zynex8kex101_11162007.htm


     

    
      

      

    

     

     

    Exhibit
      10.1

     

     

    
      SUBLEASE

      


                 THIS
        SUBLEASE (hereinafter “Sublease”), made this 31st day
        of October, by and between ZYNEX MEDICAL, INC., a Colorado corporation
        (hereinafter “Subtenant”) and JONES/NCTI, INC., a Colorado corporation f/k/a
        Versacom, Inc. (hereinafter “Sublandlord”).  Subtenant and Sublandlord
        are sometimes referred to herein individually as a “party” and collectively as
        the “parties.”

      


      WITNESSETH:

      


                 WHEREAS,
        pursuant to the terms and conditions of that certain lease dated April 24,
        2002,
        as amended, a true and complete copy of which is attached hereto as Exhibit
        A
        (the “Prime Lease”), First Industrial Development predecessor-in-interest
        to  COLORADO NI INDUSTRIAL ONE LLC, (hereinafter “Prime Landlord”),
        did lease to Sublandlord, as tenant, certain premises located at 8022 South
        Park
        Circle, Suite 100, Littleton, CO 80120, and more particularly described in
        the
        Prime Lease, on the terms and conditions contained therein; and

      


                 WHEREAS,
        Sublandlord desires to sublease those premises to Subtenant, and Subtenant
        desires to sublease from Sublandlord the premises leased by Sublandlord,
        all on
        the terms and conditions set forth below;

      


                 NOW,
        THEREFORE, in and for consideration of the demise and the mutual covenants
        set
        forth below, the parties do hereby agree as follows:

      


                 1.           Term.  Sublandlord
        subleases to Subtenant, and Subtenant hereby subleases from Sublandlord,
        for a
        term commencing the later to occur of (i) Sublandlord’s delivery of possession,
        or (ii) November 1, 2007 (the “Commencement Date”) and terminating on November
        29, 2009 (the “Expiration Date”), those certain premises described on Exhibit B
        attached hereto and made a part hereof (hereinafter the “Sublease Premises” or
“premises”).  The Sublease Premises consist of approximately 16,553
        rentable square feet, commonly known as Suite 100.

      


                 2.           Use.  The
        Sublease Premises shall be used solely for general office and warehouse
        purposes, and no other purpose without the express written consent of
        Sublandlord.

      


                 3.           Rent.

      


      a.           Base
        Rent.  Subject to adjustment as provided herein, Subtenant shall pay
        to Sublandlord, or Sublandlord’s designee, Base Rent in monthly installments,
        payable in advance (together with the pro-rata portion of the Furniture Purchase
        Price as set forth below) on the first day of each month during the term
        hereof,
        in the amount of:

      


      i.           November
        1, 2007 – April 30, 2007 – $4.42 per square foot or $6,097.02 per month (NNN)
        payable in monthly installments beginning with an initial payment of $6,097.02
        for November 2007 payable on or prior to the execution of this
        Sublease;

      


      ii.           May
        1, 2008 – November 30, 2008 - $5.14 per square foot or $7,090.20 per month (NNN)
        payable in monthly installments; and

      


      iii.           December
        1, 2008 – November 29, 2009 - $7.50 per square foot or $10,345.63 per month
        (NNN) payable in monthly installments.

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
 

      at
        the
        office of Sublandlord or at such other place as Sublandlord may
        designate.  All rent shall be prorated for any partial months or years
        during the term hereof.

      


                 b.           Adjustments
        to Base Rent.  Subtenant agrees to use commercially reasonable efforts
        to sublease or terminate its lease with respect to that certain 9,857 rentable
        square feet of office space located at 8100 S. Southpark Way, Suite A-9,
        Littleton CO 80120 (the “Current Lease”).  Subtenant agrees and
        acknowledges that in the event that Subtenant successfully subleases or
        terminates the Current Lease, Subtenant shall immediately notify Sublandlord,
        and effective as of the date of such sublease or termination the aforementioned
        Base Rent shall be increased to the following amounts:

      


      i.           November
        1, 2007 – April 30, 2007 – $6.85 per square foot or $9,449.00 per month (NNN)
        payable in monthly installments;

      


      ii.           May
        1, 2008 – November 30, 2008 - $6.85 per square foot or $9,449.00 per month (NNN)
        payable in monthly installments; and

      


      iii           December
        1, 2008 – November 29, 2009 - $7.50 per square foot or $10,345.63 per month
        (NNN) payable in monthly installments.

