The following is a summary of the material provisions of the Merger Agreement, a copy of which is attached as Annex A to this proxy statement and is incorporated into this proxy statement by reference. We urge you to carefully read this entire proxy statement, including the annexes and the other documents to which we have referred you. You should also review the section titled “Where You Can Find Additional Information.”
The Merger Agreement has been included to provide you with information regarding its terms, and we recommend that you read it in its entirety. The Merger Agreement is a contractual document that establishes and governs the legal relations between the Company, Parent, Merger Subsidiary and, solely for the limited purposes set forth therein, TIBCO, and allocates risks between the parties, with respect to the Merger, the other agreements contemplated by the Merger Agreement, and the transactions contemplated by the Merger Agreement.
The Merger Agreement contains representations, warranties and covenants that the respective parties made to each other as of the date of the Merger Agreement or other specific dates specified in the Merger Agreement. The assertions embodied in those representations, warranties and covenants were made for purposes of the contract between the respective parties and are subject to representations, warranties, covenants and agreements contained in the Merger Agreement, which were made only for purposes of such agreement and as of specific dates, were solely for the benefit of the parties to the Merger Agreement, may be subject to limitations agreed upon by the contracting parties (including being qualified by a confidential disclosure schedule made for the purposes of allocating contractual risk between the parties to the Merger Agreement instead of establishing these matters as facts), and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors, security holders, or securities laws. Investors and security holders are not third-party beneficiaries under the Merger Agreement and should not rely on the representations, warranties, covenants and agreements, or any descriptions thereof, as characterizations of the actual state of facts or condition of any party to the Merger Agreement. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in the Company’s public disclosures.
The representations and warranties in the Merger Agreement and the description of them in this proxy statement should not be read alone but instead should be read in conjunction with the other information contained in the reports, statements and filings the Company publicly files with the SEC. Such information can be found elsewhere in this proxy statement and in the public filings the Company makes with the SEC, as described in the section titled “Where You Can Find Additional Information.”
Upon the terms and subject to the conditions of the Merger Agreement and in accordance with the DGCL, at the effective time of the Merger, Merger Subsidiary will merge with and into the Company, the separate corporate existence of Merger Subsidiary will thereupon cease and the Company will continue as the surviving corporation of the Merger as a wholly owned subsidiary of Parent.
Closing and Effective Time of the Merger
The closing of the Merger will take place at 8:00 a.m., Eastern time, within five business day after the satisfaction or waiver (to the extent permitted by law) of all of the conditions described in the section below titled “—Conditions to the Merger.” However, if the marketing period has not ended at the time of the satisfaction or waiver of those conditions (other than those conditions that by their nature are to be satisfied at the closing of the Merger, but subject to the satisfaction or waiver (to the extent permitted by law) of those conditions at such time), then, subject to the continued satisfaction or waiver of such conditions, Parent and Merger Subsidiary shall not be required to effect the closing until the earlier of (1) a date during the marketing period specified by Parent
in writing on no fewer than three business days’ notice to the Company and (2) the fifth business day immediately following the last day of the marketing period (subject in each case to the satisfaction or waiver (to the extent permitted hereunder) of such conditions (other than those conditions that by their nature are to be satisfied at the closing, but subject to the satisfaction or waiver (to the extent permitted hereunder) of such conditions at the closing)).
The Merger will become effective at the time a certificate of merger is filed with the Secretary of State of the State of Delaware or at such later time stated in the certificate of merger and agreed to by the parties. The time that the Merger becomes effective is referred to as the “effective time” of the Merger.
Certificate of Incorporation and By-laws; Directors and Officers
At the effective time of the Merger, the Company’s certificate of incorporation will be amended and restated to be in the form of Exhibit A to the Merger Agreement and the by-laws will be amended and restated to be in the form of Exhibit B to the Merger Agreement.
Under the Merger Agreement, the directors of Merger Subsidiary immediately prior to the effective time of the Merger will be the directors of the surviving corporation immediately after the effective time of the Merger. The officers of Merger Subsidiary immediately prior to the effective time of the Merger will be the officers of the surviving corporation immediately after the effective time of the Merger.
Consideration to be Received in the Merger
At the effective time of the Merger, each share of Citrix common stock that is outstanding immediately prior to the effective time of the Merger (other than shares held by the Company as treasury stock, owned by Parent or Merger Subsidiary or as to which the holders thereof have properly and validly exercised their statutory rights of appraisal in accordance with Section 262 of the DGCL) will be automatically converted into the right to receive cash in an amount equal to $104.00, without interest (which is referred to as the “merger consideration”), less any applicable withholding taxes.
Treatment of Equity-Based Awards
Vested Citrix stock options: Each vested Citrix stock option will be automatically cancelled and converted into the right to receive an amount in cash equal to the product obtained by multiplying (1) the excess, if any, of the merger consideration, over the per share exercise price of such Citrix stock option, by (2) the aggregate number of shares of Citrix common stock that would have been issuable upon exercise of such Citrix stock option immediately prior to the effective time.
Unvested Citrix stock options: Each unvested Citrix stock option will be automatically cancelled and converted into the contingent right to receive an aggregate amount in cash (referred to as a “converted cash award”) equal to the product obtained by multiplying (1) the excess, if any, of the merger consideration over the per share exercise price of such Citrix stock option, by (2) the aggregate number of shares of Citrix common stock that would have been issuable upon exercise of such Citrix stock option immediately prior to the effective time. The converted cash award will be subject to generally the same terms as the corresponding, cancelled equity award, including vesting conditions.
Citrix DSU awards: Each Citrix DSU award, whether or not vested, will be automatically cancelled and converted into the right to receive an amount in cash equal to the product obtained by multiplying (1) the aggregate number of shares of Citrix common stock subject to such Citrix DSU award by (2) the merger consideration.
Citrix RSU awards: Each Citrix RSU award (with time-based vesting only) will be automatically cancelled and converted into a converted cash award with respect to an aggregate amount in cash equal to the product obtained
by multiplying (1) the aggregate number of shares of Citrix common stock subject to such Citrix RSU award by (2) the merger consideration. The converted cash award will be subject to generally the same terms as the corresponding, cancelled equity award, including vesting conditions.
Citrix PRSU awards: Each Citrix PRSU award will be deemed earned for such number of shares of Citrix common stock as determined in accordance with the terms of the applicable award agreement, and such Citrix PRSU awards will be automatically cancelled and converted into a converted cash award with respect to an aggregate amount in cash equal to the product obtained by multiplying (1) the aggregate number of shares of Citrix common stock subject to such Citrix PRSU award (as deemed earned) by (2) the merger consideration. The converted cash award will be subject to generally the same terms as the corresponding, cancelled equity award, including vesting conditions.
All payments with respect to Citrix equity awards will be made without interest and less any applicable withholding taxes.
ESPP: As soon as practicable following the date of the Merger Agreement, the Citrix Board (or, if appropriate, any committee administering the Company’s 2015 Employee Stock Purchase Plan (the “ESPP”)) is required to adopt such resolutions or take such other actions as may be required to provide that, with respect to the ESPP: (1) each individual participating in an Offering (as defined in the ESPP) or a purchase period in progress on the date of the Merger Agreement will not be permitted to increase his or her payroll contributions rate pursuant to the ESPP from the rate in effect as of such date or make separate non-payroll contributions to the ESPP on or following such date, except as may be required under applicable law; (2) no individual who is not participating in the ESPP with respect to any current Offering as of the Merger Agreement will be allowed to commence participation in the ESPP following such date; (3) the final exercise date for such Offering shall be the earlier of the regularly scheduled final exercise date for such Offering and a date that is no later than five calendar days prior to the effective time of the Merger; (4) each ESPP participant’s accumulated contributions under the ESPP will be used to purchase shares of Company Common Stock in accordance with the terms of the ESPP as of the final exercise date; (5) no further Offering or purchase period will commence pursuant to the ESPP after the date of the Merger Agreement; and (6) the ESPP will terminate on the date immediately prior to the date on which the effective time of the Merger occurs and no further rights shall be granted or exercised under the ESPP thereafter. All shares of Citrix common stock purchased on the final exercise date shall be cancelled at the effective time and converted into the right to receive the merger consideration in accordance with the terms and conditions of the Merger Agreement.
Procedure for Receiving Merger Consideration
Prior to the effective time of the Merger, Parent agreed to appoint Computershare Trust Company N.A. (or such other nationally recognized transfer agent or such other bank or trust company agreed to between the parties hereto) as the “payment agent.” At or prior to the effective time, Parent will deposit, or cause to be deposited, with the payment agent the aggregate per share merger consideration, less any applicable withholding taxes, for payment to the holders of Citrix common stock.
Promptly after the effective time of the Merger, and in any event no later than three business days after the effective time, Parent agreed to send, or cause the payment agent to send, to each record holder as of immediately prior to the effective time of (1) a certificate or certificates that immediately prior to the effective time represented outstanding shares of Citrix common stock and (2) book-entry shares of Citrix common stock that represented outstanding shares of Citrix common stock (other than, in each case, shares to be cancelled or as to which the holders thereof have properly and validly exercised their statutory rights of appraisal in accordance with Section 262 of the DGCL), whose shares were converted into the right to receive the merger consideration a letter of transmittal and instructions for use in effecting the surrender of such certificates or uncertificated shares in forms reasonably satisfactory to the Company (which shall specify that the delivery shall be effected, and risk of loss and title shall pass, only upon proper delivery or transfer of the certificates or affidavits of loss in lieu of
the certificates to the payment agent). Each holder of shares of Citrix common stock that have been converted into the right to receive the merger consideration will be entitled to receive the merger consideration in respect of each share of Citrix common stock upon, as applicable: (a) surrender to the payment agent of a certificate, together with a duly completed and validly executed letter of transmittal or (b) receipt of an “agent’s message” by the payment agent (or such other evidence, if any, of transfer as the payment agent may reasonably request) in the case of uncertificated shares, and, in each case, delivery to the payment agent of such other documents as may reasonably be requested by the payment agent. The payment agent will accept such certificates and transferred uncertificated shares upon compliance with such reasonable terms and conditions as the payment agent may impose to cause an orderly exchange thereof in accordance with normal exchange practices. Until so surrendered or transferred, each such certificate or uncertificated share shall represent after the effective time for all purposes only the right to receive such merger consideration. No interest shall be paid or accrued on the cash payable upon the surrender or transfer of any such certificate or uncertificated share. You should not send in your certificates until you receive a letter of transmittal with instructions from the payment agent. Do not send your certificates with your proxy card.
Following the effective time of the Merger, each holder of Citrix common stock will cease to have any rights with respect to such common stock, except for the right to receive the merger consideration or, in the case of stockholders who have properly and validly exercised their statutory rights of appraisal in accordance with Section 262 of the DGCL, such rights as are provided by Section 262 of the DGCL.
