Document:

EXHIBIT 10.3

THE WARRANT REPRESENTED BY THIS CERTIFICATE AND THE OTHER SECURITIES ISSUABLE
UPON THE EXERCISE HEREOF MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO (i) AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR (ii) AN EXEMPTION FROM REGISTRATION UNDER SAID ACT WHERE THE HOLDER HAS
FURNISHED TO THE COMPANY AN OPINION OF ITS COUNSEL, WHICH OPINION SHALL BE
SATISFACTORY TO THE COMPANY, THAT AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT
IS AVAILABLE.

THE ASSIGNMENT, TRANSFER OR EXCHANGE OF THIS WARRANT IS RESTRICTED IN ACCORDANCE
WITH THE TERMS HEREOF.

               WARRANT TO PURCHASE 500,000 SHARES OF COMMON STOCK

                            PAR VALUE $.01 PER SHARE
                                       OF
                           THE SAGEMARK COMPANIES LTD.

                            EXERCISABLE ON OR BEFORE
                    5:00 PM., NEW YORK CITY, OCTOBER 24, 2010

     This is to certify that, for value received, MICHAEL FAGIEN the "Holder")
is entitled to purchase, subject to the provisions of this Warrant, from THE
SAGEMARK COMPANIES LTD., a New York corporation (the "Company"), FIVE HUNDRED
THOUSAND (500,000) fully paid and nonassessable shares of the Company's Common
Stock, par value $.01 per share (the "Warrant Shares"), on the terms and
conditions set forth herein. This Warrant and any warrant resulting from an
assignment, transfer, subdivision or exchange of this Warrant, shall sometimes
hereinafter be referred to as a "Warrant" or, collectively, as the "Warrants".

     This Warrant has been issued pursuant to the terms of that certain
Executive Employment Agreement dated as of October 25, 2005 between the Company
and Holder (the "Employment Agreement"), the terms of which are incorporated
herein by reference thereto. Any capitalized terms which are used in this
Warrant, but not defined herein, shall have the meanings ascribed to them in the
Employment Agreement.

     1. Exercise Price. The purchase price of each of the Five Hundred Thousand
(500,000) Warrant Shares shall be $1.60 per share, subject to adjustment as
hereinafter provided (the "Purchase Price").

     2. Term. This Warrant shall be exercisable by the Holder, in whole or in
part, at any time and from time to time during a period of five (5) years,
commencing on October 25, 2005 and terminating at 5:00 PM Eastern Standard Time

<PAGE>

on October 24, 2010 (the "Exercise Period"), by the presentation of this
Warrant, together with the Warrant Share Purchase Form in the form attached
hereto as Exhibit "A", completed and duly executed by the Holder as provided in
Paragraph 14 hereof and payment of the Purchase Price as more specifically
provided in this Warrant. Notwithstanding the foregoing, in the event that the
Employment Agreement is terminated by the Company pursuant to either Section
3.3(c) or 3.3(f) thereof, this Warrant will expire on the date of any such
termination (in such instance, the Holder will be entitled to retain any Warrant
Shares acquired by the Holder upon the exercise of this Warrant prior to the
date of any such termination).

     3. Payment.

          (a) The Purchase Price of each of the Warrant Shares which are the
subject of any exercise of this Warrant shall, be paid in full by the Holder at
the time of exercise, by cash, certified check or bank draft therefor, payable
to the Company.

          (b) The Company agrees that the Holder shall be deemed the record
owner of the Warrant Shares as of the close of business on the date on which
this Warrant and the completed and executed Warrant Share Purchase Form shall
have been delivered by the Holder to the Company, and payment of the Purchase
Price made in full, all in accordance with the terms of this Warrant,
notwithstanding that certificates representing the Warrant Shares shall not then
be or have been actually issued and delivered to the Holder.

     4. Vesting.

          (a) Notwithstanding any provision of this Warrant to the contrary, the
right of the Holder to exercise this Warrant and purchase the Warrant Shares
shall be subject to and conditioned upon the following vesting schedule:

               (i) 100,000 Warrant Shares shall vest and be purchasable
hereunder as of the date of this Warrant;

               (ii) 100,000 Warrant Shares shall vest and be purchasable
hereunder as of each of October 24, 2006, October 24, 2007, October 24, 2008 and
October 24, 2009; and

               (iii) 100,000 Warrant Shares shall vest and be purchasable
hereunder as of the date, if any, that each New Florida Center commences its
operations (i.e., performs a positron emission tomography imaging scan for a fee
on a patient) or the closing date of the acquisition by the Company of any such
New Florida Center during the term of this Warrant.

As to the vesting provisions set forth above in clauses (ii) and (iii), the
applicable Warrant Shares will vest on the earlier of such dates if, as and when
they occur.

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          (b) Notwithstanding subparagraph (a) above, any Warrant Shares which
shall not have vested in accordance with the provisions of subparagraph (a)
above, will vest immediately upon any issuance by the Company of a non-renewal
notice under the Employment Agreement prior to October 24, 2010 or upon any
termination of the Employment Agreement by Holder pursuant to Section 3.3(g) of
the Employment Agreement.

     5. Exchange; Division. Subject to the provisions of Paragraph 11 hereof,
this Warrant is assignable or exchangeable at the option of the Holder at the
office of the Company for a warrant or other warrants of different denominations
entitling the Holder thereof (and the Holder's assignees and transferees) to
purchase in the aggregate up to but not more than the number of Warrant Shares,
and (b) this Warrant may be divided or combined with other warrants which carry
the same rights as this Warrant, in either case, upon presentation of this
Warrant, at the office of the Company, together with a completed assignment in
the form attached hereto as Exhibit "B" (the "Assignment Form") , duly executed
by the Holder, specifying the names and denominations in which any such new
Warrants are to be issued, and the payment of any transfer tax payable in
connection therewith. The Company will issue any such new Warrant or Warrants as
soon as practical after its receipt of any such executed Assignment Form and
this Warrant.

