Document:

Exhibit 4.1

 

THE BANK OF NEW YORK MELLON

NEW YORK’S FIRST BANK-FOUNDED 1784 BY ALEXANDER HAMILTON

 

 

2 HANSON PLACE, 12TH FLOOR, BROOKLYN,
N.Y. 11217

 

 

 

September 25, 2013

 

Hennion & Walsh, Inc.

2001 Route 46, Waterview Plaza

Parsippany, New Jersey 07054

 

Smart Trust, Morningstar Dividend Yield Focus
Trust, Series 3

Dear Sirs:

The Bank of New York
Mellon is acting as trustee for Smart Trust, Morningstar Dividend Yield Focus Trust, Series 3 set forth above (the “Trust”).
We enclosed a list of the Securities to be deposited in the Trust on the date hereof. The prices indicated therein reflect our
evaluation of such Securities as of close of business on September 25, 2013, in accordance with the valuation method set forth
in the Trust Indenture and Agreement. We consent to the reference to The Bank of New York Mellon as the party performing the evaluations
of the Trust Securities in the Registration Statement (No. 333-190070) filed with the Securities and Exchange Commission with respect
to the registration of the sale of the Trust Units and to the filing of this consent as an exhibit thereto.

 

 

Very truly yours,

 

/s/ GERARDO
CIPRIANO_______________ 

Gerardo Cipriano

Vice PresidentExhibit 4.3

 

Consent of Independent Registered
Public Accounting Firm

We consent to the
reference made to our firm under the caption “Independent Registered Public Accounting Firm” in Part B of the Prospectus
and to the use of our report dated September 25, 2013, in this Registration Statement (Form S-6 No. 333-190070) of Smart Trust,
Morningstar Dividend Yield Focus Trust, Series 3.

 

/s/ Grant
Thornton LLP

Grant
Thornton LLP

Chicago, Illinois

September 25, 2013EXHIBIT 10.44

AMENDMENT TO EMPLOYMENT AGREEMENT

          THIS
AMENDMENT TO EMPLOYMENT AGREEMENT is entered into
effective as of July 1, 2013, by and between Electromed, Inc. (“Employer”), and
Kathleen Skarvan. (“Employee”).

          WHEREAS,
Employer and Employee previously entered into an Employment Agreement dated
effective December 1, 2012 (the “Employment Agreement”); and

          WHEREAS,
Employer and Employee desire to modify and amend the Employment Agreement on
the terms and conditions set forth in this Amendment to Employment Agreement
(the “Amendment”).

          NOW,
THEREFORE, in consideration of the foregoing recitals,
Employee’s continued employment, the compensation Employee will receive in
connection with such continued employment, and other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties agree
to modify and amend the Employment Agreement as follows:

          1.          Paragraph
2 of the Employment Agreement is hereby deleted and replaced with the
following:

                       “Term
of Employment. The term of the Employee’s employment hereunder shall
commence on the Effective Date of this Agreement and shall continue thereafter
through the last day of fiscal year 2014 (“Initial Term”), unless terminated
earlier in accordance with Paragraph 4 of this Agreement. The term of this
Agreement and the Employee’s employment hereunder shall automatically renew for
successive fiscal year periods beyond the expiration of the Initial Term (the
“Renewal Term”), unless at least ninety (90) days prior to the expiration of
the Initial Term or any Renewal Term either party hereto gives written notice
to the other party that it does not intend to renew this Agreement for the
coming year. During the Initial Term or any Renewal Term, this Agreement may be
terminated pursuant to the terms of Paragraph 4 of this Agreement.”

          2.          Paragraph
3.1 of the Employment Agreement is hereby deleted and replaced with the
following:

                       “Base
Salary. As of the Effective Date, the Corporation agrees to pay the
Employee an annualized base salary of $210,000.00 for the fiscal year ending
June 30, 2014, which amount shall be earned by the Employee on a pro rata basis
as the Employee performs services and which shall be paid according to the
Corporation’s normal payroll practices. The Board of Directors acting
reasonably shall annually review and determine the amount of Base Salary
payable pursuant to this Paragraph 3.1.” 

          3.          The
following paragraph is hereby added to Paragraph 3.2 of the Employment
Agreement:

                       “Non-Equity
Incentive Compensation. For the fiscal year ending June 30, 2014, Employee
shall receive a bonus in the maximum aggregate amount of 30% of the base salary
set forth in Paragraph 3.1 only if she achieves the goals and milestones set
forth in the Fiscal 2014 Officer Bonus Plan, as such goals have been determined
by, and as achievement against such goals will be evaluated by, the Personnel
and Compensation Committee of the Board of Directors. Future Non-Equity
Incentive Compensation will be determined by the Personnel and Compensation
Committee or the Board of Directors in their discretion. If a bonus is earned
in accordance with this Paragraph 3.2, it will be paid to Employee by the
Corporation by December 31, 2014 regardless of whether she is employed by the
Corporation on the date payable.”

