Document:

nlst_Ex_4-1

		
			Exhibit 4.1
		

		
			 
		

		
			DESCRIPTION OF THE REGISTRANT’S SECURITIES
		

		
			REGISTERED PURSUANT TO SECTION 12 OF THE
		

		
			SECURITIES EXCHANGE ACT OF 1934
		

		
			 
		

		
			The following is a description of the common stock, par value $0.001 per share (the “Common Stock”), and the series A preferred stock purchase rights of Netlist, Inc. (the “Company,” “we,” “us,” or “our”) which are the securities of the Company registered under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
		

		
			 
		

		
			DESCRIPTION OF CAPITAL STOCK
		

		
			 
		

		
			The following description of our capital stock is a summary and does not purport to be complete. It is subject to and qualified in its entirety by reference to our restated certificate of incorporation, as amended (the “Certificate of Incorporation”) and our amended and restated bylaws, as amended (the “Bylaws”), each of which is incorporated herein by reference as an exhibit to the Annual Report on Form 10-K filed with the Securities and Exchange Commission, of which this Exhibit 4. 1 is a part. We encourage you to read our Certificate of Incorporation, our Bylaws and the applicable provisions of the General Corporation Law of the State of Delaware (the “DGCL”) for additional information.
		

		
			 
		

		
			Authorized Capital Stock
		

		
			 
		

		
			Our authorized capital stock consists of 300,000,000 shares of Common Stock and 10,000,000 shares of serial preferred stock, par value $0.001 per share.  Our board of directors has designated and authorized the issuance of a series of up to 1,000,000 shares of our serial preferred stock as Series A Preferred Stock.
		

		
			 
		

		
			Common Stock
		

		
			 
		

		
			Fully Paid and non-assessable.  All outstanding shares of our Common Stock are fully paid and non-assessable. 
		

		
			 
		

		
			Voting Rights.  Holders of our Common Stock are entitled to one vote per share on all matters voted on by the shareholders, including the election of directors. Our Common Stock does not have cumulative voting rights.
		

		
			 
		

		
			Dividend Rights.  Subject to any preferential dividend rights granted to the holders of any shares of our preferred stock that may at the time be outstanding, holders of our Common Stock are entitled to receive dividends as may be declared from time to time by our board of directors out of funds legally available therefor. 
		

		
			 
		

		
			Liquidation Rights.  Upon liquidation, dissolution or winding-up, the holders of our Common Stock are entitled to receive, after payment or provision for payment of all of our debts and liabilities, all of our assets available for distribution subject to the prior rights of any holders of preferred stock then outstanding.
		

		
			 
		

		
			No Preemptive and Similar Rights.  Our Common Stock has no preemptive or other subscription rights, and there are no conversion rights or redemption or sinking fund provisions with respect to such shares of Common Stock.
		

		
			

		 

		

		
			 
		

		
			Listing. Our Common Stock is listed and traded on the OTCQX Best Market under the symbol “NLST.”
		

		
			 
		

		
			Preferred Stock
		

		
			 
		

		
			Under our Certificate of Incorporation, without further stockholder action, our board of directors is authorized, subject to any limitations prescribed by the DGCL to provide for the issuance of the shares of preferred stock in one or more series, to establish from time to time the number of shares to be included in each such series, to fix the designation, powers, preferences and rights of the shares of each such series and any qualifications, limitations or restrictions thereof, and to increase or decrease the number of shares of any such series (but not below the number of shares of such series then outstanding).
		

		
			 
		

		
			Series A Preferred Stock Purchase Rights
		

		
			 
		

		
			On April 17, 2017, we entered into a rights agreement (the “Rights Agreement”) with Computershare Trust Company, N.A., as rights agent. In connection with the adoption of the Rights Agreement and pursuant to its terms, our board of directors authorized and declared a dividend of one right (each, a “Right”) for each outstanding share of our Common Stock to stockholders of record at the close of business on May 18, 2017 (the “Record Date”), and authorized the issuance of one Right for each share of Common Stock issued by us (except as otherwise provided in the Rights Agreement) between the Record Date and the Distribution Date (as defined below).
		

