exv10w31






EXHIBIT 10.31




LOAN AGREEMENT




among




GRAYMARK HEALTHCARE, INC.




SDC HOLDINGS, LLC




APOTHECARYRx, LLC




OLIVER COMPANY HOLDINGS, LLC




ROY T. OLIVER




THE ROY T. OLIVER REVOCABLE TRUST




STANTON M. NELSON




VAHID SALALATI




GREG LUSTER




KEVIN LEWIS




ROGER ELY




LEWIS P. ZEIDNER




and




ARVEST BANK




May 21, 2008




COMMERCIAL LAW GROUP, P.C.

ATTORNEYS AND COUNSELORS

700 OKLAHOMA TOWER • 210 PARK AVENUE • OKLAHOMA CITY, OKLAHOMA 73102-5604

TELEPHONE (405) 232-3001 • TELECOPIER (405) 232-5553




 









 




TABLE OF CONTENTS



	 	 	 	 	 
	 	 	Page	 
	1. Definition of Terms
	 	 	1	 
	1.1 Accounts
	 	 	1	 
	1.2 Borrower Subsidiaries
	 	 	1	 
	1.3 Closing Date
	 	 	2	 
	1.4 Collateral
	 	 	2	 
	1.5 Collateral Assignment of Equity Interests
	 	 	2	 
	1.6 Collateral Assignment of Leases
	 	 	2	 
	1.7 Debt Service Coverage Ratio
	 	 	2	 
	1.8 Default
	 	 	2	 
	1.9 Equipment
	 	 	2	 
	1.10 General Intangibles
	 	 	3	 
	1.11 Guaranteed Amount
	 	 	3	 
	1.12 Guaranties
	 	 	3	 
	1.13 Guarantor Pro-Rata Percentage
	 	 	3	 
	1.14 Guaranty Debt Service Coverage Ratio
	 	 	3	 
	1.15 Guaranty Reduction Trigger Date
	 	 	4	 
	1.16 Inventory
	 	 	4	 
	1.17 Loan
	 	 	4	 
	1.18 Loan Documents
	 	 	4	 
	1.19 Minimum Net Worth
	 	 	4	 
	1.20 Note
	 	 	4	 
	1.21 Obligations
	 	 	5	 
	1.22 Security Agreements
	 	 	5	 
	 
	 	 	 	 
	2. Lending Agreement
	 	 	5	 
	 
	 	 	 	 
	3. Loan
	 	 	6	 
	3.1 Term Note
	 	 	6	 
	3.1.1 Term
	 	 	6	 
	3.1.2 Interest
	 	 	6	 
	3.1.3 Payments
	 	 	6	 
	3.1.4 Voluntary Prepayment
	 	 	7	 
	3.1.5 Use of Proceeds
	 	 	7	 
	3.1.6 Place of Advances and Payments
	 	 	7	 
	3.2 Acquisition Note
	 	 	7	 
	3.2.1 Term
	 	 	7	 
	3.2.2 Interest
	 	 	8	 
	3.2.3 Payments
	 	 	8	 
	3.2.4 Voluntary Prepayment
	 	 	8	 
	3.2.5 Use of Proceeds
	 	 	8	 
	3.2.6 Place of Advances and Payments
	 	 	9	 





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	 	 	Page	 
	4. Collateral Security
	 	 	9	 
	4.1 Release of Collateral and Prior Loan Documents
	 	 	9	 
	 
	 	 	 	 
	5. Conditions of Lending
	 	 	9	 
	5.1 Loan Documents
	 	 	10	 
	5.2 Casualty Insurance
	 	 	10	 
	5.3 Authority
	 	 	10	 
	5.4 No Default
	 	 	10	 
	5.5 Commitment Fee
	 	 	10	 
	5.6 Opinion of Counsel
	 	 	10	 
	5.7 Other Information
	 	 	10	 
	 
	 	 	 	 
	6. Representations
	 	 	10	 
	6.1 Existence
	 	 	10	 
	6.2 Financial Condition
	 	 	11	 
	6.3 Liabilities
	 	 	11	 
	6.4 Ownership
	 	 	11	 
	6.5 Taxes
	 	 	11	 
	6.6 Litigation
	 	 	11	 
	6.7 Location of Business Records
	 	 	11	 
	6.8 No Default
	 	 	12	 
	6.9 Agreements Effective
	 	 	12	 
	6.10 Full Disclosure
	 	 	12	 
	6.11 Survival of Representations
	 	 	12	 
	6.12 ERISA Plans
	 	 	12	 
	6.13 Solvency
	 	 	12	 
	 
	 	 	 	 
	7. Affirmative Covenants
	 	 	13	 
	7.1 Performance of Obligations
	 	 	13	 
	7.2 Notifications
	 	 	13	 
	7.3 Records Inspections
	 	 	13	 
	7.4 Financial Information
	 	 	13	 
	7.4.1 Financial Statements
	 	 	13	 
	7.4.2 Compliance Certificate
	 	 	14	 
	7.4.3 Other Information
	 	 	15	 
	7.5 Deposit Accounts
	 	 	15	 
	7.6 Additional Documents
	 	 	15	 
	7.7 Governmental Approvals
	 	 	15	 
	7.8 Taxes
	 	 	15	 
	7.9 Access
	 	 	15	 
	7.10 Operation
	 	 	16	 
	7.11 Qualification; Licenses
	 	 	16	 
	7.12 Insurance
	 	 	16	 






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	 	 	Page	 
	8. Negative Covenants
	 	 	16	 
	8.1 Creation of Liens
	 	 	16	 
	8.2 Liquidation or Merger
	 	 	16	 
	8.3 Creation of Debt
	 	 	16	 
	8.4 Loan and Guaranties
	 	 	17	 
	8.5 Transfers
	 	 	17	 
	8.6 Other Agreements
	 	 	17	 
	8.7 Limitation on Distributions and Redemptions
	 	 	17	 
	8.8 Limitation on Investments and New Businesses
	 	 	18	 
	8.9 Transactions with Affiliates
	 	 	18	 
	8.10 Subsidiaries
	 	 	18	 
	8.11 Debt Service Coverage Ratio
	 	 	18	 
	 
	 	 	 	 
	9. Default
	 	 	18	 
	9.1 Nonpayment of Note
	 	 	18	 
	9.2 Other Nonpayment
	 	 	18	 
	9.3 Breach of Agreement
	 	 	19	 
	9.4 Lien Filings
	 	 	19	 
	9.5 Casualty Loss
	 	 	19	 
	9.6 Other Agreements
	 	 	19	 
	9.7 Representations
	 	 	19	 
	9.8 Bankruptcy
	 	 	19	 
	9.9 Judgment
	 	 	19	 
	9.10 Maturity of Other Debt
	 	 	19	 
	9.11 Failure of Liens
	 	 	19	 
	 
	 	 	 	 
	10. Remedies
	 	 	20	 
	10.1 Acceleration of Note
	 	 	20	 
	10.2 Selective Enforcement
	 	 	20	 
	10.3 Performance by Bank
	 	 	20	 
	10.4 Waiver of Default
	 	 	20	 
	10.5 Deposits; Setoff
	 	 	21	 
	 
	 	 	 	 
	11. Miscellaneous
	 	 	21	 
	11.1 Participating Lenders
	 	 	21	 
	11.2 Cumulative Remedies
	 	 	21	 
	11.3 Survival of Representations
	 	 	21	 
	11.4 Expenses
	 	 	21	 
	11.5 Notices
	 	 	22	 
	11.6 Construction
	 	 	23	 
	11.7 Binding Effect
	 	 	23	 
	11.8 No Third Party Beneficiaries
	 	 	23	 
	11.9 Assignment
	 	 	23	 
	11.10 Expiration of Agreement
	 	 	23	 
	11.11 Time
	 	 	23	 





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	 	 	Page	 
	11.12 Severability
	 	 	23	 
	11.13 Verbal Change
	 	 	24	 
	11.14 No Waiver
	 	 	24	 
	11.15 Application of Loan Proceeds
	 	 	24	 
	11.16 ACKNOWLEDGMENTS AND ADMISSIONS
	 	 	24	 
	11.17 JOINT ACKNOWLEDGMENT
	 	 	25	 
	11.18 INDEMNITY
	 	 	25	 
	11.19 WAIVER OF JURY TRIAL, PUNITIVE DAMAGES, ETC.
	 	 	26	 






	 	 	 	 	 
	Schedule “1.5”

	 	-
	 	Collateral Assignment of Equity Interests
	Schedule “1.6”

	 	-
	 	Collateral Assignment of Leases
	Schedule “1.12”

	 	-
	 	Guaranties
	Schedule “1.13”

	 	-
	 	Guarantor Pro-Rata Percentage
	Schedule “1.20(a)”

	 	-
	 	Term Note
	Schedule “1.20(b)”

	 	-
	 	Acquisition Note
	Schedule “1.22”

	 	-
	 	Security Agreement
	Schedule “4.1”

	 	-
	 	List of Released Loan Documents
	Schedule “7.4.2”

	 	-
	 	Compliance Certificate





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LOAN AGREEMENT




          THIS LOAN AGREEMENT is made effective the 21st day of May, 2008 among GRAYMARK
HEALTHCARE, INC., an Oklahoma corporation (“GRMH”), SDC HOLDINGS, LLC, an Oklahoma limited
liability company (“SDC”) and APOTHECARYRx, LLC, an Oklahoma limited liability company (“ARx”
together with GRMH and SDC, jointly and severally the “Borrowers” and each a “Borrower”), OLIVER
COMPANY HOLDINGS, LLC, an Oklahoma limited liability company (“OCH”), ROY T. OLIVER, an individual
(“Oliver”), STANTON M. NELSON, an individual (“Nelson”), ROY T. OLIVER, as Trustee (“Trustee” and
together with OCH, Oliver and Nelson, jointly and severally the “Oliver Group”) of the Roy T.
Oliver Revocable Trust dated June 15, 2004 (the “Trust”), VAHID SALALATI, an individual
(“Salalati”), GREG LUSTER, an individual (“Luster”), KEVIN LEWIS, an individual (“Lewis”) ROGER
ELY, an individual (“Ely”) and LEWIS P. ZEIDNER, an individual (“Zeidner” and together with Oliver
Group, Salalati, Luster, Lewis and Ely, the “Guarantors”) and ARVEST BANK, an Arkansas banking
corporation (the “Bank”).




