Payment and Proration Clause Samples
The Payment and Proration clause defines how payments are calculated and adjusted when a service or obligation does not cover a full billing period. Typically, this clause specifies that if a contract starts or ends partway through a month or other billing cycle, the payment due will be proportionally adjusted based on the actual time the service was provided. This ensures that both parties pay or receive only for the period during which services were rendered, preventing overpayment or underpayment and promoting fairness in financial transactions.
Payment and Proration. As promptly as practicable but not later than five business days after the Effective Time, Buyer shall cause the Exchange Agent to effect the allocation among the holders of Company Common Stock of rights to receive Buyer Common Stock or cash in the Merger in accordance with the Election Forms as follows:
(A) In the event that the aggregate number of shares of Company Common Stock in respect of which Cash Elections and Combination Cash Elections have been made and not subsequently revoked or changed (collectively, the “Cash Election Shares”) exceeds the Cash Election Number, all shares in respect of which Stock Elections and Combination Stock Elections have been made and not subsequently revoked or changed (the “Stock Election Shares”) and all Undesignated Shares in respect of which Stock Elections are deemed to have been made (it being understood that in such case all Undesignated Shares shall be deemed to be shares in respect of which Stock Elections have been made) shall be converted into the right to receive Stock Consideration, and all Cash Election Shares shall be converted into the right to receive Stock Consideration or Cash Consideration in the following manner:
(1) Cash Election Shares shall be deemed converted to Stock Election Shares, on a pro-rata basis for each record holder of shares of Company Common Stock with respect to those shares, if any, of such record holder that are Cash Election Shares, so that the number of Cash Election Shares so converted into Stock Election Shares, when added to the existing Stock Election Shares, shall equal as closely as practicable the Stock Election Number, and all such Cash Election Shares so converted into Stock Election Shares shall be converted into the right to receive Stock Consideration (and cash in lieu of fractional interests); and
(2) any remaining Cash Election Shares shall be converted into the right to receive Cash Consideration.
(B) In the event that the aggregate number of Stock Election Shares exceeds the Stock Election Number, all Cash Election Shares and all Undesignated Shares in respect of which Cash Elections are deemed to have been made (it being understood that in such case all Undesignated Shares shall be deemed to be shares in respect of which Cash Elections have been made) shall be converted into the right to receive Cash Consideration, and all Stock Election Shares shall be converted into the right to receive Stock Consideration or Cash Consideration in the following manner:
(1) S...
Payment and Proration. As promptly as practicable but not later than five (5) Business Days after the ---------------------- Effective Time of the Merger, CVB shall cause the Exchange Agent to effect the allocation among the holders of Kaweah Stock of rights to receive CVB Stock or cash in the Merger in accordance with the Election Forms as follows:
(a) if the aggregate number of shares of Kaweah Stock as to which Stock Elections and Combination Stock Elections shall have effectively been made results in the issuance of CVB Stock pursuant to the Merger that would have an aggregate value of at least 42.0 percent (42.0%) of $15,500,000 (or $6,510,000) (valued at the Average CVB Stock Price) in exchange for shares of Kaweah Stock (the "Minimum Stock Amount"), but does not result in the issuance of CVB Stock having an aggregate value exceeding 51 percent (51.0%) of $15,500,000 (or $7,905,000) (valued at the Average CVB Stock Price) in exchange for shares of Kaweah Stock (the "Maximum Stock Amount") (assuming all other shares of Kaweah Stock other than any shares of Kaweah Stock held by CVB or CBB receive the Per Share Cash Consideration), then:
(i) Each holder of Kaweah Stock who made an effective Stock Election or Combination Stock Election shall receive the number of shares of CVB Stock equal to the product of the Exchange Ratio multiplied by the number of shares of Kaweah Stock covered by such Stock Election or Combination Stock Election; and
(ii) Each holder of Kaweah Stock who made an effective Cash Election or Combination Cash Election, and each holder of Undesignated Shares shall receive the Per Share Cash Consideration.
(b) if the aggregate number of shares of Kaweah Stock as to which Stock Elections and Combination Stock Elections shall have effectively been made exceeds, and is not approximately equal to, the Maximum Stock Amount (assuming all other shares of Kaweah Stock receive the Per Share Cash Consideration), then:
(i) Each holder of Kaweah Stock who made an effective Cash Election or Combination Cash Election shall receive the Per Share Cash Consideration;
(ii) All Undesignated Shares shall be deemed to have made Cash Elections; and
(iii) A stock proration factor (the "Stock Proration Factor") shall be determined by dividing (1) the maximum number of shares of Kaweah Stock which must make a Stock Election and Combination Stock Election to equal the Maximum Stock Amount based on the Exchange Ratio by (2) the number of shares of Kaweah Stock with respect to which effec...