EXHIBIT
10.29




SECOND MODIFICATION
AGREEMENT




THIS
SECOND MODIFICATION AGREEMENT, executed on April 3, 2009 effective March 31,
2009 by and between CAS MEDICAL SYSTEMS, INC., a Delaware corporation having its
chief executive office at 44 East Industrial Road, Branford, Connecticut (the
"Borrower") and NEWALLIANCE BANK, a Connecticut stock savings bank with a place
of business at 195 Church Street, New Haven, Connecticut (the
"Bank").





W I T N E S S E T H





WHEREAS,
the Borrower executed a Commercial Revolving Promissory Note in the original
principal amount of Ten Million Dollars ($10,000,000.00) dated February 11,
2008, as modified by a Debt Modification Agreement (the “First Modification”)
from Borrower dated December 31, 2008  (said Commercial Revolving
Promissory Note, as modified by the First Modification, herein called the "Note"
and the loan evidenced by the Note herein called the “Loan”); and





WHEREAS
the Note was issued pursuant to a Commercial Loan Agreement dated February 11,
2008 between Borrower and Bank, including a Commercial Loan Agreement Addendum
(“Addendum”) also dated February 11, 2008 between Borrower and Bank, which said
Commercial Loan Agreement, including the Addendum, were modified by the First
Modification (said Commercial Loan Agreement, including the Addendum, as
modified by the First Modification herein called the "Loan Agreement");
and





WHEREAS,
Borrower's obligations to the Bank, including those under the Note and Loan
Agreement are secured inter alia by a security
interest in the Collateral, as defined in the Security Agreement (the “Security
Agreement”) from Borrower to Bank dated February 11, 2008, and herein also
called the “Collateral;” and





WHEREAS,
in connection with the Loan, Borrower executed and delivered various other
documents, instruments and/or indemnities to Bank (said documents, instruments
and indemnities, including without limitation, the Note, the Loan Agreement, the
Security Agreement, the Loan Documents as defined in the Loan Agreement, and all
other documents evidencing, securing, or relating to the Loan, collectively
called the "Loan Documents"); and





WHEREAS,
Borrower has requested a modification of the debt service coverage ratio
covenant contained in the Loan Agreement and the Bank is willing to modify such
covenant subject to and on the terms and conditions set forth
herein.





NOW,
THEREFORE in consideration of the mutual promises and covenants contained
herein, the parties hereto agree as follows:





1.  Borrower
acknowledges and agrees that (i) as of March 31, 2009, the outstanding principal
balance due Bank under the Note was Three Million One Hundred Thirty-Five
Thousand Three Hundred Thirty-Eight and 93/100 Dollars ($3,135,338.93) (ii) that
as of the date of execution of this Modification Agreement, the outstanding
principal balance due Bank under the Note is Three Million Four Hundred One
Thousand Nineteen and 22/100 Dollars ($3,401,019.22); and (iii) the said
principal balances were due and owing to the Bank under the Note as of said
applicable dates, without defense, offset or
counterclaim.


2. The
Loan Agreement is modified as follows:





2.1. To
indicate that Section 3.1(c) of the Loan Agreement is modified to provide
that:





a.  Whenever
the Borrower requests an Advance which, if made, would result in the principal
balance outstanding pursuant to the Loan Agreement, exceeding or equal to two
million dollars ($2,000,000.00), the following requirements are to be satisfied
as to all amounts which would be outstanding under or pursuant to the Loan
Agreement, if the new Advance were made (including amounts outstanding prior to
the making of such new Advance):





i.  The
maximum principal amount which is outstanding pursuant to the Loan Agreement
shall not exceed the lesser of (the lesser of a or b in the Loan Agreement shall
be called the “Borrowing Base”):





a.           
The sum of:





(1)           Seventy-Five
Percent (75.00%) of the
Borrower's Eligible Receivables; AND





(2)           the
lesser of two million five hundred thousand dollars ($2,500,000.00) or Thirty
Percent (30.00%) of the
Borrower's Eligible Inventory;





OR





b.           Five
Million Dollars ($5,000,000.00).





2.2.           To
indicate that the term “Borrowing Base” as used in the Loan Agreement, shall
have the meaning of “Borrowing Base” set forth in Section 2.1 of this
Modification Agreement.