WITNESSETH:




          WHEREAS, the Borrowers and the Guarantors have requested that the Bank loan the Borrowers
funds to provide funds for the refinancing of existing indebtedness and funds for the purchase and
acquisition of additional pharmacies and sleep labs, which the Bank is willing to do subject to the
terms and conditions set forth in this Agreement.




          NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein, the
funds to be advanced by the Bank under the Notes (as hereinafter defined), the receipt and
sufficiency of all of which are hereby acknowledged, the Borrower, the Guarantors and the Bank
hereby agree as follows:



1. Definition of Terms. All terms defined in this Agreement will have the defined meanings
when used in any of the Loan Documents (as hereinafter defined) unless the context otherwise
requires. Each accounting term not defined herein, and each accounting term partly defined herein
to the extent not defined, will have the meaning given to it under generally accepted accounting
principles. As used in this Agreement, the following terms will have the meanings indicated:





	 	1.1	 	Accounts. All accounts, accounts receivable, contract rights, notes,
drafts, acceptances and all other forms of obligations and receivables in favor of
Borrower owed or owing by any party or entity to a Borrower including, but not limited
to, deposits or other sums credited by or due from the Bank to a Borrower, now owned or
hereafter acquired. In addition, the term “Accounts” will have the same meaning (to
the extent not inconsistent with the foregoing definition) as defined in the Oklahoma
Uniform Commercial Code (the “UCC”).
	 
	 	1.2	 	Borrower Subsidiaries. The direct and indirect subsidiaries of the
Borrowers as of the Closing Date, and all subsidiaries thereafter created or acquired.





Loan Agreement

Graymark Healthcare, Inc.




 









 






	 	1.3	 	Closing Date. The date upon which the Loan Documents are signed by the
Borrowers and the Guarantors and accepted by the Bank at the Bank’s offices in Oklahoma
City, Oklahoma, all in form and substance satisfactory to the Bank.
	 
	 	1.4	 	Collateral. All of the Borrowers’ right, title and interest in and to
the personal property described in the Loan Documents whether now owned or hereafter
acquired including without limitation: (1) the Accounts; (2) the Equipment; (3) the
Inventory; (4) General Intangibles, including all membership interests in SDC and ARx;
(5) all items of tangible and intangible personal property now owned and hereafter
acquired by a Borrower; (6) all insurance policies and proceeds; (7) all leases, rents
and royalties; (8) all business records of Borrowers; and (9) all additions and
accessions to, replacements of, substitutions for and proceeds from any of the items
listed in the foregoing parts (a) through (h) inclusive.
	 
	 	1.5	 	Collateral Assignment of Equity Interests. The agreement(s) to be
executed by the Bank and GRMH granting to the Bank a first perfected collateral
assignment of the equity interests directly or indirectly owned by GRMH in SDC and ARx,
in substantially the form of Schedule “1.5” attached hereto as a part hereof.
	 
	 	1.6	 	Collateral Assignment of Leases. The agreement(s) to be executed by
the Bank and Borrowers granting to the Bank a first perfected collateral assignment of
the leases of property by a Borrower utilized in the operation of its pharmacy or sleep
lab businesses in substantially the form of Schedule “1.6” attached hereto as a part
hereof.
	 
	 	1.7	 	Debt Service Coverage Ratio. For any period, the ratio of: (A) the net
income of GRMH (i) increased (to the extent deducted in determining net income) by the
sum, without duplication, of (1) all interest expense of GRMH, (2) amortization, (3)
depreciation, and (4) non-recurring expenses as approved by the Bank, and (ii)
decreased (to the extent included in determining net income and without duplication) by
the amount of minority interest share of net income and distributions to minority
interests for taxes, if any, to (B) annual debt service including interest expense and
current maturities of indebtedness as determined in accordance with generally accepted
accounting principles.
	 
	 	1.8	 	Default. The occurrence of any of the events specified in paragraph 9
of this Agreement.
	 
	 	1.9	 	Equipment. All furniture, fixtures, machinery, tools, equipment,
apparatus, utensils, appliances and supplies now owned or hereafter acquired by a
Borrower and all documents of title, insurance policies and proceeds relating thereto.
In addition, the term “Equipment” will have the same meaning (to the extent not
inconsistent with the foregoing definition) as defined in the UCC.





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	 	1.10	 	General Intangibles. All of each Borrower’s general intangibles of any
kind whether now existing or hereafter arising including all stock, membership
interests, units, partnership interests, patents, trademarks, copyrights and other
intangibles, chattel papers, documents and instruments relating to the General
Intangibles. In addition, the term “General Intangibles” will have the same meaning
(to the extent not inconsistent with the foregoing definition) as defined in the UCC.
	 
	 	1.11	 	Guaranteed Amount. Initially the amount of Fifteen Million Dollars
($15,000,000.00) which shall apply to the last portion or dollars of the Obligations
collected by Bank, subject to reduction on a Guaranty Reduction Trigger Date as
specified therein. After a Guaranty Reduction Trigger Date, the Guaranteed Amount
shall be reduced or eliminated as set forth more fully in paragraph 1.15.
	 
	 	1.12	 	Guaranties. The agreements to be executed by the Guarantors in favor
of the Bank in substantially the form of Schedule “1.12” attached hereto as a part
hereof, whereby the Guarantors unconditionally guarantee to the Bank payment of all
Obligations now or hereafter owing to the Bank by the Borrower in connection with the
Loan Documents and the full and complete performance by the Borrower of the Loan
Documents, as further set forth therein. The initial liability of each of the
Guarantors thereunder will be limited to the Guarantor Pro-Rata Percentage (on a
several basis) times the Guaranteed Amount, initially Fifteen Million Dollars
($15,000.000.00). On a Guaranty Reduction Trigger Date, the liability of the
Guarantors will be reduced to their respective Guarantor Pro-Rata Percentage times the
Guaranteed Amount as defined in paragraph 1.11. Notwithstanding any provision of this
Loan Agreement to the contrary, in all events the liability of a Guarantor shall be
limited as provided in the Guaranty Agreement for each Guarantor.
	 
	 	1.13	 	Guarantor Pro-Rata Percentage. The Guarantor’s pro-rata direct or
indirect ownership percentage of GRMH as of the Closing Date, as set forth in Schedule
“1.13” attached hereto.
	 
	 	1.14	 	Guaranty Debt Service Coverage Ratio. For any period, the ratio of: (A)
the net income of GRMH (i) increased (to the extent deducted in determining net income)
by the sum, without duplication, of (1) all interest expense of GRMH, (2) amortization,
(3) depreciation, and (4) non-recurring expenses as approved by the Bank, and
(ii) decreased (to the extent included in determining net income and without
duplication) by the amount of minority interest share of net income and
distributions to minority interests for taxes, if any, to (B) annual debt service
including interest expense and current maturities of indebtedness; provided
however that for purposes of this ratio the debt service shall include principal
and interest on the Notes as if payable in equal monthly payments on a twenty
(20) year amortization from the date of the Term Note and each respective Tranche
of





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	 	 	 	the Acquisition Note; all as determined in accordance with generally accepted
accounting principles.






	 	1.15	 	Guaranty Reduction Trigger Date. So long as no default exists that has
not been cured, the effective date of the Bank’s acceptance of the outside accountant’s
financials for the Borrowers and the Borrowers’ certification of the accuracy and
correctness of such financials, reflecting the Borrowers maintaining a Guaranty Debt
Service Coverage Ratio, commencing with the calendar quarter ending June 30, 2008, of
not less than: (i) 1.50 to 1 for four (4) consecutive calendar quarters will reduce the
Guaranteed Amount to Ten Million Dollars ($10,000,000.00); (ii) 1.75 to 1 for four (4)
consecutive calendar quarters will reduce the Guaranteed Amount to Five Million Dollars
($5,000,000.00); (iii) 2.00 to 1 for four (4) consecutive calendar quarters will reduce
the Guaranteed Amount to zero and Bank will release such Guaranties.
	 
	 	1.16	 	Inventory. All personal property now owned or hereafter acquired by a
Borrower which are to be furnished under contracts of service, or which are raw
materials, work in process, or materials used or consumed in a Borrower’s business. In
addition, the term “Inventory” will have the same meaning (to the extent not
inconsistent with the foregoing definition) as defined in the UCC.
	 
	 	1.17	 	Loan. The loan by the Bank to the Borrowers evidenced by the Term Note
in the principal amount of Thirty Million Dollars ($30,000,000.00) and the Acquisition
Note in the Principal amount of Fifteen Million Dollars ($15,000,000.00).
	 
	 	1.18	 	Loan Documents. This Agreement, the Collateral Assignment of Equity
Interests, Collateral Assignment of Leases, the Guaranties, the Notes, the Security
Agreements and all other instruments executed and delivered by the Borrowers, the
Guarantors or any other person or entity in connection with the extension of credit
contemplated by this Agreement, all instruments issued pursuant to the foregoing
documents and all extensions, renewals, modifications and amendments thereof.
	 
	 	1.19	 	Minimum Net Worth. Borrowers Total Net Worth as of the December 31,
2007 Financials was $1,862,882 on a consolidated basis. For purposes of this Agreement, the
Borrowers’ Minimum Net Worth will be calculated on a consolidated basis based on
seventy-five (75%) percent of the December 31, 2007 existing equity
($1,397,162.00) plus seventy-five (75%) percent of the Net Income (as per GAAP)
for each fiscal quarter ending after December 31, 2007 on a consolidated basis,
less non-recurring expenses as approved by the Bank.
	 
