beneficial ownership required by 31 C.F.R. § 1010.230, in each case, at least four business days prior to the closing of the merger to the extent requested in writing at least nine business days prior to the closing date of the merger; (vii) giving any necessary notices to allow for the payoff, discharge and termination in full at the closing of all indebtedness required to be repaid at the closing and release of all liens and guarantee obligations in connection therewith and cooperating in the replacement, backstop or cash collateralization of any outstanding letters of credit issued for the account of Tufin or any of its subsidiaries; (viii) cooperating with Buyer and Buyer’s efforts to obtain consents, landlord waivers and estoppels, non-disturbance agreements, non-invasive environmental assessments, surveys and title insurance (including providing reasonable access to Buyer and its representatives to all owned or leased real property) as reasonably requested by Buyer; (ix) taking all corporate, limited liability company, partnership or other similar actions reasonably requested by Buyer or any lenders party to the debt commitment letter to permit the consummation of the debt financing; and (x) cooperating in satisfying the conditions precedent to the funding of the debt financing, set forth in the debt commitment letter or any definitive documentation relating to the debt financing to the extent such condition requires the cooperation of, or is within the control of, Tufin.
 
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Notwithstanding the foregoing, subject to certain exceptions set forth in the merger agreement, (i) in no event shall Tufin or its subsidiaries be required to provide any such cooperation to the extent it interferes unreasonably with the ongoing operations of Tufin or its subsidiaries; (ii) no obligation of Tufin or its subsidiaries or any of their respective representatives on account of the debt financing shall be effective until the closing date of the merger; (iii) in no event shall Tufin or its subsidiaries be required to pay any commitment or other fee or incur any cost, expense or liability in connection with the financing prior to the closing date (in each case, except to the extent Tufin is entitled to receive reimbursement or indemnification therefor), or enter into any definitive agreement in connection with the debt financing that is effective, prior to the closing date; (iv) such cooperation shall not require any action that would conflict with or violate any applicable laws or result in, prior to the closing date, the material contravention of any note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other instrument or obligation to which Tufin or any of its subsidiaries is a party or by which Tufin or any of its subsidiaries or its or any of their properties is bound or affected on the date of the merger agreement; (v) neither Tufin nor any of its subsidiaries nor any persons who is a director, officer or employee of Tufin or any of its subsidiaries will be required to (x) pass resolutions or consents or (y) authorize, approve, execute or deliver any document or contract prior to the occurrence of the closing of the merger in connection with the debt financing (except, in each case, for the execution and delivery of such documents and contracts that is conditioned upon, and not effective until, the consummation of the closing of the merger); (vi) neither Tufin nor any of its subsidiaries nor any of their respective representatives will be required to disclose or provide any information in connection with the debt financing, the disclosure of which is subject to attorney-client privilege or could reasonably result in the disclosure of any trade secrets or competitively sensitive information not otherwise required to be provided under the merger agreement; (vii) neither Tufin nor any of its subsidiaries nor any of their respective representatives will be required to prepare or deliver any pro forma financial information or projections (without waiver of Tufin’s obligations set forth in clause (v) in the preceding paragraph); (viii) none of Tufin nor any of its subsidiaries nor of any of its or any of their respective representatives shall be required to deliver any legal opinion in connection with the debt financing; (ix) none of Tufin nor any of its subsidiaries or any of their respective representatives will be required to take any action that would cause Tufin or any of its subsidiaries to breach any representation, warranty, covenant or agreement in the merger agreement; and (x) neither Tufin nor any of its subsidiaries nor any of their respective representatives will be required to take any action that would reasonably be expected to cause any director, officer, manager or employee or stockholder of Tufin or any of its subsidiaries to incur personal liability.
 
