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AMENDED AND RESTATED
STANDSTILL AGREEMENT
This AMENDED AND RESTATED STANDSTILL AGREEMENT is made as of September
14, 1998 by and between CATALYST SEMICONDUCTOR, INC., a corporation organized
and existing under the laws of the State of Delaware (the "CATALYST"), and ELEX
N.V., a corporation organized and existing under the laws of the Country of
Belgium ("PURCHASER"). This Agreement amends and restates that certain
Standstill Agreement dated as of May 26, 1998 (the "PRIOR AGREEMENT") between
the Company and Purchaser.
R E C I T A L S
In connection with negotiations relating to the proposed issuance by
Catalyst and purchase by Purchaser of shares of Catalyst's Common Stock,
Purchaser and the Company wish to amend and restate the Prior Agreement such
that Purchaser makes certain covenants to Catalyst so as to provide limits on
Purchaser's ownership of and voting of the Company's capital stock of Catalyst.
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises herein contained, the parties agree as follows:
A G R E E M E N T
1. Certain Definitions. Unless the context otherwise requires, the
following terms, for all purposes of this Agreement, shall have the meanings
specified in this Section 1:
"AFFILIATE" of any Person shall mean: (i) any entity which owns fifty
percent (50%) or more of such Person's Outstanding Voting Stock or which has the
power to appoint or elect a majority of the Board of Directors of such Person;
(ii) any entity in which such Person owns fifty percent (50%) or more of such
entity's Outstanding Voting Stock or for which such Person has the power to
appoint or elect a majority of the Board of Directors of such entity; (iii) any
entity having a common stockholder with such Person wherein such stockholder
owns fifty percent (50%) or more of such entity's Outstanding Voting Stock and
has the power to appoint a majority of the Board of Directors of such Person;
(iv) any entity having a common stockholder with such Person wherein such
stockholder owns fifty percent (50%) or more of such Person's Outstanding Voting
Stock and has the power to appoint a majority of the Board of Directors of such
entity; or (v) any entity having a common stockholder with such Person wherein
such stockholder has the power to appoint a majority of the Board of Directors
of such Person and such entity.
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"OUTSTANDING VOTING STOCK" of Catalyst, or another entity as the context
requires, shall mean the Common Stock of Catalyst (or such other entity) and any
other securities convertible into Common Stock of Catalyst (or such other
entity) having the power to vote in the election of directors of Catalyst (or
such other entity) then outstanding, other than securities having such power
only upon the happening of a contingency which has not yet occurred.
"PERSON" shall mean any individual, partnership, joint venture,
corporation, trust or unincorporated organization, or any business entity or
governmental authority, in any case whether acting in an individual, fiduciary
or other capacity
"VOTING POWER" shall mean the number of votes entitled to then be cast
by the Outstanding Voting Stock of Catalyst at any election of directors of
Catalyst, provided that, for the purpose of determining Voting Power, each share
of Preferred Stock of Catalyst, if any (the "PREFERRED STOCK"), shall be deemed
to be entitled to the number of votes equal to the number of shares of Common
Stock of Catalyst (the "COMMON STOCK") into which such share of Preferred Stock
could then be converted.
"VOTING STOCK" shall mean the Common Stock outstanding, assuming the
exercise or conversion of all outstanding securities convertible into or
exercisable or exchangeable for Common Stock and further assuming the issuance
of all shares of Common Stock reserved for issuance pursuant to stock options
whether or not yet granted, and any other securities issued by Catalyst having
the power to vote in the election of directors of Catalyst, other than
securities having such power only upon the happening of a contingency which has
not yet occurred.
