**Exhibit 10.1**

 

**AMENDMENT TO LOAN DOCUMENTS**

 

THIS**AMENDMENTTO LOAN DOCUMENTS** (this****“Amendment”)is entered into as of March 24, 2010, by and between SILICON VALLEY BANK (“Bank”or “Silicon”) and NETLIST, INC., a Delaware corporation (“Borrower”).  Borrower’s chief executive office is locatedat 51 Discovery, Suite 150, Irvine, CA 92618.

 

**RECITALS**

 

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

 

**B.**                                    Bank hasextended credit to Borrower for the purposes permitted in the Loan Agreement.

 

**C.**                                    Borrower hasrequested that Bank amend the Loan Agreement to: (i) remove the BB BlockedAmount and make certain other conforming modifications in respect thereof, asset forth in Section 2.1 below;  and(ii) increase the Concentration Limit, as set forth in Section 2.2below; all as more fully set forth herein.

 

**D.**                                    Bank has agreedto so amend the Loan Agreement, but only to the extent, in accordance with theterms, subject to the conditions and in reliance upon the representations andwarranties set forth below.

 

**AGREEMENT**

 

**NOW, THEREFORE,** in consideration of the foregoing recitalsand other good and valuable consideration, the receipt and adequacy of which ishereby acknowledged, and intending to be legally bound, the parties heretoagree as follows:

 

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

 

**2.****                                     ****Amendments to Loan Documents.**

 

**2.1****                              ****Removal of the BB Blocked Amount.**

 

(a) Section 2.1.1(a) ofthe Loan Agreement, which currently reads as follows (italics added):

 

*(a)**                              **Availability**.  Subject to the terms and conditions of thisAgreement and to deduction of Reserves (without duplication of the BB BlockedAmount component of the Borrowing Base), Bank shall make Advances not exceedingthe Availability Amount.  Amountsborrowed hereunder may be repaid and, prior to the Revolving Line MaturityDate, reborrowed, subject to the applicable terms and conditions precedentherein.*

 

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herebyis amended and restated in its entirety to read as follows:

 

(a)                                  Availability.  Subject to the terms and conditions of thisAgreement and to deduction of Reserves, Bank shall make Advances not exceedingthe Availability Amount.  Amountsborrowed hereunder may be repaid and, prior to the Revolving Line MaturityDate, reborrowed, subject to the applicable terms and conditions precedentherein.

 

(b) Thedefinition of “BB Blocked Amount” set forth in Section 13.1 of the LoanAgreement, which definition currently reads as follows (italics added):

 

*“**BB Blocked Amount**” is defined withinthe definition of “Borrowing Base”.*

 

herebyis deleted in its entirety.

 

(c) Thedefinition of “Borrowing Base” set forth in Section 13.1 of the LoanAgreement, which definition currently reads as follows (italics added):

 

*“**Borrowing Base**” is (a) 80% (the “**A/R Advance Rate**” and also an “**Advance Rate**”)of Eligible Accounts minus (b) the amount of One Million Dollars($1,000,000) (the “**BB Blocked Amount**”),as determined by Bank from Borrower’s most recent Transaction Report; provided,however, that Bank may decrease any one or more of the Advance Rates in itsgood faith business judgment based on events, conditions, contingencies, orrisks which, as determined by Bank, may adversely affect Collateral orBorrower.*

 

herebyis amended and restated in its entirety to read as follows:

 

“**Borrowing Base**”is 80% (the “**A/R Advance Rate**” and also an “**Advance Rate**”) of Eligible Accounts, as determined by Bankfrom Borrower’s most recent Transaction Report; provided, however, that Bankmay decrease any one or more of the Advance Rates in its good faith businessjudgment based on events, conditions, contingencies, or risks which, asdetermined by Bank, may adversely affect Collateral or Borrower.

 

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**2.2****                              ****Modification of ConcentrationLimit. **Clause (h) of the definition of “EligibleAccounts” set forth in Section 13.1 of the Loan Agreement, which currentlyreads as follows (italics added):

 

*(h)**                              **Accountsof Borrower owing from an Account Debtor, including Affiliates, whose totalobligations to Borrower exceed twenty-five percent (25%) (such percentage, the “ConcentrationLimit”) of all Eligible Accounts, to the extent of amounts that exceed thatpercentage, unless Bank approves in writing;*

 

herebyis amended and restated in its entirety to read as follows:

 

(h)                                 Accounts of Borrower owingfrom an Account Debtor, including Affiliates, whose total obligations toBorrower exceed forty percent (40%) (such percentage, the “Concentration Limit”)of all Eligible Accounts, to the extent of amounts that exceed that percentage,unless Bank approves in writing;

 

**3.****                                     ****Limitation of Amendments.**

 

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

 

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

 

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

 

**4.1****                              **Immediately after giving effect to thisAmendment, (a) the representations and warranties contained in the LoanDocuments are true, accurate and complete in all material respects as of thedate hereof (except to the extent such representations and warranties relate toan earlier date, in which case they are true and correct as of such date, orexcept as otherwise previously disclosed in writing by Borrower to Bank), and (b) noEvent of Default has occurred and is continuing;

 

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

 

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**4.3****                              **The organizational documents of Borrowerdelivered to Bank on the Effective Date remain true, accurate and complete andhave not been otherwise amended, supplemented or restated and are and continueto be in full force and effect;

