Exhibit 10.2

EXECUTION VERSION

SILICON VALLEY BANK

GUARANTEE AND COLLATERAL AGREEMENT

 

 

 

GUARANTEE AND COLLATERAL AGREEMENT

Dated as of October 24, 2014,

made by

VIOLIN MEMORY, INC.,

and the other Grantors referred to herein and from time to time parties hereto,

in favor of

SILICON VALLEY BANK,

as Administrative Agent

 

 

 

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TABLE OF CONTENTS

 

         Page   SECTION 1.  

DEFINED TERMS

     1    1.1  

Definitions

     1    1.2  

Other Definitional Provisions

     2    SECTION 2.  

GUARANTEE

     2    2.1  

Guarantee

     2    2.2  

Right of Contribution

     3    2.3  

No Subrogation

     3    2.4  

Amendments, Etc

     4    2.5  

Guarantee Absolute and Unconditional; Guarantor Waivers; Guarantor Consents

     4    2.6  

Reserved

     6    2.7  

Reinstatement

     6    2.8  

Payments

     7    SECTION 3.  

GRANT OF SECURITY INTEREST

     7    3.1  

Grant of Security Interests

     7    3.2  

Grantors Remain Liable

     7    3.3  

Perfection and Priority

     7    SECTION 4.  

REPRESENTATIONS AND WARRANTIES

     8    4.1  

Title; No Other Liens

     8    4.2  

Perfected Liens

     8    4.3  

Jurisdiction of Organization; Chief Executive Office and Locations of Books

     8    4.4  

Deposit and Securities Accounts

     8    4.5  

Accounts Receivable

     9    4.6  

Instruments

     9    SECTION 5.  

COVENANTS

     9    5.1  

Delivery of Instruments and Chattel Paper

     9    5.2  

Maintenance of Insurance

     9    5.3  

Maintenance of Perfected Security Interest; Further Documentation

     10    5.4  

Changes in Locations, Name, Etc

     10    5.5  

Notices

     11    5.6  

Deposit and Securities Accounts

     11    5.7  

Accounts Receivables

     11    5.8  

Defense of Collateral

     11    5.9  

Preservation of Collateral

     11    5.10  

Compliance with Laws, Etc

     11    5.11  

Location of Books and Chief Executive Office

     11    5.12  

Maintenance of Records

     12    5.13  

Disposition of Collateral

     12    5.14  

Liens

     12    5.15  

Expenses

     12    5.16  

Chattel Paper

     12   

 

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TABLE OF CONTENTS

(continued)

 

         Page   SECTION 6.  

REMEDIAL PROVISIONS

     12    6.1  

Certain Matters Relating to Accounts Receivable

     12    6.2  

Communications with Obligors; Grantors Remain Liable

     13    6.3  

Application of Deposit Account and Securities Account Funds

     13    6.4  

Proceeds to be Turned Over To Administrative Agent

     13    6.5  

Application of Proceeds

     14    6.6  

Code and Other Remedies

     14    6.7  

Intellectual Property License

     15    6.8  

Deficiency

     15    SECTION 7.  

THE ADMINISTRATIVE AGENT

     15    7.1  

Administrative Agent’s Appointment as Attorney-in-Fact, etc

     15    7.2  

Duty of Administrative Agent

     16    7.3  

Authority of Administrative Agent

     16    SECTION 8.  

MISCELLANEOUS

     17    8.1  

Amendments in Writing

     17    8.2  

Notices

     17    8.3  

No Waiver by Course of Conduct; Cumulative Remedies

     17    8.4  

Enforcement Expenses; Indemnification

     17    8.5  

Successors and Assigns

     18    8.6  

Set Off

     19    8.7  

Counterparts

     19    8.8  

Severability

     19    8.9  

Section Headings

     19    8.10  

Integration

     19    8.11  

GOVERNING LAW; Submission to Jurisdiction; Jury Trial Waiver

     19    8.12  

Acknowledgements

     20    8.13  

Additional Grantors

     20    8.14  

Releases

     20   

 

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TABLE OF CONTENTS

(continued)

SCHEDULES

Schedule 1 Notice Addresses of Grantors

Schedule 3 Filings and Other Actions Required to Perfect Security Interests

Schedule 4 Location of Jurisdictions of Organization, Chief Executive Office and
Location of Books

Schedule 5 Deposit and Securities Accounts

ANNEXES

Annex 1 Form of Assumption Agreement

 

EXHIBITS

Exhibit A:   Form of Guarantee and Collateral Agreement Exhibit B:   Form of
Compliance Certificate Exhibit C:   Form of Secretary’s Certificate Exhibit D:  
Form of Solvency Certificate Exhibit E:   Form of Assignment and Assumption
Exhibits F-1 – F-4:  

Forms of U.S. Tax Compliance Certificates

Exhibit G:   Form of Addendum Exhibit H-1:   Form of Formula-Based Revolving
Loan Note Exhibit H-2:   Form of Non-Formula-Based Revolving Loan Note Exhibit
I:   Form of Borrowing Base Certificate Exhibit J:   Form of Subsidiary Borrower
Joinder Agreement Exhibit K:   Form of Notice of Borrowing Exhibit L:   Form of
Notice of Conversion/Continuation

 

 

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GUARANTEE AND COLLATERAL AGREEMENT

This GUARANTEE AND COLLATERAL AGREEMENT (this “Agreement”), dated as of
October 24, 2014, is made by each of the signatories hereto (together with any
other entity that may become a party hereto as provided herein (each a “Grantor”
and, collectively, the “Grantors”), in favor of SILICON VALLEY BANK (“SVB”), as
administrative agent (together with its successors, in such capacity, the
“Administrative Agent”) for the banks and other financial institutions or
entities (each a “Lender” and, collectively, the “Lenders”) from time to time
parties to that certain Credit Agreement, dated as of the date hereof (as
amended, amended and restated, supplemented, restructured or otherwise modified,
renewed or replaced from time to time, the “Credit Agreement”), among Violin
Memory, Inc., a Delaware corporation (the “Borrower”), the Subsidiary Borrowers
named therein and a party thereto, the Lenders party thereto and the
Administrative Agent.

RECITALS

WHEREAS, the Borrower, the Subsidiary Borrowers, the Lenders and the
Administrative Agent are parties to the Credit Agreement;

WHEREAS, the proceeds of the extensions of credit under the Credit Agreement
will be used in part to enable the Grantors to make valuable transfers to one or
more members of an Affiliated group of companies that includes the other
Grantors in connection with the operation of their respective businesses;

WHEREAS, each Co-Borrower and the other Grantors are engaged in related
businesses, and each Co-Borrower and each other Grantor derives substantial
direct and indirect benefit from the extensions of credit under the Credit
Agreement; and

WHEREAS, it is a condition precedent to the Closing Date and to the initial
extension of credit under the Credit Agreement that the Grantors shall have
delivered this Agreement in favor of the Administrative Agent for the ratable
benefit of the Secured Parties.

NOW, THEREFORE, in consideration of the above premises, the parties hereto
hereby agree as follows:

SECTION 1. DEFINED TERMS.

1.1 Definitions.

(a) Unless otherwise defined herein, terms defined in the Credit Agreement and
used herein shall have the respective meanings given to such terms in the Credit
Agreement, and the following terms are used herein as defined in the UCC:
Chattel Paper, Deposit Account, Instrument, Money, and Supporting Obligation.

(b) The following terms shall have the following meanings:

“Accounts Receivable”: with respect to any Grantor, as defined in
Section 3.1(a).

“Agreement”: as defined in the preamble hereto.

“Assumption Agreement”: is an Assumption Agreement in substantially the form set
forth at Annex 1.

 

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“Books”: all books, records and other written, electronic or other documentation
in whatever form maintained now or hereafter by or for any Grantor in connection
with the ownership of its assets or the conduct of its business or evidencing or
containing information relating to the Collateral, including: (a) ledgers;
(b) records indicating, summarizing, or evidencing such Grantor’s assets
(including its Accounts Receivable), business operations or financial condition;
(c) computer programs and software; (d) computer discs, tapes, files, manuals,
spreadsheets; (e) computer printouts and output of whatever kind; (f) any other
computer prepared or electronically stored, collected or reported information
and equipment of any kind; and (g) any and all other rights now or hereafter
arising out of any contract or agreement between such Grantor and any service
bureau, computer or data processing company or other Person charged with
preparing or maintaining any of such Grantor’s books or records or with credit
reporting, including with regard to any of such Grantor’s Accounts Receivable.

“Borrower”: as defined in the preamble hereto.

“Collateral”: as defined in Section 3.1.

“Collateral Account”: the Designated Deposit Account and any other Deposit
Account or Securities Account of any Grantor over which the Administrative Agent
has “control” within the meaning of Section 9104 of the UCC.

“Credit Agreement”: as defined in the recitals to this Agreement.

“Grantor”: is any Loan Party that is party hereto as of the date hereof or that
accedes hereto as a “Grantor” pursuant to an Assumption Agreement executed and
delivered to the Administrative Agent in accordance with the terms hereof.

“Guarantor”: as defined in Section 2.1(a).

“Investment Property”: the collective reference to all “investment property” as
such term is defined in Section 9-102(a)(49) of the UCC.

“Lender”: as defined in the preamble hereto.

“Proceeds”: all “proceeds” as such term is defined in Section 9102(a)(64) of the
UCC.

“Secured Obligations”: collectively, the “Obligations”, as such term is defined
in the Credit Agreement.

“Secured Parties”: the collective reference to the Administrative Agent and the
Lenders.

1.2 Other Definitional Provisions. The rules of interpretation set forth in
Section 1.2 of the Credit Agreement are by this reference incorporated herein,
mutatis mutandis, as if set forth herein in full.

SECTION 2. GUARANTEE.

2.1 Guarantee.

(a) At such time that the Borrower, at its sole discretion, consents to any
Grantor becoming a Guarantor hereunder, each such Grantor, together with any
Material Domestic Subsidiary of any such Grantor who accedes to this Agreement
as a Guarantor with the consent of the Borrower (each, a “Guarantor” and,
collectively, the “Guarantors”), hereby jointly and severally, unconditionally
and irrevocably, guarantees to the Administrative Agent, for the ratable benefit
of the Secured Parties and

 

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their respective successors, indorsees, transferees and assigns, the prompt and
complete payment and performance by the Co-Borrowers and the other Loan Parties
when due (whether at the stated maturity, by acceleration or otherwise) of the
Secured Obligations. In furtherance of the foregoing, and without limiting the
generality thereof, each Guarantor agrees as follows:

(i) each Guarantor’s liability hereunder shall be the immediate, direct, and
primary obligation of such Guarantor and shall not be contingent upon the
Administrative Agent’s or any Secured Party’s exercise or enforcement of any
remedy it or they may have against any Co-Borrower, any other Guarantor, any
other Person, or all or any portion of the Collateral; and

(ii) the Administrative Agent may enforce this guaranty notwithstanding the
existence of any dispute between any of the Secured Parties and the Borrower,
any Subsidiary Borrower or any other Guarantor with respect to the existence of
any Event of Default.

(b) Anything herein or in any other Loan Document to the contrary
notwithstanding, the maximum liability of each Guarantor hereunder and under the
other Loan Documents shall in no event exceed the amount which can be guaranteed
by such Guarantor under applicable federal and state laws relating to the
insolvency of debtors (after giving effect to the right of contribution
established in Section 2.2).

(c) Each Guarantor agrees that the Secured Obligations may at any time and from
time to time exceed the amount of the liability of such Guarantor hereunder
without impairing the guarantee contained in this Section 2 or affecting the
rights and remedies of the Administrative Agent or any other Secured Party
hereunder.

(d) The guarantee contained in this Section 2 shall remain in full force and
effect until the occurrence of the Discharge of Obligations, notwithstanding
that from time to time during the term of the Credit Agreement the outstanding
amount of the Secured Obligations may be zero.

(e) No payment made by any Co-Borrower, any Guarantor, any other guarantor or
any other Person or received or collected by the Administrative Agent or any
other Secured Party from any Co-Borrower, any Guarantor, any other guarantor or
any other Person by virtue of any action or proceeding or any setoff or
appropriation or application at any time or from time to time in reduction of or
in payment of the Secured Obligations shall be deemed to modify, reduce, release
or otherwise affect the liability of any Guarantor hereunder which shall,
notwithstanding any such payment (other than any payment made by such Guarantor
in respect of the Secured Obligations or any payment received or collected from
such Guarantor in respect of the Secured Obligations), remain liable for the
Secured Obligations up to the maximum liability of such Guarantor hereunder
until the Discharge of Obligations.

2.2 Right of Contribution. If in connection with any payment made by any
Guarantor hereunder any rights of contribution arise in favor of such Guarantor
against one or more other Guarantors, such rights of contribution shall be
subject to the terms and conditions of Section 2.3. The provisions of this
Section 2.2 shall in no respect limit the obligations and liabilities of any
Guarantor to the Administrative Agent and the other Secured Parties, and each
Guarantor shall remain liable to the Administrative Agent and the other Secured
Parties for the full amount guaranteed by such Guarantor hereunder.

2.3 No Subrogation. Notwithstanding any payment made by any Guarantor hereunder
or any setoff or application of funds of any Guarantor by the Administrative
Agent or any other Secured Party, no Guarantor shall be entitled to be
subrogated to any of the rights of the Administrative Agent or any other Secured
Party against any Co-Borrower or any other Grantor or any other Guarantor or any
Collateral or guarantee or right of offset held by the Administrative Agent or
any other Secured Party for

 

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the payment of the Secured Obligations, nor shall any Guarantor seek or be
entitled to seek any contribution or reimbursement from any Co-Borrower or any
other Grantor or any other Guarantor in respect of payments made by such
Guarantor hereunder, in each case, until the Discharge of Obligations. If any
amount shall be paid to any Guarantor on account of such subrogation rights at
any time prior to the Discharge of Obligations, such amount shall be held by
such Guarantor in trust for the Administrative Agent and the other Secured
Parties, shall be segregated from other funds of such Guarantor, and shall,
forthwith upon receipt by such Guarantor, be turned over to the Administrative
Agent in the exact form received by such Guarantor (duly indorsed by such
Guarantor to the Administrative Agent, if required), to be applied in such order
as set forth in Section 6.5 hereof irrespective of the occurrence or the
continuance of any Event of Default.

2.4 Amendments, Etc. with Respect to the Secured Obligations. Each Guarantor
shall remain obligated hereunder notwithstanding that, without any reservation
of rights against any Guarantor and without notice to or further assent by any
Guarantor, any demand for payment of any of the Secured Obligations made by the
Administrative Agent or any other Secured Party may be rescinded by the
Administrative Agent or such Secured Party and any of the Secured Obligations
continued, and the Secured Obligations, or the liability of any other Person
upon or for any part thereof, or any collateral security or guarantee therefor
or right of offset with respect thereto, may, from time to time, in whole or in
part, be renewed, extended, amended, modified, accelerated, compromised, waived,
surrendered or released by the Administrative Agent or any other Secured Party,
and the Credit Agreement, the other Loan Documents (other than the Warrant), and
any other documents executed and delivered in connection therewith may be
amended, modified, supplemented or terminated, in whole or in part, as the
Administrative Agent (or the Required Lenders, all of the Lenders, as the case
may be) may deem advisable from time to time, and any collateral security,
guarantee or right of offset at any time held by the Administrative Agent or any
other Secured Party for the payment of the Secured Obligations may be sold,
exchanged, waived, surrendered or released. Neither the Administrative Agent nor
any other Secured Party shall have any obligation to protect, secure, perfect or
insure any Lien at any time held by it as security for the Secured Obligations
or for the guarantee contained in this Section 2 or any property subject
thereto.

2.5 Guarantee Absolute and Unconditional; Guarantor Waivers; Guarantor Consents.
Each Guarantor waives any and all notice of the creation, renewal, extension or
accrual of any of the Secured Obligations and notice of or proof of reliance by
the Administrative Agent or any other Secured Party upon the guarantee contained
in this Section 2 or acceptance of the guarantee contained in this Section 2;
the Secured Obligations, and any of them, shall conclusively be deemed to have
been created, contracted or incurred, or renewed, extended, amended or waived,
in reliance upon the guarantee contained in this Section 2; and all dealings
between any Co-Borrower and any of the Guarantors on the one hand, and the
Administrative Agent and the other Secured Parties, on the other hand, likewise
shall be conclusively presumed to have been had or consummated in reliance upon
the guarantee contained in this Section 2. Each Guarantor further waives:

(a) diligence, presentment, protest, demand for payment and notice of default or
nonpayment to or upon any Co-Borrower, any other Grantor or any of the other
Guarantors with respect to the Secured Obligations;

(b) any right to require any Secured Party to marshal assets in favor of any
Co-Borrower, any other Grantor, such Guarantor, any other Guarantor or any other
Person, to proceed against any Co-Borrower, any other Grantor, any other
Guarantor or any other Person, to proceed against or exhaust any of the
Collateral, to give notice of the terms, time and place of any public or private
sale of personal property security constituting the Collateral or other
collateral for the Secured Obligations or to comply with any other provisions of
Section 9611 of the UCC (or any equivalent provision of any other applicable
law) or to pursue any other right, remedy, power or privilege of any Secured
Party whatsoever;

 

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(c) the defense of the statute of limitations in any action hereunder or for the
collection or performance of the Secured Obligations;

(d) any defense arising by reason of any lack of corporate or other authority or
any other defense of any Co-Borrower, any other Grantor, such Guarantor or any
other Person;

(e) any defense based upon the Administrative Agent’s or any Secured Party’s
errors or omissions in the administration of the Secured Obligations;

(f) any rights to set-offs and counterclaims;

(g) any defense based upon an election of remedies (including, if available, an
election to proceed by nonjudicial foreclosure) which destroys or impairs the
subrogation rights of such Guarantor or the right of such Guarantor to proceed
against any Co-Borrower, any other Grantor or any other obligor of the Secured
Obligations for reimbursement; and

(h) without limiting the generality of the foregoing, to the fullest extent
permitted by law, any defenses or benefits that may be derived from or afforded
by applicable law that limit the liability of or exonerate guarantors or
sureties, or which may conflict with the terms of this Agreement, including any
rights and defenses which are or may become available to any Guarantor by reason
of California Civil Code Sections 2787 through 2855, 2899 and 3433.