      


                 c.           Triple
        Net Lease.  Subtenant agrees and acknowledges that the Sublease
        Premises are being subleased on a triple net basis, and, in addition to payment
        of the above sums, Subtenant shall also be responsible for payment to
        Sublandlord of Subtenant’s pro rata share of Building Operating Costs, real
        estate taxes and assessments (special or otherwise), as said terms are defined
        in the Primary Lease.  The monthly estimated Building Operating Costs
        are $3.71 per square foot.  Subtenant shall also procure and pay
        directly all insurance and maintenance expenses arising out of its use of
        the
        Sublease Premises during the term of this Sublease, including but not limited
        to
        utilities, janitorial services, maintenance (including procurement of any
        HVAC
        maintenance contract required under the Prime Lease and payment of all costs
        relating to its use of the HVAC system), and any repair or upkeep of the
        Sublease Premises.  Subtenant shall have no obligation to replace any
        item except in case where damage has been caused by Subtenant’s negligence or
        willful misconduct.

      


                 d.           Furniture
        and Fixture Purchase.  Sublandlord and Subtenant acknowledge and agree
        that the Sublease Premises are partially furnished and have an NEC telephone
        system, office furniture, systems furniture, security system, storage shelving,
        uninterruptible power supply (UPS) system, lunchroom television, computer
        room
        racking and conference room furniture (collectively, the “Purchased
        Furniture”).  Sublandlord, in consideration of a purchase price of
        Seven Thousand Dollars ($7,000.00) (the “Furniture Purchase Price”), does hereby
        sell, assign and transfer unto Subtenant good title to the Purchased Furniture,
        free and clear of any and all security interests, claims, liens, pledges,
        restrictions, encumbrances, claims and charges of any kind.  Subtenant
        agrees to pay the Furniture Purchase Price in twenty-five (25) equal monthly
        payments of Two Hundred Eighty Dollars ($280.00) which shall be due and payable
        on the first day of each month during the term hereof in addition to the
        Base Rent set forth above (as adjusted herein).  Until all twenty-five
        (25) installment payments, and any other amounts due under this Sublease,
        have
        been fully paid, Sublandlord shall retain title and a security interest in
        the
        Purchased Furniture (and any and all equipment,
        parts, accessories, attachments, additions and other goods, and all replacements
        of them, installed in, affixed to or used in connection with the Purchased
        Furniture and,
        if
        Subtenant sells or otherwise disposes of the Purchased Furniture in violation
        of
        the terms of this agreement, in the proceeds of such sale or
        disposition.  During the term hereof, Subtenant agrees to maintain the
        Purchased Furniture in good working condition and that all repairs

       

      
        
          
          

        

        
          2.

          
            

          

        

        
          
          

        

      

       

       

       to
        Purchased Furniture shall be effected in such manner (both as regards
        workmanship and quality of materials) as not to materially diminish the value
        of
        the Purchased Furniture, reasonable wear and tear
        excepted.  SUBLANDLORD MAKES NO REPRESENTATIONS OR WARRANTIES
        REGARDING THE PURCHASED FURNITURE, AND THE PURCHASED FURNITURE IS SOLD, ASSIGNED
        AND TRANSFERRED TO SUBTENANT IN ITS PRESENT CONDITION, AS IS, WHERE
        IS.

      


