EXHIBIT 10.1
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Prior Obligation Information: Loan Number - 41341; Agreement Date - 02/11/08;
Credit Limit - $10,000,000.00; Maturity Date - 05/01/09
Amended Obligation Information: Loan Number - 41341; Modification Date -
12/31/08; Credit Limit - $10,000,000.00; Maturity Date - 07/01/10; Index
(w/margin) - NAB Base Rate; Interest Rate - 3.25%
DEBT MODIFICATION AGREEMENT
DATE AND PARTIES. The date of this Debt Modification Agreement (Modification) is
December 31, 2008. The parties and their addresses are:
LENDER:
NEWALLIANCE BANK
000 Xxxxxx Xxxxxx
Xxx Xxxxx, XX 00000
Telephone: (000) 000-0000
BORROWER:
CAS MEDICAL SYSTEMS, INC.
a Delaware corporation
00 X. Xxxxxxxxxx Xxxx
Xxxxxxxx, XX 00000
1. DEFINITIONS. In this Modification, these terms have the following meanings:
A. PRONOUNS. The pronouns "I," "me," and "my" refer to each Borrower
signing this Modification, individually and together with their
heirs, executors, administrators, successors, and assigns. "You" and
"your" refer to the Lender, with its participants or syndicators,
successors and assigns, or any person or entity that acquires an
interest in the Modification or the Prior Obligation.
B. AMENDED OBLIGATION. Amended Obligation is the resulting agreement
that is created when the Modification amends the Prior Obligation.
It is described above in the AMENDED OBLIGATION INFORMATION section.
C. LOAN. Loan refers to this transaction generally. It includes the
obligations and duties arising from the terms of all documents
prepared or submitted in association with the Prior Obligation and
this modification, such as applications, security agreements,
disclosures, notes, agreements and this Modification.
D. MODIFICATION. Modification refers to this Debt Modification
Agreement.
E. PRIOR OBLIGATION. Prior Obligation refers to my existing
agreement described above in the PRIOR OBLIGATION INFORMATION
section, and any previous extensions, renewals, modifications or
substitutions of it.
2. BACKGROUND. You and I have previously entered into a Prior Obligation. As of
the date of this Modification, the outstanding, unpaid balance of the Prior
Obligation is $2,275,662.86. Conditions have changed since the execution of the
Prior Obligation instruments. In response, and for value received, you and I
agree to modify the terms of the Prior Obligation, as provided for in this
Modification.
3. TERMS. The Prior Obligation is modified as follows:
A. INTEREST. Our agreement for the payment of interest is modified
to read:
(1) INTEREST. Interest will accrue on the unpaid
Principal balance of the Loan at the rate of 3.25
PERCENT (INTEREST RATE) until January 1, 2009, after
which time it may change as described in the Variable
Rate subsection.
(a) Maximum Interest Amount. Any amount assessed
or collected as interest under the terms of the
Loan will be limited to the maximum lawful
amount of interest allowed by state or federal
law, whichever is greater. Amounts collected in
excess of the maximum lawful amount will be
applied first to the unpaid Principal balance.
Any remainder will be refunded to me.
(b) Statutory Authority. The amount assessed or
collected on the Loan is authorized by the
Connecticut usury laws under Xxxx. Gen. Stat.
xx.xx. 37-1 through 37-9, as amended.
(c) Accrual. Interest accrues using an
Actual/360 days counting method.
(d) Variable Rate. The Interest Rate may change
during the term of this transaction.
(1) Index. Beginning with the first
Change Date, the Interest Rate will be
based on the following index: the Banks
"Base Rate" which is a rate designated as
such by the Bank from time to time.
The Current Index is the most recent
index figure available on each Change
Date. You do not guaranty by selecting
this Index, or the margin, that the
Interest Rate on the Loan will be the
same rate you charge on any other loans
or class of loans you make to me or other
borrowers. If this Index is no longer
available, you will substitute a similar
index. You will give me notice of your
choice.
(2) Change Date. Each date on which the
Interest Rate may change is called a
Change Date. The Interest Rate may change
January 1, 2009 and daily thereafter.
(3) Calculation of Change. On each Change
Date you will calculate the Interest
Rate, which will be the Current Index.
The result of this calculation will be
rounded to the nearest .001 percent.
Subject to any limitations, this will be
the Interest Rate until the next Change
Date. The new Interest Rate will become
effective on each Change Date. The
Interest Rate and other charges on the
Loan will never exceed the highest rate
or charge allowed by law for the Loan.
(4) Limitations. The Interest Rate
changes are subject to the following
limitations:
Lifetime. The Interest Rate will never be
less than 3.250 percent.
