Exhibit 10.2



 


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 December 18, 2019 (as amended, restated, supplemented or otherwise modified from time to time,
including by this Rider, the “Business Loan Agreement”), referring to that certain original Promissory Note # 15695
dated December 18, 2019 (as amended, restated, supplemented, extended, renewed, replaced or otherwise modified from time to time,
including by this Rider and by the Change in Terms Agreement dated on or about the date hereof, the “Note”),
in each case between Electromed, Inc. (“Borrower”) and Choice Financial Group (“Lender”).
In the event of any inconsistency between this Rider, the Business Loan Agreement or any of the Related Documents as defined in
the Business Loan Agreement (including any Change of Terms Agreement executed concurrently herewith), 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 or any Advance.


 


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 (including the right of setoff and the right to freeze accounts of Borrower)
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.


 


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 and grant related liens 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 tor 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.       A
default under any loan, extension of credit, security agreement, purchase or sales agreement, or any other agreement, in favor
of any other creditor or person shall not constitute an Event of Default unless such default involves indebtedness in excess of
$1,000,000 and would materially affect Borrower’s property or Borrower’s ability to repay the Loans or perform its
obligations under the Business Loan Agreement or any other Related Document.


 


15.       Borrower
shall have the right to sell obsolete equipment or fixtures constituting part of the Collateral without the consent of Lender.


 


16.       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.


 


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


 


18.       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.


 


19.       The
Commercial Security Agreement dated December 18, 2019 shall secure only the Note and the obligations under the Related Documents.


 


20.       Borrower
may maintain deductib1es 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.


 


21.       Lender
waives the obligation of Borrower to make monthly payments into reserves for payment of insurance unless and until an Event of
Default occurs and a written notice requiring such reserve payments be made is delivered by Lender to Borrower.


 






     


     


    

 


22.       Lender
will not require direct payment of accounts to Lender or into a lock box unless and until an Event of Default occurs and a written
notice requiring such lock box use is delivered by Lender to Borrower.


 


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


 


24.
     The immediate termination of all commitments pursuant to the paragraph labeled “EFFECT
OF AN EVENT OF DEFAULT” will not trigger the mandatory loan prepayment obligation of Borrower pursuant to the paragraph
labeled “Mandatory Loan Repayments” unless and until Lender elects to accelerate the Indebtedness.


 


25.       Borrower
may sell inventory in the ordinary course of business without the prior written consent of the Lender. Borrower may also compromise,
settle, adjust or extend payment under or with regard to Accounts in the ordinary course of business using prudent business practices,
provided the Borrower promptly remedies any noncompliance with the Borrowing Base following such action.


 


26.       All
representations and warranties made by Borrower related to Collateral ownership, title and Security Interests, as well as all
conditions precedent to Advances and covenants of Borrower related to the foregoing, are amended to specifically permit the existence
of and allow the continuance of Permitted Liens.


 


27.       The
terms set forth in the Business Loan Agreement (as modified and controlled by this Rider) control in the event of any inconsistency
between the Business Loan Agreement (as modified and controlled by this Rider) and any Related Document.


 


28.       Borrower
shall only be obligated to reimburse or make payment to Lender for reasonable costs, expenditures and expenses incurred by Lender;
provided, however, that in the event of an enforcement action or proceeding, Borrower shall be obligated to reimburse Lender for
all costs, expenditures and expenses.


 


29.       A
default will not arise in respect of any representations, warranties or covenants made by or binding on Borrower related to compliance
with laws, ordinances, rules and regulations unless the Borrower has failed to comply with such laws, ordinances, rules and regulations
in a manner that has or could have, in the reasonable opinion of the Lender, a material adverse effect on Borrower’s operations
or properties.


 


30.       For
the avoidance of doubt:


 


(a)
      it is understood that all references to a “Restated Agreement” contained
in the Business Loan Agreement are references to the Business Loan Agreement dated as of December 18, 2019 and all references
to an “Existing Agreement” contained in the Business Loan Agreement are references to the Business Loan Agreement
dated as of December 18, 2018, and the Restated Agreement amends and restates in its entirety the Existing Agreement;


 


(b)       it
is understood that all references to a “Restated Agreement” contained in the Note are references to the Promissory
Note dated December 18, 2019 as amended by the Change in Terms Agreement dated December 18, 2021, and all references to an “Existing
Agreement” contained in the Note are references to the Promissory Note dated December 18, 2013 in the original principal
amount of $2,500,000, and the Restated Agreement amends and restates in its entirety the Existing Agreement, as described in the
paragraph titled “PRIOR NOTE”; and


 






     


     


    

 


(c)       it
is understood that Commercial Security Agreement dated as of December 18, 2019 amends and restates any prior security agreement
executed by Borrower in favor of Lender, and all references to any Commercial Security Agreement contained in the Business Loan
Agreement or any other Related Agreement are references to the Commercial Security Agreement dated as of December 18, 2019.


 


31.       To
the extent that any payment is required to be made on a day that is not a Business Day, such payment shall, notwithstanding the
date set forth in the applicable agreement or document, be required to be made on the next following day that is a Business Day.


 


32.       Notwithstanding
any reference in any other document executed in connection therewith in December 2018, Borrower and Lender hereby acknowledge
and agree that (a) no replacement or new Business Loan Agreement was executed by the parties in December 2018 and (b) each reference
to the “Business Loan Agreement” contained in the Change in Terms Agreement dated December 18, 2019 or any other related
documents shall be a reference to the Business Loan Agreement (Asset Based) dated December 18, 2016 (as amended by the Change
in Terms Agreement).


 


33.       Notwithstanding
any reference in the Note or any other Related Document, principal and interest outstanding under the Note are due and payable
in full on the maturity date stated therein (or upon the earlier exercise by Lender of its rights and remedies in accordance with
the terms thereof), and are not and shall not be payable upon demand.


 


34.       Borrower
and Lender acknowledge and agree that this Rider amends and restates and replaces that certain prior Rider to Business Loan Agreement
(Asset Based) and Related Documents dated on or about December 18, 2020.


 


Signature
page follows


 




     


     


    

 


IN
WITNESS WHEREOF, the parties hereto have caused this Rider to be duly executed effective as of December _____, 2021.


 


	 	CHOICE FINANCIAL GROUP
	 	 	 
	 	By:	/s/ Kevin P. Doyle
	 	Name:	Kevin P. Doyle 
	 	Title:	Senior Vice President 
	 	 	 
	 	ELECTROMED, INC.
	 	 	 
	 	By:	/s/ Michael J. MacCourt
	 	Name:	Michael J. MacCourt
	 	Title:	Chief Financial Officer