-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Up4iz9Jowxk/YXkfKD40YyLFCKu8oVJ10JmPfEITiGf8AYPsXh9oTX1GqFvsoWo4 TibPwZP8J0MotnTNXGQ5Kw== 0000891618-99-003853.txt : 19990818 0000891618-99-003853.hdr.sgml : 19990818 ACCESSION NUMBER: 0000891618-99-003853 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19990704 FILED AS OF DATE: 19990817 FILER: COMPANY DATA: COMPANY CONFORMED NAME: XICOR INC CENTRAL INDEX KEY: 0000319191 STANDARD INDUSTRIAL CLASSIFICATION: SEMICONDUCTORS & RELATED DEVICES [3674] IRS NUMBER: 942526781 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-09653 FILM NUMBER: 99694087 BUSINESS ADDRESS: STREET 1: 1511 BUCKEYE DR CITY: MILPITAS STATE: CA ZIP: 95035 BUSINESS PHONE: 4084328888 MAIL ADDRESS: STREET 1: 1511 BUCKEYE DRIVE CITY: MILPITAS STATE: CA ZIP: 95035 10-Q 1 FORM 10-Q FOR PERIOD ENDED 7/4/99 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------------- FORM 10-Q [x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended July 4, 1999 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to ------------- ------------- -------------------- Commission File Number 0-9653 XICOR, INC. (Exact name of registrant as specified in its charter) California 94-2526781 (State or other jurisdiction of (I.R.S.Employer incorporation or organization) Identification No.) 1511 Buckeye Drive, Milpitas, California 95035 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (408) 432-8888 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ----- ----- NUMBER OF SHARES OUTSTANDING AT JULY 4, 1999 20,310,593 2 XICOR, INC. FORM 10-Q QUARTER ENDED JULY 4, 1999 INDEX
PAGE ---- PART I: FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS Consolidated Balance Sheets at July 4, 1999 1 and December 31, 1998 Consolidated Statements of Operations for the three 2 and six months ended July 4, 1999 and June 28, 1998 Consolidated Statements of Cash Flows for the three 3 and six months ended July 4, 1999 and June 28, 1998 Notes to Consolidated Financial Information 4 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL 5 CONDITION AND RESULTS OF OPERATIONS PART II: OTHER INFORMATION ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 10 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. 11 SIGNATURES 11
-i- 3 PART I: FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS XICOR, INC. CONSOLIDATED BALANCE SHEETS ASSETS
July 4, December 31, 1999 1998 ------------- ------------- (Unaudited) Current assets: Cash and cash equivalents $ 13,939,000 $ 17,881,000 Accounts receivable 10,989,000 8,835,000 Inventories 10,509,000 12,770,000 Prepaid expenses and other current assets 671,000 1,016,000 ------------- ------------- Total current assets 36,108,000 40,502,000 ------------- ------------- Property, plant and equipment, at cost less accumulated depreciation 32,127,000 38,074,000 Other assets 288,000 286,000 ------------- ------------- $ 68,523,000 $ 78,862,000 ============= ============= LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 8,560,000 $ 9,279,000 Accrued expenses 8,244,000 9,504,000 Deferred income on shipments to distributors 10,722,000 9,121,000 Current portion of long-term obligations 5,969,000 7,216,000 ------------- ------------- Total current liabilities 33,495,000 35,120,000 ------------- ------------- Long-term obligations 10,575,000 13,137,000 ------------- ------------- Shareholders' equity: Preferred stock; 5,000,000 shares authorized -- -- Common stock; 75,000,000 shares authorized; 20,310,593 and 20,134,427 shares outstanding 128,470,000 128,232,000 Accumulated deficit (104,017,000) (97,627,000) ------------- ------------- 24,453,000 30,605,000 ------------- ------------- $ 68,523,000 $ 78,862,000 ============= =============
See accompanying notes to consolidated financial information -1- 4 XICOR, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended Six Months Ended -------------------------------- -------------------------------- July 4, 1999 June 28, 1998 July 4, 1999 June 28, 1998 ------------ ------------- ------------ ------------- Net sales $ 28,751,000 $ 26,787,000 $ 54,407,000 $ 54,533,000 Cost of sales 21,305,000 25,521,000 42,306,000 45,413,000 ------------ ------------ ------------ ------------ Gross profit 7,446,000 1,266,000 12,101,000 9,120,000 ------------ ------------ ------------ ------------ Operating expenses: Research and development 3,683,000 4,628,000 7,242,000 9,194,000 Selling, general and administrative 5,553,000 5,620,000 10,815,000 11,118,000 ------------ ------------ ------------ ------------ 9,236,000 10,248,000 18,057,000 20,312,000 ------------ ------------ ------------ ------------ Income (loss) from operations (1,790,000) (8,982,000) (5,956,000) (11,192,000) Interest expense (359,000) (481,000) (751,000) (981,000) Interest income 156,000 279,000 317,000 635,000 ------------ ------------ ------------ ------------ Income (loss) before income taxes (1,993,000) (9,184,000) (6,390,000) (11,538,000) Provision for income taxes -- -- -- -- ------------ ------------ ------------ ------------ Net income (loss) $ (1,993,000) $ (9,184,000) $ (6,390,000) $(11,538,000) ============ ============ ============ ============ Net income (loss) per common share: Basic $ (0.10) $ (0.48) $ (0.32) $ (0.60) ============ ============ ============ ============ Diluted $ (0.10) $ (0.48) $ (0.32) $ (0.60) ============ ============ ============ ============ Shares used in per share calculations: Basic 20,257,000 19,108,000 20,215,000 19,099,000 ============ ============ ============ ============ Diluted 20,257,000 19,108,000 20,215,000 19,099,000 ============ ============ ============ ============
See accompanying notes to consolidated financial information -2- 5 XICOR, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Six Months Ended -------------------------------- July 4, June 28, 1999 1998 ------------ ------------ Cash flows from operating activities: Net income (loss) $ (6,390,000) $(11,538,000) Adjustments to reconcile net income (loss) to cash provided by (used for) operating activities: Depreciation and amortization 6,663,000 5,992,000 Changes in assets and liabilities: Accounts receivable (2,154,000) 2,700,000 Inventories 2,261,000 3,860,000 Prepaid expenses and other current assets 345,000 42,000 Other assets (2,000) 14,000 Accounts payable and accrued expenses (1,979,000) (4,067,000) Deferred income on shipments to distributors 1,601,000 (2,638,000) ------------ ------------ Net cash provided by (used for) operating activities 345,000 (5,635,000) ------------ ------------ Cash flows from investing activities: Investments in plant and equipment, net (716,000) (2,787,000) Purchases of short-term investments -- (4,292,000) Maturities of short-term investments -- 11,512,000 ------------ ------------ Net cash provided by (used for) investing activities (716,000) 4,433,000 ------------ ------------ Cash flows from financing activities: Repayments of long-term obligations (3,809,000) (3,040,000) Net proceeds from sale of common stock 238,000 36,000 ------------ ------------ Net cash used for financing activities (3,571,000) (3,004,000) ------------ ------------ Decrease in cash and cash equivalents (3,942,000) (4,206,000) Cash and cash equivalents at beginning of year 17,881,000 21,106,000 ------------ ------------ Cash and cash equivalents at end of period $ 13,939,000 $ 16,900,000 ============ ============ Supplemental information: Cash paid (refunded) for: Interest expense $ 825,000 $ 982,000 Income taxes 24,000 (110,000) Equipment acquired pursuant to long-term obligations -- 1,097,000
