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EXHIBIT 10.52
An agreement is made this 23RD day of MARCH 1998 by and among :
CATALYST SEMICONDUCTOR, INC ("CSI" ) a Delaware, U.S.A. corporation, having its
principle place of business at 1250 Borregas Avenue, Sunnyvale, California
94089, U.S.A. and
TRIO-TECH INTERNATIONAL PTE LTD ("TTI") having its principle place of business
at 5 Kian Teck Road, Singapore 628765
Whereas TTI is willing to supply OKI brand wafers to CSI from third
party supplier OKI Electronics Industry Co., Ltd ("OKI") with its principle
place of business at 4-10-3 Shibaura, Minato-ku, Tokyo, 108, Japan.
Whereas CSI is willing to purchase OKI brand wafers from TTI under the
following terms and conditions as agreed hereunder:
1. AGREEMENT
1.1. CSI will place orders with TTI for wafer purchases for amount not
exceeding US $300,000 ("principal sum" as defined under clause 2.3) per
month. Maximum total cumulative exposure to TTI shall be only US
$900,000 with maximum credit period being three (3) months.
1.2. In consideration for obtaining credit terms from OKI, TTI will issue a
standby letter of credit to OKI.
1.3 TTI will then place orders with OKI for same amount of wafers as placed
upon itself by CSI and give instructions to OKI similar shipping
details as per CSI' s instructions.
1.4. OKI will only ship out the wafers to CSI's designated locations upon
TTI's instructions and upon receiving the purchase orders from TTI.
1.5. CSI shall not in any way instruct OKI to proceed with any shipment for
orders secured through TTI.
1.6. OKI shall not in any case, activate shipment orders secured by TTI upon
instructions from CSI, whether verbal or written.
1.7. In the event that CSI gave direct instruction to OKI to ship the wafers
and OKI obliged to such instructions, TTI shall not be responsible for
the shipment and CSI will be liable to pay OKI for the wafers.
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1.8 CSI agrees to remain current on all other payments/invoices due to TTI
for services rendered besides the invoices for wafer purchases. These
services include reimbursements for advanced payment made by TTI on
behalf of CSI, advanced payroll for CSI's employees, burn-in services,
tape and reel services and all other business services as and when
incurred between TTI and CSI.
2. PAYMENT TERMS
2.1 CSI shall make payment to TTI within 90 days upon OKI's shipment of
goods to CSI.
2.2 TTI shall only forward payment to OKI after receiving full payment
which consists of the principal sum plus interest (as stipulated under
clause 2.5 and 2.6) from CSI.
2.3 The principal sum includes the cost of wafer plus whatever air freight,
handling charges, seaport charges, taxes, insurance or other expenses
incurred in bringing the wafers to CSI's specified locations. These
shall be stated clearly in the invoice from OKI to TTI and shall total
up to the credit limit of US $300,000 per month or cummulative US
$900,000 for three months.
2.4 TTI shall not be responsible for any other costs incurred besides that
stated in OKI's invoice to TTI. Any incidental expenses or costs
incurred will be charged to and fully responsible by CSI.
2.5 CSI will pay TTI the full payment which is the principal sum according
to clause 2.3 above plus interest rate of 12.125 percent per annum up
to ninety (90) days.
2.6 Interest of 2 percent per month or the highest allowable rate shall be
charged for any outstanding receivables unpaid after the 90 days
credit.
2.7 Should CSI's outstanding payments for all other services and goods
provided by TTI besides the wafer products (as stipulated in clause
1.8) exceed 30 days, TTI reserves the right to halt all wafer shipment
and instruct OKI to halt such shipment until the invoices are paid.
3. SECURITY
3.1 As a security to TTI, CSI shall hold a minimum of US$1 million (one
million dollars) worth of inventory at Trio-Tech's facilities in
Bangkok, Thailand at any point in time.
4. DEFAULTS
4.1 In the event that CSI shall default in its payments, and not cure any
such default within 30 days of written notification (Default date) from
TTI, TTI shall have the following options of 4.1a or 4.1b or a
combination of both 4.1a and 4.1b.:
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a. TTI will take possession of the inventories assigned to them
under clause 3.1 subject to the senior right of Coast Business
Credit.
b. TTI will convert all amounts due and payable to TTI to common
stocks of CSI, at 20 percent discount of the closing price
calculated based on the average of the last five (5) trading
days prior to default date (the "conversion price"). The
number of shares to be issued to TTI is determined by dividing
the said amount by the conversion price of CSI's common stock.
