UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

Form 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 15, 2017

VIOLIN MEMORY, INC.

(Exact name of registrant as specified in its charter)

(650) 396-1500

(Registrant’s telephone number, including area code)

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

On February 15, 2017, Violin Memory, Inc. (the “Company”) entered into that certain Plan Sponsor Agreement with VM Bidco LLC (“Soros”) and the Official Committee of Unsecured Creditors appointed in the Company’s Chapter 11 Case (as defined below). The information disclosed under Item 1.03 of this Current Report on Form 8-K is incorporated herein by reference.

As previously reported, on December 14, 2016, the Company filed a voluntary petition (the “Chapter 11 Case”) in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) seeking relief under the provisions of Chapter 11 of Title 11 of the United States Code (the “Bankruptcy Code”). The Company is continuing in possession of its assets and is managing its business as a debtor in possession (in such capacity, the “Debtor”) in accordance with the applicable provisions of the Bankruptcy Code and the orders of the Bankruptcy Court. The Chapter 11 Case is being administered by the Bankruptcy Court in the proceeding bearing the caption In re Violin Memory, Inc., Case No. 16-12782.

On February 8, 2017, the Bankruptcy Court entered an Order Authorizing the Debtor’s Entry Into and Performance Under a Plan Support Agreement (the “Order”) pursuant to Sections 105(a) and 363(b) of Title 11 of the Bankruptcy Code. The Order was issued in response to the Debtor’s motion filed on February 6, 2017 to enter into that certain Plan Sponsor Agreement, among the Company, Soros, and the Official Committee of Unsecured Creditors appointed in the Company’s Chapter 11 Case (the “Plan Sponsor Agreement”), which was executed among the parties thereto on February 15, 2017 following the issuance of the Order, substantially in the form submitted to the Bankruptcy Court.

The Plan Sponsor Agreement was a result of several bids and a competitive auction between multiple qualified bidders following the Company’s filing of its Chapter 11 Case, and provides for, among other things: (i) an $8.0 million debtor-in-possession facility from Soros to finance the Debtor’s continued operations and restructuring efforts, which facility will be converted into an exit facility under a confirmed plan of reorganization, (ii) cash from Soros for recoveries equivalent to $15.0 million to the Debtor’s creditors under a plan of reorganization, in exchange for which Soros will receive a note, (iii) Quantum Partners LP (“QP”), an investment fund that holds $25.65 million of the Company’s outstanding convertible notes, will receive all of the equity interests in the reorganized Debtor in lieu of cash for its claims, (iv) retention by the Company of certain employee claims and counterparty obligations (and related cure costs), and (v) preservation of certain avoidance actions for the benefit of unsecured creditors. Soros is an affiliate of QP and is managed by Soros Fund Management LLC. The parties to the Plan Sponsor Agreement will work in good faith to confirm this plan expeditiously, with a goal for confirmation on or before April 20, 2017.

The foregoing description of the Plan Sponsor Agreement is qualified in its entirety by reference to the full text of the Plan Sponsor Agreement, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.

Cautionary Information Regarding Forward-Looking Statements

Certain statements and information included in this Current Report on Form 8-K may constitute “forward-looking” statements that are generally identifiable through the use of words such as “plan,” “goal” and similar expressions and include any statements that are made regarding financial expectations. The forward-looking statements speak only as of the date of this Current Report on Form 8-K, and the Company undertakes no obligation to update or revise such statements to reflect new information or events as they occur. These statements are based on a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company. Investors are cautioned that any such statements are not guarantees of future business or financial performance and that actual future results may differ materially due to a variety of factors. Factors that could cause the Company’s results to differ materially include, but are not limited to, the following: (i) the Company’s ability to obtain Bankruptcy Court approval with respect to motions and actions in connection with a plan of reorganization in the Chapter 11 Case; (ii) the Company’s ability to operate its business during the pendency of the Chapter 11 Case; (iii) the effects of the filing of the Chapter 11 Case on the Company’s business operations and the upon the interests of various creditors, stockholders and other stakeholders; (iv) the length of time the Company will operate as a debtor in possession in the Chapter 11 Case; (v) risks associated with motions and other actions that third parties may take in the Chapter 11 Case, which may interfere with the Company’s ability to develop, secure approval of, and consummate a plan of reorganization; (vi) the potential adverse effects of the Chapter 11 Case on the Company’s financial condition, business operations, customers and potential customers, employees, liquidity, and results of operations; and (vii) other factors disclosed by the Company from time to time in its filings with the SEC, including those described under the caption “Risk Factors” in the Company’s Quarterly Report on Form 10-Q for the period ended July 31, 2016. As a result of these factors, the Company’s actual results may differ materially from those indicated or implied by such forward-looking statements.

Cautionary Information Regarding Trading in the Company’s Equity Securities

The Company’s stockholders are cautioned that trading in shares of the Company’s equity securities during the pendency of its Chapter 11 Case is highly speculative and poses substantial risks, including the fact that the Company’s stock may be of little or no value. Trading prices for the Company’s equity securities may bear little or no relationship to the actual recovery, if any, by holders of the Company’s securities upon the conclusion of the Chapter 11 Case. Therefore, the Company urges extreme caution with respect to existing and future investments in its securities.

Except as required by law, the Company disclaims any obligation to publicly update such statements.

(d) Exhibits

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

EXHIBIT INDEX

Exhibit 10.1

EXECUTION VERSION

PLAN SPONSOR AGREEMENT

This PLAN SPONSOR AGREEMENT (as amended, supplemented, or otherwise modified from time to time, this “Agreement”), dated as of February 14, 2017, is entered into by and among Violin Memory, Inc. (the “Company”), VM Bidco LLC (“Soros”), and the Official Committee of Unsecured Creditors appointed in the Company’s chapter 11 case (the “Committee”). The Company, Soros and the Committee are together referred to herein as the “Parties” and each individually as a “Party.” If Quantum Partners LP (“QP”) becomes a party to this Agreement by executing and delivering a joinder agreement substantially in the form attached hereto as Exhibit D (a “Joinder Agreement”), then QP shall be a Party to this Agreement as set forth in the Joinder Agreement.

