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Exhibit 10.18  

	U.S. $625,000	 	No. NLCP-10
 

 
 

Netlist, Inc.
  475 Goddard
  Irvine, CA 92618 USA
  (Incorporated in the State of Delaware)

 
 

7.5% Promissory Note  
  

        Netlist, Inc., a Delaware corporation (hereinafter called the "Company," which term includes any successor corporation), for value
received, hereby promises to pay to Serim Paper Manufacturing Co., Ltd., 505, ShinSa-Dong, KangNam-Ku, Seoul, Korea, or its assigns, the principal sum of Six Hundred
Twenty-Five Thousand Dollars, on July 3, 2006 (the "Initial Maturity Date") upon the presentation and surrender of this Security or, if no such presentation or surrender of this
Security is made on that date, on April 3, 2007 (the "Rollover Maturity Date"). 

        The
Company promises to pay interest on the principal amount of this Security at a rate of 7.5% per annum. Interest payments will be made on the Initial Maturity Date and, if applicable,
the Rollover Maturity Date (each, an "Interest Payment Date"). Interest on this Security will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from
October 3, 2005. Interest will be computed on the basis of a 360-day year consisting of twelve 30-day months. 

        Reference
is made to the further provisions of this Security on the reverse side hereof, which will, for all purposes, have the same effect as if set forth at this place. 

        IN
WITNESS WHEREOF, the Company has caused this 7.5% Promissory Note to be duly executed under its corporate seal. 

Dated:
October 3, 2005. 

	 	 	NETLIST, INC.
	

 	

 	
 	

By:	

/s/  C.K. HONG      

	 	 	 	 	C.K. Hong

President
	

Attest:	
 	

 	

 
	

/s/  CHRISTOPHER LOPES      
 Christopher Lopes

Secretary	
 	

 	

 

  
 

  Terms and Conditions of this Security    
    

        1.    Method of Payment.    The Company shall pay interest on this Security to the holder of this Security at the close
of business on the date immediately preceding each Interest Payment Date. The holder must present and surrender this Security to the Company to collect the principal payment. Notwithstanding any
statement included on the face of this Security, the holder of this Security, upon the mutual agreement of such holder and the Company, may present and surrender this Security in exchange for the
immediate payment of the then-outstanding principal and all interest accrued on this Security at any time prior to the Initial Maturity Date or the Rollover Maturity Date, as the case may
be. The Company shall pay principal and interest in such coin or currency of the United States of America as at the time of payment shall be legal tender for payment of public and private debts ("U.S.
Legal Tender") and shall pay principal and interest by wire transfer of funds to the bank account of the financial institution designated by the securities company representing the holder of this
Security. 

        2.    Defaults and Remedies.    If the Company defaults on any payment due under this Security, the holder may declare
all interest and principal due and owing under this Security to be immediately due and payable. 

        3.    No Recourse Against Others.    No stockholder, director, officer, employee or incorporator, as such, past, present
or future, of the Company or any successor corporation shall have any liability for any obligation of the Company under this Security or for any claim based on, in respect of or by reason of, such
obligations or their creation. Each holder of this Security, by accepting this Security, waives and releases all such liability. The waiver and release are part of the consideration for the issuance
of this Security. 

        4.    Acquisition for Investment.    By accepting this Security, the holder hereof shall be deemed to have represented
to the Company that such holder (i) is an "accredited investor" as such term is defined in Rule 501 promulgated under the Securities Act of 1933, (ii) by reason of its business or
financial experience, has the capacity to protect its own interests in connection with the acquisition of this Security, and (iii) is acquiring this Security for its own account, for investment
purposes only, and not with a view to, or for sale in connection with, any distribution of this Security. 

        5.    Miscellaneous.    The terms of this Security may be amended or supplemented only by a written instrument executed
by the Company and the current holder of this Security and any existing default under the terms of this Security may be waived with the consent of such holder. When a successor assumes all the
obligations of its predecessor under this Security, the predecessor will be released from those obligations. The terms and provisions of this Security shall be governed by the law of the State of
California without giving effect to any conflicts of laws provisions. 