Each Guarantor understands and agrees that the guarantee contained in this
Section 2 shall be construed as a continuing, absolute and unconditional
guarantee of payment without regard to (i) the validity or enforceability of the
Credit Agreement or any other Loan Document, any of the Secured Obligations or
any other collateral security therefor or guarantee or right of offset with
respect thereto at any time or from time to time held by the Administrative
Agent or any other Secured Party, (ii) any defense, setoff or counterclaim
(other than a defense of payment or performance) which may at any time be
available to or be asserted by any Co-Borrower, any other Grantor or any other
Person against the Administrative Agent or any other Secured Party, (iii) any
other circumstance whatsoever (with or without notice to or knowledge of any
Co-Borrower, any other Grantor or such Guarantor) which constitutes, or might be
construed to constitute, an equitable or legal discharge of any Co-Borrower, any
other Grantor or any other Guarantor for the Secured Obligations, or of such
Guarantor under the guarantee contained in this Section 2, in bankruptcy or in
any other instance, (iv) any Insolvency Proceeding with respect to any
Co-Borrower, any other Grantor, any Guarantor or any other Person, (v) any
merger, acquisition, consolidation or change in structure of any Co- Borrower,
any other Grantor, any Guarantor or any other Person, or any sale, lease,
transfer or other disposition of any or all of the assets or Voting Stock of any
Co-Borrower, any other Grantor, any Guarantor or any other Person, (vi) any
assignment or other transfer, in whole or in part, of any Secured Party’s
interests in and rights under this Agreement or any other Loan Document,
including any Secured Party’s right to receive payment of the Secured
Obligations, or any assignment or other transfer, in whole or in part, of any
Secured Party’s interests in and to any of the Collateral, (vii) any Secured
Party’s vote, claim, distribution, election, acceptance, action or inaction in
any Insolvency Proceeding related to any of the Secured Obligations, and
(viii) any other guaranty, whether by such Guarantor or any other Person, of all
or any part of the Secured Obligations or any other indebtedness, obligations or
liabilities of any Guarantor to any Secured Party.

When making any demand hereunder or otherwise pursuing its rights and remedies
hereunder against any Guarantor, the Administrative Agent or any other Secured
Party may, but shall be under no obligation to make a similar demand on or
otherwise pursue such rights and remedies as it may have against any
Co-Borrower, any other Grantor, any other Guarantor or any other Person or
against any collateral security or guarantee for the Secured Obligations or any
right of offset with respect thereto.

 

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Any failure by the Administrative Agent or any other Secured Party to make any
such demand, to pursue such other rights or remedies or to collect any payments
from any Co-Borrower, any other Grantor, any other Guarantor or any other Person
or to realize upon any such collateral security or guarantee or to exercise any
such right of offset, or any release of any Co-Borrower, any other Grantor, any
other Guarantor or any other Person or any such collateral security, guarantee
or right of offset, shall not relieve any Guarantor of any obligation or
liability hereunder, and shall not impair or affect the rights and remedies,
whether express, implied or available as a matter of law, of the Administrative
Agent or any other Secured Party against any Guarantor. For the purposes hereof
“demand” shall include the commencement and continuance of any legal
proceedings.

Each Guarantor further unconditionally consents and agrees that, without notice
to or further assent from any Guarantor: (a) the principal amount of the Secured
Obligations may be increased or decreased and additional indebtedness or
obligations of the Co-Borrowers or any other Persons under the Loan Documents
may be incurred, by one or more amendments, modifications, renewals or
extensions of any Loan Document or otherwise; (b) the time, manner, place or
terms of any payment under any Loan Document may be extended or changed,
including by an increase or decrease in the interest rate on any Secured
Obligation or any fee or other amount payable under such Loan Document by an
amendment, modification or renewal of any Loan Document or otherwise; (c) the
time for the Co-Borrowers’ (or any other Loan Party’s) performance of or
compliance with any term, covenant or agreement on its part to be performed or
observed under any Loan Document may be extended, or such performance or
compliance waived, or failure in or departure from such performance or
compliance consented to, all in such manner and upon such terms as the
Administrative Agent may deem proper; (d) in addition to the Collateral, the
Secured Parties may take and hold other security (legal or equitable) of any
kind, at any time, as collateral for the Secured Obligations, and may, from time
to time, in whole or in part, exchange, sell, surrender, release, subordinate,
modify, waive, rescind, compromise or extend such security and may permit or
consent to any such action or the result of any such action, and may apply such
security and direct the order or manner of sale thereof; (e) the Secured Parties
may, in accordance with the terms of the Loan Documents discharge or release, in
whole or in part, any other Guarantor or any other Loan Party or other Person
liable for the payment and performance of all or any part of the Secured
Obligations, and may permit or consent to any such action or any result of such
action, and shall not be obligated to demand or enforce payment upon any of the
Collateral, nor shall any Secured Party be liable to any Guarantor for any
failure to collect or enforce payment or performance of the Secured Obligations
from any Person or to realize upon the Collateral, and (f) the Secured Parties
may request and accept other guaranties of the Secured Obligations and any other
indebtedness, obligations or liabilities of the Co-Borrowers or any other Loan
Party to any Secured Party and may, from time to time, in whole or in part,
surrender, release, subordinate, modify, waive, rescind, compromise or extend
any such guaranty and may permit or consent to any such action or the result of
any such action; in each case (a) through (f), as the Secured Parties may deem
advisable, and without impairing, abridging, releasing or affecting this
Agreement.

2.6 Reserved.

2.7 Reinstatement. The guarantee contained in this Section 2 shall continue to
be effective, or be reinstated, as the case may be, if at any time payment, or
any part thereof, of any of the Secured Obligations is rescinded or must
otherwise be restored or returned by the Administrative Agent or any other
Secured Party upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of any Co-Borrower, any Grantor or any Guarantor, or upon or as a
result of the appointment of a receiver, intervenor or conservator of, or
trustee or similar officer for, any Co-Borrower, any Grantor or any such
Guarantor or any substantial part of its respective property, or otherwise, all
as though such payments had not been made.

 

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2.8 Payments. Each Guarantor hereby guarantees that payments hereunder will be
paid to the Administrative Agent without setoff or counterclaim in Dollars at
the Funding Office.

SECTION 3. GRANT OF SECURITY INTEREST

3.1 Grant of Security Interests. Each Grantor hereby grants to the
Administrative Agent, for the ratable benefit of the Secured Parties, a security
interest in all of the following property now owned or at any time hereafter
acquired by such Grantor or in which such Grantor now has or at any time in the
future may acquire any right, title or interest, and wherever located
(collectively, the “Collateral”), as collateral security for the prompt and
complete payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of the Secured Obligations:

(a) all accounts receivable owing to such Grantor for goods sold or leased by
such Grantor or services rendered by such Grantor (“Accounts Receivable”); and

(b) all proceeds of Accounts Receivable, including (to the extent constituting
or evidencing Accounts Receivable or the proceeds of Accounts Receivable),
Instruments, Chattel Paper and Supporting Obligations.

3.2 Grantors Remain Liable. Anything herein to the contrary notwithstanding,
(a) each Grantor shall remain liable under any contracts, agreements and other
documents included in the Collateral, to the extent set forth therein, to
perform all of its duties and obligations thereunder to the same extent as if
this Agreement had not been executed, (b) the exercise by the Administrative
Agent of any of the rights granted to the Administrative Agent hereunder shall
not release any Grantor from any of its duties or obligations under any such
contracts, agreements and other documents included in the Collateral, and
(c) neither the Administrative Agent nor any other Secured Party shall have any
obligation or liability under any such contracts, agreements and other documents
included in the Collateral by reason of this Agreement, nor shall the
Administrative Agent or any other Secured Party be obligated to perform any of
the obligations or duties of any Grantor thereunder or to take any action to
collect or enforce any such contract, agreement or other document included in
the Collateral hereunder.

3.3 Perfection and Priority.

(a) Financing Statements. Pursuant to any applicable law, each Grantor
authorizes the Administrative Agent (and its counsel and its agents) to file or
record at any time and from time to time any financing statements and other
filing or recording documents or instruments with respect to the Collateral and
each Grantor shall execute and deliver to the Administrative Agent and each
Grantor hereby authorizes the Administrative Agent (and its counsel and its
agents) to file (with or without the signature of such Grantor) at any time and
from time to time, all amendments to financing statements, continuation
financing statements, termination statements, assignments, affidavits, reports
notices and all other documents and instruments, in such form and in such
offices as the Administrative Agent or the Required Lenders determine
appropriate to perfect and continue perfected, maintain the priority of or
provide notice of the Administrative Agent’s security interest in the Collateral
under and to accomplish the purposes of this Agreement. Each Grantor hereby
ratifies and authorizes the filing by the Administrative Agent (and its counsel
and its agents) of any financing statement with respect to the Collateral made
prior to the date hereof.

(b) Filing of Financing Statements. Each Grantor shall deliver to the
Administrative Agent, from time to time, such completed UCC-1 financing
statements for filing or recording in the appropriate filing offices as may be
reasonably requested by the Administrative Agent.

 

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(c) Control. Each Grantor acknowledges that the Administrative Agent has
“control” (within the meaning of Section 9104 of the UCC) over the Designated
Deposit Account. Each Grantor covenants and agrees that no Collateral (including
any Proceeds of Collateral) will be deposited in any Deposit Account or
Securities Account other than the Designated Deposit Account, unless, prior to
such deposit, such Grantor has obtained the consent of the Administrative Agent
and has caused the Administrative Agent to obtain “control” (within the meaning
of Section 9104 of the UCC) over such Deposit Account or Securities Account to
the satisfaction of the Administrative Agent, including pursuant to the delivery
of Control Agreements in form and substance reasonably satisfactory to the
Administrative Agent as it may reasonably request. Notwithstanding the
foregoing, this Section 3.3(c) shall not restrict the Borrower’s ability to
transfer funds out of the Designated Deposit Account to the extent such
transfers are otherwise permitted by the terms of the Credit Agreement
(including Section 6.3 thereof).

SECTION 4. REPRESENTATIONS AND WARRANTIES

In addition to the representations and warranties of the Co-Borrowers set forth
in the Credit Agreement and relating to the other Loan Parties, which
representations and warranties are incorporated herein by this reference, and to
induce the Administrative Agent and the Lenders to enter into the Credit
Agreement and to induce the Lenders to make their respective extensions of
credit to the applicable Co-Borrowers thereunder, each Grantor hereby represents
and warrants to the Administrative Agent and each other Secured Party that:

4.1 Title; No Other Liens. Such Grantor owns each item of the Collateral in
which it grants a Lien hereunder free and clear of any and all Liens and other
claims of others (except for the Liens permitted to exist on the Collateral
pursuant to Section 7.3 of the Credit Agreement, if any). No financing statement
or other public notice with respect to all or any part of such Collateral is on
file or of record or will be filed in any public office, except such as have
been filed as permitted by the Credit Agreement.

4.2 Perfected Liens. The security interests granted to the Administrative Agent
pursuant to this Agreement (a) upon completion of the filings and other actions
specified on Schedule 3 (which, in the case of any filings and other documents
referred to on said Schedule but subject to Section 5.3 of the Credit Agreement,
have been delivered to the Administrative Agent in completed and duly (if
applicable) executed form) will constitute valid perfected security interests in
all of the Collateral in favor of the Administrative Agent, for the ratable
benefit of the Secured Parties, as collateral security for the Secured
Obligations, enforceable in accordance with the terms hereof against any
creditors of any Grantor and any Persons purporting to purchase any Collateral
from any Grantor, and (b) are prior to all other Liens on the Collateral in
existence on the date hereof, except for Liens permitted by the Credit Agreement
which have priority over the Liens of the Administrative Agent on the Collateral
(for the ratable benefit of the Secured Parties) by operation of law.

4.3 Jurisdiction of Organization; Chief Executive Office and Locations of Books.
On the date hereof, such Grantor’s jurisdiction of organization, identification
number from the jurisdiction of organization (if any), and the location of such
Grantor’s chief executive office or sole place of business, as the case may be,
are specified on Schedule 4. All locations where Books pertaining to the
Collateral are kept, including all equipment necessary for accessing such Books
and the names and addresses of all service bureaus, computer or data processing
companies and other Persons keeping any Books or collecting Accounts Receivable
for such Grantor, are set forth in Schedule 4.

4.4 Deposit and Securities Accounts. (i) Schedule 5 sets forth under the heading
“Deposit and Securities Accounts” each Deposit Account and each Securities
Account in which the Borrower or any of its consolidated Subsidiaries has an
interest, (ii) the applicable Group Members that hold such Deposit Accounts and
Securities Accounts are the sole account holders of such Deposit Accounts and
Securities Accounts and (iii) no such Group Member has consented to, and no such
Group Member is

 

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otherwise aware of, any Person (other than the Administrative Agent) having
either sole dominion and control (within the meaning of common law) or “control”
(within the meaning of Section 9104 of the UCC) over, or any other interest in,
any such Deposit Account or Securities Account or any money or other property
deposited therein.

4.5 Accounts Receivable. No amount payable to such Grantor under or in
connection with any Account Receivable of such Grantor in an amount greater than
$350,000 is evidenced by any Instrument (other than checks, drafts or other
Instruments that will be promptly deposited in the Designated Deposit Account)
or Chattel Paper which has not been delivered to the Administrative Agent. None
of the account debtors or other obligors in respect of any such Account
Receivable in excess of $350,000 in the aggregate is the government of the
United States or any agency or instrumentality thereof.

4.6 Instruments. (i) Such Grantor has not previously assigned any interest in
any Instruments evidencing any Collateral of such Grantor, and (ii) no Person
other than such Grantor owns an interest in such Instruments (whether as joint
holders, participants or otherwise).

SECTION 5. COVENANTS

In addition to the covenants of the Co-Borrowers set forth in the Credit
Agreement, which by their terms the Co-Borrowers are required to cause any
Grantor to observe (including any such covenants set forth in Section 2.20 of
the Credit Agreement) and which are incorporated herein by this reference, each
Grantor hereby covenants and agrees with the Administrative Agent and the other
Secured Parties that, from and after the date of this Agreement until the
Discharge of Obligations:

5.1 Delivery of Instruments and Chattel Paper. If any amount payable under or in
connection with any of the Collateral shall be or become evidenced by any
Instrument (other than checks, drafts or other Instruments that will be promptly
deposited in the Designated Deposit Account), or Chattel Paper evidencing an
amount in excess of $350,000, such Instrument or Chattel Paper shall be promptly
delivered to the Administrative Agent, duly indorsed in a manner satisfactory to
the Administrative Agent, to be held as Collateral pursuant to this Agreement.

5.2 Maintenance of Insurance.

(a) Such Grantor shall (i) keep all material property useful and necessary in
its respective business in good working order and condition, ordinary wear and
tear excepted and (ii) maintain with financially sound and reputable insurance
companies insurance on all of the property of such Grantor in at least such
amounts and against at least such risks (but including in any event public
liability, product liability and business interruption) as are usually insured
against in the same general area by companies engaged in the same or a similar
business.

(b) All such insurance shall (i) provide that no cancellation, material
reduction in amount or material change in coverage thereof shall be effective
until after receipt by the Administrative Agent of prior written notice thereof,
(ii) name the Administrative Agent as an additional insured party, and (iii) be
reasonably satisfactory in all other material respects to the Administrative
Agent.

(c) Each Grantor shall deliver to the Administrative Agent a report of a
reputable insurance broker with respect to such insurance substantially
concurrently with each delivery of the Borrower’s audited annual financial
statements pursuant to Section 6.1(a) of the Credit Agreement and such
supplemental reports with respect thereto as the Administrative Agent may from
time to time reasonably request.

 

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If any Grantor fails to obtain insurance as required under this Section 5.2, to
pay any amount or furnish any required proof of payment to third Persons, or if
the Administrative Agent receives any notice of termination or cancellation of
any such insurance policies or reduction of coverages or amounts thereunder, the
Administrative Agent shall be entitled to obtain or renew, as applicable, any
such policies, cause the coverages and amounts thereof to be maintained at
levels required pursuant to Section 6.6 of the Credit Agreement or otherwise to
obtain similar insurance in place of such policies, in each case at the expense
of the Grantors.

5.3 Maintenance of Perfected Security Interest; Further Documentation.

(a) Such Grantor shall maintain the security interests of the Administrative
Agent (for the ratable benefit of the Secured Parties) granted by such Grantor
pursuant to the terms of this Agreement as perfected security interests having
at least the priority described in Section 4.2 and shall defend such security
interests against the claims and demands of all Persons whomsoever, subject to
the rights of such Grantor under the Loan Documents to dispose of the
Collateral.

(b) Such Grantor will furnish to the Administrative Agent from time to time
statements and schedules further identifying and describing the assets and
property of such Grantor and such other reports in connection therewith as the
Administrative Agent may reasonably request, all in reasonable detail.

(c) At any time and from time to time, upon the written request of the
Administrative Agent, and at the sole expense of such Grantor, such Grantor will
promptly and duly execute and deliver, and have recorded, such further
instruments and documents and take such further actions as the Administrative
Agent may reasonably request for the purpose of obtaining or preserving the full
benefits of this Agreement and of the rights and powers herein granted,
including (i) filing any financing or continuation statements under the Uniform
Commercial Code (or other similar laws) in effect in any jurisdiction with
respect to the security interests created hereby, and (ii) taking the actions
described under Section 3.3(c) to establish the Administrative Agent’s “control”
(within the meaning of Section 9104 of the UCC) over any Deposit Account or
Securities Account into which any Collateral is deposited, as provided therein.

5.4 Changes in Locations, Name, Etc. Such Grantor will not, except upon 15 days’
(or such shorter period as may be agreed to by the Administrative Agent) prior
written notice to the Administrative Agent and delivery to the Administrative
Agent of (a) all additional executed financing statements and other documents
reasonably requested by the Administrative Agent to maintain the validity,
perfection and priority of the security interests provided for herein, and
(b) if applicable, a written supplement to Schedule 4 showing the relevant new
jurisdiction of organization, location of chief executive office or sole place
of business, as appropriate:

(i) change its jurisdiction of organization, identification number from the
jurisdiction of organization (if any) or the location of its chief executive
office or sole place of business, as appropriate, from that referred to in
Section 4.3;

(ii) change its name; or

(iii) subject to Section 5.14, locate any Collateral in any state or other
jurisdiction other than those in which such Grantor operates as of the Closing
Date (or, with respect to any Grantor who accedes to this Agreement as a Grantor
after the Closing Date, other than those jurisdictions in which such Grantor
operates as of the date on which such Grantor so accedes to this Agreement as a
Grantor).

 

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5.5 Notices. Such Grantor will advise the Administrative Agent promptly, in
reasonable detail, of:

(a) any Lien (other than Liens permitted under Section 7.3 of the Credit
Agreement) placed (voluntarily or involuntarily) on any of the Collateral, if
any; and

(b) the occurrence of any casualty event which has reduced the value of the
Collateral in an amount equal to at least the Threshold Amount or which has had
a material adverse effect on the security interests created hereby.

5.6 Deposit and Securities Accounts.

(a) Such Grantor shall comply with the requirement of Section 3.3(c) hereof
prior to depositing any Collateral into any Deposit Account or Securities
Account, other than the Designated Deposit Account.

(b) The Administrative Agent agrees that it will only communicate “entitlement
orders” with respect to such Deposit Accounts and Securities Accounts subject to
a third-party Control Agreement in favor of the Administrative Agent pursuant to
Section 5.6(a), during the existence of a Liquidity Event or an Event of
Default.

(c) Such Grantor shall give the Administrative Agent prompt notice of the
establishment by such Grantor of any new Deposit Account or Securities Account.

