Document:

stock_agreement2.htm

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    AGREEMENT
      FOR PURCHASE AND SALE OF STOCK

    

         This
      Agreement for Purchase of Stock  ("Agreement") is made and deemed
      effective as of January 10, 2008, by and between US Biodefense, Inc. (referred
      to as "Seller"), on one side, and 221 Fund, LLC /or its assigns, successors
      and/or nominees (referred to as "Purchaser"), on the other side, with reference
      to the herein recitals, terms and conditions.

    

    RECITALS

    

         A.
      Seller’s representative is a shareholder of record and current Chairman and CEO
      of U.S. Biodefense, Inc. a Utah Corporation (the "Corporation");

    

         B.
      Purchaser desires to purchase and Seller desire to sell or cause to be sold
      a
      certain number of common shares of the Corporation’s stock as identified in
      Exhibit  "A" (the  "Stock") upon the terms and subject to
      the conditions hereinafter set forth;

    

         C.
      Purchaser further desires to be retained by the Corporation as Chairman of
      the
      board of directors and Chief Executive Officer in conjunction with consummation
      of the transaction contemplated by this Agreement;

    

         NOW,
      THEREFORE, in consideration of the mutual covenants and agreements
      contained in this Agreement, it is hereby agreed as follows:

    

    AGREEMENT

    

         1.0
      Purchase and Sale; Closing.

    

         1.1
      Purchases and Sale of Corporation’s Common Stock.

         Subject
      to the terms and conditions hereinafter set forth, at the closing of the
      transaction (defined below) contemplated hereby, Seller shall collectively
      sell,
      convey and transfer, or cause to be sold, conveyed or transferred, the Stock
      and
      deliver to Purchaser certificates representing the Stock, and the Purchaser
      shall purchase from the Seller the Stock in consideration of the purchase price
      set forth in Section 2, below.  The certificates representing the
      Stock shall be duly endorsed for transfer or accompanied by appropriate stock
      transfer powers duly executed in blank, in either case with signatures
      guaranteed in the customary fashion, and shall have all the necessary
      documentary transfer tax stamps affixed thereto at Sellers' sole
      expense.

    

         1.2
      Procedure for Closing.

         The
      closing of the transaction contemplated by this Agreement shall be held on
      January 10, 2008 at 1:00 p.m. EST, or such other place, date and time as the
      parties hereto may otherwise agree (such date to be referred to in this
      Agreement as the "Closing Date").

    

         1.3
      Deliveries by Sellers.

         On
      the Closing Date, Sellers shall deliver to Purchaser the following:

    

             
      A.  Those certificates evidencing the Stock as set forth in Section 3.2,
      below; and

    
      	
              B.  

            	
              Executed
                resignation of David Chin; and

            

    

    
      	
              C.  

            	
              Executed
                Employment agreement for Scott
                Gallagher

            

    

    

         1.4
      Deliveries by Buyers.

         On
      the Closing Date, Purchaser shall deliver to Seller, in accordance with the
      allocations set forth in Exhibit "A" hereto, checks or wire transfers totaling
      $150,000 as full consideration of the contemplated purchase of 5,000,000 (FIVE
      MILLION) shares of the sellers common stock..

    

         2.0
      Amount and Payment of Purchase Price.

         The
      full purchase price of the Stock shall be $150,000 in accordance with the
      allocation set forth in Exhibit "A" attached and incorporated herein, all in
      the
      aggregate sum of One Hundred Fifty Thousand ($150,000) Dollars and
      00/100.

    

         3.0
      Sellers' Representations and Warranties.

         Seller
      hereby warrants and represent as follows:

    

         3.1.
      Validity of Agreement.

         This
      Agreement has been duly executed and delivered by Seller and is a legal, valid
      and binding obligation upon Seller, enforceable in accordance with its terms,
      except as may be limited by the laws of bankruptcy or equity.

    

         3.2
      Title to Shares.

         The
      ten million shares of Stock and free and clear of all liens, security interests,
      charges or other encumbrances, except as otherwise disclosed in writing by
      Seller. Seller is not party to any agreement, written or oral, creating rights
      in respect to the Stock in any third person or relating to the voting of the
      Stock. There are no existing warrants, options, stock purchase agreements,
      stock
      transfer restriction agreements, redemption agreements, calls or rights to
      subscribe of any character relating to the Stock, nor are there any securities
      convertible into such stock.

    

         3.3
      Voluntary and Intelligent Execution.

         Seller
      has entered into the transaction contemplated by this Agreement at Sellers'
      own
      free will and without any fraud or coercion of any kind. Seller has not relied
      on any representations not contained in this Agreement. Seller has had the
      opportunity to seek the advice of competent and independent legal counsel with
      respect thereto and undertaken such investigation into the relevant facts as
      Seller deemed necessary and appropriate.

    

         3.4
      Authority Relative to this Agreement.

         Except
      as otherwise stated herein, Seller has full power and authority to execute
      this
      Agreement and carry out the transaction contemplated by it and no further action
      is necessary by Seller to make this Agreement valid and binding upon Seller
      and
      enforceable against him, individually or jointly, in accordance with the terms
      hereof, or to carry out the actions contemplated hereby. The execution, delivery
      and performance of this Agreement by Seller will not:

    

              A.
      Constitute a breach or a violation of the Corporation's Certificate of
      Incorporation, By-Laws, or of any law, agreement, indenture, deed of trust,
      mortgage, loan agreement or other instrument to which any of them are a party,
      or by which it is bound;

    

              B.  Constitute
      a violation of any order, judgment or decree to which any of them are a party
      or
      by which its assets or properties are bound or affected; or

    

              C.
      Result in the creation of any lien, charge or encumbrance upon any of their
      assets or properties, except as stated herein.

    

          3.5
      Seller’s Liability Representation.

    Seller
      hereby represents that Schedule
“C” contains the full list of outstanding liabilities of the Company as of the
      Closing Date and hereby indemnifies the Purchaser for any and all amounts in
      excess of those described on Schedule “C”.