See accompanying notes to consolidated financial information -3- 6 XICOR, INC. NOTES TO CONSOLIDATED FINANCIAL INFORMATION (Unaudited) NOTE 1 - THE COMPANY: In the opinion of management, all adjustments necessary for a fair statement of the results of the interim periods presented (consisting only of normal recurring adjustments) have been included. These financial statements, notes and analyses should be read in conjunction with Xicor's Annual Report on Form 10-K for the year ended December 31, 1998 filed with the Securities and Exchange Commission. NOTE 2 - NET INCOME (LOSS) PER SHARE: Basic net income (loss) per share is computed using the weighted average number of common shares outstanding. Diluted net income (loss) per share is computed using the weighted average number of common shares and all dilutive potential common shares outstanding. Options to purchase 2,778,525 shares of common stock were outstanding at July 4, 1999, but were excluded from the earnings per share (EPS) computation as they were antidilutive. NOTE 3 - COMPREHENSIVE INCOME (LOSS): The net loss for the periods reported also approximated the comprehensive loss for such periods. NOTE 4 - BALANCE SHEET DETAIL:
July 4, December 31, 1999 1998 ------------- ------------- Inventories: Raw materials and supplies $ 1,085,000 $ 1,450,000 Work in process 5,993,000 7,036,000 Finished goods 3,431,000 4,284,000 ------------- ------------- $ 10,509,000 $ 12,770,000 ============= ============= Property, plant and equipment: Leasehold improvements $ 17,439,000 $ 17,674,000 Equipment 121,623,000 124,371,000 Furniture and fixtures 1,891,000 1,881,000 Construction in progress 603,000 1,501,000 ------------- ------------- 141,556,000 145,427,000 Less accumulated depreciation (109,429,000) (107,353,000) ------------- ------------- $ 32,127,000 $ 38,074,000 ============= ============= Accrued expenses: Accrued wages and employee benefits $ 4,159,000 $ 4,038,000 Other accrued expenses 4,085,000 5,466,000 ------------- ------------- $ 8,244,000 $ 9,504,000 ============= =============
-4- 7 Accounts receivable: Accounts receivable at July 4, 1999 and December 31, 1998 are presented net of an allowance for doubtful accounts of $500,000. Accrued restructuring costs: During 1998 Xicor announced and began to implement a restructuring plan to revise its manufacturing and procurement strategies to significantly increase outsourcing of wafer fabrication and product testing to overseas subcontractors and to streamline operations. Estimated restructuring costs of $1.4 million were accrued at December 31, 1998. During the first half of 1999, $0.4 million of severance costs were paid, with the $1.0 million balance of accrued restructuring costs expected to be paid by 2000. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion should be read in conjunction with the accompanying Quarterly Financial Information and Notes thereto and Xicor's Annual Report on Form 10-K for the year ended December 31, 1998. The results of operations for the three and six months ended July 4, 1999 are not necessarily indicative of results to be expected in future periods. RESULTS OF OPERATIONS Sales for the first half of 1999 were relatively level compared to the prior year. First quarter 1999 sales of $25.7 million were lower than the $27.7 million reported in the prior year primarily due to lower average selling prices. Second quarter 1999 sales of $28.8 million increased 12% compared to first quarter 1999 sales, driven by increased unit shipments into wireless communications and networking applications. Sales for the second quarter of 1999 were 7% higher than second quarter 1998 sales of $26.8 million primarily due to increased sales to Asian customers, including sales into wireless communications applications. Gross profit as a percentage of sales was 26% and 22% for the three and six months ended July 4, 1999 compared to 5% and 17% for the comparable 1998 periods. The 1998 gross profit percentage was impacted by lower average selling prices as a result of competitive price pressures, Xicor's increased manufacturing cost level associated with increased production capacity and upgrading of the wafer fabrication operations during 1996 and 1997 and decreased factory utilization. After the first quarter of 1998 Xicor substantially reduced the production volume in its factory in response to declining business conditions. Unfavorable overhead variances that resulted from the fixed nature of certain manufacturing costs and the smaller number of units in production were expensed. Additionally, in the second quarter of 1998, Xicor -5- 8 wrote down inventories by $2.2 million to cover declining sales prices and inventories of certain devices that were discontinued as Xicor streamlines its product portfolio. To control wafer fabrication costs, Xicor has continued to limit 1999 wafer output at its in-house plant by operating at about one-third of its full capacity. Although the income statement was burdened by the related factory underutilization, the gross profit percentage improved in the second quarter of 1999 compared to the first quarter of 1999 primarily due to product mix and increased production outsourcing. Research and development expenses were 13% of sales in the three and six months ended July 4, 1999 compared to 17% in the comparable prior year periods. Research and development expenses decreased as a percentage of sales primarily due to lower personnel and depreciation costs and higher sales. Selling, general and administrative expenses were 19% and 20% of sales, respectively, for the three and six months ended July 4, 1999 compared to 21% and 20% for the comparable prior year periods. Selling, general and administrative expenses declined as a percentage of sales in the second quarter of 1999 primarily due to higher sales. Interest expense decreased in the second quarter and the first half of 1999 compared to the second quarter and first half of 1998 due to normal principal payments of outstanding lease debt. Interest income decreased in the second quarter and first half of 1999 compared to the comparable prior year periods due to a decrease in the average balance invested caused primarily by Xicor's use of such funds for operating activities during 1998 and the first quarter of 1999, ongoing debt repayments and 1998 and 1999 capital asset purchases. No taxes were provided in 1999 or 1998 due to the net loss. Net deferred tax assets of $44.7 million at December 31, 1998 remain fully reserved because of the uncertainty regarding the ultimate realization of these assets. During 1998 Xicor announced and began to implement a restructuring plan to change its manufacturing and procurement strategies to significantly increase outsourcing of wafer fabrication and product testing to overseas subcontractors and to streamline operations. In the second quarter of 1999 Xicor entered into agreements with ZMD GmbH of Germany and Sanyo Electric Co., Ltd. of Japan to fabricate wafers for Xicor. These foundry relationships are intended to supplement Xicor's foundry activities with Yamaha Corporation of Japan, which currently produces about one-third of Xicor's wafer requirements. With this additional foundry capability, Xicor has set a goal to outsource all wafer fabrication operations in the