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                                                                   EXHIBIT 10.51



                          COMMERCIAL SECURITY AGREEMENT


         This COMMERCIAL SECURITY AGREEMENT ("Agreement") is entered into
between CATALYST SEMICONDUCTOR INC., a corporation organized and existing under
the laws of the State of Delaware Catalyst") and OKI ELECTRIC INDUSTRY CO.,
LTD., a corporation organized and existing under the laws of Japan ("Oki").

         WHEREAS, Catalyst and Oki have entered into a Wafer Supply Agreement
dated March 15, 1995 (as defined hereunder) under which Oki produces and
supplies silicon wafers to Catalyst which Catalyst uses to manufacture various
non-volatile memory devices;

         WHEREAS, in order to facilitate an increased measure of Catalyst's
production and sale of such memory devices, Oki is willing to grant Catalyst
financial credit on terms and conditions as may be agreed by Oki and Catalyst
from time to time;

         WHEREAS, Oki is aware that Catalyst has entered into one or more
Commercial Security Agreements with Coast Business Credit, a Division of the
Southern Pacific Thrift & Loan Association ("Coast Business Credit") dated June
19, 1997 (collectively, the "First Security Agreement") under which Catalyst has
pledged secured interests in its accounts, inventory, proceeds, products and
other assets; and

         WHEREAS, in order to permit Oki to secure rights and/or subordinated
rights in certain of Catalyst's assets in return for granting Catalyst financial
credit and in order to facilitate an understanding of Oki's rights as a secured
creditor in relation to Catalyst and its prior obligations to Coast Business
Credit, Oki and Catalyst are desirous of entering into this Agreement,

         NOW THEREFORE, Oki and Catalyst hereby agree to the following terms and
conditions:

1. GRANT OF SECURITY INTEREST & ASSIGNMENT

         GRANT AND ASSIGNMENT. For consideration and value received, Debtor
hereby mortgages, conveys and assigns as security all of Debtor's right, title
and interest in and grants to Secured Party a security interest in, the
Collateral to secure the Indebtedness.

2. DEFINITIONS. The following words shall have the following meanings when used
in this Agreement. Terms not otherwise defined in this Agreement shall have the
meanings attributed to such terms in the Wafer Supply Agreement or the Uniform
Commercial Code, which definitions are incorporated herein by this reference.
All references to dollar amounts shall mean amounts in immediately available
lawful money of the United States of America.

         2.1 AGREEMENT. The word "Agreement" means this Commercial Security
Agreement and all exhibits and schedules attached hereto, all as may be amended
from time to time.



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         2.2 CLAIM. The word "Claim" means any and all administrative, legal or
other actions, arbitrations, mediations, appeals, settlements, consent decrees,
investigations, liabilities, demands, penalties, and fines.

         2.3 COLLATERAL. The word "Collateral" means certain personal property
and rights of Debtor, described below whether now owned or existing or hereafter
acquired or arising and wherever located:

                  2.3.1 DEPOSITS ACCOUNT. The term "Deposits Account" has the
meaning set forth in Section 9105 of California Uniform Commercial Code in
effect on the date hereof.

                  2.3.2 EQUIPMENT. The term "Equipment" means all of Debtor's
present and hereafter acquired machinery, molds, machine tools, motors,
furniture, equipment, furnishings, fixtures, motor vehicles, tools, parts, dyes,
jigs, goods, and other tangible personal property (other than Inventory) of
every kind and description used in Debtor's operations or owned by Debtor and
any interest in any of the foregoing and all attachments, accessories,
accessions, replacements, substitutions, additions, or improvements to any of
the foregoing, wherever located.

                  2.3.3 INVENTORY. The term "Inventory" means all of Debtor's
now owned and hereafter acquired goods, merchandise or other personal property,
wherever located, to be furnished wider any Contract of service or held for sale
or lease (including without limitation all raw materials, work in progress,
finished goods and goods in transit, and including without limitation all raw
products. and all materials and supplies of every kind, nature and description
which are or might be used or consumed in Debtor's business or used connection
with the manufacture, packing, shipping, advertising, selling or finishing of
such goods, merchandise or other personal property, and all warehouse receipts,
documents of title and other documents representing any of the foregoing.

                  2.3.4 RECEIVABLES. The term "Receivables" means of Debtor's
now owned and hereafter acquired accounts (whether or not earned by
performance), letters of credit, contract rights, chattel paper, instruments,
securities, documents and all other forms of obligations at any time owing to
Debtor, all guaranties and other security therefor, all merchandise returned to
or repossessed by Debtor, and all rights of storage in transit and other rights
or remedies of an unpaid vendor, lien or secured party.

         2.4 DEBTOR. "Debtor" means CATALYST SEMICONDUCTOR INC., its affiliates,
successors and assigns.

         2.5 DEFAULT INTEREST RATE. "Default Interest Rate" means 12% per annum.

         2.6 WAFER SUPPLY AGREEMENT. "Wafer Supply Agreement" means that certain
WAFER SUPPLY AGREEMENT dated March 15,1995 (including any exhibits) entered into
by CATALYST SEMICONDUCTOR INC. and Oki Electric Industry Co., Ltd. and any and
all amendments thereto.



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         2.7 DEFAULT OR EVENT OF DEFAULT. "Default," "Event of Default" or
"default" means and include any of the Events of Default set forth below in the
section titled "Events of Default."