    

          3.6
      Audit Representation.

    To
      the best of Seller’s belief and
      knowledge, the Corporation’s books are “Auditable” for the fiscal year ended
      2007. Further the Seller guarantee’s that he will deliver complete audited
      financial results for the fiscal year ended December 31, 2007 at his full
      expenses by February 10, 2008. Further, at closing, the seller will deliver
      to
      the Purchaser the Corporate book, including copies of all of the Corporation’s
      executed board resolutions and approved contracts.  In addition the
      Seller pledges full cooperation with the Purchaser in completing the
      aforementioned transaction.

    

         4.0
      Release and Waiver.

         For
      the consideration and mutual promises herein contained, the Seller, on behalf
      of
      himself and for all of its officers, directors, trustees, shareholders, heirs,
      executors, administrators, attorneys, consultants, successors and assigns,
      principals, agents, servants, employees, representatives, and each of them,
      hereby forever release and discharge Purchaser and the Corporation and their
      companies, officers, directors, trustees, shareholders, heirs, executors,
      administrators, attorneys, consultants, successors and assigns, partners,
      principals, agents, servants, employees, representatives, and each of them,
      from
      any and all actions, causes of action, judgments, liens, promises, agreements,
      contracts, obligations, Transactions, indebtedness, costs, damages, losses,
      lawsuits, arbitrations, appeals, claims, liabilities, indemnifications, debts,
      restrictive covenants, demands, attorney’s fees or expenses of any nature
      whatsoever, except as expressly set forth in this Agreement, and rights of
      any
      kind or character, known or unknown or speculative, arising out of, based upon,
      or relating to any claim, whether known or unknown, concerning in any manner
      Purchaser or the Corporation.

    

         5.0
      Indemnification.

    

         5.1
      Definition.

         As
      used in this provision, "Damages” means all claims, damages, liabilities,
      losses, judgments, settlements, and expenses, including, without limitation,
      all
      reasonable fees and disbursements of counsel incident to the investigation
      or
      defense of any claim or proceeding or threatened claim or
      proceeding.

    

         5.2
      Terms of Indemnification.

         Seller
      agrees to jointly and severally indemnify, defend and hold harmless Purchaser
      from all Damages (i) proximately caused by the fault or negligence of Seller,
      its officers, employees or agents; (ii) which relate in any manner to the terms
      and obligations of this Agreement; (iii) which relate to any other failure
      by
      Seller to comply with any terms of this Agreement; (iv) which relate to any
      failure by Seller to comply with applicable laws and/or regulations in
      accordance with this   Agreement; (v) resulting from any breach
      of any representation, warranty, covenant or promise made by Seller in this
      Agreement; and/or (vi) resulting from any and all federal, state or local tax
      liabilities of Seller that in any manner impact Purchaser.

    

         5.3
      Notice of Claim.

         Seller
      shall promptly notify Purchaser in writing of any claim asserted by a third
      person that might give rise to any indemnity obligation hereunder. Failure
      of
      Seller to promptly give such notice shall not relieve that individual of his
      indemnification obligations under this Agreement.  Together with or
      following such notice, Seller shall deliver to Purchaser copies of all Notices
      and documents received by such party relating to the asserted claim (including
      court papers).

    

         6.0
      Expenses.

         Each
      of the parties hereto shall pay its own expense in connection with this
      Agreement and the transactions contemplated hereby, including the fees and
      expenses of its counsel and its certified public accountants and other
      experts.

    

         7.0
      Conditions Precedent.

    

         7.1
      Purchaser's obligations under this Agreement are expressly conditioned upon,
      among other requirements stated herein, (i) the negotiation and execution of
      an
      executive employment agreement between the Corporation and Purchaser’s
      representative, (ii) effective resignation of all present board members and
      officers of the Corporation, and (iii) the election of Purchaser’s
      representative as the CEO of the Corporation.  Seller acknowledges and
      understands that the Corporation intends to retain and employ Purchaser’s
      representative as an officer and/or director of the
      Corporation.  Seller further acknowledges and hereby waives any
      conflict of interest by virtue of the intended employment of Purchaser’s
      representative by the Corporation.

    

         7.2
      In the event that Purchaser, Corporation or any third party fails to execute
      any
      of the above referenced agreements for any reason, then any deposits made by
      Purchaser to Seller, either individually or collectively, towards purchase
      of
      the Stock shall be immediately refunded by Seller and Purchaser's obligations
      under this Agreement shall be fully extinguished. Further, in such event, all
      items delivered by Seller shall be returned to same, including the
      Stock.

    

         8.0
      Miscellaneous.

    

         8.1
      Waivers.

         No
      action taken pursuant to this Agreement, including any investigation by or
      on
      behalf of any party shall be deemed to constitute a waiver by the party taking
      such action or compliance with any representation, warranty, covenant or
      agreement contained herein, therein and in any documents delivered in connection
      herewith or therewith.  The waiver by any party hereto of a breach of
      any provision of this Agreement shall not operate or be construed as a waiver
      of
      any subsequent breach.

    

         8.2
      Notices.

         All
      notices, requests, demands and other communications, which are required or
      may
      be given under this Agreement shall be in writing and shall be deemed to have
      been duly given if delivered or mailed, first class mail, postage
      prepaid:

    

                         To
      Seller:                        See
      Exhibit "B"

    

                         To
      Purchaser:                221
      Fund, LLC/ Scott Gallagher

    300
      State Street East, Suite
      226

    Oldsmar,
      Florida 34677

    813-749-8805/Voice

    727-417-7807/Cell

    215-689-2748/Fax

    

         Or
      to such other address as such party shall have specified by notice in writing
      to
      the other party.