          4.          The
following paragraph is hereby added to Paragraph 3.3 of the Employment
Agreement:

                       “Stock
Option. On the Effective Date, or if the Effective Date is not a business
day on which stocks listed on the NYSE MKT national exchange are trading, the
first such business day following the Effective Date, Employee shall be granted
a non-qualified stock option to purchase 15,000 shares of the Corporation’s
common stock pursuant to the Corporation’s 2012 Stock Incentive Plan. The
option shall have an exercise price equal to the fair market value of the
Corporation’s common stock on the date of the grant, shall have a 10-year term,
and shall vest as to 5,000 shares on the last day of each of the Corporation’s
fiscal years ending June 30, 2014, 2015 and 2016. The remaining terms of the
option will be governed by the 2012 Stock Incentive Plan and the non-qualified
stock option agreement to be executed by the Corporation and the Employee on or
about the date of grant.”

          5.          Employee
acknowledges that Employee agrees to the terms of this Amendment and has
entered into this Amendment voluntarily, understanding that she had no
obligation to do so and could choose to end her employment with the Employer
pursuant to the provisions of the Employment Agreement. 

          6.          This
Amendment may not be amended or modified except by a writing signed by both
parties.

          7.          Except
as modified by this Amendment, the Employment Agreement shall continue in full
force and effect.

-2-

          IN
WITNESS WHEREOF, the parties have executed this Agreement the day and year
first above written.

	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Date: 

 	
 July 1, 2013

 	
  

 	
 ELECTROMED, INC. 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 By

 	
 /s/ Stephen Craney

 
	
  

 	
  

 	
  

 	
  

 	
 Its: Chairman

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Date: 

 	
 July 2, 2013

 	
  

 	
 EMPLOYEE

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
 /s/ Kathleen Skarvan

 
	
  

 	
  

 	
  

 	
  

 	
 Kathleen
 Skarvan

 

-3-EXHIBIT 10.45

Summary of Fiscal Year 2014 Director Compensation

          Each
of the Company’s non-employee directors shall receive a cash retainer of $1,000
per Board of Directors meeting attended. In addition, members of the Audit,
Personnel and Compensation, and Nominating and Governance Committees will be
paid a $1,000 retainer during the first fiscal quarter and a $500 retainer
during the second, third, and fourth fiscal quarters. 

          The Company
shall also reimburse all directors for certain reasonable out-of-pocket expenses related to their
attendance at Board meetings and performance of other services as Board
members.EXHIBIT 10.46

 

MEDIATED SETTLEMENT AGREEMENT

 

After mediation before George F. McGunnigle, Mediator, Electromed, Inc.
(“Electromed”) and Robert D. Hansen (“Hansen”) agree to settle their disputes on the following terms:

 

		1.	Electromed shall dismiss its claims against Hansen and Hansen shall dismiss
his counterclaims against Electromed in the lawsuit entitled Electromed, Inc. v. Eileen M. Manning and Robert D. Hansen,
Court File No. 70-cv-12-24946 (the “Lawsuit”), with prejudice and without an award of costs or fees to any party.

		2.	Electromed shall pay Hansen $150,000 by September 16, 2013, via check jointly
payable to Leonard Crowley and Robert Hansen. 

		3.	The parties acknowledge and reaffirm the continuing validity, and their continuing
rights and obligations under, the Separation Agreement and Release of Claims dated May 14, 2012 (“Separation Agreement”),
which is attached hereto as Exhibit A. The parties hereby replace Paragraphs 9.B. and 10 of the Separation Agreement with
the following:

Paragraph 9.B.:

Hansen promises and agrees not to make or induce any other person
to make derogatory or disparaging statements of any kind, oral or written, regarding the Released Parties (as defined in Section
3.E.) to any person or organization whatsoever. Without limiting the foregoing, the phrase “any person or organization whatseover”
shall have the broadest possible meaning, and shall include, but not be limited to, all persons and organizations, including Hansen’s
friends and family and each of the Released Parties. The terms “derogatory or disparaging statements” shall mean any
statements that are critical or distract from the reputation of another’s character, property, product, or business. Additionally,
for the period of the Standstill Provision set forth in Paragraph 10, if any shareholder (including any of the Released Parties)
contacts Hansen regarding Electromed, he will limit his response to the following statement: “I am not able to discuss the
Company. If you have questions, you should contact the CEO or one of the board members.”