2. Covenants of Purchaser.
2.1. Standstill Provisions. Purchaser shall not (and shall not
permit any Affiliate to), directly or indirectly,
(a) acquire from other holders of Voting Stock or other
securities convertible into or exchangeable or exercisable for Voting Stock,
beneficial ownership of any Voting Stock, any securities convertible into or
exchangeable for Voting Stock, or any other right to acquire Voting Stock
(except, in any case, by way of stock dividends, stock splits or other
distributions made to holders of any Voting Stock generally), or authorize or
make a tender, exchange or other offer which would result in such an
acquisition, without the prior written consent of Catalyst approved by the Board
of Directors of Catalyst, if the effect of such acquisition would be to increase
the Voting Power of all Voting Stock then beneficially owned by Purchaser (and
its Affiliates), or which Purchaser (and its Affiliates) collectively have a
right to acquire, to more than 5,500,000 shares (as appropriately adjusted for
stock dividends, stock splits, recapitalizations, reclassifications and the
like) or, following the Second Closing contemplated by the Common Stock Purchase
Agreement dated as of September 14, 1998 between the Company and Purchaser, to
more than 9,500,000 shares (as appropriately adjusted for stock dividends, stock
splits, recapitalizations, reclassifications and the like);
(b) deposit any shares of Voting Stock in a voting trust
or subject any Voting Stock to any arrangement or agreement with respect to the
voting of such Voting Stock;
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(c) otherwise act to seek to control the management, Board
of Directors, or policies of Catalyst (or any of its Affiliates), or, except as
required by law, make public statements with respect thereto;
(d) solicit, or induce others to solicit, "proxies" to
vote with respect to any securities issued by Catalyst or any of its Affiliates,
or become a "participant" or induce others to become a "participant" in any
solicitation of "proxies" to vote (as such terms are used in Regulation 14A
under the Securities Exchange Act of 1934) securities issued by Catalyst (or any
of its Affiliates) or seek to advise or influence any Person with respect to the
voting of securities issued by Catalyst (or its Affiliates); or
(e) otherwise act in any manner, whether by forming,
joining or participating with any Person or group, or aiding, advising,
encouraging or assisting any other Person or group, whether for the purpose of
acquiring, holding, voting or disposing of Voting Stock or accomplishing any of
the foregoing (a) through (d) above,, including inviting, encouraging,
soliciting or providing information to assist the submission of any proposal for
the acquisition, by purchase or otherwise, from Catalyst (or any of its
Affiliates) or any other Person of securities issued by Catalyst (or any of its
Affiliates) or assets of Catalyst (or any of its Affiliates) or any proposal
with respect to any form of restructuring, recapitalization or similar
transaction of Catalyst (or any of its Affiliates).
2.2. Notice of Purchases. Purchaser shall notify Catalyst in
writing as to Purchaser's (or any Affiliate's) acquisition of additional shares
of Voting Stock, or rights thereto within a reasonable time period not to exceed
ten (10) days after such acquisition.
2.3 Transferees. Purchaser shall not sell, assign or transfer in
excess of one hundred thousand (100,000) Common Shares to any other party (or
any Affiliate of such party) in a transaction or a series of related
transactions without such other party which purchases such shares having agreed
to and having become a party to this Agreement with the Company.
3. Voting of Stock. Purchaser (a) will execute all "proxies" solicited
by management or the Board of Directors of Catalyst or (b) will vote all Voting
Stock "FOR" all proposals submitted by Management or the Board of Directors of
Catalyst, for approval or a vote by the shareholders of Catalyst, including all
nominations for the Board of Directors of Catalyst.
4. Prohibited Transfer. Any purchase which causes Purchaser to be in
violation of the terms of Section 2 above ("PROHIBITED TRANSFER") shall not be
effected by Catalyst and shall be voidable at the option of Catalyst by their
giving written notice to the transferor, his transferee and Purchaser. Each
certificate representing Common Shares held by Purchaser shall be endorsed by
the Company with a legend reading as follows:
"THE SHARES EVIDENCED HEREBY ARE SUBJECT TO A STANDSTILL AGREEMENT BY
AND BETWEEN THE COMPANY AND THE HOLDER HEREOF (A COPY OF WHICH MAY BE
OBTAINED FROM THE COMPANY), AND NO TRANSFER OF THE SHARES EVIDENCED
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HEREBY SHALL BE EFFECTIVE EXCEPT IN COMPLIANCE WITH THE TERMS THEREOF."
5. Miscellaneous.
5.1. Governing Law; Jurisdiction. This Agreement shall be
governed by and construed and enforced in accordance with the internal laws of
the State of Delaware, and shall be binding upon the parties hereto in the
United States and worldwide. The federal and state courts within County of Santa
Xxxxx in the State of California shall have exclusive jurisdiction to adjudicate
any dispute arising out of this Agreement.
