Exhibit 10.4
PRISM EQUITY VALUE PLAN
EFFECTIVE AS OF AUGUST 31, 1998
BY PRISM MORTGAGE COMPANY
AND BY PERSONNEL OF
PACIFIC GUARANTEE MORTGAGE CORPORATION
Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission.
The omitted text has been marked with a bracketed asterisk ("[*]") and has
been filed separately with the Securities and Exchange Commission.
PRISM EQUITY VALUE PLAN-I
This agreement establishing the Prism Equity Value Plan-I (the
"Agreement" or "Plan") is dated as of March 1999, but is effective as of
August 31, 1998 (the "Effective Date"), by PRISM MORTGAGE COMPANY, an
Illinois corporation ("Prism" or "Company"), and those Key Personnel of
PACIFIC GUARANTEE MORTGAGE CORP., a California corporation ("PGM"), who
become Participants and signatories in accordance with the terms hereof, and
is intended to supersede any previous understandings or agreements of the
parties with respect to the subject matter contained herein.
SECTION I: RECITALS
A. Prism has acquired all of the issued and outstanding shares of
capital stock of PGM from Xxxxxxx X. Xxxxxxx and Xxxxx X. Xxxxxxx, pursuant
to that certain Agreement for the Purchase and Sale of the Capital Stock of
Pacific Guarantee Mortgage Corporation, dated July 23, 1998 (the "PGM
Purchase Agreement").
B. Pursuant to the PGM Purchase Agreement, Prism agreed to establish
this Plan to provide certain payments to Key Personnel at the time of an IPO
(as defined below) or Sale of Prism (as defined below), and certain payments
relating to PGM Net Income (as defined below).
C. Accordingly, in consideration of the covenants and mutual
agreements set forth below and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Prism hereby agrees
to establish this Plan and the Key Personnel hereby agree to the terms and
conditions contained herein.
SECTION II: DEFINITIONS
A. ADMINISTRATOR means the person or persons designated by the Board
to administer this Plan in accordance with the provisions of Section VII.
B. BENEFICIARY means the person or persons to whom a Participant's
benefits hereunder are payable to upon his or her death in accordance with
Section VI.
C. BOARD means the Board of Directors of Prism.
D. CLOSING means that corresponding definition as set forth in the PGM
Purchase Agreement, the definition of which is hereby specifically
incorporated by reference.
E. CODE means the Internal Revenue Code of 1986, as amended.
F. COMMON STOCK means shares of common stock of the Company.
G. COMPANY means Prism or any successor thereto.
H. ERISA means the Employee Retirement Income Security Act of 1974, as
amended.
I. IPO means an initial public offering of capital stock of Prism.
J. KEY PERSONNEL means those management employees, staff and
independent contractors affiliated with PGM initially designated by PGM
management who become a signatory to this Agreement plus those employees and
independent contractors affiliated with PGM or if PGM and Prism shall merge,
Prism (or the surviving entity of the merger), who are eligible to become
Participants in the Plan, as determined by the Board.
K. PARTICIPANTS mean those Key Personnel who are signatories to this
Agreement and who remain employed or affiliated with PGM.
L. PGM NET INCOME means that corresponding definition as set forth in
the PGM Purchase Agreement, the definition of which is hereby specifically
incorporated by reference.
M. PRISM NET INCOME means the definition corresponding to Purchaser
Net Income as set forth in the Purchase Agreement, the definition of which is
hereby specifically incorporated by reference.
N. SALE OF PRISM means the occurrence of (a) the sale of all or
substantially all of the assets of Prism or a successor of Prism or (b) the
sale of eighty percent (80%) or more of the outstanding shares of Prism,
whether such sale in (a) or (b) is effected directly or indirectly through a
merger, consolidation or reorganization.
O. SECURITIES ACT means the Securities Act of 1933, as amended.
SECTION III: PLAN PURPOSE AND FUNDING
A. PURPOSE: This Plan has been established to provide equity-related
compensation to the Participants in the event of an IPO or a Sale of Prism,
and certain payments relating to PGM Net Income.
