Loan and Security Agreement by MERU NETWORKS INC

Exhibit 10.2

SUPPLEMENT

to the

Loan and Security Agreement

dated as of June 6, 2012

between

Meru Networks, Inc. (“Borrower”)

and

Venture Lending & Leasing VI, Inc. (“Lender”)

This is a Supplement identified in the document entitled Loan and Security Agreement dated as of June 6, 2012 (as the same may be amended, restated, supplemented and modified from time to time, the “Loan and Security Agreement”), by and between Borrower and Lender.  All capitalized terms used in this Supplement and not otherwise defined in this Supplement have the meanings ascribed to them in Article 10 of the Loan and Security Agreement, which is incorporated in its entirety into this Supplement.  In the event of any inconsistency between the provisions of the Loan and Security Agreement and this Supplement, this Supplement is controlling.

In addition to the provisions of the Loan and Security Agreement, the parties agree as follows:

Part 1. - Additional Definitions:

“Commitment”: Subject to the terms and conditions set forth in the Loan and Security Agreement and this Supplement, Lender commits to make a Growth Capital Loan to Borrower up to the original principal amount of Twelve Million Dollars ($12,000,000).

“Designated Rate”:  The Designated Rate for the Growth Capital Loan shall be a fixed rate of interest per annum equal to twelve percent (12.00%).

“Growth Capital Loan” means the Loan requested by Borrower and funded by Lender under its Commitment for general corporate purposes of Borrower.

“Loan Commencement Date” means, with respect to the Growth Capital Loan, (i) the first day of the first full calendar month following the Borrowing Date of such Loan if such Borrowing Date is not the first day of a month; or (ii) the same day as the Borrowing Date if the Borrowing Date is the first day of a month.

“Termination Date”:  The Termination Date is the earlier of:  (i) the date Lender may terminate its Commitment or extending other credit pursuant to the rights of Lender under Article 7 of the Loan and Security Agreement; and (ii) the Closing Date.

“Threshold Amount”: Two Hundred Fifty Thousand Dollars ($250,000).

Part 2. - Additional Covenants and Conditions:

1.                                      Commitment; Additional Conditions Precedent Regarding; Funding and Repayment of Growth Capital Loan.

(a)                                 Additional Condition Precedent.  In addition to the satisfaction of all the other conditions precedent specified in Article 4 of the Loan and Security Agreement and this Supplement, Lender’s obligation to fund the Growth Capital Loan under Lender’s Commitment is subject to receipt by Lender of evidence satisfactory to it, as determined by Lender in its reasonable judgment, that as of the Borrowing Date of such Loan, Borrower does not have any outstanding Indebtedness to SVB.  Subject to the foregoing and the other terms and conditions of the Loan and Security Agreement and this Supplement, Lender agrees to make a Growth Capital Loan

to Borrower from the Closing Date up to and including the Termination Date in an original principal amount up to but not exceeding the Commitment.

(b)                                 Repayment of Growth Capital Loan.  Principal of and interest on the Growth Capital Loan funded by Lender shall be payable as set forth in a Note evidencing such Loan (substantially in the form attached hereto as Exhibit “A”), which Note shall provide substantially as follows:  principal and interest at the Designated Rate shall be fully amortized over a period of thirty-nine (39) months in equal, monthly installments.  In particular, on the Borrowing Date applicable to such Growth Capital Loan, Borrower shall pay to Lender the first amortization installment of principal and interest at the Designated Rate, in advance, for the month of June 2012.  Commencing on July 1, 2012, and continuing on the first day of each consecutive calendar month thereafter, Borrower shall pay to Lender principal, plus interest at the Designated Rate, in advance, in thirty-eight (38) equal consecutive monthly installments.  For clarity, Borrower and Lender acknowledge and agree that $369,405.09 represents the monthly payment amount that will be required to amortize the principal balance of the Growth Capital Loan, together with interest thereon at the Designated Rate, over a 39-month term.

2.                                      Prepayment.

(a)                                 Generally.  Except as set forth in Section 2(b) below, the Growth Capital Loan may be voluntarily prepaid as provided in this Section 2(a) only.  Borrower may voluntarily prepay all but not less than all of such Growth Capital Loan in whole but not in part at any time by tendering to Lender cash payment in respect of such Growth Capital Loan in an amount equal to the sum of: (i) the accrued and unpaid interest on such Growth Capital Loan as of the date of prepayment, and (ii) an amount equal to the total amount of all scheduled but unpaid payments of principal and interest that would have accrued and been payable from the date of prepayment through the stated date of maturity of such Growth Capital Loan had it remained outstanding and been paid in accordance with the terms of the related Note.

