EXHIBIT
10.4


 


CO-FINANCE AGREEMENT BETWEEN GRAYMARK
PRODUCTIONS, INC.,

and ROY T. OLIVER


 


Agreement made May 10,
2004, by and between Graymark Productions, Inc. (“Company”), and Roy T.
Oliver  (‘‘Co-Financier’’) regarding a
fiscal contribution and contribution of services in consideration of acquiring
the right to share in the profits of a particular motion picture to be
designated by Company (the ‘‘Picture’’) to be produced, in part, by Company. 


 


1. PICTURE; SERVICES: The Picture shall
be based upon that certain screenplay currently titled “Cloud Nine” written by
Brett Hudson, Burt Kearns and Albert S. Ruddy. 
Co-Financier shall provide consulting services regarding the Picture.
However, Company’s decision regarding all aspects of the Picture shall be final.


 


2.  RECOUPMENT OF
INVESTMENT; PROFIT PARTICIPATION: In consideration of
Co-Financier providing above services and the “Contribution” as defined below
in to the production of Picture, Company shall pay or cause to be paid to
Co-Financier the following: 


 


(a) Recoupment of
Contribution: One Hundred Percent (100%) of all proceeds, commencing from the
first dollar, received by Company from the rights sales and distribution of the
Picture up to and until such time as Co-Financier is repaid the Contribution in
full.


 


(b) Profit Participation:
Ten Percent (10%) of all Net Profits paid to and received by Company from the
rights sales and distribution of the Picture. “Net Profits” shall be defined as
the sum remaining after deduction of third-party distribution fees and
expenses, Company’s recoupment of all costs plus interest, production costs,
distribution costs, cash deferments to cast, crew and/or producers, equipment
suppliers, rights holders or any other party. 


 


3. CONTRIBUTION: Co-Financier shall
provide a Contribution of Two Hundred Fifty Thousand Dollars ($250,000)
(“Contribution”) to the production of Picture. Upon execution of this
agreement, Co-Financier shall pay the full sum of Contribution to Company.
Company shall hold Contribution in escrow until such time as Picture begins
principal photography. At such time when Picture begins principal photography,
Contribution shall be dispersed to the production account of Picture. If
principal photography has not commenced one (1) year from the execution of this
Agreement, then Contribution shall be returned to Co-Financier and Co-Financier
shall not be entitled to the compensation discussed in Paragraph 2 of this
Agreement.


 


4. REPRESENTATIONS AND WARRANTIES:
Co-Financier hereby represents and warrants to Company that: 


 


(a) Powers and
Authority: It is duly incorporated, validly existing and in good standing. It
has the corporate power and all necessary rights and title to enter into and
perform this Agreement and the transactions contemplated hereby or referred to
herein and has taken all necessary action to authorize the entry into and
performance of this Agreement and such transactions. 


 


(b) Legal
Validity: This Agreement constitutes a legal, valid and binding obligation of
Co-Financier and is in proper form for enforcement against it. 


 


(c) Non-conflict
with Laws: The entry into and performance of this Agreement and the
transactions contemplated hereby do not and will not conflict with: 


 


(i) any existing law or regulation or any official or judicial order,
or 


 


(ii) its articles of incorporation, or 


 


(iii) any agreement or document to which it is a party or which is
binding upon it. 


 


1

















 


(c) Consents: All
authorizations, approvals, consents, licenses, exemptions, filings,
registrations, notarizations and other matters, official or otherwise, required
by Co-Financier or advisable in connection with the entry into, performance,
validity and enforceability of this Agreement and the transactions contemplated
hereby by Co-Financier have been obtained or effected and are in full force and
effect.


 


5. INDEMNIFICATION:
Company and Co-Financier shall, at its own respective expense, indemnify, save
and hold harmless the other party and its successors, licensees, assigns,
agents, representatives and affiliates from and against any and all claims,
demands, causes of action, obligations, liability, loss, damage, cost and
expenses (including reasonable attorneys’ fees), incurred or sustained by
reason of or arising out of any breach or alleged breach of any of the
warranties, representations or agreements herein made by the respective party,
or from any reliance upon any such warranties, representations or agreements.