5.7 Accounts Receivables. Other than in the ordinary course of business and
other than as otherwise expressly permitted by Section 6.3(b) of the Credit
Agreement, such Grantor will not (a) grant any extension of the time of payment
of any Account Receivable of such Grantor, (b) compromise or settle any such
Account Receivable for less than the full amount thereof, (c) release, wholly or
partially, any Person liable for the payment of any such Account Receivable,
(d) allow any credit or discount whatsoever on any such Account Receivable, or
(e) amend, supplement or modify any such Account Receivable in any manner that
could adversely affect the value thereof.

5.8 Defense of Collateral. Such Grantor will appear in and defend any action,
suit or proceeding which may affect to a material extent its title to, or right
or interest in, or the Administrative Agent’s right or interest in, any material
portion of the Collateral of such Grantor.

5.9 Preservation of Collateral. Such Grantor will do and perform all reasonable
acts that may be necessary and appropriate to maintain, preserve and protect the
Collateral of such Grantor.

5.10 Compliance with Laws, Etc. Such Grantor will comply in all material
respects with all laws, regulations and ordinances, and all policies of
insurance, relating in a material way to the possession, operation, maintenance
and control of the Collateral of such Grantor.

5.11 Location of Books and Chief Executive Office. Such Grantor will:
(a) subject to clause (b) of this Section 5.11, keep all Books pertaining to the
Collateral of such Grantor at the locations set forth in Schedule 4; and
(b) give at least 15 days’ prior written notice to the Administrative Agent
of any changes in any location where Books pertaining to the Collateral of such
Grantor are kept, including any change of name or address of any service bureau,
computer or data processing company or other Person preparing or maintaining any
such Books or collecting Accounts Receivable for such Grantor.

 

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5.12 Maintenance of Records. Such Grantor will keep separate, accurate and
complete Books with respect to Collateral held by such Grantor, disclosing the
Administrative Agent’s security interest hereunder.

5.13 Disposition of Collateral. Such Grantor will not surrender or lose
possession of (other than to the Administrative Agent), sell, lease, rent, or
otherwise dispose of or transfer any of the Collateral held by such Grantor or
any right or interest therein, except to the extent permitted by the Loan
Documents.

5.14 Liens. Such Grantor will not create, incur, assume or suffer to exist any
Lien upon any of its property, whether now owned or hereafter acquired, except
Liens permitted under Section 7.3 of the Credit Agreement.

5.15 Expenses. Such Grantor will pay all expenses of protecting, storing,
warehousing, insuring, handling and shipping the Collateral held by such
Grantor, to the extent the failure to pay any such expenses could reasonably be
expected to materially and adversely affect the value of the Collateral.

5.16 Chattel Paper. Such Grantor will not create any Chattel Paper evidencing
any Collateral without placing a legend on such Chattel Paper acceptable to the
Administrative Agent indicating that the Administrative Agent has a security
interest in such Chattel Paper. Such Grantor will give the Administrative Agent
immediate notice if such Grantor at any time holds or acquires an interest in
any Chattel Paper evidencing any Collateral in an amount greater than $350,000,
including any Electronic Chattel Paper, and shall comply, in all respects, with
the provisions of Section 5.1 hereof.

SECTION 6. REMEDIAL PROVISIONS

Each Grantor covenants and agrees with the Administrative Agent and the other
Secured Parties that, from and after the date of this Agreement until the
Discharge of Obligations:

6.1 Certain Matters Relating to Accounts Receivable.

(a) The Administrative Agent hereby authorizes each Grantor to collect such
Grantor’s Accounts Receivable solely in the Designated Deposit Account pursuant
to Section 6.3 of the Credit Agreement, and the Administrative Agent may curtail
or terminate said authority at any time after the occurrence and during the
continuance of an Event of Default. If required by the Administrative Agent at
any time after the occurrence and during the continuance of an Event of Default,
any payments of Accounts Receivable (i) shall be forthwith (and, in any event,
within two Business Days) deposited by such Grantor in the form received, duly
indorsed by such Grantor to the Administrative Agent if required, in a deposit
account designated by the Administrative Agent and in the name of the
Administrative Agent, subject to withdrawal by the Administrative Agent for the
account of the Secured Parties only as provided in Section 6.5, and (ii) until
so turned over, shall be held in the Designated Deposit Account for the
Administrative Agent and the other Secured Parties or (if not yet deposited in
the Designated Deposit Account), shall be held by such Grantor in trust for the
Administrative Agent and the other Secured Parties, segregated from other funds
of such Grantor. At the Administrative Agent’s request after the occurrence and
during the continuance of an Event of Default, each such deposit of Proceeds of
Accounts Receivable shall be accompanied by a report identifying in reasonable
detail the nature and source of the payments included in the deposit.

(b) At the Administrative Agent’s request, during the existence of an Event of
Default, each Grantor shall deliver to the Administrative Agent all original and
other documents evidencing, and relating to, the agreements and transactions
which gave rise to the Accounts Receivable, including, without limitation, all
original orders, invoices and shipping receipts.

 

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6.2 Communications with Obligors; Grantors Remain Liable.

(a) The Administrative Agent in its own name or in the name of others may at any
time after the occurrence and during the continuance of an Event of Default
communicate with obligors under the Accounts Receivable to verify with them to
the Administrative Agent’s satisfaction the existence, amount and terms of any
Accounts Receivable.

(b) Upon the request of the Administrative Agent, at any time after the
occurrence and during the continuance of an Event of Default, each Grantor shall
notify obligors on the Accounts Receivable that the Accounts Receivable have
been assigned to the Administrative Agent for the ratable benefit of the Secured
Parties and that payments in respect thereof shall be made directly to the
Administrative Agent.

(c) Anything herein to the contrary notwithstanding, each Grantor shall remain
liable under each of the Accounts Receivable to observe and perform all the
conditions and obligations to be observed and performed by it thereunder, all in
accordance with the terms of any agreement giving rise thereto. Neither the
Administrative Agent nor any other Secured Party shall have any obligation or
liability under any Account Receivable (or any agreement giving rise thereto) by
reason of or arising out of this Agreement or the receipt by the Administrative
Agent or any Lender of any payment relating thereto, nor shall the
Administrative Agent nor any other Secured Party be obligated in any manner to
perform any of the obligations of any Grantor under or pursuant to any Account
Receivable (or any agreement giving rise thereto), to make any payment, to make
any inquiry as to the nature or the sufficiency of any payment received by it or
as to the sufficiency of any performance by any party thereunder, to present or
file any claim, to take any action to enforce any performance or to collect the
payment of any amounts which may have been assigned to it or to which it may be
entitled at any time or times.

6.3 Application of Deposit Account and Securities Account Funds.

(a) In addition to the rights granted to the Administrative Agent under the
Credit Agreement, if an Event of Default shall have occurred and be continuing,
the Administrative Agent shall have the right to apply the balance from the
Non-Formula Based Revolving Loan Proceeds Account, the Designated Deposit
Account or any other Deposit Account or Securities Account pledged to the
Administrative Agent pursuant to Section 5.6 to pay the balance of the
Non-Formula Based Revolving Loan Proceeds Account, the Designated Deposit
Account or such other Deposit Account or Securities Account pledged to the
Administrative Agent pursuant to Section 5.6 to or for the benefit of the
Administrative Agent, to be applied to the Secured Obligations in accordance
with the terms of the Loan Documents.

(b) If a Liquidity Event shall have occurred and be continuing, the
Administrative Agent shall have the right to apply the balance from the
Non-Formula Based Revolving Loan Proceeds Account and the Designated Deposit
Account to the Secured Obligations in accordance with the terms of the Loan
Documents.

6.4 Proceeds to be Turned Over To Administrative Agent. In addition to the
rights of the Administrative Agent and the other Secured Parties specified in
Section 6.1 with respect to payments of Accounts Receivable, if an Event of
Default shall occur and be continuing, all Proceeds received by any Grantor
consisting of cash, checks, Cash Equivalents and other near-cash items shall be
held by such Grantor in trust for the Administrative Agent and the other Secured
Parties, segregated from other funds of such Grantor, and shall, forthwith upon
receipt by such Grantor, be turned over to the Administrative Agent in the exact
form received by such Grantor (duly indorsed by such Grantor to the
Administrative Agent, if required). All Proceeds received by the Administrative
Agent hereunder shall be held by the

 

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Administrative Agent in the Designated Deposit Account or another Collateral
Account over which it maintains “control” (within the meaning of Section 9104 of
the UCC). All Proceeds while held by the Administrative Agent in the Designated
Deposit Account or other Collateral Account (or by such Grantor in trust for the
Administrative Agent and the other Secured Parties) shall continue to be held as
collateral security for all the Secured Obligations and shall not constitute
payment thereof until applied as provided in Section 6.5.

6.5 Application of Proceeds. If an Event of Default shall have occurred and be
continuing, at any time at the Administrative Agent’s election, the
Administrative Agent may apply all or any part of Proceeds constituting
Collateral, whether or not held in the Designated Deposit Account or any other
Collateral Account, in payment of the Secured Obligations in accordance with
Section 8.3 of the Credit Agreement.

6.6 Code and Other Remedies. If an Event of Default shall occur and be
continuing, the Administrative Agent, on behalf of the Secured Parties, may
exercise, in addition to all other rights and remedies granted to them in this
Agreement and in any other instrument or agreement securing, evidencing or
relating to the Secured Obligations, all rights and remedies of a secured party
under the UCC or any other applicable law. Without limiting the generality of
the foregoing, the Administrative Agent, without demand of performance or other
demand, presentment, protest, advertisement or notice of any kind (except any
notice required by law) to or upon any Grantor or any other Person (all and each
of which demands, defenses, advertisements and notices are hereby waived), may
in such circumstances forthwith collect, receive, appropriate and realize upon
the Collateral, or any part thereof, and/or may forthwith sell, lease, assign,
give option or options to purchase, or otherwise dispose of and deliver the
Collateral or any part thereof (or contract to do any of the foregoing), in one
or more parcels at public or private sale or sales, at any exchange, broker’s
board or office of the Administrative Agent or any other Secured Party or
elsewhere upon such terms and conditions as it may deem advisable and at such
prices as it may deem best, for cash or on credit or for future delivery without
assumption of any credit risk. The Administrative Agent or any other Secured
Party shall have the right upon any such public sale or sales, and, to the
extent permitted by law, upon any such private sale or sales, to purchase the
whole or any part of the Collateral so sold, free of any right or equity of
redemption in any Grantor, which right or equity is hereby waived and released.
Each Grantor further agrees, at the Administrative Agent’s request made during
the existence of an Event of Default, to assemble the Collateral and make it
available to the Administrative Agent at places which the Administrative Agent
shall reasonably select, whether at such Grantor’s premises or elsewhere. The
Administrative Agent shall apply the net proceeds of any action taken by it
pursuant to this Section 6.6, in accordance with the provisions of Section 6.5,
only after deducting all reasonable costs and expenses of every kind incurred in
connection therewith or incidental to the care or safekeeping of any of the
Collateral or in any way relating to the Collateral or the rights of the
Administrative Agent and the other Secured Parties hereunder, including, without
limitation, reasonable attorneys’ fees and disbursements, to the payment in
whole or in part of the Secured Obligations, in such order as is contemplated by
Section 8.3 of the Credit Agreement, and only after such application and after
the payment by the Administrative Agent of any other amount required by any
provision of law, including Section 9615(a)(3) of the UCC, but only to the
extent of the surplus, if any, owing to any Grantor. To the extent permitted by
applicable law, each Grantor waives all claims, damages and demands it may
acquire against the Administrative Agent or any other Secured Party arising out
of the exercise by any of them of any rights hereunder, except to the extent
caused by the gross negligence or willful misconduct of the Administrative Agent
or such Secured Party or their respective agents. If any notice of a proposed
sale or other disposition of Collateral shall be required by law, such notice
shall be deemed reasonable and proper if given at least 10 days before such sale
or other disposition.

 

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6.7 Intellectual Property License. Solely for the purpose of enabling the
Administrative Agent to exercise rights and remedies under this Section 6 and at
such time as the Administrative Agent shall be lawfully entitled to exercise
such rights and remedies, each Grantor hereby grants to the Administrative
Agent, for the benefit of the Secured Parties, an irrevocable, non-exclusive,
worldwide license (exercisable without payment of royalty or other compensation
to such Grantor), subject, in the case of Trademarks, to sufficient rights to
quality control and inspection in favor of such Grantor to avoid the risk of
invalidation of said Trademarks, to use, operate under, license, or sublicense
any Intellectual Property now owned or hereafter acquired by the Grantors
(subject, in the case of any Trademark License, Copyright License or Patent
License, to the terms of any applicable license agreement).

6.8 Deficiency. Each Grantor shall remain liable for any deficiency if the
proceeds of any sale or other disposition of the Collateral are insufficient to
pay its Secured Obligations and the fees and disbursements of any attorneys
employed by the Administrative Agent or any other Secured Party to collect such
deficiency, in each case until the Discharge of Obligations.

SECTION 7. THE ADMINISTRATIVE AGENT

Each Grantor covenants and agrees with the Administrative Agent and the other
Secured Parties that:

7.1 Administrative Agent’s Appointment as Attorney-in-Fact, etc.

(a) Each Grantor hereby irrevocably constitutes and appoints the Administrative
Agent and any officer or agent thereof, with full power of substitution, as its
true and lawful attorney-in-fact with full irrevocable power and authority in
the place and stead of such Grantor and in the name of such Grantor or in its
own name, for the purpose of carrying out the terms of this Agreement, to take
any and all appropriate action and to execute any and all documents and
instruments which may be necessary or desirable to accomplish the purposes of
this Agreement, and, without limiting the generality of the foregoing, each
Grantor hereby gives the Administrative Agent the power and right, on behalf of
such Grantor, without notice to or assent by such Grantor, to do any or all of
the following:

(i) in the name of such Grantor or its own name, or otherwise, take possession
of and indorse and collect any checks, drafts, notes, acceptances or other
instruments for the payment of moneys due under any Accounts Receivable or with
respect to any other Collateral and file any claim or take any other action or
proceeding in any court of law or equity or otherwise deemed appropriate by the
Administrative Agent for the purpose of collecting any and all such moneys due
under any Accounts Receivable or with respect to any other Collateral whenever
payable;

(ii) pay or discharge taxes and Liens levied or placed on or threatened against
the Collateral, effect any insurance called for by the terms of this Agreement
and pay all or any part of the premiums therefor and the costs thereof;

(iii) execute, in connection with any sale provided for in Section 6.6 or 6.7,
any endorsements, assignments or other instruments of conveyance or transfer
with respect to the Collateral; and

(iv)(A) direct any party liable for any payment under any of the Collateral to
make payment of any and all moneys due or to become due thereunder directly to
the Administrative Agent or as the Administrative Agent shall direct; (B) ask or
demand for, collect, and receive payment of and receipt for, any and all moneys,
claims and other amounts due or to become due at any time in respect of or
arising out of any Collateral; (C) sign and indorse any invoices, freight or
express bills, bills of lading, storage or warehouse receipts, drafts against
debtors, assignments, verifications, notices and other

 

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documents in connection with any of the Collateral; (D) commence and prosecute
any suits, actions or proceedings at law or in equity in any court of competent
jurisdiction to collect the Collateral or any portion thereof and to enforce any
other right in respect of any Collateral; (E) defend any suit, action or
proceeding brought against such Grantor with respect to any Collateral;
(F) settle, compromise or adjust any such suit, action or proceeding and, in
connection therewith, give such discharges or releases as the Administrative
Agent may deem appropriate; (G) reserved; and (H) generally, sell, transfer,
pledge and make any agreement with respect to or otherwise deal with any of the
Collateral as fully and completely as though the Administrative Agent were the
absolute owner thereof for all purposes, and do, at the Administrative Agent’s
option and such Grantor’s expense, at any time, or from time to time, all acts
and things which the Administrative Agent deems necessary to protect, preserve
or realize upon the Collateral and the Administrative Agent’s and the other
Secured Parties’ security interests therein and to effect the intent of this
Agreement, all as fully and effectively as such Grantor might do.

Anything in this Section 7.1(a) to the contrary notwithstanding, the
Administrative Agent agrees that it will not exercise any rights under the power
of attorney provided for in this Section 7.1(a) unless an Event of Default shall
have occurred and be continuing.

(b) If any Grantor fails to perform or comply with any of its agreements
contained herein, the Administrative Agent, at its option, but without any
obligation so to do, may perform or comply, or otherwise cause performance or
compliance, with such agreement.

(c) The expenses of the Administrative Agent incurred in connection with actions
undertaken as provided in this Section 7.1, together with interest thereon at a
rate per annum equal to the highest rate per annum at which interest would then
be payable on any category of past due ABR Loans under the Credit Agreement,
from the date of payment by the Administrative Agent to the date reimbursed by
the relevant Grantor, shall be payable by such Grantor to the Administrative
Agent on demand.

(d) Each Grantor hereby ratifies all that said attorneys shall lawfully do or
cause to be done by virtue hereof. All powers, authorizations and agencies
contained in this Agreement are coupled with an interest and are irrevocable
until this Agreement is terminated and the security interests created hereby are
released.

7.2 Duty of Administrative Agent. The Administrative Agent’s sole duty with
respect to the custody, safekeeping and physical preservation of the Collateral
in its possession, under Section 9207 of the UCC or otherwise, shall be to deal
with it in the same manner as the Administrative Agent deals with similar
property for its own account. Neither the Administrative Agent, any other
Secured Party nor any of their respective officers, directors, employees or
agents shall be liable for failure to demand, collect or realize upon any of the
Collateral or for any delay in doing so or shall be under any obligation to sell
or otherwise dispose of any Collateral upon the request of any Grantor or any
other Person or to take any other action whatsoever with regard to the
Collateral or any part thereof. The powers conferred on the Administrative Agent
and the other Secured Parties hereunder are solely to protect the Administrative
Agent’s and the other Secured Parties’ interests in the Collateral and shall not
impose any duty upon the Administrative Agent or any other Secured Party to
exercise any such powers. The Administrative Agent and the other Secured Parties
shall be accountable only for amounts that they actually receive as a result of
the exercise of such powers, and neither they nor any of their officers,
directors, employees or agents shall be responsible to any Grantor for any act
or failure to act hereunder, except for their own gross negligence or willful
misconduct.

7.3 Authority of Administrative Agent. Each Grantor acknowledges that the rights
and responsibilities of the Administrative Agent under this Agreement with
respect to any action taken by the Administrative Agent or the exercise or
non-exercise by the Administrative Agent of any option, voting

 

16

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right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Agreement shall, as between the Administrative
Agent and the other Secured Parties, be governed by the Credit Agreement and by
such other agreements with respect thereto as may exist from time to time among
them, but, as between the Administrative Agent and the Grantors, the
Administrative Agent shall be conclusively presumed to be acting as agent for
the Secured Parties with full and valid authority so to act or refrain from
acting, and no Grantor shall be under any obligation, or entitlement, to make
any inquiry respecting such authority.