If any certificate shall have been lost, stolen or destroyed, upon the holder’s compliance with the replacement requirements established by the payment agent, including, if necessary, the making of an affidavit by such person and/or posting by such person of a bond, in such customary amount as the surviving corporation may direct, as indemnity against any claim that may be made against it with respect to such certificate, the payment agent will issue, in exchange for such lost, stolen or destroyed certificate, the merger consideration to be paid in respect of the shares of Citrix common stock formerly represented by such certificate.
Each of Parent, Merger Subsidiary, the surviving corporation and the payment agent shall be entitled to deduct and withhold from the consideration otherwise payable to any person pursuant to the Merger Agreement such amounts as it is required to deduct and withhold with respect to the making of such payment under any provision of any applicable tax law or under any agreement between the Company and the person entitled to such payment.
Representations and Warranties
In the Merger Agreement, Citrix, on the one hand, and Parent, Merger Subsidiary and TIBCO, on the other hand, made a number of representations and warranties to each other. The parties’ reciprocal representations and warranties relate to, among other things:
| • | due organization, valid existence, good standing (with respect to jurisdictions that recognize such concept), qualification to do business and power and authority to enter into the Merger Agreement and consummate the transactions contemplated thereby; and |
| • | the absence of certain legal proceedings and orders. |
Further, Citrix, on the one hand, and Parent and Merger Subsidiary, on the other hand, made a number of additional representations and warranties to each other. These reciprocal representations and warranties relate to, among other things:
| • | required governmental filings and consents and approvals of governmental entities in connection with the Merger Agreement and the Merger; |
| • | the absence of any violation of or conflict with such party’s organizational documents, applicable laws or material contracts as a result of entering into the Merger Agreement and consummating the Merger; |
| • | the absence of undisclosed broker’s, finder’s, financial advisor’s or other similar fees or commissions; |
| • | capitalization; and |
| • | the stockholder approvals required to consummate the Merger. |
In addition to the foregoing, the Merger Agreement contains representations and warranties made by Citrix to Parent and Merger Subsidiary, including regarding:
| • | the due incorporation or organization, good standing, power and authority and qualifications of Citrix’s subsidiaries; |
| • | the authority of Citrix to execute and deliver the agreements contemplated by the Merger Agreement, approval of the Merger Agreement by the Citrix Board and recommendation that the stockholders vote to adopt the Merger Agreement; |
| • | the accuracy and sufficiency of the reports and financial statements filed by the Company with the SEC; |
| • | internal controls over financial reporting; |
| • | the absence of certain undisclosed liabilities; |
| • | the absence of certain changes or events; |
| • | tax matters; |
| • | employee compensation and benefits matters; |
| • | compliance with applicable laws; |
| • | the receipt of the Qatalyst Partners fairness opinion; |
| • | environmental matters; |
| • | material contracts; |
| • | real property; |
| • | intellectual property; |
| • | labor matters; |
| • | privacy and data security; |
| • | government contracts; |
| • | compliance with trade control and anticorruption laws and certain business practices; and |
| • | insurance. |
In addition, the Merger Agreement contains representations and warranties made by Parent, Merger Subsidiary and TIBCO to Citrix, including regarding:
| • | the equity and debt commitment letters and transactions contemplated thereby, sufficiency of funds and the limited guarantees; and |
| • | Parent’s, TIBCO’s and its parent’s, Merger Subsidiary’s, the surviving corporation and their subsidiaries solvency. |
In addition, the Merger Agreement contains representations and warranties made by Parent and Merger Subsidiary to Citrix, including regarding:
| • | operations of Merger Subsidiary since its formation; |
| • | compliance with anti-money laundering laws; |
| • | stating that Parent is not an “interested stockholder” of Citrix; and |
| • | the absence of undisclosed arrangements between Parent, Merger Subsidiary or any of their affiliates, on the one hand, and Citrix’s management, directors, stockholders or employees, on the other hand. |
Significant portions of the representations and warranties of the Company are qualified as to “materiality,” a “Company Material Adverse Effect” or the “knowledge” of the Company, and certain portions of the representations and warranties of Parent and Merger Subsidiary are qualified as to “materiality,” a “Parent Material Adverse Effect” or the “knowledge” of Parent or Merger Subsidiary, as applicable.
Under the Merger Agreement, a “Company Material Adverse Effect” means any change, event, effect, occurrence or development that, individually or in the aggregate, has had or would reasonably be expected to have, a material adverse effect on (1) the business, assets, financial condition or results of operations of the Company and its subsidiaries, taken as a whole, or (2) the ability of the Company and its subsidiaries to consummate the Merger; provided, however, that, with respect to clause (1), none of the following (alone or in combination) shall constitute or be taken into account in determining whether a Company Material Adverse Effect has occurred or would reasonably be expected to occur:
| (A) | the negotiation, execution, announcement or performance of the Merger Agreement or the pendency or consummation of the Merger or the other transactions contemplated by the Merger Agreement (including loss of or adverse change in the relationship of the Company and its subsidiaries with their respective employees, investors, contractors, lenders, customers, distribution partners, technology and other partners, suppliers, vendors, governmental authorities or other third parties); provided, however, that this clause (A) does not apply to certain representations or warranties set forth 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 pendency or consummation of the Merger or the other transactions contemplated by the Merger Agreement; |
| (B) | the identity of Parent or any of its affiliates as the acquiror of the Company, or any communication by Parent or any of its affiliates regarding plans, proposals or projections with respect to the Company or its subsidiaries; |
| (C) | general business, economic or political conditions, or the capital, credit, banking, debt, financial or currency markets, in the United States or elsewhere in the world, or changes therein, including changes in interest or exchange rates or any suspension of trading in securities on any securities exchange or other market; |
| (D) | general conditions in any industry in which the Company and its subsidiaries operate, or changes therein; |
| (E) | any changes in GAAP or other accounting standards (or the official interpretation thereof); |
| (F) | any changes in applicable law (or official interpretation thereof), including the adoption, implementation, repeal or modification of any law, regulation or policy (or the official interpretation thereof) by any governmental authority, or any panel or advisory body empowered or appointed thereby; |
| (G) | the taking of any action, or refraining from taking any action, by the Company or any of its subsidiaries, in each case at the express written direction of Parent or Merger Subsidiary or as expressly required by the Merger Agreement, or the taking of any action, or failure to take any action, by Parent, Merger Subsidiary or any of their affiliates; |
| (H) | any stockholder litigation, or any proceeding for appraisal of the fair value of any shares of Citrix common stock pursuant to the DGCL in connection with the Merger; |
| (I) | any outbreak, continuation or escalation of acts of terrorism, cyberterrorism, hostilities, sabotage or war, hurricanes, volcanoes, tornados, floods, earthquakes, tsunamis, mudslides, weather-related events, epidemics, pandemics (including COVID-19), plagues, public health events, fires or natural or man-made disaster or act of God; |
| (J) | the availability or cost of equity, debt or other financing to Parent, Merger Subsidiary or the surviving corporation; or |
| (K) | any failure, in and of itself, by the Company to meet, or changes to, internal or analysts’ estimates, projections, expectations, budgets, guidance or forecasts of revenue, earnings, cash flow or any other financial measures (including annualized recurring revenue and bookings) (whether made by the Company or any third parties), any change, in and of itself, in the Company’s credit ratings, or in the price or trading volume of shares of the Citrix common stock (however, the underlying causes of such failures or changes in this clause (K) may be taken into account in determining whether a Company Material Adverse Effect has occurred or would reasonably be expected to occur, unless (and to the extent) such underlying cause would otherwise be excepted by this definition). |
In the case of clauses (C), (D), (E), (F) and (I) above, such effect may be taken into account in determining whether or not there has been a Company Material Adverse Effect to the extent such effect has a disproportionate adverse effect on the Company and its subsidiaries as compared to other participants in the industry in which the Company and its subsidiaries operate, in which case only the incremental disproportionate impact or impacts may be taken into account in determining whether or not there has been or would reasonably be expected to be a Company Material Adverse Effect.
Under the Merger Agreement, a “Parent Material Adverse Effect” means any change, event, effect, occurrence or development that, individually or in the aggregate, would reasonably be expected to prevent or materially delay consummation of the Merger and the other transactions contemplated by the Merger Agreement.
The representations and warranties of the Company, Parent, Merger Subsidiary and TIBCO will expire upon the effective time of the Merger.
Covenants Regarding Conduct of Business by the Company Pending the Effective Time
From the date of the Merger Agreement to the earlier of the effective time of the Merger or the termination of the Merger Agreement (referred to as the “interim period”), the Company will, and will cause its subsidiaries to, use its commercially reasonable efforts to conduct its business in all material respects in the ordinary course consistent with past practice and preserve intact its present business organization and material business relationships, including its relationships with customers, suppliers, licensors, licensees, distributors and other persons with which it has significant business dealings. However, the Company and its subsidiaries may continue any necessary or advisable changes in their respective business practices adopted prior to the date of the Merger Agreement in response to COVID-19 and any COVID-19 measures and, after the date of the Merger Agreement, may take further actions in good faith that are reasonably required to respond to COVID-19 or any COVID-19 measures.