    

         8.3
      Merger and Integration.

         This
      Agreement contains the entire understanding of the parties.  There are
      no representations, covenants or understandings other than those, either
      express, implied or referred to herein.  Each party acknowledges that
      there are no conditions to this Agreement other than those expressed or referred
      to herein.  Each party further acknowledges that no other party or any
      agent or attorney of any other party has made any promise, representation or
      warranty whatsoever, express or implied or statutory, not contained or referred
      to herein, concerning the subject matter hereof, to induce him to execute this
      Agreement, and he acknowledges that he has not executed this Agreement in
      reliance on any such promise, representation or warranty not specifically
      contained or referred to herein.

    

         8.4
      Sections and Other Headings.

         The
      section and other headings contained in this Agreement are for reference
      purposes only and shall not affect the meaning or interpretation of this
      Agreement.

    

         8.5
      Governing Law.

         This
      Agreement, and all transactions contemplated hereby, shall be governed by,
      construed and enforced in accordance with the laws of the State of
      Nevada.  The parties herein submit to personal jurisdiction and venue
      of a court of subject matter jurisdiction, which is appropriate for Tampa,
      Florida.

    

         8.6
      Attorney's Fees and Court Costs.

         In
      the event that litigation results from or arises out of this Agreement or the
      performance thereof, the parties agree to reimburse the prevailing party's
      reasonable attorney's fees, court costs, and all other expenses, whether or
      not
      taxable by the court as costs, in addition to any other relief to which, the
      prevailing party may be entitled.

    

         8.8
      Contractual Procedures.

         Unless
      specifically disallowed by law, should litigation arise hereunder, service
      of
      process therefore, may be obtained through certified mail, return receipt
      requested; the parties hereto waiving any and all rights they may have to object
      to the method by which service was perfected.

    

         8.9
      Partial Invalidity.

         If
      any provision in this Agreement is held by a court of competent jurisdiction
      to
      be invalid, void, or unenforceable, the remaining provisions will nevertheless
      continue in full force without being impaired or invalidated in any
      way.

    

         8.10
      Survival of Representations and Warranties.

         The
      representations and warranties of the parties including indemnification
      obligations contained herein shall survive following the Closing
      Date.

    

         8.11
      Further Assurances.

         The
      parties agree to take all further actions, including execution of documents,
      which are reasonably necessary to effectuate the transaction contemplated by
      this Agreement.

    

         8.12
      Binding on Successors.

         This
      Agreement and covenants and conditions herein contained shall apply to, be
      binding upon and inure to the benefit of the respective heirs, administrators,
      executors, legal representatives, assignees, successors and agents of the
      parties hereto.

    

         8.13
      Specific Performance.

         The
      parties agree that remedies, at least for any breach or threat of breach of
      this
      Agreement, may be inadequate and that, in the event of any such breach or threat
      of breach, the non-breaching party will be entitled, in addition to all other
      rights and remedies otherwise available at law or in equity, to the equitable
      remedy of injunctive relief to enforce the provisions of this
      Agreement.

    

         8.14
      Joint Preparation.

         This
      Agreement is to be deemed to have been jointly prepared by the parties hereto
      and any uncertainty and ambiguity existing herein shall not be interpreted
      against any party hereto, but according to the application of the rules of
      interpretation of contracts, if any such uncertainty or ambiguity
      exists.

    

         8.15
      Counterparts.

         This
      Agreement can be executed in one or more counterparts and the counterparts
      signed in the aggregate shall constitute a single, original
      instrument.  A facsimile/photocopy of this Agreement may be used in
      lieu of the original for all purposes.

    

         IN
      WITNESS WHEREOF, the parties have executed this Agreement (consisting
      of 9 pages including Exhibits "A", “B” and "C") so that it is deemed effective
      as of the day and year first written above.

    

    SELLER:                                                                                     PURCHASER:

    US
      Biodefense,
      Inc.                                                                                     221
      Fund, LLC.

    

    

    By:          /s/
      David Chin                                            By:       /s/
      Scott
      Gallagher                                                    

    David
      Chin,
      CEO                                                                                     Scott
      Gallagher, CIO

    

    Dated:  January
      10,
      2008                                                                                     Dated:  January
      10, 2008

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    EXHIBIT
      "A"

    

    SELLERS'
      ALLOCATION OF SHARES/PURCHASE PRICE

     

    SHARES
      TO BE DELIVERED:

    

    SHAREHOLDER                                                      COMMON
      SHARES                                                                           

    

    221
      Fund,
      LLC                                                          5,000,000

    

        

    Total                                                   5,000,000

              =======

     

    CASH
      DISBURSEMENT

    

    US
      BioDefense,
      Inc.                                                  $150,000
      (to be applied to an existing debt obligation of the Company)zynexs8ex410_11212007.htm

     

    
      

      

    

     

    Exhibit
      4.10

    

      10/2/07

      

      PROSPECTUS

      

      THIS
        PROSPECTUS COVERS SECURITIES THAT HAVE BEEN REGISTERED UNDER THE SECURITIES
        ACT
        OF 1933.

       

      ZYNEX
        MEDICAL HOLDINGS,
        INC.

       

      2005
        STOCK OPTION PLAN

       

      Common
        Stock

      ($.001
        Par Value)

       

      This
        Prospectus covers shares of common stock (“Common Stock”) of Zynex Medical
        Holdings, Inc., a Nevada corporation (the “Company”), which may be issued upon
        the exercise of stock options granted under the Zynex Medical Holdings, Inc.
        2005 Stock Option Plan, as amended (the “Plan”).  Each option is
        subject to the terms and conditions in the Plan and in the stock option
        agreement between the Company and each participant who receives an
        option.

       

      ____________________

       

      

      THESE
        SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE

      SECURITIES
        AND EXCHANGE COMMISSION, NOR HAS THE COMMISSION

      PASSED
        UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.

      ANY
        REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

       

      _______________

       

      

      ZYNEX
        MEDICAL HOLDINGS, INC.

       

      8100
        Southpark Way, Suite A-9

       

      Littleton,
        Colorado 80120

       

      (303) 703-4906

       

      

      The
        date
        of this Prospectus is December 10, 2007.