B. FUNDING: All amounts payable or credited to Participants or their
Beneficiaries hereunder shall be paid in cash from the general assets of the
Company or by issuing shares of Common Stock of the Company, as determined by
the Administrator in accordance with the terms of the Plan. The Company
shall be under no obligation to establish a trust, a special or separate
fund, or to segregate any of its assets to assure payment of amounts under
this Plan. It is the intent
of the Company and the Participants that this Plan shall not be deemed or
construed to defer the receipt of compensation past termination of employment
and, accordingly, shall not be deemed to be an "employee benefit plan," as
defined in section 3(3) of ERISA.
C. UNSECURED CREDITOR: Nothing contained in this Plan, and no action
taken pursuant to its provisions, shall create or be construed to create a
trust of any kind, nor a fiduciary relationship between the Company and the
Participants. To the extent that the a Participant acquires a right to
receive any amount from the Company under the Plan, such rights shall be no
greater than the right of a general unsecured creditor of the Company. Each
Participant acknowledges that, in the event the Company becomes financially
distressed (whether due to bankruptcy, insolvency or otherwise), the
Company's ability to pay benefits to the Participant under this Plan could be
adversely impacted. In agreeing to become a Participant hereunder, each
Participant represents and warrants that he or she is sufficiently familiar
with the financial condition of the Company.
SECTION IV: CALCULATION OF BENEFIT
A. IPO GRANTS. At the time of an IPO or a Sale of Prism, the
Participants shall be entitled to receive, in the aggregate, a grant of
shares of Common Stock, in an amount to be determined by the following
formula:
FIRST, the [ * ] value of [ * ] reduced by [ * ] multiplied by [ * ];
and
SECOND, the amount determined above shall be multiplied by 5%.
Thereafter, the number of shares of Common Stock allocated and distributed to
each Participant shall be determined under paragraph D below.
Notwithstanding any provision contained herein to the contrary, if counsel to
Prism determines that the grant of shares of Common Stock hereunder requires
registration, or compliance with an exemption from registration, under the
Securities Act or the securities laws of any state, then no shares of Common
Stock shall be distributed to Participants hereunder until such time that an
effective registration statement is filed or all of the conditions for an
exemption are met, as determined by Prism in its sole discretion. Each
participant agrees to cooperate with Prism and comply with any terms and
conditions imposed by Prism in connection with Prism filing a registration
statement or meeting the terms and conditions of an exemption from
registration. Prism will use its best efforts to ensure that shares of
Common Stock can be distributed to Participants in compliance with the
Securities Act as soon as practicable following an IPO.
B. SALE OF PRISM GRANTS. If there is a Sale of Prism prior to the time
of an IPO, the Participants shall be entitled to receive, in the aggregate, a
grant of shares of Common Stock, in an amount to be determined by the
following formula:
FIRST, the [ * ] value of [ * ] multiplied by [ * ]; and
SECOND, the amount determined above shall be multiplied by 5%.
Thereafter, the number of shares of Common Stock allocated and distributed to
each Participant shall be determined under paragraph D below.
Notwithstanding the foregoing, in lieu of issuing shares of Common Stock to
the Participants under this paragraph B, Prism may, in its sole discretion,
distribute cash to the Participants in an amount equal to the Fair Market
Value of Common Stock that would have been distributed. Notwithstanding any
provision contained herein to the contrary, if counsel to Prism determines
that issuing shares of Common Stock to Participants under this paragraph B
requires registration, or compliance with an exemption from registration,
under the Securities Act of 1933 or the securities laws of any state, then no
payment shall be made to Participants hereunder until such time that an
effective registration statement is filed or all of the conditions for an
exemption are met, as determined by Prism in its sole discretion. Each
participant agrees to cooperate with Prism and comply with any terms and
conditions imposed by Prism in connection with Prism filing a registration
statement or meeting the terms and conditions of an exemption from
registration. Prism will use its best efforts to ensure that shares of
Common Stock can be distributed to Participants in compliance with the
Securities Act as soon as practicable following a Sale of Prism.
