PK Ventures, Inc. and Subsidiaries, et al. - Page 97

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          Under the terms of the Stock Redemption Agreement, the 705 shares           
          of PK Ventures’ stock that were not redeemed from Kane remained             
          subject to both the Voting Trust Agreement and the Pledge                   
          Agreement.                                                                  
               Also on December 7, 1990, Rose, PK Ventures, and the Printon           
          Kane Group executed a document entitled “Agreement” (litigation             
          agreement) whereby they agreed to share the litigation costs                
          incurred to sue Raymond James & Associates.  The litigation                 
          subject to the litigation agreement involved the business and               
          activities of Zephyr.  As a result of Zephyr’s bankruptcy, the              
          Zephyr purchasers had lost all of the cash that they had                    
          contributed to Zephyr.                                                      
          Transfers From PK Ventures to the Zephyr Purchasers                         
               PK Ventures did not receive promissory notes from the Zephyr           
          purchasers in exchange for the $1 million that it transferred to            
          them.  No accrued interest attributable to this transfer was                
          posted to PK Ventures’ general ledger or reported in its audited            
          financial statements.                                                       
               The Zephyr purchasers did not repay any portion of the                 
          $1 million that had been transferred to them from PK Ventures.              
          PK Ventures neither took legal action against the Zephyr                    
          purchasers to force repayment of the $1 million transfer nor did            
          it attempt to negotiate a partial collection of this amount with            
          any of the Zephyr purchasers.  PK Ventures issued Forms 1099 to             






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