     6. Reservation of Shares. The Company hereby agrees that at all times
during the Exercise Period there shall be reserved for issuance and/or delivery
upon the exercise of this Warrant, such Warrant Shares as shall be required for
issuance and delivery upon the proper exercise of this Warrant. If at any time
during the Exercise Period, the number of shares of the Company's authorized
Common Stock, $.01 par value per share (the "Common Stock"), shall not be
sufficient to effect the exercise of this Warrant, the Company will promptly
take such corporate action as may be necessary to increase its authorized but
unissued shares of Common Stock, to such number of shares of Common Stock as
shall be sufficient for such purposes and the Company shall have the same
obligation with respect to any other securities or property that may become
issuable upon the exercise of this Warrant.

     7. Adjustments. Subject and pursuant to the provisions of this Paragraph 7,
or elsewhere in this Warrant, the Purchase Price and the number and character of
the Warrant Shares shall be subject to adjustment from time to time during the
Exercise Period, upon the occurrences of any of the following events prior to
the full exercise of this Warrant:

          (a) In the event that at any time hereafter, the Company shall pay a
dividend in shares of its Common Stock or subdivide its outstanding shares of
Common Stock into a greater number of shares, the Purchase Price in effect
immediately prior to such dividend or subdivision shall be proportionately
reduced, and the number of Warrant Shares purchasable pursuant to this Warrant
immediately prior to such dividend or subdivision shall be proportionately
increased, calculated to the next lowest whole number of shares. In the event
that the outstanding shares of Common Stock of the Company shall be combined
into a smaller number of shares, the Purchase Price in effect immediately prior
to such combination shall be proportionately increased, and the number of
Warrant Shares purchasable pursuant to this Warrant immediately prior thereto
shall be proportionately decreased, calculated to the next lowest whole number

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of shares, provided, however, that (x) notwithstanding the foregoing or any
other provision in this Warrant to the contrary, in the event of any reverse
split of the outstanding shares of Common Stock of the Company, the number of
Warrant Shares shall be adjusted so that the number of Warrant Shares after any
such reverse stock split will be equal in percentage to the Warrant Shares that
existed on the day immediately prior to any such reverse stock split, and (y) if
for any reason the plan to pay a dividend in Common Stock or subdivide or
combine the Common Stock is legally abandoned before payment, distribution or
other final act of consummation, then any adjustment made in the Purchase Price
by reason of the passage of the record date with respect to such dividend,
subdivision or combination and the proposed change in the number of Warrant
Shares subject to this Warrant shall be cancelled as of the date the plan is so
abandoned.

          (b) In the event of any reclassification, capital reorganization or
other change of the outstanding shares of Common Stock, or in case of any
consolidation or merger of the Company with or into another corporation (other
than a merger with a wholly owned subsidiary in which the Company is the
continuing corporation and which does not result in any reclassification,
capital reorganization or other change of the outstanding shares of Common Stock
of the class issuable upon the exercise of this Warrant) or in case of any sale
or transfer to another corporation or entity of the assets or business of the
Company as an entity or substantially as an entirety, the Holder of this Warrant
shall have the right to purchase the kind and amount of shares of stock and
other securities and property receivable upon such reclassification, capital
reorganization or other change, consolidation, merger, sale or transfer as such
Holder would have been entitled to purchase had such Holder exercised this
Warrant in full immediately prior to such reclassification, capital
reorganization, other change, consolidation, merger, sale or transfer.

          (c) In the event that at any time, as a result of an adjustment made
pursuant to this Paragraph 7, the Holder of this Warrant shall become entitled
to purchase, upon the exercise of this Warrant, shares of stock, evidences of
indebtedness, or other securities or assets (other than shares of Common Stock),
then, wherever appropriate, all references herein to shares of Common Stock
shall be deemed to refer to and include such shares of stock, evidences of
indebtedness, or other securities or assets, and thereafter the number of such
shares of stock, evidences of indebtedness, or other securities or assets shall
be subject to adjustment from time to time in a manner and upon terms as nearly
equivalent as practicable to the provisions contained in this Paragraph 7.

          (d) If the Company shall distribute, during the Exercise Period, to
all holders of its Common Stock, any securities or other assets (other than a
distribution of Common Stock or a cash distribution made as a dividend) the
Board of Directors shall be required to make such equitable adjustment in the
Purchase Price and/or Warrant Shares in effect immediately prior to the record
date of such distribution as may be necessary to preserve to the Holder of this
Warrant rights substantially proportionate to those enjoyed hereunder by the
Holder immediately prior to the happening of any such distribution.

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          (e) No adjustment in the number of Warrant Shares shall be required
under this Paragraph 7 unless such adjustment would require an increase or
decrease in such number of shares of at least 1% of the then adjusted number of
Warrant Shares issuable upon the exercise of this Warrant, provided, however
that any adjustments, by reason of the foregoing, which are not required at the
time to be made, shall be carried forward and taken into account and included in
determining the amount of any subsequent adjustment.

          (f) Except as otherwise provided herein, whenever the number of
Warrant Shares is adjusted pursuant to this Paragraph 7, the Purchase Price
shall be adjusted (to the nearest one-tenth of a cent) by multiplying such
Purchase Price immediately prior to such adjustment by a fraction, the numerator
of which shall be the number of Warrant Shares purchasable upon the exercise of
this Warrant immediately prior to such adjustment and the denominator of which
shall be the number of such Warrant Shares so purchasable immediately
thereafter.

          (g) Upon the occurrence of each event requiring an adjustment of the
Purchase Price and of the number of Warrant Shares pursuant to the terms of this
Paragraph 7, the Company shall promptly notify the Holder of such event and the
date on which such event is to become effective and the facts with respect
thereto which shall be reasonably necessary to indicate the effect of such event
on the Purchase Price and the Warrant Shares and shall forthwith have its
independent certified public accountants compute or confirm the computation of
the adjusted Purchase Price and the adjusted Warrant Shares by reason of such
event in accordance with the provisions of this Paragraph 7 (such notice and
computation to be delivered to the Holder at least ten (10) days prior to the
effective date of such event). The Company shall mail forthwith to the Holder a
copy of a certification containing such computation (the "Certificate") which
shall be conclusive and binding upon the Holder unless contested by the Holder
by written notice to the Company within thirty (30) days after receipt thereof
by the Holder.