Buyer will, in the event the closing of the merger does not occur, (i) promptly following receipt of a written request therefor, reimburse Tufin for all reasonable and documented out-of-pocket costs and expenses incurred by Tufin and its subsidiaries or their respective representatives in connection with the cooperation of Tufin and its subsidiaries and their representatives contemplated by the financing cooperation covenant in the merger agreement.  It being understood that such reimbursement will not apply to and Tufin and its subsidiaries will be solely responsible for: (A) any fees payable to existing legal, financial or other advisors of Tufin or its subsidiaries with respect to services provided prior to the date of the merger agreement; (B) any ordinary course amounts payable to existing employees of or consultants Tufin or its subsidiaries or any of their affiliates with respect to services provided prior to the closing; and (C) costs and expenses that would have been incurred by Tufin or its subsidiaries, as applicable, in connection with the transactions contemplated by the merger agreement; and (ii) indemnify and hold harmless Tufin, its subsidiaries and their respective representatives from and against any and all losses, damages, claims, costs or expenses suffered or incurred by any of them in connection with the arrangement of the debt financing and any information used in connection therewith, in each case other than to the extent any of the foregoing was suffered or incurred as a result of (1) the fraud, bad faith, gross negligence or willful misconduct of, or a material breach of the merger agreement by any Tufin, any of its subsidiaries or any of their respective representatives or (2) information provided by or on behalf of Tufin, any of its subsidiaries or any of their respective representatives.
 
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Indemnification and Insurance
 
From and after the effective time of the merger, Buyer and the surviving company will, to the fullest extent permitted under applicable law, (i) indemnify and hold harmless each present and former director, officer or employee of Tufin or any of its subsidiaries and any person who is on the date of the merger agreement, was previously, or during the period from the date of the merger agreement through the effective time will be serving as or served as a present of former director, officer, member, trustee or fiduciary of another corporation, partnership, joint venture, trust, pension or other employee benefit plan or enterprise at the request of or for the benefit Tufin and its subsidiaries (collectively, the “Covered Persons”) in connection with any D&O Claim (as defined in the merger agreement) against any losses, claims, damages, liabilities, judgments, fines, penalties, amounts paid in settlement and out-of-pocket attorneys’ fees and all other out-of-pocket costs relating to or resulting from such D&O Claim; provided, however, that no Covered Person will compromise, settle or come to an arrangement regarding, or agree to compromise, settle or come to an arrangement regarding, any D&O Claim for which indemnification is being sought unless Buyer has consented thereto in writing (which consent will not be unreasonably withheld, condition or delayed), and Buyer and the surviving company will not have any liability for any such compromise, settlement or arrangement effected without Buyer’s prior written consent, and (ii) promptly (and in any event within 10 days) advance costs and expenses (including attorneys’ fees) as incurred by the Covered Persons in connection with any D&O Claim.
 
In addition, prior to the effective time of the merger, Buyer will purchase and prepay the premium for a seven-year “tail” insurance policy for D&O Claims arising from facts, acts, events or omissions that occurred on or prior to the effective time.  If Buyer fails to obtain such tail policy prior to the effective time, Tufin or the surviving company may obtain such a tail policy.  Any such tail policy must have at least the same coverage and amounts and contain terms and conditions that are no less favorable to the covered individuals as Tufin’s existing directors’ and officers’ insurance policy or policies with a claims period of seven (7) years from the effective time.  Notwithstanding the foregoing, in no event will Buyer (or Tufin, as applicable) be required to expend a premium in excess of 300% of the aggregate annual amount currently paid by Tufin for such insurance (the “Maximum Premium”) and, if the annual premium of such insurance coverage exceeds such maximum amount, Tufin, Buyer or the surviving company will only be required to obtain as much coverage as can be obtained by paying an annual premium equal to the Maximum Premium.
 
Other Covenants
 
Shareholders Meeting
 
As soon as reasonably practicable following the date of the merger agreement, but in no event later than the 15th business day after the merger agreement date, Tufin will (i) establish a record date for, duly call, give notice of a special general meeting of its shareholders for the purpose of obtaining the affirmative vote of the a majority (as determined pursuant to Section 320 of the Companies Law) of votes present or represented by proxy at the special general meeting that is required to adopt the merger agreement and (ii) publish the notice of the special general meeting (with the proxy card (Ktav Hatzbaa) required under the Companies Law and the regulations promulgated thereunder) (the “Notice Date”).  The special general meeting cannot be held later than 40 days after the Notice Date.
 
