rim_8k-ex1003.htm


    Exhibit
      10.3

     

    ANNEX
      V

    TO

    BRIDGE
      LOAN AGREEMENT

    


    


    SECURITY
      INTEREST AGREEMENT

    


    SECURITY
      INTEREST
      AGREEMENT ("Security Interest Agreement"), dated as of July 26, 2007,
      by and among the persons set forth on Schedule 1 (each a “Secured Party” and
      collectively, the “Secured Parties”), RIM SEMICONDUCTOR COMPANY, a Utah
      corporation with headquarters located at 305 NE 102nd Ave., Suite 105, Portland,
      OR 97220 (the “Company” or the “Debtor”), and KRIEGER & PRAGER, LLP, as
      agent for the Secured Parties (the “Agent”).

    


    RECITALS

    


    A.           Reference
      is made to (i) that certain Bridge Loan Agreement of even date herewith (the
      “Bridge Loan Agreement”) to which the Debtor and each of the Secured Parties are
      parties, and (ii) the Transaction Agreements, including, without limitation,
      the
      Notes.  Capitalized terms not otherwise defined herein shall have the
      meanings ascribed to them in the Bridge Loan Agreement or other relevant
      Transaction Agreements.

    


    B.           Pursuant
      to the Notes, the Debtor has certain obligations to each of the Secured Parties
      (all such obligations, the “Obligations”).

    


    C.           In
      order to induce each of the Secured Parties to execute and deliver the
      Transaction Agreements and to make the advances to the Debtor contemplated
      thereby, and as contemplated by the Bridge Loan Agreement and the Notes, the
      Debtor has agreed to grant to each of the Secured Parties a security interest
      in
      the Collateral (as defined below) to secure the due and punctual fulfillment
      of
      the Obligations.  Each of the Secured Parties is willing to enter into
      the Bridge Loan Agreement and the other Transaction Agreements only upon
      receiving the Debtor’s execution of this Security Interest
      Agreement.

    


    NOW,
      THEREFORE, in consideration of the
      premises, the mutual covenants and conditions contained herein, and for other
      good and valuable consideration, the receipt and sufficiency of which are hereby
      acknowledged, the parties hereto hereby agree as follows:

    


    1.           Grant
      of Security Interest.

    


    (a)           In
      order to secure the due and punctual fulfillment of the Obligations, the Debtor
      hereby grants, conveys, transfers and assigns to the Secured Parties (and to
      each of them based on their respective Allocable Shares, as defined below)
      a
      continuing security interest in the Collateral.

    


    
      
        
        

      

      
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    (b)           For
      purposes of this Agreement, the following terms shall have the meanings
      indicated:

    


    “COLLATERAL”
      is all right, title and interest of Debtor in and to all of the following,
      whether now owned or (except as with respect to Intellectual Property and
      general intangibles referred to below) hereafter acquired and wherever located:
      All assets of the Debtor, including, but not limited to: all personal and
      fixture property of every kind and nature, including without limitation all
      goods (including inventory, equipment and any accessions thereto), instruments
      (including promissory notes), documents, accounts (including accounts
      receivable), chattel paper (whether tangible or electronic), deposit accounts,
      letter-of-credit rights (whether or not the letter of credit is evidenced by
      a
      writing), commercial tort claims, securities and all other investment property,
      supporting obligations, any other contract rights or rights to the payment
      of
      money, insurance claims and proceeds, and all general intangibles now owned
      (including all payment intangibles); all Equipment; all Intellectual Property;
      and any and all claims, rights and interests in any of the above, and all
      guaranties and security for any of the above, and all substitutions and
      replacements for, additions, accessions, attachments, accessories, and
      improvements to, and proceeds (including proceeds of any insurance policies,
      proceeds of proceeds and claims against third parties) of, any and all of the
      above, and all Debtor’s books relating to any and all of the above and includes,
      without limiting the generality of the above, the assets listed in Exhibit
      B.

    


    “CODE”
is
      the Uniform Commercial Code, in effect in the State of Delaware as in effect
      from time to time.

    


    “COPYRIGHTS”
      are all copyrights, copyright rights, applications or registrations and like
      protections in each work or authorship or derivative work, whether published
      or
      not (whether or not it is a trade secret) now or later existing, created,
      acquired or held.

