rim_8k-ex1002.htm


    Exhibit
      10.2

     

    ANNEX
      I

    TO

    BRIDGE
      LOAN AGREEMENT

    (PROTOTYPE
      FOR EACH ISSUANCE)

     

    


    FORM
      OF NOTE

    


    THESE
      SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
      AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OFFERED
      FOR
      SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
      OR
      AN OPINION OF COUNSEL OR OTHER EVIDENCE ACCEPTABLE TO THE COMPANY THAT SUCH
      REGISTRATION IS NOT REQUIRED.

    


    No. 07-02-
      1

    US
      $__________2

     

    RIM
      SEMICONDUCTOR COMPANY

    


    SENIOR
      SECURED PROMISSORY NOTE DUE DECEMBER ____, 20073

    


    THIS
      NOTE is one of a duly authorized
      issue of up to $1,100,000 of RIM SEMICONDUCTOR COMPANY, a corporation organized
      and existing under the laws of the State of Utah (the "Company"), designated
      as
      its Senior Secured Promissory Note Series 07-02.

    


    FOR
      VALUE RECEIVED, the Company
      promises to pay to ___________________ , the registered holder
      hereof (the "Holder"), the principal sum of ___________Thousand
      ____________  and 00/100  Dollars (US $________)4 on the Maturity Date (as defined
      below).

     

    TIME
      IS OF THE ESSENCE WITH RESPECT
      TO THE COMPANY’S FULFILLMENT OF ALL OF ITS PAYMENT OBLIGATIONS
      HEREUNDER.  The Holder shall not be required to give the Company
      any notice of default of payment if any such payment is not timely paid or
      otherwise satisfied.  All provisions of this Note which apply in the
      event of the Company’s not timely fulfilling any of its payment obligations
      hereunder shall apply whether or not such notice of default is
      given.  The Holder’s giving of any notice to the Company shall not be
      deemed a waiver, modification or amendment of this provision with respect to
      the
      failure referred to in that notice or to any other failure by the Company timely
      to make any other payment due hereunder.

     

     
      
        

      

    

    
      1Insert
        unique Note
        number for each issuance.  

      
        2Insert
          amount equal
          to 110% of Holder’s Purchase Price. 


      

      
        3Insert
          date which is
          150 days after the Closing Date 


      

      
        4See
          fn 2.  

      

    

    


    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    This
      Note or its predecessor was
      originally issued on July ___, 20075
      (the “Issue Date”).

    


    This
      Note is being issued pursuant to
      the terms of the Bridge Loan Agreement, dated as of July 26, 2007 (the “Bridge
      Loan Agreement”), to which the Company and the Holder (or the Holder’s
      predecessor in interest) are parties.  Capitalized terms not otherwise
      defined herein shall have the meanings ascribed to them in the Bridge Loan
      Agreement.

    


    This
      Note
      is subject to the following additional provisions:

    


    1.           The
      Note will initially be issued in denominations determined by the Company, but
      are exchangeable for an equal aggregate principal amount of Note of different
      denominations, as requested by the Holder surrendering the same.  No
      service charge will be made for such registration or transfer or
      exchange.

    


    2.           No
      interest will accrue on this Note until the Maturity Date.  If any
      portion of this Note is outstanding on the Maturity Date, interest at the rate
      of twenty-four percent (24%) per annum or the highest rate allowed by law,
      whichever is lower, shall accrue on the outstanding principal of this Note
      from
      the Maturity Date to and including the date of payment by the
      Company.  Such interest shall accrue on a daily basis and shall be
      payable in cash. The Holder may demand payment of all or any part of this Note,
      together with accrued interest, if any, and any other amounts due hereunder,
      as
      of the Maturity Date or any date thereafter.

    


    3.           The
      Company shall be entitled to withhold from all payments of principal of, and,
      if
      applicable, interest on, this Note any amounts required to be withheld under
      the
      applicable provisions of the United States income tax laws or other applicable
      laws at the time of such payments, and Holder shall execute and deliver all
      required documentation in connection therewith.