long-term. -6- 9 LIQUIDITY AND CAPITAL RESOURCES During the balance of 1999 Xicor expects to use cash to fund operating activities, repay long-term obligations and purchase equipment. In the first half of 1999, Xicor generated $0.3 million of cash from operating activities and used $3.8 million to repay long-term obligations and $0.7 million for equipment purchases. Capital expenditures for 1999 are currently planned at approximately $2 million. At July 4, 1999, Xicor had entered into commitments for equipment purchases aggregating less than $0.5 million. Xicor has a line of credit agreement with a financial institution that expires March 31, 2000, provides for borrowings of up to $7.5 million against eligible accounts receivable and is secured by all of Xicor's assets. Interest on borrowings is charged at the prime lending rate plus 2% and is payable monthly. At July 4, 1999, the entire $7.5 million was available to Xicor based on the eligible accounts receivable balances and the borrowing formulas. To date, no amounts have been borrowed under this line of credit. Subsequent to the second quarter of 1999, $1.7 million of the line of credit was reserved to secure a standby letter of credit. Management believes that currently available cash and the existing line of credit facility will be adequate to support Xicor's operations for the next twelve months. "SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 This quarterly report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements regarding the continuation of underutilization of Xicor's in-house wafer fabrication plant in 1999, the intent for the ZMD GmbH and Sanyo Electric Co., Ltd. foundry relationships to supplement Xicor's foundry activities with Yamaha, the goal to outsource all wafer fabrication operations in the long-term and the expectation that currently available cash and the existing line of credit facility will be adequate to support Xicor's operations for the next twelve months. Except for historical information, the matters discussed in this Quarterly Report are forward-looking statements that are subject to certain risks and uncertainties that could cause the actual results to differ materially from those projected. Factors that could cause Xicor's actual results to differ materially include the following: general economic conditions and conditions specific to the semiconductor industry, fluctuations in customer demand, competitive factors such as pricing pressures on existing products and the timing and market acceptance of new product introductions, Xicor's ability to have available an appropriate amount of competitive cost foundry production capacity in a timely manner, our foundry partners' timely ability to successfully manufacture products for Xicor using Xicor's proprietary technology, manufacturing efficiencies, the ability to continue effective cost reductions, the timely development of new products and submicron processes, the ability of Xicor, its customers, vendors and subcontractors to make their systems Year 2000 compliant, and the risk factors listed from time to time in Xicor's SEC -7- 10 reports, including but not limited to the "Factors Affecting Future Results" section following and Part I, Item 1. of Xicor's Form 10-K for the year ended December 31, 1998. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Xicor undertakes no obligation to publicly release or otherwise disclose the result of any revision to these forward-looking statements which may be made as a result of events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. FACTORS AFFECTING FUTURE RESULTS The semiconductor industry is highly competitive and characterized by rapidly changing technology and steadily declining product prices. The current business climate has and will continue to result in underutilization of Xicor's internal wafer fabrication factory, which will adversely affect Xicor's business and results of operations. Xicor's results of operations, including gross margins, are affected by a wide variety of factors, including general economic conditions and conditions specific to the semiconductor industry, decreases in average selling price over the life of any particular product, the timing of new product introductions (both by Xicor and competitors), availability of new manufacturing technologies, the ability to secure intellectual property rights in a rapidly evolving market and the ability to have an appropriate amount of competitive cost internal and outsourced production capacity in a timely manner. The sales level in any specific quarter also depends significantly on orders received during that quarter, as customers continue to shorten lead times for purchase commitments. Consistent with industry practice, customer orders are generally subject to cancellation by the customer without penalty. Xicor may be at a disadvantage in competing with major domestic and foreign concerns that have significant financial resources, established and diverse product lines, worldwide vertically integrated production facilities and extensive research and development capabilities. The semiconductor industry is also characterized by substantial capital and research and development investment for products and processes. The rapid rate of technological change within the industry requires Xicor to continually develop new and improved products and processes to maintain its competitive position. Xicor expects to continue to invest in the research and development of new products and manufacturing processes during the remainder of 1999, although these research and development efforts and new products may not be successful. Xicor uses a significant number of computer software programs and operating systems and intelligent hardware devices in its internal operations, including information technology (IT) systems and non-IT systems used in the design, manufacture and marketing of company products. These items are considered to be Year 2000 "objects" and to the extent that these objects are unable to correctly recognize and process date dependent information beyond the year 1999, some level of modification or replacement is necessary. Xicor's Year 2000 Compliance Program addresses Xicor IT and non-IT systems, Xicor products, key suppliers and key customers. The compliance program consists of five phases: Planning, Assessment, Renovation, Validation and Implementation. At the end of the second quarter of 1999, 90% of all the objects used in the internal systems of Xicor were in the -8- 11 Validation or Implementation phase. Company actions have and continue to include replacing certain systems, while modifying others. Xicor plans to have all critical objects that would prevent Xicor from meeting its customer commitments completed by the end of the third quarter of 1999. Xicor believes its products are Year 2000 compliant. Xicor is also actively working with key suppliers of products and services to determine that the suppliers' operations and the products and services they provide are Year 2000 compliant. Approximately 30% of Xicor's key suppliers are Year 2000 compliant while the majority of the remaining suppliers have active Year 2000 programs in place. Xicor is developing contingency plans for Year 2000 non-compliance. These plans include identifying alternate suppliers, vendors, procedures, generating supply and equipment lists, conducting staff training and developing communication