          (h) In case the total number of Warrant Shares shall be increased or
decreased pursuant to any of the provisions of this Paragraph 7, such total
number of shares issuable to the Holder shall be rounded off to the nearest full
share and no adjustment shall be made with respect to any fractional share of
Common Stock which otherwise would be issuable as a result of any adjustment
pursuant to this Paragraph. The Holder of this Warrant, by the Holder's
execution hereof, expressly waives any right to receive any fractional share of
Common Stock or scrip or any other evidence of fractional interest upon the
exercise of this Warrant.

          (i) For the purposes of this Paragraph, the term "Common Stock" shall
mean the class of capital stock designated as the Common Stock of the Company on
the first page of this Warrant and defined in Paragraph 5 hereof, or any other
class of stock resulting from successive changes or reclassifications of such
Common Stock. If at any time during the Exercise Period, as a result of an
adjustment made pursuant to this Paragraph 7, the securities or other property
obtainable upon the exercise of this Warrant shall include shares or other
securities of the Company other than Common Stock, or securities of another

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corporation or other property, the number of such other shares or other
securities or property shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions with
respect to the Common Stock contained in this Paragraph 7 and all other
provisions or this Warrant with respect to Common Stock shall apply on like
terms to any other shares, securities or property

     8. Exchange Right. Holder will have the right, during the term of this
Warrant, to exchange all (but not part) of Four Hundred Thousand (400,000) of
the vested Warrant Shares for a twenty percent (20%) equity interest in all of
the New Florida Centers existing on the date of any such exchange, without
making any payment to the Company therefor, provided that Holder makes such
election, in writing, prior to any exercise of this Warrant and not later than
October 24, 2008. In the event that Holder fails to provide such notice to the
Company by such date, Holder's exchange right hereunder will terminate as of
October 24, 2008.

     9. Company's Representations to Holder. The Company hereby represents and
warrants to the Holder that (a) the Company, by all appropriate and required
action, is duly authorized to issue this Warrant and consummate all of the
transactions contemplated hereby; and (b) the Warrant Shares, when issued and
delivered by the Company to the Holder, and when paid for by the Holder in
accordance with the terms and conditions hereof, will be duly and validly
issued, fully paid and nonassessable.

     10. Holder's Representations to the Company. By acceptance of this Warrant,
the Holder represents and warrants to the Company that the Holder is acquiring
the Warrant and shall acquire the Warrant Shares, for investment, for the
Holder's own account and not with a view towards the resale or distribution
thereof

     11. Restrictions on Transfer. By acceptance of this Warrant, the Holder
hereby agrees that the Holder shall not sell, assign, convey or transfer by any
means, or otherwise dispose of the Warrant or the Warrant Shares acquired by the
Holder, in whole or in part, without registration under the Securities Act of
1933, as amended (the "Act"), and all applicable state securities ("Blue Sky")
laws, rules and regulations, unless (i) an exemption from registration under the
Act and all applicable Blue Sky laws, rules and regulations is available
thereunder, and (ii) the Holder has furnished the Company with notice of such
proposed transfer and an opinion of the Holder's legal counsel, which opinion is
acceptable to the Company, that such proposed sale or transfer is so exempt.
Absent the foregoing, the Holder shall be under no other restriction with
respect to the sale, assignment, conveyance or transfer of this Warrant or the
Warrant Shares.

     12. Registration Right.

          (a) The Holder may, at any time during the Exercise Period, notify the
Company that the Holder wishes the Warrant Shares (to the extent vested) and/or
any other securities purchasable under this Warrant (collectively, the
"Registrable Securities") to be registered under the Act. The Company will, at
its sole expense, prepare and file a registration statement pursuant to the Act

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to the end that the Registrable Securities shall be permitted to be sold under
the Act, as promptly as practical after any such notice from the Holder and the
Company shall use its best efforts to cause such registration statement to
become effective, provided that the Holder shall furnish the Company with all
information required in connection therewith as the Company shall reasonably
request in writing. The Company shall not be required to file more than one (1)
registration statement pursuant to this Paragraph 12. Nothing contained herein
shall require the Company to conduct a financial audit, other than in the
ordinary course of business at the end of its fiscal year. The Holder shall not
be required to exercise this Warrant prior to or after the date that any such
registration statement has been declared effective by the Securities and
Exchange Commission (the "Commission") but in no event shall the exercise date
under this Warrant occur at a date subsequent to the last day of the Exercise
Period. Notwithstanding any provision of this Paragraph 12 to the contrary, the
Company's obligation with respect to any such registration statement shall
terminate as to any Warrant Shares which are exchanged by Holder pursuant to the
provisions of Paragraph 8 hereof.

          (b) (i) If, at any time during the Exercise Period, the Company
proposes to register any of its securities under the Act (other than in
connection with a merger, acquisition, or pursuant to a registration statement
on Form S8 or any successor form or pursuant to any registration statement filed
on behalf of investors who received securities from the Company in connection
with any private placement of the Company's securities, unless the shares of
common stock of any officer, director or principal shareholder of the Company
are included therein), it will give notice to the Holder, by registered or
certified mail, return receipt requested, at least thirty (30) days prior to the
filing of each such registration statement of its intention to do so. If the
Holder notifies the Company within twenty (20) days after receipt of any such
notice of the Holder's desire to include any or all of the Registrable
Securities in such proposed registration statement, the Company shall afford the
Holder the opportunity to have any or all of the Registrable Securities included
in and registered under such registration statement, all at the Company's sole
cost and expense, except for the fees of any counsel retained by the Holder in
connection therewith and any transfer taxes or underwriting discounts or
commissions applicable to the Registrable Securities sold by the Holder pursuant
thereto. Notwithstanding the foregoing, if, in the written opinion of the
Company's underwriter for such offering, the inclusion of all, or any portion of
the Registrable Securities requested to be so registered by the Holder, when
added to the securities being registered by the Company (or any selling
shareholder), will exceed the maximum amount of the Company's securities which
the underwriter believes can be marketed (x) at a price reasonably related to
their then current market value, or (y) without otherwise materially adversely
affecting the offering, then the Company may exclude from such offering all, or
any portion of the Registrable Securities requested by the Holder to be
registered.