     

     
      
        

      

    

    
      
        
        
5Insert
        the Closing
        Date.  

    

    


    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    4.           This
      Note has been issued subject to investment representations of the original
      purchaser hereof and may be transferred or exchanged only in compliance with
      the
      Securities Act of 1933, as amended (the "Act"), and other applicable state
      and
      foreign securities laws and the terms of the Bridge Loan
      Agreement.  In the event of any proposed transfer of this Note, the
      Company may require, prior to issuance of a new Note in the name of such other
      person, that it receive reasonable transfer documentation that is sufficient
      to
      evidence that such proposed transfer complies with the Act and other applicable
      state and foreign securities laws and the terms of the Bridge Loan
      Agreement.  Prior to due presentment for transfer of this Note, the
      Company and any agent of the Company may treat the person in whose name this
      Note is duly registered on the Company's Note Register as the owner hereof
      for
      the purpose of receiving payment as herein provided and for all other purposes,
      whether or not this Note be overdue, and neither the Company nor any such agent
      shall be affected by notice to the contrary.

    


    5     
             (a)           The
      term “Maturity Date” means the earliest of (i) December ____, 20076 (the “Stated Maturity Date”), (ii) the New
      Transaction Threshold Date (as defined below), or (iii) the Default Maturity
      Date (as defined below).

    


    (b)           The
      term “New Transaction Threshold Date” means the date on which the Company
      consummates the first New Transaction in which the Company receives, on a
      cumulative basis after taking into account the gross proceeds from all prior
      New
      Transactions, if any, after the Issue Date, gross proceeds of at least Three
      Million Dollars ($3,000,000).  All such gross proceeds are determined
      before deduction of any fees or other expenses or disbursements of any kind
      in
      connection with the relevant New Transaction.

    


    6.       
          (a)           Any
      payment made on account of this Note shall be applied in the following order
      of
      priority: (i) first, to any amounts due hereunder other than principal and
      accrued interest, (ii) then, to accrued interest, if any, through and including
      the date of payment, and (iii) then, to principal of this Note.

    


    (b)           Subject
      to the provisions of Section 6(a) hereof, the outstanding principal of this
      Note
      may be prepaid in whole or in part at the option of the Company at any time
      prior to the Maturity Date.

     

     
      
        

      

    

    6See
      fn 3.

    
 

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    7.           All
      payments contemplated hereby are to be made “in cash” and shall be made in
      immediately available good funds of United States of America currency by wire
      transfer to an account designated in writing by the Holder to the Company (which
      account may be changed by notice similarly given).  For purposes of
      this Note, the phrase “date of payment” means the date good funds are received
      in the account designated by the notice which is then currently
      effective.

    


    8.           (a)           Subject
      to the terms of the Bridge Loan Agreement, no provision of this Note shall
      alter
      or impair the obligation of the Company, which is absolute and unconditional,
      to
      pay the principal of, and, if applicable, interest on, this Note at the time,
      place, and rate, and in the coin or currency, as herein
      prescribed.  This Note is a direct obligation of the
      Company.

    


    (b)           Payment
      of this Note is secured pursuant to the terms of the Security Interest
      Agreement, dated the Issue Date (the “Security Interest Agreement”), executed by
      the Company, as debtor, in favor of the Lender, as secured party.  The
      terms of the Security Interest Agreement are incorporated herein by
      reference.

    


    9.           No
      recourse shall be had for the payment of the principal of, or, if applicable,
      the interest on, this Note, or for any claim based hereon, or otherwise in
      respect hereof, against any incorporator, shareholder, officer or director,
      as
      such, past, present or future, of the Company or any successor corporation,
      whether by virtue of any constitution, statute or rule of law, or by the
      enforcement of any assessment or penalty or otherwise, all such liability being,
      by the acceptance hereof and as part of the consideration for the issue hereof,
      expressly waived and released.