Paragraph 10:

Hansen agrees that for a period of three (3) years from September
6, 2013, he will not, whether alone or in conjunction with others (including by providing financing or forming, joining, or in
any way participating in any “group” (within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934)),
directly or indirectly: (a) propose any alternate board nominees or make any other proposal at any annual or special meeting of
the Electromed shareholders; (b) participate in any proxy solicitations or proxy contests, or seek to advise or influence any person
with respect to the voting of any securities of Electromed; (c) vote, via proxy or otherwise, any shares of Electromed capital
stock except for his own shares or for shares held for him by a broker (such as RBC); (d) initiate any discussions about Electromed's
management with any shareholders of Electromed; (e) call or seek to call any special meeting of the Electromed shareholders; or
(f) make any tender or exchange offer for Electromed securities, engage in, or participate in any way in, any transaction regarding
control of Electromed that has not been approved by the Board, or otherwise seek control of or influence over the management, board
of directors, business or policies of the Company.

    	1

    	 

    

 

		4.	Hansen agrees that for a period of eighteen (18) months, he shall not vote,
via proxy or otherwise, any shares of Electromed capital stock, or provide voting instructions for shares of Electromed capital
stock held for Hansen by a broker. Nothing herein shall be construed as preventing any pledgee of Hansen’s shares of Electromed
capital stock (including, but not limited to, Round Bank) from exercising any rights regarding shares of Electromed capital stock
pledged by Hansen, provided, however that, for a period of eighteen (18) months, Hansen shall not directly or indirectly influence
the voting, via proxy or otherwise, of any shares of Electromed capital stock pledged by Hansen to a pledgee. 

		5.	The parties release each other and their respective officers, stockholders,
directors, employees, independent contractors, insurers, attorneys and agents, and their respective successors, heirs and assigns
from any and all claims made, or that could have been made, in the Lawsuit.

		6.	This Mediated Settlement Agreement, and the terms herein, shall not be deemed
to be an admission of liability for any claims asserted in the Lawsuit. All such liability is expressly denied by the parties.

		7.	Pursuant to the Minnesota Civil Mediation Act, the parties are advised that:
(a) the mediator has no duty to protect the parties' interests or provide them with information about their legal rights; (b) signing
a mediated settlement agreement may adversely affect the parties' legal rights; and (c) the parties should consult an attorney
before signing a mediated settlement agreement if they are uncertain of their rights.

		8.	The Agreement to Mediate is incorporated herein.

		9.	Except as otherwise set forth herein regarding the parties’ continuing
rights and obligations under Separation Agreement (as amended herein), this Mediated Settlement Agreement contains the entire agreement
between the parties.

    	2

    	 

    

		10.	The Mediated Settlement Agreement is a final, binding, and enforceable agreement.
The parties do not intend to execute additional documents to effectuate or implement this Mediated Settlement Agreement. 

		11.	Any and all disputes arising out of or related to this Mediated Settlement Agreement,
including the making of this Mediated Settlement Agreement, or the negotiations, drafting, or execution of any additional documents
to effectuate or implement this Mediated Settlement Agreement, shall be submitted to binding arbitration before the Mediator, who
shall serve as the Arbitrator. The arbitration shall be conducted on an expedited basis according to the rules and procedures established
by the Arbitrator. Judgment upon the award may be entered in any court of competent jurisdiction.

 

 

Dated: September 6, 2013

 

 

	Mediator:  	 /s/ George F. McGunnigle
	 	George F. McGunnigle

 

All participants, attorneys and non-attorneys,
must sign:

 

 

 

	/s/ Robert D. Hansen	 	/s/ Leonard V. Crowley
	 	 	 
	/s/ William V. Eckles	 	/s/ Joseph J. Cassioppi
	 	 	 
	/s/ David R. Marshall	 	 

 

 

 

 

    	3

    	 

    

 

 

 

 

 

 

EXHIBIT A

 

 

 

 

 

 

 

 

    	 

    	 

    

SEPARATION AGREEMENT AND RELEASE OF CLAIMS

 

This Separation Agreement and Release
of Claims (“Separation Agreement”) is entered into by and between Electromed, Inc., a Minnesota corporation (“Electromed”)
and Robert D. Hansen (“Hansen”).