4.2 Under 4.1b., CSI must issue and TTI must receive the stock certificates
within two (2) weeks upon TTI's demand to convert the outstanding to
CSI common stocks. These shares must be FULLY transferable immediately
to any party without restrictions on the date of transfer, amount, and
category of buyers/transferees and shall be fully tradeable on the
stock exchange. If any such restrictions remain, CSI must take the
necessary steps to remove such restrictions before issuing the stocks
to TTI.
4.3 TTI shall appoint a valuer to conduct a valuation of the inventory
pledged to TTI
4.4 All valuations conducted and all charges and costs incurred to
determine the worth and value of the inventory shall be paid by TTI.
5. EVENTS OF DEFAULTS
5.1 The whole of the principal sum and interest thereon and any other
moneys covenanted to be paid by CSI under this agreement shall become
due and immediately repayable and the security hereby created shall
become enforceable in any of the following events:
a) if CSI shall commit a breach of any of the agreements,
stipulations, terms, covenants, conditions or undertakings
contained in this Agreement on its part to be observed and
performed and in the reasonable opinion of TTI has failed to
remedy it within fourteen (14) days after written notice
served by TTI.
b) if CSI ceases or threatens to cease to carry on its business.
c) if a petition shall be presented or an order be made or a
resolution be passed for winding up CSI,
d) if a distress or execution or other process of a Court of
competent jurisdiction be levied upon or issued against any
property of CSI and such distress execution or other process
as the case may be is not satisfied by CSI within seven (7)
days from the date thereof;
e) if in the reasonable opinion of TTI its security hereunder is
in jeopardy and notice thereof is given to CSI;
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g) if CSI is unable to pay its debts or any statutory
modification or renactment thereof or suspend the payment
thereof or enter into any arrangement or composition with its
or his creditors or there is declared by any competent court
or authority or moratorium on the payment of indebtedness;
h) if any legal proceedings suit or action shall be instituted
against CSI or event or events has or have occurred and a
situation exist and after review but TTI is of the reasonable
opinion that this will materially affect CSI's ability to
repay the principal and interest thereon and or to perform its
or other obligations under this agreement in accordance with
the terms thereof;
7. CANCELLATION OF ORDERS
7.1 Any cancellation of orders from CSI to TTI shall be made in writing and
communicated through facsimile. TTI shall forward the same to OKI
immediately.
7.2 If OKI in anyway, is not able to or refuse to cancel the order, CSI
undertakes to indemnify TTI from any losses and expenses arising from
cancellations orders from OKI by paying the full amounts so billed to
TTI by OKI.
7.3 TTI reserves the right to bill CSI 12.125 percent interest for any
outstanding payable for the cancelled orders and any reasonable
administrative charges deemed appropriate by TTI for handling the
cancelled orders.
8 WAIVER
8.1 No failure or delay on the part of TTI in exercising nor any omissions
to exercise any right, power, privilege or remedy accruing to TTI under
this agreement upon any default on the part of CSI shall impair any
such right, power, privilege or remedy or be construed to be a waiver
thereof or an acquiescence in such default, nor shall any action by TTI
in respect of any right, power, privilege or remedy or TTI in respect
of any other or subsequent default.
8.2 The security liabilities or obligations created by this agreement shall
continue to be valid and binding for all purposes whatsoever
notwithstanding:
a) any time or indulgence which TTI may from time to time grant
to CSI for the payment of moneys due to TTI or for the
observance or performance of any term, stipulation, covenant
or undertaking on the part of CSI to be observed and
performed:
b) any arrangement entered into or any composition accepted by
TTI modifying its rights and remedies by any alteration in the
obligations, terms, stipulations, covenants and undertakings
contained herein or by any forbearance whether as to payment
time performance or otherwise.
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9. COSTS
9.1 CSI shall pay to TTI or its solicitors on demand all reasonable fees
disbursements and expenses in connection with or incidental to this
agreement (including but not limited to TTI's solicitor's fees and
expenses on a solicitor and client basis) in connection with the
negotiation, preparation, execution, stamping and registration of this
agreement and the documents related thereto (not exceeding US $10,000
without the prior written consent of CSI) and shall further pay to TTI
or to its solicitors on demand all fees and expenses whatsoever
incurred payable to TTI in the maintenance, protection and enforcement
of its right under clauses 4.1b. and 4.2.
9.2 If obligations or any part thereof under this agreement shall be
required to be recovered through any process of law, or if the
obligation or any part thereof shall be placed in the hands of
solicitors for collection, CSI shall pay (in addition to the moneys
then due and payable hereunder) by TTI's solicitors' reasonable fees
and any other reasonable fees and expenses incurred in respect of such
collection.
