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<SEC-DOCUMENT>0001079974-05-000363.txt : 20051007
<SEC-HEADER>0001079974-05-000363.hdr.sgml : 20051007
<ACCEPTANCE-DATETIME>20051007123732
ACCESSION NUMBER:		0001079974-05-000363
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		5
CONFORMED PERIOD OF REPORT:	20051005
ITEM INFORMATION:		Entry into a Material Definitive Agreement
ITEM INFORMATION:		Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
FILED AS OF DATE:		20051007
DATE AS OF CHANGE:		20051007

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			ZYNEX MEDICAL HOLDINGS INC
		CENTRAL INDEX KEY:			0000846475
		STANDARD INDUSTRIAL CLASSIFICATION:	ELECTROMEDICAL & ELECTROTHERAPEUTIC APPARATUS [3845]
		IRS NUMBER:				870403828
		STATE OF INCORPORATION:			NV
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	033-26787-D
		FILM NUMBER:		051128934

	BUSINESS ADDRESS:	
		STREET 1:		8100 SOUTH PARK WAY
		STREET 2:		SUITE A-9
		CITY:			LITTLETON
		STATE:			CO
		ZIP:			80120
		BUSINESS PHONE:		(303) 703-4906

	MAIL ADDRESS:	
		STREET 1:		8100 SOUTH PARK WAY
		STREET 2:		SUITE A-9
		CITY:			LITTLETON
		STATE:			CO
		ZIP:			80120

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	ZYNEX MEDICAL HOLDINGS   INC
		DATE OF NAME CHANGE:	20040120

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	FOX RIVER HOLDINGS  INC
		DATE OF NAME CHANGE:	20031126

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	ARIZONA VENTURES INC
		DATE OF NAME CHANGE:	20030115
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>zynex8k_1062005.txt
<DESCRIPTION>REPORT 8-K
<TEXT>
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549



                                    FORM 8-K
                                 CURRENT REPORT

     Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934


Date of Report (Date of earliest event reported): October 5, 2005
                                                  ---------------


                          Zynex Medical Holdings, Inc.
             ------------------------------------------------------
             (Exact name of Registrant as specified in its charter)


         Nevada                    33-26787-D                  90-0214497
      ------------------         --------------        ---------------------
     (State or other             (Commission            (I.R.S. Employer
      jurisdiction               File Number)          Identification No.)
     of incorporation)


      8100 South Park Way, Suite A-9, Littleton, CO              80120
      ---------------------------------------------            ----------
        (Address of principal executive offices)               (Zip Code)


                  Registrant's telephone number: (303) 703-4906
                                                 --------------


                                 Total pages: 2
                                             ---

                               Exhibit index at: 2
                                                ---
<PAGE>



Item 1.01 Entry into a Material Definitive Agreement

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
          Off-Balance Sheet Arrangement of a Registrant

On October 5, 2005 Zynex Medical Holdings, Inc. and Zynex Medical, Inc
(collectively "Zynex") received $400,000 under a three year term loan agreement
with Silicon Valley Bank, Santa Clara, California and Boulder. Colorado (the
"Lender"). The loan bears interest at a per annum fixed rate of 7.84%. The loan
is guaranteed by Zynex Chairman, President and Chief Executive Officer Thomas
Sandgaard and is collateralized by a first perfected security interest in
accounts, inventory, chattel paper, equipment, fixtures, general intangibles,
including intellectual property and other assets. Registrant will repay the loan
in 36 equal monthly payments of principal and interest. The loan includes
financial covenants for minimum liquidity and minimum debt service coverage. In
connection with the loan, the Lender was granted a seven-year warrant to
purchase 50,000 shares of Zynex Common Stock at an exercise price of $0.71 per
share.

     The following exhibits are filed with this Report:

     Exhibit No.    Document
     -----------    ---------------------------------------------
        10.1        Loan and Security Agreement among Zynex Medical
                    Holdings, Inc, Zynex Medical, Inc and Silicon Valley
                    Bank, dated September 29, 2005.

        10.2        Warrant to Purchase Stock from Zynex Medical Holdings,
                    Inc. to Silicon Valley Bank.

        10.3        Unconditional Guaranty by Thomas Sandgaard for Silicon
                    Valley Bank, dated September 29, 2005.

        99.1        Press Release dated October 5, 2005.



                                   SIGNATURES


     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned hereunto duly authorized.



                                      Zynex Medical Holdings, Inc.
                                      (Registrant)



Date:  October 7, 2005                By:  /s/ Thomas Sandgaard
                                           -------------------------------------
                                           Thomas Sandgaard
                                           President and Chief Executive Officer



                                  EXHIBIT INDEX


         Exhibit No.      Document
         -----------      ------------------------------------------------------

           10.1           Loan and Security Agreement among Zynex Medical
                          Holdings, Inc, Zynex Medical, Inc and Silicon Valley
                          Bank, dated September 29, 2005.

           10.2           Warrant to Purchase Stock from Zynex Medical Holdings,
                          Inc. to Silicon Valley Bank.

           10.3           Unconditional Guaranty by Thomas Sandgaard for Silicon
                          Valley Bank, dated September 29, 2005.

           99.1           Press Release dated October 6.


                                   Page 2 of 2






</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>2
<FILENAME>zynex8kex101_1062005.txt
<DESCRIPTION>AGREEMENT
<TEXT>
                                                                    Exhibit 10.1

                           LOAN AND SECURITY AGREEMENT
              ZYNEX MEDICAL, INC. AND ZYNEX MEDICAL HOLDINGS, INC.


<PAGE>


                                TABLE OF CONTENTS


      1       ACCOUNTING AND OTHER TERMS......................................4
              --------------------------


      2       LOAN AND TERMS OF PAYMENT.......................................4
              -------------------------
              2.1      Promise to Pay.........................................4
              2.2      Interest Rate, Payments. ..............................4
              2.3      Fees...................................................5
              2.4      Additional Costs.......................................5


      3       CONDITIONS OF LOANS.............................................5
              ---------------------
              3.1     Conditions Precedent to Initial Credit Extension........5


      4       CREATION OF SECURITY INTEREST...................................5
              -----------------------------
              4.1      Grant of Security Interest.............................5
              4.2      Authorization of File..................................5


      5       REPRESENTATIONS AND WARRANTIES..................................5
              ------------------------------
              5.1      Due Organization and Authorization.....................5
              5.2      Collateral.............................................6
              5.3      Litigation.............................................6
              5.4      No Material Adverse Change in Financial Statements.....6
              5.5      Solvency...............................................6
              5.6      Regulatory Compliance..................................6
              5.7      Investments in Subsidiaries............................7
              5.8      Full Disclosure........................................7


      6       AFFIRMATIVE COVENANTS...........................................7
              ---------------------
              6.1      Government Compliance..................................7
              6.2      Financial Statements, Reports, Certificates............7
              6.3      Inventory; Returns.....................................8
              6.4      Taxes........ ............... .........................8
              6.5      Insurance..............................................8
              6.6      Primary Accounts.......................................8
              6.7      Financial Covenants....................................9
              6.8      Registration of Intellectual Property Rights...........9
              6.9      Further Assurances.....................................9


              <PAGE>



      7       NEGATIVE COVENANTS..............................................9
              ------------------
              7.1      Dispositions...........................................9
              7.2      Changes in Business, Ownership, Management or
                       Locations of Collateral...............................10
              7.3      Mergers or Acquisitions...............................10
              7.4      Indebtedness..........................................10
              7.5      Encumbrance...........................................10
              7.6      Distributions; Investments............................10
              7.7      Transactions with Affiliates..........................10
              7.8      Subordinated Debt.....................................10
              7.9      Compliance............................................11


              EVENTS OF DEFAULT..............................................11
      8       -----------------
              8.1      Payment Default.......................................11
              8.2      Covenant Default......................................11
              8.3      Material Adverse Change...............................11

                                        2
<PAGE>

              Attachment.....................................................11
              Insolvency.....................................................12
              Other Agreements...............................................12
              Judgments......................................................12
              Misrepresentations. ...........................................12
              Guaranty.......................................................12


      9       BANK'S RIGHTS AND REMEDIES.....................................12
              --------------------------.
              9.1      Rights and Remedies...................................12
              9.2      Power of Attorney.....................................13
              9.3      Bank Expenses.........................................13
              9.4      Bank's Liability for Collateral.......................13
              9.5      Remedies Cumulative...................................14
              9.6      Demand Waiver.........................................14


     10       NOTICES AND WAIVERS............................................14
              -------------------
              10.1     Notices...............................................14
              10.2     Subrogation and Similar Rights........................14
              10.3     Waivers of Notice. ...................................15
              10.4     Subrogation Defenses..................................15
              10.5     Right to Settle, Release..............................15



     11       CHOICE OF LAW. VENUE AND JURY TRIAL WAIVER.....................15
              ------------------------------------------


     12       GENERAL Provisions.............................................16
              ------------------
              12.1     Successors and Assigns................................16
              12.2     Indemnification.......................................16
              12.3     Time of Essence.......................................16
              12.4     Severability of Provision.............................16
              12.5     Amendments in Writing, Integration....................16
              12.6     Counterparts..........................................16
              12.7     Survival..............................................17
              12.8     Confidentiality.......................................17
              12.9     Attorneys' Fees, Costs and Expenses...................17



     13       DEFINITIONS....................................................17
              ------------
              13.1     Definitions...........................................17


                                        3
<PAGE>


     This LOAN AND SECURITY AGREEMENT (Agreement) dated as of the Effective
Date, between SILICON VALLEY BANK ("Bank"), whose address is 3003 Tasman Drive,
Santa Clara, California 95054 with a loan production office located at 4410
Arapahoe Avenue, Suite 200, Boulder, Colorado 80303 and ZYNEX MEDICAL, INC. and
ZYNEX MEDICAL HOLDINGS, INC. Jointly and severally, "Borrower") provides the
terms on which Bank will lend to Borrower and Borrower will repay Bank. The
parties agree as follows:


1.   ACCOUNTING AND OTHER TERMS
     --------------------------

     Accounting terms not defined in this Agreement will be construed following
GAAP. Calculations and determinations must be made following GAAP. The term
"financial statements" includes the notes and schedules. The terms "including"
and "includes" always mean "including (or includes) without limitation," in this
or any Loan Document.


2.   LOAN AND TERMS OF PAYMENT
     -------------------------

2.1  Promise to Pay.

     Borrower promises to pay Bank the unpaid principal amount of all Credit
Extensions and interest on the unpaid principal amount of the Credit Extensions.

2.1.1 Term Loan.

     (a) Bank will make a Tern Loan available to Borrower to be advanced on the
Effective Date.

     (b) Borrower will pay 36 equal installments of principal and interest (the
"Term Loan Payment"). Each Term Loan Payment is payable on the 1st of each
month, beginning November 1, 2005, during the term of the loan. Borrower's final
Term Loan Payment, due on October 1, 2008, includes all outstanding Term Loan
principal and accrued interest.

     (c) Bank's obligation to lend the undisbursed portion of the Obligations
will terminate if, in Bank's sole discretion, there has been a material adverse
change in the general affairs, management, results of operation, condition
(financial or otherwise) or the prospect of repayment of the Obligations, or
there has been any material adverse deviation by Borrower from the most recent
business plan of Borrower presented to and accepted by Bank prior to the
execution of this Agreement.

2.2  Interest Rate, Payments.

     (a) Interest Rate. The Term Loan accrues interest at a per annum rate equal
to the Basic Rate. After an Event of Default, Obligations accrue interest at 5
percent above the rate effective immediately before the Event of Default
Interest is computed on a 360 day year for the actual number of days elapsed.

     (b) Payments. Bank may debit any of Borrower's deposit accounts including
Account Number for principal and interest payments owing or any amounts Borrower
owes Bank. Bank will promptly notify Borrower when it debits Borrower's
accounts. These debits are not a set-off. Payments received after 12:00 noon
Pacific time are considered received at the opening of business on the next
Business Day. When a payment is due on a day that is not a Business Day, the
payment is due the next Business Day and additional interest shall accrue.

                                        4
<PAGE>


2.3  Fees.

     Borrower will pay:

     (a) Facility Fee. A fully earned, non-refundable Facility Fee of $2,500 due
on the Effective Date; and

     (b) Bank Expenses. All Bank Expenses (including reasonable attorneys' fees
and reasonable expenses) incurred through and after the date of this Agreement,
are payable when due.

2.4  Additional Costs.

     If any law or regulation increases Bank's costs or reduces its income for
any loan, Borrower will pay the increase in cost or reduction in income or
additional expense.

3    CONDITIONS OF LOANS
     -------------------

3.1  Conditions Precedent to Initial Credit Extension.

     Bank's obligation to make the initial Credit Extension is subject to the
condition precedent that it receives the agreements, documents and fees it
requires.


4    CREATION OF SECURITY INTEREST
     -----------------------------

4.1  Grant of Security Interest.

     Borrower grants Bank a continuing security interest in all presently
existing and later acquired Collateral to secure all Obligations and performance
of each of Borrower's duties under the Loan Documents. Except for Permitted
Liens, any security interest will be a first priority security interest in the
Collateral. If this Agreement is terminated, Bank's lien and security interest
in the Collateral will continue until Borrower fully satisfies its Obligations.
If Borrower shall at any time, acquire a commercial tort claim, Borrower shall
promptly notify Bank in a writing signed by Borrower of the brief details
thereof and grant to Bank in such writing a security interest therein and in the
proceeds thereof, all upon the terms of this Agreement, with such writing to be
in form and substance satisfactory to Bank.

