EXHIBIT 10.5
RESTRUCTURE AND EXTENSION AGREEMENT
This Agreement dated as of July 1, 1997 Is between Bank of America NT&SA,
successor by name change to Seattle-First National Bank and doing business as
Seafirst Bank (hereafter "Seafirst"); PT Link Corporation (hereafter "Company");
and The Pathways Group, Inc. ("Pathways").
RECITALS
A. The subject of this Agreement is the following obligation (hereafter
"Loan") owed by the Company to Seafirst
Borrowing Agreement Unpaid Accrued Interest Per Diem
Dated Principal to 7/11/97 Thereafter
------------------- --------- ---------------- ----------
May 5, 1994 $364,750.00 $3,039.58 $101.32
B. Pathways has guaranteed payment of the Loan.
C. Seafirst, the Company, and Pathways desire to restructure and extend
the Loan on the terms set forth in this Agreement.
AGREEMENT
In consideration of the mutual covenants contained in this Restructure and
Extension Agreement, the parties agree as follows:
1. The amounts of ft Loan owing as set forth above (in Recital A) are
correct and the Company and Pathways hereby reaffirm their respective
obligations to repay the Loan to Seafirst. The Company and Pathways acknowledge
and agree that the Loan has matured and remains unpaid. The Company and Pathways
further acknowledge that they have no defenses to, or offsets against, their
respective obligations to repay the Loan. All terms of the Loan documents
evidencing and securing the original obligation, and renewals of same, are
expressly ratified, reconfirmed and remain unchanged except as modified in this
Agreement
2. Not later than July 1, 1997, the Company shall pay Seafirst a)
$34,750.00, to be applied to principal reduction of the Loan; and b) a loan fee
In the amount of $1,823.75, which amount equals one half of one percent of the
total unpaid Loan principal. The Company acknowledges and agrees that Seafirst's
obligations under this Agreement are wholly conditioned upon Seafirst's timely
receipt of said payments. If the Company falls to make timely payments of these
amounts, this Agreement shall be void and of no further effect
3. Commencing on the date of this Agreement, the unpaid Loan principal
shall accrue interest at the rate of Seafirst's Prime Rate + 1.5%. Company shall
pay interest accrued on the Loan monthly on the first day of each month,
commencing August 1, 1997 and continuing thereafter until the Loan is paid in
full. In addition to making monthly payments of all accrued Interest,Company
shall make principal reduction payments of $55,000.00 on each of the following
dates: February 1, 1998, May 1, 1998, August 1, 1998, November 1, 1998, and
February 1, 1999. Final payment of all unpaid principal and accrued interest
will be due and payable on May 1, 1999.
4. Subject to the Company's timely performance of this payment
obligations described in preceding paragraph 3, the maturity date of the Loan Is
hereby extended to the earlier of a) May 1, 1999; or b) the sale or transfer of
either: 1) a controlling ownership Interest In the Company; or ii) substantially
all of the Company's assets.
5. Commencing on July 1, 1997, on the first day of each month Seafirst is
hereby authorized: a) automatically to debit the Company's checking account No.
00000000 with Seafirst In an amount equal to the
payment of interest and principal due at that time; and b) to apply the debited
amount to payment of said interest or principal.
6. Pathways shall provide Seafirst with copies of Pathways' financial
statements, as soon as possible after such financial statements become available
and In no event less frequently than on a quarterly basis.
7. Time Is of the essence and any failure by the Company to pay or
otherwise strictly perform the provisions of this Agreement will nullify this
Agreement and allow Seafirst, without notification and in Its sole discretion,
to pursue any and all collection remedies available to it under applicable law
and the Borrowing Agreement.
8. In partial consideration for this Agreement the Company and Pathways
hereby irrevocably and unconditionally waive, relinquish, release and discharge
Seafirst, and its employees, agents, successors and assigns from any and all
existing claims, known or unknown, which arise from or are In any way relate to
the making and collection of the Loan, the execution of this Agreement, and any
and all other loan and credit transactions existing between the Company,
Pathways, and Seafirst. Nothing In t1his section shah be deemed to constitute an
admission by Seafirst that any such claims exist.
9. Any and all changes to this Agreement must be in writing and signed by
all the parties.
10. This Agreement may be executed in counterparts. If so executed, each
of such counterparts is to be deemed an original for all purposes, and all such
counterparts shall collectively constitute one agreement.
11. This Agreement may be executed by facsimile, with copies bearing
original signatures sent by First Class U.S. Mail at the same time to the other
parties.
ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY. EXTEND CREDIT OR TO FORBEAR
FROM ENFORCING A PAYMENT OF DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON LAW (RCW
19.36).
SEAFIRST BANK HAS PREPARED THIS INSTRUMENT WHICH MAY SUBSTANTIALLY AFFECT YOUR
LEGAL RIGHTS, BUT IS DOING SO FOR ITS OWN BENEFIT AND TO PROTECT ITS OWN
INTEREST IN THIS TRANSACTION. IF YOU HAVE ANY QUESTIONS REGARDING SUCH DOCUMENT
OR INSTRUMENTS, OR YOUR RIGHTS, YOU SHOULD CONSULT AN ATTORNEY OF YOUR CHOICE.
SEAFIRST BANK PT LINK CORPORATION
By: /s/ XXXXX X. XXXXXXX, V.P. By:
-------------------------------- --------------------------------
For: Xxxxxx Xxxxx Xxxxx X. Xxxx, XX
Vice President President
THE PATHWAYS GROUP, INC.
By: /s/ XXXXXXX XXXXXXX
-------------------------------- By: /s/ XXXX XXXXXX
Xxxxxxx Xxxxxxx --------------------------------
Credit Officer Xxxx Xxxxxx
Chief Financial Officer
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