2.3.           To
indicate that in 2009, the Debt Service Coverage Ratio shall not be tested
quarterly but shall be tested as of Borrower’s fiscal year end December 31,
2009, as of which time Borrower shall have a minimum Debt Service Coverage Ratio
of 1.0 to 1.0.  Thereafter Borrower shall maintain a minimum Debt
Service Coverage Ratio of 1.5 to 1.0, to be tested quarterly on a rolling four
quarter basis commencing with the first quarter ending on March 31, 2010, and
each quarter end thereafter. Debt Service Coverage Ratio is defined as:
(Earnings Before Interest Expense, Taxes, Depreciation and Amortization Expense)
divided by (Current Maturities of Long Term Debt plus Interest Expense) all as
determined in accordance with generally accepted accounting
principles.





2.4.           To
indicate that references to the Note therein shall mean the “Note,” as that term
is defined in this Modification Agreement, as modified by this Modification
Agreement, as the same may be further amended and/or restated from time to
time.





2.5.           To
indicate that references to the Security Agreement therein shall mean the
“Security Agreement,” as that term is defined in this Modification Agreement, as
modified by this Modification Agreement, as the same may be further amended
and/or restated from time to time.





3.  The
Note is modified as follows:





3.1.           To
indicate that commencing as of March 31, 2009, and continuing thereafter the
Borrower shall pay interest on the outstanding principal balance of the Note, at
the rate per annum which is at all times equal to the greater of (a) the Index
Rate, as hereafter defined, or  (b) four percent (4.0%). The term
“Index Rate” shall mean the Base Rate (as hereafter defined) in effect from time
to time, plus one percentage point (1.0%).  Any change in the Base
Rate shall cause an immediate change in the Index Rate without notice from the
Holder of the Note so that the Index Rate shall at all times be equal to the
Base Rate in effect from time to time, plus one percentage point
(1.0%).  Holder shall not be required to provide notice of any change
in the interest rate made pursuant to the Note, as modified by this Modification
Agreement. The term “Base Rate” shall mean the rate designated from time to time
by the Bank as its “Base Rate.” The Base Rate is not necessarily the best or
lowest interest rate charged by the Bank.  If the Bank discontinues
the designation of a Base Rate, for any reason, the Bank can select, in its sole
discretion, a reasonably comparable substitute index therefor.





3.2.           To
indicate that after the occurrence of an Event of Default (as defined in the
Note) or after maturity of the Note, and including the period after any judgment
has been rendered with respect thereto, the Borrower shall pay interest on the
outstanding principal balance of the Note, at the rate which shall be three
percentage points (3.0%) per annum higher than the rate of interest that would
otherwise be payable under the Note, as set forth in Section 3.1
of  this Modification Agreement.








3.3.           To
indicate that references therein to the “Commercial Loan Agreement” or the
“Agreement” shall mean the “Loan Agreement,” as that term is defined in this
Modification Agreement, as modified by this Modification Agreement, as the same
may be further amended and/or restated from time to time.





4. The
Loan Documents are hereby reaffirmed and modified to incorporate the terms
contained in this Modification Agreement.  Any default in this
Modification Agreement shall be an Event of Default as defined in the Loan
Agreement. The Borrower acknowledges and agrees that without limiting any other
rights or remedies available to the Bank at law, equity or by contract, upon the
occurrence of an Event of Default, as defined in or under the Note or Loan
Agreement, or the failure to comply with the terms of this Modification
Agreement, the entire principal balance of the Note, with accrued interest
thereon shall, at the option of holder of the Note, become due and payable
forthwith without demand or notice.





5. The
Borrower reaffirms all its representations, warranties, covenants (both
affirmative and negative), waivers and indemnities contained in the Loan
Documents, as modified hereby.  All of the representations and
warranties set forth in the Loan Documents are true and correct as if made on
the date of execution of this Agreement.





6. The
Borrower represents, acknowledges and affirms that it has no claim, defense,
offset or counterclaim whatsoever against Bank with respect to the Note, the
Loan Agreement, or any other Loan Document, or the modifications made herein,
and that Bank is relying on this representation in agreeing to said
modifications.  The Borrower further acknowledges that Bank would not
agree to said modifications unless the Borrower made the representations
contained in this paragraph, and elsewhere in this Modification Agreement,
freely and willingly, after due consultation with its
attorneys.  Borrower further represents that this Modification
Agreement, and all of the Loan Documents executed by it, are its valid and
binding obligations and enforceable in accordance with their terms and further
represents that no Event of Default (as defined in the Loan Agreement or any
Loan Document) has occurred nor has there occurred any event or condition which,
with the giving of notice or the passage of time or both would constitute an
Event of Default.





7. In
furtherance of the immediately preceding paragraph, Borrower, as of March 31,
2009 and as of the date of its execution of this Modification Agreement,
releases, and forever discharges the Bank, its officers, agents, successors and
assigns, from any and all claims, actions, causes of action, obligations and
liabilities of any kind known or unknown which the Borrower has or may have as
of March 31, 2009, and as of the date of Borrower’s execution hereof, whether
relating to the Note, the Loan Agreement, any of the Loan Documents or any of
the transactions contemplated hereby or consummated in connection herewith, or
any negotiations in connection with any of the foregoing.





8. The
Borrower agrees that nothing contained herein shall in any way impair the Note,
Loan Agreement, the Security Agreement or any other Loan Document, and the
Collateral







shall
remain in all respects subject to the lien, charge and encumbrance of the
Security Agreement.  The Borrower further agrees that nothing
contained herein or modified pursuant to this Modification Agreement shall
affect or be construed to affect the lien, charge or encumbrance of the security
interests granted by the Borrower or the priority thereof, over other liens,
charges and encumbrances, or release or affect the liability of any other party
or parties who may now or hereafter be liable under, pursuant to, or on account
of the Note, the Loan Agreement and/or the other Loan Documents. The Borrower
acknowledges, confirms and agrees that (i) the Security Agreement and the
security interest in the Collateral granted to the Bank pursuant to the Security
Agreement, secure among other things, and without limiting the terms of the
Security Agreement, the Borrower’s obligations under this Modification
Agreement, as well as the other Loan Documents; and (ii) the “Obligations” as
defined in the Security Agreement, include, without limitation, all liabilities,
obligations, indebtedness, duties, and covenants of the Borrower under this
Modification Agreement, and under the Note and the Loan Agreement, both as
modified by this Modification Agreement.





9.  Borrower
shall pay a fee of five thousand dollars ($5,000.00) to the Bank on the date of
execution of this Modification Agreement, in consideration of the Bank’s
agreements herein (the “Modification Fee”). The Borrower shall also pay upon
demand all costs and expenses, including reasonable attorneys’ fees, incurred by
Bank in connection with the Loan, including, without limitation, matters
relating to the Debt Service Coverage Ratio covenant in the Loan Agreement, and
the transaction of which this Modification Agreement forms a part, including the
preparation of this Modification Agreement.





10. Capitalized
terms not otherwise defined herein shall have the same meaning as in the
document to which they refer.  Except as modified by this Modification
Agreement, the Note, the Loan Agreement and all other Loan Documents shall
remain unchanged and in full force and effect.  Borrower shall keep
and perform all of the terms and agreements contained in the Loan Documents, as
modified by this Modification Agreement.





11. This
Modification Agreement shall be binding upon and inure to the benefit of the
parties hereto, their respective heirs, successors and assigns.  This
Modification Agreement may only be amended in writing.  If any term or
provision of this Modification Agreement or the application thereof to any
person or circumstance, shall to any extent be invalid or unenforceable, the
remainder of this Modification Agreement, or the application of such term or
provision to persons or circumstances other than those as to which it is invalid
or unenforceable, shall not be affected thereby, and each term and provision of
this Modification Agreement shall be valid and enforceable to the fullest extent
permitted by law.





12. This
Agreement may be signed in one or more counterparts all of which shall
constitute one document and shall be construed under the laws of the State of
Connecticut. The Recitals are incorporated herein.








13. THE
BORROWER ACKNOWLEDGES THAT THE NOTE, THE LOAN AGREEMENT, ALL LOAN DOCUMENTS AND
THIS MODIFICATION AGREEMENT RESULT FROM A COMMERCIAL TRANSACTION AND THE
BORROWER HEREBY WAIVES ANY RIGHT TO NOTICE OR HEARING UNDER THE CONSTITUTION OF
THE UNITED STATES OR ANY STATE OR FEDERAL LAW,  INCLUDING CONNECTICUT
GENERAL STATUTES SECTION 52-278a ET SEQ., AS NOW OR HEREAFTER AMENDED, OR ANY
SUCCESSOR ACT OR ACTS THERETO, AND WAIVES ANY REQUIREMENTS FOR THE POSTING OF
ANY BOND IN CONNECTION WITH ANY PREJUDGMENT REMEDY SOUGHT.  THE
BORROWER AUTHORIZES THE ATTORNEY FOR ANY HOLDER OF THE NOTE TO ISSUE A WRIT FOR
PREJUDGMENT REMEDY WITHOUT COURT ORDER.  BORROWER ACKNOWLEDGES THAT IT
MAKES THIS WAIVER KNOWINGLY AND VOLUNTARILY AFTER CONSULTATION WITH ITS
ATTORNEY.





14. THE
BORROWER WAIVES TRIAL BY JURY IN ANY COURT IN ANY SUIT, ACTION OR PROCEEDING ON
ANY MATTER ARISING IN CONNECTION WITH THE NOTE, THE LOAN AGREEMENT, ANY LOAN
DOCUMENT, THIS MODIFICATION AGREEMENT OR IN ANY WAY RELATED TO THE FINANCING
TRANSACTIONS OF WHICH THIS MODIFICATION AGREEMENT IS A PART AND/OR THE DEFENSE
OR ENFORCEMENT OF ANY OF BANK’S RIGHTS OR REMEDIES.  BORROWER
ACKNOWLEDGES THAT IT MAKES THIS WAIVER KNOWINGLY AND VOLUNTARILY AFTER
CONSULTATION WITH ITS ATTORNEY.





15. Borrower
will, upon demand, furnish to the Bank such further information,
and


will
execute and deliver such instruments or documents, and will do all such acts as
the Bank may, at any time or from time to time, reasonably request, or as may be
necessary or appropriate to establish and maintain a valid and enforceable first
security interest of the Bank in the Collateral described in the Security
Agreement.





16. Borrower
shall cause to be delivered to the Bank (i) within 15 days following the
execution hereof, a legal opinion from Borrower’s counsel with respect to this
Modification Agreement, and a current UCC Search of the Delaware Secretary of
State both in form and substance satisfactory to the Bank; and (ii) within 3
days following the date hereof, a current Certificate of Good Standing from the
Delaware Secretary of State  as to Borrower, and a current Certificate
of Authority to Transact Business, as to Borrower from the Connecticut Secretary
of State; and (iii) contemporaneously with the execution hereof by the Borrower,
a resolution of the board of directors of the Borrower certified by the
Secretary or other officer of the Borrower (other than Jeffery A. Baird)
authorizing the execution and delivery of this Modification Agreement by the
Borrower, and authorizing Jeffery A. Baird, Chief Financial Officer to so
execute and deliver this Modification Agreement on behalf of the Borrower, which
resolution shall be in form and substance satisfactory  to the
Bank.





[Balance
of Page Intentionally Left Blank]











IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.





Signed,
Sealed and Delivered


In The
Presence Of:








/s/
      Terence Sullivan
                
                Terrence
      Sullivan
                
                /s/
      Nathan A. Kelley
                  Nathan A.
      Kelley
              NEWALLIANCE BANK
                
                
                
                
                
                By:   /s/
      Joy E. Rogers
                
                Joy E.
      Rogers
                Its Vice
      President






/s/
      Sandra A. Nye
                  
                  Sandra A.
      Nye
                  
                  /s/
      Deborah Apuzzo
                    Deborah
      Apuzzo
                CAS MEDICAL SYSTEMS, INC.
                  
                  
                  
                  
                  
                  By:   /s/
      Jeffery A. Baird
                  
                  Jeffery A.
      Baird





STATE OF
CONNECTICUT)


)   ss:
New
Haven,                              April 3,
2009


COUNTY OF
NEW HAVEN)





Personally appeared Joy E. Rogers, Vice
President, of NewAlliance Bank, a


Connecticut
bank, signer and sealer of the foregoing instrument and acknowledged the same to
be her free act and deed as such officer and the free act and deed of said Bank,
before me.


/s/
      Katherine B. Kregling
                        
                        Katherine B. Kregling
                        Notary Public
                        My Commission expires: 2/28/12
                        Commissioner of the
                        Superior Court





STATE
OF CONNECTICUT  )


)   ss:                                           
         April 3,
2009


COUNTY
OF NEW HAVEN  )





Personally appeared Jeffery A. Baird,
Chief Financial Officer of CAS
MEDICAL SYSTEMS, INC., a Delaware corporation, signer and sealer of the
foregoing instrument, and acknowledged the same to be his free act and deed as
such officer and the free act and deed of said corporation, before
me.





/s/
      Sandra A. Nye
                      
                      Sandra A. Nye
                      Notary Public
                      My Commission expires: 4/30/2012
                      Commissioner of the
                      Superior Court