                 4.           Security
        Deposit.  Upon mutual execution of this Sublease by Sublandlord
        and Subtenant and during the term hereof, Subtenant shall be required to
        deposit
        with Sublandlord the amount of $10,345.63 as security for Subtenant's faithful
        performance of its obligations hereunder (the “Security Deposit”), it being
        expressly understood that Security Deposit shall not be considered an advance
        payment of rental or a measure of Sublandlord’s damage in case of default by
        Subtenant.  If Subtenant defaults in any of its obligations, including
        but not limited to the payment of rent, Sublandlord may use, apply, or retain
        the whole or any part of the Security Deposit to satisfy any sum due to
        Sublandlord or to defray any expense or damage reasonably incurred by reason
        of
        the default.  In the event that all or part of the Security Deposit is
        so used or applied, Subtenant shall, on demand, pay to Sublandlord a like
        sum to
        replenish the Security Deposit and Subtenant’s failure to so replenish the
        Security Deposit shall be an default hereunder.  Sublandlord shall not
        be obliged to keep the Security Deposit as a  separate
        account  and may mix said Security Deposit with its own
        funds.  No interest shall accrue on the Security
        Deposit.  Provided that Subtenant is not in default of any of its
        obligations hereunder and Sublandlord does not, as a direct result of
        Subtenant’s occupancy, need to repair any damage or injury, or pay any expense
        or liability, Sublandlord shall return the amount of such security deposit
        to
        Subtenant within sixty (60) days following the expiration or other termination
        of this Sublease.  The making by Subtenant of such deposit, or the
        application thereof by Sublandlord in the manner hereinabove provided, shall
        not
        constitute nor be construed as a limitation upon the exercise by Sublandlord
        of
        any other rights or remedies provided to Sublandlord under the terms of this
        Lease in the event of Subtenant’s default.

      


                 5.           Pre-occupancy.  Upon
        mutual execution hereof, Subtenant shall be given reasonable access to the
        premises during business hours in order to allow Subtenant to setup the phone
        system and internet access.  Such preoccupancy access
        shall be free of any Rent or Additional Rent or Building Operating
        Costs.

      


                 6.           Assumption
        of Prime Lease Obligations.  Except as modified by this Sublease,
        all of the terms and provisions of the Prime Lease are incorporated into
        and
        made a part of this Sublease and the rights and obligations of the parties
        under
        the Prime Lease are hereby imposed upon the parties hereto with respect to
        the
        Sublease Premises, Sublandlord being substituted for the “Landlord” in the Prime
        Lease, and Subtenant being substituted for the “Tenant” in the Prime Lease,
        except as required in Section 8.4 of the Prime Lease.  Subtenant shall
        not be required to remove or restore Tenant-Owned Alterations or Utility
        installations (other than the Purchased Furniture which
        shall become the obligations of Subtenant upon full payment in accordance
        with
        Section 3.d. above), such obligations called for in Section 8.4
        shall remain with Sublandlord, “Tenant”, in the Prime Lease.  It is
        further understood that where reference is made in the Prime Lease to the
        “Premises,” the same shall mean the Sublease Premises as defined herein; where
        reference is made to the “Commencement Date,” the same shall mean the
        Commencement Date as defined herein; and where reference is made to the “Lease,”
the same shall mean this Sublease.  Subtenant shall not do or cause to
        be done or suffer or permit any act to be done which would or might cause
        the
        Prime Lease, or the rights of Sublandlord, as lessee or tenant, under the
        Prime
        Lease, to be endangered, canceled, terminated, forfeited or surrendered,
        or
        which would or might cause Sublandlord to be in default thereunder or liable
        for
        any damage, claim or penalty and 

       

      
        
          
          

        

        
          3.

          
            

          

        

        
          
          

        

      

       

       

      Subtenant
        indemnifies and holds harmless Sublandlord from any such acts.  In the
        event of any inconsistency between the terms of this Sublease and the terms
        of
        the Prime Lease, the terms of this Sublease shall prevail, provided, however,
        that Subtenant agrees, as an express inducement for Sublandlord’s executing this
        Sublease, that if there is any conflict between the provisions of this Sublease
        and the provisions of the Prime Lease which would permit Subtenant to do
        or
        cause to be done or suffer or permit any act or things to be done which is
        prohibited by the Prime Lease, then the provisions of the Prime Lease shall
        prevail. Sublandlord shall have all those rights and privileges against
        Subtenant, including, without limitation, all those remedies in the event
        of
        Subtenant’s default, which Prime Landlord has against Sublandlord, as tenant
        under the Prime Lease.  Sublandlord shall also have such other rights
        and privileges against Subtenant to which Sublandlord may be entitled either
        at
        law or in equity.  Any rights reserved by the Prime Landlord under the
        Prime Lease may be exercised by either Prime Landlord or Sublandlord with
        respect to this Sublease.  Sublandlord represents to Subtenant that
        the Prime Lease is in full force and effect, and that no default or event
        that,
        with the passing of time or the giving of notice of both, would constitute
        a
        default, exists on the part of Sublandlord, or, to Sublandlord’s knowledge, the
        Prime Landlord.  Sublandlord agrees to maintain the Prime Lease in
        full force and effect, except to the extent that any failure to maintain
        the
        Prime Lease is due to the failure of Subtenant to comply with any of its
        obligations under this Sublease.  Additionally, Sublandlord shall not
        amend or modify the Prime Lease in such a manner as to materially or adversely
        affect Subtenant’s use of the Subleased Premises or increase the obligations or
        decrease the rights of Subtenant hereunder, without the prior written consent
        of
        Subtenant, which may be granted or withheld at Subtenant’s sole
        discretion.   Subtenant shall have all those rights and
        privileges against Prime Landlord, including, without limitation, all those
        remedies in the event of Prime Landlord’s default, which Sublandlord has against
        Prime Landlord, as tenant under the Prime Lease.  Subtenant shall also
        have such other rights and privileges against Sublandlord and Prime Landlord
        to
        which Subtenant may be entitled either at law or in equity.  Any
        rights reserved by the Sublandlord as “Tenant” under the Prime Lease may be
        exercised by Subtenant with respect to this Sublease.