Without limiting the generality of the foregoing, except for matters (1) permitted or contemplated by the Merger Agreement, (2) required by applicable law or the rules or regulations of Nasdaq, or (3) undertaken with the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed), during the interim period, the Company shall not, and shall cause each of its subsidiaries not to:
| • | amend the Company’s certificate of incorporation or by-laws, or amend any certificate of incorporation or by-laws, or other comparable charter or organizational documents, of Citrix’s subsidiaries; |
| • | declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock, property or otherwise) in respect of, or enter into any agreement with respect to the voting of, any capital stock of the Company or any of its subsidiaries, other than dividends and distributions by a direct or indirect wholly-owned subsidiary of the Company; |
| • | (a) adjust, split, combine or reclassify any capital stock of Citrix or any of its subsidiaries, (b) issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, shares of capital stock of the Company or any of its subsidiaries, or (c) purchase, redeem or otherwise acquire |
| any Company securities, except for acquisitions of shares of Citrix common stock by the Company in satisfaction by holders of Citrix equity awards of the applicable exercise price and/or withholding taxes or in accordance with the terms of the Company stock plans or the ESPP; |
| • | issue, deliver, sell or grant any Company securities, other than (a) the issuance of shares of Citrix common stock upon the exercise of Citrix stock options or pursuant to the terms of Citrix DSU awards, Citrix RSU awards or Citrix PRSU awards that are outstanding on the date of the Merger Agreement or issued not in violation of the Merger Agreement, in each case in accordance with the applicable terms of such Citrix equity award, (b) grants or awards of Citrix equity awards or securities pursuant to certain offer and promotion letters, director deferred compensation and annual director grants, or (c) the issuance of shares of Citrix common stock in accordance with the ESPP; |
| • | adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial liquidation, dissolution, consolidation, restructuring or recapitalization or other reorganization of Citrix or any of its subsidiaries; |
| • | (a) increase or decrease the salary or wages, benefits, bonuses or other compensation payable, or to become payable, to Citrix’s current or former directors, employees or other individual service providers with a title of director or above or with annual targeted base salary of $300,000 or more, (b) pay or award, or commit to pay or award, any new bonuses or cash incentive compensation to the Company’s current or former directors, employees or other individual service providers with a title of director or above or with targeted base salary of $300,000 or more, (c) grant any severance or termination pay to any of Citrix’s current or former directors, employees or other individual service providers with a title of director or above or with targeted base salary of $300,000 or more, or (d) take any action to accelerate any payment or benefit, or the funding of any payment or benefit, payable or to become payable to any of Citrix’s current or former directors, employees or other individual service providers with a title of director or above or with targeted base salary of $300,000 or more, except, in each case, as required to be made pursuant to the terms of any labor agreements as in effect as of the date of the Merger Agreement and as required under the terms of any Citrix employee plan as in effect on the date of the Merger Agreement; |
| • | adopt, terminate or amend any material Citrix employee plan or any other benefit or compensation plan, policy or arrangement that would be a material Citrix employee plan if in effect on the date of the Merger Agreement, except (a) as required by applicable law, (b) as required under the terms of any Citrix employee plan as in effect on the date of the Merger Agreement or adopted, amended or modified as expressly permitted by the Merger Agreement, or (c) for annual renewals of benefit plans undertaken in the ordinary course of business and consistent with past practice; |
| • | negotiate, modify, extend, terminate, or enter into any labor agreement, or voluntarily recognize or certify any labor union, labor organization, works council, or group of employees as the bargaining representative for any employees of Citrix or any subsidiary of Citrix; |
| • | 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 would reasonably be expected to trigger notice requirements under the WARN Act; |
| • | hire, engage, terminate (without cause), furlough, or temporarily layoff any employee with a title of director or above or with annual targeted base salary of $300,000 or more; |
| • | affirmatively waive or release any noncompetition, non-solicitation, nondisclosure, noninterference, non-disparagement, or other restrictive covenant obligation of any current or former employee or independent contractor; |
| • | acquire any business, assets or capital stock of any person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, or otherwise), other than one or more acquisitions in the ordinary course of business that, individually or in the aggregate, involve a purchase price of not more than $500,000; |
| • | sell, lease, license, sublicense, pledge, transfer, assign, abandon, subject to any lien or otherwise dispose of, or fail to preserve and maintain, any intellectual property of Citrix, material assets or material properties except (a) pursuant to contracts existing as of the date of the Merger Agreement, (b) non-exclusive licenses and sublicenses of Citrix’s intellectual property to customers, contractors, distribution partners, technology and other partners or suppliers of the Company and its subsidiaries in the ordinary course of business consistent with past practice, (c) sales of inventory or obsolete equipment in the ordinary course of business consistent with past practice or (d) permitted liens; |
| • | disclose or fail to preserve and maintain any trade secrets included in Citrix’s intellectual property to any third party other than pursuant to written confidentiality obligations; |
| • | agree to any covenant limiting the ability of Citrix or any of its subsidiaries to compete or engage in any line of business or to compete with any person in any geographic area, in each case that is material to Citrix and its subsidiaries taken as a whole; |
| • | change any of the accounting methods used by Citrix materially affecting its assets, liabilities or business, except for such changes that are required by GAAP or Regulation S-X promulgated under the Exchange Act or as otherwise specifically disclosed in Citrix’s reports filed with the SEC; |
| • | make or change any material tax election, change any material accounting method for tax purposes, surrender any right to claim a material tax refund, enter into any closing agreement related to any material taxes, settle any material tax claim or assessment, or except in the ordinary course of business, amend any material tax return or consent to any extension or waiver of the limitation period applicable to any material tax claim or assessment; |
| • | incur or commit to any capital expenditures that in the aggregate exceeds, in any given fiscal quarter, $500,000 that are not contemplated in Citrix’s annual budget; |
| • | (a) enter into any contract that, if in existence as of the date of the Merger Agreement, would be a material contract other than contracts with end-user customers or distribution partners in the ordinary course of business or as permitted under the Merger Agreement, or (b) modify, amend, terminate or grant a waiver or release under any material contract in a manner that would be adverse to Citrix or its subsidiaries in any material respect; |
| • | settle or compromise any pending or threatened proceeding, or pay, discharge, or satisfy or agree to pay, discharge or satisfy any claim with respect to any proceeding, other than the settlement, compromise, payment, discharge or satisfaction of proceedings providing solely for the payment of monetary damages which are (a) reflected or reserved against in full in the Company balance sheet, (b) covered in full by existing insurance policies or (c) less than $500,000 individually or $2,500,000 in the aggregate; |
| • | except for borrowings under Citrix’s current credit facilities in the ordinary course of business, interest rate and currency swaps and hedging arrangements in the ordinary course of business, and intercompany loans between Citrix and any of its wholly-owned subsidiaries or between any wholly-owned subsidiaries of Citrix, (a) incur, issue, or otherwise become liable for additional indebtedness in excess of $1,000,000 in the aggregate, (b) modify the terms of any material indebtedness existing as of the date of the Merger Agreement, or (c) assume, guarantee or endorse the obligations of any person (other than a wholly-owned subsidiary of Citrix); or |
| • | authorize, commit or agree to take any of the foregoing actions. |
No-Shop; Citrix Board Recommendation Change
No-Shop
From and after the date of the Merger Agreement, Citrix agreed to not, and agreed to cause its subsidiaries and its and their respective directors, officers and employees not to, and agreed to instruct and use reasonable best efforts to cause each of its other representatives not to, directly or indirectly (other than with respect to Parent and Merger Subsidiary):
| • | solicit, initiate, propose, assist, knowingly facilitate, or knowingly encourage any inquiries, proposals or offers that constitute, or that could reasonably be expected to lead to, an acquisition proposal; |
| • | engage in, continue or otherwise participate in any discussions or negotiations with any third party regarding an acquisition proposal, or furnish to any third party information or provide to any third party access to the businesses, properties, assets or personnel of Citrix or any of its subsidiaries, in each case for the purpose of encouraging or facilitating the making, submission or announcement of any proposal or inquiry that constitutes, or could reasonably be expected to lead to, an acquisition proposal; |
| • | enter into any alternative acquisition agreement (other than an acceptable confidentiality agreement or such other confidentiality agreement permitted by the Merger Agreement) or enter into any agreement requiring Citrix to abandon, terminate or fail to consummate the transactions contemplated by the Merger Agreement; or |
| • | approve, endorse or recommend any proposal that constitutes, or could reasonably be expected to lead to, an acquisition proposal. |
The Company also agreed to, and agreed to cause its subsidiaries and its and their respective officers and directors, and agreed to instruct and use reasonable best efforts to cause each of its other representatives to, immediately cease and terminate any discussions or negotiations with any third party that would be prohibited by the Merger Agreement and, within forty-eight hours following the execution of the Merger Agreement, to request that all non-public information previously provided by or on behalf of Citrix or any of its subsidiaries to any third party with whom a confidentiality agreement was entered into during the twelve-month period immediately preceding the date of the Merger Agreement relating to a potential acquisition proposal be promptly returned or destroyed in accordance with the terms of such confidentiality agreement and cease providing any further information with respect to Citrix, its subsidiaries, or any acquisition proposal to any such third party or its representatives and immediately terminate all access granted to any such third party and its representatives to any physical or electronic data room.
If, at any time on or after the date of the Merger Agreement, but prior to obtaining the Citrix stockholder approval, (1) Citrix receives a written acquisition proposal from a third party, (2) such acquisition proposal did not result from a material breach of the Merger Agreement and (3) the Citrix Board or any committee thereof has determined in good faith, after consultation with its financial advisor and outside legal counsel, that such acquisition proposal constitutes, or would reasonably be expected to lead to, a superior proposal and the failure to engage the third party pursuant to the Merger Agreement would be inconsistent with its fiduciary duties pursuant to applicable law, then Citrix may:
| • | furnish information and data with respect to Citrix and its subsidiaries to the third party making such acquisition proposal (and its representatives, including potential financing sources of such third party), in each case pursuant to an acceptable confidentiality agreement; and |
| • | enter into, maintain and participate in discussions or negotiations with the third party making such acquisition proposal (and its representatives, including potential financing sources of such third party) regarding such acquisition proposal or otherwise cooperate with or assist or participate in, or facilitate, any such discussions or negotiations (including by entering into a customary confidentiality agreement with such third party for the purpose of receiving non-public information relating to such third party). |
However, Citrix will not, and will not permit its subsidiaries or its or their representatives to, furnish any non-public information except pursuant to an acceptable confidentiality agreement, and will substantially concurrently provide to Parent any non-public information concerning Citrix or its subsidiaries provided to such third party, which was not previously provided to Parent.
From and after the date of the Merger Agreement, Citrix agreed to as promptly as practicable (and in any event within 24 hours) notify Parent of Citrix’s receipt of any acquisition proposal, which notification shall include a copy of the applicable written acquisition proposal (or, if oral, the material terms and conditions of such acquisition proposal) and the identity of the third party making such acquisition proposal. Citrix agreed to thereafter keep Parent reasonably informed on a prompt and current basis of the status of any developments, discussions or negotiations regarding any such acquisition proposal, and the material terms and conditions thereof (including any change in price or form of consideration or other material amendment to such acquisition proposal), including by providing a copy of all documentation relating to the acquisition proposal that is exchanged between the third party (or its representatives) making such acquisition proposal and Citrix (or its representatives) within 24 hours.
Citrix agreed not to release or permit the release of any person from, or to waive or permit the waiver or termination of any provision of, any standstill or similar provision of any agreement to which Citrix or any subsidiary of Citrix is a party, other than to the extent that the Citrix Board or any committee of the Citrix Board determines in good faith, after consultation with outside legal counsel, that failure to provide such waiver, release or termination would reasonably be expected to be inconsistent with its fiduciary duties under applicable law.