	 	1.20	 	Notes. The promissory notes and all extensions, renewals,
modifications, consolidations and increases thereof executed by Borrowers and delivered
to the Bank pursuant to this Agreement to evidence the Loan and all advances thereunder
contemplated by this Agreement for the Term Note and Acquisition





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	 	 	 	Note. The Notes will
be payable on the terms stated at paragraph 3 of this Agreement and will be in
substantially the form of Schedule “1.20(a)” and “1.20(b)” respectively, attached
hereto as a part hereof.






	 	1.21	 	Obligations. The obligation of the Borrowers to: (1) pay the principal
of and interest on the Notes in accordance with the terms thereof and to satisfy all of
the Borrowers’ other liabilities to the Bank, whether under this Agreement or
otherwise, whether now existing or hereafter incurred, matured or unmatured, direct or
contingent, joint or several, including any extensions, modifications, renewals, or
increases thereof and substitutions therefor; (2) repay to the Bank all amounts
advanced by the Bank under this Agreement or otherwise on behalf of the Borrowers
including, without limitation, overdrafts and advances for principal or interest
payments to other secured parties, mortgagees or lienors, or for taxes, levies,
insurance, rent, repairs to or maintenance or storage of any of the Collateral; (3)
reimburse the Bank, on demand, for all of the Bank’s expenses and costs including,
without limitation, reasonable fees and expenses of the Bank’s counsel in connection
with the preparation, negotiation, amendment, modification, or enforcement of this
Agreement and the Loan Documents including, without limitation, any proceeding brought
or threatened to enforce payment of any of the obligations referred to in this
paragraph 1.21; and (4) perform all other obligations of the Borrowers under the Loan
Documents.
	 
	 	1.22	 	Security Agreements. The instruments and all extensions, renewals and
modifications thereof, executed and delivered to the Bank by Borrowers or Borrower
Subsidiaries granting to the Bank a first perfected security interest in and to that
portion of the Collateral therein described in substantially the form of Schedule
“1.22” attached hereto as a part hereof.
	 
	 	1.23	 	WSJ Prime Rate. The rate per annum determined on the basis of the
Prime rate as reported in the “Money Rates” section of The Wall Street Journal or a
substitute source reasonably determined by Bank in the event such source is no longer
available. The WSJ Prime Rate for each Note will initially be the WSJ Prime Rate as of
the date of the Term Note or date of advance of each Tranche of the
Acquisition Note, and will be adjusted on an annual basis to the rate then in
effect for each Note or Tranche as of each respective anniversary date, or the
first business day following such date if the anniversary date occurs on a
weekend or holiday that there is no such rate determined or published.




2. Lending Agreement. Subject to the terms and conditions of this Agreement, the
Bank agrees to lend to Borrowers and Borrowers agree to borrow from the Bank the principal amount
of the Notes. Notwithstanding any other provision of the Loan Documents, the advances herein
provided for will not be required to be made by the Bank if after making such advance, the Bank
would, as determined in the sole discretion of the Bank, be in violation of any regulatory
requirements imposed on banking corporations by any branch of government of the United States of America or any state




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thereof including, without limitation, restrictions on the scope of lending
powers of state banks and limitations on total loans to any debtor imposed by the Comptroller of
the Currency.



3. Loan. The Loan will be evidenced by the Term Note and Acquisition Note and will be
payable as follows:





	 	3.1	 	Term Note. The portion of the Loan to be made under the Term Note will be payable
of the following terms:






	 	3.1.1	 	Term. The term of the Term Note will be for the
period commencing on the Closing Date and ending on May 21, 2014 (the “Term
Note Maturity Date”).
	 
	 	3.1.2	 	Interest. Prior to Default, the unpaid
principal balance of the Term Note will bear interest from the date of
advance at the per annum rate equal to the WSJ Prime Rate, as adjusted. The
WSJ Prime Rate will be adjusted, without notice, on an annual basis to the
WSJ Prime Rate then in effect as of each anniversary date of this Note, or
the first business day following such date if the anniversary date occurs on
a weekend or holiday that there is no such rate determined or published.
After Default, all amounts due under the Term Note will bear interest at the
per annum rate equal to the greater of: (a) fifteen percent (15%); or (b)
the WSJ Prime Rate plus five percent (5%). Interest will be computed on a
per diem charge based on a three hundred sixty (360) day year.
	 
	 	3.1.3	 	Payments. Provided that no event of Default has
occurred or is continuing under any of the Loan Documents, the Term Note
will be repaid in quarterly payments of interest only for up to three (3)
years, then principal and interest payments based on a seven (7) year
amortization until the balloon payment on the Term Note Maturity Date. The
Borrowers will pay to the Lender quarterly payments of accrued and unpaid
interest only on the Term Note
which will be due and payable on each September 1, December 1, March
1, and June 1. Commencing on September 1, 2011, and quarterly
thereafter on each December 1, March 1, June 1 and September 1, the
Borrowers will pay to the Lender equal payments consisting of
principal and interest calculated on a seven (7) year amortization of
the unpaid principal balance of the Term Note as of June 1, 2011 at
the then current WSJ Prime Rate, and adjusted annually thereafter for
any changes to the WSJ Prime Rate as provided herein. The entire
unpaid principal balance of the Term Note plus all accrued and unpaid
interest thereon will be due and payable on the Term Note Maturity
Date.





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	 	3.1.4	 	Voluntary Prepayment. Borrowers will have the right at any
time to prepay the Term Note in whole or in part, without premium or
penalty, but with interest accrued to the date of prepayment.
	 
	 	3.1.5	 	Use of Proceeds. All proceeds of the Term Note
will be used solely for the funding of (1) the acquisition and refinancing
of the existing indebtedness and loans owed to Intrust Bank (the “Intrust
Loan”); (2) the refinancing of the existing indebtedness owed to the Bank;
and (3) other costs incurred by Borrowers or the Bank in connection with the
preparation of the Loan Documents, provided that such payment is approved by
the Bank.
	 
	 	3.1.6	 	Place of Advances and Payments. Advances under
the Term Note will be made at the offices of the Bank. All payments and
prepayments of principal or interest on the Term Note will be made to the
Bank in collected and freely transferable funds at or before 5:00 p.m.
Oklahoma City, Oklahoma time on the date due at the Bank’s offices. All
payments will be paid in full without set off or counterclaim and without
reduction for, and free from, any and all taxes, levies, imposts, duties,
fees, charges, deductions, withholdings, restrictions or conditions of any
nature imposed by any government or any political subdivision or taxing
authority thereof. Borrowers hereby authorize and direct the Bank to make
all payments on the Term Note as and when due, by direct debit to Borrowers’
demand deposit accounts with the Bank. If any payment under the Term Note or
this Agreement becomes due and payable on a day other than a business day,
the maturity thereof will be extended to the next succeeding business day
and such extension of time will in such case be included in the computation
of payments of interest.





     3.2 Acquisition Note. The Borrowers, the Guarantors and the Bank specifically agree
that the aggregate of advances made during the term of Acquisition Note will not exceed the
original principal amount thereof. The Acquisition Note is an advancing term note with a
commitment term through May 21, 2010 and the Bank will have no obligation to fund any advances
under the Acquisition Note after such commitment term, unless renewed and extended in writing and
on such terms as may be determined by the Bank. Advances under the Acquisition Note will be
separately represented as a Tranche on a schedule to the Acquisition Note specifying the number of
the Tranche, amount advanced, the date of advance, applicable WSJ Prime Rate and final maturity of
such advance. The portion of the Loan to be made under each Tranche of the Acquisition Note will
be payable on the following terms:




	 	3.2.1	 	Term. The term of each Tranche of the
Acquisition Note will be for the period commencing on the respective date of
advance and ending on the sixth anniversary of the first day of the month
following such date of advance (each a “Tranche Note Maturity Date”).





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	 	3.2.2	 	Interest. Prior to Default, the unpaid principal balance of
each Tranche of the Acquisition Note will bear interest from the date of
advance at the per annum rate equal to the WSJ Prime Rate, and will adjust
for any changes to the WSJ Prime Rate on each anniversary date. The WSJ
Prime Rate will be adjusted, without notice, on an annual basis to the WSJ
Prime Rate then in effect as of each anniversary date of each Tranche of the
Acquisition Note, or the first business day following such date if the
anniversary date occurs on a weekend or holiday that there is no such rate
determined or published. After Default, all amounts due under the
Acquisition Note will bear interest at the per annum rate equal to the
greater of: (a) fifteen percent (15%); or (b) the WSJ Prime Rate plus five
percent (5%). Interest will be computed on a per diem charge based on a
three hundred sixty (360) day year.
	 
	 	3.2.3	 	Payments. Provided that no event of Default has
occurred or is continuing under any of the Loan Documents, the loan
represented by each Tranche will be repaid in quarterly payments of interest
only for up to three (3) years, then principal and interest payments based
on a seven (7) year amortization until the balloon payment on the Tranche
Note Maturity Date. The Borrowers will pay to the Bank accrued and unpaid
interest only at the WSJ Prime Rate in quarterly payments on each Tranche of
the Acquisition Note for the first three (3) years of the term of such
Tranche, which will be due and payable commencing three (3) months after
the first day of the month following the date of advance and on the first
day of each third month thereafter. Commencing on the third anniversary of
the first quarterly payment date, and each following anniversary thereof,
the principal balance outstanding on such Tranche of the Acquisition Note,
together with interest at the WSJ Prime Rate on the most recent anniversary date of
the date of advance under such Tranche, will be amortized in
quarterly payments over a seven (7) year term beginning on the third
anniversary of the date of advance, and recalculated each anniversary
thereafter over the remaining portion of such seven (7) year period
at the then applicable WSJ Prime Rate. The entire unpaid principal
balance of the Acquisition Note plus all accrued and unpaid interest
thereon will be due and payable on the respective Tranche Note
Maturity Date.
	 
	 	3.2.4	 	Voluntary Prepayment. Borrowers will have the
right at any time to prepay the Acquisition Note in whole or in part,
without premium or penalty, but with interest accrued to the date of
prepayment.
	 