               (ii) If securities proposed to be offered for sale pursuant to
such registration statement are securities owned by other security holders of
the Company and the total number of securities to be offered by the Holder of
the Registrable Securities and such other selling security holders is required
to be reduced pursuant to a written request from the underwriter (which request
shall be made only for the reasons set forth in subparagraph (b)(i) above) the
aggregate number of Registrable Securities to be included by the Company for the

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Holder in such registration statement shall equal the number of shares which
bears the same ratio to the maximum number of securities that the underwriter
believes may be included for all the selling security holders (including the
Holder of the Registrable Securities) as the original number of Registrable
Securities proposed to be included therein by the Holder bears to the total
original number of securities proposed to be included therein by the Holder and
the other selling security holders.

               (iii) Notwithstanding the provisions of this Paragraph 12(b), the
Company shall have the right at any time after it shall have given written
notice pursuant to this Paragraph 12(b) (irrespective of whether a written
request for inclusion of any such securities shall have been made by the Holder)
to elect not to file any such proposed registration statement, or to withdraw
the same after the filing but prior to the effective date thereof.

          (c) The Company will use its best efforts to cause any such
registration statement covering all or any portion of the Registrable Securities
to become effective as promptly as possible and, if any stop order shall be
issued by the Commission in connection therewith, to use its best efforts to
obtain the removal of such order. The Holder agrees to cooperate in all respects
with the Company in effectuating the foregoing,

          (d) While any registration statement covering all or any portion of
the Registrable Securities is effective, the Company will take all necessary
action which may be required in qualifying or registering the Registrable
Securities for offering and sale under the Blue Sky laws of such number of
states as are reasonably requested by the Holder, provided that the Company
shall not be obligated to qualify as a foreign corporation to do business under
the laws of any such jurisdiction.

          (e) The Company shall comply with one request for registration made by
the Holder under Paragraph 12(a) during the Exercise Period, at the Company's
sole cost and expense and without charge to the Holder, except that the Holder
shall bear the fees of any counsel retained by the Holder in connection
therewith and any transfer taxes and underwriting discounts or commissions
applicable to the Registrable Securities sold by the Holder pursuant thereto.

          (f) The Company shall be required to maintain the effectiveness of any
registration statement registering Registrable Securities under this Paragraph
12 until the earlier of (i) the expiration of the Exercise Period, (ii) the
public sale of all of the Registrable Securities registered thereunder, or (iii)
the expiration of one year from the date such Registration Statement has been
declared effective by the Commission.

          (g) The giving of any notice by the Holder under this Paragraph 12
shall not impose upon the Holder any obligation to sell any Registrable
Securities or to exercise this Warrant.

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          (h) Except as provided herein the Company's covenants and agreements
with respect to the Registrable Securities in this Paragraph shall continue in
effect regardless of the exercise and surrender of this Warrant

          (i) The Company shall not be required by this Paragraph 12 to file a
registration statement with respect to the Registrable Securities if, in the
opinion of counsel for both the Holder of the Registrable Securities and the
Company (or, should they not agree, in the opinion of another counsel
experienced in securities laws matters acceptable to counsel for the Holder and
the Company), that the proposed public offering or other sales or transfers to
which such registration statement is requested is exempt from applicable federal
and state securities laws registration requirements and would result in all
purchasers or transferees obtaining securities which are not "restricted
securities" as defined under Rule 144 under the Act.

          (j) The Company agrees that until all Warrant Shares have been sold
under a registration statement pursuant to this Paragraph 12 or pursuant to Rule
144 under the Act, it will, if economically or otherwise practicable, keep
current in filing all materials required to be filed with the Commission in
order to permit the Holder of such securities to sell the same under Rule 144.

          (k) The Holder shall provide the Company with such information
necessary for the compliance by the Company with its obligations under this
Paragraph 12, as shall from time to time be reasonably requested by the Company.

     13. Indemnification.

          (a) The Company will indemnify and hold harmless the Holder(s) of this
Warrant and/or the securities issuable upon the exercise thereof and each person
who controls a Holder within the meaning of the applicable provisions of the
Act, individually and jointly, as the case may be, from and against any and all
losses, claims, damages, expenses and liabilities (the "Losses"), to which the
Holder, or either of them, may become subject under the Act or under any other
statute (including any Blue Sky law) or at common law or otherwise and, except
as hereinafter provided, will reimburse the Holder(s) and any such controlling
person for any legal and other expenses (including all costs of any
investigation and preparation) reasonably incurred by the Holder or either of
them in connection with investigating and/or defending any litigation or a claim
whether or not resulting in any liability, only insofar as such Losses arise out
of, or are based upon, any untrue statement or alleged untrue statement of a
material fact contained in any registration statement referred to in Paragraph
12 or any amendment or supplement thereto (including any Prospectus forming a
part thereof) (collectively, the "Registration Statements") or in any Blue Sky
application filed by the Company under Paragraph 12 or arise out of, or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein necessary to make the statements therein not
misleading, provided however, that the indemnity agreement contained in this
subparagraph shall not apply to amounts paid in settlement of any such
litigation or claim if such settlement is effected without the consent of the
Company nor shall it extend to the Holder(s) in respect of any such Losses

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arising out, of or based upon, any such untrue statement or alleged untrue
statement or any such omission, if such statement or omission was made in
reliance upon, and in conformity with written information furnished to the
Company by the Holder(s) or such controlling person, or on their behalf,
specifically for use in connection with the preparation of such Registration
Statement, or any such Blue Sky application.

