0001193125-13-315050.txt : 20130801 0001193125-13-315050.hdr.sgml : 20130801 20130801160900 ACCESSION NUMBER: 0001193125-13-315050 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20130801 DATE AS OF CHANGE: 20130801 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: Graymark Healthcare, Inc. CENTRAL INDEX KEY: 0001272597 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-SPECIALTY OUTPATIENT FACILITIES, NEC [8093] IRS NUMBER: 200180812 STATE OF INCORPORATION: OK FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-81595 FILM NUMBER: 131002762 BUSINESS ADDRESS: STREET 1: 204 N. ROBINSON STREET 2: SUITE 400 CITY: OKLAHOMA CITY STATE: OK ZIP: 73102 BUSINESS PHONE: 4056015300 MAIL ADDRESS: STREET 1: 204 N. ROBINSON STREET 2: SUITE 400 CITY: OKLAHOMA CITY STATE: OK ZIP: 73102 FORMER COMPANY: FORMER CONFORMED NAME: GRAYMARK PRODUCTIONS INC DATE OF NAME CHANGE: 20031210 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: FOUNDATION HEALTHCARE AFFILIATES LLC CENTRAL INDEX KEY: 0001581848 IRS NUMBER: 731487633 STATE OF INCORPORATION: OK FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 14000 N. PORTLAND STREET 2: SUITE 203 CITY: OKLAHOMA CITY STATE: OK ZIP: 73134 BUSINESS PHONE: 4056081702 MAIL ADDRESS: STREET 1: 14000 N. PORTLAND STREET 2: SUITE 203 CITY: OKLAHOMA CITY STATE: OK ZIP: 73134 SC 13D 1 d576685dsc13d.htm SCHEDULE 13D Schedule 13D

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 13D

Under the Securities Exchange Act of 1934

 

 

GRAYMARK HEALTHCARE, INC.

(Name of Issuer)

Common Stock, par value $0.0001 per share

(Title of Class of Securities)

389465303

(CUSIP Number)

Marcelo Puiggari, Esq.

General Counsel & VP Legal Services

Foundation HealthCare Affiliates, LLC

14000 N. Portland Ave., Suite 204

Oklahoma City, OK 73134

(405) 608-1735

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

With copies to:

Eulalia M. Mack

Reed Smith LLP

599 Lexington Avenue

New York, New York 10022

Telephone: (212) 521-5400

July 22, 2013

(Date of Event Which Requires Filing of this Statement)

 

 

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box.  ¨

 

 

 


SCHEDULE 13D

 

CUSIP No. 389465303   Page 2 of 7

 

  1   

NAMES OF REPORTING PERSONS

 

Foundation Healthcare Affiliates, LLC

  2  

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP

 

(a)  ¨

(b)  ¨

 

  3  

SEC USE ONLY

 

  4  

SOURCE OF FUNDS*

 

OO

  5  

CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e)

 

¨

  6  

CITIZENSHIP OR PLACE OF ORGANIZATION

 

Oklahoma

NUMBER OF

SHARES

BENEFICIALLY

OWNED BY

EACH

REPORTING

PERSON

WITH

     

SOLE VOTING POWER

 

114,500,000 shares

     8   

SHARED VOTING POWER

 

0 shares

     9   

SOLE DISPOSITIVE POWER

 

114,500,000 shares

   10   

SHARED DISPOSITIVE POWER

 

0 shares

11  

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

 

114,500,000 shares

12  

CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*

 

¨

13  

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

 

70.2%*

14  

TYPE OF REPORTING PERSON*

 

OO

 

* Based upon 163,203,276 shares of the Issuer’s (as defined below) common stock outstanding as of July 22, 2013, as reported in the Issuer’s Current Report on Form 8-K filed on July 26, 2013.


CUSIP No. 389465303

   Page 3 of 7

 

Item 1. Security and Issuer

The securities covered by this Schedule 13D are shares of common stock, $0.0001 par value, of Graymark Healthcare, Inc., an Oklahoma corporation (the “Issuer”). The Issuer’s principal executive offices are located at 204 N. Robinson Ave., Ste. 400, Oklahoma City, OK 73102.