C. ALLOCATION OF IPO OR SALE OF PRISM GRANTS. In allocating the total
number of shares of Common Stock issued, or cash payment made, to a
Participant, as the case may be, in connection with an IPO or Sale of Prism,
the Administrator shall utilize the following process:
First, 20% of the shares of Common Stock or cash shall be designated as
EVP Pool 1 and shall be allocated among those Participants listed in
Exhibit A as EVP Pool 1 Participants, who were employed by or affiliated
with PGM prior to January 1, 1995. Allocation among EVP Pool 1
Participants shall be on the basis of the percentage arrived at by
dividing the total number of full months an EVP Pool 1 Participant was
employed at PGM prior to January 1, 1995 by the total number of full
months all EVP Pool 1 Participants were employed at PGM prior to January
1, 1995 multiplied by the percentage of shares of Common Stock allocated
to EVP Pool 1.
Second, 20% of the shares of Common Stock or cash shall be designated as
EVP Pool 2 and shall be allocated among Participants, who were employed
at PGM subsequent to December 31, 1994. Allocation among EVP Pool 2
Participants shall be determined as of the IPO or Sale of Prism date and
shall be on the basis of the percentage arrived at by dividing the total
number of full months an EVP Pool 2 Participant has been employed at
Prism or PGM subsequent to December 31, 1994 by the total number of full
months all EVP Pool 2 Participants have been employed at Prism or PGM
subsequent to December 31, 1994.
If any EVP Pool 1 or EVP Pool 2 Participant is no longer employed by PGM
or Prism, that Participants nonvested or forfeited share of Common Stock
or cash in EVP Pool 1 and/or EVP Pool 2 shall be reallocated to EVP Pool
3, described below.
Third, the remaining 60% of the shares of Common Stock or cash, and any
nonvested or forfeited benefits corresponding to EVP Pool 1 and EVP Pool
2 Participants who have terminated employment, shall be designated as
EVP Pool 3 and shall be allocated among all remaining Participants based
on the following point system. For each full year of service completed
by a Participant after the Effective Date and prior to the IPO or Sale
of Prism date, the Administrator shall determine, in its sole
discretion, how many points, if any, to assign to a Participant out of a
total of 100 points per year. This shall be done for each of the first
five full years, measured from the Effective Date or, if less, the
number of full and partial years from the Effective Date preceding an
IPO or Sale of Prism. Points allocated for a partial year shall be
weighted, in relation to those allocated for a full year, in the ratio
of the number of months in the partial year to a full 12 month year.
Thereafter, the number of shares of Common Stock or cash assigned to a
Participant from EVP Pool 3 shall be determined by, first, multiplying
the aggregate number of shares of Common Stock or cash allocated to EVP
Pool 3, by the total number of points assigned to a Participant, as of
the IPO or Sale of Prism Date, and, then, dividing such amount by the
total number of points assigned to all Participants.
SECTION V: VESTING OF GRANTS
A. VESTING OF IPO AND SALE OF PRISM GRANTS: Notwithstanding any
provision contained herein to the contrary, a Participant's allocations and
payment of grants relating to an IPO (under Section IV-A) or the Sale of
Prism Grants (under Section IV-B) shall vest at a rate of 20% per year
following the Effective Date and each Participant shall be fully vested if he
or she terminates employment due to death or total and permanent disability
(as determined by the Administrator in its sole discretion); provided,
however, that EVP Pool 1 allocations shall be immediately vested as of the
Effective Date. Nonvested benefits shall be forfeited, and will be
reallocated to EVP Pool 3 to be allocated to other Participants according to
the method described in Section IV-D above.
B. NONCOMPETE AND CONFIDENTIALITY: Notwithstanding anything contained
in this Plan to the contrary, a Participant will forfeit all rights to unpaid
benefits under this Plan if the Participant, without the prior approval of an
independent majority of the Board, violates the provisions of any
confidentiality or noncompete agreement with, or policy of, the Company.
Forfeitures under this paragraph B shall be reallocated to other Participants
based on the method described in the last sentence of paragraph A above.
SECTION VI: PAYMENT OF DEATH BENEFITS
A. BENEFITS UPON DEATH OF PARTICIPANT BEFORE RECEIVING ALL BENEFITS:
If upon the Participant's death he remains entitled to receive any unpaid
benefit hereunder, his designated beneficiary shall receive any remaining
benefits to which the Participant remains entitled at such time as the
Participant would otherwise have received payment.
