SAGEMARK MANAGEMENT LLC
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
November 17, 2000
The Sagemark Companies, Ltd.
c/o Xxxxxx Xxxxxx, Esq.
Xxxxxxx, Israels & Xxxxxxxx LLP
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Re: SAGEMARK CAPITAL LP
Gentlemen:
This shall confirm the agreement of Sagemark Management LLC ("SML"),
the General Partner of Sagemark Capital LP (the "Partnership"), not to request
or demand of The Sagemark Companies, Ltd. ("Sagemark") pursuant to the
applicable provisions of the Agreement of Limited Partnership of the Partnership
dated November 30, 1999, as the same may be amended from time to time hereafter
(the "Partnership Agreement"), any of the $333,155 balance of Sagemark's
$4,920,000 capital contribution commitment until such time as:
(1) each other limited partner of the Partnership which has not yet
fully funded its capital contribution commitment to the
Partnership contributes to the capital of the Partnership an
amount which will result in such limited partner having
contributed to the Partnership the same percentage of such limited
partner's total capital contribution commitment to the Partnership
as the capital thus far contributed to the Partnership by Sagemark
bears to Sagemark's total capital contribution commitment to the
Partnership (which is 93% as of the date hereof); and
(2) the Partnership draws down or otherwise receives from the Small
Business Administration (the "SBA") all of the investment funds to
which the SBA determines that the Partnership is entitled under
the Small Business Investment Company Act of 1958, as amended,
based upon the Partnership's total capital contributions at such
time as all of the limited partners have contributed capital to
the Partnership against their total capital contribution
commitments in equal percentages based upon their original capital
contribution commitments to the Partnership; and
(3) all of such capital contributions and investment funds referred to
in clauses (a) and (b) above are fully invested by the
Partnership.
The Sagemark Companies, Ltd.
November 17, 2000
Page 2
At such time, if any, that the requirements of clauses (a) through (c)
have been met, to the extent that SML thereafter requests or demands that the
limited partners contribute any such additional capital to the Partnership
pursuant to their commitments under the Partnership Agreement to provide such
capital, SML will require each limited partner to contribute any such additional
capital to the Partnership at the same time and in amounts equal in percentage
to each limited partner's respective total capital contribution commitments to
the Partnership (and Sagemark will only be required to make any such additional
capital contribution to the extent that such other limited partners pay to the
Partnership any such additional capital contributions).
As of the date hereof, each of the following limited partners will be
required to contribute additional capital to the Partnership in the amounts set
forth below opposite their names in order to satisfy the requirements of clause
(a) above:
Xxxxxx X. Xxxxxxxxx $197,500
Xxxxxx X. Xxxxxxxxx $197,500
Founders Equity Group, Inc. $465,000
In addition, at no time will SML offset against Sagemark's capital
contribution commitment any sums or amounts due by the Partnership to Sagemark
in the absence of Xxxxxxxx's prior written consent and SML will pay to Xxxxx
XxXxxx and Xxxxxxx Xxxxx all amounts to which they are entitled from all
distributions received by SML from the Partnership pursuant to Section 3.19 of
the Partnership Agreement, contemporaneously with SML's receipt of any such
distributions.
Upon the written request of Xxxxxxxx, SML will appoint Xxx Xxxxxxx to
the Advisory Board of the Partnership which is provided for in Section 2.6 of
the Partnership Agreement and, upon such appointment, the Advisory Board (which
will consist of at least one other designee of SML) will be available for weekly
meetings or communications with SML (or, if circumstances require, more frequent
meetings or communications).
In consideration of the payments to Sagemark on the date hereof of
$113,863 and $12,917.82 (this latter payment representing reimbursement for the
period November 1, 2000 through November 10, 2000), the January 1, 2000
Reimbursement Agreement between Sagemark and SML is hereby terminated and
neither Sagemark nor SML has any further obligations or responsibilities
thereunder.
The Sagemark Companies, Ltd.
November 17, 2000
Page 3
Effective November 1, 2000, the monthly management fee payable to SML
by the Partnership under the Partnership Agreement will be $46,875 during the
remainder of the term of the Partnership Agreement, subject to adjustment as
provided under Section 2.5(a) of the Partnership Agreement. SML agrees that the
Partnership owes it the sum of $118,750 in management fees for the period August
4, 2000 through October 31, 2000 (all such management fees for periods prior to
August 4, 2000 having been fully paid by the Partnership).
Effective as of the date hereof, SML will assume all obligations of
Sagemark under that certain equipment lease agreement (Canon Fax Machine) dated
June 2, 1999 between Consolidated Technology Group Ltd. and Ikon Office
Solutions.
Notwithstanding the provisions of Section 6.9 of the Transition
Agreement dated as of November 17, 2000 by and among Xxxxxxxx, Xxxxx XxXxxx,
Xxxxxxx Xxxxx and Xxxxxx Xxxxxx, Sagemark hereby acknowledges that the
transactions contemplated by this letter agreement constitute transactions which
are the subject of such Section.
Each of the signatories to this Agreement have duly authorized this
Agreement and this Agreement will be binding upon each of them.
Very truly yours,
SAGEMARK MANAGEMENT LLC
By: /s/ XXXXXXX XXXXX
------------------------------------
Xxxxxxx Xxxxx, Authorized Member
THE SAGEMARK COMPANIES, LTD.
By: /s/ XXXXXXX XXXXX
------------------------------------
Xxxxxxx Xxxxx, President and Chief
Operating Officer
