Document:

Annex V to Bridge Loan

    EXHIBIT
      10.4

     

    ANNEX
      V

    TO

    BRIDGE
      LOAN AGREEMENT

    

    SECURITY
      INTEREST AGREEMENT

     

    SECURITY
      INTEREST AGREEMENT
      ("Security Interest Agreement"), dated as of March 26, 2007, by and among the
      persons set forth on Schedule 1 (each a “Secured Party” and collectively, the
“Secured Parties”), RIM SEMICONDUCTOR COMPANY (formerly known as New Visual
      Corporation), 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 Party 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 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. 

     

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

     

    
      
        
        

      

      
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“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. 

     

    “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. 

     

    
      
        
        

      

      
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    (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. 

     

    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. 

     

    
      
        
        

      

      
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    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:

     

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

     

    
      
        
        

      

      
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    (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"). 

     

    (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.

     

    
      
        
        

      

      
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    (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. 

     

    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.

     

    
      
        
        

      

      
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    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.

     

    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. 

     

    
      
        
        

      

      
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    (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.
      

     

    (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. 

     

    
      
        
        

      

      
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    (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.
      

     

    (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. 

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    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 (o require Secured Party to proceed
        against any other person, or proceed against or exhaust anyothersecurity,
        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
        PARTY:

      DOUBLE
        U
        MASTER FUND LP 

       

      By:_________________________

      Navigator
        Management Ltd.

      Authorised
        Signatory

       

       

      DEBTOR:

      RIM
        SEMICONDUCTOR COMPANY

       

      By:_________________________

          President
        

       

       

      AGENT:

      KR1EGER
        & PRAGER, LLP

       

      By:_________________________

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
      1 

     

    The
      Secured Parties are:

    
      

        
          	
                  Name
                    

                	
                  Address
                    

                
	
                  Double
                    U Master Fund LP 

                	
                  Harbour
                    House, Waterfront Drive Road Town, Tortola, BVI 

                
	 	 

        

      

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    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. 

     

    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./

                	
                  Filing
                    Date:

                
	 	
                  Registration
                    No.: 

                	 
	 	 	 
	
                  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
                    

                
	 	 	 
	
                  
                    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
      - 1Convertible Promissory Note

    Exhibit
      10.5

    
 

    THIS
      NOTE AND THE SECURITIES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
      ACT”),
      OR ANY STATE SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD, PLEDGED, OR OTHERWISE
      TRANSFERRED OR DISPOSED OF UNLESS AND UNTIL THIS NOTE AND/OR SUCH SECURITIES
      ARE
      REGISTERED UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS OR
      AN
      EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.

    

    CONVERTIBLE
      PROMISSORY NOTE

    

      
        	
                $400,000.00

              	
                May
                  24, 2007

              
	 	
                Portland,
                  Oregon

              

      

    

     

    For
      value
      received, RIM SEMICONDUCTOR COMPANY, a Utah corporation (“Maker”),
      hereby unconditionally promises to pay to the order of The Charles R. Cono
      Trust
      (“Payee”)
      the
      principal sum of FOUR HUNDRED THOUSAND
      AND
      00/100 DOLLARS ($400,000.00), together with interest on the unpaid principal
      balance from time to time outstanding at a rate per annum equal to 10.0%
      (calculated on the basis of actual days elapsed, but computed as if each
      calendar year consisted of 360 days); provided that, in no event shall the
      interest rate hereunder exceed the Highest Lawful Rate (as defined in Paragraph
      4).

    

    Interest
      on this Convertible Promissory Note (“Note”)
      shall
      accrue from the date hereof. All principal of and interest on this Note shall
      be
      due and payable on August 22, 2007 (the “Maturity
      Date”).
      

     

    All
      payments on this Note shall be due and payable in lawful money of the United
      States of America at 5550 Baltimore Drive, La Mesa, California 91942-1776 (or
      such other place as Payee may from time to time designate).

    

    1. Events
      of Default and Remedies.
      In the
      event Maker fails to pay the amount due under this Note within ten Business
      Days
      (as hereafter defined) after the due date (a “Default”),
      the
      holder of this Note may (i) offset against this Note any sum or sums owed by
      the
      holder hereof to Maker, (ii) exercise its Optional Conversion rights under
      Paragraph 3, or (iii) proceed to protect and enforce its rights either by suit
      in equity and/or by action at law, or by other appropriate proceedings, whether
      for the specific performance of any covenant or agreement contained in this
      Note
      or to enforce any other legal or equitable right of the holder of this Note.
      As
      used herein, a “Business
      Day”
is
      any
      day other than a Saturday, Sunday or a legal holiday for financial institutions
      in Portland, Oregon.