4.2  Authorization of File.

     Borrower authorizes Bank to file financing statements without notice to
Borrower, with all appropriate jurisdictions, as Bank deems appropriate, in
order to perfect or protect Bank's interest in the Collateral.


5    REPRESENTATIONS AND WARRANTIES

     Borrower represents and warrants as follows:

5.1  Due Organization and Authorization.

     Borrower and each Subsidiary is duly existing and in good standing in its
state of formation and qualified and licensed to do business in, and in good
standing in, any state in which the conduct of its business or its ownership of
property requires that it be qualified, except where the failure to do so could
not reasonably be expected to cause a Material Adverse Change. Except as
disclosed in Borrower's Form 10-K Report for the year ended December 31, 2004
which has been delivered to Bank on or prior to the Effective Date, Borrower has
not changed its

                                        5
<PAGE>


 state of formation or its organizational structure or type or any
 organizational number (if any) assigned by its jurisdiction of formation.

         The execution, delivery and performance of the Loan Documents have been
 duly authorized, and do not conflict with Borrower's formation documents, nor
 constitute an event of default under any material agreement by which Borrower
 is bound. Borrower is not in default under any agreement to which or by which
 it is bound in which the default could reasonably be expected to cause a
 Material Adverse Change.

5.2  Collateral.

     Borrower has good title to the Collateral, free of Liens except Permitted
Liens or Borrower has Rights to each asset that is Collateral. Borrower has no
other deposit account, other than the deposit accounts described in the
Schedule. The Accounts are bona fide, existing obligations, and the service or
property has been performed or delivered to the account debtor or its agent for
immediate shipment to and unconditional acceptance by the account debtor. The
Collateral is not in the possession of any third party bailee (such as at a
warehouse). In the event that Borrower, after the date hereof, intends to store
or otherwise deliver the Collateral to such a bailee, then Borrower will receive
the prior written consent of Bank and such bailee must acknowledge in writing
that the bailee is holding such Collateral for the benefit of Bank. All
Inventory is in all material respects of good and marketable quality, free from
material defects. Borrower is the sole owner of the Intellectual Property,
except for non-exclusive licenses granted to its customers in the ordinary
course of business. Each Patent is valid and enforceable and no part of the
Intellectual Property has been judged invalid or unenforceable, in whole or in
part, and no claim has been made that any part of the Intellectual Property
violates the rights of any third party, except to the extent such claim could
not reasonably be expected to cause a Material Adverse Change.

5.3  Litigation.

     Except as shown in the Schedule, there are no actions or proceedings
pending or, to the knowledge of Borrower's Responsible Officers, threatened by
or against Borrower or any Subsidiary in which a likely adverse decision could
reasonably be expected to cause a Material Adverse Change.

5.4  No Material Adverse Change in Financial Statements.

     All consolidated financial statements for Borrower, and any Subsidiary,
delivered to Bank fairly present in all material respects Borrower's
consolidated financial condition and Borrower's consolidated results of
operations. There has not been any material deterioration in Borrower's
consolidated financial condition since the date of the most recent financial
statements submitted to Bank.

5.5  Solvency.

     The fair salable value of Borrower's assets (including goodwill minus
disposition costs) exceeds the fair value of its liabilities; the Borrower is
not left with unreasonably small capital after the transactions in this
Agreement; and Borrower is able to pay its debts (including trade debts) as they
mature.

5.6  Regulatory Compliance.

     Borrower is not an "investment company" or a company "controlled" by an
"investment company" under the Investment Company Act. Borrower is not engaged
as one of its important activities in extending credit for margin stock (under
Regulations T and U of the Federal Reserve Board of Governors). Borrower has
complied in all material respects with the Federal Fair Labor Standards Act.

                                        6
<PAGE>


 Borrower has not violated any laws, ordinances or rules, the
violation of which could reasonably be expected to cause a Material Adverse
Change. None of Borrower's or any Subsidiary's properties or assets has been
used by Borrower or any Subsidiary or, to the best of Borrower's knowledge, by
previous Persons, in disposing, producing, storing, treating, or transporting
any hazardous substance other than legally. Borrower and each Subsidiary has
timely filed all required tax returns and paid, or made adequate provision to
pay, all material taxes, except those being contested in good faith with
adequate reserves under GAAP. Borrower and each Subsidiary has obtained all
consents, approvals and authorizations of, made all declarations or filings
with, and given all notices to, all government authorities that are necessary to
continue its business as currently conducted, except where the failure to do so
could not reasonably be expected to cause a Material Adverse Change.

5.7  Investments In Subsidiaries.

     Borrower does not own any stock, partnership interest or other equity
securities except for Permitted Investments.

5.8  Full Disclosure.

     No written representation, warranty or other statement of Borrower in any
certificate or written statement given to Bank (taken together with all such
written certificates and written statements to Bank) contains any untrue
statement of a material fact or omits to state a material fact necessary to make
the statements contained in the certificates or statements not misleading. It
being recognized by Bank that the projections and forecasts provided by Borrower
in good faith and based upon reasonable assumptions are not viewed as facts and
that actual results during the period or periods covered by such projections and
forecasts may differ from the projected and forecasted results.


6    AFFIRMATIVE COVENANTS
     ---------------------

     Borrower will do all of the following for so long as Bank has an obligation
to lend, or there are outstanding Obligations:

6.1  Government Compliance.

     Borrower will maintain its and all Subsidiaries' legal existence and good
standing in its jurisdiction of formation and maintain qualification in each
jurisdiction in which the failure to so qualify would reasonably be expected to
cause a material adverse effect on Borrower's business or operations. Borrower
will comply, and have each Subsidiary comply, with all laws, ordinances and
regulations to which it is subject, noncompliance with which could have a
material adverse effect on Borrower's business or operations or would reasonably
be expected to cause a Material Adverse Change.

6.2  Financial Statements, Reports, Certificates.


     (a) Borrower will deliver to Bank: (Q as soon as available, but no later
than 30 days after the last day of each month, a company prepared consolidated
balance sheet and income statement covering Borrower's consolidated operations
during the period certified by a Responsible Officer and in a form acceptable to
Bank; (ii) as soon as available, but no later than 180 days after the last day
of Borrower's fiscal year, audited consolidated financial statements prepared
under GAAP, consistently applied, together with an opinion which is unqualified
or otherwise consented to by Bank on the financial statements from an
independent certified public accounting firm reasonably acceptable to Bank;
(Iii) within 5 days of filing, copies of all statements, reports and notices
made available to Borrower's security holders or to any holders of Subordinated
Debt and all reports on Form 1o.K, 10-0 and 8-K filed with the Securities and
Exchange Commission; (iv) a prompt report of any legal actions pending or
threatened against

                                        7
<PAGE>


Borrower or any Subsidiary that could result in damages or costs to Borrower or
any Subsidiary of $100,000 or more; (v) budgets, sales projections, operating
plans or other financial information Bank reasonably requests: and (vi) prompt
notice of any material change in the composition of the Intellectual Property,
including any subsequent ownership right of Borrower in or to any Copyright,
Patent or Trademark not shown in any intellectual property security agreement
between Borrower and Bank or knowledge of an event that materially adversely
affects the value of the Intellectual Property.

     (b) Within 30 days after the last day of each month, Borrower will deliver
to Bank aged listings of accounts receivable and accounts payable.

     (c) Within 30 days after the last day of each month, Borrower will deliver
to Bank with the monthly financial statements a Compliance Certificate signed by
a Responsible Officer in the form of Exhibit C.

     (d) Allow Bank to audit Borrower's Collateral at Borrower's expense. Such
audits will be conducted only at such times as an Event of Default has occurred
and is continuing.

6.3  Inventory; Returns.

     Borrower will keep all Inventory in good and marketable condition, free
from material defects. Returns and allowances between Borrower and its account
debtors will follow Borrower's customary practices as they exist at execution of
this Agreement. Borrower must promptly notify Bank of all returns, recoveries.
disputes and claims that involve more than $50,000.

6.4  Taxes.

     Borrower will make, and cause each Subsidiary to make, timely payment of
all material federal, state, and local taxes or assessments, unless contested in
good faith and for which Borrower maintains adequate reserves in accordance with
GAAP and will deliver to Bank, on demand, appropriate certificates attesting to
the payment.

6.5  Insurance.

     Borrower will keep its business and the Collateral insured for risks and in
amounts, as Bank may reasonably request. Insurance policies will be in a form,
with companies, and in amounts that are satisfactory to Bank in Bank's
reasonable discretion. All property policies will have a lender's loss payable
endorsement showing Bank as an additional loss payee and all liability policies
will show the Bank as an additional insured and provide that the insurer must
give Bank at least 20 days notice before canceling its policy. At Bank's
request, Borrower will deliver certified copies of policies and evidence of all
premium payments. Proceeds payable under any policy will, at Bank's option, be
payable to Bank on account of the Obligations.

6.6  Primary Accounts.


     Borrower will maintain its primary banking relationship with Bank, which
relationship shall include Borrower maintaining account balances in any accounts
at or through Bank representing at least 85% of all account balances of Borrower
at any financial institution. As to any deposit accounts and investment accounts
maintained with another institution, within 60 days following the Effective
Date, Borrower shall cause such institution to enter into a control agreement in
form acceptable to Bank in its good faith business judgment in order to perfect
Bank's first priority security interest in said deposit accounts and investment
accounts.

                                        8
<PAGE>


6.7  Financial Covenants.

     Borrower will maintain as of the last day of each month:

     (i) Debt Service Coverage (measured on a roiling 3 month basis). A ratio of
Borrower's consolidated earnings before interest expense, income taxes,
depreciation, amortization of intangible assets and other non-cash charges made
to Borrower's income, to principal and interest payments due on the outstanding
Obligations, of at least 1.40 to 1.00, increasing to 1.75 to 1.00 beginning with
the month ending June 30, 2006 and thereafter.

     (ii) liquidity Coverage (to be maintained at all times). A ratio of
unrestricted cash held with Bank plus all Accounts (less Borrower's reserves for
uncollectible Accounts), to outstanding Obligations, of at least 1.50 to 1.00.

6.8  Registration of Intellectual Property Rights.

     Borrower shall not register any Copyrights or Mask Works with the United
States Copyright Office unless it: (i) has given at least fifteen (15) days'
prior notice to Bank of its intent to register such Copyrights or Mask Works and
has provided Bank with a copy of the application it intends to file with the
United States Copyright Office (excluding exhibits thereto); (ii) executes a
security agreement or such other documents as Bank may reasonably request in
order to maintain the perfection and priority of Bank's security interest in the
Copyrights proposed to be registered with the United States Copyright Office;
and (iii) records such security documents with the United States Copyright
Office contemporaneously with filing the Copyright application(s) with the
United States Copyright Office. Borrower shall promptly provide to Bank a copy
of the Copyright application(s) filed with the United States Copyright Office,
together with evidence of the recording of the security documents necessary for
Bank to maintain the perfection and priority of its security interest in such
Copyrights or Mask Works. Borrower shall provide written notice to Bank of any
application filed by Borrower in the United States Patent Trademark Office for a
patent or to register a trademark or service mark within 30 days of any such
filing.

     Borrower will (i) protect, defend and maintain the validity and
enforceability of the Intellectual Property and promptly advise Bank in writing
of material infringements and (ii) not allow any Intellectual Property to be
abandoned, forfeited or dedicated to the public without Bank's written consent.

6.9  Further Assurances.

     Borrower will execute any further instruments and take further action as
Bank reasonably requests to perfect or continue Bank's security interest in the
Collateral or to effect the purposes of this Agreement.


7    NEGATIVE COVENANTS
     ------------------

     For so long as Bank has an obligation to lend or there are any outstanding
Obligations, Borrower shall not, without Bank's prior written consent (which
shall be a matter of its good faith business judgment), do any of the following:

7.1  Dispositions.

     Convey, sell, lease, transfer or otherwise dispose of (collectively
"Transfer"), or permit any of its Subsidiaries to Transfer, all or any part of
its business or property, except for Transfers (i) of Inventory in the ordinary
course of business; (ii) of non-exclusive licenses and similar arrangements for
the use of the property of Borrower or its Subsidiaries in the ordinary course
of business; (iii) of worn-out or obsolete Equipment; or (iv) other Equipment no
longer used by Borrower, which value does not exceed $25,000 in any calendar
year.

                                        9
<PAGE>


7.2  Changes In Business, Ownership, Management or Locations of Collateral.

     Engage in or permit any of its Subsidiaries to engage in any business other
than the businesses currently engaged in by Borrower or reasonably related
thereto or have a material change in its ownership or management of greater than
25% (other than by the sale of Borrower's equity securities in a public offering
or to venture capital investors so long as Borrower identifies the venture
capital investors prior to the closing of the investment). Borrower will not,
without at least 30 days prior written notice, relocate its chief executive
office, change its state of formation (including reincorporation), change its
organizational number or name or add any new offices or business locations (such
as warehouses) in which Borrower maintains or stores over $5,000 in Collateral.

7.3  Mergers or Acquisitions.

     Merge or consolidate, or permit any of its Subsidiaries to merge or
consolidate, with any other Person, or acquire, or permit any of its
Subsidiaries to acquire, all or substantially all of the capital stock or
property of another Person, except where (i) no Event of Default has occurred
and is continuing or would result from such action during the term of this
Agreement and (Ii) such transaction would not result in a decrease of more than
25% of Tangible Net Worth. A Subsidiary may merge or consolidate Into another
Subsidiary or into Borrower.

7.4  Indebtedness.

     Create, incur, assume, or be liable for any Indebtedness, or permit any
Subsidiary to do so, other than Permitted Indebtedness.