plans. In some cases, the contingency plan will be to get the system modified and operational as soon as possible. Based on currently available information, the incremental costs associated with these efforts are expected to be less than $0.5 million, a portion of which relates to the purchase of software and hardware and will be capitalized. Approximately 60% of these costs have been incurred to date. Year 2000 compliance issues could have a significant impact on Xicor's operations and its financial results if modifications cannot be completed in a timely manner; unforeseen needs or problems arise or if the systems operated by Xicor's customers, vendors or subcontractors are not Year 2000 compliant. Xicor has an investment portfolio of fixed income securities that are classified as "held to maturity securities". These securities, like all fixed income instruments, are subject to interest rate risk and will fall in value if market interest rates increase. Xicor attempts to limit this exposure by investing primarily in short-term securities. In view of the nature and mix of Xicor's total portfolio, a movement of 10% by market rates would not have a material impact on the total value of the portfolio at July 4, 1999. Xicor makes certain purchases denominated in foreign currencies. As a result, Xicor's cash flows and earnings are exposed to fluctuations in interest rates and foreign currency exchange rates. Xicor attempts to limit these exposures through operational strategies and generally has not hedged currency exposures. Due to the foregoing and other factors, past results are a much less reliable predictor of the future than is the case in many older, more stable and less dynamic industries. In addition, the securities of many high technology companies, including Xicor, have historically been subject to extensive price and volume fluctuations that may adversely affect the market price of their common stock. -9- 12 PART II: OTHER INFORMATION ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS On June 4, 1999 the shareholders of Xicor held their annual meeting in Milpitas, California. The holders of 18,671,929 shares of Common Stock were present or represented by proxy, and accordingly, a quorum was present and matters were voted upon as follows: (a) The following persons were elected directors:
Votes for Votes withheld --------- -------------- Raphael Klein 17,296,756 1,375,173 Bruce Gray 17,305,716 1,366,213 Julius Blank 17,294,266 1,377,663 Andrew W. Elder 17,305,066 1,366,863 Geoffrey C. Winkler 17,304,406 1,367,523
(b) The following resolutions were submitted to a vote of the shareholders at the meeting: (1) To approve an amendment to the Company's Bylaws to increase the authorized number of directors to no less than four (4) nor more than seven (7) and initially set the number of directors at five (5). As of the annual meeting date, the Company had not received sufficient votes to approve the proposal. As a result, for this proposal the meeting was adjourned to June 25, 1999 and subsequently to July 14, 1999 pursuant to Section 601(d) of the General Corporation Law of the State of California and Article III, Section 4 of Xicor's Bylaws. At the July 14, 1999 meeting the resolution was passed, 10,156,243 shares voting in favor, 427,463 shares voting against and 57,990 shares abstaining. (2) To approve and ratify amendments to the Company's 1990 Incentive and Non-Incentive Stock Option Plan including an increase of 250,000 shares of Common Stock issuable thereunder. The resolution was passed, 15,789,522 shares voting in favor, 2,689,237 shares voting against and 193,170 shares abstaining. (3) To ratify the designation of PricewaterhouseCoopers LLP as independent accountants for the period ending December 31, 1999. The resolution was passed, 18,467,340 shares voting in favor, 144,794 shares voting against and 59,795 shares abstaining. -10- 13 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. (a) Exhibits: 10.8A Fourth Amendment to Loan Documents and Letter of Credit Collateral Agreement 27 Financial Data Schedule (b) Reports on Form 8-K: No reports on Form 8-K were filed with the Securities and Exchange Commission during the quarter ended July 4, 1999. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. XICOR, INC., a California Corporation By /s/ Raphael Klein ----------------------------------- Raphael Klein Chief Executive Officer (Principal Executive Officer) By /s/ Geraldine N. Hench ----------------------------------- Geraldine N. Hench Vice President, Finance (Principal Financial Officer) Date: August 13, 1999 -11- 14 Index to Exhibits Number Description - ------ ----------- 10.8A Fourth Amendment to Loan Documents and Letter of Credit Collateral Agreement 27 Financial Data Schedule EX-10.8(A) 2 FOURTH AMENDMENT TO LOAN DOCUMENTS AND LETTER 1 EXHIBIT 10.8A COAST FOURTH AMENDMENT TO LOAN DOCUMENTS BORROWER: XICOR, INC. ADDRESS: 1511 BUCKEYE DRIVE MILPITAS, CALIFORNIA 95035 DATE: JULY 1, 1999 THIS FOURTH AMENDMENT TO LOAN DOCUMENTS is entered into between Coast Business Credit, a division of Southern Pacific Bank (successor by merger of CoastFed Business Credit Corporation) ("Coast"), whose address is 12121 Wilshire Blvd., Suite 1400, Los Angeles, California and the borrower named above (the "Borrower"). The Parties agree to amend the Loan and Security Agreement between them, dated March 10, 1993 (as amended, supplemented or otherwise modified from time to time being referred to herein as the "Loan Agreement"), and that certain Accounts Collateral Security Agreement between them, dated March 10, 1993 (the "Accounts Agreement"), as follows, effective as of the date hereof. (This Amendment, the Loan Agreement, the Accounts Agreement, any prior written amendments to said agreements signed by Coast and the Borrower, and all other written documents and agreements between Coast and the Borrower are referred to herein collectively as the "Loan Documents". Capitalized terms used but not defined in this Amendment, shall have the meanings set forth in the Loan Agreement.) 1. LETTER OF CREDIT COLLATERAL AGREEMENT. Concurrently herewith with respect to the establishment of a letter of credit facility by Coast in favor of Borrower, Borrower shall execute and deliver to Coast the Letter of Credit Collateral Agreement of even date herewith (the "LC Agreement") on Coast's standard form. 2. COASTFED REFERENCES. All references in the Loan Documents to "CoastFed" are hereby amended to be references to "Coast." 