UNCONDITIONAL GUARANTY
----------------------
This continuing
Unconditional Guaranty ("Guaranty") is entered into as of
September 29, 2005, by Thomas Sandgaard
("Guarantor"), in favor of Silicon
Valley Bank ("Bank").
Recitals
--------
A. Concurrently
herewith, Bank and Zynex Medical, Inc., a Colorado
corporation and Zynex Medical Holdings,
Inc., a Nevada corporation (jointly and
severally, 'Borrower"), are entering into
that certain Loan and Security
Agreement dated as of the Effective Date
(as defined therein) (as amended,
restated, or otherwise modified from time
to time, the 'Loan Agreement")
pursuant to which Bank has agreed to make
certain advances of money and to
extend certain financial accommodations to
Borrower (collectively, the "Loans"),
subject to the terms and conditions set
forth therein. Capitalized terms used
but not otherwise defined herein shall have
the meanings given them in the Loan
Agreement.
B. In
consideration of the agreement of Bank to make the loans to
Borrower
under the Loan Agreement, Guarantor is
willing to guaranty the full payment and
performance by Borrower of all of its
obligations thereunder and under the other
Loan Documents, all as further set forth
herein.
C. Guarantor is
the chairman. president and CEO of Borrower and will obtain
substantial direct and indirect benefit
from the Loans made by Bank to Borrower
under the Loan Agreement.
Now, THEREFORE,
to induce Bank to enter into the Loan Agreement, and for
other good and valuable consideration, the
receipt and adequacy of which are
hereby acknowledged, and intending to be
legally bound, Guarantor hereby
represents, warrants, covenants and agrees
as follows:
Section 1.
Guaranty.
1.1
Unconditional Guaranty of Payment In consideration of the
foregoing,
Guarantor hereby irrevocably, absolutely
and unconditionally guarantees to Bank
the prompt and complete payment and
performance when due (whether at stated
maturity, by acceleration or otherwise) of
all Obligations. Guarantor agrees
that it shall execute such other documents
or agreements and take such action as
Bank shall reasonably request to effect the
purposes of this Guaranty.
1.2 Separate
Obligations. These obligations are independent of Borrower's
obligations and separate actions may be
brought against Guarantor (whether
action is brought against Borrower or
whether Borrower is joined in the action).
Section 2.
Representations and Warranties.
Guarantor hereby
represents and warrants that
(a) Intentionally Omitted
(b) The
execution, delivery and performance by Guarantor of this
Guaranty
(i) do not contravene any law or any
contractual restriction binding on or
affecting Guarantor or by which Guarantor's
property may be affected; (ii) do
not require any authorization or approval
or other action by, or any notice to
or filing with, any governmental authority
or any other Person under any
indenture, mortgage, deed of trust, lease,
agreement or other instrument to
which Guarantor is a party or by which
Guarantor or any of its property is
bound, except such as have been obtained or
made; and (iii) do not result in the
imposition or creation of any Lien upon any
property of Guarantor.
(c) Guarantor is
legally competent to execute, deliver and perform this
Guaranty.
1
<PAGE>
(d) This
Guaranty is a valid and binding obligation of Guarantor,
enforceable against Guarantor in accordance
with its terms, except as the
enforceability thereof may be subject to or
limited by bankruptcy, insolvency,
reorganization, arrangement, moratorium or
other similar laws relating to or
affecting the rights of creditors
generally.
(e) There is no
action, suit or proceeding affecting Guarantor pending or
threatened before any court, arbitrator, or
governmental authority, domestic or
foreign, which may have a material adverse
effect on the ability of Guarantor to
perform its obligations under this
Guaranty.
(f) Guarantor's
obligations hereunder are not subject to any offset or
defense against Bank or Borrower of any
kind.
(g)
Intentional1y Omitted.
(h) The personal
financial statements as of August 31,2005 for Guarantor
and the U.S. federal and Colorado state
2004 tax returns of Guarantor, copies of
which have been furnished to Bank, fairly
present the financial position of
Guarantor for the dates and periods
purported to be covered thereby based upon
actual and estimated fair market value, and
there has been no material adverse
change in the financial position of
Guarantor since the date of such personal
financial statements and tax returns.
(i)
Intentionally Omitted.
(j)
Intentionally Omitted.
(k) The
incurrence of Guarantor's obligations under this Guaranty will
not
cause Guarantor to (i) become insolvent;
(ii) be left with unreasonably small
capital for any business or transaction in
which Guarantor is presently engaged
or plans to be engaged; or (iii) be unable
to pay its debts as such debts
mature.
(l) Guarantor
covenants, warrants, and represents to Bank that all
representations and warranties contained in
this Guaranty shall be true at the
time of Guarantor's execution of this
Guaranty, and shall continue to be true so
long as this Guaranty remains in effect.
Guarantor expressly agrees that any
misrepresentation or breach of any warranty
whatsoever contained in this
Guaranty shall be deemed material.
Section 3. General Waivers.
Guarantor waives:
(a) Any right to
require Bank to (i) proceed against Borrower or any other
person; (ii) proceed against or exhaust any
security or (ii) pursue any other
remedy. Bank may exercise or not exercise
any right or remedy it has against
Borrower or any security it holds
(including the right to foreclose by judicial
or nonjudicial sale) without affecting
Guarantor's liability hereunder.
(b) Any defenses
from disability or other defense of Borrower or from the
cessation of Borrowers liabilities.
(c) Any setoff,
defense or counterclaim against Bank.
(d) Any defense
from the absence, impairment or loss of any right of
reimbursement or subrogation or any other
rights against Borrower. Until
Borrower's obligations to Bank have been
paid, Guarantor has no right of
subrogation or reimbursement or other
rights against Borrower.
(e) Any right to
enforce any remedy that Bank has against Borrower.
(f) Any rights
to participate in any security held by Bank.
2
<PAGE>
(g) Any demands
for performance, notices of nonperformance or of new or
additional indebtedness incurred by
Borrower to Bank. Guarantor is responsible
for being and keeping itself informed of
Borrower's financial condition.
(h) The benefit
of any act or omission by Bank which directly or indirectly
results in or aids the discharge of