       

      

      
        
          
          

        

        
          -
            1 -

          
            

          

        

        
          
          

        

      

      The
        Company files reports, proxy and information statements, and other information
        under the Securities Exchange Act of 1934 with the Securities and Exchange
        Commission (“Commission”).  Such reports, proxy and information
        statements, and other information may be inspected or copied at the Public
        Reference Room maintained by the SEC at 100 F Street, N.E., Washington, D.C.
        20549. You may obtain information on the operation of the Public Reference
        Room
        by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site
        at
        http://www.sec.gov that contains reports, proxy and information statements
        and
        other information regarding issuers that file electronically with the SEC,
        including the Company. The Company's Common Stock is traded on the OTC Bulletin
        Board under the symbol “ZYNX.”

       

      The
        Company is furnishing with this Prospectus or has previously furnished its
        most
        recent Annual Report to Stockholders or Annual Report on Form 10-KSB with
        audited financial statements.  A copy of that Annual Report also is
        available, without charge, from the Company upon written request.

       

      The
        Company will furnish without charge to each person, including any beneficial
        owner, to whom this Prospectus is delivered, upon oral or written request,
        a
        copy of any or all of the documents incorporated herein by reference (see
        Page
        13 of the Prospectus), other than exhibits to those documents, and copies
        of all
        reports and other communications distributed to its security holders generally.
        Requests should be addressed to Corporate Secretary, Zynex Medical Holdings,
        Inc., 8022 Southpark Circle, Suite 100, Littleton, Colorado 80120;
        telephone:  (303) 703-4906.

       

      

      
        
          
          

        

        
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            2 -

          
            

          

        

        
          
          

        

      

      TABLE
        OF CONTENTS

       

       

      
        	
                2005
                  STOCK OPTION PLAN

              	
                 
                  4

              
	
                General
                  Information

              	
                 
                  4

              
	
                Eligibility

              	
                 
                  4

              
	
                Administration
                  and Amendment of the Plan

              	
                 
                  5

              
	
                Stock
                  Options

              	
                 
                  6

              
	
                Vesting

              	
                 
                  7

              
	
                Exercise
                  of Options

              	
                 
                  7

              
	
                Adjustments
                  to Options

              	
                 
                  8

              
	
                Transfer
                  of Options

              	
                 
                  8

              
	
                Effect
                  of Termination of Employment of Participant

              	
                 
                  8

              
	
                Cancellation
                  of Option

              	
                 9

              
	
                Other
                  Conditions; Registration

              	
                10

              
	
                Withholding

              	
                11

              
	
                [Federal
                  Tax Consequences

              	
                11

              
	
                Termination
                  of the Plan

              	
                13

              
	
                General

              	
                13

              
	
                Restrictions
                  on Resales of Securities

              	
                13

              
	
                INCORPORATION
                  OF CERTAIN DOCUMENTS BY REFERENCE

              	
                13

              
	
                DESCRIPTION
                  OF CAPITAL STOCK

              	
                14

              
	
                Common
                  Shares

              	
                14

              
	
                Preferred
                  Shares

              	
                14

              
	
                Transfer
                  Agent

              	
                15

              
	
                EXPERTS

              	
                15

              

      

      

       

      
        
          
          

        

        
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      ZYNEX
        MEDICAL HOLDINGS,
        INC.

      

       

      2005
        STOCK OPTION PLAN

       

        General
        Information

       

      On
        January 3, 2005 the Board of Directors of Zynex Medical Holdings, Inc. (the
        “Company”) adopted the Company’s 2005 Stock Option Plan (the “Plan”), and the
        Plan was approved by written consent of the holder of a majority of the
        Company’s outstanding Common Stock on December 30, 2005.

       

      The
        purpose of the Plan is to provide participants with an increased economic
        and
        proprietary interest in the Company and its subsidiary in order to encourage
        those participants to contribute to the success and progress of the Company
        and
        its subsidiary.

       

      Options
        granted under the Plan (each, an “Option”) provide the holder a right to buy
        Common Stock of the Company at the fair market value of the Common Stock
        on the
        date of grant of the Option.  The fair market value of the Common
        Stock at any future time cannot be predicted.

       

      The
        Plan
        is not subject to the provisions of the Employee Retirement Income Security
        Act
        of 1974.

       

      The
        following summary of the terms of the Plan and the form of stock option
        agreement under the Plan does not purport to be complete and is qualified
        in its
        entirety by reference to all of the terms and conditions of the Plan and
        the
        form of stock option agreement.  Copies of the Plan and the Company’s
        current form of stock option agreement are available from the Company and
        have
        been filed as exhibits to a registration statement registering the shares
        which
        may be issued upon the exercise of options under the Plan.  Additional
        information about the Plan and its administration may be obtained by contacting
        Corporate Secretary, Zynex Medical Holdings, Inc., 8100 Southpark Way, Suite
        A-9, Littleton, Colorado 80120;
        telephone:  (303) 703-4906.

       

        Eligibility

       

      Options
        may only be granted to officers, directors, independent contractors,
        consultants, employees and prospective employees of the Company and its
        subsidiary as selected by the Board of Directors (each, a
“Participant”).

      
        
          
          

        

        
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            4 -

          
            

          

        

        
          
          

        

      

        Administration
        and Amendment
        of the Plan

       

      The
        Plan
        will be administered by the Administrator who is the Company's President
        and
        Chief Executive Officer. Subject to the express provisions of the Plan, the
        Administrator is authorized and empowered to do all things necessary or
        desirable in connection with the administration of the Plan, including, without
        limitation: (a) to prescribe, amend and rescind rules and regulations relating
        to the Plan and to define terms not otherwise defined; (b) to determine which
        persons are Participants and to which of such Participants, if any, an Option
        will be granted and the timing of any such Option grants; (c) to determine
        the
        number of shares of Common Stock subject to an Option and the exercise or
        purchase price of such shares; (d) to establish and verify the extent of
        satisfaction of any conditions to exercisability applicable to an Option;
        (e) to
        waive conditions to and/or accelerate exercisability of an Option, either
        automatically upon the occurrence of specified events (including in connection
        with a change of control of the Company) or otherwise in his discretion;
        (f) to
        prescribe and amend the terms of Option grants made under the Plan (which
        need
        not be identical); (g) to determine whether, and the extent to which,
        adjustments are required pursuant to the Plan; and (h) to interpret and construe
        the Plan, any rules and regulations under the Plan and the terms and conditions
        of any Option granted, and to make exceptions to any such provisions in good
        faith and for the benefit of the Company.