		
			 
		

		
			Each Right entitles the registered holder, subject to the terms of the Rights Agreement, to purchase from us, when exercisable and subject to adjustment, one unit consisting of one one-thousandth of a share (a “Unit”) of Series A Preferred Stock, par value $0.001 per share, at a purchase price of $6.56 per Unit, subject to adjustment.  Subject to the provisions of the Rights Agreement, including certain exceptions specified therein, a distribution date for the Rights (the “Distribution Date”) will occur upon the earlier of (i) 10 business days (or such later date as may be determined by our board of directors) following a public announcement that a person or group of affiliated or associated persons (an “Acquiring Person”) has acquired or otherwise obtained beneficial ownership of 15% or more of the then‐outstanding shares of our Common Stock, and (ii) 10 business days (or such later date as may be determined by our board of directors) following the commencement of a tender offer or exchange offer that would result in a person or group becoming an Acquiring Person.  The Rights are not exercisable until the Distribution Date and, unless earlier redeemed or exchanged by us pursuant to the terms of the Rights Agreement, will expire on the close of business on April 17, 2021.
		

		
			 
		

		
			In connection with the adoption of the Rights Agreement, our board of directors approved a Certificate of Designation of the Series A Preferred Stock (the “Certificate of Designation”) designating 1,000,000 shares of our serial preferred stock as Series A Preferred Stock and setting forth the rights, preferences and limitations of the Series A Preferred Stock. 
		

		
			 
		

		
			The above summary of the Rights, the Rights Agreement and Series A Preferred Stock does not purport to be complete. You should refer to the Rights Agreement, as amended, and the Certificate of Designation which are included as an exhibit to the Annual Report on Form 10-K.
		

		
			 
		

		
			

		 

		

		
			Certain Provisions of Our Certificate of Incorporation, Bylaws
		

		
			 
		

		
			Our Certificate of Incorporation and Bylaws vest the power to call special meetings of stockholders at any time in the chairman of the board, President or the board of directors.
		

		
			 
		

		
			To be properly brought before an annual meeting of stockholders, (i) any stockholder nomination for the board of directors must be delivered to our Secretary not later than 90 days prior to the date of the annual meeting, and (ii) any stockholder proposal other than nominations for our board of directors must be delivered to our Secretary not less than 120 days or more than 180 days prior to the first anniversary of the date on which we first released our proxy materials (or, in the absence of proxy materials, its notice of meeting) for the previous year’s annual meeting of stockholders.  However, if we did not hold an annual meeting the previous year, or if the date of the annual meeting is advanced more than 30 days prior to or delayed by more than 30 days after the anniversary of the preceding year’s annual meeting, then to be timely, notice by the stockholder must be delivered to the Secretary not later than the close of business on the later of (i) the 90th day prior to such annual meeting or (ii) the 15th day following the day on which public announcement of the date of such meeting is first made. Such notice must contain information specified in the Bylaws as to the director nominee or proposal of other business, information about the stockholder making the nomination or proposal and the beneficial owner, if any, on behalf of whom the nomination or proposal is made, including name and address, class and number of shares owned, and representations regarding the intention to make such a proposal or nomination and to solicit proxies in support of it. With respect to director nominees, we may require any proposed nominee to furnish information concerning his or her eligibility to serve as our director.
		

		
			 
		

		
			Unless otherwise provided in our Certificate of Incorporation, our stockholders may not act by written consent.
		

		
			 
		

		
			Certain Anti-Takeover Effects of Delaware Law
		

		
			 
		

		
			We are subject to Section 203 of the DGCL. In general, Section 203 of the DGCL prohibits a publicly held Delaware corporation from engaging in various business combination transactions with any interested stockholder for a period of three years following the time that such person became an interested stockholder, unless:
		

		
			 
		

			
	
			
				 ·
			

			
	
			
			the business combination or the transaction which resulted in the stockholder becoming an interested stockholder is approved by the board of directors prior to the time the interested stockholder obtained such status;

		
			 
		

			
	
			
				 ·
			

			
	
			
			upon consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the voting stock outstanding those shares owned (i) by persons who are directors and also officers and (ii) employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or

		
			 
		

			
	
			
				 ·
			

			
	
			
			at or subsequent to such time the business combination is approved by the board of directors and authorized at an annual or special meeting of stockholders by the affirmative vote of at 

		 

	least two-thirds of the outstanding voting stock which is not owned by the interested stockholder.

