8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): June 6, 2008

GRAYMARK HEALTHCARE, INC.

(Exact name of registrant as specified in its charter)

Oklahoma	000-50638	20-0180812
(State or other jurisdiction	(Commission File Number)	(I.R.S. Employer
of incorporation)		Identification No.)

101 N. Robinson, Suite 920
Oklahoma City, Oklahoma 73102	73102
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (405) 601-5300

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14a-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into Material Definitive Agreement.

Asset Purchase Agreement — Acquisition of Nocturna Sleep Center, LLC

Subject to a number of conditions precedent, SDC Holdings LLC, one of our subsidiaries at Graymark Healthcare, Inc., entered in to the Purchase Agreement dated June 1, 2008, with Christina Molfetta, individually and as Trustee of the Hannah Friends Trust (collectively, the “Seller”) providing for the purchase of the Seller’s equity ownership interest in Nocturna Sleep Center, LLC (“Nocturna”). Nocturna operates two sleep disorder centers in Las Vegas, Nevada. Prior to execution of the Purchase Agreement, the Seller, Ms. Molfetta and Nocturna did not have a material relationship with us or any of our subsidiaries.

On June 6, 2008, SDC Holdings completed the purchase of the equity ownership interest for a total purchase price of $2,196,600 of which $1,446,600 was paid at closing, $250,000 was deposited with an escrow agent until written approval of the transfer of the equity ownership Interest is received by SDC Holdings from Sierra Health and Life Insurance Company, Inc. and its affiliates. The $500,000 balance of the purchase price will become payable on June 1, 2009 and is secured by a $500,000 letter of credit issued by Valliance Bank in Oklahoma City, Oklahoma.

During the three years ending June 1, 2011, Ms. Molfetta (and her immediate family) and the Trust agreed not to carry on or engage or participate in any business substantially the same as that conducted by Nocturna (i.e., sleep order diagnoses and treatment) in Nevada. This prohibition includes in the capacity as a lender for the purpose of establishing or operating any competitive business, providing advice to any other person engaged in a competitive business, lending or consenting to the use of her or its name or reputation to be used in any a competitive business, or allowing her or its skill, knowledge or experience to be used in any a competitive business. The three year period will be extended for the duration of any period during which either Ms. Molfetta or the Trust is in violation of these prohibitions.

Furthermore, during the two years ending June 1, 2010, Ms. Molfetta and the Trust agreed not directly or indirectly to call upon or solicit any employee of Nocturna or SDC Holdings for the purpose or with the intent of enticing that employee from or out of the employ of Nocturna or SDC Holdings.

SDC Holdings agreed to hold Ms. Molfetta and the Trust (and their respective agents and affiliates) harmless and Ms. Molfetta and the Trust agreed to hold SDC Holdings (and its members, managers, employees and other agents and affiliates) harmless from all damages, losses, liabilities, payments, obligations, penalties, claims, litigation, demands, defenses, judgments, suits, proceedings, costs, disbursements or expenses (including, without limitation, reasonable fees, disbursements and expenses of attorneys, accountants and other professional advisors) of any kind or nature asserted against it or her or incurred by it or her as a result of, in connection with or arising out of any inaccuracy in or breach of any representation or warranty made in the Purchase Agreement or any breach or nonperformance (partial or total) of any covenant or agreement contained in the Purchase Agreement.

Asset Purchase Agreements — Plano Sleep Center, LTD, Southlake Sleep Center, LTD. and Sleep Center of Waco, Ltd.

Pursuant to the Asset Purchase Agreement dated May 30, 2008 and on the effective date of June 1, 2008, our subsidiary, Capital Sleep Management, LLC, acquired substantially all of the assets of Plano Sleep Center, Ltd., (“PSC”), and Southlake Sleep Center, Ltd. (“SSC”). Furthermore, pursuant to the Asset Purchase Agreement dated May 30, 2008 and on the effective date of June 1, 2008, our subsidiary, Texas Center for TCSD of Waco, LLC, acquired substantially all of the assets of Sleep Center of Waco, Ltd. (“SCW”). Both Asset Purchase Agreements in substance were substantially similar. The assets acquired are identified in the respective Asset Purchase Agreements and in general included the (a) the tangible personal property, (b) accounts receivable, (c) intellectual property, goodwill, licenses and sublicenses granted and obtained with respect to their businesses, and the related rights, remedies against infringements, and rights to protection of interests in the assets acquired under the laws of all jurisdictions, (d) to the extent assignable, franchises, approvals, permits, licenses, orders, registrations, certificates,

-2-

variances, and similar rights obtained from governments and governmental agencies, (e) the identified agreements and all rights thereunder, (f) phone numbers and e-mail addresses; (g) web sites and the contents, and (h) books, records, ledgers, files, documents, correspondence, lists, plats, engineering plans, drawings, and specifications, creative materials, advertising and promotional materials, studies, reports, and other printed or written materials relating in any way to the respective businesses of PSC, SSC or SCW, as may be applicable.

The acquired assets did not include (i) the charter, qualifications to conduct business as a foreign limited partnership, arrangements with registered agents relating to foreign qualifications, taxpayer and other identification numbers, seals, minute books, transfer books, and other documents relating to the organization, maintenance, and existence of each Seller as a limited partnership, (ii) any of the rights of PSC, SSC or SCW, or (iii) any of the assets specifically identified in the respective Asset Purchase Agreements.

SDC Holdings agreed to deliver to PSC, SSC and SCW that number of our common stock shares that have an aggregate “Agreed Value” of $900,000. For this purpose the “Agreed Value” per share of our common stock is the average closing price of the stock as reported by the OTC Bulletin Board for the 10 consecutive trading days ending on May 28, 2008. In addition, we are required to issue and deliver to PSC, SSC and SCW stock options providing for the purchase in the aggregate of 35,000 common stock shares for $5.00 per share on or before June 1, 2010.

Furthermore, our subsidiaries assumed certain liabilities as set forth in the respective Asset Purchase Agreement.

SDC Holdings’ subsidiaries agreed to hold to PSC, SSC and SCW (Holdings (and its members, managers, employees and other agents and affiliates) harmless and PSC, SSC and SCW agreed to hold SDC Holdings’ subsidiaries (and its members, managers, employees and other agents and affiliates) harmless from all damages, losses, liabilities, payments, obligations, penalties, claims, litigation, demands, defenses, judgments, suits, proceedings, costs, disbursements or expenses (including, without limitation, reasonable fees, disbursements and expenses of attorneys, accountants and other professional advisors) of any kind or nature asserted against it or her or incurred by it or her as a result of, in connection with or arising out of any inaccuracy in or breach of any representation or warranty made in the respective Asset Purchase Agreements or any breach or nonperformance (partial or total) of any covenant or agreement contained in the respective Asset Purchase Agreements.

Item 2.01 Completion of Acquisition or Disposition of Assets.

Effective June 1, 2008, our subsidiaries, SDC Holdings LLC and its subsidiaries acquired Nocturna and the assets of PSC, SSC and SCW pursuant to the Purchase Agreement and respective Asset Purchase Agreements described under Item 1.01 Entry into a Material Definitive Agreement, above.

Item 7.01 Regulation FD Disclosure.

On June 12, 2008, we, at Graymark Healthcare, Inc. issued a press release announcing completion of the acquisition of Nocturna and the assets of PSC, SSC and SCW.

Item 9.01 Financial Statements and Exhibits.

     (a) Financial Statements of Business Acquired.

We have determined that the audited financial statements for Nocturna and the assets acquired pursuant to the transactions described in Item 1.01 Entry into a Material Definitive Agreement, above, are not required to be provided as part of this report.

-3-

     (b) Pro Forma Financial Information.

We have determined that the pro forma financial information for Nocturna and the assets acquired pursuant to the transactions described in Item 1.01 Entry into a Material Definitive Agreement, above, are not required to be provided as part of this report.

     (d) Exhibits.

10.1	Purchase Agreement with an effective date of June 1, 2008 among SDC Holdings, LLC, Christina Molfetta and the Hannah Friends Trust.
10.2	Asset Purchase Agreement dated May 30, 2008, among Capital Sleep Management, LLC, Plano Sleep Center, Ltd., and Southlake Sleep Center, Ltd.
10.3	Asset Purchase Agreement dated May 30, 2008, between Texas Center for TCSD of Waco, LLC and Sleep Center of Waco, Ltd.
99.1	Press Release dated June 12, 2008.

-4-

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

GRAYMARK HEALTHCARE, INC. (Registrant)
By:	/S/ STANTON NELSON
	Stanton Nelson, Chief Executive Officer

Date: June 13, 2008

-5-

EX-10.1

EXHIBIT 10.1

PURCHASE AGREEMENT

     This Purchase Agreement (the “Agreement”) is made and entered into effective for all purposes as of the 1^st day of June, 2008 (the “Closing Date”), by and among SDC Holdings, LLC, an Oklahoma limited liability company (the “Buyer”), and Christina Molfetta, individually and as Trustee of the Hannah Friends Trust (collectively, the “Seller”).

     The Trust owns all of the outstanding equity interests of Nocturna Sleep Center, LLC, a Nevada limited liability company (the “Company”).

     This Agreement contemplates a transaction in which the Buyer will purchase from the Trust, and the Trust will sell to the Buyer, all of the outstanding equity interests of the Company in return for cash.

     Now, therefore, in consideration of the premises and the mutual promises herein made, and in consideration of the representations, warranties, and covenants herein contained, the parties agree as follows.

ARTICLE I — DEFINITIONS

     1.1 Definitions. For purposes of this Agreement, the following terms have the meanings specified or referred to in this Article I:

     “Affiliate” has the meaning set forth in Rule 12b-2 of the regulations promulgated under the Securities Exchange Act.

     “Basis” means any past or present fact, situation, circumstance, status, condition, activity, practice, plan, occurrence, event, incident, action, failure to act or transaction that forms or could form the basis for any specified consequence.

     “Business” means the diagnosis and treatment of sleep disorders and disturbances including, without limitation, sleep apnea, narcolepsy, insomnia, restless legs syndrome and parasomnias.

     “Buyer” has the meaning set forth in the preface above.

     “Buyer Indemnitees” has the meaning set forth in Section 7.2 below.

     “Closing” means the closing of the transactions contemplated by this Agreement.

     “Closing Date” has the meaning set forth in the preface above.

     “Code” means the Internal Revenue Code of 1986, as amended.

     “Company” has the meaning set forth in the preface above.

1

     “Confidential Information” means any information concerning the business and affairs of the Company that is not already generally available to the public.

     “Damages” has the meaning set forth in Section 7.2.

     “Disclosure Schedule” has the meaning set forth in Article IV below.

     “Environmental, Health and Safety Laws” means the Comprehensive Environmental Response, Compensation and Liability Act of 1980, the Resource Conservation and Recovery Act of 1976, and the Occupational Safety and Health Act of 1970, each as amended, together with all other laws (including rules, regulations, codes, plans, injunctions, judgments, orders, decrees, rulings, and charges thereunder) of federal, state, local, and foreign governments (and all agencies thereof) concerning pollution or protection of the environment, public health and safety, or employee health and safety, including laws relating to emissions, discharges, releases, or threatened releases of pollutants, contaminants, or chemical, industrial, hazardous, or toxic materials or wastes into ambient air, surface water, ground water, or lands or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport, or handling of pollutants, contaminants, or chemical, industrial, hazardous, or toxic materials or wastes.

     “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

     “Financial Statements” has the meaning set forth in Section 4.7 below.

     “Intellectual Property” means (a) all inventions (whether patentable or unpatentable and whether or not reduced to practice), all improvements thereto, and all patents, patent applications, and patent disclosures, together with all reissuances, continuations, continuations-in-part, revisions, extensions, and reexaminations thereof, (b) all trademarks, service marks, trade dress, logos, trade names, and corporate names, together with all translations, adaptations, derivations, and combinations thereof and including all goodwill associated therewith, and all applications, registrations, and renewals in connection therewith, (c) all copyrightable works, all copyrights, and all applications, registrations, and renewals in connection therewith, (d) all mask works and all applications, registrations, and renewals in connection therewith, (e) all trade secrets and confidential business information (including ideas, research and development, know-how, formulas, compositions, manufacturing and production processes and techniques, technical data, designs, drawings, specifications, customer and supplier lists, pricing and cost information, and business and marketing plans and proposals), (f) all computer software (including data and related documentation), (g) all other proprietary rights, and (h) all copies and tangible embodiments thereof (in whatever form or medium).

     “Interests” has the meaning set forth in Section 2.1 below.

     “Knowledge” means actual knowledge after reasonable investigation.

     “Liability” means any liability (whether known or unknown, whether asserted or unasserted, whether absolute or contingent, whether accrued or unaccrued, whether liquidated or unliquidated, and whether due or to become due), including any liability for Taxes.

2

     “Molfetta” means Christina Molfetta.

     “Most Recent Balance Sheet” means the balance sheet contained within the Most Recent Financial Statements.

     “Most Recent Financial Statements” has the meaning set forth in Section 4.7 below.

     “Most Recent Fiscal Month End” has the meaning set forth in Section 4.7 below.

     “Most Recent Fiscal Year End” has the meaning set forth in Section 4.7 below.

     “Noncompete Term” has the meaning set forth in Section 6.5(a)(iv) below.

     “Ordinary Course of Business” means the ordinary course of business consistent with past custom and practice (including with respect to quantity and frequency).

     “Person” means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, a governmental entity (or any department, agency, or political subdivision thereof) or any other entity of any kind or nature.

     “Purchase Price” has the meaning set forth in Section 2.2 below.

     “Securities Act” means the Securities Act of 1933, as amended.

     “Securities Exchange Act” means the Securities Exchange Act of 1934, as amended.

     “Security Interest” means any mortgage, pledge, lien, encumbrance, deed of trust, charge, or other security interest, other than liens for Taxes not yet due and payable.

     “Seller Indemnitees” has the meaning set forth in Section 7.3 below.

     “Seller” has the meaning set forth in the preface above.

     “Tax” means any federal, state, local, or foreign income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental (including taxes under Code Section 59A), customs duties, capital stock, franchise, profits, withholding, social security (or similar), unemployment, disability, real property, personal property, sales, use, transfer, registration, value added, alternative or add-on minimum, estimated, or other tax of any kind whatsoever, including any interest, penalty, or addition thereto, whether disputed or not.

     “Tax Return” means any return, declaration, report, claim for refund, or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.

     “Trust” means the Hannah Friends Trust.

3

ARTICLE II — PURCHASE AND SALE OF INTERESTS

     2.1 Basic Transaction. On and subject to the terms and conditions of this Agreement, the Buyer agrees to purchase from the Trust, and the Trust agrees to sell to the Buyer, all of the equity interests in the Company (collectively, the “Interests”) for the consideration specified below in this Article II.

     2.2 Purchase Price. The purchase price (“Purchase Price”) for the Interests shall be $2,196,600.00, payable as follows:

     (i) $1,446,600 of the Purchase Price (the “Closing Date Payment”) shall be paid in cash at the Closing by wire transfer in accordance with Seller’s written instructions;

     (ii) $250,000 of the Purchase Price (the “Sierra Escrow Payment”) shall be deposited with an escrow agent mutually agreed upon by the parties until such time as written approval of the transfer of the Interests as contemplated herein is delivered to the Buyer by Sierra Health and Life Insurance Company, Inc. and its Affiliates (collectively, “Sierra”), at which time the Sierra Escrow Payment, plus accrued interest, shall be paid to Seller by wire transfer in accordance with Seller’s written instructions; and

     (iii) the remainder of the Purchase Price (the “Post-Closing Payment”) shall be paid on the first anniversary of the Closing Date in cash by wire transfer in accordance with Seller’s written instructions.

     2.3 Security. To secure the Buyer’s obligation to make the Post-Closing Payment in a timely manner, the Buyer shall deliver to the Seller at the Closing a letter of credit (the “Letter of Credit”) in the amount of $500,000 issued by Valliance Bank in Oklahoma City, Oklahoma. The form of the Letter of Credit shall be satisfactory to the Seller in her reasonable discretion. The parties hereby acknowledge and agree that, subject to Section 7.5 hereof, the Letter of Credit shall permit the Seller to draw against the Letter of Credit in the event that the Post-Closing Payment is not made in accordance with the terms of Section 2.2(iii).

     2.4 Deliveries at the Closing. At the Closing:

     (a) The Seller will deliver to the Buyer:

     (i) Releases in the form and substance as set forth in Exhibit “A” attached hereto; and

     (ii) A payoff letter from Sunwest Bank agreeing to promptly release all security interests held by Sunwest Bank in and to any assets of the Company upon receipt of the funds necessary to pay in full the Company’s outstanding obligations to Sunwest Bank.

     (b) The Buyer will deliver to the Trust the Closing Date Payment by wire transfer in accordance with the Seller’s written instructions. The parties acknowledge that

4

approximately $246,400.00 of the Closing Date Payment will be paid to Sunwest Bank to satisfy the Company’s outstanding obligations to Sunwest Bank. The Buyer will also deliver to the Seller a guaranty executed by Graymark in favor of the Sellers, which guaranty will be in the form attached hereto as Exhibit “B”.

     (c) The Trust will deliver to the Buyer an assignment of the Interests in the form attached hereto as Exhibit “C”.

ARTICLE III — REPRESENTATIONS AND WARRANTIES
CONCERNING THE TRANSACTION

     Molfetta and the Trust jointly and severally represent and warrant to the Buyer that the statements contained in this Article III are correct and complete as of the date of this Agreement.

     3.1 Authorization of Transaction. Each of Molfetta and the Trust has full power and authority to execute and deliver this Agreement and to perform its respective obligations hereunder. This Agreement constitutes the valid and legally binding obligation of Molfetta and the Trust, enforceable against each of them in accordance with its terms and conditions, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally or by general equitable principles. Neither Molfetta nor the Trust need give any notice to, make any filing with, or obtain any authorization, consent or approval of any government or governmental agency in order to consummate the transactions contemplated by this Agreement.

     3.2 Noncontravention. Neither the execution and the delivery of this Agreement, nor the consummation of the transactions contemplated hereby, will (i) violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of any government, governmental agency, or court to which either Molfetta or the Trust is subject, or (ii) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify, or cancel, or require any notice under any agreement, contract, lease, license, instrument or other arrangement to which either Molfetta or the Trust is a party or by which either is bound or to which any of their respective assets is subject.

     3.3 Brokers’ Fees. Neither Molfetta nor the Trust has any Liability or obligation to pay any fees or commissions to any broker, finder or agent with respect to the transactions contemplated by this Agreement for which the Company or the Buyer could become liable or obligated.

     3.4 Interests. The Trust holds of record and owns beneficially all of the outstanding equity interests in the Company, free and clear of any restrictions on transfer (other than any restrictions under the Securities Act and state securities laws), Taxes, Security Interests, options, warrants, purchase rights, contracts, commitments, equities, claims and other encumbrances of any kind. Neither Molfetta nor the Trust is a party to any option, warrant, purchase right, or other contract or commitment that could require the Trust to sell, transfer, or otherwise dispose of any Interests (other than this Agreement). The Trust is not a party to any voting trust, proxy, or other agreement or understanding with respect to the voting of any Interests.

5

     3.5 Trust Agreement. Attached hereto as Schedule 3.5 is a true and correct copy of the trust agreement for the Trust, as amended to date. Molfetta is currently the sole trustee of the Trust.

ARTICLE IV — REPRESENTATIONS AND WARRANTIES
CONCERNING THE COMPANY

     Molfetta and the Trust jointly and severally represent and warrant to the Buyer that the statements contained in this Article IV are correct and complete as of the date of this Agreement, except as set forth in the disclosure schedule delivered by the Seller to the Buyer on the date hereof and initialed by the parties (the “Disclosure Schedule”). Nothing in the Disclosure Schedule shall be deemed adequate to disclose an exception to a representation or warranty made herein, however, unless the Disclosure Schedule identifies the exception with particularity and describes the relevant facts. The Disclosure Schedule will be arranged in paragraphs corresponding to the lettered and numbered paragraphs contained in this Article IV.

     4.1 Organization, Qualification, and Corporate Power. The Company is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Nevada. The Company has full power and authority necessary to carry on the business in which it is engaged and in which it presently proposes to engage and to own and use the properties owned and used by it. Section 4.1 of the Disclosure Schedule lists the managers of the Company. The Seller has delivered to the Buyer correct and complete copies of the articles of organization and the operating agreement of the Company (as amended to date). The minute books (containing the records of meetings of the members and the managers) and the unit record books of the Company are correct and complete. The Company is not in default under or in violation of any provision of its articles of organization or its operating agreement.

     4.2 Capitalization. All of the issued and outstanding equity interests of the Company are held of record by the Trust. There are no outstanding or authorized options, warrants, purchase rights, subscription rights, conversion rights, exchange rights, or other contracts or commitments that could require the Company to issue, sell, or otherwise cause to become outstanding any other equity interests. There are no outstanding or authorized interest appreciation, phantom interests, profit participation, or similar rights with respect to the Company. There are no voting trusts, proxies, or other agreements or understandings with respect to the voting of the Interests of the Company.

     4.3 Noncontravention. Except as described in Section 4.3 of the Disclosure Schedule, neither the execution and the delivery of this Agreement, nor the consummation of the transactions contemplated hereby, will (i) violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of any government, governmental agency, or court to which the Company is subject or any provision of the articles of organization or the operating agreement of the Company, or (ii) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify, or cancel, or require any notice under any agreement, contract, lease, license, note, mortgage, indenture, deed of trust, instrument or other arrangement to which the Company is a party or by which it is bound or to which any of its assets is subject (or result in the imposition of any Security Interest upon any of its assets). The Company is not required to

6

give any notice to, make any filing with, or obtain any authorization, consent, or approval of any Person in order for the parties to consummate the transactions contemplated by this Agreement.

     Notwithstanding the foregoing, Buyer acknowledges receipt from Seller of copies of all the managed care contracts identified in Section 4.14 of the Disclosure Schedule (the “Managed Care Contracts”), has reviewed the Managed Care Contracts and has made its own determination as to the extent to which notice must be given to and/or consent must be obtained from the other contracting parties to the Managed Care Contracts in connection with Buyer’s purchase of the Interests. The parties further acknowledge and agree that Buyer has instructed that Seller give notice of Buyer’s purchase of the Interests to (i) PacifiCare, and (ii) Sierra Health & Life Insurance Company, Inc. and its Affiliates, that Seller has given notice of Buyer’s purchase of the Interests to such parties and that any failure of Seller to give any further notice to and/or obtain the consent of any party to any Managed Care Contract shall not be considered to be a breach of this Agreement.

     Buyer and Seller further acknowledge that any of the Managed Care Contracts may be terminated for any reason by any party at any time and that any such termination is outside the control of Seller. Accordingly, Buyer and Seller agree that any termination and/or modification of any Managed Care Contract subsequent to the Closing Date shall not affect the Purchase Price or the amount of the Post-Closing Payment and shall not be considered to be a breach of this Agreement by Seller, or a breach of any representation, warranty or covenant made by Seller herein.

     4.4 Brokers’ Fees. The Company has no Liability or obligation to pay any fees or commissions to any broker, finder, or agent with respect to the transactions contemplated by this Agreement.

     4.5 Title to Assets. Except as described in Section 4.5 of the Disclosure Schedule and further excepting properties and assets disposed of in the Ordinary Course of Business since the date of the Most Recent Balance Sheet, the Company has good and marketable title to, or a valid leasehold interest in, the properties and assets used by it, located on its premises, or shown on the Most Recent Balance Sheet or acquired after the date thereof, free and clear of all Security Interests.

     4.6 Subsidiaries. The Company has no direct or indirect equity interest in any corporation, partnership, joint venture, business association or other entity.

     4.7 Financial Statements. Attached hereto as Exhibit “D” are the following financial statements (collectively the “Financial Statements”) of the Company: (i) unaudited balance sheets and statements of income and cash flow as of and for the fiscal years ended December 31, 2006, and December 31, 2007 (the “Most Recent Fiscal Year End”); and (ii) an unaudited balance sheet and statement of income (the “Most Recent Financial Statements”) as of and for the four (4) months ended April 30, 2008 (the “Most Recent Fiscal Month End”). The Financial Statements (including the notes thereto) have been prepared on a consistent basis throughout the periods covered thereby, present fairly the financial condition of the Company as of such dates and the results of operations of the Company for such periods, are correct and complete in all material respects, and are consistent with the books and records of the Company (which books

7

and records are correct and complete in all material respects); provided, however, that the Most Recent Financial Statements are subject to normal year-end adjustments (which will not be material individually or in the aggregate) and lack footnotes and other presentation items.

     4.8 Events Subsequent to Most Recent Fiscal Year End. Since December 31, 2007, there has not been any material adverse change in the business, financial condition, operations, results of operations, or future prospects of the Company. Without limiting the generality of the foregoing, except as disclosed in Section 4.8 of the Disclosure Schedule, since that date:

     (a) the Company has not sold, leased, transferred, or assigned any of its assets, tangible or intangible, other than for a fair consideration in the Ordinary Course of Business;

     (b) the Company has not entered into any agreement, contract, lease, or license (or series of related agreements, contracts, leases, and licenses) either involving more than $5,000 or outside the Ordinary Course of Business;

     (c) no party (including the Company) has accelerated, terminated, modified, or cancelled any agreement, contract, lease, or license (or series of related agreements, contracts, leases, and licenses) to which the Company is a party or by which it or any of its assets is bound;

     (d) the Company has not imposed any Security Interest upon any of its assets, tangible or intangible;

     (e) the Company has not made any capital expenditure (or series of related capital expenditures) either involving more than $5,000 or outside the Ordinary Course of Business;

     (f) the Company has not made any capital investment in, any loan to, or any acquisition of the securities or assets of, any other Person;

     (g) the Company has not issued any note, bond, or other debt security or created, incurred, assumed, or guaranteed any indebtedness for borrowed money or capitalized lease obligation;

     (h) the Company has not delayed or postponed the payment of accounts payable or other Liabilities;

     (i) the Company has not cancelled, compromised, waived, or released any right or claim (or series of related rights and claims) outside the Ordinary Course of Business;

     (j) the Company has not granted any license or sublicense of any rights under or with respect to any Intellectual Property;

     (k) there has been no change made or authorized in the articles of organization or the operating agreement of the Company;

8

     (l) the Company has not issued, sold, or otherwise disposed of any equity interests of the Company, or granted any options, warrants, or other rights to purchase or obtain (including upon conversion, exchange, or exercise) any equity interests of the Company;

     (m) except as described in Section 4.26 and Section 4.28 herein, the Company has not declared, set aside, or paid any distribution to its members (whether in cash or in kind) or redeemed, purchased, or otherwise acquired any of its equity interests;

     (n) the Company has not experienced any damage, destruction, or loss (whether or not covered by insurance) to its property;

     (o) the Company has not made any loan to, or entered into any other transaction with, any of its members, managers or employees outside the Ordinary Course of Business;

     (p) the Company has not entered into any employment contract or collective bargaining agreement, written or oral, or modified the terms of any existing such contract or agreement;

     (q) the Company has not granted any increase in the base compensation of any of its employees outside the Ordinary Course of Business;

     (r) the Company has not adopted, amended, modified, or terminated any bonus, profit-sharing, incentive, severance, or other plan, contract, or commitment for the benefit of any of its employees (or taken any such action with respect to any other employee benefit plan);

     (s) the Company has not made any other change in employment terms for any of its employees outside the Ordinary Course of Business;

     (t) the Company has not made or pledged to make any charitable or other capital contribution outside the Ordinary Course of Business;

     (u) there has not been any other material occurrence, event, incident, action, failure to act, or transaction outside the Ordinary Course of Business involving the Company; and

     (v) the Company has not committed to any of the foregoing.

