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                                                                    Exhibit 10.8


                                 FIRST AMENDMENT
                                       TO
                               FINANCING AGREEMENT

         FIRST AMENDMENT, dated as of July 13, 2000 (this "Amendment"), to the
Financing Agreement, dated as of June 30, 2000 (the "Original Agreement"), among
THE PATHWAYS GROUP, INC., a Delaware corporation (the "Company"), CAREY F. DALY,
II ("Daly"), JOLSON MERCHANT PARTNERS GROUP LLC, a Delaware limited liability
company ("Jolson"), and HARVEST OPPORTUNITY PARTNERS, LP, a Delaware limited
liability partnership ("Harvest"; Harvest and Jolson are collectively referred
to herein as the "Lender").

                              W I T N E S S E T H:

         WHEREAS, the Company desires to issue and sell to the Lender senior
secured promissory notes of the Company, and the Lender is willing to purchase
such senior secured promissory notes, pursuant to the Original Agreement,
subject to the amendments set forth in this Amendment;

         NOW, THEREFORE, in consideration of the premises and of the mutual
representations and covenants contained herein, the parties hereto agree as
follows:

         1.   DEFINITIONS. All capitalized terms used herein and not otherwise
defined herein shall have the same respective meanings set forth in the Original
Agreement.

         2.   AMENDMENT TO THE ORIGINAL AGREEMENT. The Original Agreement is
hereby amended as follows:

              A.   Section 5.1(b) is hereby deleted and the following is hereby
         substituted therefor:

              "(b) each Warrant shall be exercisable to purchase one share of
         Common Stock at a price equal to $0.65 per share;"

              B.   The form of the Warrant as attached to the Original Agreement
         shall be amended to reflect Section 5.1(b) as amended by this
         Amendment.

              C.   The parties hereby agree that the Initial Warrant, originally
         issued on the Closing Date, shall be amended to reflect Section 5.1(b)
         as amended by this Amendment.

              D.   The 1999 Warrants shall be repriced in accordance with
         Section 5.1(b) as amended by this Amendment.


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         3.   FUNDING UNDER THE LINE OF CREDIT. Upon execution of this
Amendment, the Lender agrees to purchase a Line of Credit Note in the principal
amount of $500,000 on July 14, 2000. The Lender shall purchase such Line of
Credit Note by wire transfer of immediately available funds to the Company's
account on July 14, 2000.

         4.   NO OTHER MODIFICATIONS. Except as otherwise provided herein, the
Original Agreement shall continue in full force and effect as of the date
hereof.

         5.   GOVERNING LAW. This Amendment shall be governed by and construed
in accordance with the laws of the State of California.

         6.   COUNTERPARTS. This Amendment may be executed in two or more
counterparts, each of which shall constitute an original, and all of which taken
together shall constitute one and the same instrument.

         IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the day and year first above written.


                                  THE PATHWAYS GROUP, INC.

                                  By /s/ Carey F. Daly, II
                                     -------------------------------
                                  Carey F. Daly, II, President

                                  /s/ Carey F. Daly, II
                                  ----------------------------------
                                  Carey F. Daly, II

                                  JOLSON MERCHANT PARTNERS GROUP LLC

                                  /s/ Joseph A. Jolson
                                  ----------------------------------
                                  Joseph A. Jolson, Managing Member

                                  HARVEST OPPORTUNITY PARTNERS L.P.

                                    By JMP Asset Management Group, LLC,
                                    General Partner

                                      By /s/ Joseph A. Jolson
                                      ---------------------------------
                                      Joseph A. Jolson, Managing Member