7.5  Encumbrance.

     Create, incur, or allow any Lien on any of its property, or assign or
convey any right to receive income, including the sale of any Accounts, or
permit any of its Subsidiaries to do so, except for Permitted Liens, or permit
any Collateral not to be subject to the first priority security interest granted
here, subject to Permitted Liens.

7.6  Distributions; Investments.

     Directly or indirectly acquire or own any Person, or make any Investment in
any Person, other than Permitted Investments, or permit any of its Subsidiaries
to do so. Pay any dividends or make any distribution or payment or redeem,
retire or purchase any capital stock.

7.7  Transactions with Affiliates.

     Directly or indirectly enter into or permit to exist any material
transaction with any Affiliate of Borrower except for transactions that are in
the ordinary course of Borrower's business, upon fair and reasonable terms that
are no less favorable to Borrower than would be obtained in an arm's length
transaction with a nonaffiliated Person.

7.8  Subordinated Debt

     Make or permit any payment on any Subordinated Debt, except under the terms
of the Subordinated Debt, or amend any provision in any document relating to the
Subordinated Debt without Bank's prior written consent.

                                       10
<PAGE>


7.9  Compliance.

     Become an "investment company" or a company controlled by an "investment
company," under the Investment Company Act of 1940 or undertake as one of its
important activities extending credit to purchase or carry margin stock, or use
the proceeds of any Credit Extension for that purpose; fail to meet the minimum
funding requirements of ERISA, permit a Reportable Event or Prohibited
Transaction, as defined in ERISA, to occur; fail to comply with the Federal Fair
Labor Standards Act or violate any other law or regulation, if the violation
could reasonably be expected to have a material adverse effect on Borrower's
business or operations or would reasonably be expected to cause a Material
Adverse Change, or permit any of its Subsidiaries to do so.


8    EVENTS OF DEFAULT
     ------------------

8.1  Anyone of the following is an Event of Default: Payment Default.

     If Borrower fails to pay any of the Obligations within 5 days after their
due date, however, during such period no Credit Extensions will be made;

8.2  Covenant Default.

     (a) If Borrower fails to perform any obligation under Sections 6.2 or 6.7
or violates any of the covenants contained in Section 7 of this Agreement, or

     (b) If Borrower fails or neglects to perform, keep, or observe any other
material term, provision, condition, covenant, or agreement contained in this
Agreement, in any of the Loan Documents, or in any other present or future
agreement between Borrower and Bank and as to any default under such other term,
provision, condition, covenant or agreement that can be cured, has failed to
cure such default within ten (10) Business Days after the occurrence thereof;
provided, however, that if the default cannot by its nature be cured within the
ten (10) Business Day period or cannot after diligent attempts by Borrower be
cured within such ten (10) Business Day period, and such default is likely to be
cured within a reasonable time, then Borrower shall have an additional
reasonable period (which shall not in any case exceed thirty (30) Business Days)
to attempt to cure such default, and within such reasonable time period the
failure to have cured such default shall not be deemed an Event of Default
(provided that no Credit Extensions will be made during such cure period);

8.3  Material Adverse Change.

     If there (i) occurs a material adverse change in the business, operations,
or financial condition of the Borrower, or (ii) is a material impairment of the
prospect of repayment of any portion of the Obligations; or (iii) is a material
impairment of the value or priority of Bank's security interests in the
Collateral (the foregoing being defined as a "Material Adverse Change").

8.4  Attachment.

     If any material portion of Borrower's assets is attached, seized, levied
on, or comes into possession of a trustee or receiver and the attachment,
seizure or levy is not removed in 10 days, or if Borrower is enjoined,
restrained, or prevented by court order from conducting a material part of its
business or if a judgment or other claim becomes a Lien on a material portion of
Borrower's assets, or if a notice of lien, levy, or assessment is filed against
any of Borrower's assets by any government agency and not paid within 10 days
after Borrower receives notice. These are not

                                       11
<PAGE>


Events of Default if stayed or if a bond is posted pending contest by Borrower
(but no Credit Extensions will be made during the cure period);

8.5  Insolvency.

     If Borrower becomes insolvent or if Borrower begins an Insolvency
Proceeding or an Insolvency Proceeding is begun against Borrower and not
dismissed or stayed within 30 days (but no Credit Extensions will be made before
any Insolvency Proceeding is dismissed);

8.6  Other Agreements.

     If there is a default in any agreement between Borrower and a third party
that gives the third party the right to accelerate any Indebtedness exceeding
$100,000 or that could reasonably be expected to cause a Material Adverse
Change;

8.7  Judgments.

     If a money judgment(s) in the aggregate of at least $50,000 is rendered
against Borrower and is unsatisfied and unstayed for 10 days (but no Credit
Extensions will be made before the judgment is stayed or satisfied);

8.8  Misrepresentations.

     If Borrower or any Person acting for Borrower makes any material
misrepresentation or material misstatement now or later in any warranty or
representation in this Agreement or in any writing delivered to Bank or to
induce Bank to enter this Agreement or any Loan Document; or

8.9  Guaranty.

     Any guaranty of any Obligations ceases for any reason to be in full force
or any Guarantor does not perform any obligation under any guaranty of the
Obligations, or any material misrepresentation or material misstatement exists
now or later in any warranty or representation in any guaranty of the
Obligations or in any certificate delivered to Bank in connection with the
guaranty, or any circumstance described in Sections 8.4,8.5 or 8.7 occurs to any
Guarantor.

9    BANK'S RIGHTS AND REMEDIES
     --------------------------

9.1  Rights and Remedies.

     When an Event of Default occurs and continues Bank may, without notice or
demand, do any or all of the following:

     (a) Declare all Obligations immediately due and payable (but if an Event of
Default described in Section 8.5 occurs all Obligations are immediately due and
payable without any action by Bank);

     (b) Stop advancing money or extending credit for Borrower's benefit under
this Agreement or under any other agreement between Borrower and Bank;

     (c) Settle or adjust disputes and claims directly with account debtors for
amounts, on terms and in any order that Bank considers advisable; notify any
Person owing Borrower money of Bank's security interest in the funds and verify
the amount of the Account. Borrower must collect all payments in trust for Bank
and, if requested by Bank, immediately deliver the payments to Bank in the form
received from the account debtor, with proper endorsements for deposit;

                                       12
<PAGE>


     (d) Make any payments and do any acts it considers necessary or reasonable
to protect its security interest in the Collateral. Borrower will assemble the
Collateral if Bank requires and make it available as Bank designates. Bank may
enter premises where the Collateral is located. take and maintain possession of
any part of the Collateral, and pay, purchase, contest, or compromise any Lien
which appears to be prior or superior to its security interest and pay all
expenses incurred. Borrower grants Bank a license to enter and occupy any of its
premises, without charge, to exercise any of Bank's rights or remedies;

     (e) Bank may place a "hold" on any account maintained with Bank and deliver
a notice of exclusive control, any entitlement order, or other directions or
instructions pursuant to any control agreement or similar agreements providing
control of any Collateral;

     (f) Apply to the Obligations any 0) balances and deposits of Borrower it
holds, or (ii) any amount held by Bank owing to or for the credit or the account
of Borrower;

     (g) Ship, reclaim, recover, store, finish, maintain, repair, prepare for
sale, advertise for sale, and sell the Collateral. Bank is granted a
non-exclusive, royalty-free license or other right to use, without charge,
Borrower's labels, Patents, Copyrights, Mask Works, rights of use of any name,
trade secrets, trade names, Trademarks, service marks, and advertising matter,
or any similar property as it pertains to the Collateral, in completing
production of, advertising for sale, and selling any Collateral and, in
connection with Bank's exercise of its rights under this Section, Borrower's
rights under all licenses and all franchise agreements inure to Bank's benefit;
and

     (h) Dispose of the Collateral according to the Code.

9.2 Power of Attorney.

     Effective only when an Event of Default occurs and continues, Borrower
irrevocably appoints Bank as its lawful attorney to: (i) endorse Borrower's name
on any checks or other forms of payment or security; (ii) sign Borrower's name
on any invoice or bill of lading for any Account or drafts against account
debtors, (iii) make, settle, and adjust all claims under Borrower's insurance
policies; (iv) settle and adjust disputes and claims about the Accounts directly
with account debtors, for amounts and on terms Bank determines reasonable; and
(v) transfer the Collateral into the name of Bank or a third party as the Code
permits. Bank may exercise the power of attorney to sign Borrower's name on any
documents necessary to perfect or continue the perfection of any security
interest regardless of whether an Event of Default has occurred. Bank's
appointment as Borrower's attorney in fact, and all of Bank's rights and powers,
coupled with an interest, are irrevocable until all Obligations have been fully
repaid and performed and Bank's obligation to provide Credit Extensions
terminates.

9.3  Bank Expenses.

     If Borrower fails to pay any amount or furnish any required proof of
payment to third persons, Bank may make all or part of the payment or obtain
insurance policies required in Section 6.5, and take any action under the
policies Bank deems prudent. Any amounts paid by Bank are Bank Expenses and
immediately due and payable, bearing interest at the then applicable rate and
secured by the Collateral. No payments by Bank are deemed an agreement to make
similar payments in the future or Bank's waiver of any Event of Default.

9.4  Bank's Liability for Collateral.

     If Bank complies with reasonable banking practices and Section 9-207 of the
Code, it is not liable for; (a) the safekeeping of the Collateral; (b) any loss
or damage to the Collateral; (c) any diminution in the value of the Collateral;
or (d) any act or default of any carrier, warehouseman, bailee, or other person.
Except as provided above, Borrower bears all risk of loss, damage or destruction
of the Collateral.

                                       13
<PAGE>


9.5  Remedies Cumulative.

     Bank's rights and remedies under this Agreement, the Loan Documents, and
all other agreements are cumulative. Bank has all rights and remedies provided
under the Code, by law, or in equity. Bank's exercise of one right or remedy is
not an election, and Bank's waiver of any Event of Default is not a continuing
waiver. Bank's delay is not a waiver, election, or acquiescence. No waiver is
effective unless signed by Bank and then is only effective for the specific
instance and purpose for which it was given.

9.6  Demand Waiver.

     Borrower waives demand, notice of default or dishonor, notice of payment
and nonpayment, notice of any default, nonpayment at maturity, release,
compromise, settlement, extension, or renewal of accounts, documents,
instruments. chattel paper. and guarantees held by Bank on which Borrower is
liable.


10   NOTICES AND WAIVERS
     -------------------

10.1 Notices.

     Unless otherwise provided in this Agreement, all notices or demands by any
party relating to this Agreement or any other agreement entered into in
connection herewith shall be in writing and (except for financial statements and
other informational documents which may be sent by first-class mail, postage
prepaid) shall be personally delivered or sent by a recognized overnight
delivery service. certified mail, postage prepaid, return receipt requested, or
by telefacsimile to Borrower or to Bank, as the case may be, at its addresses
set forth below:

      If to Borrower

                          Zynex Medical, Inc.
                          8100 South Park Way, Suite A-9
                          Littleton, CO 80120
                          Attn: Thomas Sandgaard and Chief Financial Officer
                          FAX: 303-347-9153

      and to


                          Zynex Medical Holdings, Inc.
                          8100 South Park Way, Suite A-9
                          Littleton, CO 80120
                          Attn: Thomas Sandgaard and Chief Financial Officer
                          FAX:303-347-9153

      If to Bank


                          Silicon Valley Bank
                          4410 Arapahoe Avenue, Suite 200 Boulder. CO 80303
                          Attn: Kevin Grossman
                          FAX: (303) 938-5900

10.2 Subrogation and Similar Rights.

     Notwithstanding any other provision of this Agreement or any other Loan
Document, each Borrower Irrevocably waives all rights that it may have at law or
in equity (including, without limitation, any law subrogating the Borrower to
the rights of Bank under the Loan Documents) to seek contribution,
indemnification. or any other form of reimbursement from any other Borrower, or
any other Person now or hereafter primarily or secondarily liable for any of the
Obligations, for any payment made by the Borrower with respect to the
Obligations in connection with the Loan Documents or otherwise and all rights
that it might have to benefit from, or to participate in, any security for the
Obligations as a result of any payment made by the Borrower with respect to the

                                       14
<PAGE>


Obligations in connection with the Loan Documents or otherwise. Any agreement
providing for indemnification, reimbursement or any other arrangement prohibited
under this Section 10.2 shall be null and void. If any payment is made to a
Borrower in contravention of this Section 10.2, such Borrower shall hold such
payment in trust for Bank and such payment shall be promptly delivered to Bank
for application to the Obligations, whether matured or unmatured.

10.3 Waivers of Notice.

     Each Borrower waives notice of acceptance hereof; notice of the existence,
creation or acquisition of any of the Obligations; notice of an Event of
Default; notice of the amount of the Obligations outstanding at any time; notice
of intent to accelerate; notice of acceleration; notice of any adverse change in
the financial condition of any other Borrower or of any other fact that might
increase the Borrower's risk; presentment for payment; demand; protest and
notice thereof as to any instrument; default; and all other notices and demands
to which the Borrower would otherwise be entitled. Each Borrower waives any
defense arising from any defense of any other Borrower, or by reason of the
cessation from any cause whatsoever of the liability of any other Borrower.
Bank's failure at any time to require strict performance by any Borrower of any
provision of the Loan Documents shall not waive, alter or diminish any right of
Bank thereafter to demand strict compliance and performance therewith. Nothing
contained herein shall prevent Bank from foreclosing on the lien of any deed of
trust, mortgage or other security instrument, or exercising any rights available
thereunder, and the exercise of any such rights shall not constitute a legal or
equitable discharge of any Borrower. Each Borrower also waives any defense
arising from any act or omission of Bank that changes the scope of the
Borrower's risks hereunder. Each Borrower hereby waives any right to assert
against Bank any defense (legal or equitable), setoff, counterclaim, or claims
that such Borrower individually may now or hereafter have against another
Borrower or any other Person liable to Borrower with respect to the Obligations
in any manner whatsoever.