     4.9 Undisclosed Liabilities. The Company has no Liability (and there is no Basis for any present or future action, suit, proceeding, hearing, investigation, charge, complaint, claim, or demand against the Company giving rise to any Liability), except for (i) Liabilities set forth on the face of the Most Recent Balance Sheet (rather than in any notes thereto), and (ii) Liabilities which have arisen after the Most Recent Fiscal Month End in the Ordinary Course of Business (none of which results from, arises out of, relates to, is in the nature of, or was caused by any breach of contract, breach of warranty, tort, infringement or violation of law, and which

9

Liabilities will not, individually or in the aggregate, have a material adverse effect upon the business, properties or condition (financial or otherwise) of the Company).

     4.10 Legal Compliance. The Company has complied in all material respects with all applicable laws (including rules, regulations, codes, plans, injunctions, judgments, orders, decrees, rulings and charges thereunder) of federal, state, local and foreign governments (and all agencies thereof), and no action, suit, proceeding, hearing, investigation, charge, complaint, claim, demand or notice has been filed or commenced or, to the Knowledge of the Seller, threatened against the Company alleging any failure so to comply.

     4.11 Tax Matters.

     (a) The Company has filed in accordance with applicable law all Tax Returns required to be filed by it. All such Tax Returns were correct and complete in all respects. All Taxes owed by the Company (whether or not shown on any Tax Return) have been paid. The Company currently is not the beneficiary of any extension of time within which to file any Tax Return. No claim has ever been made by an authority in a jurisdiction where the Company does not file Tax Returns that it is or may be subject to taxation by that jurisdiction. There are no Security Interests on any of the assets of the Company that arose in connection with any failure (or alleged failure) to pay any Tax.

     (b) The Company has withheld and paid all Taxes required to have been withheld and paid in connection with amounts paid or owing to any employee, independent contractor, creditor, member, or other third party.

     (c) The Company has not waived any statute of limitations in respect of Taxes or agreed to any extension of time with respect to a Tax assessment or deficiency.

     (d) The unpaid Taxes of the Company (i) did not, as of the Most Recent Fiscal Month End, exceed the reserve for Tax Liability (rather than any reserve for deferred Taxes established to reflect timing differences between book and tax income) set forth on the face of the Most Recent Balance Sheet (rather than in any notes thereto), and (ii) do not exceed that reserve as adjusted for the passage of time through the Closing Date in accordance with the past custom and practice of the Company in filing its Tax Returns.

     (e) For purposes of Federal income tax, Seller will be responsible for and will report all income, loss and deduction relating to the operations of the Company conducted before the Closing Date and Buyer will be responsible for and will report all income, loss and deduction relating to the operations of the Company conducted on the Closing Date and thereafter. Except as otherwise provided in this Section 4.11(e), Buyer agrees to indemnify and hold harmless the Seller for any and all tax liabilities (including penalties and interest) incurred by the Seller, including, without limitation, employment tax liabilities, that relate to operations of the Company conducted after the Closing.

     4.12 Real Property.

     (a) The Company does not own any real property.

10

     (b) Schedule 4.12(b) of the Disclosure Schedule lists and describes briefly all real property leased by the Company. Except as described on Schedule 4.12(b), the Company has not subleased any real property. The Company has delivered to Buyer correct and complete copies of the leases listed in Schedule 4.12(b) (as amended to date). With respect to each lease listed in Schedule 4.12(b):

     (i) the lease is legal, valid, binding, enforceable and in full force and effect;

     (ii) the lease will continue to be legal, valid, binding, enforceable and in full force and effect on identical terms following the consummation of the transactions contemplated hereby;

     (iii) no party to the lease is in breach or default, and no event has occurred which, with notice or lapse of time, would constitute a breach or default or permit termination, modification, or acceleration thereunder;

     (iv) no party to the lease has repudiated any provision thereof;

     (v) there are no disputes, oral agreements, or forbearance programs in effect as to the lease;

     (vi) the Company has not assigned, transferred, conveyed, mortgaged, deeded in trust, or encumbered any interest in the leasehold;

     (vii) all facilities leased thereunder are supplied with utilities and other services necessary for the operation of said facilities;

     (viii) there are no pending or, to the Knowledge of the Seller, threatened condemnation proceedings, lawsuits, or administrative actions relating to the leased premises, or other matters affecting adversely the use, occupancy, value, or the marketability of title thereof; and

     (ix) there are no parties (other than the Company) in possession of the leased premises (or any portion thereof).

     4.13 Intellectual Property.

     (a) The Company owns or has the right to use pursuant to license, sublicense or agreement all Intellectual Property (including, without limitation, the trademark “Nocturna”) necessary or desirable for the operation of its business as presently conducted and as presently proposed to be conducted. Each item of Intellectual Property owned or used by the Company immediately prior to the Closing hereunder will be owned or available for use by the Company on identical terms and conditions immediately subsequent to the Closing hereunder. The Company has taken all necessary and desirable action to maintain and protect each item of Intellectual Property that it owns or uses.

11

     (b) The Company has not interfered with, infringed upon, misappropriated or otherwise come into conflict with any Intellectual Property rights of third parties, and neither the Company nor the Seller has ever received any charge, complaint, claim, demand or notice alleging any such interference, infringement, misappropriation or violation (including any claim that the Company must license or refrain from using any Intellectual Property rights of any third party). To the Knowledge of the Seller, no third party has interfered with, infringed upon, misappropriated or otherwise come into conflict with any Intellectual Property rights of the Company.

     (c) Section 4.13(c) of the Disclosure Schedule identifies each patent or registration which has been issued to the Company with respect to any of its Intellectual Property, identifies each pending patent application or application for registration which the Company has made with respect to any of its Intellectual Property, and identifies each license, agreement or other permission which the Company has granted to any third party with respect to any of its Intellectual Property (together with any exceptions). The Seller has delivered to the Buyer correct and complete copies of all such patents, registrations, applications, licenses, agreements and permissions (as amended to date) and has made available to the Buyer correct and complete copies of all other written documentation evidencing ownership and prosecution (if applicable) of each such item. Section 4.13(c) of the Disclosure Schedule also identifies each trade name or unregistered trademark used by the Company in connection with its business. With respect to each item of Intellectual Property required to be identified in Section 4.13(c) of the Disclosure Schedule:

     (i) the Company possesses all right, title and interest in and to the item, free and clear of any Security Interest, license or other restriction;

     (ii) the item is not subject to any outstanding injunction, judgment, order, decree, ruling or charge;

     (iii) no action, suit, proceeding, hearing, investigation, charge, complaint, claim or demand is pending or, to the Knowledge of the Seller, is threatened which challenges the legality, validity, enforceability, use or ownership of the item; and

     (iv) the Company has never agreed to indemnify any Person for or against any interference, infringement, misappropriation, or other conflict with respect to the item.

     (d) The only items of Intellectual Property that any third party owns and that the Company uses pursuant to license, sublicense or agreement are off-the-shelf computer software programs.

     (e) To the Knowledge of the Seller, the Company will not interfere with, infringe upon, misappropriate, or otherwise come into conflict with any Intellectual Property rights of third parties as a result of the continued operation of its business as presently conducted and as presently proposed to be conducted.

12

     4.14 Contracts. Schedule 4.14 of the Disclosure Schedule lists the following contracts and other agreements to which the Company is a party or is bound:

     (i) any agreement pursuant to which the Company provides or has agreed to provide sleep disorder or disturbance services to or for the benefit of any Person;

     (ii) any agreement (or group of related agreements), for the lease of personal property to or from any Person;

     (iii) any agreement (or group of related agreements) for the purchase or sale of raw materials, commodities, supplies, products or other personal property, or for the furnishing or receipt of services;

     (iv) any agreement concerning a partnership or joint venture;

     (v) any agreement (or group of related agreements) under which it has created, incurred, assumed or guaranteed any indebtedness for borrowed money, or any capitalized lease obligation;

     (vi) any agreement concerning confidentiality or noncompetition;

     (vii) any agreement involving Molfetta, the Trust and/or any of their respective Affiliates or relatives;

     (viii) any profit sharing, deferred compensation, severance or other plan or arrangement for the benefit of its current or former officers and/or employees;

     (ix) any collective bargaining agreement;

     (x) any agreement for the employment of any individual on a full-time, part-time, consulting or other basis;

     (xi) any agreement under which it has advanced or loaned any amount to any Person;

     (xii) any agreement under which the consequences of a default or termination could have an adverse effect on the business, financial condition, operations, results of operations or future prospects of the Company; or

     (xiii) any other agreement (or group of related agreements) the performance of which involves consideration in excess of $5,000.00.

The Company has delivered to Buyer a correct and complete copy of each written agreement listed in Schedule 4.14 (as amended to date) and a written summary setting forth the terms and conditions of each oral agreement referred to in Schedule 4.14. With respect to each such agreement: (A) the agreement is legal, valid, binding, enforceable and in full force and effect; (B) the agreement will continue to be legal, valid, binding, enforceable and in full force and

13

effect on identical terms following the consummation of the transactions contemplated hereby; (C) no party is in breach or default, and no event has occurred which with notice or lapse of time would constitute a breach or default, or permit termination, modification or acceleration, under the agreement; and (D) no party has repudiated any provision of the agreement.

     4.15 Tangible Assets. The Company owns or leases all buildings, machinery, equipment and other tangible assets necessary for the conduct of its business as presently conducted and as presently proposed to be conducted.

     4.16 Accounts Receivable. Except as disclosed in Section 4.16 of the Disclosure Schedule, all accounts receivable of the Company are reflected properly on its books and records, are valid receivables subject to no setoffs or counterclaims and are current and collectible. Seller shall not be entitled to any of the accounts receivable of the Company collected after the Closing Date. Seller shall promptly deliver to the Buyer any payments of accounts receivable of the Company received by Seller after the Closing Date.

     4.17 Powers of Attorney. There are no outstanding powers of attorney executed on behalf of the Company.

     4.18 Insurance. Section 4.18 of the Disclosure Schedule sets forth the following information with respect to each insurance policy (including policies providing property, casualty, liability and workers’ compensation coverage and bond and surety arrangements) to which the Company has been a party, a named insured, or otherwise the beneficiary of coverage at any time within the past two (2) years:

     (a) the name, address and telephone number of the agent;

     (b) the name of the insurer, the name of the policyholder and the name of each covered insured;

     (c) the policy number and the period of coverage;

     (d) the scope (including an indication of whether the coverage was on a claims made, occurrence, or other basis) and amount (including a description of how deductibles and ceilings are calculated and operate) of coverage;

     (e) a summary of the loss experience under each policy; and

     (f) a description of any retroactive premium adjustments or other loss-sharing arrangements.

With respect to each such insurance policy: (A) the policy is legal, valid, binding, enforceable and in full force and effect; (B) the policy will continue to be legal, valid, binding, enforceable and in full force and effect on identical terms following the consummation of the transactions contemplated hereby; (C) neither the Company nor any other party to the policy is in breach or default (including with respect to the payment of premiums or the giving of notices), and no event has occurred which, with notice or the lapse of time, would constitute such a breach or default, or permit termination, modification or acceleration, under the policy; and (D) no party to

14

the policy has repudiated any provision thereof. The Seller has no reason to believe that any such insurance policy will not be renewed upon the expiration thereof at premiums substantially equivalent to those currently being paid, except for changes in such premiums applicable to insureds similarly situated. The Company has been covered during the past seven (7) years by insurance in scope and amount customary and reasonable for the business in which it has engaged during the aforementioned period. Section 4.18 of the Disclosure Schedule describes any self-insurance arrangements affecting the Company.

     4.19 Litigation. Section 4.19 of the Disclosure Schedule sets forth each instance in which the Company (i) is subject to any outstanding injunction, judgment, order, decree, ruling or charge or (ii) is a party or, to the Knowledge of the Seller, is threatened to be made a party to any action, suit, proceeding, hearing, or investigation of, in, or before any court or quasi-judicial or administrative agency of any federal, state, local or foreign jurisdiction or before any arbitrator. None of the actions, suits, proceedings, hearings, and investigations set forth in Section 4.19 of the Disclosure Schedule could result in any material adverse change in the business, financial condition, operations, results of operations or future prospects of the Company.

     There are no existing violations of federal, state or local laws, ordinances, rules, regulations or orders by the Company which materially and adversely affect the business of the Company or the possession, use, occupancy or operation of any of its facilities or other property.

     4.20 Employees. To the Knowledge of the Seller, no executive, key employee or group of employees has any plans to terminate employment with the Company. The Company is not a party to or bound by any collective bargaining agreement, nor has it experienced any strikes, grievances, claims of unfair labor practices or other collective bargaining disputes. The Company has not committed any unfair labor practice. The Seller has no Knowledge of any organizational effort presently being made or threatened by or on behalf of any labor union with respect to employees of the Company.

     4.21 ERISA Compliance. The Company has not maintained at any time in the five (5) year period ending with the Closing Date any employee benefit plan, including any employee pension benefit plan or employee welfare benefit plan (as such terms are defined in ERISA).

     4.22 Guaranties. The Company is not a guarantor or otherwise liable for any Liability or obligation (including indebtedness) of any other Person.

     4.23 Environment, Health, and Safety.

     (a) The Company has complied in all material respects with all Environmental, Health, and Safety Laws, and no action, suit, proceeding, hearing, investigation, charge, complaint, claim, demand or notice has been filed or commenced against the Company alleging any failure so to comply. Without limiting the generality of the preceding sentence, the Company has obtained and been in compliance in all materials respects with all of the terms and conditions of all permits, licenses, and other authorizations which are required under, and has complied in all material respects with all other limitations, restrictions, conditions, standards, prohibitions, requirements,

15

obligations, schedules and timetables which are contained in, all Environmental, Health, and Safety Laws.

     (b) The Company has no Liability (and the Company has not ever handled or disposed of any substance, arranged for the disposal of any substance, exposed any employee or other individual to any substance or condition, or owned or operated any property or facility in any manner, that could form the Basis for any present or future action, suit, proceeding, hearing, investigation, charge, complaint, claim or demand against the Company giving rise to any Liability) for damage to any site, location or body of water (surface or subsurface), for any illness of or personal injury to any employee or other individual, or for any reason under any Environmental, Health, and Safety Law.

     (c) All properties and equipment used in the business of the Company have been free of asbestos, PCB’s, methylene chloride, trichloroethylene, 1,2-trans-dichloroethylene, dioxins, dibenzofurans and other hazardous substances or wastes.

     (d) The Company has never transferred or disposed of, or contracted for the transportation or disposal of, any hazardous waste, hazardous substance, infectious or medical waste, radioactive waste or sewage sludge in violation of any Environmental, Health, and Safety Law.

     (e) Following the Closing, no material capital expenditures shall be required by the Company to insure compliance with any Environmental, Health and Safety Law. There is no pending audit known to the Seller by any federal, state, or local governmental authority with respect to groundwater, soil, or air monitoring; the storage, burial, release, transportation, or disposal of hazardous substances or wastes; or relating to the facilities of the Company. The Company does not have any agreement or arrangement with any federal, state, or local governmental authority or any other third party relating to any such environmental matter or environmental cleanup.

     (f) The Seller has delivered to Buyer true and complete copies and results of any reports, studies, analyses, tests or monitorings possessed or initiated by the Seller or the Company pertaining to hazardous materials or hazardous activities in, on, or under any facility owned, leased or operated by the Company, or concerning compliance by the Company, or any other Person for whose conduct the Company is or may be held responsible, with Environmental, Health, and Safety Laws.

     4.24 Certain Business Relationships with the Company. Except as described in Section 4.24 of the Disclosure Schedule, none of Molfetta, the Trust and their respective Affiliates and relatives has been involved in any business arrangement or relationship with the Company within the past twelve months, and none of Molfetta, the Trust and their respective Affiliates and relatives owns any asset, tangible or intangible, which is used in the business of the Company.

     4.25 Permits, Licenses, Etc. The Company holds or possesses all permits, licenses, approvals, authorizations, applications, franchises, certificates and similar such items and rights (collectively, the “Authorizations”) necessary for the operation of the business of the Company.

16

Each of the Authorizations is valid and in full force and effect, and neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby will cause the termination of, or interfere in any respect with, the Company’s operation under any such Authorizations.

     4.26 Material Assets. Section 4.26 of the Disclosure Schedule lists and briefly describes all the material tangible assets comprising a part of or used or useful in the business of the Company including, without limitation, identification of each vehicle by description and serial number, identification of portable units, machinery and equipment by type and amount and a general description of parts, supplies and inventory. Buyer and Seller acknowledge and agree that prior to the Closing Seller has taken title to that certain 2007 Nissan Armada vehicle (the “Vehicle”) previously owned by the Company and that the Vehicle is not currently an asset of the Company. Buyer and Seller further agree that Seller’s taking of title to the Vehicle shall not affect the Purchase Price for the Interests as provided in Section 2.2 and shall not be considered a default under any provision of this Agreement.

     4.27 Personnel. Section 4.27 of the Disclosure Schedule lists all employees of the Company (by type or classification) and their respective rates of compensation (including the portions thereof attributable to bonuses or other extraordinary compensation).

     4.28 Bank Accounts. Section 4.28 of the Disclosure Schedule lists, as of the date hereof:

     (i) the name of each bank in which the Company has accounts or safe deposit boxes;

     (ii) the names in which the accounts or boxes are held;

     (iii) the type of account; and

     (iv) the name of each Person authorized to draw thereon or have access thereto.

     Buyer and Seller agree that all accounts of the Company listed in Section 4.28 of the Disclosure Schedule shall be the property of the Seller following the Closing and that this Agreement does not confer any rights whatsoever to the Buyer over such accounts. After the Closing Date, Seller will not use the name “Nocturna” in connection with any such account.

     4.29 Accounts Payable. All accounts payable and other Liabilities of the Company have arisen in the Ordinary Course of Business and are reflected properly on the Company’s books and records. None of the accounts payable of the Company is past due. Seller shall be responsible for payroll expenses up to and including the Closing Date and shall make appropriate arrangements for the payment such expenses. Buyer and Seller acknowledge and agree that Seller has satisfied her obligations for payment of the accounts payable of the Company and that Seller shall not be liable for any account payable or other expense of the Company arising in the ordinary course of the business of the Company that comes due after the Closing Date whether or not such account payable relates to operations of the Company conducted before the Closing Date.

17

     4.30 Settlement Agreement. In June 2005, Molfetta and the Company entered into a Settlement Agreement and Release with Nevada Sleep Diagnostics, Inc., Joyce Mistrella and Nocturna 2004, LLC. Sellers have previously delivered to the Buyer a true and correct copy of such Settlement Agreement and Release, as amended to date. Except as disclosed in Schedule 4.30 of the Disclosure Schedule, Molfetta and the Company have each complied with all applicable provisions of the Settlement Agreement and Release and no claim has ever been made by any other party thereto alleging any failure to comply by Molfetta or the Company.

     4.31 Disclosure. The representations and warranties contained in this Article IV do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements and information contained in this Article IV not misleading.

ARTICLE V — REPRESENTATIONS AND WARRANTIES OF THE BUYER

     The Buyer represents and warrants to the Seller that the statements contained in this Article V are correct and complete as of the date of this Agreement.

     5.1 Organization of the Buyer. The Buyer is a limited liability company duly organized, validly existing, and in good standing under the laws of the State of Oklahoma.

     5.2 Authorization of Transaction. The Buyer has full power and authority to execute and deliver this Agreement and to perform its obligations hereunder. This Agreement constitutes the valid and legally binding obligation of the Buyer, enforceable in accordance with its terms and conditions, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally or by general equitable principles.

     5.3 Noncontravention. Neither the execution and the delivery of this Agreement, nor the consummation of the transactions contemplated hereby, will (i) violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of any government, governmental agency, or court to which the Buyer is subject or any provision of its Articles of Organization or operating agreement or (ii) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify, or cancel, or require any notice under any agreement, contract, lease, license, instrument, or other arrangement to which the Buyer is a party or by which it is bound or to which any of its assets is subject. The Buyer is not required to give any notice to, make any filing with, or obtain any authorization, consent, or approval of any government or governmental agency in order to consummate the transactions contemplated by this Agreement.

     5.4 Brokers’ Fees. The Buyer has no Liability or obligation to pay any fees or commissions to any broker, finder or agent with respect to the transactions contemplated by this Agreement for which the Seller could become liable or obligated.

     5.5 Investment. The Buyer is not acquiring the Interests with a view to or for sale in connection with any distribution thereof within the meaning of the Securities Act.

18

ARTICLE VI — POST-CLOSING COVENANTS

     The parties agree as follows with respect to the period following the Closing:

     6.1 General. In case at any time after the Closing any further action is necessary or desirable to carry out the purposes of this Agreement, each of the parties will take such further action (including the execution and delivery of such further instruments and documents) as any other party reasonably may request, all at the sole cost and expense of the requesting party (unless the requesting party is entitled to indemnification therefor under Article VII below). The Seller acknowledges and agrees that from and after the Closing the Buyer will be entitled to possession of all documents, books, records (including Tax records), agreements, and financial data of any sort relating to the Company.

     6.2 Litigation Support. In the event and for so long as the Company is actively contesting or defending against any action, suit, proceeding, hearing, investigation, charge, complaint, claim or demand in connection with any fact, situation, circumstance, status, condition, activity, practice, plan, occurrence, event, incident, action, failure to act or transaction on or prior to the Closing Date involving the Company, Molfetta will (i) cooperate with the Company, the Buyer and their respective counsel in the contest or defense, and (ii) provide such testimony and access to her books and records as shall be necessary in connection with the contest or defense, all at the sole cost and expense of the Company (unless the Buyer is entitled to indemnification therefor under Article VII below).

     6.3 Transition. The Seller will not take any action that is designed or intended to have the effect of discouraging any distributor, lessor, licensor, customer, supplier or other business associate of the Company from maintaining the same business relationships with the Company after the Closing as it maintained with the Company prior to the Closing. The Seller will refer all customer inquiries relating to the business of the Company to the Company or the Buyer from and after the Closing.

     6.4 Confidentiality. The Seller will treat and hold as such all of the Confidential Information, refrain from using any of the Confidential Information except in connection with this Agreement or its employment by the Company. In the event that the Seller is requested or required (by oral question or request for information or documents in any legal proceeding, interrogatory, subpoena, civil investigative demand or similar process) to disclose any Confidential Information, the Seller will notify the Buyer promptly of the request or requirement so that the Buyer may seek an appropriate protective order or waive compliance with the provisions of this Section 6.4. If, in the absence of a protective order or the receipt of a waiver hereunder, the Seller is, on the advice of counsel, compelled to disclose any Confidential Information to any tribunal or else stand liable for contempt, the Seller may disclose the Confidential Information to the tribunal; provided, however, that the Seller shall use reasonable efforts to obtain, at the reasonable request of the Buyer, an order or other assurance that confidential treatment will be accorded to such portion of the Confidential Information required to be disclosed as the Buyer shall designate. The foregoing provisions shall not apply to any Confidential Information which is generally available to the public immediately prior to the time of disclosure. The obligations of the Seller under the provisions of this Section 6.4 shall survive for a period of three (3) years after the Closing Date.

19

     6.5 Covenant Not to Compete.

     (a)(i) During the Noncompete Term, neither Molfetta nor the Trust shall carry on or engage or participate in any business substantially the same as or in competition with the Business.

     (ii) The prohibition appearing in subsection (a)(i) above shall extend throughout the State of Nevada.

     (iii) The phrase “carry on or engage or participate in any business substantially the same as or in competition with the Business” shall include, without limitation, doing any of the following — listed acts with the intent of profit, production of income or any type of remuneration in whatever form whether direct or indirect to Molfetta or the Trust or a member of Molfetta’s immediate family: (A) carrying on or engaging in any such business as the principal, or on her or its own account, or solely or jointly with others as a director, officer, agent, employee, independent contractor, manager, consultant or partner (general or limited), shareholder or holder of an equity security (except that Molfetta and/or the Trust may own up to 3% of the equity securities or securities convertible into equity securities of any corporation or other entity the securities of which are traded on a national stock exchange or listed on the National Association of Securities Dealers Automated Quotation System and may make personal real estate related investments) or otherwise; (B) lending credit or money for the purpose of establishing or operating any such business; (C) giving advice to any other Person engaging in any such business; (D) lending or consenting to the use of her or its name or reputation to be used in any such business; or (E) allowing her or its skill, knowledge or experience to be used in any such business.

     (iv) “Noncompete Term” shall mean that period commencing with the Closing Date and ending three (3) years later; provided, however, that the duration of the Noncompete Term shall be extended by and for the duration of any period during which either Molfetta or the Trust is in violation of this Section 6.5(a).

     (b) During the two (2) year period immediately following the Closing Date, neither Molfetta nor the Trust shall, either on its own account or directly or indirectly in conjunction with or on behalf of any Person, call upon or solicit any employee of the Company or the Buyer for the purpose or with the intent of enticing that employee from or out of the employ of the Company or the Buyer, as the case may be, for any reason whatsoever.

     (c) It is the desired intent of the parties that the provisions of this Section 6.5 be enforced to the fullest extent permissible under the laws and public policies of Nevada and any other applicable jurisdiction. Accordingly, to the extent that any covenant hereunder or a portion thereof shall be adjudicated to be invalid or unenforceable, this Section 6.5 shall be reformed such that the restrictions imposed upon Molfetta and the Trust are no greater than would otherwise be permissible under applicable law.

20

Moreover, each provision of this Section 6.5 is intended to be severable; and in the event that any one or more of the provisions contained in this Section 6.5 shall for any reason be adjudicated to be invalid or enforceable and incapable of reformation in accordance with the terms of the preceding sentence, the same shall not affect the validity or enforceability of any other provision of this Section 6.5, but this Section 6.5 shall be construed as if such invalid or unenforceable (and nonreformable) provision had not been contained herein.