	 	3.2.5	 	Use of Proceeds. All proceeds of the Acquisition Note will
be used solely for the funding of (a) up to seventy percent (70%) of either
the





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	 	 	 	purchase price of the acquisition of existing pharmacy business assets
or sleep labs or the startup costs of new sleep labs; and (b) other costs
incurred by Borrowers or the Bank in connection with the preparation of the
Loan Documents, provided that such payment is approved by the Bank. For
purposes of this paragraph 3.2.5, the purchase price will include the cost
of inventory purchased through the acquisition, to the extent not already
included in the purchase price amount.






	 	3.2.6	 	Place of Advances and Payments. Advances under
the Notes will be made at the offices of the Bank. All payments and
prepayments of principal or interest on each Tranche of the Acquisition Note
will be made to the Bank in collected and freely transferable funds at or
before 5:00 p.m. Oklahoma City, Oklahoma time on the date due at the Bank’s
offices. All payments will be paid in full without set off or counterclaim
and without reduction for, and free from, any and all taxes, levies,
imposts, duties, fees, charges, deductions, withholdings, restrictions or
conditions of any nature imposed by any government or any political
subdivision or taxing authority thereof. Borrowers hereby authorize and
direct the Bank to make all payments on each Tranche of the Acquisition Note
as and when due, by direct debit to Borrowers’ demand deposit accounts with
the Bank. If any payment under the Notes or this Agreement becomes due and
payable on a day other than a business day, the maturity thereof will be
extended to the next succeeding business day and such extension of time will
in such case be included in the computation of payments of interest.




4. Collateral Security. Payment and performance of the Obligations will be secured by the
Guaranties, the Security Agreements, Collateral Assignment of Equity Interests, Collateral
Assignment of Leases, the other Loan Documents, all of the Collateral and such other or additional
property as is agreed to by the Borrowers, Borrower Subsidiaries, Guarantors and the Bank,
including, without limitation all loan documents evidencing and securing the Intrust Loan or
indebtedness owed by any Borrower or Borrower Subsidiary to the Bank unless such documents are
expressly released by the Bank.





	 	4.1	 	Release of Collateral and Prior Loan Documents. Following the Closing
of the Loan and receipt by Bank of all collateral documents including the Intrust Loan
documents, and in consideration of the execution and delivery of the Loan Documents
provided herein, Bank will release and return originals of those Intrust Loan documents
and prior Bank loan documents set forth specifically on Schedule “4.1” attached hereto.




5. Conditions of Lending. The obligation of the Bank to perform this Agreement to make the
initial advance under the Notes is subject to the continued performance by the Borrowers and the
Guarantors of the following conditions precedent:




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	 	5.1	 	Loan Documents. The execution, acknowledgment (where appropriate) and
delivery by the appropriate parties of the Loan Documents, all in form and substance
satisfactory to the Bank, and delivery of possession to the Bank of any Collateral the
possession of which is necessary to perfect the Bank’s security interest, together with
the assignment of all loan documents evidencing or securing the Intrust Bank
indebtedness being refinanced by this Loan.
	 
	 	5.2	 	Casualty Insurance. The Bank will have received satisfactory
certificates of policies of fire and extended coverage insurance at full insurable
value, business interruption insurance and public liability insurance with premiums
prepaid and standard mortgagee clauses or designations as additional insureds in favor
of the Bank and such additional persons as the Bank might reasonably require.
	 
	 	5.3	 	Authority. The Bank will have received: (1) certified copies of the
instruments creating Borrowers and OCH and/or governing the operation of Borrowers and
OCH complete with all amendments thereto and certificates to be filed in connection
therewith; (2) satisfactory evidence that Borrowers and OCH are qualified to do
business in the State of Oklahoma; and (3) certified copies of resolutions and other
documents reasonably required to authorize the execution, delivery and performance of
the Loan Documents by the parties thereto.
	 
	 	5.4	 	No Default. The representations and warranties set forth in paragraph
6 of this Agreement will be true and correct on and as of the date of the initial advance of funds under the Note and there will
have occurred and be continuing no Default.
	 
	 	5.5	 	Commitment Fee. As reimbursement for processing the Loan, the Bank
will have received a non-refundable fee from the Borrowers in the amount of Twenty-Five
Thousand Dollars ($25,000.00).
	 
	 	5.6	 	Opinion of Counsel. The Bank will have received the opinion of the
Borrowers’ and the Guarantors’ counsel in form and substance reasonably acceptable to
the Bank and the Bank’s counsel.
	 
	 	5.7	 	Other Information. The Bank will have received current financial
statements for the Borrowers and the Guarantors and such other information, documents
and instruments concerning the Borrowers and the Guarantors as the Bank reasonably
requests.




6. Representations. The Borrowers (and the Guarantors severally and where and as indicated
below) represent and warrant to the Bank that the following circumstances exist on the date of this
Agreement and will continually exist throughout the term of the Loan:





	 	6.1	 	Existence. GRMH is a corporation duly organized and validly existing
under the laws of the State of Oklahoma. ARx, SDC and OCH are and will each continue
to be a limited liability company duly organized and validly existing under the





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	 	 	 	laws of the State of Oklahoma. Borrowers and Guarantors have adequate power, authority and
legal right to enter into and carry out the provisions of the Loan Documents, to borrow
money and to give security for borrowings as required by this Agreement and to
consummate the transactions hereby contemplated.






	 	6.2	 	Financial Condition. The financial statements of Borrowers and
Guarantors, copies of which have been furnished to the Bank, are correct and complete
and fairly reflect the financial condition of Borrowers and Guarantors as of the date
thereof and have been prepared in conformity with accounting principles applied on a
basis consistent with that of preceding periods. There has occurred no material
adverse change in the financial condition of Borrowers from the date of such financial
statements to the date of execution of this Agreement. Each Guarantor joins in this
paragraph 6.2 on a several basis, as applicable to the Guarantor.
	 
	 	6.3	 	Liabilities. Neither Borrowers nor any Guarantors has any material
liabilities, direct or contingent, except those disclosed in the financial statements
referred to in paragraph 6.2 of this Agreement. Each Guarantor joins in this paragraph
6.3 on a several basis, as applicable to the Guarantor.
	 
	 	6.4	 	Ownership. The Borrowers have good and marketable title to the
Collateral, free and clear of all liens, security interest, claims or encumbrances,
except for liens and security interests in favor of the Bank.
	 
	 	6.5	 	Taxes. The Borrowers and the Guarantors have filed all foreign,
federal, state and local tax returns which are required to be filed and have paid or
made provisions for payment of all taxes which have or may become due pursuant to said
returns or pursuant to any assessment, except such taxes as are being contested in good
faith and as to which adequate reserves have been provided. The Borrowers and the
Guarantors do not know of any basis for the assessment of any deficiency taxes. Each
Guarantor joins in this paragraph 6.5 on a several basis, as applicable to the
Guarantor.
	 
	 	6.6	 	Litigation. There is no action, suit, proceeding or investigation
pending, or threatened against any Borrowers, any of the Guarantors or the Collateral
which might: (1) adversely affect a Borrower, any of the Guarantors or the Collateral;
(2) impair the ability of a Borrower to carry on their respective business as
contemplated hereby; (3) result in any substantial liability not adequately covered by
insurance; or (4) adversely affect a Borrower or their ability to perform their
obligations under the Loan Agreement. Each Guarantor joins in this paragraph 6.6 on a
several basis, as applicable to the Guarantor.
	 
	 	6.7	 	Location of Business Records. Borrowers will give the Bank written
notice of each location of each Borrower and Borrower Subsidiaries at which records
pertaining to the Collateral, their business and other contract rights are kept.





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	 	 	 	Except as such notice is given, all records of Borrowers pertaining to the Collateral
and other contract rights are and will continue to be kept at the address of Borrowers
as it appears in paragraph 11.5 of this Agreement, or at such other address as the
Borrowers designate for such purpose in a written notice to the Bank. The principal
place of business of each Borrower is in the State of Oklahoma.






	 	6.8	 	No Default. The execution, delivery and performance by the Borrowers
and the Guarantors of this Agreement and the Loan Documents will not violate any
provision or constitute a default under any indenture, agreement or instrument to which
any of the Borrowers or Guarantors is a party or by which any Borrower, any Guarantor
or the Collateral is bound or affected. Each Guarantor joins in this paragraph 6.8 on a
several basis, as applicable to the Guarantor.
	 
	 	6.9	 	Agreements Effective. True, correct and complete copies of the
agreement creating the Trust, and each
amendment thereto, have been delivered to the Bank and the agreement creating the
Trust will be maintained in full force and effect.
	 
	 	6.10	 	Full Disclosure. Neither this Agreement nor any statement or
instrument referred to herein nor any other information, report or statement delivered
to the Bank by the Borrowers or the Guarantors contains any untrue statement or omits
to state a material fact necessary to make the statements herein or therein not
misleading. Each Guarantor joins in this paragraph 6.10 on a several basis, as
applicable to the Guarantor.
	 
	 	6.11	 	Survival of Representations. All representations and warranties made
by the Borrowers and the Guarantors herein will survive the delivery of the Loan
Documents and the making of the Loan evidenced thereby, and any investigation at any
time made by or on behalf of the Bank will not diminish the Bank’s right to rely
thereon. All statements contained in any certificate or other instrument delivered by
or on behalf of the Borrowers or the Guarantors under or pursuant to this Agreement or
in connection with the transactions contemplated hereby will constitute representations
and warranties made by the Borrowers and the Guarantors hereunder. Each Guarantor
joins in this paragraph 6.11 on a several basis, as applicable to the Guarantor.
	 
	 	6.12	 	ERISA Plans. Each of the Borrowers has disclosed to the Bank all
existing employee benefit plans under the Employee Retirement Income Security Act of
1974, as amended (“ERISA”). No termination event has occurred with respect to any
ERISA plan of any Borrower and each of the Borrowers is in compliance with ERISA in all
respects.
	 
