Exhibit 4.1


 


THIS NOTE
AND THE SECURITIES ISSUABLE UPON THE CONVERSION OF THIS NOTE HAVE BEEN ACQUIRED
FOR INVESTMENT ONLY AND NOT WITH THE INTENT OF FURTHER DISTRIBUTION, AND HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT
BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED, OR OTHERWISE TRANSFERRED IN
THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT THIS NOTE AND
THE SECURITIES UNDER THAT ACT UNLESS SOLD PURSUANT TO RULE 144 PROMULGATED
UNDER THAT ACT OR UNLESS THE SALE, PLEDGE, HYPOTHECATION OR TRANSFER IS
OTHERWISE EXEMPT FROM REGISTRATION. GRAYMARK PRODUCTIONS, INC. MAY REQUEST
A WRITTEN OPINION FROM COUNSEL AND IN FORM ACCEPTABLE TO GRAYMARK
PRODUCTIONS, INC., TO THE EFFECT THAT REGISTRATION IS NOT REQUIRED IN
CONNECTION WITH SUCH SALE, PLEDGE OR HYPOTHECATION, OR OTHER TRANSFER. THIS
NOTE OR ANY SECURITY ISSUABLE UPON THE CONVERSION OF THIS NOTE MUST BE
SURRENDERED TO GRAYMARK PRODUCTIONS, INC. AS A CONDITION PRECEDENT TO THE SALE,
PLEDGE, HYPOTHECATION OR ANY OTHER TRANSFER OF ANY INTEREST IN THIS NOTE OR ANY
SECURITY INTO WHICH THIS NOTE IS CONVERTIBLE.


 


GRAYMARK PRODUCTIONS, INC.


 


SENIOR PROMISSORY NOTE


 


	
  U.S.
  $750,000

  	
   

  	
  October 25, 2005       

  



 


FOR VALUE
RECEIVED, the undersigned, GRAYMARK PRODUCTIONS, INC. an
Oklahoma corporation, and all of its existing subsidiaries and subsidiaries
created after the date hereof (hereinafter called the “Company”), hereby
promises to pay to the order of            
or any future permitted holder of this Senior Promissory Note (the “Payee”),
at the principal office of the Payee set forth herein, or at such other place
as the holder may designate in writing to the Company, the principal sum of
SEVEN HUNDRED FIFTY THOUSAND DOLLARS (U.S. $750,000), or such other amount as may
be outstanding hereunder, together with all accrued but unpaid interest, in
such coin or currency of the United States of America as at the time shall be
legal tender for the payment of public and private debts and in immediately
available funds, as provided in this Senior Promissory Note (the “Note”).


 


Upon
the date of issuance of this Note the Company has no outstanding securities or
other financial instruments that rank senior or pari-passu to this Note.


 


The
Company shall not issue any securities or other financial instruments that rank
senior or pari-passu to this Note without the prior written consent of the
Payee.


 





















 


1.                                       Principal and Interest Payments.  


 


(a)                                  The
Company shall repay in full the entire principal balance then outstanding under
this Note in the manner provided in Section 1(d) hereof on the first
to occur (the “Maturity Date”) of: (i) October 25, 2007; (ii) the
consummation of a Qualified Financing (as defined in Section 1(d) hereof);
or (iii) the acceleration of the obligations as contemplated by this
Note.  The Company may prepay all or any
part of this Note, in whole or in part at any time, as set forth in Section 6(d) hereof.


 


(b)                                 Interest
on the outstanding principal balance of this Note shall accrue at a rate of
eight percent (8%) per annum.  Interest
on the outstanding principal balance of the Note shall be computed on the basis
of the actual number of days elapsed and a year of three hundred and sixty
(360) days and shall be payable quarterly by the Company in cash or in shares of
the Company’s equity securities as contemplated in Section 1(d) hereof.  Furthermore, upon the occurrence of an Event
of Default that shall be continuing for more than thirty (30) consecutive days
following the Company’s receipt of Payee’s notice describing in reasonable
detail the occurrence of an Event of Default, then to the extent permitted by
law, the Company will pay interest to the Payee, payable on demand, on the
outstanding principal balance of the Note from the date of the Event of Default
until payment in full at the rate of eighteen percent (18%) per annum.