     (d) Molfetta and the Trust hereby acknowledge and agree that, in the event of a prospective or actual breach of any of the provisions of this Section 6.5 by it, damages would not be an adequate remedy to compensate the Company and the Buyer for the loss of goodwill and other harm to the business of the Company. In the event of a threatened or actual breach of any of the provisions of this Section 6.5 by either Molfetta or the Trust, the parties agree that the Buyer or the Company shall be entitled, if it so elects, to a temporary restraining order and to temporary and permanent injunctive relief to prevent or terminate such anticipated or actual breach, in each case without the necessity of a bond. In addition, the Buyer and the Company shall each be entitled to such damages as it can show it sustained by reason of such threatened or actual breach. Nothing in this Section 6.5 shall be construed to limit in any way the remedies of the Buyer or the Company for a breach of the covenants contained in this Section 6.5. The Buyer and the Company shall have the right to inform any person that they reasonably believe to be, or to be contemplating, participating with either Molfetta or the Trust or receiving from Molfetta or the Trust assistance in violation of the terms of this Section 6.5 and the rights of the Buyer and the Company hereunder, that participation by any such Person with Molfetta and/or the Trust in activities in violation of this Section 6.5 may give rise to claims by the Buyer and/or the Company against such Person.

     6.6 Employer Identification Number. The Company’s employer identification number is 43-2062521 (the “Existing EIN”). After the Closing Date, the Buyer will not report any payroll, for federal or state employment tax purposes, using the Existing EIN. Buyer acknowledges and agrees that the employees of the Company shall be treated as employees of the Buyer beginning on the day following the Closing Date and thereafter for all purposes, including payroll and employment tax purposes. In addition, the Company shall use commercially reasonable efforts to begin using Buyer’s employer identification number with respect to each of the Managed Care Contracts to which the Company is a party on the Closing Date within nine (9) months after the Closing. Notwithstanding anything to the contrary in the preceding sentence, the Company shall not be obligated to use or attempt to use Buyer’s employer identification number with respect to any such Managed Care Contract if Buyer has reasonable grounds to believe that such use, or notice of Buyer’s employer identification number would have a material adverse effect upon the Company’s ability to maintain the existing terms of such Managed Care Contract. To the extent that any income earned after the Closing Date under a Managed Care Contract is included on a Form 1099 issued using the Existing EIN, Buyer shall prepare and file with the Internal Revenue Service a nominee Form 1099 which reattributes all such post-Closing income to Buyer’s employer identification number. Upon receipt of a request from Molfetta on or after March 1 of any calendar year, Buyer shall provide Molfetta with copies of all 1099’s it received for the previous calendar year which referenced the Existing EIN, and all nominee Forms 1099 filed by Buyer pursuant to the preceding sentence. In

21

addition, notwithstanding anything to the contrary herein, if either Buyer or one of its Affiliates ceases to own at least 51% of the outstanding equity interests of the Company, the Company shall promptly cease using the Existing EIN for any purpose.

     6.7 Continued Service of Molfetta. Commencing on the Closing Date and continuing for sixty (60) days thereafter, Molfetta shall personally provide up to forty (40) hours per week of consulting services to the Company as requested by the Company; thereafter and until the first anniversary of the Closing Date, Molfetta shall personally provide up to five (5) hours per week of consulting services to the Company, as requested by the Company.

ARTICLE VII — INDEMNIFICATION

     7.1 Survival of Representations and Warranties. All of the representations and warranties of the parties contained in this Agreement shall survive the closing of the transactions contemplated herein for a period of three (3) years. The parties intend to shorten the statute of limitations and agree that no claims or causes of action of any kind may be brought against the Seller, the Buyer or any of their respective managers, members, employees, affiliates, controlling persons, agents or representatives based upon, directly or indirectly, any of the representations, warranties, covenants or agreements contained herein after the third anniversary of the date hereof. This Section 7.1 shall not limit any covenant or agreement of the parties which contemplates performance after the Closing including, without limitation, the covenants and agreements set forth in Sections 2.2(ii) and (iii) and Article VI hereof, it being understood that all such covenants and agreements contemplating performance after the Closing shall survive until the expiration of the applicable statute of limitations.

     7.2 Indemnification by Molfetta and the Trust. Subject to the terms and conditions set forth herein, Molfetta and the Trust shall jointly and severally indemnify and hold harmless the Buyer and its members, managers, employees and other agents and Affiliates (collectively, the “Buyer Indemnitees”) in respect of any and all damages, losses, liabilities, payments, obligations, penalties, claims, litigation, demands, defenses, judgments, suits, proceedings, costs, disbursements or expenses (including, without limitation, reasonable fees, disbursements and expenses of attorneys, accountants and other professional advisors) of any kind or nature whatsoever (collectively “Damages”) asserted against or incurred by any Buyer Indemnitee as a result of, in connection with or arising out of:

     (i) Any inaccuracy in or breach of any representation or warranty made by Molfetta and/or the Trust herein; or

     (ii) Any breach or nonperformance (partial or total) of any covenant or agreement of Molfetta and/or the Trust contained herein.

     7.3 Indemnification by Buyer. Subject to the terms and conditions set forth herein, the Buyer shall indemnify and hold harmless Molfetta and the Trust and their respective agents and Affiliates (collectively, the “Seller Indemnitees”) in respect of any Damages asserted against or incurred by any Seller Indemnitee as a result of, in connection with or arising out of:

     (i) Any inaccuracy in or breach of any representation or warranty made by the Buyer herein; or

22

     (ii) Any breach or nonperformance (partial or total) of any covenant or agreement of the Buyer contained herein; or

     (iii) The Company’s use of the Existing EIN after the Closing; or

     (iv) The Company’s failure to satisfy any obligations under any lease described in Section 4.12 of the Disclosure Schedule at any time following the Closing Date.

     7.4 Third Party Indemnification. The obligations of Molfetta and the Trust to indemnify the Buyer Indemnitee under Section 7.2 and the obligations of the Buyer to indemnify the Seller Indemnitees under Section 7.3 hereof, in each case resulting from the assertion of liability by a third party (each, as the case may be, a “Claim”), shall be further subject to the following terms and conditions:

     (a) Any party against whom any Claim is asserted shall give the party (or the parties) required to provide indemnity hereunder written notice of such Claim promptly after learning of such Claim, and the indemnifying party may, at its option, undertake the defense thereof with counsel chosen by it but reasonably satisfactory to the indemnified party. Failure to give prompt notice of a Claim hereunder shall not affect the indemnifying party’s obligations under this Section 7.4, except to the extent the indemnifying party is materially prejudiced by such failure to give prompt notice. If the indemnifying party, within thirty (30) days after notice of any such Claim, or such shorter period as is reasonably required, fails to assume the defense of such Claim, the Buyer Indemnitee or the Seller Indemnitee, as the case may be (each, an “Indemnitee”), against whom such Claim has been made shall have the right, but shall not be obligated, to undertake the defense, compromise or settlement of such Claim on behalf and for the account and risk, and at the expense, of the indemnifying party.

     (b) Anything in this Section 7.4 to the contrary notwithstanding, the indemnifying party shall not enter into any settlement or compromise of any action, suit or proceeding or consent to the entry of any judgment (A) which does not include as an unconditional term thereof the delivery by the claimant or plaintiff to the Indemnitee of a written release from all liability in respect of such action, suit or proceeding, or (B) for other than monetary damages without the prior written consent of the Indemnitee, which consent shall not be unreasonably withheld.

     7.5 Buyer’s Right of Setoff. The parties hereby agree that any Damages suffered by the Buyer (or any other Buyer Indemnitee) for which the Buyer Indemnitees are entitled to be indemnified by Molfetta and the Trust pursuant to Section 7.2 shall be subject to setoff against the Post-Closing Payment, provided that Buyer shall be deemed to have waived its right of setoff with respect to any particular Damages suffered by the Buyer (or any other Buyer Indemnitee) unless Buyer delivers written notice (the “Notice”) of such Damages to Seller within thirty (30) days after Buyer’s discovery of such Damages. Such notice shall include a description in reasonable detail of the basis for the indemnification claim, a good-faith estimate of the total amount of Damages incurred or to be incurred by the Buyer Indemnitee, the name of the claimant, a copy of the demand or other evidence of the claim and any other relevant

23

information relating to the claim. Within fifteen (15) days of Seller’s receipt of the Notice, Seller shall in a writing delivered to Buyer either accept or dispute the claim disclosed in the Notice. If Seller fails to accept or dispute in writing the claim disclosed in the Notice within such fifteen (15) day period, Seller shall be deemed to have accepted such claim. Claims accepted by Seller shall be subject to Buyer’s right of setoff against the Post-Closing Payment. Claims disputed by Seller shall not be subject to Buyer’s right of setoff against the Post-Closing Payment unless and until Seller’s liability for the disputed claim is determined either by the mutual agreement of Buyer and Seller or by a neutral, third-party arbitrator; provided, however, that, in the event Seller disputes any such claim, the amount of Damages alleged in good faith by Buyer to be subject to Buyer’s right of setoff shall be held in escrow by a third party selected by the parties until Seller’s liability for the disputed claim is determined as described above. In the event the Buyer asserts its right of setoff hereunder, no more than the amount of Damages alleged in good faith to be subject to such right of setoff shall be retained by the Buyer and the remainder of the Post-Closing Payment (the “Post-Setoff Amount”) shall be disbursed in accordance with Section 2.2(iii) on the first anniversary of the Closing Date. In the event the Buyer fails to disburse the Post-Setoff Amount to the Trust on the first anniversary of the Closing Date, the Seller may pursue any and all remedies available to Seller at law, in equity or otherwise.

ARTICLE VIII — MISCELLANEOUS

     8.1 Press Releases and Public Announcements. The Seller shall not, and the Seller shall not permit or cause the Company to, make any press release or other public disclosure of this transaction without the prior written consent of the Buyer. Without the prior written consent of the Seller, the Buyer shall not, prior to the Closing, make any press release or other public disclosure of this transaction; provided, however, that nothing contained in this Section 8.1 shall prohibit the Buyer from issuing a press release or making other disclosure of the transactions contemplated by this Agreement if required to do so by applicable law.

     8.2 Entire Agreement. This Agreement (including the documents referred to herein) constitutes the entire agreement among the parties and supersedes any prior understandings, agreements, or representations by or among the parties hereto, written or oral, to the extent they related in any way to the subject matter hereof including, without limitation, that certain letter agreement, dated March 6, 2008, between Graymark Healthcare, Inc., Sleep Disorder Centers, LLC and the Seller.

     8.3 Succession and Assignment. This Agreement shall be binding upon and inure to the benefit of the parties named herein and their respective heirs, personal representatives, successors and permitted assigns. No party may assign either this Agreement or any of his or its rights, interests, or obligations hereunder without the prior written approval of the other parties hereto; provided, however, that the Buyer may (i) assign any or all of its rights and interests hereunder to one or more of its Affiliates, and (ii) designate one or more of its Affiliates to perform its obligations hereunder (in any or all of which cases the Buyer nonetheless shall remain responsible for the performance of all of its obligations hereunder).

     8.4 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together will constitute one and the same instrument.

24

     8.5 Headings. The section headings contained in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement.

     8.6 Notices. All notices, requests, demands, claims and other communications hereunder will be in writing. Any notice, request, demand, claim or other communication hereunder shall be deemed duly given (i) if served personally, on the day of such service, or (ii) if mailed by certified or registered mail (return receipt requested), on the second business day after mailing, or (iii) if transmitted by recognized overnight carrier, on the next business day after tender to the carrier. Such communications shall be sent to the following addresses:

If to Seller:	Christina Molfetta 2246 Driftwood Tide Avenue Henderson, NV 89052
Copy to:	McDonald Carano Wilson, LLP 2300 West Sahara Avenue, Suite 1000 Las Vegas, NV 89102
	Attn: Cody R. Noble
If to Buyer:	SDC Holdings, LLC 305 N. Bryant Edmond, OK 73034 Attn: Vahid Salalati
Copy to:	Hartzog Conger Cason & Neville 1600 Bank of Oklahoma Plaza 201 Robert S. Kerr Ave. Oklahoma City, OK 73102 Attn: Steven C. Davis and John D. Robertson

Any party may change the address to which notices, requests, demands, claims and other communications hereunder are to be delivered by giving the other parties notice in the manner herein set forth.

     8.7 Governing Law. This Agreement shall be governed by and construed in accordance with the domestic laws of the State of Nevada without giving effect to any choice or conflict of law provision or rule that would cause the application of the laws of any jurisdiction other than the State of Nevada.

     8.8 Amendments and Waivers. No amendment of any provision of this Agreement shall be valid unless the same shall be in writing and signed by the Buyer and the Seller. No waiver by any party of any default, misrepresentation or breach of warranty or covenant hereunder, whether intentional or not, shall be deemed to extend to any prior or subsequent default, misrepresentation or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence.

25

     8.9 Severability. Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction.

     8.10 Expenses. Each of the parties hereto will bear its own costs and expenses (including legal fees and expenses) incurred in connection with this Agreement and the transactions contemplated hereby. The Seller represents, warrants and covenants that the Company has not borne and will not bear any of the Seller’s costs and expenses (including any of its legal fees and expenses) in connection with this Agreement or any of the transactions contemplated hereby.

     8.11 Construction. The parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement. Any reference to any federal, state, local, or foreign statute or law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise. The word “including” shall mean including without limitation. The parties intend that each representation, warranty and covenant contained herein shall have independent significance.

     8.12 Incorporation of Exhibits and Disclosure Schedule. The Exhibits identified in this Agreement and the Disclosure Schedule are incorporated herein by reference and made a part hereof.

     8.13 Submission to Jurisdiction. In the event any party hereto institutes any legal action in connection with any matter contained herein, that legal action shall be instituted only in the District Court of Clark County, Nevada, if in state court, and if in federal court, then in the United States District Court for the District of Nevada, sitting in Las Vegas, Nevada. Each party hereto irrevocably waives any objection which it may have at any time to the venue of any suit, action or proceeding arising out of or relating to this Agreement brought in any such court and, further, irrevocably waives any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. Each party hereto irrevocably waives the right to object, with respect to any suit, action or proceeding brought in any such court, that such court does not have jurisdiction over such party.

     8.14 Specific Performance. Each of the parties acknowledges and agrees that the other party will be damaged irreparably in the event any of the provisions of this Agreement are not performed in accordance with their specific terms or otherwise are breached. Accordingly, each of the parties agrees that the other party shall be entitled to an injunction or injunctions to prevent breaches of the provisions of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof, in addition to any other remedy to which it may be entitled, at law or in equity.

     8.15 Litigation Expense. In any action brought by a party hereto to enforce the obligations of the other party hereto, the prevailing party shall be entitled to collect from the

26

other party to such action such party’s reasonable attorneys’ and accountants’ fees, court costs and other expenses incidental to such litigation.

     8.16 Negation of Third-Party Beneficiaries. Nothing contained in this Agreement, express or implied, is intended to confer upon any person, other than the parties hereto and their respective successors and permitted assigns, any rights or remedies under or by reason of this Agreement, nor is anything in this Agreement intended to relieve or discharge any obligations or Liability of any third person to any party to this Agreement.

     8.17 Allocation of Purchase Price. The parties hereby agree that the Purchase Price shall be allocated in accordance with Exhibit “E”.

[SIGNATURE PAGE TO FOLLOW]

27

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

BUYER:	SDC HOLDINGS, LLC
	By:	/S/ VAHID SALALATI
		Name: Title:	Vahid Salalati President
TRUST:	THE HANNAH FRIENDS TRUST
	By:	/S/ CHRISTINA MOLFETTA
		Christina Molfetta, Trustee
MOLFETTA:	/S/ CHRISTINA MOLFETTA
	Christina Molfetta

28

EX-10.2

EXHIBIT 10.2

ASSET PURCHASE AGREEMENT

     This Asset Purchase Agreement (the “Agreement”) is made and entered into this 30th day of May, 2008, between and among Capital Sleep Management, LLC, a Texas limited liability company (“Buyer”), Plano Sleep Center, Ltd., a Texas limited partnership (“PSC”), and Southlake Sleep Center, Ltd., a Texas limited partnership (“SSC”) (PSC and SSC are individually referred to herein as a “Seller” and are collectively referred to herein as the “Sellers”).

     This Agreement contemplates a transaction in which Buyer will purchase substantially all of the assets (and assume certain of the liabilities) of each of the Sellers.

     Now, therefore, in consideration of the premises and the mutual promises herein made, and in consideration of the representations, warranties, and covenants herein contained, the parties agree as follows.

ARTICLE I
DEFINITIONS

     1.1 The following capitalized words and phrases have the stated meanings:

     “Accounts Receivable” means all rights to payment and accounts receivable owned or held by a Seller in connection with services provided on or after March 1, 2008 by such Seller, together with all interest, late charges, penalties, collection fees and other sums that may be due and payable in connection with such rights to payment or accounts receivable.

     “Acquired Assets” means all right, title, and interest in and to all of the assets of each Seller including, without limitation, all of (a) the tangible personal property identified on Schedule 1.1 attached hereto, (b) its Accounts Receivable, (c) its Intellectual Property, goodwill associated therewith, licenses and sublicenses granted and obtained with respect thereto, and rights thereunder, remedies against infringements thereof, and rights to protection of interests therein under the laws of all jurisdictions, (d) to the extent assignable, its franchises, approvals, permits, licenses, orders, registrations, certificates, variances, and similar rights obtained from governments and governmental agencies, (e) the Seller Agreements and all rights thereunder, (f) its phone numbers and e-mail addresses; (g) its web sites and the contents thereof, and (h) its books, records, ledgers, files, documents, correspondence, lists, plats, engineering plans, drawings, and specifications, creative materials, advertising and promotional materials, studies, reports, and other printed or written materials relating in any way to the respective businesses of Sellers; provided, however, that the Acquired Assets shall not include (i) the charter, qualifications to conduct business as a foreign limited partnership, arrangements with registered agents relating to foreign qualifications, taxpayer and other identification numbers, seals, minute books, transfer books, and other documents relating to the organization, maintenance, and existence of each Seller as a limited partnership, (ii) any of the rights of Sellers under this Agreement (or under any side agreement between any Seller on the one hand and Buyer on the other hand entered into on or after the date of this Agreement), or (iii) any of the Excluded Assets.

1

     “Affiliate” has the meaning set forth in Rule 12b-2 of the regulations promulgated under the Securities Exchange Act of 1934, as amended.

     “Assumed Liabilities” means (a) all obligations of a Seller under the Seller Agreements either (i) to furnish goods, services and other non-Cash benefits to another party after the Closing, or (ii) to pay for goods, services and other non-Cash benefits that another party will furnish to it after the Closing, and (b) all Liabilities and obligations of Sellers set forth in Schedule 1.1(a) attached hereto.

     “Basis” means any past or present fact, situation, circumstance, status, condition, activity, practice, plan, occurrence, event, incident, action, failure to act, or transaction that forms or could form the basis for any specified consequence.

     “Buyer Indemnitees” has the meaning set forth in Section 7.1 below.

     “Closing” has the meaning set forth in Section 2.1(d) below.

     “Closing Date” has the meaning set forth in Section 2.1(d) below.

     “Code” means the Internal Revenue Code of 1986, as amended.

     “Confidential Information” means any information concerning the business and affairs of any Seller that is not already generally available to the public other than as a result of a breach of this Agreement by any Seller.

     “Damages” has the meaning set forth in Section 7.1 below.

     “Environmental, Health, and Safety Laws” means the Comprehensive Environmental Response, Compensation and Liability Act of 1980, the Resource Conservation and Recovery Act of 1976, and the Occupational Safety and Health Act of 1970, each as amended, together with all other laws (including rules, regulations, codes, plans, injunctions, judgments, orders, decrees, rulings, and charges thereunder) of federal, state and local governments (and all agencies thereof) concerning pollution or protection of the environment, public health and safety, or employee health and safety, including laws relating to emissions, discharges, releases, or threatened releases of pollutants, contaminants, or chemical, industrial, hazardous, or toxic materials or wastes into ambient air, surface water, ground water, or lands or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transportation, or handling of pollutants, contaminants, or chemical, industrial, hazardous, or toxic materials or wastes.

     “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

     “Excluded Assets” means the assets listed on Schedule 1.1(b) attached hereto.

     “Financial Statements” has the meaning set forth in Section 3.7 below.

     “Graymark” means Graymark Healthcare, Inc., an Oklahoma corporation.

2

     “Intellectual Property” means (a) all inventions (whether patentable or unpatentable and whether or not reduced to practice), all improvements thereto, and all patents, patent applications, and patent disclosures, together with all reissuances, continuations, continuations-in-part, revisions, extensions, and reexaminations thereof, (b) all trademarks, service marks, trade dress, logos, trade names, and corporate names, together with all translations, adaptations, derivations, and combinations thereof and including all goodwill associated therewith, and all applications, registrations, and renewals in connection therewith, (c) all copyrightable works, all copyrights, and all applications, registrations, and renewals in connection therewith, (d) all mask works and all applications, registrations, and renewals in connection therewith, (e) all trade secrets and confidential business information (including ideas, research and development, know-how, formulas, compositions, manufacturing and production processes and techniques, technical data, designs, drawings, specifications, customer and supplier lists, pricing and cost information, and business and marketing plans and proposals), (f) all assignable computer software (including data and related documentation), and (g) all copies and tangible embodiments thereof (in whatever form or medium).

     “Knowledge of Seller” means the actual knowledge after reasonable investigation by that specific Seller and its general partner. No knowledge will be imputed from one Seller to the other.

     “Liability” means any liability (whether known or unknown, whether asserted or unasserted, whether absolute or contingent, whether accrued or unaccrued, whether liquidated or unliquidated, and whether due or to become due), including any liability for Taxes.

     “Material Adverse Effect” means, with respect to any Seller, any change, event, violation, inaccuracy, circumstance or effect that is materially adverse to the business, assets, liabilities, financial condition, results of operations or prospects of such Seller taken as a whole, other than as a result of: (i) changes adversely affecting the United States economy (so long as such Seller is not disproportionately affected thereby); (ii) changes adversely affecting the industry in which such Seller operates (so long as such Seller is not disproportionately affected thereby); (iii) the announcement or pendency of the transactions contemplated by this Agreement; (iv) changes in laws; or (v) acts of war or terrorism.

     “Most Recent Balance Sheet” means the balance sheet contained within the Most Recent Financial Statements.

     “Most Recent Financial Statements” has the meaning set forth in Section 3.7 below.

     “Most Recent Fiscal Month End” has the meaning set forth in Section 3.7 below.

     “Most Recent Fiscal Year End” has the meaning set forth in Section 3.7 below.

     “Ordinary Course of Business” means the ordinary course of business consistent with past custom and practice (including with respect to quantity and frequency).

     “PBGC” means the Pension Benefit Guaranty Corporation.

3

     “Permitted Encumbrances” means the Security Interests specifically identified in Schedule 1.1(a) attached hereto as Security Interests affecting some or all of the Acquired Assets and that will not be released/terminated prior to Closing.

     “Person” means an individual, a partnership, a corporation, an association, a limited liability company, a joint stock company, a trust, a joint venture, an unincorporated organization, a governmental entity (or any department, agency, or political subdivision thereof), or any other entity of any kind.

     “Security Interest” means any mortgage, pledge, lien, encumbrance, charge or other security interest of any kind or nature, other than liens for Taxes not yet due and payable.

     “Seller Agreements” means the agreements identified in Schedule 1.1(c) attached hereto.

     “Seller Indemnitees” has the meaning set forth in Section 7.2 below.

     “Subsidiary” means any corporation with respect to which a specified Person (or a Subsidiary thereof) owns a majority of the common stock or has the power to vote or direct the voting of sufficient securities to elect a majority of the directors.

     “Tax” means any federal, state or local income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental (including taxes under Code Section 59A), customs duties, capital stock, franchise, profits, withholding, social security (or similar), unemployment, disability, real property, personal property, sales, use, transfer, registration, value added, alternative or add-on minimum, estimated, or other tax of any kind whatsoever, including any interest, penalty, or addition thereto, whether disputed or not.

     “Tax Return” means any return, declaration, report, claim for refund, or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.

ARTICLE II
PURCHASE AND SALE OF ASSETS

     2.1 Basic Transaction.

     (a) Purchase and Sale of Assets. On and subject to the terms and conditions of this Agreement, at the Closing, Buyer shall purchase from Sellers, and Sellers shall sell, transfer, convey, and deliver to Buyer, free and clear of all Security Interests and restrictions on transfer other than the Permitted Encumbrances, all of the Acquired Assets for the consideration specified below in this Article II.

     (b) Delivery of Graymark Stock. Within five (5) days after the Closing Date, Buyer will deliver to Sellers that number of shares of Graymark common stock, par value $0.0001 per share (the “Graymark Stock”), having an aggregate Agreed Value equal to: (i) the sum of Nine Hundred Thousand Dollars ($900,000), minus (ii) the value of all Graymark Stock delivered to Sleep Center of Waco, LTD under that certain Asset

4

Purchase Agreement between Sleep Center of Waco, LTD and TCSD of Waco, LP of even date herewith (the “Waco Agreement”). For purposes of this Agreement, the “Agreed Value” per share of the Graymark Stock shall mean the average closing price for the Graymark Stock as reported by the OTC Bulletin Board for the ten (10) consecutive trading days ending on the third trading day immediately preceding the Closing Date. The parties agree that the shares of Graymark Stock to be delivered to Sellers shall be distributed among the Sellers as set forth in Schedule 2.1(b) attached hereto. In addition, Graymark, shall deliver to Seller options to purchase an additional amount of Graymark Stock equal to (i) 35,000 shares minus (ii) that number of optioned shares of Graymark Stock received by Sleep Center of Waco, LTD under the Waco Agreement; the exercise price for all such options shall be Five Dollars ($5.00) per share. Such options shall expire if not exercised on or before the second anniversary of the Closing Date.

     (c) Assumption of Liabilities. On and subject to the terms and conditions of this Agreement, Buyer shall assume and become responsible for all of the Assumed Liabilities at the Closing. Buyer will not assume or have any responsibility, however, with respect to any other obligation or Liability of any Seller not included within the definition of Assumed Liabilities.

     (d) The Closing. Subject to and in accordance with the provisions of this Agreement, the closing of the transactions contemplated by this Agreement (the “Closing”) shall take place via fax or electronically transmitted signatures (with originals to be delivered via overnight delivery), commencing at 9:00 a.m. local time on the third business day following the satisfaction or waiver of all conditions to the obligations of the parties to consummate the transactions contemplated hereby (other than conditions with respect to actions the respective parties will take at the Closing itself), or at such other time and place as Buyer and Sellers may mutually determine (the “Closing Date”).

     (e) Deliveries at the Closing. At the Closing, (i) Sellers will deliver to Buyer the various certificates, instruments, and documents referred to in Section 8.1 below; (ii) Buyer will deliver to Sellers the various certificates, instruments, and documents referred to in Section 8.2 below; (iii) Sellers will each execute, acknowledge (if appropriate), and deliver to Buyer (A) a bill of sale in the form attached hereto as Exhibit “A”, and (B) such other instruments of sale, transfer, conveyance, and assignment as Buyer and its counsel reasonably may request; (iv) Buyer will execute, acknowledge (if appropriate), and deliver to Seller (A) an assumption agreement in the form attached hereto as Exhibit “B” and (B) such other instruments of assumption as Sellers and their counsel reasonably may request; and (v) Buyer will deliver to Sellers the consideration specified in Section 2.1(b) above.