As used in the Merger Agreement, the term “acquisition proposal” means any offer or proposal from any third party relating to any transaction or series of related transactions involving:
| • | any direct or indirect acquisition or purchase by any third party, whether from Citrix or any other person(s), of securities representing 15% or more of any class of outstanding voting securities of Citrix after giving effect to the consummation of such acquisition or purchase, including any tender offer or exchange offer that, if consummated, would result in any third party beneficially owning 15% or more of the total outstanding equity securities (by vote or economic interests) of Citrix after giving effect to the consummation of such tender offer or exchange offer; |
| • | any direct or indirect acquisition, purchase or exclusive license, whether by merger, amalgamation, consolidation, share exchange, business combination, joint venture or otherwise, by any third party of assets constituting or accounting for 15% or more of the consolidated revenues, net income or assets of Citrix and its subsidiaries, taken as a whole (measured by the fair market value thereof as of the date of such purchase, acquisition or license); |
| • | any liquidation, dissolution, recapitalization, extraordinary dividend or other reorganization of Citrix or any of its subsidiaries, the business of which constitutes 15% or more of the consolidated revenues, net income or assets of the Company and its subsidiaries, taken as a whole; |
| • | any merger, consolidation, share exchange, business combination, joint venture, recapitalization, reorganization or other transaction involving the Company, pursuant to which the stockholders of Citrix immediately preceding such transaction hold less than 85% of the total outstanding equity securities (by vote or economic interests) in the surviving or resulting entity of such transaction or any third party would hold securities representing more than 15% of the total outstanding equity securities (by vote or economic interests) after giving effect to the consummation of such transaction; or |
| • | any combination of the foregoing. |
Also used in the Merger Agreement, the term “superior proposal” means any bona fide written acquisition proposal that the Citrix Board or any committee of the Citrix Board has determined in good faith (after consultation with its financial advisor and outside legal counsel), taking into account, among other things, all legal, financial, regulatory, and other aspects of the acquisition proposal (including certainty of closing) and the
identity of the third party making the acquisition proposal, would, if consummated, result in a transaction that is more favorable from a financial point of view to the Company’s stockholders (in their capacity as such) than the Merger (taking into account any revisions to the terms of the Merger Agreement, the Guarantees and the Financing Commitment Letters proposed by Parent in writing prior to the time of such determination). For purposes of the definition of “superior proposal,” all references in the term “acquisition proposal” to “15%” will be deemed to be references to “50%,” and all references in the term “acquisition proposal” to “85%” will be deemed to be references to “50%.”
Citrix Board Recommendation Change
Neither the Citrix Board nor any committee of Citrix Board may:
| • | fail to make, withhold, withdraw, amend, qualify or modify, or publicly propose to withhold, withdraw, amend, qualify or modify, in any manner adverse to Parent or Merger Subsidiary, its recommendation to Citrix stockholders to adopt the Merger Agreement (the “Company Recommendation”); |
| • | adopt, approve, endorse, recommend or declare advisable, or publicly propose to adopt, approve, endorse, recommend or declare advisable, an acquisition proposal; |
| • | fail to recommend against acceptance of any third party tender offer or exchange offer for the shares of Citrix common stock within ten business days after commencement of such offer pursuant to Rule 14d-2 of the Exchange Act or issue a public press release within ten business days following the first public announcement of any acquisition proposal by a third party (other than by commencement of a tender or exchange offer) reaffirming the Company Recommendation; |
| • | fail to publicly reaffirm the Company Recommendation within ten business days after Parent so requests in writing (with the Company having no obligation to make such reaffirmation on more than three separate occasions); |
| • | fail to include the Company Recommendation in the proxy statement; |
| • | take any formal action or make any recommendation or public statement in connection with a tender or exchange offer, other than a recommendation against such offer or a “stop, look and listen” communication by the Citrix Board (or a committee of the Citrix Board) to the Company stockholders pursuant to Rule 14d-9(f) promulgated under the Exchange Act (or any substantially similar communication); or |
| • | resolve or publicly propose to take any action described in the foregoing clauses (each of the foregoing actions is referred to as an “adverse recommendation change”). |
In addition, neither the Company nor any subsidiary of the Company may execute or enter into, any letter of intent, memorandum of understanding, Merger Agreement, acquisition agreement, or other contract or agreement with respect to an acquisition proposal (other than an acceptable confidentiality agreement, or such other permitted confidentiality agreement) (each, referred to as an “alternative acquisition agreement”).
Notwithstanding anything in the Merger Agreement to the contrary, at any time prior to obtaining the Citrix stockholder approval, the Citrix Board or any committee of the Citrix Board may, if it determines in good faith (after consultation with a company financial advisor and outside legal counsel), that the failure to do so would be inconsistent with its fiduciary duties under applicable law, make an adverse recommendation change in response to a superior proposal or make an applicable adverse recommendation change in response to any positive material event, change or development with respect to the Company or any of its subsidiaries that was not known to or reasonably foreseeable by the Citrix Board as of the date of the Merger Agreement and not relating to any acquisition proposal or the mere fact, in and of itself, that the Company meets or exceeds any internal or published projections, forecasts, estimates or predictions of revenue, earnings or other financial or operating metrics for any period, or changes in the market price or trading volume of the Citrix common stock or the credit
rating of the Company (however, the underlying cause of any of the foregoing may be taken into account) (each such event, change or development, referred to as an “intervening event”), subject in each case to compliance with the procedures described below.
In the case of a superior proposal, no adverse recommendation change and/or termination of the Merger Agreement may be made:
| • | unless the Company and its representatives have complied in all material respects with their obligations pursuant to the Merger Agreement with respect to such acquisition proposal; |
| • | until after the fourth business day following written notice from the Company to Parent advising Parent that the Citrix Board (1) has received a bona fide acquisition proposal that has not been withdrawn, (2) concluded in accordance with the terms of the Merger Agreement that such acquisition proposal constitutes a superior proposal and (3) intends to resolve to effect an adverse recommendation change and/or terminate the Merger Agreement (referred to as a “notice of superior proposal”) and specifying the reasons, including the material terms and conditions of, and the identity of the third party making, such superior proposal, and copies of all other relevant transaction documents (with any amendment to the financial terms or any other material term of such superior proposal requiring a new notice of superior proposal with a new notice period of two business days); |
| • | unless during such four business day period (or two business day period following an amended proposal), the Company agreed to, and agreed to cause its representatives to, if requested by Parent, (1) negotiate with Parent and its representatives in good faith to make amendments to the terms and conditions of the Merger Agreement, the Guarantees and the Financing Commitment Letters so that the acquisition proposal no longer constitutes a superior proposal and (2) permit Parent and its representatives to make a presentation to the Citrix Board regarding the Merger Agreement and any proposed amendments with respect thereto during the initial four business day period; and |
| • | unless, following the expiration of such four business day period (or two business day period following an amended proposal) and after taking into account any amendments proposed in writing by Parent to the terms and conditions of the Merger Agreement, the Guarantees and the Financing Commitment Letters, the Citrix Board or a committee of the Citrix Board determines in good faith (after consultation with its financial advisor and outside legal counsel) that the acquisition proposal continues to constitute a superior proposal. |
In the case of an intervening event, no adverse recommendation change may be made:
| • | until after the fourth business day following written notice from the Company to Parent advising Parent that the Citrix Board or any committee of the Citrix Board intends to take such action and specifying the facts underlying the determination by the Citrix Board or such committee that an intervening event has occurred, and the reason for the adverse recommendation change, in reasonable detail (referred to as a “notice of intervening event”); |
| • | unless during such four business day period, the Company agreed to, and agreed to cause its representatives to, if requested by Parent, (1) negotiate with Parent and its representatives in good faith to make amendments to the terms and conditions of the Merger Agreement, the Guarantees and the Financing Commitment Letters so that the Citrix Board (or a committee of the Citrix Board) no longer determines that the failure to make an adverse recommendation change in response to such intervening event would be inconsistent with its fiduciary duties pursuant to applicable law and (2) permit Parent and its representatives to make a presentation to the Citrix Board regarding the Merger Agreement and any proposed amendments with respect thereto; and |
| • | unless, prior to the expiration of such four business day period, the Citrix Board or a committee thereof determines in good faith, taking into consideration any amendments to the Merger Agreement, the Guarantees and the Financing Commitment Letters proposed in writing by Parent (after consultation with its financial advisor and outside legal counsel), that the failure to effect an adverse recommendation change would be inconsistent with its fiduciary duties under applicable law. |
Reasonable Best Efforts; Antitrust Filings
Citrix and Parent agreed to use their reasonable best efforts to take, or cause to be taken (including by their respective subsidiaries), all actions and to do, or cause to be done, and to assist and cooperate with the other parties in doing, all things necessary, proper or advisable under applicable law to consummate the transactions contemplated by the Merger Agreement, including:
| • | obtaining of all necessary actions or non-actions, waivers, consents and approvals from governmental authorities and the making of all necessary, notices, registrations and filings (including notices and filings with governmental authorities, if any) and the taking of all steps as may be necessary to obtain an approval or waiver from, or to avoid a proceeding by, any governmental authorities; |
| • | delivery of required notices to, and the obtaining of required consents or waivers from, third parties (provided that the Company shall not be obligated to make any payment or commercial concession to any third party, or incur any liability, as a condition to (or in connection with) obtaining any such consent or waiver, unless such payment, concession or liability is requested by Parent and is conditioned and effective only upon the closing); and |
| • | the execution and delivery of any additional instruments necessary to consummate the Merger and to fully carry out the purposes of the Merger Agreement. |
Each of Citrix and Parent further agreed to:
| • | promptly, but in no event later than ten business days after the date of the Merger Agreement, file any and all notices, reports and other documents required to be filed by such party (and, if applicable, cause their respective affiliates to promptly file any notices, reports and other documents required to be filed by such party) under the HSR Act with respect to the Merger and the other transactions contemplated by the Merger Agreement and agreed to use reasonable best efforts to promptly secure the expiration or termination of any applicable waiting periods under the HSR Act; |
| • | promptly make all filings (and, if applicable, cause their respective affiliates to promptly make all filings), and use reasonable best efforts to timely obtain all consents, permits, authorizations, waivers, clearances and approvals, and to cause the expiration or termination of any applicable waiting periods, as may be required under any other applicable antitrust laws, applicable foreign investment regulations overseen by relevant governmental authorities, the Defense Production Act or the National Industrial Security Program Operating Manual and related guidance issued by the Defense Counterintelligence and Security Agency (referred to as “NISPOM”); and |
| • | as promptly as reasonably practicable provide such information (and, if applicable, cause their respective affiliates to as promptly as reasonably practicable provide such information) as may reasonably be requested by the U.S. Department of Justice (referred to as the “DOJ”) or the Federal Trade Commission (referred to as the “FTC”) under the HSR Act or by any other governmental authority under applicable antitrust laws, applicable foreign investment regulations, the Defense Production Act or the NISPOM in connection with the Merger and the other transactions contemplated by the Merger Agreement, as well as any information required to be submitted to comply with a request for additional information in order to commence or end a statutory waiting period. |
The parties agreed that the Company would not be obligated to obtain any approval from the Committee on Foreign Investment in the United States (referred to as “CFIUS”) or any governmental authority under NISPOM to consummate the transactions contemplated by the Merger Agreement, including the Merger.