5.2. Successors and Assigns. Except as otherwise expressly
provided herein, the provisions hereof shall inure to the benefit of, and be
binding upon, the successor and assigns of the parties hereto.
5.3. Entire Agreement; Amendment. This Agreement constitutes the
full and entire understanding and agreement between the parties with regard to
the subjects hereof and thereof. Neither this Agreement nor any provision hereof
may be amended, changed, waived, discharged or terminated other than by a
written instrument signed by the party against who enforcement of any such
amendment, change, waiver, discharge or termination is sought. Any amendment or
waiver effected in accordance with this section shall be binding upon each
holder of any securities purchased under this Agreement at the time outstanding
(including securities into which such securities have been converted), each
future holder of all such securities and Catalyst.
5.4. Notices, etc. All notices and other communications required
or permitted hereunder shall be effective upon receipt and shall be in writing
and may be delivered in person, by telecopy, electronic mail, express delivery
service or U.S. mail, in which event it may be mailed by first-class, certified
or registered, postage prepaid, addressed, to the party to be notified, at the
respective addresses set forth below, or at such other address which may
hereinafter be designated in writing:
(a) If to Purchaser, to:
Elex X.X.
Xxxxxxxxxxxxxxx 0
X 0000
Xxxxxxxxxxx, Xxxxxxx
Xxxxxxx
Attention: Chairman of the Board
Phone: 011+00 00 00 00 00
Fax: 011+00 00 00 00 00
(b) If to Catalyst, to:
Catalyst Semiconductor, Inc.
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0000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: President and Chief Executive Officer
Phone: (000) 000-0000
Fax: (000) 000-0000
5.5. Severability. If any provision of this Agreement shall be
judicially determined to be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
5.6. Titles and Subtitles. The titles of the Articles and
Sections of this Agreement are for convenience of reference only and in no way
define, limit, extend, or describe the scope of this Agreement or the intent of
any of its provisions.
5.7. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
5.8. Delays or Omissions. It is agreed that no delay or omission
to exercise any right, power or remedy accruing to any party upon any breach or
default of any other party under this Agreement shall impair any such right,
power or remedy, nor shall it be construed to be a waiver of any such breach or
default, or any acquiescence therein, or of any similar breach or default
thereafter occurring; nor shall any waiver of any single breach or default be
deemed a waiver of any other breach or default theretofore or thereafter
occurring. It is further agreed that any waiver, permit, consent or approval of
any kind or character of any breach or default under this Agreement, or any
waiver of any provisions or conditions of this Agreement must be in writing and
shall be effective only to the extent specifically set forth in writing, and
that all remedies, either under this Agreement, by law or otherwise, shall be
cumulative and not alternative.
5.9. Consents. Any permission, consent, or approval of any kind
or character under this Agreement shall be in writing or detrimentally relied
upon and proved by clear and convincing evidence (other than alleged reliance)
and shall be effective only to the extent specifically set forth in such writing
or proved.
5.10. Payment of Fees and Expenses. Each party shall be
responsible for paying its own fees, costs and expenses in connection with this
Agreement and the transactions herein contemplated.
5.11. Construction of Agreement. No provision of this Agreement
shall be construed against either party as the drafter thereof.
5.12. Section References. Unless otherwise stated, any reference
contained herein to a Section or subsection refers to the provisions of this
Agreement.
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5.13. Variations of Pronouns. All pronouns and all variations
thereof shall be deemed to refer to the masculine, feminine, or neuter, singular
or plural, as the context in which they are used may require.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties have caused this Standstill Agreement to
be duly executed and delivered by their proper and duly authorized officers as
of the day and year first written above.
CATALYST SEMICONDUCTOR, INC.
By: /s/ Xxxx Xxxxx
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Xxxx Xxxxx
President and Chief Executive Officer
ELEX N.V.
By: /s/ Xxxxxx Xxxxxxxxxx
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Xxxxxx Xxxxxxxxxx
Chairman of the Board
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