      


                 7.           Indemnification.  Subtenant
        shall indemnify and hold Sublandlord and Prime Landlord harmless from and
        against all losses, costs, damages, expenses and liabilities, including but
        not
        limited to internal administrative costs, attorneys’ fees, court costs and
        penalty, that Sublandlord or Prime Landlord may incur or pay out by reason
        of
        any injuries to person or damage caused, in whole or in part, by any wrongful,
        negligent or willful act or omission of Subtenant, its agents, employees
        or
        invitees, or by reason of any breach or default under the Prime Lease or
        hereunder on Subtenant’s part.  Sublandlord agrees to indemnify
        Subtenant, and hold it harmless, from and against any and all claims, damages,
        losses, expenses and liabilities (including reasonable attorneys’ fees) incurred
        as a result of any default by Sublandlord, beyond any applicable cure periods,
        under this Sublease or the Prime Lease, arising from the non-performance,
        non-observance or non-payment of any of Sublandlord’s obligations under this
        Sublease or the Master Lease, provided Subtenant has fully performed all
        of its
        obligations hereunder.  Sublandlord shall not do, nor permit to be
        done, any act or thing which is, or with notice or the passage of time would
        be,
        a default under this Sublease or the Prime Lease.

      


                 8.           Insurance.

      


                 a.           Coverage.  Subtenant
        shall, at all times during the term of this Lease, and at its own cost and
        expense procure and continue in force the following insurance
        coverage:

      


                            i.           Bodily
        Injury and Property Damage, Liability Insurance with a combined single limit
        for
        bodily injury and property damage of not less than $2,000,000.

       

      
        
          
          

        

        
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                            ii.           Fire
        and Extended Coverage Insurance, including vandalism and malicious mischief
        coverage, in an amount equal to the full replacement value of all fixtures,
        furniture and improvements installed by or at the expense of
        Subtenant.

      


                 b.           Insurance
        Policies.  The aforementioned minimum limits of policies shall in
        no event limit the liability of Subtenant hereunder.  The aforesaid
        insurance shall name both Prime Landlord and Sublandlord as an additional
        insured.  Said insurance shall be with companies having a rating of
        not less than A-VII in “Best’s Key Rating Guide.”  Subtenant shall
        furnish from the insurance companies or cause the insurance companies to
        furnish
        certificates of coverage.  No such policy shall be cancelable or
        subject to reduction of coverage or other material modifications or
        cancellation except after thirty (30) days’ prior notice in writing to
        Sublandlord by the insurer.  All such policies shall be written as
        primary policies, not contributing with and not in excess of the coverage
        which
        Sublandlord may carry.  Subtenant shall, not more than twenty (20)
        days after the expiration of such policies, furnish Sublandlord with
        renewals or binders.  Subtenant agrees that if Subtenant does not take
        out and maintain such insurance, then, upon at least five (5) days’ written
        notice, Sublandlord may (but shall not be required to) procure said insurance
        on
        Subtenant’s behalf and charge Subtenant the premium together with a ten percent
        (10%) handling charge, payable upon demand.  Subtenant shall have the
        right to provide such insurance coverage pursuant to blanket policies obtained
        by Subtenant provided such blanket policies expressly afford coverage to
        the
        Sublease Premises and to Subtenant as required by this Lease.