SECTION 8. MISCELLANEOUS

8.1 Amendments in Writing. None of the terms or provisions of this Agreement may
be waived, amended, supplemented or otherwise modified except in accordance with
Section 10.1 of the Credit Agreement.

8.2 Notices. All notices, requests and demands to or upon the Administrative
Agent or any Grantor hereunder shall be effected in the manner provided for in
Section 10.2 of the Credit Agreement; provided that any such notice, request or
demand to or upon any Grantor (other than any Co-Borrower) shall be addressed to
such Grantor at its notice address set forth on Schedule 1 (as the same may be
updated from time to time in accordance with the terms hereof).

8.3 No Waiver by Course of Conduct; Cumulative Remedies. Neither the
Administrative Agent nor any other Secured Party shall by any act (except by a
written instrument pursuant to Section 8.1), delay, indulgence, omission or
otherwise be deemed to have waived any right or remedy hereunder or to have
acquiesced in any Default or Event of Default, as applicable. No failure to
exercise, nor any delay in exercising, on the part of the Administrative Agent
or any other Secured Party, any right, power or privilege hereunder shall
operate as a waiver thereof. No single or partial exercise of any right, power
or privilege hereunder shall preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. A waiver by the
Administrative Agent or any other Secured Party of any right or remedy hereunder
on any one occasion shall not be construed as a bar to any right or remedy which
the Administrative Agent or such other Secured Party would otherwise have on any
future occasion. The rights and remedies herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any other rights or
remedies provided by law.

8.4 Enforcement Expenses; Indemnification.

(a) Costs and Expenses. The Grantors shall pay (i) all reasonable out-of-pocket
expenses incurred by the Administrative Agent and its Affiliates (including the
reasonable fees, charges and disbursements of counsel for the Administrative
Agent), and shall pay all fees and time charges and disbursements for attorneys
who may be employees of the Administrative Agent, in connection with the
preparation, negotiation, execution, delivery and administration of this
Agreement and the other Security Documents, or any amendments, modifications or
waivers of the provisions hereof or thereof (whether or not the transactions
contemplated by the Credit Agreement shall be consummated), and (ii) all
out-of-pocket expenses incurred by the Administrative Agent or any Lender
(including the fees, charges and disbursements of any counsel for the
Administrative Agent or any Lender), and shall pay all fees and time charges for
attorneys who may be employees of the Administrative Agent or any Lender, in
connection with the enforcement or protection of its rights in connection with
this Agreement and the other Security Documents, including its rights under this
Section.

(b) Indemnification by the Grantors. The Grantors shall indemnify each
Indemnitee against, and hold each Indemnitee harmless from, any and all losses,
claims, damages, liabilities and related expenses (including the fees, charges
and disbursements of any counsel for any Indemnitee), and shall indemnify and
hold harmless each Indemnitee from all fees and time charges and disbursements
for

 

17

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attorneys who may be employees of any Indemnitee, incurred by any Indemnitee or
asserted against any Indemnitee by such Grantor arising out of, in connection
with, or as a result of (i) the execution or delivery of this Agreement, any
other Security Document or any agreement or instrument contemplated hereby or
thereby, the performance by the parties hereto of their respective obligations
hereunder or thereunder or the consummation of the transactions contemplated
hereby or thereby, or (ii) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory, whether brought by a third party or by such
Grantor or any other Loan Party, and regardless of whether any Indemnitee is a
party thereto; provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages, liabilities or
related expenses (x) are determined by a court of competent jurisdiction by
final and nonappealable judgment to have resulted from the gross negligence or
willful misconduct of such Indemnitee or (y) result from a claim brought by such
Grantor or any other Loan Party against an Indemnitee for breach in bad faith of
such Indemnitee’s obligations hereunder or under any other Loan Document, if
such Grantor or such Loan Party has obtained a final and nonappealable judgment
in its favor on such claim as determined by a court of competent jurisdiction.

(c) Waiver of Consequential Damages, Etc. To the fullest extent permitted by
applicable law, no Grantor shall assert, and each Grantor hereby waives, any
claim such Grantor may at any time have against any Indemnitee, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with, or as a result
of, this Agreement, any other Loan Document or any agreement or instrument
contemplated hereby or the transactions contemplated hereby or thereby. No
Indemnitee referred to in paragraph (b) above shall be liable for any damages
arising from the use by unintended recipients of any information or other
materials distributed by it through telecommunications, electronic or other
information transmission systems in connection with this Agreement, any other
Loan Document or the transactions contemplated hereby or thereby.

(d) Taxes. The Grantors agree to pay, and to save the Administrative Agent and
each other Secured Party harmless from, any and all liabilities with respect to,
or resulting from any delay in paying, any and all stamp, excise, sales or other
taxes (including any withholding taxes) which may be payable or determined to be
payable with respect to any of the Collateral or in connection with any of the
transactions contemplated by this Agreement.

(e) Collecting under Guarantees. To the extent not included in the foregoing and
for the avoidance of doubt, each Guarantor agrees to pay or reimburse the
Administrative Agent and each other Secured Party for all their respective
documented out-of-pocket costs and expenses incurred in collecting against such
Guarantor under the guaranty contained in Section 2 of this Agreement or
otherwise enforcing or preserving any rights under this Agreement and the other
Loan Documents to which such Guarantor is a party, including the documented
out-of-pocket fees and disbursements of counsel (including the allocated fees
and expenses of in-house counsel) to the Administrative Agent and of counsel to
each other Secured Party.

(f) Payments. All amounts due under this Section 8.4 shall be payable promptly
after demand therefor.

(g) Survival. The agreements in this Section 8.4 shall survive the Discharge of
Obligations.

8.5 Successors and Assigns. This Agreement shall be binding upon the successors
and assigns of each party hereto and shall inure to the benefit of each party
hereto (including the Administrative Agent on behalf of the Secured Parties) and
their respective successors and assigns; provided that no Grantor may assign,
transfer or delegate any of its rights or obligations under this Agreement
without the prior written consent of the Administrative Agent.

 

18

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8.6 Set Off. Each Grantor hereby irrevocably authorizes the Administrative Agent
and each other Secured Party and any Affiliate thereof at any time and from time
to time after the occurrence and during the continuance of an Event of Default,
without notice to such Grantor or any other Grantor, any such notice being
expressly waived by each Grantor, to setoff and appropriate and apply any and
all deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by the Administrative Agent or such Secured
Party or such Affiliate to or for the credit or the account of such Grantor, or
any part thereof in such amounts as the Administrative Agent or such Secured
Party may elect, against and on account of the Secured Obligations and
liabilities of such Grantor to the Administrative Agent or such Secured Party
hereunder and under the other Loan Documents and claims of every nature and
description of the Administrative Agent or such Secured Party against such
Grantor, in any currency, whether arising hereunder, under the Credit Agreement,
any other Loan Document or otherwise, as the Administrative Agent or such
Secured Party may elect, whether or not the Administrative Agent or any other
Secured Party has made any demand for payment and although such obligations,
liabilities and claims may be contingent or unmatured. The rights of the
Administrative Agent and each other Secured Party under this Section 8.6 are in
addition to other rights and remedies (including, without limitation, other
rights of set-off (including pursuant to Sections 2.4 and 10.7 of the Credit
Agreement)) which the Administrative Agent or such other Secured Party may have.

8.7 Counterparts. This Agreement may be executed by one or more of the parties
to this Agreement on any number of separate counterparts (including by facsimile
and/or electronic mail), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.

8.8 Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

8.9 Section Headings. The Section headings used in this Agreement are for
convenience of reference only and are not to affect the construction hereof or
be taken into consideration in the interpretation hereof.

8.10 Integration. This Agreement and the other Loan Documents represent the
entire agreement of the Grantors, the Administrative Agent and the other Secured
Parties with respect to the subject matter hereof and thereof, and there are no
promises, undertakings, representations or warranties by the Administrative
Agent or any other Secured Party relative to the subject matter hereof and
thereof not expressly set forth or referred to herein or in the other Loan
Documents.

8.11 GOVERNING LAW; Submission to Jurisdiction; Jury Trial Waiver. THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF CALIFORNIA (WITHOUT GIVING EFFECT TO THE CONFLICTS
OF LAWS PRINCIPLES THEREOF). THE PROVISIONS OF SECTION 10.14 OF THE CREDIT
AGREEMENT REGARDING SUBMISSION TO JURISDICTION AND JURY TRIAL WAIVER SHALL BE
APPLICABLE TO THIS AGREEMENT AND ARE HEREBY INCORPORATED HEREIN BY REFERENCE,
MUTATIS MUTANDIS, AS IF SUCH PROVISIONS WERE FULLY SET FORTH HEREIN.

 

19

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8.12 Acknowledgements. Each Grantor hereby acknowledges that:

(a) it has been advised by counsel in the negotiation, execution and delivery of
this Agreement and the other Loan Documents to which it is a party;

(b) neither the Administrative Agent nor any other Secured Party has any
fiduciary relationship with or duty to any Grantor arising out of or in
connection with this Agreement or any of the other Loan Documents, and the
relationship between the Grantors, on the one hand, and the Administrative Agent
and the other Secured Parties, on the other hand, in connection herewith or
therewith is solely that of debtor and creditor; and

(c) no joint venture is created hereby or by the other Loan Documents or
otherwise exists by virtue of the transactions contemplated hereby among any of
the Secured Parties or among the Grantors and any of the Secured Parties.

8.13 Additional Grantors. Each Material Domestic Subsidiary of a Grantor that is
required to become a party to this Agreement pursuant to Section 6.12 of the
Credit Agreement shall become a Grantor for all purposes of this Agreement upon
execution and delivery by such Subsidiary of an Assumption Agreement in
substantially the form of Annex 1 hereto, and each Grantor shall cause such
Subsidiary to so execute and deliver such Assumption Agreement in accordance
with the provisions of this Agreement and the other Loan Documents.

8.14 Releases.

(a) Upon the Discharge of Obligations, but subject to Section 10.16(b) of the
Credit Agreement, the Collateral shall be released from the Liens in favor of
the Administrative Agent (for the ratable benefit of the Secured Parties)
created hereby, this Agreement shall terminate with respect to the
Administrative Agent and the other Secured Parties, and all obligations (other
than those expressly stated to survive such termination) of each Grantor to the
Administrative Agent or any other Secured Party hereunder shall terminate, all
without delivery of any instrument or performance of any act by any party. At
the sole expense of any Grantor following any such termination, the
Administrative Agent shall deliver such documents as such Grantor shall
reasonably request to evidence such termination.

(b) If any of the Collateral shall be sold, transferred or otherwise disposed of
by any Grantor in a transaction permitted by Section 7 of the Credit Agreement,
then the Administrative Agent, at the request and sole expense of such Grantor,
shall promptly execute and deliver to such Grantor all releases or other
documents reasonably necessary or desirable for the release of the Liens created
hereby on such Collateral, as applicable. At the request and sole expense of the
Co-Borrowers, a Grantor shall be released from its obligations hereunder in the
event that all the Capital Stock of such Grantor shall be sold, transferred or
otherwise disposed of to a Person other than another Grantor in a transaction
permitted by Section 7 of the Credit Agreement; provided that the Borrower shall
have delivered to the Administrative Agent, at least 30 days, or such shorter
period as the Administrative Agent may agree, prior to the date of the proposed
release, a written request for release identifying the relevant Grantor and the
terms of the sale or other disposition in reasonable detail, including the price
thereof and any expenses in connection therewith, together with a certification
by the Borrower stating that such transaction is in compliance with terms and
provisions of the Credit Agreement and the other Loan Documents.

(remainder of page intentionally left blank; signature pages follow)

 

20

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IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee and
Collateral Agreement to be duly executed and delivered as of the date first
above written.

 

GRANTORS:

 

VIOLIN MEMORY, INC.

By:   /s/ Cory Sindelar Name:   Cory Sindelar Title:   Chief Financial Officer

 

Signature Page 1 to Guarantee and Collateral Agreement

--------------------------------------------------------------------------------

ADMINISTRATIVE AGENT:

 

SILICON VALLEY BANK

By:   /s/ Matthew Wright Name:   Matthew Wright Title:   Director

 

Signature Page 2 to Guarantee and Collateral Agreement

--------------------------------------------------------------------------------

SCHEDULE 1

NOTICE ADDRESSES OF GUARANTORS

 

Guarantor   Notice Address Violin Memory, Inc.  

4555 Great America Parkway, Suite #150

Santa Clara, CA 95054

 

Schedule 1

--------------------------------------------------------------------------------

SCHEDULE 3

FILINGS AND OTHER ACTIONS

REQUIRED TO PERFECT SECURITY INTERESTS

1. UCC-1 financing statement naming each Co-Borrower as “debtor” and the
Administrative Agent as “secured party” (for the ratable benefit of the Secured
Parties) thereunder, to be filed with the filing office of the Secretary of
State of the State of Delaware.

 

Schedule 3

--------------------------------------------------------------------------------

SCHEDULE 4

LOCATION OF JURISDICTION OF ORGANIZATION,

CHIEF EXECUTIVE OFFICE AND LOCATION OF BOOKS

 

Grantor   Jurisdiction of Organization  

Organizational Identification

Number

  Location of Chief Executive Office   Location of Books Violin Memory, Inc.  
Delaware   20-3940944   4555 Great America Parkway, Suite #150, Santa Clara, CA
95054   4555 Great America Parkway, Suite #150, Santa Clara, CA 95054

 

Schedule 5

--------------------------------------------------------------------------------

SCHEDULE 5

DEPOSIT AND SECURITIES ACCOUNTS

Designated Deposit Account maintained with the Administrative Agent.

Borrower Deposit Accounts nos. 1894-67810-9, 1894-67811-7, 1894-67815-8 and
1894-67819-0, each maintained with Comerica Bank.

Borrower Securities Account no. 814-012213 maintained with Morgan Stanley Smith
Barney LLC.

Borrower Deposit Account no. 50410145988978 maintained with National Westminster
Bank (United Kingdom)

 

Schedule 5

--------------------------------------------------------------------------------

ANNEX 1 TO

GUARANTEE AND COLLATERAL AGREEMENT

FORM OF

ASSUMPTION AGREEMENT

This ASSUMPTION AGREEMENT, dated as of [                        ], is executed
and delivered by [                                        ] (the “Additional
Grantor”), in favor of SILICON VALLEY BANK, as administrative agent (in such
capacity, the “Administrative Agent”) for the banks and other financial
institutions or entities (the “Lenders”) from time to time parties to that
certain Credit Agreement, dated as of October 24, 2014 (as amended, amended and
restated, supplemented, restructured or otherwise modified, renewed or replaced
from time to time, the “Credit Agreement”), among Violin Memory, Inc., a
Delaware corporation (the “Borrower”), the Subsidiary Borrowers, if any, party
thereto, the Lenders party thereto and the Administrative Agent. All capitalized
terms not defined herein shall have the respective meanings ascribed to such
terms in such Credit Agreement.

W  I  T  N  E  S  S   E  T  H:

WHEREAS, in connection with the Credit Agreement, the Borrower and certain
Subsidiary Borrowers (other than the Additional Grantor) have entered into that
certain Guarantee and Collateral Agreement, dated as of October 24, 2014, in
favor of the Administrative Agent for the benefit of the Secured Parties defined
therein (the “Guarantee and Collateral Agreement”);

WHEREAS, the Borrower is required, pursuant to Section 6.12 of the Credit
Agreement to cause the Additional Grantor to become a party to the Guarantee and
Collateral Agreement as a “Grantor” thereunder in order to grant in favor of the
Administrative Agent (for the ratable benefit of the Lenders) the Liens and
security interests therein specified and otherwise to undertake the obligations
of a “Grantor” contemplated therein; and

WHEREAS, the Additional Grantor has agreed to execute and deliver this
Assumption Agreement in order to become a party to and a “Grantor” under the
Guarantee and Collateral Agreement.

NOW, THEREFORE, IT IS AGREED:

1. Guarantee and Collateral Agreement. By executing and delivering this
Assumption Agreement, the Additional Grantor, as provided in Section 8.13 of the
Guarantee and Collateral Agreement, (a) hereby becomes a party to the Guarantee
and Collateral Agreement as a “Grantor” thereunder with the same force and
effect as if originally named therein as a Grantor and, without limiting the
generality of the foregoing, hereby expressly assumes all obligations and
liabilities of a Grantor thereunder, and (b) hereby grants to the Administrative
Agent, for the benefit of the Secured Parties, as security for the Secured
Obligations, a security interest in all of the Additional Grantor’s right, title
and interest in any and to all Collateral of the Additional Grantor, in each
case whether now owned or hereafter acquired or in which the Additional Grantor
now has or hereafter acquires an interest and wherever the same may be located,
but subject in all respects to the terms, conditions and exclusions set forth in
the Guarantee and Collateral Agreement. The information set forth in Schedule 1
hereto is hereby added to the information set forth in the Schedules to the
Guarantee and Collateral Agreement. The Additional Grantor hereby represents and
warrants that each of the representations and warranties contained in Section 4
of the Guarantee and Collateral Agreement (x) that is qualified by materiality
is true and correct, and (y) that is not qualified by materiality, is true and
correct in all material respects, in each case, on and as the date hereof (after
giving effect to this Assumption Agreement) as if made on and as of such date
(except to the extent any such representation and warranty expressly relates to
an earlier date, in which case such representation and warranty was true and
correct in all material respects as of such earlier date).

 

Annex 1

--------------------------------------------------------------------------------

2. Governing Law. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF CALIFORNIA (WITHOUT
GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF). THE PROVISIONS OF
SECTION 10.14 OF THE CREDIT AGREEMENT REGARDING SUBMISSION TO JURISDICTION AND
JURY TRIAL WAIVER SHALL BE APPLICABLE TO THIS AGREEMENT AND ARE HEREBY
INCORPORATED HEREIN, MUTATIS MUTANDIS, AS IF SET FORTH HEREIN IN FULL.

3. Loan Document. This Assumption Agreement shall constitute a Loan Document
under the Credit Agreement.

IN WITNESS WHEREOF, the undersigned has caused this Assumption Agreement to be
duly executed and delivered as of the date first above written.

 

[ADDITIONAL GRANTOR] By:       Name:   Title:

 

Annex 1

--------------------------------------------------------------------------------

Schedule to

Assumption Agreement

Supplement to Schedule 1

Supplement to Schedule 3

Supplement to Schedule 4

Supplement to Schedule 5

 

Annex 1

--------------------------------------------------------------------------------

EXECUTION VERSION

EXHIBIT A

FORM OF GUARANTEE AND COLLATERAL AGREEMENT

(Please see attached form)

 

Exhibit A

--------------------------------------------------------------------------------

EXHIBIT B

FORM OF COMPLIANCE CERTIFICATE

VIOLIN MEMORY, INC.