Each party also agreed to use reasonable best efforts to:
| • | give the other parties prompt notice of the making or commencement of any request, inquiry or proceeding by any governmental authority with respect to the Merger and the other transactions contemplated by the Merger Agreement; |
| • | keep the other parties reasonably informed as to the status of any such request, inquiry or proceeding; and |
| • | promptly inform the other parties of any substantive communication to or from the FTC, DOJ, CFIUS, or any other governmental authority to the extent regarding the Merger and the other transactions contemplated by the Merger Agreement, or regarding any such request, inquiry or proceeding, and provide a copy of all written communications. |
Subject to applicable law, in advance and to the extent practicable, each of Parent or the Company, as the case may be, will consult the other on all the information relating to Parent or the Company, as the case may be, and any of their respective subsidiaries that appear in any filing made with, or written materials submitted to, and agreed to provide the other party with a reasonable opportunity to review and provide comments on any proposed substantive written communications to, any governmental authority in connection with the Merger and the other transactions contemplated by the Merger Agreement and agreed to incorporate all comments reasonably proposed by Parent or the Company, in each case subject to specified limitations. In addition, except as may be prohibited by any governmental authority or by any applicable law, in connection with any such request, inquiry or proceeding in respect of the Merger and the other transactions contemplated by the Merger Agreement, each party will permit authorized representatives of the other party to be present at each meeting or telephone or video conference relating to such request, inquiry or proceeding and to have access to and be consulted in connection with any document, opinion or proposal made or submitted to any governmental authority in connection with such request, inquiry or proceeding.
In furtherance and not in limitation of the foregoing, each of Parent and TIBCO agreed to take promptly any and all steps necessary to avoid, eliminate or resolve each and every impediment and obtain all clearances, consents, approvals and waivers under applicable antitrust laws that may be required by any governmental authority, so as to enable the parties to consummate the Merger and the other transactions contemplated by the Merger Agreement as soon as reasonably practicable (and in any event no later than five business days prior to the end date), including:
| • | committing to or effecting, by consent decree, hold separate order, trust, or otherwise, the sale, divestiture, license, transfer, assignment or other disposition of assets or businesses of TIBCO or the Company or their respective subsidiaries; |
| • | terminating, relinquishing, modifying, transferring, assigning, restructuring, or waiving existing agreements, licenses, collaborations, relationships, ventures, contractual rights, obligations or other arrangements of TIBCO or the Company or their respective subsidiaries; and |
| • | creating or consenting to create or enter into any agreements, licenses, collaborations, relationships, ventures, contractual rights, obligations, behavioral undertakings or other arrangements (and, in each case, to enter, or offer to enter, into agreements and stipulate to the entry of an order or file appropriate applications with any governmental authority in connection with any of the foregoing) and in the case of actions by or with respect to TIBCO or the Company or their respective subsidiaries or their businesses or assets, by consenting to such action by the Company; |
however, any such action to be taken by (1) the Company may, at the discretion of the Company, be conditioned upon consummation of the Merger and the other transactions contemplated by the Merger Agreement or (2) TIBCO or Parent may, at the discretion of Parent, be conditioned upon consummation of the Merger and the other transactions contemplated by the Merger Agreement (each referred to as a “divestiture action”), as may be necessary or required to avoid the entry of, or to effect the dissolution of or vacate or lift, any order that would otherwise have the effect of preventing consummation of the Merger and the other transactions contemplated by the Merger Agreement, and to ensure that no governmental authority with the authority to clear, authorize or otherwise approve consummation of the Merger and the other transactions contemplated by the Merger Agreement, fails to do so as promptly as practicable and in any event no later than five business days prior to the end date.
Parent and the Company agreed to cooperate in any proposal, negotiation, or offer to commit and to effect, by consent decree, hold separate order or otherwise, any and all divestiture actions or otherwise to offer to take or offer to commit (and if such offer is accepted, commit to and effect) to take any divestiture action as may be required to resolve any governmental authority’s objections to the Merger and the other transactions contemplated by the Merger Agreement. Parent shall control any such proposal negotiation or offer and any and all divestiture actions; provided that notwithstanding any other provisions in the Merger Agreement, Parent shall only be required to take, or shall take, any divestiture action related to the Company and its subsidiaries and/or TIBCO and its subsidiaries. The parties agreed not to enter into any agreement with a governmental authority to delay or otherwise not to consummate as soon as possible the Merger except with the prior written consent of the other parties, such consent not to be unreasonably withheld or conditioned. Notwithstanding anything to the contrary in the Merger Agreement, in no event shall Parent, TIBCO or any of their respective subsidiaries be required to, and the Company shall not without the prior written consent of Parent, take or agree to take any action, including any divestiture action, that is reasonably likely to have a material impact on the business of the Company and TIBCO, taken as a whole.
In the event that any administrative or judicial action is commenced by a governmental authority challenging the Merger under antitrust laws and the other transactions contemplated by the Merger Agreement and such action seeks to prevent consummation of the Merger and the other transactions contemplated by the Merger Agreement, each of Parent and Merger Subsidiary agreed to cooperate with the Company and use its respective reasonable best efforts to contest any such action and to have vacated, lifted, reversed or overturned any decree, judgment, injunction or other order, whether temporary, preliminary or permanent, that is in effect and that prohibits, prevents or restricts consummation of the Merger and the other transactions contemplated by the Merger Agreement.
Neither Parent, Merger Subsidiary nor TIBCO shall, nor shall they permit TIBCO’s parent or its or their respective subsidiaries to, directly or indirectly, acquire or agree to acquire any rights, assets, business, person or division thereof, if such acquisition would reasonably be expected to materially delay the obtaining of, or materially increase the risk of not obtaining, any applicable clearance, consent, approval or waiver of any governmental authority (including under antitrust laws) with respect to the Merger and the other transactions contemplated by the Merger Agreement. Neither Parent nor Merger Subsidiary shall permit or agree to permit any person to obtain equity interests (or rights to obtain equity interests) in Parent, Merger Subsidiary or TIBCO (or TIBCO’s parent or its or their respective subsidiaries) if such acquisition would reasonably be expected to materially delay the obtaining of, or materially increase the risk of not obtaining, any applicable clearance, consent, approval or waiver of any governmental authority under antitrust laws with respect to the Merger and the other transactions contemplated by the Merger Agreement.
Proxy Statement; Citrix Stockholders Meeting
The Company has agreed, in accordance with applicable law and the Company’s governing documents, and in consultation with Parent, to take all necessary action to duly set a record date for (and the Company will not change the record date without the prior written consent of Parent, not to be unreasonably withheld, conditioned or delayed), call, give notice of, convene and hold a special meeting of the Company’s stockholders (including any adjournments and postponements thereof, referred to as the “stockholder meeting”) for the purpose of considering and taking action upon the matters requiring stockholder approval (with the stockholder meeting in no event being initially scheduled for a date later than the 25th business day following the first mailing of the proxy statement to the Company’s stockholders) as soon as practicable after the date of the Merger Agreement, and the Company agreed to, in consultation with Parent, to conduct a “broker search” in accordance with Rule 14a-13 of the Exchange Act as soon as practicable after the date of the Merger Agreement to enable such record date to be so set. Without the prior written consent of Parent, and except as may be required by applicable law to be voted on by the Company’s stockholders in connection with the adoption of the Merger Agreement, obtaining the stockholder approval and a proposal with respect to adjournment of the stockholder meeting shall be the only matters which the Company shall propose to be acted on by the Company’s stockholders at the stockholder meeting.
The Company may postpone or adjourn the stockholder meeting:
| • | with the consent of Parent (not to be unreasonably withheld, conditioned or delayed); |
| • | for the absence of a quorum (it being understood that the Company may not so postpone or adjourn the stockholder meeting more than two times without Parent’s prior consent (not to be unreasonably withheld, conditioned or delayed)); |
| • | to ensure that any supplement or amendment to the proxy statement required by applicable law is provided to the holders of shares of Citrix common stock with a reasonable amount of time in advance of the stockholder meeting; |
| • | to allow additional time for the solicitation of votes in order to obtain the stockholder approval (provided that the stockholder meeting shall not be so delayed by more than 10 business days without the prior consent of Parent); and |
| • | if the Company is required to postpone or adjourn the stockholder meeting by applicable law. |
If requested by Parent, the Company agreed to postpone or adjourn the stockholder meeting to allow additional time for the solicitation of votes in order to obtain the stockholder approval (provided that the stockholder meeting shall not be delayed by more than ten business days unless mutually agreed by Parent and the Company). Unless the Citrix Board or any committee of the Citrix Board has withdrawn the Company Recommendation in compliance with the Merger Agreement, the Company agreed to use its reasonable best efforts to solicit from stockholders of the Company proxies in favor of the adoption of the Merger Agreement and take all action necessary or advisable to secure the vote of the holders of shares of Citrix common stock required by applicable law to effect the Merger. Unless the Merger Agreement is validly terminated, the Company will submit the Merger Agreement for a vote by its stockholders at the stockholder meeting even if the Citrix Board (or a committee thereof) has effected an adverse recommendation change.
The Company agreed to ensure that the proxy statement will not, on the date it is first mailed to stockholders of the Company and at the time of the stockholder meeting, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading and will comply in all material respects with the applicable requirements of the Exchange Act. However, the Company assumes no responsibility with respect to information supplied by or on behalf of Parent or Merger Subsidiary or their affiliates for inclusion or incorporation by reference in the proxy statement. Parent agreed to ensure that such information supplied by it and its affiliates for inclusion in the proxy statement will not, on the date it is first mailed to stockholders of the Company and at the time of the stockholder meeting, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading.
If at any time prior to the stockholder meeting or any such filing, any information relating to the Company, Parent, Merger Subsidiary or any of their respective affiliates should be discovered by the Company, on the one hand, or Parent or Merger Subsidiary, on the other hand, that should be set forth in an amendment or supplement to the proxy statement, any other required Company filing or any other required Parent filing, as the case may be, so that such filing would not include any misstatement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, then the party that discovers such information will promptly notify the other, and the parties agreed to cooperate and the Company agreed to promptly prepare an appropriate amendment or supplement to such filing describing such information and agreed to file such amendment or supplement with the SEC and, to the extent required by applicable law or the SEC or its staff, disseminate such amendment or supplement to the Company’s stockholders.
Subject to applicable law and to the terms of the Merger Agreement, the Company will use its reasonable best efforts to cause the proxy statement to be disseminated to the Citrix’s stockholders as promptly as reasonably
practicable following the filing thereof with the SEC and confirmation from the SEC that it will not review, or that it has completed its review of, the proxy statement, which confirmation will be deemed to occur (absent any change in protocol announced by the SEC) if the SEC has not affirmatively notified Citrix on or prior to the 10th calendar day after filing the proxy statement that the SEC will be reviewing the proxy statement.