    


    “EQUIPMENT”
      has the meaning set forth in the Code and includes all present and future
      machinery, equipment, tenant improvements, furniture, fixtures, vehicles, tools,
      parts and attachments in which Debtor has any interest.

    


    “INTELLECTUAL
      PROPERTY” is all present (a) Copyrights, (b) trade secret rights, including all
      rights to unpatented inventions and know-how, and confidential information;
      (c)
      mask work or similar rights available for the protection of semiconductor chips;
      (d) Patents; (e) Trademarks; (f) computer software and computer software
      products; (g) designs and design rights; (h) technology; (i) all claims for
      damages by way of past, present and future infringement of any of the rights
      included above; (j) all licenses or other rights to use any property or rights
      of a type described above.

    


    “PATENTS”
      are patents, patent applications and like protections, including improvements,
      divisions, continuations, renewals, reissues, extensions and
      continuations-in-part of the same.

    


    
      
        
        

      

      
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    “TRADEMARKS”
      are trademarks, servicemarks, trade styles, and trade names, whether or not
      any
      of the foregoing are registered, and all applications to register and
      registrations of the same and like protections, and the entire goodwill of
      the
      business of Debtor connected with and symbolized by any such
      trademarks.


    


    (b)
      The
      security interests granted pursuant to this Section (the "Security Interests")
      are granted as security only and shall not subject any of the Secured Parties
      to, or transfer or in any way affect or modify, any obligation or liability
      of
      the Debtor under any of the Collateral or any transaction which gave rise
      thereto.

    


    (c)
      The
      term “Allocable Share” means, with respect to each Secured Party (if there is
      more than one Secured Party), as of the relevant date, the fraction equal to
      (i)
      the outstanding principal of the Notes then held by such Secured Party, divided
      by (ii) the aggregate outstanding principal of the Notes then held by all
      Secured Parties.

    


    Section
      2. Filing; Further Assurances.

    


    (a)
      The
      Debtor will, at its expense, cause to be searched the public records with
      respect to the Collateral and will execute, deliver, file and record (in such
      manner and form as each of the Secured Parties may reasonably require), or
      permit each of the Secured Parties to file and record, as its attorney in fact
      for such purpose, any financing statement, any carbon, photographic or other
      reproduction of a financing statement or this Security Interest Agreement (which
      shall be sufficient as a financing statement hereunder), any specific
      assignments or other paper that may be reasonably necessary or desirable, or
      that the Secured  Parties may reasonably request, in order to create,
      preserve, perfect or validate any Security Interest or to enable each of the
      Secured Parties to exercise and enforce its rights hereunder with respect to
      any
      of the Collateral.

    


    (b)
      Each
      Secured Party has designated an Agent as provided in the Section titled “Agent”
below.  Among other things, such Agent shall be agent of each such
      Secured Party for execution of and identification on any financing statement
      or
      similar instrument referring to or describing the Collateral.

    


    (c)
      If
      Debtor does not comply with Section 2(a) hereof in a prompt manner, the Agent
      is
      authorized to execute and file any and all financing statements desired to
      be
      filed by the relevant Secured Party to reflect the security interest in the
      Collateral in any and all jurisdictions.  For such purposes, the
      Debtor irrevocably appoints the Agent (acting by Samuel M. Krieger and Ronald
      Nussbaum, or either one of them), with full power of substitution to execute
      and
      file such financing statements naming the Debtor as debtor thereon.

    


    
      
        
        

      

      
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    Section
      3. Representations and Warranties of Debtor. The Debtor hereby
      represents and warrants to each Secured Party (a) that, except for the Permitted
      Liens as defined in set forth in Exhibit A attached hereto, the Debtor is,
      or to
      the extent that certain of the Collateral is to be acquired after the date
      hereof, will be, the owner of the Collateral free from any adverse lien,
      security interest or encumbrance; and (b) that except for such financing
      statements as may be described on Exhibit A attached hereto and made a part
      hereof, no financing statement covering the Collateral is on file in any public
      office, other than the financing statements filed pursuant to this Security
      Agreement.

