Exhibit
10.5


 


CERTAIN INFORMATION (INDICATED BY “[***]”) IN THIS EXHIBIT
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.  CONFIDENTIAL TREATMENT HAS
BEEN 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.


 


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


 


1.             Project
Name


 


Register ASIC


 


2.             New
Schedule


 


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


 


Major Project Milestones


 


	
  Event

  	
   

  	
  Target Date/Completed

  
	
  Development
  PO Released

  	
   

  	
  [***]

  
	
  Preliminary
  Feasibility Study

  	
   

  	
  [***]

  
	
  Design
  Decision

  	
   

  	
  [***]

  
	
  Design
  Initiation

  	
   

  	
  [***]

  
	
  Package
  Selection Finalized

  	
   

  	
  [***]

  
	
  Early
  RTL for Pipecleaning

  	
   

  	
  [***]

  
	
  Final
  RTL (functionally correct)

  	
   

  	
  [***]

  
	
  Tapeout
  — Second Signoff (GDSII transfer)

  	
   

  	
  [***]

  
	
  Delivery
  of Prototypes

  	
   

  	
  TBD

  
	
  System
  compliance phase - start

  	
   

  	
  TBD

  
	
  System
  compliance phase - complete

  	
   

  	
  TBD

  
	
  1st
  Risk Production shipment

  	
   

  	
  TBD

  



 

















 


Production
turnaround time: 16 working weeks.


 


Schedule
is provisional.


 


3.             New
Package and Die Size Option


 


The parties 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.             New
Price


 


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


 


	
  First

  	
   

  	
  1M
  pieces:

  	
   

  	
  US$[***]

  	
   

  	
  *[***]

  
	
  Next

  	
   

  	
  2M
  pieces:

  	
   

  	
  US$[***]

  	
   

  	
   

  
	
  Next

  	
   

  	
  2M
  pieces:

  	
   

  	
  US$[***]

  	
   

  	
   

  
	
  After
  first

  	
   

  	
  5M
  pieces:

  	
   

  	
  US$[***]

  	
   

  	
   

  



 






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


 


Changes
in die size will affect the price quoted.


 


The
prices quoted herein for mass production are based on the assumption of
adequate yield. TAEC reserves the right to adjust pricing based on mutual
agreement in the event that adequate yield figures, in TAEC’s reasonable
opinion, are not achieved by the start of mass production despite reasonable
commercial efforts by both parties. TAEC will provide Netlist with timely data
such that Netlist can reasonably assess yield.


 


Prices
do not include and are subject to any applicable sales tax.


 


5.             New
Engineering Sample and Risk Production Pricing


 


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


 


All
extra engineering samples and Risk Production parts shall be sold at US$[***] each (2X the unit price of US[***]).


 

















 


All
extra engineering samples are sold as Prototypes and are subject to, without
limitation, Articles 18.2 and 19.1 of the Design and Production Agreement Terms
and Conditions (“Terms and Conditions”). All Risk Production parts are subject
to, 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 accept
extra engineering sample or Risk Production orders.


 


6.             Additional
Non-Recurring Engineering Charges and Payment Schedule


 


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


 


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


 


2.             US$[***] upon Delivery of Prototypes together with test logs
showing successful completion of the mutually agreed-upon tests.


 


For the avoidance of doubt, the Additional
NRE payable under this Amendment is in addition to and does not replace the NRE
payable under the Agreement.


 


7.             Cancellation


 


7.1           If Customer wishes to discontinue the project after
execution of this Amendment, then in addition to the provisions set Forth in Section 10
of the Terms and Conditions, the Customer shall be responsible to pay TAEC for
the NRE charges as set forth below (“Additional Cancellation Fee”), unless
otherwise agreed in writing between TAEC and the Customer:


 


	
  Time

  	
   

  	
  Additional Cancellation Fee

  
	
  [***]

  	
   

  	
  [***]% of
  Additional NRE

  
	
  [***]

  	
   

  	
  [***]% of
  Additional NRE

  
	
  [***]

  	
   

  	
  [***]% of
  Additional NRE

  



 


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


 


8.             Additional
Terms


 


8.1           [***]


 

















 


Except as modified herein, all other terms
and conditions of the Agreement shall remain in full force and effect per their
terms.


 


	
  Toshiba
  America Electronic Components, Inc.  

  	
   

  	
  NetList
  Inc.  

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/
  Takeshi Iwamoto  

  	
   

  	
  /s/
  Gail Itow 

  
	
  Signature
  

  	
   

  	
  Signature
  

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Gail
  Itow, CFO 

  
	
  Takeshi
  Iwamoto VP, Customer SoC & 

  	
   

  	
  Printed
  Name and Title

  
	
  Foundry
  Business Unit

  	
   

  	
   

  
	
  Printed
  Name and Title

  	
   

  	
  1-28-10

  
	
   

  	
   

  	
  Date

  
	
   

  	
   

  	
   

  
	
  1-28-10

  	
   

  	
   

  
	
  Date