Each of Parent, TIBCO and Merger Subsidiary agreed to use, and agreed to cause its affiliates (including the preferred equity issuer) to use, its reasonable best efforts to take, or cause to be taken, all actions and do, or cause to be done, all things necessary, proper or advisable to arrange, obtain and consummate the financing on the terms and conditions (including, to the extent required, by the marketing period and implementation of any “flex” provisions) described in the Financing Commitment Letters, and agreed to not permit any amendment, restatement, replacement, supplement or modification to be made to, or any waiver of any provision under, the Financing Commitment Letters if such amendment, restatement, replacement, supplement, modification or waiver:
| (A) | with respect to the Financing Commitment Letters, reduces (or would have the effect of reducing) the aggregate amount of the financing (including by increasing the amount of fees to be paid or original issue discount) unless (x) the debt financing, the preferred equity financing or the equity financing is increased by a corresponding amount or the debt financing is otherwise made available to fund such fees or original issue discount and (y) after giving effect to any of the transactions referred to in clause (x) above, the representations and warranties of Parent, Merger Subsidiary and TIBCO related to the solvency are true, correct and complete; |
| (B) | imposes new or additional conditions, or would permit the imposition of additional conditions precedent, or otherwise expands, amends, supplements or modifies any of the conditions precedent to the financing or other provision of the Financing Commitment Letters related to conditionality of the funding of such financing (x) in a manner materially adverse to the Company (including with respect to the certainty and timing of funding), or (y) that would (or would reasonably be expected to) delay or prevent or make less likely the funding of the full amount of the financing to be available to Parent (or satisfaction of the conditions to the financing) on the closing date (taking into account the expected timing of the marketing period) or adversely impact the ability of TIBCO, Parent, Merger Subsidiary, the preferred equity issuer or the Company, as applicable, to enforce its rights against other parties to the Financing Commitment Letters or the definitive agreements with respect thereto, or |
| (C) | otherwise adversely affect the ability of TIBCO, Parent, Merger Subsidiary or the preferred equity issuer to enforce their rights under the Financing Commitment Letters or to consummate the transactions contemplated by the Merger Agreement or the timing of the closing, including by making the funding of the financing less likely to occur (any such actions, impacts or effects in clauses (A), (B) and (C) directly above, referred to as an “adverse effect on financing”) |
However, TIBCO, Parent and/or Merger Subsidiary (and/or their applicable affiliates) may amend any Financing Commitment Letter to add lenders, purchasers, investors, lead arrangers, bookrunners, syndication agents or other debt financing sources (or, with respect to the preferred equity commitment letter, the preferred equity financing sources) who had not executed such Financing Commitment Letter as of the date of the Merger Agreement and, in connection therewith, amend the additional lender, purchasers, investors, lead arrangers, bookrunners or syndication agents provisions with respect to the appointment of such additional lenders, purchasers, investors, lead arrangers, bookrunners, syndication agents or other debt financing sources (or, with respect to the preferred equity commitment letter, the preferred equity financing sources), in each case, which do not have an adverse effect on financing (with the creditworthiness of any such additional lenders, purchasers, investors, lead arrangers, bookrunners, syndication agents or other debt financing sources (or, with respect to the preferred equity commitment letter, the preferred equity financing sources) not being taken into account in determining whether such amendments result in an adverse effect on financing); and TIBCO, Parent or Merger Subsidiary will disclose to the Company promptly its intention to so amend, restate, replace, supplement, modify,
or waive any of the Financing Commitment Letters and promptly (and, in any event, within five business days thereof) furnish to the Company copies of any agreements or other documentation with respect to such amendment, restatement, replacement, supplement, modification or waiver.
TIBCO, Parent and Merger Subsidiary may not agree (and agreed to not permit any of their respective affiliates (including the preferred equity issuer)) to the withdrawal, termination, repudiation or rescission of any commitment in respect of the debt financing or preferred equity financing without the prior written consent of the Company, and may not, without the prior written consent of the Company, release or consent to the termination of the obligations of the debt financing sources under the Debt Commitment Letter, the preferred equity financing sources under the Preferred Equity Commitment Letter or any person under the Equity Commitment Letter, as applicable. Parent agreed to promptly deliver to the Company copies of any such amendment, restatement, supplement, replacement, modification, withdrawal, termination, repudiation, rescission or waiver.
Each of Parent, Merger Subsidiary and TIBCO agreed to, and agreed to cause its affiliates (including the preferred equity issuer) and its and their respective officers, employees, advisors and other representatives to, use its reasonable best efforts to:
| • | maintain in full force and effect the Financing Commitment Letters; |
| • | promptly negotiate and enter into definitive agreements with respect to the debt financing and preferred equity financing on the terms and conditions (including, as necessary to ensure the funding of the debt financing and the preferred equity financing on the closing date, agreeing to any requested changes to the debt financing in accordance with any “flex” provisions pursuant to customary syndication practices) contained in the Debt Commitment Letter and the Preferred Equity Commitment Letter (or, except to the extent agreed to by TIBCO, Parent and Merger Subsidiary in instances that would not have an adverse effect on financing, on terms no less favorable to TIBCO, Parent, Merger Subsidiary or their respective affiliates (including the preferred equity issuer) than the terms and conditions (including flex provisions) in the Debt Commitment Letter and the Preferred Equity Commitment Letter); |
| • | satisfy (unless waived) on a timely basis all conditions to funding in the Debt Commitment Letter and the Preferred Equity Commitment Letter and, in each case, such definitive agreements thereto and in the Equity Commitment Letter and to consummate the financing at or prior to the closing; |
| • | enforce its rights under the Financing Commitment Letters to the extent necessary to consummate the transaction contemplated hereby; and |
| • | comply with its obligations under the Financing Commitment Letter. |
Neither TIBCO, Parent nor Merger Subsidiary shall, nor shall they permit any of their respective affiliates (including the preferred equity issuer) to, without the prior written consent of the Company, take any action or enter into any transaction that would (or would reasonably be expected to) impair, delay or prevent consummation of all or any portion of the financing necessary to fund the amounts required to be paid by TIBCO, Parent or Merger Subsidiary (or any other party to the Financing Commitment Letters, other than the debt financing sources and the preferred equity financing sources) in connection with the Merger and the other transactions contemplated by the Merger Agreement (including, without limitation, paying in cash all of the financing purposes). Parent agreed to promptly, upon reasonable written request by the Company, keep the Company fully informed, in all reasonable detail, of the status of its efforts to arrange and consummate the financing and of all material developments in respect thereof. Parent agreed to provide the Company, promptly upon reasonable request, with copies of any documents in respect of the debt financing and the preferred equity financing and such other information on the status and any syndication efforts as agreed to be requested by the Company, in each case, to the extent necessary to allow the Company to monitor the progress of such financing activities or helpful in assisting the Company, its subsidiaries or any of their respective representatives in satisfying any of their obligations under the Merger Agreement. TIBCO, Parent and Merger Subsidiary also agreed to promptly, and in any event within two business days following the occurrence thereof, in each case, to
the extent TIBCO, Parent or Merger Subsidiary have actual knowledge thereof, notify the Company in writing if at any time prior to the closing certain events occurred as set forth in the Merger Agreement.
If any portion of the debt financing or the preferred equity financing becomes unavailable, and such portion is reasonably required to fund the amounts required to be paid by TIBCO, Parent and/or Merger Subsidiary in connection with the Merger and the other transactions contemplated by the Merger Agreement, TIBCO, Parent and Merger Subsidiary agreed to, and agreed to cause their affiliates (including the preferred equity issuer and each related party to any Financing Commitment Letter to) to, use their reasonable best efforts to arrange and obtain alternative financing from alternative sources (referred to as an “alternative financing”) in an amount sufficient to pay in cash all financing purposes with terms and conditions not materially less favorable (unless agreed to by TIBCO, Parent and Merger Subsidiary), in the aggregate, to TIBCO, Parent, Merger Subsidiary and their affiliates (including the preferred equity issuer and each related party to any Financing Commitment Letter) than the terms and conditions in the Preferred Equity Commitment Letter and the Debt Commitment Letter (including with respect to funding and timing of funding) on the date of the Merger Agreement as promptly as reasonably practicable following the occurrence of such event. However, TIBCO, Parent and Merger Subsidiary will not be required to pay or incur materially more (taken as a whole) fees, OIDs or pricing relative to the pricing or fee terms of the debt commitment letter or preferred equity commitment letter, as applicable, as in effect on the date of the Merger Agreement, taking into account any flex terms (other than any increases in OID or interest rates that generally correspond with interest rate increases implemented by the United States Federal Reserve or any other applicable governmental authority, which such increases shall not be deemed to be increases to OID (to the extent any increase in interest rate takes the form of OID) or the interest rate pricing terms of the financing contemplated by the debt commitment letter or preferred equity commitment letter) or seek equity financing (other than the preferred equity financing) from any person other than the applicable sponsors or in an amount in excess of the equity financing contemplated by the equity commitment letters as of the date of the Merger Agreement or on terms and conditions other than as set forth in the equity commitment letters. In the Merger Agreement, each of TIBCO, Parent and Merger Subsidiary acknowledge and agree that the obtaining of the financing, or any alternative financing, is not a condition to closing of the Merger.
The Company agreed to use its reasonable best efforts to provide, and agreed to cause each of its subsidiaries and each of their respective representatives to, use reasonable best efforts to provide to Parent and Merger Subsidiary cooperation reasonably requested in writing by Parent that is customary in connection with the arrangement of the debt financing and/or the preferred equity financing as further described in the Merger Agreement. Subject to certain exceptions, Parent agreed to indemnify and hold harmless the Company, its subsidiaries, their respective affiliates and their respective representatives from and against any and all costs, expenses and other liabilities directly or indirectly suffered or incurred by any of them in connection with the arrangement and consummation of the financing.
Under the Merger Agreement, the Company is required to allow Parent a marketing period of 14 consecutive business days to market the debt financing. The marketing period is a period commencing upon the latest to occur of (1) the date that the financial information of the Company required to be delivered to the Parent by the Company pursuant to the Merger Agreement is received, (2) the date that all consents required under antitrust and foreign investment laws have been obtained and the waiting period under the HSR Act waiting period has expired or been terminated, and (3) stockholder approval of the Merger has been obtained.
Indemnification of Directors and Officers and Insurance
For six years after the effective time of the Merger, Parent agreed to, and agreed to cause the surviving corporation to, maintain officers’ and directors’ liability insurance in respect of acts, errors or omissions occurring prior to the effective time covering each such person currently covered by the Company’s and the Company’s subsidiaries’ officers’ and directors’ liability insurance policy on terms with respect to coverage and
amount no less favorable than those of such policy in effect as of immediately prior to the effective time. This requirement will be deemed to have been satisfied if prepaid “tail” or “runoff” policies have been obtained by either the Company or Parent, which policies provide such persons currently covered by such policies with coverage for an aggregate period of six years with respect to claims arising from acts, errors or omissions that occurred on or before the effective time, including in respect of the transactions contemplated by the Merger Agreement. However, in satisfying its obligation, neither Parent nor the surviving corporation agreed to be obligated to pay aggregate annual premiums in excess of 350% of the amount paid for the policy year in effect immediately prior to the effective time (referred to as the “maximum premium”), and the Company agreed to not be permitted to obtain any “tail” or “runoff” officers’ and directors’ liability insurance policies with a cost in excess of the maximum premium. If the aggregate premiums of any such insurance coverage exceed the maximum premium, then the surviving corporation will be obligated to obtain a policy with the greatest coverage available for a cost not exceeding the maximum premium. If any such prepaid policies have been obtained by the Company prior to the effective time, the surviving corporation agreed to (and Parent agreed to cause the surviving corporation to) maintain any and all such policies in full force and effect for their full term.
