GUARANTY
Reference is made to the Non-Negotiable Promissory Note of Gemini VII,
Inc. ("Maker") to The Sagemark Companies Ltd. ("Payee") in the principal amount
of $3,500,000 dated November 17th, 2000 (the "Note"), the terms of which are
incorporated herein by reference thereto. All capitalized terms used but not
defined herein shall have the meanings ascribed to them in the Note.
For good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged by the undersigned, the undersigned (each a
"Guarantor" and, collectively, the "Guarantors") hereby severally, but not
jointly, guarantee the obligations of Maker under the Note, subject to and in
accordance with the terms hereof including, but not limited to, the penultimate
paragraph hereof. The Guarantor's guarantee hereunder is a guarantee of payment
and not of collection.
By their execution hereof, each of the undersigned Guarantors hereby
agree to be bound by the provisions of Paragraphs 8, 9, 10 and 11 of the Note,
the terms of which are incorporated herein by reference thereto.
In the event of any breach by either of the Guarantors of this
Guaranty, the Guarantor who is in breach shall be severally, but not jointly,
liable to Payee, in addition to the Guarantors' guarantee of Maker's obligations
under the Note, as aforesaid, for (i) interest at the rate of 10% per annum from
the date of default to the date of payment, only on such portion of the unpaid
principal amount of the Note which is in default, and (ii) all reasonable costs
of collection incurred by Payee in connection with enforcing this Guaranty,
including Payee's reasonable counsel fees and disbursements (it being
acknowledged and agreed by Payee that the non-breaching Guarantor shall have no
liability hereunder). By its execution hereof, Payee hereby agrees that in the
event it commences an action or other legal proceeding to enforce the provisions
of this Guaranty and the Guarantors, or either of them, prevail in any such
action, Payee shall be liable for the payment of all of either or both of such
Guarantors' reasonable costs of collection, including such Guarantors'
reasonable counsel fees and disbursements.
Notwithstanding any provision of this Guaranty or the Note to the
contrary, each Guarantor shall only be liable hereunder for 50% of the total
amount of any liability of Maker under the Note (and 50% of the amounts
described in clauses (i) and (ii) above) and, in all circumstances, such
liability shall apply only to the extent that either of the Guarantors actually
receives amounts or sums from the general partner of Sagemark Capital LP (the
"Partnership") which are based upon or derived from distributions of sums
received by such general partner from the Partnership pursuant to Section 3.19
of the Agreement of Limited Partnership of the Partnership (less the amount of
all applicable Federal, state and local taxes computed at the maximum applicable
tax rate, i.e., the maximum Federal tax rate is currently 39.8%) or either of
the Guarantors actually receives proceeds from the sale by Gemini VII, Inc. of
the shares of capital stock of Gavelnet.com, Inc. or JewelersEdge, Inc. (less
the amount of all applicable Federal, state and local taxes, if any; however,
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the Guarantors will use their best efforts to have Gemini pay the net proceeds
from such sale directly to The Sagemark Companies, Ltd.).
Each of the Guarantors have duly authorized the execution and delivery
of this Guaranty as of the 17th day of November, 2000. For purposes of this
Guaranty, notices by Payee to either of the Guarantors may be given if addressed
to each Guarantor at 700 Gemini, Suite 104, Houston, Texas 77058 (or any such
other address as either Guarantor may notify Payee of in writing after the date
hereof).
WITNESS:
/s/ FRANK DELAPE
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Frank DeLape
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Print Name and Title
WITNESS:
/s/ RICHARD YOUNG
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Richard Young
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Print Name and Title
AGREED TO AND ACKNOWLEDGED this
17th day of November, 2000
WITNESS: THE SAGEMARK COMPANIES, LTD.
By: /s/ STEVE JONES
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Steve Jones
Chief Financial Officer
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Print Name