The Parties have agreed to undertake a financial restructuring of the Company (the “Restructuring”), to be effected pursuant to the Company’s chapter 11 bankruptcy case (the “Chapter 11 Case”) currently pending in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”), on the terms and conditions set forth in the plan term sheet attached hereto as Exhibit A (as may be amended from time to time in accordance with this Agreement, the “Plan Term Sheet”).

The Company and Soros have also agreed to a debtor-in-possession financing arrangement to support the Restructuring pursuant to the terms and conditions of the term sheet attached hereto as Exhibit B (the “DIP Term Sheet”) and exit financing pursuant to the terms and conditions of the term sheet attached hereto as Exhibit C (the “Exit Financing Term Sheet” and together with the Plan Term Sheet and the DIP Term Sheet, the “Term Sheets”).

The Parties desire to express to each other their mutual support and commitment in respect of the matters set forth in the Term Sheets and hereunder, and therefore agree as follows:

As used in this Agreement, the following terms have the following meanings:¹

(a) “Affiliate” means, as applied to any person, any other person directly or indirectly controlling, controlled by, or under common control with, that person. For the purposes of this definition, “control” (including, with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”), as applied to any person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of that person, whether through the ownership of voting securities or by contract or otherwise.

(b) “Cash Portion of the Sale Proceeds” means that amount of the Sale Proceeds (which amount shall be not less than $10.7 million) necessary, as of the Plan Effective Date, to fund a cash distribution to holders of Allowed claims (which claims, for the avoidance

of doubt, shall not include claims under the DIP Facility and shall include Administrative Claims, Priority Tax Claims, Secured Claims (other than claims under the DIP Facility), Other Priority Claims, General Unsecured Claims, and the Allowed claims of Quantum Partners LP (“QP”)), without consideration of the Initial Cash or the Supplemental Cash, in an amount equal to (i) the amount of the Sale Proceeds less (ii) the cash distribution that would otherwise be payable to QP on account of its Allowed general unsecured claims but for the separate treatment provided for such Claims in the Plan.

As relates to disputed claims, the Cash Portion of the Sale Proceeds shall be computed on the Plan Effective Date treating any Disputed Claims as if they were Allowed claims in the amount asserted or, alternatively, as estimated by the Court. The Liquidation Trust (as defined below) shall withhold from the distribution to holders of General Unsecured Claims, and set aside in a segregated account, the amount of Cash that would be distributable to such disputed claims had such claims been so Allowed, pending the resolution of such claims. At reasonable period intervals as such claims are resolved, the amount set aside for such claim(s) (including any earnings thereon, net of any allocable expenses of the reserve) shall be distributed (i) in the case of amounts allocable to the Allowed portion of any such claim, to the holder of such resolved disputed claim and (ii) in the case of amounts allocable to the Disallowed portion of any such Claim, to the Liquidation Trust for redistribution to Allowed claims. (The amount of cash set aside with respect to disputed claims will be treated as held by a “disputed ownership fund” for federal and applicable state and local income tax purposes).

(c) “Definitive Documentation” means the definitive documents and agreements governing the Restructuring, and shall include every material order entered by the Bankruptcy Court, and every pleading, motion, proposed order, or document filed by the Company, in each case material to this Restructuring at any point prior to termination of this Agreement including, without limitation: (i) the Plan (and all exhibits thereto) and the confirmation order with respect to the Plan (the “Confirmation Order”); (ii) the Disclosure Statement (and all exhibits thereto) and the order approving the Disclosure Statement (the “Disclosure Statement Order”); (iii) the solicitation materials with respect to the Plan (collectively, the “Solicitation Materials”); and (iv) any documents or agreements in connection with the reorganized Company after the date the Plan becomes effective (the “Plan Effective Date”), including, without limitation, any amended certificates of incorporation or similar organizational documents, or other related transactional or corporate documents. The Definitive Documentation identified in the foregoing sentence remains subject to negotiation and shall, upon completion, contain terms, conditions, representations, warranties, and covenants consistent with the terms of this Agreement. Any document that is included within the definition of “Definitive Documentation,” including any amendment, supplement, or modification thereof, shall be in a form and substance reasonably satisfactory to Soros, provided that corporate governance for reorganized VM or any of its subsidiaries, including charters, bylaws, operating agreements, or other organization or formation documents, as applicable, shall be consistent with section 1123(a)(6) of the Bankruptcy Code, as applicable, and in form and substance acceptable to Soros in its sole discretion. The Company acknowledges and agrees that it will provide advance draft copies of all Definitive Documentation at least five (5) days prior to the date when the Company intends to file any such pleading or other document (and, if not reasonably practicable, as soon as reasonably practicable prior to filing) to Weil, Gotshal & Manges LLP (“Weil”), as counsel to Soros, and shall consult in good faith with Weil regarding the form and substance of any such proposed filing.

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(d) “D&O Claims” means any and all actual or potential claims and causes of action against current and former directors and officers of the Company.

(e) “Releases” means customary releases for D&O Claims in the Plan.

(f) “Disclosure Statement” means the disclosure statement of the Company with respect to the Plan, as may be amended from time to time in accordance with this Agreement, in form and substance reasonably acceptable to Soros, to the Company, and to the Committee.

(g) “Letter of Support” means a letter from the Committee in support of confirmation of the Plan included in the Solicitation Materials that urges creditors to vote in favor of the Plan, which letter shall affirmatively state that the Committee has evaluated the results of the Company’s postpetition sale process and agrees that the consideration provided by the Restructuring represents the highest and best offer for the Company’s business and assets, including Soros’ acquisition of the D&O Claims and the treatment of such claims under the Plan.

