Exhibit 10.9

PARTICIPATION AGREEMENT

This Participation Agreement (the “Participation Agreement”) is made effective
as of July 22, 2013, among ARVEST BANK, an Arkansas banking corporation (the
“Lead”), and GRAYMARK HEALTHCARE, INC., an Oklahoma corporation (the
“Participant”) with reference to the following circumstances:

A. The Lead, the Participant (as a Borrower), and the Guarantors and other
Borrowers thereto, previously entered into an Amended and Restated Loan
Agreement dated effective December 17, 2010, as amended by the First Amendment
to Loan Agreement dated January 1, 2012, the Second Amendment to Loan Agreement
dated effective June 30, 2012, and the Third Amendment to Loan Agreement dated
effective October 12, 2012 (collectively, the “Prior Agreement”).

B. The Participant is indebted to the Lead under (i) the Amended and Restated
Promissory Note, in the original principal amount of $15,000,000.00 dated
June 30, 2010, and (ii) the Second Amended and Restated Promissory Note, in the
original principal amount of $30,000,000.00, dated June 30, 2010 (collectively,
together with any amendments, renewals or extensions thereto, the “Prior
Notes”).

C. The Lead, the Participant and others have agreed, pursuant to a Loan
Restructuring Agreement dated of even date herewith, to amend and restate the
Prior Agreement and to restructure the loan evidenced by the Prior Notes and
enter into certain other transactions, including (i) the issuance of a
$6,000,00.00 subordinated participation by the Bank to the Participant in the
restructured loan pursuant to this Participation Agreement, and (ii) the
Participant’s issuance of 13,333,333 shares of its common stock to the Bank in
exchange for the participation.

Now, therefore, in consideration of the restructuring of the loan evidenced by
the Prior Notes, the issuance of shares of common stock by the Participant to
the Lead, and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties agree as follows:

1. Sale and Purchase of Participation. This Participation Agreement is in
reference to the Amended and Restated Promissory Note made by SDC Holdings, LLC
and ApothecaryRx, LLC (collectively, the “Borrowers”) in favor of the Lead in
the principal amount of $10,691,261.71, dated July 22, 2013 (the “Note”), the
Second Amended and Restated Loan Agreement by and among the Lead, the
Participant, the Borrowers and Stanton M. Nelson (the “Loan Agreement”) and all
of the other loan documents executed in connection with the Note (collectively,
the “Loan Documents”). The Lead hereby sells and the Participant hereby
purchases a participation interest in the Note in the amount of Six Million
Dollars ($6,000,000.00) (the “Participation Interest”). The purchase and sale of
the Participation Interest will be made as follows:

 

  1.1. Simultaneously with the purchase of the Participation Interest by the
Participant, the Lead will execute and deliver to the Participant a counterpart
of this Participation Agreement as evidence of the Participant’s interest in the
Note. The Participation Interest is granted without recourse to, or
representation or warranty by, the Lead and is subject to the terms and
provisions of this Agreement and the Loan Documents.

 

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  1.2. In exchange for the Participation Interest, simultaneously with the
purchase of the Participation Interest, the Participant will (i) execute and
deliver to the Lead a Subscription Agreement dated of even date herewith,
pursuant to which the Participant will issue, and the Lead will acquire,
13,333,333 shares of the Participant’s Common Stock, and (ii) deliver to the
Lead a stock certificate representing the shares of Participant’s Common Stock
issued to the Lead pursuant to the Subscription Agreement.

 

  1.3. Notwithstanding any other provision of this Agreement, the Participation
Interest will be fully subordinated to the interest of the Lead and any other
participation in the Loan sold or transferred by the Lead (collectively, the
“Lead Interest”). After the Lead Interest has been paid in full, including the
amount of all principal, interest, and costs incurred by the holder of the Lead
Interest during the collection, documentation or administration thereof, and any
other costs for which the holder of the Lead Interest is entitled to
reimbursement under the Loan Documents and this Agreement (a “Lead Payoff”), the
holder of the Lead Interest will assign the Loan Documents to the Participant
without representation, warranty or recourse of any kind and thereafter the
Participant will be the sole owner of the Note. Until a Lead Payoff occurs, the
Lead will retain (a) all amounts received or collected by the Lead on the Note
until the principal amount of the Note has been paid in full and (b) the benefit
of any collateral held by the Lead securing the Note (the “Collateral”).
Payments received by the Lead resulting from foreclosure or other collection
procedures (including bankruptcy and other federal or state insolvency
proceedings) will be distributed in the same manner as payments of interest and
principal.