       

      All
        decisions, determinations and interpretations by the Administrator regarding
        the
        Plan, any rules and regulations under the Plan and the terms and conditions
        of
        any Option granted, will be final and binding on all Participants and
        optionholders.  The Administrator will consider such factors as he
        deems relevant, in his sole and absolute discretion, to making such decisions,
        determinations and interpretations including, without limitation, the
        recommendations or advice of any officer or other employee of the Company
        and
        such attorneys, consultants and accountants as the Administrator may
        select.

       

      The
        Administrator may, from time to time, delegate some of the responsibilities
        with
        respect to the administration of the Plan to such persons as he may designate
        in
        his sole discretion but may not delegate authority to grant options to a
        person
        who is not a member of the Board of Directors.

       

      The
        interpretation and construction of any provision of the Plan by the Board
        of
        Directors will be final and conclusive.  The Board of Directors may
        periodically adopt rules and regulations for carrying out the Plan, and amend
        the Plan as desired, without further action by the Company’s stockholders except
        to the extent required by applicable law.  Any amendment to the Plan
        will not affect the rights and obligations of the Participants and the Company
        arising under Options previously granted and then in
        effect.  Notwithstanding the foregoing, and subject to adjustment, the
        Plan may not be amended to increase the number of shares of Common Stock
        authorized for issuance, unless approved by the Company's
        stockholders.

       

      
        
          
          

        

        
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            5 -

          
            

          

        

        
          
          

        

      

       

      The
        Company’s Board of Directors serves until the next annual meeting of
        shareholders or until successors are elected and qualified.  The
        President and Chief Executive Officer, who is the Administrator, serves at
        the
        pleasure of the Board of Directors.

       

        Stock
        Options

       

      Options
        will be incentive stock options or nonqualified (non-statutory) stock options
        as
        determined by the Administrator or the Board.  An incentive stock
        option is an option which qualifies for certain favorable federal income
        tax
        treatment under the Internal Revenue Code of 1986 (the “Code”).  A
        nonqualified stock option is one not intended to qualify as an incentive
        stock
        option under the Code.  See “Federal Tax
        Consequences.”  Incentive stock options may only be granted to
        employees.  If the aggregate fair market value (determined as of the
        date an option is granted) of the Common Stock with respect to which any
        incentive stock options are exercisable for the first time during a calendar
        year (under all incentive stock option plans of the Company) would exceed
        $100,000, options in excess of this amount will be nonqualified stock options
        in
        accordance with the Code.

       

      Options
        may be granted at any time and from time to time prior to the termination
        of the
        Plan.  No Participant will have any rights as a stockholder with
        respect to any shares of stock subject to Options until such shares have
        been
        issued. Each Option will be evidenced by a written stock option agreement
        and/or
        such other written arrangements as may be approved from time to time by the
        Administrator.  Options granted pursuant to the Plan need not be
        identical, but each Option must contain and be subject to the following terms
        and conditions:

       

      (a)           The
        purchase price under each Option will be established by the Administrator.
        In no
        event will the option price be less than the fair market value of the stock
        on
        the date of grant unless such Options are granted in substitution of options
        granted by a new employee's previous employer or the optionee pays or foregoes
        compensation in the amount of any discount. The price may be paid in cash
        or any
        alternative means acceptable to the Administrator, including an irrevocable
        commitment by a broker to pay over such amount from a sale of the shares
        issuable under an Option and, to the extent permitted by applicable law,
        the
        acceptance of a promissory note secured by the number of shares of Common
        Stock
        then issuable upon exercise of the Options.

       

      
        
          
          

        

        
          -
            6 -

          
            

          

        

        
          
          

        

      

       

      (b)           Unless
        the Administrator provides otherwise, each Option granted must expire within
        a
        period not more that ten (10) years from the date of grant.

       

      (c)           Other
        terms and conditions stated in the Plan, including (but not limited to) the
        cancellation of Options at any time by the Administrator as described below
        and
        termination of Options after the termination of employment as described
        below.

       

      The
        stock
        subject to Options authorized to be granted under the Plan consists of three
        million (3,000,000) shares of the Company’s Common Stock, or the number and kind
        of shares of stock or other securities which will be substituted or adjusted
        for
        such shares as provided in the Plan.  The shares to be delivered upon
        exercise of Options granted under the Plan will be made available, at the
        discretion of the Board of Directors, from the authorized unissued shares
        or
        treasury shares of common stock.

       

        Vesting

       

      The
        Board
        of Directors or Administrator may provide for vesting of Options under the
        Plan.  Under the current form of stock option agreement, an Option
        vests, subject to continued employment or service with the Company or its
        subsidiaries, on the following schedule:

       

      
        	
                Date
                  on or
                  After

                Which
                  Option
                  is

                Vested
                  and
                  Exercisable

                 

              	
                Portion
                  of Total
                  Option

                Which
                  is

                Vested
                  and
                  Exercisable

              
	
                One
                  year from Vesting Base Date

                 

              	
                25%

              
	
                Two
                  years from Vesting Base Date

                 

              	
                50%

              
	
                Three
                  years from Vesting Base Date

                 

              	
                75%

              
	
                Four
                  years from Vesting Base Date

              	
                100%

              

      

      

        Exercise
        of
        Options

       

      Under
        the
        current form of stock option agreement, a Participant may exercise an option
        by
        giving written notice to the Company (in form and substance satisfactory
        to the
        Company).  The written notice must state the election to exercise the
        option and the number of shares for which the Participant is exercising the
        Option.  The written notice of exercise must be accompanied by full
        payment of the exercise price for the number of shares being purchased plus
        the
        withholding taxes.