	FOR VALUE RECEIVED	 
	 	
 FILL IN AMOUNT
	

 NAME IN FULL OF TRANSFEROR

	Hereby shall assign and transfer unto	 
	 	
 NAME IN FULL OF TRANSFEREE

	this Security, and do hereby irrevocably constitute and appoint	 
	 	

	as Attorney to transfer said Security on the register of the within named Corporation, with full power of substitution in the premises.

	Dated:	 	 
	 	
	 	 
	

IN THE PRESENCE OF:	
 	

 
	

	
 	

	 	 	 	        TRANSFEROR
	

 2 WITNESSES SIGN HERE	
 	

 
	

IN THE PRESENCE OF:	
 	

 
	

	
 	

	 	 	 	        TRANSFEREE
	

 2 WITNESSES SIGN HERE

	
 	

 

        THE
SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS WRITTEN UPON THE FACE OF THIS CERTIFICATE IN EVERY PARTICULAR WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE
WHATSOEVER. 

        KEEP
THIS CERTIFICATE IN A SAFE PLACE. IF IT IS LOST, STOLEN, MUTILATED OR DESTROYED, THE CORPORATION WILL REQUIRE A BOND OF INDEMNITY AS A CONDITION TO THE ISSUANCE OF A REPLACEMENT
CERTIFICATE. 

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Netlist, Inc. 475 Goddard Irvine, CA 92618 USA (Incorporated in the State of Delaware)

7.5% Promissory Note

Terms and Conditions of this SecurityQuickLinks
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Exhibit 10.19  

 
 

NOTE PURCHASE AGREEMENT    
    

        THIS NOTE PURCHASE AGREEMENT (this "Agreement") is made and entered into as of February 12, 2006, by and between Netlist, Inc., a Delaware
corporation, whose address is 475 Goddard, Irvine, California 92618 (the "Company"), and Serim Paper Manufacturing Co., Ltd., whose address is 505, ShinSa-Dong,
KangNam-Ku, Seoul, Korea (hereinafter referred to as the "Purchaser"); 

 
 

WITNESSETH:    

        WHEREAS,
the Company agrees to issue to Purchaser a 6.5% Promissory Note No. NLCP-11, dated of even date herewith and in the original principal amount of $500,000 (the "New
Note") in exchange for the 6.5% Promissory Note No. NLCP-08, dated August 12, 2004, in the original principal amount of $500,000 (the "Existing Note"), upon the terms and subject to
the conditions hereinafter set forth. 

        NOW,
THEREFORE, in consideration of the mutual covenants and agreements contained in this Agreement, and in order to consummate the exchange of the New Note for the Existing Note, it is
hereby agreed as follows: 

	1)
	PURCHASE
AND SALE: 

        Subject
to the terms and conditions hereinafter set forth, concurrently with the execution of this Agreement, (i) the Company shall issue and sell to the Purchaser the New Note in
consideration of the return and cancellation of the Existing Note, and (ii) the Purchaser shall return to the Company the Existing Note for cancellation in consideration of the issuance of the
New Note. 

	2)
	MATURITY:

        Although
the New Note provides that principal and accrued interest owing on the New Note is due and payable on November 12, 2006 (the "Initial Maturity Date"), the Purchaser
agrees not to present or surrender the New Note for redemption on that date. The Purchaser further agrees to hold the New Note until August 12, 2007 (the "Rollover Maturity Date") unless the
Purchaser desires to exchange the New Note for preferred stock of the Company pursuant to Section 3 below. 