    


    Section
      4. Covenants of Debtor. The Debtor hereby covenants and agrees with
      each Secured Party that the Debtor (a) will, at the  Debtor's sole
      cost and expense, defend the Collateral against all claims and demands of all
      persons at any time claiming any interest therein junior to the Secured Party's
      interest; (b) will provide the Secured Party with prompt written notice of
      (i)
      any change in the chief executive officer of the Debtor or the office where
      the
      Debtor maintains its books and records pertaining to the Collateral; (ii) the
      movement or location  of all or a material part of the Collateral to
      or at any address other than as set forth in said Exhibit B; and (iii) any
      facts
      which constitute a Debtor Event of Default (as such term is defined below),
      or
      which, with the giving of notice and/or the passage of time,
      could  or  would constitute a Debtor Event of Default,
      pursuant to the Section titled “Debtor Events of Default” below; (c) will
      promptly pay any and all taxes, assessments and governmental charges upon the
      Collateral prior to the date penalties are attached thereto, except to the
      extent that such taxes, assessments and charges shall be contested in good
      faith
      by the Debtor; (d) will immediately notify the Secured Party of any event
      causing a substantial loss or diminution in the value of all or any material
      part of the Collateral and the amount or an estimate of the amount of such
      loss
      or diminution; (e) will not sell or offer to sell or otherwise assign, transfer
      or dispose of the Collateral or any interest therein, without the prior written
      consent of the Secured Party, except in the ordinary course of business; (f)
      will keep the Collateral free from any adverse lien, security interest or
      encumbrance (except for encumbrances specified in Exhibit
      A  attached  hereto) and in good order and repair,
      reasonable wear and tear excepted, and will not waste or destroy the Collateral
      or any part thereof; and (g) will not use the Collateral in material violation
      of any statute or ordinance the violation of which could materially and
      adversely affect the Debtor's business.

    


    Section
      5. Records Relating To Collateral. The Debtor will keep its records
      concerning the Collateral at its offices designated in the caption of this
      Security Interest Agreement or at such other place or places of business of
      which the Secured Party shall have been notified in writing no less than ten
      (10) days prior thereto. The Debtor will hold and preserve such records and
      chattel paper and will permit representatives of the Secured Party at any time
      during normal business hours upon reasonable notice to examine and inspect
      the
      Collateral and to make abstracts from such records and chattel paper, and will
      furnish to the Secured Party such information and reports regarding the
      Collateral as the Secured Party may from time to time reasonably
      request.

    


    Section
      6. General Authority. From and during the term of any Debtor Event of
      Default, the Debtor hereby appoints the Secured Party the Debtor's lawful
      attorney, with full power of substitution, in the name of the Debtor, for the
      sole use and benefit of the Secured Party, but at the Debtor's expense, to
      exercise, all or any of the following powers with respect to all or any of
      the
      Collateral:

    


    
      
        
        

      

      
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    (a)
      to
      demand, sue for, collect, receive and give acquittance for any and all monies
      due or to become due;

    


    (b)
      to
      receive, take, endorse, assign and deliver all checks, notes, drafts, documents
      and other negotiable and non- negotiable instruments and chattel paper taken
      or
      received by the Secured Party;

    


    (c)
      to
      settle, compromise, prosecute or defend any action or proceeding with respect
      thereto;

    


    (d)
      to
      sell, transfer, assign or otherwise deal in or with the same or  the
      proceeds thereof or the related goods securing the Collateral, as fully and
      effectually as if the Secured Party were the sole and absolute owner
      thereof;

    


    (e)
      to
      extend the time of payment of any or all thereof and to make any allowance
      and
      other adjustments with reference thereto; and

    


    (f)
      to
      discharge any taxes, liens, security interests or other encumbrances at any
      time
      placed thereon;

    


    provided,
      however, that the Secured Party shall give the Debtor not less than ten (10)
      business days prior written notice of the time and place of any sale or other
      intended disposition of any of the Collateral.

    


    The
      exercise by the Secured Party or by the Agent of or failure to so exercise
      any
      authority granted herein shall in no manner affect Debtor's liability to the
      Secured Party, and provided, further, that the Secured Party and the Agent
      shall
      be under no obligation or duty to exercise any of the powers hereby conferred
      upon them and they shall be without liability for any act or failure to act
      in
      connection with the collection of, or the preservation of, any rights under
      any
      of the Collateral.