10.4 Subrogation Defenses.

     Each Borrower waives the benefits, if any, of any statutory or common law
rule that may permit a borrower to assert any defenses of a surety or guarantor,
or that may give a borrower the right to require a senior creditor to marshal
assets, and Borrower agrees that it shall not assert any such defenses or
rights.

10.5 Right to Settle, Release.


     (a) The liability of each Borrower hereunder shall not be diminished by (i)
any agreement, understanding or representation that any of the Obligations is or
was to be guaranteed by another Person or secured by other property, or (Ii) any
release or unenforceability. whether partial or total, or rights, if any, which
Borrower may now or hereafter have against any other Person, including another
Borrower, or property with respect to any of the Obligations.

     (b) Without notice to any Borrower and without affecting the liability of
any Borrower hereunder, Bank may (i) compromise, settle, renew, extend the time
for payment, change the manner or terms of payment, discharge the performance
of, decline to enforce, or release all or any of the Obligations with respect to
a Borrower, (ii) grant other indulgences to a Borrower in respect of the
Obligations, (iii) modify in any manner any documents, relating to the
Obligations with respect to a Borrower, (iv) release, surrender or exchange any
deposits or other property securing the Obligations, whether pledged by a
Borrower or any other Person, or (v) compromise, settle renew, or extend the
time for payment, discharge the performance of, decline to enforce, or release
all or any obligations of any guarantor, endorser or other Person who is now or
may hereafter be liable with respect to any of the Obligations.


11   CHOICE OF LAW. VENUE AND JURY TRIAL WAIVER
     ------------------------------------------

                                       15
<PAGE>


     Colorado law governs the Loan Documents without regard to principles of
conflicts of law. Borrower and Bank each submit to the exclusive jurisdiction of
the State and Federal courts in Denver County, Colorado.


BORROWER AND BANK EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE
OF ACTION ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY CONTEMPLATED
TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS. THIS
WAIVER IS A MATERIAL INDUCEMENT FOR BOTH PARTIES TO ENTER INTO THIS AGREEMENT.
EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL. initial here


12   GENERAL PROVISIONS
     ------------------

12.1 Successors and Assigns.

     This Agreement binds and is for the benefit of the successors and permitted
assigns of each party. Borrower may not assign this Agreement or any rights
under it without Bank's prior written consent which may be granted or withheld
in Bank's discretion. Bank has the right, without the consent of or notice to
Borrower, to sell, transfer, negotiate, or grant participation in all or any
part of, or any interest in, Bank's obligations, rights and benefits under this
Agreement.

12.2 Indemnification.

     Borrower will indemnify, defend and hold harmless Bank and its officers,
employees, and agents against: (a) all obligations, demands, claims, and
liabilities asserted by any other party in connection with the transactions
contemplated by the Loan Documents; and (b) all losses or Bank Expenses
incurred, or paid by Bank from, following, or consequential to transactions
between Bank and Borrower (including reasonable attorneys fees and expenses),
except for losses caused by Bank's gross negligence or willful misconduct.

12.3 Time of Essence.

     Time is of the essence for the performance of all obligations in this
Agreement.

12.4 Severability of Provision.

     Each provision of this Agreement is severable from every other provision in
determining the enforceability of any provision.

12.5 Amendments In Writing, Integration.

     All amendments to this Agreement must be in writing and signed by Borrower
and Bank. This Agreement represents the entire agreement about this subject
matter, and supersedes prior negotiations or agreements. All prior agreements,
understandings, representations, warranties, and negotiations between the
parties about the subject matter of this Agreement merge into this Agreement and
the Loan Documents.

12.6 Counterparts.

     This Agreement may be executed in any number of counterparts and by
different parties on separate counterparts, each of which, when executed and
delivered, are an original, and all taken together, constitute one Agreement.

                                       16
<PAGE>


12.7 Survival

     All covenants, representations and warranties made in this Agreement
continue in full force while any Obligations remain outstanding. The obligations
of Borrower in Section 12.2 to indemnify Bank will survive until all statutes of
limitations for actions that may be brought against Bank have run.

12.8 Confidentiality .

     In handling any confidential information, Bank will exercise the same
degree of care that it exercises for its own proprietary information, but
disclosure of information may be made (i) to Bank's subsidiaries or affiliates
in connection with their business with Borrower, (ii) to prospective transferees
or purchasers of any interest in the loans (provided, however, Bank shall use
commercially reasonable efforts in obtaining such prospective transferee or
purchasers agreement of the terms of this provision), (iii) as required by law,
regulation, subpoena, or other order, (iv) as required in connection with Bank's
examination or audit and (v) as Bank considers appropriate exercising remedies
under this Agreement. Confidential information does not include information that
either: (a) is in the public domain or in Bank's possession when disclosed to
Bank, or becomes part of the public domain after disclosure to Bank; or (b) is
disclosed to Bank by a third party, if Bank does not know that the third party
is prohibited from disclosing the information.

12.9 Attorneys' Fees, Costs and Expenses.

     In any action or proceeding between Borrower and Bank arising out of the
Loan Documents, the prevailing party will be entitled to recover its reasonable
attorneys' fees and other reasonable costs and expenses incurred, in addition to
any other relief to which it may be entitled.


13   DEFINITIONS
     -----------

13.1 Definitions.

     In this Agreement:

     "Accounts" are all existing and later arising accounts, contract rights,
and other obligations owed Borrower in connection with its sale or lease of
goods (including licensing software and other technology) or provision of
services, all credit insurance, guaranties, other security and all merchandise
returned or reclaimed by Borrower and Borrower's Books relating to any of the
foregoing, as such definition may be amended from time to time according to the
Code.

         "Affiliate" of a Person is a Person that owns or controls directly or
 indirectly the Person, any Person that controls or is controlled by or is under
 common control with the Person, and each of that Person's senior executive
 officers, directors, and partners and, for any Person that is a limited
 liability company, that Person's managers and members.

         "Bank Expenses" are all audit fees and expenses and reasonable costs
 and expenses (including reasonable attorneys' fees and expenses) for preparing,
 negotiating, administering, defending and enforcing the Loan Documents
 (including appeals or Insolvency Proceedings).

         "Basic Rate. is, as of the Effective Date, the per annum rate of
 interest equal to the sum of (a) the U.S. Treasury note yield to maturity for a
 term of 36 months as quoted in The Wall Street Journal on the Effective Date,
 plus (b) 375 basis points.

         "Borrower's Books" are all Borrower's books and records including
 ledgers, records regarding Borrower's assets or liabilities, the Co/lateral,
 business operations or financial condition and all computer programs or discs
 or any equipment containing the information.

                                       17
<PAGE>


     "Business Day" is any day that is not a Saturday, Sunday or a day on which
the Bank is closed.

     "Code" is the Colorado Uniform Commercial Code, as applicable.

     "Collateral" is the property described on Exhibit A.

     "Contingent Obligation" is, for any Person, any direct or indirect
liability, contingent or not, of that Person for (i) any indebtedness, lease,
dividend, letter of credit or other obligation of another such as an obligation
directly or indirectly guaranteed, endorsed, co-made, discounted or sold with
recourse by that Person, or for which that Person is directly or indirectly
liable; (ii) any obligations for undrawn letters of credit for the account of
that Person; and (iii) all obligations from any interest rate, currency or
commodity swap agreement, interest rate cap or collar agreement, or other
agreement or arrangement designated to protect a Person against fluctuation in
interest rates, currency exchange rates or commodity prices; but "Contingent
Obligation" does not include endorsements in the ordinary course of business.
The amount of a Contingent Obligation is the stated or determined amount of the
primary obligation for which the Contingent Obligation is made or, if not
determinable, the maximum reasonably anticipated liability for it determined by
the Person in good faith; but the amount may not exceed the maximum of the
obligations under the guarantee or other support arrangement.

     "Copyrights" are all copyright rights, applications or registrations and
like protections in each work or authorship or derivative work, whether
published or not (whether or not it is a trade secret) now or later existing,
created, acquired or held.

     "Credit Extension" is each Term Loan or any other extension of credit by
Bank for Borrower's benefit.

     "Effective Date. is the date Bank executes this Agreement.

     "Equipment' is all present and future machinery, equipment, tenant
improvements, furniture, fixtures, vehicles, tools, parts and attachments in
which Borrower has any interest.

     "ERISA" is the Employment Retirement Income Security Act of 1974, and its
regulations. "GAAP" is generally accepted accounting principles. "Guarantor" is
any present or future guarantor of the Obligations, including Thomas Sandgaard.

     "Indebtedness. is (a) indebtedness for borrowed money or the deferred price
of property or services, such as reimbursement and other obligations for surety
bonds and letters of credit, (b) obligations evidenced by notes, bonds,
debentures or similar instruments, (c) capital lease obligations and (d)
Contingent Obligations.

     "Insolvency Proceeding" are proceedings by or against any Person under the
United States Bankruptcy Code, or any other bankruptcy or insolvency law,
including assignments for the benefit of creditors, compositions, extensions
generally with its creditors, or proceedings seeking reorganization,
arrangement, or other relief.

     "Intellectual Property" is all of Borrower's:

     (a) Copyrights, Trademarks, Patents, and Mask Works including amendments,
renewals, extensions, and all licenses or other rights to use and all license
fees and royalties from the use;

                                       18
<PAGE>


     (b) Any trade secrets and any intellectual property rights in computer
software and computer software products now or later existing, created, acquired
or held;

     (c) All design rights which may be available to Borrower now or later
created, acquired or held;

     (d) Any claims for damages (past, present or future) for infringement of
any of the rights above, with the right, but not the obligation, to sue and
collect damages for use or infringement of the intellectual property rights
above;

     All proceeds and products of the foregoing, including all insurance,
indemnity or warranty payments.

     "Inventory" is present and future inventory in which Borrower has any
interest, including merchandise, raw materials, parts, supplies, packing and
shipping materials, work in process and finished products intended for sale or
lease or to be furnished under a contract of service, of every kind and
description now or later owned by or in the custody or possession, actual or
constructive, of Borrower, including inventory temporarily out of its custody or
possession or in transit and including returns on any accounts or other proceeds
(including insurance proceeds) from the sale or disposition of any of the
foregoing and any documents of title. .

     "Investment" is any beneficial ownership of (including stock, partnership
interest or other securities) any Person, or any loan, advance or capital
contribution to any Person.

     "Lien" is a mortgage, lien, deed of trust, charge, pledge, security
interest or other encumbrance.

     "Loan Documents" are, collectively, this Agreement, any note, or notes or
guaranties executed by Borrower or Guarantor, and any other present or future
agreement between Borrower and/or for the benefit of Bank in connection with
this Agreement, all as amended, extended or restated.

     "Mask Works" are all mask works or similar rights available for the
protection of semiconductor chips, now owned or later acquired.

     "Material Adverse Change" is defined in Section 8.3.

     "Obligations" are debts, principal, interest, Bank Expenses and other
amounts Borrower owes Bank now or later, including cash management services,
letters of credit and foreign exchange contracts, if any and including interest
accruing after Insolvency Proceedings begin and debts, liabilities, or
obligations of Borrower assigned to Bank.

     "Patents" are patents, patent applications and like protections, including
improvements, divisions, continuations, renewals, reissues, extensions and
continuations-in-part of the same.

         "Permitted Indebtedness" is:

     (a) Borrower's indebtedness to Bank under this Agreement or any other Loan
Document; (b) Indebtedness existing on the Effective Date and shown on the
Schedule;

     (c) Subordinated Debt;

     (d) Indebtedness to trade creditors incurred in the ordinary course of
business; and

     (e) Indebtedness secured by Permitted Liens.

                                       19
<PAGE>


     "Permitted Investments" are:

     (a) Investments shown on the Schedule and existing on the Effective Date;
and

     (b) (i) marketable direct obligations issued or unconditionally guaranteed
by the United States or its agency or any State maturing within 1 year from its
acquisition, (ii) commercial paper maturing no more than 1 year after its
creation and having the highest rating from either Standard & Poor's Corporation
or Moody's Investors Service, Inc., and (iii) Bank's certificates of deposit
issued maturing no more than 1 year after issue.

     "Permitted Liens" are:

     (a) Liens existing on the Effective Date and shown on the Schedule or
arising under this Agreement or other Loan Documents;

     (b) Liens for taxes, fees, assessments or other government charges or
levies, either not delinquent or being contested in good faith and for which
Borrower maintains adequate reserves on its Books, !f they have no priority over
any of Bank's security interests;

     (c) Purchase money Liens (i) on Equipment acquired or held by Borrower or
its Subsidiaries incurred for financing the acquisition of the Equipment, or
(ii) existing on equipment when acquired, !f the Lien is confined to the
property and improvements and the proceeds of the equipment;

     (d) Licenses or sublicenses granted in the ordinary course of Borrower's
business and any interest or title of a licensor or under any license or
sublicense, !f the licenses and sublicenses permit granting Bank a security
interest;

     (e) Leases or subleases granted in the ordinary course of Borrower's
business, including in connection with Borrower's leased premises or leased
property;

     (f) Liens incurred in the extension, renewal or refinancing of the
indebtedness secured by Liens described in (a) through (c), but any extension,
renewal or replacement Lien must be limited to the property encumbered by the
existing Lien and the principal amount of the indebtedness may not increase.