         2.8 INDEBTEDNESS. "Indebtedness" means (i) all amounts of every nature
row or hereafter owed by Debtor to Secured Party under the Wafer Supply
Agreement, including without limitation all payment of the prices and
obligations due thereunder; (ii) all amounts of every nature whatsoever now or
hereafter owned by Debtor to Secured Party under this Agreement; and (iii) all
other now or hereafter existing obligations, debts, liabilities, plus interest
thereon, of Debtor to Secured Party, as well as all claims by Secured Party
against Debtor. "Indebtedness" includes the foregoing whether any of each is
voluntary or involuntary, due or not due, direct or indirect, absolute or
contingent, liquidated or unliquidated; whether Debtor may be liable
individually or jointly with others; whether Debtor may be obligated as
guarantor, surety, accommodation party or otherwise.

         2.9 LAWS. "Laws" means all foreign, federal, state and local laws,
regulations, rules, orders, ordinances, decrees, treaties, conventions and
directives, as amended from time to time and whether now or hereafter existing.

         2.10 SECURED PARTY. "Secured Party" means OKI ELECTRIC INDUSTRY CO.,
LTD., its affiliates, successors and assigns.

         2.11 RELATED DOCUMENTS. Documents" means all letters of credit and
other agreements and documents, whether now or hereafter existing executed at
any time in connection with any of the indebtedness.

         2.12 SENIOR RIGHTS. "Senior Rights" shall mean the interest in the
Collateral and other assets to which Coast Business Credit has secured a prior
perfected position by filing appropriate UCC-1 Financing Statements in the State
of California (and/or in other state. as applicable) and to which Oki will take
a secondary or subordinated interest by filing its own UCC-l Financing
Statements. For purposes of this definition, "Senior Rights" may not include a
secured interest in certain Collateral (including Inventory, work in progress or
other items) being manufactured by Oki for Catalyst under the Wafer Supply
Agreement to which Coast Business Credit has not perfected a prior interest by
filing appropriate UCC-l Financing Statements or by following appropriate legal
procedures in relevant jurisdictions.

3. RIGHTS OF RECOUPMENT AND SETOFF. Subject to the Senior Rights of Coast
Business Credit, Debtor hereby grants Secured Party a subordinated right of
recoupment and a contractual right of setoff and a security interest in (i)
monies, accounts or other property of Debtor held by Secured Party in any
capacity, and (ii) obligations of Secured Party to Debtor, including but not
limited to Secured Party's obligations under the Wafer Supply Agreement,
including any of the foregoing held or owed jointly with someone else. Subject
to the Senior Rights of Coast Business Credit, upon any material Event of
Default, Debtor authorizes Secured Party to recoup, and to charge or setoff from
time to time all Indebtedness against any and all of the foregoing without
regard to concepts of mutuality or other requirements of common law recoupment
or setoff.



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4. OBLIGATIONS OF DEBTOR, AND REPRESENTATIONS AND WARRANTIES. Debtor represents,
warrants and covenants to Secured Party as follows:

         4.1 PERFECTION AND PRESERVATION OF SECURITY INTEREST. Debtor agrees to
execute from time to time a mortgage on or assignment for security of Debtor's
Collateral, and to take whatever other actions are reasonably requested by
Security Party to perfect and continue Secured Party's interest in the
Collateral and to note Secured Party's interest upon any and an Collateral as
requested by Secured Party. Secured Party may at any time, and without further
authorization from Debtor, file a carbon, photographic or other reproduction of
any financing statement or of this Agreement for use as a financing statement

         4.2 DEBTOR'S NAME & LOCATION. Debtor's true and only name is "CATALYST
SEMICONDUCTOR INC." Debtor has not had any other name in the last six (6)
months, and has no trade names or assumed business names. Debtor promptly shall
notify Secured Party before any material Change in Debtor's name, including any
change to the assumed business names of Debtor, and before any change in the
corporate structure of Debtor. The location of Debtor's chief executive office
and all other places of business are set forth on Schedule 4.2 which is attached
and incorporated herein, and Debtor will not change such locations without
nothing Secured Party.

         4.3 AUTHORIZATION. Subject to the Senior Rights of Coast Business
Credit, the execution, delivery and performance of this Agreement by Debtor have
been duly authorized by all necessary action by Debtor and do not conflict with,
result in a violation of, create an encumbrance under, or constitute a default
under: (i) any provision of its charter documents (articles of incorporation and
bylaws) or any agreement, license or other instrument or contract binding upon
Debtor, including without limitation, agreements with creditors of Debtor, or
(ii) any Law, court decree, or order applicable to Debtor.

         4.4 ENFORCEABILITY OF COLLATERAL. To the extent, the Collateral
consists of accounts, contract rights, or chattel paper, the Collateral is
enforceable in accordance with its terms, is genuine, and complies with
applicable laws concerning form, content and manner of preparation and
execution, and all persons appearing to be obligated on the Collateral have
authority and capacity to contract and are in fact obligated as they appear on
the Collateral. All existing accounts arc, and at the time any account hereafter
becomes subject to the security interest in favor of Secured Party the account
shall be, a good and valid account representing an undisputed, bona fide
indebtedness incurred by the account debtor, for inventory held subject to
delivery instruments or theretofore tendered, shipped or delivered pursuant to a
contract, or for services therefore performed by Debtor with or for the account
debtor; other than Senior Rights of Coast Business Credit there are none and
there shall be no setoffs or counterclaims against any such account; and no
agreement under which any deductions or discounts may be claimed exists or shall
have been made with the account debtor except those approved for Debtor's
distribution customers in the normal course of business.