    


    10.           The
      Holder of the Note, by acceptance hereof, agrees that this Note is being
      acquired for investment and that such Holder will not offer, sell or otherwise
      dispose of this Note  except under circumstances which will not result
      in a violation of the Act or any applicable state Blue Sky or foreign laws
      or
      similar laws relating to the sale of securities.

    


    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    11.           Any
      notice required or permitted hereunder shall be given in manner provided in
      the
      Section headed "NOTICES" in the Bridge Loan Agreement, the terms of which are
      incorporated herein by reference.

    


    12.           (a)           This
      Note shall be governed by and interpreted 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 the state courts of the State of Delaware sitting in the City of Wilmington
      in connection with any dispute arising under this Note and hereby waives, to
      the
      maximum extent permitted by law, any objection, including any objection based
      on forum non conveniens, to the bringing of any such proceeding in such
      jurisdictions. To the extent determined by such court, the Company shall
      reimburse the Holder for any reasonable legal fees and disbursements incurred
      by
      the Holder in enforcement of or protection of any of its rights under this
      Note.

    


    (b)           JURY
      TRIAL WAIVER.   The Company and the Holder 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 this Note.

    


    13.           (a)           The
      following shall constitute an "Event of Default":

    


    
      	
               

            	
              i.

            	
              The
                Company shall default in the timely payment of principal on this
                Note or
                any other amount due hereunder (without the requirement of any further
                notice with respect thereto from the Holder);
                or

            


    

    


    
      	
               

            	
              ii.

            	
              Any
                of the representations or warranties made by the Company herein,
                in the
                Bridge Loan Agreement or any of the other Transaction Agreements
                shall be
                false or misleading in any material respect at the time made;
                or

            


    

    


    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    
      	
               

            	
              iii.

            	
              The
                Company shall fail to perform or observe, in any material respect,
                any
                other covenant, term, provision, condition, agreement or obligation
                of any
                Note in this series and such failure shall continue uncured for a
                period
                of thirty (30) days after the Company’s receipt of written notice thereof
                from the Holder; or

            


    

    


    
      	
               

            	
              iv.

            	
              The
                Company shall fail to perform or observe, in any material respect,
                any
                covenant, term, provision, condition, agreement or obligation of
                the
                Company under any of the Transaction Agreements and such failure
                shall
                continue uncured for a period of thirty (30) days after the Company’s
                receipt of written notice thereof from the Holder;
                or

            


    

    


    
      	
               

            	
              v.

            	
              The
                Company shall (1) admit in writing its inability to pay its debts
                generally as they mature; (2) make an assignment for the benefit
                of
                creditors or commence proceedings for its dissolution; or (3) apply
                for or
                consent to the appointment of a trustee, liquidator or receiver for
                its or
                for a substantial part of its property or business;
                or

            


    

    


    
      	
               

            	
              vi.

            	
              A
                trustee, liquidator or receiver shall be appointed for the Company
                or for
                a substantial part of its property or business without its consent
                and
                shall not be discharged within sixty (60) days after such appointment;
                or

            


    

    


    
      	
               

            	
              vii.

            	
              Any
                governmental agency or any court of competent jurisdiction at the
                instance
                of any governmental agency shall assume custody or control of the
                whole or
                any substantial portion of the properties or assets of the Company
                and
                shall not be dismissed within sixty (60) days thereafter;
                or

            


    

    


    
      	
               

            	
              viii.

            	
              Any
                money judgment, writ or warrant of attachment, or similar process
                in
                excess of Seven Hundred Fifty Thousand ($750,000) Dollars in the
                aggregate
                shall be entered or filed against the Company or any of its properties
                or
                other assets and shall remain unpaid, unvacated, unbonded or unstayed
                for
                a period of sixty (60) days or in any event later than five (5) days
                prior
                to the date of any proposed sale thereunder;
                or

            


    

    


    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    
      	
               

            	
              ix.