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Shareholder Litigation
 
Each of Buyer and Tufin will: (i) provide the other with prompt notice of all litigation relating to the merger agreement (including by providing copies of all pleadings with respect thereto) of which it has received written notice and (ii) keep the other reasonably informed with respect to the status thereof.  Each party will give the other the opportunity to participate (at the other’s expense), but not control, in the defense, settlement or prosecution of any such litigation; and consult with the other with respect to the defense, settlement or prosecution of any such litigation.  Tufin may not compromise, settle or come to an arrangement regarding, or agree to compromise, settle or come to an arrangement regarding any such litigation without Buyer’s prior written consent (such consent not to be unreasonably withheld, conditioned or delayed).
 
Tax Matters
 
Buyer and its affiliates (including Tufin) shall not make or cause to be made an election under Sections 338 or 336 of the Code or any similar provision of state, local, or non-U.S. law in connection with the transactions contemplated by the merger agreement with respect to Tufin or any subsidiaries of Tufin.
 
Conditions to the Closing of the Merger
 
The obligations of Buyer and Merger Sub, on the one hand, and Tufin, on the other hand, to consummate the merger is subject to the satisfaction or waiver (where permitted by applicable law) of each of the following conditions:
 

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.
 
In addition, the obligations of Buyer and Merger Sub to consummate the merger are subject to the satisfaction or waiver (where permitted by applicable law) of each of the following additional conditions:
 

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
 
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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.
 
In addition, the obligation of Tufin to consummate the merger are subject to the satisfaction or waiver (where permitted by applicable law) of each of the following additional conditions:
 

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.
 
Financing of the Merger
 
Tufin anticipates that the total amount of funds necessary to complete the merger and the related transactions, and to pay the fees and expenses required to be paid at the closing of the merger by Buyer and Merger Sub under the merger agreement, will be approximately $570.0 million.  This amount includes funds needed to: (1) pay Tufin shareholders the amounts due under the merger agreement for their Tufin ordinary shares, (2) pay the RSU Consideration (3) pay the Option Consideration and (4) to pay all associated fees, costs and expenses of Buyer and Merger Sub arising in connection with the merger (collectively, the “required amounts”).
 
Buyer and Merger Sub have obtained committed financing consisting of (i) equity to be provided by the T/R Funds pursuant to the terms of the equity commitment letter and (ii) debt financing to be provided pursuant to the debt commitment letter by the lenders party thereto.  In connection with the merger agreement, Buyer and Merger Sub have delivered to Tufin copies of the financing letters.  Notwithstanding anything in the merger agreement to the contrary, in no event shall the receipt or availability of any funds or financing (including the financing contemplated by the financing letters) by or to Buyer or any of its affiliates or any other financing transaction be a condition to any of the obligations of Buyer and Merger Sub under the merger agreement.
 
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Equity Financing
 
Pursuant to the equity commitment letter, the T/R Funds have committed to contribute or cause to be contributed to Buyer at the closing of the merger an aggregate amount in cash equal to $360.0 million for the purpose of funding the required amounts.  The obligations of the T/R Funds to provide the equity financing under the equity commitment letter is subject to a number of conditions, including, but not limited to: (i) satisfaction or written waiver by Tufin, Buyer and Merger Sub, as applicable, of each of the conditions to the obligations of Tufin, Buyer and Merger Sub to consummate the merger set forth in the merger agreement (other than those conditions that by their terms are to be satisfied at the closing of the merger, but subject to the satisfaction or waiver (to the extent permitted hereunder) of such conditions) and (ii) the prior or substantially concurrent receipt of the debt financing contemplated by the debt commitment letter or confirmation that the debt financing contemplated by the debt commitment letter will be funded at the closing of the merger if the equity financing under the equity commitment letter is consummated at the closing of the merger.  The equity financing described in the preceding sentence is referred to as the “equity financing.”
 