ARTICLE III
REPRESENTATIONS AND WARRANTIES CONCERNING
THE TRANSACTION

     Each of the Sellers severally represents and warrants to Buyer that the statements contained in this Article III are correct and complete as of the date of this Agreement and will be correct and complete as of the Closing Date (as though made then and as though the Closing

5

Date were substituted for the date of this Agreement throughout this Article III) only with respect to itself and not as to any other party. PSC and SSC make these representations and warranties only as to themselves and not as to the operations of the other.

     3.1 Organization of Sellers. Seller is a limited partnership duly organized, validly existing, and in good standing under the laws of the State of Texas. Seller is not qualified or licensed to do business in any other jurisdiction. Attached hereto as Exhibit “C” are true, accurate and complete copies of the currently effective Certificate of Limited Partnership and Limited Partnership Agreement of Seller.

     3.2 Authorization of Transaction. Seller has full power and authority to execute and deliver this Agreement and to perform its obligations hereunder. This Agreement constitutes the valid and legally binding obligation of Seller enforceable in accordance with its terms and conditions, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally or as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies.

     3.3 Noncontravention. Neither the execution and the delivery of this Agreement, nor the consummation of the transactions contemplated hereby, will (i) violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of any government, governmental agency, or court to which Seller is subject or any provision of the Certificate of Limited Partnership or Limited Partnership Agreement of Seller or (ii) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify, or cancel, or require any notice under any agreement, contract, lease, license, instrument, or other arrangement to which Seller is a party or by which it is bound or to which any of its assets is subject (or result in the imposition of any Security Interest or lien of any kind upon any of its assets), in each case excepting any such violation, conflict, breach or default which would not have a Material Adverse Effect. Except as described in Schedule 3.3, Seller is not required to give any notice to, make any filing with, or obtain any authorization, consent, or approval of any government, governmental agency or other Person in order for the parties to consummate the transactions contemplated by this Agreement (including the assignments and assumptions referred to in Section 2 above).

     3.4 Brokers’ Fees. Seller has no Liability or obligation to any broker, finder, or agent with respect to the transactions contemplated by this Agreement for which Buyer could become liable or obligated or to which the Acquired Assets could become subject.

     3.5 Title to Assets. Except as described on Schedule 3.5, Seller has good and marketable title to, or a valid leasehold interest in, all of the properties and assets used by it, located on its premises, or shown on the Most Recent Balance Sheet or acquired after the date thereof, free and clear of all Security Interests, except for properties and assets disposed of in the Ordinary Course of Business since the date of the Most Recent Balance Sheet. Without limiting the generality of the foregoing, Seller has, or at Closing will have, good and marketable title to all of the Acquired Assets owned by such Seller, free and clear of any Security Interests (other than the Permitted Encumbrances) or restrictions on transfer.

6

     3.6 Subsidiaries. Seller has no Subsidiaries. Except as described on Schedule 3.6, Seller has no direct or indirect equity interest in any corporation, partnership, joint venture, business association or other entity.

     3.7 Financial Statements. Seller has delivered to Buyer copies of the following financial statements (collectively the “Financial Statements”) of Seller at Schedule 3.7: (i) unaudited balance sheets, statements of income, and statements of cash flows as of and for the fiscal years ended December 31, 2006 and December 31, 2007 (the “Most Recent Fiscal Year End”); and (ii) an unaudited consolidated balance sheet and statement of income (the “Most Recent Financial Statements”) as of and for the three months ended March 31, 2008 (the “Most Recent Fiscal Month End”). The Financial Statements (including the notes thereto) have been prepared on a consistent basis throughout the periods covered thereby, present fairly the financial condition of Seller as of such dates and the results of operations of Seller for such periods, are true and correct in all material respects and do not contain any misstatement of a material fact or omit to state any material matter required to make such Financial Statements not misleading; provided, however, that the Most Recent Financial Statements are subject to normal year-end adjustments and lack footnotes and other presentation items.

     3.8 Events Subsequent to Most Recent Fiscal Year End. To the Knowledge of Seller, since the Most Recent Fiscal Year End, there has not been any material adverse change in the business, financial condition, operations, results of operations, or future prospects of Seller. Without limiting the generality of the foregoing, since that date:

     (i) Seller has not sold, leased, transferred, or assigned any of its assets, tangible or intangible, other than for a fair consideration in the Ordinary Course of Business;

     (ii) Seller has not entered into any agreement, contract, lease, or license (or series of related agreements, contracts, leases, and licenses) either involving more than $5,000 or outside the Ordinary Course of Business;

     (iii) no party (including Seller) has accelerated, terminated, modified, or canceled any material agreement, contract, lease, or license (or series of related agreements, contracts, leases, and licenses) to which Seller is a party or by which it or any of its assets is bound;

     (iv) Seller has not imposed any Security Interest upon any of the Acquired Assets;

     (v) Seller has not made any capital expenditure (or series of related capital expenditures) either involving more than $5,000 or outside the Ordinary Course of Business;

     (vi) Seller has not made any capital investment in, any loan to, or any acquisition of the securities or assets of any other Person either involving more than $5,000 or outside the Ordinary Course of Business;

7

     (vii) Seller has not granted any license or sublicense of any rights under or with respect to any Intellectual Property;

     (viii) there has been no change made or authorized in the Certificate of Limited Partnership or the limited partnership agreement of Seller;

     (ix) Seller has not declared, set aside or paid any distribution to its partners or redeemed, purchased or otherwise acquired any of its partnership interests;

     (x) Seller has not experienced any material damage, destruction, or loss (whether or not covered by insurance) to its property;

     (xi) Seller has not made any loan to, or entered into any other transaction with, any of its partners or employees outside the Ordinary Course of Business;

     (xii) Seller has not adopted, amended, modified or terminated any bonus, profit-sharing, incentive, severance or other plan, contract or commitment for the benefit of any of its employees (or taken any such action with respect to any other employee benefit plan);

     (xiii) there has not been any other occurrence, event, incident, action, failure to act, or transaction involving Seller that would have a Material Adverse Effect; and

     (xiv) Seller has not committed to any of the foregoing.

     3.9 Undisclosed Liabilities. Seller has no Liability (and there is no Basis for any present or future action, suit, proceeding, hearing, investigation, charge, complaint, claim, or demand against Seller giving rise to any Liability), except for (i) Liabilities set forth on the face of the Most Recent Balance Sheet (rather than in any notes thereto), (ii) Liabilities which have arisen after the Most Recent Fiscal Month End in the Ordinary Course of Business (none of which results from, arises out of, relates to, is in the nature of, or was caused by any breach of contract, breach of warranty, tort, infringement, or violation of law), and (iii) the Liabilities identified on Schedule 3.9 attached hereto.

     3.10 Legal Compliance. Seller has complied in all material respects with all applicable laws (including rules, regulations, codes, plans, injunctions, judgments, orders, decrees, rulings, and charges thereunder) of federal, state, local and foreign governments (and all agencies thereof), and no action, suit, proceeding, hearing, investigation, charge, complaint, claim, demand, or notice has been filed or commenced or, to the Knowledge of Seller, threatened against Seller alleging any failure so to comply.

     3.11 Tax Matters.

     (a) Seller has filed all Tax Returns that it was required to file. All such Tax Returns were correct and complete in all respects. All Taxes owed by Seller (whether or

8

not shown on any Tax Return) have been paid or will be paid in accordance with the applicable extensions. Except as described on Schedule 3.11, Seller currently is not the beneficiary of any extension of time within which to file any Tax Return. No claim has ever been made by an authority in a jurisdiction where Seller does not file Tax Returns that it is or may be subject to taxation by that jurisdiction. There are no Security Interests on any of the assets of Seller that arose in connection with any failure (or alleged failure) to pay any Tax.

     (b) Seller has withheld and paid all Taxes required to have been withheld and paid in connection with amounts paid or owing to any employee, independent contractor, creditor, partner, or other third party.

     (c) Seller has not waived any statute of limitations in respect of Taxes or agreed to an extension of time with respect to a tax assessment or deficiency.

     (d) The unpaid Taxes of Seller (i) did not, as of the Most Recent Fiscal Month End, exceed the reserve for Tax Liability (rather than any reserve for deferred Taxes established to reflect timing differences between book and tax income) set forth on the face of the Most Recent Balance Sheet (rather than in any notes thereto) and (ii) do not exceed that reserve as adjusted for the passage of time through the Closing Date in accordance with the past custom and practice of Seller in filing its Tax Returns.

     3.12 Real Property.

     (a) Seller does not own any real property.

     (b) Schedule 3.12(b) lists and describes briefly all real property leased by Seller. Seller has not subleased any real property. Correct and complete copies of each of the leases listed in Schedule 3.12(b) (as amended to date) are attached hereto as Exhibit “D”. Except as described on Schedule 3.12(b), with respect to each such lease:

     (i) the lease is legal, valid, binding, enforceable and in full force and effect;

     (ii) the lease will continue to be legal, valid, binding, enforceable and in full force and effect on identical terms following the consummation of the transactions contemplated hereby;

     (iii) no party to the lease is in breach or default, and no event has occurred which, with notice or lapse of time, would constitute a breach or default or permit termination, modification, or acceleration thereunder;

     (iv) no party to the lease has repudiated any provision thereof;

     (v) there are no disputes, oral agreements, or forbearance programs in effect as to the lease;

9

     (vi) Seller has not assigned, transferred, conveyed, mortgaged, deeded in trust, or encumbered any interest in the leasehold;

     (vii) all facilities leased thereunder are supplied with utilities and other services necessary for the operation of said facilities;

     (viii) there are no pending or, to the Knowledge of Seller, threatened condemnation proceedings, lawsuits, or administrative actions relating to the parcel, or other matters affecting adversely the use, occupancy or value, or the marketability of title, thereof; and

     (ix) there are no parties (other than Seller) in possession of the parcel of real property.

     3.13 Intellectual Property.

     (a) Seller does not own any Intellectual Property.

     (b) To the Knowledge of Seller, Seller has not interfered with, infringed upon, misappropriated, or otherwise come into conflict with any Intellectual Property rights of third parties. Seller has never received any charge, complaint, claim, demand or notice alleging any such interference, infringement, misappropriation, or violation (including any claim that Seller must license or refrain from using any Intellectual Property rights of any third party). To the Knowledge of Seller, no third party has interfered with, infringed upon, misappropriated, or otherwise come into conflict with any Intellectual Property rights of Seller.

     (c) Schedule 3.13(c) identifies each item of Intellectual Property that any third party owns and that Seller uses pursuant to license, sublicense, agreement or permission. Seller has delivered to Buyer correct and complete copies of all such licenses, sublicenses, agreements and permissions (as amended to date).

     (d) To the Knowledge of Seller, Seller will not interfere with, infringe upon, misappropriate or otherwise come into conflict with any Intellectual Property rights of third parties as a result of the continued operation of its business as presently conducted and as presently proposed to be conducted.

     3.14 Tangible Assets. Seller owns or leases all buildings, machinery, equipment, and other tangible assets necessary for the conduct of its business as presently conducted and as presently proposed to be conducted. The parties acknowledge and agree that all tangible Acquired Assets are being conveyed to Buyer “AS IS, WHERE IS,” and no Seller makes any representation or warranty regarding the merchantability or fitness for a particular purpose of any tangible Acquired Asset.

     3.15 Contracts. Schedule 3.15 lists the following contracts and other agreements to which Seller is a party or is bound:

10

     (i) any agreement (or group of related agreements), for the lease of personal property to or from any Person;

     (ii) any agreement (or group of related agreements) for the purchase or sale of raw materials, commodities, supplies, products or other personal property, or for the furnishing or receipt of services;

     (iii) any agreement concerning a partnership or joint venture;

     (iv) any agreement (or group of related agreements) under which it has created, incurred, assumed or guaranteed any indebtedness for borrowed money, or any capitalized lease obligation;

     (v) any agreement concerning confidentiality or noncompetition;

     (vi) any agreement involving any of the partners of Sellers and/or their respective Affiliates;

     (vii) any profit sharing, deferred compensation, severance or other plan or arrangement for the benefit of its current or former officers and/or employees;

     (viii) any collective bargaining agreement;

     (ix) any agreement for the employment of any individual on a full-time, part-time, consulting or other basis;

     (x) any agreement under which it has advanced or loaned any amount to any Person;

     (xi) any agreement under which the consequences of a default or termination could have an adverse effect on the business, financial condition, operations, results of operations or future prospects of Seller; or

     (xii) any other agreement (or group of related agreements) the performance of which involves consideration in excess of $5,000.00.

A correct and complete copy of each written agreement listed in Schedule 3.15 (as amended to date) and a written summary setting forth the terms and conditions of each oral agreement referred to in Schedule 3.15 is attached hereto as Exhibit “E”. With respect to each of the Seller Agreements, except as set forth in Schedule 3.15: (A) the Seller Agreement is legal, valid, binding, enforceable and in full force and effect; (B) the Seller Agreement will continue to be legal, valid, binding, enforceable and in full force and effect on identical terms following the consummation of the transactions contemplated hereby; (C) no party is in breach or default, and no event has occurred which with notice or lapse of time would constitute a breach or default, or permit termination, modification or acceleration, under the Seller Agreement; and (D) no party has repudiated any provision of the Seller Agreement.

11

     3.16 Litigation. Schedule 3.16 sets forth each instance in which Seller (i) is subject to any outstanding injunction, judgment, order, decree, ruling, or charge, or (ii) is a party or, to the Knowledge of Seller, is threatened to be made a party to any action, suit, proceeding, hearing, or investigation of, in, or before any court or quasi-judicial or administrative agency of any federal, state or local jurisdiction or before any arbitrator.

     3.17 Employees. To the Knowledge of Seller, no executive, key employee or group of employees has any plans to terminate employment with Seller. Seller is not a party to or bound by any collective bargaining agreement, nor has Seller experienced any strikes, grievances, claims of unfair labor practices, or other collective bargaining disputes. Seller has not committed any unfair labor practice. To the Knowledge of Seller, no organizational effort is presently being made or threatened by or on behalf of any labor union with respect to employees of Seller.

     3.18 ERISA Compliance. Schedule 3.18 identifies each and every employee benefit plan, including each employee pension benefit plan and employee welfare benefit plan (as such terms are defined in ERISA), which is currently maintained by Seller.

     With respect to such plans the following apply:

     (a) Each such employee benefit plan complies in form and in operation in all respects with the applicable requirements of ERISA, the Code and all other applicable laws.

     (b) All required reports and descriptions including Forms 5500, the summary annual reports and summary plan descriptions have been filed or distributed appropriately with respect to each such employee benefit plan.

     (c) The requirements of Part VI of Subtitle B of Title I of ERISA and of Code Section 4980B have been met with respect to each such employee benefit plan which is an employee welfare benefit plan.

     (d) All contributions including all employer contributions and employee salary reduction contributions which are due have been paid to each such employee benefit plan which is an employee pension benefit plan and all contributions for any period ending on or before the Closing Date which are not yet due have been paid to each such employee pension benefit plan or accrued in accordance with the past customs and practice of Seller. All premiums or other payments for all periods ending on or before the Closing Date have been paid with respect to each such employee benefit plan which is an employee welfare benefit plan.

     (e) Each employee benefit plan which is an employee pension plan meets the requirements for qualification under Code Section 401(a).

     (f) The market value of assets of each such employee benefit plan which is an employee pension benefit plan other than a multi-employer plan equals or exceeds the present value of all vested and nonvested liabilities thereunder determined in accordance with PBGC’s methods, factors and assumptions applicable to the employee pension benefit plan terminating on the date for determination.

12

     (g) Seller has delivered to Buyer correct and complete copies of all plan documents, summary plan descriptions, the most recent determination letter received from the Internal Revenue Service, the most recent Form 5500 annual report and all related trust agreements, insurance contracts and other funding agreements which implement each such employee benefit plan.

     (h) With respect to each employee benefit plan that Seller maintains or ever has maintained or to which Seller contributes, ever has contributed, or ever has been required to contribute:

     (A) No such employee benefit plan which is an employee pension benefit plan (other than any multiemployer plan) has been completely or partially terminated or been the subject of a reportable event as to which notices would be required to be filed with the PBGC. No proceeding by the PBGC to terminate any such employee pension benefit plan (other than any multiemployer plan) has been instituted or, to the Knowledge of Seller, is threatened.

     (B) There have been no prohibited transactions with respect to any such employee benefit plan. No fiduciary has any liability for material breach of fiduciary duty or any other material failure to act or comply in connection with the administration or investment of the assets of any such employee benefit plan. No action, suit, proceeding, hearing, or investigation with respect to the administration or the investment of the assets of any such employee benefit plan (other than routine claims for benefits) is pending or, to the Knowledge of Seller, is threatened.

     (C) Seller has not incurred any material liability (whether known or unknown, whether asserted or unasserted, whether absolute or contingent, whether accrued or unaccrued, whether liquidated or unliquidated, and whether due or to become due) to the PBGC (other than PBGC premium payments) or otherwise under Title IV of ERISA (including any withdrawal liability) or under the Code with respect to any such employee benefit plan which is an employee pension benefit plan.

     (i) Seller has not ever contributed to, and has not ever been required to contribute to, any multiemployer plan, and has no material Liability (whether known or unknown, whether asserted or unasserted, whether absolute or contingent, whether accrued or unaccrued, whether liquidated or unliquidated, and whether due or to become due), including any withdrawal Liability, under any multiemployer plan.

     (j) Seller has not ever maintained or contributed to, and has not ever been required to contribute to any employee welfare benefit plan providing medical, health, or life insurance or other welfare-type benefits for current or future retired or terminated employees, their spouses, or their dependents (other than in accordance with Code Section 4980B).

13

     3.19 Environment, Health, and Safety.

     (a) Seller has complied in all material respects with all Environmental, Health, and Safety Laws, and no action, suit, proceeding, hearing, investigation, charge, complaint, claim, demand, or notice has been filed or commenced against Seller alleging any failure so to comply. Without limiting the generality of the preceding sentence, Seller has obtained and been in compliance in all material respects with all of the terms and conditions of all permits, licenses, and other authorizations which are required under, and has complied with all other limitations, restrictions, conditions, standards, prohibitions, requirements, obligations, schedules, and timetables which are contained in, all Environmental, Health, and Safety Laws.

     (b) Seller has no Liability (and Seller has not ever handled or disposed of any substance, arranged for the disposal of any substance, exposed any employee or other individual to any substance or condition, or owned or operated any property or facility in any manner that could form the Basis for any present or future action, suit, proceeding, hearing, investigation, charge, complaint, claim, or demand against Seller giving rise to any Liability) for damage to any site, location, or body of water (surface or subsurface), for any illness of or personal injury to any employee or other individual, or for any reason under any Environmental, Health, and Safety Law.

     (c) To the Knowledge of Seller, all properties and equipment used in the business of Seller have been free of asbestos, PCB’s, methylene chloride, trichloroethylene, 1,2-trans-dichloroethylene, dioxins, dibenzofurans, and other hazardous substances or wastes.

     (d) To the Knowledge of Seller, following the Closing, no material capital expenditures shall be required by Buyer to insure compliance with any Environmental, Health and Safety Law. To the Knowledge of Seller, there is no pending audit by any federal, state, or local governmental authority with respect to the storage, burial, release, transportation, or disposal of hazardous substances or wastes by Seller; or relating to the facilities of Seller. Seller does not have any agreement or arrangement with any foreign, federal, state, or local governmental authority or any other third party relating to any such environmental matter or environmental cleanup.

     (e) Seller has delivered to Buyer true and complete copies and results of any reports, studies, analyses, tests or monitorings possessed or initiated by Seller pertaining to hazardous materials or hazardous activities in, on or under any facility owned, leased or operated by Seller or concerning compliance by Seller with Environmental, Health, and Safety Laws.

     3.20 Certain Business Relationships With Seller. Except as described in Schedule 3.20, none of the partners of Seller or any of their Affiliates has been involved in any business arrangement or relationship with Seller within the past twelve months, and none of the partners of Seller or any of their Affiliates owns any asset, tangible or intangible, which is used in the business of Seller.

14

     3.21 Assumed Liabilities. All Liabilities of Seller to be assumed by Buyer hereunder have arisen in the Ordinary Course of Business, are bona fide and are properly recorded on the books of Seller.

     3.22 Partners. Schedule 3.22 identifies each of the partners of Seller and their respective ownership interests in Seller, and no other Person currently has the right to acquire any additional equity interests of Seller.

     3.23 Personnel. Schedule 3.23 lists all employees of Seller and their respective rates of compensation.

     3.24 Powers of Attorney. Except as described on Schedule 3.24, there are no outstanding powers of attorney executed on behalf of Seller.

     3.25 Insurance.

Seller has been covered during the past three (3) years by insurance in scope and amount customary and reasonable for the business in which it has engaged during the aforementioned period.

     3.26 Disclosure. The representations and warranties contained in this Article III do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements and information contained in this Article III not misleading.

     3.27 Consents. Except as provided in Schedule 3.3, no consent, approval or authorization of, or registration or filing with, any Person is required in connection with the execution and delivery of this Agreement by Seller or for the consummation by Seller of the transactions contemplated hereby.

ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER

     Buyer represents and warrants to Sellers that the statements contained in this Article IV are correct and complete as of the date of this Agreement and will be correct and complete as of the Closing Date (as though made then and as though the Closing Date were substituted for the date of this Agreement throughout this Article IV).

     4.1 Organization. Buyer is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Oklahoma.

     4.2 Authorization of Transaction. Buyer and Graymark each has full power and authority to execute and deliver this Agreement and to perform its obligations hereunder. This Agreement constitutes the valid and legally binding obligation of Buyer and Graymark, enforceable in accordance with its terms and conditions, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally or by general equitable principles.

15

     4.3 Noncontravention. Neither the execution and the delivery of this Agreement, nor the consummation of the transactions contemplated hereby, will (i) violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of any government, governmental agency, or court to which Buyer or Graymark or any of their respective assets is subject or any provision of the organizational documents of Buyer or Graymark or (ii) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify, or cancel, or require any notice under any agreement, contract, lease, license, instrument, or other arrangement to which Buyer or Graymark is a party or by which it is bound or to which any of its assets is subject. Neither Buyer nor Graymark is required to give any notice to, make any filing with, or obtain any authorization, consent, or approval of any government or governmental agency in order for the parties to consummate the transactions contemplated by this Agreement.

     4.4 Brokers’ Fees. Buyer has no Liability or obligation to pay any fees or commissions to any broker, finder, or agent with respect to the transactions contemplated by this Agreement for which Sellers could become liable or obligated.

     4.5 Valid Issuance of Graymark Stock. The shares of Graymark Stock to be delivered to Sellers at Closing have been duly authorized and, upon issuance thereof in accordance with the terms of this Agreement, will be validly issued, fully paid and non-assessable.

     4.6 Acknowledgements by Buyer. Buyer hereby acknowledges that, since March 1, 2008, it has been managing the day-to-day operations of the two sleep diagnostic facilities owned by Sellers. Buyer further acknowledges that it has had an opportunity to ask questions of and receive answers from representatives of the Sellers concerning the Acquired Assets and the businesses and operations of the Sellers. Notwithstanding anything to the contrary herein, no such answers, information or disclosures provided by any representative of the Sellers shall be deemed to amend or supplement the representations and warranties made by any Seller herein or prevent or cure any misrepresentation, breach of warranty or breach of covenant by any Seller.

ARTICLE V
PRECLOSING COVENANTS

     5.1 Covenants. The parties agree as follows with respect to the period between the execution of this Agreement and the Closing:

     (a) General. Each of the parties will use commercially reasonable efforts to take all action and to do all things necessary, proper, or advisable in order to consummate and make effective the transactions contemplated by this Agreement (including satisfaction, but not waiver, of the closing conditions set forth in Article VIII below).

     (b) Notices and Consents. Sellers will give any notices to third parties, and Sellers will use their best efforts to obtain any third party consents, that Buyer reasonably may request in connection with the matters referred to in Section 3.3 above.

     (c) Operation of Business. Sellers will not engage in any practice, take any action, or enter into any transaction outside the Ordinary Course of Business. Buyer will

16

operate the sleep disorder facilities of Sellers in accordance with the terms of the management agreements entered into between the parties.

     (d) Preservation of Business. Sellers shall keep their respective business and properties substantially intact, including their present operations, physical facilities, working conditions and relationships with lessors, licensors, suppliers, customers and employees.

     (e) Notice of Developments. Each party will give prompt written notice to the other parties of any material adverse development causing a breach of any of such party’s own representations and warranties (or any other party’s representations and warranties) in Articles III and IV above. No disclosure by any party pursuant to this Section 5.1(e), however, shall be deemed to prevent or cure any misrepresentation, breach of warranty, or breach of covenant.

     (f) Exclusivity. During the term of this Agreement, none of Sellers will (i) solicit, initiate, or encourage the submission of any proposal or offer from any Person relating to the acquisition of any securities, or any substantial portion of the assets, of any of Sellers (including any acquisition structured as a merger, consolidation or share exchange) or (ii) participate in any discussions or negotiations regarding, furnish any information with respect to, assist or participate in, or facilitate in any other manner any effort or attempt by any Person to do or seek any of the foregoing. Sellers will notify Buyer immediately if any Person makes any proposal, offer, inquiry, or contact with respect to any of the foregoing.

ARTICLE VI
COVENANTS

     Each of the Sellers hereby covenants and promises to Buyer and, where expressly stated, Buyer hereby covenants and promises to Sellers, the following:

     6.1 Employees. Buyer shall have no obligation to make an offer of employment to any employee of any Seller. Notwithstanding the preceding sentence, any employee of any Seller hired by Buyer shall become an employee of Buyer under Buyer’s plans and practices, and shall be subject to the terms and conditions of Buyer’s plans, including the terms of eligibility. At or prior to the Closing, each Seller shall pay to its employees all amounts owing to such employees for earned vacation and sick leave in accordance with such Seller’s current policies. Buyer shall not assume and shall not be obligated to continue or assume any employee benefit plan or any other type of employee benefit or compensation plan or arrangement or any employer payroll policy or practice established, maintained, or contributed to by any Seller. Buyer is not a “successor employer” with respect to any employee benefit plan of any Seller. Buyer and Sellers agree that the provisions of this Section 6.1 are solely between and for the benefit of Buyer and Sellers and do not inure to the benefit of, or confer rights upon, any third party, including any employee of Buyer or any Seller.

     6.2 Miscellaneous. Each Seller shall retain liability for and such Seller shall indemnify and hold Buyer harmless against:

17

     (A) All claims asserted by third persons for breach of contract, tort, infringement, violation of law, or other conduct occurring on or before the Closing Date in connection with the business of such Seller; and

     (B) All claims relating to compliance by such Seller with the applicable provisions of ERISA, the Code and other applicable laws.