(h) “Plan” means the plan of reorganization consistent with the terms of the Plan Term Sheet attached hereto as Exhibit A, in form and substance reasonably acceptable to Soros, to the Company, and to the Committee.

(i) “Sale Proceeds” means the amount of $15,000,000.00.

(j) “Solicitation” means the solicitation of votes for the Plan pursuant to, and in compliance with, chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”) and any applicable nonbankruptcy law, rule, or regulation governing the adequacy of information in connection with such solicitation.

(a) The terms and conditions of the Restructuring will be as set forth in the Plan; provided that the Plan is supplemented by the terms and conditions of this Agreement, including the Plan Term Sheet. In the event of any inconsistencies between the terms of this Agreement (including the Plan Term Sheet) and the Plan, the Plan shall govern.

(b) The Plan shall contain the Releases, provided that the Company may not withdraw and must affirmatively support confirmation of the Plan even if the Bankruptcy Court does not approve the Releases as part of the confirmed Plan and/or the Confirmation Order. In the event that the Releases are not approved by the Bankruptcy Court as part of the confirmed Plan and/or the Confirmation Order, the D&O Claims shall vest in the reorganized Company (and, for the avoidance of doubt, shall no longer be property of the Company’s bankruptcy estate) and shall not be further transferred or sold.

(c) Through the Plan the Parties shall use their commercially reasonable efforts to seek an exculpation of all estate parties and their professionals (including Committee

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Members in their individual capacities) for all postpetition actions taken in furtherance of their responsibilities in this case, all as consistent with the practice in the District of Delaware; provided, that notwithstanding the foregoing, the failure of the Plan to contain such provisions shall not be a Soros Termination Event or a Company Termination Event (each as hereinafter defined).

(a) Filing of the Plan and Disclosure Statement. The Company shall file the Plan and the Disclosure Statement with the Bankruptcy Court no later than February 15, 2017.

(b) DIP Facility. The Company shall file a motion with the Bankruptcy Court seeking approval of the DIP Facility (the “DIP Motion”) no later than February 8, 2017.

(c) Disclosure Statement Approval. The Company shall seek to have the Disclosure Statement approved by no later than March 6, 2017.

(d) Solicitation. The Company shall initiate the Solicitation no later than one business day after entry of an order approving the Disclosure Statement.

(e) Confirmation of the Plan. The Company shall use its commercially reasonable efforts to obtain confirmation of the Plan as soon as reasonably practicable (and on or prior to April 20, 2017) in accordance with the Bankruptcy Code and on terms consistent with this Agreement; and Soros and the Committee shall use their commercially reasonable efforts to cooperate fully in connection therewith.

(i) (A)(1) support and work diligently towards the completion of the Restructuring set forth in this Agreement, (2) negotiate in good faith all Definitive Documentation that is subject to negotiation as of the effective date of this Agreement and take any and all necessary and appropriate actions in furtherance of the Plan and this Agreement, (3) take all commercially reasonable actions necessary to complete the Restructuring set forth in the Plan, (4) make commercially reasonable efforts to obtain any and all required regulatory and/or third-party approvals necessary to consummate the Restructuring, if any, and (5) support and take such actions as are necessary or appropriate or reasonably requested by Soros or QP in furtherance of the Restructuring in accordance with, and within the time frames contemplated by, this Agreement, including, without limitation, filing and pursuing any pleadings that Soros or QP may reasonably request, which pleadings shall be in form and substance reasonably satisfactory to Soros and QP; and (B) shall not undertake any action materially inconsistent with the adoption and implementation of the Plan and the speedy confirmation thereof, including, without limitation, filing any motion to reject this Agreement.

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(ii) afford Soros and its respective attorneys, consultants, accountants, and other authorized representatives full access, upon reasonable notice during normal business hours, and at other reasonable times, to all properties, books, contracts, commitments, records, management personnel, and advisors of the Company (but not including access to any privileged information). In addition, the Company shall promptly notify Soros of any material developments with respect to its business, the Chapter 11 Case, or otherwise.

(iii) as to itself and its subsidiaries, after the date of its entry into the Plan Sponsor Agreement and prior to the Plan Effective Date (unless Soros shall otherwise approve in writing) and except as required by applicable law:

(A) The Company shall submit to Soros for prior written approval all proposed new contracts and agreements involving individual commitments of more than $25,000;

(B) The Company shall submit to Soros for prior written approval the sale or encumbrance of any assets between the date of this Agreement and the Plan Effective Date in excess of $25,000 for any single transaction or $50,000 for any series of related transactions;

(C) The Company shall use commercially reasonable efforts to maintain all of the assets and properties (excluding the Company’s current lease at 4555 Great America Parkway, Santa Clara, CA or lease at 200 Holger Way, San Jose, CA (prior to a decision to assume such lease)) in their current condition, ordinary wear and tear excepted;

(D) The Company shall maintain insurance upon all of the assets and properties of the Company in such amounts and of such kinds comparable to that in effect on the date of this Agreement;

(E) (i) The Company shall use commercially reasonable efforts to maintain the books, accounts and records of the Company in the ordinary course of business, (ii) the Company shall continue to collect accounts receivable and pay accounts payable utilizing reasonable procedures and without discounting or accelerating payment of such accounts, and (iii) the Company shall use commercially reasonable efforts to comply with all contractual and other obligations applicable to the operation of the Company;

(F) The Company shall comply in all material respects with applicable laws;

(G) The Company shall only submit tax returns and otherwise conduct its affairs with respect to tax matters with the prior written consent of Soros; and the Company shall not (without Soros’ prior written consent) make or rescind any election relating to taxes, settle or compromise any claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to taxes, or except as may be required by applicable law or GAAP, make any material change