     "Person" is any individual, sole proprietorship, partnership, limited
liability company, joint venture, company association, trust, unincorporated
organization, association, corporation, institution, public benefit corporation,
firm, joint stock company, estate, entity or government agency.

     "Responsible Officer" is each of the Chief Executive Officer, the
President. the Chief Financial Officer and the Controller of Borrower.

     "Rights", as applied to the Collateral, means the Borrower's rights and
interests in, and powers with respect to, that Collateral, whatever the nature
of those rights, interests and powers and, in any event, including Borrower's
power to transfer rights in such Collateral to Bank. "Schedule" is any attached
schedule of exceptions.

     "Subordinated Debt" is debt incurred by Borrower subordinated to Borrower's
indebtedness owed to Bank and which is reflected in a written agreement in a
manner and form acceptable to Bank and approved by Bank in writing.

                                       20
<PAGE>


     "Subsidiary" is for any Person, or any other business entity of which more
than 50% of the voting stock or other equity interests is owned or controlled,
directly or indirectly, by the Person or one or more Affiliates of the Person.

     "Tangible Net Worth" is, on any date, the consolidated total assets of
Borrower and its Subsidiaries minus, (i) any amounts attributable to (a)
goodwill, (b) intangible items such as unamortized debt discount and expense,
patents, trade and service marks and names, copyrights and research and
development expenses except prepaid expenses, and (c) reserves not already
deducted from assets, and (ii) Total Liabilities. "Term Loan" a loan of
$400,000.

     "Term Loan Maturity Date" is October 1, 2008.

     "Total Liabilities" is on any day, obligations that should, under GAAP, be
classified as liabilities on Borrower's consolidated balance sheet, including
all Indebtedness, and current portion Subordinated Debt allowed to be paid, but
excluding all other Subordinated Debt.

     "Trademarks" are trademark and service mark rights, registered or not,
applications to register and registrations and like protections, and the entire
goodwill of the business of Assignor connected with the trademarks.


BORROWER:

ZYNEX MEDICAL, INC.

By:   /s/ Thomas Sandgaard
      ----------------------------------------

Title: President and Chief Executive Officer
      ----------------------------------------


ZYNEX MEDICAL HOLDINGS, INC.

By:   /s/ Thomas Sandgaard
      ----------------------------------------

Title: President and Chief Executive Officer
      ----------------------------------------


BANK:

SILICON VALLEY BANK

By:   /s/ Chris Ennis
      ----------------------------------------

Title: Relationship Manager
      ----------------------------------------

Effective
Date:     September 29, 2005
      ----------------------------------------

                                       21
<PAGE>

                                    EXHIBIT A
                                    ---------

The Collateral consists of all of Borrower's right, title and interest in and to
the following personal property:

All goods, Accounts (including health-care receivables), Equipment, Inventory,
contract rights or rights to payment of money, leases, license agreements,
franchise agreements, General Intangibles, commercial tort claims, documents,
instruments (including any promissory notes), chattel paper (whether tangible or
electronic), cash, deposit accounts, fixtures, letters of credit rights (whether
or not the letter of credit is evidenced by a writing), securities, and all
other investment property, supporting obligations, and financial assets, whether
now owned or hereafter acquired, wherever located; and

all Borrower's Books relating to the foregoing, and any and all claims, rights
and interests in any of the above and all substitutions for, additions,
attachments, accessories, accessions and improvements to and replacements,
products, proceeds and insurance proceeds of any or all of the foregoing.

                                       A-1
<PAGE>



                                    EXHIBIT B
                                   ----------

LOAN PAYMENT/ADVANCE REQUEST FORM
DEADLINE FOR SAME DAY PROCESSING IS 12:00 P.S.T.

Fax To:                                                 Date:
       -------------------------------------------------     -------------------

o    LOAN PAYMENT:

              Zynex Medical. Inc. and Zynex Medical Holdings. Inc. (Borrower)
              ---------------------------------------------------------------

      From Account #                        To Account #
                      -------------------                -----------------------
                      (Deposit Account #)                    (Loan Account #)

    Principal $                            and/or Interest $
               ---------------------------                  --------------------

All Borrower's representation and warranties in the Loan and Security Agreement
are true. correct and complete in all material respects up to and Including the
date of the transfer request for a loan payment. but those representations and
warranties expressly referring to another date shall be true, correct and
complete in all material respects as of that date:

Authorized Signature:                           Phone Number:
                      --------------------------             -------------------
________________________________________________________________________________

o    LOAN ADVANCE:

Complete Outgoing Wire Request section below If all or a portion of the funds
from this loan advance are for an outgoing wire.


From Account #                             To Account #
               ------------------------                 ------------------------
                   (Loan Account #)                        (Deposit Account #)

Amount of Advance $
                    -------------------

    All Borrower's representation and warranties in the Loan and Security
    Agreement are true, correct and complete in all material respects up to and
    including the date of the transfer request for an advance, but those
    representations and warranties expressly referring to another date shall be
    true, correct and complete in all material respects as of that date:

Authorized Signature:                           Phone Number:
                      --------------------------             -------------------
________________________________________________________________________________

   OUTGOING WIRE REQUEST

   Complete only if all or a portion of funds from the loan advance above are to
be wired. Deadline for same day processing is 12:00pm, P.S.T.

Beneficiary Name:                          Amount of Wire: $
                  ---------------------                     --------------------
Beneficiary Bank:                          Account Number:
                  ---------------------                     --------------------

City and State:
                ---------------------------


Beneficiary Bank Transit (ABA) #:          Beneficiary Bank Code
                                 - - - - - (Swift, Sort, Chip, etc.):
                                                                     -----------
                                           (For International Wire Only)


Intermediary Bank:                        Transit (ABA) #:
                  ---------------------                     --------------------

For Further Credit to:
                       ---------------------------------------------------------

Special Instruction:
                       ---------------------------------------------------------

By signing below. I (we) acknowledge and agree that my (our) funds transfer
request shall be processed in accordance with and subject to the terms and
conditions set forth in the agreements(s) covering funds transfer service(s),
which agreements(s) were previously received and executed by me (us).

Authorized Signature:                  2nd Signature (If Required):
                      ---------------                              -------------

Print Name/Title:                      Print Name/Title:
                      ---------------                              -------------

Telephone #                            Telephone #
            -----------------                       -----------------
________________________________________________________________________________


<PAGE>



                                    EXHIBIT C
                             COMPLIANCE CERTIFICATE

TO:     SILICON VALLEY BANK

FROM:   ZYNEX MEDICAL, INC. AND ZYNEX MEDICAL HOLDINGS, INC.

     The undersigned Responsible officers of Zynex Medical, Inc. and Zynex
Medical Holdings, Inc. Jointly and severally, "Borrower") certify that under the
terms and conditions of the Loan and Security Agreement between Borrower and
Bank (the "Agreement"), (i) Borrower is in complete compliance for the period
ending ____________ with all required covenants except as noted below and (ii)
all representations and warranties in the Agreement are true and correct in all
material respects on this date. In addition, the undersigned certifies that
Borrower, and each Subsidiary, has timely filed all required tax returns and
paid, or made adequate provision to pay, all material taxes, except those being
contested in good faith with adequate reserves under GAAP. Attached are the
required documents supporting the certification. The Officer certifies that
these are prepared in accordance with Generally Accepted Accounting Principles
(GAAP) consistently applied from one period to the next except as explained in
an accompanying letter or footnotes. The Responsible Officer acknowledges that
no borrowings may be requested at any time or date of determination that
Borrower is not in compliance with any of the terms of the Agreement, and that
compliance is determined not just at the date this certificate is delivered.

  Please indicate compliance status by circling Yes/No under "Complies" column.


    Reporting Covenant         Required                         Complies
    ------------------         --------                         --------

    Monthly financial
       statements + CC         Monthly within 30 days           Yes   No

    Annual (Audited)           FYE within 180 days              Yes   No

    10-Q, 10-K and 8-K         Within 5 days after filing
                               with SEC                         Yes   No

    AR & AP                    Monthly within 30 days           Yes   No
    Aging

    Financial Covenant                  Required      Actual        Complies
    ------------------                  --------      ------        --------

    Maintain on a Monthly Basis:
        Minimum Debt Service              *           ___ 1.00      Yes   No
        Minimum Liquidity Coverage        **                        Yes   No

*    (measured on a rolling 3 month  basis).  A ratio of EBITDA to principal and
     interest payments due on the outstanding  Obligations,  of at least 1.40 to
     1.00,  increasing to 1.75 to 1.00  beginning with the month ending June 30,
     2006 and thereafter.

**   (to be maintained at all times) A ratio of unrestricted cash held with Bank
     plus all Accounts (less Borrower's reserves for uncollectible Accounts), to
     outstanding Obligations, of at least 1.50 to 1.00.

Have there been updates to Borrower's  intellectual property?  Borrower only has
deposit accounts located at the following institutions:       Yes /  No
                                                        ------------------------

<PAGE>


Comments Regarding Exceptions: See Attached.

                                        ________________________________________
                                        BANK USE ONLY

                                        Received by:
 Sincerely,                                         ----------------------------
                                                        AUTHORIZED SIGNER

                                        Date:
                                             -----------------------------------
ZYNEX MEDICAL, INC.

- ------------------------------------    Verified:
SIGNATURE                                        -------------------------------
                                                        AUTHORIZED SIGNER

- ------------------------------------    Date:
TITLE                                       ------------------------------------

                                        Compliance Status:             Yes   No
- ------------------------------------    ________________________________________
DATE



ZYNEX MEDICAL HOLDINGS, INC.


- ------------------------------------
SIGNATURE


- ------------------------------------
TITLE


- ------------------------------------
DATE

                                       2

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>3
<FILENAME>zynex8kex102_1062005.txt
<DESCRIPTION>WARRANT
<TEXT>
                                                                    Exhibit 10.2


THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE (Y)ACT"), OR THE SECURITIES LAWS OF
ANY STATE AND, EXCEPT AND PURSUANT TO THE PROVISIONS OF ARTICLE 5 BELOW, MAY NOT
BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND
UNTIL REGISTERED UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAW OR, IN THE
OPINION OF LEGAL COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER OF
THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS
EXEMPT FROM REGISTRATION.

                            WARRANT TO PURCHASE STOCK

Company: Zynex Medical Holdings, Inc., a Nevada corporation
Number of Shares: 50,000
Class of Stock: Series Common
Warrant Price: $0.71 per share
Issue Date: Is the Warrant Effective Date, which is the date in which the Holder
executes this Warrant Expiration Date: The 7th anniversary after the Issue Date

     THIS  WARRANT  CERTIFIES  THAT,  for the agreed upon value of $1.OO and for
other  good and  valuable  consideration,  SILICON  VALLEY  BANK  ("Holder")  is
entitled to purchase  the number of fully paid and  nonassessable  shares of the
class  of  securities  (the  "Shares")  of  Zynex  Medical,   Inc.,  a  Colorado
corporation  (the "Company") at the Warrant Price, all as set forth above and as
adjusted  pursuant 10 Article 2 of this Warrant,  subject to the  provisions and
upon the terms and conditions set forth in this Warrant.


ARTICLE 1. EXERCISE.
           ---------

     1.1 Method of Exercise.  Holder may exercise  this Warrant by  delivering a
duly executed Notice of Exercise in substantially  the form attached as Appendix
1 to the  principal  office of the  Company.  Unless  Holder is  exercising  the
conversion  right set forth in Article  1.2,  Holder  shall also  deliver to the
Company a check,  wire transfer (to an account  designated  by the Company),  or
other form of payment  acceptable to the Company for the aggregate Warrant Price
for 'the Shares being purchased.

     1.2 Conversion  Right.  In lieu of exercising  this Warrant as specified in
Article 1.1,  Holder may from time to time convert this Warrant,  in whole or in
part,  into a number of Shares  determined  by dividing (a) the  aggregate  fair
market value of the Shares or other securities  otherwise issuable upon exercise
of this Warrant minus the aggregate Warrant Price of such Shares by (b) the fair
market  value  of one  Share.  The fair  market  value  of the  Shares  shall be
determined pursuant. to Article 1.3.

     1.3 Fair Market Value. If the Company's  common stock is traded in a public
market  and the Shares are common  stock,  the fair  market  value of each Share
shall be the closing price of a Share reported for the business day  immediately
before Holder delivers its Notice of Exercise to the Company (or in the instance
where the


<PAGE>


Warrant is exercised  immediately  prior to the  effectiveness  of the Company's
initial public offering,  the "price to public" per share price specified in the
final  prospectus  relating to such offering).  If the Company's common stock is
traded in a public  market and the Shares are preferred  stock,  the fair market
value of a Share shall be the closing price of a share of the  Company's  common
stock  reported for the  business day  immediately  before  Holder  delivers its
Notice of  Exercise to the Company  (or,  in the  instance  where the Warrant is
exercised immediately prior to the effectiveness of the Company's initial public
offering,  the initial "price to public" per share price  specified in the final
prospectus relating to such offering),  in both cases,  multiplied by the number
of shares of the Company's  common stock into which a Share is  convertible.  If
the  Company's common  stock is not  traded  in a public  market,  the Board of
Directors of the Company  shall  determine  fair market value in its  reasonable
good faith judgment.

