Document:

nlst_Ex_10-1

		
			Exhibit 10.1
		

		
			SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT 
		

		
			THIS SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT (this “Amendment”) is entered into as of February 17,  2015 (the “Amendment Effective Date”), by and among Netlist, Inc., a Delaware corporation (“Borrower”), Fortress Credit Opportunities I LP (the “Lender”), as successor to DBD Credit Funding LLC, a Delaware limited liability company (the “Initial Lender”) and Drawbridge Special Opportunities Fund LP, a Delaware limited partnership (“Drawbridge”).
		

		
			W I T N E S S E T H:
		

		
			WHEREAS, (i) the Borrower and the Initial Lender have entered into that certain Loan and Security Agreement dated as of July 18, 2013 (as, amended pursuant to that certain First Amendment to Loan and Security Agreement dated July 18, 2014 (the “First Amendment”) and as may be further amended, restated, supplemented or otherwise modified from time to time, the “Loan Agreement”); and (ii) the Borrower and Drawbridge have entered into that certain Monetization Letter Agreement dated as of July 18, 2013 (as amended pursuant to that certain amendment to Monetization Side Letter dated as of the date hereof, and as may be further amended, restated, supplemented or otherwise modified from time to time, the “Monetization Side Letter”).
		

		
			WHEREAS, the parties hereto desire to (i) amend the Loan Agreement on the terms and subject to the conditions set forth herein and (ii) acknowledge and confirm the effect of this Amendment with respect to the Monetization Side Letter.
		

		
			NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained herein, the parties agree as follows:
		

		
			1.Defined Terms.  Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Loan Agreement.
		

		
			2.Amendments.   
		

			
	
			
				 (I)
			Effective as of the Amendment Effective Date, Section 13.1 of the Loan Agreement is hereby amended by adding the following new definitions in their appropriate alphabetical order: 

		
			 
		

		
			““SanDisk/Diablo Litigation” means (i) the case captioned Netlist, Inc. vs. Diablo Technologies, Inc., No. 4:13-CV-05962-YGR, in the United States District Court for the Northern District of California, (ii) the case captioned Netlist, Inc. vs. Smart Storage Systems,  Diablo Technologies, Inc. and Sandisk Corporation, No. 4:13-CV-05889-YGR, in the United States District Court for the Northern District of California, and (iii) the same matters if transferred to any other jurisdiction or forum (arbitral, judicial or otherwise).”
		

		
			““Second Amendment” means the Second Amendment to Loan and Security Agreement dated as of the Second Amendment Effective Date.”
		

		
			““Second Amendment Effective Date” means February 17, 2015.”
		

			
	
			
				 (II)
			

			
	
			
			Effective as of the Amendment Effective Date, the terms “IP Monetization Milestones” and “IP Monetization Milestone Term Loan Tranche” are hereby deleted and the term “IP Monetization Milestone Term Loan Amount” is hereby amended and restated in its entirety as follows:

		
			 
		

		

		

		 

 

		 
		

		
			“IP Monetization Milestone Term Loan Amount” means $4,000,000.”
		

			
	
			
				 (III)
			

			
	
			
			Effective as of the Amendment Effective Date, Section 2.1.2(a)(iii) of the Loan Agreement is hereby amended and restated in its entirety as follows:

		
			 
		

		
			“(iii)Commencing with the month that is nineteen (19) months after the Effective Date, Borrower shall, on the last business day of the applicable month, repay the Closing Date Term Loan in (i) eighteen (18) equal installments of principal, plus (ii) monthly payments of accrued interest, in each case, in an amount equal to the amount set forth on Schedule 2.1.2(a)(iii), with the final payment, which shall be an amount equal to the entire remaining principal balance of the Closing Date Term Loan, any accrued and unpaid interest therein, and all other Obligations relating to the Closing Date Term Loans, being immediately due and payable on the Maturity Date, subject to any extension of the Maturity Date with respect to the Closing Date Term Loan pursuant to Section 2.1.2(c).”
		