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to any of its methods of accounting or methods of reporting income or deductions for tax or accounting practice or policy from those employed in the preparation of its most recent tax returns;

(H) The Company shall not, without the prior written consent of Soros, (A) materially increase the annual level of compensation of any employee of the Company, (B) increase the annual level of compensation payable or to become payable by the Company to any of its executive officers, (C) grant any unusual or extraordinary bonus, benefit or other direct or indirect compensation to any employee, director or consultant, (D) materially increase the coverage or benefits available under any (or create any new) severance pay, termination pay, vacation pay, company awards, salary continuation for disability, sick leave, deferred compensation, bonus or other incentive compensation, insurance, pension or other employee benefit plan or arrangement made to, for, or with any of the directors, officers, employees, agents or representatives of the Company or otherwise modify or amend or terminate any such plan or arrangement or (E) enter into any employment, deferred compensation, severance, consulting, non-competition or similar agreement (or amend any such agreement) to which Company is a party or involving a director, officer or employee of the Company in his or her capacity as a director, officer or employee of Company; and

(I) The Company shall not cancel or compromise any debt or claim or waive or release any material right of the Company except in the ordinary course of business. For the avoidance of doubt, the foregoing shall not limit the Company’s ability to resolve, fix or allow administrative or prepetition claims to be resolved in accordance with the Plan.

For the purposes of this Section 4(a)(iii), upon execution by QP of the Joinder Agreement annexed hereto as Exhibit D, consent of QP shall thereafter also be required in addition to the consent of Soros for any of the actions contemplated in this Section.

(i) subject to the Company complying in all material respects with the terms of this Agreement, procure the vote of all of the claims and interests of QP against or in the Company to accept the Plan by promptly after commencement of the Solicitation delivering its duly executed and completed ballots accepting the Plan; and

(ii) not change or withdraw (or cause to be changed or withdrawn) any such vote in clause (i) above except upon a termination of this Agreement pursuant to the occurrence of a Soros Termination Event or a Company Termination Event (or otherwise), or as otherwise expressly permitted pursuant to this Agreement.

(c) The Committee hereby covenants and agrees to (A) not take any action or inaction to hinder, delay or impede confirmation of the Plan or the consummation of the Restructuring, (B) support and cooperate with the other Parties to take all reasonable actions necessary to obtain confirmation of the Plan and to consummate the Restructuring, including

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supporting motions reasonably requested by the Company or Soros to consummate the Restructuring, (C) include a Letter of Support in the Solicitation Materials, which letter and recommendation shall not be subsequently withdrawn, (D) file a statement with the Bankruptcy Court in support of confirmation of the Plan and the consummation of the Restructuring, which statement shall not be subsequently withdrawn, and (E) use commercially reasonable efforts to procure a joinder to this Agreement from any entity or individual appointed to the Committee. Each of Clinton Group, Inc., Forty Niners SC Stadium Company LLC and Wilmington Trust N.A., as indenture trustee for the Notes (each, a “Committee Member”) hereby covenants and agrees to (A) not take any action or inaction to hinder, delay or impede confirmation of the Plan or the consummation of the Restructuring, and (B) support and cooperate with the other Parties to obtain confirmation of the Plan and to consummate the Restructuring. Each Committee Member, subject to the Company and Soros complying in all material respects with the terms of this Agreement, shall (A) to the extent eligible to vote on the Plan, vote all of its claims against the Company (if any) to accept the Plan by promptly after commencement of the Solicitation delivering its duly executed and completed ballots accepting the Plan, (B) not change or withdraw (or cause to be changed or withdrawn) any such vote except upon the occurrence of a Company Termination Event, or as otherwise expressly permitted pursuant to this Agreement, and (C) continue to serve on the Committee until the Plan Effective Date. Notwithstanding the foregoing, a Committee Member may resign from the Committee only if the Committee Member is replaced by a new member that agrees, in writing, to be bound by this Agreement to the same extent as each Committee Member is bound hereunder.

(d) Treatment of Sale Proceeds: The Sale Proceeds shall be treated as follows by Soros, the Company and the Committee, and this Section 4(d) shall survive termination of the Agreement:

(i) Soros shall fund the Cash Portion of the Sale Proceeds to the trust account of Debtor’s counsel (the “Trust Account”) as follows:

(A) Upon (i) entry of the final order approving the Debtor’s entry into and performance under this Agreement, and (ii) the filing of the Plan and Disclosure Statement, an advance on the Cash Portion of the Sale Proceeds in the amount of $10,700,000.00 (the “Sale Proceeds Advance”) shall be paid to the Trust Account.

(B) Upon occurrence of the Plan Effective Date, the balance of the Cash Portion of the Sale Proceeds (the “Sale Proceeds Balance”) shall be paid to the Liquidating Trust for disbursement as provided for in the Plan.

(C) The Cash Portion of the Sale Proceeds shall be added to the Exit Facility (as defined in Exhibit C hereto) on the Plan Effective Date, and Soros shall receive the Exit Loans on the Plan Effective Date in consideration for its allocation of the Cash Portion of the Sale Proceeds.

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(ii) the Parties hereby agree and instruct that the Sale Proceeds shall be disbursed from the Trust Account as follows:

(A) Prior to the occurrence of the Plan Effective Date, the Sale Proceeds Advance shall be held in the Trust Account for disbursement in accordance with the terms of this Agreement.

(B) Upon the occurrence of the Plan Effective Date, the Sale Proceeds Advance shall be disbursed from the Trust Account to the Liquidating Trust for disbursement as provided for in the Plan.

(C) Upon termination of this Agreement pursuant to the occurrence of a Soros Termination Event, the Sale Proceeds Advance shall be promptly disbursed from the Trust Account to Soros.