Date:                     , 20        

This Compliance Certificate is delivered pursuant to Section 6.2(b)(ii) of that
certain Credit Agreement, dated as of October 24, 2014, among Violin Memory,
Inc., a Delaware corporation (the “Borrower”), the Subsidiary Borrowers party
thereto, the Lenders party thereto, and Silicon Valley Bank, as Administrative
Agent (as amended, restated, amended and restated, supplemented, restructured or
otherwise modified from time to time, the “Credit Agreement”). Unless otherwise
defined herein, terms defined in the Credit Agreement and used herein shall have
the meanings given to them in the Credit Agreement.

1. The undersigned, a duly authorized and acting Responsible Officer of the
Borrower, hereby certifies to the Administrative Agent, in his/her capacity as
an officer of the Borrower, and not in any personal capacity, as follows:

2. I have reviewed and am familiar with the contents of this Compliance
Certificate.

3. I have reviewed the terms of the Credit Agreement and the other Loan
Documents and have made, or caused to be made under my supervision, a review in
reasonable detail of the transactions and condition of the Borrower and its
Subsidiaries during the accounting period covered by the financial statements
attached hereto as Attachment 1 (the “Financial Statements”). Except as set
forth on Attachment 2, such review did not disclose the existence during or at
the end of the accounting period covered by the Financial Statements, and I have
no knowledge of the existence as of the date of this Compliance Certificate, of
any condition or event which constitutes a Liquidity Event, a Default or an
Event of Default.

4. Attached hereto as Attachment 3 are the computations showing compliance with
the covenants set forth in Section 7.1 of the Credit Agreement, as well as a
calculation of Liquidity as of the date hereof.

5. Attached hereto as Attachment 4 is detailed account balance information
relating to all Deposit Accounts and Securities Accounts of the Borrower and its
consolidated Subsidiaries that are not maintained with the Administrative Agent
or one of its Affiliates.

6. [To the extent not previously disclosed to the Administrative Agent, a
description of any change in the jurisdiction of organization of any Loan Party
is attached hereto as Attachment [5].]

[Remainder of page intentionally left blank; signature page follows]

 

Exhibit B

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, I have executed this Compliance Certificate as of the date
first written above.

 

VIOLIN MEMORY, INC. By:     Name:     Title:    

 

Exhibit B

--------------------------------------------------------------------------------

Attachment 1

to Compliance Certificate

[Attach Financial Statements]

 

Exhibit B

--------------------------------------------------------------------------------

Attachment 2

to Compliance Certificate

Except as set forth below, no Liquidity Event, Default or Event of Default has
occurred. [If a Liquidity Event, a Default or an Event of Default has occurred,
the following describes the nature of the Liquidity Event, the Default or the
Event of Default in reasonable detail and the steps, if any, being taken or
contemplated by the Borrower to be taken on account thereof.]

 

Exhibit B

--------------------------------------------------------------------------------

Attachment 3

to Compliance Certificate

Preliminary Note to Compliance Certificate Calculations

The information described in Parts I and II of this Attachment 3 is as of
[            ], [            ] (the “Statement Date”), and pertains to the
Subject Period defined below, as applicable. The information described in Part
III of this Attachment 3 is as of the date of the Compliance Certificate to
which this Attachment 3 is attached.

 

I.   

Section 7.1(a)—Minimum Consolidated Quick Ratio

      A.    Consolidated Quick Assets for the Statement Date          1.    All
unrestricted cash and Cash Equivalents (other than to the extent constituting
proceeds of any Non-Formula-Based Revolving Loan) that are maintained in Deposit
Accounts or Securities Accounts, in any such case, with SVB or one of its
Affiliates as of such date:    $                                       2.    All
net accounts receivable that would appear on a consolidated balance sheet of the
Borrower prepared as of the Statement Date in accordance with GAAP:    $
                                      3.   

Consolidated Quick Assets for the Statement Date

(Lines I.A.1+I.A.2):

   $                                    B.    Consolidated Current Liabilities
as of the Statement Date:    $                                    C.   
Aggregate amount of Deferred Revenue of the Borrower and its consolidated
Subsidiaries as of the Statement Date (to the extent included in Consolidated
Current Liabilities as of the Statement Date):    $                             
      D.    Aggregate principal amount of all Formula-Based Revolving Loans
outstanding as of the Statement Date:    $                                    E.
   Sum of Lines I.B minus I.C plus I.D:    $                                   
C.    Consolidated Quick Ratio for the Statement Date (Ratio of Line I.A.3 to
I.E):                   to 1.00          Minimum required:      1.60 to 1.00   
      Covenant compliance?                     Yes   ¨                    No  ¨
         Does the amount on Line I.A.3 equal or exceed $30,000,000?     
Yes  ¨    No  ¨   

 

Exhibit B

--------------------------------------------------------------------------------

  II.         Section 7.1(b)—Minimum Performance to Plan         A.      
Aggregate amount of revenues forecasted in the Revenue Plan as being generated
by the Borrower and its consolidated Subsidiaries during the fiscal quarter of
the Borrower ended on the Statement Date:    $                                
     B.       Aggregate amount of revenues actually generated by the Borrower
and its consolidated Subsidiaries during the fiscal quarter of the Borrower
ended on the Statement Date:    $                                      C.      
Amount equal to 80% of the amount specified in Line II.A:    $
                                     D.       Is amount specified in Line II.B
equal to or greater than the amount specified in Line II.C:      Yes  ¨    No  ¨
         Covenant compliance:                     Yes  
¨                    No  ¨   

 

Exhibit B

--------------------------------------------------------------------------------

  III.       Minimum Liquidity       A.    Aggregate amount of all unrestricted
cash and Cash Equivalents (i) that would appear on a consolidated balance sheet
of the Borrower prepared as of the Statement Date in accordance with GAAP and
(ii) that are held as of the Statement Date in any Deposit Accounts or
Securities Accounts that are maintained with the Administrative Agent or any of
its Affiliates or that are maintained as of the Statement Date in other Deposit
Accounts or Securities Accounts with respect to which the Administrative Agent
shall have received (A) a monthly statement attached to each Compliance
Certificate, and (B) upon the Administrative Agent’s request pursuant to Section
6.16 of the Credit Agreement, current balance information:    $
                                   B.    Aggregate amount of short-term
securities purchased in accordance with the Board-Approved Cash Investment
Policy that are held as of the Statement Date in any Securities Account that are
maintained with the Administrative Agent or any of its Affiliates or that are
maintained as of the Statement Date in Securities Accounts with respect to which
the Administrative Agent shall have received (A) a monthly statement attached to
each Compliance Certificate and (B) upon the Administrative Agent’s request
pursuant to Section 6.16 of the Credit Agreement, current balance information
for each such Securities Account:    $                                    C.   
Aggregate principal balance of all Revolving Loans outstanding as of the
Statement Date:    $                                    D.   

Liquidity as of the Statement Date:

(Line III.A plus Line III.B minus Line III.C):

   $                                       Minimum amount required to avoid a
Liquidity Event:    $ 50,000,000          Liquidity
Event?                     Yes   ¨                    No  ¨   

 

Exhibit B

--------------------------------------------------------------------------------

Attachment 4

to Compliance Certificate

Detailed account balance information with respect to all Deposit Accounts and
Securities Accounts of the Borrower and its consolidated Subsidiaries that are
not maintained with the Administrative agent or one of its Affiliates:

 

Exhibit B

--------------------------------------------------------------------------------

Attachment 5

to Compliance Certificate

A description of any change in the jurisdiction of organization of any Loan
Party appears below:

 

Exhibit B

--------------------------------------------------------------------------------

EXHIBIT C

FORM OF SECRETARY’S CERTIFICATE

[NAME OF APPLICABLE LOAN PARTY]

This Certificate is delivered pursuant to Section 5.1[(e)][6.12(b)] of that
certain Credit Agreement, dated as of October 24, 2014, among Violin Memory,
Inc., a Delaware corporation (the “Borrower”), the Subsidiary Borrowers party
thereto, the Lenders party thereto, and Silicon Valley Bank, as Administrative
Agent (as amended, restated, amended and restated, supplemented, restructured or
otherwise modified from time to time, the “Credit Agreement”). Unless otherwise
defined herein, terms defined in the Credit Agreement and used herein shall have
the meanings given to them in the Credit Agreement. The undersigned Secretary of
[the Borrower][insert the name of the certifying Loan Party, a [            ]
[corporation][limited liability company], the “Certifying Loan Party”)], solely
in [her][his] capacity as the Secretary of [the Certifying Loan Party][the
Borrower], and not in [her][his] individual capacity, hereby certifies to the
Administrative Agent as follows:

1. The representations and warranties made by [the Borrower][the Certifying Loan
Party] in or pursuant to each of the Loan Documents to which it is a party or
which are contained in any certificate furnished by or on behalf of [the
Borrower][the Certifying Loan Party] pursuant to any of the Loan Documents to
which it is a party are, (i) to the extent qualified by materiality, true and
correct, and (ii) to the extent not qualified by materiality, true and correct
in all material respects, in each case, on and as of the date hereof with the
same effect as if made on the date hereof, except to the extent such
representations and warranties expressly relate 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.

2. I am the duly elected and qualified Secretary of [the Borrower][the
Certifying Loan Party].

3. No Default or Event of Default has occurred and is continuing as of the date
hereof or after giving effect to the Loans to be made on the date hereof and the
use of proceeds thereof.

4. [The conditions precedent set forth in Section 5.1, of the Credit Agreement
were satisfied or waived, as applicable, as of the Closing Date.]

5. There are no liquidation or dissolution proceedings pending or, to my
knowledge, threatened against [the Borrower][the Certifying Loan Party], nor has
any other event occurred which could be reasonably likely to materially
adversely affect or threaten the continued [corporate][company] existence of
[the Borrower][the Certifying Loan Party].

6. [The Borrower][The Certifying Loan Party] is a [corporation][limited
liability company] duly [incorporated][organized], validly existing and in good
standing under the laws of the jurisdiction of its organization.

7. Attached hereto as Annex 1 is a true and complete copy of the resolutions
duly adopted by the Board of [Directors][Managers] of [the Borrower][the
Certifying Loan Party] authorizing the execution, delivery and performance of
the Loan Documents to which [the Borrower][the Certifying Loan Party] is a party
and all other agreements, documents and instruments to be executed, delivered
and performed in connection therewith. Such resolutions

 

Exhibit C

--------------------------------------------------------------------------------

have not in any way been amended, modified, revoked or rescinded, and have been
in full force and effect since their adoption up to and including the date
hereof and are now in full force and effect.

8. Attached hereto as Annex 2 is a true and complete copy of the
[By-Laws][Operating Agreement] of [the Borrower][the Certifying Loan Party] as
in effect on the date hereof.

9. Attached hereto as Annex 3 is a true and complete copy of the Certificate of
[Incorporation][Formation] of [the Borrower][the Certifying Loan Party] as in
effect on the date hereof, along with a long-form good-standing certificate for
[the Borrower][the Certifying Loan Party] from the jurisdiction of its
organization.

10. Attached hereto as Annex 4 is a true and correct list of the Persons that
are now duly elected and qualified officers of [the Borrower][the Certifying
Loan Party] holding the offices indicated next to their respective names, and
the signatures appearing opposite their respective names are the true and
genuine signatures of such officers, and each of such officers, acting alone, is
duly authorized to execute and deliver on behalf of [the Borrower][the
Certifying Loan Party] each of the Loan Documents to which it is a party and any
certificate or other document to be delivered by [the Borrower][the Certifying
Loan Party] pursuant to the Loan Documents to which it is a party:

[Signature page follows]

 

Exhibit C

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, I have hereunto set my hand as of the date set forth below.

 

          Name:         Title:   Secretary

I, [                ], in my capacity as the [                ] of [the
Borrower][the Certifying Loan Party], do hereby certify in the name and on
behalf of [the Borrower][the Certifying Loan Party] that [                ] is
the duly elected and qualified Secretary of [the Borrower][the Certifying Loan
Party] and that the signature appearing above is [her][his] genuine signature.

 

Date: [                    ]           Name:         Title:    

 

Exhibit C

--------------------------------------------------------------------------------

ANNEX 1

RESOLUTIONS

 

Exhibit C

--------------------------------------------------------------------------------

ANNEX 2

[BY-LAWS][OPERATING AGREEMENT]

 

Exhibit C

--------------------------------------------------------------------------------

ANNEX 3

[CERTIFICATE OF INCORPORATION][CERTIFICATE OF FORMATION]

AND

GOOD-STANDING CERTIFICATE

 

Exhibit C

--------------------------------------------------------------------------------

ANNEX 4

INCUMBENCY

[insert name of applicable Loan Party]

 

Name

  

Office

  

Signature

[                                ]    [                                ]     
[                                ]    [                                ]     
[                                ]    [                                ]     
[                                ]    [                                ]     

 

Exhibit C

--------------------------------------------------------------------------------

EXHIBIT D

FORM OF SOLVENCY CERTIFICATE

VIOLIN MEMORY, INC.

Date:                     , 20        

To the Administrative Agent,

and each of the Lenders party

to the Credit Agreement referred to below:

This SOLVENCY CERTIFICATE (this “Certificate”) is delivered pursuant to
Section 5.1(p) of that certain Credit Agreement, dated as of October 24, 2014,
among Violin Memory, Inc., a Delaware corporation (the “Borrower”), the
Subsidiary Borrowers party thereto, the Lenders party thereto, and Silicon
Valley Bank, as Administrative Agent (as amended, restated, amended and
restated, supplemented, restructured or otherwise modified from time to time,
the “Credit Agreement”). Unless otherwise defined herein, terms defined in the
Credit Agreement and used herein shall have the meanings given to them in the
Credit Agreement. The undersigned Chief Financial Officer of the Borrower, in
such capacity only and not in his individual capacity, does hereby certify to
the Administrative Agent and each of the Lenders, on behalf of each Loan Party
as of the date hereof, that:

 

1. For purposes of this Certificate, the terms below shall have the following
definitions:

 

  (a) “Fair Value”

 

     The amount at which the assets (both tangible and intangible), in their
entirety, of the Borrower would change hands between a willing buyer and a
willing seller, within a commercially reasonable period of time, each having
reasonable knowledge of the relevant facts, with neither being under any
compulsion to act.

 

  (b) “Present Fair Salable Value”

 

     The amount that could be obtained by an independent willing seller from an
independent willing buyer if the assets of the Borrower are sold with reasonable
promptness in an arm’s-length transaction under present conditions for the sale
of comparable business enterprises.

 

  (c) “Stated Liabilities”

 

     The recorded liabilities (including contingent liabilities that would be
recorded in accordance with GAAP) of the Borrower as of the date hereof after
giving effect to the Loans made by the Lenders on the Closing Date and the
consummation of the Transactions, determined in accordance with GAAP
consistently applied.

 

Exhibit D

--------------------------------------------------------------------------------

  (d) “Identified Contingent Liabilities”

 

     The maximum estimated amount of liabilities reasonably likely to result
from pending litigation, asserted claims and assessments, guaranties, uninsured
risks and other contingent or unliquidated liabilities of the Borrower after
giving effect to the Loans made by the Lenders on the Closing Date and the
consummation of the Transactions (including all fees and expenses related
thereto but exclusive of such contingent liabilities to the extent reflected in
Stated Liabilities), as identified and explained in terms of their nature and
estimated magnitude by responsible officers of the Borrower.

 

  (e) “will be able to pay its or their Stated Liabilities and Identified
Contingent Liabilities as they mature or otherwise become payable”

 

     For the period from the date hereof through the Revolving Termination Date
(and after giving effect to the Loans made by the Lenders on the Closing Date
and the consummation of the Transactions), the Borrower will have sufficient
assets and cash flow to pay its Stated Liabilities and Identified Contingent
Liabilities as those liabilities mature or otherwise become due and payable.

 

  (f) “does not have Unreasonably Small Capital”

 

     For the period from the date hereof through the Revolving Termination Date,
the Borrower, after giving effect to the Loans made by the Lenders on the
Closing Date and the consummation of the Transactions and all Indebtedness
(including Indebtedness incurred under the Credit Agreement) being incurred or
assumed and Liens created by the Borrower in connection therewith, is a going
concern and has sufficient capital to conduct any business in which it is or is
about to become engaged and to remain a going concern.

2. For purposes of this Certificate, the undersigned has, or officers of the
Borrower under the direction and supervision of the undersigned have, performed
the following procedures as of and for the periods set forth below.

 

  (a) Reviewed the financial statements referred to in Section 5.1(c) of the
Credit Agreement.

 

  (b) Made inquiries of certain officials of the Borrower who have
responsibility for financial and accounting matters regarding the existence and
amount of Identified Contingent Liabilities associated with the business of the
Borrower.

 

  (c) Reviewed, to the satisfaction of the undersigned, the Loan Documents and
the respective Schedules and Exhibits thereto.

 

  (d) With respect to Identified Contingent Liabilities:

 

  1. inquired of certain officials of the Borrower who have responsibility for
legal, financial and accounting matters as to the existence and estimated
liability with respect to all contingent liabilities associated with the
business of the Borrower; and

 

Exhibit D

--------------------------------------------------------------------------------

  2. confirmed with officers of the Borrower that, to the best of such officers’
knowledge, (i) all appropriate items were included in Stated Liabilities or
Identified Contingent Liabilities and (ii) the amounts relating thereto were the
maximum estimated amount of liabilities reasonably likely to result therefrom as
of the date hereof.

 

  (e) Made inquiries of certain officers of the Borrower who have responsibility
for financial reporting and accounting matters regarding whether they were aware
of any events or conditions that, as of the date hereof, would cause the
Borrower, after giving effect to the Loans made by the Lenders on the Closing
Date and the consummation of the Transactions, to (i) have assets with a Fair
Value that is less than the sum of its Stated Liabilities and Identified
Contingent Liabilities; (ii) have assets with a Present Fair Salable Value that
is less than the amount that will be required to pay its Stated Liabilities and
Identified Contingent Liabilities as they become absolute and matured;
(iii) have Unreasonably Small Capital; or (iv) not be able to pay its or their
respective Stated Liabilities and Identified Contingent Liabilities as they
mature or otherwise become payable.

 

  (f) Prepared the projections relating to the Borrower, which have been
previously delivered to the Administrative Agent and the Lenders, based on good
faith estimates and assumptions, and have re-examined such projections on the
date hereof and considered the effect thereon of any changes since the date of
the preparation thereof on the results projected therein. After such review, the
undersigned hereby certifies that in his opinion such projections are reasonable
and attainable (it being recognized by the Lenders that such projections of
future events are not to be viewed as facts and that actual results during the
period or periods covered by any such projections may differ from the projected
results contained therein) and such projections support the conclusions
contained in paragraph 3 below.