			
	
			
				 (IV)
			

			
	
			
			Effective as of the Amendment Effective Date, Section 2.1.2(b)(i) of the Loan Agreement is hereby amended and restated in its entirety as follows:

		
			 
		

		
			“(i)Subject to the terms and conditions of this Agreement (including, without limitation, the conditions set forth in Section 3.2) and in reliance upon the representations and warranties of Borrower contained herein, the Lender agrees to lend to Borrower, on the Second Amendment Effective Date, term loans in an aggregate principal amount not to exceed the IP Monetization Milestone Term Loan Amount (such term loans, the “IP Monetization Milestone Term Loans”; together with the Closing Date Term Loan, sometimes referred to individually as a “Term Loan” and together as the “Term Loans”).  The date on such IP Monetization Milestone Term Loan is funded, the “IP Monetization Milestone Term Loan Effective Date”).”
		

			
	
			
				 (V)
			

			
	
			
			Effective as of the Amendment Effective Date, Section 2.1.2(b)(iii) of the Loan Agreement is hereby amended and restated in its entirety as follows:

		
			 
		

		
			“(iii)Commencing with the month of February, 2015, Borrower shall, on the last day of business day of the applicable month, repay each IP Monetization Milestone Term Loan in (i) seventeen (17) equal installments of principal, plus (ii) monthly payments of accrued interest, in each case, in an amount equal to the amount set forth on Schedule 2.1.2(b)(iii), with the final payment, which shall be an amount equal to the entire remaining principal balance of each such IP Monetization Milestone Term Loan, any accrued and unpaid interest therein, and all other Obligations relating to the IP Monetization Milestone Term Loans, being immediately due and payable on the Maturity Date, subject to any extension of the Maturity Date with respect to such IP Monetization Milestone Term Loans pursuant to Section 2.1.2(c).
		

			
	
			
				 (VI)
			

			
	
			
			Effective as of the Amendment Effective Date, Section 2.4(b) of the Loan Agreement is hereby amended and restated as follows:

		
			 
		

		
			“(b)       IP Monetization Milestone Fee.  A fully earned, non-refundable fee equal to the product of 1.5% and $4,000,000.00, payable on the Second Amendment Effective Date; and”
		

		
			 
		

			
	
			
				 (VII)
			

			
	
			
			Effective as of the Amendment Effective Date, Section 2.4 of the Loan Agreement is hereby amended by removing the period at the end of clause (c) thereof and adding “;

		
			 
		

		

		

		 

		

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			and” at the end of clause (c) thereof and adding the following clause (d) immediately after clause (c) thereof:
		

		
			“(d)        Management and Monitoring Fee.  A fully earned, non-refundable annual management and monitoring fee of $20,000 payable to the Lender, payable on the Second Amendment Effective Date and annually in advance on each anniversary thereof.”  
		

		
			3.Effect on Monetization Side Letter. For the avoidance of doubt, the parties hereby confirm and agree that all defined terms in the Loan Agreement that are included in the Monetization Side Letter (including, without limitation, the defined term “Early Repayment Option A Premium”) shall be deemed to refer to such defined terms after giving effect to this Amendment.   
		

		
			4.Effect on Warrant.  Borrower hereby acknowledges and agrees that, concurrently with the funding of the IP Monetization Milestone Term Loans on the Second Amendment Effective Date, all of the restrictions upon the exercise of the Warrant pursuant to Section 9 thereof, and the issuance of the Warrant Stock thereunder, shall cease to be effective.  On the Second Amendment Effective Date, Lender shall surrender to Borrower for cancellation the original warrant certificate representing the Warrant (the “Original Warrant Certificate”) and Borrower shall issue to Lender a new warrant certificate in the form of Exhibit A attached hereto, and thereafter shall deliver to Lender such other evidence of the vesting of the Warrant as may be reasonably requested by Lender from time to time.  The parties agree that, upon issuance of such new warrant certificate by Borrower to Lender, the Original Warrant Certificate shall be deemed cancelled in its entirety and be of no further force and effect, whether or not it is delivered for cancellation.  Failure to deliver such new warrant certificate or other evidence as specified above shall constitute an Event of Default pursuant to Section 8.11 of the Loan Agreement.
		

		
			5.Conditions Precedent to Effectiveness.  This Amendment shall not be effective until each of the following conditions precedent has been fulfilled prior to or concurrently herewith, each to the satisfaction of the Lender:
		

			
	
			
				 (i)
			This Amendment and any other documents or other deliverables or conditions required hereunder, including, without limitation, the amendment to the Monetization Side Letter, shall have been duly executed and/or delivered by the respective parties hereto and thereto.

		
			 
		

			
	
			
				 (ii)
			The Lender shall have received payment of (a) an amendment and restructuring fee equal to $20,000.00 and (b) the IP Monetization Milestone Fee equal to the product of 1.5% and $4,000,000.00.  

