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shareholders with each scheduled payment that it made. The
parties to the Stock Redemption Agreement also agreed as follows:
7.1 Release. The Company, Rose, and the
Shareholders acknowledge that there are certain
obligations and indebtedness existing between Rose and
the Company on the one hand and the Shareholders on the
other hand. It is the intent of the parties in
executing this Agreement that all such debts and
obligations, except as otherwise provided herein, be
hereby expressly extinguished. Accordingly, the
Shareholders hereby release Rose and the Company and
the Company and Rose, jointly and severally, release
the Shareholders with respect to any and all claims
which the Shareholders on the one hand may have against
Rose and/or the Company (including obligations of the
Company to repay the indebtedness to Summit as set
forth in the Agreement among Rose, the Certificate
Holders and the Company dated February 16, 1990) or,
respecting claims which Rose and/or the company may
have against the Shareholders excepting, as to all
parties, claims and obligations arising pursuant to
this Agreement, the * * * Pledge Agreement, the Voting
Trust Agreement, and any agreement executed in
conjunction with this Agreement * * *
In accordance with the Stock Redemption Agreement, Rose
loaned $400,000 to PK Ventures on December 7, 1990. Rose paid
the $400,000 directly to Summit Trust. Rose refinanced his
New Jersey home in order to obtain the funds for this loan. In
exchange for the $400,000 loan, PK Ventures gave Rose a
promissory note. PK Ventures accounted for the promissory note
by debiting the liability account to Summit Trust and crediting
the account “Due To/From PKV/RLR”. PK Ventures repaid the
$400,000 directly to Rose’s mortgagee.
The series of agreements executed on February 16, 1990, were
amended, but not voided, by the Stock Redemption Agreement.
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