Exhibit 10.2

 

AMENDMENT TO LOAN DOCUMENTS

 

THIS AMENDMENT TO LOAN DOCUMENTS (this “Amendment”) is entered into as of
June 30, 2010, by and between SILICON VALLEY BANK (“Bank” or “Silicon”) and
NETLIST, INC., a Delaware corporation (“Borrower”).  Borrower’s chief executive
office is located at 51 Discovery, Suite 150, Irvine, CA 92618.

 

RECITALS

 

A.            Bank and Borrower are parties to that certain Loan and Security
Agreement with an Effective Date of October 31, 2009  (as amended, modified,
supplemented or restated, the “ Loan Agreement”) in effect between Bank and
Borrower.

 

B.            Bank has extended credit to Borrower for the purposes permitted in
the Loan Agreement.

 

C.            Borrower has requested that Bank amend the Loan Agreement to
modify the Profitability Financial Covenant as more fully set forth herein.

 

D.            Bank has agreed to so amend the Loan Agreement, but only to the
extent, in accordance with the terms, subject to the conditions and in reliance
upon the representations and warranties set forth below.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the foregoing recitals and other good and
valuable consideration, the receipt and adequacy of which is hereby
acknowledged, and intending to be legally bound, the parties hereto agree as
follows:

 

1.             Definitions.  Capitalized terms used but not defined in this
Amendment shall have the meanings given to them in the Loan Agreement.

 

2.             Amendments to Loan Documents.

 

2.1          Modified Profitability Financial Covenant.  Section 6.9(b) of the
Loan Agreement is hereby amended in its entirety to read as follows:

 

(b)           Profitability.  Measured as of the end of each of the following
fiscal quarters, minimum Gross Profit of not less than the following [note —
amounts within pointed brackets ( < $ > ) are negative amounts]:

 

Fiscal Quarter ending ...

 

Minimum Gross Profit

 

September 30, 2009

 

$

<415,000.00

> 

December 31, 2009

 

$

43,000.00

 

March 31, 2010

 

$

1,429,000.00

 

June 30, 2010

 

$

1,500,000.00

 

September 30, 2010

 

$

2,000,000.00

 

 

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3.             Limitation of Amendments.

 

3.1          The amendments set forth in Section 2, above, are effective for the
purposes set forth herein and shall be limited precisely as written and shall
not be deemed to (a) be a consent to any amendment, waiver or modification of
any other term or condition of any Loan Document, or (b) otherwise prejudice any
right or remedy which Bank may now have or may have in the future under or in
connection with any Loan Document.

 

3.2          This Amendment shall be construed in connection with and as part of
the Loan Documents and all terms, conditions, representations, warranties,
covenants and agreements set forth in the Loan Documents (as amended by this
Amendment, as applicable) are hereby ratified and confirmed and shall remain in
full force and effect.

 

4.             Representations and Warranties.  To induce Bank to enter into
this Amendment, Borrower hereby represents and warrants to Bank as follows:

 

4.1          Immediately after giving effect to this Amendment, (a) the
representations and warranties contained in the Loan Documents are true,
accurate and complete in all material respects as of the date hereof (except to
the extent such representations and warranties relate to an earlier date, in
which case they are true and correct as of such date, or except as otherwise
previously disclosed in writing by Borrower to Bank), and (b) no Event of
Default has occurred and is continuing;

 

4.2          Borrower has the power and authority to execute and deliver this
Amendment and to perform its obligations under the Loan Documents, as amended by
this Amendment;

 

4.3          The organizational documents of Borrower delivered to Bank on the
Effective Date remain true, accurate and complete and have not been otherwise
amended, supplemented or restated and are and continue to be in full force and
effect;

 

4.4          The execution and delivery by Borrower of this Amendment and the
performance by Borrower of its obligations under the Loan Documents, as amended
by this Amendment, have been duly authorized;

 

4.5          The execution and delivery by Borrower of this Amendment and the
performance by Borrower of its obligations under the Loan Documents, as amended
by this Amendment, do not and will not contravene (a) any law or regulation
binding on or affecting Borrower, (b) any contractual restriction with a Person
binding on Borrower, (c) any order, judgment or decree of any court or other
governmental or public body or authority, or subdivision thereof, binding on
Borrower, or (d) the organizational documents of Borrower;

 

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4.6          The execution and delivery by Borrower of this Amendment and the
performance by Borrower of its obligations under the Loan Documents, as amended
by this Amendment, do not require any order, consent, approval, license,
authorization or validation of, or filing, recording or registration with, or
exemption by any governmental or public body or authority, or subdivision
thereof, binding on either Borrower, except as already has been obtained or
made; and

 

4.7          This Amendment has been duly executed and delivered by Borrower and
is the binding obligation of Borrower, enforceable against Borrower in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, liquidation, moratorium or other similar
laws of general application and equitable principles relating to or affecting
creditors’ rights.

