EXHIBIT 3
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (the "Agreement") is made as of the 24th
day of August, 1999 by and among Clarus Corporation, a Delaware corporation (the
"Company"), Geac Computer Systems, Inc., a Georgia corporation (the "US Buyer")
and Geac Canada Limited, a Canadian corporation (the "IP Buyer" and, together
with the US Buyer, the "Buyers").
WHEREAS, immediately prior to the execution of this Agreement, the
Company and the IP Buyer have entered into an Intellectual Property Rights
Purchase Agreement pursuant to which the Company agreed to sell to the IP Buyer
and the IP Buyer agreed to purchase from the Company certain intellectual
property relating to the Business, as such term is hereafter defined (the "IP
Purchase Agreement");
WHEREAS, immediately prior to the execution of this Agreement, the
Company and the US Buyer have entered into an Asset Purchase Agreement pursuant
to which the Company agreed to sell and the US Buyer agreed to purchase certain
other assets of the Company relating to the Business (the "US Purchase
Agreement");
WHEREAS, the parties to this Agreement desire to provide for
indemnification rights and obligations pertaining to the breach of any of the
covenants, obligations, representations and warranties set forth in the IP
Purchase Agreement and the US Purchase Agreement; and
WHEREAS, for purposes of this Agreement, the term "Business" means all
of the business conducted by the Company, of each and every nature, relating to
the development, marketing, licensing and sale of products exclusively for use
in the Financial/Enterprise Resource Planning/Human Resources market, and, for
greater certainty, excluding the Electronic Commerce Business;
WHEREAS, for purposes of this Agreement, the term "Electronic Commerce
Business" means the development, marketing, licensing and sale of products
exclusively for use in electronic commerce, currently consisting of the "Clarus
E Procurement" and "Clarus Commerce" products;
NOW THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements contained herein, in the IP Purchase Agreement and in
the US Purchase Agreement, and intending to be legally bound, the Company, the
IP Buyer and the US Buyer hereby agree as follows:
1. DEFINITIONS. All capitalized terms used herein and not otherwise
defined shall have the respective meanings assigned to them in the IP Purchase
Agreement or the US Purchase Agreement, as the case may be.
2. INDEMNIFICATION.
2.1 BY THE COMPANY. The Company hereby agrees to indemnify and
hold harmless each of the IP Buyer and the US Buyer from and against all claims,
damages, losses, liabilities, costs and expenses, including, without limitation,
settlement costs and any reasonable legal, accounting or other expenses for
investigating or defending any actions or threatened actions (collectively, the
"Losses"), in connection with each of the following (it being understood and
agreed that the enumeration of specific categories of Losses below does not
limit the scope of any other categories of Losses listed below which may include
such specific categories):
(a) any breach of any representation or warranty, or
non-fulfillment or non-performance on the part of the Company of any covenant or
agreement, contained in this Agreement, the IP Purchase Agreement, the US
Purchase Agreement, the Trademark License Agreement among the US Buyer, the IP
Buyer and the Company, dated as of even date hereunder (including their
respective Schedules) and any other related agreements or transactions
contemplated herein or therein, or any certificates delivered by the Company in
connection with such transaction (collectively, the "Covered Documents");
(b) any product warranty or product liability claim
(however characterized) relating to (i) products manufactured, delivered,
licensed or sold by the Company prior to the Closing Date or (ii) the Company's
use of the Company Intellectual Property, the Acquired Assets or the Company's
business or operations prior to the Closing Date, except for claims by customers
made pursuant to the Company's Software License and Support Agreement ("SLSA")
where (x) the remedy sought is a remedy specified therein and (y) such SLSA is
an Assumed Contract (it being understood and agreed that the foregoing exception
does not apply to claims under such SLSA where the remedy sought is not a remedy
specified therein; provided, that the Buyer has used commercially reasonable
efforts to meet its obligations under such SLSA); or
(c) any claims, penalties or obligations in
connection with any failure to comply with the requirements of the Uniform
Commercial Code and bulk sales laws in force in the jurisdictions in which such
laws may be applicable to the Company or the transactions contemplated by this
Agreement.