B. DESIGNATION OF BENEFICIARY: The Participant, from time to time,
may designate in writing any legal or natural person or persons (who may be
designated contingently or successively) to whom his benefits are to be paid
if he dies before receiving all of his unpaid benefits hereunder. A
beneficiary designation will be effective only when signed by the Participant
and filed with the Administrator while the Participant is alive, and will
cancel all beneficiary designations signed earlier. If the Participant fails
to designate a beneficiary as provided in this Section VI, or if all
designated beneficiaries predecease the Participant or die prior to complete
distribution of the Participant's benefits, then the Participant's designated
beneficiary shall be deemed to be the person or persons surviving him in the
first of the following classes in which there is a survivor, share and share
alike:
i. the Participant's surviving spouse;
ii. the Participant's children, except that if any of the children
predecease the Participant but leave issues surviving, then such issue
shall take, by right of representation, the share their parent would
have taken if living; or
iii. the Participant's personal representative (executor or
administrator).
Any payment to a deemed beneficiary shall completely discharge the Company's
obligations under this Plan.
SECTION VII: PLAN ADMINISTRATION PROVISIONS
A. APPOINTMENT AND AUTHORITY Appointment And Authority : The Board
shall appoint one or more persons to administer the Plan (singularly or
collectively referred to as the Administrator). The Administrator, is
expressly granted the following powers:
(1) To determine all questions arising under the Plan, including
the power to determine the rights or eligibility of employees and their
beneficiaries and their respective benefits, and to remedy ambiguities,
inconsistencies or omissions in the text of the Plan;
(2) To direct all payments of benefits under the Plan;
(3) To request, receive and have custody of all records and
documents pertaining to administration of the Plan;
(4) To be agent for the service of legal process on behalf of the
Plan;
(5) To delegate in writing one (1) or more individuals, agents or
counsel on behalf of the Administrator or to carry out administrative
functions;
(6) To interpret the terms of the Plan and make final binding
determinations regarding the Participant's rights under the Plan,
subject to the Participant's right to arbitrate a decision on the
grounds that it is clearly erroneous; or
(7) To perform any other acts necessary or appropriate to the
administration of the Plan and the discharge of its duties.
B. RIGHT TO AMEND OR TERMINATE: The Board may at any time and from
time to time to modify, suspend, amend or terminate the Plan in whole or in
part; provided, however, that no such action shall be effective with respect
to any Participant without the Participant's written consent.
C. INDEMNIFICATION OF THE ADMINISTRATOR: The Administrator shall be
indemnified by the Company against any and all liabilities, settlements,
judgments, losses, costs, and expenses (including reasonable legal fees and
expenses) of whatever kind and nature which may be imposed on, incurred by or
asserted against the Administrator by reason of the performance or
nonperformance of a Administrator function if such action did not constitute
gross negligence or willful misconduct. The foregoing right of
indemnification shall be in addition to other rights the Administrator by law
or by reason of insurance coverage of any kind. The Company may, at its own
expense, settle any claim asserted or proceeding brought against the
Administrator when such settlement appears to be in the best interests of the
Company.