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         4.5 LOCATION OF THE COLLATERAL. All Collateral is located only at the
locations set forth in Schedule 4.2 and Debtor agrees not to move Collateral
from those locations except in the normal course of business without prior
written consent of Secured Party (except for any disposition of inventory if
such is expressly allowed elsewhere in this Agreement or the First Security
Agreements. Debtor, upon requested of Secured Party, shall deliver from time to
time in form satisfactory to Secured Party, a schedule of real properties and a
schedule of additional locations of Collateral hereafter acquired, including
without limitation the following: (i) all real property owned or being purchased
or leased or rented by Debtor; (ii) all storage facilities owned, rented,
leased, or being used by Debtor or any consignee of Debtor; and (iii) all other
properties where Collateral is or may be located.

         4.6 RECORDS. Secured Party may examine and -inspect the Collateral at
any reasonable time but not more than once each month wherever located upon
reasonable notice to Debtor and during Debtor's ordinary business hours. Debtor
shall at all times maintain accurate Records of Collateral and Secured Party may
examine the Records and may consult with Debtor's accountants to determine
Debtor's compliance with this Agreement or any Related Document.

         4.7 TRANSACTIONS INVOLVING COLLATERAL. Except for property (including
inventory and equipment) sold, licensed or leased or accounts collected in the
ordinary course of Debtor's business, or under Debtor's senior obligations to
Coast Business Credit Debtor shall rot sell (or license or lease), offer to sell
(or license or lease), or otherwise transfer or dispose of the Collateral. For
so long as Debtor is not in default under this Agreement, Debtor may use the
Collateral and may sell, license or lease inventory on a non-exclusive basis,
but only in the ordinary course and on the ordinary, arms-length terms and
conditions of Debtor's business, which terms and conditions shall conform to
customary trade and industry practices or under Debtor's obligations to Coast
Business Credit.

         Debtor agrees at all times during the course of this Agreement that its
indebtedness with regarding accounts receivable shall comply with tile following
formula:

         O.8 x A-B > $US million where:
         A equals all of Debtor's outstanding accounts receivable 
         B equals all of Debtors outstanding borrowings from Coast.

         4.8 RIGHTS TO AUDIT. Notwithstanding the limitations of Section 4.6
above, in order to satisfy itself that Debtor is meeting its obligations
regarding the indebtedness/receivables formula set forth in Section 4.7 of this
Agreement and that Secured Party's rights are otherwise effectively being
protected under this Agreement, Debtor hereby grants Secured Party from time to
time the right to audit all or any portion of Debtor's current outstanding
accounts receivable in accordance with terms and conditions to be agreed by the
parties.

         4.9 TITLE, NO ENCUMBRANCE OR EXCLUSIVE LICENSES, AUTHORIZATION,
PRIORITY. Subject to the Senior Rights of Coast Business Credit, Debtor
represents and warrants to Secured Party that: (i) except for Secured Party no
person or entity except Debtor has any right, title or 



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interest in any of the Collateral, except as is disclosed in Schedule 4.9; (ii)
Debtor has not executed any assignment or transfer of the Collateral (as
security, to effect any sale or otherwise) before the date hereto. except as is
disclosed in Schedule 4.9; nor has Debtor granted any exclusive license(s) or
lease(s) of any part of the Collateral; (iii) Debtor holds good and marketable
tide to the Collateral owned by it and holds good and full right and authority
to possess or control all Collateral with respect 10 which Debtor is licensee or
lessee, all free and clear of all liens and encumbrances except as disclosed in
Schedule 4.9; and (iv) the execution and delivery of this Agreement by Debtor
and any realization by Secured Party on all or any part of the Collateral, do
not require the consent, license, approval or authorization from any party or
governmental authority which has not been disclosed Secured Party in schedule
4.9 and do not violate any contract or agreement of, or obligation binding upon,
Debtor.

         Except for any encumbrances (if any) listed in Schedule 4.9, Debtor
represents and warrants that Secured Party has a first priority security
interest in and lien on all Collateral, which interest and lien is prior to all
other interests of every nature whatsoever of all other persons or entities. No
financing statement, federal registration, assignment or other registration
covering any of the Collateral and purporting to grant any person other than
Secured Party or Debtor an interest therein, is on file in any public offer
other than those which reflect the security interest created by this Agreement
or to which Secured Party has consented in writing, and Debtor has not executed
or delivered any document that could be so registered by anyone other than
Secured Party or Coast Business Credit in connection with the encumbrances
listed in Schedule 4.9.

         4.10 REPORTING, COLLATERAL SCHEDULES AND LOCATIONS. As often as Secured
Party shall reasonably require, and to no lesser extent as Secured Party
furnishes reports to Coast Business Credit with regard to its obligations under
the First Security Agreement, Debtor shall deliver to Secured Party reports
concerning its financial status and schedules of Collateral, including such
information as Secured Party reasonably require from time to time, including
without limitation names and addresses of account debtors and aging of accounts.
Insofar as the Collateral consists of inventory and/or Debtor shall deliver to
Secured Party, as often as Secured Party shall reasonably require, lists and
descriptions of Collateral to allows Secured Party easily to identify the
nature, extent, and location of such Collateral.