The obligation of the T/R Funds to fund the equity commitment will automatically and immediately terminate upon the earliest to occur of: (i) the consummation of the closing of the merger and the payment by Buyer required amounts, (ii) the valid termination of the merger agreement in accordance with its terms, (iii) a court declining to specifically enforce the obligations of Buyer to consummate the merger pursuant to a claim for specific performance brought against Buyer in accordance with the merger agreement, or (iv) the assertion of a claim or legal proceeding by Tufin or any of its affiliates or any of their Representatives (as defined in the equity commitment letter), under or in respect of the merger agreement, the guarantee or the transactions contemplated thereby against Buyer, the T/R Funds, or any of their affiliates, subject to the exceptions, terms and conditions of the merger agreement, the equity commitment letter and the guarantee.
 
Tufin is an express third-party beneficiary of the equity commitment letter solely with respect to enforcing Buyer’s right to cause the commitment under the equity commitment letter by the T/R Funds to be funded to Buyer in accordance with the equity commitment letter, and to cause Buyer to enforce its rights against the T/R Funds to perform its funding obligations under the equity commitment letter, in each case subject to (i) the limitations and conditions set forth in the equity commitment letter and (ii) the terms and conditions of the merger agreement.
 
Debt Financing
 
The debt commitment letter provides that the lenders party thereto will provide, upon the terms and subject to the conditions set forth in the debt commitment letter, in the aggregate $210.0 million in debt financing, consisting of the following:
 

$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 debt financing described above is referred to as the “debt financing.” The proceeds of the debt financing borrowed on the closing date will be used on the closing date (i) to finance (or to replenish balance sheet cash used to finance) a portion of the required amounts on the closing date of the merger and to pay fees, premiums, expenses and other transaction costs incurred in connection therewith, (ii) for working capital purposes and to cash collateralize any existing letters of credit (if any) of Tufin or its subsidiaries permitted to remain outstanding after the closing date pursuant to the merger agreement (iii) for other general corporate purposes, (iv) to finance purchase price adjustments under the merger agreement (if any) and (v) to fund any other payments contemplated by the merger agreement.
 
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The obligations of the lenders party to the debt commitment letter to provide the debt financing under the debt commitment letter are subject to the following conditions:
 

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).
 
As of the date hereof, the documentation governing the debt financing contemplated by the debt commitment letter has not been finalized and, accordingly, the actual terms of the debt financing may differ from those described in this proxy statement.
 
Guarantee
 
Pursuant to the guarantee, the T/R Funds have collectively agreed to guarantee the due and punctual payment of: (i) the aggregate amount of the Buyer Termination Fee (as defined under the caption “The Merger—Termination Fee”) solely if and when any of the Buyer Termination Fee is payable pursuant to the merger agreement; (ii) enforcement expenses due by Buyer pursuant to legal proceedings as a result of certain defaults under the merger agreement, not to exceed $1.5 million in the aggregate; and (iii) the reimbursement obligations of Buyer pursuant to the indemnification obligations to Tufin and its representatives in connection with debt financing as well as other specified fees and expenses.  The obligations set forth in the preceding sentence are referred to as the “guaranteed obligations.” The obligations of the T/R Funds under the guarantee are subject to an aggregate cap equal to $36.9 million.
 
Subject to specified exceptions, the guarantee will terminate upon the earliest of:
 

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.
 
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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.
 
Termination of the Merger Agreement
 
The merger agreement may be terminated at any time prior to the effective time of the merger, whether before or after the adoption of the merger agreement by shareholders, solely in the following ways:
 

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.
 
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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.
 