          (b) The Holder hereby agrees that after the Holder's actual receipt of
written notice of any claim or the commencement of any action against the
Holder(s) or any such controlling person referred to in subparagraph (a) above
in respect of which indemnity may be sought from the Company thereunder, (i) to
notify the Company with ten (10) days of the assertion or commencement thereof
and to supply a copy of any notice and/or legal document served upon the
Holder(s) in connection with such claim or action. The failure of the Holder(s)
to so notify the Company of any such action, as aforesaid, shall relieve the
Company from any liability which it may have to the Holder(s) or such
controlling person, as the case may be, as to any such claim or action on
account of the indemnity agreement of the Company contained in this Paragraph
13, but shall not relieve the Company from any other liability which it may have
to the Holder(s) or such person. In case any such claim or action shall be
asserted or brought against the Holder(s), the Holder(s) shall promptly notify
the Company of the assertion or commencement thereof and the Company shall be
entitled to participate in (and, to the extent it shall wish, to direct) the
defense thereof, at its sole expense. The Holder shall have the right to employ
separate counsel in any such action or with respect to any such claim and to
participate in the defense thereof at the Holder's expense unless (i) the
employment of such counsel has been specifically authorized by the Company or
(ii) the Company shall not have employed counsel to defend such action or claim
or (iii) there is a conflict of interest which would prevent counsel for the
Company from representing both the Company and the Holder, in any of which cases
the Company shall not have the right to direct the defense of such action or
claim on behalf of the Holder(s). The Company agrees to notify the Holder(s)
promptly of the commencement of any action or proceeding or the assertion of any
claim against it or against any of its officers or directors of which it or they
may be advised, in connection with any such Registration Statement and to
furnish the Holder(s) at the Company's sole expense, with copies of all
pleadings therein and communications relating thereto and to promptly and
regularly apprise the Holder of all developments therein, all at the Company's
sole expense.

          (c) The Holder will indemnify and hold harmless the Company, the
directors of the Company, the officers of the Company who shall have signed any
such Registration Statement under Paragraph 12 and each person, if any, who
controls the Company within the meaning of the applicable provisions of the Act
(the "Indemnitees") from and against any and all Losses, joint or several, to
which they or any of them, may become subject under the Act or under any other
statute (including any Blue Sky law) or common law, or otherwise, and except as
provided herein and elsewhere in this Paragraph 13, will reimburse the
Indemnitees for any legal and other expenses (including all costs of any
investigation or preparation) reasonably incurred by them, or any of them, in
connection with investigating and/or defending any litigation or claims
thereunder, whether or not resulting in any liability, only insofar as such
Losses arise out of, or based upon, any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement or in any

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Blue Sky application filed by the Company under Paragraph 12 or arise out of, or
are based upon, the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, but only insofar as such statement or omission was made in
reliance upon information furnished in writing to the Company by or on behalf of
the Holder specifically for use in connection with the preparation of any such
Registration Statement or in any such Blue Sky application. The Holder shall not
be liable for any amounts paid in settlement of any such litigation or claim, if
such settlement is effected without the Holder's consent. In the case of the
commencement of any action or the assertion of any claim in respect of which
indemnity may be sought from the Holder hereunder, the Indemnitees shall have
the same obligation to notify the Holder and the Holder shall have the same
right to participate in, and to the extent that it shall wish, to direct the
defense of any such litigation as set forth in subparagraph (b) above, at the
Holder's expense, provided that such defense shall be conducted by counsel of
recognized standing and reasonably satisfactory to the Indemnitees. The Holder
agrees to notify the Company promptly of the commencement of any litigation or
proceeding against the Holder in connection with any such Registration Statement
and to provide the Company with copies of all pleadings therein, at the Holder's
expense.

          (d) The respective indemnity agreements of the Company and the Holder
contained in this Paragraph 13 and the representations of the Company set forth
in this Warrant shall remain operative and in full force and effect, regardless
of any investigation made by the Holder, or on the Holder's behalf, or the
Indemnitees and shall survive the expiration of this Warrant and/or the delivery
of the securities issuable upon the exercise of this Warrant and the Holder, and
any successor, assignee, or transferee of the Holder, as the case may be, shall
be entitled to the benefit of such indemnity agreements by the Company.

          (e) If, for any reason, the indemnification agreements provided for in
this Paragraph 13 are held by a court of competent jurisdiction to be
unavailable to an indemnified party with respect to any Loss, then the
indemnifying party, in lieu of indemnifying such indemnified party thereunder,
shall contribute to the amount paid or payable by the indemnified party as a
result of such Loss in such proportion as is appropriate to reflect not only the
relative benefits received by the indemnified party and the indemnifying party,
but also the relative fault of the indemnified party and the indemnifying party
as well as any other relative equitable considerations.

     14. Holder's Acknowledgments. By acceptance of this Warrant the Holder
acknowledges that:

          (a) The Holder must bear the economic risk of the investment proposed
herein for an indefinite period of time because the Warrant Shares will not have
been registered under the Act and cannot be sold by the Holder unless they are
registered under the Act or an exemption therefrom is available thereunder.

                                       11
<PAGE>

          (b) The Holder has had both the opportunity to ask questions of and
receive answers from the officers and directors of the Company and all persons
acting on their behalf concerning this Warrant, the Warrant Shares and the terms
and conditions hereof and to obtain any additional information necessary for the
Holder to make the investment in the Company contemplated hereby, to the extent
the Company possesses or may possess such information or can acquire it without
unreasonable effort or expense.

          (c) The Company shall place stop transfer orders with its transfer
agent against the transfer of this Warrant and the Warrant Shares in the absence
of registration under the Act or an exemption therefrom thereunder as provided
herein.

          (d) The certificate(s), evidencing the Warrant Shares shall bear a
legend substantially as follows:

          "The shares represented by this Certificate have not been registered
under the Securities Act of 1933, as amended (the "Act"). The shares have been
acquired for investment purposes and may not be sold, transferred, pledged or
hypothecated in the absence of an effective current Registration Statement for
the shares under the Act or an opinion of counsel to the Corporation that
registration is not required under the Act."