2.2 BY THE IP BUYER AND THE US BUYER. The IP Buyer and the US
Buyer, jointly and severally, hereby indemnify and hold harmless the Company
from and against all Losses in connection with:
(a) any breach of any representation or warranty, or
non-fulfillment or non-performance on the part of the IP Buyer or the US Buyer,
as applicable, of any covenant or agreement, contained in the Covered Documents;
(b) the US Buyer's use of the Acquired Assets after
the Closing Date; and
(c) the IP Buyer's use of the Company Intellectual
Property after the Closing Date.
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2.3 CLAIMS FOR INDEMNIFICATION. Whenever any claim shall arise
for indemnification under this Section 2, the IP Buyer or the US Buyer, on the
one hand, or the Company, on the other hand (the party seeking such
indemnification, the "Indemnified Party"), shall promptly notify the other party
or parties hereto (the party or parties from whom indemnification is sought, the
"Indemnifying Party"), and such Indemnifying Party's counsel pursuant to the IP
Purchase Agreement or the US Purchase Agreement, as applicable, in writing (the
"Indemnification Notice") of the claim, which writing shall include the facts
constituting the basis for such claim, the specific section of the IP Purchase
Agreement or the US Purchase Agreement, as applicable, upon which the claim is
based and an estimate, if possible, of the amount of damages suffered by the
Indemnified Party. In the event of any such claim for indemnification hereunder
resulting from or in connection with any claim or legal proceedings by a third
party (a "Third Party Claim"), the Indemnification Notice shall specify, if
known, the amount or an estimate of the amount of the liability arising
therefrom and shall attach all correspondence and demands from such third party.
In the event that any claim for indemnification involves a matter other than a
Third Party Claim, the Indemnifying Party shall have thirty (30) days from
receipt of the Indemnification Notice to object to such claim by delivery of a
written notice of such objection to the Indemnified Party specifying in
reasonable detail the basis for such objection. Failure to timely object shall
constitute a final and binding acceptance of the claim for indemnification by
the Indemnifying Party and the claim shall be paid in accordance with Section
2.5 hereof. The Indemnified Party shall not settle or compromise any Third Party
Claim for which it is entitled to indemnification hereunder without the prior
written consent, which shall not be unreasonably withheld or delayed, of the
Indemnifying Party; provided, however, that if suit shall have been instituted
against the Indemnified Party and the Indemnifying Party shall not have taken
control of such suit within twenty (20) days after notification thereof, the
Indemnified Party shall (until such time as the Indemnifying Party assumes
control of the defense) have the right to settle or compromise such claim on
commercially reasonable terms upon giving notice to the Indemnifying Party, so
long as such settlement includes a full release of the Indemnifying Party from
such Third Party Claim.
2.4 DEFENSE BY THE INDEMNIFYING PARTY. (a) In connection with
any claim which may give rise to indemnity hereunder resulting from or arising
out of any Third Party Claim, the Indemnifying Party, at the sole cost and
expense of the Indemnifying Party, may, upon written notice given to the
Indemnified Party, assume the defense of any such claim or legal proceeding. If
the Indemnifying Party assumes the defense of any such claim or legal
proceeding, the Indemnifying Party shall select counsel to conduct the defense
of such claims or legal proceedings (provided that such counsel shall
acknowledge in writing to the Indemnifying Party and the Indemnified Party that
in conducting such defense it is representing both the Indemnifying Party and
the Indemnified Party; and that if such counsel subsequently determines that
there is a conflict of interest in continuing to represent both the Indemnifying
Party and the Indemnified Party, such counsel shall notify such parties, in
which event the Indemnified Party shall be entitled to participate in such
defense with its own counsel). The reasonable fees of the counsel selected by
the Indemnified Party in accordance with the preceding sentence shall be at the
sole cost and expense of the Indemnifying Party if it is finally determined that
the Indemnifying Party is responsible for such claim. The Indemnifying Party
shall not consent to a settlement of, or the entry of any judgment arising from,
any such claim or legal proceeding
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without the prior written consent of the Indemnified Party (which consent shall
not be unreasonably withheld or delayed), unless such settlement or judgement
includes a full release of the Indemnified Party from such Third Party Claim.