 


(c)                                  The
outstanding principal amount of this Note shall be secured by all assets of the
Company including but not limited to, all purchase agreements and any such
options or rights to acquire, all intellectual and real property, all assets
and properties of GrayMark Productions, Inc. and all of its existing
subsidiaries and subsidiaries created after the date hereof.


 


(d)                                 At
the Maturity Date, the outstanding principal amount of this Note plus all
accrued and unpaid interest herein shall be due and payable in cash in the
absence of a Qualified Financing by the Company on or before the Maturity Date
or, in the event of a Qualified Financing by the Company on or before Maturity
Date, automatically converted into equity securities of the Company which may
be issued in connection with the Qualified Financing by the Company of its
equity securities to certain investors; provided, however, the
Company receives aggregate gross cash proceeds in connection with a Qualified
Financing of at least $2,000,000 (excluding the conversion of this Note)
occurring on or before October 25, 2007, the outstanding principal amount
of this Note plus all accrued and unpaid interest herein shall automatically be
converted into shares of equity securities of the Company (the “Qualified
Financing”).  The principal amount
of this Note plus all accrued and unpaid interest shall convert into such
number of shares of equity securities of the Company equal to 120% of the
principal amount of this Note and all accrued interest outstanding divided by
the price per share of the equity securities sold in the Qualified Financing,
the maximum price or value of the Common Stock into which the indebtedness
evidenced by this Note converts shall not exceed the equivalent of $1.10 per
Common Stock share.  Upon the conversion
of this Note, the outstanding principal amount of this Note, together with
accrued interest hereon, shall be deemed to be the consideration for the Payee’s
interest in the equity securities upon consummation of the Qualified
Financing.  In consideration for the loan
evidenced by this Note, the Payee shall receive common stock purchase warrants
exercisable during a five-year period for the purchase of (i) 250,000
shares of the Company’s common stock, $.001 par value (the “Common Stock”) at
$2.00 per share, and (ii) 250,000 shares of Common Stock at $3.00 per
share (the “Common Stock Purchase Warrants”) in the form attached to this Note
as Exhibits A-1 and A-2.


 





















 


2.                                       Payment on Non-Business Days. 
Whenever any payment to be made shall be due on a Saturday, Sunday or a
public holiday under the laws of the United States of America or the State of
Michigan, such payment may be due on the next succeeding business day and such
next succeeding day shall be included in the calculation of the amount of
accrued interest payable on such date.


 


3.                                       Representations, Warranties and Covenants
of the Company.  The Company represents, warrants and
covenants to the Payee as follows:


 


(a)                            The Company
has been duly incorporated and is validly existing and in good standing under
the laws of the state of Oklahoma, with full corporate power and authority to
own, lease and operate its properties and to conduct its business as currently
conducted.


 


(b)                           This
Note has been duly authorized, validly executed and delivered on behalf of the
Company and is a valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, subject to limitations on
enforcement by general principles of equity and by bankruptcy or other laws
affecting the enforcement of creditors’ rights generally, and the Company has
full power and authority to execute and deliver this Note and to perform its
obligations hereunder.


 


(c)                            The
execution, delivery and performance of this Note will not (i) conflict
with or result in a breach of or a default under any of the terms or provisions
of, (A) the Company’s certificate of incorporation or by-laws, or (B) any
material provision of any indenture, mortgage, deed of trust or other material
agreement or instrument to which the Company is a party or by which it or any
of its material properties or assets is bound, (ii) result in a violation
of any material provision of any law, statute, rule, regulation, or any
existing applicable decree, judgment or order by any court, Federal or state
regulatory body, administrative agency, or other governmental body having
jurisdiction over the Company, or


 


3





















 


any of its material
properties or assets or (iii) result in the creation or imposition of any
material lien, charge or encumbrance upon any material property or assets of
the Company or any of its subsidiaries pursuant to the terms of any agreement
or instrument to which any of them is a party or by which any of them may be
bound or to which any of their property or any of them is subject.   