D. CLAIMS PROCEDURE: A Participant or any designated beneficiary who
disputes the Administrator's determination of the benefits due to him or her
under the Plan may file a claim with the Administrator. A claim must be in
writing, in a form which gives the Administrator reasonable notice of the
claim, sets forth the basis of the claim, and authorizes the Administrator to
take all steps reasonably necessary to determine the validity of the claim
and to facilitate the payment of any benefits to which the claimant is
entitled. The Administrator will, if reasonably possible, decide whether to
grant or deny a claim within ninety (90) days after it is filed. If a longer
period is needed, the Administrator will, no later than the last day of the
ninety (90) day period, notify the claimant of the extension of time and the
reasons why it is needed. A decision must then be rendered within ninety (90)
days after the claimant was notified of the extension. If the Administrator
does not act within the time specified by this paragraph C, the claim is
automatically denied, and the claimant may appeal in accordance with this
paragraph C. If the Administrator determines that a claim should be denied,
it will give the claimant written notice of denial. This notice must be
written in a manner calculated to be understood by the claimant, state
specific reasons for denying the claim, citing the provisions of the Plan on
which the denial is based, explain the procedure for reviewing the
Administrator's decision, and if the claim is denied because the
Administrator lacks adequate information to reach a decision, state what
information is needed to make a decision possible and why it is needed. If a
claim is denied, the claimant may appeal to the Board. The claimant's appeal
must be submitted in writing to the Board no later than sixty (60) days after
the earlier of the date on which he receives notice of denial or the
expiration of the period within which the Board is required to render a
decision. The claimant or his representative may submit any documents or
written arguments that he desires in support of his claim, and the Board may,
but is not required to, hold a hearing on the claim. The Board will, if
reasonably possible, decide the claimant's appeal
within sixty (60) days after it is filed. If a longer period is needed, the
Board will, no later than the last day of the sixty (60) day period, notify
the claimant of the extension of time and the reasons why it is needed. A
decision must then be rendered within sixty (60) days after the claimant was
notified of the extension. If the Board does not act within the time
specified by this paragraph C, the appeal is automatically denied. If the
Board determines that an appeal should be denied, it must give the claimant
written notice of the denial in the same manner as required on initial denial
of the claim by the Board.
SECTION VIII: MISCELLANEOUS PLAN PROVISIONS
A. NOT A CONTRACT OF EMPLOYMENT: The terms and conditions of this Plan
shall not be deemed to constitute a contract of employment between the Company
and the Participant, and the Participant (or his beneficiary) shall have no
rights against the Company except as may otherwise be specifically provided
herein. Moreover, nothing in this Plan shall be deemed to give the Participant
a right to be retained in the service of the Company or to interfere with the
right of the Company to discipline or discharge him or her at any time.
B. NONALIENATION OF BENEFITS: To the extent permitted by law, no amount
payable under the Plan shall be subject in any manner to anticipation,
alienation, sale, transfer, assignment, garnishment, pledge or encumbrance. Any
attempt to anticipate, alienate, sell, transfer, assign, attach, pledge or
encumber the same shall be void, and no amount payable under the Plan shall be
in any manner liable to or subject to the debts, contracts, liabilities,
engagements or torts of any Participant or designated beneficiary.
C. PAYMENTS TO INCOMPETENTS: If the Participant or designated
beneficiary entitled to receive any benefit hereunder is deemed by the
Administrator, or is adjudged, to be legally incapable of giving valid receipt
and discharge for such benefit, such benefit shall be paid to such person(s) as
the Administrator may designate or to a duly appointed guardian. Any such
payment shall be in complete discharge of the liability of the Plan, the
Administrator and the Company to the Participant or the designated beneficiary.
D. MISSING PERSONS: If the Administrator cannot ascertain the
whereabouts of any designated beneficiary to whom a payment is due under the
Plan, and if, after five (5) years from the date such payment is due, a notice
of such payment due is mailed to the last known address of such designated
beneficiary as shown on the records of the Administrator, and within three (3)
months after such mailing such designated beneficiary has not made written claim
therefor, the Administrator, if it so elects, may direct that such payment and
all remaining payments otherwise due to such designated beneficiary be
permanently cancelled. Any such cancellation shall be in complete discharge of
the liability of the Plan, the Administrator and the Company to the Participant
and his designated beneficiaries.
E. GENDER AND NUMBER: Wherever used herein, the masculine gender shall
include the feminine gender and the singular shall include the plural, unless
the context indicates otherwise.
F. WITHHOLDING: The Company may withhold from any benefits payable
under the Plan all federal, state, local or other taxes as shall be required
pursuant to any law or governmental regulation or ruling.
G. GOVERNING LAW: Except as provided in subparagraph (K)(1) below, the
provisions of the Plan shall be governed by and construed in accordance with
the laws of the State of Illinois.
H. SEVERABILITY: If any provision of this Plan or application thereof
to any designated beneficiary is held invalid or unenforceable, the remainder
of the Plan will not be affected thereby and to that extent the provisions of
this Plan are intended to be and are deemed to be severable.