3. Based on and subject to the foregoing, the undersigned Chief Financial
Officer of the Borrower hereby certifies on behalf of the Borrower that, on and
as of the date hereof and after giving effect to the Loans made by the Lenders
on the Closing Date and the consummation of the Transactions, the initial
borrowings on the Closing Date and the application of the proceeds thereof, it
is my opinion that (i) the Fair Value of the assets of the Borrower exceed the
aggregate amount of the Borrower’s Stated Liabilities and Identified Contingent
Liabilities; (ii) the Present Fair Salable Value of the assets of the Borrower
will be greater than the amount that will be required to pay the Borrower’s
Stated Liabilities and Identified Contingent Liabilities as they become absolute
and matured; (iii) the Borrower does not have Unreasonably Small Capital; and
(iv) the Borrower intends to and believes that it will be able to pay its Stated
Liabilities and Identified Contingent Liabilities as they mature or otherwise
become payable.

4. The Borrower does not intend, in receiving the Loans to be made on the
Closing Date and consummating the Transactions and the other transactions
contemplated by the Loan Documents, to delay, hinder, or defraud either present
or future creditors.

(Signature page follows)

 

Exhibit D

--------------------------------------------------------------------------------

I represent the foregoing information to be, to the best of my knowledge and
belief, true and correct and execute this Certificate as of the date first
written above.

 

By:     Name:   Cory Sindelar

as Chief Financial Officer of:

Violin Memory, Inc., a Delaware corporation

 

Exhibit D

--------------------------------------------------------------------------------

EXHIBIT E

FORM OF ASSIGNMENT AND ASSUMPTION

VIOLIN MEMORY, INC.

This Assignment and Assumption Agreement (the “Assignment Agreement”) is dated
as of the Assignment Effective Date set forth below and is entered into by and
between the Assignor identified in item 1 below (the “Assignor”) and the
Assignee identified in item 2 below (the “Assignee”). Capitalized terms used but
not defined herein shall have the meanings given to them in the Credit Agreement
identified below (as amended, restated, amended and restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”), receipt of a copy
of which is hereby acknowledged by the Assignee. The Standard Terms and
Conditions set forth in Annex 1 attached hereto are hereby agreed to and
incorporated herein by reference and made a part of this Assignment Agreement as
if set forth herein in full.

For an agreed consideration, the Assignor hereby irrevocably sells and assigns
to the Assignee, and the Assignee hereby irrevocably purchases and assumes from
the Assignor, subject to and in accordance with the Standard Terms and
Conditions and the Credit Agreement, as of the Assignment Effective Date
inserted by the Administrative Agent as contemplated below (i) all of the
Assignor’s rights and obligations in its capacity as a Lender under the Credit
Agreement and any other documents or instruments delivered pursuant thereto to
the extent related to the amount and percentage interest identified below of all
of such outstanding rights and obligations of the Assignor under the respective
facilities identified below (including without limitation any guarantees
included in such facilities) and (ii) to the extent permitted to be assigned
under applicable law, all claims, suits, causes of action and any other right of
the Assignor (in its capacity as a Lender) against any Person, whether known or
unknown, arising under or in connection with the Credit Agreement, any other
documents or instruments delivered pursuant thereto or the loan transactions
governed thereby or in any way based on or related to any of the foregoing,
including, but not limited to, contract claims, tort claims, malpractice claims,
statutory claims and all other claims at law or in equity related to the rights
and obligations sold and assigned pursuant to clause (i) above (the rights and
obligations sold and assigned by the Assignor to the Assignee pursuant to
clauses (i) and (ii) above being referred to herein collectively as the
“Assigned Interest”). Each such sale and assignment is without recourse to the
Assignor and, except as expressly provided in this Assignment Agreement, without
representation or warranty by the Assignor.

 

1.    Assignor:                  2.    Assignee:           [for Assignee, if
applicable, indicate [Affiliate][Approved Fund] of [identify Lender]] 3.   
Co-Borrowers:   VIOLIN MEMORY, INC., a Delaware corporation, and certain of its
Subsidiaries as “Subsidiary Borrowers” (as more fully described in the Credit
Agreement) 4.    Administrative Agent:   SILICON VALLEY BANK    5.    Credit
Agreement:   Credit Agreement, dated as of October 24, 2014, among Violin
Memory, Inc., a Delaware corporation, as the Borrower, certain of its
Subsidiaries, as Subsidiary Borrowers, the Lenders party thereto, and SILICON
VALLEY BANK, as Administrative Agent

 

Exhibit E

--------------------------------------------------------------------------------

6.    Assigned Interest[s]:  

 

Assignor

  

Assignee

  

Facility
Assigned1

  

Aggregate
Amount of
Commitment /
Loans for all
Lenders2

    

Amount of
Commitment /
Loans Assigned3

    

Percentage
Assigned of
Commitment /
Loans4

    

CUSIP Number

           $                         $                                     %   
              $                         $                                     %
                 $                         $                        
            %      

 

[7.    Trade Date:  

                             ]5

Assignment Effective Date:                              , 20         [TO BE
INSERTED BY THE ADMINISTRATIVE AGENT AND WHICH SHALL BE THE ASSIGNMENT EFFECTIVE
DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]

[Signature pages follow]

 

1  Fill in the appropriate terminology for the types of facilities under the
Credit Agreement that are being assigned under this Assignment Agreement (e.g.
“Formula-Based Revolving Facility”, “Non-Formula-Based Revolving Facility”,
etc.)

2  Amount to be adjusted by the counterparties to take into account any payments
or prepayments made between the Trade Date and the Assignment Effective Date.

3  Amount to be adjusted by the counterparties to take into account any payments
or prepayments made between the Trade Date and the Assignment Effective Date.

4  Set forth, to at least 9 decimals, as a percentage of the applicable
Commitment/Loans of all Lenders thereunder.

5  To be completed if the Assignor(s) and the Assignee(s) intend that the
minimum assignment amount is to be determined as of the Trade Date.

 

Exhibit E

--------------------------------------------------------------------------------

The terms set forth in this Assignment Agreement are hereby agreed to:

 

ASSIGNOR1

[NAME OF ASSIGNOR]

By:       Name:   Title:

ASSIGNEE2

[NAME OF ASSIGNEE]

By:       Name:   Title:

 

1  Add additional signature blocks as needed.

2  Add additional signature blocks as needed.

 

Exhibit E

--------------------------------------------------------------------------------

Consented to and Accepted:

 

SILICON VALLEY BANK,

as Administrative Agent

By       Name:   Title: By       Name:   Title:

[Consented to:]3

 

[NAME OF RELEVANT PARTY]

By       Name:   Title: [NAME OF RELEVANT PARTY] By       Name:   Title:

 

3  To be added only if the consent of the Borrower is required by the terms of
the Credit Agreement.

 

Exhibit E

--------------------------------------------------------------------------------

ANNEX 1

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

1. Representations and Warranties.

1.1 Assignor. The Assignor (a) represents and warrants that (i) it is the legal
and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is
free and clear of any lien, encumbrance or other adverse claim and (iii) it has
full power and authority, and has taken all action necessary, to execute and
deliver this Assignment Agreement and to consummate the transactions
contemplated hereby; and (b) assumes no responsibility with respect to (i) any
statements, warranties or representations made in or in connection with the
Credit Agreement or any other Loan Document, (ii) the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Loan
Documents or any collateral thereunder, (iii) the financial condition of any
Loan Party, any of their respective Subsidiaries or Affiliates or any other
Person obligated in respect of any Loan Document or (iv) the performance or
observance by any Loan Party, any of their respective Subsidiaries or Affiliates
or any other Person of any of their respective obligations under any Loan
Document or any other instrument or document furnished pursuant hereto or
thereto.

1.2. Assignee. The Assignee (a) represents and warrants that (i) it has full
power and authority, and has taken all action necessary, to execute and deliver
this Assignment Agreement and to consummate the transactions contemplated hereby
and to become a Lender under the Credit Agreement, (ii) it meets all the
requirements to be an Assignee under Section 10.6(b) of the Credit Agreement
(subject to such consents, if any, as may be required under Section 10.6(b)(iii)
of the Credit Agreement), (iii) from and after the Assignment Effective Date, it
shall be bound by the provisions of the Credit Agreement as a Lender thereunder
and, to the extent of the Assigned Interest, shall have the obligations of a
Lender thereunder, (iv) it is sophisticated with respect to decisions to acquire
assets of the type represented by the Assigned Interest and either it, or the
person exercising discretion in making its decision to acquire the Assigned
Interest, is experienced in acquiring assets of such type, (v) it has received a
copy of the Credit Agreement, and has received or has been accorded the
opportunity to receive copies of the most recent financial statements delivered
pursuant to Section 6.1 thereof, as applicable, and such other documents and
information as it deems appropriate to make its own credit analysis and decision
to enter into this Assignment Agreement and to purchase the Assigned Interest,
(vi) it has, independently and without reliance upon the Administrative Agent or
any other Lender and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Assignment Agreement and to purchase the Assigned Interest, and (vii) if it is a
Non-U.S. Lender, attached to the Assignment Agreement is any documentation
required to be delivered by it pursuant to the terms of the Credit Agreement,
duly completed and executed by the Assignee; and (b) agrees that (i) it will,
independently and without reliance on any of the Administrative Agent, the
Assignor or any other Lender, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Loan Documents and (ii) it will perform in
accordance with their terms all of the obligations which by the terms of the
Loan Documents are required to be performed by it as a Lender.

2. Payments. From and after the Assignment Effective Date, the Administrative
Agent shall make all payments in respect of the Assigned Interest (including
payments of principal, interest, fees and other amounts) to the Assignor for
amounts which have accrued to but excluding the Assignment Effective Date and to
the Assignee for amounts which have accrued from and after the Assignment
Effective Date.

 

Exhibit E

--------------------------------------------------------------------------------

3. General Provisions. This Assignment Agreement shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and
assigns. This Assignment Agreement may be executed in any number of
counterparts, which together shall constitute one instrument. Delivery of an
executed counterpart of a signature page of this Assignment Agreement by
telecopy (or other electronic method of transmission) shall be effective as
delivery of a manually executed counterpart of this Assignment Agreement. This
Assignment Agreement shall be governed by, and construed and interpreted in
accordance with, the laws of the State of California.

 

Exhibit E

--------------------------------------------------------------------------------

EXHIBIT F-1

FORM OF U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Lenders That Are Not Partnerships for U.S. Federal Income Tax
Purposes)

[Date]

Reference is made to that certain Credit Agreement, dated as of October 24, 2014
(as amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among Violin Memory, Inc., a Delaware corporation (the “Borrower”),
the Subsidiary Borrowers party thereto, the Lenders party thereto and Silicon
Valley Bank, as Administrative Agent for such Lenders (in such capacity; the
“Administrative Agent”). Unless otherwise defined herein, terms defined in the
Credit Agreement and used herein shall have the meanings given to them in the
Credit Agreement.

Pursuant to the provisions of Section 2.20 of the Credit Agreement, the
undersigned hereby certifies that (i) it is the sole record and beneficial owner
of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of
which it is providing this certificate, (ii) it is not a bank within the meaning
of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder
of any Co-Borrower within the meaning of Section 871(h)(3)(B) of the Code and
(iv) it is not a controlled foreign corporation related to any Co-Borrower as
described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished the Administrative Agent and the Borrower with a
certificate of its non-U.S. Person status on IRS Form W-8BEN. By executing this
certificate, the undersigned agrees that (1) if the information provided on this
certificate changes, the undersigned shall promptly so inform the Borrower and
the Administrative Agent, and (2) the undersigned shall have at all times
furnished the Borrower and the Administrative Agent with a properly completed
and currently effective certificate in either the calendar year in which each
payment is to be made to the undersigned, or in either of the two calendar years
preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.

IN WITNESS WHEREOF, the undersigned has caused this certificate to be duly
executed and delivered by its proper and duly authorized signatory as of the day
and year first written above.

 

[Name of Lender] By     Name: Titile:

 

Exhibit F-1

--------------------------------------------------------------------------------

EXHIBIT F-2

FORM OF U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Participants That Are Not Partnerships for U.S. Federal Income Tax
Purposes)

[Date]

Reference is made to that certain Credit Agreement, dated as of October 24, 2014
(as amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among Violin Memory, Inc., a Delaware corporation (the “Borrower”),
the Subsidiary Borrowers party thereto, the Lenders party thereto and Silicon
Valley Bank, as Administrative Agent for such Lenders (in such capacity; the
“Administrative Agent”). Unless otherwise defined herein, terms defined in the
Credit Agreement and used herein shall have the meanings given to them in the
Credit Agreement.

Pursuant to the provisions of Section 2.20 of the Credit Agreement, the
undersigned hereby certifies that (i) it is the sole record and beneficial owner
of the participation in respect of which it is providing this certificate,
(ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code,
(iii) it is not a ten percent shareholder of any Co-Borrower within the meaning
of Section 871(h)(3)(B) of the Code, and (iv) it is not a controlled foreign
corporation related to any Co-Borrower as described in Section 881(c)(3)(C) of
the Code.

The undersigned has furnished its participating Lender with a certificate of its
non-U.S. Person status on IRS Form W-8BEN. By executing this certificate, the
undersigned agrees that (1) if the information provided on this certificate
changes, the undersigned shall promptly so inform such Lender in writing, and
(2) the undersigned shall have at all times furnished such Lender with a
properly completed and currently effective certificate in either the calendar
year in which each payment is to be made to the undersigned, or in either of the
two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.

IN WITNESS WHEREOF, the undersigned has caused this certificate to be duly
executed and delivered by its proper and duly authorized signatory as of the day
and year first written above.

 

[Name of Participant] By     Name: Titile:

 

Exhibit F-2

--------------------------------------------------------------------------------

EXHIBIT F-3

FORM OF U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Participants That Are Partnerships for U.S. Federal Income Tax
Purposes)

[Date]

Reference is made to that certain Credit Agreement, dated as of October 24, 2014
(as amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among Violin Memory, Inc., a Delaware corporation (the “Borrower”),
the Subsidiary Borrowers party thereto, the Lenders party thereto and Silicon
Valley Bank, as Administrative Agent for such Lenders (in such capacity; the
“Administrative Agent”). Unless otherwise defined herein, terms defined in the
Credit Agreement and used herein shall have the meanings given to them in the
Credit Agreement.

Pursuant to the provisions of Section 2.20 of the Credit Agreement, the
undersigned hereby certifies that (i) it is the sole record owner of the
participation in respect of which it is providing this certificate, (ii) its
direct or indirect partners/members are the sole beneficial owners of such
participation, (iii) with respect such participation, neither the undersigned
nor any of its direct or indirect partners/members is a bank extending credit
pursuant to a loan agreement entered into in the ordinary course of its trade or
business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of
its direct or indirect partners/members is a ten percent shareholder of any
Co-Borrower within the meaning of Section 871(h)(3)(B) of the Code and (v) none
of its direct or indirect partners/members is a controlled foreign corporation
related to any Co-Borrower as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished its participating Lender with IRS Form W-8IMY
accompanied by one of the following forms from each of its partners/members that
is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or (ii) an
IRS Form W-8IMY accompanied by an IRS Form W-8BEN from each of such
partner’s/member’s beneficial owners that is claiming the portfolio interest
exemption. By executing this certificate, the undersigned agrees that (1) if the
information provided on this certificate changes, the undersigned shall promptly
so inform such Lender and (2) the undersigned shall have at all times furnished
such Lender with a properly completed and currently effective certificate in
either the calendar year in which each payment is to be made to the undersigned,
or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.

IN WITNESS WHEREOF, the undersigned has caused this certificate to be duly
executed and delivered by its proper and duly authorized signatory as of the day
and year first written above.

 

[Name of Participant] By     Name: Titile:

 

Exhibit F-3

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EXHIBIT F-4

FORM OF U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Lenders That Are Partnerships for U.S. Federal Income Tax Purposes)

[Date]

Reference is made to that certain Credit Agreement, dated as of October 24, 2014
(as amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among Violin Memory, Inc., a Delaware corporation (the “Borrower”),
the Subsidiary Borrowers party thereto, the Lenders party thereto and Silicon
Valley Bank, as Administrative Agent for such Lenders (in such capacity; the
“Administrative Agent”). Unless otherwise defined herein, terms defined in the
Credit Agreement and used herein shall have the meanings given to them in the
Credit Agreement.

Pursuant to the provisions of Section 2.20 of the Credit Agreement, the
undersigned hereby certifies that (i) it is the sole record owner of the Loan(s)
(as well as any Note(s) evidencing such Loan(s)) in respect of which it is
providing this certificate, (ii) its direct or indirect partners/members are the
sole beneficial owners of such Loan(s) (as well as any Note(s) evidencing such
Loan(s)), (iii) with respect to the extension of credit pursuant to this Credit
Agreement or any other Loan Document, neither the undersigned nor any of its
direct or indirect partners/members is a bank extending credit pursuant to a
loan agreement entered into in the ordinary course of its trade or business
within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct
or indirect partners/members is a ten percent shareholder of any Co-Borrower
within the meaning of Section 871(h)(3)(B) of the Code and (v) none of its
direct or indirect partners/members is a controlled foreign corporation related
to any Co-Borrower as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished the Administrative Agent and the Borrower with IRS
Form W-8IMY accompanied by one of the following forms from each of its
partners/members that is claiming the portfolio interest exemption: (i) an IRS
Form W-8BEN or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN from
each of such partner’s/member’s beneficial owners that is claiming the portfolio
interest exemption. By executing this certificate, the undersigned agrees that
(1) if the information provided on this certificate changes, the undersigned
shall promptly so inform the Borrower and the Administrative Agent, and (2) the
undersigned shall have at all times furnished the Borrower and the
Administrative Agent with a properly completed and currently effective
certificate in either the calendar year in which each payment is to be made to
the undersigned, or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.

IN WITNESS WHEREOF, the undersigned has caused this certificate to be duly
executed and delivered by its proper and duly authorized signatory as of the day
and year first written above.

 

[Name of Lender] By     Name: Titile:

 

Exhibit F-4

--------------------------------------------------------------------------------

EXHIBIT G

FORM OF ADDENDUM

VIOLIN MEMORY, INC.

The undersigned Lender (i) hereby agrees to all of the provisions of that
certain Credit Agreement, dated as of October 24, 2014, among Violin Memory,
Inc., a Delaware corporation (the “Borrower”), the Subsidiary Borrowers party
thereto, the Lenders party thereto, and Silicon Valley Bank, as Administrative
Agent (as amended, restated, amended and restated, supplemented, restructured or
otherwise modified from time to time, the “Credit Agreement”), and (ii) hereby
agrees to become a party thereto, as a Lender, with all of the rights and
obligations applicable to a Lender thereunder, including, without limitation,
the obligation to make extensions of credit to the Co-Borrowers in an aggregate
principal amount not to exceed the amount of such Lender’s Revolving Commitment,
as set forth opposite the undersigned Lender’s name in Schedule 1.1A to the
Credit Agreement, as such amount may be changed from time to time as provided in
the Credit Agreement. Unless otherwise defined herein, terms defined in the
Credit Agreement and used herein shall have the meanings given to them in the
Credit Agreement.