RECITALS

 

A.                 
Hansen has announced his retirement from his employment and arty and all
positions with Electromed, including but not limited to Chief Executive Officer (“CEO”), Chairman of the Board, and
Director of the Board effective May 11, 2012 (the “Separation Date”).

 

B.                 
Hansen desires to receive, and Electromed desires to provide in exchange
for a release of claims and other promises, separation pay to assist Hansen with his transition into retirement.

 

C.                 
Electromed and Hansen desire to set forth fully their understanding and agreement
with respect to the terms of Hansen’s separation from Electromed.

 

NOW, THEREFORE, in consideration
of the mutual covenants and promises made by and between the parties, the receipt and adequacy of which is acknowledged, Electromed
and Hansen hereby agree as follows:

 

		1.	Separation.

 

A.                 
The parties agree that Hansen has retired as CEO, Chairman and Director of
Electromed effective as of the Separation Date.

B.                 
Hansen acknowledges and agrees that upon receipt of his final paycheck, which
will include payment for services through May 11, 2012, less the $5,000.00 for the Dodge Durango as set forth in Paragraph 2.D
below, and that, except as otherwise provided for in this Agreement, he has received all compensation and benefits owed to him
through May 11, 2012, by virtue of his employment with Electromed or separation thereof, including but not limited to wages for
services rendered through May 11, 2012.

C.                 
The COBRA period for continuation of Hansen’s insurance coverage under
Electromed’s group plans will begin on the first day of the month immediately following the Separation Date. Information
recording Hansen’s right to elect COBRA coverage will be sent to him via separate letter.

D.                 
Hansen is not eligible for any other payments or benefits by virtue of his
employment with Electromed or separation thereof except for those expressly described in this Separation Agreement. Hansen will
receive the Separation Pay described in Section 2 of this Separation Agreement if, and only if, (i) Hansen signs the Separation
Agreement, (ii) Hansen does not violate any of the terms and conditions set forth in this Separation Agreement, and (iii) Hansen
signs (and does not rescind in whole or in part) this Separation Agreement.

    	-1-

    	 

    

2.                  
Separation Pay. Specifically in consideration of Hansen’s
signing this Separation Agreement and subject to the limitations, obligations, and other provisions contained in this Separation
Agreement, Electromed agrees as follows:

 

A.                 
To pay Hansen Separation Pay in the amount of one year’s base salary
totaling $209,000.00 less applicable deductions and withholding. Provided that Hansen meets all of the conditions set forth in
this Separation Agreement for receiving Separation Pay, payment under this Section 2.A. will be paid in a lump sum on the first
day of the seventh month following Hansen’s “separation from service,” as defined in Code Section 409A.

B.                 
To pay Hansen any earned and unpaid bonus, if any, on a pro rata basis for
the period through the Separation Date. The amount of such bonus, if any, shall be calculated based on Electromed’s annualized
gross sales revenue as date last day of Hansen’s employment and shall be paid in a lump sum approximately sixty (60) days
after the Separation Date.

C.                 
To continue to pay for 18 months, until November 30, 2013, the entire portion
of the premiums for COBRA health and dental insurance coverage under Electromed’s group health and dental insurance plans.
Electromed will discontinue payments under this Section 2.C. before November 30, 2013, if, and at such time as Hansen ceases to
participate, for whatever reason, in Electromed’s group insurance plans, or Hansen accepts a position with another company
that includes health benefits. By Hansen’s signature below, Hansen acknowledges and agrees that Electromed may modify or
terminate its group insurance plans at any time and that Hansen will have the same right to participate in Electromed’s group
insurance plans only as is provided on an equivalent basis to the company’s employees. Notwithstanding the foregoing, the
COBRA period for continuation of Hansen’s insurance coverage under Electromed’s group plans will begin on June 1, 2012.

D.                 
To transfer title of the 2002 Volvo 5-80 sedan and 1995 Mercedes Benz 5-500
currently being used by Hansen. Hansen acknowledges that he has also been transferred title of the 2000 Dodge Durango Sport in
his possession, although he owes Electromed a balance of $5,000.00 on that vehicle. Hansen acknowledges and agrees by signing this
Separation Agreement, that the $5,000.00 may be deducted in full from his final paycheck. Hansen acknowledges that upon transfer
of title of the vehicles above and final payment on the Dodge Durango, Electromed will have no further responsibility or liability
for the maintenance and care of those vehicles, nor for any insurance premiums associated with those vehicles, coverage for which
will be canceled upon transfer of title.

