AMENDMENT TO LOAN
AGREEMENT
This
Amendment to Loan Agreement (“Amendment”) is made
effective the 21 st day of May, 2008, between 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 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 OCH, Oliver, Nelson, Trustee, Salalati, Lewis and
Ely, the “Guarantors”) and ARVEST BANK, an Arkansas
banking corporation (the “Bank”).
WHEREAS,
the Borrower, Guarantors and Bank have heretofore entered into that
certain Loan Agreement dated effective May 21, 2008 (the
“Loan Agreement”) and related Loan
Documents;
WHEREAS,
the Borrower, Guarantors and Bank desire to amend the Loan
Agreement and Loan Documents by means of this Amendment as set
forth herein; and
WHEREAS,
this Amendment is executed by each Guarantor and delivered to the
Bank to reflect the Guarantors consent to the Amendment, to
induce the Bank to amend the Loan and in satisfaction of a
material condition precedent to such amendment by the Bank. Except
as otherwise defined herein, all defined terms shall have the
meaning prescribed in the Loan Agreement or other Loan
Documents.
NOW,
THEREFORE, in consideration of the mutual covenants among the
parties hereto, it is agreed as follows:
1.1
Paragraph 1.6 Replaced . Paragraph 1.6 of the Loan
Agreement is hereby deleted and replaced in its entirety with the
following:
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1.6
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Collateral Assignment of Leases.
With respect to the lease of real property by a Borrower utilized
in the operation of its pharmacy or sleep lab business that is
entered into from and after the date of this Agreement, the
agreement(s) to be executed by the Bank and Borrowers granting to
the Bank a first perfected collateral assignment of such in
substantially the form of Schedule “1.6” attached
hereto as a part hereof, unless waived in whole or part in writing
by the Bank.
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Amendment to Loan
Agreement
Graymark Healthcare,
Inc.
1.2
Paragraph 1.8 Replaced . Paragraph 1.8 of the Loan
Agreement is hereby deleted and replaced in its entirety with the
following:
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1.8
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Default. The occurrence of any of
the events specified in Paragraph 9 of this Agreement, that
are not remedied by the Borrowers or waived by the Bank as may be
provided therein.
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2. Use of
Funds for Acquisition Note Advances . Paragraph 3.2.5 of
the Loan Agreement is hereby deleted and replaced in its entirety
with the following:
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3.2.5
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Use of Proceeds
. Except as may be
allowed in writing by Bank in its sole and absolute discretion, all
proceeds of the Acquisition Note will be used solely for the
funding of (a) up to seventy percent (70%) of either the
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: (y) include the cost
of inventory purchased through the acquisition, to the extent not
already included in the purchase price amount; and (z) exclude any
amount which is funded with Seller carry-back financing, unless
fully subordinated to the Bank.
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3.
Representation and Warranties . Paragraph 6.4 of the
Loan Agreement is hereby deleted and replaced in its entirety with
the following and the attached Schedule 6.4 is incorporated by
reference:
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6.4
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Ownership . Except as set forth on
Schedule 6.4 attached hereto, 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.
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4.1
Paragraph 8.1 Replaced . Paragraph 8.1 of the Loan
Agreement is hereby deleted and replaced in its entirety with the
following:
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8.1
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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
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Amendment to Loan
Agreement
Graymark Healthcare,
Inc.
- 2 -
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 (new or assumed); (4) Seller carry-back financing
and liens of ARx or SDC set forth on Schedule 6.4;
(5) Seller carry-back financing to ARx or SDC from the
acquisition of new sleep or pharmacy businesses, so long as
subordinated to the Bank’s liens; (6) ARx’s
financing for working capital evidenced by (i) “Up-front
Discounts” for inventory purchase commitments,
(ii) extended financing referred to as “dating of
inventory” relating to the replacement of the initial
inventory from the acquisition of new pharmacy businesses, and
(iii) o
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