In the event that the merger agreement is terminated pursuant to the termination rights above, the merger agreement will be of no further force or effect without liability of any party to the other parties, as applicable, except certain sections of the merger agreement will survive the termination of the merger agreement in accordance with their respective terms.  Notwithstanding the foregoing, nothing in the Merger Agreement will relieve the Tufin from any liability for any intentional fraud or willful and material breach of the Merger Agreement prior to its termination.  In addition, no termination of the Merger Agreement will affect the rights or obligations of any party pursuant to the confidentiality agreement between the Tufin and Turn/River or the guarantee, which rights, obligations and agreements will survive the termination of the merger agreement in accordance with their respective terms.
 
Termination Fee
 
If Tufin had terminated the merger agreement for the purposes of entering into a definitive agreement with any Exempted Person prior to the Cut-Off Time in respect of a Superior Proposal, Tufin would have been required to pay a $10.0 million termination fee to Buyer, so long as Tufin had complied in all material respects with the non-solicitation provisions set forth in the merger agreement with respect to such Superior Proposal.  If the merger agreement is terminated under specified circumstances including the instances described below, Tufin must pay a $17.2 million termination fee to Buyer.
 
Buyer will be entitled to receive a termination fee of $17.2 million from Tufin if the merger agreement is terminated:
 

(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%”);
 
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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.
 
Tufin will be entitled to receive a termination fee of $34.4 million in cash from Buyer (the “Buyer Termination Fee”) if the merger agreement is terminated:
 

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.
 
Specific Performance
 
Buyer, Merger Sub and Tufin agree that irreparable damage for which monetary damages, even if available, would not be an adequate remedy would occur in the event that the parties do not timely perform the provisions of the merger agreement (including any party failing to take such actions as are required of it in order to consummate the merger agreement).  Buyer, Merger Sub and Tufin acknowledge and agree that: (1) the parties will be entitled, in addition to any other remedy to which they are entitled at law or in equity, to an injunction, specific performance and other equitable relief to prevent breaches (or threatened breaches) of the merger agreement and to enforce specifically the terms and provisions thereof; (2) the fees and expenses provisions of the merger agreement are not intended to and would not adequately compensate Tufin, on the one hand, or Buyer and Merger Sub, on the other hand, for the harm that would result from a breach of the merger agreement, and will not be construed to diminish or otherwise impair in any respect any party’s right to an injunction, specific performance and other equitable relief; and (3) the right of specific enforcement is an integral part of the merger and without that right, neither Tufin nor Buyer would have entered into the merger agreement.  It is explicitly agreed that, subject to the limitations of the next three (3) sentences, Tufin will have the right to an injunction, specific performance or other equitable remedies in connection with enforcing Buyer’s and Merger Sub’s obligations to consummate the merger and cause the financing to be funded (including to cause Buyer to enforce the obligations of the Buyer’s affiliates, as applicable, under the equity commitment letter in order to cause the equity financing to be timely completed in accordance with and subject to the terms and conditions set forth in the equity commitment letter) subject to the terms and conditions set forth therein and in the merger agreement.  Notwithstanding the foregoing and subject to the rights of the parties to the definitive agreements for any financing under the terms thereof, none of Tufin or its affiliates and their direct and indirect shareholders will be entitled to seek the remedy of specific performance of the merger agreement against the guarantors.  Notwithstanding the foregoing and subject to the rights of the parties to the definitive agreements for any financing under the terms thereof, none of Tufin and its affiliates and their direct and indirect shareholders will be entitled to directly seek the remedy of specific performance of the merger agreement against any financing source.  Notwithstanding anything to the contrary in the merger agreement, it is explicitly agreed that the right of Tufin to seek an injunction, specific performance or other equitable remedies in connection with enforcing Buyer’s obligation to close the transactions and cause the equity financing under the merger agreement to be funded to fund a portion of the amount required to consummate the merger and to make all payments required to be made in connection therewith (but not the right of Tufin to seek such injunctions, specific performance or other equitable remedies for reasons other than to cause the closing to occur) shall be subject to the requirements that (i) all of the (x) joint conditions to Buyer, Merger Sub and Tufin’s obligations to consummate the merger and (y) conditions to Buyer and Merger Sub’s obligations to consummate the merger, in each case, have been satisfied (other than those conditions that by their terms are to be satisfied at the closing, but subject to the satisfaction or waiver (to the extent permitted hereunder) of such conditions), (ii) the debt financing has been funded in full in accordance with the terms and conditions thereof or will be funded in accordance with the terms and conditions thereof if the equity financing is funded and (iii) Tufin has irrevocably confirmed in writing that if the equity financing and debt financing are funded, then Tufin will take such actions that are required of it by the merger agreement to consummate the closing of the merger pursuant to the terms of the merger agreement.
 