     6.3 Due Diligence Investigation. For the purpose of permitting Buyer and its representatives to conduct a due diligence review (the “Diligence Review”) of Sellers, each Seller shall afford Buyer and its representatives full and complete access to the books and records, financial statements, Tax Returns, facilities, employees and such other information of such Seller as Buyer may reasonably request to evaluate the business, operations, properties, assets, Liabilities and prospects of such Seller. In connection with the Diligence Review, representatives of Buyer shall be entitled to consult with representatives, officers and employees of Sellers. The Diligence Review and any such consultations shall be conducted in a manner not to unreasonably interfere with the operation of the respective businesses of Sellers.

     6.4 Confidentiality. Any non-public information furnished to or obtained by Buyer from Sellers or any of their respective officers, employees, attorneys, accountants or authorized representatives in connection with the Diligence Review pursuant to Section 6.3 hereof shall be considered “Evaluation Material.” Evaluation Material shall not include public information or non-public information obtained by Buyer or its Affiliates or representatives from a third party who is lawfully in possession of such information and who has the legal right to transmit such information. In the event that the transactions contemplated by this Agreement are not consummated, Buyer (i) agrees to return to Sellers all written evaluation materials and copies thereof furnished by Sellers to Buyer, (ii) agrees to destroy all documents, notes and other work product derived from the Evaluation Material, and (iii) agrees to promptly confirm in writing to Sellers the fact of such destruction. Except as otherwise required by law, Buyer agrees to keep the Evaluation Material confidential, not to use the Evaluation Material for any purpose other than to the extent contemplated hereby, or permit any such Evaluation Material to be made available to third parties other than its designated representatives or agents who Buyer will direct to maintain the Evaluation Material confidential. The obligations of Buyer under the provisions of this Section 6.4 shall survive for a period of three (3) years after the date of any termination of this Agreement.

     6.5 Confidential Information. Each of the Sellers will treat and hold as such all of the Confidential Information, refraining from using any of the Confidential Information except in connection with this Agreement, and, following the Closing, will deliver promptly to Buyer or destroy, at the request and option of Buyer, all tangible embodiments (and all copies) of the Confidential Information which are in its possession. In the event that any Seller is requested or required (by oral question or request for information or documents in any legal proceeding, interrogatory, subpoena, civil investigative demand, or similar process) to disclose any Confidential Information, such Seller will notify Buyer promptly of the request or requirement so that Buyer may seek an appropriate protective order or waive compliance with the provisions of this Section 6.5. If, in the absence of a protective order or the receipt of a waiver hereunder, such Seller is, on the advice of counsel, compelled to disclose any Confidential Information to any tribunal or governmental agency or else stand libel for contempt, such Seller may disclose

18

the Confidential Information to the tribunal or governmental agency; provided, however, that such Seller shall use commercially reasonable efforts to obtain, at the request and expense of Buyer, an order or other assurance that confidential treatment will be accorded to such portion of the Confidential Information required to be disclosed as Buyer shall designate.

     6.6 Continued Existence of Sellers. Each Seller hereby covenants and agrees that it shall not dissolve or otherwise terminate its existence as a limited partnership for at least one (1) year after the Closing Date. But nothing herein shall require a Seller to continue any operations.

     6.7 Survivability. The provisions of this Article VI shall survive the Closing Date; provided, however, that in the event that the transactions contemplated hereby are consummated, Buyer’s obligations under Section 6.4 shall terminate as of the Closing Date.

ARTICLE VII
INDEMNIFICATION

     7.1 Survival of Representations and Warranties. All of the representations and warranties of the parties contained in this Agreement shall survive the closing of the transactions contemplated herein for a period of one (1) year. The parties intend to shorten the statute of limitations and agree that no claims or causes of action of any kind may be brought against any Seller, the Buyer or any of their respective partners, officers, employees, affiliates, controlling persons, agents, attorneys, accountants or representatives based upon, directly or indirectly, any of the representations, warranties, covenants or agreements contained herein after the first anniversary of the Closing Date. This Section 7.1 shall not limit any covenant or agreement of the parties which contemplates performance after the Closing including, without limitation, the covenants and agreements set forth in Article VI hereof, it being understood that all such covenants and agreements contemplating performance after the Closing shall survive until the expiration of the applicable statute of limitations.

     7.2 Indemnification by Sellers. Subject to the terms and conditions set forth herein, each Seller shall severally indemnify and hold harmless Buyer and its members, managers, officers, employees, attorneys, accountants, and other agents and Affiliates (collectively, the “Buyer Indemnitees”) in respect of any and all damages, losses, liabilities, payments, obligations, penalties, claims, litigation, demands, defenses, judgments, suits, proceedings, costs, disbursements or expenses (including, without limitation, reasonable fees, disbursements and expenses of attorneys, accountants and other professional advisors) of any kind or nature whatsoever (collectively “Damages”) incurred by any Buyer Indemnitee as a result of, in connection with or arising out of:

     (i) Any inaccuracy in or breach of any representation or warranty made by such Seller herein; or

     (ii) Any breach or nonperformance (partial or total) of any covenant or agreement of such Seller contained herein.

     7.3 Indemnification by Buyer. Subject to the terms and conditions set forth herein, Buyer shall indemnify and hold harmless each of the Sellers and their respective partners, officers, employees, attorneys, accountants and other agents and Affiliates (collectively, the

19

“Seller Indemnitees”) in respect of any Damages incurred by any Seller Indemnitee as a result of, in connection with or arising out of:

     (i) Any inaccuracy in or breach of any representation or warranty made by Buyer herein; or

     (ii) Any breach or nonperformance (partial or total) of any covenant or agreement of Buyer contained herein.

     7.4 Third Party Indemnification. The obligations of the Sellers to indemnify the Buyer Indemnitees under Section 7.2 hereof and the obligations of the Buyer to indemnify the Seller Indemnitees under Section 7.3 hereof, in each case resulting from the assertion of liability by a third party (each, as the case may be, a “Claim”), shall be further subject to the following terms and conditions:

     (i) Any party against whom any Claim is asserted shall give the party (or the parties) required to provide indemnity hereunder written notice of such Claim promptly after learning of such Claim, and the indemnifying party may, at its option, undertake the defense thereof with counsel chosen by it but reasonably satisfactory to the indemnified party. Failure to give prompt notice of a Claim hereunder shall not affect the indemnifying party’s obligations under this Section 7.4, except to the extent the indemnifying party is materially prejudiced by such failure to give prompt notice. If the indemnifying party, within thirty (30) days after notice of any such Claim, or such shorter period as is reasonably required, fails to assume the defense of such Claim, the Buyer Indemnitee or the Seller Indemnitee, as the case may be (each, an “Indemnitee”), against whom such Claim has been made shall have the right, but shall not be obligated, to undertake the defense, compromise or settlement of such Claim on behalf and for the account and risk, and at the expense, of the indemnifying party.

     (ii) Anything in this Section 7.4 to the contrary notwithstanding, the indemnifying party shall not enter into any settlement or compromise of any action, suit or proceeding or consent to the entry of any judgment (A) which does not include as an unconditional term thereof the delivery by the claimant or plaintiff to the Indemnitee of a written release from all liability in respect of such action, suit or proceeding, or (B) for other than monetary damages without the prior written consent of the Indemnitee, which consent shall not be unreasonably withheld.

     7.5 Limitations. Notwithstanding anything to the contrary in this Article VII, in no event shall the liability for indemnification of any Seller pursuant to Section 7.2 exceed the aggregate Agreed Value of the Graymark Stock delivered to such Seller pursuant to Section 2.1(b) hereof. For example, and as an illustration only, in the event the aggregate Agreed Value of the Graymark Stock delivered to PSC is $200,000, PSC’s maximum liability for indemnification pursuant to Section 7.2 would be $200,000.

20

ARTICLE VIII
CLOSING CONDITIONS

     8.1 Conditions to the Obligations of Buyer. Each and every obligation of Buyer hereunder shall be subject to the satisfaction, as of Closing, of each of the following conditions, each of which can be waived by Buyer, but only in writing:

     (a) All of the representations and warranties of Sellers set forth in Article III above shall be true and correct as of the date hereof and shall be deemed to have been made again at Closing and shall then be true and correct;

     (b) Sellers shall have procured all of the third party consents specified in Section 5.1(b) above;

     (c) Each of the covenants and other obligations of Sellers to be performed by them or any of them on or before Closing pursuant to the terms hereof shall have been duly performed and complied with in all material respects;

     (d) No action, suit, or proceeding shall be pending before any court or governmental agency or before any arbitrator wherein an unfavorable injunction, judgment, order, decree, ruling, or charge would (i) prevent consummation of any of the transactions contemplated by this Agreement, (ii) cause any of the transactions contemplated by this Agreement to be rescinded following consummation, or (iii) affect adversely the right of Buyer to own the Acquired Assets and to operate the former businesses of Sellers;

     (e) Each Seller shall have delivered to Buyer a certificate, in form reasonably satisfactory to Buyer, to the effect that each of the conditions specified above in Section 8.1(a)-(d) has been satisfied in all respects with respect to such Seller;

     (f) Buyer and its representatives shall have been provided full and complete access to the books and records, financial statements, Tax Returns, facilities, employees and such other information of Sellers as Buyer may have reasonably requested to evaluate the business, operations, properties, assets, Liabilities and prospects of Sellers. If, in its sole discretion, Buyer decides for any reason not to proceed with the transactions contemplated hereby, then Buyer may terminate this Agreement by giving notice thereof to Sellers on or prior to the Closing Date;

     (g) (i) Each of the Persons listed on Schedule 8.1(g)(i) shall have executed and delivered to Buyer a release in the form attached hereto as Exhibit “F” releasing PSC from any and all claims that such Person may have against PSC as of the Closing Date, and (ii) each of the Persons listed on Schedule 8.1(g)(ii) shall have executed and delivered to Buyer a release in the form attached hereto as Exhibit “G” releasing SSC from any and all claims that such Person may have against SSC as of the Closing Date;

     (h) All actions to be taken by Sellers or any of them in connection with consummation of the transactions contemplated hereby and all certificates, instruments,

21

and other documents required to effect the transactions contemplated hereby are reasonably satisfactory in form and substance to Buyer;

     (i) Icon Sleep Texas, LP (“Icon”) shall have executed and delivered to Buyer an agreement in form and substance satisfactory to Buyer in its sole discretion indemnifying Buyer against any inaccuracy in or breach of any of the representations and warranties made by Sellers in Sections 3.2, 3.3, 3.4 and/or the second sentence of Section 3.5 hereof;

     (j) All Security Interests (other than the Permitted Encumbrances) affecting the Acquired Assets (or any of them) shall have been terminated;

     (k) Buyer have entered into a Real Estate Lease Agreement with Southlake Sleep, LP covering the premises located at 620 E, Southlake Blvd, Southlake, Texas on terms satisfactory to Buyer in its sole discretion;

     (l) Buyer have entered into a Real Estate Lease Agreement with Coit Park, Inc. covering the premises located at 3604 Preston Road, Suite 300, Plano, Texas on terms satisfactory to Buyer in its sole discretion;

     (m) Charles Willis, II, M.D. (“Willis”) shall have assigned to Buyer all of his right, title and interest in and to that certain Lease Agreement, dated October 18, 2005, between Willis and Court Square Leasing Corporation (“CSL”), Buyer shall have assumed all obligations and liabilities of Willis arising or accruing under such Lease Agreement from and after the Closing Date, and CSL shall have consented in writing to such assignment and assumption;

     (n) Willis shall have assigned to Buyer all of his right, title and interest in and to that certain Lease Agreement, dated December 18, 2005, between Willis and US Express Leasing (“US Express”), Buyer shall have assumed all obligations and liabilities of Willis arising or accruing under such Lease Agreement from and after the Closing Date, and US Express shall have consented in writing to such assignment and assumption;

     (o) Icon shall have transferred to Buyer, free and clear of any Security Interests, all of the assets identified on Schedule 8.1(n) for a purchase price of $1,100,000. Such transfer shall be evidenced by a Bill of Sale executed by Icon in favor of Buyer in form and substance satisfactory to Buyer in its reasonable discretion;

     (p) FMB Medical Equipment LLC (“FMB”) shall have transferred to Buyer, free and clear of any Security Interests, all of the assets identified on Schedule 8.1(o) for a purchase price of $340,000. Such transfer shall be evidenced by a Bill of Sale executed by FMB in favor of Buyer in form and substance satisfactory to Buyer in its reasonable discretion; and

     (q) The transactions contemplated by the Waco Agreement shall have been consummated prior to or contemporaneous with the Closing.

22

     8.2 Conditions to the Obligations of Sellers. Each and every obligation of Sellers hereunder shall be subject to the satisfaction, as of Closing, of each of the following conditions, each of which can be waived by Sellers, but only in writing:

     (a) All of the representations and warranties of Buyer set forth in Article IV above shall be true and correct as of the date hereof and shall be deemed to have been made again at Closing and shall then be true and correct;

     (b) Each of the covenants and other obligations of Buyer to be performed by it on or before Closing pursuant to the terms hereof shall have been duly performed and complied with in all material respects;

     (c) No action, suit, or proceeding shall be pending before any court or governmental agency or before any arbitrator wherein an unfavorable injunction, judgment, order, decree, ruling, or charge would (i) prevent consummation of any of the transactions contemplated by this Agreement or (ii) cause any of the transactions contemplated by this Agreement to be rescinded following consummation (and no such injunction, judgment, order, decree, ruling, or charge shall be in effect);

     (d) Buyer shall have delivered to Sellers a certificate, in form reasonably satisfactory to Sellers, to the effect that each of the conditions specified above in Section 8.2(a)-(c) has been satisfied in all respects; and

     (e) All actions to be taken by Buyer in connection with consummation of the transactions contemplated hereby and all certificates, opinions, instruments, and other documents required to effect the transactions contemplated hereby are reasonably satisfactory in form and substance to Sellers.

ARTICLE IX
TERMINATION

     9.1 Mutual Consent. This Agreement may be terminated by the mutual written consent of Buyer and Sellers.

     9.2 By Buyer.

     (a) Default. This Agreement may be terminated by Buyer if a material default shall be made by any Seller in the observance of or in the due and timely performance by them or any of them of any of the agreements or covenants of Sellers herein contained, or if there shall have been a material breach by any Seller of any of the warranties and representations of Sellers herein contained, or if the conditions of this Agreement to be complied with or performed by any of them at or before Closing shall not have been complied with or performed at the time required for such compliance or performance and such non-compliance or non-performance shall not have been waived by Buyer.

     (b) Due Diligence Review. Buyer may terminate this Agreement in accordance with the terms of Section 8.1(f).

23

     9.3 By Sellers. This Agreement may be terminated by Sellers if a material default shall be made by Buyer in the observance of or in the due and timely performance by Buyer of any of the agreements or covenants of Buyer herein contained, or if there shall have been a material breach by Buyer of any of the warranties and representations of Buyer herein contained, or if the conditions of this Agreement to be complied with or performed by Buyer at or before Closing shall not have been complied with or performed at the time required for such compliance or performance and such non-compliance or non-performance shall not have been waived by Sellers.

     9.4 Effect of Termination. If this Agreement is terminated pursuant to Section 9.1, 9.2 or 9.3 above, all rights and obligations of the parties hereunder shall terminate without any liability to any other party hereto; provided, however, that if the basis of termination is a material breach or default by Buyer, on the one hand, or any Seller, on the other hand, of one or more of the provisions of this Agreement, the party or parties then in breach or default shall be liable to the nonbreaching party or parties for all damages resulting from such breach or default; and further provided, however, that Buyer’s obligation to treat Evaluation Material in a confidential manner, as set forth in Section 6.4 above, shall survive any such termination.

ARTICLE X
FEDERAL SECURITIES LAWS

     10.1 Unregistered Stock. Each of the Sellers hereby acknowledges that the shares of Graymark Stock to be delivered to it pursuant to this Agreement will not be registered (referred to sometimes herein as “Unregistered Stock”) under the Securities Act of 1933, as amended (the “Act”), or any other securities law. Accordingly, such Unregistered Stock is not freely transferable except as permitted under various exemptions contained in the Act and the rules and regulations of the U.S. Securities and Exchange Commission interpreting said Act. Each of the Sellers therefore covenants, warrants and represents that none of the shares of Graymark Stock issued to it in accordance with this Agreement will be offered, sold, assigned, pledged, hypothecated, transferred or otherwise disposed of except after full compliance with all of the applicable provisions of the Act and the rules and regulations of the Securities and Exchange Commission and all applicable state securities laws.

     10.2 Legend. All Unregistered Stock issued in accordance with this Agreement shall bear the following legend (or a legend substantially similar thereto):

THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) OR ANY OTHER SECURITIES LAW, AND NO REOFFER, SALE, TRANSFER, PLEDGE OR OTHER DISPOSITION THEREOF MAY BE MADE UNLESS, IN THE WRITTEN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER, SUCH TRANSACTION WILL NOT REQUIRE REGISTRATION UNDER THE ACT OR ANY OTHER SECURITIES LAW.

24

     10.3 Securities Law Representations. As of the Closing Date, each of the Sellers hereby makes the following representations and warranties to and for the benefit of Buyer and Graymark:

     (a) Such Seller has been provided with the various filings described in Schedule 10.3, and has been provided as much time and opportunity as it deemed appropriate to review and study such information and to consult with Buyer and Graymark regarding the merits and risks of the transactions contemplated by this Agreement;

     (b) Such Seller has had adequate opportunity to ask questions of and receive answers from representatives of Buyer and Graymark concerning any and all matters pertaining to Buyer and Graymark and the transactions contemplated by this Agreement which it deemed appropriate;

     (c) Such Seller is the true party in interest and is not acquiring any of the Graymark Stock for the benefit of any other Person; provided, however, that such Seller intends to transfer its shares of Graymark Stock to certain partners and creditors in part to satisfy certain obligations, subject to and in accordance with subsection (e) below;

     (d) The Graymark Stock being acquired hereunder by such Seller is being acquired for its own account for investment, and is not being acquired with a view to resale, redistribution, subdivision or fractionalization thereof; provided, however, that such Seller intends to transfer its shares of Graymark Stock to certain partners and creditors in part to satisfy certain obligations, subject to and in accordance with subsection (e) below;

     (e) Prior to any transfer or assignment of shares of Graymark Stock to any of its partners or creditors as contemplated in this Agreement, such Seller shall cause to be delivered (i) to each of its assignees, with each assignee’s written confirmation of receipt, the various filings described in Schedule 10.3(e) and as supplemented with all additional reports filed by Graymark with the U.S. Securities and Exchange Commission following the Closing Date, and (ii) to Graymark written representations of the assignee that the assignee qualifies as an “accredited investor” as defined in Rule 501(a) of Regulation D as promulgated by the U.S. Securities and Exchange Commission in effect at the time of the assignment of the Graymark Stock and representations substantially the same as those set forth in subsections (a), (b), (c) and (d) above and subsections (f) and (g) below. Any assignment of any of the Graymark Stock shall require the consent of Graymark, which consent shall not be unreasonably withheld when all conditions of transfer or assignment set forth herein are complied with or waived in writing by Graymark;

     (f) Such Seller has such knowledge and experience in financial and business matters and investments in general that it is capable of evaluating the merits and risks of the ownership of the Graymark Stock by it; and

25

     (g) Such Seller understands that the Graymark Stock that it will receive cannot be readily sold without compliance with applicable state and federal securities laws.

     10.4 Piggyback Registrations.

     (a) Right to Piggyback. In the event shares of common stock of Graymark are to be registered by Graymark under the Securities Act of 1933, as amended (the “Securities Act”), within twelve months after the Closing Date, and the form of registration statement to be used permits the inclusion of the Graymark Stock therein (a “Piggyback Registration”), Graymark will give prompt written notice to all Sellers of its intention to effect such a registration and will include in such registration, subject to the provisions of Section 10.4(b), all Graymark Stock with respect to which Graymark has received written requests for inclusion therein within twenty-one (21) days after Graymark’s notice has been given. Graymark shall pay all registration expenses for such Piggyback Registration. This Section 10.4 shall not apply to a registration effected solely to implement an employee benefit plan or to any other form or type of registration which does not permit inclusion of Graymark Stock, including without limitation Form S-4 and Form S-8.

     (b) Priority on Registrations. If a Piggyback Registration is an underwritten offering and the managing underwriters advise Graymark in writing that in their opinion the number of securities requested to be included in such offering creates a substantial risk that the price per share of Common Stock will be reduced or that the number of securities requested to be included is greater than the underwriters are prepared to sell, Graymark will include in such registration prior to the Graymark Stock, the securities proposed to be sold by Graymark and by any other person granted registration rights senior to the Graymark Stock. Graymark will then include in such registration the Graymark Stock requested to be included in such registration which in the opinion of such underwriters can be sold in such offering without creating such a risk or exceeding such number, pro rata among the Sellers on the basis of the number of shares of Graymark Stock owned by such Sellers, with further successive pro rata allocations among the Sellers if any such Seller has requested the registration of less than all the Graymark Stock entitled to registration. Nothing in this Agreement shall prohibit Graymark from granting registration rights senior to the rights granted herein with respect to the Graymark Stock. In the event that a Piggyback Registration for which Graymark gives notice under Section 10.4(a) is for holders of Graymark’s securities other than the Sellers and is pursuant to the exercise by such other holders of demand registration rights granted to them after the date hereof, then no Seller shall be entitled to sell shares in such Piggyback Registration except with the consent of (and subject to such limitations and restrictions as are imposed by) such other holders.

     (c) Indemnification. Graymark agrees to indemnify, to the fullest extent permitted by law, each Seller, or assignee of the Graymark Stock hereunder, against all losses, claims, damages, liabilities and expenses (including without limitation reasonable and customary attorneys’ fees) caused by any untrue or alleged untrue statement of a material fact contained in any registration statement, prospectus or preliminary

26

prospectus or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as the same are caused by or contained in any information furnished in writing to Graymark by such Seller, or any Seller assignee of the Graymark Stock hereunder, expressly for use therein or by such Seller’s or assignee’s failure to deliver a copy of the prospectus or any amendments or supplements thereto. In connection with any registration statement in which a Seller, or any Seller assignee of the Graymark Stock hereunder, is participating, each such Seller, or assignee of the Graymark Stock hereunder, severally, but not jointly, shall indemnify Graymark, its affiliates, officers, directors and each person who controls Graymark (within the meaning of the Securities Act), insofar as and to the extent that losses, claims, damages, liabilities, and expenses (including without limitation reasonable and customary attorneys’ fees) are caused by any untrue statement of a material fact contained in the registration statement, prospectus or preliminary prospectus or any amendment or supplement thereto or any omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, but only to the extent that such untrue statement or omission is contained in any information or affidavit so furnished in writing by such Seller, or assignee of the Graymark Stock hereunder, expressly for use therein.

ARTICLE XI
MISCELLANEOUS

     11.1 Press Releases and Public Announcements. The parties agree that Buyer and/or Graymark may issue a press release or make other disclosure of this Agreement at such times and in the manner which they believe is necessary or appropriate. Prior to issuing any such press release or other disclosure, Buyer shall first advise Sellers. None of the Sellers shall make any press release or other public disclosure of this transaction without the prior written consent of Buyer.

     11.2 No Third Party Beneficiaries. This Agreement shall not confer any rights or remedies upon any Person other than the parties hereto and their respective successors and permitted assigns.

     11.3 Entire Agreement. This Agreement (including the documents referred to herein) constitutes the entire agreement between the parties and supersedes any prior understandings, agreements, or representations by or between the parties, written or oral, to the extent they related in any way to the subject matter hereof including, without limitation, that certain letter agreement, dated as of January 24, 2008, between Sleep Development Group, LP and Graymark.

     11.4 Succession and Assignment. This Agreement shall be binding upon and inure to the benefit of the parties named herein and their respective successors and permitted assigns. No party may assign either this Agreement or any of its rights, interests, or obligations hereunder without the prior written approval of the other parties hereto; provided, however, that Buyer may (i) assign any or all of its rights and interests hereunder to one or more of its Affiliates, and (ii) designate one or more of its Affiliates to perform its obligations hereunder (in any or all of which

27

cases Buyer nonetheless shall remain responsible for the performance of all of its obligations hereunder).

     11.5 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together will constitute one and the same instrument.

     11.6 Headings. The section headings contained in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement.

     11.7 Notices. All notices, requests, demands, claims, and other communications hereunder will be in writing. Any notice, request, demand, claim, or other communication hereunder shall be deemed duly given (i) if served personally, on the day of such service, or (ii) if mailed by certified or registered mail (return receipt requested), on the second business day after mailing, and (iii) if transmitted by recognized overnight carrier, on the next business day after tender to the carrier. Such communications shall be sent to the following addresses:

If to Sellers:	Sleep Development Group, L.P.
	620 E. Southlake Blvd.
	Southlake, Texas 76092
	Attn: Thomas Whitaker
Copy to:	Law Offices of Bert Starr
	2701 N. Dallas Parkway, Ste 540
	Plano, Texas 75093
	Attn: Bert Starr
If to Buyer:	Capital Sleep Management, LLC
	305 N. Bryant
	Edmond, OK 73034
	Attn: Vahid Salalati
Copy to:	Hartzog Conger Cason & Neville
	1600 Bank of Oklahoma Plaza
	201 Robert S. Kerr
	Oklahoma City, OK 73102
	Attn: Steven C. Davis and John D. Robertson

Any party may change the address to which notices, requests, demands, claims, and other communications hereunder are to be delivered by giving the other parties notice in the manner herein set forth.

     11.8 Governing Law. This Agreement shall be governed by and construed in accordance with the domestic laws of the State of Texas without giving effect to any choice or conflict of law provision or rule that would cause the application of the laws of any jurisdiction other than the State of Texas.

28

     11.9 Amendments and Waivers. No amendment of any provision of this Agreement shall be valid unless the same shall be in writing and signed by each of the parties hereto. No waiver by any party of any default, misrepresentation, or breach of warranty or covenant hereunder, whether intentional or not, shall be deemed to extend to any prior or subsequent default, misrepresentation, or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence.

     11.10 Severability. Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction.

     11.11 Expenses. Each of Buyer and Sellers will bear its own costs and expenses (including legal fees and expenses) incurred in connection with this Agreement and the transactions contemplated hereby.

     11.12 Construction. The parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement. Any reference to any federal, state, local, or foreign statute or law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise. The word “including” shall mean including without limitation.

     11.13 Incorporation of Exhibits and Schedules. The Exhibits and Schedules identified in this Agreement are incorporated herein by reference and made a part hereof.

     11.14 Litigation Expense. In any action brought by a party hereto to enforce the obligations of any other party hereto, the prevailing party shall be entitled to collect from the other parties to such action such party’s reasonable attorneys’ and accountants’ fees, court costs and other expenses incidental to such litigation.

     11.15 Specific Performance. Each of the parties acknowledges and agrees that the other party will be damaged irreparably in the event any of the provisions of this Agreement are not performed in accordance with their specific terms or otherwise are breached. Accordingly, each of the parties agrees that the other party shall be entitled to an injunction or injunctions to prevent breaches of the provisions of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof, in addition to any other remedy to which it may be entitled, at law or in equity.