		
			 
		

			
	
			
				 (iii)
			Prior to and immediately after giving effect to this Amendment, the representations and warranties herein and in the Loan Agreement, the other Loan Documents, the Monetization Side Letter and the Warrant Documents shall be true and correct in all material respects on and as of the date hereof, as though made on such date (except to the extent that (i) such representations and warranties relate solely to an earlier date, in which case such representations and warranties shall have been true and correct in all material respects as of such earlier date or (ii) such representations and warranties are qualified by materiality in the text thereof, in which case they shall be true and correct in all respects).

		
			 
		

		
			6.Severability.  In case any provision of or obligation under this Amendment shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.
		

		
			7.Integration.  This Amendment, together with the other Loan Documents, the Monetization Side Letter and the Warrant Documents, incorporates all negotiations of the parties hereto with respect to the subject matter hereof and is the final expression and agreement of the parties hereto with respect to the subject matter hereof. Except as amended hereby (as applicable), the Loan Agreement,
		

		
			 
		

		

		

		 

		

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			the other Loan Documents, the Monetization Side Letter and the Warrant Documents remain unmodified and in full force and effect.  All references to the Loan Agreement in each of the Loan Documents, the Monetization Side Letter and the Warrant Documents shall be deemed to be references to the Loan Agreement as amended hereby.  
		

		
			8.Counterparts.  This Amendment may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument and any of the parties hereto may execute this Amendment by signing any such counterpart.
		

		
			9.Controlling Provisions.  In the event of any inconsistencies between the provisions of this Amendment and the provisions of any other Loan Document, the Monetization Side Letter or any Warrant Document, the provisions of this Amendment shall govern and prevail.  Except as expressly modified by this Amendment, the Loan Documents, the Monetization Side Letter and the Warrant Documents shall not be modified and shall remain in full force and effect.  This Amendment shall be deemed a Loan Document.  
		

		
			10.Governing Law.    THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.  SECTION 11 OF THE Loan AGREEMENT IS HEREBY INCORPORATED BY REFERENCE INTO THIS AGREEMENT MUTATIS MUTANDIS AND SHALL APPLY HERETO.
		

		
			11.Reaffirmation of Obligations.  The Borrower hereby reaffirms its obligations under each Loan Document.  The Borrower hereby further ratifies and reaffirms the validity and enforceability of all of the Liens heretofore granted, pursuant to and in connection with the Loan Agreement or any other Loan Document to the Initial Lender on behalf and for the benefit of the Lenders, as collateral security for the Obligations under the Loan Documents in accordance with their respective terms, and acknowledges that all of such Liens, and all collateral heretofore pledged as security for such Obligations, continues to be and remain collateral for such Obligations from and after the date hereof.    The Borrower further acknowledges and affirms that notwithstanding the execution and delivery of the Amendment or any prior amendment, the obligations of the Borrower under the Loan Agreement and any other applicable security document are not impaired or affected and each such Loan Document continues in full force and effect and shall apply to the Obligations as amended hereby.
		

		
			 
		

		
			 
		

		
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		IN WITNESS WHEREOF, the parties have executed this Amendment as of the date set forth above.
		

		
			 
		

			
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						BORROWER:

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						NETLIST, INC.

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						By:

					
					
						/s/ Gail Sasaki

				
	
					
						 

					
					
						 

					
					
						Title:

					
					
						Chief Financial Officer

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						LENDER:

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						FORTRESS CREDIT OPPORTUNITIES I LP

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						By:

					
					
						/s/ Jason Meyer

				
	
					
						 

					
					
						 

					
					
						Name:

					
					
						Jason Meyer

				
	
					
						 

					
					
						 

					
					
						Title:

					
					
						Chief Administrative Officer

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						DRAWBRIDGE:

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						DRAWBRIDGE SPECIAL OPPORTUNITIES FUND LP

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						By:

					
					
						Drawbridge Special Opportunities GP LLC, its general partner

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						By:

					
					
						/s/ Jason Meyer

				
	
					
						 

					
					
						 

					
					
						Name:

					
					
						Jason Meyer

				
	
					
						 

					
					
						 

					
					
						Title:

					
					
						Chief Administrative Officer

				

		
			 
		

		

		

		 

		

			[Signature Page To Second Amendment to Loan and Security Agreement]

		

 

		
		

		
			Exhibit A
		

		
			 
		

		
			Form of Warrant Certificate
		

		
			 
		

		
			[see attached]
		

		
			 
		

		
			 
		

		 

		

			[Signature Page To Second Amendment to Loan and Security Agreement]nlst_Ex_10-2

		

			CONFIDENTIAL TREATMENT REQUESTED, OMITTED PORTIONS ARE MARKED 
WITH [*****] AND HAVE BEEN FILED SEPARATELY WITH THE SEC.