(b)                                 From and after January 1, 2014.  Notwithstanding anything to the contrary in Section 2(a), commencing at any time from and after January 1, 2014 and so long as no Event of Default has occurred and is continuing, Borrower may voluntarily prepay all but not less than all of the Growth Capital Loan in whole but not in part by tendering to Lender cash payment in respect of such Growth Capital Loan in an amount (as determined by Lender) equal to the sum of: (i) the accrued and unpaid interest on such Growth Capital Loan as of the date of prepayment; (ii) the unpaid principal balance of such Growth Capital Loan as of the date of prepayment and (iii) the product of (A) 0.80 and (B) the interest that would have accrued and been payable from the date of prepayment through the stated date of maturity of such Growth Capital Loan had it remained outstanding and been paid in accordance with the terms of the related Note.

3.                                      SVB Credit Facility; Subordination of Lien Priority.  Lender agrees that Lender will subordinate to SVB the priority of the Liens granted to Lender pursuant to the Security Documents as to that portion of the Collateral consisting of Borrower’s accounts receivable, the proceeds thereof and Borrower’s cash.  Lender agrees to negotiate in good faith and to enter an intercreditor agreement with SVB, in form and substance acceptable to Lender, setting forth SVB’s and Lender’s rights and obligations with respect to their respective Liens in Collateral.   Borrower and Lender acknowledge and agree that:  (i) the SVB Credit Facility shall have an advance rate of no more than 80% and other terms and conditions acceptable to Lender; (ii) the Indebtedness of Borrower to SVB under the SVB Credit Facility shall not exceed an aggregate amount outstanding at any time equal to the difference between Twenty Million Dollars ($20,000,000) and the outstanding principal balance of the Growth Capital Loan advanced to Borrower by Lender hereunder; (iii) advances under the SVB Credit Facility shall be made as close to the end of Borrower’s then-current fiscal quarter as practicable, and no earlier than three (3) Business Days prior to the end of such fiscal quarter; (iv) any such advances made under the SVB Credit Facility shall be repaid by Borrower as soon as practicable, and no later than three (3) Business Days following the end of the fiscal quarter in which an advance was made; and (v) no later than four (4) Business Days after the end of each fiscal quarter, Borrower shall deliver to Lender a certificate from Borrower’s chief financial officer or other authorized officer, substantially in the form of Exhibit “C-2” to this Supplement (“Advance Certificate”), setting forth the details of any amounts advanced and repaid by Borrower in connection with the SVB Credit Facility.  Borrower and Lender further acknowledge and agree that upon Borrower’s achieving two (2) consecutive quarters of increasing profitability of at least One Million Dollars ($1,000,000) per quarter (based on non-GAAP income, and excluding stock compensation and other non-cash items), and so long as Borrower maintains such profitability (i.e., at least One Million Dollars ($1,000,000) per quarter), Lender will remove the temporal limitations relating to advances under the SVB Credit Facility.

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4.                                      Issuance of Warrant.  As additional consideration for the making of its Commitment, Lender has earned and is entitled to receive immediately upon the execution of the Loan and Security Agreement and this Supplement a warrant instrument issued by Borrower, substantially in the form of Exhibit “D” attached hereto (the “Warrant”).  Borrower acknowledges that Lender has assigned its rights to receive the Warrant to its parent, Venture Lending & Leasing VI, LLC (“LLC”).  In connection therewith, Borrower shall issue the Warrant directly to LLC.  Upon request of Borrower, Lender shall furnish to Borrower a copy of the agreement in which Lender assigned its rights to receive the Warrant to LLC.

5.                                      Success Bonus.  As additional consideration for the making of its Commitment, Lender has earned and is entitled to receive a cash payment in an amount equal to Two Million Dollars ($2,000,000) (the “Success Bonus”) at the earlier to occur of (i) a Change of Control (as defined below) and (ii) September 1, 2015.  Borrower and Lender acknowledge and agree that the Success Bonus shall be and constitutes an Obligation secured by the Collateral for purposes of this Supplement and the other Loan Documents.  Borrower and Lender further acknowledge and agree that the Success Bonus shall be paid by Borrower prior to, or concurrently with, any payments to Borrower’s stockholders and other creditors and Lender’s right to receive the Success Bonus shall survive the payment and satisfaction of all of Borrower’s other Obligations to Lender.  Borrower acknowledges that Lender may assign its rights to receive the Success Bonus to LLC.  If such assignment is made then Lender shall notify Borrower and Borrower shall pay the Success Bonus to LLC when due.  If such assignment is made, upon request of Borrower, Lender shall furnish to Borrower a copy of the agreement in which Lender assigned its rights to receive the Success Bonus to LLC.  “Change of Control” shall mean any sale, exclusive license, or other disposition of all or substantially all of the assets of Borrower, any reorganization, privatization, consolidation, merger