3. SECTION 2.1 MODIFICATION. Section 2.1 of the Accounts Agreement is hereby amended to read as follows: "2.1 Amount of Loans. Provided that no Event of Default has occurred, Coast agrees to make Loans to Borrower, repayable on demand, in amounts up to Applicable OEM Percentage (as 2 defined below) of the Net Amount of each Account, in the case of accounts owing from original equipment manufacturers, and the Applicable Distributor Percentage (as defined below) of the Net Amount of each Account in the case of distributors, in each case which Coast in its sole and absolute discretion deems eligible for borrowing. The term "Net Amount" of an Account, as used herein, shall mean the gross amount of the Account, minus all applicable sales, use, excise and other similar taxes and minus all discounts, credits and allowances of any nature at any time issued, owing, granted, outstanding, available or claimed, except that, in determining the "Net Amount" of an Account owing from a distributor, discounts and allowances granted in the ordinary course of business shall not be deducted, but the same shall be reported to Coast on a regular basis in accordance with such reasonable practice as Coast shall specify. Further, in no event shall Loans arising from Receivables owing from account debtors not located in the United States ("Foreign Accounts) exceed $1,500,000 at any time at such time that the Reduced Reporting and Collection Duties (as defined below) are in effect. As used herein, the term "Applicable OEM Percentage" shall mean 50% at such times that the Reduced Reporting and Collection Duties (as defined below) are in effect, and 80% at other times. As used herein, the term "Applicable Distributor Percentage" shall mean 15% at such times that the Reduced Reporting and Collection Duties (as defined below) are in effect, and 35% at other times. As used herein, the term "Reduced Reporting and Collection Duties" shall have the meaning set forth in the Fourth Amendment to Loan Documents dated June 22, 1999 between Coast and Borrower (the "Fourth Amendment"), which shall only be in effect when the Standby LC Only Condition (as defined in the Fourth Amendment) is also satisfied. Foreign Accounts may be considered Accounts eligible for borrowing purposes hereunder (subject to all of the other criteria herein) if any of the following apply: (i) the Account is due from an account debtor which has a verifiable credit history acceptable to Coast, (ii) the account debtor thereon is a foreign subsidiary of a large United States company with a demonstrated credit history acceptable to Coast, (iii) the account debtor thereon has a Dun & Bradstreet rating of 3A2 or better, (iv) the Account is backed by a letter of credit, which letter of credit is in form and substance acceptable to Coast and which letter of credit may be assigned to Coast, at Coast's discretion, or (v) the Account is insured by insurance acceptable to and assigned to Coast, but all such Foreign Accounts deemed eligible for borrowing purposes hereunder shall nevertheless be acceptable to Coast in its sole discretion." 4. RECEIVABLES REPORTING AND COLLECTION. At such times that the only Obligations outstanding are LC Obligations (as defined in the LC Agreement) relating to the issuance of standby letters of credit only (referred to herein as the "Standby LC Only Condition"), and no other monetary Obligations or LC Obligations of any other nature are outstanding: (A) the 3 Borrower shall provide accounts receivable reports to Coast on a weekly basis, i.e., by Thursday of each week relating to the status of the Borrower's Accounts as of Sunday of such week; and (B) Borrower shall not be obligated to forward to Coast proceeds of its accounts receivable collections and may retain such proceeds in Borrower's own bank accounts (collectively referred to as the "Reduced Reporting and Collection Duties"). Immediately at such time that the Standby LC Only Condition lapses and is no longer occurring or an Event of Default occurs (the "Reversion Condition"), the Reduced Reporting and Collection Duties shall no longer be in effect and all terms and provisions of the Loan Agreement and all Collateral Agreements, including, without limitation, the full and complete terms of sections 3 and 4 of the Accounts Agreement shall be deemed in full force and effect, without any notice to Borrower or any other party whatsoever. Thus, by way of example only, upon the occurrence of the Reversion Condition, Borrower shall forward to Coast the accounts receivable collections that the Borrower receives on a daily basis or otherwise comply with instructions from Coast in accordance with Section 4 of the Accounts Agreement and other related provisions of the Loan Documents that may include the Coast's direct collection of the Borrower's accounts. Further, nothing herein diminishes or otherwise affects the security interest of Coast in the Collateral, including, without limitation, the accounts of the Borrower. 5. SECTION 8 MODIFICATION. Section 8 of the Loan Agreement is hereby amended to read as follows: "This Loan Agreement and all Collateral Agreement(s) shall continue in effect until March 31, 2000 (the "initial renewal date") and shall thereafter automatically and continuously renew for successive additional terms of ONE year each unless terminated as to future transactions as hereinafter provided. (The initial renewal date and each subsequent date on which the terms of this Loan Agreement and the Collateral Agreement(s) automatically renew are hereinafter referred to as "renewal dates.") This Loan Agreement and any Collateral Agreement may be terminated, as to future transactions only, as follows: (a) By written notice from either Coast or Borrower to the other, not less than ninety (90) days prior to the next renewal date, in which event termination shall be effective on the next renewal date; or (b) By Coast at any time after the occurrence of an Event of Default, without notice, in which event termination shall be effective immediately; or (c) By ninety (90) days' prior written notice from Borrower to Coast, in which event, termination shall be effective on the ninetieth day after such notice is given; or (d) By the grant by Borrower to any third party of a lien or encumbrance on, or security interest in, any of the Collateral, as provided in Paragraph 3.5, in which event termination shall be effective on the date selected by Coast pursuant to Paragraph 3.5. On the effective date of termination, Borrower shall pay and perform in full all Obligations, whether evidenced by installment notes or otherwise, and whether or not all or any part of such Obligations are otherwise then due and payable. If Borrower attempts to terminate this Loan Agreement under subparagraph (a) or (c) above, but does not pay and perform all Obligations in full on the effective date of termination, then this Loan Agreement and all Collateral Agreement(s) shall not be terminated and shall continue in full force and effect until the next renewal date and shall automatically renew thereafter as provided above. If termination occurs under subparagraph (b), (c) or (d) above, Borrower shall pay to 4 Coast a termination fee in an amount equal to $5,000 for each month (or portion thereof) from the effective date of termination to the date which would have been the next renewal date had this Loan Agreement not been terminated. Said termination fee shall be included in the Obligations, shall be payable on the effective date of termination, and shall bear interest at a rate equal to the highest interest rate applicable to any of the Obligations. Notwithstanding any termination of this Loan Agreement or any Collateral Agreement, all of Coast's security interest in all of the Collateral and all of the terms and provisions of this Loan Agreement and all Collateral Agreement(s) shall continue in full force and effect until all Obligations have been paid and performed in full, and no termination shall in any way affect or impair any right or remedy of Coast, nor shall any such termination relieve Borrower of any Obligation to Coast until all of the Obligations have been paid and performed in full. Without limiting the fact that all Loans are discretionary on the part of Coast, Coast may, in its sole discretion, refuse to make any further Loans after termination. Upon payment and performance in full of all the Obligations, Coast shall promptly deliver to Borrower termination statements, request for reconveyances and such other documents as may be required to fully terminate any of Coast's security interests." 