	 	6.13	 	Solvency. Upon giving effect to the issuance of the Notes, the
execution of the Loan Documents by the Borrowers and the Guarantors and the
consummation of the transactions contemplated hereby, the Borrowers and the Guarantors
will be





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	 	 	 	solvent (as such term is used in applicable bankruptcy, liquidation,
receivership, insolvency or similar laws). Each Guarantor joins in this paragraph 6.13
on a several basis, as applicable to the Guarantor.




7. Affirmative Covenants. Until the payment in full of the Obligations, unless the Bank
otherwise consents in writing, the Borrowers (and the Guarantors severally and where and as
indicated below) agree to perform or cause to be performed the following:





	 	7.1	 	Performance of Obligations. The Borrowers will pay and perform all
Obligations under the Loan Documents. The Borrowers will perform all of their
respective obligations under
all material contracts and agreements relating to their respective businesses,
and will enforce the performance of the obligations of the other parties thereto.
	 
	 	7.2	 	Notifications. The Borrowers will give prompt written notice to the
Bank of: (1) any event of Default; (2) any event of default by a Borrower affiliate
under a material contract to such affiliates portion of the Business; (3) changes of
management of a Borrower; (4) the death, disability or termination of employment with a
Borrower by any Guarantor; (5) all material litigation affecting any of the Borrower,
Borrower affiliates, any of the Guarantors or the Collateral; (6) any notices, demands
or other written communications from third party payers regarding the general coding or
billing practices or asserting a pattern of improper coding or billing practices of any
Borrower or any of the Borrower affiliates; (7) the change or relocation of the
principal place of business of any Borrower outside the State of Oklahoma; and (8) any
other matter which has resulted in, or might result in: (1) a material adverse change
in the financial condition of any Borrower, the pharmacy or sleep lab businesses or any
of the Guarantors, or (2) a material adverse change in the ability of the Borrowers to
perform the Obligations, warranties, covenants and conditions of the Loan Documents.
Each Guarantor joins in this paragraph 7.2 on a several basis, as applicable to the
Guarantor.
	 
	 	7.3	 	Records Inspections. Borrowers and Borrower Subsidiaries will each
maintain full and accurate accounts and records of their respective operations on a
basis consistent with prior periods. Borrowers will permit the Bank and the Bank’s
designated representatives to have access to the Collateral and the records and
accounts relating to the Collateral at all reasonable times to perform such
inspections, audits and examinations as the Bank might reasonably request from time to
time.
	 
	 	7.4	 	Financial Information. The Borrowers and the Guarantors will furnish
to the Bank (Each Guarantor joins in this paragraph 7.4 on a several basis, as
applicable to the Guarantor):






	 	7.4.1	 	Financial Statements. Accurate books and records of account
will be kept by the Borrowers and the Guarantors in accordance with





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	 	 	 	accounting principles consistently applied. The Bank will have the right to
examine and copy such books and records and the federal and state income tax
returns of the Borrowers and the Guarantors, to discuss the affairs,
finances and accounts of the Borrowers and the Guarantors, and to be
informed as to the same at such times and intervals as the Bank might
reasonably request. Borrowers will furnish to the Bank within thirty (30)
days after the end of each calendar quarter commencing with the quarter
ending June 30, 2008, a quarterly reviewed financial statement of Borrowers
in form satisfactory to the Bank completed by Borrowers’ outside accountant,
together with a certification by Borrowers as to the correctness of
the Guaranty Debt Service Coverage Ratio, Debt Service Coverage Ratio
and Net Worth calculations in accordance with this Agreement. In
addition to the quarterly statements, Borrowers will furnish to the
Bank within one hundred twenty (120) days after the close of
Borrowers’ fiscal year, annual consolidated financial statements of
each Borrower completed and audited by Borrowers’ outside accountant,
including all consolidating entries and footnotes, starting with the
calendar year 2008 and each year thereafter. The annual financial
statements of Borrowers will be prepared by Borrowers in accordance
with generally accepted accounting principles consistently applied,
will be certified by Borrowers as to correctness and audited by
Borrowers’ outside accountants and will be in form and substance
satisfactory to the Bank. So long as the Guaranties remain
outstanding, Guarantors will each furnish to the Bank annual
financial statements within one hundred twenty (120) days after the
close of each respective Guarantor’s fiscal year. The financial
statements of Guarantors will be prepared in accordance with
accounting principles consistently applied and will be certified by
each respective Guarantor to the Bank, and will be in form and
substance satisfactory to the Bank. In addition after an event of
Default, the Guarantors will furnish financial statements to the Bank
within fifteen (15) days after written request by the Bank. For each
year in which any Obligations are outstanding, the Borrowers and the
Guarantors (as to Guarantors until release of the Guaranties) will
furnish to the Bank within fifteen (15) days of filing complete
copies of all federal and state income tax returns of the Borrowers
and the Guarantors for the preceding year with all schedules
attached. If the time for filing any such tax returns is to be
extended, the Borrowers and the Guarantors will provide to the Bank
copies of such extensions with evidence that such extensions have
been timely filed, within fifteen (15) days of filing.
	 
	 	7.4.2	 	Compliance Certificate. The Borrowers will deliver to the
Bank within thirty (30) days of the end of each fiscal quarter commencing
June 1, 2008, and more frequently on the Bank’s request, a certificate





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	 	 	 	in the form attached hereto as Schedule “7.4.2” stating that the Borrowers know
of no event of Default under any of the Loan Documents and that all
requirements of the Loan Documents have been fully performed, or if to the
knowledge of any Borrower any of the terms of any of the Loan Documents have
not been fully performed, such certificate will specify the nature of the
Default and the steps taken by the Borrowers to correct such Default.






	 	7.4.3	 	Other Information. At the Bank’s request from
time to time, the Borrowers
and the Guarantors (as to Guarantors until release of the Guaranties)
will provide the Bank with such other information as the Bank may
reasonably request regarding the business affairs and financial
condition of the Borrowers and the Guarantors and the Borrowers and
the Guarantors will provide access to the Bank at all reasonable
times to all documents and information relating to the Collateral,
the Borrower Subsidiaries and the pharmacy and sleep lab businesses.






	 	7.5	 	Deposit Accounts. The Borrowers will use their reasonable efforts to
maintain their respective primary banking and deposit accounts with the Bank.
	 
	 	7.6	 	Additional Documents. The Borrowers and the Guarantors will promptly,
on demand by the Bank, perform or cause to be performed such actions and execute or
cause to be executed all such additional agreements, contracts, indentures, documents
and instruments as might be reasonably requested by the Bank to satisfy the
requirements of this Agreement and the disbursement of funds hereunder. Each Guarantor
joins in this paragraph 7.6 on a several basis, as applicable to the Guarantor.
	 
	 	7.7	 	Governmental Approvals. Borrowers or Borrower Subsidiaries will each
obtain all permits, licenses, and necessary approvals from governmental authorities and
abutting landowners which are considered necessary for the proper operation of their
respective businesses.
	 
	 	7.8	 	Taxes. All taxes, assessments, governmental charges and levies imposed
on the Borrowers and the Guarantors or the Borrowers’ or the Guarantors’ assets, income
and profits will be paid prior to the date on which penalties attach thereto, provided
that the Borrowers and the Guarantors will not be required to pay any such charge which
is being contested in good faith by proper proceedings as to which adequate reserves
have been established. Each Guarantor joins in this paragraph 7.8 on a several basis,
as applicable to the Guarantor.
	 
	 	7.9	 	Access. Any representative of the Bank will have reasonable access to
the Collateral and any other property owned by the Borrowers.





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	 	7.10	 	Operation. The Borrowers agree to operate the pharmacy and sleep lab
businesses directly, or indirectly through the Borrower Subsidiaries in a prudent and
efficient manner consistent with normal industry practices and all governing laws and
regulations.
	 
	 	7.11	 	Qualification; Licenses. Borrowers will take such actions or cause
such actions to be taken as might be required to maintain the existence of all
governmental and private permits, licenses and authorities of the Borrowers and
Borrower Subsidiaries, necessary or desirable to the continuation of the pharmacy and
sleep lab businesses and will comply with all statutes and governmental regulations.
	 
	 	7.12	 	Insurance. Policies of insurance will be continuously maintained by
the Borrowers on the Collateral with companies, in amounts equal to the replacement
cost of such Collateral, with business interruption, valuable documents and account
receivable loss coverage and against risks satisfactory to the Bank. The Borrowers
will furnish the Bank with copies of all certificates of insurance policies in effect
and evidence of payment of the premium for each insurance policy.




8. Negative Covenants. The Borrowers (and the Guarantors severally and where and as
indicated below until release of the Guaranties) agree that until payment in full of the
Obligations, unless the Bank waives compliance in writing:





	 	8.1	 	Creation of Liens. Neither any Borrower nor any of Borrower
Subsidiaries will create, assume or suffer to exist any trust deed, mortgage, pledge,
security interest, encumbrance or other lien (including the lien of an attachment,
judgment or execution) securing a charge or obligation affecting any or all of the
Collateral or Accounts of the Borrower Subsidiaries, excluding only: (1) liens for
governmental charges which are not delinquent or the validity of which is being
contested in good faith by appropriate proceedings and as to which adequate reserves
have been established under generally accepted accounting principles; (2) deposits made
to secure statutory and other obligations incurred in the ordinary course of the
Borrowers’ respective businesses; (3) equipment acquisition leases in the ordinary
course of business; and (4) liens to the Bank contemplated by this Agreement.
	 
	 	8.2	 	Liquidation or Merger. Neither the Borrowers nor any of Borrower
Subsidiaries will liquidate, dissolve or enter into any consolidation, merger,
partnership, joint venture, syndicate, pool, operating agreement or other combination,
or convey, sell or assign any substantial part of their respective assets.
	 