    

    2. Prepayment.
      The
      unpaid principal balance of and accrued but unpaid interest on this Note may
      be
      prepaid in whole or in part at any time without premium or penalty, but only
      if
      all accrued interest on the amount of each principal prepayment is paid to
      the
      date of such principal prepayment.

    

    3. Optional
      Conversion Upon Default.

    

    (a) Conversion
      Option.
      If the
      Note is in Default, this Note shall be convertible at the option of Payee or
      other holder hereof (the “Optional
      Conversion”),
      in
      whole or in part, in lieu of and in satisfaction of the unpaid principal and
      unpaid interest hereunder, into that number of fully paid and nonassessable
      shares of Common Stock (as defined in Paragraph 4) as is equal to the quotient
      of the unpaid principal plus the unpaid interest divided by the applicable
      Conversion Price (as defined in Paragraph 4). Upon any Optional Conversion,
      the
      outstanding principal and unpaid interest due under this Note shall be reduced
      in full by an amount equal to the number of shares of Common Stock issued upon
      such conversion multiplied by the applicable Conversion Price.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    
 

    (b) Conversion
      Procedures.
      If
      Payee is entitled to and desires to convert this Note into Common Stock, it
      shall surrender this Note to Maker at its principal executive offices,
      accompanied by proper instruments of transfer to Maker or in blank, accompanied
      by irrevocable written notice to Maker that Payee elects so to convert this
      Note
      and the name or names (with address) in which a certificate or certificates
      for
      Common Stock are to be issued. Maker shall, as soon as practicable after such
      written notice and compliance with any other conditions herein contained,
      deliver at such office to Payee, certificates for the number of full shares
      of
      Common Stock to which it shall be entitled. Such conversion shall be deemed
      to
      have been made as of the date of such surrender of this Note, and the person
      or
      persons entitled to receive Common Stock or other securities deliverable upon
      conversion shall be treated for all purposes as the record holder or holders
      thereof on such date.

    

    (c) Certain
      Adjustments.
      The
      applicable Conversion Price and the number of securities issuable upon
      conversion of this Note shall be subject to adjustment from time to time as
      follows:

    

    (i) In
      case
      Maker shall at any time after the date hereof (1) pay a dividend or make a
      distribution on its capital stock that is paid or made in shares of stock of
      Maker, (2) subdivide its outstanding shares of Common Stock into a greater
      number of shares or (3) combine its outstanding shares of Common Stock into
      a smaller number of shares, then in each such case the applicable Conversion
      Price in effect immediately prior thereto and the securities issuable shall
      be
      adjusted retroactively as provided below so that Payee thereafter shall be
      entitled to receive the number of shares of Common Stock of Maker and other
      shares and rights to purchase stock or other securities which Payee would have
      owned or have been entitled to receive after the happening of any of the events
      described above had this Note been converted immediately prior to the happening
      of such event or any record date with respect thereto. In the event of the
      redemption of any shares referred to in clause (1), Payee shall have the right
      to receive, in lieu of any such shares or rights, any cash, property or
      securities paid in respect of such redemption. An adjustment made pursuant
      to
      this subparagraph (i) shall become effective immediately after the record
      date in the case of a dividend or distribution and shall become effective
      immediately after the effective date in the case of a subdivision or
      combination.

    

    (ii) Whenever
      the Conversion Price is adjusted as provided above, Maker shall compute the
      adjusted Conversion Price in accordance herewith and mail to Payee a notice
      stating that the Conversion Price has been adjusted and setting forth the
      adjusted Conversion Price.

    

    (iii) In
      the
      event that at any time, as a result of any adjustment made pursuant to this
      Paragraph, Payee shall become entitled to receive any shares of Maker other
      than
      shares of Common Stock or to receive any other securities, the number of such
      other shares or securities so receivable upon conversion of this Note shall
      be
      subject to adjustment from time to time in a manner and on terms as nearly
      equivalent as practicable to the provisions contained in these provisions with
      respect to Common Stock.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    
 

    (d) No
      Fractional Shares.
      No
      fractional shares or scrip representing fractional shares of Common Stock shall
      be issued upon conversion of this Note. All calculations of the number of shares
      of Common Stock to be issued upon conversion of this Note shall be rounded
      to
      the nearest whole share.