I. HEADINGS. All headings in this Plan are for reference only and are
not to be utilized to construe its terms.
J. ARBITRATION:
(1) NEGOTIATION. EXCEPT FOR CONTROVERSIES, DISPUTES OR CLAIMS
RELATED TO PARTICIPANTS' OR ANY AFFILIATED PARTY'S COVENANT NOT TO COMPETE,
FOR WHICH PRISM OR PGM MAY SEEK INJUNCTIVE OR SUCH OTHER RELIEF AS IT MAY
DEEM APPROPRIATE, NEITHER PARTY SHALL INSTITUTE ANY PROCEEDING IN ANY COURT
OR ADMINISTRATIVE AGENCY OR ANY ARBITRATION TO RESOLVE A DISPUTE BETWEEN THE
PARTIES BEFORE THAT PARTY HAS SOUGHT TO RESOLVE THE DISPUTE THROUGH DIRECT
NEGOTIATION WITH THE OTHER PARTY AND PURSUANT TO THE PLAN'S CLAIMS PROCEDURE.
IF THE DISPUTE IS NOT RESOLVED WITHIN THE TIME PERIODS SET FORTH IN SECTION
VII-C, THE PARTIES SHALL THEN ATTEMPT TO RESOLVE THE DISPUTE THROUGH
ARBITRATION AS PROVIDED IN THIS SECTION.
(2) SCOPE OF ARBITRATION. EXCEPT FOR CONTROVERSIES, DISPUTES OR
CLAIMS RELATED TO PARTICIPANTS' OR ANY AFFILIATED PARTY'S COVENANT NOT TO
COMPETE, FOR WHICH PRISM MAY SEEK INJUNCTIVE OR SUCH OTHER RELIEF AS SUCH
PARTY MAY DEEM APPROPRIATE, ALL CONTROVERSIES, DISPUTES OR CLAIMS BETWEEN
PRISM AND PARTICIPANTS (AND ANY BENEFICIARY) ARISING OUT OF OR RELATED TO
(a) THIS AGREEMENT OR ANY OTHER AGREEMENT BETWEEN PRISM AND
PARTICIPANTS THAT DO NOT HAVE THEIR OWN SPECIFIC ARBITRATION PROVISIONS
("OTHER COVERED AGREEMENTS"); OR
(b) THE VALIDITY OF THIS AGREEMENT OR ANY OTHER COVERED AGREEMENT
BETWEEN PRISM AND PARTICIPANTS OR ANY PROVISION OF ANY SUCH AGREEMENT
WILL BE SUBMITTED FOR BINDING ARBITRATION TO THE CHICAGO, ILLINOIS OFFICE OF
JAMS/ENDISPUTE ON DEMAND OF PRISM OR PARTICIPANTS. SUCH ARBITRATION
PROCEEDING WILL BE CONDUCTED IN CHICAGO, ILLINOIS AND, EXCEPT AS OTHERWISE
PROVIDED IN THIS AGREEMENT, WILL BE HEARD BY ONE ARBITRATOR IN ACCORDANCE
WITH THE THEN CURRENT RULES OF THE JAMS/ENDISPUTE. ALL MATTERS RELATING TO
ARBITRATION WILL BE GOVERNED BY THE FEDERAL ARBITRATION ACT (9 U.S.C.
Sections 1 ET SEQ.) AND NOT BY ANY STATE ARBITRATION LAW.
THE DECISION AND AWARD OF THE ARBITRATOR SHALL BE BINDING AND CONCLUSIVE
UPON BOTH PRISM AND PARTICIPANTS, AND ENFORCEABLE IN ANY COURT OF COMPETENT
JURISDICTION. THE ARBITRATOR WILL HAVE THE RIGHT TO AWARD OR INCLUDE IN THE
AWARD ANY LAWFULLY APPROPRIATE RELIEF AND TO ASSESS COSTS OR EXPENSES TO ONE
OR BOTH PARTIES.
