EXHIBIT 10.4
RESTRUCTURE AND EXTENSION AGREEMENT
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This Agreement dated as of July 1, 1996 is between Bank of America NW,
N.A., successor by name change to Seattle-First National Bank and doing business
as Seafirst Bank (hereafter "Seafirst") and The Pathways Group, Inc. and
Pathways International Ltd. (each a "Borrower" and hereafter jointly and
severally referred to as the "Company") and Xxxxx X. Xxxx XX and the marital
community of Xxxxx X. Xxxx XX and Xxxx X. Xxxx (Guarantor).
RECITALS
A. This Agreement concerns the following obligations owed by the
Borrowers to Seafirst (each a "Loan" and together the "Loans"):
Borrowing Agreement Unpaid Accrued Interest Per Diem
Dated Principal to 7/1/96 Thereafter
------------------- --------- ---------------- ----------
(1) July 26, 1994 $150,000.00 $11,230.04 $40.63
(2) February 4, 1994
as last amended
July 11, 1994 $190,000.00 $17,444.74 $51.46
(3) October 25, 1994 $250,000.00 $22,907.58 $71.18
B. Each of said Loans is in default in that, without limitation, each has
matured and remains unpaid in the amount set above as of the date of this
agreement.
C. Seafirst commenced suit to enforce the Loans in the Superior Court of
Washington for King County, SEATTLE-FIRST NATIONAL BANK V. PATHWAYS
INTERNATIONAL, LTD. ET AL., Cause #95-2-17990-8 (the "Lawsuit"), in which each
Borrower and the Guarantor were joined as defendants. Pursuant to a Settlement
Agreement dated December 15, 1995, each of the defendants executed a Confession
of Judgment, a true and correct copy of which is attached hereto as Exhibit A.
Although by the terms of the Settlement Agreement Seafirst is entitled to file
the Confession of Judgment and enter Judgment upon the Confession, the
Confession of Judgment has not been filed in the Lawsuit.
AGREEMENT
In consideration of the mutual covenants contained in this Restructure and
Extension Agreement the parties agree as follows:
1. The amounts of the Loans owing as set forth above are hereby
reaffirmed by each Borrower and Guarantor as the correct amount of the
Loans at the non-default interest rate. The amounts set forth in the
Confession of Judgment are hereby reaffirmed as the correct amount of the
Loans compounded at the Default rate of interest to October 14, 1995.
2. Subject to and expressly conditioned upon Seafirst's receipt not later
than July 15, 1996 of the sum of $200,000 together with the payment in full
of the accrued interest on all three Loans to July 1, 1996, Seafirst agrees
as follows:
(a) to dismiss the Lawsuit without prejudice and to reinstate the
terms and conditions of the original Borrowing Agreements as amended or
modified, which will thereupon be reconfirmed and remain unchanged except
as expressly modified in this Agreement;
(b) to apply the $200,000 principal payment to reduction of the
principal balance of Loan #3;
(c) to extend the respective maturity dates of the Loans as follows:
Loan #3, February 1, 1998; Loan #2, February 1, 1999 and Loan #1, August 1,
1999; and
(d) to restructure payment of the balance of the Loans as provided in
section 3 below.
3. In consideration of the dismissal of the Lawsuit, each Borrower shall
be jointly and severally liable for, and Guarantor's guaranty shall extend
to, repayment when due of the balance of the Loans as follows:
(a) the principal balance of the Loans shall be repaid in 6 quarterly
principal payments in the amount of $65,000.00 commencing 2/1/98 and on
each 5/1, 8/1, 11/1 and 2/1 thereafter, to be applied to the Loans in the
following order: first, Loan #3; second, Loan #2 and lastly to Loan #1;
and,
(b) accrued interest on each of the three Loans shall be paid on
August 1, 1996 and on the first of each month thereafter at the same rate
set forth in the respective Borrowing Agreement evidencing that Loan.
4. Seafirst is authorized to automatically debit The Pathways Group,
Inc.'s checking account No. 00000000 with Seafirst for each payment of
interest and installment of principal.
5. The parties to this Agreement understand and agree that upon:
(a) payment of the $200,000.00 referenced in section 2, above, and
(b) execution by the Company and Guarantor of all documents necessary to
modify the Loans in accordance with the terms set forth in sections 2 and
3, above, all prior defaults under the Loans shall be deemed cured.
6. Time is of the essence. Seafirst shall retain the right to
immediately file the Confession of Judgment and obtain entry of the
Judgment in the Lawsuit upon failure to timely meet the express condition
to Seafirst's agreements set forth in section 2, above. If the condition
is met then upon any subsequent failure by Borrowers or Guarantor to pay or
otherwise strictly perform the provisions of this Agreement Seafirst may
without notification pursue any and all collection remedies available under
the Borrowing Agreements and Loan documents, as modified, including the
right to recommence litigation.
7. In consideration of this Agreement, Company hereby irrevocably and
unconditionally waives, relinquishes, releases and discharges Seafirst, and
its employees, agents, successors and assigns from any and all existing
claims, defenses, setoffs, liabilities, demands, actions and causes of
action, whether known or unknown, which arise from, or are in any way
related 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 and Seafirst. Nothing in this section shall be deemed
to constitute an admission by Seafirst that any such claims exist.
8. Any and all changes to this Agreement must be in writing and signed by
all the parties.
ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO
FORBEAR FROM ENFORCING A PAYMENT OF A 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.
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SEAFIRST BANK GUARANTOR:
By /s/ XXXXXXX XXXX /s/ XXXXX X. XXXX, XX
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Xxxxxxx Xxxx Xxxxx X. Xxxx, XX for himself and the
Credit Officer marital community of Xxxxx X. Xxxx, XX
Seattle-First National Bank and Xxxx X. Xxxx
000 Xxxxx Xxxxxx, Xxxxx 00
Xxxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
BORROWERS:
THE PATHWAYS GROUP, INC.
By /s/ XXXXX X. XXXX, XX
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Xxxxx X. Xxxx, XX
President
PATHWAYS INTERNATIONAL, LTD.
By /s/ XXXXX X. XXXX, XX
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Xxxxx X. Xxxx, XX
President
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