      


                 9.           Services.  Sublandlord
        shall provide Subtenant with any and all maintenance or other services made
        available to Sublandlord by Prime Landlord under the Prime Lease, insofar
        as the
        same are applicable to the Sublease Premises.  Sublandlord agrees to
        use commercially reasonable efforts to cause Prime Landlord to perform all
        the
        duties, covenants, agreements and obligations of Prime Landlord under the
        Prime
        Lease except as stated herein to the contrary.  Upon Subtenant’s
        request, Sublandlord agrees to immediately notify Prime Landlord of its
        non-performance under the Prime Lease and requesting that Prime Landlord
        perform
        its obligations under the Prime Lease; provided, however, that if Subtenant
        commences a lawsuit or other action, Subtenant shall pay all costs and expenses
        incurred in connection therewith, and Subtenant shall indemnify Sublandlord
        against, and hold Sublandlord harmless from, all costs and expenses incurred
        by
        Sublandlord in connection therewith to obtain all maintenance or other services
        which Prime Landlord is required to provide under the Prime Lease, but
        Sublandlord shall not be liable for the failure of Prime Landlord to provide
        such services, unless such failure is due to the willful act or neglect of
        Sublandlord under the Prime Lease.  In addition, Sublandlord shall
        have no obligation to render any services to Subtenant or to spend any money
        for
        the repair or preservation of the Sublease Premises.  If services to
        the Sublease Premises are stopped or interrupted in such a manner as to
        substantially interfere with the normal operation of Subtenant’s business on the
        Sublease Premises, Sublandlord, upon the written request and at the reasonable
        expense of Subtenant, will exert reasonable efforts to enforce and pursue
        the
        rights, which Sublandlord may have pursuant to the Prime Lease to rectify
        such
        service stoppage or failure; however, Sublandlord is not liable for any damages
        which may result.  Sublandlord covenants to reasonably comply with its
        duties and obligations under the Prime Lease so as to keep the same free
        from
        default and in full force and effect, but this Sublease is subject and
        subordinate to the terms and conditions of the Prime Lease and any mortgages
        as
        provided therein.

      


                 10.           Consent
        of Prime Landlord.  This Sublease is subject to the written
        consent of the Prime Landlord, which consent shall be evidenced by the Prime
        Landlord’s execution of the Consent to Sublease attached hereto as Attachment
        A.

       

      
        
          
          

        

        
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                 11.           Binding
        Effect.  This Sublease shall apply to and bind the respective
        successors and assigns of the parties hereto, but this paragraph shall not
        be
        construed as a consent to any additional assignment or subletting by the
        Sublandlord or the Prime Landlord, or a waiver of any rights whatsoever by
        the
        Prime Landlord.

      


                 12.           Assignment
        or Subletting.  This Sublease may not be assigned or sublet by
        Subtenant without Sublandlord’s prior written
        consent.  Notwithstanding anything to the contrary contained in this
        Sublease, and provided that Subtenant complies with any restrictions on
        assignment or subletting set forth in the Prime Lease, none of (i) an assignment
        of this Sublease to a transferee of all or substantially all of the assets
        of
        Subtenant, (ii) an assignment of this Sublease or sublease of the Sublease
        Premises to a transferee which is either (A) the resulting entity of a merger
        or
        consolidation of Subtenant with another entity or (B) acquiring all or
        substantially all of the assets of Subtenant, or (iii) an assignment or
        subletting of all or a portion of the Sublease Premises to an affiliate of
        Subtenant (an entity which is controlled by, controls, or is under common
        control with, Subtenant), shall be deemed an assignment or sublease under
        this
        Sublease (and thus shall not be subject to Sublandlord's prior consent pursuant
        to this section).