6. CASH COVENANT; MONTHLY REPORT. At all times that the Reduced Reporting and Collection Duties are in effect, Borrower shall maintain unrestricted Cash (as defined below), at all times, in an amount not less than $7,500,000. As used herein "Cash" shall mean cash on hand or on deposit in banks, readily marketable securities issued by the United States, readily marketable commercial paper rated "A-1" by Standard & Poor's Corporation (or a similar rating by a similar rating organization), certificates of deposit and banker's acceptances. Borrower shall provide to Coast a Cash report, in such form as is acceptable to Coast, on a monthly basis, within 30 days of the end of each month 7. TANGIBLE NET WORTH COVENANT. At all times that the Reduced Reporting and Collection Duties are in effect, Borrower shall maintain, at all times, a Tangible Net Worth of not less than $15,000,000. "Tangible net worth" means the excess of total assets over total liabilities, determined in accordance with generally accepted accounting principles, excluding however all assets which would be classified as intangible assets under generally accepted accounting principles, including without limitation goodwill, licenses, patents, trademarks, trade names, copyrights, and franchises. Coast agrees to adjust the foregoing covenant amount by the amount of any non-cash extraordinary adjustments, specifically including, without limitation, any restructuring charges of the Borrower. Borrower shall supply evidence, satisfactory to Coast, of compliance with the foregoing covenant on a monthly basis, within 30 days of the end of each month. 8. PATENT AND TRADEMARK SECURITY AGREEMENT. Within 45 days of the date hereof, Borrower shall execute and deliver to Coast a patent and trademark security agreement on Coast's standard form, subject to agreed upon changes thereto, as Borrower requests, as are reasonably acceptable to Coast, together with complete and accurate information concerning the composition of the Borrower's patent, trademark and other intellectual property assets. Failure to comply with the foregoing covenant shall constitute an Event of Default under the Loan Agreement. 5 9. SECTION 12 MODIFICATION. That portion of section 12 of the Loan Agreement that now reads as: "Without limiting the generality of the foregoing, Borrower shall reimburse CoastFed for its out of pocket costs in connection with CoastFed's regular quarterly audits of Borrower and shall Borrower shall pay CoastFed an audit fee of $1,250 for each such quarterly audit" IS HEREBY AMENDED TO READ AS FOLLOWS: "Without limiting the generality of the foregoing, the regularly quarterly audits of Borrower shall be at Borrower's expense and the charge therefor shall be $750 per person per day (or such higher amount as shall represent Coast's then current standard charge for the same) (which charge is generally not to exceed $2,500 per quarter, provided no such general understanding shall apply upon the occurrence and during the continuance of an Event of Default), plus reasonable out of pocket expenses." 10. REPRESENTATIONS TRUE. Borrower represents and warrants to Coast that all representations and warranties set forth in the Loan Agreement, as amended hereby, are true and correct, other than with respect to the locations of Collateral and liens with respect thereto relating to which Borrower agrees to provide current information to Coast within 45 days of the date hereof. 11. GENERAL PROVISIONS. This Amendment, the Loan Agreement, and the other Loan Documents set forth in full all of the representations and agreements of the parties with respect to the subject matter hereof and supersede all prior discussions, representations, agreements and understandings between the parties with respect to the subject hereof. Except as herein expressly amended, all of the terms and provisions of the Loan Agreement and the other Loan Documents shall continue in full force and effect and the same are hereby ratified and confirmed. Borrower: Coast: XICOR, INC. COAST BUSINESS CREDIT, a division of Southern Pacific Bank By /s/ Klaus G. Hendig By /s/ Phillip Goessler ------------------------------ ---------------------------- Vice President Title Vice President 6 [COAST LOGO] LETTER OF CREDIT COLLATERAL AGREEMENT BORROWER: XICOR, INC. ADDRESS: 1511 BUCKEYE DRIVE MILPITAS, CALIFORNIA 95035 DATE: JULY 1, 1999 THIS LETTER OF CREDIT COLLATERAL AGREEMENT ("LC Agreement"), dated the above date, is entered into between COAST BUSINESS CREDIT, a division of Southern Pacific Bank ("Coast") and the borrower named above ("Borrower"), and is one of the Collateral Agreements referred to in that certain Loan and Security Agreement between Coast and Borrower dated March 10, 1993, as amended, supplemented and otherwise modified from time to time ("Loan Agreement"). This LC Agreement is an integral part of the Loan Agreement, and all of the terms and provisions of the Loan Agreement are incorporated herein by this reference. (Capitalized terms used in this Agreement, which are not defined in this Agreement, shall have the meanings set forth in the Loan Agreement. This Agreement, the Loan Agreement and all other present and future documents instruments and agreements between Coast and the Borrower are referred to herein collectively as the "Loan Documents.") 1. LETTERS OF CREDIT. From time to time, in order to assist Borrower in establishing or opening Letters of Credit (the "LCs") with a bank, trust company or other issuer ("Bank") to cover the purchase of goods or for other purposes, Borrower may request that Coast join in the applications for the LCs, and/or provide guarantees of, and/or indemnities with respect to, payment or performance of the LCs and/or any drafts or acceptances thereunder and/or Borrower's obligations in connection therewith (collectively, "Guarantees"). The decision to do so shall be a matter of Coast's sole discretion. In the event Coast joins in such applications and/or provides Guarantees, the transactions shall be subject to the terms and conditions of this Agreement. The amount, extent, terms and conditions of the LCs and any drafts or acceptance relating thereto, shall in all respects be determined solely by Coast and shall be subject to change, modification and revision by Coast at any time and from time to time, in its discretion. LCs shall have a maturity date of February 28, 2000 or sooner, provided that such LCs may contain a provision that permits the automatic renewal thereof if, and only if, notices of non-renewal by the issuer thereof, account party thereon or beneficiary thereof is provided no later than 60 days prior the then effective maturity date or contains other notice and renewal provisions that are acceptable to Coast in its sole discretion. 