     11.16 Payment of Sales Taxes. Buyer agrees that it shall be responsible for, pay and discharge all sales and/or excise taxes, if any, imposed by the State of Texas or any other county or municipal taxing authority on the transactions to be performed pursuant to this Agreement including, without limitation, the sale of furniture, fixtures and equipment. At the Closing, Buyer shall remit to Sellers all such amounts believed to be owed with regard to the sale of the Acquired Assets. Should any Seller be assessed any additional or other amounts of sales taxes or assessments not collected from Buyer at the Closing, such Seller shall notify Buyer of said

29

assessment and Buyer shall have the opportunity to contest and defend such additional assessments. If it is ultimately determined that any additional sales and/or excise taxes are required to be paid in connection with the transactions contemplated herein, then Buyer shall immediately pay such taxes.

     11.17 Completion of Schedules and Exhibits. The parties acknowledge that certain of the Schedules and the Exhibits to this Agreement have not been prepared as of the date of this Agreement. The parties will cooperate with each other in preparing such Schedules and Exhibits following the execution of this Agreement. All final Schedules and Exhibits must be in a form satisfactory to Buyer in its sole discretion.

*****

30

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

BUYER:	CAPITAL SLEEP MANAGEMENT, LLC
	By:
		Name:
		Title:

SELLERS:	PLANO SLEEP CENTER, LTD., a Texas limited partnership
	By:	SC Plano Lab, LLC, its General Partner
	By:
		Name:
		Title:

SOUTHLAKE SLEEP CENTER, LTD., a Texas limited partnership
By:	Southlake SC, LLC, its General Partner
By:
	Name:
	Title:

31

JOINDER BY GRAYMARK HEALTHCARE, INC.

     Graymark Healthcare, Inc., an Oklahoma corporation and the sole member of Capital Sleep Management, LLC, hereby joins in this Asset Purchase Agreement for the sole purpose of guaranteeing the delivery of the Graymark Stock pursuant to Section 2.1(b) thereof.

     Dated this ___ day of May, 2008.

GRAYMARK HEALTHCARE, INC.
By:
	Name:
	Title:

32

EXHIBIT “A”

BILL OF SALE

     This Bill of Sale is executed and delivered pursuant to that certain Asset Purchase Agreement, dated as of _______________, 2008 (the “Agreement”), between and among SDC Holdings, LLC, an Oklahoma limited liability company (“Buyer”), _____________________, a Texas limited partnership (“Seller”), and certain other parties. Terms defined in the Agreement and not otherwise defined herein are used herein with the meanings so defined.

     For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

     1. Seller hereby SELLS, CONVEYS, TRANSFERS, ASSIGNS and DELIVERS to Buyer, and Buyer hereby purchases and acquires from Seller, all of the assets described on Schedule 1 attached hereto (the “Assets”) (and all assignable warranties and guarantees, if any, express or implied, in connection with the Assets to the extent transferable) free and clear of all claims, liens, Security Interests and other encumbrances of any kind or nature other than the Permitted Encumbrances. Seller shall cooperate with Buyer, its successors and assigns in securing the performance of any warrantor or guarantor under any warranty, guarantee, or other agreement assigned to the Buyer pursuant to this Bill of Sale or any work that the Buyer, its successors or assigns believe in good faith should be performed by any warrantor or guarantor pursuant to such warranties or guarantees.

     2. THIS BILL OF SALE IS EXECUTED PURSUANT TO THE AGREEMENT, AND THE TERMS AND CONDITIONS OF THE AGREEMENT, INCLUDING THE REPRESENTATIONS AND WARRANTIES CONCERNING THE ASSETS CONVEYED HEREBY, APPLY TO THIS BILL OF SALE AS IF FULLY INCORPORATED HEREIN. THE ASSETS ARE TRANSFERRED AND SOLD SUBJECT TO AND WITH THE BENEFIT OF ALL THE REPRESENTATIONS, WARRANTIES AND COVENANTS CONTAINED IN THE AGREEMENT.

     3. This Bill of Sale is made without assumption of any Liabilities, obligations or debts of Seller, except as expressly provided in the Agreement or the Assumption Agreement executed contemporaneously herewith.

     4. At any time or from time to time after the date hereof, Seller shall execute and deliver or cause to be executed and delivered to the Buyer, its successors and assigns such other instruments and take or cause to be taken such other actions as may reasonably be requested in order to carry out the intent and purposes of the Agreement and this Bill of Sale and to more effectively vest title to the Assets and all warranties and guarantees related to the Assets in the Buyer and its successors and assigns.

     5. The parties acknowledge and agree that all tangible Assets are being conveyed to Buyer “AS IS, WHERE IS,” and no Seller makes any representation or warranty regarding the merchantability or fitness for a particular purpose of any tangible Asset.

33

     IN WITNESS WHEREOF, Seller has caused this instrument to be executed by its duly authorized officer this ___ day of ____________, 2008.

By:	_______________, its General Partner
By:
	Name:
	Title:

34

SCHEDULE 1

[INSERT TO COME]

35

EXHIBIT “B”

ASSUMPTION AGREEMENT

     THIS ASSUMPTION AGREEMENT (the “Assumption Agreement”), between Capital Sleep Management, LLC, a Texas limited liability company (“Buyer”), and Plano Sleep Center, Ltd., a Texas limited partnership (“PSC”), and Southlake Sleep Center, Ltd., a Texas limited partnership (“SSC”) (PSC and SSC are collectively referred to herein as the “Sellers”), is executed and delivered this ____ day of ____________, 2008, pursuant to that certain Asset Purchase Agreement, dated May ___, 2008 (the “Agreement”) between and among Sellers and Buyer.

WITNESSETH:

     WHEREAS, pursuant to the terms of the Agreement, Sellers have agreed to sell to Buyer, and Buyer has agreed to purchase from Sellers, certain of the assets of Sellers and certain of the liabilities of Sellers on the terms and subject to the conditions set forth therein.

     NOW, THEREFORE, in consideration of the premises and the transactions contemplated by the Agreement, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

     1. Capitalized terms used but not defined herein shall have the respective meanings assigned thereto in the Agreement.

     2. Buyer does hereby assume, and agrees to perform, pay and discharge all of the Assumed Liabilities and agrees to indemnify, defend and hold Sellers harmless from and against any and all Damages arising from the failure of Buyer to perform, pay or discharge any of the Assumed Liabilities.

     3. Sellers and Buyer agree that this Assumption Agreement is subject to the terms and conditions of the Agreement and that, notwithstanding anything contained herein to the contrary, this Assumption Agreement shall not be deemed to limit or extinguish any obligation of Buyer or Sellers under the Agreement, all of which obligations shall survive the delivery of this Assumption Agreement in accordance with the terms of the Agreement.

     4. This Assumption Agreement shall be governed by and construed and interpreted in accordance with the laws of the State of Oklahoma.

36

     IN WITNESS WHEREOF, the undersigned have executed this Assumption Agreement as of the date first above written.

SELLERS:	PLANO SLEEP CENTER, LTD., a Texas limited partnership
	By:	SC Plano Lab, LLC, its General Partner
	By:
		Name:
		Title:
	SOUTHLAKE SLEEP CENTER, LTD., a Texas limited partnership
	By:	Southlake SC, LLC, its General Partner
	By:
		Name:
		Title:
BUYER:	CAPITAL SLEEP MANAGEMENT, LLC
	By:
		Name:
		Title:

37

EX-10.3

EXHIBIT 10.3

ASSET PURCHASE AGREEMENT

     This Asset Purchase Agreement (the “Agreement”) is made and entered into this 30th day of May, 2008, between and among Texas Center for TCSD of Waco, LLC, a Texas limited liability company (“Buyer”), and Sleep Center of Waco, Ltd., a Texas limited partnership (“Seller”).

     This Agreement contemplates a transaction in which Buyer will purchase substantially all of the assets (and assume certain of the liabilities) of Seller.

     Now, therefore, in consideration of the premises and the mutual promises herein made, and in consideration of the representations, warranties, and covenants herein contained, the parties agree as follows.

ARTICLE I
DEFINITIONS

     1.1 The following capitalized words and phrases have the stated meanings:

     “Accounts Receivable” means all rights to payment and accounts receivable owned or held by Seller in connection with services provided on or after March 1, 2008 by Seller, together with all interest, late charges, penalties, collection fees and other sums that may be due and payable in connection with such rights to payment or accounts receivable.

     “Acquired Assets” means all right, title, and interest in and to all of the assets of Seller including, without limitation, all of (a) the tangible personal property identified on Schedule 1.1 attached hereto, (b) its Accounts Receivable, (c) its Intellectual Property, goodwill associated therewith, licenses and sublicenses granted and obtained with respect thereto, and rights thereunder, remedies against infringements thereof, and rights to protection of interests therein under the laws of all jurisdictions, (d) to the extent assignable, its franchises, approvals, permits, licenses, orders, registrations, certificates, variances, and similar rights obtained from governments and governmental agencies, (e) the Seller Agreements and all rights thereunder, (f) its phone numbers and e-mail addresses; (g) its web sites and the contents thereof, and (h) its books, records, ledgers, files, documents, correspondence, lists, plats, engineering plans, drawings, and specifications, creative materials, advertising and promotional materials, studies, reports, and other printed or written materials relating in any way to the business of Seller; provided, however, that the Acquired Assets shall not include (i) the charter, qualifications to conduct business as a foreign limited partnership, arrangements with registered agents relating to foreign qualifications, taxpayer and other identification numbers, seals, minute books, transfer books, and other documents relating to the organization, maintenance, and existence of Seller as a limited partnership, (ii) any of the rights of Seller under this Agreement (or under any side agreement between Seller on the one hand and Buyer on the other hand entered into on or after the date of this Agreement), or (iii) any of the Excluded Assets.

     “Affiliate” has the meaning set forth in Rule 12b-2 of the regulations promulgated under the Securities Exchange Act of 1934, as amended.

1

     “Assumed Liabilities” means (a) all obligations of Seller under the Seller Agreements either (i) to furnish goods, services and other non-Cash benefits to another party after the Closing, or (ii) to pay for goods, services and other non-Cash benefits that another party will furnish to it after the Closing, and (b) all Liabilities and obligations of Seller set forth in Schedule 1.1(a) attached hereto.

     “Basis” means any past or present fact, situation, circumstance, status, condition, activity, practice, plan, occurrence, event, incident, action, failure to act, or transaction that forms or could form the basis for any specified consequence.

     “Buyer Indemnitees” has the meaning set forth in Section 7.1 below.

     “Closing” has the meaning set forth in Section 2.1(d) below.

     “Closing Date” has the meaning set forth in Section 2.1(d) below.

     “Code” means the Internal Revenue Code of 1986, as amended.

     “Confidential Information” means any information concerning the business and affairs of Seller that is not already generally available to the public other than as a result of a breach of this Agreement by Seller.

     “Damages” has the meaning set forth in Section 7.1 below.

     “Environmental, Health, and Safety Laws” means the Comprehensive Environmental Response, Compensation and Liability Act of 1980, the Resource Conservation and Recovery Act of 1976, and the Occupational Safety and Health Act of 1970, each as amended, together with all other laws (including rules, regulations, codes, plans, injunctions, judgments, orders, decrees, rulings, and charges thereunder) of federal, state and local governments (and all agencies thereof) concerning pollution or protection of the environment, public health and safety, or employee health and safety, including laws relating to emissions, discharges, releases, or threatened releases of pollutants, contaminants, or chemical, industrial, hazardous, or toxic materials or wastes into ambient air, surface water, ground water, or lands or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transportation, or handling of pollutants, contaminants, or chemical, industrial, hazardous, or toxic materials or wastes.

     “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

     “Excluded Assets” means the assets listed on Schedule 1.1(b) attached hereto.

     “Financial Statements” has the meaning set forth in Section 3.7 below.

     “Graymark” means Graymark Healthcare, Inc., an Oklahoma corporation.

     “Intellectual Property” means (a) all inventions (whether patentable or unpatentable and whether or not reduced to practice), all improvements thereto, and all patents, patent applications, and patent disclosures, together with all reissuances, continuations, continuations-

2

in-part, revisions, extensions, and reexaminations thereof, (b) all trademarks, service marks, trade dress, logos, trade names, and corporate names, together with all translations, adaptations, derivations, and combinations thereof and including all goodwill associated therewith, and all applications, registrations, and renewals in connection therewith, (c) all copyrightable works, all copyrights, and all applications, registrations, and renewals in connection therewith, (d) all mask works and all applications, registrations, and renewals in connection therewith, (e) all trade secrets and confidential business information (including ideas, research and development, know-how, formulas, compositions, manufacturing and production processes and techniques, technical data, designs, drawings, specifications, customer and supplier lists, pricing and cost information, and business and marketing plans and proposals), (f) all assignable computer software (including data and related documentation), and (g) all copies and tangible embodiments thereof (in whatever form or medium).

     “Knowledge of Seller” means the actual knowledge after reasonable investigation of Seller and its general partner. .

     “Liability” means any liability (whether known or unknown, whether asserted or unasserted, whether absolute or contingent, whether accrued or unaccrued, whether liquidated or unliquidated, and whether due or to become due), including any liability for Taxes.

     “Material Adverse Effect” means, with respect to Seller, any change, event, violation, inaccuracy, circumstance or effect that is materially adverse to the business, assets, liabilities, financial condition, results of operations or prospects of Seller taken as a whole, other than as a result of: (i) changes adversely affecting the United States economy (so long as Seller is not disproportionately affected thereby); (ii) changes adversely affecting the industry in which Seller operates (so long as Seller is not disproportionately affected thereby); (iii) the announcement or pendency of the transactions contemplated by this Agreement; (iv) changes in laws; or (v) acts of war or terrorism.

     “Most Recent Balance Sheet” means the balance sheet contained within the Most Recent Financial Statements.

     “Most Recent Financial Statements” has the meaning set forth in Section 3.7 below.

     “Most Recent Fiscal Month End” has the meaning set forth in Section 3.7 below.

     “Most Recent Fiscal Year End” has the meaning set forth in Section 3.7 below.

     “Ordinary Course of Business” means the ordinary course of business consistent with past custom and practice (including with respect to quantity and frequency).

     “PBGC” means the Pension Benefit Guaranty Corporation.

     “Permitted Encumbrances” means the Security Interests specifically identified in Schedule 1.1(a) attached hereto as Security Interests affecting some or all of the Acquired Assets and that will not be released/terminated prior to Closing.

3

     “Person” means an individual, a partnership, a corporation, an association, a limited liability company, a joint stock company, a trust, a joint venture, an unincorporated organization, a governmental entity (or any department, agency, or political subdivision thereof), or any other entity of any kind.

     “Security Interest” means any mortgage, pledge, lien, encumbrance, charge or other security interest of any kind or nature, other than liens for Taxes not yet due and payable.

     “Seller Agreements” means the agreements identified in Schedule 1.1(c) attached hereto.

     “Seller Indemnitees” has the meaning set forth in Section 7.2 below.

     “Subsidiary” means any corporation with respect to which a specified Person (or a Subsidiary thereof) owns a majority of the common stock or has the power to vote or direct the voting of sufficient securities to elect a majority of the directors.

     “Tax” means any federal, state or local income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental (including taxes under Code Section 59A), customs duties, capital stock, franchise, profits, withholding, social security (or similar), unemployment, disability, real property, personal property, sales, use, transfer, registration, value added, alternative or add-on minimum, estimated, or other tax of any kind whatsoever, including any interest, penalty, or addition thereto, whether disputed or not.

     “Tax Return” means any return, declaration, report, claim for refund, or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.

ARTICLE II
PURCHASE AND SALE OF ASSETS

     2.1 Basic Transaction.

     (a) Purchase and Sale of Assets. On and subject to the terms and conditions of this Agreement, at the Closing, Buyer shall purchase from Seller, and Seller shall sell, transfer, convey, and deliver to Buyer, free and clear of all Security Interests and restrictions on transfer other than the Permitted Encumbrances, all of the Acquired Assets for the consideration specified below in this Article II.

     (b) Delivery of Graymark Stock. Within five (5) days after the Closing Date, Buyer will deliver to Seller that number of shares of Graymark common stock, par value $0.0001 per share (the “Graymark Stock”), having an aggregate Agreed Value equal to: (i) the sum of Nine Hundred Thousand Dollars ($900,000), minus (ii) the value of all Graymark Stock delivered to Plano Sleep Center, LTD and Southlake Sleep Center, LTD. under that certain Asset Purchase Agreement between Plano Sleep Center, LTD, Southlake Sleep Center, LTD and Capital Sleep Management, LLC of even date herewith (the “Plano Agreement”). For purposes of this Agreement, the “Agreed Value” per share of the Graymark Stock shall mean the average closing price for the Graymark Stock as

4

reported by the OTC Bulletin Board for the ten (10) consecutive trading days ending on the third trading day immediately preceding the Closing Date. In addition, Graymark, shall deliver to Seller options to purchase an additional amount of Graymark Stock equal to (i) 35,000 shares minus (ii) that number of optioned shares of Graymark Stock received by Plano Sleep Center, LTD and Southlake Sleep Center, LTD under the Plano Agreement; the exercise price for all such options shall be Five Dollars ($5.00) per share. Such options shall expire if not exercised on or before the second anniversary of the Closing Date.

     (c) Assumption of Liabilities. On and subject to the terms and conditions of this Agreement, Buyer shall assume and become responsible for all of the Assumed Liabilities at the Closing. Buyer will not assume or have any responsibility, however, with respect to any other obligation or Liability of Seller not included within the definition of Assumed Liabilities.

     (d) The Closing. Subject to and in accordance with the provisions of this Agreement, the closing of the transactions contemplated by this Agreement (the “Closing”) shall take place via fax or electronically transmitted signatures (with originals to be delivered via overnight delivery), commencing at 9:00 a.m. local time on the third business day following the satisfaction or waiver of all conditions to the obligations of the parties to consummate the transactions contemplated hereby (other than conditions with respect to actions the respective parties will take at the Closing itself), or at such other time and place as Buyer and Seller may mutually determine (the “Closing Date”).

     (e) Deliveries at the Closing. At the Closing, (i) Seller will deliver to Buyer the various certificates, instruments, and documents referred to in Section 8.1 below; (ii) Buyer will deliver to Seller the various certificates, instruments, and documents referred to in Section 8.2 below; (iii) Seller will execute, acknowledge (if appropriate), and deliver to Buyer (A) a bill of sale in the form attached hereto as Exhibit “A”, and (B) such other instruments of sale, transfer, conveyance, and assignment as Buyer and its counsel reasonably may request; (iv) Buyer will execute, acknowledge (if appropriate), and deliver to Seller (A) an assumption agreement in the form attached hereto as Exhibit “B” and (B) such other instruments of assumption as Seller and its counsel reasonably may request; and (v) Buyer will deliver to Seller the consideration specified in Section 2.1(b) above.

ARTICLE III
REPRESENTATIONS AND WARRANTIES CONCERNING
THE TRANSACTION

     Seller represents and warrants to Buyer that the statements contained in this Article III are correct and complete as of the date of this Agreement and will be correct and complete as of the Closing Date (as though made then and as though the Closing Date were substituted for the date of this Agreement throughout this Article III).

     3.1 Organization of Seller. Seller is a limited partnership duly organized, validly existing, and in good standing under the laws of the State of Texas. Seller is not qualified or

5

licensed to do business in any other jurisdiction. Attached hereto as Exhibit “C” are true, accurate and complete copies of the currently effective Certificate of Limited Partnership and Limited Partnership Agreement of Seller.

     3.2 Authorization of Transaction. Seller has full power and authority to execute and deliver this Agreement and to perform its obligations hereunder. This Agreement constitutes the valid and legally binding obligation of Seller enforceable in accordance with its terms and conditions, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally or as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies.

     3.3 Noncontravention. Neither the execution and the delivery of this Agreement, nor the consummation of the transactions contemplated hereby, will (i) violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of any government, governmental agency, or court to which Seller is subject or any provision of the Certificate of Limited Partnership or Limited Partnership Agreement of Seller or (ii) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify, or cancel, or require any notice under any agreement, contract, lease, license, instrument, or other arrangement to which Seller is a party or by which it is bound or to which any of its assets is subject (or result in the imposition of any Security Interest or lien of any kind upon any of its assets), in each case excepting any such violation, conflict, breach or default which would not have a Material Adverse Effect. Except as described in Schedule 3.3, Seller is not required to give any notice to, make any filing with, or obtain any authorization, consent, or approval of any government, governmental agency or other Person in order for the parties to consummate the transactions contemplated by this Agreement (including the assignments and assumptions referred to in Section 2 above).

     3.4 Brokers’ Fees. Seller has no Liability or obligation to any broker, finder, or agent with respect to the transactions contemplated by this Agreement for which Buyer could become liable or obligated or to which the Acquired Assets could become subject.

     3.5 Title to Assets. Except as described on Schedule 3.5, Seller has good and marketable title to, or a valid leasehold interest in, all of the properties and assets used by it, located on its premises, or shown on the Most Recent Balance Sheet or acquired after the date thereof, free and clear of all Security Interests, except for properties and assets disposed of in the Ordinary Course of Business since the date of the Most Recent Balance Sheet. Without limiting the generality of the foregoing, Seller has, or at Closing will have, good and marketable title to all of the Acquired Assets owned by Seller, free and clear of any Security Interests (other than the Permitted Encumbrances) or restrictions on transfer.

     3.6 Subsidiaries. Seller has no Subsidiaries. Except as described on Schedule 3.6, Seller has no direct or indirect equity interest in any corporation, partnership, joint venture, business association or other entity.

     3.7 Financial Statements. Seller has delivered to Buyer copies of the following financial statements (collectively the “Financial Statements”) of Seller at Schedule 3.7:

6

(i) unaudited balance sheets, statements of income, and statements of cash flows as of and for the fiscal years ended December 31, 2006 and December 31, 2007 (the “Most Recent Fiscal Year End”); and (ii) an unaudited consolidated balance sheet and statement of income (the “Most Recent Financial Statements”) as of and for the three months ended March 31, 2008 (the “Most Recent Fiscal Month End”). The Financial Statements (including the notes thereto) have been prepared on a consistent basis throughout the periods covered thereby, present fairly the financial condition of Seller as of such dates and the results of operations of Seller for such periods, are true and correct in all material respects and do not contain any misstatement of a material fact or omit to state any material matter required to make such Financial Statements not misleading; provided, however, that the Most Recent Financial Statements are subject to normal year-end adjustments and lack footnotes and other presentation items.

     3.8 Events Subsequent to Most Recent Fiscal Year End. To the Knowledge of Seller, since the Most Recent Fiscal Year End, there has not been any material adverse change in the business, financial condition, operations, results of operations, or future prospects of Seller. Without limiting the generality of the foregoing, since that date:

     (i) Seller has not sold, leased, transferred, or assigned any of its assets, tangible or intangible, other than for a fair consideration in the Ordinary Course of Business;

     (ii) Seller has not entered into any agreement, contract, lease, or license (or series of related agreements, contracts, leases, and licenses) either involving more than $5,000 or outside the Ordinary Course of Business;

     (iii) no party (including Seller) has accelerated, terminated, modified, or canceled any material agreement, contract, lease, or license (or series of related agreements, contracts, leases, and licenses) to which Seller is a party or by which it or any of its assets is bound;

     (iv) Seller has not imposed any Security Interest upon any of the Acquired Assets;

     (v) Seller has not made any capital expenditure (or series of related capital expenditures) either involving more than $5,000 or outside the Ordinary Course of Business;

     (vi) Seller has not made any capital investment in, any loan to, or any acquisition of the securities or assets of any other Person either involving more than $5,000 or outside the Ordinary Course of Business;

     (vii) Seller has not granted any license or sublicense of any rights under or with respect to any Intellectual Property;

     (viii) there has been no change made or authorized in the Certificate of Limited Partnership or the limited partnership agreement of Seller;

7

     (ix) Seller has not declared, set aside or paid any distribution to its partners or redeemed, purchased or otherwise acquired any of its partnership interests;

     (x) Seller has not experienced any material damage, destruction, or loss (whether or not covered by insurance) to its property;

     (xi) Seller has not made any loan to, or entered into any other transaction with, any of its partners or employees outside the Ordinary Course of Business;

     (xii) Seller has not adopted, amended, modified or terminated any bonus, profit-sharing, incentive, severance or other plan, contract or commitment for the benefit of any of its employees (or taken any such action with respect to any other employee benefit plan);

     (xiii) there has not been any other occurrence, event, incident, action, failure to act, or transaction involving Seller that would have a Material Adverse Effect; and

     (xiv) Seller has not committed to any of the foregoing.

     3.9 Undisclosed Liabilities. Seller has no Liability (and there is no Basis for any present or future action, suit, proceeding, hearing, investigation, charge, complaint, claim, or demand against Seller giving rise to any Liability), except for (i) Liabilities set forth on the face of the Most Recent Balance Sheet (rather than in any notes thereto), (ii) Liabilities which have arisen after the Most Recent Fiscal Month End in the Ordinary Course of Business (none of which results from, arises out of, relates to, is in the nature of, or was caused by any breach of contract, breach of warranty, tort, infringement, or violation of law), and (iii) the Liabilities identified on Schedule 3.9 attached hereto.

     3.10 Legal Compliance. Seller has complied in all material respects with all applicable laws (including rules, regulations, codes, plans, injunctions, judgments, orders, decrees, rulings, and charges thereunder) of federal, state, local and foreign governments (and all agencies thereof), and no action, suit, proceeding, hearing, investigation, charge, complaint, claim, demand, or notice has been filed or commenced or, to the Knowledge of Seller, threatened against Seller alleging any failure so to comply.

     3.11 Tax Matters.

     (a) Seller has filed all Tax Returns that it was required to file. All such Tax Returns were correct and complete in all respects. All Taxes owed by Seller (whether or not shown on any Tax Return) have been paid or will be paid in accordance with the applicable extensions. Except as described on Schedule 3.11, Seller currently is not the beneficiary of any extension of time within which to file any Tax Return. No claim has ever been made by an authority in a jurisdiction where Seller does not file Tax Returns that it is or may be subject to taxation by that jurisdiction. There are no Security Interests

8

on any of the assets of Seller that arose in connection with any failure (or alleged failure) to pay any Tax.

     (b) Seller has withheld and paid all Taxes required to have been withheld and paid in connection with amounts paid or owing to any employee, independent contractor, creditor, partner, or other third party.

     (c) Seller has not waived any statute of limitations in respect of Taxes or agreed to an extension of time with respect to a tax assessment or deficiency.

     (d) The unpaid Taxes of Seller (i) did not, as of the Most Recent Fiscal Month End, exceed the reserve for Tax Liability (rather than any reserve for deferred Taxes established to reflect timing differences between book and tax income) set forth on the face of the Most Recent Balance Sheet (rather than in any notes thereto) and (ii) do not exceed that reserve as adjusted for the passage of time through the Closing Date in accordance with the past custom and practice of Seller in filing its Tax Returns.