     15. Warrant Exercise. This Warrant shall be exercised, in whole or in part,
by delivering this Warrant and a completed and duly executed Warrant Share
Purchase Form in the form annexed hereto as Exhibit "A" (the "Purchase Notice")
to the Company at its principal place of business, at any time and from time to
time during the Exercise Period. The Purchase Notice shall be accompanied by
payment of the full Purchase Price of the Warrant Shares which are the subject
of any Purchase Notice pursuant to the terms hereof, and the Company shall issue
a certificate or certificates evidencing the Warrant Shares as soon as
practicable after the Warrant and said notice and payment is received. Payment
of the Purchase Price shall be made by a certified check or bank draft payable
to the order of the Company. The certificate or certificates evidencing the
Warrant Shares shall be registered in the name of the person or persons so
indicated on the Purchase Notice. If this Warrant shall have been exercised only
in part, the Company shall, at the time of the issuance and delivery of the
Warrant Shares to the Holder, deliver to the Holder a new warrant evidencing the
rights of the Holder to purchase the unpurchased Warrant Shares called for by
this Warrant, which new warrant shall, in all other respects, be identical with
this Warrant.

     16. Replacement Warrant. Upon receipt of such evidence satisfactory to the
Company of the loss, theft, destruction or mutilation of this Warrant and, in
the case of any such loss, theft or destruction, upon the delivery to the
Company of a bond or indemnity satisfactory to the Company if determined to be
necessary by the Company, or in the case of such mutilation, of the surrender or
cancellation of this Warrant if deemed necessary by the Company, the Company
will issue to the Holder a new warrant of like tenor in lieu of this Warrant,
representing the right to subscribe for and purchase the number of Warrant
Shares covered by this Warrant.

                                       12
<PAGE>

     17. Expenses. All expenses, including but not limited to attorneys' fees
incurred in connection with the preparation of this Warrant shall be borne by
the Company.

     18. Notices. All notices, requests, consents, deliveries, payments, demands
and other communications which are required or permitted to be given under this
Warrant (the "Notices") shall be in writing and shall be either delivered
personally or sent by registered or certified mail, return receipt requested,
postage prepaid, to the parties at the following addresses set for therein, or
to such other address as either party shall have specified by notice in writing
to the other. Such Notices shall be deemed duly given hereunder when so
delivered or within three (3) business days of mailing, if mailed as aforesaid,
as the case may be:

If to the Company:      The Sagemark Companies Ltd.
                        1285 Avenue of the Americas
                        35th Floor
                        New York, NY 10019

                        -and-

                        Premier P.E.T. Imaging International, Inc.
                        4710 N.W. Boca Raton Boulevard
                        Suite 200
                        Boca Raton, FL 33431

                        Attn:  Chief Financial Officer

If to the Holder:       Michael Fagien, M.D.
                        7426 Floranada Way
                        Delray Beach, Florida 33446

     19. Governing Law; Sole Agreement. This Warrant 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 therein and without regard to
principles of conflicts of laws. This Warrant represents the sole and entire
agreement of the parties hereto with respect to the subject matter hereof and
may not be modified without the written consent of the party to be charged with
such modification. To the extent that there is any inconsistency between the
terms of this Warrant and the terms of the Employment Agreement with respect
thereto, the terms of this Warrant shall govern and control.

     21. Binding Effect. The provisions of this Warrant shall be binding upon
and inure to the benefit of the Company and the Holder and their respective
successors, permitted assigns, heirs and personal representatives.

                                       13
<PAGE>

     22. Headings. The headings in this Warrant are for purposes of reference
only, and shall not affect the meaning or construction of any of the provisions
of this Warrant.

     IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its
duly authorized officer as of the 25th day of October, 2005.

WITNESS:                             THE SAGEMARK COMPANIES LTD.

/s/ GERALD PETERS                    By: /s/ THEODORE B. SHAPIRO
-----------------                        -----------------------------------
Gerald Peter                             Theodore B. Shapiro, President and
                                         Chief Executive Officer

WITNESS:

/s/ ERIC ROSS                            /s/ MICHAEL FAGIEN
-----------------                    ---------------------------------------
Eric Ross                                Michael Fagien, M.D.

                                       14
<PAGE>

                                    EXHIBIT A
                                    ---------

                           WARRANT SHARE PURCHASE FORM
                           ---------------------------

                 (To be executed upon exercise of this Warrant)

     The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant, to purchase ________________ of the Warrant Shares
and herewith tenders payment for such Warrant Shares to the order of THE
SAGEMARK COMPANIES LTD. in the amount of $__________ in accordance with the
terms of this Warrant. The undersigned requests that a certificate for (such
Warrant Shares) be registered in the name of the undersigned and that such
certificates be delivered to the undersigned's address below.

     If said number of Warrant Shares shall not be all of the shares purchasable
under the within Warrant, the undersigned requests that a new Warrant for the
unexercised portion thereof be registered in the name of ________________ and
delivered at ____________________ in accordance with the applicable provisions
of the within Warrant.

Dated:________________

                               Signature   ________________________________

                                           ________________________________
                                                     (Print Name)
                                           ________________________________
                                                   (Street Address)
                                           ________________________________
                                            (City)      (State)  (Zip Code)

                                       15
<PAGE>

                                    EXHIBIT B
                                    ---------

                                 ASSIGNMENT FORM
                                 ---------------

     FOR VALUE RECEIVED, ____________________ hereby sells, assigns and
transfers to ________________, Social Security Number _____________________the
within Warrant, to the extent of all _________ of the Warrant Shares covered
thereby, together with all right, title and interest therein, and does hereby
irrevocably constitute and appoint as attorney, _______________ to transfer such
Warrant on the register of THE SAGEMARK COMPANIES LTD. with full power and
substitution.

                                            _______________________________

                                            _______________________________
                                            Print Name

Dated:

                                       16EXHIBIT 10.4

THE STOCK OPTION REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON STOCK
ISSUABLE UPON THE EXERCISE OF SUCH OPTION MAY NOT BE OFFERED OR SOLD EXCEPT
PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR (ii) AN EXEMPTION FROM REGISTRATION UNDER SAID ACT WHERE
THE HOLDER HAS FURNISHED TO THE COMPANY AN OPINION OF ITS COUNSEL THAT AN
EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS AVAILABLE.

THE TRANSFER OR EXCHANGE OF THIS STOCK OPTION IS RESTRICTED IN ACCORDANCE WITH
THE TERMS HEREOF.