 

Item 2. Identity and Background

This statement is filed by Foundation Healthcare Affiliates, LLC, an Oklahoma limited liability company (the “Reporting Person”). The Reporting Person is a healthcare development and management company operating ambulatory surgery centers and surgical hospitals, with its principal business address at 14000 N. Portland Avenue, Suite 203, Oklahoma City, OK, 73134. Set forth on Schedule I hereto is the name, citizenship, business or residence address and present principal occupation or employment, as well as the name and address of any corporation or other organiation in which such occupation or employmet is conducted, of each of the members of the Reporting Person’s Board of Managers and each executive officer of the Reporting Person.

The Reporting Person has not, during the last five years, (a) been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (b) been party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

 

Item 3. Source and Amount of Funds or Other Consideration

The information contained in Item 4 is incorporated by reference into this Item 3. As described in Item 4, the 114,500,000 shares of common stock that are the subject of this Schedule 13D (the “Shares”) were acquired by the Reporting Person in the Acquisition (as defined below) in exchange for all of the outstanding membership interests of Foundation Surgery Affiliates, LLC and Foundation Surgical Hospital Affiliates, LLC (together the “Companies” or “Foundation”) as well as assets of the Reporting Person related to the businesses of the Companies. The Reporting Person was the sole equity owner of the Companies prior to consummation of the Acquisition. In consideration for the Acquisition, in addition to the issuance of the Shares, the Issuer assumed certain liabilities and obligations of the Reporting Person. In accordance with the Amended Purchase Agreement (as defined below), as further consideration for the equity interests of the Companies, a demand promissory note in the principal amount of $2,000,000 was also issued by the Issuer to the Reporting Company at the closing of the Acquisition (the “Closing”).

 

Item 4. Purpose of Transaction.

The Reporting Person acquired the securities described in this Schedule 13D in connection with the consummation on July 22, 2013, of the acquisition (the “Acquisition”) by the Issuer through its wholly owned subsidiary, TSH Acquisition, LLC (“Acquisition Sub”), from the Reporting Person of all of the membership interests of the Companies pursuant to the terms and conditions of the Amended and Restated Membership Interest Purchase Agreement, dated as of March 29, 2013, as amended by the First Amendment to Amended and Restated Membership Interest Purchase Agreement, dated as of July 22, 2013, among the Issuer, Acquisition Sub and the Reporting Person (as so amended, the “Amended Purchase Agreement”).

Prior to the completion of the Acquisition, the Reporting Person held all of the equity interests of the Companies. Pursuant to the terms of the Amended Purchase Agreement and effective upon the completion of the Acquisition, the Reporting Person acquired beneficial ownership of the Shares, and the Issuer assumed certain liabilities and obligations of the Reporting Person, as described in Item 3. The Reporting Person acquired such Shares for investment purposes and with the intent to obtain a substantial ownership interest in the Issuer in order to be able to influence the business and management of the Issuer. The Reporting Person disclaims any membership in a group relating to the Issuer. Subject to the information contained in this Item 4 and Item 6, which is incorporated by reference into this Item 4, depending upon market conditions and other factors that the Reporting Person deems material, after the date of this Schedule 13D the Reporting Person may purchase additional shares of common stock or other securities of the Issuer in the open market, in private transactions or from the Issuer, or may dispose of all or a portion of the shares of common stock (including the Shares) or other securities of the Company that the Reporting Person now owns or hereafter may acquire.