	 	8.3	 	Creation of Debt. Neither the Borrowers nor any of Borrower Subsidiaries
will incur, create or suffer to exist any indebtedness for borrowed money, or issue,
discount or sell any obligation of the Borrowers or Borrower Subsidiaries, excluding
only: (1) the indebtedness to the Bank contemplated by this Agreement;





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	 	 	 	(2) current accounts payable arising in the ordinary course of their respective businesses; and (3)
an amount not to exceed $100,000.00 each incurred in the ordinary course of business by
SDC and Arx, including their respective subsidiaries, for a total not to exceed $200,000.00;
and (4) such other indebtedness as the Bank specifically approves in writing.






	 	8.4	 	Loan and Guaranties. Neither the Borrowers nor any of Borrower
Subsidiaries will make any loans, advances or extensions of credit to any person, firm
or corporation nor become a guarantor or surety directly or indirectly, except that
Borrowers may make short term operating advances or loans to Borrower Subsidiaries in
the ordinary course of business.
	 
	 	8.5	 	Transfers. The Borrowers will not transfer or permit to be transferred
voluntarily or by operation of law any interest in the Collateral, the Borrowers
Subsidiaries or assets of the Borrower Subsidiaries; provided however the Borrowers,
with notice to Bank, may recognize transfers of existing minority equity interests held
by third parties in Borrowers Subsidiaries so long as Borrowers’ equity or ownership
interest therein is not decreased. GRMH holds and will maintain at all times ownership
and distributable equity interest, directly or indirectly, in SDC and ARx of not less
than one hundred percent (100%). The Borrowers may create or activate currently
inactive Borrower Subsidiaries so long as the Borrowers maintain the ownership and
distributable equity interests percentages of not less than 51% as to new Borrower
Subsidiaries and provides notice to Bank thereof and delivers such additional
assignments or amendments to the Loan Documents satisfactory to the Bank covering such
interests. Borrowers will not issue or sell any additional membership interests in
SDC, ARx or Borrowers Subsidiaries or any other securities convertible into equity of
such entities. The Guarantors will not sell, transfer or otherwise dispose of or
create, assume or suffer to exist any pledge, lien, security interest, charge or
encumbrance on, any interest in GRMH owned by the respective Guarantor which exceeds,
in one or an aggregate of transactions, twenty percent (20%) of the respective interest
currently owned, except after notice to Bank pursuant to this Loan Agreement without
any approval right implied. The Guarantors will not sell, transfer or permit to be
transferred voluntarily or by operation of law assets owned by such Guarantor which
will materially impair the financial worth of such Guarantor or the Bank’s ability to
collect the amount of Obligations guaranteed by such Guarantor. Each Guarantor joins
in this paragraph 8.5 on a several basis, as applicable to the Guarantor.
	 
	 	8.6	 	Other Agreements. The Borrowers and Guarantors will not enter into any
agreement that limits or restricts the ability of the Borrowers or Guarantors to comply
with the terms of the Loan Documents. Each Guarantor joins in this paragraph 8.6 on a
several basis, as applicable to the Guarantor
	 
	 	8.7	 	Limitation on Distributions and Redemptions. After the occurrence of an
event of Default, Borrower will not declare, pay or make any dividend or
distribution





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	 	 	 	directly or indirectly in respect of any stockholder or equity
interest or other interest in GRMH. GRMH will not directly or indirectly make any
capital contribution to or purchase, redeem, acquire or retire any stockholder or
equity interest in GRMH (whether such interest is now or hereafter issued,
outstanding or created) except with prior written consent and approval of the
Bank.






	 	8.8	 	Limitation on Investments and New Businesses. None of Borrowers will:
(1) make any expenditure or commitment or incur any obligation or enter into or engage
in any transaction except in the ordinary course of business; (2) engage directly or
indirectly in any business or conduct any operations except in connection with or
incidental to their respective present businesses and operations; or (3) make any
acquisitions of or capital contributions to or other investments in any person or
entity, other than the planned and disclosed expansion of the pharmacy and sleep lab
businesses.
	 
	 	8.9	 	Transactions with Affiliates. No Borrower will engage in any material
transaction with any affiliate of a Borrower on terms which are less favorable to the
Borrower than those which would have been obtainable at the time in an arm’s-length
dealing with persons other than such affiliates.
	 
	 	8.10	 	Subsidiaries. None of the Borrowers will create or own any subsidiary
without the prior written notice to the Bank including the name, state of organization,
list of equity holders, principal place of business and intended purpose, geographical
area and scope of business operations. Borrowers agree to cause the execution and
delivery of such documents to collaterally assign the Borrower’s equity interest
therein and to pledge, encumber or grant a security interest in such subsidiaries’
assets.
	 
	 	8.11	 	Debt Service Coverage Ratio. During the term of the Loan, Borrowers
will continuously maintain a Debt Service Coverage Ratio of not less than 1.25 to 1.
	 
	 	8.12	 	Minimum Net Worth. During the term of the Loan, Borrowers will
continuously maintain the Minimum Net Worth determined on a quarterly basis.




9. Default. The Bank may declare the Notes and all other indebtedness and Obligations of
the Borrowers owing to the Bank to be due and payable if any of the following events occur and are
not remedied by the Borrowers or waived by the Bank in writing:





	 	9.1	 	Nonpayment of Note. A default in payment when due of any interest on
or principal of the Note; or
	 
	 	9.2	 	Other Nonpayment. A default in payment when due of any other amount
payable to the Bank under the terms of any of the Loan Documents; or





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	 	9.3	 	Breach of Agreement. A default by a Borrower or a Guarantor in the
performance or observance of any agreement contained in the Loan Documents, or under
the terms of any other instrument delivered to the Bank in connection with this
Agreement; or
	 
	 	9.4	 	Lien Filings. The existence of any lien on the Collateral without
indemnification therefor satisfactory to the Bank, except as allowed in writing by the
Bank; or
	 
	 	9.5	 	Casualty Loss. Substantial damage to or destruction of a material
portion of the Collateral or the pharmacy or sleep lab businesses; or
	 
	 	9.6	 	Other Agreements. The rescission, abandonment, disclaimer or breach of
the Loan Agreement, a Guaranty or any of the other Loan Documents or other contracts or
agreements pledged to the Bank under the Loan Documents; or
	 
	 	9.7	 	Representations. Any representation, statement, certificate, schedule
or report made or furnished to the Bank by the Borrowers or the Guarantors proves to be
false or erroneous in any material respect at the time of the making thereof or any
representation or warranty ceases to be complied with in any material respect; or
	 
	 	9.8	 	Bankruptcy. A Borrower or any of the Guarantors becomes bankrupt or
makes a general assignment for the benefit of creditors or applies for, or consents to,
the appointment of a trustee, receiver or liquidator or authorizes such application or
consent, or if proceedings seeking such appointment are commenced against a Borrower or
a Guarantor and remain undismissed and unstayed for ninety (90) days; or a Borrower or
any of the Guarantors authorizes or files a voluntary petition in bankruptcy or applies
for or consents to the application of any bankruptcy, reorganization, readjustment of
debt, insolvency, dissolution, liquidation or other similar law of any jurisdiction; or
	 
	 	9.9	 	Judgment. Entry by any court of judgment against any of the Borrowers
or any of the Guarantors in excess of Fifty Thousand Dollars ($50,000.00) which is not
adequately covered by insurance or secured by a supersedes bond, or any attachment of
any of the Collateral which is not discharged to the satisfaction of the Bank within
thirty (30) days thereof; or
	 
	 	9.10	 	Maturity of Other Debt. The occurrence of an event of default under or
the acceleration of the maturity of any other indebtedness of a Borrower or a Guarantor
to any other person which in the reasonable opinion of the Bank will materially and
adversely affect the ability of a Borrower or a Guarantor, as applicable, to perform
the Loan Documents; or
	 
	 	9.11	 	Failure of Liens. Failure of the Bank’s assignment, liens and security
interests covering the Collateral to constitute a first and prior perfected lien on any
material portion of the Collateral.





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	 	9.12	 	Stock Suspension. The suspension of trading for more than thirty (30)
days or delisting of the stock of GRMH from the OC:BB or such future exchange on which
the stock is hereafter listed and traded.




In the event a Borrower or a Guarantor, as applicable, cures or causes to be cured such Default
within ten (10) days [five (5) days with regard to paragraph 9.11] after receipt of written notice
thereof, the parties will be restored to their respective rights and obligations under this
Agreement as if no Default had occurred, except that no right to cure or notice of Default will be
given as to events of Default in paragraphs 9.1, 9.2, 9.8 or 9.9; provided, however that Bank
agrees to give a written notice to Borrowers only without copy to counsel and five (5) days
opportunity to cure for up to three (3) events of Default in paragraphs 9.1 or 9.2 during the term
of this Agreement.



10. Remedies. In the event of Default, the Bank will have the following remedies:





	 	10.1	 	Acceleration of Note. The Bank may, at the Bank’s option, declare the
Notes and all other Obligations to be immediately due and payable and the Bank will be
entitled to proceed to selectively and successively enforce the Bank’s rights under the
Loan Documents or any one or more of them.
	 
	 	10.2	 	Selective Enforcement. In the event the Bank elects to selectively and
successively enforce the Bank’s rights under any one or more of the instruments
securing payment of the Obligations, such action will not be deemed a waiver or
discharge of any other lien or encumbrance securing payment of the Obligations until
such time as the Bank has been paid in full all sums owing to the Bank.
	 
	 	10.3	 	Performance by Bank. The Bank will have the right (but not the
obligation) to: (1) take possession of the Collateral and operate or dispose of the
Collateral in such manner as the Bank determines in the Bank’s sole discretion; (2)
take possession of all Accounts. Equipment, Inventory, General Intangibles, materials
and tools used in any Borrower’s businesses; (3) make payments of the costs directly to
persons engaged by a Borrower or the Bank; (4) make such payments and perform such acts
as might be determined by the Bank to be necessary or appropriate to perform or to cure
any default in performance by the Borrowers under agreements affecting the
Collateral; and (5) make advances under the Notes without the consent of the
Borrowers to pay interest accrued thereon and all costs. If the Bank exercises
such option, all costs will be paid to the Bank by the Borrowers. The Borrowers
and the Guarantors hereby authorize the Bank to increase the indebtedness owing
by the Borrowers to the Bank and agree that the Loan Documents will evidence and
secure payment of such costs whether or not the total funds advanced exceed the
face amount of the Loan Documents.
	 