E.                  
To pay, within ten (10) days following expiration of the applicable rescission
periods, Hansen’s reasonable attorneys’ fees incurred in connection with his separation from employment, in an amount
up to, but not to exceed, $15,000.00. Hansen agrees that he, or his attorneys, will provide to Electromed’s attorneys a statement
for services rendered by his attorneys in connection with his separation from employment and that payment will be made for the
actual attorneys’ fees incurred not to exceed $15,000.00.

    	-2-

    	 

    

3.                  
Release of Claims. Specifically in consideration of the Separation
Pay described in Section 2, to which Hansen would not otherwise be entitled, by signing this Separation Agreement Hansen, for himself
and anyone who has or obtains legal rights or claims through him, agrees to the following:

 

A.                 
Hansen hereby does release and forever discharge the “Released Parties”
(as defined in Section 3.E. below) of and from any and all manner of claims, demands, actions, causes of action, administrative
claims, liability, damages, claims for punitive or liquidated damages, claims for attorney’s fees, costs and disbursements,
individual or class action claims, or demands of any kind whatsoever, Hansen has or might have against them or any of them, whether
known or unknown, in law or equity, contract or tort, arising out of or in connection with his employment with Electromed, or the
separation of that employment, or otherwise, and however originating or existing, from the beginning of time through the date of
his signing this Separation Agreement.

B.                 
This release includes, without limiting the generality of the foregoing,
any claims Hansen may have for any of the following:

		•	wages, compensation, distributions, bonuses, commissions, penalties, deferred compensation, vacation,
sick, and/or PTO pay, separation pay and/or benefits;

		•	defamation of any kind including, but not limited to, libel, slander; invasion of privacy; negligence;
emotional distress; breach of express, implied or oral contract; estoppel; fraud; intentional or negligent misrepresentation; breach
of any implied covenants; wrongful prosecution; assault or battery; negligent hiring, supervision or retention;

		•	wrongful discharge (based on contract, common law, or statute, including any federal, state or
local statute or ordinance prohibiting discrimination or retaliation in employment);

		•	violation of any of the following:

		o	the United States Constitution,

		o	the Minnesota Constitution,

		o	the Minnesota Human Rights Act, Minn. Stat. § 363A.01 et seq.,

		o	Minn. Stat. Chapters 177 and 181,

		o	Title VII of the Civil Rights Act, 42 U.S.C. § 2000e et seq.,

		o	the Age Discrimination in Employment Act, 29 U.S.C. § 621 et seq.,

		o	the Older Workers Benefit Protection Act, 29 U.S.C. § 623 et seq.,

		o	Civil Rights Act of 1866, 42 U.S.C. § 1981,

		o	Civil Rights Act of 1991, 42 U.S.C. §1981a,

		o	the Americans with Disabilities Act, 42 U.S.C. § 12101 et seq.,

		o	the Genetic Information Nondiscrimination Act of 2008,

		o	the Employee Retirement Income Security Act of 1976, 29 U.S.C. § 1001 et seq.,

		o	the Family and Medical Leave Act, 29 U.S.C. § 2601 et seq.,

		o	the National Labor Relations Act, 29 U.S.C. § 151 et seq.,

		o	the Worker Adjustment and Retraining Notification Act, 29 U.S.C. § 2101 et seq.,

		o	the Fair Credit Reporting Act, 15 U.S.C. §§ 1681 et seq.,

		o	the Sarbanes-Oxley Act, 15 U.S.C. § 7201 et seq., or

 

    	-3-

    	 

    

 

		o	any other federal, state or local statute prohibiting discrimination in employment or granting
rights to Hansen arising out of the employment relationship with Electromed or separation thereof;

		•	any claim for retaliation, including any claim for retaliation under Minn. Stat. Chapter 176; and

		•	any claim for discrimination or harassment based on sex, race, color, creed, religion, age, national
origin, marital status, sexual orientation, disability, genetic information, status with regard to public assistance, or any other
legally-protected class.

 

C.                 
Hansen hereby waives any and all relief not provided for in this Separation
Agreement. Hansen understands and agrees that, by signing this Separation Agreement, he waives and releases any claim to employment
with Electromed.