 

  [Name of Lender] By:     Name: Titile:

Dated as of [                    ]

 

Exhibit G

--------------------------------------------------------------------------------

EXHIBIT H-1

FORM OF FORMULA-BASED REVOLVING LOAN NOTE

THIS FORMULA-BASED REVOLVING LOAN NOTE AND THE OBLIGATIONS REPRESENTED HEREBY
MAY NOT BE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE TERMS AND PROVISIONS OF THE
CREDIT AGREEMENT REFERRED TO BELOW. TRANSFERS OF THIS FORMULA-BASED REVOLVING
LOAN NOTE AND THE OBLIGATIONS REPRESENTED HEREBY MUST BE RECORDED IN THE
REVOLVING LOAN REGISTER MAINTAINED BY THE ADMINISTRATIVE AGENT PURSUANT TO THE
TERMS OF SUCH CREDIT AGREEMENT.

 

$[            ]    Santa Clara, California    [insert date]

FOR VALUE RECEIVED, the undersigned, Violin Memory, Inc., a Delaware corporation
(the ““Borrower”), and any Subsidiary Borrower that executes this Formula-Based
Revolving Loan Note (this “Note”) pursuant to a joinder agreement entered into
after the date hereof (collectively with the Borrower, the “Co-Borrowers”),
HEREBY JOINTLY AND SEVERALLY AND UNCONDITIONALLY PROMISE TO PAY to [insert name
of applicable Lender] (the “Lender”) or its registered assigns at the Funding
Office specified in the Credit Agreement (as hereinafter defined) in Dollars and
in immediately available funds, on the Revolving Maturity Date the principal
amount of (a) [insert amount of applicable Lender’s Revolving Commitment]
($[            ]), or, if less, (b) the aggregate unpaid principal amount of all
Formula-Based Revolving Loans made by the Lender to the Co-Borrowers pursuant to
Section 2.4 of the Credit Agreement referred to below. Each Co-Borrower further
jointly and severally agrees to pay interest in like money at such office on the
unpaid principal amount hereof from time to time outstanding at the rates and on
the dates specified in the Credit Agreement.

The holder of this Note is authorized to indorse on the schedules annexed hereto
and made a part hereof or on a continuation thereof which shall be attached
hereto and made a part hereof the date, Type and amount of each Formula-Based
Revolving Loan made pursuant to the Credit Agreement and the date and amount of
each payment or prepayment of principal thereof, each continuation thereof, each
conversion of all or a portion thereof to another Type and, in the case of
Eurodollar Loans, the length of each Interest Period with respect thereto. Each
such indorsement shall, absent manifest error, constitute prima facie evidence
of the accuracy of the information indorsed. The failure to make any such
indorsement or any error in any such indorsement shall not affect the joint and
several obligations of the Co-Borrowers in respect of any Formula-Based
Revolving Loan.

This Note (a) is one of the Formula-Based Revolving Loan Notes referred to in
the Credit Agreement, dated as of October 24, 2014, among the Co-Borrowers, the
Lenders party thereto, and Silicon Valley Bank, as Administrative Agent (as
amended, restated, amended and restated, supplemented or otherwise modified from
time to time, the “Credit Agreement”), (b) is subject to the provisions of the
Credit Agreement and (c) is subject to optional prepayment in whole or in part
as provided in the Credit Agreement. This Note is secured and guaranteed as
provided in the Loan Documents. Reference is hereby made to the Loan Documents
for a description of the properties and assets in which a security interest has
been granted, the nature and extent of the security and the guarantees, the
terms and conditions upon which the security interests and each guarantee were
granted and the rights of the holder of this Note in respect thereof.

 

Exhibit H-1

--------------------------------------------------------------------------------

Upon the occurrence and during the continuance of any one or more Events of
Default, all principal and all accrued interest then remaining unpaid on this
Note shall become, or may be declared to be, immediately due and payable, all as
provided in the Credit Agreement.

All parties now and hereafter liable with respect to this Note, whether maker,
principal, surety, guarantor, indorser or otherwise, hereby waive presentment,
demand, protest and all other notices of any kind.

The Borrower and, upon execution of a joinder to this Note, each other
Co-Borrower, acknowledges and agrees that the obligation to pay hereunder and
under the Credit Agreement is the joint and several obligation of each
Co-Borrower, that the Co-Borrowers are jointly and severally liable to pay such
obligations and to perform all covenants hereunder and thereunder, and that no
Co-Borrower shall be relieved under this Note, the Credit Agreement or the other
Loan Documents unless and until all such obligations have been satisfied in
full.

Unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.

NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN OR IN THE CREDIT
AGREEMENT, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO AND IN ACCORDANCE
WITH THE REGISTRATION AND OTHER PROVISIONS OF SECTION 10.6 OF THE CREDIT
AGREEMENT.

THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF CALIFORNIA (WITHOUT GIVING EFFECT TO THE CONFLICT
OF LAWS PRINCIPLES THEREOF).

(Remainder of page intentionally left blank; signature page follows)

 

Exhibit H-1

--------------------------------------------------------------------------------

VIOLIN MEMORY, INC. By:     Name:     Title:    

 

Exhibit H-1

--------------------------------------------------------------------------------

Schedule A

to Formula-Based Revolving Loan Note

LOANS, CONVERSIONS AND REPAYMENTS OF ABR LOANS

 

Date

  

Amount of ABR
Loans

  

Amount
Converted to ABR
Loans

  

Amount of Principal
of ABR Loans
Repaid

  

Amount of ABR
Loans Converted to
Eurodollar Loans

  

Unpaid Principal
Balance of ABR
Loans

  

Notation Made By

 

Exhibit H-1

--------------------------------------------------------------------------------

Schedule B

to Formula-Based Revolving Loan Note

LOANS, CONTINUATIONS, CONVERSIONS AND REPAYMENTS OF EURODOLLAR LOANS

 

Date

  

Amount of
Eurodollar Loans

  

Amount
Converted to
Eurodollar Loans

  

Interest Period
and Eurodollar
Rate with
Respect Thereto

  

Amount of
Principal of
Eurodollar Loans
Repaid

  

Amount of
Eurodollar Loans
Converted to
ABR Loans

  

Unpaid Principal
Balance of
Eurodollar Loans

  

Notation Made
By

 

Exhibit H-1

--------------------------------------------------------------------------------

EXHIBIT H-2

FORM OF NON-FORMULA-BASED REVOLVING LOAN NOTE

THIS NON-FORMULA-BASED REVOLVING LOAN NOTE AND THE OBLIGATIONS REPRESENTED
HEREBY MAY NOT BE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE TERMS AND PROVISIONS
OF THE CREDIT AGREEMENT REFERRED TO BELOW. TRANSFERS OF THIS NON-FORMULA-BASED
REVOLVING LOAN NOTE AND THE OBLIGATIONS REPRESENTED HEREBY MUST BE RECORDED IN
THE REVOLVING LOAN REGISTER MAINTAINED BY THE ADMINISTRATIVE AGENT PURSUANT TO
THE TERMS OF SUCH CREDIT AGREEMENT.

 

$[            ]    Santa Clara, California    [insert date]

FOR VALUE RECEIVED, the undersigned, Violin Memory, Inc., a Delaware corporation
(the ““Borrower”), and any Subsidiary Borrower that executes this
Non-Formula-Based Revolving Loan Note (this “Note”) pursuant to a joinder
agreement entered into after the date hereof (collectively with the Borrower,
the “Co-Borrowers”), HEREBY JOINTLY AND SEVERALLY AND UNCONDITIONALLY PROMISE TO
PAY to [insert name of applicable Lender] (the “Lender”) or its registered
assigns at the Funding Office specified in the Credit Agreement (as hereinafter
defined) in Dollars and in immediately available funds, in accordance with the
provisions of the Credit Agreement referred to below, the principal amount of
(a) [insert amount of applicable Lender’s Revolving Commitment]
($[            ]), or, if less, (b) the aggregate unpaid principal amount of all
Non-Formula-Based Revolving Loans made by the Lender to the Borrower pursuant to
Section 2.4 of the Credit Agreement referred to below. Each Co-Borrower further
jointly and severally agrees to pay interest in like money at such office on the
unpaid principal amount hereof from time to time outstanding at the rates and on
the dates specified in the Credit Agreement.

The holder of this Note is authorized to indorse on the schedules annexed hereto
and made a part hereof or on a continuation thereof which shall be attached
hereto and made a part hereof the date and amount of each Non-Formula-Based
Revolving Loan made pursuant to the Credit Agreement and the date and amount of
each payment or prepayment of principal thereof. Each such indorsement shall,
absent manifest error, constitute prima facie evidence of the accuracy of the
information indorsed. The failure to make any such indorsement or any error in
any such indorsement shall not affect the joint and several obligations of the
Co-Borrowers in respect of any Non-Formula-Based Revolving Loan.

This Note (a) is one of the Non-Formula-Based Revolving Loan Notes referred to
in the Credit Agreement, dated as of October 24, 2014, among the Co-Borrowers,
the Lenders party thereto, and Silicon Valley Bank, as Administrative Agent (as
amended, restated, amended and restated, supplemented or otherwise modified from
time to time, the “Credit Agreement”), (b) is subject to the provisions of the
Credit Agreement and (c) is subject to optional prepayment in whole or in part
as provided in the Credit Agreement. This Note is secured and guaranteed as
provided in the Loan Documents. Reference is hereby made to the Loan Documents
for a description of the properties and assets in which a security interest has
been granted, the nature and extent of the security and the guarantees, the
terms and conditions upon which the security interests and each guarantee were
granted and the rights of the holder of this Note in respect thereof.

Upon the occurrence and during the continuance of any one or more Events of
Default, all principal and all accrued interest then remaining unpaid on this
Note shall become, or may be declared to be, immediately due and payable, all as
provided in the Credit Agreement.

 

Exhibit H-2

--------------------------------------------------------------------------------

All parties now and hereafter liable with respect to this Note, whether maker,
principal, surety, guarantor, indorser or otherwise, hereby waive presentment,
demand, protest and all other notices of any kind.

The Borrower and, upon execution of a joinder to this Note, each other
Co-Borrower, acknowledges and agrees that the obligation to pay hereunder and
under the Credit Agreement is the joint and several obligation of each
Co-Borrower, that the Co-Borrowers are jointly and severally liable to pay such
obligations and to perform all covenants hereunder and thereunder, and that no
Co-Borrower shall be relieved under this Note, the Credit Agreement or the other
Loan Documents unless and until all such obligations have been satisfied in
full.

Unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.

NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN OR IN THE CREDIT
AGREEMENT, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO AND IN ACCORDANCE
WITH THE REGISTRATION AND OTHER PROVISIONS OF SECTION 10.6 OF THE CREDIT
AGREEMENT.

THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF CALIFORNIA (WITHOUT GIVING EFFECT TO THE CONFLICT
OF LAWS PRINCIPLES THEREOF).

(Remainder of page intentionally left blank; signature page follows)

 

Exhibit H-2

--------------------------------------------------------------------------------

VIOLIN MEMORY, INC. By:     Name:     Title:    

 

Exhibit H-2

--------------------------------------------------------------------------------

Schedule A

to Non-Formula-Based Revolving Loan Note

LOANS, CONVERSIONS AND REPAYMENTS OF ABR LOANS

 

Date

  

Amount of ABR Loans

  

Amount of Principal of ABR
Loans Repaid

  

Unpaid Principal Balance of
ABR Loans

  

Notation Made By

 

Exhibit H-2

--------------------------------------------------------------------------------

EXHIBIT I

FORM OF BORROWING BASE CERTIFICATE

VIOLIN MEMORY, INC.

Date:                     , 20        

Violin Memory, Inc., a Delaware corporation (the “Borrower”), through the
undersigned in [his][her] capacity as a duly authorized officer of such entity
or an entity authorized to certify on such entity’s behalf, hereby certifies to
the Administrative Agent and each Lender, in accordance with (i) the Credit
Agreement, dated as of October 24, 2014 (as amended, restated, amended and
restated, supplemented, restructured or otherwise modified from time to time,
the “Credit Agreement”, the terms defined therein and not otherwise defined
herein being used herein as therein defined), among the Borrower, the Subsidiary
Borrowers party thereto, the Lenders party thereto (the “Lenders”) and Silicon
Valley Bank, as administrative agent for such Lenders (together with its
successors in such capacity, the “Administrative Agent”), and (ii) each of the
other Loan Documents, that:

A. Borrowing Base and Compliance

The amounts, calculations and representations set forth on Schedule 1 hereto
with respect to the Accounts of the Borrower are true and correct in all
material respects and were determined in accordance with the terms and
definitions set forth in the Credit Agreement. All of the Accounts referred to
in Schedule 1 (other than those Accounts designated as ineligible on Schedule 1)
are Eligible Accounts. Attached are reports with detailed aged listings of the
Borrower’s accounts receivable (by invoice date), accounts payables and deferred
revenue schedule, and supporting detail and documentation with respect to the
amounts, calculation and representations set forth on Schedule 1, all as
reasonably requested by the Administrative Agent pursuant to the Credit
Agreement.

B. General Certifications

The Borrower further certifies to the Administrative Agent and each Lender that:
(i) the certifications, representations, calculations and statements herein will
be true and correct in all material respects as of the date hereof; (ii) each
representation and warranty of each Loan Party contained in or pursuant to any
Loan Document (A) to the extent qualified by materiality, is true and correct,
and (B) to the extent not qualified by materiality, is true and correct in all
material respects, in each case, on and as of such date as if made on and as of
such date, except to the extent such representations and warranties expressly
relate 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; (iii) each of the covenants and agreements contained in any Loan Document
have been performed (to the extent required to be performed on or before the
date hereof or each such effective date); and (iv) no Default or Event of
Default has occurred and is continuing on the date hereof, nor will any thereof
occur after giving effect to the request above.

[Signature page follows]

 

Exhibit I

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the undersigned has caused this Borrowing Base Certificate
to be executed as of the day first written above.

 

VIOLIN MEMORY, INC. By:     Name:     Title:    

 

Exhibit I

--------------------------------------------------------------------------------

SCHEDULE 1

TO

BORROWING BASE CERTIFICATE

OF

VIOLIN MEMORY, INC.

 

ACCOUNTS    1.    Book Value of Accounts as of                         $
                        2.    Additions (please explain on reverse)    $
                        3.    TOTAL ACCOUNTS    $                        
DEDUCTIONS TO ACCOUNTS (without duplication)    4.    Accounts that do not arise
from the sale of goods or the performance of services by the Borrower in the
ordinary course of its business    $                         5.    Accounts upon
which the Borrower’s right to receive payment is not absolute or is contingent
upon the fulfillment of any condition whatsoever (other than any such
contingencies or conditions that have already been satisfied)    $
                        6.    Accounts as to which Borrower is not able to bring
suit or otherwise enforce remedies against the applicable Account Debtor through
judicial process or arbitration    $                         7.    Accounts that
represent a progress billing consisting of an invoice for goods sold or services
rendered pursuant to a contract under which the applicable Account Debtor’s
obligation to pay that invoice is subject to Borrower’s completion of further
performance under such contract or is subject to the equitable lien of a surety
bond issuer    $                         8.    Accounts to the extent that any
defense, counterclaim, setoff or dispute is asserted as to such Account in
writing (but only to the extent of the amount subject to such defense,
counterclaim, setoff or dispute)    $                         9.    Accounts
that are not true and correct statements of bona fide indebtedness incurred in
the amount of such Accounts for merchandise sold to or services rendered and
accepted by the applicable Account Debtor    $                         10.   
Accounts with respect to which an invoice, reasonably acceptable to the
Administrative Agent in form and substance and consistent with the Borrower’s
past business practices, has not been sent to the applicable Account Debtor (but
excluding the amount of any non-refundable deposits that are required to be paid
by the applicable Account Debtor)    $                         11.    Accounts
that (i) are not owned by Borrower, or (ii) are subject to any Lien of any other
Person, other than Liens in favor of the Administrative Agent    $
                       

 

Exhibit I

--------------------------------------------------------------------------------

12.    Accounts that arise from a sale to any director, officer, other employee
or Affiliate of any Loan Party, or to any entity that has any common officer or
director with any Loan Party    $                         13.    Accounts that
are the obligation of an Account Debtor that is the United States government or
a political subdivision thereof, or any state, county or municipality or
department, agency or instrumentality thereof, unless the Administrative Agent,
in its sole discretion, has agreed to the contrary in writing and Borrower, if
necessary or desirable in the reasonable determination of the Administrative
Agent, has complied with respect to such obligation with the Federal Assignment
of Claims Act of 1940, or any applicable state, county or municipal law
restricting assignment thereof    $                         14.    Accounts
(A) that are the obligations of Account Debtors located in foreign countries and
that are not billed for and collected in the United States, (B) that are the
obligations of Account Debtors located in foreign countries and that are billed
for and collected in the United States, but the Accounts of which Account
Debtors the Administrative Agent has determined, acting in its commercially
reasonable good faith business judgment, are not Eligible Accounts, and (C) that
(1) are the obligations of Account Debtors located in foreign countries and that
are billed for and collected in the United States, and (2) are not deemed
ineligible under clause (B) above, but that constitute in excess of 40% of the
aggregate amount of the Borrowing Base    $                         15.   
Accounts to the extent any Group Member is liable to the applicable Account
Debtor related to such Account for goods sold or services rendered or to be
rendered by such Group Member, but only to the extent of the potential offset   
$                         16.    Accounts that arise with respect to goods that
are delivered on a bill-and-hold, cash-on-delivery basis or placed on
consignment, guaranteed sale or other terms by reason of which the payment by
the applicable Account Debtor is or may be conditional (but only to the extent
that any such delivery condition then applies)    $                         17.
   Accounts that are in default; provided that, without limiting the generality
of the foregoing, an Account shall be deemed in default upon the occurrence of
any of the following: (i) the Account is not paid within ninety (90) days
following its original invoice date (irrespective of whether the payment terms
related to such Account permit payment after the 90th day following such
original invoice date); (ii) the Account Debtor obligated upon such Account
suspends business, makes a general assignment for the benefit of creditors or
fails to pay its debts generally as they come due; or (iii) a petition is filed
by or against the applicable Account Debtor obligated upon such Account under
any Debtor Relief Law and such petition has not been removed, withdrawn or
vacated    $                         18.    Accounts that are obligations of an
Account Debtor where 50% or more of the aggregate Dollar amount of all Accounts
owing by such Account Debtor are unpaid ninety (90) days following the
applicable original invoice dates relating to such Accounts (irrespective of
whether the payment terms relating to any such Accounts permit payment after the
90th day following such original invoice dates)    $                         19.
   Accounts as to which the Administrative Agent’s Lien is not a first priority
perfected Lien    $                         20.    Accounts as to which any of
the representations or warranties in the Loan Documents is untrue    $
                       

 