            	
              Bankruptcy,
                reorganization, insolvency or liquidation proceedings or other proceedings
                for relief under any bankruptcy law or any law for the relief of
                debtors
                shall be instituted by or against the Company and, if instituted
                against
                the Company, shall not be dismissed within sixty (60) days after
                such
                institution or the Company shall by any action or answer approve
                of,
                consent to, or acquiesce in any such proceedings or admit the material
                allegations of, or default in answering a petition filed in any such
                proceeding.

            


    

    


    (b)           If
      an Event of Default shall have occurred and is continuing, then, or at any
      time
      thereafter, and in each and every such case, unless such Event of Default shall
      have been cured or waived in writing by the Holder (which waiver shall not
      be
      deemed to be a waiver of any subsequent default) (the period during which such
      Event of Default shall be continuing until such cure or waiver, the “Default
      Period”),

    


    (i)
      at
      the option of the Holder and in the Holder's sole discretion, the Holder may
      consider this Note immediately due and payable (and the Maturity Date shall
      be
      accelerated accordingly; the “Default Maturity Date”), without presentment,
      demand, protest or notice of any kinds, all of which are hereby expressly
      waived, anything herein or in any note or other instruments contained to the
      contrary notwithstanding, and the Holder may immediately enforce any and all
      of
      the Holder's rights and remedies provided herein or any other rights or remedies
      afforded by law, including, but not necessarily limited to, the equitable remedy
      of specific performance and injunctive relief; and

    


    (ii)
      the
      terms of Appendix I to this Note shall be effective.

    


    


    


    [Balance
      of page intentionally left blank]

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    14.           In
      the event for any reason, any payment by or act of the Company or the Holder
      shall result in payment of interest which would exceed the limit authorized
      by
      or be in violation of the law of the jurisdiction applicable to this Note,
      then
ipso facto the obligation of the Company to pay interest or perform
      such act or requirement shall be reduced to the limit authorized under such
      law,
      so that in no event shall the Company be obligated to pay any such interest,
      perform any such act or be bound by any requirement which would result in the
      payment of interest in excess of the limit so authorized.  In the
      event any payment by or act of the Company shall result in the extraction of
      a
      rate of interest in excess of a sum which is lawfully collectible as interest,
      then such amount (to the extent of such excess not returned to the Company)
      shall, without further agreement or notice between or by the Company or the
      Holder, be deemed applied to the payment of principal, if any, hereunder
      immediately upon receipt of such excess funds by the Holder, with the same
      force
      and effect as though the Company had specifically designated such sums to be
      so
      applied to principal and the Holder had agreed to accept such sums as an
      interest-free prepayment of this Note.  If any part of such excess
      remains after the principal has been paid in full, whether by the provisions
      of
      the preceding sentences of this Section or otherwise, such excess shall be
      deemed to be an interest-free loan from the Company to the Holder, which loan
      shall be payable immediately upon demand by the Company.  The
      provisions of this Section shall control every other provision of this
      Note.

    


    IN
      WITNESS WHEREOF, the Company has
      caused this instrument to be duly executed by an officer thereunto duly
      authorized.

    


    Dated:
      _________________, 2007

    


    RIM
      SEMICONDUCTOR COMPANY

    


    By:_______________________________________

    


    __________________________________________

    (Print
      Name)

    __________________________________________(Title)

    


    


    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    APPENDIX
      I

    TO

    RIM
      SEMICONDUCTOR COMPANY

    SENIOR
      SECURED PROMISSORY NOTE SERIES 07-02

    


    Capitalized
      terms not otherwise defined herein shall have the meanings ascribed to them
      in
      the Bridge Loan Agreement or in the Note.

    


    1.           A.           
      (i)  For purposes of this Appendix, the following terms shall have the
      meanings indicated below:

    


    “Conversion
      Price” means the amount equal to (x) the average Closing Price for the five (5)
      Trading Days ending on the Trading Day immediately before the Conversion Date,
      multiplied by (y) seventy-five percent (75%); provided, however, that the
      Conversion Price shall in no event be less than $0.01.