The Amended Purchase Agreement provides that at or prior to the Closing, the Issuer’s Board of Directors would appoint Mr. Thomas Michaud, Chief Executive Officer of the Reporting Person, and up to six other directors designated by the Reporting Person to serve until the next annual meeting of the Issuer following the Closing. In accordance therewith, concurrently with the Closing, Ms. Jamie Hopping and Dr. S. Edward Dakil resigned from the Board of Directors of the Issuer and the Board of Directors appointed Mr. Michaud and Dr. Robert Moreno, the Reporting Person’s designee, to fill the vacancies created thereby. The remaining four directorships continue unchanged. The Amended Purchase Agreement also provides that Mr. Michaud will be appointed Chairman. Inherent in his Board membership and in such position, Mr. Michaud will participate in and influence the affairs of the Issuer. In addition, the Reporting Person also may participate in and influence the affairs of the Issuer through the exercise of voting rights with respect to the beneficial ownership of the Shares. The Reporting Person has no registration rights.


CUSIP No. 389465303

   Page 4 of 7

 

Other than as described in this Schedule 13D, the Reporting Person does not have any present plans or proposals that relate to, or that would result in, any of the events described in paragraphs (a) to (j) of Item 4 of the Schedule 13D instructions. The Reporting Person reserves the right to formulate plans or make proposals, and take such actions with respect to its investment in the Issuer, including any or all of the items specified in paragraphs (a) to (j) of Item 4 of the Schedule 13D instructions and any other actions as it may determine.

 

Item 5. Interest in Securities of the Issuer.

The disclosures in Item 4 above are incorporated by reference into this Item 5. The Reporting Person is the beneficial owner of the Shares, constituting approximately 70.2% of the Issuer’s outstanding shares of common stock. Such percentage is based upon 163,203,276 shares of the Issuer’s common stock outstanding as of July 22, 2013, as reported in the Issuer’s Current Report on Form 8-K filed on July 26, 2013. The Reporting Person has sole power to vote and direct the vote of all Shares.

Except in connection with the acquisition of the Shares described in Items 4 and 5 of this Schedule 13D, the Reporting Person has not effected any transactions in the Issuer’s common stock during the sixty days prior to the date of this Schedule 13D.

 

Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer.

There are no other contracts, arrangements, understandings, or relationships (legal or otherwise) between Reporting Person and any other person with respect to the Shares beneficially owned by the Reporting Person.

 

Item 7. Materials to be Filed as Exhibits

 

1. Amended and Restated Membership Interest Purchase Agreement, dated March 29, 2013, among the Issuer, Acquisition Sub and the Reporting Person (filed by the Issuer with the Securities and Exchange Commission on April 2, 2013, as Exhibit 2.1 to the Issuer’s Current Report on Form 8–K and incorporated herein by reference).

 

2. First Amendment to Amended and Restated Membership Interest Purchase Agreement, dated July 22, 2013, among the Issuer, Acquisition Sub and the Reporting Person (filed herewith).


SIGNATURE

After reasonable inquiry and to the best of such Reporting Person’s knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct.

Dated: August 1, 2013

 

FOUNDATION HEALTHCARE AFFILIATES, LLC
By:   /s/ Robert M. Byers
  Name: Robert M. Byers
  Title: President


Schedule I

Members of the Board of Managers and Executive Officers of

Foundation HealthCare Affiliates, LLC

July 31, 2013

 

Members of Board of

Managers; Citizenship

  

Address

  

Principal Occupation

   Shares of Issuer
Common Stock

Thomas A. Michaud

USA

  

Suite 204

14000 N. Portland Ave. Oklahoma City, OK 73134

   Chief Executive Officer and Chairman of the Board of the Reporting Person; Chairman of the Board of the Issuer    None

Robert M. Byers

USA

  

Suite 204

14000 N. Portland Ave. Oklahoma City, OK 73134

   President of the Reporting Person    None

Richard Zahn

USA

  

Suite 204

14000 N. Portland Ave. Oklahoma City, OK 73134

   Owner and Managing Director, RLZ Consulting    None

Victor Samuels

USA

  

Suite 204

14000 N. Portland Ave. Oklahoma City, OK 73134

   Chairman Emeritus, Victory Packaging, Inc.    None

Warren Cross, M.D.