         4.11 MAINTENANCE AND INSPECTION OF COLLATERAL. Subject to the Senior
Rights of Coast Business Credit Debtor shall maintain all Collateral in good
condition Debtor shall not commit or permit damage or destruction of all or any
part of the Collateral Secured Party and its designated representatives and
agents shall have the right at all reasonable times, but no more than once each
month to examine, inspect, and audit the Collateral wherever located. Debtor
shall immediately notify Secured Party of any material return, rejection,
repossession, loss or damage of or to any Collateral, of any request for credit
or adjustment or of any other dispute arising with respect to the Collateral;
and generally of all happenings and events affecting the Collateral or the value
or the amount of the Collateral that should be material to Secured Party.



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         4.12 TAXES, FEES, ASSESSMENTS AND LIENS. Debtor shall pay when due all
taxes, assessments and liens or encumbrances due in connection with the
Collateral. Debtor may withhold any such payment or may elect to contest any of
the foregoing if Debtor is in good faith duly conducing an appropriate
proceeding to contest the obligation to pay such taxes, assessments and liens or
encumbrances. In any contest Debtor shall defend itself and Secured Party at
Debtor's sole expense and shall satisfy any final adverse judgment before
enforcement against the Collateral. Debtor shall name Secured Party as an
additional obligee or beneficiary but subordinated to Coast Business Credit as
may be applicable under any surety bond or letter of credit furnished in the
contest proceedings.

         4.13 COMPLIANCE WITH LAW. Debtor shall comply promptly with all Laws
applicable to the Collateral, including but not limited to Laws applicable to
the development, production, disposition, and use of the Collateral. Debtor may
duly contest in good faith any such Law and withhold compliance during any
appropriate proceeding, including appropriate appeals.

         4.14 MAINTENANCE OF INSURANCE. Debtor shall procure and maintain all
risks insurance, including without limitation fire, theft and liability coverage
with respect to the Collateral, if such insurance be available to Debtor and if
obtaining such insurance is customary in Debtor's trade or industry. Debtor,
upon request of Secured Party, shall deliver to Secured Party from time to time
but not more than once each year copies of the policies or certificates of
insurance. In connection with all policies covering Collateral, Debtor will
cause Secured Party to be named as a subordinated additional insured and provide
Secured Party with such logs loss payable or other endorsements and certificates
as Secured Party may require to ensure subordinated payment of such insurance
proceeds to Secured Party and compliance by Debtor with this section.

         4.15 APPLICATION OF INSURANCE PROCEEDS. Debtor shall promptly notify
Secured Party of any material loss or damage to the Collateral. Secured Party
may make proof of loss if Debtor fails to do so within fifteen (15) days of the
casualty. If Debtor is in default, all of Debtor's right title and interest in
all now or hereafter existing proceeds of any insurance on or relating to the
Collateral arc subject to the senior rights of Coast Business Credit, hereby
assigned as security to Secured Party, including accrued proceeds the and such
proceeds if any, after the claims of Coast Business Credit shall be held by
Secured Parry as part of the Collateral if Secured Party consents to repair or
replacement of the damaged or destroyed Collateral, Secured Party shall, upon
satisfactory proof of expenditure, pay or reimburse Debtor from the proceeds or
the reasonable cost of repair or restoration. If Secured Party does not consent
to repair or replacement of the Collateral, Secured Party shall retain a
sufficient amount of the proceeds to pay all of the Indebtedness, and shall pay
the balance to Debtor. Any proceeds which have not been disbursed within six (6)
months after their receipt and which Debtor has not committed to the repair or
restoration of the Collateral shall be used to prepay the Indebtedness subject
to the senior claims of Coast Business Credit.

         4.16 INSURANCE REPORTS. Debtor, upon request of Secured Patty, but not
more than once each year, shall furnish to Secured Party reports on each
existing policy of insurance 



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showing such information as Secured Parry may reasonably request including the
following: (i) the name of the insurer; (ii) the risks insured; (iii) the amount
of the policy; (iv) the property insured; (v) the then current value on the
basis of which insurance has been obtained and the manner of determining that
value; and (vi) the expiration date of the policy.

5. POSSESSION; LICENSE TO COLLECT ACCOUNTS. Until Default and except as
otherwise provided below with respect to Income (as defined in Section 8.4 of
this Agreement), Debtor may possess and use the Collateral in any manner not
inconsistent with this Agreement.