2. INDEMNITY. Borrower unconditionally agrees to indemnify, defend and hold Coast harmless from any and all indebtedness, liabilities, obligations, losses and claims, of every sort whatsoever, however arising, whether present or future, fixed or contingent, due or to become due, paid or incurred, arising, incurred in connection with, or relating to, any LCs, applications for LCs, Guarantees, drafts or acceptances thereunder or LC Collateral (as defined below), including without limitation (i) any and all losses and claims due to any action or omission by any Bank, any errors or omissions of Coast or any Bank, or otherwise, other than arising from any gross negligence, (ii) all amounts due or which may become due under LCs, or any drafts or acceptances thereunder, (iii) all liabilities and obligations under any steamship or airway guarantees or releases or any Guarantees, (iv) all amounts charged or chargeable to Borrower or to -1- 7 COAST LETTER OF CREDIT AGREEMENT - -------------------------------------------------------------------------------- Coast by any Bank, any other financial institution or any correspondent bank which opens, issues or is involved with the LCs, (v) all other bank charges, and (vi) all fees, commissions, duties, taxes, costs of insurance, and all such other charges and expenses which may pertain either directly or indirectly to any LC, draft, acceptance, or Guarantee or to the goods or documents relating thereto. Borrower's obligation to indemnify Coast under this Agreement and Borrower's other obligations under this Agreement are referred to herein as the "LC Obligations" (which shall include, without limitation, the aggregate face amounts of all LCs and Guarantees). Borrower's LC Obligations shall not be modified or diminished for any reason or in any manner whatsoever, shall be included in the "Obligations" (as defined in the Loan Agreement), and shall survive termination of the Loan Agreement and any other Loan Document. Without limiting the generality of the foregoing, Borrower agrees that any charges made to Coast by any Bank for Borrower's account or relating to any LC shall be conclusive on Borrower and may be charged to any of Borrower's Loan accounts with Coast. Coast shall have the right, at any time and without notice to Borrower, to charge any of Borrower's Loan accounts with Coast with the amount of any and all sums due from Borrower to Coast under this Agreement, and the same shall constitute Loans for all purposes of the Loan Documents and shall bear interest at the rate provided in the Loan Agreement. All sums payable by Borrower to Coast under this Agreement shall be paid solely in United States dollars. 3. LC LIMITS. Without limiting the fact that Coast's decisions to join in an application for an LC or issue a Guarantee are a matter of its sole discretion, the total amount of all outstanding LC Obligations shall not at any time exceed $2,500,000 in the aggregate, and if for any reason they do, Borrower shall provide cash collateral to Coast in an amount equal to the excess, to secure all of the Obligations, and Borrower shall execute and deliver to Coast a pledge agreement with respect thereto on Coast's standard form. In addition, the total amount of all LC Obligations and all outstanding "Loans" and other "Obligations" (as defined in the Loan Agreement) shall not at any time exceed the maximum amount of all Loans and other Obligations specified in Section 1.1 of the Loan Agreement, and if for any reason they do, Borrower shall immediately pay the excess to Coast to be applied to the Obligations in such order and manner as Coast shall determine in its sole discretion. 4. LOAN AVAILABILITY RESERVE. Without limiting the fact that Loans under the Loan Documents are discretionary on the part of Coast, the amount of Loans which would otherwise be available to Borrower from time to time under the lending formulas set forth in the Loan Agreement and the other Loan Documents shall be reduced by 100% of the total amount of all LC Obligations from time to time outstanding. 5. CHARGES. In addition to any charges, fees or expenses of any Bank or other person in connection with any LC (all of which shall be charged to Borrower's Loan account), Coast shall be entitled to charge Borrower's Loan account with a monthly fee in an amount equal to .25% of the amount of all LC Obligations from time to time outstanding, calculated on the basis of a 30-day month for the actual number of days elapsed, payable in arrears on the first day of each month. 6. SECURITY. Without limiting the security interests granted in the Loan Documents, Borrower hereby grants Coast a security interest in the following (the "LC Collateral"), whether now owned or hereafter acquired by Borrower, wherever located, whether in transit or not, to secure all of the Obligations: all bills of lading, shipping documents, documents of title, chattel paper, invoices, cash, checks, drafts, notes, documents, warehouse, shipping and dock receipts, and other title, payment, or other instruments, and instruments, whether negotiable or not, relating to any LC, and all goods and inventory relating thereto in all stages of manufacture, process or production, and all cash and non-cash proceeds and insurance proceeds thereof of whatever sort and however arising. All references in the Loan Agreement to "Collateral" shall, for all purposes, include without limitation the LC Collateral, and all terms and provisions of the Loan Agreement applicable to Collateral shall also apply to the LC Collateral. 7. NON-RESPONSIBILITY. Coast shall not be responsible for: the existence, character, quality, quantity, condition, packing, value or delivery of the goods purporting to be represented by any documents; any difference or variation in the character, quality, quantity, condition, packing, value or delivery of the goods from that expressed in the documents; the validity, sufficiency or genuineness of any documents or of any endorsements thereon, even if such documents should in fact prove to be in any or all respects invalid, insufficient, fraudulent or forged; the time, place, manner or order in which shipment is made; -2- 8 COAST LETTER OF CREDIT AGREEMENT - -------------------------------------------------------------------------------- partial or incomplete shipment, or failure or omission to ship any or all of the goods referred to in the LCs or documents; any deviation from instructions, delay, default, or fraud by the shipper and/or anyone else in connection with the LC Collateral or the shipping thereof; or any breach of contract between the shipper or vendors and Borrower. Furthermore, without being limited by the foregoing, Coast shall not be responsible for any act or omission with respect to or in connection with any LC Collateral. 8. COAST'S AUTHORITY. Borrower agrees that any action taken by Coast, if taken in good faith, or any action taken by any Bank, under or in connection with the LCs, the Guarantees, the drafts or acceptances, or the LC Collateral, shall be binding on Borrower and shall not result in any liability of Coast to Borrower. In furtherance thereof, Coast shall have the full right and authority to clear and resolve any questions of non-compliance of documents; to give any instructions as to acceptance or rejection of any documents or goods; to execute any and all applications for steamship or airway guarantees, indemnities or delivery orders; to grant any extensions of the maturity of, time or payment for, or time of presentation of, any drafts, acceptances, or documents; and to agree to any amendments, renewals, extensions, modifications, changes or cancellations of any of the terms or conditions of any of the applications, LCs, drafts or acceptances; all in Coast's sole name, and the Bank shall be entitled to comply with and honor any and all such documents or instruments executed by or received solely from Coast, all without any notice to or any consent from Borrower. 