D.                 
Hansen is not, by signing this Separation Agreement, releasing or waiving
(i) any vested interest he may have in any 401(k), pension, or profit sharing plan by virtue of his employment with Electromed,
(ii) any rights or claims that may arise after the Separation Agreement is signed, (iii) the Separation Pay specifically promised
to him in Section 2 of this Separation Agreement, (iv) the right to institute legal action for the purpose of enforcing the provisions
of this Separation Agreement, (v) the right to file a charge of discrimination with a governmental agency such as the Equal Employment
Opportunity Commission (although Hansen agrees that he will not be able to recover any award of money or damages if he files such
a charge or has a charge filed on his behalf) or to testify, assist, or participate in an investigation, hearing, or proceeding
conducted by such an agency, (vi) any rights he has under the Consolidated Onmibus Budget Reconciliation Act (“COBRA”);
(vii) any existing rights pertaining to outstanding warrant agreements; or (viii) the right to coverage and indemnification under
Minnesota law or under .Electromed’s directors’ and officers’ insurance coverage for acts or omissions in the
course and scope of his employment with Electromed and his service as an officer and director of Electromed as set forth in and
governed by Minnesota law and Electromed’s D&O insurance policy.

E.                  
The “Released Parties,” as used in this Separation Agreement,
means Electromed, Inc. and any of its subsidiaries, divisions, affiliated entities, and its and their present and former officers,
directors, shareholders, trustees, employees, agents, attorneys, insurers, representatives and consultants, and the successors
and assigns of each, whether in their individual or official capacities, and the current and former trustees or administrators
of any pension or other benefit plan applicable to the employees or former employees of Electromed, in their official and individual
capacities.

4.                  
Notice of Right to Consult Attorney and Twenty-One (21) Calendar Day
Consideration Period. By signing this Separation Agreement, Hansen acknowledges and agrees that Electromed has informed
him by this Separation Agreement that (a) he has the right to consult with an attorney of his choice prior to signing this Separation
Agreement and Electromed encourages him to do so, and (b) he is entitled to twenty-one (21) calendar days from his receipt of this
Separation Agreement to consider whether the terms are acceptable to him. Electromed encourages Hansen to use the full 21-day period
to consider this Separation Agreement but he has the right, if he chooses, to sign this Separation Agreement prior to the expiration
of the twenty-one (21) day period; provided, however, that Hansen may not sign this Separation Agreement until on or after the
Separation Date.

 

    	-4-

    	 

    

5.                  
Notification of Rights under the Minnesota Human Rights Act (Minn.
Stat. Chapter 363A) and the Federal Age Discrimination in Employment Act (29 U.S.C. § 621 et seq.). Hansen is hereby
notified of his right to rescind (revoke) the release of claims contained in Section 3 with regard to claims arising under the
Minnesota Human Rights Act, Minnesota Statutes Chapter 363A, within fifteen (15) calendar days of his signing this Separation Agreement,
and with regard to claims arising under the federal Age Discrimination in Employment Act, 29 U.S.C. § 621 et seq.,
within seven (7) calendar days of his signing this Separation Agreement. The two rescission periods will run concurrently. in order
to be effective, the rescission must:

 

A.                 
Be in writing; and

B.                 
Be delivered to Dr. James Cassidy, Interim Chief Executive Officer, Electromed,
Inc., 500 Sixth Avenue NW, New Prague, MN 56071 by hand or mail within the required period; and

C.                 
If delivered by mail, the rescission must be postmarked within the required
period, properly addressed to Dr. James Cassidy, as set forth above, and sent by certified mail, return receipt requested.

This Separation Agreement will be effective upon the
expiration of the 15-day period. Notwithstanding the foregoing, if Hansen rescinds any part of this Separation Agreement in accordance
with this Section 5, Electromed will have the right to void this Separation Agreement by giving Hansen written notice within ten
(10) calendar days after Electromed’s receipt of his rescission notice. If Electromed exercises its right to void the Separation
Agreement, then Hansen will not receive or be entitled to the Separation Pay described in Section 2 of this Separation Agreement.

 

6.                  
Post-Separation Restrictions and Obligations.

 

A.                 
Non-Competition. Hansen agrees that he will abide by the restrictions
and obligations described in his Non-Competition, Non-Solicitation, and Confidentiality Agreement dated effective January 1, 2010
(the “Non-Competition Agreement”).

B.                 
Cooperation. Hansen agrees to provide Electromed the following
for no additional payment or compensation other than the compensation and benefits outlined herein, at Electromed’s request,
Hansen will cooperate with Electromed in any pending or future claims or lawsuits involving Electromed where Hansen has knowledge
of the underlying facts. In addition, Hansen will not voluntarily aid, assist, or cooperate with any third party claimants or third
party plaintiffs or their attorneys or agents in any claims or lawsuits commenced in the future against Electromed that arise out
of events occurring prior to the Separation Date; provided, however, that nothing in this Separation Agreement will be construed
to prevent Hansen from testifying truthfully and completely at an administrative hearing, a deposition, or in court in response
to a lawful subpoena or as otherwise required by law, in any litigation or proceeding involving Electromed. Hansen agrees to promptly
notify Electromed as immediately as possible if he is subpoenaed or otherwise required or asked to testify in any proceeding so
it has sufficient time to move to quash or otherwise lawfully prevent his testimony.