                  INSTRUMENT OF GRANT OF INCENTIVE STOCK OPTION
                  ---------------------------------------------

     INSTRUMENT OF GRANT dated as of the 11th day of October, 2005 from The
Sagemark Companies Ltd., a New York corporation with offices at 1285 Avenue of
the Americas, 35th Floor, New York, New York 10019 (the "Company") to George W.
Mahoney, an individual residing at 21082 Sweetwater Lane North, Boca Raton,
Florida 33428 ("Optionee").

                              W I T N E S S E T H:
                              - - - - - - - - - -

     WHEREAS, the Board of Directors of the Company has granted Optionee an
incentive stock option as defined in Section 422 of the Internal Revenue Code of
1986, as amended (the "Code") to purchase from the Company shares of the
Company's common stock, par value $.01 per share (the "Common Stock") pursuant
to the Company's 1999 Long-Term Incentive Plan (the "Plan"), subject to the
terms and conditions of this Stock Option and the Plan;

     WHEREFORE, the Company does hereby grant to Optionee the following stock
option:

     (1) Stock Option. Subject to the terms and conditions set forth in this
Instrument of Grant and the terms and conditions of the Plan, the Company hereby
grants to Optionee an incentive stock option (the "Option") to purchase from the
Company up to 45,000 (Forty Five Thousand) shares (the "Optioned Shares") of
Common Stock at an exercise price of $1.60 (One Dollar and Sixty Cents) per
share (the "Exercise Price"), being the closing price of the publicly traded
shares of the Common Sock on the date of grant of this Option. The number of
Optioned Shares being exercised hereunder at any particular time multiplied by
the Exercise Price shall be hereinafter referred to as the "Purchase Price."

     (2) Exercise Period; Vesting. This Option is fully vested and exercisable
in whole or in part at any time during the five (5) year period commencing on
the date of this Option and ending at 5:00 P.M. New York City time on October

                                      -1-
<PAGE>

10, 2010. The maximum number of shares of Common Stock which shall be subject to
exercise under this Option shall be 45,000 (Forty Five Thousand) shares.

     3. Termination.

          (a) This Option shall terminate, and Optionee shall have no further
rights under this Option with respect to any of the Optioned Shares which have
not vested on the date of any such termination, if at any time Optionee ceases
to be an employee of the Company (or any subsidiary of the Company), except as
provided in subparagraph (b) of this Section in the event of Optionee's death or
a termination of the Optionee's employment for a disability. Notwithstading the
foregoing, in the event that Optionee's employment with the Company (or any
subsidiary of the Company) is terminated as a result of any breach or default by
the Company of the terms of any employment agreement between Optionee and the
Company, this Option will continue for the then remainder of the Exercise
Period.

          (b) In the event of Optionee's death or a termination of Optionee's
employment as a result of a disability during the Exercise Period and while
Optionee is still employed by the Company (or any subsidiary of the Company),
this Option may be exercised, to the extent exercisable on the date of
Optionee's death or the date of any such termination of employment, by
Optionee's legal representatives or Optionee, as applicable, during the twelve
month period following the date of death or the date of such termination, but
not subsequent to the expiration of the Exercise Period.

     4. Manner of Exercise.

          (a) This Option shall be exercised by written notice of exercise in
the form of exhibit A to this Instrument of Grant addressed to the Company and
signed by Optionee (or Optionee's legal representative, if applicable) and
delivered to the Company along with the original of this Instrument of Grant and
payment in full of the Purchase Price of the Optioned Shares as to which this
Option is being exercised. If this Option is exercised in part only, the Company
will either issue a new Instrument of Grant with respect to the unexercised
portion of this Option or shall make a notation on this Instrument of Grant
reflecting the partial exercise and provide Optionee with a copy of such new
Instrument of Grant or noted document, as the case may be.

          (b) The Purchase Price is payable by certified or official bank check
or by personal check, subject to collection; provided, however, that if payment
is made by personal check, no Optioned Shares shall be issued to Optionee, and
Optionee shall have no rights as a shareholder of the Company, until such check
has cleared and been collected by the Company's bank. The Company shall deliver
to Optionee certificates for any of the Optioned Shares acquired by Optionee by
virtue of the exercise of this Option as soon as practical after the exercise of
this Option and payment of the Purchase Price.

                                      -2-
<PAGE>

          (c) The Optioned Shares, when issued upon exercise of this Option,
will be duly and validly authorized and issued, fully paid and non-assessable.

          (d) In connection with any exercise of this Option, Optionee shall,
contemporaneously with the exercise of this Option, pay or provide for payment
of any withholding or other taxes due as a result of such exercise, if any.

          (e) If the exercise of this Option is accelerated as a result of the
change of control provisions of the Plan, any portion of this Option which is
not exercisable as an incentive stock option by reason of the One Hundred
Thousand Dollar ($100,000) limitation contained in Section 422(b) of the Code
shall be treated as a non-qualified stock option.

     5. Adjustment Provisions. The number of shares of Common Stock subject to
this Option and the Exercise Price shall be adjusted in accordance with
generally accepted accounting principles in the event of a stock dividend, stock
split, stock distribution, reverse split or other combination of shares,
recapitalization or otherwise, which affects the Common Stock.

     6. Transferability. This Option is not transferrable by Optionee except
that this Option may, in the event of Optionee's death or incompetence, be
exercised by Optionee's legal representative or by the persons to whom this
Option is transferred by will or the laws of descent and distribution.

     7. No Rights As a Shareholder. Optionee shall have no interest in and shall
not be entitled to any voting rights or any dividend or other rights or
privileges of a shareholder of the Company with respect to any shares of Common
Stock issuable upon exercise of this Option prior to the exercise of this Option
and payment of the Purchase Price of the Optioned Shares in accordance with the
provisions of this Option.

     8. No Rights to Continued Employment. Nothing in this Instrument of Grant
shall be construed as (a) an employment agreement or (b) a grant to Optionee of
any rights to continue as an employee, officer or director of the Company or of
any subsidiary or affiliate of the Company.

     9. Restricted Securities. Optionee acknowledges that, unless the Optioned
Shares are registered pursuant to the Securities Act of 1933, as amended, the
Optioned Shares, if and when issued, will be restricted securities as defined in
Rule 144 of the Securities and Exchange Commission pursuant to the Securities
Act and shall be subject to the resale conditions and limitations of such Rule.