2. Agency. The Participant hereby irrevocably appoints the Lead as its duly
authorized agent and attorney in fact to act on behalf of the Participant in all
matters relating to this Participation Agreement and the Loan Documents and to
take such actions on behalf of the Participant and to exercise such powers as
are delegated to the Lead by the terms of this Participation Agreement or the
Loan Documents together with all actions and powers that are reasonably
incidental thereto. Without limiting the foregoing, the Lead will have the
following duties and rights in acting as agent for the Participant under this
Participation Agreement and the Loan Documents:

 

  2.1. Collateral. Legal title and physical possession of the Note and the Loan
Documents will be held by and in the name of the Lead. To the extent applicable,
legal title and physical possession of the Collateral will be held by and in the
name of the Lead or an entity designated to be the Lead, until a Lead Payoff
occurs.

 

  2.2. Discretion. In the exercise of its functions under this Participation
Agreement and the Loan Documents, the Lead will have, may exercise and will be
entitled to such rights, powers, immunities, exculpations and privileges as are
specifically granted to it by the terms hereof and thereof, together with such
powers as are reasonably incidental thereto. The Lead will use the Lead’s sole
discretion with respect to exercising or refraining from exercising any
discretionary rights or taking or refraining from taking any actions which the
Lead is entitled to take or exercise under the Loan Documents or this
Participation Agreement.

 

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  2.3. Observance of Agreements. The Lead will not be bound to ascertain or
inquire as to the performance or observance by any party of any of the terms of
this Participation Agreement or any of the Loan Documents. The Lead will not be
responsible to the Participant for the value, legality, validity, sufficiency,
priority, perfection, enforceability or effectiveness of the Loan Documents, the
Collateral or any security interest or lien given to or held by the Lead
thereunder or hereunder, or for the performance or observance of any other party
of any of the terms of any of the Loan Documents or this Participation
Agreement.

3. Duties of Participants. The Participant hereby agrees as follows:

 

  3.1. Duty to Participate in Decision Making. The Participant will promptly
respond to all requests for information or responses from the Lead.

 

  3.2. Reimbursement. All of the Lead’s fees, expenses, costs and other
liabilities which are incurred by the Lead in connection with any action taken
by the Lead (including legal expenses and attorneys’ fees) and disbursements of
the Lead incident to: (a) the protection of the rights of the Lead and the
Participants in connection with the Loan Documents and the transactions
contemplated thereby; (b) the collection or enforcement of the Loan Documents
whether by judicial proceedings, proceedings under the Bankruptcy Code or any
successor statute thereto; or (c) administration of the Loan Documents, and all
amendments thereto, including the attorney fees incurred by the Lead in
connection therewith and administration of the transactions contemplated by the
Loan Documents, exclusive, however, of any expenses for which the Lead has been
reimbursed by the Borrower, shall be added to the amounts due by Borrower under
the Note, for purposes of determining when a Lead Payoff has occurred pursuant
to this Participation Agreement. Participant shall not be obligated to pay any
of such costs or expenses.

 

  3.3. Duty to Inform Lead. The Participant will immediately inform the Lead
should the Participant become aware of any default by the Borrower under the
Loan Documents. Absent actual knowledge by the Lead or such notification, the
Lead will be under no obligation to take any action in connection with the Loan
Documents as a result of such failure or default by the Borrower.

 

  3.4. Actions Regarding Payments. The Participant agrees that it will (i) not
seek to collect any payments in connection with the Note unless and until the
Lead has assigned the Note to the Participant following a Lead Payoff,
(ii) immediately remit to the Lead any payments it receives in connection with
the Note prior to an assignment of the Note to the Participant, and (iii) do
nothing to discourage, inhibit or prevent Borrower from making its payments due
under the Note.