The Indemnified Party shall be entitled to participate in (but not control) the
defense of any such action, with its own counsel and at its own expense. If the
Indemnifying Party does not assume the defense of any such claim or litigation
resulting therefrom within twenty (20) days after the date it receives written
notice of such claim from the Indemnified Party: (a) the Indemnified Party may
defend against such claim or litigation in such manner as it may deem necessary
or appropriate, including, but not limited to, settling such claim or litigation
(subject to the last sentence of Section 2.3), on such terms as the Indemnified
Party may reasonably deem appropriate, and (b) the Indemnifying Party shall be
entitled to participate in (but not control) the defense of such action, with
its counsel and at its own expense. If the Indemnifying Party thereafter seeks
to question the manner in which the Indemnified Party defended such third party
claim or the amount or nature of any such settlement, the Indemnifying Party
shall have the burden to prove by a preponderance of the evidence that the
Indemnified Party did not defend or settle such Third Party Claim in a
reasonably prudent manner.
(b) The Indemnifying Party and the Indemnified Party shall
cooperate with each other in all reasonable respects in connection with the
defense of any Third Party Claim, including making available records relating to
such claim and furnishing employees of the Indemnified Party as may be
reasonably necessary for the preparation of the defense of any such Third Party
Claim or for testimony as witnesses in any proceeding relating to a Third Party
Claim.
2.5 PAYMENT OF INDEMNIFICATION OBLIGATION. Subject to Section
3 hereof, upon a final determination of an indemnification claim, whereby such
final determination is by reason of (i) a failure of the Indemnifying Party to
timely object to an Indemnification Notice or (ii) the mutual agreement of the
Indemnifying Party and the Indemnified Party, or (iii) a final arbitration award
pursuant to the provisions of the IP Purchase Agreement or the US Purchase
Agreement, as applicable, then the amount of the Losses stated in such claim or
otherwise agreed to or awarded, as the case may be, shall be promptly paid, (i)
if owed by the Company to the US Buyer or the IP Buyer, in cash or by cashier's
check or wire transfer of immediately available funds payable to the applicable
Indemnified Party either directly by the Company or by the Escrow Agent from the
Escrow Amount as specified in Section 3.5 below; and (ii) if owed by the US
Buyer or the IP Buyer, as applicable, to the Company, in cash or by cashier's
check or wire transfer of immediately available funds payable to the Company.
The parties agree that any payment of an indemnification obligation hereunder by
the Company to the Buyers shall constitute a reduction in the Purchase Price
paid under the US Purchase Agreement.
2.6 NO CONSEQUENTIAL DAMAGES. The parties agree that special,
punitive, consequential or exemplary damages shall not be included in any Losses
for purposes hereof.
3. LIMITATIONS ON INDEMNIFICATION.
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3.1 DEFINITIONS. For purposes of this Agreement, the following
terms shall have the following definitions:
(a) "Class A Claims" shall mean claims for indemnification
pursuant to Section 2.1(a) of this Agreement for a breach of any of the
representations set forth in Section 2.12 or 2.17 of the US Purchase Agreement
or the last two sentences of Section 2.3, Sections 2.4(f) or 2.4(g) or clause
(iii) of the first sentence of Section 2.4(i) (in each case incorporating the
defined terms of Section 2.4) of the IP Purchase Agreement.
(b) "Class B Claims" shall mean claims for indemnification
pursuant to Sections 2.1(b) or 2.1(c) of this Agreement, or pursuant to Section
2.1(a) of this Agreement for a breach of any of the representations and
warranties set forth in those provisions of Section 2.4 of the IP Purchase
Agreement that are not included within the scope of Class A Claims.
(c) "Class C Claims" shall mean claims for indemnification
pursuant to Section 2.1 of this Agreement which do not constitute Class A Claims
or Class B Claims, including without limitation claims for indemnification for
the breach of any of the representations, warranties, covenants and obligations
of the Company set forth in the US Purchase Agreement and the IP Purchase
Agreement.
(d) "Company Claims" shall mean claims for indemnification
pursuant to Section 2.2 of this Agreement.
(e) "First Tier Amount" means, as of a given time, the least
of the following dollar amounts:
(i) $2,907,000 minus the aggregate amount of
indemnification payments then made pursuant
to Section 2.1 of this Agreement to satisfy
all Class C Claims;
(ii) one-half of the sum of the Purchase Price
set forth in the US Purchase Agreement, as
adjusted, and the Purchase Price set forth
in the IP Purchase Agreement, as adjusted
(together, the "Combined Purchase Price")
minus the aggregate amount of
indemnification payments then made pursuant
to Section 2.1 of this Agreement to satisfy
all Class B Claims and Class C Claims; and
(iii) the Combined Purchase Price minus the
aggregate amount of indemnification payments
then made pursuant to Section 2.1 of this
Agreement to satisfy all Class A Claims,
Class B Claims and Class C Claims.
