**Exhibit10.5**

 

**CERTAIN INFORMATION (INDICATED BY “[***]”) IN THIS EXHIBIT HASBEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGECOMMISSION.  CONFIDENTIAL TREATMENT HASBEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.**

 

TOSHIBA

 

Toshiba America Electronic Components, Inc.

2950 Orchard Parkway, San Jose, CA 95131

 

**Design and Production Agreement**

 

**Amendment #1**

 

**Netlist Inc.**

 

ThisAmendment #1 (“Amendment”) to the Register ASIC Design and ProductionAgreement, dated July 31, 2008, (TAEC#27N1242613) (“Agreement”) is betweenToshiba America Electronic Components, Inc., with a principal place ofbusiness at 19900 MacArthur Boulevard, Suite 400, Irvine, CA 92612 (“TAEC”)and Netlist Inc. with a place of business at 51 Discovery, Suite 150Irvine, CA 92618 (“Customer”) and sets out the terms and conditions under whichTAEC will design the product identified herein for Customer. This Amendment iseffective as of the date finally executed below (“Effective Date”).

 

**1.****                                     ****ProjectName**

 

RegisterASIC

 

**2.****                                     ****NewSchedule**

 

Theparties agree to delete the contents of Section 4 of the Agreement,Schedule, and replace it with the following:

 

**MajorProject Milestones**

 
| **Event** | ** ** | **Target Date/Completed** |
|-----------|------------|--------------------------------|
| **[***]** | ** ** | **[***]**                      |
| **[***]** | ** ** | **[***]**                      |
| **[***]** | ** ** | **[***]**                      |
| **[***]** | ** ** | **[***]**                      |
| **[***]** | ** ** | **[***]**                      |
| **[***]** | ** ** | **[***]**                      |
| **[***]** | ** ** | **[***]**                      |
| **[***]** | ** ** | **[***]**                      |
| **[***]** |       | TBD                            |
| **[***]** |       | TBD                            |
| **[***]** |       | TBD                            |
| **[***]** |       | TBD                            |

 

Production turnaround time: **[***]** workingweeks.

 

Schedule is provisional.

 

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**3.****                                     ****NewPackage and Die Size Option**

 

Theparties agree to delete the contents of Section 6 of the Agreement,Package and Die Size Option, and replace it with the following:

 
| **Package** | ** ** | **Ball Pitch** | ** ** | **Body Size** | ** ** | **Substrate Layers** | ** ** | **Die Size** |
|-------------|------------|---------------------|------------|--------------------|------------|---------------------------|------------|-------------------|
| ** **  | ** ** | ** **          | ** ** | ** **         | ** ** | ** **                | ** ** | ** **        |
| **[***]**   | ** ** | **[***]**           | ** ** | **[***]**          | ** ** | **[***]**                 | ** ** | **[***]**         |

 

**4.****                                     ****NewPrice**

 

Theparties agree to delete the contents of Section 8 of the Agreement, Price,and replace it with the following:

 
| First        | ** ** | **[***]** pieces: |   | US$**[***]** |   | ***[***]** |
|--------------|------------|-------------------|--------|--------------|--------|------------|
| Next         | ** ** | **[***]** pieces: |   | US$**[***]** |   |       |
| Next         | ** ** | **[***]** pieces: |   | US$**[***]** |   |       |
| After  first | ** ** | **[***]** pieces: |   | US$**[***]** |   |       |

 

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*Prices for first 1 Mpcs represent an addition of US$**[***]**perunit in amortized Total NRE cost. See Section 10.

 

Changesin die size will affect the price quoted.

 

Theprices quoted herein for mass production are based on the assumption ofadequate yield. TAEC reserves the right to adjust pricing based on mutualagreement in the event that adequate yield figures, in TAEC’s reasonableopinion, are not achieved by the start of mass production despite reasonablecommercial efforts by both parties. TAEC will provide Netlist with timely datasuch that Netlist can reasonably assess yield.

 

Pricesdo not include and are subject to any applicable sales tax.

 

**5.****                                     ****NewEngineering Sample and Risk Production Pricing**

 

Theparties agree to delete Section 13.3 of the Agreement. The parties agreeto delete the contents of Section 12 of the Agreement, Extra EngineeringSamples, and replace it with the following:

 

Allextra engineering samples and Risk Production parts shall be sold at US$**[***]** each (**[***]** the unitprice of US**[***]**).

 

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Allextra engineering samples are sold as Prototypes and are subject to, withoutlimitation, Articles 18.2 and 19.1 of the Design and Production Agreement Termsand Conditions (“Terms and Conditions”). All Risk Production parts are subjectto, without limitation, Articles 18.2 and 19.2 of the Terms and Conditions.TAEC reserves the right in its sole discretion to determine whether to acceptextra engineering sample or Risk Production orders.

 

**6.****                                     ****AdditionalNon-Recurring Engineering Charges and Payment Schedule**

 

Customeragrees to pay additional non-recurring engineering charges of US$**[***]** (“Additional NRE”) to TAEC for design support. TheAdditional NRE will be due and payable as follows:

 

1.                                       US$**[***]** upon **[***]**.

 

2.                                       US$**[***]** upon **[***]** togetherwith test logs showing successful completion of the mutually agreed-upon tests.

 

Forthe avoidance of doubt, the Additional NRE payable under this Amendment is inaddition to and does not replace the NRE payable under the Agreement.

 

**7.****                                     ****Cancellation**

 

7.1                                 If Customerwishes to discontinue the project after execution of this Amendment, then inaddition to the provisions set Forth in Section 10 of the Terms andConditions, the Customer shall be responsible to pay TAEC for the NRE chargesas set forth below (“Additional Cancellation Fee”), unless otherwise agreed inwriting between TAEC and the Customer:

 
| **Time**  | ** ** | **Additional Cancellation Fee** |
|-----------|------------|-------------------------------------------|
| **[***]** | ** ** | **[***]**% of  Additional NRE             |
| **[***]** | ** ** | **[***]**% of  Additional NRE             |
| **[***]** | ** ** | **[***]**% of  Additional NRE             |

 

7.2                                 For theavoidance of doubt, NRE already invoiced to Customer per the milestones and NREpayment schedule set forth herein and in the DPA (“Paid NRE”) shall offset theAdditional Cancellation Fee assessed in Article 7.1 above. To the extentthat the Paid NRE exceeds the Additional Cancellation Fee and the CancellationFee set forth in Section 10 of the Terms and Conditions of the Agreement,TAEC shall not charge further Additional Cancellation Fee; however, Paid NREwill not be refunded upon cancellation of the design.

 

**8.****                                     ****AdditionalTerms**

 

8.1                                 **[***]**

 

Exceptas modified herein, all other terms and conditions of the Agreement shallremain in full force and effect per their terms.

 

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| **Toshiba  America Electronic Components, Inc.**              | ** ** | **NetList  Inc.**      |
|--------------------------------------------------------------------|------------|------------------------|
| ** **                                                         | ** ** | ** **             |
| */s/  Takeshi Iwamoto*                                             | * *   | */s/ Gail  Itow*       |
| Signature                                                          |       | Signature              |
|                                                               |       |                   |
|                                                               |       | Gail Itow, CFO         |
| Takeshi Iwamoto VP,  Customer SoC & Foundry Business Unit |       | Printed Name and Title |
| Printed Name and Title                                             |       |                   |
|                                                               |       | 1-28-10                |
| 1-28-10                                                            |       | Date                   |
| Date                                                               |       |                   |

 

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