USA

  

Suite 204

14000 N. Portland Ave. Oklahoma City, OK 73134

   Founder, Warren Cross and Associates, The Laser Vision Center and Cross Eye Centers    None

Executives; Citizenship

  

Address

  

Principal Occupation

   Shares of Issuer
Common Stock

Thomas A. Michaud

USA

   See information above    See information above    See information
above

Robert M. Byers

USA

   See information above    See information above    See information
above


Exhibit Index

 

Exhibit 1.    Amended and Restated Membership Interest Purchase Agreement, dated March 29, 2013, among the Issuer, Acquisition Sub and the Reporting Person (filed by the Issuer with the Securities and Exchange Commission on April 2, 2013, as Exhibit 2.1 to the Issuer’s Current Report on Form 8–K and incorporated herein by reference).
Exhibit 2    First Amendment to Amended and Restated Membership Interest Purchase Agreement, dated July 22, 2013, among the Issuer, Acquisition Sub and the Reporting Person (filed herewith).
EX-2 2 d576685dex2.htm EX-2 EX-2

Exhibit 2

EXECUTION COPY

FIRST AMENDMENT TO AMENDED AND RESTATED MEMBERSHIP INTEREST

PURCHASE AGREEMENT

This First Amendment to Amended and Restated Membership Interest Purchase Agreement (this “Amendment), dated as of July 22, 2013 (the “Effective Date), is entered into among Foundation Healthcare Affiliates, LLC, an Oklahoma limited liability company (“Seller), TSH Acquisition, LLC, a Delaware limited liability company (“Buyer), and Graymark Healthcare, Inc., an Oklahoma corporation (“Parent and together with the Seller and Buyer, the “Parties).

RECITALS

WHEREAS, Seller and Buyer entered into that certain Amended and Restated Membership Interest Purchase Agreement dated as of March 29, 2013 (the “Purchase Agreement), pursuant to which Seller agreed to sell and Buyer agreed to purchase (i) all of the issued and outstanding membership interests (the “FSA Membership Interests) in Foundation Surgery Affiliates, LLC, a Nevada limited liability company, and (ii) all of the issued and outstanding membership interests (together with the FSA Membership Interests, the “Membership Interests) in Foundation Surgical Hospital Affiliates, LLC, a Nevada limited liability company, all as more particularly described in the Purchase Agreement.

WHEREAS, the Parties desire to amend the Purchase Agreement to update the Purchase Price Seller shall receive from Buyer in connection with the sale of the Membership Interests.

AGREEMENT

NOW, THEREFORE, in consideration of the mutual rights and obligations hereunder, the Parties hereby agree as follows:

 

1. Purchase Agreement. The Parties agree that the Purchase Agreement is in full force and effect. All capitalized terms used in, and not otherwise defined in, this Amendment shall have the meanings given them in the Purchase Agreement.

 

2. Amendments to Article I.

 

  (a) The definition of the term “Parent Common Shares” in Article I is amended to read as follows:

““Parent Common Shares means 114,500,000 shares of Parent Common Stock issued at Closing.”

 

  (b) The definition of “Post-Closing Tax Period” in Article I is amended to read as follows:

““Post-Closing Tax Period” means any taxable period beginning after the Tax Effective Date and, with respect to any taxable period beginning before and ending after the Tax Effective Date, the portion of such taxable period beginning after the Tax Effective Date.”


  (c) The definition of “Pre-Closing Tax Period” in Article I is amended to read as follows:

““Pre-Closing Tax Period” means any taxable period ending on or before the Tax Effective Date and, with respect to any taxable period beginning before and ending after the Tax Effective Date, the portion of such taxable period ending on and including the Tax Effective Date.”

 

  (d) A definition of the term “Amendment” is added in Article I to read as follows:

““Amendment” means the First Amendment to Amended and Restated Membership Interest Purchase Agreement, entered into by and among Buyer, Seller and Parent, dated as of July 22, 2013.”

 

  (e) A definition of the term “Note” is added in Article I to read as follows:

““Note” has the meaning set forth in Section 2.2(c).”

