Exhibit 10.1


 


AMENDMENT TO LOAN DOCUMENTS


 


THIS AMENDMENT
TO 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 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: (i) remove the BB Blocked
Amount and make certain other conforming modifications in respect thereof, as
set forth in Section 2.1 below;  and
(ii) increase the Concentration Limit, as set forth in Section 2.2
below; all 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                               Removal of the BB Blocked Amount.


 


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


 


(a)                               Availability.  Subject to the terms and conditions of this
Agreement and to deduction of Reserves (without duplication of the BB Blocked
Amount component of the Borrowing Base), Bank shall make Advances not exceeding
the Availability Amount.  Amounts
borrowed hereunder may be repaid and, prior to the Revolving Line Maturity
Date, reborrowed, subject to the applicable terms and conditions precedent
herein.


 

















 


hereby
is amended and restated in its entirety to read as follows:


 


(a)                                  Availability.  Subject to the terms and conditions of this
Agreement and to deduction of Reserves, Bank shall make Advances not exceeding
the Availability Amount.  Amounts
borrowed hereunder may be repaid and, prior to the Revolving Line Maturity
Date, reborrowed, subject to the applicable terms and conditions precedent
herein.


 


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


 


“BB Blocked Amount” is defined within
the definition of “Borrowing Base”.


 


hereby
is deleted in its entirety.


 


(c) The
definition of “Borrowing Base” set forth in Section 13.1 of the Loan
Agreement, 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 its
good faith business judgment based on events, conditions, contingencies, or
risks which, as determined by Bank, may adversely affect Collateral or
Borrower.


 


hereby
is 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 Bank
from Borrower’s most recent Transaction Report; provided, however, that Bank
may decrease any one or more of the Advance Rates in its good faith business
judgment based on events, conditions, contingencies, or risks which, as
determined by Bank, may adversely affect Collateral or Borrower.


 

















 


2.2                               Modification of Concentration
Limit.  Clause (h) of the definition of “Eligible
Accounts” set forth in Section 13.1 of the Loan Agreement, which currently
reads as follows (italics added):


 


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


 


hereby
is amended and restated in its entirety to read as follows:


 


(h)                                 Accounts of Borrower owing
from an Account Debtor, including Affiliates, whose total obligations to
Borrower 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 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;


 


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.)


 


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.


 


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.


 


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


 

















 


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 Itow

  
	
  Name: Kurt Miklinski

  	
   

  	
  Name:
  Gail Itow

  
	
  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 Itow

  	
   

  
	
   

  	
  Name:
  Gail Itow

  	
   

  
	
   

  	
  Title:
  Chief Financial Officer