     1.4  Delivery  of  Certificate  and  New  Warrant.  Promptly  after  Holder
exercises  or converts  this Warrant and, if  applicable,  the Company  receives
payment of the  aggregate  Warrant  Price,  the Company  shall deliver to Holder
certificates  for the Shares  acquired  and, if this  Warrant has not been fully
exercised or converted  and has 'not  expired,  a new Warrant  representing  the
Shares not so acquired.

     1.5 Replacement of Warrants. On receipt Of evidence reasonably satisfactory
to the Company of the loss,  theft,  destruction  or  mutilation of this Warrant
and, in the case of loss,  theft or  destruction,  on  delivery of an  indemnity
agreement  reasonably  satisfactory in form and amount to the Company or, in the
case of mutilation on surrender and  cancellation  of this Warrant,  the Company
shall execute and deliver, in lieu of this Warrant, a new warrant of like tenor.

     1.6  Treatment of Warrant Upon Acquisition of Company.

     1.6.1 "Acquisition".  For the purpose of this Warrant,  "Acquisition" means
any sale,  license,  or other  disposition  of all or  substantially  all of the
assets of the Company,  or any reorganization,  consolidation,  or merger of the
Company where the holder of the  Company's  securities  before the  transaction,
beneficially  own less  than 50% of the  outstanding  voting  securities  of the
surviving entity after the transaction., .

     1.6.2 Treatment of Warrant at Acquisition.

A) Upon the written request of the Company, Holder agrees-that,  in the event of
an Acquisition that is not an asset sale and in which the sole  consideration is
cash,  either (a) Holder shall  exercise its  conversion or purchase right under
this Warrant and such exercise will be deemed effective immediately prior to the
consummation  of such  Acquisition  or (b) if Holder  elects not to exercise the
Warrant, this Warrant will expire upon the consummation of such Acquisition. The
Company shall provide the Holder with written notice of its request  relating to
the  foregoing  (together  with such  reasonable  information  as the Holder may
request in connection  with such  contemplated  Acquisition  giving rise to such
notice),  which is to be delivered to Holder,  not less than ten (10) days prior
to the closing of the proposed Acquisition.


B) Upon the written request of the Company,  Holder agrees that, in the event of
an Acquisition that is an "arms length" sale of all or substantially  all of the
Company's assets (and only its assets) to a third party that is not an Affiliate
(as defined below) of


<PAGE>


the  Company  (a "True  Asset  Sale),  either  (a)  Holder  shall  exercise  its
conversion or purchase right under this Warrant and such exercise will be deemed
effective  immediately  prior to the  consummation of such Acquisition or (b) if
Holder elects not to exercise the Warrant,  this Warrant will continue until the
Expiration  Date if the  Company  continues  as a going  concern  following  the
closing of any such,  True Asset Sale. The Company shall provide the Holder with
written  notice of its request  relating to the  .foregoing  (together with such
reasonable  information  as the  Holder may  request  'in  connection  with such
contemplated  Acquisition giving rise to such notice),  which is to be delivered
to Holder  not less  than ten (10) days  prior to the  closing  of the  proposed
Acquisition.

C) ,Upon the closing .of any Acquisition other than those particularly described
in  subsections  (A) and (B)  above,  the  successor  entity  shall  assume  the
obligations of this Warrant,  and this Warrant shall be exercisable for the same
securities,  cash, and property as would be payable for the Shares issuable upon
exercise  of the  unexercised  portion.  of this  Warrant as if such Shares were
outstanding on the record date for the Acquisition and subsequent  closing.  The
Warrant Price and/or number of Shares shall be adjusted accordingly.

As used herein "Affiliate" shall mean any person or entity that owns or controls
directly or  indirectly  ten (10)  percent or more of the stock of Company,  any
person or entity that controls or is  controlled  by or is under common  control
with such persons or entities,  and each of such person's or entity's  officers,
directors, joint ventures or partners, as applicable.


ARTICLE 2. ADJUSTMENTS TO THE SHARES.
           --------------------------

     2.1  Stock  Dividends.  Splits.  Etc.  If the  Company  declares  or pays a
dividend' on the Shares payable in common stock, or other securities, then' upon
exercise of this Warrant, for each Share acquired, Holder shall receive, without
cost to Holder,  the total number and kind of  securities  to which Holder would
have been  entitled  had  Holder  owned the  Shares of record as of the date the
dividend occurred.  If the Company subdivides the Shares by  reclassification or
otherwise  into a greater  number of  shares  or takes  any other  action  which
increase the amount of stock into which the Shares are  convertible,  the number
of shares  purchasable  hereunder  shall be  proportionately  increased  and the
Warrant Price shall be proportionately  decreased. If the outstanding shares are
combined or consolidated,  .,by  reclassification  or otherwise',  into a lesser
number of shares, the Warrant Price shall be  proportionately  increased and the
number of Shares shall be proportionately decreased'

     2.2  Reclassification.  Exchange.  Combinations or  Substitution.  Upon any
reclassification,  exchange,  substitution,  or other  event  that  results in a
change of the number  and/or class of the  securities  issuable upon exercise or
conversion of this Warrant,  Holder shall be entitled to receive,  upon exercise
or conversion of this  Warrant,  the number and kind of securities  and property
that  Holder  would  have  received  for,  the Shares if this  Warrant  had been
exercised immediately before such reclassification,  exchange,  substitution, or
other  event.  Such an event  shall  include  any  automatic  conversion  of the
outstanding or issuable securities of the Company of the same class or series as
the Shares to common stock  pursuant to the terms of the  Company's  Articles or
Certificate  (as applicable) of  Incorporation  upon the closing of a registered
public  offering of the  Company's  common  stock.  The Company or its successor
shall promptly


<PAGE>


issue to Holder an amendment to this Warrant  setting  forth the number and kind
of such new securities or other property issuable upon exercise or conversion of
this Warrant as a result of such  reclassification,  exchange,  substitution  or
other event that results in a change of the number  and/or  class of  securities
issuable upon  exercise or  conversion  of this  Warrant.  The amendment to this
Warrant shall provide for adjustments which shall be as nearly equivalent as may
be  practicable  to the  adjustments  provided  for in this Article 2 including,
without  limitation;  adjustments  to the  Warrant  Price  and to the  number of
securities or property issuable upon exercise of the new Warrant. The provisions
of this  Article  2.2 shall  similarly  apply to  successive  reclassifications,
exchanges, substitutions, or other events.

     2.3 Intentionally Omitted.


<PAGE>



     2.4 No  Impairment.  The Company shall not, by amendment of its Articles or
Certificate  (as  applicable)  of  Incorporation  or  through a  reorganization,
transfer  of  assets,  consolidation,  merger,  dissolution,  issue,' or sale of
securities or any other voluntary action,  avoid or seek to avoid the observance
or  performance  of any of the terms to be  observed  or  performed  under  this
Warrant by the Company,  but shall at all times in good faith assist in carrying
out of all the provisions of this Article 2 and in taking all such action as may
be  necessary  or  appropriate  to protect  Holder's  rights  under this Article
against impairment. ' .

     2.5 Fractional Shares. No fractional Shares shall be issuable upon exercise
en  conversion  of this  Warrant and the number of Shares to be issued  shall be
rounded down to the nearest whole Share.  If a fractional  share interest arises
upon any exercise or conversion of the Warrant, the Company shall eliminate such
fractional  share  interest by paying Holder the amount  computed by multiplying
the fractional interest by the fair market value of a full Share. '

     2.6  Certificate  as to  Adjustments.  Upon each  adjustment of the Warrant
Price,  the  Company  shall  promptly  notify  Holder in  writing,  and,  at the
Company's expense,  promptly compute such adjustment,  and furnish Holder with a
certificate of its Chief Financial Officer setting forth such adjustment and the
facts upon which such  adjustment  is based.  The Company  shall,  upon  written
request,  furnish Holder a certificate setting forth the Warrant Price in effect
upon the date  thereof  and the series of  adjustments  leading to such  Warrant
Price.


 ARTICLE 3. REPRESENTATIONS AND COVENANTS OF THE COMPANY.
            ---------------------------------------------

     3.1 Representations and Warranties.  The Company represents and warrants to
the Holder as follows: '

     (a) The initial Warrant Price  referenced on the first page of this Warrant
is not greater  than the average  fair market value of the Shares as of the five
trading days immediately prior to the date of this Warrant.

     (b) All Shares which may be issued upon the exercise of the purchase  right
represented  by  this  Warrant,  and  all  securities,  if  any,  issuable  upon
conversion of the Shares,  shall,  upon issuance,  be duly  authorized,  validly
issued,  fully paid and  nonassessable,  and free of any liens and  encumbrances
except for  restrictions  on transfer  provided  for herein or under  applicable
federal and state securities laws.

     3.2 Notice of Certain  Events.  If the Company  proposes at any time (a) to
declare any  dividend or  distribution  upon any of its stock,  whether in cash,
property, stock, or other securities and whether or not a regular cash dividend;
(b) to offer  for sale any  shares  of the  Company's  capital  stock  (or other
securities  convertible into such capital stock), other than (i) pursuant to the
Company's  stock option or other  compensatory  plans,  (ii) in connection  with
commercial credit  arrangements or equipment  financings,  or (Hi) in connection
with  strategic  transactions  for purposes other than capital  raising;  (c) to
effect any  reclassification  or  recapitalization  of any of its stock;  (d) to
merge  or  consolidate  with or into any  other  corporation,  or  sell,  lease,
license,  or convey all or  substantially  all of its assets,  or to  liquidate,
dissolve or wind up; or (e) offer holders of registration rights the opportunity
to participate in an underwritten  public  offering of the Company's  securities
for cash,  then,  in  connection  with each such event,  the Company  shall give
Holder:  (1) at least 10 days prior written notice of the date on which a record
will be taken for such  dividend,  distribution,  or  subscription  rights  (and
specifying  the date on which the  holders  of  common  stock  will be  entitled
thereto) or for  determining  rights to vote,  if any, in respect of the matters
referred to in (a) and (b) above;  (2) in the case of the matters referred to in
(c) and (d)  above at least 10 days  prior  written  notice of the date when the
same will take place  (and  specifying  the date on which the  holders of common
stock will be entitled to exchange  their common stock for  securities  or other
property  deliverable upon the occurrence of such event); and (3) in the case of
the matter referred to in (e) above,  the same notice as is given to the holders
of such registration rights.

     3.3 Intentionally Omitted.

     3.4 No Shareholder Rights.  Except as provided in this Warrant,  the Holder
will not have .any rights as a shareholder  of the Company until the exercise of
this Warrant.


ARTICLE 4. REPRESENTATIONS. WARRANTIES OF THE HOLDER.
           ------------------------------------------

     The Holder represents and warrants to the Company as follows:

     4.1  Purchase  for Own  Account.  This  Warrant  and the  securities  to be
acquired  upon  exercise  of this  Warrant by the Holder  will be  acquired  for
investment for the Holder's  account,  not as a nominee or agent, and not with a
view to the public resale or distribution  within the meaning of the Act. Holder
also represents that the Holder has not been formed for the specific  purpose of
acquiring this Warrant or the Shares.

     4.2  Disclosure  of  Information.  The Holder has  received or has had full
access to all the  information it considers  necessary or appropriate to make an
informed investment decision with respect to the acquisition of this Warrant and
its  underlying  securities.  The Holder  further has had an  opportunity to ask
questions  and  receive  answers  from  the  Company  regarding  the  terms  and
conditions of the offering of this Warrant and its underlying  securities and to
obtain  additional  information  (to  the  extent  the  Company  possessed  such
information  or  could  acquire  it  without  unreasonable  effort  or  expense)
necessary  to verify  any  information  furnished  to the Holder or to which the
Holder has access.

     4.3 Investment Experience. The Holder understands that the purchase of this
Warrant and its underlying  securities involves substantial risk. The Holder has

<PAGE>


experience as an investor in securities  of companies in the  development  stage
and  acknowledges  that the Holder can bear the economic  risk of such  Holder's
investment in this Warrant and its underlying  securities and has such knowledge
and  experience  in financial or business  matters that the Holder is capable of
evaluating  the  merits  and risks of its  investment  in this  Warrant  and its
underlying securities and/or has a preexisting personal or business relationship
with the Company and certain of its officers,  directors or controlling  persons
of a nature and duration  that enables the Holder to be aware of the  character,
business acumen and financial circumstances of such persons.

     4.4 Accredited  Investor  Status.  The Holder is an  "accredited  investor"
within the meaning of Regulation D promulgated under the Act.

     4.5 The Act.  The  Holder  understands  that this  Warrant  and the  Shares
issuable upon exercise or conversion  hereof have not been registered  under the
Act in reliance upon a specific  exemption there from,  which exemption  depends
upon, among other things, the bona fide nature of the Holder's investment intent
as expressed  herein.  The Holder  understands  that this Warrant and the Shares
issued upon any exercise or conversion hereof must be held  indefinitely  unless
subsequently  registered  under the Act and  qualified  under  applicable  state
securities  laws, or unless exemption from such  registration and  qualification
are otherwise available.


ARTICLE 5. MISCELLANEOUS.
           --------------

     5.1 Term:  This Warrant is  exercisable in whole or in part at any time and
from time to time on or before the Expiration Date.