 

  (f) A definition of the term “Tax Effective Date” is added in Article I to read as follows:

““Tax Effective Date” means July 1, 2013.”

 

3. Amendment to Section 2.2. Section 2.2 of the Purchase Agreement is deleted in its entirety and replaced with the following:

“Section 2.2 Purchase Price. The aggregate purchase price (the “Purchase Price) for the Membership Interests and the Additional Purchased Assets shall be:

 

  (a) the Parent Common Shares;

 

  (b) the assumption of the Assumed Liabilities; and

 

  (c) a demand promissory note for the principal amount of two million US dollars ($2,000,000) (the “Note) issued by Parent to Seller substantially in the form attached as Exhibit A to the Amendment.”

 

4. Amendment to Section 2.4(a)(i). Section 2.4(a)(i) of the Purchase Agreement is deleted in its entirety and replaced with the following:

“(i) the Purchase Price, by delivery to Seller of a stock certificate registered in the name of Seller representing the Parent Common Shares and the Note executed by a duly authorized officer of Parent.”

 

5. Amendment to Section 2.5. Section 2.5 of the Purchase Agreement is amended by adding the following sentence at the end of the existing Section 2.5:

“For tax and accounting purposes the Closing shall be deemed to be effective as of the Tax Effective Date.”


6. Amendment to Section 6.1(b). Section 6.1(b) of the Purchase Agreement is deleted in its entirety and replaced with the following:

“(b) Without the prior written consent of Buyer, Seller (and, prior to the Closing, each Company, their Affiliates and their respective Representatives) shall not, to the extent it may affect, or relate to, any Company, make, change or rescind any Tax election, amend any Tax Return or take any position on any Tax Return, take any action, omit to take any action or enter into any other transaction not in the ordinary course of business consistent with past practice that would have the effect of increasing the Tax liability or reducing any Tax asset of Buyer or a Company. Seller agrees that Buyer is to have no liability for any Tax resulting from any action of Seller, any Company, their respective Affiliates or any of their respective Representatives taken prior to the Tax Effective Date, and agrees to indemnify and hold harmless Buyer (and, after the Closing Date, each Company) against any such Tax or reduction of any Tax asset.”

 

7. Amendment to Section 6.3. Section 6.3 of the Purchase Agreement is deleted in its entirety and replaced with the following:

“Section 6.3. Tax Indemnification. Seller shall indemnify each Company, Buyer, and each Buyer Indemnitee and hold them harmless from and against: (a) any Loss attributable to any breach of or inaccuracy in any representation or warranty made in Section 3.25; (b) any Loss attributable to any breach or violation of, or failure to fully perform, any covenant, agreement, undertaking or obligation in Article VI; (c) all Taxes of the Seller or any Company for all Pre-Closing Tax Periods; (d) all Taxes required to be paid or withheld by the Seller or any Company for all Pre-Closing Tax Periods; (e) all Taxes of any member of an affiliated, consolidated, combined or unitary group of which the Company (or any predecessor of the Company) is or was a member on or prior to the Tax Effective Date by reason of a liability under Treasury Regulation Section 1.1502-6 or any comparable provisions of foreign, state or local Law; and (f) any and all Taxes of any person imposed on a Company arising under the principles of transferee or successor liability or by contract, relating to an event or transaction occurring before the Tax Effective Date, in each of the above cases, together with any out-of-pocket fees and expenses (including attorneys’ and accountants’ fees) incurred in connection therewith. Seller shall reimburse Buyer for any Taxes of a Company that are the responsibility of Seller pursuant to this Section 6.3 within ten Business Days after payment of such Taxes by Buyer or the Company.

Parent shall indemnify Seller and each Seller Indemnitee and hold them harmless from and against (i) any Loss attributable to any breach of or inaccuracy in any representation or warranty made in Section 4.11, and (ii) any Loss attributable to any breach or violation of, or failure to fully perform, any covenant, agreement, undertaking or obligation in Article VI, in each case, together with any out-of-pocket fees and expenses (including attorneys’ and accountants’ fees) incurred in connection therewith.