     3.12 Real Property.

     (a) Seller does not own any real property.

     (b) Schedule 3.12(b) lists and describes briefly all real property leased by Seller. Seller has not subleased any real property. Correct and complete copies of each of the leases listed in Schedule 3.12(b) (as amended to date) are attached hereto as Exhibit “D”. Except as described on Schedule 3.12(b), with respect to each such lease:

     (i) the lease is legal, valid, binding, enforceable and in full force and effect;

     (ii) the lease will continue to be legal, valid, binding, enforceable and in full force and effect on identical terms following the consummation of the transactions contemplated hereby;

     (iii) no party to the lease is in breach or default, and no event has occurred which, with notice or lapse of time, would constitute a breach or default or permit termination, modification, or acceleration thereunder;

     (iv) no party to the lease has repudiated any provision thereof;

     (v) there are no disputes, oral agreements, or forbearance programs in effect as to the lease;

     (vi) Seller has not assigned, transferred, conveyed, mortgaged, deeded in trust, or encumbered any interest in the leasehold;

     (vii) all facilities leased thereunder are supplied with utilities and other services necessary for the operation of said facilities;

9

     (viii) there are no pending or, to the Knowledge of Seller, threatened condemnation proceedings, lawsuits, or administrative actions relating to the parcel, or other matters affecting adversely the use, occupancy or value, or the marketability of title, thereof; and

     (ix) there are no parties (other than Seller) in possession of the parcel of real property.

     3.13 Intellectual Property.

     (a) Seller does not own any Intellectual Property.

     (b) To the Knowledge of Seller, Seller has not interfered with, infringed upon, misappropriated, or otherwise come into conflict with any Intellectual Property rights of third parties. Seller has never received any charge, complaint, claim, demand or notice alleging any such interference, infringement, misappropriation, or violation (including any claim that Seller must license or refrain from using any Intellectual Property rights of any third party). To the Knowledge of Seller, no third party has interfered with, infringed upon, misappropriated, or otherwise come into conflict with any Intellectual Property rights of Seller.

     (c) Schedule 3.13(c) identifies each item of Intellectual Property that any third party owns and that Seller uses pursuant to license, sublicense, agreement or permission. Seller has delivered to Buyer correct and complete copies of all such licenses, sublicenses, agreements and permissions (as amended to date).

     (d) To the Knowledge of Seller, Seller will not interfere with, infringe upon, misappropriate or otherwise come into conflict with any Intellectual Property rights of third parties as a result of the continued operation of its business as presently conducted and as presently proposed to be conducted.

     3.14 Tangible Assets. Seller owns or leases all buildings, machinery, equipment, and other tangible assets necessary for the conduct of its business as presently conducted and as presently proposed to be conducted. The parties acknowledge and agree that all tangible Acquired Assets are being conveyed to Buyer “AS IS, WHERE IS,” and Seller makes any representation or warranty regarding the merchantability or fitness for a particular purpose of any tangible Acquired Asset.

     3.15 Contracts. Schedule 3.15 lists the following contracts and other agreements to which Seller is a party or is bound:

     (i) any agreement (or group of related agreements) for the lease of personal property to or from any Person;

     (ii) any agreement (or group of related agreements) for the purchase or sale of raw materials, commodities, supplies, products or other personal property, or for the furnishing or receipt of services;

10

     (iii) any agreement concerning a partnership or joint venture;

     (iv) any agreement (or group of related agreements) under which it has created, incurred, assumed or guaranteed any indebtedness for borrowed money, or any capitalized lease obligation;

     (v) any agreement concerning confidentiality or noncompetition;

     (vi) any agreement involving any of the partners of Sellers and/or their respective Affiliates;

     (vii) any profit sharing, deferred compensation, severance or other plan or arrangement for the benefit of its current or former officers and/or employees;

     (viii) any collective bargaining agreement;

     (ix) any agreement for the employment of any individual on a full-time, part-time, consulting or other basis;

     (x) any agreement under which it has advanced or loaned any amount to any Person;

     (xi) any agreement under which the consequences of a default or termination could have an adverse effect on the business, financial condition, operations, results of operations or future prospects of Seller; or

     (xii) any other agreement (or group of related agreements) the performance of which involves consideration in excess of $5,000.00.

A correct and complete copy of each written agreement listed in Schedule 3.15 (as amended to date) and a written summary setting forth the terms and conditions of each oral agreement referred to in Schedule 3.15 is attached hereto as Exhibit “E”. With respect to each of the Seller Agreements, except as set forth in Schedule 3.15: (A) the Seller Agreement is legal, valid, binding, enforceable and in full force and effect; (B) the Seller Agreement will continue to be legal, valid, binding, enforceable and in full force and effect on identical terms following the consummation of the transactions contemplated hereby; (C) no party is in breach or default, and no event has occurred which with notice or lapse of time would constitute a breach or default, or permit termination, modification or acceleration, under the Seller Agreement; and (D) no party has repudiated any provision of the Seller Agreement.

     3.16 Litigation. Schedule 3.16 sets forth each instance in which Seller (i) is subject to any outstanding injunction, judgment, order, decree, ruling, or charge, or (ii) is a party or, to the Knowledge of Seller, is threatened to be made a party to any action, suit, proceeding, hearing, or investigation of, in, or before any court or quasi-judicial or administrative agency of any federal, state or local jurisdiction or before any arbitrator.

     3.17 Employees. To the Knowledge of Seller, no executive, key employee or group of employees has any plans to terminate employment with Seller. Seller is not a party to or bound

11

by any collective bargaining agreement, nor has Seller experienced any strikes, grievances, claims of unfair labor practices, or other collective bargaining disputes. Seller has not committed any unfair labor practice. To the Knowledge of Seller, no organizational effort is presently being made or threatened by or on behalf of any labor union with respect to employees of Seller.

     3.18 ERISA Compliance. Schedule 3.18 identifies each and every employee benefit plan, including each employee pension benefit plan and employee welfare benefit plan (as such terms are defined in ERISA), which is currently maintained by Seller.

     With respect to such plans the following apply:

     (a) Each such employee benefit plan complies in form and in operation in all respects with the applicable requirements of ERISA, the Code and all other applicable laws.

     (b) All required reports and descriptions including Forms 5500, the summary annual reports and summary plan descriptions have been filed or distributed appropriately with respect to each such employee benefit plan.

     (c) The requirements of Part VI of Subtitle B of Title I of ERISA and of Code Section 4980B have been met with respect to each such employee benefit plan which is an employee welfare benefit plan.

     (d) All contributions including all employer contributions and employee salary reduction contributions which are due have been paid to each such employee benefit plan which is an employee pension benefit plan and all contributions for any period ending on or before the Closing Date which are not yet due have been paid to each such employee pension benefit plan or accrued in accordance with the past customs and practice of Seller. All premiums or other payments for all periods ending on or before the Closing Date have been paid with respect to each such employee benefit plan which is an employee welfare benefit plan.

     (e) Each employee benefit plan which is an employee pension plan meets the requirements for qualification under Code Section 401(a).

     (f) The market value of assets of each such employee benefit plan which is an employee pension benefit plan other than a multi-employer plan equals or exceeds the present value of all vested and nonvested liabilities thereunder determined in accordance with PBGC’s methods, factors and assumptions applicable to the employee pension benefit plan terminating on the date for determination.

     (g) Seller has delivered to Buyer correct and complete copies of all plan documents, summary plan descriptions, the most recent determination letter received from the Internal Revenue Service, the most recent Form 5500 annual report and all related trust agreements, insurance contracts and other funding agreements which implement each such employee benefit plan.

12

     (h) With respect to each employee benefit plan that Seller maintains or ever has maintained or to which Seller contributes, ever has contributed, or ever has been required to contribute:

     (A) No such employee benefit plan which is an employee pension benefit plan (other than any multiemployer plan) has been completely or partially terminated or been the subject of a reportable event as to which notices would be required to be filed with the PBGC. No proceeding by the PBGC to terminate any such employee pension benefit plan (other than any multiemployer plan) has been instituted or, to the Knowledge of Seller, is threatened.

     (B) There have been no prohibited transactions with respect to any such employee benefit plan. No fiduciary has any liability for material breach of fiduciary duty or any other material failure to act or comply in connection with the administration or investment of the assets of any such employee benefit plan. No action, suit, proceeding, hearing, or investigation with respect to the administration or the investment of the assets of any such employee benefit plan (other than routine claims for benefits) is pending or, to the Knowledge of Seller, is threatened.

     (C) Seller has not incurred any material liability (whether known or unknown, whether asserted or unasserted, whether absolute or contingent, whether accrued or unaccrued, whether liquidated or unliquidated, and whether due or to become due) to the PBGC (other than PBGC premium payments) or otherwise under Title IV of ERISA (including any withdrawal liability) or under the Code with respect to any such employee benefit plan which is an employee pension benefit plan.

     (i) Seller has not ever contributed to, and has not ever been required to contribute to, any multiemployer plan, and has no material Liability (whether known or unknown, whether asserted or unasserted, whether absolute or contingent, whether accrued or unaccrued, whether liquidated or unliquidated, and whether due or to become due), including any withdrawal Liability, under any multiemployer plan.

     (j) Seller has not ever maintained or contributed to, and has not ever been required to contribute to any employee welfare benefit plan providing medical, health, or life insurance or other welfare-type benefits for current or future retired or terminated employees, their spouses, or their dependents (other than in accordance with Code Section 4980B).

     3.19 Environment, Health, and Safety.

     (a) Seller has complied in all material respects with all Environmental, Health, and Safety Laws, and no action, suit, proceeding, hearing, investigation, charge, complaint, claim, demand, or notice has been filed or commenced against Seller alleging any failure so to comply. Without limiting the generality of the preceding sentence, Seller has obtained and been in compliance in all material respects with all of the terms

13

and conditions of all permits, licenses, and other authorizations which are required under, and has complied with all other limitations, restrictions, conditions, standards, prohibitions, requirements, obligations, schedules, and timetables which are contained in, all Environmental, Health, and Safety Laws.

     (b) Seller has no Liability (and Seller has not ever handled or disposed of any substance, arranged for the disposal of any substance, exposed any employee or other individual to any substance or condition, or owned or operated any property or facility in any manner that could form the Basis for any present or future action, suit, proceeding, hearing, investigation, charge, complaint, claim, or demand against Seller giving rise to any Liability) for damage to any site, location, or body of water (surface or subsurface), for any illness of or personal injury to any employee or other individual, or for any reason under any Environmental, Health, and Safety Law.

     (c) To the Knowledge of Seller, all properties and equipment used in the business of Seller have been free of asbestos, PCB’s, methylene chloride, trichloroethylene, 1,2-trans-dichloroethylene, dioxins, dibenzofurans, and other hazardous substances or wastes.

     (d) To the Knowledge of Seller, following the Closing, no material capital expenditures shall be required by Buyer to insure compliance with any Environmental, Health and Safety Law. To the Knowledge of Seller, there is no pending audit by any federal, state, or local governmental authority with respect to the storage, burial, release, transportation, or disposal of hazardous substances or wastes by Seller; or relating to the facilities of Seller. Seller does not have any agreement or arrangement with any foreign, federal, state, or local governmental authority or any other third party relating to any such environmental matter or environmental cleanup.

     (e) Seller has delivered to Buyer true and complete copies and results of any reports, studies, analyses, tests or monitorings possessed or initiated by Seller pertaining to hazardous materials or hazardous activities in, on or under any facility owned, leased or operated by Seller or concerning compliance by Seller with Environmental, Health, and Safety Laws.

     3.20 Certain Business Relationships With Seller. Except as described in Schedule 3.20, none of the partners of Seller or any of their Affiliates has been involved in any business arrangement or relationship with Seller within the past twelve months, and none of the partners of Seller or any of their Affiliates owns any asset, tangible or intangible, which is used in the business of Seller.

     3.21 Assumed Liabilities. All Liabilities of Seller to be assumed by Buyer hereunder have arisen in the Ordinary Course of Business, are bona fide and are properly recorded on the books of Seller.

     3.22 Partners. Schedule 3.22 identifies each of the partners of Seller and their respective ownership interests in Seller, and no other Person currently has the right to acquire any additional equity interests of Seller.

14

     3.23 Personnel. Schedule 3.23 lists all employees of Seller and their respective rates of compensation.

     3.24 Powers of Attorney. Except as described on Schedule 3.24, there are no outstanding powers of attorney executed on behalf of Seller.

     3.25 Insurance. Seller has been covered during the past three (3) years by insurance in scope and amount customary and reasonable for the business in which it has engaged during the aforementioned period.

     3.26 Disclosure. The representations and warranties contained in this Article III do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements and information contained in this Article III not misleading.

     3.27 Consents. Except as provided in Schedule 3.3, no consent, approval or authorization of, or registration or filing with, any Person is required in connection with the execution and delivery of this Agreement by Seller or for the consummation by Seller of the transactions contemplated hereby.

ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER

     Buyer represents and warrants to Seller that the statements contained in this Article IV are correct and complete as of the date of this Agreement and will be correct and complete as of the Closing Date (as though made then and as though the Closing Date were substituted for the date of this Agreement throughout this Article IV).

     4.1 Organization. Buyer is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Oklahoma.

     4.2 Authorization of Transaction. Buyer and Graymark each has full power and authority to execute and deliver this Agreement and to perform its obligations hereunder. This Agreement constitutes the valid and legally binding obligation of Buyer and Graymark, enforceable in accordance with its terms and conditions, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally or by general equitable principles.

     4.3 Noncontravention. Neither the execution and the delivery of this Agreement, nor the consummation of the transactions contemplated hereby, will (i) violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of any government, governmental agency, or court to which Buyer or Graymark or any of their respective assets is subject or any provision of the organizational documents of Buyer or Graymark or (ii) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify, or cancel, or require any notice under any agreement, contract, lease, license, instrument, or other arrangement to which Buyer or Graymark is a party or by which it is bound or to which any of its assets is subject. Neither Buyer nor Graymark is required to give any notice to, make any filing with, or

15

obtain any authorization, consent, or approval of any government or governmental agency in order for the parties to consummate the transactions contemplated by this Agreement.

     4.4 Brokers’ Fees. Buyer has no Liability or obligation to pay any fees or commissions to any broker, finder, or agent with respect to the transactions contemplated by this Agreement for which Seller could become liable or obligated.

     4.5 Valid Issuance of Graymark Stock. The shares of Graymark Stock to be delivered to Seller at Closing have been duly authorized and, upon issuance thereof in accordance with the terms of this Agreement, will be validly issued, fully paid and non-assessable.

     4.6 Acknowledgements by Buyer. Buyer hereby acknowledges that, since March 1, 2008, it has been managing the day-to-day operations of the sleep diagnostic facility owned by Seller. Buyer further acknowledges that it has had an opportunity to ask questions of and receive answers from representatives of Seller concerning the Acquired Assets and the businesses and operations of Seller. Notwithstanding anything to the contrary herein, no such answers, information or disclosures provided by any representative of Seller shall be deemed to amend or supplement the representations and warranties made by Seller herein or prevent or cure any misrepresentation, breach of warranty or breach of covenant by Seller.

ARTICLE V
PRECLOSING COVENANTS

     5.1 Covenants. The parties agree as follows with respect to the period between the execution of this Agreement and the Closing:

     (a) General. Each of the parties will use commercially reasonable efforts to take all action and to do all things necessary, proper, or advisable in order to consummate and make effective the transactions contemplated by this Agreement (including satisfaction, but not waiver, of the closing conditions set forth in Article VIII below).

     (b) Notices and Consents. Seller will give any notices to third parties, and Seller will use its best efforts to obtain any third party consents, that Buyer reasonably may request in connection with the matters referred to in Section 3.3 above.

     (c) Operation of Business. Seller will not engage in any practice, take any action, or enter into any transaction outside the Ordinary Course of Business. Buyer will cause Capital Sleep Management, LLC to operate the sleep disorder facility of Seller in accordance with the terms of the management agreement entered into between Seller and Capital Sleep Management, LLC.

     (d) Preservation of Business. Seller shall keep its business and properties substantially intact, including its present operations, physical facilities, working conditions and relationships with lessors, licensors, suppliers, customers and employees.

     (e) Notice of Developments. Each party will give prompt written notice to the other parties of any material adverse development causing a breach of any of such party’s own representations and warranties (or any other party’s representations and

16

warranties) in Articles III and IV above. No disclosure by any party pursuant to this Section 5.1(e), however, shall be deemed to prevent or cure any misrepresentation, breach of warranty, or breach of covenant.

     (f) Exclusivity. During the term of this Agreement, Seller will not (i) solicit, initiate, or encourage the submission of any proposal or offer from any Person relating to the acquisition of any securities, or any substantial portion of the assets, of Seller (including any acquisition structured as a merger, consolidation or share exchange) or (ii) participate in any discussions or negotiations regarding, furnish any information with respect to, assist or participate in, or facilitate in any other manner any effort or attempt by any Person to do or seek any of the foregoing. Seller will notify Buyer immediately if any Person makes any proposal, offer, inquiry, or contact with respect to any of the foregoing.

ARTICLE VI
COVENANTS

     Seller hereby covenants and promises to Buyer and, where expressly stated, Buyer hereby covenants and promises to Seller, the following:

     6.1 Employees. Buyer shall have no obligation to make an offer of employment to any employee of Seller. Notwithstanding the preceding sentence, any employee of Seller hired by Buyer shall become an employee of Buyer under Buyer’s plans and practices, and shall be subject to the terms and conditions of Buyer’s plans, including the terms of eligibility. At or prior to the Closing, Seller shall pay to its employees all amounts owing to such employees for earned vacation and sick leave in accordance with Seller’s current policies. Buyer shall not assume and shall not be obligated to continue or assume any employee benefit plan or any other type of employee benefit or compensation plan or arrangement or any employer payroll policy or practice established, maintained, or contributed to by Seller. Buyer is not a “successor employer” with respect to any employee benefit plan of Seller. Buyer and Seller agree that the provisions of this Section 6.1 are solely between and for the benefit of Buyer and Seller and do not inure to the benefit of, or confer rights upon, any third party, including any employee of Buyer or Seller.

     6.2 Miscellaneous. Seller shall retain liability for and Seller shall indemnify and hold Buyer harmless against:

     (A) All claims asserted by third persons for breach of contract, tort, infringement, violation of law, or other conduct occurring on or before the Closing Date in connection with the business of Seller; and

     (B) All claims relating to compliance by Seller with the applicable provisions of ERISA, the Code and other applicable laws.

     6.3 Due Diligence Investigation. For the purpose of permitting Buyer and its representatives to conduct a due diligence review (the “Diligence Review”) of Seller, Seller shall afford Buyer and its representatives full and complete access to the books and records, financial statements, Tax Returns, facilities, employees and such other information of Seller as Buyer may

17

reasonably request to evaluate the business, operations, properties, assets, Liabilities and prospects of Seller. In connection with the Diligence Review, representatives of Buyer shall be entitled to consult with representatives, officers and employees of Seller. The Diligence Review and any such consultations shall be conducted in a manner not to unreasonably interfere with the operation of the business of Seller.

     6.4 Confidentiality. Any non-public information furnished to or obtained by Buyer from Seller or any of its partners, officers, employees, attorneys, accountants or authorized representatives in connection with the Diligence Review pursuant to Section 6.3 hereof shall be considered “Evaluation Material.” Evaluation Material shall not include public information or non-public information obtained by Buyer or its Affiliates or representatives from a third party who is lawfully in possession of such information and who has the legal right to transmit such information. In the event that the transactions contemplated by this Agreement are not consummated, Buyer (i) agrees to return to Seller all written evaluation materials and copies thereof furnished by Seller to Buyer, (ii) agrees to destroy all documents, notes and other work product derived from the Evaluation Material, and (iii) agrees to promptly confirm in writing to Seller the fact of such destruction. Except as otherwise required by law, Buyer agrees to keep the Evaluation Material confidential, not to use the Evaluation Material for any purpose other than to the extent contemplated hereby, or permit any such Evaluation Material to be made available to third parties other than its designated representatives or agents who Buyer will direct to maintain the Evaluation Material confidential. The obligations of Buyer under the provisions of this Section 6.4 shall survive for a period of three (3) years after the date of any termination of this Agreement.

     6.5 Confidential Information. Seller will treat and hold as such all of the Confidential Information, refraining from using any of the Confidential Information except in connection with this Agreement, and, following the Closing, will deliver promptly to Buyer or destroy, at the request and option of Buyer, all tangible embodiments (and all copies) of the Confidential Information which are in its possession. In the event that Seller is requested or required (by oral question or request for information or documents in any legal proceeding, interrogatory, subpoena, civil investigative demand, or similar process) to disclose any Confidential Information, Seller will notify Buyer promptly of the request or requirement so that Buyer may seek an appropriate protective order or waive compliance with the provisions of this Section 6.5. If, in the absence of a protective order or the receipt of a waiver hereunder, Seller is, on the advice of counsel, compelled to disclose any Confidential Information to any tribunal or governmental agency or else stand libel for contempt, Seller may disclose the Confidential Information to the tribunal or governmental agency; provided, however, that Seller shall use commercially reasonable efforts to obtain, at the request and expense of Buyer, an order or other assurance that confidential treatment will be accorded to such portion of the Confidential Information required to be disclosed as Buyer shall designate.

     6.6 Continued Existence of Sellers. Seller hereby covenants and agrees that it shall not dissolve or otherwise terminate its existence as a limited partnership for at least one (1) year after the Closing Date.

18

     6.7 Survivability. The provisions of this Article VI shall survive the Closing Date; provided, however, that in the event that the transactions contemplated hereby are consummated, Buyer’s obligations under Section 6.4 shall terminate as of the Closing Date.

ARTICLE VII
INDEMNIFICATION

     7.1 Survival of Representations and Warranties. All of the representations and warranties of the parties contained in this Agreement shall survive the closing of the transactions contemplated herein for a period of one (1) year. The parties intend to shorten the statute of limitations and agree that no claims or causes of action of any kind may be brought against Seller, the Buyer or any of their respective partners, officers, employees, affiliates, controlling persons, agents or representatives based upon, directly or indirectly, any of the representations, warranties, covenants or agreements contained herein after the first anniversary of the Closing Date. This Section 7.1 shall not limit any covenant or agreement of the parties which contemplates performance after the Closing including, without limitation, the covenants and agreements set forth in Article VI hereof, it being understood that all such covenants and agreements contemplating performance after the Closing shall survive until the expiration of the applicable statute of limitations.

     7.2 Indemnification by Seller. Subject to the terms and conditions set forth herein, Seller shall indemnify and hold harmless Buyer and its members, managers, officers, employees, attorneys, accountants, and other agents and Affiliates (collectively, the “Buyer Indemnitees”) in respect of any and all damages, losses, liabilities, payments, obligations, penalties, claims, litigation, demands, defenses, judgments, suits, proceedings, costs, disbursements or expenses (including, without limitation, reasonable fees, disbursements and expenses of attorneys, accountants and other professional advisors) of any kind or nature whatsoever (collectively “Damages”) incurred by any Buyer Indemnitee as a result of, in connection with or arising out of:

     (i) Any inaccuracy in or breach of any representation or warranty made by Seller herein; or

     (ii) Any breach or nonperformance (partial or total) of any covenant or agreement of Seller contained herein.

     7.3 Indemnification by Buyer. Subject to the terms and conditions set forth herein, Buyer shall indemnify and hold harmless Seller and its partners, officers, employees, attorneys, accountants and other agents and Affiliates (collectively, the “Seller Indemnitees”) in respect of any Damages incurred by any Seller Indemnitee as a result of, in connection with or arising out of:

     (i) Any inaccuracy in or breach of any representation or warranty made by Buyer herein; or

     (ii) Any breach or nonperformance (partial or total) of any covenant or agreement of Buyer contained herein.

19

     7.4 Third Party Indemnification. The obligation of Seller to indemnify the Buyer Indemnitees under Section 7.2 hereof and the obligation of the Buyer to indemnify the Seller Indemnitees under Section 7.3 hereof, in each case resulting from the assertion of liability by a third party (each, as the case may be, a “Claim”), shall be further subject to the following terms and conditions:

     (i) Any party against whom any Claim is asserted shall give the party (or the parties) required to provide indemnity hereunder written notice of such Claim promptly after learning of such Claim, and the indemnifying party may, at its option, undertake the defense thereof with counsel chosen by it but reasonably satisfactory to the indemnified party. Failure to give prompt notice of a Claim hereunder shall not affect the indemnifying party’s obligations under this Section 7.4, except to the extent the indemnifying party is materially prejudiced by such failure to give prompt notice. If the indemnifying party, within thirty (30) days after notice of any such Claim, or such shorter period as is reasonably required, fails to assume the defense of such Claim, the Buyer Indemnitee or the Seller Indemnitee, as the case may be (each, an “Indemnitee”), against whom such Claim has been made shall have the right, but shall not be obligated, to undertake the defense, compromise or settlement of such Claim on behalf and for the account and risk, and at the expense, of the indemnifying party.

     (ii) Anything in this Section 7.4 to the contrary notwithstanding, the indemnifying party shall not enter into any settlement or compromise of any action, suit or proceeding or consent to the entry of any judgment (A) which does not include as an unconditional term thereof the delivery by the claimant or plaintiff to the Indemnitee of a written release from all liability in respect of such action, suit or proceeding, or (B) for other than monetary damages without the prior written consent of the Indemnitee, which consent shall not be unreasonably withheld.

     7.5 Limitations. Notwithstanding anything to the contrary in this Article VII, in no event shall the liability for indemnification of any Seller pursuant to Section 7.2 exceed the aggregate Agreed Value of the Graymark Stock delivered to such Seller pursuant to Section 2.1(b) hereof. For example, and as an illustration only, in the event the aggregate Agreed Value of the Graymark Stock delivered to Seller is $200,000, Seller’s maximum liability for indemnification pursuant to Section 7.2 would be $200,000.