9. COAST'S RIGHTS. Any rights, remedies, duties or obligations granted or undertaken by Borrower to any Bank in any application for LCs, or any standing agreement relating to LCs or otherwise, shall be deemed to have been granted to Coast and apply in all respects to Coast and shall be in addition to any rights, remedies, duties or obligations contained herein. Borrower hereby agrees that prior to the payment of all Obligations to Coast, Coast may be deemed to be the absolute owner of, with unqualified rights to possession and disposition of, all LC Collateral, all of which may be held by Coast as security as herein provided. Should possession of any LC Collateral be transferred to Borrower, said LC Collateral shall continue to serve as security as herein provided, and any goods or inventory covered hereby may be sold, transferred or disposed of only as permitted by the Loan Documents. 10. NEGATIVE COVENANTS. Without Coast's prior written approval, Borrower agrees not to clear or resolve any questions of non-compliance of documents; not to give any instructions as to acceptance or rejection of any documents or goods; not to execute any applications for steamship or airway guarantees, indemnities or delivery orders; not to grant any extensions of the maturity of, time of payment for, or time of presentation of, any drafts, acceptances or documents; and not to agree to any amendments, renewals, extensions, modifications, changes or cancellations of any of the terms or conditions of any of the applications, LCs, drafts or acceptances. 11. AFFIRMATIVE COVENANTS. Borrower shall cause: all necessary import, export or other licenses or certificates for the import or handling of the LC Collateral to be promptly procured; all foreign and domestic governmental laws and regulations in regard to the shipment and importation of the LC Collateral, or the financing thereof to be promptly and fully complied with; and any certificates in that regard that Coast may at any time request to be promptly furnished. In this connection, Borrower warrants and represents to Coast that all shipments made under the LCs are and shall be in accordance with the governmental laws and regulations of the countries in which the shipments originate and terminate, and shall not be prohibited by any such laws or regulations. Borrower assumes all risk, liability and responsibility for, and agrees to pay and discharge, all present and future local, state, federal or foreign taxes, duties, and levies. Any embargo, restriction, laws, customs or regulations of any country, state, city, or other political subdivision, where the Collateral is or may be located, or wherein payments are to be made, or wherein drafts may be drawn, negotiated, accepted, or paid, shall be solely Borrower's risk, liability and responsibility. 12. TERMINATION. Without limiting any of the terms of the Loan Agreement, on the effective date of termination of the Loan Agreement, in addition to paying and performing in full all other Obligations, Borrower shall provide cash collateral to Coast in an amount equal to 100% of the amount of all LC Obligations, to secure all of the Obligations, and Borrower shall execute and deliver to Coast a pledge agreement with respect thereto on Coast's standard form. 13. DEFAULT. On any failure to pay or perform any Obligation when due, or the occurrence of any other "Event of Default" (as -3- 9 COAST LETTER OF CREDIT AGREEMENT - -------------------------------------------------------------------------------- defined in the Loan Agreement), Coast shall have all of the rights and remedies set forth in the Loan Documents and which it otherwise has under applicable law, and without limiting the generality of the foregoing, Coast shall have the right to require Borrower to deposit cash collateral with Coast in an amount equal to 110% of the amount of all LC Obligations, to secure all of the Obligations, and Borrower shall execute and deliver to Coast a pledge agreement with respect thereto on Coast's standard form. 14. POWER OF ATTORNEY. Without limiting the terms of any of the Loan Documents, Borrower hereby appoints each employee, attorney or agent of Coast as Borrower's attorney-in-fact, with full power and authority in each of them, at Coast's option, but without obligation, with or without notice to Borrower, in connection with any LC and any purchase agreement or other document or agreement entered into, or goods delivered, in connection therewith, at Borrower's expense, to do any or all of the following in Borrower's name or otherwise: (i) to sign or endorse all warehouse, shipping, dock or other receipts, letters of credit, notes, acceptances, checks, drafts, money orders and all other evidence of indebtedness, and all financing statements, invoices, trust receipts, bills of lading and other title documents; (ii) to complete any transaction in connection with, arising out of, or which is the subject of any LC or Guarantee, to obtain, execute and deliver all necessary or proper documents in connection therewith and to collect the proceeds thereof; (iii) upon any Event of Default under the Loan Agreement, or this Agreement, to cancel, rescind, terminate, modify, amend, or adjust, in any other way, in whole or in part, any transaction in connection with, arising out of, or which is the subject of any LC or Guarantee; and (iv) to do any and all other acts and things which may be necessary or appropriate in connection with this Agreement or any LC, or any transaction relating thereto, or to enable Coast to obtain payment of any Obligations. The power of attorney granted hereunder is coupled with an interest and shall be irrevocable until all Obligations have been paid in full. 15. GENERAL. Without limiting any of the other provisions of this Agreement, all of the General Provisions of the Loan Agreement, as well as all other provisions of the Loan Agreement, are hereby incorporated herein by this reference. [Text continues on the following page] -4- 10 COAST LETTER OF CREDIT AGREEMENT - -------------------------------------------------------------------------------- 16. MUTUAL WAIVER OF JURY TRIAL. BORROWER AND COAST EACH HEREBY WAIVE THE RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT OF, OR IN ANY WAY RELATING TO, THIS AGREEMENT OR ANY OTHER PRESENT OR FUTURE INSTRUMENT OR AGREEMENT BETWEEN COAST AND BORROWER, OR ANY CONDUCT, ACTS OR OMISSIONS OF COAST OR BORROWER OR ANY OF THEIR DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, ATTORNEYS OR ANY OTHER PERSONS AFFILIATED WITH COAST OR BORROWER, IN ALL OF THE FOREGOING CASES, WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE. BORROWER: XICOR, INC. BY /s/ Klaus G. Hendig ----------------------------- Vice President COAST: COAST BUSINESS CREDIT, A DIVISION OF SOUTHERN PACIFIC BANK BY /s/ Phillip Goessler -------------------------- TITLE Vice President EX-27 3 FINANCIAL DATA SCHEDULE
5 6-MOS JAN-02-2000 JAN-04-1999 JUL-04-1999 13,939,000 0 11,489,000 500,000 10,509,000 36,108,000 141,556,000 109,429,000 68,523,000 33,495,000 0 0 0 128,470,000 (104,017,000) 68,523,000 54,407,000 54,407,000 42,306,000 42,306,000 7,242,000 0 751,000 (6,390,000) 0 (6,390,000) 0 0 0 (6,390,000) (0.32) (0.32)
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