 

8. Ratification. Except as specifically amended herein, the Purchase Agreement shall remain in full force and effect, and is hereby ratified by the Parties. In the event that any terms of this Amendment shall conflict with the terms of the Purchase Agreement, the terms of this Amendment shall prevail. All references herein to the “Purchase Agreement” shall mean the Purchase Agreement as amended by this Amendment. This Amendment may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which shall constitute one and the same Amendment.


IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed effective in all respects as of the Effective Date set forth above.

[SIGNATURES ON FOLLOWING PAGE]


FOUNDATION HEALTHCARE

AFFILIATES, LLC

By:   /s/ Robert M. Byers
Name:   Robert M. Byers
Title:   President and Chief Operating Officer

GRAYMARK HEALTHCARE, INC.

By:

  /s/ Stanton Nelson

Name:

  Stanton Nelson

Title:

  Chief Executive Officer

TSH ACQUISITION, LLC

By:

  Graymark Healthcare, Inc.,
  its Manager

By:

  /s/ Stanton Nelson

Name:

  Stanton Nelson

Title:

  Chief Executive Officer

SIGNATURE PAGE TO FIRST AMENDMENT TO AMENDED AND RESTATED

MEMBERSHIP INTEREST PURCHASE AGREEMENT


EXHIBIT A

Promissory Note (Demand)


PROMISSORY NOTE (DEMAND)

 

$2,000,000.00

                       , 2013

1. Principal Amount. For Value Received, Graymark Healthcare, Inc., an Oklahoma corporation, (“Maker”), promises to pay to the order of Foundation Healthcare Affiliates, LLC (“Payee”), the principal amount of two million dollars ($2,000,000.00), payable at the times specified in paragraph 3 hereof.

2. Interest. Maker also promises to pay interest on the unpaid principal amount hereof from the date hereof until such unpaid principal amount is paid in full, at the per annum rate of seven percent, (7%), payable at the times specified in paragraph 3 hereof.

3. Payments. The principal balance shall be paid by Maker to Payee, on demand. Interest on the unpaid balance at the rate set forth above shall be paid monthly, commencing 30 days from the date hereof and continuing on the same day of each month thereafter until paid in full. All payments shall be payable in U. S. dollars and directed to Payee’s offices at 14000 N. Portland Ave., Suite 203, Oklahoma City, OK 73134, unless Maker is otherwise notified in writing by Payee.

4. Application of Payments. All payments made by Maker to Payee pursuant to this Note shall be applied first to accrued and unpaid interest and the balance, if any, to unpaid principal.

5. Post-Maturity Interest; Computation of Interest. Any amount of principal and/or interest hereof which is not paid when due, whether at stated maturity or by acceleration, shall bear interest from the date when due until said principal and/or interest amount is paid in full, at an interest rate of one and one-half per cent (1.5%) per month; provided however, that in no event shall the interest contracted for, charged, received, paid, or agreed to be paid to the holder hereof, exceed the maximum amount permissible under applicable law. If, from any circumstance whatsoever, interest would otherwise be payable to the holder hereof in excess of the maximum lawful amount, the interest payable to the holder hereof shall be reduced to the maximum amount permitted under applicable law, and if from any circumstance the holder hereof shall ever receive anything of value deemed interest by applicable law in excess of the maximum lawful amount, an amount equal to any excessive interest shall be applied to the reduction of the principal hereof and not to the payment of interest, or if such excessive interest exceeds the unpaid balance of principal hereof, such excess shall be refunded to Maker. Interest shall be computed on the basis of a year of 360 days.