     10. Legality. Anything in this Option to the contrary notwithstanding,
Optionee agrees that Optionee will not exercise this Option, and that the
Company will not be obligated to issue any shares of Common Stock pursuant to
this Option, if the exercise of this Option or the issuance of such shares shall
constitute a violation by Optionee or the Company of any provisions of any law
or of any regulation of any governmental authority or of any provision of the

                                      -3-
<PAGE>

Plan. Any determination by either the Stock Option Committee of the Company's
Board of Directors or of the Board of Directors acting in lieu thereof, in this
connection, shall be final, binding and conclusive. The Company shall not be
obligated to take any affirmative action in order to cause the exercise of this
Option or the issuance of shares pursuant thereto to comply with any such law or
regulation or provision of the Plan.

     11. Tax Status. In accepting this Option, Optionee understands that in
order to obtain the tax treatment provided for incentive stock options under
Section 422 of the Code, Optionee may not dispose of any shares issued upon
exercise of this Option until the expiration of the later of two years from the
date of grant or one year from the date of exercise. Optionee shall pay or
provide for payment of any withholding tax due as a result of a disposition of
the Optioned Shares in violation of Section 422(a)(1) of the Code.

     12. Action by Company. The existence of this Option shall not affect in any
way the right or power of the Company or its shareholders to make or authorize
any or all adjustments, recapitalizations, reorganizations or other changes in
the Company's capital structure or its business, or any merger or consolidation
of the Company, or any issue of bonds, debentures, preferred or prior preference
stocks ahead of or affecting the Common Stock or the rights of the holders
thereof, or the dissolution or liquidation of the Company, or any sale or
transfer of all or any part of the Company's assets or business, or any other
corporate act or proceeding, whether of a similar character or otherwise.

     13. Notices. All notices, consents, requests, demands and other
communications required or permitted to be given under this Option (the
"Notices") shall be in writing and delivered personally, receipt acknowledged,
or mailed by registered or certified mail, postage prepaid, return receipt
requested, addressed to the parties hereto at their respective addresses set
forth below (or to such other address as either the Company or Optionee shall
specify by notice given in accordance with this provision):

        (a) If to the Company:

            The Sagemark Companies Ltd.
            1285 Avenue of the Americas, 35th Floor
            New York, New York 10019

            -and-

            The Sagemark Companies Ltd.
            4710 NW Boca Raton Blvd., Suite 200
            Boca Raton, Florida 33431
            Attn: Chief Financial Officer

                                      -4-
<PAGE>

        (b) If to Optionee:

            George W. Mahoney
            21082 Sweetwater Lane North
            Boca Raton, Florida 33428

All such Notices shall be deemed given when personally delivered as aforesaid,
or, if mailed as aforesaid, on the third business day after the mailing thereof
or on the day actually received, if earlier, except for a notice of a change of
address which shall be effective only upon receipt.

     14. Governing Law. This Instrument of Grant shall be construed and governed
in accordance with the laws of the State of New York without applying its
conflict of laws principles.

     15. Interpretation. As a condition of the grant of this Option, Optionee
(and each person who succeeds to Optionee's rights hereunder) agrees that any
dispute or disagreement which may arise under or as a result of or pursuant to
this Option shall be determined by the Stock Option Committee of the Company's
Board of Directors, or the Board of Directors, acting in lieu thereof, in their
sole discretion and that any interpretation by such Committee or the Board,
acting in lieu thereof, of the terms of this Option shall be final, binding and
conclusive.

     16. Binding Effect. This Option shall be binding upon and inure to the
benefit of the Company and Optionee and their respective successors, heirs,
personal representatives, administrators, executors and permitted assigns.

     17. Waiver. No waiver of any provision of this Option or of any breach
thereof shall be effective unless in writing and signed by the party to be bound
thereby. The waiver by either the Company or Optionee, as the case may be, of a
breach of any provision of this Option shall not be construed as a waiver of any
subsequent breach or of any other provision of this Option, unless the
instrument of waiver expressly so provides.

     18. Partial Invalidity. If one or more provisions of this Option are held
to be unenforceable under applicable law, such provision(s) shall be excluded
from this Option and the balance of this Option shall remain in full force and
effect.

     19. The Plan. This Option is subject to the terms and conditions of the
Plan, the terms of which are incorporated by reference thereto. In the event of
any conflict or inconsistency between the discretionary terms and provisions of
the Plan and the provisions of this Option, this Option shall govern and
control. In all other instances, conflicts or inconsistencies, the terms and
provisions of the Plan shall govern and control. Optionee acknowledges receipt
of a copy of the Plan, represents that Optionee is familiar with the terms and
provisions thereof and hereby accepts this Option, subject to all of the terms
and provisions thereof.

                                      -5-
<PAGE>

     IN WITNESS WHEREOF, the Company has executed this Instrument of Grant of
Incentive Stock Option as of the date first above written.

                                          THE SAGEMARK COMPANIES LTD.

                                          By: /s/ THEODORE B. SHAPIRO
                                              -------------------------------
                                              Theodore B. Shapiro, Chief
                                              Executive Officer

                                          OPTIONEE:

                                          /s/ GEORGE W. MAHONEY
                                          ----------------------
                                          George W. Mahoney

                                      -6-
<PAGE>

                                    Exhibit A

                                      Date:

The Sagemark Companies Ltd.
1285 Avenue of the Americas, 35th Floor
New York, New York 10019

          Re:  Stock Option Exercise - Instrument of Grant of
               Incentive Stock Option Dated as of ______________

Gentlemen:

     I hereby exercise the above-referenced option to the extent of shares, and
I am tendering with this Notice full payment of the Purchase Price in the manner
provided in Section 4 of the Instrument of Grant of Incentive Stock Option with
respect to the Optioned Shares as to which this Option is being exercised. I
further represent and warrant to the Company that I am aware of the tax
consequences of my exercise of the option.

                                            Very truly yours,

                                            _____________________________
                                            Print Name

                                      -7-

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