     5.2  Legends.  This  Warrant and the Shares (and the  securities  Issuable,
directly  or  indirectly,  upon  conversion  of the  Shares,  if any)  shall  be
imprinted with a legend in substantially the following form:

     THIS WARRANT AND THE SHARES  ISSUABLE  HEREUNDER  HAVE NOT BEEN  REGISTERED
     UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES
     LAWS OF ANY STATE AND,  EXCEPT AND PURSUANT TO THE  PROVISIONS OF ARTICLE 5
     BELOW,  MAY NOT BE  OFFERED,  SOLD OR  OTHERWISE  TRANSFERRED,  PLEDGED  OR
     HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER SAID ACT AND APPLICABLE 5T A
     TE SECURITIES LAW OR, IN THE OPINION OF LEGAL COUNSEL IN FORM AND SUBSTANCE
     SATISFACTORY  TO THE  ISSUER  OF  THESE  SECURITIES,  SUCH  OFFER,  SALE OR
     TRANSFER, PLEDGE OR HYPOTHECATION IS EXEMPT FROM REGISTRATION

     5.3  Compliance  with  Securities  Laws on  Transfer.  This Warrant and the
Shares  issuable  upon  exercise of this Warrant (and the  securities  issuable,
directly  or  indirectly,  upon  conversion  of the  Shares,  if any) may not be
transferred or assigned in whole or in part without  compliance  with applicable
federal  and  state  securities  laws  by  the  transferor  and  the  transferee
(including,  without  limitation,  the  delivery  of  investment  representation
letters and legal opinions reasonably satisfactory to the Company, as reasonably
requested by the Company).  The Company  shall not require  Holder to provide an
opinion of counsel if the transfer is to Holder's parent company,  SVB Financial

<PAGE>


Group (formerly  Silicon Valley  Bancshares),  or any other affiliate of Holder.
Additionally,  the Company shall also not require an opinion of counsel if there
is no  material  question  as to the  availability  of  current  information  as
referenced  in Rule 144(c),  Holder  represents  that it has complied  with Rule
144(d) and (e) in reasonable  detail,  the selling broker represents that it has
complied with Rile 144(f),  and the Company is provided with a copy  of-Holder's
notice of proposed sale.

     5.4 Transfer  Procedure.  Upon  receipt by Holder of the executed  Warrant,
Holder  will  transfer  all of this  Warrant to  Holder's  parent  company,  SVB
Financial  Group,  by execution of an  Assignment  substantially  in the form of
Appendix 2. Subject to the provisions of Article 5.3 and upon providing  Company
with written notice, SVB Financial Group and any, subsequent Holder may transfer
all or part of this Warrant or the Shares issuable upon exercise of this Warrant
(or the Shares issuable  directly or indirectly,  upon conversion of the Shares,
if any) to any  transferee,  provided,  however,  in  connection  with  any such
transfer,  SVB Financial  Group or any  subsequent  Holder will give the Company
notice of the portion of the Warrant being  transferred  with the name,  address
and taxpayer  identification  number of the transferee and Holder will surrender
this Warrant to the Company for reissuance to the  transferee(s)  (and Holder if
applicable).  The Company may refuse to transfer  this  Warrant or the Shares to
any person who directly  competes with the Company,  unless, in either case, the
stock of the Company is publicly traded.

     5.5 Notices.  All notices and other  communications from the Company to the
Holder,  or vice  versa,  shall be deemed  delivered  and  effective  when given
personally  or mailed by  first-class  registered  or  certified  mail,  postage
prepaid,  at such  address  as may have been  furnished  to the  Company  or the
Holder,  as the case may (or on the first  business  day after  transmission  by
facsimile)  be, in writing  by the  Company  or such  Holder  from time to time.
Effective  upon receipt of the fully executed  Warrant and the initial  transfer
described in Article 5.4 above,  all notices to the Holder shall be addressed as
follows until the Company  receives notice of a change of address in connection.
with a transfer or otherwise:

                         SVB Financial Group
                         Attn: Treasury Department 3003 Tasman
                         Drive, HA 200 Santa Clara, CA 95054
                         Telephone: 408-654-7400 Facsimile:
                         408-496-2405

Notice to the Company  shall be addressed as follows  until the Holder  receives
notice of a change in address:

                         Zynex Medical, Inc.
                         8100 South Park Way, Suite A-9 Littleton,
                         CO 80120
                         Attn:____________________________________
                         (ADDRESS):_______________________________
                         Telephone:_______________________________
                         Facsimile:_______________________________

<PAGE>


     5.6  Waiver.  This  Warrant  and any term  hereof may be  changed,  waived,
discharged  or terminated  only by an instrument in writing  signed by the party
against which  enforcement of such change,  waiver,  discharge or termination is
sought.

     5.7  Attorneys'  Fees.  In the event of any  dispute  between  the  parties
concerning  the terms and  provisions of this Warrant,  the party  prevailing in
such  dispute  shall be  entitled  to  collect  from the  other  party all costs
incurred in such dispute, including reasonable attorney's fees.

     5.8  Automatic  Conversion  Upon  Expiration.  In the event that,  upon the
Expiration Date, the fair market value of one Share (or other security  issuable
upon the exercise  hereof) as determined in accordance with Section 1.3 above is
greater than the Warrant  Price in effect on such date,  then this Warrant shall
automatically  be  deemed  on and as of such date to be  converted  pursuant  to
Section 1.2 above as to all Shares (or such other securities) for which it shall
not previously have been exercised or converted,  and the Company shall promptly
deliver a certificate  representing the Shares (or such other securities) issued
upon such conversion to the Holder.

     5.9  Counterparts.  This Warrant may be executed in  counterparts,  all of
which together shall constitute one and the same agreement.

     5.10  Governing  Law. This Warrant  shall be governed.  by and construed in
accordance  with the laws of the State of California,  'without giving effect to
its principles regarding conflicts of Jaw.




"COMPANY"

ZYNEX MEDICAL, INC.


By:                                     By:
   -----------------------------------     -------------------------------------

Name:                                   Name:
     ---------------------------------       -----------------------------------
     (Print)                                 (Print) Title: Chief Financial
     Title: Chairman of the Board,           Officer, Secretary,  Assistant
     President or Vice President             Treasurer or Assistant Secretary


 "HOLDER"

 SILICON VALLEY BANK

By:
   -----------------------------------

Name:
     ---------------------------------
     (Print)


<PAGE>


Title:
      --------------------------------

Warrant Effective Date:
                        --------------

<PAGE>


                                   APPENDIX 1

                               NOTICE OF EXERCISE

     1. Holder elects to purchase  _________  shares of the  Common/Series______
Preferred [strike one] Stock of Zynex Medical, Inc. pursuant to the terms of the
attached  Warrant,  and tenders  payment of the purchase  price of the shares in
full.

             [or]

     1. Holder elects to convert the attached Warrant into  Shares/cash  [strike
one] in the manner  specified in the Warrant.  This  conversion is exercised for
_________ of the Shares covered by the Warrant.

             [Strike paragraph that does not apply.]

     2. Please issue a certificate or  certificates  representing  the shares in
the name specified below:

                                  ----------------------------------------------
                                  Holders Name

                                  ----------------------------------------------

                                  ----------------------------------------------
                                  (Address)

     3. By its execution below and for the benefit of the Company, Holder hereby
restates each of the  representations and warranties in Article 4 of the Warrant
as the date hereof.

                                          HOLDER:

                                                --------------------------------

                                          By:
                                                --------------------------------

                                          Name:
                                                --------------------------------

                                          Title:
                                                --------------------------------

                                          (Date):
                                                --------------------------------

<PAGE>

                                   APPENDIX 2

                                   ASSIGNMENT
                                   ----------


For value received, Silicon Valley Bank hereby sells, assigns and transfers unto

                Name:           SVB Financial Group

                Address:        3003 Tasman Drive (HA-200)
                                Santa Clara, CA 95054

                Tax lD:         91-1962278


that certain  Warrant to Purchase Stock issued by  _______________________  (the
"Company"), on _________,200__ (the "Warrant") together with all rights, title
and interest therein.


                                                  SILICON VALLEY BANK

                                          By:
                                                --------------------------------

                                          Name:
                                                --------------------------------

                                          Title:
                                                --------------------------------

(Date):
       -------------------------


By its execution below. and for the benefit of the Company,  SVB Financial Group
makes each of the  representations  and warranties set forth in Article 4 of the
Warrant and agrees to all other provisions of the Warrant as of the date hereof.


<PAGE>



                                                  SVB FINANCIAL GROUP
                                          By:
                                                --------------------------------

                                          Name:
                                                --------------------------------

                                          Title:
                                                --------------------------------
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.3
<SEQUENCE>4
<FILENAME>zynex8kex103_1062005.txt
<DESCRIPTION>GUARANTY
<TEXT>
                             UNCONDITIONAL GUARANTY
                             ----------------------

     This continuing Unconditional Guaranty ("Guaranty") is entered into as of
September 29, 2005, by Thomas Sandgaard ("Guarantor"), in favor of Silicon
Valley Bank ("Bank").

                                    Recitals
                                    --------

     A. Concurrently herewith, Bank and Zynex Medical, Inc., a Colorado
corporation and Zynex Medical Holdings, Inc., a Nevada corporation (jointly and
severally, 'Borrower"), are entering into that certain Loan and Security
Agreement dated as of the Effective Date (as defined therein) (as amended,
restated, or otherwise modified from time to time, the 'Loan Agreement")
pursuant to which Bank has agreed to make certain advances of money and to
extend certain financial accommodations to Borrower (collectively, the "Loans"),
subject to the terms and conditions set forth therein. Capitalized terms used
but not otherwise defined herein shall have the meanings given them in the Loan
Agreement.

     B. In consideration of the agreement of Bank to make the loans to Borrower
under the Loan Agreement, Guarantor is willing to guaranty the full payment and
performance by Borrower of all of its obligations thereunder and under the other
Loan Documents, all as further set forth herein.

     C. Guarantor is the chairman. president and CEO of Borrower and will obtain
substantial direct and indirect benefit from the Loans made by Bank to Borrower
under the Loan Agreement.

     Now, THEREFORE, to induce Bank to enter into the Loan Agreement, and for
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, and intending to be legally bound, Guarantor hereby
represents, warrants, covenants and agrees as follows:

     Section 1. Guaranty.

     1.1 Unconditional Guaranty of Payment In consideration of the foregoing,
Guarantor hereby irrevocably, absolutely and unconditionally guarantees to Bank
the prompt and complete payment and performance when due (whether at stated
maturity, by acceleration or otherwise) of all Obligations. Guarantor agrees
that it shall execute such other documents or agreements and take such action as
Bank shall reasonably request to effect the purposes of this Guaranty.

     1.2 Separate Obligations. These obligations are independent of Borrower's
obligations and separate actions may be brought against Guarantor (whether
action is brought against Borrower or whether Borrower is joined in the action).

     Section 2. Representations and Warranties.

     Guarantor hereby represents and warrants that

     (a)  Intentionally Omitted


     (b) The execution, delivery and performance by Guarantor of this Guaranty
(i) do not contravene any law or any contractual restriction binding on or
affecting Guarantor or by which Guarantor's property may be affected; (ii) do
not require any authorization or approval or other action by, or any notice to
or filing with, any governmental authority or any other Person under any
indenture, mortgage, deed of trust, lease, agreement or other instrument to
which Guarantor is a party or by which Guarantor or any of its property is
bound, except such as have been obtained or made; and (iii) do not result in the
imposition or creation of any Lien upon any property of Guarantor.

     (c) Guarantor is legally competent to execute, deliver and perform this
Guaranty.

                                        1
<PAGE>


     (d) This Guaranty is a valid and binding obligation of Guarantor,
enforceable against Guarantor in accordance with its terms, except as the
enforceability thereof may be subject to or limited by bankruptcy, insolvency,
reorganization, arrangement, moratorium or other similar laws relating to or
affecting the rights of creditors generally.

     (e) There is no action, suit or proceeding affecting Guarantor pending or
threatened before any court, arbitrator, or governmental authority, domestic or
foreign, which may have a material adverse effect on the ability of Guarantor to
perform its obligations under this Guaranty.


     (f) Guarantor's obligations hereunder are not subject to any offset or
defense against Bank or Borrower of any kind.

     (g) Intentional1y Omitted.

     (h) The personal financial statements as of August 31,2005 for Guarantor
and the U.S. federal and Colorado state 2004 tax returns of Guarantor, copies of
which have been furnished to Bank, fairly present the financial position of
Guarantor for the dates and periods purported to be covered thereby based upon
actual and estimated fair market value, and there has been no material adverse
change in the financial position of Guarantor since the date of such personal
financial statements and tax returns.


     (i) Intentionally Omitted.

     (j) Intentionally Omitted.

     (k) The incurrence of Guarantor's obligations under this Guaranty will not
cause Guarantor to (i) become insolvent; (ii) be left with unreasonably small
capital for any business or transaction in which Guarantor is presently engaged
or plans to be engaged; or (iii) be unable to pay its debts as such debts
mature.

     (l) Guarantor covenants, warrants, and represents to Bank that all
representations and warranties contained in this Guaranty shall be true at the
time of Guarantor's execution of this Guaranty, and shall continue to be true so
long as this Guaranty remains in effect. Guarantor expressly agrees that any
misrepresentation or breach of any warranty whatsoever contained in this
Guaranty shall be deemed material.


     Section 3. General Waivers. Guarantor waives:

     (a) Any right to require Bank to (i) proceed against Borrower or any other
person; (ii) proceed against or exhaust any security or (ii) pursue any other
remedy. Bank may exercise or not exercise any right or remedy it has against
Borrower or any security it holds (including the right to foreclose by judicial
or nonjudicial sale) without affecting Guarantor's liability hereunder.

     (b) Any defenses from disability or other defense of Borrower or from the
cessation of Borrowers liabilities.

     (c) Any setoff, defense or counterclaim against Bank.

     (d) Any defense from the absence, impairment or loss of any right of
reimbursement or subrogation or any other rights against Borrower. Until
Borrower's obligations to Bank have been paid, Guarantor has no right of
subrogation or reimbursement or other rights against Borrower.