 


(d)                           No
consent, approval or authorization of or designation, declaration or filing
with any governmental authority on the part of the Company is required in
connection with the valid execution and delivery of this Note.


 


(e)                            Upon
the date of issuance of this Note the Company has no outstanding securities or
other financial instruments that rank senior or pari-passu to this Note. The
Company shall not issue any securities or other financial instruments that rank
senior or pari-passu to this Note without the prior written consent of the
Payee.


 


(f)                              Within
ten (10) days following the occurrence of a Material Adverse Change, the
Company shall provide Payee written notification describing in reasonable
detail the events and circumstances constituting the basis for the Material
Adverse Change. For purposes of this Note, “Material Adverse Change” shall mean
(a) a material adverse change in the business, prospects, operations,
results of operations, assets, liabilities or condition (financial or
otherwise) of the Company taken as a whole, or (b) a material adverse
change in the business, prospects, operations, results of operations, assets,
liabilities or condition (financial or otherwise) of the Company, or (c) a
material adverse change in the motion picture industry as it relates to the
Company.  


 


4.                                       Events of Default. 
The occurrence of any of the following events shall be an “Event of
Default” under this Note:


 


(a)                            the
Company shall fail to make the payment of any amount of any principal
outstanding for a period of three (3) business days after the date such
payment shall


 


4





















 


become due and payable
hereunder; or


 


(b)                           the
Company shall fail to make any payment of interest for a period of three (3) business
days after the date such interest shall become due and payable hereunder; or


 


(c)                            any
representation, warranty or certification made by the Company herein or in any
certificate or financial statement shall prove to have been false or incorrect
or breached in a material respect on the date as of which made; or


 


(d)                           the
holder of any indebtedness (“Indebtedness”) of the Company or any of its
subsidiaries shall accelerate any payment of any amount or amounts of principal
or interest on any indebtedness (the “Indebtedness”) (other than the
Indebtedness hereunder) prior to its stated maturity or payment date the
aggregate principal amount of which Indebtedness of all such persons is in
excess of $500,000, whether such Indebtedness now exists or shall hereinafter
be created, and such accelerated payment entitles the holder thereof to
immediate payment of such Indebtedness which is due and owing and such
indebtedness has not been discharged in full or such acceleration has not been
stayed, rescinded or annulled within ten (10) business days of such
acceleration; or  


 


(e)                            A
judgment or order for the payment of money shall be rendered against the
Company or any of its subsidiaries in excess of $500,000 in the aggregate (net
of any applicable insurance coverage) for all such judgments or orders against
all such persons (treating any deductibles, self insurance or retention as not
so covered) that shall not be discharged, and all such judgments and orders
remain outstanding, and there shall be any period of sixty (60) consecutive
days following entry of the judgment or order in excess of $500,000 or the
judgment or order which causes the aggregate amount described above to exceed
$500,000 during which a stay of enforcement of such judgment or order, by
reason of a pending appeal or otherwise, shall not be in effect; or


 


5





















 


(f)                              the
Company shall (i) apply for or consent to the appointment of, or the
taking of possession by, a receiver, custodian, trustee or liquidator of itself
or of all or a substantial part of its property or assets, (ii) admit in
writing its inability to pay its debts as such debts become due, (iii) make
a general assignment for the benefit of its creditors, (iv) commence a
voluntary case under the Bankruptcy Code or under the comparable laws of any
jurisdiction (foreign or domestic), (v) file a petition seeking to take
advantage of any bankruptcy, insolvency, moratorium, reorganization or other
similar law affecting the enforcement of creditors’ rights generally, (vi) acquiesce
in writing to any petition filed against it in an involuntary case under the
Bankruptcy Code or under the comparable laws of any jurisdiction (foreign or
domestic), or (vii) take any action under the laws of any jurisdiction
(foreign or domestic) analogous to any of the foregoing; or


 


