SECOND AMENDMENT TO PURCHASE AND SALE AGREEMENT
THIS SECOND AMENDMENT TO PURCHASE AND SALE AGREEMENT is entered into on
April 27, 1999 ("Second 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 to the Original Purchase Agreement (as amended by such First
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 $6,421,538. 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.
2.3 Section 3.2(a)(ii)(B) of the Purchase Agreement shall be deleted
and Subsections 3.2(a)(ii)(C) and (D) renumbered accordingly.
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.
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SECTION 4. CONSTRUCTION AND INTERPRETATION OF THIS SECOND 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:
PRISM MORTGAGE COMPANY,
an Illinois corporation /s/ Xxxxxxx Xxxxxxx
------------------------
Xxxxxxx Xxxxxxx
By: Xxxxx Xxxxxx
------------------------ /s/ Xxxxx Xxxxxxx
Its: Senior Vice President ------------------------
------------------------ 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 Second Amendment to evidence my knowledge of its existence and
acknowledgment that I understand and agree to the provisions of this Second
Amendment and that I desire to bind to the performance of this Second 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 Second 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 Second
Amendment and this Consent reviewed by a counsel of my own choosing.
/s/ Xxxxxx Xxxxxx Barbera
--------------------------
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 Second Amendment to evidence my knowledge of its existence and
acknowledgment that I understand and agree to the provisions of this Second
Amendment and that I desire to bind to the performance of this Second 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 Second 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 Second
Amendment and this Consent reviewed by a counsel of my own choosing.
/s/ Xxxxxxxx X. Xxxxxxx
--------------------------
Xxxxxxxx X. Xxxxxxx
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