Exhibit 2
NON-RECOURSE STOCK PLEDGE AGREEMENT
NON-RECOURSE STOCK PLEDGE AGREEMENT, dated as of July 23, 2001
(this "Agreement"), made and entered into by and between RAM Venture Holdings
Corp., a Florida corporation (the "Creditor"), for itself and as agent for KM
Financial, Inc., an Arizona corporation ("KM"), and RAM Capital Management, a
Massachusetts Business Trust (the "Pledgor").
RECITALS
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WHEREAS, simultaneously herewith, Tremor Entertainment Inc., a
California corporation ("Tremor"), is executing and delivering to the Creditor
and to KM a stock purchase agreement, of even date herewith, among the Creditor,
KM and Tremor (the "Stock Purchase Agreement") pursuant to which Tremor is
obligated to make deferred payments to the Creditor and to KM in the aggregate
amount of Five Hundred Thousand Dollars ($500,000) (the "Obligations"); and
WHEREAS, it is a condition to the Creditor's and KM's execution
and delivery of the Stock Purchase Agreement that, contemporaneously therewith,
the Pledgor enter into this Agreement in order to secure Tremor's obligations to
make prompt payment when due of the Obligations by pledging to the Creditor Five
Million (5,000,000) shares of common stock, par value $.0001 per share, of the
Creditor owned by the Pledgor (the "Pledged Securities"), with the Creditor to
accept and hold such pledge for itself and as agent for KM;
NOW, THEREFORE, in consideration of the foregoing and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Pledge. The Pledgor hereby delivers to the Creditor, for
itself and as agent for KM, stock certificate nos. CS 3657 through CS 3661,
issued to the Pledgor, evidencing the Pledged Securities, together with undated
stock transfer powers for the Pledged Securities duly executed in blank by the
Pledgor, with signatures guaranteed, and grants to the Creditor, for itself and
as agent for KM, a first priority security interest in the Pledged Securities,
as collateral security for the prompt and complete payment when due (whether at
the stated maturity, acceleration or otherwise) of the Obligations, to be held
by the Creditor in pledge until the earlier of satisfaction of the Obligations
or the occurrence of an Event of Default .
2. Administration of Security. The following provisions shall
govern the administration of the Pledged Securities:
(a) So long as no default has occurred and is
continuing with respect to the Obligations (an "Event of Default"), the Pledgor
shall be entitled to act with
respect to the Pledged Securities in any manner not inconsistent with this
Agreement, including voting the Pledged Securities and receiving all
distributions thereon and giving consents, waivers and ratifications in respect
thereof.
(b) The Pledgor shall immediately upon request by the
Creditor and in confirmation of the security interests hereby intended to be
created in respect of the Pledged Securities, execute and deliver to the
Creditor such further agreements, documents, certificates, instruments,
conveyances, assignments, deeds, transfers, assurances and agreements in form
and substance as the Creditor shall request, including any financing statements
and amendments thereto or any other documents required under applicable law to
protect the security interests created hereunder.
(c) 40% of the Pledged Securities shall be returned
to the Pledgor upon Tremor's payment of $250,000 of the Obligations in
accordance with the terms of the Stock Purchase Agreement and the entire balance
of the Pledged Securities shall be returned to the Pledgor upon payment in full
of the remaining $250,000 of the Obligations in accordance with the terms of the
Stock Purchase Agreement.
3. Remedies in Case of an Event of Default.
(a) Upon an Event of Default, the Creditor shall be
entitled to take title to the Pledged Securities, to the extent not previously
released to the Pledgor pursuant to Section 2(c), in full satisfaction of the
Obligations.
(b) The parties acknowledge and agree that the sole
recourse of the Creditor against the Pledgor with respect to the Obligations
shall be to the Pledged Securities, and that, accordingly, absent fraud, the
Pledgor shall not be personally liable for any deficiency with respect to the
Obligations.
(c) The parties further acknowledge and agree that,
upon an Event of Default, the sole recourse of the Creditor against Tremor with
respect to the Obligations shall be to the Pledged Securities and that,
accordingly, absent fraud, Tremor shall not be personally liable for any
deficiency with respect to the Obligations. The parties further agree that
Tremor is intended to be a third party beneficiary under this Section 3(c) and
is entering into the Stock Purchase Agreement in reliance on the provisions
hereof.