      


                 13.           Consents
        and Approvals.  In any instance when Sublandlord’s consent or
        approval is required under this Sublease, Sublandlord’s refusal to consent to or
        approve any matter or thing shall be deemed reasonable and in good faith
        if such
        consent or approval has not been obtained from Prime Landlord; provided however,
        Sublandlord covenants to use reasonable efforts, at the sole cost and expense
        of
        Subtenant (including, without limitation, internal administrative costs,
        attorneys’ fees and expenses), to obtain the consent or approval of Prime
        Landlord and will indicate to Prime Landlord in those cases where its approval
        is conditioned upon Prime Landlord’s approval that it has no objection
        thereto.  If such consent of Prime Landlord shall not be required,
        Sublandlord shall not unreasonably withhold, condition or delay its consent
        to
        such matter.

      


                 14.           Right
        to Cure Subtenant’s Defaults and Damages.  If Subtenant shall at
        any time fail to make any payment or perform any other obligation of Subtenant
        hereunder within the applicable cure period, if any, then Sublandlord shall
        have
        the right, but not the obligation, after five days’ written notice to Subtenant,
        or without notice to Subtenant in the case of any emergency, and without
        waiving
        or releasing Subtenant from any obligations of Subtenant hereunder, to make
        such
        payment or perform such other obligation of Subtenant in such manner and
        to
        extent as Sublandlord shall deem necessary, and in exercising any such right,
        to
        pay any incidental reasonable costs and expenses, employ attorneys, and incur
        and pay reasonable attorneys’ fees.  Subtenant shall pay to
        Sublandlord upon demand all reasonable sums so paid by Sublandlord and all
        reasonable incidental costs and expenses of Sublandlord in connection therewith
        together with interest thereon at a rate of ten percent (10%) per year or
        any
        part thereof or the then-maximum rate of interest which may lawfully be
        collected from Subtenant, whichever shall be less, from the date of the making
        of such expenditures.

      


                 15.           Brokerage
        Fees.  Justin Rayburn of CB Richard Ellis (“CBRE”) represents
        Sublandlord, and Sublandlord recognizes that Melanie Baxter of Cresa Partners
        (“CP”) represents Subtenant pursuant to a separate agreement.  In
        consideration of the foregoing, Sublandlord hereby agrees to pay CBRE and
        CP the
        following amounts, respectively:

      


      a.           $6,983.30
        to CBRE and $13,966.60 to CP, payable upon the parties’ execution of this
        Sublease; and

       

      
        
          
          

        

        
          6.

          
            

          

        

        
          
          

        

      

      
 

      b.           an
        additional $6,983.30 to CBRE and $13,966.60 to CP, payable on June 1, 2008;
        provided that Subtenant has not failed to make any payment or perform any
        other
        obligation of Subtenant hereunder within the applicable cure
        period.

      


                 16.           Options,
        Rights of First Refusal, Etc.  If the Prime Lease provides for any
        options to lease additional space, rights of first refusal, rights of
        contradiction, rights of cancellation, roof rights, or staging rights, such
        rights shall not be transferred to Subtenant hereby.

      


                 17.           No
        Recording.  Subtenant shall not record this Sublease or a
        memorandum hereof.  Violation of this provision shall cause an
        automatic termination of this Sublease.

      


                 18.           Notices.  Notices
        shall be given as provided in the Prime Lease.  Sublandlord’s and
        Subtenant’s addresses for notices shall be as follows:

      


                 Subtenant:                      
        Zynex Medical, Inc.

                                                      
        Attn: Chief Executive Officer

                                                      
        Attn: Chief Financial Officer

                                                      
        8022 South Park Circle, Suite 100

                                                      
        Littleton, CO 80120

      


                 Sublandlord:                    Jones/NCTI,
        Inc.

      Attn:
        Mary Bliss

      9697
        E.
        Mineral Ave.

      Centennial,
        CO 80112

       

      with
        a
        copy to:               Jones
        International, Ltd.

      Attn:
        General Counsel

      9697
        E.
        Mineral Ave.

      Centennial,
        CO 80112

      


                 19.           Default
        Under Prime Lease.  If Sublandlord is in default with respect to
        the terms and conditions of the Prime Lease, Prime Landlord may give notice
        of
        Sublandlord's default to Subtenant and, if Prime Landlord elects, in its
        sole
        discretion, may require Subtenant to attorn to Prime Landlord and thereafter
        all
        payments hereunder shall be paid directly to Prime Landlord.  In no
        event shall Subtenant be liable to Sublandlord as a result of Subtenant’s
        compliance with any notice provided by Prime Landlord hereunder.

