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. 06-01- (1) US$_____________(2)
RIM SEMICONDUCTOR COMPANY
SECURED PROMISSORY NOTE DUE MAY ____, 2006(3)
THIS NOTE is one of a duly authorized issue of up to $810,000 of RIM
SEMICONDUCTOR COMPANY, a corporation organized and existing under the laws of
the State of Utah (the "Company"), designated as its Secured Promissory Note
Series 06-01.
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.
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(1)Insert unique Note number for each issuance.
(2)Insert amount equal to 108% of Holder's Purchase Price.
(3)Insert date which is later of May 25, 2006 or 120 days after the
Closing Date
(4)See fn 2.
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This Note or its predecessor was originally issued on ________, 200_(5)
(the "Issue Date").
This Note is being issued pursuant to the terms of the Bridge Loan
Agreement, dated as of January 24, 2006 (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 fourteen percent (14%) 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.
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(5)Insert the Advance Date or the Closing Date, as the case may be.
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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) May ____,
2006(6) (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 Two Million Dollars ($2,000,000). 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.
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(6)See fn 3.
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(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.
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.
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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
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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
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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), 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.
[Balance of page intentionally left blank]
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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: _________________, 2006
RIM SEMICONDUCTOR COMPANY
By:_______________________________________
__________________________________________
(Print Name)
__________________________________________
(Title)
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