		

		

			 

		

		
			Exhibit 10.2
		

		
			FIRST AMENDMENT TO MONETIZATION LETTER AGREEMENT 
		

		
			THIS FIRST AMENDMENT TO MONETIZATION LETTER AGREEMENT (this “Amendment”) is entered into as of February 17, 2015 (the “Amendment Date”), by and among Netlist, Inc., a Delaware corporation (“Company”), and Drawbridge Special Opportunities Fund LP, a Delaware limited partnership (“Lender”).
		

		
			W I T N E S S E T H:
		

		
			WHEREAS, the Company and Lender have entered into that certain Monetization Letter Agreement dated as of July 18, 2013 (as may be further amended, restated, supplemented or otherwise modified from time to time, the “Monetization Side Letter”).
		

		
			WHEREAS, the parties hereto desire to amend the Monetization Side Letter on the terms and subject to the conditions set forth herein.
		

		
			NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained herein, the parties agree as follows:
		

		
			1.Defined Terms.  Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Monetization Side Letter.
		

		
			2.Amendments.   
		

		
			(I)Effective as of the Amendment Date, Section 2(a) of the Monetization Side Letter is hereby amended and restated in its entirety as follows:
		

		
			(a)General Net Revenue Share Commitment.  If neither the conditions for the Early Repayment Option A Net Revenue Share are satisfied (under the terms of the Loan Agreement) nor the conditions for the Early Repayment Option B Net Revenue Share are satisfied (as set forth in Section 1(b) above), Drawbridge will be entitled to, and Company shall pay to Drawbridge, a share of the Patent Monetization Net Revenues (as defined in Section 2(b)(i) below) that are recognized by Company (in accordance with its generally applicable accounting principles, consistently applied) during the seven (7) year period after the Effective Date, in the amounts and subject to the limitations set forth below (the “General Net Revenue Share”). 
		

			
					
						 

					
					
						 

					
					
						 

				
	
					
						[*****] Patent Monetization Net Revenues

				
	
					
						Patent Monetization
Net Revenues

					
					
						Netlist
Share %

					
					
						Drawbridge
Share %

				
	
					
						US$0 – 8.57 million

					
					
						65%

					
					
						35%

				
	
					
						Above US$8.57 million

					
					
						100%

					
					
						0%

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						Non-[*****] Monetization Net Revenues

				
	
					
						Patent Monetization
Net Revenues

					
					
						Netlist
Share %

					
					
						Drawbridge
Share %

				
	
					
						US$0 - 10 million

					
					
						65%

					
					
						35%

				
	
					
						US$10 - 20 million

					
					
						75%

					
					
						25%

				
	
					
						US$20 - 30 million

					
					
						80%

					
					
						20%

				
	
					
						Above US$30 million

					
					
						100%

					
					
						0%

				

		
			 
		

		

		

		 

		

			 

		

 

		

			CONFIDENTIAL TREATMENT REQUESTED, OMITTED PORTIONS ARE MARKED
WITH [*****] AND HAVE BEEN FILED SEPARATELY WITH THE SEC.

		

		

			 

		

		 
		

		
			 
		

		

		

		 

		

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			CONFIDENTIAL TREATMENT REQUESTED, OMITTED PORTIONS ARE MARKED 
WITH [*****] AND HAVE BEEN FILED SEPARATELY WITH THE SEC.