    


    “Closing
      Price” means the 4:00 P.M. closing bid price of the Common Stock on the
      Principal Trading Market on the relevant Trading Day(s), as reported by the
      Reporting Service for the relevant date(s).

    


    “Reporting
      Service” means Bloomberg LP or if that service is not then reporting the
      relevant information regarding the Common Stock, a comparable reporting service
      of national reputation selected by a Majority in Interest of the Holders and
      reasonably acceptable to the Company.

    


    (d)  “Majority
      in Interest of the Holders” means, as of the relevant date, one or more Holders
      whose respective outstanding principal amounts of the Notes of this Series
      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 of this Series
      held by all Holders on that date.

    


    (ii)  At
      any time during the
      Default Period and prior to the date this Note is paid in full in accordance
      with its terms, the Holder of this Note is entitled, at its option, subject
      to
      the following provisions of this Appendix I, to convert  the principal
      and the accrued interest, if any, of this Note into shares of Common Stock,
      $0.001 par value ("Common Stock"), of the Company at the Conversion
      Price.

    


    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    B.           Conversion
      shall be effectuated by faxing a Notice of Conversion (as defined below) to
      the
      Company as provided in this paragraph.  The Notice of Conversion shall
      be executed by the Holder of this Note and shall evidence such Holder's
      intention to convert this Note or a specified portion hereof in the form annexed
      hereto as Exhibit A. No fractional shares of Common Stock or scrip representing
      fractions of shares will be issued on conversion, but the number of shares
      issuable shall be rounded to the nearest whole share.  The date on
      which notice of conversion is given (the "Conversion Date") shall be deemed
      to
      be the date on which the Holder faxes or otherwise delivers the conversion
      notice ("Notice of Conversion") to the Company so that it is received by the
      Company on or before such specified date, provided that, if such conversion
      would convert the entire remaining principal of this Note, the Holder shall
      deliver to the Company the original Note being converted no later than five
      (5)
      Trading Days thereafter.  Delivery of the Notice of Conversion shall
      be accepted by the Company by hand, mail or courier delivery at the address
      specified in said Exhibit A or at the facsimile number specified in said Exhibit
      A (each of such address or facsimile number may be changed by notice given
      to
      the Holder in the manner provided in the Bridge Loan
      Agreement).  Certificates representing Common Stock upon conversion
      (“Conversion Certificates”) will be delivered to the Holder at the address
      specified in the Notice of Conversion (which may be the Holder’s address for
      notices as contemplated by the Bridge Loan Agreement or a different
      address),  via express courier, by electronic transfer or otherwise,
      within three (3) Trading Days (such third Trading Day, the “Delivery Date”)
      after the relevant Conversion Date.  The Holder shall be deemed to be
      the holder of the shares issuable to it in accordance with the provisions of
      this paragraph (B) on the Conversion Date.

    


    C.           Notwithstanding
      any other provision hereof or of any of the other Transaction Agreements, in
      no
      event (except (i) as specifically provided herein as an exception to this
      provision, or (ii) while there is outstanding a tender offer for any or all
      of
      the shares of the Company’s Common Stock) shall the Holder be entitled to
      convert any portion of this Note, or shall the Company have the obligation
      to
      convert such Note to the extent that, after such conversion or issuance of
      stock
      in payment of interest, the sum of (1) the number of shares of Common Stock
      beneficially owned by the Holder and its affiliates (other than shares of Common
      Stock which may be deemed beneficially owned through the ownership of the
      unconverted portion of the Note or other convertible securities or of the
      unexercised portion of warrants or other rights to purchase Common Stock),
      and
      (2) the number of shares of Common Stock issuable upon the conversion of the
      Notes with respect to which the determination of this proviso is being made,
      would result in beneficial ownership by the Holder and its affiliates of more
      than 4.99% of the outstanding shares of Common Stock (after taking into account
      the shares to be issued to the Holder upon such conversion).  For
      purposes of the proviso to the immediately preceding sentence, beneficial
      ownership shall be determined in accordance with Section 13(d) of the Securities
      Exchange Act of 1934, as amended, except as otherwise provided in clause (1)
      of
      such sentence.  Nothing herein shall preclude the Holder from
      disposing of a sufficient number of other shares of Common Stock beneficially
      owned by the Holder so as to thereafter permit the continued conversion of
      this
      Note.