(g)                           a
proceeding or case shall be commenced in respect of the Company or any of its
subsidiaries without its application or consent, in any court of competent
jurisdiction, seeking (i) the liquidation, reorganization, moratorium,
dissolution, winding up, or composition or readjustment of its debts, (ii) the
appointment of a trustee, receiver, custodian, liquidator or the like of it or
of all or any substantial part of its assets or (iii) similar relief in
respect of it under any law providing for the relief of debtors, and such
proceeding or case described in clause (i), (ii) or (iii) shall continue
undismissed, or unstayed and in effect, for a period of thirty (30) consecutive
days or any order for relief shall be entered in an involuntary case under the
Bankruptcy Code or under the comparable laws of any jurisdiction (foreign or
domestic) against the Company or any of its subsidiaries or action under the
laws of any jurisdiction (foreign or domestic) analogous to any of the
foregoing shall be taken with respect to the Company or any of its subsidiaries
and shall continue undismissed, or unstayed and in effect for a period of
thirty (30) consecutive days.


 


(h)                           a
material impairment of the Company’s ability to perform its financial
obligations, or a material impairment of the enforceability or priority of
Payee’s creditor priority as a result of an action or failure to act on the
part of the Company,


 


6





















 


5.                                       Remedies Upon An Event of Default. 
If an Event of Default shall have occurred and shall be continuing for
more than thirty (30) consecutive days following the Company’s receipt of Payee’s
notice describing in reasonable detail the occurrence of an Event of Default,
the Payee of this Note may at any time at its option, (a) declare the
entire unpaid principal balance of this Note, together with all interest
accrued hereon, due and payable, and thereupon, the same shall be accelerated
and so due and payable; provided, however, that upon the
occurrence of an Event of Default described in (i) Sections 4(f) and
(g), without presentment, demand, protest, or notice, all of which are hereby
expressly unconditionally and irrevocably waived by the Company, the
outstanding principal balance and accrued interest hereunder shall be
automatically due and payable, and (ii) Sections 4(a) through (e),
the Payee may demand the prepayment of this Note pursuant to Section 6
hereof; or (b) exercise or otherwise enforce any one or more of the Payee’s
rights, powers, privileges, remedies and interests under this Note or
applicable law.  No course of delay on
the part of the Payee shall operate as a waiver thereof or otherwise prejudice
the right of the Payee.  No remedy
conferred hereby shall be exclusive of any other remedy referred to herein or
now or hereafter available at law, in equity, by statute or otherwise.  Notwithstanding the foregoing, Payee agrees
that its rights and remedies hereunder are limited to receipt of cash or shares
of the Company’s equity securities in the amounts described herein.


 


6.                                       Prepayment Options.


 


(a)                            Prepayment.  Notwithstanding anything to the contrary
contained herein, the Payee shall have the right, at such Payee’s option, to
require the Company to prepay all of the sum of this Note at a price equal to
110% of the outstanding principal amount and any interest accrued and
outstanding under this Note (the “Prepayment Price”), provided,
that such prepayment is requested upon the occurrence of a Major Transaction
(as defined in Section 6(e) below). 
Nothing in this Section 6(a) shall limit the Payee’s rights
under Section 5 hereof.  


 


(b)                           Mechanics
of Prepayment at Option of Payee.  At
least thirty (30) days prior to the occurrence of a Major Transaction and
within one (1) day after the occurrence


 


7





















 


of a Major Transaction,
the Company shall deliver written notice thereof via facsimile and overnight
courier (“Notice of a Prepayment Event”) to the Payee.  At any time on or after the earlier of the
Payee’s receipt of a Notice of a Prepayment Event and the Payee becoming aware
of a Major Transaction, the Payee may require the Company to prepay all of the
outstanding principal amount and any interest accrued and outstanding under
this Note by delivering written notice thereof via facsimile and overnight
courier (“Notice of Prepayment at Option of Payee”) to the Company.