6. Default. At the option of Payee and upon demand, it shall be considered an event of default (“Event of Default”) if any of the following occurs and such Event of Default remains uncured ten (10) days following a notice of default given by Payee to Maker:

 

  (i) Maker shall fail to pay any sum due hereunder within ten (10) days of the date such sum is due and payable (whether at maturity, by acceleration or otherwise);

 

  (ii) Maker voluntarily liquidates;

 

  (iii) Maker pursuant to or within the meaning of Title 11, U.S. Code or any similar federal or state law for the relief of debtors: (a) commences a voluntary case or proceeding; (b) consents to the entry of an order for relief against it in an involuntary case or proceeding; (c) consents to the appointment of a custodian of it or for all or substantially all of its property; (d) makes a general assignment for the benefit of its creditors; or (e) generally is unable to pay its debts as they become due.

 

  (iv) A court of competent jurisdiction enters an order or decree (that remains unstayed and in effect for 30 days under any bankruptcy law that: (a) is for relief against Maker in an involuntary case or proceeding; (b) appoints a custodian of Maker or for all or substantially all of its property; or (c) orders the liquidation of Maker.

7. Remedies. After the occurrence of an Event of Default, this Note shall, at the option of Payee, become due and payable forthwith, without demand upon or further notice to the undersigned, and upon occurrence of any Event of Default or nonpayment of any amounts due hereunder, Payee shall have all of the rights and remedies provided under applicable law and in equity. Failure to exercise this option shall not constitute a waiver of the right to exercise the same at any other time.


8. Waiver. Maker hereby: (i) waives presentment, demand, protest and notice of dishonor; and (ii) agrees that its liability hereunder shall not be affected by any neglect or omission of Payee to exercise any remedies of set-off. Any failure by Payee to exercise any right hereunder shall not be construed as a waiver of the right to exercise the same or any other rights at any other time.

9. Transfer of Note. Payee may transfer this Note and assign its rights to any transferee and such transferee shall become vested with all the powers and rights herein and therein given to Payee. Thereafter, Payee shall be forever relieved and fully discharged from any liability or responsibility in connection with this Note.

10. Choice of Law; Venue. THIS NOTE, ITS SCHEDULES, RIDERS, ANCILLARY DOCUMENTS AND AMENDMENTS THERETO SHALL BE GOVERNED IN ALL RESPECTS BY THE LAWS OF THE STATE OF OKLAHOMA. IN ORDER TO INDUCE MAKER TO EXECUTE THIS NOTE, MAKER HEREBY AGREES THAT ALL ACTIONS OR PROCEEDINGS ARISING DIRECTLY OR INDIRECTLY FROM THIS NOTE SHALL BE LITIGATED ONLY IN COURTS (STATE OR FEDERAL) HAVING SITUS IN THE STATE OF OKLAHOMA AND THE COUNTY OF OKLAHOMA UNLESS PAYEE, IN ITS SOLE DISCRETION, WAIVES THIS PROVISION. MAKER HEREBY EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR PROCEEDING COMMENCED BY PAYEE IN ANY STATE OR FEDERAL COURT LOCATED WITHIN THE STATE OF OKLAHOMA. MAKER WAIVES ANY CLAIM THAT ANY ACTION INSTITUTED BY PAYEE HEREUNDER IS IN AN INCONVENIENT FORUM OR AN IMPROPER FORUM BASED ON LACK OF VENUE. TO THE EXTENT PERMITTED BY LAW, MAKER HEREBY WAIVES TRIAL BY JURY AND ANY RIGHT OF SETOFF OR COUNTERCLAIM IN ANY ACTION BETWEEN PAYEE AND MAKER.

11. Expenses of Enforcement. Maker promises to pay all costs and expenses, including reasonable attorneys’ fees incurred in the collection and enforcement of this Note.

12. Counterparts; Facsimile Execution. The Note may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same Note. Delivery of an executed counterpart of this Note by facsimile shall be equally as effective as delivery of a manually executed counterpart. If Maker delivers an executed counterpart of this Note by facsimile, Maker shall also deliver a manually executed counterpart of the Note, but the failure to deliver a manually executed counterpart shall not affect the validity, enforceability, and binding effect of this Note.

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

 

Maker: GRAYMARK HEALTHCARE, INC.

By:

   
  (signature of duly authorized representative)
Print Name: Stanton Nelson
Title: Chief Executive Officer