Exhibit I

--------------------------------------------------------------------------------

21.    Accounts to the extent such Accounts exceed any credit limit established
by the Administrative Agent, in its reasonable credit judgment    $
                        22.    Accounts to the extent that such Accounts,
together with all other Accounts owing by such Account Debtor and its Affiliates
as of any date of determination, exceed 25% of all Eligible Accounts    $
                        23.    Accounts that are payable in any currency other
than Dollars, euros, British pound sterling or Japanese yen (unless converted
into Dollars on terms reasonably satisfactory to the Administrative Agent)    $
                        24.    Accounts owing from an Account Debtor the amount
of which may be subject to withholding based on the Account Debtor’s
satisfaction of the Borrower’s complete performance (but only to the extent of
the amount withheld (sometimes called retainage billings)    $
                        25.    Accounts subject to contractual arrangements
between the Borrower and an applicable Account Debtor where payments shall be
scheduled or due according to completion or fulfillment requirements and where
the applicable Account Debtor has a right of setoff for damages suffered as a
result of the Borrower’s failure to perform in accordance with the contract
setting forth such requirements (sometimes called contracts accounts receivable,
progress billings, milestone billings or fulfillment contracts)    $
                        26.    Accounts subject to trust provisions, subrogation
rights of a bonding company or a statutory trust    $                        
27.    Accounts the payments by the applicable Account Debtors in respect of
which are not deposited by such Account Debtors directly into the Designated
Deposit Account    $                         28.    Accounts for which the
instruments, chattel paper, security agreements, guarantees and/or other
documents, information or property evidencing or securing such Accounts are
subject to written confidentiality covenants of the Borrower expressly
prohibiting the delivery of such items to the Administrative Agent or an
attorney client privilege which is not waivable by the Borrower    $
                        29.    Accounts for which the Administrative Agent,
acting in its commercially reasonable good faith business judgment, determines
collection to be doubtful    $                         30.    TOTAL DEDUCTIONS
TO ACCOUNTS (sum of #4 through #29)    $                         ELIGIBLE
ACCOUNTS    $                         31.    Total amount of Eligible Accounts
(#3 minus #30)    $                         32.    BORROWING BASE VALUE OF
ELIGIBLE ACCOUNTS (80% of #31)    $                         RESERVES    33.   
Aggregate amount of Reserves, if any, established by the Administrative Agent,
in its reasonable credit judgment, against Eligible Accounts    $
                       

 

Exhibit I

--------------------------------------------------------------------------------

BORROWING BASE    34.    Borrowing Base value of Eligible Accounts (#32)    $
                        35.    Total Reserves (#33)    $                        
36.    TOTAL BORROWING BASE (#34 minus #35)    $                        
AVAILABLE FORMULA-BASED REVOLVING COMMITMENTS    37.    Total Formula-Based
Revolving Commitments in effect as of the date hereof    $                     
   38.    Total funds available (the lesser of #36 and #37)    $
                        39.    The aggregate principal balance of any
Formula-Based Revolving Loans outstanding as of the date hereof    $
                        40.    AVAILABLE FORMULA-BASED REVOLVING COMMITMENTS
(#38 minus #39)    $                        

 

      BANK USE ONLY     COMMENTS:       Received by:             AUTHORIZED
SIGNER       Date:           Verified:             AUTHORIZED SIGNER   Date:    
  Compliance Status:    Yes    No    

 

Exhibit I

--------------------------------------------------------------------------------

EXHIBIT J

FORM OF SUBSIDIARY BORROWER JOINDER AGREEMENT

Date: ______________, _____

To: Silicon Valley Bank, as Administrative Agent

Ladies and Gentlemen:

This Subsidiary Borrower Joinder Agreement (this “Subsidiary Borrower Joinder
Agreement”) is made and delivered by the undersigned [insert name of applicable
“Subsidiary Borrower”] (the “Designated Subsidiary Borrower”) pursuant to
Section 6.12(b) of that certain Credit Agreement, dated as of October 24, 2014
(as amended, restated, extended, supplemented or otherwise modified in writing
from time to time, the “Credit Agreement”), among Violin Memory, Inc., a
Delaware corporation (the “Borrower”), the Subsidiary Borrowers party thereto,
the Lenders party thereto, and Silicon Valley Bank, as Administrative Agent for
such Lenders, and reference is made thereto for full particulars of the matters
described therein. All capitalized terms used in this Subsidiary Borrower
Joinder Agreement and not otherwise defined herein shall have the respective
meanings assigned to such terms in the Credit Agreement. The Designated
Subsidiary Borrower acknowledges receipt of copies of the Credit Agreement and
each of the other Loan Documents.

In consideration of the mutual conditions and agreements set forth in the Credit
Agreement and this Subsidiary Borrower Joinder Agreement, and for good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows.

Section 1. Representations and Warranties. On and as of the date of this
Subsidiary Borrower Joinder Agreement (the “Effective Date”), and for the
benefit of the Administrative Agent and the Lenders, the Designated Subsidiary
Borrower hereby makes for itself each of the representations and warranties made
by each Subsidiary Borrower in the Credit Agreement and each of the other Loan
Documents, with only such changes as are indicated in Schedule 1 hereto. The
Designated Subsidiary Borrower is a [describe entity type]. The true and correct
U.S. taxpayer identification number of the Designated Subsidiary Borrower is
_____________.

Section 2. Agreement to be Bound; Joint and Several Liability; Further
Assurances.

(a) The Designated Subsidiary Borrower agrees that, on and as of the Effective
Date, it shall become a “Subsidiary Borrower” and a “Co-Borrower” under the
Credit Agreement, each Note and each of the other Loan Documents and shall be
bound by all the provisions of the Credit Agreement, each Note and each of the
other Loan Documents to the same extent as if the Designated Subsidiary Borrower
had executed the Credit Agreement, each Note and each of the other Loan
Documents, as a “Subsidiary Borrower” and a “Co-Borrower” thereunder, on the
Effective Date.

(b) From and after the Effective Date, all references to the “Subsidiary
Borrowers” and the “Co-Borrowers” in the Credit Agreement, the Notes and each of
the other Loan Documents shall be deemed to refer to the Borrower, each other
Subsidiary Borrower currently a party thereto, and the Designated Subsidiary
Borrower, jointly and severally, and their respective successors and assigns,
including debtors-in-possession and bankruptcy trustees; words used therein in
the singular shall be considered to have been used in the plural where the
context and construction so requires in order to refer to more than one
Co-Borrower.

(c) From and after the Effective Date, the Designated Subsidiary Borrower and
the Borrower (on behalf of itself and each other Co-Borrower currently a party
to the Credit Agreement), hereby irrevocably and unconditionally accept joint
and several liability under the Credit Agreement, the Notes

 

Exhibit J

--------------------------------------------------------------------------------

and each other Loan Document for the mutual benefit, directly and indirectly, of
each other, it being the intention of the Borrower (on behalf of itself and each
other such Co-Borrower) and the Designated Subsidiary Borrower that all
obligations of the Borrower, the Co-Borrowers and the Designated Subsidiary
Borrower be the joint and several obligations of all such parties, without
preference or distinction among them.

(d) The Designated Subsidiary hereby makes for the benefit of the Administrative
Agent and each of the Lenders, each of the representations, warranties,
covenants, agreements and waivers set forth in Section 2.25 of the Credit
Agreement, the terms of which are incorporated herein by this reference.

(e) The documents required to be delivered to the Administrative Agent pursuant
to Section 6.12(b) of the Credit Agreement with respect to the Designated
Subsidiary Borrower (including, without limitation, an accession to the
Guarantee and Collateral Agreement and a joinder to each Note) will be furnished
to the Administrative Agent in accordance with the requirements of the Credit
Agreement.

(f) The Designated Subsidiary Borrower hereby consents to the filing by the
Administrative Agent or one or more UCC financing statements to perfect its
Liens in the Collateral of the Designated Subsidiary Borrower. The Designated
Subsidiary Borrower shall, at the request of the Administrative Agent, execute
such other documents and agreements, and shall take or cause to be taken all
actions, as the Administrative Agent may, from time to time, request to carry
out the terms and conditions of this Subsidiary Borrower Joinder Agreement, the
Credit Agreement and the other Loan Documents.

(g) This Subsidiary Borrower Joinder Agreement shall constitute a Loan Document
under the Credit Agreement.

Section 3. Governing Law. THIS SUBSIDIARY BORROWER JOINDER AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
CALIFORNIA. Sections 10.13 and 10.14 of the Credit Agreement are hereby
incorporated herein by this reference, mutatis mutandis, as if set for the
herein in full.

IN WITNESS WHEREOF, the parties hereto have caused this Subsidiary Borrower
Joinder Agreement to be duly executed and delivered by their proper and duly
authorized officers as of the day and year first above written.

 

[insert name of Designated Subsidiary Borrower] By:     Name:     Title:    

 

BORROWER By:     Name:    

 

  Title:_____________________________  

 

Exhibit J

--------------------------------------------------------------------------------

SCHEDULE TO

SUBSIDIARY BORROWER JOINDER AGREEMENT

 

Exhibit J

--------------------------------------------------------------------------------

EXHIBIT K

FORM OF NOTICE OF BORROWING

VIOLIN MEMORY, INC.

Date: ______________

 

TO: SILICON VALLEY BANK

     3003 Tasman Drive

     Santa Clara, CA 95054

     Attention: Corporate Services Department

 

RE: Credit Agreement, dated as of October 24, 2014 (as amended, modified,
supplemented or restated from time to time, the “Credit Agreement”), by and
among Violin Memory, Inc., a Delaware corporation (the “Borrower”), the
Subsidiary Borrowers party thereto, the Lenders party thereto and Silicon Valley
Bank, as Administrative Agent for such Lenders (in such capacity; the
“Administrative Agent”). Capitalized terms used but not otherwise defined herein
shall have the respective meanings given to such terms in the Credit Agreement.

Ladies and Gentlemen:

The undersigned refers to the Credit Agreement and hereby gives you irrevocable
notice, pursuant to Section 2.5 of the Credit Agreement, of the borrowing of a
[Formula-Based Revolving Loan][Non-Formula-Based Revolving Loan].

1. The requested Borrowing Date, which shall be a Business Day, is
_______________.

2. The aggregate amount of the requested Loan is $_______.

3. The requested Loan shall consist of $___________ of ABR Loans and $______ of
Eurodollar Loans.

4. The duration of the Interest Period for any Formula-Based Revolving Loans
that are Eurodollar Loans included in the requested Loan shall be __________
[one][two][three][six] months.

5. [Insert instructions for remittance of the proceeds of the applicable Loans
to be borrowed; provided that any proceeds of any Non-Formula Revolving Loan
must be deposited directly into the Non-Formula-Based Revolving Loan Proceeds
Account.]

6. The undersigned, in his/her capacity as a Responsible Officer of the Borrower
and not in his/her individual capacity, hereby certifies to the Administrative
Agent that the following statements are true on the date hereof, and will be
true on the date of the proposed Loan before and after giving effect thereto,
and to the application of the proceeds therefrom, as applicable:

(a) each representation and warranty of each Loan Party contained in or pursuant
to any Loan Document (i) to the extent qualified by materiality, is true and
correct, and (ii) to the extent not qualified by materiality, is true and
correct in all material respects, in each case, on and as of the date hereof as
if made on and as of the date hereof, except to the extent such representations
and warranties expressly relate 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;

(b) no Default or Event of Default exists or will occur after giving effect to
the extensions of credit requested herein; [and]

 

Exhibit K

--------------------------------------------------------------------------------

(c) after giving effect to such Revolving Extension of Credit, the availability
and borrowing limitations specified in Section 2.4 of the Credit Agreement will
be satisfied[; and][.]

[(d) no Liquidity Event exists immediately prior to or after giving effect to
the making of the Non-Formula-Based Revolving Loan requested hereby. Attached
hereto as Annex 1 is a Liquidity Report that specifies the calculation of
Liquidity on a pro forma basis as of the requested Borrowing Date after giving
effect to the making of the Non-Formula-Based Revolving Loan requested hereby.]

[Signature page follows]

 

Exhibit K

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the undersigned has caused this notice to be duly executed
and delivered by its proper and duly authorized officer as of the day and year
first written above.

 

VIOLIN MEMORY, INC. By:     Name:     Title:    

For internal Bank use only

 

Eurodollar Pricing Date

   Eurodollar
Rate    Eurodollar
Variance     Maturity
Date         ____ %   

 

Exhibit K

--------------------------------------------------------------------------------

ANNEX 1

TO NOTICE OF BORROWING

 

   Liquidity as of the requested Borrowing Date (after giving effect to the
making of the Non-Formula- Based Revolving Loan requested by this Notice of
Borrowing) (such date, the “Statement Date”)       A.    Aggregate amount of all
unrestricted cash and Cash Equivalents (i) that would appear on a consolidated
balance sheet of the Borrower prepared as of the Statement Date in accordance
with GAAP and (ii) that are held as of the Statement Date in any Deposit
Accounts or Securities Accounts that are maintained with the Administrative
Agent or any of its Affiliates or that are maintained as of the Statement Date
in other Deposit Accounts or Securities Accounts with respect to which the
Administrative Agent shall have received (A) a monthly statement attached to
each Compliance Certificate, and (B) upon the Administrative Agent’s request
pursuant to Section 6.16 of the Credit Agreement, current balance information:
   $ ___________       B.    Aggregate amount of short-term securities purchased
in accordance with the Board-Approved Cash Investment Policy that are held as of
such date in any Securities Accounts that are maintained with the Administrative
Agent or any of its Affiliates or that are maintained as of such date in other
Securities Accounts with respect to which the Administrative Agent shall have
received (A) a monthly statement attached to each Compliance Certificate and (B)
upon the Administrative Agent’s request pursuant to Section 6.16 of the Credit
Agreement, current balance information:   

 

$

 

___________

 

  

   C.    Aggregate principal balance of all Revolving Loans outstanding as of
the Statement Date:    $ ___________       D.   

Liquidity as of the Statement Date:

(Line A plus Line B minus Line C):

   $ ___________          Minimum amount required to avoid a Liquidity Event:   
$ 50,000,000          Liquidity Event?    Yes  ¨   
No  ¨                                    

 

Exhibit K

--------------------------------------------------------------------------------

EXHIBIT L

FORM OF NOTICE OF CONVERSION/CONTINUATION

VIOLIN MEMORY, INC.

Date: _________________

 

TO: SILICON VALLEY BANK

     3003 Tasman Drive

     Santa Clara, CA 95054

     Attention:

 

RE: Credit Agreement, dated as of October 24, 2014 (as amended, modified,
supplemented or restated from time to time, the “Credit Agreement”), by and
among Violin Memory, Inc., a Delaware corporation (the “Borrower”), the
Subsidiary Borrowers party thereto, the Lenders party thereto and Silicon Valley
Bank, as Administrative Agent for such Lenders (in such capacity; the
“Administrative Agent”). Capitalized terms used but not otherwise defined herein
shall have the respective meanings given to such terms in the Credit Agreement.

Ladies and Gentlemen:

The undersigned, in his/her capacity as a Responsible Officer of the Borrower
and not in his/her individual capacity, refers to the Credit Agreement and
hereby gives you irrevocable notice pursuant to Section [2.13(a)] [2.13(b)] of
the Credit Agreement, of the [conversion] [continuation] of the Loans specified
herein, that:

1. The date of the [conversion] [continuation] is _________________.

2. The aggregate amount of the proposed Formula-Based Revolving Loans to be
[converted] [continued] is $___________

3. The Formula-Based Revolving Loans are to be [converted into] [continued as]
[Eurodollar] [ABR] Loans.

4. The duration of the Interest Period for the Formula-Based Revolving Loans
that are Eurodollar Loans included in the [conversion] [continuation] shall be
[one][two][three][six] months.

[5. The undersigned, on behalf of the Borrower, hereby certifies that the
following statements are true on the date hereof, and will be true on the date
of the proposed conversion of any Formula-Based Revolving Loan that is an ABR
Loan to a Formula-Based Revolving Loan that is a Eurodollar Loan, both before
and after giving effect thereto and to the application of the proceeds
therefrom:

(a) each representation and warranty of each Loan Party contained in or pursuant
to any Loan Document (i) to the extent qualified by materiality, is true and
correct, and (ii) to the extent not qualified by materiality, is true and
correct in all material respects, in each case, on and as of the date hereof as
if made on and as of the date hereof, except to the extent such

 

Exhibit L

--------------------------------------------------------------------------------

representations and warranties expressly relate 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;

(b) no Default or Event of Default exists or shall occur after giving effect to
the conversion of the ABR Loans to Eurodollar Loans requested to be made on such
date.; and

(c) no Liquidity Event exists immediately prior to or after giving effect to the
[conversion][continuation] of the Formula-Based Revolving Loan requested hereby.
Attached hereto as Annex 1 is a Liquidity Report that specifies the calculation
of Liquidity on a pro forma basis as of the requested [conversion][continuation]
date referenced above after giving effect to the [conversion][continuation] of
the Formula-Based Revolving Loan requested hereby.]

[Signature page follows]

 

Exhibit L

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the undersigned has caused this notice to be duly executed
and delivered by its proper and duly authorized officer as of the day and year
first written above.

 

VIOLIN MEMORY, INC. By:     Name:     Title:    

For internal Bank use only

 

Eurodollar Pricing Date

   Eurodollar
Rate    Eurodollar
Variance     Maturity
Date         ____ %   

 

Exhibit L

--------------------------------------------------------------------------------

ANNEX 1

TO NOTICE OF CONVERSION/CONTINUATION

 

   Liquidity as of the requested conversion/continuation date (after giving
effect to the [conversion][continuation] of the Non-Formula-Based Revolving Loan
requested by this Notice of Conversion/Continuation) (such date, the “Statement
Date”)       A.    Aggregate amount of all unrestricted cash and Cash
Equivalents (i) that would appear on a consolidated balance sheet of the
Borrower prepared as of the Statement Date in accordance with GAAP and (ii) that
are held as of the Statement Date in any Deposit Accounts or Securities Accounts
that are maintained with the Administrative Agent or any of its Affiliates or
that are maintained as of the Statement Date in other Deposit Accounts or
Securities Accounts with respect to which the Administrative Agent shall have
received (A) a monthly statement attached to each Compliance Certificate, and
(B) upon the Administrative Agent’s request pursuant to Section 6.16 of the
Credit Agreement, current balance information:    $ ___________       B.   
Aggregate amount of short-term securities purchased in accordance with the
Board-Approved Cash Investment Policy that are held as of such date in any
Securities Accounts that are maintained with the Administrative Agent or any of
its Affiliates or that are maintained as of such date in other Securities
Accounts with respect to which the Administrative Agent shall have received (A)
a monthly statement attached to each Compliance Certificate and (B) upon the
Administrative Agent’s request pursuant to Section 6.16 of the Credit Agreement,
current balance information:   

 

$

 

___________

 

  

   C.    Aggregate principal balance of all Revolving Loans outstanding as of
the Statement Date:    $ ___________       D.   

Liquidity as of the Statement Date:

(Line A plus Line B minus Line C):

   $ ___________          Minim um amount required to avoid a Liquidity Event:
         $ 50,000,000          Liquidity Event?    Yes  ¨   
No  ¨                                    

 

Exhibit L