Purchase Option Exercise Price Clause Samples

Purchase Option Exercise Price. The total “Purchase Option Exercise Price” shall be an amount equal to (a) the number of Shares owned by the Minority Shareholders divided by the total issued and outstanding Shares of the Company, multiplied by (b) 5 times EBITDA for the twelve-month period ending on the last day of the month prior to the date the Purchase Option Exercise Notice is given. For example, if the Year 2 Projections arc met and the EBITDA for the twelve-month period ending on the last day of the month prior to the date the Purchase Option Exercise Notice is given is $6.7 million, a multiple of 5 will provide for a total Company valuation of $33.5 million. 49% of said amount is $16,415,000. The Minority Shareholders will be paid their pro rata share of said amount upon the closing of the Purchase Option.

Purchase Option Exercise Price. If the Company sells a portion of its oil and gas properties before you exercise the Purchase Option, the exercise price will be reduced by an amount equal to one percent (1%) of the net proceeds from such sale(s) but only to the extent that such net proceeds have actually been distributed to the holders of the Company’s membership interests prior to the Contribution (as defined in Section 2(d) below) or to the stockholders of Diamondback (as defined below) after the Contribution (as defined below) (the “Reduction Amount”). However, in no event will the Reduction Amount exceed an amount that will cause the exercise price to be less than the fair market value of the membership interests subject to the Purchase Option on the date the Reduction Amount becomes applicable. In order to exercise any vested portion of the Purchase Option, you must give the Board written notice of your desire to acquire a one percent (1%) membership interest in the Company, which notice shall be given on or before the earlier of (i) the fifth (5th) anniversary date of the Effective Date; and (ii) the termination of your employment with the Company for any reason or no reason other than your death, Disability or No Cause Termination (each as defined below) (the “Expiration Date”); provided, however, that your right to exercise the Purchase Option shall be suspended commencing on the date a registration statement relating to an IPO (as defined below) is filed with the Securities and Exchange Commission and such suspension shall continue until the earliest of: (x) December 31, 2013, (y) the date the registration statement is withdrawn and (z) the date a definitive agreement for the sale of the Company or all or substantially all of its assets is entered into (the “Exercise Suspension Period”). In the event your employment with the Company terminates on account of your death, Disability or No Cause Termination, the Expiration Date will be the earlier of the fifth (5th) anniversary date of the Effective Date or the 90th day following your death, Disability or No Cause Termination; provided, however, if the period of time between your death, Disability or No Cause Termination and the Expiration date at all times is subject to Exercise Suspension Period, the Expiration Date will be the earlier of the fifth (5th) anniversary date of the Effective Date or the 30th day following the end of the Exercise Suspension Period. If you fail to notify the Board in writing on or before the Expiration ...