THIRD AMENDMENT TO PURCHASE AND SALE AGREEMENT
THIS THIRD AMENDMENT TO PURCHASE AND SALE AGREEMENT is entered into as of
May 11, 1999 ("Third Amendment") by and among Xxxxx Xxxxxxx and Xxxxxxx Xxxxxxx
("Sellers") and Prism Mortgage Company ("Purchaser").
W I T N E S S E T H:
WHEREAS, on July 23, 1998, Purchaser entered into that certain Purchase and
Sale Agreement dated as of July 23, 1998 (the "Original Purchase Agreement")
with Xxxxx Xxxxxxx and Xxxxxxx Xxxxxxx (together, the "Sellers"), pursuant to
which Purchaser has agreed to purchase all of the shares of Pacific Guarantee
Mortgage Corporation ("PGM");
WHEREAS, upon consummation of the transactions contemplated by the Original
Purchase Agreement, Purchaser was the sole shareholder of PGM;
WHEREAS, on April 25, 1999, Sellers and Purchaser entered into that certain
First Amendment (the "First Amendment") to the Original Purchase Agreement;
WHEREAS, on April 27, 1999, Sellers and Purchaser entered into that certain
Second Amendment (the "Second Amendment") to the Original Purchase Agreement (as
amended by such First Amendment and such Second Amendment, the Original Purchase
Agreement called the "Purchase Agreement");
WHEREAS, pursuant to the Purchase Agreement the Sellers each received
"Additional Consideration" as defined therein;
WHEREAS, Sellers and Purchaser wish to clarify and restate the Additional
Consideration to be received by Sellers.
NOW, THEREFORE, in consideration of the mutual agreements herein contained
and other good and valuable consideration, the adequacy of which is hereby
acknowledged, and subject to the terms and conditions hereof, the parties hereto
hereby agree as follows:
SECTION 1. DEFINITIONS. Unless otherwise defined herein, all capitalized
terms shall have the meaning given to them in the Purchase Agreement.
SECTION 2. AMENDMENTS TO PURCHASE AGREEMENT. The Purchase Agreement is
hereby amended as set forth below.
2.1 Section 3.2(i) shall be deleted in its entirety and the
following inserted in lieu thereof:
(i) SELLERS. At the time of an IPO or Sale of
Purchaser, the Sellers will be entitled to receive the
"Seller's Additional Stock Consideration" consisting of
additional stock of Prism Financial Corporation in the
case of an IPO or a sale of all or substantially all of
the assets, or stock, or at the option of the Purchaser,
stock appreciation rights (the dollar equivalent value of
the stock) in Purchaser in the case of a sale of 80% or
more of the stock of Prism, in an amount valued at
$6,196,637. In addition, for each of the Contract Years
ending in 2000 and 2001, Prism shall pay an additional
amount stock or cash of Prism Financial Corporation (at
Purchaser's option) to Sellers equal to 9% of the amount
by which after-tax PGM Net Income in such Contract Years
exceeds $2,000,000. For purposes of this calculation,
PGM Net Income and Purchaser Net Income will be
determined on a trailing twelve-months basis.
Allocation of the above Additional Consideration to each
individual Seller will be on the basis of shares of PGM
sold.
"Additional Compensation" equal to 1/9th of the
Additional Consideration payable to Sellers shall be
allocated to Xxxxxx Xxxxxxx as provided in that certain
Additional Compensation Agreement attached hereto and
made a part hereof as Exhibit E. Said Additional
Compensation payable to Xxxxxx Xxxxxxx is in addition to
the amounts to be paid to Sellers described above.
In no event shall this provision cause Sellers to be
deemed to have received stock in Purchaser.
2.2 Section 3.2(a)(ii)(A) shall be amended by deleting
such section in its entirety and inserting the following in lieu thereof:
A. At the time of an IPO or Sale of Purchaser, the
participants in the Equity Value Plan will be entitled to
receive the "Equity Value Plan Stock Consideration"
consisting of additional stock in the case of an IPO or a
sale of all or substantially all of the assets, or stock,
or, at the option of the Purchaser, stock appreciation
rights (the dollar equivalent value of the stock) in
Prism Financial Corporation in the case of a sale of 80%
or more of the Stock of Prism in an amount valued at
$1,783,760.
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SECTION 3. FULL FORCE AND EFFECT. Except as expressly amended hereby, the
Purchase Agreement shall remain in full force and effect, and, as so amended, is
hereby acknowledged, confirmed and ratified in all respects.
SECTION 4. CONSTRUCTION AND INTERPRETATION OF THIS THIRD AMENDMENT. The
terms and provision of this Amendment shall be governed by the provisions,
including without limitation the construction, arbitration and choice of law
provisions, set forth in Section 12 of the Purchase Agreement, which terms are
expressly incorporated herein by this reference thereto.
SECTION 5. COUNTERPARTS. This Amendment may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same document.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment on the
day and year specified above.
PURCHASER: SELLERS:
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PRISM MORTGAGE COMPANY, /s/ Xxxxxxx Xxxxxxx
an Illinois corporation -----------------------------
Xxxxxxx Xxxxxxx
By: /s/ Xxxxx Xxxxxx
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Its: Senior Vice President /s/ Xxxxx Xxxxxxx
------------------------ -----------------------------
Xxxxx Xxxxxxx
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CONSENT OF SPOUSE
I am the spouse of the Seller, Xxxxx Xxxxxxx, and hereby join in the
execution of this Third Amendment to evidence my knowledge of its existence and
acknowledgment that I understand and agree to the provisions of this Third
Amendment and that I desire to bind to the performance of this Third Amendment
my interest, if any, in any shares of any securities of Prism in which the
Seller may receive an interest in connection with the transactions.
Accordingly, I agree that my community property interest, if any, in such
securities of Purchaser in which the Seller may receive any interest in
connection with the transactions shall be bound by this Third Amendment and that
such consent is binding upon my executors, administrators, heirs and assigns. I
acknowledge that the foregoing is not intended to, and shall not be construed
as, conferring or creating in me any interest in any securities of Prism which
the Seller may receive in connection with the transactions. I hereby
acknowledge that I have been afforded the opportunity to have this Third
Amendment and this Consent reviewed by a counsel of my own choosing.
/s/ Xxxxxx Xxxxxx Barbera
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Xxxxxx Xxxxxx Xxxxxxx
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CONSENT OF SPOUSE
I am the spouse of the Seller, Xxxxxxx Xxxxxxx, and hereby join in the
execution of this Third Amendment to evidence my knowledge of its existence and
acknowledgment that I understand and agree to the provisions of this Third
Amendment and that I desire to bind to the performance of this Third Amendment
my interest, if any, in any shares of any securities of Prism in which the
Seller may receive an interest in connection with the transactions.
Accordingly, I agree that my community property interest, if any, in such
securities of Purchaser in which the Seller may receive any interest in
connection with the transactions shall be bound by this Third Amendment and that
such consent is binding upon my executors, administrators, heirs and assigns. I
acknowledge that the foregoing is not intended to, and shall not be construed
as, conferring or creating in me any interest in any securities of Prism which
the Seller may receive in connection with the transactions. I hereby
acknowledge that I have been afforded the opportunity to have this Third
Amendment and this Consent reviewed by a counsel of my own choosing.
/s/ Xxxxxxxx X. Xxxxxxx
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Xxxxxxxx X. Xxxxxxx
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