(D) Upon termination of this Agreement pursuant to the occurrence of a Company Termination Event, the Sale Proceeds Advance shall be disbursed from the Trust Account to the Company as liquidated damages.

(e) Soros and the Company acknowledge and agree that the DIP Facility has been structured to support the Company’s performance of its obligations under this Agreement. In the event that, notwithstanding the Company’s performance of its obligations under this Agreement, the Plan Effective Date does not occur on or prior to May 1, 2017, the Company and Soros shall negotiate in good faith to develop a budget for the period of May 1, 2017 – August 30, 2017, which budget shall be consistent in form and detail with the then-current Budget (as defined in the DIP Term Sheet) and shall identify the expenses and any additional funding reasonably necessary for the Company to continue its then-current operations and continue to administer its bankruptcy case in accordance with this Agreement through August 30, 2017, including, without limitation, continuing to pursue confirmation of the Plan through such date (the “Continuation Budget”). The initial draft of the Continuation Budget shall be developed in good faith by the Company in consultation with the Committee and based upon assumptions and projections believed by the Company in good faith to be reasonable at such time, and shall be delivered to Soros no later than May 1, 2017 or such later date as may be agreed to between the Company and Soros (the “Continuation Budget Milestone”). Subject to reaching agreement with the Company on the Continuation Budget and any related documentation, and further subject to any requisite Bankruptcy Court approval, Soros will provide the Company with postpetition financing (in addition to the DIP Facility) in accordance with the Continuation Budget.

This Agreement shall automatically terminate three (3) business days after delivery of written notice to the other Party (in accordance with Section 21) from (i) the Company at any time after the occurrence and during the continuance of any Company Termination Event or (ii) Soros at any time after the occurrence and during the continuance of any Soros Termination Event. In addition, this Agreement shall terminate automatically on the Plan Effective Date without any further required action or notice.

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(i) the breach in any material respect by the Company of any of the undertakings, representations, warranties, or covenants of the Company set forth herein that would prevent and result in a material adverse effect on the consummation of the Plan in accordance with this Agreement and which remains uncured for a period of five (5) business days after the receipt of written notice of such breach pursuant to this Section 5 and in accordance with Section 21 (as applicable);

(ii) the Company files Definitive Documentation in a form not reasonably acceptable to Soros, or makes any amendments, modifications, exhibits, or supplements thereto, in a manner that adversely affects Soros without the consent of Soros or except as otherwise permitted by this Agreement;

(iii) the Company withdraws the Plan or publicly announces its intention not to support the Plan, or propounds, or otherwise supports any chapter 11 plan other than the Plan;

(iv) the Company withdraws the DIP Motion or publicly announces its intention not to support the DIP Motion, or propounds, or otherwise supports any postpetition financing motion other than the DIP Motion without the consent of Soros;

(v) The Committee or any Committee Member breaches any or all of its obligations set forth in Section 4(c), including pursuant to the exercise of the Committee’s “fiduciary out” as provided for in Section 8.

(vi) the Disclosure Statement Order is not filed in a form and substance reasonably satisfactory to Soros, it being understood and agreed that Soros will act reasonably and commercially in considering any modifications to the Disclosure Statement Order requested or required by the Bankruptcy Court and other parties in interest;

(vii) the Confirmation Order is not filed in form and substance reasonably satisfactory to Soros, it being understood and agreed that Soros will act reasonably and commercially in considering any modifications to the Confirmation Order requested or required by the Bankruptcy Court and other parties in interest;

(viii) the Company fails to comply with its obligations in Section 4(a) or Section 4(e);

(ix) the Company, any Committee Member and/or the Committee seek, pursue, support and/or do not oppose ² an order to be entered by the Bankruptcy Court or a court of competent jurisdiction either converting the Chapter 11 Case to a case under chapter 7 of the Bankruptcy Code or dismissing the Chapter 11 Case;

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(x) the Company, any Committee Member and/or the Committee seek, pursue, support and/or do not oppose³ an order of the Bankruptcy Court seeking appointment, in respect of the Company, a trustee, a responsible officer, or an examiner with enlarged powers (powers beyond those set forth in subclauses (3) and (4) of section 1106(a)) under section 1106(b) of the Bankruptcy Code);

(xi) this Agreement is waived, modified, amended, or supplemented in any way, except by mutual agreement of, and in a writing signed by, the Company, Soros and the Committee; or

(xii) the Bankruptcy Court grants relief that is inconsistent with this Agreement or the Plan in any material respect, except if such relief is granted pursuant to a motion by Soros (or with the consent of Soros); provided, however, that the failure to obtain confirmation of the Plan and/or the occurrence of the Effective Date shall not constitute a Soros Termination Event pursuant to this Section 5(a)(xii) unless such failure is the result of any Soros Termination Event identified in Section 5(a)(i)-(xi).

For the avoidance of doubt, (i) this Agreement may not be terminated for a material adverse change in the business or operations of the Company; and (ii) the failure of any Committee Member to individually take affirmative action to oppose any proposed order referenced in subsection (ix) or (x) above shall not constitute a Soros Termination Event so long as such proposed order is affirmatively opposed by the Committee.

(b) A “Company Termination Event” shall mean (i) the breach in any material respect by Soros of any of the undertakings, representations, warranties, or covenants of Soros set forth herein that would result in a material adverse effect on the consummation of a Plan in accordance with this Agreement and which remains uncured for a period of five (5) business days after the receipt of written notice of such breach pursuant to this Section 5 and in accordance with Section 21 (as applicable); (ii) the failure by Soros to agree on the Continuation Budget, and any amendment to the DIP Facility necessary to provide the Company with additional financing in accordance with the Continuation Budget, no later than May 10, 2017, provided that the Company delivers the Continuation Budget to Soros by the Continuation Budget Milestone; (iii) the delivery by Soros of a notice of its intention to abandon the Transaction contemplated herein (other than as a result of a Soros Termination Event); and (iv) the failure of the Plan Effective Date to occur by August 30, 2017, other than as a result of a Soros Termination Event. Each of the Company and the Committee hereby acknowledge and agree that, in the event of a termination of this Agreement pursuant to the occurrence of a Company Termination Event, the only recourse for the Company will be to the Sale Proceeds Advance in accordance with Section 4(d)(ii)(D).

