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FOURTH AMENDED AND RESTATED RIGHT OF FIRST REFUSAL AND CO-SALE AGREEMENT

Private Equity CoSale Agreement

FOURTH AMENDED AND RESTATED RIGHT OF FIRST REFUSAL 
AND CO-SALE AGREEMENT | Document Parties: SOURCEFIRE INC | BIG BASIN PARTNERS, L.P. | MARYLAND DEPARTMENT OF BUSINESS AND ECONOMIC DEVELOPMENT | INFLECTION POINT VENTURES II, L.P. | INFLECTION POINT VENTURES, L.P. | MINOTAUR FUNDS, LLC | CORE CAPITAL PARTNERS, L.P. | SIERRA VENTURES VII, L.P. | SIERRA VENTURES VIII-A, L.P. You are currently viewing:
This Private Equity CoSale Agreement involves

SOURCEFIRE INC | BIG BASIN PARTNERS, L.P. | MARYLAND DEPARTMENT OF BUSINESS AND ECONOMIC DEVELOPMENT | INFLECTION POINT VENTURES II, L.P. | INFLECTION POINT VENTURES, L.P. | MINOTAUR FUNDS, LLC | CORE CAPITAL PARTNERS, L.P. | SIERRA VENTURES VII, L.P. | SIERRA VENTURES VIII-A, L.P.

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Title: FOURTH AMENDED AND RESTATED RIGHT OF FIRST REFUSAL AND CO-SALE AGREEMENT
Governing Law: Delaware     Date: 10/25/2006

FOURTH AMENDED AND RESTATED RIGHT OF FIRST REFUSAL 
AND CO-SALE AGREEMENT, Parties: sourcefire inc , big basin partners  l.p. , maryland department of business and economic development , inflection point ventures ii  l.p. , inflection point ventures  l.p. , minotaur funds  llc , core capital partners  l.p. , sierra ventures vii  l.p. , sierra ventures viii-a  l.p.
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Exhibit 10.2

SOURCEFIRE, INC.

FOURTH AMENDED AND RESTATED RIGHT OF FIRST REFUSAL
AND CO-SALE AGREEMENT

     This Fourth Amended and Restated Right of First Refusal and Co-Sale Agreement (this “ Agreement ”), dated as of May 24, 2006, is entered into by and among Sourcefire, Inc., a Delaware corporation (the “ Company ”), the persons and entities listed on Exhibit A hereto (individually, a “ Purchaser ” and collectively, the “ Purchasers ”) and the individuals or entities listed on Exhibit B hereto (each a “ Key Holder ” and collectively, the “ Key Holders ”).

Recitals

      WHEREAS, certain of the Purchasers are purchasing shares of the Company’s Series D Convertible Preferred Stock, par value $0.001 per share (the “ Series D Preferred Stock ”), pursuant to that certain Series D Convertible Preferred Stock Purchase Agreement, dated as of the date hereof, by and among the Company and the parties identified therein (the “ Purchase Agreement ”);

      WHEREAS, the obligations in the Purchase Agreement are conditioned upon the execution and delivery of this Agreement;

      WHEREAS, certain of the Purchasers (the “ Initial Purchasers ”) are holders of the Company’s Series A Convertible Preferred Stock, par value $0.001 per share (the “ Series A Preferred Stock ”), Series B Convertible Preferred Stock, par value $0.001 per share (the “ Series B Preferred Stock ,”), Series C Convertible Preferred Stock, par value $0.001 per share (the “ Series C Preferred Stock ,” and together with the Series A Preferred Stock, Series B Preferred Stock and the Series D Preferred Stock, the “ Preferred Stock ”);

      WHEREAS, the Company, the Initial Purchasers and the Key Holders are parties to a Third Amended and Restated Right of First Refusal and Co-Sale Agreement, dated as of January 15, 2004 (the “ Prior Agreement ”);

      WHEREAS, the Key Holders are the beneficial owners of shares of the Common Stock of the Company, par value $0.001 per share (the “ Common Stock ”) and options to purchase shares of Common Stock;

      WHEREAS, the Prior Agreement can be amended with the written consent of (i) the Company, (ii) those Initial Purchasers holding at least two-thirds of the outstanding shares of Series A Preferred Stock, (iii) those Initial Purchasers holding at least sixty percent (60%) of the outstanding shares of the Series B Preferred Stock, (iv) those Initial Purchasers holding at least a majority of the outstanding shares of the Series C Preferred Stock, and (v) those Key Holders holding Shares (as defined below) representing at least a majority of the outstanding Shares then held by the Key Holders; and

 


 

     WHEREAS, the parties to the Prior Agreement desire to amend and restate the Prior Agreement in its entirety and, together with the other parties hereto, desire to enter into this Agreement in order to effect such amendment and restatement of the Prior Agreement.

     NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which is hereby acknowledged, it is agreed as follows:

     1.  Restrictions on Transfer .

          1.1. Any sale, transfer or other disposition, whether voluntarily or by operation of law (“ Transfer ”) of any of the Shares held by the Key Holders, other than according to the terms of this Agreement, shall be void and transfer no right, title, or interest in or to any of such Shares to the purported transferee. As used in this Agreement, the term “ Shares ” shall include all shares of capital stock of the Company held by the Key Holders and the Purchasers, respectively, whether now owned or hereafter acquired; provided, however , that the 71,529 shares of Series A Preferred Stock (as adjusted for stock splits and the like after the date hereof) held by E. Wayne Jackson, III shall not be considered Shares held by a Key Holder subject to the transfer limitations and rights of first refusal rights of the Purchasers set forth in Section 3, 4, 5 and 6. For purposes of calculating any Purchaser’s “pro rata” ownership of Shares, all shares of Preferred Stock of the Company then held by such Purchaser shall be deemed to have been converted into shares of Common Stock of the Company at the then-effective conversion rate specified in the Company’s Certificate of Incorporation.

          1.2. An original copy of this Agreement, duly executed by each of the parties hereto, shall be delivered to the Secretary of the Company and maintained at the principal executive office of the Company and made available for inspection by any person requesting it.

          1.3. Each Key Holder agrees to present the certificates representing the Shares presently owned or hereafter acquired by such Key Holder to the Secretary of the Company and cause the Secretary to stamp on the certificate in a prominent manner the following legend:

“The sale or other disposition of any of the shares represented by this certificate is restricted by a Right of First Refusal and Co-Sale Agreement, as may be amended from time to time, by and among certain of the shareholders of this corporation and this corporation. A copy of such agreement is available for inspection during normal business hours at the principal executive office of this corporation.”

     2.  Transfers Not Subject to Restrictions . Notwithstanding anything to the contrary contained herein, the right of first refusal and co-sale rights of the Company and the Purchasers set forth in this Agreement will not apply to any Transfer by a Key Holder of Shares to the ancestors, descendants or spouse of such Key Holder or to trusts for the benefit of such person, provided that the transferee of such Shares delivers to the Company and the Purchasers a written instrument agreeing to be bound by the terms of this Agreement as if he or it were a Key Holder.

2.


 

     3.  Transfers Subject to Restrictions; Offer of Sale; Notice of Proposed Sale .

          3.1. All Transfers by a Key Holder in one or more transactions, other than (a) Transfers to permitted transferees pursuant to Section 2, and (b) Transfers of up to ten percent (10%) of the aggregate number of Shares held by such Key Holder as of the date of this Agreement, shall require the approval of the holders of at least a majority of the shares of the Company’s then-outstanding Preferred Stock, provided that the Purchasers retain at least twenty-five percent (25%) of the aggregate number of Shares held by them as of the date of this Agreement through the date of Transfer.

          3.2. None of the Key Holders shall Transfer in one or more transactions more than twenty-five percent (25%) of the aggregate number of Shares held by such Key Holder as of the date of this Agreement during the three (3) year period following the date of this Agreement, provided that the Purchasers retain at least twenty-five percent (25%) of the aggregate number of Shares held by them as of the date of this Agreement during such three (3) year period.

          3.3. If any Key Holder desires to Transfer any of his Shares, or any interest in such Shares, in any transaction other than pursuant to Section 2 of this Agreement, such Key Holder (the “ Selling Key Holder ”) shall first deliver written notice of his desire to do so (the “ Notice ”) to the Company and each of the Purchasers, in the manner prescribed in Section 10.4 of this Agreement. The Notice must specify: (i) the name and address of the party to which the Selling Key Holder proposes to sell or otherwise dispose of the Shares or an interest in the Shares (the “ Offeror ”), (ii) the number of Shares the Selling Key Holder proposes to sell or otherwise dispose of (the “ Offered Shares ”), (iii) the consideration per Share to be delivered to the Selling Key Holder for the proposed sale, transfer or disposition and (iv) all other material terms and conditions of the proposed transaction.

     4.  Company’s Option to Purchase.

          4.1. The Company shall have the first option to purchase all or any part of the Offered Shares for the consideration per share and on the terms and conditions specified in the Notice. The Company must exercise such option, no later than fifteen (15) days after such Notice is deemed under Section 10.4 hereof to have been delivered to it, by delivery of written notice to the Selling Key Holder.

          4.2. In the event the Company does not exercise its option within such fifteen (15) day period with respect to all of the Offered Shares, the Company shall give prompt written notice of that fact to the Purchasers (the “ Purchaser Notice ”). The Purchaser Notice shall specify the number of Offered Shares not purchased by the Company (the “ Remaining Shares ”).

          4.3. In the event the Company duly exercises its option to purchase all or part of the Offered Shares, the closing of such purchase shall take place at the offices of the Company on the later of (i) the date five (5) days after the expiration of such fifteen (15) day period or (ii) the date that the Purchasers consummate their purchase of Remaining Shares under Section 5.1 or 5.3 hereof.

3.


 

          4.4. To the extent that the consideration proposed to be paid by the Offeror for the Offered Shares consists of property other than cash or a promissory note, the consideration required to be paid by the Company and/or the Purchasers exercising their options under Sections 4 and 5 hereof may consist of cash equal to the value of such property, as determined in good faith by agreement of the Selling Key Holder and the Company and/or the Purchasers acquiring such Offered Shares.

     5.  Purchasers’ Option to Purchase.

          5.1. Each Purchaser shall have an option, exercisable for a period of fifteen (15) days from the date of delivery of the Purchaser Notice, to purchase, its pro rata share of the Remaining Shares for the consideration per Share and on the terms and conditions set forth in the Notice. Each Purchaser’s pro rata share shall be equal to the product obtained by multiplying (i) the Remaining Shares and (ii) a fraction, the numerator of which is the number of Shares owned by such Purchaser at the time of the Transfer and the denominator of which is the total number of Shares owned by all of the Purchasers at the time of the Transfer. Such option shall be exercised by delivery by such Purchaser of written notice to the Selling Key Holder and to the Secretary of the Company. Alternatively, each Purchaser may within the same fifteen (15) day period, notify the Selling Key Holder and the Secretary of the Company of its desire to participate in the sale of the Shares on the terms set forth in the Notice, and the number of Shares it wishes to sell.

          5.2. In the event options to purchase have been exercised by the Purchasers with respect to some but not all of the Remaining Shares, the Company shall notify those Purchasers who have exercised their options within the fifteen (15) day period specified in Section 5.1 of the number of unsold shares, and each Purchaser so notified shall have an additional option, for a period of five (5) days next succeeding delivery of the Company’s notice, to purchase all or any part of the balance of such Remaining Shares on the terms and conditions set forth in the Notice, which option shall be exercised by the delivery of written notice to the Selling Key Holder and to the Secretary of the Company. In the event there are two (2) or more such Purchasers that choose to exercise the last-mentioned option for a total number of Remaining Shares in excess of the number available, the Remaining Shares available for each such Purchaser’s option shall be allocated to such Purchasers pro rata based on the number of Shares owned by the Purchasers so electing.

          5.3. If the options to purchase the Remaining Shares are exercised in full by the Purchasers, the Selling Key Holder shall immediately notify all of the exercising Purchasers of that fact. The closing of the purchase of the Remaining Shares shall take place at the offices of the Company no later than five (5) days after the date of such notice to the Purchasers.

          5.4. For purposes of this Section 5, Core Capital Partners, L.P. and Minotaur Funds, LLC shall be deemed to be one Purchaser for purposes of determining their pro rata share of the Remaining Shares (the “ Core Pro Rata Share ”), and Core Capital Partners, L.P. and Minotaur Funds, LLC (either individually or together) shall have the right to repurchase all or part of the Core Pro Rata Share.

4.


 

     6.  Failure to Exercise Options; Co-Sale.

          6.1. If the Company and the Purchasers do not exercise all of their options to purchase all of the Offered Shares within the periods described in this Agreement (the “ Option Period ”), then such unexercised options of the Company and the Purchasers to purchase the Offered Shares shall terminate. Each Purchaser which has, pursuant to Section 5.1, expressed a desire to sell Shares in the transaction (a “ Participating Purchaser ”) shall be entitled to do so pursuant to this Section 6. The Selling Key Holder shall use reasonable efforts to interest the Offeror in purchasing, in addition to the remaining Offered Shares, the Shares the Participating Purchasers wish to sell. If the Offeror does not wish to purchase all of the Shares made available by the Selling Key Holder and the Participating Purchasers, then each Participating Purchaser and the Selling Key Holder shall be entitled to sell, at the price and on the terms and conditions set forth in the Notice (provided that the price set forth in the Offer with respect to shares of Common Stock shall be appropriately adjusted, if necessary, based on the conversion ratio of any Preferred Stock to be sold), a portion of the Shares being sold to the Offeror, in the same proportion as such Selling Key Holder or Participating Purchaser’s ownership of Shares bears to the aggregate number of Shares owned by the Selling Key Holder and the Participating Purchasers. The transaction contemplated by the Notice shall be consummated not later than sixty (60) days after the expiration of the Option Period.

          6.2. If the Participating Purchasers do not elect to sell the full number of Shares which they are entitled to sell pursuant to Section 6.1, the Selling Key Holder shall be entitled to sell to the Offeror, according to the terms set forth in the Notice, that number of his own Shares which equals the difference between the number of Shares desired to be purchased by the Offeror and the number of Shares the Participating Purchasers elect to sell pursuant to Section 6.1. If the Selling Key Holder wishes to Transfer any such Shares at a price per Share which differs from that set forth in the Notice, upon terms different from those previously offered to the Company and the Purchasers, or more than sixty (60) days after the expiration of the Option Period, then, as a condition precedent to such transaction, such Shares must first be offered to the Company and the Purchasers on the same terms and conditions as given the Offeror, and in accordance with the procedures and time periods set forth above in Sections 3, 4 and 5 and this Section 6.

          6.3. The proceeds of any sale made by the Selling Key Holder without compliance with the provisions of this Section 6 shall be deemed to be held in constructive trust in such amount as would have been due the Participating Purchasers if the Selling Key Holder had complied with this Agreement.

     7.  Voting and Required Sale . If (i) any person or entity offers to acquire all


 
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