4. Pledgor's Obligations Not Affected. The obligations of the
Pledgor under this Agreement shall remain in full force and effect without
regard to, and shall not be impaired or affected by: (a) any amendment or
modification of the Stock Purchase Agreement; (b) any exercise or non-exercise
by the Creditor of any right, remedy, power or privilege under or in respect of
this Agreement or the Stock Purchase Agreement, or any waiver of any such right,
remedy, power or privilege; (c) any waiver, consent, extension, indulgence or
other action or inaction in respect of this Agreement or the Stock Purchase
Agreement, or any assignment or transfer of any thereof; or (d) any bankruptcy,
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insolvency, reorganization, arrangement, readjustment, composition, liquidation
or the like, of the Creditor, whether or not the Pledgor shall have notice of
any of the foregoing.
5. Transfer by Pledgor. The Pledgor shall not sell, assign,
transfer or otherwise dispose of, grant any option with respect to, or mortgage,
pledge or otherwise encumber the Pledged Securities or any interest therein or
take any action which would transfer the economic consequences of the ownership
of the Pledged Securities.
6. Representations and Warranties of Pledgor. The Pledgor
represents and warrants to the Creditor as follows:
(a) Title to Pledged Securities; Authority;
Enforceability. The Pledgor has good and marketable title to the Pledged
Securities, free and clear of all liens. The Pledgor is a duly organized
Massachusetts Business Trust, and has the power and authority to execute,
deliver and perform this Agreement and to consummate the transactions
contemplated hereby. The execution, delivery and performance of this Agreement
has been duly authorized by all necessary action on the part of the Pledgor.
This Agreement has been duly executed and delivered by the Pledgor and
constitutes the legal, valid and binding obligation of the Pledgor, enforceable
against the Pledgor in accordance with its terms, except as enforceability may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights and by equitable principles of general
application which may limit the availability of certain remedies such as
specific performance.
(b) No Conflict. The execution, delivery and
performance of this Agreement by the Pledgor and the consummation of the
transactions contemplated hereby do not and will not (i) violate or conflict
with any provision of the organizational documents of the Pledgor; or (ii)
violate, conflict with, result in a breach of or constitute (with or without
notice or lapse of time or both) a default under any contract or agreement
(whether or not in written form), instrument or other writing of a material
nature to or by which the Pledgor is a party or is bound with respect to the
Pledged Securities; or (iii) violate, conflict with or result in a breach of any
Legal Requirement (as defined in the Stock Purchase Agreement) with respect to
the Pledged Securities; or (iv) result in the creation of any lien on any of the
Pledged Securities.
(c) Litigation. There is no claim, action, suit,
proceeding (including, without limitation, arbitrations and alternative dispute
resolution proceedings) or governmental investigation before any court,
arbitrator or governmental entity or regulatory authority pending or, to the
best knowledge of the Pledgor, threatened, against the Pledgor which would
prevent the taking of the actions contemplated by this Agreement.
(d) Consents. No filing or registration with, notice
to or authorization, consent or approval or other action (including, without
limitation, the grant of any waiver, of any governmental entity or regulatory
authority or any other person or entity) is required to be obtained by the
Pledgor in connection with the execution,
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delivery and performance of this Agreement by the Pledgor and the consummation
of a the transactions contemplated hereby.
7. Termination. Upon payment in full of the Obligations, this
Agreement shall terminate and the Pledgor shall be entitled to the return of
such of the Pledged Securities as have not theretofore been sold, released or
otherwise applied pursuant to the provisions of this Agreement.
8. Notices. All notices or other communications required or
permitted to be given hereunder to the Creditor or KM shall be delivered as
provided in the Stock Purchase Agreement, with any notices to the Pledgor to be
delivered to RAM Capital Management, 00000 Xxxxx Xxxxxx, Xxxx Xxxxx, Xxxxxxx
00000, Attention: Xx. Xxxxxx Xxxxxxxx.
9. Binding Effect, Successors and Assigns. This Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns and nothing herein is intended or shall be
construed to give any other person any right, remedy or claim under, to or in
respect of this Agreement.
10. Miscellaneous. The Creditor and its assigns shall have no
obligation in respect of the Pledged Securities under this Agreement, except to
hold and dispose of the same in accordance with the terms of this Agreement.
Neither this Agreement nor any provision hereof may be amended, modified,
waived, discharged or terminated orally, but only by an instrument in writing
signed by the party against which enforcement of the amendment, modification,
waiver, discharge or termination is sought. The captions in this Agreement are
for convenience of reference only and shall not define or limit the provisions
hereof. This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Florida, without regard to the
conflicts of law rules thereof.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and delivered on the date first above written.
CREDITOR:
RAM VENTURE HOLDINGS CORP.
By:
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Name:
Title:
PLEDGOR:
RAM CAPITAL MANAGEMENT
By:
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Name:
Title:
[SIGNATURE PAGE - NON-RECOURSE PLEDGE AGREEMENT]
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