 


6. ACCOUNTING AND REPORTS BY COMPANY:
Company shall render to Co-Financier, on a quarterly basis for the first two
years after initial distribution of the Picture, a written statement of monies
due Investor hereunder, if any (‘‘Accounting Statement’’), and such Accounting
Statement shall be accompanied by remittance of any amount shown to be due to
Company thereon. Thereafter, Accounting Statements and payments shall be
provided annually for as long as the Picture generates revenue. If any error is
made by Company in any Accounting Statement, it may be corrected by Company
within two years thereafter by making any necessary deductions or additions on
subsequent Accounting Statements, or at Company’s option by the rendering of an
Amended Accounting Statement. Each Accounting Statement shall be rendered
within sixty
(60) days following the end of each accounting period. Any
Accounting Statement rendered by Company hereunder shall be deemed conclusively
true and correct and binding upon Co-Financier, shall constitute an account
stated and be incontestable unless Co-Financier delivers to Company in writing
specific objections, setting forth specific transactions or items objected to
and the basis of such objections, within sixty (60) days from the date such
Accounting Statement was received by Co-Financier. 


 


7. RELATIONSHIP OF PARTIES:
Company and Co-Financier each acknowledge that they are independent contractors
and that no partnership, joint venture, agency or employment relationship has
or will be created by this Agreement. 


 


8. NOTICES: All
notices hereunder shall be in writing and shall be served by personal delivery
to Company or Co-Financier, as the case may be, [or by facsimile transmission,
with a copy sent by U.S. Mail] or by registered or certified mail, return
receipt requested, or by telegram, addressed as follows: 


 


To Company: 101
N.Robinson, Ste 920, Oklahoma City, OK 
73102; with a courtesy copy to: Cohen & Gardner LLP, 329 North
Wetherly Dr.,  Ste 206, Beverly Hills,
CA 90211 Attn: Jonathan Gardner Esq. 


 


To Co-Financier: 


 


Any party may
change its address at any time by written notice to the other parties. Notices
served by mail shall be deemed to be served three (3) business days next
following deposit in the U.S. mails, (in the case of facsimile on the day of
transmission).


 


9. ASSIGNMENT: No party hereto shall
have the right to assign all or any part of its right or obligations hereunder
without the prior written consent of the other party, except that nothing
contained in this sentence shall prevent any party from assigning its right to
receive monies hereunder after providing written notice to the other party. 


 


10. AMENDMENTS: This Agreement may not
be modified except by written agreement signed by each of the parties hereto. 


 


11. NO THIRD PARTY BENEFICIARIES: This
Agreement shall in no event be construed as a third party beneficiary contract
and is not intended for the benefit of any person or company whomsoever except
the parties hereto. 


 


12. WAIVER: No waiver by one party of a
breach or default by the other party shall be deemed to be a waiver of any
preceding, continuing or succeeding breach of the same or any other provision
of this Agreement. 


 


2

















 


13. ENTIRE AGREEMENT:  Each party acknowledges that no
representation or warranty not expressly set forth in this Agreement has been
made or relied upon by the other party, it being agreed that this Agreement
constitutes the entire Agreement of the parties regarding the subject matter
hereof and supersedes all prior Agreements with respect thereto. 


 


14. GOVERNING LAW: This Agreement has
been entered into in the State of Oklahoma and shall be construed and enforced
under and subject to the laws of said state.


 


15. ARBITRATION: Should there be any
dispute between the parties concerning the interpretation of this Agreement or
concerning an alleged breach of this Agreement, which the parties are unable to
resolve after consultation with each other, such dispute shall be decided by
arbitration pursuant to the regulations and procedures of the American Arbitration
Association. 


 


16. ATTORNEYS’ FEES: In any action or
proceeding between or among the parties hereto to interpret or enforce any of
the provisions hereof, the prevailing party shall, in addition to any other
award of damages or other remedy, be entitled to reasonable attorneys’ fees and
costs. 


 


Wherefore, the parties
have executed this agreement on the date first above written.


 


	
  AGREED & ACCEPTED:

  
	
   

  
	
  GRAYMARK PRODUCTIONS
  INC.

  
	
   

  
	
  By:

  	
  /S/HARRY GRAY
  FREDERICKSON, JR.

  	
   

  
	
   

  	
   

  	
   

  
	
  Its:

  	
  Chief Execution Officer

  	
   

  
	
   

  
	
  /S/ ROY T. OLIVER

  	
   

  
					



 


3