 

5.             Release by Borrower and Guarantor.  Each of Borrower and
Guarantor (individually and collectively, “Obligor”) hereby agree as follows:

 

5.1          FOR GOOD AND VALUABLE CONSIDERATION, Obligor hereby forever
relieves, releases, and discharges Bank and its present or former employees,
officers, directors, agents, representatives, attorneys, and each of them, from
any and all claims, debts, liabilities, demands, obligations, promises, acts,
agreements, costs and expenses, actions and causes of action, of every type,
kind, nature, description or character whatsoever, whether known or unknown,
suspected or unsuspected, absolute or contingent, arising out of or in any
manner whatsoever connected with or related to facts, circumstances, issues,
controversies or claims existing or arising from the beginning of time through
and including the date of execution of this Amendment (collectively “Released
Claims”).  Without limiting the foregoing, the Released Claims shall include any
and all liabilities or claims arising out of or in any manner whatsoever
connected with or related to the Loan Documents, the Recitals hereto, any
instruments, agreements or documents executed in connection with any of the
foregoing or the origination, negotiation, administration, servicing and/or
enforcement of any of the foregoing.

 

5.2          In furtherance of this release, Obligor expressly acknowledges and
waives any and all rights under Section 1542 of the California Civil Code, which
provides as follows:

 

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
EXPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.” (Emphasis added.)

 

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5.3          By entering into this release, Obligor recognizes that no facts or
representations are ever absolutely certain and it may hereafter discover facts
in addition to or different from those which it presently knows or believes to
be true, but that it is the intention of Obligor hereby to fully, finally and
forever settle and release all matters, disputes and differences, known or
unknown, suspected or unsuspected; accordingly, if Obligor should subsequently
discover that any fact that it relied upon in entering into this release was
untrue, or that any understanding of the facts was incorrect, Obligor shall not
be entitled to set aside this release by reason thereof, regardless of any claim
of mistake of fact or law or any other circumstances whatsoever.  Obligor
acknowledges that it is not relying upon and has not relied upon any
representation or statement made by Bank with respect to the facts underlying
this release or with regard to any of such party’s rights or asserted rights.

 

5.4          This release may be pleaded as a full and complete defense and/or
as a cross-complaint or counterclaim against any action, suit, or other
proceeding that may be instituted, prosecuted or attempted in breach of this
release.  Obligor acknowledges that the release contained herein constitutes a
material inducement to Bank to enter into this Amendment, and that Bank would
not have done so but for Bank’s expectation that such release is valid and
enforceable in all events.

 

5.5          Obligor hereby represents and warrants to Bank, and Bank is relying
thereon, as follows:

 

(a)           Except as expressly stated in this Amendment, neither Bank nor any
agent, employee or representative of Bank has made any statement or
representation to Obligor regarding any fact relied upon by Obligor in entering
into this Amendment.

 

(b)           Obligor has made such investigation of the facts pertaining to
this Amendment and all of the matters appertaining thereto, as it deems
necessary.

 

(c)           The terms of this Amendment are contractual and not a mere
recital.

 

(d)           This Amendment has been carefully read by Obligor, the contents
hereof are known and understood by Obligor, and this Amendment is signed freely,
and without duress, by Obligor.

 

(e)           Obligor represents and warrants that it is the sole and lawful
owner of all right, title and interest in and to every claim and every other
matter which it releases herein, and that it has not heretofore assigned or
transferred, or purported to assign or transfer, to any person, firm or entity
any claims or other matters herein released.  Obligor shall indemnify Bank,
defend and hold it harmless from and against all claims based upon or arising in
connection with prior assignments or purported assignments or transfers of any
claims or matters released herein.

 

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6.             Fee.  In consideration for Bank entering into this Amendment,
Borrower shall pay Bank a fee in the mutually agreed amount of $2,500.00, which
fee shall be earned in full and payable concurrently with the execution and
delivery of this Amendment.  Such fee shall be non-refundable and in addition to
all interest and other fees payable to Bank under the Loan Documents.  Bank is
authorized to charge such fee to Borrower’s loan account.

 

7.             Bank Expenses.  Borrower shall pay to Bank, when due, all Bank
Expenses (including reasonable attorneys’ fees and expenses), when due, incurred
in connection with or pursuant to this Amendment.

 

8.             Counterparts.  This Amendment may be executed in any number of
counterparts and all of such counterparts taken together shall be deemed to
constitute one and the same instrument.

 

9.             Effectiveness.  This Amendment shall be deemed effective upon the
due execution and delivery to Bank of this Amendment by each party hereto.

 

[Remainder of page intentionally left blank; signature page immediately
follows.]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed and delivered as of the date first written above.

 

BANK

 

BORROWER

 

 

 

Silicon Valley Bank

 

NETLIST, INC.

 

 

 

 

 

 

By:

/s/ Kurt Miklinski

 

By:

/s/ Gail Sasaki

Name: Kurt Miklinski

 

Name: Gail Sasaki

Title: Vice President

 

Title: Chief Financial Officer

 

CONSENT

 

The undersigned hereby expressly agrees to Section 5 of the foregoing Amendment
and acknowledges that its consent to the rest of the foregoing Amendment is not
required, but the undersigned nevertheless does hereby agree and consent to the
entire foregoing Amendment and to the documents and agreements referred to
therein and to all future modifications and amendments thereto, and any
termination thereof, and to any and all other present and future documents and
agreements between or among the foregoing parties.  Nothing herein shall in any
way limit any of the terms or provisions of the Guaranty, the Guarantor Security
Agreement, or any other Loan Documents, executed by the undersigned, all of
which are hereby ratified and affirmed.

 

 

GUARANTOR:

 

 

 

NETLIST TECHNOLOGY TEXAS LP, a Texas limited partnership

 

 

 

By:          NETLIST, INC., its general partner

 

 

 

 

 

By:

/s/ Gail Sasaki

 

Name: Gail Sasaki

 

Title: Chief Financial Officer

 

 

Signature Page

 

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