Purchase Contracts: Short Sale Counter Offer from Lender

My question involves real estate located in the State of: Illinois

Hello,

I am involved in a short sale and an agreement was signed between myself and the seller. The lender has submitted a counter offer, with a higher price, and I want to submit a counter offer to that counter offer. Do I need to (A) draw up an addendum that only the buyer and seller sign, with the new purchase price OR (B) draw up an addendum that goes directly to the lender with the new purchase price.

Also, I am a little confused on how the lender works in a short sale agreement. Is the lender a party to this contract?

Thanks in advance for your help.

Jim G.

Purchase Contracts: Short Sale Counter Offer from Lender