(g) "Second Tier Amount" means, as of a given time, the lesser
of the following dollar amounts:
(i) one-half of the Combined Purchase Price
minus the aggregate amount of
indemnification payments then made pursuant
to
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Section 2.1 of this Agreement to satisfy all
Class B Claims and Class C Claims; and
(ii) the Combined Purchase Price minus the
aggregate amount of indemnification payments
then made pursuant to Section 2.1 of this
Agreement to satisfy all Class A Claims,
Class B Claims and Class C Claims.
(h) "Third Tier Amount" means, as of a given time, the dollar
amount equal to the Combined Purchase Price minus the aggregate amount of
indemnification payments then made pursuant to Section 2.1 of this Agreement to
satisfy all Class A Claims, Class B Claims and Class C Claims.
3.2 THE COMPANY'S MAXIMUM INDEMNIFICATION LIABILITY. All
claims for indemnification and damages under this Agreement, the IP Purchase
Agreement and the US Purchase Agreement, other than claims relating to Sections
1.8 and 1.9 of the US Purchase Agreement and claims based on fraud, shall be
governed solely by this Agreement and limited to the amounts specified in this
Section 3.2. The indemnification liability of the Company under Section 2.1 of
this Agreement shall be subject to the limitations set forth below:
(a) The Company's indemnification liability at any given time
for Class A Claims shall be limited to the Third Tier Amount applicable at such
time;
(b) The Company's indemnification liability at any given time
for Class B Claims shall be limited to the Second Tier Amount applicable at such
time; and
(c) The Company's indemnification liability at any given time
for Class C Claims shall be limited to the First Tier Amount applicable at such
time.
For the avoidance of uncertainty, Schedule 3.2 attached hereto sets
forth a number of hypothetical scenarios illustrating the operations of the
indemnity limitations set forth in this Section 3.2. The Indemnified Party shall
not be entitled to indemnification hereunder until the aggregate of all claims
for indemnification by such party exceeds $50,000, in which case the Indemnified
Party shall be entitled to recover the full amount of such claims.
3.3 OTHER COMPANY LIABILITIES. Notwithstanding the limitations
of Section 3.2 above, the Company shall be liable to the full extent of the
amounts payable pursuant to Sections 1.8 and 1.9 of the US Purchase Agreement,
as well as to any liability for damages or indemnification arising by reason of
fraud.
3.4. LIMITATION ON LIABILITY OF THE US BUYER AND THE IP BUYER.
The maximum amount for which the US Buyer and the IP Buyer, in the aggregate,
shall be liable with respect to Company Claims shall be one-half of the Purchase
Price; provided, however, that the foregoing limitation shall not apply to their
indemnity obligations under Sections 2.2(b) and (c) hereof.
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3.5 USE OF ESCROW AMOUNT. All payment of indemnification
obligations for Class A Claims shall be satisfied from the Escrow Amount
pursuant to the provisions of the Escrow Agreement; provided that if the Escrow
Amount is exhausted or the Escrow Agreement has been terminated, such payments
shall be made directly by the Company. All other payment of indemnification
obligations shall be made in cash, or by wire transfer of immediately assessable
funds, directly by the Indemnifying Party. The Escrow Amount shall be available,
pursuant to the Escrow Agreement, for the payment of indemnification obligations
for Class B and Class C Claims and unpaid amounts due under Section 4 hereof and
Section 1.9 of the US Purchase Agreement, to the extent specified in the US
Agreement and the Escrow Agreement.
3.6 SURVIVAL. All representations and warranties contained in
Sections 2.12 and 2.17 of the US Purchase Agreement shall survive until the
expiration of the statute of limitations applicable to the subject matter
thereof. All representations and warranties contained in Section 2.4 of the IP
Purchase Agreement shall survive through the last calendar day of the eighteenth
(18th) full calendar month after the Closing Date. All representations,
warranties and covenants contained elsewhere in the US Purchase Agreement, the
IP Purchase Agreement and the Trademark License Agreement shall survive for 180
days after the Closing Date. Notwithstanding anything in the foregoing to the
contrary, (i) claims, if any, asserted in writing prior to the applicable
survival termination date set forth above and identified as claims for
indemnification pursuant to this Section 3 shall survive until finally resolved
and satisfied in full, (ii) claims based upon fraud or misrepresentations shall
survive until the expiration of the applicable statute of limitations.