         Secured Party hereby grants Debtor a revocable license to collect any
of the Collateral consisting of Income. Subject to the Senior Rights of Coast
Business Credit, Secured Party may revoke this license in its discretion and the
license shall be automatically revoked without further notice upon any Event of
Default unless Secured Party gives contrary written notice to Debtor. Upon any
Event of Default. Secured Party may exercise its rights to collect the Income
and to notify Income debtors to make payments directly to Secured Party for
application to the Indebtedness. If Secured Party at any time has possession (or
deemed possession) of or title to any Collateral, whether before or after an
Event of Default, Secured Party shall be deemed to have exercised reasonable
care in the custody and preservation of the Collateral if Secured Party (a)
takes such action for such purpose as is routinely taken by Debtor and as Debtor
shall reasonably request in writing, or (b) takes such action as Secured Party
shall deem appropriate under the circumstances and in Secured Party's sole
discretion, but failure to honor any request by Debtor shall not of itself be
deemed to be a failure to exercise reasonable care subject to the Senior Rights
of Coast Business Credit Secured Parry shall not be required to take any steps
necessary to preserve any rights in the Collateral against prior parties or
existing parties such as licensors or lessors of Debtor, nor to protect,
preserve or maintain any security interest given to secure the Collateral. Upon
default, and subject to the Senior Rights of Coast Business Credit, Secured
Party shall have the right to posses, use, or dispose of the Collateral pursuant
to terms hereof or applicable Laws, and Secured Party may exercise all rights of
Debtor in the Collateral, and may use or consume any inventory in connection
therewith.

6. EXPENDITURES BY SECURED PARTY. Subject to the Senior Rights of Coast Business
Credit if not discharged or paid when due, Secured Party may (but shall not be
obligated to) discharge or pay any amounts required to be discharged or paid by
Debtor under this Agreement, including without limitation taxes, liens, security
interests encumbrances, and other Claims, at any time levied or placed on the
Collateral.

7. EVENTS OF DEFAULT. Each of the following shall constitute a default or an
Event of Default under this Agreement:

         7.1 DEFAULT ON INDEBTEDNESS. Failure of Debtor to make any payment when
due on the Indebtedness.

         7.2 OTHER DEFAULTS. Failure of Debtor to comply with or to perform any
other material term, obligation, covenant or condition contained in this
Agreement, the Wafer Supply Agreement or in any other agreement between Secured
Party and Debtor. If any default, other 



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than a Default on Indebtedness, is curable and if Debtor has not been given a
prior notice of a breach of the same provision of this Agreement, it may be
cured (and no Event of Default will have occurred) if Debtor, after Secured
Party sends written notice demanding cure of such default, (a) cures the default
within ten (10) business days; or (b) if the cure requires more than ten (10)
business days, immediately initiates such actions which Secured Party deems in
Secured Party's sole discretion to be sufficient to cure the default and
thereafter diligently continues and completes all reasonable and necessary steps
sufficient to produce compliance s soon as reasonably practical but in any event
by the 60th day after the date of said written notification.

         7.3 FALSE STATEMENTS. Any warranty, representation or statement made or
furnished to Secured Parry by or on behalf Debtor under this Agreement, the
Wafer Supply Agreement is false or misleading in any material respect when made
or deemed made.

         7.4 DEFECTIVE COLLATERALIZATION. This Agreement, the Wafer Supply
Agreement ceases TO be in full force and effect at any time and for any reason.

         7.5 INSOLVENCY. The dissolution or termination of Debtor's existence as
a going business, the insolvency of Debtor, the appointment of a receiver for
any part of Debtor'. property, any assignment for the benefit of creditors, or
the commencement of any proceeding under any bankruptcy or insolvency laws by or
against Debtor.

         7.6 CREDITOR OR FORFEITURE PROCEEDING. Commencement of foreclosure or
forfeiture proceedings, self-help, repossession or any other method, by any
creditor of Debtor or by any governmental agency against the Collateral or any
other collateral securing the Indebtedness. This includes a garnishment of or
levy upon Secured Party for obligations of Debtor. However, this Event of
Default shall not apply if there is a good faith dispute by Debtor as to the
validity or reasonableness of the claim which is the basis of the creditor or
forfeiture proceeding and if Debtor gives Secured Party written notice of the
creditor or forfeiture proceeding.

8. RIGHTS AND REMEDIES ON DEFAULT. Subject to the Senior Rights of Coast
Business Credit if an Event of Default Occurs under this Agreement, at any time
thereafter, Secured Party shall have, in addition to all of its rights under
this Agreement, applicable Laws or in equity all the rights of a secured party
under the California Uniform Commercial Code, as amended from time to time and
whether or not such code actually applies to the Collateral in question. In
addition and subject to any limitations set forth in an Intercreditor Agreement
entered into between Secured Party and Coast Credit Bank, Secured Party may
exercise any one or more of the following rights and remedies in any order
(and/or simultaneously):

         8.1 ASSEMBLE COLLATERAL. Secured Party may require Debtor to deliver to
Secured Party all or any portion of the Collateral and any and all original
licenses, leases, agreements, certificates of title and other documents relating
to the Collateral. Secured Party may require Debtor to assemble the Collateral
and make it available to Secured Party at a place to be designated by Secured
Party. Secured Party also shall have full power to enter upon all property OIL
which Collateral is located to take possession of arid remove the Collateral.
Debtor agrees to use its best efforts to cooperate with Secured Party in the
exercise by Secured Party of its right 



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to take possession of the Collateral and the exercise of all other rights of
Secured Party under Part 5 of Article 9 of the California Uniform Commercial
Code and/or under any other applicable article of said code.

         8.2 DISPOSE OF THE COLLATERal. Secured Party shall have full power to
assign, sell, lease or sublease, license or sublicense, transfer, or otherwise
dispose (collectively, "Dispose") of the Collateral in its Own name or that of
Debtor.