From and after the effective time, each of Parent and the surviving corporation agreed to indemnify (including advancement of expenses) and hold harmless each individual who at the effective time is, or at any time prior to the effective time was, a director or officer of the Company or of a subsidiary of the Company (each referred to as an “indemnified party”) for any and all costs and expenses (including fees and expenses of legal counsel, which shall be advanced as they are incurred, subject to the indemnified party making an undertaking to repay such expenses if it is ultimately determined that such indemnified party was not entitled to indemnification), judgments, fines, penalties or liabilities (including amounts paid in settlement or compromise) imposed upon or incurred by such indemnified party in connection with or arising out of any action, suit or other proceeding (whether civil or criminal) in which such indemnified party may be involved or with which he or she may be threatened (regardless of whether as a named party or as a participant other than as a named party, including as a witness) (referred to as an “indemnified party proceeding”) by reason of such indemnified party’s being or having been such director or officer or an employee or agent of the Company or any subsidiary of the Company or otherwise in connection with any action taken or not taken at the request of the Company or any subsidiary of the Company or arising out of such indemnified party’s service in connection with any other corporation or organization for which he or she serves or has served as a director, officer, employee, agent, trustee or fiduciary at the request of the Company (including in any capacity with respect to any employee benefit plan), in each case, whether or not the indemnified party continues in such position at the time such indemnified party proceeding is brought or threatened and at, or at any time prior to, the effective time (including any indemnified party proceeding relating in whole or in part to the transactions contemplated by the Merger Agreement or relating to the enforcement of this provision or any other indemnification or advancement right of any indemnified party), to the fullest extent permitted under applicable law. In addition, each of Parent and the surviving corporation agreed to fulfill and honor in all respects the obligations of the Company pursuant to (1) each indemnification or similar agreement between the Company or any subsidiary of the Company and any indemnified party (or any other employee or former employee of the Company or any of its subsidiaries) in effect as of the date of the Merger Agreement and (2) any indemnification provision (including advancement of expenses) and any exculpation provision set forth in the certificate of incorporation or by-laws of the Company or similar organizational documents of any subsidiary of the Company as in effect on the date of the Merger Agreement. To the fullest extent permitted under applicable law, Parent agreed to pay all expenses, including reasonable attorneys’ fees and expenses, that may be incurred by indemnified parties in connection with their successful enforcement of their rights. These obligations of Parent and the surviving corporation will continue for a period of six years from the effective time or, with respect to any claim asserted or made within such period, until the final disposition of such claim. No indemnified party may compromise, settle or come to an arrangement regarding, or agree to compromise, settle or come to an arrangement regarding, any indemnified party proceeding for which indemnification is being sought unless Parent has consented in writing (which consent will not be unreasonably withheld, conditioned or delayed).
As of the closing date, the surviving corporation or one of its subsidiaries will continue to employ the employees of the Company and its subsidiaries as of the effective time of the Merger. For a period of not less than twelve months following the closing (or, if sooner, until the date of termination of employment of the relevant continuing employee), Parent agreed to provide each employee of the Company or its subsidiaries who is employed by the Company or its subsidiaries immediately before the closing date and who continues employment with Parent, the surviving corporation or any subsidiary of Parent or the surviving corporation immediately following the closing date (each referred to as a “continuing employee”) with (1) base salary or base hourly rate in an amount at least equal to the level that was provided to each such continuing employee prior to the closing date and (2) target incentive compensation (including commissions) in an amount at least equal to the aggregate target cash incentive opportunities that were provided to each such continuing employee prior to the closing date. Until December 31, 2022 (or, if sooner, until the date of termination of employment of the relevant continuing employee), Parent agreed to provide each continuing employee with employee benefits (other than equity awards, defined benefit pension, post-employment welfare and non-qualified deferred compensation or benefits) that are at least as favorable in the aggregate to those provided to each such continuing employee immediately prior to the closing date under the Citrix employee plans. In addition, for a period of twelve months following the closing, Parent agreed to cause the surviving corporation and its respective subsidiaries to assume and honor the terms of the Company’s severance guidelines.
From and after the closing date, Parent will cause each continuing employee’s service with Citrix and its subsidiaries (including any predecessors thereto or any other entities that have been merged with or into or been acquired by the Company or any of its subsidiaries) prior to the closing date to be recognized for purposes of eligibility to participate, future vacation accruals, determining levels of benefits (but not for benefit accruals under any defined benefit pension plan) and vesting under each compensation, severance, retirement, vacation, paid time off, fringe or other welfare benefit plan, program or arrangement of Parent, the surviving corporation or any of their subsidiaries (excluding any equity compensation plans, programs, agreements or arrangements in which any continuing employee is or becomes eligible to participate immediately following the closing) (collectively, referred to as the “Parent benefit plans”), but solely to the extent service was credited to such employee for such purposes under a comparable Citrix employee plan immediately prior to the closing date and without duplication of benefits or compensation. The surviving corporation and its subsidiaries agreed to assume all obligations for all vacation and paid time off balances of continuing employees and assume and pay all costs and notice obligations incurred in connection with terminations of non-continuing employees.
From and after the closing date, with respect to each Parent benefit plan that is an “employee welfare benefit plan” as defined in Section 3(1) of ERISA in which any continuing employee is or becomes eligible to participate during the calendar year in which the closing occurs, Parent agreed to use commercially reasonable efforts to cause each such Parent benefit plan to (1) waive all limitations as to pre-existing conditions, waiting periods, required physical examinations and exclusions with respect to participation and coverage requirements applicable under such Parent benefit plan for such continuing employees and their eligible dependents to the same extent that such pre-existing conditions, waiting periods, required physical examinations and exclusions would not have applied or would have been waived under the corresponding Citrix employee plan in which such continuing employee was a participant immediately prior to the closing date but, with respect to long-term disability and life insurance benefits and coverage, solely to the extent permitted under the terms and conditions of Parent’s applicable insurance contracts in effect as of the closing date; and (2) provide each continuing employee and their eligible dependents with credit for any co-payments and deductibles paid during the portion of the calendar year prior to the closing date in satisfying any applicable co-payment or deductible requirements under such Parent benefit plan for the applicable calendar year, to the extent that such expenses were recognized for such purposes under the comparable Citrix employee plan.
From and after the closing date, Parent agreed to cause the surviving corporation and their respective subsidiaries to honor, in accordance with its terms, each existing employment, change in control, retention, bonus, cash
incentive, severance and termination protection plan, policy or agreement of or between Citrix or any of its subsidiaries and any current or former officer, director or employee of Citrix or its subsidiaries, and all vested and accrued benefits under any Citrix employee plan.
The Merger Agreement contains additional agreements between Citrix, on the one hand, and Parent and Merger Subsidiary, on the other hand, relating to, among other things:
| • | debt financing cooperation and repayment and discharge of the Company’s and TIBCO’s indebtedness by Parent in connection with the Merger; |
| • | repatriation of the Company’s cash and sale of certain marketable securities; |
| • | Parent and Merger Subsidiary’s access to information of Citrix; |
| • | notification of certain matters; |
| • | confidentiality; |
| • | consultations regarding public statements and disclosure; and |
| • | litigation relating to the transactions contemplated by the Merger Agreement. |
The obligations of Citrix, Parent and Merger Subsidiary to consummate the Merger are subject to the satisfaction or waiver of various conditions on or prior to the effective time of the Merger, including the following:
| • | the adoption of the Merger Agreement by the Company’s stockholders; |
| • | the absence of any order from any governmental authority having jurisdiction over any party to the Merger Agreement (whether temporary, preliminary or permanent) restraining, enjoining or otherwise prohibiting the consummation of the Merger, and the absence of any applicable law being adopted that makes consummation of the Merger illegal or otherwise prohibited; and |
| • | the expiration or early termination of any applicable waiting period under the HSR Act, and receipt of the consents required under the antitrust laws and applicable foreign investment regulations of certain foreign jurisdictions or expiration or termination of any applicable waiting period thereunder (see the section titled “The Merger—Regulatory Approvals Required for the Merger”). |
Parent and Merger Subsidiary’s obligations to consummate the Merger are subject to the satisfaction or waiver of the following additional conditions:
| • | the representations and warranties made by Citrix relating to organization, good standing, corporate power, and brokers’ fees being true and correct in all material respects as of the closing; |
| • | certain representations and warranties regarding Citrix’s capitalization and capital structure being true and correct except for de minimis inaccuracies relative to the total fully-diluted equity capitalization of the Company as of the closing; |
| • | the other representations and warranties made by the Company in the Merger Agreement being true and correct as of the closing, except where the failure of such representations and warranties to be so true and correct (disregarding all qualifications or limitations as to “materiality,” “Company Material Adverse Effect” or words of similar import) would not, individually or in the aggregate, have a Company Material Adverse Effect; |
| • | Citrix’s performance and compliance in all material respects with all covenants, obligations and agreements required to be performed or complied with by the Company in accordance with the Merger Agreement; |
| • | no Company Material Adverse Effect having occurred after the date of the Merger Agreement and continuing; and |
| • | receipt by Parent and Merger Subsidiary of a certificate signed by an executive officer of Citrix certifying to the satisfaction of the conditions described immediately above |
The Company’s obligations to consummate the Merger are subject to the satisfaction or waiver of the following additional conditions:
| • | the representations and warranties made by Parent, Merger Subsidiary and TIBCO set forth in the Merger Agreement being true and correct as of the closing, except where the failure of such representations and warranties to be so true and correct (disregarding all qualifications or limitations as to “materiality,” “Parent Material Adverse Effect” or words of similar import) would not, individually or in the aggregate, prevent or materially delay Parent’s or Merger Sub’s ability to consummate the transactions contemplated by the Merger Agreement; |
| • | Parent’s, Merger Subsidiary’s and TIBCO’s performance and compliance in all material respects with all covenants, obligations and agreements required to be performed or complied with by it in accordance with the Merger Agreement; and |
| • | receipt by Citrix of a certificate signed by an executive officer of Parent certifying to the satisfaction of the conditions described immediately above. |
The Merger Agreement does not contain any financing-related closing condition. Parent and Merger Subsidiary each acknowledged and agreed in the Merger Agreement that obtaining the financing is not a condition to the closing.
