EXHIBIT 10.2
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_________________, Connecticut
Date of this Agreement: __________, 2006
NEWALLIANCE BANK
SECURITY AGREEMENT
1. WHAT
SOME OF THE WORDS MEAN.
"SECURED
PARTY" means NewAlliance Bank, 195 Church Street, New Haven,
Connecticut 06510 and what are called its "SUCCESSORS AND
ASSIGNS."
"DEBTOR"
means, individually and collectively, the following persons
and/or entities: CAS MEDICAL SYSTEMS, INC.
"THIS
AGREEMENT" means this Security Agreement.
"BORROWER"
means, individually and collectively, the following persons
and/or entities: CAS MEDICAL SYSTEMS, INC
"COMMERCIAL LOAN AGREEMENT" means and includes, individually
and
collectively (applicable box is checked):
[X] Commercial
Line of Credit Note and Loan Agreement dated the date hereof
from the
Borrower to the Secured Party with a credit limit of
$5,000,000.00;
[_] Commercial
Term Loan Note dated the date hereof from the Borrower to the
Secured
Party with an initial principal balance of $________.
2. DEBTOR
GRANTS A SECURITY INTEREST IN COLLATERAL. For valuable
consideration, the receipt and sufficiency of which is hereby
acknowledged by
the parties, the Debtor does hereby grant to the Secured Party a
security
interest in the property (the same being hereinafter referred to
as
"COLLATERAL") described in Exhibit A attached hereto and made a
part hereof, to
secure payment of all of DEBTOR'S AND BORROWER'S indebtedness,
obligations and
liabilities to Secured Party, whether arising under this Agreement,
the
Commercial Loan Agreement, any extension or modification thereof,
any promissory
note, any guaranty or endorsement or otherwise, whether direct or
indirect,
joint or several, absolute or contingent (all of which
indebtedness, obligations
and liabilities are hereinafter sometimes called the
"OBLIGATIONS").
3.
WARRANTIES AND COVENANTS. The Debtor hereby warrants and covenants
that
the Collateral is used primarily for business purposes and that the
tangible
personal property forming a part of the Collateral shall be kept
and maintained
within the State of Connecticut; that Debtor will promptly notify
Secured Party
of any change in the State wherein said Collateral is located and
will not
remove said Collateral from said State without the prior written
consent of the
Secured Party.
Debtor
hereby further warrants and covenants that:
(a) Debtor
is the Owner of the Collateral free from any adverse lien,
security interest or encumbrance, except for the security interest
granted
hereby, and Debtor will defend the Collateral against all claims
and demands of
all persons at any time claiming the same or any interest
therein.
(b) No
financing statement covering all or any part of the Collateral
is
on file in any public office (other than those expressly consented
to in writing
by Secured Party), and at the request of Secured Party, Debtor will
execute or
join with Secured Party in executing one or more financing
statements pursuant
to the Uniform Commercial Code in form satisfactory to Secured
Party and will
pay the cost of filing the same or filing or recording this
Agreement in all
public offices wherever filing or recording is deemed by Secured
Party to be
necessary or desirable. A photocopy of this Agreement may be filed
as a
financing statement at the option of the Secured Party. The Debtor
hereby
authorizes the Security Party to file one or more financing
statements without
the Debtor's signature in any jurisdiction deemed reasonable or
necessary by
Secured Party to further perfect the security interests granted
hereunder and
Debtor hereby appoints the Secured Party as its attorney-in-fact,
which
appointment is coupled with an interest and is irrevocable, to sign
Debtor's
name to any such financing statement.
(c) Debtor
will not sell or offer for sale or otherwise transfer all or
any part of the Collateral or any interest therein (except sales in
the ordinary
course of the Debtor's business) without the prior written consent
of Secured
Party.
(d) Debtor
will have and maintain insurance at all times with respect to
all insurable Collateral against risks of fire (including so-called
extended
coverage), theft and such other risks as Secured Party may require,
containing
such terms, in such form, for such periods and written by such
companies as may
be satisfactory to Secured Party, such insurance to be payable to
Secured Party
and Debtor as their interests may appear; all policies of insurance
shall
provide for thirty (30) days prior written minimum cancellation
notice to
Secured Party; Debtor shall furnish Secured Party with certificates
or other
evidence satisfactory to Secured Party of compliance with the
foregoing
insurance provisions; and Debtor hereby appoints Secured Party
as
attorney-in-fact for Debtor, which appointment is coupled with an
interest
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and is irrevocable, for the purpose of obtaining, adjusting,
settling and
canceling such insurance and endorsing any drafts.
(e) Debtor
will keep the Collateral free from any adverse lien, security
interest or encumbrance (other than those expressly consented to in
writing by
Secured Party) and in good order and repair and will not waste or
destroy the
Collateral or any part thereof; Debtor will not use the Collateral
in violation
of any statute or ordinance; and Secured Party may examine and
inspect the
Collateral at any time, wherever located.
(f) Debtor
will pay promptly when due all taxes and assessments upon the
Collateral or for its use or operation or upon this Agreement or
upon any
instrument or document creating the Obligations.
(g) Debtor
will permit the Secured Party, or any agent or person
designated by the Secured Party, at any time during normal business
hours to
enter the premises of the Debtor for the purpose of inspecting
and/or appraising
the Collateral, provided, however, that unless an event of default
has occurred
or the Secured Party believes in good faith that there has been an
adverse
change in market or other conditions that may affect the value of
the
Collateral, the Debtor shall be required to pay the costs of such
inspection
and/or appraisal only once every three (3) years.
(h) At its
option, Secured Party may discharge taxes, liens or security
interests or other encumbrances at any time levied or placed on the
Collateral,
may pay for insurance on the Collateral, and may pay for the
maintenance and
preserv