      


      20.           Acceptance
        of Sublease Premises.  Sublandlord warrants that, to its knowledge
        (i) the plumbing, electrical, gas, HVAC and other mechanical systems servicing
        the Sublease Premises are in good working condition and order on the
        Commencement Date, (ii) the Sublease Premises are free of Hazardous Substances,
        and (iii) the Sublease Premises are in material compliance with all existing
        laws, codes, regulations and ordinances of any governmental
        authorities.  Sublandlord makes no other warranties, express or
        implied, as to the fitness (including fitness for any particular purpose)
        or
        condition of the Sublease Premises or the Purchased Furniture, including
        but not
        limited to the integrity of the existing cabling and other equipment located
        within the Sublease Premises.  Subtenant, at its sole cost and
        expense, shall be responsible for all costs and expenses incurred in connection
        with procuring for the Sublet Premises telephone and data connectivity services,
        programming of the security system, and electrical, gas and other
        utilities.

       

      
        
          
          

        

        
          7.

          
            

          

        

        
          
          

        

      

       

                 21.           Governing
        Law.  This Sublease shall be governed by and construed in
        accordance with the laws of the State of Colorado.

      


                 22.           Entire
        Agreement.  This Sublease, including all attachments and exhibits
        hereto, contains the entire agreement between the parties and no agreement
        shall
        be effective to change, modify or terminate this Sublease in whole or in
        part
        unless such agreement is in writing and duly signed by the parties
        hereto.

      


                 23.           Definitions.  Any
        term that is capitalized but not defined in this Sublease that is capitalized
        and defined in the Prime Lease shall have the same meaning for purposes of
        this
        Sublease as it has for purposes of the Prime Lease.

      


                 24.           Waiver.  One
        or more waivers of any covenant or condition by Sublandlord shall not be
        construed as a waiver of a subsequent breach of the same or any other covenant
        or condition, and the consent or approval by Sublandlord to or of any act
        by
        Subtenant requiring Sublandlord’s consent or approval shall not be construed to
        waive or render unnecessary Sublandlord’s consent or approval to or of any
        subsequent similar act by Subtenant.

      


                 25.           Severability.  If
        any term or provision of this Sublease or any application thereof shall be
        invalid or unenforceable, the remainder of this Sublease and any other
        application of such term or provision shall not be affected
        thereby.

      


                 26.           Access.  Subtenant
        shall permit Sublandlord to have access to the Sublease Premises during
        Subtenant’s business hours during the term hereof, after reasonable advance
        notice, for the purpose of inspection the same and, to the extent Subtenant
        fails to perform such obligations after expiration of any applicable notice
        and
        cure period, for the purpose of performing Sublandlord’s obligations under the
        Prime Lease.

      


                 27.           Interpretation.  If
        any provision of this Sublease or the application thereof to any person or
        circumstance shall, for any reason and to any extent, be invalid or
        unenforceable, the remainder of this Sublease and the application of that
        provision to other persons or circumstances shall not be affected but rather
        shall be enforced to the extent permitted by law.  The table of
        contents, captions, headings and titles, if any, in this Sublease are solely
        for
        convenience of reference and shall not affect its
        interpretation.  This Sublease shall be construed without regard to
        any presumption or other rule requiring construction against the party causing
        this Sublease to be drafted.  Each covenant, agreement, obligation or
        other provision of this Sublease shall be deemed and construed as a separate
        and
        independent covenant of the party bound by, undertaking or making same, not
        dependent on any other provision of this Sublease unless otherwise expressly
        provided.  All pronouns and any variations thereof shall be deemed to
        refer to the masculine, feminine or neuter, singular or plural, as the identity
        of the parties may require.  The word “person” as used in this
        Sublease shall mean a natural person or persons, a partnership, a corporation
        or
        any other form of business or legal association or entity.  This
        Sublease may be executed in counterparts or with counterpart signature
        pages.

      


                 28.           No
        Offer.  The submission of this Sublease shall not be deemed to be
        an offer, an acceptance, or a reservation of the Sublease Premises; and
        Sublandlord shall not be bound hereby until Sublandlord has delivered to
        Subtenant a fully executed copy of this Sublease, signed by both of the parties
        on the last page of this Sublease in the spaces herein
        provided.  Until such delivery, Sublandlord reserves the right to
        exhibit and lease the Sublease Premises to other prospective
        tenants.

