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
”).
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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