    	-5-

    	 

    

7.                  
Representations and Warranties. Hansen represents and warrants
that to the best of his knowledge, Hansen did not breach any fiduciary duties owed to Electromed and that he has not taken any
action of which he is aware that could result in criminal liability for Electromed. Hansen acknowledges that these representations
and warranties are a material inducement for Electromed to enter into this Agreement. Electromed is not currently aware of any
instances in which Hansen has breached his fiduciary duties owed to Electromed or any actions he has taken that could result in
criminal liability for Electromed.

 

8.                  
Return of Property. Hansen acknowledges and agrees that all
documents and materials relating to the business of, or the services provided by, Electromed are the sole property of Electromed.
Hansen agrees and represents that to the best of his knowledge (a) he has returned to Electromed all of its property (whether or
not confidential or proprietary), including but not limited to, all client records, and all Electromed documents, materials, emails,
and texts concerning Electromed from any and all personal media (including, but not limited to, personal computers, Blackberries,
PDA’s, cell phones, etc.), whether on computer disc, hard drive or other form, and all copies thereof, within his possession
or control, and (b) following his returning of all the above-described property, he then deleted or otherwise destroyed all Electromed-related
information, including deleting such information from all his personal media. This provision does not relate to publicly available
information about Electromed that may be in Hansen’s possession, or to any data relating to Hansen’s ownership of shares
in Electromed.

 

9.                  
Confidentiality and Nondisparagement.

 

A.                 
Hansen promises and agrees not to discuss or disclose, directly or indirectly,
in any manner whatsoever, any information regarding either (i) the contents and terms of this Separation Agreement, or (ii) the
substance and/or nature of any dispute between Electromed and any employee or former employee, including himself. Hansen agrees
that the only people with whom he may discuss this confidential information are his legal and financial advisors, and his spouse,
if applicable, provided they agree to keep the information confidential, or as required by law. Notwithstanding the foregoing,
Hansen acknowledges that Electromed may disclose either or both of (i) the contents and terms or this Separation Agreement, and
(ii) the substance and/or nature of any dispute between Electromed and any employee or former employee, including himself, to the
extent necessary to comply with legal requirements.

B.                 
Hansen promises and agrees not to make or induce any other person to make
derogatory or disparaging statements of any kind, oral or written, regarding the Released Parties (as defined in Section 3.E.)
to any person or organization whatsoever.

C.                 
Provided, however, that nothing in this Section or elsewhere in this Separation
Agreement will limit (i) Hansen’s obligation to give truthful testimony or information to a court or governmental agency
when required to do so by subpoena, court order, law, or administrative regulation, or (ii) Hansen’s legal right to testify,
assist, or participate in an investigation, hearing or proceeding conducted regarding a charge of discrimination filed with a governmental
agency.

    	-6-

    	 

    

10.               
Standstill. For a period of three (3) years from and after
the Separation Date, Hansen will not, and will not assist or encourage others (including by providing financing or forming, joining,
or in any way participating in any “group” (within the meaning of Section 13(d)(3) of the Securities Exchange Act of
1934 (the “Exchange Act”)) to, directly, or indirectly, (a) nominate a competing slate of directors at any meeting
of the Company’s shareholders, (b) engage in any “solicitation” of proxies to vote or consent, or seek to advise
or influence any person with respect to the voting of, any voting securities of the Company or be or become a “participant”
in any “election contest” with respect to the Company (all within the meaning of Section 14 of the Exchange Act), (c)
make, effect or commence (including by way of letter or other communication to the Company or its shareholders) any tender or exchange
offer, merger or other business combination, (d) engage in, or participate in any way in, any transaction regarding control of
the Company that has not been approved by the Board, or (e) otherwise act, alone or in concert with others, to seek representation
on or to control of influence the management, board of directors or policies of the Company.

 

11.               
Non-Admission. It is expressly understood that this Separation
Agreement does not constitute, nor will it be construed as an admission by Electromed or Hansen of any liability or unlawful conduct
whatsoever. Electromed and Hansen specifically deny any liability or unlawful conduct.