3.7 CERTAIN ADDITIONAL INDEMNITY ARRANGEMENTS. Schedule 2.6
attached to the US Purchase Agreement sets out three customers to whom the
Company has contractual deliverable obligations generally described in said
schedule ("Deliverables"), which contracts are being assumed by the US Buyer.
For a period of 18 months from the Closing Date, the Company agrees to
indemnify the Buyers for 50% of all costs of any nature incurred by the Buyers
to satisfy the Deliverables, up to a maximum indemnity of $490,000. Buyers shall
deliver to the Company proper evidence and invoices of all such costs incurred.
In the event the Buyers satisfy the Deliverables through the use of internal
resources, such costs shall be charged at the Buyers' then current list price
less 30%. The Buyer(s), after using reasonable efforts to resolve any dispute
regarding the Deliverables, may satisfy or otherwise settle with each of the
above referenced customers as it considers appropriate in its sole discretion.
The above indemnity will apply independently of the other indemnity
obligations set forth in this Section 3 and will have no impact thereon or be
impacted thereby.
4. IP PURCHASE PRICE ADJUSTMENT FORMULA. The Purchase Price set forth
in Section 1.3 of the IP Purchase Agreement (the "IP Purchase Price") shall be
subject to adjustment after the Closing as follows to reflect the diminution in
value of the Company's Intellectual Property:
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(a) Within thirty (30) days after the Closing Date, the
Company shall deliver to the Buyers a schedule of assets acquired and
liabilities assumed of the Business pursuant to the US Purchase Agreement as of
the Closing Date (the "Closing Statement of Value"). Each account reflected on
such Closing Statement of Value shall be prepared in accordance with United
States generally accepted accounting principles ("GAAP") and the Company's past
accounting practices applied consistently with the accounting practices utilized
in preparing the Schedule of Acquired Assets and Assumed Liabilities as of March
31, 1999 attached as Schedule 4(a) hereto (the "Initial Asset/Liability
Schedule"). The Company shall determine the Asset Value of the Business as of
the Closing Date based on the information set forth in the Closing Statement of
Value (the "Closing Asset Value"). For purposes of this Section 4, the "Asset
Value of the Business" shall be the amount by which the net book value of the
Total Current Assets included in the Acquired Assets exceeds the Assumed
Liabilities. "Total Current Assets" means total current assets determined in
accordance with GAAP and the Company's past accounting practices used in
preparing the Initial Asset/Liability Schedule. The Company shall also determine
the Asset Value of the Business as of the date of the Initial Asset/Liability
Schedule based on the information set forth therein as to the net book value of
the same categories of assets included in the Acquired Assets and the same
categories of liabilities included in the Assumed Liabilities (the "Initial
Asset Value"). The Closing Statement of Value shall be accompanied by a
statement (the "Adjustment Statement") prepared by the Company setting forth the
amount, if any, by which the Closing Asset Value is less than the Initial Asset
Value (the "Adjustment Amount").
(b) There shall be no adjustment to the IP Purchase Price if
the Closing Asset Value is equal to or greater than the Initial Asset Value.
(c) In the event that the Adjustment Statement indicates an
Adjustment Amount and the Buyers dispute the calculation of the Closing Asset
Value, they shall notify the Company in writing (the "Dispute Notice") of the
amount, nature and basis of such dispute within fifteen (15) business days after
delivery of the Closing Statement of Value. In the event of such dispute, the
parties shall first use their reasonable efforts to resolve such dispute among
themselves. In the event that the parties resolve such dispute among themselves,
the Company shall immediately pay, by wire transfer to the IP Buyer, the
Adjustment Amount. If the parties are unable to resolve the dispute within
thirty (30) days after delivery of the Dispute Notice, then the dispute shall be
submitted for binding resolution to a mutually acceptable, nationally recognized
Big Five accounting firm which is independent of all parties.
(d) If the Adjustment Statement indicates an Adjustment Amount
and the Company has not received a Dispute Notice within the fifteen (15) day
period referenced in clause (c) above, then the Adjustment Amount shall be
deemed accepted by and binding upon the parties and the Company shall
immediately pay, by wire transfer to the IP Buyer, the Adjustment Amount. The IP
Purchase Price shall be decreased on a dollar-for-dollar basis for the
Adjustment Amount.