    

    (e) Reclassification,
      Consolidation, Merger or Sale of Assets.
      In case
      of any reclassification of Common Stock, any consolidation of Maker with, or
      merger of Maker into, any other person, any merger of another person into Maker
      (other than a merger which does not result in any reclassification, conversion,
      exchange or cancellation of outstanding shares of Common Stock of Maker), any
      sale or transfer of all or substantially all of the assets of Maker or any
      compulsory share exchange pursuant to which share exchange the Common Stock
      is
      converted into other securities, cash or other property, then lawful provision
      shall be made as part of the terms of such transaction whereby Payee shall
      have
      the right thereafter, during the period this Note shall be convertible
      hereunder, to convert this Note only into the kind and amount of securities,
      cash and other property receivable upon such reclassification, consolidation,
      merger, sale, transfer or share exchange by a holder of the number of shares
      of
      Common Stock of Maker into which this Note might have been converted immediately
      prior to such reclassification, consolidation, merger, sale, transfer or share
      exchange assuming such holder of Common Stock of Maker (i) is not a person
      with
      which Maker consolidated or into which Maker merged or which merged into Maker,
      to which such sale or transfer was made or a party to such share exchange,
      as
      the case may be (“constituent
      person”),
      or an
      affiliate of a constituent person and (ii) failed to exercise his rights of
      election, if any, as to the kind or amount of securities, cash and other
      property receivable upon such reclassification, consolidation, merger, sale,
      transfer or share exchange (provided that if the kind or amount of securities,
      cash and other property receivable upon such reclassification, consolidation,
      merger, sale, transfer or share exchange is not the same for each share of
      Common Stock of Maker held immediately prior to such consolidation, merger,
      sale
      or transfer by other than a constituent person or an affiliate thereof and
      in
      respect of which such rights of election shall not have been exercised
      (“non-electing
      share”),
      then
      the kind and amount of securities, cash and other property receivable upon
      such
      reclassification, consolidation, merger, sale, transfer or share exchange by
      each non-electing share shall be deemed to be the kind and amount so receivable
      per share by a plurality of the non-electing shares). Maker, the person formed
      by such consolidation or resulting from such merger or which acquires such
      assets or which acquires Maker’s shares, as the case may be, shall make
      provisions in its certificate or articles of incorporation or other constituent
      document to establish such right. Such certificate or articles of incorporation
      or other constituent document shall provide for adjustments which, for events
      subsequent to the effective date of such certificate or articles of
      incorporation or other constituent document, shall be as nearly equivalent
      as
      may be practicable to the adjustments provided for herein. The above provisions
      shall similarly apply to successive reclassifica-tions, consolidations, mergers,
      sales, transfers or share exchanges.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    
 

    (f) Reservation
      of Shares; Transfer Taxes; Etc.
      Maker
      shall at all times reserve and keep available, out of its authorized and
      unissued stock, solely for the purpose of effecting the conversion of this
      Note,
      such number of shares of its Common Stock and other securities free of
      preemptive rights as shall from time to time be sufficient to effect the
      conversion of this Note. Maker shall from time to time, in accordance with
      the
      laws of the State of Utah, increase the authorized number of shares of Common
      Stock if at any time the number of shares of Common Stock not outstanding shall
      not be sufficient to permit the conversion of this Note. If the Common Stock
      is
      listed on the New York Stock Exchange, the Nasdaq National Market, or any other
      national securities exchange, Maker will, if permitted by the rules of such
      exchange, list and keep listed on such exchange, upon official notice of
      issuance, all shares of Common Stock issuable upon conversion of this Note.
      Maker shall pay any and all issue or other taxes that may be payable in respect
      of any issue or delivery of shares of Common Stock or other securities upon
      conversion of this Note by Payee.

    

    4. Defined
      Terms.
      As used
      in this Note, the following terms have the respective meanings set forth
      below:

    

    (a) “Common
      Stock”
shall
      mean the common stock of Maker and any capital stock into which such common
      stock shall have been changed and any other stock resulting from any
      reclassification of such stock which is not preferred as to dividends or assets
      over any other class of stock which shall be in effect from time to
      time.

    

    (b) “Conversion
      Price”
shall
      mean, subject to adjustment as provided in Paragraph 3(c) hereof,
      $0.08.