 

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4. Term. Unless sooner terminated by the written agreement of the Lead and the
Participant, the term of this Participation Agreement and the Participation
Interest provided for herein will be for the period from the date of this
Participation Agreement through the time when either (i) the Note is paid in
full, or (ii) the Note has been assigned to the Participant following a Lead
Payoff, whichever first occurs.

5. Limited Liability. In making and administering the Loan and dealing with the
Collateral, the Lead will exercise the same care as the Lead exercises in the
case of loans in which the Lead alone is interested. The Lead will keep the
Participant informed as to the occurrence of any default after execution and
delivery of the Note occurring under the Loan Documents that has resulted in the
maturity of the Note being accelerated. If the Borrower is in default under the
Loan Documents after execution and delivery of the Note and any applicable cure
period has expired without such Default being cured, the Lead will take actions
from time to time under the Loan Documents or with respect to the Collateral
held by the Lead, based solely on the Lead’s own discretion. No implied
covenants, duties or obligations will be read into this Participation Agreement
against the Lead but the duties and obligations of the Lead will be determined
solely by the express provisions of this Participation Agreement. The
relationship of the Lead on the one hand and the Participant on the other will
be that of agent and principal only; the Lead will be obligated to perform its
express duties, covenants and obligations as agent hereunder in good faith in
accordance with the terms set forth herein and to duly and faithfully account
for all monies, proceeds or products received by the Lead in connection with the
Loan Documents through payment, realization proceedings or otherwise, and the
distribution thereof, but will not be deemed to have any fiduciary duties to the
Participant or others. Neither the Lead nor any of the Lead’s attorneys, agents
or employees will be liable for any action taken or omitted to be taken
hereunder, or in connection herewith or in connection with the Loan Documents,
AND PARTICIPANT HEREBY WAIVES ANY AND ALL SUITS, LAWSUITS, CLAIMS, DEMANDS,
PROCEEDINGS, ACTIONS, CAUSES OF ACTION, ORDERS, LIABILITIES, DAMAGES, INJURIES,
EXPENSES, WHETHER KNOWN OR UNKNOWN, FORESEEN OR UNFORESEEN, BOTH AT LAW AND IN
TORT, IN CONTRACT OR OTHERWISE, WHICH PARTICIPANT MAY HAVE OR MANY IN THE FUTURE
HAVE AGAINST THE LEAD ARISING OUT OF THE LEAD’S PERFORMANCE OF THIS
PARTICIPATION AGREEMENT, EXCEPT ANY CLAIMS ARISING OUT OF THE LEAD’S GROSS
NEGLIGENCE OR WILLFULL MISCONDUCT.

6. No Liability. Notwithstanding any provision of this Agreement, in no event
shall Participant have any personal liability under this Agreement, it being
agreed and understood that any liability of Participant shall in all events be
limited to and be recourse only to the Participation.

7. No Assignment. Without the prior written consent of the Lead, not to be
unreasonably withheld, the Participant will not sell, transfer or assign any or
all of its Participation Interest in the Note, nor will the Participant sell,
transfer or assign its rights or duties under this Participation Agreement.

8. Additional Participants. Nothing contained herein will prevent the Lead from
selling to others percentages of participation in the Note.

 

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9. Binding Effect. This Participation Agreement will be binding on and will
inure to the benefit of the Lead and the Participant and their respective
successors and assigns.

10. Representations. The Lead will not be responsible for and makes no express
or implied warranties or representations with respect to: (a) the
creditworthiness, including without limitation, financial condition and ability
to perform, of the Borrower, any guarantor or any other person or entity who is
or may be liable on any of the obligations under the Loan Documents; (b) the
legality, validity, genuineness, substance, enforceability, priority or value of
any of the Loan Documents in connection with the Note; or (c) the value,
validity, substance or genuineness of any lien or security interest in any
Collateral. The Participant hereby acknowledges that the Participant has,
independent of and without reliance on the Lead and based on documents and
information provided by the Borrower, made the Participant’s own credit analysis
and decision to enter this Participation Agreement. Nothing contained in this
Participation Agreement will confer upon the Lead or the Participant any
interest in, or subject the Lead or the Participant to any liability for, the
assets or liabilities of the other, except only as to the transactions
contemplated by this Participation Agreement.