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Buyer, Merger Sub and Tufin agree not to raise any objections to (1) the granting of an injunction, specific performance or other equitable relief to prevent or restrain breaches or threatened breaches of the merger agreement by Tufin, on the one hand, or Buyer and Merger Sub, on the other hand; and (2) the specific performance of the terms and provisions of the merger agreement to prevent breaches or threatened breaches of, or to enforce compliance with, the covenants, obligations and agreements of Buyer and Merger Sub pursuant to the merger agreement.  Any party seeking an injunction or injunctions to prevent breaches of the merger agreement and to enforce specifically the terms and provisions of the merger agreement will not be required to provide any bond or other security in connection with such injunction or enforcement, and each party irrevocably waives any right that it will have to require the obtaining, furnishing or posting of any such bond or other security.
 
Limitations of Liability
 
The collective monetary damages of Buyer, Merger Sub or any of their affiliates for breaches (including any willful breach) under the merger agreement (taking into account the payment of the Buyer Termination Fee pursuant to the merger agreement), the guarantee or the equity commitment letter will not exceed, in the aggregate for all such breaches, an amount equal to $34.4 million.  The maximum aggregate monetary damages of Tufin for breaches under the merger agreement (taking into account the payment of the termination fee, if applicable) will not exceed an amount equal to $17.2 million in the aggregate for all such breaches.
 
Notwithstanding such limitations on liability for monetary damages, Buyer, Merger Sub and Tufin may be entitled to an injunction, specific performance or other equitable relief as provided in the merger agreement.
 
Fees and Expenses
 
Except in specified circumstances in the merger agreement, whether or not the merger is completed, Tufin, on the one hand, and Buyer and Merger Sub, on the other hand, are each responsible for all of their respective costs and expenses incurred in connection with the merger and the other transactions contemplated by the merger agreement.
 
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Amendment
 
The merger agreement may be amended by the parties in an executed written instrument at any time before or after adoption of the merger agreement by the Tufin shareholders.  However, after adoption of the merger agreement by the Tufin shareholders, no amendment that requires further approval by such shareholders pursuant to the Companies Law may be made without such approval.  Notwithstanding anything to the contrary in the merger agreement, the provisions relating to the financing sources may not be amended, modified or altered in a manner materially adverse to any financing source without the prior written consent of the financing sources.
 
Governing Law
 
The merger agreement is governed by Delaware law.  The internal affairs of the corporations party to the merger agreement are governed by the applicable governing law of their entity formation.  All other provisions of the merger agreement and transactions contemplated there by that are expressly or otherwise required to be governed by the Companies Law will be governed by the Companies Law.
 
The Voting Agreements
 
Concurrently with and as a condition to entering into the Merger Agreement, each of Reuven Kitov and Reuven Harrison entered into a voting and support agreement with Buyer and Tufin (each, a “Voting Agreement”), with respect to all Tufin ordinary shares beneficially owned by such executive, as set forth in his Voting Agreement (collectively, the “Voting Agreement Shares”).
 
Each of Messrs.  Kitov and Harrison has agreed to, among other things, take the following actions pursuant to the terms, conditions and limitations set forth in his Voting Agreement, during the term of his Voting Agreement: (a) vote his Voting Agreement Shares in favor of approval of the merger and the other actions contemplated by the merger agreement and (b) vote his Voting Agreement Shares against any Acquisition Proposal.