Exhibit 10.9
FIRST AMENDMENT TO
PURCHASE AND SALE AGREEMENT
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.
FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT
THIS FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT is entered into on
April 25, 1999 ("First 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 "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 Purchase
Agreement, Purchaser was the sole shareholder of PGM;
WHEREAS, Xxxxxx Xxxxxxx ("Xxxxxxx") has served as a branch operator of PGM
and has agreed to continue to do so and in connection therewith has agreed to
perform certain other tasks thereunder;
WHEREAS, pursuant to the Purchase Agreement the Sellers each received
"Additional Consideration" as defined therein;
WHEREAS, in recognition of Xxxxxxx'x unique and substantial contributions
as branch operator and as a further incentive to compensate Xxxxxxx for his
efforts on behalf of PGM which Sellers acknowledge is of benefit to Sellers and
Purchaser, Sellers have offered to amend the Purchase Agreement to relinquish
and reduce a portion of the Additional Consideration payable to Sellers so as to
allow Purchaser to give the Additional Compensation to Xxxxxxx for his
employment as a branch operator.
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 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 to
be determined by the following formula:
Value of Stock or PGM Net Income
Appreciation Rights to be = [*] x --------------------- x [*]%
received by Sellers [*]
By way of example, if Purchaser completes an IPO for [*] and at
the time of the offering, [*] and PGM Net Income was $22,500,000,
Sellers Additional Consideration would be computed as follows:
$[*] - $[*] $22,500,000 [*]% = $[*]
----------- x x
[*]% [*]
$[*] [*]% of Purchaser Stock
------------------------------------------- = after offering
$[*]
Alternatively, if there is a Sale of Purchaser, i.e. if
there is a sale of all or substantially all of the assets or
eighty percent (80%) or more of the Stock in a private sale,
[*] and, at the time of the sale, [*] and PGM Net Income was
$22,500,000, Sellers Additional Consideration would be computed
as follows:
$[*] $22,500,000 [*]% = $[*]
x x
[*]
$[*] [*]% of Purchaser
------------------------------------------- = Post-Sale Stock
$[*]
For purposes of this calculation, PGM Net Income and
[*] will be determined on a trailing twelve-months basis.
Allocation of the [*]% Additional Consideration to each
individual Seller will be on the basis of shares of PGM
sold.
An additional [*]% of "Additional Compensation" computed on
the basis of Sellers' Additional Compensation shall be
allocated to Xxxxxx Xxxxxxx as provided in that certain
Additional Compensation Agreement attached hereto and made a
part hereof as Exhibit E.
2.2 Exhibit E attached hereto and made a part hereof shall be affixed
to and be deemed to be Exhibit E to the Purchase Agreement.
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 FIRST 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.
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PURCHASER: SELLERS:
PRISM MORTGAGE COMPANY,
an Illinois corporation
/s/ Xxxxxxx Xxxxxxx
---------------------
Xxxxxxx Xxxxxxx
By: /s/ Xxxxx Xxxxxx
----------------------
Its: Senior Vice President
----------------------
/s/ Xxxxx Xxxxxxx
---------------------
Xxxxx Xxxxxxx
CONSENT OF SPOUSE
I am the spouse of the Seller, Xxxxx Xxxxxxx, and hereby join in the
execution of this First Amendment to evidence my knowledge of its existence and
acknowledgment that I understand and agree to the provisions of this First
Amendment and that I desire to bind to the performance of this First 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 First 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 First
Amendment and this Consent reviewed by a counsel of my own choosing.
/s/ Xxxxxx Xxxxxx Barbera
-------------------------
Xxxxxx Xxxxxx Xxxxxxx
CONSENT OF SPOUSE
I am the spouse of the Seller, Xxxxxxx Xxxxxxx, and hereby join in the
execution of this First Amendment to evidence my knowledge of its existence and
acknowledgment that I understand and agree to the provisions of this First
Amendment and that I desire to bind to the performance of this First 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 First 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 First
Amendment and this Consent reviewed by a counsel of my own choosing.
/s/ Xxxxxxxx X. Xxxxxxx
-------------------------
Xxxxxxxx X. Xxxxxxx