PRISM AND PARTICIPANTS AGREE TO BE BOUND BY THE PROVISIONS OF ANY
LIMITATION ON THE PERIOD OF TIME IN WHICH CLAIMS MUST BE BROUGHT UNDER
APPLICABLE LAW OR THIS AGREEMENT, WHICHEVER EXPIRES EARLIER. PRISM AND
PARTICIPANTS FURTHER AGREE THAT, IN CONNECTION WITH ANY SUCH ARBITRATION
PROCEEDING, EACH MUST SUBMIT OR FILE ANY CLAIM WHICH WOULD CONSTITUTE A
COMPULSORY COUNTERCLAIM (AS DEFINED BY RULE 13 OF THE FEDERAL RULES OF CIVIL
PROCEDURE) (EXCEPT ONE THAT COULD BE FILED UNDER ANOTHER AGREEMENT HAVING ITS
OWN ARBITRATION AGREEMENT) WITHIN THE SAME PROCEEDING AS THE CLAIM TO WHICH
IT RELATES. ANY SUCH CLAIM WHICH IS NOT SUBMITTED OR FILED AS DESCRIBED
ABOVE WILL BE FOREVER BARRED.
EACH PARTY AGREES THAT ARBITRATION WILL BE CONDUCTED ON AN INDIVIDUAL,
NOT A CLASS-WIDE, BASIS, AND THAT AN ARBITRATION PROCEEDING BETWEEN PRISM AND
A PARTICIPANT (OR BENEFICIARY) MAY NOT BE CONSOLIDATED WITH ANY OTHER
ARBITRATION PROCEEDING BETWEEN PRISM OR ANOTHER PARTICIPANT (OR BENEFICIARY),
AS APPLICABLE, AND ANY OTHER PERSON, CORPORATION, LIMITED LIABILITY COMPANY
OR PARTNERSHIP EXCEPT BY THE AGREEMENT OF THE PARTIES, PROVIDED THAT PRISM OR
PARTICIPANT (OR BENEFICIARY) MAY CONSOLIDATE ANY ARBITRATION PROCEEDING
COMMENCED UNDER THIS SEXTION 12 WITH ANY ARBITRATION PROCEEDING COMMENCED BY
PRISM OR PARTICIPANT (OR BENEFICIARY) UNDER ANY OTHER COVERED AGREEMENT
EXECUTED IN CONNECTION HEREWITH.
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS SECTION,
PRISM AND PARTICIPANTS SHALL EACH HAVE THE RIGHT IN A PROPER CASE TO OBTAIN
TEMPORARY RESTRAINING ORDERS AND TEMPORARY OR PRELIMINARY INJUNCTIVE RELIEF
FROM A COURT OF COMPETENT JURISDICTION; PROVIDED, HOWEVER, THAT PRISM OR
PARTICIPANTS MUST
CONTEMPORANEOUSLY SUBMIT THE DISPUTE FOR ARBITRATION ON THE MERITS AS
PROVIDED HEREIN.
THE PROVISIONS OF THIS SECTION WILL CONTINUE IN FULL FORCE AND EFFECT
SUBSEQUENT TO AND NOTWITHSTANDING THE EXPIRATION OR TERMINATION OF THIS
AGREEMENT.
(3) CONSENT TO JURISDICTION. EACH PARTY AGREES THAT THE OTHER PARTY
MAY INSTITUTE ANY ACTION AGAINST IT (WHICH IS NOT REQUIRED TO BE ARBITRATED
HEREUNDER OR UNDER ANOTHER ARBITRATION AGREEMENT IN ANY OTHER AGREEMENT) IN
ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION LOCATED IN THE CITY OF
CHICAGO, STATE OF ILLINOIS, AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF
SUCH COURTS AND WAIVES ANY OBJECTION IT MAY HAVE TO EITHER THE JURISDICTION
OF OR VENUE IN SUCH COURTS.
(4) WAIVER OF JURY TRIAL. PRISM AND PARTICIPANTS IRREVOCABLY WAIVE
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM, WHETHER AT LAW OR IN
EQUITY, BROUGHT BY EITHER OF THEM AGAINST THE OTHER.
PRISM MORTGAGE CORP.
By: /s/ Xxxxx Xxxxxx
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Title: /s/ Vice President
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