 


(c)                            Payment
of Prepayment Price.  Upon the
Company’s receipt of a Notice of Prepayment at Option of Payee from the Payee,
the Company shall immediately notify the Payee by facsimile of the Company’s
receipt of a Notice of Prepayment at Option of Payee and the Payee which has
sent such a notice shall deliver to the Company this Note on or before the
consummation or closing of a Major Transaction.    The Company shall pay the Prepayment Price
to Payee at or prior to the closing of the Major Transaction; provided
that this Note shall have been so delivered to the Company.  If the Company shall fail to prepay all of
the Prepayment Price (other than pursuant to a dispute as to the arithmetic
calculation of the Prepayment Price), in addition to any remedy the Payee may
have under this Note, the Prepayment Price payable in respect of such unprepaid
Notes shall bear interest at the rate of two percent (2.0%) per each period of
thirty (30) consecutive days, pro rated for any period of less than thirty (30)
days until paid in full.  Until the
Company pays such unpaid Prepayment Price in full to the Payee, the Payee shall
have the option (the “Void Optional Prepayment Option”) to, in lieu of
prepayment, require the Company to promptly return to the Payee this Note that
was submitted for prepayment by Payee under this Section 6(c) and for
which the Prepayment Price has not been paid, by sending written notice thereof
to the Company via facsimile (the “Void Optional Prepayment Notice”).   Upon the Company’s receipt of such Void
Optional Prepayment Notice(s) and prior to payment of the full Prepayment Price
to Payee, (i) the Notice(s) of Prepayment at Option of Payee shall be null
and void with respect to this Note submitted for prepayment and for which the
Prepayment Price has not been paid and (ii) the Company shall immediately
return this Note submitted to the Company by the Payee for


 


8





















 


prepayment under this Section 6(c) and
for which the Prepayment Price has not been paid.  A Payee’s delivery of a Void Optional
Prepayment Notice and exercise of its rights following such notice shall not
affect the Company’s obligations to make any payments which have accrued prior
to the date of such notice.


 


(d)                           Company’s
Prepayment Option.  The Company may
prepay, at the option of its Board of Directors, all or any portion of the
outstanding principal amount of this Note and the accrued and unpaid interest
thereon upon five (5) business days prior written notice to the Payee (the
“Company Prepayment Notice”) at a cash price equal to 110% of the sum of
the outstanding principal amount of this Note and any interest accrued and
outstanding (the “Company Prepayment Price”).  The Company may not deliver a Company
Prepayment Notice to the Payee unless the Company has clear and good funds for
a minimum of the amount it intends to prepay in a bank account controlled by
the Company.  The Company Prepayment
Notice shall state the date of prepayment (the “Company Prepayment Date”),
the Company Prepayment Price, the amount of the Note of such Payee to be
prepaid, the amount of accrued and unpaid interest through the Company
Prepayment Date and shall call upon the Payee to surrender to the Company on
the Company Prepayment Date at the place designated in the Company Prepayment
Notice such Payee’s Note.  The Company
Prepayment Date shall be no more than five (5) trading days after the date
on which the Payee is notified of the Company’s intent to prepay the Note (the “Company
Prepayment Notice Date”).  If the
Company fails to pay the Company Prepayment Price by the sixth (6th)
trading day following the Company Prepayment Notice Date, the prepayment will
be declared null and void and the Company shall lose its right to deliver a
Company Prepayment Notice to the Payee in the future.  On or after the Company Prepayment Date, the
Payee shall surrender the Notes called for prepayment to the Company at the
place designated in the Company Prepayment Notice and shall thereupon be
entitled to receive payment of the Company Prepayment Price.


 


(e)                            For
purposes of this Note, “Major Transaction” means the consummation of any
of the following transactions: (i) the consolidation, merger or other
business combination of the Company with or into a person or entity (other than
(A) pursuant to


 


9





















 


a migratory merger
effected solely for the purpose of changing the jurisdiction of incorporation
of the Company, or (B) a consolidation, merger or other business
combination in which holders of the Company’s or any of its subsidiaries voting
power immediately prior to the transaction continue after the transaction to
hold, directly or indirectly, the voting power of the surviving entity or
entities necessary to elect a majority of the members of the board of directors
(or their equivalent if other than a corporation) of such entity or entities); (ii) the
sale or transfer of all or substantially all of the Company’s or any of its
subsidiaries’ assets; or (iii) the consummation of a purchase, tender or
exchange offer made to the holders of more than 30% of the outstanding shares
of the Company’s common stock; provided, however, the following
shall not be deemed a Major Transaction for purposes of this Note: (a) the
Proposed Financing; (b) a split, reverse split, dividend or distribution
with respect to the common stock of the Company which has been disclosed to the
Payee; (c) the tender, exchange or repricing of any securities of the
Company which are convertible into shares of common stock of the Company which
has been disclosed to the Payee.


