NLST Netlist Inc (QB)

Item 8.01  Other Events.

On July 1, 2019, Netlist, Inc. (“Netlist”) entered into a non-binding Memorandum of Understanding (the “MOU”) with Xi’an UniIC Semiconductors Co., Ltd. (“UniIC”).  Pursuant to the MOU, Netlist will grant to UniIC a non-exclusive license to develop, market and sell a Media Controller ASIC (the “MCA”) and a Hybrid DIMM Memory Module (the “HDIMM”) based on Netlist’s HybriDIMM TM  intellectual property (the “HybriDIMM Technology”).

Pursuant to the MOU, UniIC will market and sell the MCAs and Netlist will receive a per unit royalty therefrom.  Netlist will also receive the right to purchase MCAs from UniIC based on a cost plus model to be mutually agreed upon in a definitive agreement entered into between Netlist and UniIC (the “Definitive Agreement”).  Additionally, Netlist would obtain the right to build and sell HDIMMs based on the MCA and the right to develop and sell derivative MCA and HDIMM products based on the HybriDIMM Technology for a royalty amount to be negotiated between Netlist and UniIC.  The MOU also anticipates Netlist receiving most favored customer pricing on the MCA, DRAM and NAND devices if Netlist develops and sells a product based on its own DIMM design.  The MOU contemplates UniIC paying Netlist an upfront amount upon execution of the Definitive Agreement to be determined in return for the HybriDIMM  Technology architectural specification documentation, technical information transfer, detailed proto-type information, and consultation to appropriately transfer technology.

The MOU also contemplates further negotiations between Netlist and UniIC regarding technology generation and regional exclusivity.  The Definitive Agreement would contain customary provisions, including, without limitation, regarding ownership of intellectual property, representations and warranties, indemnification, limitation of liability, termination, dispute resolution and insolvency.

The terms of the MOU are non-binding on Netlist and UniIC and are subject to the parties entering into the Definitive Agreement, if such Definitive Agreement is entered into at all.  The MOU remains in effect until the earlier of (i) termination of discussions by either party by written notice to the other party, or (ii) the effective date of the Definitive Agreement or (iii) October 31, 2019.  The final terms of the Definitive Agreement may vary materially from those described herein, and there can be no assurance that the parties will ever enter into a binding agreement regarding the subject matter of the MOU.

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