       

      
        
          
          

        

        
          8.

          
            

          

        

        
          
          

        

      

       

                 29.           Notice
        of Default.  Sublandlord hereby represents that at the execution
        of this Sublease no noncured notice of default has been issued by Prime Landlord
        and that Sublandlord has no knowledge of any current condition which would
        constitute such a default of the Prime Lease.

      


      30.           Consents.  In
        the event that Subtenant desires to take any action that will require the
        consent of Prime Landlord, Sublandlord shall use commercially reasonable
        efforts
        to obtain such consent, provided that Sublandlord shall not be liable in
        any way
        for the failure of Prime Landlord to so consent.

      


      31.           Attorneys’
        Fees.  In the event that either Sublandlord or Subtenant should
        bring suit because of the breach of any provision of this Sublease or for
        any
        other relief against the other, then all costs and expenses, including
        reasonable attorneys' fees, incurred by the prevailing party therein shall
        be
        paid by the other party.

      


      32.           Parking.  Subtenant
        shall be entitled to use, at no additional cost to Subtenant, the fifty-one
        (51)
        vehicle parking spaces granted to Sublandlord under the Prime
        Lease.

      


      33.           Signage.  Subtenant,
        at its sole cost and expense, shall be entitled to install standard suite
        entry
        and monument signage; provided, that all such signage complies with all terms
        and conditions (including any notice and approval requirements) set forth
        in any
        of the Prime Lease, the covenants, conditions and restrictions applicable
        to the
        High Pointe Business Center (if any), and local and state zoning
        codes.

      


      34.           Access.  Sublandlord,
        at Sublandlord’s cost, shall provide Subtenant with a minimum of three (3)
        security access cards at the time of the pre-occupancy period specified in
        Section 5, supra; thereafter, upon delivery of the Sublease Premises,
        Sublandlord shall provide no fewer than an additional thirty-two (32) security
        access cards.  Sublandlord shall be entitled to keep two (2) security
        access cards, and Subtenant shall ensure that such security access cards
        remain
        operable at all times throughout the term hereof.

      


      35.           Subordination.  The
        sublease shall be subject and subordinate at all times to the Prime Lease
        and to
        all of the covenants, agreements, terms, provisions and conditions of the
        Prime
        Lease.

      


      [SIGNATURES
        ON THE FOLLOWING PAGE]


      
        
          
          

        

        
          9.

          
            

          

        

        
          
          

        

      


                 IN
        WITNESS WHEREOF, The parties hereto have executed this instrument on the
        date
        first above written.

      


      SUBLANDLORD:                                                                SUBTENANT:

      


      Jones/NCTI,
        Inc.                                                                   Zynex
        Medical, Inc.

      


      


                               
        /s/ Thomas Sandgaard

      


      By:
I
        cannot make out the
        signature                                        By:    
        Thomas Sandgaard

      


      Title:
        Vice
        President                                                              
Title: President

      


      Date:
        11/2/2007                                                                    
Date: 10-31-2007

      



      
        
                    

          
          

        

        
          10.

          
            

          

        

        
          
          

        

      


      ATTACHMENT
        A

      


      FORM
        OF
        CONSENT TO SUBLEASE

      


      Colorado
        NI Industrial One LLC., a Delaware corporation, Landlord under the Prime
        Lease,
        hereby consents to the foregoing Sublease, dated ______, 2007 by and between
        Jones/NCTI, Inc. (f/k/a Versacom, Inc.), as Sublandlord, and Zynex Medical,
        Inc., as Subtenant, relating to consist of approximately 16,553 square feet
        of
        net rentable space, commonly known as Suite 100 located at 8022 South Park
        Circle, Littleton, CO 80120.  Landlord’s consent hereunder is
        expressly conditioned upon Sublandlord’s continuing responsibility for the full
        performance of all terms and conditions of the Prime Lease.  Neither
        the giving of this Consent nor anything contained in the Sublease shall serve
        to
        modify the Prime Lease in any way.

      


      LANDLORD

      


      Colorado
        NI Industrial One LLC

      


      By:                                                                

      


      Its:                                                                

      


      Date: