Exhibit 10.5


RIDER TO BUSINESS LOAN AGREEMENT (ASSET
BASED)

AND RELATED DOCUMENTS


             This
Rider to Business Loan Agreement (Asset Based) (“Rider”) is attached to and
made a part of that certain Business Loan Agreement (Asset Based) dated May 6,
2014 (“Business Loan Agreement”) between Electromed, Inc. (“Borrower”) and
Venture Bank (“Lender”). In the event of any inconsistency between this Rider
and the Business Loan Agreement or any of the Related Documents, as defined
therein, the terms of this Rider shall control. Terms used herein and not
otherwise defined shall have the meanings given such terms in the Business Loan
Agreement. Accordingly, notwithstanding any provisions of the Business Loan
Agreement or any of the Related Documents:


     1.     Lender
does not require any opinions of counsel to Borrower in connection with the
Loan.


     2.     Borrower’s
representations and warranties with respect to Hazardous Substances are made to
the best of its knowledge, based upon reasonable investigation, and subject to
any matters disclosed in any environmental site assessments obtained by or
delivered to Lender. Lender acknowledges and agrees that the Collateral has
been used for the storage, use and generation of hazardous substances as
customary in Borrower’s business in compliance with all applicable laws and may
in the future be used for such purposes in compliance with all applicable laws.
Further, inspections, tests and assessments of the Collateral by Lender to
determine compliance with the provisions of the Business Loan Agreement and
Related Documents relating to Hazardous Substances shall be at Borrower’s
expense only if Lender has reasonable cause to believe Borrower is in violation
of such provisions.


     3.     Lender’s
request for additional information and insurance coverage shall be reasonable
for the type of business and type of property constituting the Collateral.
Borrower shall not have the obligation to have the Collateral appraised for
insurance purposes during the term of the Loan.


     4.     Borrower
shall not have the obligation to notify Lender of defaults under any agreements
other than the Business Loan Agreement or Related Documents unless such
defaults are material.


     5.     Borrower
shall not have the obligation to notify Lender of management changes other than
executive management changes.


     6.     Lender
shall give Borrower reasonable notice prior to inspection of the tangible
Collateral or Borrower’s books and records.


     7.     Lender
shall not have the right to exercise any of the remedies provided for under the
Business Loan Agreement or Related Documents except upon the occurrence of an
Event of Default as defined therein and during the continuance of such Event of
Default.


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Exhibit 10.5


     8.     Failure
of the Borrower to make any payment when due under the Loan shall not
constitute an Event of Default under the Business Loan Agreement or any of the
Related Documents until five (5) days after written notice thereof is given to
Borrower.


     9.     Lender
will promptly notify Borrower if it makes any expenditures or takes any action
pursuant to the paragraph labeled “LENDER’S EXPENDITURES.”


     10.   Borrower shall have the right to incur indebtedness to other
lenders and to enter into equipment leases from third party vendors or finance
companies to finance equipment acquisitions not to exceed $100,000 per year
without the consent of Lender. 


     11.   The
filing of any involuntary bankruptcy or insolvency petition against Borrower
shall not constitute an Event of Default unless the Borrower fails to have such
filing dismissed within thirty days after such filing is made or the court
grants the petition for relief.


     12.   A
change in ownership of Borrower’s stock shall not constitute a default.


     13.   A
material adverse change in Borrower’s financial condition, or Lender believing
the prospect of payment or performance is impaired, or the Lender otherwise
believing itself insecure, shall not constitute an event of default so long as
no other event of default has occurred and is continuing.


     14.   Borrower
shall have the right to sell obsolete equipment or fixtures constituting part
of the Collateral without the consent of Lender, so long as such equipment or
fixtures are promptly replaced with items of equivalent or greater value.


     15.   Lender
shall not sell the Loan to another lender or sell participation interests in
the Loan without Borrower’s prior consent, except in the event of the sale or
transfer of substantially all the assets of Lender. 


     16.   There
are no guarantors of the Loan, and no affiliates of Borrower shall be required
to provide Collateral. 


     17.   The
definition of “Eligible Accounts” is hereby modified to include (i) foreign
accounts that are secured by a letter of credit issued by a U.S. state or
federal bank acceptable to Lender, and (ii) accounts that are conditional but
are carried on Borrower’s books in accordance with GAAP. Further, Lender shall
not unreasonably disqualify accounts as Eligible Accounts based upon the creditworthiness
or financial condition of the Account Debtor.


     18.   The
Commercial Security Agreement shall secure only the Note, the obligations under
the Related Documents, and that certain Promissory Note dated December 18, 2013
between Borrower and Lender in the amount of $1,300,000 (the “RE Note”) and the
“Related Documents” as defined in the Business Loan Agreement of even date
herewith between Borrower and Lender relating to the RE Note. 


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Exhibit 10.5


     19.   Borrower
may maintain deductibles under its insurance policies up to $20,000. Borrower
shall not have the obligation to notify Lender and shall have the right to
adjust and receive insurance proceeds upon damage to the Collateral not
exceeding $50,000, so long as Borrower promptly repairs and restores such
damage. The occurrence of casualty damage or other loss which is insured (other
than a reasonable deductible) shall not constitute an Event of Default.


     20.   Lender
waives the obligation of Borrower to make monthly payments into reserves for
payment of insurance unless and until an Event of Default occurs.


     21.   Lender
will not require direct payment of accounts to Lender or into a lock box unless
and until an Event of Default occurs. 


     22.   Borrower
has a corporate seal but it is not required for effective execution of the
Business Loan Agreement or any of the Related Documents.


[SIGNATURES ON FOLLOWING PAGE]


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Exhibit 10.5


	
  

 	
  

 	
  

 	
  

 
	
  

 	
 VENTURE BANK

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
 /s/ Kevin
 Doyle



 	
  

 
	
  

 	
 Its:

 	
 Vice
 President



 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 ELECTROMED, INC.

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
 /s/ Jeremy
 Brock



 	
  

 
	
  

 	
 Its:

 	
 Chief
 Financial Officer



 	
  

 


[SIGNATURE PAGE TO RIDER TO BUSINESS LOAN
AGREEMENT

AND RELATED DOCUMENTS]


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