(5) Effect of Variable Rate. A change in
the Interest Rate will have the following
effect on the payments: The amount of
scheduled payments will change.
B. MATURITY AND PAYMENTS. The maturity and payment provisions are
modified to read:
(1) PAYMENT. I agree to pay all accrued interest on the
balance outstanding from time to time in regular
payments beginning January 1, 2009, then on the same day
of each month thereafter. A final payment of the entire
unpaid outstanding balance of Principal and interest
will be due July 1, 2010.
Payments will be rounded up to the nearest $.01. With
the final payment I also agree to pay any additional
fees or charges owing and the amount of any advances you
have made to others on my behalf. Payments scheduled to
be paid on the 29th, 30th or 31st day of a month that
contains no such day will, instead, be made on the last
day of such month.
(2) Maturity. The maturity provision is modified to
read:
(a) Maturity Date. Consistent with our existing
periodic payment arrangement, except any
scheduled, final payment, I agree that the entire
outstanding balance of Principal and accrued
interest is due on, or before, July 1, 2010.
C. FEES AND CHARGES. As additional consideration for your consent to
enter into this Modification, I agree to pay, or have paid these
additional fees and charges.
(1) Nonrefundable Fees and Charges. The following fees
are earned when collected and will not be refunded if I
prepay the Loan before the scheduled maturity date.
Commitment. A(n) Commitment fee of
$25,000.00 payable from separate funds on or
before today's date.
(2) Stop Payment Fee. A(n) Stop Payment Fee equal to
$25.00.
(3) Minimum Finance Charge - Commercial/Ag. A(n) Minimum
Finance Charge - Commercial/Ag equal to $25.00.
(4) Late Charge. If a payment is more than 15 days late,
I will be charged 5.000 percent of the Amount of Payment
or $25.00, whichever is greater. I will pay this late
charge promptly but only once for each late payment.
(5) Returned Check Charge. I agree to pay a fee not to
exceed $31.00 for each check, negotiable order of
withdrawal or draft I issue in connection with the Loan
that is returned because it has been dishonored.
D. PREPAYMENT CHANGE. Conditions for the prepayment of the Loan are
modified to read:
(1) I may prepay the Loan under the following terms and
conditions. In any event, even upon full prepayment of
this Note, Xxxxxxxx understands that Lender is entitled
to a minimum interest charge of $25.00. Other than
Xxxxxxxx's obligation to pay any minimum interest
charge, Borrower may pay without penalty all or a
portion of the amount owed earlier than is due. Early
payments will not, unless agreed to by Xxxxxx in
writing, relieve Xxxxxxxx of Xxxxxxxx's obligation to
continue to make payments of accrued unpaid interest.
Rather, early payments will reduce the principal balance
due. Any partial prepayment will not excuse any later
scheduled payments until I pay in full.
4. CONTINUATION OF TERMS. Except as specifically amended by this Modification,
all of the terms of the Prior Obligation shall remain in full force and effect.
5. WAIVER. I waive all claims, defenses, setoffs, or counterclaims relating to
the Prior Obligation, or any document securing the Prior Obligation, that I may
have. Any party to the Prior Obligation that does not sign this Modification,
shall remain liable under the terms of the Prior Obligation unless released in
writing by you.
6. REASON(S) FOR MODIFICATION. Change maturity date from May 1, 2009 to July 1,
2010. Change interest rate from NewAlliance Bank Rate -.50% to NewAlliance Bank
Rate +0.00% which as of today is 3.25%. This loan has a floor rate of 3.25%.
7. ADDITIONAL TERMS. It is expressly understood and agreed that this line of
credit is a commercial transaction and all proceeds are to be used exclusively
for that purpose only. In addition, all proceeds shall be used for short-term
working capital. Financing of any long-term capital needs shall require
additional approval.
Borrower to reflect a minimum debt service coverage ratio of 1.50X to be tested
quarterly on a rolling four quarter basis commencing with FYE 12/31/08.
Borrower to reflect a maximum debt to tangible net worth ratio of 2.50X at FYE
12/31/08 and each FYE thereafter.
Borrower Base Certificate with supporting schedules shall be submitted monthly
on the first business day of each month. Advances shall continue to be limited
to 75% of accounts receivable 90 days and under plus 30% of inventory with
inventory advances not to exceed $2,500,000.00.
8. SIGNATURES. By signing under seal, I agree to the terms contained in this
Modification. I also acknowledge receipt of a copy of this Modification.
BORROWER:
CAS Medical Systems, Inc.
By /s/ Xxxxxx Xxxxxx (Seal)
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Xxxxxx Xxxxxx, President
NewAlliance Bank
By /s/ Xxx X. Xxxxxx (Seal)
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Authorized Signer