ARTICLE VIII
CLOSING CONDITIONS

     8.1 Conditions to the Obligations of Buyer. Each and every obligation of Buyer hereunder shall be subject to the satisfaction, as of Closing, of each of the following conditions, each of which can be waived by Buyer, but only in writing:

     (a) All of the representations and warranties of Seller set forth in Article III above shall be true and correct as of the date hereof and shall be deemed to have been made again at Closing and shall then be true and correct;

20

     (b) Seller shall have procured all of the third party consents specified in Section 5.1(b) above;

     (c) Each of the covenants and other obligations of Seller to be performed by Seller on or before Closing pursuant to the terms hereof shall have been duly performed and complied with in all material respects;

     (d) No action, suit, or proceeding shall be pending before any court or governmental agency or before any arbitrator wherein an unfavorable injunction, judgment, order, decree, ruling, or charge would (i) prevent consummation of any of the transactions contemplated by this Agreement, (ii) cause any of the transactions contemplated by this Agreement to be rescinded following consummation, or (iii) affect adversely the right of Buyer to own the Acquired Assets and to operate the former business of Seller;

     (e) Seller shall have delivered to Buyer a certificate, in form reasonably satisfactory to Buyer, to the effect that each of the conditions specified above in Section 8.1(a)-(d) has been satisfied in all respects with respect to Seller;

     (f) Buyer and its representatives shall have been provided full and complete access to the books and records, financial statements, Tax Returns, facilities, employees and such other information of Seller as Buyer may have reasonably requested to evaluate the business, operations, properties, assets, Liabilities and prospects of Seller. If, in its sole discretion, Buyer decides for any reason not to proceed with the transactions contemplated hereby, then Buyer may terminate this Agreement by giving notice thereof to Seller on or prior to the Closing Date;

     (g) (i) Each of the Persons listed on Schedule 8.1(g)(i) shall have executed and delivered to Buyer a release in the form attached hereto as Exhibit “F” releasing Seller from any and all claims that such Person may have against Seller as of the Closing Date;

     (h) All actions to be taken by Seller in connection with consummation of the transactions contemplated hereby and all certificates, instruments, and other documents required to effect the transactions contemplated hereby are reasonably satisfactory in form and substance to Buyer;

     (i) Icon Sleep Texas, LP (“Icon”) shall have executed and delivered to Buyer an agreement in form and substance satisfactory to Buyer in its sole discretion indemnifying Buyer against any inaccuracy in or breach of any of the representations and warranties made by Seller in Sections 3.2, 3.3, 3.4 and/or the second sentence of Section 3.5 hereof;

     (j) All Security Interests (other than the Permitted Encumbrances) affecting the Acquired Assets (or any of them) shall have been terminated;

21

     (k) Buyer have entered into a Real Estate Lease Agreement with Waco Sleep Properties I, LP covering the premises located at 7106 Sanger Avenue, Waco, Texas on terms satisfactory to Buyer in its sole discretion;

     (l) Charles Willis, II, M.D. (“Willis”) shall have assigned to Buyer all of his right, title and interest in and to that certain Lease Agreement, dated October 18, 2005, between Willis and Court Square Leasing Corporation (“CSL”), Buyer shall have assumed all obligations and liabilities of Willis arising or accruing under such Lease Agreement from and after the Closing Date, and CSL shall have consented in writing to such assignment and assumption;

     (m) Willis shall have assigned to Buyer all of his right, title and interest in and to that certain Lease Agreement, dated December 18, 2005, between Willis and US Express Leasing (“US Express”), Buyer shall have assumed all obligations and liabilities of Willis arising or accruing under such Lease Agreement from and after the Closing Date, and US Express shall have consented in writing to such assignment and assumption;

     (n) Icon shall have transferred to Buyer, free and clear of any Security Interests, all of the assets identified on Schedule 8.1(n) for a purchase price of $1,100,000. Such transfer shall be evidenced by a Bill of Sale executed by Icon in favor of Buyer in form and substance satisfactory to Buyer in its reasonable discretion;

     (o) FMB Medical Equipment LLC (“FMB”) shall have transferred to Buyer, free and clear of any Security Interests, all of the assets identified on Schedule 8.1(o) for a purchase price of $340,000. Such transfer shall be evidenced by a Bill of Sale executed by FMB in favor of Buyer in form and substance satisfactory to Buyer in its reasonable discretion; and

     (p) The transactions contemplated by the Plano Agreement shall have been consummated prior to or contemporaneous with the Closing.

     8.2 Conditions to the Obligations of Seller. Each and every obligation of Seller hereunder shall be subject to the satisfaction, as of Closing, of each of the following conditions, each of which can be waived by Seller, but only in writing:

     (a) All of the representations and warranties of Buyer set forth in Article IV above shall be true and correct as of the date hereof and shall be deemed to have been made again at Closing and shall then be true and correct;

     (b) Each of the covenants and other obligations of Buyer to be performed by it on or before Closing pursuant to the terms hereof shall have been duly performed and complied with in all material respects;

     (c) No action, suit, or proceeding shall be pending before any court or governmental agency or before any arbitrator wherein an unfavorable injunction, judgment, order, decree, ruling, or charge would (i) prevent consummation of any of the transactions contemplated by this Agreement or (ii) cause any of the transactions

22

contemplated by this Agreement to be rescinded following consummation (and no such injunction, judgment, order, decree, ruling, or charge shall be in effect);

     (d) Buyer shall have delivered to Seller a certificate, in form reasonably satisfactory to Seller, to the effect that each of the conditions specified above in Section 8.2(a)-(c) has been satisfied in all respects; and

     (e) All actions to be taken by Buyer in connection with consummation of the transactions contemplated hereby and all certificates, opinions, instruments, and other documents required to effect the transactions contemplated hereby are reasonably satisfactory in form and substance to Seller.

ARTICLE IX
TERMINATION

     9.1 Mutual Consent. This Agreement may be terminated by the mutual written consent of Buyer and Seller.

     9.2 By Buyer.

     (a) Default. This Agreement may be terminated by Buyer if a material default shall be made by Seller in the observance of or in the due and timely performance by Seller of any of the agreements or covenants of Seller herein contained, or if there shall have been a material breach by Seller of any of the warranties and representations of Seller herein contained, or if the conditions of this Agreement to be complied with or performed by Seller at or before Closing shall not have been complied with or performed at the time required for such compliance or performance and such non-compliance or non-performance shall not have been waived by Buyer.

     (b) Due Diligence Review. Buyer may terminate this Agreement in accordance with the terms of Section 8.1(f).

     9.3 By Seller. This Agreement may be terminated by Seller if a material default shall be made by Buyer in the observance of or in the due and timely performance by Buyer of any of the agreements or covenants of Buyer herein contained, or if there shall have been a material breach by Buyer of any of the warranties and representations of Buyer herein contained, or if the conditions of this Agreement to be complied with or performed by Buyer at or before Closing shall not have been complied with or performed at the time required for such compliance or performance and such non-compliance or non-performance shall not have been waived by Seller.

     9.4 Effect of Termination. If this Agreement is terminated pursuant to Section 9.1, 9.2 or 9.3 above, all rights and obligations of the parties hereunder shall terminate without any liability to any other party hereto; provided, however, that if the basis of termination is a material breach or default by Buyer, on the one hand, or Seller, on the other hand, of one or more of the provisions of this Agreement, the party or parties then in breach or default shall be liable to the nonbreaching party or parties for all damages resulting from such breach or default; and further provided, however, that Buyer’s obligation to treat Evaluation Material in a confidential manner, as set forth in Section 6.4 above, shall survive any such termination.

23

ARTICLE X
FEDERAL SECURITIES LAWS

     10.1 Unregistered Stock. Seller hereby acknowledges that the shares of Graymark Stock to be delivered to it pursuant to this Agreement will not be registered (referred to sometimes herein as “Unregistered Stock”) under the Securities Act of 1933, as amended (the “Act”), or any other securities law. Accordingly, such Unregistered Stock is not freely transferable except as permitted under various exemptions contained in the Act and the rules and regulations of the U.S. Securities and Exchange Commission interpreting said Act. Seller therefore covenants, warrants and represents that none of the shares of Graymark Stock issued to it in accordance with this Agreement will be offered, sold, assigned, pledged, hypothecated, transferred or otherwise disposed of except after full compliance with all of the applicable provisions of the Act and the rules and regulations of the Securities and Exchange Commission and all applicable state securities laws.

     10.2 Legend. All Unregistered Stock issued in accordance with this Agreement shall bear the following legend (or a legend substantially similar thereto):

THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) OR ANY OTHER SECURITIES LAW, AND NO REOFFER, SALE, TRANSFER, PLEDGE OR OTHER DISPOSITION THEREOF MAY BE MADE UNLESS, IN THE WRITTEN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER, SUCH TRANSACTION WILL NOT REQUIRE REGISTRATION UNDER THE ACT OR ANY OTHER SECURITIES LAW.

     10.3 Securities Law Representations. As of the Closing Date, Seller hereby makes the following representations and warranties to and for the benefit of Buyer and Graymark:

     (a) Seller has been provided with the various filings described in Schedule 10.3, and has been provided as much time and opportunity as it deemed appropriate to review and study such information and to consult with Buyer and Graymark regarding the merits and risks of the transactions contemplated by this Agreement;

     (b) Seller has had adequate opportunity to ask questions of and receive answers from representatives of Buyer and Graymark concerning any and all matters pertaining to Buyer and Graymark and the transactions contemplated by this Agreement which it deemed appropriate;

     (c) Seller is the true party in interest and is not acquiring any of the Graymark Stock for the benefit of any other Person; provided, however, that Seller intends to transfer its shares of Graymark Stock to certain partners and creditors in part to satisfy certain obligations, subject to and in accordance with subsection (e) below;

24

     (d) The Graymark Stock being acquired hereunder by Seller is being acquired for its own account for investment, and is not being acquired with a view to resale, redistribution, subdivision or fractionalization thereof; provided, however, that Seller intends to transfer its shares of Graymark Stock to certain partners and creditors in part to satisfy certain obligations, subject to and in accordance with subsection (e) below;

     (e) Prior to any transfer or assignment of shares of Graymark Stock to any of its partners or creditors as contemplated in this Agreement, Seller shall cause to be delivered (i) to each of its assignees, with each assignee’s written confirmation of receipt, the various filings described in Schedule 10.3(e) and as supplemented with all additional reports filed by Graymark with the U.S. Securities and Exchange Commission following the Closing Date, and (ii) to Graymark written representations of the assignee that the assignee qualifies as an “accredited investor” as defined in Rule 501(a) of Regulation D as promulgated by the U.S. Securities and Exchange Commission in effect at the time of the assignment of the Graymark Stock and representations substantially the same as those set forth in subsections (a), (b), (c) and (d) above and subsections (f) and (g) below. Any assignment of any of the Graymark Stock shall require the consent of Graymark, which consent shall not be unreasonably withheld when all conditions of transfer or assignment set forth herein are complied with or waived in writing by Graymark;

     (f) Seller has such knowledge and experience in financial and business matters and investments in general that it is capable of evaluating the merits and risks of the ownership of the Graymark Stock by it; and

     (g) Seller understands that the Graymark Stock that it will receive cannot be readily sold without compliance with applicable state and federal securities laws.

     10.4 Piggyback Registrations.

     (a) Right to Piggyback. In the event shares of common stock of Graymark are to be registered by Graymark under the Securities Act of 1933, as amended (the “Securities Act”), within twelve months after the Closing Date, and the form of registration statement to be used permits the inclusion of the Graymark Stock therein (a “Piggyback Registration”), Graymark will give prompt written notice to Seller of its intention to effect such a registration and will include in such registration, subject to the provisions of Section 10.4(b), all Graymark Stock with respect to which Graymark has received a written request from Seller for inclusion therein within twenty-one (21) days after Graymark’s notice has been given. Graymark shall pay all registration expenses for such Piggyback Registration. This Section 10.4 shall not apply to a registration effected solely to implement an employee benefit plan or to any other form or type of registration which does not permit inclusion of Graymark Stock, including without limitation Form S-4 and Form S-8.

     (b) Priority on Registrations. If a Piggyback Registration is an underwritten offering and the managing underwriters advise Graymark in writing that in their opinion the number of securities requested to be included in such offering creates a substantial risk that the price per share of Common Stock will be reduced or that the number of

25

securities requested to be included is greater than the underwriters are prepared to sell, Graymark will include in such registration prior to the Graymark Stock, the securities proposed to be sold by Graymark and by any other person granted registration rights senior to the Graymark Stock. Graymark will then include in such registration the Graymark Stock requested to be included in such registration which in the opinion of such underwriters can be sold in such offering without creating such a risk or exceeding such number. Nothing in this Agreement shall prohibit Graymark from granting registration rights senior to the rights granted herein with respect to the Graymark Stock. In the event that a Piggyback Registration for which Graymark gives notice under Section 10.4(a) is for holders of Graymark’s securities other than the Seller and is pursuant to the exercise by such other holders of demand registration rights granted to them after the date hereof, then Seller shall not be entitled to sell shares in such Piggyback Registration except with the consent of (and subject to such limitations and restrictions as are imposed by) such other holders.

     (c) Indemnification. Graymark agrees to indemnify, to the fullest extent permitted by law, Seller, or any assignee of the Graymark Stock hereunder, against all losses, claims, damages, liabilities and expenses (including without limitation reasonable and customary attorneys’ fees) caused by any untrue or alleged untrue statement of a material fact contained in any registration statement, prospectus or preliminary prospectus or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as the same are caused by or contained in any information furnished in writing to Graymark by Seller, or any Seller assignee of the Graymark Stock hereunder, expressly for use therein or by Seller’s or assignee’s failure to deliver a copy of the prospectus or any amendments or supplements thereto. In connection with any registration statement in which Seller, or any Seller assignee of the Graymark Stock hereunder, is participating, Seller, or assignee of the Graymark Stock hereunder, severally, but not jointly, shall indemnify Graymark, its affiliates, officers, directors and each person who controls Graymark (within the meaning of the Securities Act), insofar as and to the extent that losses, claims, damages, liabilities, and expenses (including without limitation reasonable and customary attorneys’ fees) are caused by any untrue statement of a material fact contained in the registration statement, prospectus or preliminary prospectus or any amendment or supplement thereto or any omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, but only to the extent that such untrue statement or omission is contained in any information or affidavit so furnished in writing by Seller, or such assignee of the Graymark Stock hereunder, expressly for use therein.

ARTICLE XI
MISCELLANEOUS

     11.1 Press Releases and Public Announcements. The parties agree that Buyer and/or Graymark may issue a press release or make other disclosure of this Agreement at such times and in the manner which they believe is necessary or appropriate. Prior to issuing any such press release or other disclosure, Buyer shall first advise Seller. Seller shall not make any press release or other public disclosure of this transaction without the prior written consent of Buyer.

26

     11.2 No Third Party Beneficiaries. This Agreement shall not confer any rights or remedies upon any Person other than the parties hereto and their respective successors and permitted assigns.

     11.3 Entire Agreement. This Agreement (including the documents referred to herein) constitutes the entire agreement between the parties and supersedes any prior understandings, agreements, or representations by or between the parties, written or oral, to the extent they related in any way to the subject matter hereof including, without limitation, that certain letter agreement, dated as of January 24, 2008, between Sleep Development Group, LP and Graymark.

     11.4 Succession and Assignment. This Agreement shall be binding upon and inure to the benefit of the parties named herein and their respective successors and permitted assigns. No party may assign either this Agreement or any of its rights, interests, or obligations hereunder without the prior written approval of the other parties hereto; provided, however, that Buyer may (i) assign any or all of its rights and interests hereunder to one or more of its Affiliates, and (ii) designate one or more of its Affiliates to perform its obligations hereunder (in any or all of which cases Buyer nonetheless shall remain responsible for the performance of all of its obligations hereunder).

     11.5 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together will constitute one and the same instrument.

     11.6 Headings. The section headings contained in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement.

     11.7 Notices. All notices, requests, demands, claims, and other communications hereunder will be in writing. Any notice, request, demand, claim, or other communication hereunder shall be deemed duly given (i) if served personally, on the day of such service, or (ii) if mailed by certified or registered mail (return receipt requested), on the second business day after mailing, and (iii) if transmitted by recognized overnight carrier, on the next business day after tender to the carrier. Such communications shall be sent to the following addresses:

If to Seller:	Sleep Center of Waco, Ltd.
	620 E. Southlake Blvd.
	Southlake, Texas 76092
	Attn: Thomas Whitaker
Copy to:	Law Offices of Bert Starr
	2701 N. Dallas Parkway, Ste 540
	Plano, Texas 75093
	Attn: Bert Starr
If to Buyer:	SDC Holdings, LLC
	305 N. Bryant
	Edmond, OK 73034
	Attn: Vahid Salalati

27

Copy to:	Hartzog Conger Cason & Neville
	1600 Bank of Oklahoma Plaza
	201 Robert S. Kerr
	Oklahoma City, OK 73102
	Attn: Steven C. Davis and John D. Robertson

Any party may change the address to which notices, requests, demands, claims, and other communications hereunder are to be delivered by giving the other parties notice in the manner herein set forth.

     11.8 Governing Law. This Agreement shall be governed by and construed in accordance with the domestic laws of the State of Texas without giving effect to any choice or conflict of law provision or rule that would cause the application of the laws of any jurisdiction other than the State of Texas.

     11.9 Amendments and Waivers. No amendment of any provision of this Agreement shall be valid unless the same shall be in writing and signed by each of the parties hereto. No waiver by any party of any default, misrepresentation, or breach of warranty or covenant hereunder, whether intentional or not, shall be deemed to extend to any prior or subsequent default, misrepresentation, or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence.

     11.10 Severability. Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction.

     11.11 Expenses. Buyer and Seller will each bear its own costs and expenses (including legal fees and expenses) incurred in connection with this Agreement and the transactions contemplated hereby.

     11.12 Construction. The parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement. Any reference to any federal, state, local, or foreign statute or law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise. The word “including” shall mean including without limitation.

     11.13 Incorporation of Exhibits and Schedules. The Exhibits and Schedules identified in this Agreement are incorporated herein by reference and made a part hereof.

     11.14 Litigation Expense. In any action brought by a party hereto to enforce the obligations of any other party hereto, the prevailing party shall be entitled to collect from the other parties to such action such party’s reasonable attorneys’ and accountants’ fees, court costs and other expenses incidental to such litigation.

28

     11.15 Specific Performance. Each of the parties acknowledges and agrees that the other party will be damaged irreparably in the event any of the provisions of this Agreement are not performed in accordance with their specific terms or otherwise are breached. Accordingly, each of the parties agrees that the other party shall be entitled to an injunction or injunctions to prevent breaches of the provisions of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof, in addition to any other remedy to which it may be entitled, at law or in equity.

     11.16 Payment of Sales Taxes. Buyer agrees that it shall be responsible for, pay and discharge all sales and/or excise taxes, if any, imposed by the State of Texas or any other county or municipal taxing authority on the transactions to be performed pursuant to this Agreement including, without limitation, the sale of furniture, fixtures and equipment. At the Closing, Buyer shall remit to Seller all such amounts believed to be owed with regard to the sale of the Acquired Assets. Should Seller be assessed any additional or other amounts of sales taxes or assessments not collected from Buyer at the Closing, Seller shall notify Buyer of said assessment and Buyer shall have the opportunity to contest and defend such additional assessments. If it is ultimately determined that any additional sales and/or excise taxes are required to be paid in connection with the transactions contemplated herein, then Buyer shall immediately pay such taxes.

     11.17 Completion of Schedules and Exhibits. The parties acknowledge that certain of the Schedules and the Exhibits to this Agreement have not been prepared as of the date of this Agreement. The parties will cooperate with each other in preparing such Schedules and Exhibits following the execution of this Agreement. All final Schedules and Exhibits must be in a form satisfactory to Buyer in its sole discretion.

*****

29

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

BUYER:	TCSD OF WACO, LLC
	By:
		Name:
		Title:
SELLER:	SLEEP CENTER OF WACO, LTD., a Texas limited partnership By: Waco SC, LLC, its General Partner
	By:
		Name:
		Title:

30

JOINDER BY GRAYMARK HEALTHCARE, INC.

     Graymark Healthcare, Inc., an Oklahoma corporation and the sole member of Texas Center for TCSD of Waco, LLC, hereby joins in this Asset Purchase Agreement for the sole purpose of guaranteeing the delivery of the Graymark Stock pursuant to Section 2.1(b) thereof.

     Dated this ___ day of May, 2008.

GRAYMARK HEALTHCARE, INC.
By:
	Name:
	Title:

31

EXHIBIT “A”

BILL OF SALE

     This Bill of Sale is executed and delivered pursuant to that certain Asset Purchase Agreement, dated as of                     , 2008 (the “Agreement”), between and among                                         , an Oklahoma limited liability company (“Buyer”), and Sleep Center of Waco, Ltd., a Texas limited partnership (“Seller”). Terms defined in the Agreement and not otherwise defined herein are used herein with the meanings so defined.

     For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

     1. Seller hereby SELLS, CONVEYS, TRANSFERS, ASSIGNS and DELIVERS to Buyer, and Buyer hereby purchases and acquires from Seller, all of the assets described on Schedule 1 attached hereto (the “Assets”) (and all assignable warranties and guarantees, if any, express or implied, in connection with the Assets to the extent transferable) free and clear of all claims, liens, Security Interests and other encumbrances of any kind or nature other than the Permitted Encumbrances. Seller shall cooperate with Buyer, its successors and assigns in securing the performance of any warrantor or guarantor under any warranty, guarantee, or other agreement assigned to the Buyer pursuant to this Bill of Sale or any work that the Buyer, its successors or assigns believe in good faith should be performed by any warrantor or guarantor pursuant to such warranties or guarantees.

     2. THIS BILL OF SALE IS EXECUTED PURSUANT TO THE AGREEMENT, AND THE TERMS AND CONDITIONS OF THE AGREEMENT, INCLUDING THE REPRESENTATIONS AND WARRANTIES CONCERNING THE ASSETS CONVEYED HEREBY, APPLY TO THIS BILL OF SALE AS IF FULLY INCORPORATED HEREIN. THE ASSETS ARE TRANSFERRED AND SOLD SUBJECT TO AND WITH THE BENEFIT OF ALL THE REPRESENTATIONS, WARRANTIES AND COVENANTS CONTAINED IN THE AGREEMENT.

     3. This Bill of Sale is made without assumption of any Liabilities, obligations or debts of Seller, except as expressly provided in the Agreement or the Assumption Agreement executed contemporaneously herewith.

     4. At any time or from time to time after the date hereof, Seller shall execute and deliver or cause to be executed and delivered to the Buyer, its successors and assigns such other instruments and take or cause to be taken such other actions as may reasonably be requested in order to carry out the intent and purposes of the Agreement and this Bill of Sale and to more effectively vest title to the Assets and all warranties and guarantees related to the Assets in the Buyer and its successors and assigns.

     5. The parties acknowledge and agree that all tangible Assets are being conveyed to Buyer “AS IS, WHERE IS,” and Seller makes no representation or warranty regarding the merchantability or fitness for a particular purpose of any tangible Asset.

32

     IN WITNESS WHEREOF, Seller has caused this instrument to be executed by its duly authorized officer this ___ day of                                         , 2008.

SLEEP CENTER OF WACO, LTD. By: Waco SC, LLC, its General Partner
By:
	Name:
	Title:

33

SCHEDULE 1

[INSERT TO COME]

34

EXHIBIT “B”

ASSUMPTION AGREEMENT

     THIS ASSUMPTION AGREEMENT (the “Assumption Agreement”), between                                         , a Texas limited liability company (“Buyer”), and Sleep Center of Waco, Ltd., a Texas limited partnership (“Seller”) is executed and delivered this ___ day of                     , 2008, pursuant to that certain Asset Purchase Agreement, dated May ___, 2008 (the “Agreement”) between and among Seller and Buyer.

WITNESSETH:

     WHEREAS, pursuant to the terms of the Agreement, Seller has agreed to sell to Buyer, and Buyer has agreed to purchase from Seller, certain of the assets of Seller and certain of the liabilities of Seller on the terms and subject to the conditions set forth therein.

     NOW, THEREFORE, in consideration of the premises and the transactions contemplated by the Agreement, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

     1. Capitalized terms used but not defined herein shall have the respective meanings assigned thereto in the Agreement.

     2. Buyer does hereby assume, and agrees to perform, pay and discharge all of the Assumed Liabilities and agrees to indemnify, defend and hold Seller harmless from and against any and all Damages arising from the failure of Buyer to perform, pay or discharge any of the Assumed Liabilities.

     3. Seller and Buyer agree that this Assumption Agreement is subject to the terms and conditions of the Agreement and that, notwithstanding anything contained herein to the contrary, this Assumption Agreement shall not be deemed to limit or extinguish any obligation of Buyer or Seller under the Agreement, all of which obligations shall survive the delivery of this Assumption Agreement in accordance with the terms of the Agreement.

     4. This Assumption Agreement shall be governed by and construed and interpreted in accordance with the laws of the State of Oklahoma.

35

     IN WITNESS WHEREOF, the undersigned have executed this Assumption Agreement as of the date first above written.

SELLER:	SLEEP CENTER OF WACO, LTD., a Texas limited partnership By: Waco SC, LLC, its General Partner
	By:
		Name:
		Title:
BUYER:	TCSD OF WACO, LP
	By:
		Name:
		Title:

36

EX-99.1

EXHIBIT 99.1

Graymark Healthcare, Inc. Completes the Acquisitions of
Sleep Development Group, LP and
Nocturna Sleep, LLC

OKLAHOMA CITY — (June 12, 2008) — Graymark Healthcare, Inc. (OTCBB: GRMH), through its wholly owned subsidiary SDC Holdings LLC, is pleased to announce it has completed the acquisitions of Sleep Development Group, LP, “SDG,” and Nocturna Sleep, LLC, “Nocturna,” pursuant to the previously announced letter of intent for each company.

Graymark Healthcare, Inc. signed a letter of intent to acquire Sleep Development Group, LP in February of 2008. SDG, located in North and Central Texas, consists of six sleep centers and performed more than 4,000 sleep studies in 2007.

In March of 2008, Graymark signed a letter of intent to acquire Nocturna Sleep, LLC. Located in Las Vegas, Nevada, Nocturna is a leading independent sleep diagnostic facility that is comprised of two locations housing a total of 10 beds with which to diagnose patients. Nocturna performs more than 3,000 sleep studies per year in the Las Vegas market. SDG and Nocturna are expected to add approximately $6.5 million of incremental annual revenue to Graymark.

“The completion of these acquisitions has added two invaluable assets to our sleep diagnostic business,” stated Stanton Nelson, President and CEO of Graymark Healthcare. “We now have an exceptional presence in two developing markets, in addition to access to a fantastic brand in Nocturna that has been cultivated so well by its previous owner.”

Please visit the investor section of the company’s Web site, www.graymarkhealthcare.com, regarding the press releases announcing the letters of intent to acquire Sleep Development Group, LP and Nocturna Sleep, LLC.

Graymark Healthcare, Inc. is a diversified medical holding company that owns and operates; independent pharmacies that serve the needs of local markets, diagnostic sleep centers that treat a wide range of sleep disorders, and a medical equipment company that provides both disposable and durable medical equipment. Graymark plans to continue its growth both internally and through strategic acquisitions within the medical industry.

For additional information, contact
Graymark Healthcare:
Stanton Nelson or John Simonelli, 405-601-5300
or
Halliburton Investor Relations:
Geralyn DeBusk, Jeff Elliott, or Chase Zavoina, 972-458-8000

This press release may contain forward-looking statements which are based on the Company’s current expectations, forecasts and assumptions. Forward-looking statements involve risks and uncertainties which could cause actual outcomes and results to differ materially from the Company’s expectations, forecasts and assumptions. These risks and uncertainties include risks and uncertainties not in the control of the Company, including, without limitation, the current economic climate and other risks and uncertainties, including those enumerated and described in the Company’s filings with the Securities and Exchange Commission, which filings are available on the SEC’s website at www.sec.gov. Unless otherwise required by law, the Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.