 


7.                                       Replacement. 
Upon receipt of a duly executed, notarized and unsecured written
statement from the Payee with respect to the loss, theft or destruction of this
Note (or any replacement hereof), and without requiring an indemnity bond or
other security, or, in the case of a mutilation of this Note, upon surrender
and cancellation of such Note, the Company shall issue a new Note, of like
tenor and amount, in lieu of such lost, stolen, destroyed or mutilated Note.


 


8.                                       Parties in Interest, Transferability. 
This Note shall be binding upon the Company and its successors and
assigns and the terms hereof shall inure to the benefit of the Payee and its
successors and permitted assigns. This Note may be transferred or sold, subject
to the provisions of Section 18 of this Note, or pledged, hypothecated or
otherwise granted as security by the Payee.


 


9.                                       Amendments.  This Note may
not be modified or amended in any manner except in writing executed by the
Company and the Payee.


 


10





















 


Notices.  Any notice, demand, request, waiver or other
communication required or permitted to be given hereunder shall be in writing
and shall be effective (a) upon hand delivery by telecopy or facsimile at
the address or number designated below (if delivered on a business day during
normal business hours where such notice is to be received), or the first
business day following such delivery (if delivered other than on a business day
during normal business hours where such notice is to be received) or (b) on
the second business day following the date of mailing by express courier
service, fully prepaid, addressed to such address, or upon actual receipt of
such mailing, whichever shall first occur. 
The Company will give written notice to the Payee at least thirty (30)
days prior to the date on which the Company closes its books or takes a record
(x) with respect to any dividend or distribution upon the common stock of the
Company, (y) with respect to any pro rata subscription offer to holders of
common stock of the Company or (z) for determining rights to vote with respect
to a Major Transaction, dissolution, liquidation or winding-up and in no event
shall such notice be provided to such holder prior to such information being
made known to the public.  The Company
will also give written notice to the Payee at least twenty (20) days prior to
the date on which dissolution, liquidation or winding-up will take place.


 


	
  Address of the
  Payee:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address of the
  Company:

  	
   

  	
  GrayMark
  Productions, Inc.

  
	
   

  	
   

  	
  101 North
  Robinson, Suite 920

  
	
   

  	
   

  	
  Oklahoma City,
  OK 73102

  
	
   

  	
   

  	
  Attention: John
  Simonelli, CEO

  
	
   

  	
   

  	
  (405) 601-5300

  



 


10.                                 Governing Law. This Note shall be governed by and
construed in accordance with the internal laws of the State of Michigan,
without giving effect to the choice of


 


11





















 


law provisions.  This Note shall not be interpreted or
construed with any presumption against the party causing this Note to be
drafted.


 


11.                                 Headings.  Article and
section headings in this Note are included herein for purposes of
convenience of reference only and shall not constitute a part of this Note for
any other purpose.


 


12.                                 Remedies, Characterizations, Other Obligations,
Breaches and Injunctive Relief.  The remedies
provided in this Note shall be cumulative and in addition to all other remedies
available under this Note, at law or in equity (including, without limitation,
a decree of specific performance and/or other injunctive relief), no remedy
contained herein shall be deemed a waiver of compliance with the provisions
giving rise to such remedy and nothing herein shall limit a Payee’s right to
pursue actual damages for any failure by the Company to comply with the terms
of this Note.  Amounts set forth or
provided for herein with respect to payments and the like (and the computation
thereof) shall be the amounts to be received by the Payee and shall not, except
as expressly provided herein, be subject to any other obligation of the Company
(or the performance thereof).


 


13.                                 Failure or Indulgence Not Waiver. 
No failure or delay on the part of the Payee in the exercise of any
power, right or privilege hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such power, right or privilege
preclude other or further exercise thereof or of any other right, power or
privilege.