    


    Section
      7. Debtor Events of Default.

    


    (a)The
      Debtor shall be in default under this Security Agreement upon the occurrence
      of
      an Event of Default (as defined in the Note) by the
      Debtor (a "Debtor Event of Default").

    


    
      
        
        

      

      
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    (b)The
      Debtor hereby irrevocably agrees that, upon the occurrence of a Debtor Event
      of
      Default, the Debtor shall be deemed to have consented to an immediate conveyance
      and transfer to the Secured Party of the copyrights and all other rights the
      Debtor may have in the software included in the Collateral, including, but
      not
      necessarily limited to, the software identified in Schedule B attached hereto.
      In furtherance of the foregoing, and not in limitation thereof, the Debtor
      will,
      upon the occurrence of a Debtor Event of Default, deliver to the Secured Party
      copies of the source code of the relevant software, with accompanying written
      assignment of the software to the Secured Party.  Without limiting the
      foregoing, such source code and assignment shall be in form sufficient to enable
      the Secured Party to register the software in Secured Party’s name with the
      Copyright Register. The Debtor hereby agrees to take all steps necessary or
      appropriate, as requested by the Secured Party, to effectuate and reflect such
      conveyance and transfer or assignment to Secured Party.  In all
      events, such conveyance, transfer or assignment shall be deemed to vest title
      in
      such software in the Secured Party.

    


    (c)
      In
      furtherance of the foregoing and not in limitation thereof, the Debtor
      acknowledges and agrees that the Secured Party may, upon the occurrence of
      a
      Debtor Event of Default, seek the immediate entry of a preliminary injunction
      prohibiting the Debtor’s use of such software in any shape, way or manner,
      including, but not necessarily limited to, through the sale of products that
      use
      any of such software, and the Debtor hereby irrevocably agrees that it will
      not
      contest an application seeking entry of a preliminary injunction and that it
      will accept the entry of such injunction.

    


    Section
      8. Remedies Upon Debtor Event of Default. If any Debtor Event of
      Default shall have occurred, then in addition to the provisions of Section
      7
      hereof, the Secured Party may exercise all the rights and remedies of a secured
      party under the Code. The Secured Party may require the Debtor to assemble
      all
      or any part of the Collateral and make it available to the Secured Party at
      a
      place to be designated by the Secured Party which is reasonably convenient.
      The
      Secured Party shall give the Debtor ten (10) business days prior written notice
      of the Secured Party's intention to make any public or private sale or sale
      at a
      broker's board or on a securities exchange of the Collateral. At any such sale
      the Collateral may be sold in one lot as an entirety or in separate parcels,
      as
      the Secured Party, in its sole discretion, may determine. The Secured Party
      shall not be obligated to make any such sale pursuant to any such
      notice.  The Secured Party may, without notice or publication, adjourn
      any public or private sale or cause the same to be adjourned from time to time
      by announcement at the time and place fixed for the sale, and such sale may
      be
      made at any time or place to which the same may be adjourned.  The
      Secured Party, instead of exercising the power of sale herein conferred upon
      it,
      may proceed by a suit or suits at law or in equity to foreclose the Security
      Interests and sell the Collateral, or any portion thereof, under a judgment
      or
      decree of a court or courts of competent jurisdiction.

    


    Section
      9. Application of Collateral and Proceeds.  The proceeds of
      any sale of, or other realization upon, all or any part of the Collateral shall
      be applied in the following order of priorities: (a) first, to pay the
      reasonable expenses of such sale or other realization, including, without
      limitation, reasonable attorneys' fees, and all expenses, liabilities and
      advances reasonably incurred or made by the Secured Party in connection
      therewith, and any other unreimbursed expenses for which the Secured Party
      is to
      be reimbursed pursuant to the Section titled “Expenses; Secured Party's
      Lien”  below; (b) second, to the payment of the Obligations in such
      order of priority as the Secured Party, in its sole discretion, shall
      determine;  and (c) finally, to pay to the Debtor, or its successors
      or assigns, or as a court of competent jurisdiction may direct, any surplus
      then
      remaining from such proceeds.

    


    
      
        
        

      

      
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    Section
      10. Expenses; Secured Party's Lien.  If any Debtor Event of
      Default shall have occurred, the Debtor will forthwith upon demand pay to the
      Secured Party: (a) the amount which the Secured Party may have been required
      to
      pay to free any of the Collateral from any lien thereon; and (b) the amount
      of
      any and all reasonable out-of-pocket expenses, including, without limitation,
      the reasonable fees and disbursements of its counsel, and of any agents not
      regularly in its employ,  which the Secured Party may incur in
      connection with the collection, sale or other disposition of any of the
      Collateral.

    


    Section
      11. Termination of Security Interests; Release of
      Collateral.  Upon the payment, performance or other satisfaction
      in full of all the Obligations, the Security Interests shall terminate and
      all
      rights to the Collateral shall revert to the Debtor. Upon any such termination
      of the Security Interests or release of Collateral, the Secured Party will,
      at
      the Debtor's expense, to the extent permitted by law, execute and deliver to
      the
      Debtor such documents as the Debtor shall reasonably request to evidence the
      termination of the Security Interests or the release of such Collateral, as
      the
      case may be.

    


    Section
      12. Notices.  All notices, demands, requests, consents,
      approvals, and other communications required or permitted hereunder shall be
      in
      writing and, unless otherwise specified herein, shall be (a) personally served,
      (b) deposited in the mail, registered or certified, return receipt requested,
      postage prepaid, (c) delivered by reputable air courier service with charges
      prepaid, or (d) transmitted by hand delivery, telegram, or facsimile, addressed
      as set forth below or to such other address as such party shall have specified
      most recently by written notice given in accordance herewith. Any notice or
      other communication required or permitted to be given hereunder shall be deemed
      effective (i) upon hand delivery or delivery by facsimile, with accurate
      confirmation generated by the transmitting facsimile machine, at the address
      or
      number designated below (if delivered on a business day during normal business
      hours where such notice is to be received), or the first business day following
      such delivery (if delivered other than on a business day during normal business
      hours where such notice is to be received) or (ii) on the second business day
      following the date of mailing by express courier service or on the fifth
      business day after deposited in the mail, in each case, fully prepaid, addressed
      to such address, or upon actual receipt of such mailing, whichever shall first
      occur. The addresses for such communications shall be for (i) the Debtor as
      provided in the Bridge Loan Agreement for notices  to the Company,
      (ii) for each Secured Party as provided in the Bridge Loan Agreement for notices
      to the Lender and (iii) for the Agent as provided in the Bridge Loan Agreement
      for notices to the Escrow Agent.  Any party hereto may from time to
      time change its address or facsimile number for notices under this Section
      in
      the manner contemplated by the Bridge Loan Agreement.

    


    
      
        
        

      

      
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    Section
      13.  Agent.

    


    (a)
      Anything in the other provisions of this Security Interest Agreement to the
      contrary notwithstanding, the Secured Party may designate another entity to
      act
      as agent (the “Agent”) for the Secured Party with respect to any one or more of
      the rights of Secured Party hereunder, including, but not necessarily limited
      to, the right to hold the security interest and/or be named as secured party
      (as
      agent for the Secured Party) in any filed financing statement and to take action
      in the name and stead of the Secured Party hereunder.  Such
      designation may be made with or without power of substitution,  Such
      designation shall remain in effect until canceled by the Secured Party, as
      provided herein; provided, however, that such cancellation shall not affect
      the
      validity of any action theretofore taken by such agent pursuant to this Security
      Interest Agreement.  The Debtor acknowledges and agrees to honor such
      designation and acknowledges that the Agent is acting as the agent of the
      Secured Party and not as a principal.

    


    (b)
      Each
      Secured Party hereby confirms that the Secured Party has designated Krieger
      & Prager, LLP (acting by Samuel M. Krieger and Ronald Nussbaum, or either
      one of them), as its initial Agent, with full right of
      substitution.

    


    (c)
      If
      there is more than one Secured Party, the Agent shall act as agent for all
      Secured Parties.  Any revocation of the authority of the Agent or the
      designation of an alternate Agent shall be done only by Secured Parties who
      represent a Majority in Interest of the Holders (as defined below) at that
      time;
      provided that at all times all Secured Parties shall be represented by one
      and
      the same Agent.  The term “Majority in Interest of the Holders” means,
      as of the relevant date, one or more Secured Parties whose respective
      outstanding principal amounts of the Notes held by each of them, as of such
      date, aggregate more than fifty percent (50%) of the aggregate outstanding
      principal amounts of the outstanding Notes held by all Secured Parties on that
      date.

    


    (d)
      Reference is made to the provisions of Sections 2 through 15, inclusive, of
      the
      Joint Escrow Instructions.  All such provisions are incorporated
      herein by reference, as if set forth herein in full, except that, for such
      purposes, the references therein to (i) the “Escrow Agent” shall be deemed to be
      references to the “Agent” under this Security Interest Agreement, (ii) the
“Company” shall be deemed to be references to the Debtor under this Security
      Interest Agreement, and (iii) the “Lender” shall be deemed to be references to
      the relevant Secured Party under this Security Interest Agreement.

    


    Section
      14.  Miscellaneous.

    


    
      
        
        

      

      
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    (a)
      No
      failure on the part of the Secured Party to exercise, and no delay in
      exercising, and no course of dealing with respect to, any right, power or remedy
      under this Security Interest Agreement shall operate as a waiver thereof; nor
      shall any single or partial exercise by the Secured Party of any right, power
      or
      remedy under this Security Interest Agreement preclude the exercise, in whole
      or
      in part, of any other right, power or remedy. The remedies in this Security
      Interest Agreement are cumulative and are not exclusive of any other remedies
      provided by law. Neither this Security Interest Agreement nor any provision
      hereof may be changed, waived, discharged or terminated orally but only by
      a
      statement in writing signed by the party against which enforcement of the
      change, waiver, discharge or termination is sought.

    


    (b)
      The
      execution and delivery by Debtor of this Security Interest Agreement and all
      documents delivered in connection herewith have been duly and validly authorized
      by all necessary corporate action of Debtor and this Agreement and all documents
      delivered in connection herewith have been duly and validly executed and
      delivered by Debtor.  The execution and delivery by Debtor of this
      Security Interest Agreement and all documents delivered in connection herewith
      will not result in a breach or default of or under the Certificate of
      Incorporation, By-laws or any agreement, contract or indenture of
      Debtor.  This Security Interest Agreement and all documents delivered
      in connection therewith are legal, valid and binding obligations of Debtor
      enforceable against Debtor in accordance with their terms.

    


    (c)
      In
      the event that any action is taken by Debtor or Secured Party in connection
      with
      the this Security Interest Agreement, or any related document or matter, the
      losing party in such legal action, in addition to such other damages as he
      or it
      may be required to pay, shall pay reasonable attorneys’ fees to the prevailing
      party.

    


    Section
      15.Separability. If any provision hereof shall prove invalid or
      unenforceable in any jurisdiction whose laws shall be deemed applicable, the
      other provisions hereof shall remain in full force and effect in such
      jurisdiction and shall be liberally construed in favor of the Secured
      Party.

    


    Section
      16.  Governing Law.

    


    
      
        
        

      

      
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    (a)
      This
      Security Interest Agreement shall be governed by and construed in accordance
      with the laws of the State of Delaware for contracts to be wholly performed
      in
      such state and without giving effect to the principles thereof regarding the
      conflict of laws.  Each of the parties consents to the exclusive
      jurisdiction of the federal courts whose districts encompass any part of the
      City of Wilmington or  (except with respect to issues relating to the
      copyright in and to the software, as contemplated by Section 7 hereof, which
      shall exclusively be in the aforesaid federal courts) or of the state courts
      of
      the State of Delaware sitting in the City of Wilmington in connection with
      any
      dispute arising under this Security Interest Agreement and hereby waives, to
      the
      maximum extent permitted by law, any objection, including any objection based
      on
forum non coveniens, to the bringing of any such proceeding in such
      jurisdictions or to any claim that such venue of the suit, action or proceeding
      is improper. To the extent determined by such court, the Debtor shall reimburse
      the Secured Party for any reasonable legal fees and disbursements incurred
      by
      the Secured Party in enforcement of or protection of any of its rights under
      this Security Interest Agreement.  Nothing in this Section shall
      affect or limit any right to serve process in any other manner permitted by
      law.

