<PAGE>   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


<PAGE>   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


<PAGE>   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


<PAGE>   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.


<PAGE>   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




<PAGE>   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-
<PAGE>   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-
<PAGE>   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-
<PAGE>   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-
<PAGE>   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