     (e) Any right to enforce any remedy that Bank has against Borrower.

     (f) Any rights to participate in any security held by Bank.


                                        2
<PAGE>


     (g) Any demands for performance, notices of nonperformance or of new or
additional indebtedness incurred by Borrower to Bank. Guarantor is responsible
for being and keeping itself informed of Borrower's financial condition.

     (h) The benefit of any act or omission by Bank which directly or indirectly
results in or aids the discharge of Borrower from any of the obligations by
operation of law or otherwise.


     Section 4. Real Property Security Waiver. Guarantor acknowledges that, to
the extent Guarantor has or may have rights of subrogation or reimbursement
against Borrower for claims arising out of this Guaranty, those rights may be
impaired or destroyed if Bank elects to proceed against any real property
security of Borrower by non-judicial foreclosure. That impairment or destruction
could, under certain judicial cases and based on equitable principles of
estoppel give rise to a defense by Guarantor against its obligations under this
Guaranty. Guarantor waives that defense and any others arising from Bank's
election to pursue non-judicial foreclosure. Guarantor waives the benefits, if
any, of any statutory or common law rule that may permit a subordinating
creditor to assert any defenses of a surety or guarantor, or that may give the
subordinating creditor the right to require a senior creditor to marshal assets,
and Guarantor agrees that it shall not assert any such defenses or rights.


     Section 5. Reinstatement Notwithstanding any provision of the Loan
Agreement to the contrary, the liability of Guarantor hereunder shall be
reinstated and revived and the rights of Bank shall continue if and to the
extent that for any reason any payment by or on behalf of Guarantor or Borrower
is rescinded or must be otherwise restored by Bank, whether as a result of any
proceedings in bankruptcy or reorganization or otherwise, all as though such
amount had not been paid. The determination as to whether any such payment must
be rescinded or restored shall be made by Bank in its sale discretion; provided,
however, that if Bank chooses to contest any such matter at the request of
Guarantor, Guarantor agrees to indemnify and hold harmless Bank from all costs
and expenses (including, without limitation, reasonable attorneys' fees) of such
litigation. To the extent any payment is rescinded or restored, Guarantor's
obligations hereunder shall be revived in full force and effect without
reduction or discharge for that payment


     Section 6. No Waiver; Amendments. No failure on the part of Bank to
exercise, no delay in exercising and no course of dealing with respect to, any
right hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any right hereunder preclude any other or further exercise
thereof or the exercise of any other right The remedies herein provided are
cumulative and not exclusive of any remedies provided by law. This Guaranty may
not be amended or modified except by written agreement between Guarantor and
Bank, and no consent or waiver hereunder shall be valid unless in writing and
signed by Bank.


     Section 7. Compromise and Settlement. No compromise, Settlement, release,
renewal, extension, indulgence, change in, waiver or modification of any of the
Obligations or the release or discharge of Borrower from the performance of any
of the Obligations shall release or discharge Guarantor from this Guaranty or
the performance of the obligations hereunder.


     Section 8. Notice. Any notice or other communication herein required or
permitted to be given shall be in writing and may be delivered in person or sent
by facsimile transmission, overnight courier, or by United States mail,
registered or certified. return receipt requested, postage prepaid and addressed
as follows:


         If to Guarantor:


                                Thomas Sandgaard
                                8100 South Park Way, Suite A-9
                                Littleton, CO 80120
                                Telephone No.:
                                Facsimile No.: 303-347-9153


         If to Bank:


                                Silicon Valley Bank

                                        3
<PAGE>


                                4410 Arapahoe Avenue, Suite 200 Boulder, CO
                                80303
                                Attention: Chris Ennis
                                Telephone No.:(303) 938-5900 Facsimile No.:
                                (303) 938-0486

or at such other address as may be substituted by notice given as herein
provided. Every notice, demand, request, consent, approval, declaration or other
communication hereunder shall be deemed to have been duly given or served on the
date on which personally delivered or sent by facsimile transmission or three
(3) Business Days after the same shall have been deposited in the United States
mail. If sent by overnight courier service, the date of delivery shall be deemed
to be the next Business Day after deposited with such service.


     Section 9. Entire Agreement This Guaranty constitutes and contains the
entire agreement of the parties and supersedes any and all prior and
contemporaneous agreements, negotiations, correspondence, understandings and
communications between Guarantor and Bank, whether written or oral, respecting
the subject matter hereof.


     Section 10. Severability. If any provision of this Guaranty is held to be
unenforceable under applicable law for any reason, it shall be adjusted, if
possible, rather than voided in order to achieve the intent of Guarantor and
Bank to the extent possible. In any event, all other provisions of this Guaranty
shall be deemed valid and enforceable to the fun extent possible under
applicable law.


     Section 11. Subordination of Indebtedness. Any illdebtedness or other
obligation of Borrower now or hereafter held by or owing to Guarantor is hereby
suboordinated in time and right of payment to all obligations of Borrower to
Bank, except as such indebtedness or other obligation is expressly permitted to
be paid under the Credit Agreement; and such indebtedness of Borrower to
Guarantor is assigned to Bank as security for this Guaranty, and if Bank SO
requests shall be collected, enforced and received by Guarantor in trust for
Bank and to be paid over to Bank on account of the Obligations of Borrower to
Bank, but without reducing or affecting in any manner the liability of Guarantor
under the other provisions of this Guaranty. Any notes now or hereafter
evidencing such indebtedness of Borrower to Guarantor shall be marked with a
legend that the same are subject to this Guaranty and shall be delivered to
Bank.


     Section 12. Business Debt Guarantor hereby represents and agrees that none
of the Obligations and none of Guarantor's obligations hereunder are consumer
debt, or were or shall be incurred by Borrower or Guarantor, respectively,
primarily for personal, family or household purposes. Guarantor further agrees
and represents that the Obligations are and shall be incurred by Borrower, and
the obligations of Guarantor hereunder are and shall be incurred by Guarantor,
for business and commercial purposes only.


     Section 13. Separate Property. Notwithstanding anything to the contrary
contained herein, Guarantor hereby expressly agrees that recourse may be had
against Guarantor's separate property for the payment and performance of
Guarantor's obligations hereunder.


     Section 14. Payment of Expenses. Guarantor shall pay, promptly on demand,
all Expenses incurred by Bank in defending and/or enforcing this Guaranty. For
purposes hereof, "Expenses. shall mean costs and expenses (including reasonable
fees and disbursements of any law firm or other external counsel and the
allocated cost of internal legal services and all disbursements of internal
counsel) for defending and/or enforcing this Guaranty (including those incurred
in connection with appeals or proceedings by or against any Guarantor under the
United States Bankruptcy Code, or any other bankruptcy or insolvency law,
including assignments for the benefit of creditors, compositions, extensions
generally with its creditors, or proceedings seeking reorganization.
arrangement, or other relief).


     Section 15. Assignment; Governing Law. This Guaranty shall be binding upon
and inure to the benefit of Guarantor and Bank and their respective successors
and assigns, except that Guarantor shall not have the right to assign its rights
hereunder or any interest herein without the prior written consent of

                                        4
<PAGE>


dank, which may be granted or withheld in Bank sole discretion. Any such
purported assignment by Guarantor without Bank's written consent shall be void.
This Guaranty shall be governed by, and construed in accordance with, the laws
of the State of Colorado without regard to principles thereof regarding conflict
of laws.


     Section 16. PERSONAL JURISDICTION. GUARANTOR HEREBY IRREVOCABLY AGREES THAT
ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS GUARANTY OR ANY OF THE
AGREEMENTS, DOCUMENTS OR INSTRUMENTS DELIVERED IN CONNECTION HEREWITH MAY BE
BROUGHT IN THE STATE AND FEDERAL COURTS LOCATED IN THE STATE OF COLORADO AS BANK
MAY ELECT (PROVIDED THAT GUARANTOR ACKNOWLEDGES THAT ANY APPEALS FROM THOSE
COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF THE STATE OF
COLORADO), AND, BY EXECUTION AND DELIVERY HEREOF, GUARANTOR ACCEPTS AND CONSENTS
TO, Generally AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS AND
AGREES THAT SUCH JURISDICTION SHALL BE EXCLUSIVE, UNLESS WAIVED BY BANK IN
WRITING, WITH RESPECT TO ANY ACTION OR PROCEEDING BROUGHT BY GUARANTOR AGAINST
BANK NOTHING HEREIN SHALL LIMIT THE RIGHT OF BANK TO BRING PROCEEDINGS AGAINST
GUARANTOR IN THE COURTS OF ANY OTHER JURISDICTION. GUARANTOR HEREBY WAIVES, TO
THE Full EXTENT PERMITTED BY LAW, ANY RIGHT TO STAY OR TO DISMISS ANY ACTION OR
PROCEEDING BROUGHT BEFORE SAID COURTS ON THE BASIS OF FORUM NON CONVENIENS.


     Section 17. WAIVER OF JURY TRIAL EACH OF BANK AND GUARANTOR HEREBY WAIVES,
TO THE FULL EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY WITH RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS GUARANTY. EACH PARTY HERETO (A) CERTIFIES THAT
NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
Expressly OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTY HERETO HAVE BEEN INDUCED TO ENTER INTO THIS GUARANTY AND ANY
RELATED INSTRUMENTS, AS APPLICABLE, BY, AMONG OTHER THINGS, THE Mutual WAIVERS
AND CERTIFICATIONS IN THIS SECTION 17.

GUARANTOR

                                /s/ Thomas Sandgaard
                                ------------------------------------------------
                                Thomas Sandgaard

                                        5
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>5
<FILENAME>zynex8kex991_1062005.txt
<DESCRIPTION>PRESS RELEASE
<TEXT>
                                                                    Exhibit 99.1

[[ZYNEX LOGO]]



FOR IMMEDIATE RELEASE:

               ZYNEX MEDICAL ESTABLISHES $400,000 CREDIT FACILITY
               --------------------------------------------------

LITTLETON, Colo., Oct. 5, 2005 - Zynex Medical Holdings, Inc. (OTCBB: ZYNX), a
provider of pain management systems and electrotherapy products for medical
patients with functional disability, today announced that it has secured a
$400,000 credit facility with Silicon Valley Bank, the primary operating
subsidiary of Silicon Valley Bancshares (NASDAQ: SIVB). The new credit line will
payoff existing obligations and provide additional capital to expand the
Company's sales, marketing and support efforts related to its standard
electrotherapy products and proprietary NeuroMove(TM) Stroke Recovery System.

"We are pleased to  establish  this new credit  facility  and  partnership  with
Silicon Valley Bank," stated Zynex President and Chief Executive  Officer Thomas
Sandgaard.  "This  facility will enable Zynex to  substantially  accelerate  its
sales and marketing  initiatives and the roll-out of our flagship  NeuroMove(TM)
stroke  recovery  product."  "Zynex is a  rapidly  growing  Denver-area  company
addressing a large market opportunity.  We are pleased to play a role in helping
the company meet its objectives and growth plans," said Kevin  Grossman,  Senior
Relationship Manager of Silicon Valley Bank's Boulder Colorado office.

The  NeuroMove(TM)  system increases the functionality of many stroke victims by
teaching the healthy parts of the brain to  compensate  for damaged  areas.  The
NeuroMove(TM),  which is  significantly  more  sensitive  than  most  diagnostic
equipment,   monitors  muscle  activity  and  selects  signals  from  the  brain
indicating  that the patient is  attempting  to move a certain  muscle.  It then
introduces the actual movement through  electrical  stimulation.  Eventually the
connection  between  the  brain  and  muscle  can  often be  reestablished.  The
NeuroMove(TM)  (www.neuromove.com)  also  can  be  used  to  treat  spinal  cord
injuries.

About Zynex

Zynex  Medical  Holdings,  Inc.,  (www.zynexmed.com),   a  leading  provider  of
therapeutic  devices  for  patients  with  functional   disability  through  the
creation,  distribution,  and  marketing of  electrotherapy  devices since 1996,
strives  to uphold  its  mission to  improve  the  quality  of life of  patients
suffering from debilitating pain or illness by providing innovative  technology.
Utilizing a unique combination of  electromyographic  (EMG) technology  combined
with a system of instruction  and  reinforcement,  including  electrical  muscle
stimulation  (EMS), Zynex offers new treatment options to post-stroke and spinal
injury patients.

About Silicon Valley Bank

Silicon Valley Bank provides  diversified  financial services to emerging growth
and mature companies in the technology, life science and private equity markets,
as well as the premium wine industry.  Through its focus on specialized  markets
and extensive  knowledge of the people and business issues driving them, Silicon
Valley Bank provides a level of service and partnership that measurably  impacts
its clients' success.  Founded in 1983 and headquartered in Santa Clara, Calif.,
the company serves more than 10,000 clients around the world through 27 domestic
offices  and two  international  subsidiaries  in the  U.K.  and  India,  and an
extensive network of relationships with venture capitalists in Asia,  Australia,
Europe,  India,  and  Israel.  More  information  on the company can be found at
www.svb.com.

<PAGE>


Safe Harbor Provision
Certain statements in this release are "forward-looking" and as such are subject
to numerous risks and uncertainties.  Actual results may vary significantly from
the results  expressed or implied in such  statements.  Factors that could cause
actual results to materially differ from forward-looking statements include, but
are not limited to, the Company's ability to meet terms and conditions  required
to  obtain  project   financing,   risks  and  delays  associated  with  product
development,  risk of market  acceptance of new products,  technology or product
obsolescence, competitive risks, reliance on development partners and additional
capital needs.

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