THIRD AMENDMENT TO PURCHASE AND SALE AGREEMENT

 

                    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 Bruce Barbera and William Osenton
("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 Bruce Barbera and William Osenton (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 Robert Siefert as provided in that certain 
          Additional Compensation Agreement attached hereto and 
          made a part hereof as Exhibit E.  Said Additional 
          Compensation payable to Robert Siefert 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.

     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:
- ----------                              --------

PRISM MORTGAGE COMPANY,                 /s/ William Osenton
an Illinois corporation                 -----------------------------
                                            William Osenton

By:  /s/ David Fisher
   ------------------------
Its: Senior Vice President              /s/ Bruce Barbera
   ------------------------             -----------------------------
                                            Bruce Barbera

                                 CONSENT OF SPOUSE

     I am the spouse of the Seller, Bruce Barbera, 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/ Bettye Becker Barbera
                                     ----------------------------------
                                         Bettye Becker Barbera

                                 CONSENT OF SPOUSE

     I am the spouse of the Seller, William Osenton, 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/ Francine M. Osenton
                                     ----------------------------------
                                     Francine M. Osenton

 

Basic Info X:

Name: THIRD AMENDMENT TO PURCHASE AND SALE AGREEMENT
Type: Third Amendment to Purchase and Sale Agreement
Date: May 19, 1999
Company: PRISM FINANCIAL CORP
State: Delaware

Other info:

Date:

  • May 11 , 1999
  • July 23 , 1998
  • April 25 , 1999
  • April 27 , 1999

Organization:

  • Pacific Guarantee Mortgage Corporation
  • Equity Value Plan
  • Prism Financial Corporation

Location:

  • Illinois

Money:

  • $ 6,196,637
  • $ 2,000,000
  • $ 1,783,760

Person:

  • Robert Siefert
  • David Fisher
  • Bruce Barbera
  • Bettye Becker Barbera
  • William Osenton
  • Francine M. Osenton

Percent:

  • 9 %
  • 80 %