 


14.                                 Enforcement Expenses. 
The Company agrees to pay all costs and expenses of enforcement of this
Note, including, without limitation, reasonable attorneys’ fees and expenses.


 


15.                                 Binding Effect.  
The obligations of the Company and the Payee set forth herein shall be
binding upon the successors and assigns of each such party, whether or not such
successors or assigns are permitted by the terms hereof.


 


12





















 


16.                                 Compliance with Securities Laws. 
The Payee of this Note acknowledges that this Note is being acquired
solely for the Payee’s own account and not as a nominee for any other party,
and for investment, and that the Payee shall not offer, sell or otherwise
dispose of this Note other than in compliance with the laws of the United
States of America and as guided by the rules of the Securities and
Exchange Commission.  This Note and any
Note issued in substitution or replacement therefore shall be stamped or
imprinted with a legend in substantially the following form:


 


“THIS
NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR ANY STATE SECURITIES LAW AND MAY NOT BE SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER
APPLICABLE STATE SECURITIES LAWS OR GRAYMARK PRODUCTIONS INC. SHALL HAVE
RECEIVED AN OPINION OF ITS COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER
THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS
IS NOT REQUIRED.”


 


17.                                 Severability. 
The provisions of this Note are severable, and if any provision shall be
held invalid or unenforceable in whole or in part in any jurisdiction, then
such invalidity or unenforceability shall not in any manner affect such
provision in any other jurisdiction or any other provision of this Note in any
jurisdiction.


 


18.                                 Consent to Jurisdiction. 
Each of the Company and the Payee (i) hereby irrevocably submits to
the jurisdiction of the United States District Court sitting in the Western
District of Michigan and the courts of the State of Michigan located in Ingham
county for the purposes of any suit, action or proceeding arising out of or
relating to this Note and (ii) hereby waives, and agrees not to assert in
any such suit, action or proceeding, any claim that it is not personally
subject to the jurisdiction of such court, that the suit, action or proceeding
is brought


 


13





















 


in an inconvenient forum
or that the venue of the suit, action or proceeding is improper.  Each of the Company and the Payee consents to
process being served in any such suit, action or proceeding by mailing a copy
thereof to such party at the address set forth in Section 11 hereof and
agrees that such service shall constitute good and sufficient service of
process and notice thereof.  Nothing in
this Section 20 shall affect or limit any right to serve process in any
other manner permitted by law.


 


19.                                 Company Waivers. 
Except as otherwise specifically provided herein, the Company and all
others that may become liable for all or any part of the obligations evidenced
by this Note, hereby waive presentment, demand, notice of nonpayment, protest
and all other demands and notices in connection with the delivery, acceptance,
performance and enforcement of this Note, and do hereby consent to any number
of renewals of extensions of the time or payment hereof and agree that any such
renewals or extensions may be made without notice to any such persons and
without affecting their liability herein and do further consent to the release
of any person liable hereon, all without affecting the liability of the other
persons, firms or Company liable for the payment of this Note, AND DO HEREBY
WAIVE TRIAL BY JURY.


 


(a)                            No
delay or omission on the part of the Payee in exercising its rights under this
Note, or course of conduct relating hereto, shall operate as a waiver of such
rights or any other right of the Payee, nor shall any waiver by the Payee of
any such right or rights on any one occasion be deemed a waiver of the same
right or rights on any future occasion.


 


(b)                           THE
COMPANY ACKNOWLEDGES THAT THE TRANSACTION OF WHICH THIS NOTE IS A PART IS
A COMMERCIAL TRANSACTION, AND TO THE EXTENT ALLOWED BY APPLICABLE LAW, HEREBY
WAIVES ITS RIGHT TO NOTICE AND HEARING WITH RESPECT TO ANY PREJUDGMENT REMEDY
WHICH THE PAYEE OR ITS SUCCESSORS OR ASSIGNS MAY DESIRE TO USE.


 


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IN
WITNESS WHEREOF, the Company has executed and delivered this
Note as of the date first written above.


 


	
   

  	
  GRAYMARK
  PRODUCTIONS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  John Simonelli,
  CEO

  



 


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