EXHIBIT 10.04

                     MUTUAL RELEASE AND COVENANT NOT TO SUE
                     --------------------------------------

         This Mutual Release and Covenant Not to Sue (the "Release") is made as
of the 2nd day of July, 2007 by and between THE SAGEMARK COMPANIES LTD., a New
York corporation with offices at 1285 Avenue of the Americas, 35th Floor New
York, New York 10019 ("Sagemark") and STEPHEN A. SCHULMAN, an individual
residing at 501 South Ocean Blvd., Apartment 102, Boca Raton, Florida 33432
("Schulman").

         WHEREAS, pursuant to a restructuring of the management of Sagemark,
Shulman has agreed to resign as the President and Chief Executive Officer of
Premier P.E.T. Imaging International, Inc. and as a member of the Board of
Directors of Sagemark and, in connection therewith, Sagemark and Schulman have
agreed to enter into this Release, all on and subject to the terms and
conditions hereinafter set forth;

         NOW, THEREFORE, in consideration of the mutual covenants herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the undersigned do hereby agree as follows:

         For and in consideration of Schulman's resignation as the President,
Chief Executive Officer of Premier P.E.T. Imaging International, Inc. and a
director of Sagemark, the execution and delivery of an amendment to the
Executive Employment Agreement between Schulman and Sagemark, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
unconditionally acknowledged:

         (a)      Schulman, and all entities owned (in whole or in part),
controlled by, or under common control with Schulman, and their respective
officers, directors, shareholders, employees, agents, consultants, heirs,
administrators, executors, personal representatives, successors and assigns
(hereinafter collectively referred to as the "Schulman Releasors"), do hereby
unconditionally and irrevocably release and forever discharge Sagemark, and all
entities owned (in whole or in part), controlled by, or under common control
with Sagemark, and their respective officers, directors, shareholders,
employees, counsel, agents, consultants, heirs, administrators, executors,
personal representatives, successors and assigns (hereinafter collectively
referred to as the "Sagemark Releasees"), from any and all actions, causes of
action, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills,
specialties, covenants, obligations, contracts, controversies, agreements,
promises, variances, damages, liabilities, judgments, executions, claims and
demands whatsoever, in law or in equity (whether known or unknown, liquidated or
unliquidated and whether suspected or unsuspected), whether asserted
individually, derivatively, or in any other capacity, which the Schulman
Releasors, or any of them, ever had, now have or hereafter can, shall or may
have against the Sagemark Releasees (or any of them) for, by reason of, in any
way based upon, arising out of, related to, or connected with, directly or
indirectly, any matter, cause, thing, transaction, act, or omission whatsoever
from the beginning of the world to and including the date hereof, except for:

                  (i)      All right, title and interest in and to all shares of
                           capital stock of Sagemark, and all options or
                           warrants to purchase shares of capital stock of
                           Sagemark, owned by Schulman and any affiliate of
                           Schulman (i.e., any entity owned, in whole or in
                           part, by Schulman) and any and all registration

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                           rights existing as of the date hereof, or granted in
                           the future to any of them, with respect to such
                           securities of Sagemark, none of which shall be
                           affected by this Release; and

                  (ii)     any claim for indemnification, contribution or for
                           coverage under Sagemark's officer and director
                           professional liability insurance policy; and

                  (iii)    any claim against the Sagemark Releasees which cannot
                           be released under applicable law; and

                  (iv)     any claim for fraud.

The Schulman Releasors hereby covenant and agree not to sue any of the Sagemark
Releasees with respect to any matter or thing covered by or subject to the
foregoing release, subject to the exceptions set forth above, and with respect
to any suit or proceeding commenced against the Sagemark Releasors to enforce
the terms of this Release.

         (b)      Sagemark, and all subsidiaries and parents thereof, and all
entities owned (in whole or in part), controlled by, or under common control
with Sagemark (hereinafter collectively referred to as the "Sagemark
Releasors"), do hereby unconditionally and irrevocably release and forever
discharge Schulman, and all entities owned (in whole or in part), controlled by,
or under common control with Schulman, and their respective officers, directors,
shareholders, employees, counsel, agents, consultants, heirs, administrators,
executors, personal representatives, successors and assigns (hereinafter
collectively referred to as the "Schulman Releasees"), from any and all actions,
causes of action, suits, debts, dues, sums of money, accounts, reckonings,
bonds, bills, specialties, covenants, obligations, contracts, controversies,
agreements, promises, variances, damages, liabilities, judgments, executions,
claims and demands whatsoever, in law or in equity (whether known or unknown,
liquidated or unliquidated and whether suspected or unsuspected), whether
asserted individually, derivatively, or in any other capacity, which the
Sagemark Releasors, or any of them, ever had, now have or hereafter can, shall
or may have against the Schulman Releasees (or any of them) for, by reason of,
in any way based upon, arising out of, related to, or connected with, directly
or indirectly, any matter, cause, thing, transaction, act, or omission
whatsoever from the beginning of the world to and including the date hereof,
except for:

                  (i)      Any claim against the Schulman Releasees which cannot
                           be released under applicable law; and

                  (ii)     any claim for fraud.

The Sagemark Releasees hereby covenant and agree not to sue any of the Schulman
Releasors with respect to any matter or thing covered by or subject to the
foregoing release, subject to the exceptions set forth above, and with respect
to any suit or proceeding commenced against the Schulman Releasees to enforce
the terms of this Release.

         No provision of this Release may be amended, modified or waived except
by a written instrument executed by Schulman and Sagemark.

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<PAGE>

         If any term or provision of this Release is held to be illegal or
invalid, such illegality or invalidity shall not affect the remaining terms or
provisions hereof, and each term and provision of this Release shall be enforced
to the fullest extent permitted by law.

         This Release shall be binding upon each of the Schulman Releasors and
the Sagemark Releasors and their respective successors and assigns, and inure to
the benefit of the Schulman Releasees and the Sagemark Releasees and their
respective successors, assigns, heirs, administrators, executors and personal
representatives.

         This Release may be signed in any number of counterparts, each of
which, when so executed, shall be deemed to be a binding original and all of
which, when taken together, shall constitute one and the same Release.

         This Release shall be governed by and construed in accordance with the
laws of the State of New York with respect to contracts made and to be fully
performed within such state, without regard to the conflicts of laws principles
thereof.

         Each of the Schulman Releasors and the Sagemark Releasors hereby
represents and warrants to the other that this Release has been duly authorized
by all required action of the Schulman Releasors and the Sagemark Releasors, as
applicable.

         This Release represents the sole and entire agreement between the
parties hereto with respect to the subject matter hereof.

         In the event that any action or proceeding is commenced to enforce the
terms of this Release, the party prevailing therein shall be entitled to
reimbursement of all costs incurred by it in connection therewith, including its
counsel fees and disbursements.

         IN WITNESS WHEREOF, each of the undersigned has executed this Release
as of the 2nd day of July, 2007.


WITNESS:


/s/ SANDI GORMAN                             /s/ STEPHEN A. SCHULMAN
-----------------------------                -----------------------------------
                                             Stephen A. Schulman


WITNESS:                                     THE SAGEMARK COMPANIES LTD.


/s/ GEORGE MAHONEY                           By: /s/ RONALD LIPSTEIN
-----------------------------                    -------------------------------
                                                 Ronald Lipstein, President and
                                                 Chief Executive Officer


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