		

		

			 

		

		Subject to the limitations set forth below, the General Net Revenue Share shall be paid (i) with respect to any Patent Monetization Net Revenues arising in connection with the [*****] (the “[*****] Patent Monetization Net Revenues”), as thirty-five percent (35%) of up to US$8.57 million of such [*****] Patent Monetization Net Revenues (for a total payment to Drawbridge of up to US$3 million of General Net Revenue Share), and (ii) with respect to all Patent Monetization Net Revenues other than [*****] Net Revenues (the “Non-[*****] Patent Monetization Net Revenues”), on each portion of such Non‐[*****] Patent Monetization Net Revenues in accordance with the corresponding percentage for such portion of the Non-[*****] Patent Monetization Net Revenues such that Company shall pay thirty-five percent (35%) on the first US$10 million of such Non‐[*****] Patent Monetization Net Revenues, twenty-five percent (25%) on the second US$10 million of such Non-[*****] Patent Monetization Net Revenues, twenty percent (20%) on the third US$10 million of such Non-[*****] Patent Monetization Net Revenues, and no additional amounts for Non-[*****] Patent Monetization Net Revenues above US$30 million (for a total payment to Drawbridge of up to US$8 million of General Net Revenue Share).  Notwithstanding the foregoing, or anything to the contrary herein, the total maximum General Net Revenue Share payable by the Company to Drawbridge hereunder (from all sources) shall be US$9.5 million.  By way of example and without limitation, if Company has paid Drawbridge US$3 million in General Net Revenue Share from [*****] Patent Monetization Net Revenues, the maximum General Net Revenue Share payable by Company to Drawbridge from Non‐[*****] Patent Monetization Net Revenues shall be reduced to US$6.5 million.
		

		
			(II)Effective as of the Amendment Date, Section 2(b)(ii) of the Monetization Side Letter is hereby amended and restated in its entirety as follows:
		

		
			(ii)Notwithstanding anything to the contrary herein, “Patent Monetization Net Revenues” and “[*****]” do not include (A) consideration received by Company or its Subsidiaries with respect to intellectual property or assets of Company or its Subsidiaries other than the Company Patent Portfolio, (B) amounts received by Company or its Subsidiaries as debt, equity, or other financing that are not paid or granted to Company or its Subsidiaries in consideration of a grant of a license or covenant not sue, or other immunity with respect to the Company Patent Portfolio, or (C) any consideration received by Company or its Subsidiaries for non-exclusive licenses or other non-exclusive rights under the Company Patent Portfolio granted in the ordinary course of business in connection with the sale or provision of products or services of Company or its Subsidiaries or in connection with joint development or similar projects in support of the Company’s ordinary course business operations.
		

		
			(III)Effective as of the Amendment Date, Section 2(b)(iv) of the Monetization Side Letter is hereby amended and restated in its entirety as follows:
		

		
			(iv)“Company Patent Portfolio” means any and all patents and patent applications owned by Company or its Subsidiaries or exclusively licensed to Company 
		

		
			 
		

		

		

		 

		

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			CONFIDENTIAL TREATMENT REQUESTED, OMITTED PORTIONS ARE MARKED
WITH [*****] AND HAVE BEEN FILED SEPARATELY WITH THE SEC.

		

		

			 

		

		
		

		
			or its Subsidiaries (in a manner such that Company has standing to sue under those patents in its own name and retain the proceeds of such suit), whether owned, issuing, applied for, licensed, or acquired before or after the Effective Date, including the 
		

		
			 
		

		
			 
		

		

		

		 

		

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			NVvault Assets (as defined in Section 2(b)(v) below) together with (in each case if owned by or exclusively licensed to Company or its Subsidiaries) any and all (i) continuations, continuations in part, divisionals, reissues, or reexaminations of any of the foregoing, (ii) present or future United States patents claiming common priority in whole or in part with any of the foregoing, and (iii) all foreign patents and/or applications for patents that are, or in the future become, counterparts of, or claim priority in whole or in part to, any of the foregoing.  Notwithstanding the foregoing, for the avoidance of doubt, “Company Patent Portfolio” shall in no event include (A) patents or patent applications of any third party that may consummate an Acquisition of Company, and (B) patents issued or applied for after the consummation of an Acquisition of the Company, (excluding, but only if there is no Revenue Share Termination pursuant to Section 3(a): (1) any patent issuing on a patent application that was included in the Company Patent Portfolio prior to the date of consummation of such Acquisition, (2) continuations, continuations in part, divisionals, reissues, or reexaminations of any patent or patent application that was included in the Company Patent Portfolio prior to the date of consummation of such Acquisition, (3) future United States patents claiming common priority in whole or in part with any patent or patent application included in the preceding (1) or (2) or that was included in the Company Patent Portfolio prior to the date of consummation of such Acquisition, and (4) all foreign patents and/or applications for patents that are, or in the future become, counterparts of, or claim priority in whole or in part to, any patent or patent application included in the preceding (1), (2) or (3) or that was included in the Company Patent Portfolio prior to the date of consummation of such Acquisition).
		

