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due and payable on September 30, 1990. In addition, Kane, Kane
Jr., Krutoy, and Mannello executed a document entitled “Pledge
Agreement” in favor of Rose. Under the terms of the Pledge
Agreement, Kane, Kane Jr., Krutoy, and Mannello agreed to pledge
44 percent of their total shares of PK Ventures’ stock to Rose in
order to secure repayment of Rose’s $800,000 loan to PK Ventures.
As a result of entering into the Pledge Agreement, Kane, Kane.
Jr., Krutoy, and Mannello pledged a combined total of 2,032.36
shares of PK Ventures’ stock to Rose.
Also on February 16, 1990, Kane, Kane Jr., Krutoy, and
Mannello executed a document entitled “Voting Trust Agreement”
whereby they agreed to place all of their shares of PK Ventures’
stock into a voting trust in exchange for voting trust
certificates. The voting trust certificates indicated their
ownership rights in the shares of stock held by the trustee.
Rose was designated as trustee of this voting trust and was given
sole authority to vote the shares. As trustee of the voting
trust, Rose had voting rights to 86.19 percent of the shares of
PK Ventures’ stock. (The Voting Trust Agreement granted Rose
voting rights to 46.19 percent of PK Ventures’ stock; he already
held voting rights to 40 percent of the shares of PK Ventures’
stock prior to becoming trustee of the voting trust.) The shares
of PK Ventures’ stock placed into the voting trust included the
shares that had been pledged to Rose under the Pledge Agreement.
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