(e) If any amount required to be paid by the Company pursuant
to Section 4(c) or (d) above is not paid within three (3) business days after it
is due, the IP Buyer shall be entitled to submit a certificate to the Escrow
Agent requiring immediate distribution of
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the unpaid amount from the Escrow Amount (the "Adjustment Certificate").
Notwithstanding such distribution, the Company shall be required to immediately
deposit funds with the Escrow Agent to replace the amounts so distributed.
(f) No adjustment to the Purchase Price set forth in the US
Purchase Agreement shall be made as a result of the adjustments contemplated by
this Section 4.
5. DISPUTE RESOLUTION. All disputes among the parties shall be resolved
in accordance with the procedures set forth in the US Purchase Agreement (with
respect to disputes relating to such Agreement) or the IP Purchase Agreement
(with respect to disputes relating to such Agreement and this Agreement).
6. NOTICES. All notices shall be given to the parties to this Agreement
in the manner and at the addressed specified in the US Purchase Agreement (with
respect to all parties except the IP Buyer) and in the IP Purchase Agreement
(with respect to the IP Buyer).
7. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns, except that the US Buyer and the IP Buyer, on the one hand, and the
Company, on the other hand, may not assign their respective obligations
hereunder without the prior written consent of the other party. Any assignment
in contravention of this provision shall be void. No assignment shall release
the IP Buyer or the US Buyer or the Company from any obligation or liability
under this Agreement.
8. ENTIRE AGREEMENT; AMENDMENTS; ATTACHMENTS. This Agreement and all
agreements and instruments to be delivered by the parties pursuant hereto
represent the entire understanding and agreement between the parties hereto with
respect to the subject matter hereof and supersede all prior oral and written
and all contemporaneous oral negotiations, commitments and understandings
between such parties. The parties hereto may amend or modify this Agreement by a
written instrument executed by the US Buyer, the IP Buyer and the Company.
9. SEVERABILITY. Any provision of this Agreement which is invalid,
illegal or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability,
without affecting in any way the remaining provisions hereof in such
jurisdiction or rendering that or any other provision of this Agreement invalid,
illegal or unenforceable in any other jurisdiction.
10. EXPENSES. Except as otherwise expressly provided herein, the IP
Buyer and the US Buyer, on the one hand, and the Company, on the other hand,
will pay all other fees and expenses incurred by them in connection with the
transactions contemplated hereunder.
11. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Georgia.
12. SECTION HEADINGS. The section headings are for the convenience of
the parties and in no way alter, modify, amend, limit, or restrict the
contractual obligations of the parties.
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13. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
shall be one and the same document.
IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties hereto as of and on the date first above written.
GEAC COMPUTER SYSTEMS, INC.
By: ______________________
Name: ____________________
Title: ____________________
GEAC CANADA LIMITED
By: ______________________
Name: ____________________
Title: ____________________
CLARUS CORPORTION
By: ______________________
Name: ____________________
Title: ____________________
BO:24854.10
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Schedule 3.2
------------
Sample Calculations of Indemnification Limitations
--------------------------------------------------
The following examples are for illustrative purposes only.
Assume that the Combined Purchase Price is $17,100,000.
Example 1
---------
$4,000,000 Class B Claim is the first claim paid.
First Tier Amount = $2,907,000
Second Tier Amount = $8,550,000 - $4,000,000 = $4,550,000
Third Tier Amount = $17,100,000 - $4,000,000 = $13,100,000
Example 2
---------
$3,000,000 Class C Claim is the first claim paid.
First Tier Amount = $0
Second Tier Amount = $8,550,000 - $3,000,000 = $5,550,000
Third Tier Amount = $17,100,000 - $3,000,000 = $14,100,000
Example 3
---------
$7,000,000 Class A Claim is the first claim paid.
First Tier Amount = $2,907,000
Second Tier Amount = $8,550,000
Third Tier Amount = $17,100,000 - $7,000,000 = $10,100,000
Example 4
---------
$9,000,0000 Class A Claim is the first claim paid.
First Tier Amount = $2,907,000
Second Tier Amount = $17,100,000 - $9,000,000 = $8,100,000
Third Tier Amount = $17,100,000 - $9,000,000 = $8,100,000
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