		
			(IV)Effective as of the Amendment Date, Section 3(b) of the Monetization Side Letter is hereby amended and restated in its entirety as follows:
		

		
			(b)Partial Sales.  If, during the term of this Letter Agreement, Company or any of its Subsidiaries consummates a sale or divestiture of any of Company’s or its Subsidiaries’ business that includes any portion of the Company Patent Portfolio in a transaction that is not an Acquisition (other than standalone sales of patents and/or patent applications, which shall be addressed as set forth in Section 3(c)) (“Divestiture”), then the parties shall treat such Divestiture as an event leading to Patent Monetization Net Revenues and that portion of such Divestiture purchase price that is attributable to both (i) any portion of the Company Patent Portfolio that is divested, and (ii) any license granted by Company or any of its Subsidiaries to the acquirer of such business under the portion of the Company Patent Portfolio that is retained by Company or any such Subsidiary (but only to the extent such license extends beyond the operation, including manufacture and sales of products, of the divested business), shall constitute Patent Monetization Net Revenues for purposes of Section 1(a) or Section 2(a), as applicable, provided that in no event shall the aggregate Early Repayment Option A Net Revenue Share or the General Net Revenue Share, as applicable, on account of the aggregate Patent Monetization Net Revenues attributable to all such Divestitures exceed an amount equal to the total, aggregate amount of all Term Loans drawn by Company under the Loan Agreement prior to the date of consummation of such Acquisition.  If the parties are unable to agree upon the portion of any purchase price in connection with such Divestiture that is attributable to the Company Patent Portfolio and any such license, then the parties shall submit the matter to a qualified, independent, third-party appraiser 
		

		

		

		 

		

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			mutually agreed upon by the parties (and the costs and expenses of which shall be borne equally by the parties) for valuation, and such appraiser’s decision shall be final and binding on the parties.
		

		
			3.Severability.  In case any provision of or obligation under this Amendment shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.
		

		
			4.Integration.  This Amendment, together with the Loan Documents and the Warrant Documents, incorporates all negotiations of the parties hereto with respect to the subject matter hereof and is the final expression and agreement of the parties hereto with respect to the subject matter hereof. Except as amended hereby (as applicable), the Monetization Side Letter, the Loan Documents, and the Warrant Documents remain unmodified and in full force and effect.  All references to the Monetization Side Letter in each of the Loan Documents and the Warrant Documents shall be deemed to be references to the Monetization Side Letter as amended hereby.  
		

		
			5.Counterparts.  This Amendment may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument and any of the parties hereto may execute this Amendment by signing any such counterpart.
		

		
			6.Controlling Provisions.  In the event of any inconsistencies between the provisions of this Amendment and the provisions of any Loan Document or any Warrant Document, the provisions of this Amendment shall govern and prevail.  Except as expressly modified by this Amendment, the Monetization Side Letter, the Loan Documents, and the Warrant Documents shall not be modified and shall remain in full force and effect.    
		

		
			7.Governing Law.  THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.  SECTION 10 OF THE MONETIZATION SIDE LETTER IS HEREBY INCORPORATED BY REFERENCE INTO THIS AGREEMENT MUTATIS MUTANDIS AND SHALL APPLY HERETO.
		

		
			 
		

		
			 
		

		
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		IN WITNESS WHEREOF, the parties have executed this Amendment as of the date set forth above.
		

		
			 
		

			
					
						 

					
					
						COMPANY:

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						NETLIST, INC.

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						By:

					
					
						/s/ Gail M. Sasaki

				
	
					
						 

					
					
						Name:

					
					
						Gail Sasaki

				
	
					
						 

					
					
						Title:

					
					
						Chief Financial Officer

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						LENDER:

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						DRAWBRIDGE SPECIAL OPPORTUNITIES FUND LP

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						   By:

					
					
						Drawbridge Special Opportunities GP LLC, its general partner

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						By:

					
					
						/s/ Jason Meyer

				
	
					
						 

					
					
						Name:

					
					
						Jason Meyer

				
	
					
						 

					
					
						Title:

					
					
						Chief Administrative Officer

				

		
			 
		

		 

		

			[Signature Page To First Amendment to Monetization Letter Agreement]

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