	 	10.4	 	Waiver of Default. The Bank may, by an instrument in writing signed by
the Bank, waive any Default which has occurred and any of the consequences of such
Default, and in such event, the Bank, the Borrowers and the Guarantors will be restored
to their respective former positions, rights and obligations hereunder.





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	 	 	 	Any Default so
waived will, for the purposes of this Agreement, be deemed to have been cured and not
to be continuing, but no such waiver will extend to any subsequent or other Default or
impair any consequence of such subsequent or other Default.






	 	10.5	 	Deposits; Setoff. Regardless of the adequacy of any other collateral
security held by the Bank, any deposits or other sums credited by or due from the Bank
to the Borrowers or the Guarantors will at all times constitute collateral security for
all indebtedness and obligations of the Borrowers and the Guarantors to the Bank and
may be set off against any and all liabilities of the Borrowers and the Guarantors to
the Bank. The rights granted by this paragraph are in addition to the rights of the
Bank under any statutory banker’s lien now or hereafter in effect.




11. Miscellaneous. It is further agreed as follows:





	 	11.1	 	Participating Lenders. The Borrowers and the Guarantors agree that
although the Loan Documents name the Bank as the holder thereof, the Bank is authorized
to sell participation interests in all or any portion of the Loan to other financial
institutions (a “Participating Lender”) and the Borrowers and the Guarantors agree
that, subject to the terms of the agreements of participation, each Participating
Lender will be entitled to rely on the terms of the Loan Documents as if the
Participating Lender had been named as an original party to the Loan Documents.
	 
	 	11.2	 	Cumulative Remedies. No failure on the part of the Bank to exercise
and no delay in exercising any right hereunder will operate as a waiver thereof, nor
will any single or partial exercise by the Bank of any right hereunder preclude any
other or further right of exercise thereof or the exercise of any other right.
	 
	 	11.3	 	Survival of Representations. All representations and warranties made
herein will survive the making of the Loan hereunder and the delivery of the Loan
Documents.
	 
	 	11.4	 	Expenses. Within ten (10) days after receipt of invoice therefor, the
Borrowers will (except where prohibited by applicable law) pay all reasonable expenses
incurred by the Bank in connection with the transactions herein contemplated including,
without limitation, negotiation and preparation of the Loan Documents and all
attorneys’ fees, filing fees and recording costs. In addition, the Borrowers will pay
all reasonable fees, costs, expenses (including legal expenses and attorneys’ fees) and
disbursements of the Bank incident to: (1) the protection of the rights of the Bank in
connection with the Loan Documents and the transactions contemplated thereby; and (2)
the collection or enforcement of the Loan Documents whether by judicial proceedings,
proceedings under Chapter 7 or 11 of the Bankruptcy Code or any successor statute
thereto, or otherwise.





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	 	11.5	 	Notices. Any notice, demand or communication required or permitted to
be given by any provision of this 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
parties:





	 	 	 	 	 
	 

	 	The Bank:
	 	Arvest Bank
	 

	 	 	 	Attention: Ms. Cindy Batt
	 

	 	 	 	3900 N. Lincoln Boulevard
	 

	 	 	 	Oklahoma City, Oklahoma 73105
	 

	 	 	 	Fax: (405) 523-4126
	 
	 	 	 	 
	 

	 	with copy to:
	 	Ray Lees, Esquire
	 

	 	 	 	Commercial Law Group, P.C.
	 

	 	 	 	700 Oklahoma Tower
	 

	 	 	 	210 Park Avenue
	 

	 	 	 	Oklahoma City, Oklahoma 73102
	 

	 	 	 	Fax: (405) 232-5553
	 
	 	 	 	 
	 

	 	 	 	The Borrower: Graymark Healthcare, Inc.
	 

	 	 	 	Attention: Mr. Stanton Nelson
	 

	 	 	 	101 North Robinson, Suite 900
	 

	 	 	 	Oklahoma City, Oklahoma 73102
	 

	 	 	 	Fax: (405) 239-2258
	 
	 	 	 	 
	 

	 	with copy to:
	 	John D. Singleton, PLLC
	 

	 	 	 	1601 NW Expressway, Suite 1710
	 

	 	 	 	Oklahoma City, Oklahoma 73118
	 

	 	 	 	Fax: (405) 516-5525
	 
	 	 	 	 
	 

	 	The Guarantors:
	 	Oliver Company Holdings, LLC
	 

	 	 	 	Mr. Roy T. Oliver
	 

	 	 	 	Mr. Stanton Nelson
	 

	 	 	 	101 North Robinson, Suite 900
	 

	 	 	 	Oklahoma City, Oklahoma 73102
	 

	 	 	 	Fax: (405) 239-2258






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	 	 	 	Mr. Vahid Salalati
	 

	 	 	 	305 N. Bryant
	 

	 	 	 	Edmond, Oklahoma 73034
	 

	 	 	 	Fax: (405) 285-7127
	 
	 	 	 	 
	 

	 	 	 	Mr. Lewis Zeidner
	 

	 	 	 	5400 Union Terrace Lane North
	 

	 	 	 	Plymouth, MN 55442
	 

	 	 	 	Fax: (763) 577-0482







	 	11.6	 	Construction. The Loan Documents are intended to constitute contracts
made under the laws of the State of Oklahoma and to be construed in accordance with the
internal laws of said state. Nothing in this Agreement will be construed to constitute
the Bank as a joint venturer with any of the Borrowers or Guarantors or to constitute a
partnership. The descriptive headings of the paragraphs of this Agreement (except the
terms defined at paragraph 1 hereof) are for convenience only and are not to be used in
the construction of the content of this Agreement. This Agreement may be executed in
multiple counterparts, each of which will constitute one agreement.
	 
	 	11.7	 	Binding Effect. This Agreement will be binding on and will inure to
the benefit of the Bank, the Borrowers, the Guarantors and their respective successors
and assigns.
	 
	 	11.8	 	No Third Party Beneficiaries. Nothing in this Agreement, express or
implied, is intended to confer upon any person, other than the parties hereto and their
respective successors and assigns, any rights or remedies under or by reason of this
Agreement or to constitute such person a third party beneficiary of this Agreement.
	 
	 	11.9	 	Assignment. Neither this Agreement, the Loan Documents nor the
proceeds from the Loan will be assigned without the Bank’s prior written consent, and without such consent, there will be no right to
designate a payee of the proceeds from the Loan.
	 
	 	11.10	 	Expiration of Agreement. If the initial disbursement under the Term
Note has not been advanced by June 15, 2008, the obligation of the Bank to make
advances under the Notes pursuant to this Agreement will, at the option of the Bank,
terminate on such date.
	 
	 	11.11	 	Time. Time is of the essence of this Agreement and each provision of
the other Loan Documents.
	 
	 	11.12	 	Severability. In case any one or more of the provisions contained in
the Loan Documents should be invalid, illegal or unenforceable in any respect in any





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	 	 	 	jurisdiction, the validity, legality and enforceability of such provision or provisions
will not in any way be affected or impaired thereby in any other jurisdiction; and the
validity, legality and enforceability of the remaining provisions contained herein and
therein will not in any way be affected or impaired thereby.






	 	11.13	 	Verbal Change. The Loan Documents may not be amended, altered,
modified or changed verbally, but only by an agreement in writing signed by the party
against whom enforcement of any amendment, waiver, change, modification or discharge is
sought.
	 
	 	11.14	 	No Waiver. No advance of the proceeds from the Loan under any of the
Loan Documents will constitute a waiver of any of the representations, warranties,
conditions or covenants of the Borrowers or any of the Guarantors under the Loan
Documents. In the event the Borrowers or any of the Guarantors is unable to satisfy
any warranty, condition or covenant contained in the Loan Documents, no advance of the
proceeds from the Loan will preclude the Bank from thereafter declaring such inability
to be an event of Default.
	 
	 	11.15	 	Application of Loan Proceeds. The Bank may apply the proceeds from
the Loan under the Notes to the satisfaction of any condition, warranty or covenant of
the Borrowers under any of the Loan Documents, and any proceeds so applied will be
considered as a part of the proceeds from the Loan advanced under the Notes and will be
secured by the Loan Documents.
	 
	 	11.16	 	ACKNOWLEDGMENTS AND ADMISSIONS. EACH OF THE BORROWERS AND GUARANTORS
HEREBY REPRESENT, WARRANT, ACKNOWLEDGE AND ADMIT THAT (A) EACH OF THEM HAS MADE AN
INDEPENDENT DECISION TO ENTER INTO THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS TO WHICH IT IS A PARTY, WITHOUT RELIANCE
ON ANY REPRESENTATION, WARRANTY, COVENANT OR UNDERTAKING BY THE BANK, WHETHER
WRITTEN, ORAL OR IMPLICIT, OTHER THAN AS EXPRESSLY SET OUT IN THIS AGREEMENT OR
IN ANOTHER LOAN DOCUMENT DELIVERED ON OR AFTER THE DATE HEREOF, (B) THERE ARE NO
REPRESENTATIONS, WARRANTIES, COVENANTS, UNDERTAKINGS OR AGREEMENTS BY THE BANK AS
TO THE LOAN DOCUMENTS EXCEPT AS EXPRESSLY SET OUT IN THIS AGREEMENT OR IN ANOTHER
LOAN DOCUMENT DELIVERED ON OR AFTER THE DATE HEREOF, (C) THE BANK HAS NO
FIDUCIARY OBLIGATION TOWARD THE BORROWERS OR THE GUARANTORS WITH RESPECT TO ANY
LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED THEREBY, (D) THE RELATIONSHIP
PURSUANT TO THE LOAN DOCUMENTS BETWEEN THE BORROWERS AND THE BANK IS AND WILL BE
SOLELY THAT