 

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

 

**4.5****                              **The execution and delivery by Borrower ofthis Amendment and the performance by Borrower of its obligations under theLoan Documents, as amended by this Amendment, do not and will not contravene (a) anylaw or regulation binding on or affecting Borrower, (b) any contractualrestriction with a Person binding on Borrower, (c) any order, judgment ordecree of any court or other governmental or public body or authority, orsubdivision thereof, binding on Borrower, or (d) the organizationaldocuments of Borrower;

 

**4.6****                              **The execution and delivery by Borrower ofthis Amendment and the performance by Borrower of its obligations under theLoan 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 bodyor authority, or subdivision thereof, binding on either Borrower, except asalready has been obtained or made; and

 

**4.7****                              **This Amendment has been duly executed anddelivered by Borrower and is the binding obligation of Borrower, enforceable againstBorrower in accordance with its terms, except as such enforceability may belimited by bankruptcy, insolvency, reorganization, liquidation, moratorium orother similar laws of general application and equitable principles relating toor 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 VALUABLECONSIDERATION**,Obligor hereby forever relieves, releases, and discharges Bank and its presentor 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 causesof 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 thebeginning of time through and including the date of execution of this Amendment(collectively “**Released Claims**”).  Without limiting the foregoing, the ReleasedClaims shall include any and all liabilities or claims arising out of or in anymanner whatsoever connected with or related to the Loan Documents, the Recitalshereto, any instruments, agreements or documents executed in connection withany of the foregoing or the origination, negotiation, administration, servicingand/or enforcement of any of the foregoing.

 

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

 

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

 

**5.3****                              **By entering into this release, Obligorrecognizes that no facts or representations are ever absolutely certain and itmay hereafter discover facts in addition to or different from those which itpresently knows or believes to be true, but that it is the intention of Obligorhereby to fully, finally and forever settle and release all matters, disputesand differences, known or unknown, suspected or unsuspected; accordingly, ifObligor should subsequently discover that any fact that it relied upon inentering into this release was untrue, or that any understanding of the factswas incorrect, Obligor shall not be entitled to set aside this release byreason thereof, regardless of any claim of mistake of fact or law or any othercircumstances whatsoever.  Obligor acknowledgesthat it is not relying upon and has not relied upon any representation orstatement made by Bank with respect to the facts underlying this release orwith regard to any of such party’s rights or asserted rights.

 

**5.4****                              **This release may be pleaded as a full andcomplete defense and/or as a cross-complaint or counterclaim against anyaction, suit, or other proceeding that may be instituted, prosecuted orattempted in breach of this release. Obligor acknowledges that the release contained herein constitutes amaterial inducement to Bank to enter into this Amendment, and that Bank wouldnot have done so but for Bank’s expectation that such release is valid andenforceable in all events.

 

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

 

**(a)****                                 **Except as expressly stated in thisAmendment, neither Bank nor any agent, employee or representative of Bank hasmade any statement or representation to Obligor regarding any fact relied uponby Obligor in entering into this Amendment.

 

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

 

**(c)****                                 **The terms of this Amendment arecontractual and not a mere recital.

 

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

 

**(e)****                                 **Obligor represents and warrants that itis the sole and lawful owner of all right, title and interest in and to everyclaim and every other matter which it releases herein, and that it has notheretofore assigned or transferred, or purported to assign or transfer, to anyperson, firm or entity any claims or other matters herein released.  Obligor shall indemnify Bank, defend and holdit harmless from and against all claims based upon or arising in connectionwith prior assignments or purported assignments or transfers of any claims ormatters released herein.

 

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

 

**7.****                                     ****Bank Expenses. **Borrower shall pay to Bank, when due, all BankExpenses (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 ofsuch counterparts taken together shall be deemed to constitute one and the sameinstrument.

 

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

 

[Remainderof page intentionally left blank; signature page immediatelyfollows.]

 

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**INWITNESS WHEREOF,** the parties hereto have caused this Amendment to beduly executed and delivered as of the date first written above.

 
| **BANK**              | ** **            | **BORROWER**                    |
|-----------------------|-----------------------|---------------------------------|
|                  |                  |                            |
| Silicon  Valley Bank  |                  | NETLIST,  INC.                  |
|                  |                  |                            |
|                  |                  |                            |
| By:                   | */s/  Kurt Miklinski* |                            | By: | */s/**Gail Itow* |
| Name: Kurt Miklinski  |                  | Name:  Gail Itow                |
| Title: Vice President |                  | Title:  Chief Financial Officer |
|                       |                       |                                 |  |  |

 

**CONSENT**

 

The undersigned herebyexpressly agrees to Section 5 of the foregoing Amendment and acknowledgesthat its consent to the rest of the foregoing Amendment is not required, butthe undersigned nevertheless does hereby agree and consent to the entireforegoing Amendment and to the documents and agreements referred to therein andto all future modifications and amendments thereto, and any terminationthereof, and to any and all other present and future documents and agreementsbetween or among the foregoing parties. Nothing herein shall in any way limit any of the terms or provisions ofthe 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 Itow* |   |
|                                                        | Name:  Gail Itow                    |   |
|                                                        | Title:  Chief Financial Officer     |   |
|                                                             |                                     |  |  |

 

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