         Secured Party may Dispose of all or any part of the Collateral at ore
or more public or private sales, auctions or other Dispositions, including
without limitation Disposition at the premises of Debtor (without any change to
Lender or its agents). Unless the Collateral threatens to decline speedily in
value or is of a type customarily sold on a recognized market, Secured Party
will give Debtor reasonable notice of the time after which any private sale or
any other intended Disposition of the Collateral is to be made. The requirements
of reasonable notice shall be met if such notice is given at least five (5) days
before the time of the Disposition or such shorter period as is appropriate
under the circumstances. All Costs and Fees relating to the enforcement of this
Agreement and/or Disposition of the Collateral, including without limitation the
expenses of retaking, holding, insuring, preparing for Disposition and Disposing
of the Collateral, shall become a part of the Indebtedness secured by this
Agreement and shall be payable on demand, with interest at the Default Interest
Rate.

         Debtor further agrees that Secured Party may be the transferee at any
Disposition of the Collateral and that it shall not be necessary, and Debtor
hereby waives any right to require, that the Collateral be present at any
Disposition or in view of the prospective transferees or that the persons
conducting the Disposition have possession of any or all of the Collateral.
Debtor agrees that all of Debtor's rights in the Collateral shall pass upon any
such Disposition with like effect as if the Collateral were present and in
possession of the person conducing the Disposition and that any possession by
Debtor shall be deemed to be the possession of the person conducting the
Disposition.

         8.3 APPOINT RECEIVER. In addition to all rights permitted by applicable
Laws, Secured Party shall also have the following rights and remedies regarding
the appointment of a receiver: (i) Secured Party may have a receiver appointed
as a matter of right; (ii) the receiver may be an employee or agent of Secured
Party and may serve without bond; and (iii) all fees of the receiver and his or
her attorney shall become part of the Indebtedness secured by this Agreement and
shall he payable on demand, with interest at the default interest rate.

         8.4 COLLECT REVENUES, APPLY ACCOUNTS. Secured Party, either itself or
through a receiver, may collect the accounts, payment, rents, royalties,
commissions, license fees, income, and revenues from the Collateral ("Income").
Secured Party may at any time in its sole discretion transfer any Collateral
into its own name or that of its nominee and receive the Income therefrom and
hold the same as security for the Indebtedness or apply it to payment of the
Indebtedness in such order as Secured Party may determine.



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         8.5 OBTAIN DEFICIENCY. If Secured Party chooses to Dispose of any or
all of the Collateral, Secured Party may obtain a judgment against Debtor for
any deficiency remaining on the Indebtedness due to Secured Party. Subject to
California Law Debtor shall be liable for a deficiency even if the transaction
described in this subsection is a sale of accounts or chattel paper. If Secured
Party does not pay the deficiency upon demand, interest shall accrue on the
deficiency at the default interest rate.

         8.7 CUMULATIVE REMEDIES. All of Secured Party's rights and remedies,
whether created or evidenced by this Agreement, the Wafer Supply Agreement or by
any other writing or record, shall be cumulative and may be exercised singularly
or concurrently, and shall be in addition to all other rights which Secured
Party may have by Laws or in equity. A decision by Secured Party to pursue any
remedy shall not exclude pursuit of any other remedy and shall not constitute an
election of remedies, and any decision to make expenditures or to take action to
perform an obligation of Debtor under this Agreement shall not affect Secured
Party's right to declare a default and to exercise its remedies.

9. MISCELLANEOUS PROVISIONS. The following additional provisions are a part of
this Agreement.

         9.1 AMENDMENT. This Agreement constitutes the entire understanding and
agreement of the parties as to the matters set forth in this Agreement No
alteration of or amendment to this Agreement shall be effective unless given in
writing and signed by both parties.

         9.2 ARBITRATION; APPLICABLE LAW. All disputes and differences will be
addressed pursuant to the terms of arbitration clause in Section 17.13 of the
Wafer Supply Agreement, except to the extent that Secured Party deems it
necessary or advisable to realize upon the security interest granted hereunder
in a court of law. If there is a lawsuit or other proceeding, Debtor agrees upon
Secured Party's request to submit to the jurisdiction of the federal or state
court selected by Secured Party in Santa Clara County, California. Except as
otherwise provided herein, this Agreement shall be governed by and ~ in
accordance with the law: of California, provided that, with respect to
perfection of the security interest, the laws of the state required under
Article 9-103 or other applicable article of the Uniform Commercial Code shall
apply (to the extent applicable).

         9.3 ATTORNEYS' FEES; EXPENSES. Upon demand, Debtor agrees to pay all
coots and fees incurred by Secured Party in connection with collecting the
Indebtedness; realizing upon the Collateral; and/or enforcing this Agreement and
including but not limited to all costs and fees incurred in any foreign,
federal, state or local court action, in any bankruptcy (or state receivership
or other insolvency or similar proceedings or circumstances), in any forfeiture
or other proceeding, and for any post-judgment collection services. The costs
and fees shall be part of the Indebtedness secured by the security interest
glinted herein. All amounts due under this Agreement by Debtor to Secured Party
for costs and fees may be deducted from the proceeds of any disposition of
Collateral pursuant to CA UCC Section 9504(1)(a) and Section 9506.