    

    (c)
       “Highest
      Lawful Rate”
means,
      at any given time during which indebtedness shall be outstanding hereunder,
      the
      maximum nonusurious interest rate, if any, that at any time or from time to
      time
      may be contracted for, taken, reserved, charged, or received on the indebtedness
      evidenced by this Note under the laws of the United States and the State of
      Oregon applicable thereto which are presently in effect or, to the extent
      allowed by law, under such applicable laws of the United States and the State
      of
      Oregon which may hereafter be in effect and which allow a higher maximum
      nonusurious interest rate than applicable laws now allow, in any case after
      taking into account, to the extent required by applicable law, any and all
      relevant payments or charges under this Note and any documents executed in
      connection herewith.

    

    5. No
      Impairment.
      Maker
      will not, by amendment of its certificate or articles of incorporation or
      through any reorganization, transfer of assets, merger, dissolution, issuance
      or
      sale of securities or any other voluntary action or inaction, intentionally
      avoid or seek to avoid the observance or performance of any of the material
      terms to be observed or performed hereunder by Maker but will at all times
      in
      good faith assist in the carrying out of all the provisions of this
      Note.

    

    6. Cumulative
      Rights.
      No
      delay on the part of the holder of this Note in the exercise of any power or
      right under this Note, or under any document or instrument executed in
      connection herewith, shall operate as a waiver thereof, nor shall a single
      or
      partial exercise of any other power or right.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    
 

    7. Waiver.
      Maker,
      and each surety, endorser, guarantor, and other party ever liable for the
      payment of any sum of money payable on this Note, jointly and severally waive
      demand, presentment, protest, notice of nonpayment, notice of intention to
      accelerate, notice of acceleration, notice of protest, and any and all lack
      of
      diligence or delay in collection or the filing of suit hereon which may occur;
      agree that their liability on this Note shall not be affected by any renewal
      or
      extension in the time of payment hereof, by any indulgences, or by any release
      or change in any security for the payment of this Note; and hereby consent
      to
      any and all renewals, extensions, indulgences, releases, or changes hereof
      or
      hereto, regardless of the number of such renewals, extensions, indulgences,
      releases, or changes.

    

    8. Attorneys’
      Fees and Costs.
      Maker
      promises to pay, upon Payee’s demand therefor, all costs and expenses, including
      reasonable attorneys’ fees (defined as being actual hours worked at the standard
      billing rates of the attorneys involved in any matter), incurred in the
      collection and enforcement of this Note.

     

    9. NO
      ORAL AGREEMENTS.
      THIS
      NOTE (ALONG WITH THE OTHER DOCUMENTS AND INSTRUMENTS EXECUTED AND DELIVERED
      PURSUANT THERETO) REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY
      NOT
      BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
      AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
      PARTIES.

    

    10. Governing
      Law.
      This
      Note shall be governed by and construed in accordance with the laws of the
      State
      of Oregon.

    

    11. Severability.
      If any
      provision of this Note shall be held to be unenforceable by a court of competent
      jurisdiction, such provisions shall be severed from this Note and the remainder
      of this Note shall continue in full force and effect.

    

    12. Assignment.
      This
      Note, or any portion hereof, may be assigned by Payee without the consent of
      Maker. Any such assignment by Payee shall be in compliance with the Securities
      Act and applicable state securities laws.

    

    

    [Signature
      Page Follows]

    
      
         

        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    

    IN
      WITNESS WHEREOF, the undersigned has executed this Note as of the day and year
      first above written.

    

    
      	 	 	 
	
               

            	
              MAKER:

            	 
	 	 	 
	
               

            	
              RIM
                SEMICONDUCTOR COMPANY

            	 
	 	 	 
	 	 	 
	
               

            	
              By:
                /s/
                Brad Ketch            

            	 
	
               

            	
              Brad
                Ketch

            	 
	
               

            	
              Chief
                Executive Officer

            	 
	 	 	 
	
               

            	
              Address:
                305 N.E. 102nd Avenue, Suite 105

            	 
	
               

            	
              Portland,
                Oregon 97220

            	 
	
               

            	
              Phone:
                (503) 257-6700

            	 
	
               

            	
              Fax:
                (503) 257-6622

            	 
	 	 	 
	 	 	 
	
               

            	
              ACKNOWLEDGED:

            	 
	 	 	 
	
               

            	
              PAYEE:

            	 
	 	 	 
	
               

            	
              THE
                CHARLES R. CONO TRUST

            	 
	 	 	 
	
               

            	
              By:
                ___________________________

            	 
	 	
              Charles
                R. Cono, Trustee

            	 
	 	 	 

    

     

     

    6

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