		
			 
		

		
			A “business combination” is defined to include mergers, asset sales, and other transactions resulting in financial benefit to a stockholder. In general, an “interested stockholder” is a person who owns (or is an affiliate or associate of the corporation and, within the prior three years, did own) 15% or more of the corporation’s voting stock or any entity or person affiliated with or controlling or controlled by such entity or person. The statute could prohibit or delay mergers or other takeover or change in control attempts with respect to our company and, accordingly, may discourage attempts to acquire us even though such a transaction may offer our stockholders the opportunity to sell their stock at a price above the prevailing market price.nlst_Ex_10-26

		
			Exhibit 10.26
		

		
			AMENDMENT
		

		
			TO
		

		
			LOAN AND SECURITY AGREEMENT
		

		
			THIS AMENDMENT TO LOAN AND SECURITY AGREEMENT (this “Amendment”) is entered into as of February 27, 2020, by and between SILICON VALLEY BANK (“Bank” or “Silicon”) and NETLIST, INC., a Delaware corporation (“Borrower”).  Borrower’s chief executive office is located at 175 Technology Drive, 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 the same may from time to time be amended, modified, supplemented or restated, the “Loan Agreement”).
		

		
			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) extend the Revolving Line Maturity Date and (ii) make certain other revisions to the Loan Agreement as more fully set forth herein.
		

		
			D.         Bank has agreed to so amend certain provisions of the Loan Agreement and to provide its consent, 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, effective as of the date hereof:
		

		
			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 Agreement.
		

		
			2.1       Modified Definition of Revolving Line Maturity Date.  The definition of “Revolving Line Maturity Date” set forth in Section 13.1 of the Loan Agreement is hereby deleted in its entirety and replaced with the following:
		

		
			“Revolving Line Maturity Date” is April 30, 2021.
		

		
			2.2       Modified Exhibit B.  The Compliance Certificate attached to the Loan Agreement as Exhibit B is hereby deleted in its entirety and replaced with the Compliance
		

		
			
		

		
			

		 

		

		
			Certificate attached hereto as Schedule 1.
		

		
			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, except as herein amended, 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), 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 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 Borrower, except as already has been obtained or
		

		
			
		

		
			

		 

		

			2

		

		

		
			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.  Borrower hereby agree as follows:
		

		
			5.1       FOR GOOD AND VALUABLE CONSIDERATION, Borrower 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, Borrower 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 THAT THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR EXPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.” (Emphasis added.)
		

		
			5.3       By entering into this release, Borrower 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 Borrower hereby to fully, finally and forever settle and release all matters, disputes and differences, known or unknown, suspected or unsuspected; accordingly, if Borrower 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, Borrower 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. Borrower acknowledges that it is not relying upon and has not relied
		

		
			
		

		
			

		 

		

			3

		

		

		
			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. Borrower 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       Borrower 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 Borrower regarding any fact relied upon by Borrower in entering into this Amendment.
		

		
			(b)        Borrower 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 Borrower, the contents hereof are known and understood by Borrower, and this Amendment is signed freely, and without duress, by Borrower
		

		
			(e)        Borrower 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. Borrower 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.         Ratification of Intellectual Property Security Agreement.  Borrower hereby ratifies, confirms and reaffirms, all and singular, the terms and conditions of a certain Intellectual Property Security Agreement dated as of October 31, 2009 between Borrower and Bank, and acknowledges, confirms and agrees that said Intellectual Property Security Agreement (a) contains an accurate and complete listing of all Intellectual Property Collateral (as defined therein) and (b) shall remain in full force and effect.
		