                                      -11-
<PAGE>   12

         9.4 INDEMNITY. In addition to the other indemnities contained in this
Agreement, Debtor hereby agrees to indemnity and hold the Secured Party harmless
from all liability, loss, damage and expense, including without limitation Costs
and Fees, relating to or arising out of (i) the inaccuracy in whole or in part
of any representation or warranty made by Debtor in this Agreement or any
Related Document; or (ii) the breach or default by Debtor of any term or
condition of this Agreement or any Related Document; or (iii) any action (or
inaction) taken by Secured Party or its agents to enforce the terms of this
Agreement or the Indebtedness. The Section 9.4 shall survive termination of this
Agreement

         9.5 CAPTION HEADING. Caption headings in this Agreement are for
convenience purposes only and are not to be used to interpret or define the
provisions of this Agreement.

         9.6 NOTICES. Except as otherwise provided in this Agreement or as
otherwise allowed to Secured Party by law, all notices, requests, demands or
other communications shall be in a writing addressed to the respective party at
the address shown below or to such other address as a party may from time to
time specify in writing. Notice shall be in a writing. Notice shall be in a
writing, or in a confirmed facsimile and shall be deemed duly given either: (i)
when delivered in person, or by telecopy machine to the recipient named below;
or (ii) alter placement in the U.S. mails as certified or registered, return
receipt requested, first class postage prepaid, and the receipt indicates
delivery or refusal or failure to accept delivery:

         to Debtor:                 CATALYST SEMICONDUCTOR INC.
                                    1250 Borregas Avenue
                                    Sunnyvale, CA  94089

         Attention:                 Chief Financial Officer
         Fax:                       (408) 541-1405

         to Secured Party:          OKI ELECTRIC INDUSTRY CO., LTD.
                                    7-12, Toranomon 1-chome, Minato-ku
                                    Tokyo 105, Japan

         Attention:                 General Manager
                                    Silicon Foundry Marketing and Sales Division
         Fax:                       (81-3) 5445-6065

For notice purposes, Debtor agrees to keep Secured Party informed at all times
of Debtor's current address(es). Either party may change the above information
by giving notice to the other party pursuant to this section.

         9.7 POWER OF ATTORNEY. Subject to the Senior Rights of Coast Business
Credit:, Debtor hereby appoints Secured Party as its attorney-in-fact, with full
power of substitution, to execute from time to time any documents necessary to
amend, perfect or to continue the perfection of the security interest granted in
this Agreement, and to do the following on or after any Event of Default with
respect to any Collateral not subject to Senior Rights of Coast 



                                      -12-
<PAGE>   13

Business Credit: (i) to execute any document which Debtor is obligated to
execute under Section 4.1 of this Agreement upon Debtor's failure or inability
to execute such document, (ii) to demand, collect, receive, receipt for, sue and
recover all sums of money or other property which may now or hereafter become
due, from the Collateral; (iii) to execute, sign and endorse all Claims.
instruments, receipts, chicks, drafts or `warrants issued in payment for the
Collateral; (iv) to settle or compromise any and all claims arising under the
Collateral, and, in the place and stead of Debtor, to execute and deliver its
release and settlement for the claim; (v) to file any Claim or Claims or to take
any action or institute or take part in any proceedings, either in its own name
or in the name of Debtor, or otherwise, which in the sole discretion of Secured
Party may seem to be necessary or advisable; (vi) to transfer to Secured Party
all right, title and interest of Debtor in Collateral (if any) retained by
Secured Party as discharge of Indebtedness under Article 9-505 of the Uniform
Commercial Code or other applicable law; and (vii) to transfer to any transferee
of a Disposition of Collateral made under Section 8 hereof all right, tide and
interest of Debtor in Collateral, and to execute such other documents or
instruments as necessary or advisable to register, record, or prove title to or
ownership of the Collateral. The Power of Attorney hereby conferred is and shall
be irrevocable and shall remain in full force and until renounced in writing by
Secured Party.

         9.8 PREFERENCE PAYMENT. Any monies Secured Party pays because of an
asserted preference claim in Debtor's bankruptcy shall become a part of the
Indebtedness and, at Secured Party's option, shall be payable by Debtor as
provided above in Section 6.

         9.9 SEVERABILITY. For purposes of protecting Secured Party, if a court
of competent jurisdiction finds any provision of this Act to be invalid or
unenforceable as to any person or circumstances, such finding shall not render
that provision invalid or unenforceable as to any other persons or
circumstances. If feasible, any such offending provision shall be deemed to be
meddled to be within the limits of enforceability or validity; however, if the
offending provision cannot be so modified, it shall be within and all other
provisions of this Agreement shall remain valid and enforceable to the extent
Secured Party is not damage by such continued enforcement (or does not waive any
such damage).

         9.10 SUCCESSOR INTERESTS. This Agreement inures to the benefit of
Secured Party and shall bind all successors and assigns of Debtor. Debtor may
not assign its rights and obligations hereunder without the prior written
consent of Secured Party.