 

12.               
Remedies. If either party breaches any term of this Separation
Agreement, the non-breaching party will be entitled to its available legal and equitable remedies. If it is discovered that the
representations contained in Section 7 are substantially untrue as a result of any administrative, civil or criminal complaint
or investigation, Electromed will have the right, in addition to any other rights Electromed may have in law or equity, to, withhold
any future payments owed under the Separation Agreement, to be offset against any costs or damages Electromed can prove were caused
or incurred as a result of an actual breach by Hansen. Should Electromed not prove an actual breach by Hansen, any withheld amounts
under this Separation Agreement shall be released and paid to Hansen.

 

13.               
Code Section 409A. Notwithstanding any other provision of this
Separation Agreement to the contrary, the parties intend that this Separation Agreement will satisfy the applicable requirements,
if any, of Section 409A of the Internal Revenue Code of 1986, as amended, and the regulations thereunder (collectively hereinafter
referred to as “409A”) in a manner that will preclude the imposition of additional taxes and interest imposed under
409A. The parties- agree that the Separation Agreement will be amended (as determined by Electromed in consultation with Hansen)
to the extent necessary to comply with 409A, as amended from time to time, and the notices and other guidance of general applicability
issued thereunder.

 

14.               
Governing Law. This Separation Agreement and all questions
arising in connection with it will be governed by the laws of the State of Minnesota.

 

15.               
Successors and Assigns. This Separation Agreement is personal
to Hansen and may not be assigned by him without the written agreement of Electromed. The rights and obligations of this Separation
Agreement will inure to the successors and assigns of Electromed.

 

    	-7-

    	 

    

16.               
Severability. If a court finds any term of this Separation
Agreement to be invalid, unenforceable, or void, the parties agree that the court will modify such term to make it enforceable
to the maximum extent possible. If the term cannot be modified, the parties agree that the term will be severed and all other terms
of this Separation Agreement will remain in effect.

 

17.               
Entire Agreement. This Separation Agreement contains the sole
offer and full agreement between Hansen and Electromed relating to Hansen’s employment with Electromed, the separation from
such employment, and his right to severance/separation pay or benefits, and may not be modified, altered, or changed in any way
except by written agreement signed by both parties. The parties agree that this Separation Agreement supersedes and terminates
any and all other written and oral agreements and understandings between the parties relating to Hansen’s employment with
Electromed and separation thereof, compensation, benefits, and/or separation/severance payments and/or benefits, including but
not limited to Hansen’s Employment Agreement dated January 1, 2010, and any other policies, contracts, offers, or plans.
Notwithstanding the foregoing, this Separation Agreement does not supersede or terminate the Non-Compete Agreement or any separate
warrant agreements between Hansen and Electromed.

 

18.               
Expiration of Offer. Hansen may not sign this Separation Agreement
before the Separation Date. The offer contained in this Separation Agreement will automatically expire at midnight on the later
of (a) the twenty-first (21st) calendar day after the date of receipt (the “Expiration Date”). If Hansen does not sign
this Separation Agreement by the Expiration Date and promptly return it to Electromed, then the offer contained in this Separation
Agreement will automatically be revoked and Hansen will not receive the Separation Pay described in Section 2 of this Separation
Agreement.

 

19.               
Execution in Counterparts. This Separation Agreement may be
signed in counterparts by the parties hereto with the same force and effect as if the above parties signed the same original agreement.
Facsimile copies and photocopies of the parties’ signatures to this Settlement Agreement shall be valid and enforceable to
the same extent as original signatures, and the parties hereby waive any requirement that original signatures be produced as a
condition of proving the validity of or otherwise enforcing this Separation Agreement.

 

20.               
Acknowledgment of Reading and Understanding. By signing this
Separation Agreement, Hansen acknowledges that he has read and obtained legal advice regarding this Separation Agreement, including
the release of claims contained in Section 3 and that he understands that the release of claims is a full and final release
of all claims Hansen may have against Electromed and the other entities and individuals covered by the release. By signing,
Hansen also acknowledges and agrees that he has entered into this Separation Agreement knowingly and voluntarily.

 

[The remainder of this page is intentionally blank.
The signature page follows.]

 

 

 

    	-8-

    	 

    

IN WITNESS WHEREOF, the parties
have executed this Separation Agreement and Release of Claims in the manner appropriate to each.

 

 

 

	 	 	 	ROBERT D. HANSEN
	 	 	 	 
	Date:	May 14, 2012	 	/s/ Robert D. Hansen
	 	 	 	 
	 	 	 	 
	 	 	 	ELECTROMED, INC.
	 	 	 	 
	Date:	May 14, 2012	 	/s/ James Cassidy
	 	 	 	By:  James Cassidy

Its: Interim Chief Executive Officer

 

 

 

 

 

 

 

 

    	-9-

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