10. EXPENSES INCURRED BY TTI FOR AND ON BEHALF OF CSI
10.1 All moneys expended by TTI hereunder from time to time for and on
behalf of CSI and for its account with interest thereon at the rate
aforesaid from the date of such payment, relating to airfreight,
handling charges, seaport charges, taxes, legal costs and reasonable
expenses incurred in bringing in the wafers to CSI's specified
locations shall be recoverable from CSI and shall be repaid on demand.
In default of payment such moneys shall be deemed to form part of the
principal and to be secured hereunder.
11. CHANGE IN CONSTITUTION
11.1 All security (ies), agreements (s), obligation (s) given or undertaken
by CSI shall continue to be valid and binding notwithstanding any
change in the constitution of CSI, if a corporation, by amalgamation,
consolidation, reconstruction, new shareholding or otherwise, and if a
firm, by retirement, expulsion, death, admission, accession or change
of any partners or otherwise.
12. WITHHOLDING TAX/CONSUMPTION TAX
12.1 All payments by CSI in respect of the goods shall be made in full,
without set-off, deductions or counterclaim and free of and without
deduction for or on account of tax unless CSI is required by law in any
jurisdiction to make any such payments subject to such withholdings or
deduction, in which case CSI shall pay such additional amount to TTI as
may be necessary in order that the actual amount received after such
withholding and deduction shall equal the amount that would have been
received if such withholding or deduction were not required.
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12.2 CSI shall pay in full to the appropriate taxing authority all taxes and
charges imposed by law in any jurisdiction on CSI and/or TTI with
regard to the credit given and promptly deliver to TTI the original or
certified copy of each receipt evidencing such payment. CSI shall fully
indemnify TTI from any liability with respect to the delay or failure
by CSI to pay such taxes or charges.
13 DISCLOSURE
13.1 CSI by acceptance of this agreement hereby authorises TTI to at any
time, disclose to any of its subsidiaries or companies and TTI's
appointed auditors, such information about CSI, the securities given to
TTI or any other information in connection with CSI or the arrangement
as TTI may in its absolute discretion think fit.
14 GOVERNING LAW
14.1 This Agreement shall be construed and have effect in all respects in
accordance with the laws of California. CSI and TTI hereby submits to
the jurisdiction of the U.S. Courts, but such submissions shall not be
construed so as to limit the right of TTI to commence proceedings in
the courts of any other country.
15 NOTICE
15.1 Any notice required or permitted to be given by any of the parties
under this agreement shall be deemed to have been given (1) at the time
it is delivered in person, or (2), five (5) days after despatch by
registered airmail or (3) on the business day immediately following the
day of despatch by facsimile, sent to the other party at the following
respective addresses or such new addresses as may from time to time be
supplied hereunder:
Catalyst Semiconductor Inc.
1250 Borregas Avenue, Sunnyvale, California 94089, USA
and
Trio-Tech International Pte Ltd
5 Kian Teck Road, Singapore 628765
16. INDEMNITY
16.1 CSI hereby indemnifies and holds TTI harmless from any and all
liability, costs,legal fees and damages by the purchase arrangement in
this agreement .
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17. TERM OF AGREEMENT
17.1. This Agreement shall be and continue to be in full force and effect for
a period of one (1) year from the date hereof unless sooner terminated
by either party hereto. If this agreement is found to be satisfactory
to both parties, this contract will be automatically extended from year
to year thereafter unless notice of termination be given in writing by
either party at least ninety (90) days prior to the termination date of
the original or any renewal period.
18. FORCE MAJEURE
18.1. TTI shall not be liable for loss, damage, detention, or delay resulting
from any cause whatsoever beyond its reasonable control or resulting
from such things as, but not limited to, fire, flood, strike, lockout,
civil or military authority, insurrection, riot, war, embargo,
transportation shortage or delay, wreck, or inability to obtain the
wafers, and delivery dates shall be extended to the extent of delays by
any of the foregoing or similar causes.
In witness hereof, the parties have caused this Agreement by their duly
authorized representatives as of the date first written above.
TRIO-TECH INTERNATIONAL PTE LTD
/s/ Victor Ting /s/ Yong Siew Wai
- ----------------------------------------- ----------------------------
Victor Ting Yong Siew Wai
Chief Financial Officer Chief Executive Officer
and Corporate Vice President and President
CATALYST SEMICONDUCTOR INC
/s/ Daryl Stemm /s/ Radu Vanco
- ----------------------------------------- ----------------------------
Daryl Stemm Radu Vanco
Vice President of Finance & Administration President and CEO
and Chief Financial Officer
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THIS VARIATION AGREEMENT is made the 16th day of April One Thousand
Nine Hundred and Ninety-Eight (1998) Between:-
A. CATALYST SEMICONDUCTOR, INC ("CSI") of Delaware, U.S.A. corporation,
having its principal place of business at 1250 Borregas Avenue,
Sunnyvale, California 94089, U.S.A. and
B. TRIO-TECH INTERNATIONAL PTE LTD ("TTI") having its principal place of
business at 5 Kian Teck Road, Singapore 628765
WHEREAS:
1. CSI and TTI have entered into an agreement on 23 March 1998 in
accordance the terms and conditions contained therein. A copy of the
said agreement is attached hereto marked as Annex A ("supply
agreement"). The said agreement is a back to back agreement with an
agreement which TTI is required to enter into with OKI Electronics
Industry Co. Ltd ("OKI") to procure the sale and supply of wafer to CSI
("purchase agreement"). Clause 2.1 of the purchase agreement provides
that TTI shall only forward payment to OKI after receiving full payment
from CSI. In consideration of TTI agreeing to vary the purchase
agreement with OKI by deleting clause 2.1 thereof, CSI has agreed to
enter into this variation agreement. A copy of the purchase agreement
containing clause 2.1 is attached hereto marked as Annex B. A copy of
the executed purchase agreement as amended by deleting clause 2.1 is
attached hereto marked as Annex C.
2. CSI and TTI have mutually agreed to vary the terms of the said
agreement in accordance with the terms and conditions hereunder.
IT IS HEREBY AGREED AS FOLLOW:
1. In consideration of TTI agreeing to vary the purchase agreement with
OKI by deleting clause 2.1 of the purchase agreement which reads "TTI
shall only forward payment to OKI after receiving full payment from
CSI", CSI hereby covenant that it will make full payment of all wafers
supplied to them by OKI regardless of any defect, damage, delay in
delivery or any discrepancy whatsoever relating to the wafers. CSI will
further indemnify TTI from and against all or any claim, damage or loss
which TTI may suffer by reason of any dispute CSI may have against OKI
in respect of the sale and supply of wafers. CSI will further hold TTI
harmless from any liability for any defect, damage, delay in delivery
or any discrepancy
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whatsoever arising from the supply of the wafers. For the avoidance of
doubt, TTI shall be entitled and shall not be in breach of the supply
agreement by releasing full payment to OKI of all wafers supplied by
them notwithstanding the presence of any defect, damage, delay in
delivery or any discrepancy whatsoever relating to the wafers.
2. Clause 3.1 of the supply agreement refers to U.S one million dollars
worth of "inventory at Trio-Tech's facilities in Bangkok, Thailand
..........." For the avoidance of doubt and for consistency, it is
hereby clarified that reference to "inventory" shall be reference to
"work-in-progress".
3. Clause 4.1(a) of the supply agreement provides as follow:-
"TTI will take possession of the inventories assigned to them under
clause 3.1 subject to the senior right of Coast Business Credit"
CSI is aware of the dilution of the above security. In consideration of
TTI agreeing to vary their contract with OKI in accordance with clause
1 above, the parties have therefore mutually agreed to vary the supply
agreement in accordance with the terms hereunder. CSI warrants that
they have legal title in the work in progress of the semiconductors
which are in the custody of Trio-Tech (Bangkok) Co. Ltd in Thailand.
CSI hereby agrees that in the event of any default by them under the
supply agreement and in particular to the failure by CSI to make
payment when due, TTI shall be entitled to sell, dispose or compel the
sale of the work in progress held by Trio-Tech (Bangkok) Co. Ltd for
the purpose of compensating them in respect of the loss sustained by
TTI by reason of CSI's default. CSI further covenants that in the event
that the right to sell the work in progress arises, they will do all
that is necessary for the purpose of transferring title in the work in
progress to any third party on the instructions of TTI and will in
addition authorise Trio-Tech (Bangkok) Co. Ltd to assist and effect the
sale or disposal. PROVIDED THAT, TTI shall only be entitled to sell
such work in progress as is necessary to compensate them for their loss
sustained by reason of CSI's default which said sum shall not exceed
US$1 million (US one million dollars).
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IN WITNESS WHEREOF, the parties have caused this Agreement by their
duly authorized representatives as of the date first written above.
TRIO-TECH INTERNATIONAL PTE LTD
/s/ Victor Ting /s/ Yong Siew Wai
- ----------------------------- --------------------------------
Victor Ting Yong Siew Wai
Chief Financial Officer Chief Executive Officer
and Corporate Vice President and President
CATALYST SEMICONDUCTOR INC
/s/ Daryl Stemm /s/ Radu Vanco
- ----------------------------- --------------------------------
Daryl Stemm Radu Vanco
Finance & Administration President and CEO
and Chief Financial Officer