       

      
        
          
          

        

        
          -
            7 -

          
            

          

        

        
          
          

        

      

       

        Adjustments
        to
        Options

       

      In
        the
        event that the number of shares of Common Stock of the Company will be increased
        or decreased through recapitalization, reclassification, combination of shares,
        stock splits, reverse stock splits, spin-offs, or the payment of a stock
        dividend, (other than regular, quarterly cash dividends) or otherwise, then
        each
        share of Common Stock of the Company which has been authorized for issuance
        under the Plan, whether such share is then currently subject to or may become
        subject to an Option under the Plan, may be proportionately adjusted to reflect
        such increase or decrease, unless the terms of the transaction provide
        otherwise. Outstanding Options may also be amended as to price and other
        terms
        if necessary to reflect the foregoing events.

       

      In
        the
        event there will be any other change in the number or kind of outstanding
        shares
        of Common Stock of the Company, or any stock or other securities into which
        such
        Common Stock will have been changed, or for which it will have been exchanged,
        whether by reason of merger, consolidation or otherwise, the Administrator
        will,
        in his sole discretion, determine the appropriate adjustment, if any, to
        be
        effected.  In addition, in the event of such change described in this
        paragraph, the Administrator may accelerate the time or times at which any
        Option may be exercised within a time prescribed by the Administrator in
        his
        sole discretion.

       

      No
        right
        to purchase fractional shares will result from any adjustment in
        Options.  In case of any adjustment, the shares subject to the Option
        will be rounded down to the nearest whole share.  Notice of any
        adjustment will be given by the Company to each Participant and such adjustment
        (whether or not notice is given) will be effective and binding for all purposes
        of the Plan.

       

        Transfer
        of
        Options

       

      Unless
        the Administrator specifies otherwise, Participants may not transfer options,
        other than by will or the laws of descent and distribution.

       

      Any
        such
        transfer of an incentive stock option will result in the conversion of the
        option to a nonqualified stock option.

       

        Effect
        of Termination of
        Employment of Participant

       

      Unless
        the Administrator specifies otherwise, upon termination of the Participant’s
        employment, his or her rights to exercise an Option then held will be only
        as
        follows:

       

      
        
          
          

        

        
          -
            8 -

          
            

          

        

        
          
          

        

      

       

      (1)           Death.  Upon
        the death of a Participant while in the employ of the Company, all of the
        Participant's Options then held will be exercisable by his or her estate,
        heir
        or beneficiary at any time during the twelve (12) months next succeeding
        the
        date of death.  Any and all Options that are unexercised during the
        twelve (12) months next succeeding the date of death will terminate as of
        the
        end of such twelve (12) month period.

       

      (2)           Total
        and Permanent
        Disability.  Upon termination as a result of the Total and
        Permanent Disability (as defined in the Plan) of any Participant, all of
        the
        Participant’s Options then held will be exercisable for a period of twelve (12)
        months after termination. Any and all Options that are unexercised during
        the
        twelve (12) months succeeding the date of termination will terminate as of
        the
        end of such twelve (12) month period.

       

      (3)           Retirement.  Upon
        Retirement (as defined in the Plan) of a Participant, the Participant’s Options
        then held will be exercisable for a period of twelve (12) months after
        Retirement.  The number of shares with respect to which the Options
        will be exercisable will equal the total number of shares which were exercisable
        under the Participant’s Option on the date of his or her Retirement. Any and all
        Options that are unexercised during the twelve (12) months succeeding the
        date
        of termination will terminate as of the end of such twelve (12) month
        period.

       

      (4)           Other
        Reasons.  Upon the date of termination of a Participant's
        employment for any reason other that those stated above, (A) any Option that
        is
        unexercisable as of such termination date will remain unexercisable and will
        terminate as of such date, and (B) any Option that is exercisable as of such
        termination date will expire the earlier of (i) thirty (30) days following
        such
        date or (ii) the expiration date of the Option.

       

      Under
        the
        current form of stock option agreement, the unvested portion of an Option
        terminates automatically upon any termination (voluntary or involuntary)
        of
        employment or service with the Company or its subsidiaries.

       

        Cancellation
        of
        Option

       

      The
        Administrator may, at any time prior to exercise and subject to consent of
        the
        Participant, cancel any option previously granted and may or may not substitute
        in their place Options at a different price and different type under different
        terms or in different amounts.

      
        
          
          

        

        
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            9 -

          
            

          

        

        
          
          

        

      

       

      Except
        as
        otherwise provided by the Administrator, if at any time (including after
        a
        notice of exercise has been delivered) the Chief Executive Officer or any
        other
        person designated by the Administrator (each such person, an “Authorized
        Officer”) reasonably believes that a participant has committed as act of
        misconduct as described below, the Authorized Officer may suspend the
        Participant's rights to exercise any Option pending a determination of whether
        an act of misconduct has been committed.

       

      Except
        as
        otherwise provided by the Administrator, if the Administrator or an Authorized
        Officer determines a Participant has committed an act of embezzlement, fraud,
        dishonesty, nonpayment of any obligation owed to the Company, breach of
        fiduciary duty or deliberate violation of the Company rules resulting in
        loss,
        damage or injury to the Company, or if a Participant makes an unauthorized
        disclosure of any Company trade secret or confidential information, engages
        in
        any conduct constituting unfair competition, induces any Company customer
        to
        breach a contract with the Company or induces any principal for whom the
        Company
        acts as agent to terminate any such agency relationship, neither the Participant
        nor his or her estate nor transferee will be entitled to exercise any Option
        whatsoever. In making such determination, the Administrator or an Authorized
        Officer will act fairly and will give the Participant an opportunity to appeal
        and present evidence on his or her behalf at a hearing before the Administrator
        or the Board of Directors. For any Participant who is an "executive officer"
        for
        purposes of Section 16 of the Securities and Exchange Act of 1934, the
        determination of the Authorized Officer will be subject to the approval of
        the
        Administrator.