		
			7.         Ratification of Perfection Certificate.  Borrower hereby ratifies, confirms and reaffirms, all and singular, the terms and disclosures contained in a certain Perfection Certificate dated as of January 25, 2017, and acknowledges, confirms and agrees that the disclosures and information Borrower provided to Bank in such Perfection Certificate have not changed, as of the date hereof.
		

		
			
		

		
			

		 

		

			4

		

		

		
			8.         Integration.  This Amendment and the Loan Documents represent the entire agreement about this subject matter and supersede prior negotiations or agreements.  All prior agreements, understandings, representations, warranties, and negotiations between the parties about the subject matter of this Amendment and the Loan Documents merge into this Amendment and the Loan Documents.
		

		
			9.         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.
		

		
			10.       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.
		

		
			11.       Effectiveness.  This Amendment shall be deemed effective upon (a) the due execution and delivery to Bank of this Amendment by each party hereto and (b) Borrower’s payment of an amendment fee with respect to the renewal of the Loan Agreement in an amount equal to $15,000.  The above-mentioned fee shall be fully earned and payable concurrently with the execution and delivery of this Amendment and 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 fees to Borrower’s loan account.
		

		
			[Signature page follows.]
		

		
			 
		

		
			
		

		
			

		 

		

			5

		

		

		
			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/ ANDREW SKALITZY

					
					
						 

					
					
						By:

					
					
						/s/ GAIL SAKAKI

				
	
					
						Name:

					
					
						Andrew Skalitzy

					
					
						 

					
					
						Name:

					
					
						Gail Sasaki

				
	
					
						Title:

					
					
						VP

					
					
						 

					
					
						Title:

					
					
						CFO, VP, Secretary

				

		
			 
		

		
			
		

		
			

		 

		

			6

		

		

		
			Schedule 1
		

		
			 
		

		
			EXHIBIT B
		

		
			 
		

		
			COMPLIANCE CERTIFICATE
		

		
			 
		

			
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						TO:

					
					
						SILICON VALLEY BANK

					
					
						    

					
					
						Date:

				
	
					
						FROM:

					
					
						NETLIST, INC.

					
					
						 

					
					
						 

				

		
			 
		

		
			The undersigned authorized officer of NETLIST, INC. (“Borrower”) certifies that under the terms and conditions of the Loan and Security Agreement between Borrower and Bank (the “Agreement”), (1) Borrower is in complete compliance for the period ending _______________ with all required covenants except as noted below, (2) there are no Events of Default, (3) all representations and warranties in the Agreement are true and correct in all material respects on this date except as noted below; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date, (4) Borrower, and each of its Subsidiaries, has timely filed all required tax returns and reports, and Borrower has timely paid all foreign, federal, state and local taxes, assessments, deposits and contributions owed by Borrower except as otherwise permitted pursuant to the terms of Section 5.9 of the Agreement, and (5) no Liens have been levied or claims made against Borrower or any of its Subsidiaries relating to unpaid employee payroll or benefits of which Borrower has not previously provided written notification to Bank.  Attached are the required documents supporting the certification.  The undersigned certifies that these are prepared in accordance with GAAP consistently applied from one period to the next except as explained in an accompanying letter or footnotes.  The undersigned acknowledges that no borrowings may be requested at any time or date of determination that Borrower is not in compliance with any of the terms of the Agreement, and that compliance is determined not just at the date this certificate is delivered.  Capitalized terms used but not otherwise defined herein shall have the meanings given them in the Agreement.
		

		
			 
		

			
					
						 

					
					
						 

					
					
						 

				
	
					
						Please indicate compliance status by circling Yes/No under “Complies” column.