Citrix, Parent and Merger Subsidiary can provide no assurance that all of the conditions precedent to the Merger will be satisfied or waived by the party permitted to do so.
The Merger Agreement may be terminated at any time prior to the effective time of the Merger in the following circumstances:
| • | by mutual written consent of Parent and the Company; |
| • | by either Parent or the Company if: |
| • | the Merger is not consummated on or before October 31, 2022 (referred to as the “end date”); provided, however, that (1) if the marketing period has commenced but not yet been completed as of the close of business on the fifth business day immediately prior to October 31, 2022, the end date shall be automatically extended until five business days after the final day of the marketing period, provided that in no event shall the end date be extended beyond January 31, 2023 and (2) the end date shall be automatically extended to January 31, 2023 if the conditions to the closing of the Merger related to an order or applicable law prohibiting the Merger and/or antitrust and competition laws have not been satisfied as of the close of business on the fifth business day immediately prior to October 31, 2022 (and the other conditions to closing have been satisfied or, to the extent permitted by applicable law, waived (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 on such date)); and provided, further, that the right to terminate the Merger Agreement on this basis is not available to any party whose material breach of any provision of the Merger Agreement has been the cause of, or resulted in, the failure of the Merger to be consummated by the end date (referred to as an “end date termination”); |
| • | if any governmental authority has issued a final and non-appealable order, which remains in effect, permanently enjoining, restraining or otherwise prohibiting the consummation of the |
| transactions contemplated by the Merger Agreement; provided, however, that the right to terminate the Merger Agreement on this basis is not available to any party in material breach of its obligations under the regulatory covenants that has been the cause of, or resulted in, the issuance of such final and non-appealable order; or |
| • | if the Company’s stockholders fail to adopt the Merger Agreement upon a final vote taken at the Special Meeting (referred to as a “stockholder vote termination”); |
| • | by Parent if: |
| • | the Company breaches any representation, warranty, covenant or other agreement contained in the Merger Agreement that would result in a condition to the closing of the Merger not being satisfied and such breach has not been timely cured (provided that Parent or Merger Subsidiary is not then in breach of its obligations under the Merger Agreement such that the Company would be entitled to terminate the Merger Agreement pursuant to the Parent breach termination) (referred to as a “Company breach termination”); or |
| • | prior to adoption of the Merger Agreement by Citrix stockholders, the Citrix Board shall have effected an adverse recommendation change (referred to as a “recommendation change termination”); and |
| • | by the Company if: |
| • | Parent, Merger Subsidiary or TIBCO breaches any representation, warranty, covenant or other agreement contained in the Merger Agreement that would result in a condition to the closing of the Merger not being satisfied and such breach has not been timely cured (provided that the Company is not then in breach of its obligations under the Merger Agreement such that Parent would be entitled to terminate the Merger Agreement pursuant to the Company breach termination) (referred to as a “Parent breach termination”); |
| • | prior to the adoption of the Merger Agreement by Citrix stockholders, (1) the Company receives a superior proposal and the Citrix Board effects an adverse recommendation change in respect of such superior proposal and authorizes the Company to enter into a definitive agreement to consummate the transaction contemplated by the superior proposal (and immediately following such termination, the Company enters into a definitive agreement with respect to such superior proposal), (2) the Company has complied in all material respects with its obligations under the no-shop provisions in the Merger Agreement and (3) substantially concurrently with such termination Citrix pays Parent the termination fee (summarized below) (referred to as a “superior proposal termination”); or |
| • | (1) all of the mutual closing conditions and conditions to the obligations of Parent and Merger Subsidiary to effect the Merger have been and remain satisfied or waived (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 on such date, other than solely by virtue of Parent’s failure to effect the closing), (2) the Company has irrevocably notified Parent in writing that the Company stands ready, willing and able to consummate the Merger, (3) the Company has given Parent written notice at least five business days (or, if earlier, the business day immediately preceding the end date) prior to such termination stating that the Company intends to terminate the Merger Agreement and (4) Parent and Merger Subsidiary fail to consummate the Merger within such five business day period after the delivery by the Company to Parent of a notice to such effect (or, if earlier, the end date) (referred to as a “closing failure termination”). |
If the Merger Agreement is terminated by Parent or the Company, the Merger Agreement will terminate, become void and have no further force and effect, without any liability or obligation on the part of Parent, Merger
Subsidiary, TIBCO or the Company, except that certain provisions of the Merger Agreement regarding confidentiality, expense reimbursement and indemnification will survive the termination of the Merger Agreement in accordance with their respective terms, as well as the provisions regarding the effect of termination and payment of termination fees and related expenses and the general provisions contained in Article IX of the Merger Agreement. Subject to the provisions regarding payment of the Company termination fee, the Company also will not be relieved or released from any liabilities or damages arising out of its willful and material breach of any provision of the Merger Agreement. For purposes of the Merger Agreement, a “willful and material breach” means a material breach that is the consequence of an intentional act or intentional omission by the breaching party with the actual knowledge that the taking of such act or failure to take such act would cause or constitute such material breach.
The Company is required to pay or cause to be paid to Parent a “Company termination fee” of $409.0 million if the Merger Agreement is terminated in the following circumstances:
| • | Parent terminates the Merger Agreement for a recommendation change termination; |
| • | the Company terminates the Merger Agreement for a superior proposal termination; or |
| • | either party terminates the Merger Agreement for an end date termination or a stockholder vote termination and after the date of the Merger Agreement an acquisition proposal is made to the Company or is otherwise publicly announced or disclosed and within twelve months of the date of such termination, the Company enters into a definitive agreement in respect of such acquisition proposal (provided that each reference to “15%” and “85%” in the definition of acquisition proposal will be deemed to be a reference to “50%”). |
In addition, if the Merger Agreement is terminated by the Company for a Parent breach termination or closing failure termination (or by Parent for an end date termination at the time when the Company could have terminated the Merger Agreement for a Parent breach termination or closing failure termination), Parent will promptly (and in any event within three business days of the termination) pay or cause to be paid to the Company a Parent termination fee of $818 million.
The parties have agreed that, if the Merger Agreement is terminated in circumstances requiring the payment of either the Company termination fee or the Parent termination fee, and if such fee is paid to the party entitled to receive such fee, then the receipt of such fee will be that party’s sole and exclusive remedy (except that the parties will remain obligated with respect to certain expense and/or reimbursement obligations provided for in the Merger Agreement).
In the event that the Company shall receive full payment of the Parent termination fee, neither Parent, any Parent-related parties nor Merger Subsidiary (or any of the financing source related parties) shall have any further liability, whether pursuant to a claim at law or in equity, to the Company, any of its affiliates or any other person in connection with the Merger Agreement (and the termination thereof), the transactions contemplated by the Merger Agreement (and the abandonment thereof) or any matter forming the basis for such termination, and none of the Company, any of its affiliates or any other person shall be entitled to bring or maintain any proceeding against Parent, any Parent-related parties or Merger Subsidiary for damages or any equitable relief arising out of or in connection with the Merger Agreement, any of the transactions contemplated by the Merger Agreement or any matters forming the basis for such termination.
The parties to the Merger Agreement agreed that unless and until the Merger Agreement is validly terminated in accordance with the Merger Agreement, the parties will be entitled to an injunction or injunctions from a court of competent jurisdiction to prevent breaches (or threatened breaches) of the Merger Agreement and to enforce
specifically the terms and provisions of the Merger Agreement (other than Parent’s and Merger Subsidiary’s obligation to cause the equity financing to be funded and to effect the closing, which shall be governed solely by the next sentence), without bond or other security being required, this being in addition to any remedy to which they are entitled pursuant to the Merger Agreement. Unless and until the Merger Agreement is validly terminated in accordance with the Merger Agreement, the Company shall be entitled to an injunction, specific performance or other equitable remedy to specifically enforce Parent’s and Merger Subsidiary’s obligations to effect the closing on the terms and conditions set forth in the Merger Agreement if and only if and for so long as (1) all of the mutual closing conditions and conditions to the obligations of Parent and Merger Subsidiary (other than those conditions that by their nature are to be satisfied at the closing; provided that each such condition would be satisfied if the closing were on such date) have been and continue to be satisfied or waived and Parent fails to consummate the closing on the date required pursuant to the terms of the Merger Agreement, (2) the debt financing and the preferred equity financing (or, as applicable, alternative financing) is available to be funded in full at the closing and has been funded in full or will be funded in full if the equity financing is funded and (3) the Company has irrevocably confirmed in writing that if the financing is funded, then the Company shall take such actions that are required of it by the Merger Agreement to consummate the closing and Parent and Merger Sub have failed to consummate the closing within five business days after receipt of such irrevocable confirmation (together, the “Specific Performance Conditions”). For the avoidance of doubt, in no event shall the Company be entitled to specifically enforce (or to bring any action or proceeding in equity seeking to specifically enforce) Parent’s rights under the equity commitment letter to cause the equity financing to be funded or to effect the closing other than as expressly provided in the immediately preceding sentence, and in no event shall the Company, Parent or Merger Subsidiary be entitled to seek or specifically enforce any provision of the Merger Agreement or to obtain an injunction or injunctions, or to bring any other action or proceeding in equity in connection with the transactions contemplated by the Merger Agreement against any other party hereto other than under the circumstances expressly set forth in the Merger Agreement. Subject to the two preceding sentences, each of the parties agreed that it will not oppose the granting of an injunction, specific performance or other equitable relief on the basis that any other of such parties has an adequate remedy at law or that any such injunction or award of specific performance or other equitable relief is not an appropriate remedy; provided that, for the avoidance of doubt, with respect to the equitable remedy to specifically enforce Parent’s or Merger Subsidiary’s obligation to effect the closing, Parent and Merger Subsidiary may oppose the granting of specific performance on the basis that one of the Specific Performance Conditions has not been satisfied.
Subject to the foregoing, and subject to the terms and conditions of the Equity Commitment Letter and/or the Guarantees, the Company may cause Parent to enforce the terms of such Equity Commitment Letter and/or Guarantees to cause the applicable equity investor or guarantors, as the case may be, to provide funds to Parent to permit Parent to satisfy its obligations under the Merger Agreement.
Prior to the Citrix stockholder approval, the Merger Agreement may be amended or waived prior to the effective time in writing and signed, in the case of an amendment, by each party to the Merger Agreement or, in the case of a waiver, by each party against whom the waiver is to be effective. However, without the further approval of the Company’s stockholders, no such amendment or waiver shall be made or given after the stockholder approval that requires the approval of the stockholders of the Company under the DGCL unless the further required approval is obtained.
The failure or delay by any party to the Merger Agreement in exercising any right, power or privilege under the Merger Agreement shall not operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege.
The Merger Agreement is governed by and construed in accordance with the laws of the State of Delaware.