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(c) Mutual Termination. This Agreement may be terminated by mutual agreement of the Parties upon the receipt of written notice delivered in accordance with Section 21.

(d) Effect of Termination. Subject to the provisions contained in Section 15, upon the termination of this Agreement in accordance with this Section 5, and this Agreement shall become void and of no further force or effect and each Party shall, except as otherwise provided in Section 4(d), and as otherwise provided in this Agreement, be immediately released from its respective liabilities, obligations, commitments, undertakings, and agreements under or related to this Agreement, shall have no further rights, benefits, or privileges hereunder, and shall have all the rights and remedies that it would have had and shall be entitled to take all actions, whether with respect to the Restructuring or otherwise, that it would have been entitled to take had it not entered into this Agreement and no such rights or remedies shall be deemed waived pursuant to a claim of laches or estoppel; provided that in no event shall any such termination relieve a Party from liability for its breach or non-performance of its obligations hereunder before the date of such termination (except as set forth in Section 4(d)). Except as set forth herein, if the transactions contemplated hereby are not consummated, or if this Agreement is terminated for any reason, the Parties fully reserve any and all of their rights.

(e) Automatic Stay. The Company acknowledges that the giving of notice of termination by any Party pursuant to this Agreement shall not be a violation of the automatic stay of section 362 of the Bankruptcy Code; provided that nothing herein shall prejudice any Party’s rights to argue that the giving of notice of termination was not proper under the terms of this Agreement.

6. Term Sheets. The Term Sheets are incorporated herein by reference and the obligations of the Parties set forth therein shall be binding obligations of the Parties subject to the terms thereof.

7. Good Faith Cooperation; Further Assurances. Each Party hereby covenants and agrees to cooperate with each other in good faith in connection with, and shall exercise commercially reasonable efforts with respect to, the pursuit, approval, implementation, and consummation of the Restructuring, as well as the negotiation, drafting, execution, and delivery of the Definitive Documentation. Furthermore, subject to the terms hereof, the Parties shall take such action as may be reasonably necessary or reasonably requested by any Party to carry out the purposes and intent of this Agreement, and shall refrain from taking any action that would frustrate the purposes and intent of this Agreement.

8. Fiduciary Out. Nothing in this Agreement shall prevent the Committee or Wilmington Trust, N.A. from taking or failing to take any action that such person determines, based on the advice of its legal counsel, it is obligated to take in the performance of its statutory, contractual or fiduciary duties or as otherwise required by the Bankruptcy Code or applicable law that is in violation of Section 4(c) above; provided, however that it is agreed any such actions (or inactions) shall result in a Soros Termination Event. The Committee represents that as of the effective date of this Agreement, the Committee’s entry into this Agreement is consistent with the Committee’s fiduciary duties based upon the facts and circumstances actually known by the Committee as of such date.

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(a) Each Party and the Committee Members (collectively, the “PSA Parties” and individually a “PSA Party”) represent and warrants to the other PSA Parties that the following statements are true, correct, and complete as of the date hereof:

(i) Such PSA Party is validly existing and in good standing under the laws of its jurisdiction of incorporation or organization, and has all requisite corporate, partnership, limited liability company, or similar authority to enter into this Agreement and carry out the transactions contemplated hereby and perform its obligations contemplated hereunder. The execution and delivery of this Agreement and the performance of such PSA Party’s obligations hereunder have been duly authorized by all necessary corporate, limited liability company, partnership, or other similar action on its part.

(ii) The execution, delivery, or performance by such PSA Party of this Agreement does not and will not (A) violate any provision of law, rule, or regulation applicable to it, (B) violate its charter or bylaws (or other similar governing documents), or (C) conflict with, result in a breach of, or constitute (with due notice or lapse of time or both) a default under any material contractual obligation to which it is a party, except, in the case of the Company, for the filing of the Chapter 11 Case and, with respect to (A) and (C), except for a violation, conflict, breach, or default which would not individually or in the aggregate have a material and adverse effect on the Plan and Restructuring.

(iii) The execution, delivery, or performance by such PSA Party of this Agreement does not and will not require any registration or filing with, consent or approval of, or notice to, or other action, with or by, any federal, state, or governmental authority or regulatory body.

(iv) This Agreement is the legally valid and binding obligation of such PSA Party, enforceable against it in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium, or other similar laws relating to or limiting creditors’ rights generally or by equitable principles relating to enforceability.

(b) VM Bidco LLC is controlled by Soros Fund Management LLC in its capacity as investment adviser to VM Bidco LLC.

10. Disclosure; Publicity. The Company shall submit drafts to Soros of any press releases and public documents (other than Court filings, which shall be governed as set forth in Section 1(b) above) that constitute disclosure of the existence or terms of this Agreement or any amendment to the terms of this Agreement at least five (5) calendar days before making any such disclosure. Neither the Company nor any agent, officer, or representative of the Company may directly or indirectly use or refer to Soros Fund Management LLC, the “Soros” name, Quantum Partners LP, or any derivation thereof for any purpose whatsoever (including, without limitation, in any filing with any governmental authority (other than as specifically agreed to by Soros), any press release, any public announcement or statement, advertisement,

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marketing materials, client lists, or any interview or other discussion with any reporter or other member of the media), without Soros’ prior written consent with respect to each such use or reference.

11. Amendments and Waivers. Except as otherwise expressly set forth herein, this Agreement may not be waived, modified, amended, or supplemented except in a writing signed by each Party.