11. Notices. Any notice, demand or communication required or permitted to be
given by any provision of this Participation Agreement will be in writing and
will be deemed to have been given and received when delivered personally or by
telefacsimile to the party designated to receive such notice, or on the date
following the day sent by overnight courier, or on the third (3rd) business day
after the same is sent by certified mail, postage and charges prepaid, directed
to the following addresses or to such other or additional addresses as any party
might designate by written notice to the other party:

 

  To the Lead:    Arvest Bank         Attention: Mr. Bradley W. Krieger        
5621 North Classen Boulevard         Oklahoma City, Oklahoma 73118         Fax:
(405) 523-4126      With a copy to:    Tom Blalock, Esquire         Commercial
Law Group, P.C.         5520 North Francis Avenue         Oklahoma City,
Oklahoma 73118         Fax: (405) 232-5553      To the Participant:    Graymark
Healthcare, Inc.         Attention: Mr. Stanton Nelson         101 North
Robinson, Suite 900         Oklahoma City, Oklahoma 73102         Fax: (405)
239-2258   

 

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  With a copy to:    Marcelo Puiggari, Esq.         General Counsel & VP Legal
Services         Foundation HealthCare Affiliates, LLC         14000 N. Portland
Ave., Suite 204         Oklahoma City, OK 73134   

12. Counterparts. This Participation Agreement may be executed in multiple
counterparts, each of which will be an original instrument, but all of which
will constitute one agreement. The parties agree that any counterpart may be
executed by facsimile signature and such facsimile signature will be deemed an
original.

13. Construction. This Participation Agreement and the documents issued
hereunder will be deemed to be a contract made under the laws of the State of
Oklahoma and together with the rights and obligations of the parties hereto will
be construed and enforced in accordance with and governed by the laws of said
state. Nothing in this Participation Agreement will be construed to constitute
the Lead and the Participant as joint venturers with the Borrower or to
constitute a partnership. The descriptive headings of the paragraphs of this
Participation Agreement are for the convenience only and will not be used in the
construction of the content of this Participation Agreement.

14. No Registration. The Participant acknowledges that: (a) the Participant has
received and read or reviewed and is familiar with the Loan Documents and all
schedules thereto, together with the records and books pertaining to the
Borrower that have been requested by the Participant, and the Participant
confirms that all documents and information requested by the Participant have
been made available or delivered to the Participant; (b) the Participant
understands that neither the Note, the Loan Documents nor the Participation
Interest hereunder have been registered under the Securities Act of 1933 or any
state securities act and the Participant further understands that the
Participant is receiving the Participation Interest without being furnished any
offering literature; and (c) on the basis of the covenants, agreements,
warranties and representations of the Borrower set forth in the Loan Documents,
the Participant is satisfied with the authorization and enforceability of the
Loan Documents.

15. No Joint Venture. This Participation Agreement will in no way create a
partnership, joint venture or trust arrangement between the Lead and the
Participant or among the Participants, but merely serves as evidence of the
participation in the Note by the Participants.

[Signature Pages to Follow]

 

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SIGNATURE PAGE TO

PARTICIPATION AGREEMENT

IN WITNESS WHEREOF, the Lead and the Participant have caused this instrument to
be made effective the 22nd day of July, 2013.

 

ARVEST BANK, an Arkansas banking corporation

By:

  /s/ Bradley W. Krieger   Bradley W. Krieger, Executive Vice President and
Regional Manager

(the “Lead”)

 

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SIGNATURE PAGE TO

PARTICIPATION AGREEMENT

IN WITNESS WHEREOF, the Lead and the undersigned Participant have caused this
instrument to be made effective the 22nd day of July, 2013.

 

GRAYMARK HEALTHCARE, INC., an Oklahoma corporation By:   /s/ Stanton M. Nelson  
Stanton M. Nelson, CEO (the “Participant”)

 

PARTICIPATION AGREEMENT – ARVEST BANK