       

      Other
        Conditions;
        Registration

       

      The
        Administrator may provide that the shares of Common Stock issued upon exercise
        of an Option will be subject to further conditions or agreements as the
        Administrator in his discretion may specify prior to the exercise of such
        Option, including without limitation, conditions on vesting and transferability,
        forfeiture or repurchase provisions and method of payment for the shares
        issued
        upon exercise (including the actual or constructive surrender of Common Stock
        already owned by the Participant).  Options may also be subject to
        other provisions, not inconsistent with the Plan, as the Administrator deems
        appropriate.

       

      In
        the
        event that the Board of Directors or the Administrator determines that
        registration of the common stock under the Plan is necessary under applicable
        laws or governmental regulations as a condition to the issuance of the shares
        under an Option, and if the registration is not in place, an Option may not
        be
        exercised in whole or part unless the registration is in place or any other
        required consent or approval of a governmental regulator has been
        unconditionally obtained.

       

      
        
          
          

        

        
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            10 -

          
            

          

        

        
          
          

        

      

       

        Withholding

       

      To
        the
        extent required by applicable federal, state and local or foreign law, a
        Participant must make arrangements satisfactory to the Company for the
        satisfaction of any withholding tax obligations that arise by reason of an
        exercise of an Option.  The Company will not be required to issue
        shares or to recognize the disposition of such shares until such obligations
        are
        satisfied. The Administrator may permit these obligations to be satisfied
        by
        having the Company withhold a potion of the shares of stock that otherwise
        would
        be issued to him or her upon exercise of the Option, or to the extent permitted,
        by tendering shares previously acquired, provided that such will not result
        in
        an accounting charge to the Company.

       

        Federal
        Tax
        Consequences

       

      This
        Prospectus does not make representations concerning specific individual tax
        consequences because the tax result of an option exercise and subsequent
        stock
        sale will vary depending upon each optionee’s particular
        facts.  Optionees are urged to consult with their personal tax
        advisors concerning federal, state and local income tax consequences of
        exercises of options under the Plan.

       

      Incentive
        Stock
        Options

       

      Incentive
        stock options granted under the Plan are treated differently from non-qualified
        options for income tax purposes.  A general discussion of the federal
        income tax treatment of incentive stock options is presented first in this
        section.

       

      In
        most
        cases a Participant will realize no taxable income and the Company will not
        be
        entitled to a compensation deduction at either the date of the grant or the
        date
        of exercise of an incentive stock option.  The excess of the
        underlying Common Stock’s fair market value on the date of exercise less the
        exercise price, however, constitutes an item of adjustment to the employee
        and
        may be taxed under the alternative minimum tax provisions of the
        Code.

       

      For
        an
        incentive stock option, the Code imposes a statutory holding period which
        is the
        later of (i) one year after the stock was transferred to the employee upon
        exercise, or (ii) two years after the date of grant (“Statutory Holding
        Period”).  If a Participant sells or otherwise disposes of the Common
        Stock following expiration of the Statutory Holding Period, a Participant
        will
        realize the difference between disposition proceeds and the Common Stock’s
        exercise price as long-term capital gain or loss in the year of
        disposition.

       

      
        
          
          

        

        
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            11 -

          
            

          

        

        
          
          

        

      

       

      If
        a
        Participant sells or otherwise disposes of stock acquired upon exercise of
        an
        incentive stock option prior to meeting the statutory holding period
        requirements, all or a portion of any gain will be treated as ordinary income
        to
        the employee and the Company will be entitled to deduct an equal amount as
        a
        compensation expense.  The amount of ordinary income realized upon
        sale (other than to certain related parties or a “wash” sale) is the lesser of
        (i) the difference between the underlying Common Stock’s fair market value on
        the date of exercise and the stock’s exercise price, or (ii) the gain on the
        sale (the amount realized less the exercise price).  If the
        disposition is not a sale, or if it is a sale to certain related parties
        or a
“wash” sale, the amount of ordinary income realized will be the difference
        between the underlying Common Stock’s fair market value on the date of exercise
        and the exercise price.

       

      Otherwise,
        a Participant’s disposition of shares acquired upon the exercise of an incentive
        stock option, including a disposition after the expiration of the Statutory
        Holding Period, will result in a short-term or long-term capital gain or
        loss
        measured by the difference between the disposition price and the optionee’s tax
        basis in the stock.  The tax basis is generally the exercise price
        plus the amount previously recognized as ordinary income.

       

      Nonqualified
        Stock
        Options

       

      Nonqualified
        stock options are treated differently for income tax purposes.  A
        general discussion of the federal income tax treatment for nonqualified stock
        options  follows.

       

      There
        will be no federal income tax consequences to the Participant or the Company
        when a nonqualified option is granted, provided the option does not have
        a
        readily ascertainable fair market value.  The Company believes that
        the options granted under the present Plan will not have a readily ascertainable
        fair market value at the date of grant.

       

      Upon
        the
        exercise of a nonqualified option, the Participant will realize ordinary
        income
        equal to the underlying acquired Common Stock’s fair market value on the date of
        exercise less the exercise price.  The Company will be entitled to a
        deduction equal to the employee’s ordinary income.

       

      A
        Participant will realize short or long-term capital gain or loss upon any
        subsequent sale or disposition of stock equal to the amount received less
        the
        underlying acquired Common Stock’s fair market value on the date of
        exercise.

      
        
          
          

        

        
          -
            12 -

          
            

          

        

        
          
          

        

      

        Termination
        of the
        Plan

       

      The
        Plan
        will remain available for the grant of Options until December 31, 2014.
        Notwithstanding the foregoing, the Plan may be terminated at such earlier
        time
        as the Board of Directors may determine.  Termination of the Plan will
        not affect the rights and obligations of the Participants and the Company
        arising under Options previously granted and then in effect.