    


    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    D.           (i)           No
      later than the thirtieth day of the Default Period (such day the “Required
      Filing Date”), the Company shall prepare and file with the SEC a Registration
      Statement registering for resale by the Holder all Conversion Shares
      (“Registrable Securities”).  Notwithstanding the requirement to
      register all Registrable Securities, the Company’s obligation to register the
      Registrable Securities shall initially be satisfied by the registration of
      the
      Initial Number of Shares to Be Registered (as defined below).  The
“Initial Number of Shares to Be Registered” is a number of shares of Common
      Stock which is at least equal to the sum of two hundred percent (200%) of the
      number of shares into which the Note and all interest thereon for one year
      from
      the commencement of the Default Period would be convertible at  the
      time of filing of such Registration Statement (assuming for such purposes that
      the Note had been eligible to be converted, and had been converted, into
      Conversion Shares in accordance with its terms, whether or not such eligibility,
      accrual of interest or conversion had in fact occurred as of such date) based
      on
      the Conversion Price in effect on, or within three (3) Trading Days prior to,
      the date the Registration Statement is filed (or subsequently amended). Unless
      otherwise specifically agreed to in writing in advance by the Holder, the
      Registration Statement shall not restrict or limit the prices at which the
      shares sold by the selling stockholders thereunder may be sold and shall also
      state that, in accordance with Rule 416 and 457 under the Securities Act, it
      also covers such indeterminate number of additional shares of Common Stock
      as
      may become issuable upon conversion of the Note to prevent dilution resulting
      from stock splits, stock dividends or similar transactions.

    


    (ii)           The
      Company will use its reasonable best efforts to cause such Registration
      Statement to be declared effective on a date (the “Required Effective Date”)
      which is no later than the earlier of (X) five (5) days after oral or written
      notice by the SEC that it may be declared effective or (Y) the ninetieth day
      after the Closing Date.

    


    (iii)           If
      (X) the Company does not file the Registration Statement by the Required Filing
      Date and/or (Y) for any reason,  the Registration Statement is not
      declared effective by the Required Effective Date and/or (Z) the Company does
      not maintain the effectiveness of such Registration Statement for at least
      two
      years or the earlier date on which the Note has been fully paid or converted
      and
      all Conversion Shares have been sold, the Company will pay the Holder in cash
      an
      amount equal to 1.85185% of the outstanding principal amount of the Note of
      the
      Holder for each 30 day period (prorated for partial periods) until such filing,
      such  effective date or such effectiveness is re-established, as the
      case may be.  The outstanding principal amount of the Note shall be
      determined as of the close of business on the last day preceding the first
      day
      of each such 30-day period. The parties acknowledge that the damages which
      may
      be incurred by the Holder in those events may be difficult to
      ascertain.  The parties agree that the amounts payable pursuant to the
      foregoing provisions of this Section 1(D) are liquidated damages and represent
      a
      reasonable estimate on the part of the parties, as of the Issue Date, of the
      amount of such damages.

    


    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    2.           (a)           The
      term “Lower Price Transaction” means a New Transaction offered or consummated
      during the New Transaction Period (as defined below), where the lowest New
      Transaction Price (as defined below) is, or by its terms or by an existing
      understanding of the Company and the New Investor, could subsequently be
      adjusted or revised to be, lower than the then effective Conversion Price of
      the
      Note (such Conversion Price, in each case, subject to adjustment in the same
      manner as the initial Exercise Price of the Warrant is adjusted, other than
      as a
      result of the application of this Section 2 of Appendix I).