         9.11 ENTIRE AGREEMENT; AMENDMENTS AND WAIVER; TIME OF ESSENCE;
COUNTERPARTS. THIS AGREEMENT CONSTITUTES THE ENTIRE AGREEMENT BETWEEN THE
PARTIES REGARDING THE TERMS HEREOF AND SUPERSEDES ANY AND ALL OTHER AGREEMENTS
RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT (EXCEPT THE RELATED DOCUMENTS),
ORAL OR WRITTEN, AMONG ANY OR ALL OF THE PARTIES. No amendment, waiver or
forbearance of any provision of this Agreement or any Related Document shall be
effective unless the same shall be in a writing signed by both parties. Any such
waiver or forbearance shall only be effective for tile s-lie purpose and in the
specific instance given and not for other or subsequent purposes or instances



                                      -13-
<PAGE>   14

and no forbearance or waiver shall affect Secured Party's right to refuse
further forbearance or waivers. Time is of the essence of this Agreement and
each Related Document. This Agreement may be executed in any number of
counterparts each of which shall be deemed all original and as executed shall
constitute one agreement, binding on both parties even though both parties do
not sign the same counterpart.

         9.12 WAIVER OF CO-OBLIGOR'S RIGHTS. If more than on. person is
obligated for the Indebtedness Debtor irrevocably waives, disclaims and
relinquishes all Claims against such other person which Debtor has or would
otherwise have by virtue of payment of the Indebtedness or any part thereof,
specifically including but not limited to all rights of indemnity, contribution
or exoneration.

         9.13 FAIR CONSTRUCTION; NO DUAL COUNSEL. Counsel for each of the
undersigned has participated, or has had the opportunity to participate, in the
review and revision of this Agreement and each of the undersigned agrees that
rules of construction to the effect that any ambiguities are to be resolved
against the drafting party shall not be employed in the interpretation of this
Agreement. Debtor and each other person consenting to or signing this Agreement
(collectively "Debtor's Affiliates") acknowledges and agrees that any legal
counsel retained or employed by Secured Party has acted solely on Secured
Party's behalf and not on Debtor or Debtor's Affiliates, and that Debtor and
each of Debtor's Affiliates has consulted or has had sufficient opportunity to
consult its own legal counsel with regard to this Agreement

         If the person signing below purports to be an officer or agent of
Debtor, such person hereby represents and warrants that he or she is duly
authorized to legally bind the Debtor to all terms and conditions of this
Agreement This Agreement is effective as of _________ 1998.

SECURED PARTY:                         DEBTOR:

OKI ELECTRIC INDUSTRY CO., LTD.        CATALYST SEMICONDUCTOR INC.

By   /s/ Yoshiaki Inoue                By  /s/ Radu Vanco
     ------------------------------        -------------------------------------
Its  General Manager  1 April, 1998    Its  President & CEO   1 April, 1998
     ------------------------------        -------------------------------------
                      (Execution Date)                        (Executive Date)



                                      -14-
<PAGE>   15

                                  SCHEDULE 4.2

to Commercial Security Agreement between OKI ELECTRIC INDUSTRY CO., LTD.
("Secured Party") and CATALYST SEMICONDUCTOR INC. ("Debtor") dated as of January
___, 1998, of which this Schedule 4.2 is a part ("Agreement").

                       LOCATIONS OF DEBTOR AND COLLATERAL

DEBTOR'S CHIEF EXECUTIVE OFFICE:

         1250 Borregas Avenue
         Sunnyvale, California
         94089 USA

         Collateral [ ] is or will be [ ] is not and will not be kept at the
         above location.



DEBTOR'S OTHER PLACES OF BUSINESS::

         See Exhibit A, attached hereto for a complete ~ of other places of
         business

         * Collateral is or will be kept at each of the above locations marked
         with an asterisk.



<PAGE>   16
                                  SCHEDULE 4.9

to Commercial Security Agreement between OKI ELECTRIC INDUSTRY CO., LTD.
("Secured Party") and CATALYST SEMICONDUCTOR INC. ("Debtor") dated as of October
___ 1997~ of which this Schedule 4.9 is a part.

               COLLATERAL JOINT OWNERSHIP OR ENCUMBRANCE SCHEDULE

1.     Accounts Collateral Security Agreement executed on June 193 1997 between
       Debtor and Coast Business Credit a Division of Southern Pacific Thrift &
       Loan Association, a California Corporation.

2.     CEFO Collateral Agreement executed on June 19~ 1997 between Debtor and
       Coast Business Credit, a Division' of Southern Pacific Thrift & Loan
       Association, a California Corporation (as amended by Amendment Number One
       dated as of July 30, 1997).



                                      -16-
<PAGE>   17
                                    EXHIBIT A

                                  SCHEDULE 4.2
                      Subsidiary and Branch Office Listing:

EASTERN US SALES OFFICE
23 5/unit B Plaza Drive
Oviedo, FL 32765

EASTERN US SALES OFFICE
1000 Mansell Exchange West, Suite 250
Alpharetta, GA 30022

CENTRAL US SALES OFFICE
3303 FM 1960 West, Suite 300-T
Houston, TX 77068

SOUTH WESTERN US SALES OFFICE
1201 South Alma School Road Office 14-2
Mesa, AZ 85210

TAIWAN SALES OFFICE
9F, No.  400g Sec 1
Kee-Lung Road
Taipei, Taiwan

SINGAPORE SALES OFFICE
Blk 446, #B1-1635
Hougang Ave 8
Singapore 530446

EUROPEAN SALES OFFICE
The Quorem, Bldg.  7200
Oxford Business Park
Oxford 0Z4 23Z
England

NIPPON CATALYST K.K.I.  - JAPANESE SALES OFFICE
4th Fl., Shin Nakano FK Bldg.
6-16-12, Honcho
Nakano-Ku, Tokyo 164
Japan


                                      -17-