       

        General

       

      Nothing
        contained in the Plan or any Option granted under the Plan confers upon a
        Participant any right to continue in the employ or service of the
        Company.

       

        Restrictions
        on Resales of
        Securities

       

      The
        Securities Act of 1933, as amended (the “Securities Act”) restricts transfers of
        Common Stock acquired under the Plan by “affiliates” of the
        Company.  As defined under the Securities Act, an “affiliate” is any
        person who directly or indirectly controls, or is controlled by, or is under
        common control with, the Company.  A person who is an “affiliate” of
        the Company within the above definition in general will not be able to resell
        publicly such shares of Common Stock except pursuant to an effective
        registration statement filed with the Commission or pursuant to the provisions
        of Rule 144 (other than the holding period provision of the Rule) of the
        Securities Act.  “Affiliates” of the Company will not be able to rely
        upon the registration statement for the Plan for reoffers or resales of Common
        Stock acquired under the Plan.  Information regarding Rule 144 is
        available from the Company.  The Company may require certificates
        representing Common Stock acquired upon exercise of an option under the Plan
        to
        contain legends and transfer restrictions as the Company deems reasonably
        necessary or desirable, including, without limitation, legends restricting
        transfer of the Common Stock until there has been compliance with federal
        and
        state securities laws.

       

      INCORPORATION
        OF CERTAIN DOCUMENTS BY
        REFERENCE

       

      The
        Company incorporates by reference the following documents filed with the
        Commission:

       

      (1)           The
        Company’s Annual Report on Form 10-KSB for the year ended December 31,
        2006, filed pursuant to Sections 13(a) or 15(d) of the Securities Exchange
        Act
        of 1934 (the “Exchange Act”); and

       

      (2)           The
        Company’s Quarterly Reports on Form 10-QSB for the quarters ended March 31,
        2007, June 30, 2007 and September 30, 2007.

       

      
        
          
          

        

        
          -
            13 -

          
            

          

        

        
          
          

        

      

       

      All
        documents subsequently filed by the Company pursuant to Sections 13(a),
        13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a
        post-effective amendment which indicates that all securities offered hereby
        have
        been sold or which deregisters all securities then remaining unsold, will
        be
        deemed to be incorporated by reference herein and to be a part hereof from
        the
        date of filing of such documents.

       

      

      DESCRIPTION
        OF CAPITAL
        STOCK

       

      The
        following description of our capital stock is a summary and is qualified
        in its
        entirety by the provisions of our articles of incorporation, with amendments,
        all of which have been filed as exhibits to our registration statement of
        which
        this prospectus is a part.

       

        Common
        Shares

       

      The
        Company is authorized to issue up to 100,000,000 shares of Common Stock,
        par
        value $.001. Holders of common stock are entitled to one vote for each share
        held of record on all matters to be voted on by the stockholders.  The
        holders of common stock are entitled to receive dividends ratably, when,
        as and
        if declared by the board of directors, out of funds legally
        available.  In the event of the Company’s liquidation, dissolution or
        winding-up the holders of common stock are entitled to share equally and
        ratably
        in all assets remaining available for distribution after payment of liabilities
        and after provision is made for each class of stock, if any, having preference
        over the common stock.  The holders of shares of common stock, as
        such, have no conversion, preemptive, or other subscription rights and there
        are
        no redemption provisions applicable to the common stock.

       

        Preferred
        Shares

       

      The
        Company is authorized to issue up to 10,000,000 shares of preferred stock,
        par
        value $.001.  As of November 20, 2007, there were no shares of
        preferred stock issued and outstanding.  The shares of preferred stock
        may be issued in series and shall have such voting powers, full or limited,
        or
        no voting powers, and such designations, preferences and relative participating,
        optional or other special rights, and qualifications, limitations or
        restrictions thereof, as shall be stated and expressed in the resolution
        or
        resolutions providing for the issuance of such stock adopted from time to
        time
        by the board of directors.  The board of directors is expressly vested
        with the authority to determine and fix in the resolution or resolutions
        providing for the issuances of preferred stock the voting powers, designations,
        preferences and rights, and the qualifications, limitations or restrictions
        thereof, of each such series to the full extent now or hereafter permitted
        by
        the laws of the State of Nevada.  Issuances of preferred stock could
        dilute the voting power of common stockholders, adversely affect the voting
        power of common stockholders, adversely affect the likelihood that common
        stockholders will receive dividend payments on liquidation, and have the
        effect
        of delaying or preventing a change in shareholder and management
        control.

       

      
        
          
          

        

        
          -
            14 -

          
            

          

        

        
          
          

        

      

      The
        Company’s articles of incorporation and the Nevada General Corporation Law
        include a number of provisions that may have the effect of encouraging persons
        considering unsolicited tender offers or other unilateral takeover proposals
        to
        negotiate with our sole director rather than pursue non-negotiated takeover
        attempts.  The Company believes that the benefits of these provisions
        outweigh the potential disadvantages of discouraging these proposals because,
        among other things, negotiation of the proposals might result in an improvement
        of their terms. Our articles of incorporation authorize the issuance of
        preferred stock.  The Company’s sole director can set and determine
        the voting, redemption, conversion and other rights relating to any series
        of
        preferred stock.  In some circumstances, the Company could issue
        preferred stock to prevent a merger, tender offer or other takeover attempt,
        which our board of directors opposes.

       

        Transfer
        Agent

       

      Colonial
        Stock Transfer, 66 Exchange Place, Salt Lake City, Utah 84111, is the transfer
        agent and registrar for the Company’s securities.

       

      

      EXPERTS

       

      The
        audited consolidated financial statements of Zynex Medical Holdings, Inc.
        incorporated herein by reference, have been so incorporated in reliance upon
        the
        report of GHP Horwath P.C., independent registered public accounting firm,
        given upon the firm's authority as an expert in auditing and
        accounting.

       

       

      -
        15
        -

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