    


    (b)           “New
      Transaction Price” means the Basic New Transaction Price (as defined below)
      except that if the New Transaction Exercise Price is lower than the Basic New
      Transaction Price, it means the New Transaction Exercise Price.

    


    (c)           “Basic
      New Transaction Price” means, as may be applicable, on a per share basis, the
      lower of (1) the lowest fixed purchase price of any shares of the New Common
      Stock contemplated in the New Transaction, or (2) the lowest conversion price
      or
      put or call price which would be applicable under the terms of the New
      Transaction; in each such case, whether such purchase or conversion price or
      put
      or call price is stated or otherwise specified or is determined on the closing
      date of the New Transaction by the application of a formula set in the documents
      reflecting the New Transaction or could result from adjustments or revisions
      contemplated in the relevant agreements for the New Transaction and whenever
      such adjustment or revision would be applicable (and if no minimum purchase
      price,  conversion price or put or call price, as the case may be, is
      set, it shall be assumed that such minimum purchase price or conversion price
      is
      $.01); and provided, further, that, if the securities issued in the New
      Transaction are issued at a Face Value Discount (as defined below), the New
      Transaction Price shall be adjusted to reflect such discount.7

    


    (d)           “New
      Transaction Exercise Price” means the lowest exercise price per share applicable
      to the warrants, option or similar instrument (howsoever denominated;
      collectively, “New Transaction Warrants”) included in such New Transaction,
      whether such exercise price is stated or could result from adjustments or
      revisions contemplated in the relevant agreements for the New Transaction and
      whenever such exercise price would be applicable (and,  if no minimum
      exercise price is set, it shall be assumed that such minimum exercise price
      is
      $.01).

     
      
        

      

    

    7By
      way of illustration, if convertible preferred shares
      having a stated value of $1 million and a fixed conversion price of $0.50
      (resulting in 2,000,000 shares) were sold for a purchase price of $800,000,
      the
      effective New Transaction Price would be $0.40 (the conversion price at which
      $800,000 would convert into 2,000,000 shares).


    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    (e)           “Face
      Value Discount” means consideration less than, as the case may be, (x) the
      number of shares being issued multiplied by the stated purchase price, (y)
      the
      stated principal amount of a debenture, note or similar instrument or (z) the
      stated value of the shares of convertible stock.

    


    (f)           The
      term “New Transaction Period” means the period commencing on the Issue Date and
      continuing until the date on which this Note is fully paid and/or
      converted.

    


    3.           The
      Company covenants and agrees that, if there is a Lower Price Transaction during
      the New Transaction Period, then the Conversion Price on the unexercised portion
      of this Note shall be adjusted to equal the lowest New Transaction Price
      applicable to the Lower Price Transaction.

    
 

      
       

    

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    


    EXHIBIT
      A

    


    RIM
      SEMICONDUCTOR COMPANY

    


    NOTICE
      OF
      CONVERSION

    OF

    SENIOR
      SECURED PROMISSORY NOTE DUE DECEMBER ____,  2007

    SERIES
      07-02

    (To
      be
      Executed by the Registered Holder in Order to Convert the Note)

    


    
      	
              TO:

            	
              RIM
                SEMICONDUCTOR
                COMPANY                                                                                                VIA
                FAX:   (503)
                257-6622

            


    

    305
      NE 102nd Ave., Suite
      105

    Portland,
      OR 97220

    Attn:
      President

    


    FROM:
      _________________________________________________________
      (“Holder”)

    


    DATE:
      _______________________________________________ (the “Conversion
      Date”)

    


    
      	
              RE:

            	
              Conversion
                of $_________________ principal amount (the “Converted Note”) of the
                Senior Secured Promissory Note Due December ___, 2007 (the “Note”) of RIM
                SEMICONDUCTOR COMPANY (the “Company”) into ________________________ shares
                (the “Conversion Shares”) of Common Stock (defined
                below)

            


    

    


    The
      captioned Holder hereby gives
      notice to the Company, pursuant to the Note of RIM SEMICONDUCTOR COMPANY that
      the Holder elects to convert the Converted Note into fully paid and
      non-assessable shares of Common Stock, $0.001 par value (the “Common Stock”), of
      the Company as of the Conversion Date specified above.  Said
      conversion shall be based on the following Conversion Price

    


    
      	
               

            	
              

            	
              $_________________,
                representing the Conversion Price (as defined in the Note; as adjusted
                to
                reflect capital adjustments after the Issue
                Date)

            


    

    


    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    
      	
               

            	
              

            	
              $________________,
                representing the Conversion Price (as adjusted pursuant to the terms
                of
                Appendix I to the Note)

            


    

    Based
      on
      this Conversion Price, the number of Conversion Shares indicated above should
      be
      issued in the following name(s):

    


    Name
      and Record Address                                     
Conversion
      Shares

    _______________________________                                                                                     _______________

    _______________________________                                                                                     _______________

    _______________________________                                                                                     _______________

    


    It
      is the intention of the Holder to
      comply with the provisions of Section 1(C) of Appendix I to the Note regarding
      certain limits on the Holder's right to convert thereunder.  The
      Holder believe this conversion complies with the provisions of said Section
      1(C).  Nonetheless, to the extent that, pursuant to the conversion
      effected hereby, the Holder would have more shares than permitted under said
      Section, this notice should be amended and revised, ab initio, to refer to
      the
      conversion which would result in the issuance of shares consistent with such
      provision. Any conversion above such amount is hereby deemed void and
      revoked.

    


    As
      contemplated by the Note, this
      Notice of Conversion is being sent by facsimile to the telecopier number and
      officer indicated above.

    


    If
      this Notice of Conversion represents
      the full conversion of the outstanding balance of the Converted Note, the Holder
      either (1) has previously surrendered the Converted Note to the Company or
      (2)
      will surrender (or cause to be surrendered) the Converted Note to the Company
      at
      the address indicated above by express courier within five (5) Trading Days
      after delivery or facsimile transmission of this Notice of
      Conversion.

    


    The
      certificates representing the
      Conversion Shares should be transmitted by the Company to the
      Holder

    


               via
      express courier, or

    


               by
      electronic transfer

    


    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    within
      the time contemplated by the Note after receipt of this Notice of Conversion
      (by
      facsimile transmission or otherwise) to:

    


    _____________________________________

    _____________________________________

    _____________________________________

    


    


    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    As
      contemplated by the Note, the
      Company should also pay all accrued but unpaid interest on the Converted Note
      to
      the Holder.

    


    --If
      the Company elects to pay such
      interest  in Common Stock, as contemplated by and subject to the
      provisions of the Note, such shares should be issued in the name of the Holder
      and delivered in the same manner as, and together with, the Conversion
      Shares.

    


    --If
      the Company elects or is required
      to pay the interest in cash, such payment should be made by wire transfer as
      follows:8

    


    ___________________________________

    


    ___________________________________

    


    ___________________________________

    


    


    _____________________________________

    (Print
      name of Holder)

    


    By:
      __________________________________

    (Signature
      of Authorized
      Person)

    


    ______________________________________

    (Printed
      Name and Title)

    


    

      
        


    

    
      8Information
        should
        include the following:

       

       

      All
        Wires:

      (1)
        Bank
        Name

      (2)
        Bank Address (including street,
        city, state)

      (3)
        ABA or Wire Routing
        No.

      (4)
        Account Name

      (5)
        Account Number

      


      If
        Wire
        is going to International (Non-US) Bank, all of the above
plus:

      (6)
        SWIFT Number

       

      4