    


    (b)
      The
      Debtor and the Secured Party acknowledge and agree that irreparable damage
      would
      occur in the event that any of the provisions of this Security Interest
      Agreement were not performed in accordance with their specific terms or were
      otherwise breached. It is accordingly agreed that the parties shall be entitled
      to an injunction or injunctions to prevent or cure breaches of the provisions
      of
      this Security Interest Agreement and to enforce specifically the terms and
      provisions hereof, this being in addition to any other remedy to which any
      of
      them may be entitled by law or equity.

    


    Section
      16. Jury Trial Waiver.  The Debtor and the Secured Party
      hereby waive a trial by jury in any action, proceeding or counterclaim brought
      by either of the parties hereto against the other in respect of any matter
      arising out of or in connection with the Note or this Security Interest
      Agreement.

    


    Section
      17. Assignment.  Except in connection with the transfer of
      all of the rights of a Secured Party under the Transaction Agreements, a Secured
      Party shall not assign or transfer its security interest granted hereunder,
      and,
      further, upon the occurrence of a permitted transfer of a Secured Party’s
      security interest in the Collateral, the transferee shall be vested with all
      of
      the rights and powers of the assigning Secured Party hereunder with respect
      to
      the Collateral.

    


    [Balance
      of page intentionally left blank]

    


    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    Section
      18. Waiver.  The Debtor waives any right that it may have
      to require Secured Party to proceed against any other person, or proceed against
      or exhaust any other security, or pursue any other remedy Secured Party may
      have.

    


    IN
      WITNESS WHEREOF, the Parties have executed this Security Interest Agreement
      as
      of the day, month and year first above written.

    


    SECURED
      PARTIES:

    


    
      	
              DOUBLE
                U MASTER FUND LP

            	
              PROFESSIONAL
                OFFSHORE OPPORTUNITY FUND LTD.

            


      	 	 


      	 	 


      	By:/s/[illegible]  	By:/s/Marc
              K. Swickle


    

    


    DEBTOR:

    RIM
      SEMICONDUCTOR COMPANY

     

    By:/s/Ray
      Willenberg,
      Jr.                                                                

    Chairman

     

    AGENT:

    KRIEGER
      & PRAGER, LLP

     

    By:/s/Ronald
      Nussbaum                                                                

    


    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    SCHEDULE
      1

    


    The
      Secured Parties are:

    


    
      	
              Name

            	
              Address

            
	
              Double
                U Master Fund LP

            	
              Harbour
                House, Waterfront Drive

              Road
                Town, Tortola, BVI

            
	
              Professional
                Offshore Opportunity Fund Ltd.

               

            	
              1400
                Old Country Road, Suite 206

              Westbury,
                NY 11590

            


    

    


    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      A

    


    EXCEPTIONS
      TO REPRESENTATIONS

    


    


    1.
      Certain encumbrances and liens, including (i) mechanics’, materialmen’s, and
      similar liens, (ii) liens for taxes not yet due and payable or for taxes that
      the taxpayer is contesting in good faith through appropriate proceedings, (iii)
      purchase money liens and liens securing rental payments under capital lease
      and
      similar arrangements, and other liens arising in the ordinary course of business
      and not incurred in connection with the borrowing of money.

    


    2.
      Security interest (“Existing Senior Security Interest”) in the Collateral
      granted to Double U Master Fund LP (“Existing Senior Secured Party”) pursuant to
      Security Interest Agreement, dated as of March 26, 2007, between Debtor and
      Existing Senior Secured Party to secure, among other things, payment in full
      of
      the Specified Note (as defined in Annex VII to the Bridge Loan
      Agreement).  The Bridge Loan Agreement and the Transaction Agreements
      contemplate that the Specified Note will be paid in full on the Closing Date
      out
      of the  Escrow Funds, at which time the Existing Senior Secured Party
      will release the Existing Senior Security Interest.

    


    


    All
      of the above exceptions to representations on this Exhibit A shall be
      collectively referred to and defined as the “Permitted Liens” and individually
      as a “Permitted Lien”.

    


    


    


    


    


    
      
        
        

      

      
        Exhibit
          A-1

        
          

        

      

      
        
        

      

    

    EXHIBIT
      B

    ADDITIONAL
      INFORMATION RE COLLATERAL, ETC.