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	 	 	 	OF DEBTOR AND CREDITOR, (E) NO PARTNERSHIP OR JOINT VENTURE EXISTS
WITH RESPECT TO THE LOAN DOCUMENTS BETWEEN ANY BORROWER OR THE GUARANTORS AND THE
BANK, (F) SHOULD A DEFAULT OCCUR OR EXIST, THE BANK WILL DETERMINE IN ITS SOLE
DISCRETION AND FOR ITS OWN REASONS WHAT REMEDIES AND ACTIONS IT WILL OR WILL NOT
EXERCISE OR TAKE AT THE TIME, (G) WITHOUT LIMITING ANY OF THE FOREGOING, NO
BORROWER OR GUARANTOR IS RELYING UPON ANY REPRESENTATION OR COVENANT BY THE
BANK, OR ANY REPRESENTATIVE THEREOF, AND NO SUCH REPRESENTATION OR COVENANT HAS
BEEN MADE, THAT THE BANK WILL, AT THE TIME OF AN EVENT OF DEFAULT, OR AT ANY
OTHER TIME, WAIVE, NEGOTIATE, DISCUSS OR TAKE OR REFRAIN FROM TAKING ANY ACTION
PERMITTED UNDER THE LOAN DOCUMENTS WITH RESPECT TO ANY SUCH EVENT OF DEFAULT OR
ANY OTHER PROVISION OF THE LOAN DOCUMENTS, AND (H) THE BANK HAS RELIED UPON THE
TRUTHFULNESS OF THE ACKNOWLEDGMENTS IN THIS PARAGRAPH 11.16 IN DECIDING TO
EXECUTE AND DELIVER THIS AGREEMENT AND TO BECOME OBLIGATED HEREUNDER.






	 	11.17	 	JOINT ACKNOWLEDGMENT. THIS WRITTEN AGREEMENT AND THE OTHER LOAN
DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED
BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
	 
	 	11.18	 	INDEMNITY. THE BORROWERS AGREE TO INDEMNIFY THE BANK, UPON DEMAND,
FROM AND AGAINST ANY AND ALL LIABILITIES, OBLIGATIONS, CLAIMS, LOSSES, DAMAGES,
PENALTIES, FINES, ACTIONS, JUDGMENTS, SUITS, SETTLEMENTS, COSTS, EXPENSES OR
DISBURSEMENTS (INCLUDING REASONABLE FEES OF ATTORNEYS, ACCOUNTANTS, EXPERTS AND
ADVISORS) OF ANY KIND OR NATURE WHATSOEVER (IN THIS PARAGRAPH COLLECTIVELY CALLED
“LIABILITIES AND COSTS”) WHICH TO ANY EXTENT (IN WHOLE OR IN PART) MAY BE IMPOSED
ON, INCURRED BY, OR ASSERTED AGAINST THE BANK BY THIRD PARTIES GROWING OUT OF,
RESULTING FROM OR IN ANY OTHER WAY ASSOCIATED WITH THE COLLATERAL, THE LOAN
DOCUMENTS AND THE TRANSACTIONS AND EVENTS (INCLUDING THE ENFORCEMENT OR DEFENSE
THEREOF) AT ANY TIME ASSOCIATED THEREWITH OR CONTEMPLATED THEREIN (WHETHER
ARISING IN CONTRACT OR TORT OR OTHERWISE AND





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	 	 	 	INCLUDING ANY VIOLATION OR
NONCOMPLIANCE WITH ANY ENVIRONMENTAL LAWS BY THE BORROWERS, THE GUARANTORS OR THE
BANK OR ANY LIABILITIES OR DUTIES OF THE BORROWERS, THE GUARANTORS OR THE BANK
WITH RESPECT TO HAZARDOUS MATERIALS FOUND IN OR RELEASED INTO THE ENVIRONMENT).






	 	 	 	THE FOREGOING INDEMNIFICATION WILL APPLY WHETHER OR NOT SUCH LIABILITIES AND
COSTS ARE IN ANY WAY OR TO ANY EXTENT OWED, IN WHOLE OR IN PART, UNDER ANY CLAIM
OR THEORY OF STRICT LIABILITY, OR ARE CAUSED, IN WHOLE OR IN PART, BY ANY
NEGLIGENT ACT OR OMISSION OF ANY KIND BY THE BANK, PROVIDED ONLY THAT THE BANK
WILL NOT BE ENTITLED UNDER THIS PARAGRAPH TO RECEIVE INDEMNIFICATION FOR THAT
PORTION, IF ANY, OF ANY LIABILITIES AND COSTS WHICH IS PROXIMATELY CAUSED BY ITS
OWN INDIVIDUAL GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, AS DETERMINED IN A FINAL
JUDGMENT. IF ANY PERSON (INCLUDING ANY BORROWER, ANY OF THEIR AFFILIATES OR ANY
GUARANTOR) EVER ALLEGES SUCH GROSS NEGLIGENCE OR WILLFUL MISCONDUCT BY THE BANK,
THE INDEMNIFICATION PROVIDED FOR IN THIS PARAGRAPH WILL NONETHELESS BE PAID UPON
DEMAND, SUBJECT TO LATER ADJUSTMENT OR REIMBURSEMENT, UNTIL SUCH TIME AS A COURT
OF COMPETENT JURISDICTION ENTERS A FINAL JUDGMENT AS TO THE EXTENT AND EFFECT OF
THE ALLEGED GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. AS USED IN THIS PARAGRAPH
THE TERM “BANK” WILL REFER NOT ONLY TO THE PERSON DESIGNATED AS SUCH BUT ALSO TO
EACH DIRECTOR, OFFICER, AGENT, ATTORNEY, EMPLOYEE, PARTICIPANT, REPRESENTATIVE AND
AFFILIATE OF THE BANK.
	 
	 	11.19	 	WAIVER OF JURY TRIAL, PUNITIVE DAMAGES, ETC. EACH OF THE BORROWERS,
THE BORROWER SUBSIDIARIES, THE GUARANTORS AND THE BANK HEREBY KNOWINGLY, VOLUNTARILY,
INTENTIONALLY AND IRREVOCABLY (A) WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW,
ANY RIGHT IT MAY HAVE TO A TRIAL BY A JURY IN RESPECT OF ANY LITIGATION BASED HEREON,
OR DIRECTLY OR INDIRECTLY AT ANY TIME ARISING OUT OF, UNDER OR IN CONNECTION WITH THE
LOAN DOCUMENTS OR ANY TRANSACTION CONTEMPLATED THEREBY OR ASSOCIATED THEREWITH, BEFORE
OR AFTER MATURITY, (B) WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT
IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY “SPECIAL DAMAGES,”





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	 	 	 	AS DEFINED BELOW, (C) CERTIFIES THAT NO PARTY HERETO NOR ANY REPRESENTATIVE OR COUNSEL FOR
ANY PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS, AND (D)
ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT, THE OTHER LOAN
DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY BY, AMONG OTHER THINGS,
THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN THIS PARAGRAPH. AS USED IN THIS
PARAGRAPH, “SPECIAL DAMAGES” INCLUDES ALL SPECIAL, CONSEQUENTIAL, EXEMPLARY OR PUNITIVE
DAMAGES (REGARDLESS OF HOW NAMED), BUT DOES NOT INCLUDE ANY PAYMENTS OR FUNDS WHICH ANY
PARTY HERETO HAS EXPRESSLY PROMISED TO PAY OR DELIVER TO ANY OTHER PARTY HERETO.





[SIGNATURE PAGES TO FOLLOW]




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     IN WITNESS WHEREOF, the parties have executed this Agreement effective the date first above
written.



	 	 	 
	 
	 	GRAYMARK HEALTHCARE, INC., 

an Oklahoma Corporation
	 
	 	 
	 
	 	By /S/ STANTON M. NELSON

                Stanton
M. Nelson, CEO
	 
	 	 
	 
	 	APOTHECARYRx LLC, an Oklahoma limited

liability company
	 
	 	 
	 
	 	BY: GRAYMARK HEALTHCARE, INC., 

an Oklahoma Corporation, MANAGER
	 
	 	 
	 
	 	                By /S/
STANTON M. NELSON

                    Stanton M. Nelson, CEO
	 
	 	 
	 
	 	SDC HOLDINGS, LLC, an Oklahoma limited
liability company
	 
	 	 
	 
	 	BY: GRAYMARK HEALTHCARE, INC., 

an Oklahoma Corporation, MANAGER
	 
	 	 
	 
	 	                By /S/
STANTON M. NELSON

                    Stanton M. Nelson, CEO
	 
	 	 
	 
	 	(the “Borrowers”)
	 
	 	 
	 
	 	OLIVER COMPANY HOLDINGS, LLC, an Oklahoma limited

liability company
	 
	 	 
	 
	 	By /S/ ROY T. OLIVER

     Roy T. Oliver, Manager
	 
	 	 
	 
	 	/S/ ROY T. OLIVER

ROY T. OLIVER, individually





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	 	THE ROY T. OLIVER REVOCABLE TRUST DATED JUNE 15, 2004
	 
	 	 
	 

	 	By /S/ ROY T. OLIVER

           ROY T. OLIVER, Trustee
	 
	 	 
	 

	 	/S/ STANTON M. NELSON

STANTON M. NELSON, individually
	 
	 	 
	 

	 	/S/ VAHID SALALATI

VAHID SALALATI, individually
	 
	 	 
	 

	 	/S/ GREG LUSTER

GREG LUSTER, individually
	 
	 	 
	 

	 	/S/ KEVIN LEWIS

KEVIN LEWIS, individually
	 
	 	 
	 

	 	/S/ ROGER ELY

ROGER ELY, individually
	 
	 	 
	 

	 	/S/ LEWIS P. ZEIDNER

LEWIS P. ZEIDNER, individually
	 
	 	 
	 

	 	(the “Guarantors”)
	 
	 	 
	 

	 	ARVEST BANK, an Arkansas banking corporation
	 
	 	 
	 

	 	By /S/ CINDY BATT

          Cindy Batt, Senior Vice President
	 
	 	 
	 

	 	(the “Bank”)





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