	3)
	EXCHANGE
OF NEW NOTE FOR PREFERRED STOCK: 

        The
Purchaser shall have the right, but not the obligation, to effectively convert the amount of principal due on the New Note into whole shares of preferred stock of the Company at any
time. The Purchaser can exercise this right by providing a written request for the exchange of the New Note for preferred stock to the Company at least 30 days in advance of the requested date
of exchange. Prior to the requested date of exchange, the Company will take all necessary steps to authorize and prepare for legal issuance a new class of preferred stock (the "New Preferred Stock")
with rights and preferences substantially equivalent to the rights and preferences of the Company's existing Series A Convertible Preferred Stock. Each share of the New Preferred Stock will be
convertible into the number and type of securities into which the Company's Series A Convertible Preferred Stock is then convertible into (currently, one share of the Company's common stock) at
any time at the option of the holder of such share; provided, however, that such conversion shall occur automatically, without any action on the part of such holder, immediately prior to the
occurrence of a Qualifying IPO (as defined below). Each share of New Preferred Stock will rank pari passu with the Company's existing Series A
Convertible Preferred Stock. If such right of exchange is exercised, the New Note will be exchanged for shares of the New Preferred Stock at a price equal to the lower of (i) $1.667 per share,
with such price to be adjusted to appropriately reflect the effects of any stock splits, stock dividends, recapitalizations or similar changes in the Company's common stock occurring after the date
hereof and prior to such exchange, and 

1

 

(ii) the
per-share fair market value of the New Preferred Stock (the "Per-Share Exchange Price") (i.e., the New Note will be exchanged for such number of shares as
equals the principal amount of the New Note divided by the Per-Share Exchange Price). 

        Notwithstanding
anything to the contrary in the foregoing paragraph, in the event of a Qualifying IPO (as defined below), the Purchaser shall be deemed, without any requirement of
providing any advance written request or taking any other action, to have exercised the exchange right set forth in the foregoing paragraph immediately prior to the closing of such Qualifying IPO, and
thereupon the Company will issue to the Purchaser, in exchange for the New Note, such number of shares of the Company's common stock as shall equal the principal amount of the New Note divided by the
Per-Share Exchange Price. As used herein, a "Qualifying IPO" shall mean a public offering by the Company or any parent entity of the Company of shares of its common stock at a
per-share price in excess of the Per-Share Exchange Price which results in the automatic conversion of the outstanding shares of the Company's existing Series A
Convertible Preferred Stock into shares of the Company's or such parent entity's common stock. 

	4)
	PAYMENT:

        The
Company will make all payments of principal and accrued interest as set forth on the New Note. If the New Note is exchanged for shares of the New Preferred Stock, the Company shall
pay interest accrued through the date of such exchange. 

	5)
	GENERAL
PROVISIONS

	a)
	Entire
Agreement. 

        This
Agreement and the New Note shall constitute the entire agreement, and supersedes all prior agreements and understandings, oral and written, between the parties hereto with respect
to the subject matter hereof. 

	b)
	Sections
and Other Headings. 

        The
section and other headings contained in this Agreement are for reference purposed only and shall not affect the meaning or interpretation of this Agreement. 

	c)
	Governing
Law. 

        This
Agreement, and all transactions contemplated hereby, shall be governed by, the internal laws of the State of California (without giving effect to the conflicts of laws provisions
thereof). The parties hereto waive trial by jury and agree to submit to the personal jurisdiction and venue of a court of subject matter jurisdiction located in the State of California. In the event
that litigation results from or arises out of this Agreement or the performance thereof, the parties hereto agree to reimburse the prevailing party's reasonable attorney's fees, court costs, and all
other expenses, whether or not taxable by the court as costs, in addition to any other relief to which the prevailing party may be entitled. 

2

 

        IN
WITNESS WHEREOF, this Note Purchase Agreement has been executed by each of the parties hereto on the date first above written. 

	"PURCHASER"	 	"THE COMPANY"
	

Serim Paper Manufacturing Co., Ltd.	
 	

Netlist, Inc., a Delaware corporation
	

By:	

/s/  D.Y. LEE      
	
 	

By:	

/s/  C.K. HONG      

	 	Name: D.Y. Lee	 	 	C.K. Hong
	 	Title: President	 	 	President

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NOTE PURCHASE AGREEMENT

WITNESSETH

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