    


     

    The
      Collateral includes without limitation Debtor’s right, title and interest in and
      to the following:


     

    United
      States Trademarks/Service Marks:

    


    
      	
              Mark:

            	
              Application
                No./

              Registration
                No.:

            	
              Filing
                Date:

            
	 	 	 
	
              IPSL

            	
              78/844,821

            	
              03/23/2006

            
	 	 	 
	
              CUPRIA

            	
              78/956,366

            	
              08/21/2006

            


    

    


    


    
      	
              United
                States Patents:

               

            	 	 
	
              Title
                of Case

               

            	
              Patent
                No./

              Publication
                No.:

            	
              Filing
                Date:

               

            
	 	 	 
	
              TIMING
                RECOVERY WITH

              MINIMUM
                JITTER MOVEMENT

            	
               

              6,138,244

            	
               

              09/30/1998

            
	 	 	 
	
              TURBO
                TRELLIS-CODED

              MODULATION

            	
               

              6,671,327

            	
               

              05/01/2000

            
	 	 	 
	
              METHOD
                AND APPARATUS FOR

              CONNECTING
                BROADBAND VOICE AND

              DATA
                SIGNALS TO TELEPHONE SYSTEMS

            	
               

              6,674,845

            	
               

              06/21/2001

            
	 	 	 
	
              PRECURSOR
                DECISION FEEDBACK

              EQUALIZER
                (PDFE)

            	
               

              6,697,423

            	
               

              10/10/2000

            
	 	 	 
	
              PARALLEL
                TURBO TRELLIS-CODED

              MODULATION

            	
               

              6,757,859

            	
               

              05/01/2000

            


    

    


    
      
        
        

      

      
        Exhibit
          B-1

        
          

        

      

      
        
        

      

    

    
      	 	 	 
	
              DMT
                BIT ALLOCATION WITH

              IMPERFECT
                TEQ

            	
               

              6,999,507

            	
               

              12/20/2000

            
	 	 	 
	
              SOFT-DECISION
                DECODING OF

              CONVOLUTIONALLY
                ENCODED

              CODEWORD

            	
               

               

              6,999,531

            	
               

               

              02/26/2001

            
	 	 	 
	
              METHOD
                AND SYSTEM FOR PERFORMING

              A
                FAST-FOURIER TRANSFORM

            	
               

              7,024,443

            	
               

              11/08/2002

            
	 	 	 
	
              METHOD
                AND APPARATUS FOR

              CONNECTING
                BROADBAND VOICE AND

              DATA
                SIGNALS TO TELEPHONE SYSTEMS

            	
               

               

              7,106,855

            	
               

               

              04/12/2001

            
	 	 	 
	
              FLEXIBLE
                BIT SELECTION USING TURBO

              TRELLIS-CODED
                MODULATION

            	
               

              2002/0136320

            	
               

              03/18/2002

            
	 	 	 
	
              DMT
                PEAK REDUCTION WITHOUT

              AFFECTING
                TRANSMISSION SIGNAL

            	
               

              2002/0159550

            	
               

              03/01/2002

            
	 	 	 
	
              FAST
                FOURIER TRANSFORM SIGNAL

              PROCESSING

            	
               

              2003/0145026

            	
               

              01/30/2003

            
	 	 	 
	
              METHOD
                OF REDUCING PEAK-TO-

              AVERAGE
                RATIO IN MULTI-CARRIER COMMUNICATIONS SYSTEMS

            	
               

               

              2005/0141410

            	
               

               

              10/29/2004

            
	 	 	 
	
              METHOD
                OF INCREASING CHANNEL

              CAPACITY
                OF FFT AND IFFT ENGINES

            	
               

              2005/0152409

            	
               

              10/29/2004

            
	 	 	 
	
              COMMUNICATING
                DATA USING

              WIDEBAND
                COMMUNICATIONS

            	
               

              2004/258168

            	
               

              08/30/2002

            
	 	 	 
	
              COMMUNICATING
                DATA USING

              WIDEBAND
                COMMUNICATIONS

            	
               

              2005/063479

            	
               

              08/30/2002

            


    

    


    
Exhibit
      B-2