12. Effectiveness. Subject to approval by the Bankruptcy Court, this Agreement shall become effective and binding upon each Party upon the execution and delivery by such Party of an executed signature page hereto.

13. Governing Law; Jurisdiction; Waiver of Jury Trial.

(a) This Agreement shall be construed and enforced in accordance with, and the rights of the Parties shall be governed by, the laws of the State of New York, without giving effect to the conflict of laws principles thereof. The Parties irrevocably agree that any legal action, suit, or proceeding (each, a “Proceeding”) arising out of or relating to this Agreement brought by any Party or its successors or assigns shall be brought and determined in any federal or state court in the Borough of Manhattan, the City of New York (the “New York Courts”), and the Parties hereby irrevocably and generally submit to the exclusive jurisdiction of the New York Courts for themselves and with respect to their property, and unconditionally with respect to any Proceeding arising out of or relating to this Agreement and the Restructuring. The Parties agree not to commence any Proceeding relating hereto or thereto except in the New York Courts, other than Proceedings in any court of competent jurisdiction to enforce any judgment, decree, or award rendered by any New York Court. The Parties further agree that notice as provided in Section 21 shall constitute sufficient service of process and the Parties further waive any argument that such service is insufficient. The Parties hereby irrevocably and unconditionally waive and agree not to assert that a Proceeding in any New York Court is brought in an inconvenient forum or the venue of such Proceeding is improper. Notwithstanding the foregoing, during the pendency of the Chapter 11 Case, all Proceedings contemplated by this Section 13(a) shall be brought in the Bankruptcy Court.

(b) The Parties hereby waive, to the fullest extent permitted by applicable law, any right they may have to a trial by jury in any Proceeding directly or indirectly arising out of or relating to this Agreement or the transactions contemplated hereby (whether based on contract, tort or any other theory).

14. Specific Performance/Remedies. It is understood and agreed by the PSA Parties that money damages would be an insufficient remedy for any breach of this Agreement by any PSA Party and each non-breaching PSA Party shall be entitled to specific performance and injunctive or other equitable relief (including attorneys’ fees and costs) as a remedy of any such breach, without the necessity of proving the inadequacy of money damages as a remedy. The PSA Parties hereby waive any requirement for the security or posting of any bond in connection with such remedies. For the avoidance of doubt, the remedies provided for in this Section 14 apply only to this Agreement (without reference to the exhibits).

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15. Survival. Notwithstanding the termination of this Agreement pursuant to Section 5, Section 4(d), and Sections 13–24 shall survive such termination and shall continue in full force and effect in accordance with the terms hereof; provided that any liability of a Party for failure to comply with the terms of this Agreement shall survive such termination.

16. Headings. The headings of the sections, paragraphs, and subsections of this Agreement are inserted for convenience only and shall not affect the interpretation hereof or, for any purpose, be deemed a part of this Agreement.

17. Successors and Assigns; Severability. This Agreement is intended to bind and inure to the benefit of the PSA Parties and their respective successors, permitted assigns, heirs, executors, administrators, and representatives. If any provision of this Agreement, or the application of any such provision to any person or entity or circumstance, shall be held invalid or unenforceable, in whole or in part, such invalidity or unenforceability shall attach only to such provision or part thereof and the remaining part of such provision hereof and this Agreement shall continue in full force and effect. Upon any such determination of invalidity, the PSA Parties shall negotiate in good faith to modify this Agreement so as to effectuate the original intent of the PSA Parties as closely as possible in a reasonably acceptable manner so that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible. No assignment of this Agreement or of any rights or obligations hereunder may be made by any PSA Party (by operation of law or otherwise) without the prior written consent of the other parties hereto and any attempted assignment without the required consents shall be void; provided, however, that Soros may assign this Agreement and any or all rights or obligations hereunder to any Affiliate of Soros. Upon any such permitted assignment, the references in this Agreement to Soros shall also apply to any such assignee unless the context otherwise requires.

18. Relationship Among Parties. Unless expressly stated herein, this Agreement shall be solely for the benefit of the Parties and no other person or entity shall be a third-party beneficiary hereof. No Party shall have any responsibility for the transfer, sale, purchase, or other disposition of securities by any other entity, including with respect to the Notes, by virtue of this Agreement. No prior history, pattern, or practice of sharing confidences among the Parties shall in any way affect or negate this understanding and agreement. The Parties have no agreement, arrangement, or understanding with respect to acting together for the purpose of acquiring, holding, voting, or disposing of any securities of the Company and do not constitute a “group” within the meaning of Rule 13d-5 under the Securities Exchange Act of 1934, as amended.

19. Prior Negotiations; Entire Agreement. This Agreement, including the exhibits and schedules hereto (including the Term Sheets), constitutes the entire agreement of the PSA Parties, and supersedes all other prior negotiations regarding the subject matters hereof and thereof.

20. Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original, and all of which together shall be deemed to be one and the same agreement. Execution copies of this Agreement delivered by facsimile or PDF shall be deemed to be an original for the purposes of this paragraph.

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21. Notices. All notices hereunder shall be deemed given if in writing and delivered, if contemporaneously sent by electronic mail, facsimile, courier, or by registered or certified mail (return receipt requested) to the following addresses and facsimile numbers or such other addresses of which notice is given pursuant hereto:

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Any notice given by delivery, mail, or courier shall be effective when received. Any notice given by facsimile or electronic mail shall be effective upon oral, machine, or electronic mail (as applicable) confirmation of transmission.

22. No Solicitation; Adequate Information. This Agreement is not and shall not be deemed to be a solicitation for consents to the Plan. The votes of the holders of claims against the Company will not be solicited until such holders who are entitled to vote on the Plan have received the Plan, Disclosure Statement, related ballots, and other required Solicitation Materials. In addition, this Agreement does not constitute an offer to issue or sell securities to any person or entity, or the solicitation of an offer to acquire or buy securities, in any jurisdiction where such offer or solicitation would be unlawful.