				
	
					
						 

				
	
					
						Reporting Covenant

					
					
						Required

					
					
						Complies

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						Monthly financial statements with Compliance Certificate

					
					
						Monthly within 30 days

					
					
						Yes   No

				
	
					
						Annual financial statement (CPA Audited) 

					
					
						Concurrently with Form 10-K

					
					
						Yes   No

				
	
					
						10‐Q, 10‐K and 8-K

					
					
						Within 5 days after filing with SEC

					
					
						Yes   No

				
	
					
						Annual Projections 

					
					
						Within 30 days of start of FYE

					
					
						Yes   No

				
	
					
						A/R & A/P Agings 

					
					
						Monthly within 20 days

					
					
						Yes   No

				
	
					
						Borrowing Base Reports

					
					
						(i) if no Credit Extensions outstanding, monthly (within twenty (20) days after the end of each month) and at the time of each request for an Advance; and (ii) if Credit Extensions outstanding, weekly and at the time of each request for an Advance

					
					
						Yes   No

				
	
					
						 

				
	
					
						The following intellectual property was registered after the Effective Date (if no registrations, state “None”)

					
						____________________________________________________________________________

					
						 

				

		
			 
		

		
			
		

		

		 

		

			7

		

	
					
						

					
						Financial Covenant

					
					
						Required

					
					
						Actual

					
					
						Complies

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						Maintain on a Monthly Basis:

					
					
						 

					
					
						 

					
					
						 

				
	
					
						Minimum Liquidity Ratio

					
					
						4.00 : 1.00

					
					
						____ : 1.00

					
					
						Yes   No

				

		
			 
		

		
			The following financial covenant analysis and information set forth in Schedule 1 attached hereto are true and accurate as of the date of this Certificate.
		

		
			 
		

		
			The following are the exceptions with respect to the certification above:  (If no exceptions exist, state “No exceptions to note.”)
		

		
			 
		

			
					
						 

				
	
					
						 

				
	
					
						 

				
	
					
						 

				

		
			 
		

		
			 
		

			
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						NETLIST, INC.

					
					
						    

					
					
						BANK USE ONLY

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						Received by:

					
					
						 

				
	
					
						By:

					
					
						 

					
					
						 

					
					
						 

					
					
						AUTHORIZED SIGNER

				
	
					
						Name:

					
					
						 

					
					
						 

					
					
						Date:

					
					
						 

				
	
					
						Title:

					
					
						 

					
					
						 

					
					
						Verified:

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						AUTHORIZED SIGNER

				
	
					
						 

					
					
						 

					
					
						 

					
					
						Date:

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						Compliance Status:

					
					
						Yes   No

				

		
			 
		

		
			 
		

		
			
		

		
			

		 

		

			8

		

		

		
			Schedule 1 to Compliance Certificate
		

		
			 
		

		
			Financial Covenants of Borrower
		

		
			 
		

		
			In the event of a conflict between this Schedule and the Loan Agreement, the terms of the Loan Agreement shall govern.
		

		
			 
		

		
			Dated:  ____________________
		

		
			 
		

		
			I.            Liquidity Ratio (Section 6.9(a))
		

		
			 
		

		
			Required:             4.00 : 1.00
		

		
			Actual:
		

		
			 
		

			
					
						A.

					
					
						Borrower’s cash and Cash Equivalents that are unencumbered (except for Bank’s security interest) and unrestricted and maintained at Bank

					
					
						$             

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						B.

					
					
						Availability Amount 

					
					
						$            

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						C.

					
					
						Sum of line A plus line B 

					
					
						$            

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						D.

					
					
						Net Income plus depreciation plus amortization (including amortizing debt discount) plus non-cash expenses related to stock compensation for trailing three months

					
					
						$            

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						E.

					
					
						Gross margins associated with deferred NRE revenue for trailing three months

					
					
						$            

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						F.

					
					
						EBDA (line D minus line E) 

					
					
						$            

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						G.

					
					
						Average Trailing 3 Month EBDA (line F divided by 3)

					
					
						$            

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						H.

					
					
						Liquidity Ratio (line C divided by line G)

					
					
						           :1.00

				

		
			 
		

		
			 
		

		
			Is line H equal to or greater than 4.00 : 1.00 ?
		

		
			 
		

			
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						No, not in compliance

					
					
						 

					
					
						Yes, in compliance

				

		
			 
		

		 

		

			9

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