23. Business Day Convention. Any reference to “business day” means any day, other than a Saturday, a Sunday, or any other day on which banks located in New York, New York are closed for business as a result of federal, state, or local holiday. When a period of days under this agreement ends on a day that is not a business day, then such period shall be extended to the specified hour of the next business day.

24. Interpretation; Rules of Construction; Representation by Counsel. When a reference is made in this Agreement to a Section, Exhibit, or Schedule, such reference shall be to a Section, Exhibit, or Schedule, respectively, of or attached to this Agreement unless otherwise indicated. Unless the context of this Agreement otherwise requires, (a) words using the singular or plural number also include the plural or singular number, respectively, (b) the terms “hereof,” “herein,” “hereby” and derivative or similar words refer to this entire Agreement, (c) the words “include,” “includes” and “including” when used herein shall be deemed in each case to be followed by the words “without limitation,” and (d) the word “or” shall not be exclusive and shall be read to mean “and/or.” The Parties agree that they have been represented by legal counsel during the negotiation and execution of this Agreement and, therefore, waive the application of any law, regulation, holding, or rule of construction providing that ambiguities in an agreement or other document shall be construed against the party drafting such agreement or document.

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed and delivered by their respective duly authorized officers, solely in their respective capacity as officers of the undersigned and not in any other capacity, as of the date first set forth above.

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EXHIBIT A

VIOLIN MEMORY, INC.

PLAN TERM SHEET

February 14, 2017

THIS TERM SHEET (THE “PLAN TERM SHEET”) DESCRIBES THE PRINCIPAL TERMS OF A PLAN OF REORGANIZATION FOR VIOLIN MEMORY, INC. (“VM” OR THE “COMPANY”).

THIS TERM SHEET IS NOT AN OFFER OR A SOLICITATION WITH RESPECT TO ANY SECURITIES OF THE COMPANY, NOR IS IT A SOLICITATION OF THE ACCEPTANCE OR REJECTION OF THE PLAN OR ANY OTHER CHAPTER 11 PLAN FOR PURPOSES OF SECTIONS 1125 AND 1126 OF CHAPTER 11 OF TITLE 11 OF THE UNITED STATES CODE (THE “BANKRUPTCY CODE”). ANY SUCH OFFER OR SOLICITATION SHALL COMPLY WITH ALL PROVISIONS OF THE BANKRUPTCY CODE.

OVERVIEW

The Plan will be filed in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”), where the Company’s chapter 11 case is pending.

This Plan Term Sheet does not include a description of all of the terms, conditions, and other provisions that are to be contained in the Plan and the related Definitive Documentation governing the Company’s restructuring. The Definitive Documentation includes, but is not limited to, plan solicitation documents, plan supplement documents, and related motions and orders. The Definitive Documentation shall contain terms, conditions, representations, warranties, and covenants that are customary for the transactions described herein, to the extent not inconsistent with the terms and conditions explicitly set forth herein. The Definitive Documentation shall be consistent with this Plan Term Sheet and in form and substance reasonably acceptable to VM Bidco LLC (“Soros”).

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CLASSIFICATION AND TREATMENT OF CLAIMS

Treatment of Unclassified Claims

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EXHIBIT B

DIP Financing Term Sheet

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For the avoidance of doubt, the references herein to customary terms or conditions are to such terms or conditons to the extent not inconsistent with the terms and conditions set forth herein, the Plan Sponsor Agreement or Plan Term Sheet.

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SCHEDULE 1

Initial Budget

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Violin Memory, Inc.

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SCHEDULE 2

DIP Facility Milestones

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EXHIBIT C

Exit Financing Term Sheet

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EXHIBIT D

FORM OF JOINDER AGREEMENT FOR QUANTUM PARTNERS LP

WHEREAS, Violin Memory, Inc. (the “Company”), and VM Bidco LLC (“Soros”) entered into a Plan Sponsor Agreement dated January 25, 2017 (as amended, supplemented or otherwise modified from time to time, the “Agreement”).

WHEREAS, Quantum Partners LP (the “Joining Party”) is a holder of $25,600,000 in principal amount of 4.25% Convertible Senior Notes Due 2019 issued pursuant to that certain Indenture, dated as of September 24, 2014 by and among the Company as Issuer and Wilmington Trust, National Association as Trustee (the “Notes”), plus interest, fees, and other expenses.

WHEREAS, the Joining Party intends to be bound by certain provisions of the Plan Sponsor Agreement pursuant to the terms of this Joinder Agreement.

Each capitalized term used herein but not otherwise defined shall have the meaning set forth in the Plan Sponsor Agreement.

1. The Joining Party hereby agrees that, subject to the Company complying in all material respects with the terms of the Plan Sponsor Agreement, it shall the vote all of its claims and interests with respect to the Notes against or in the Company to accept the Plan by promptly after commencement of the Solicitation delivering its duly executed and completed ballots accepting the Plan.

2. The Joining Party further agrees not to change or withdraw (or cause to be changed or withdrawn) any such vote in Section 1 above except upon the occurrence of a Soros Termination Event or a Company Termination Event, or as otherwise expressly permitted pursuant to the Plan Sponsor Agreement.

3. The Company agrees that the Joining Party may direct the Company in accordance with Section 4(a) of the Plan Sponsor Agreement and enforce the provisions of Section 4(a) of the Plan Sponsor Agreement.

4. The Joining Party and the Company agree that Section 12 of the Plan Sponsor Agreement shall apply to this Joinder Agreement.

[Signature pages follow.]

IN WITNESS WHEREOF, the Joining Party has caused this Joinder Agreement to be executed as of the date first written above.

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