Section 18. 11   Deemed Consent

                If a Lender’s consent to a waiver amendment or other course of action is required under the terms of this Agreement and such Lender does not respond to any request by the Agent for such consent within ten (10) banking days after the date of such request, such failure to respond is deemed a consent to the requested course of action.

Section 18.12  Notice of Termination of Commitment

                Each Lender agrees that such Lender, acting alone, may terminate its Commitment only as of the initial or any subsequent anniversary date following the Effective Date, and then only by giving the Agent one hundred twenty (120) days prior written notice thereof.  Within 30 days after receipt of such termination notice, the Agent at its option agrees to either (a) give notice of termination of this Agreement and the Revolving Loan to the Borrower hereunder pursuant to

 

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Section 14.1 hereof, or (b) purchase such Lender’s entire Commitment hereunder for the full amount thereof as of the date of such purchase, plus accrued interest to the date of such purchase.

Section 18.13  Survival of Agreements of the Lenders

The obligations of the Lenders set forth in this Article 18 survive the termination of this Agreement.

[Signatures appear on the following page]

 

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IN WITNESS WHEREOF, the Borrower, Guarantor, Lenders and Agent have executed this Agreement.

Borrower:

Witness: /s/  Lawrence David Swift        Lawrence David Swift, Esq	SPAR Group, Inc.   By:  /s/ James R. Segreto                                            James R. Segreto Chief Financial Officer, Treasurer and Secretary
Witness: /s/  Lawrence David Swift        Lawrence David Swift, Esq	SPAR Incentive Marketing, Inc.   By:  /s/ James R. Segreto                                            James  R. Segreto Chief Financial Officer, Treasurer and Secretary
Witness: /s/  Lawrence David Swift        Lawrence David Swift, Esq	PIA Merchandising Co., Inc.   By:  /s/ James R. Segreto                                            James R. Segreto Chief Financial Officer, Treasurer and Secretary
Witness: /s/  Lawrence David Swift        Lawrence David Swift, Esq	Pivotal Sales Company   By:  /s/ James R. Segreto                                            James R. Segreto Chief Financial Officer, Treasurer and Secretary
Witness: /s/  Lawrence David Swift        Lawrence David Swift, Esq	National Assembly Services, Inc.   By:  /s/ James R. Segreto                                            James R. Segreto Chief Financial Officer, Treasurer and Secretary
Witness: /s/  Lawrence David Swift        Lawrence David Swift, Esq	SPAR Acquisition, Inc.   By:  /s/ James R. Segreto                                            James R. Segreto Chief Financial Officer, Treasurer and Secretary
Witness: /s/  Lawrence David Swift        Lawrence David Swift, Esq	SPAR Trademarks, Inc.   By:  /s/ James R. Segreto                                            James R. Segreto Chief Financial Officer, Treasurer and Secretary

Signatures to Revolving Loan and Security Agreement continued on following page……

 

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…….   continuation of signatures to Revolving Loan and Security Agreement

Witness: /s/  Lawrence David Swift        Lawrence David Swift, Esq.	SPAR Marketing Force, Inc.   By:  /s/ James R. Segreto                                            James R. Segreto Chief Financial Officer, Treasurer and Secretary
Witness: /s/  Lawrence David Swift        Lawrence David Swift, Esq.	SPAR, Inc.   By:  /s/ James R. Segreto                                            James R. Segreto Chief Financial Officer, Treasurer and Secretary
Witness: /s/  Lawrence David Swift        Lawrence David Swift, Esq.	SPAR/Burgoyne Retail Services, Inc. f/k/a Retail Information, Inc.   By:  /s/ James R. Segreto                                            James R. Segreto Chief Financial Officer, Treasurer and Secretary
Witness: /s/  Lawrence David Swift        Lawrence David Swift, Esq.	SPAR Group International, Inc.   By:  /s/ James R. Segreto                                            James R. Segreto Chief Financial Officer, Treasurer and Secretary

Signatures to Revolving Loan and Security Agreement continued on following page……

 

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…….   continuation of signatures to Revolving Loan and Security Agreement

Commitment Amount:

$5,000,000.00  -    Revolving Loan	(AGENT/LENDER)
	STERLING NATIONAL BANK
	By:   /s/ Murray R. Markowitz Murray R. Markowitz    First Vice President
$1,500,000.00   -    Revolving Loan	(LENDER)
	CORNERSTONE BANK
	By:   /s/ John V. Lavin John V. Lavin                 Vice President

 

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EXHIBIT A

(i) “Accounts”,  which means, in addition to the definition now and hereafter contained in the Uniform Commercial Code, all accounts and any and all obligations of any kind at any time due and/or owing to the Borrower and all rights of the Borrower to receive payment or any other consideration, whether or not earned by performance, including without limitation, invoices, contract rights, Accounts, and all other debts, obligations and liabilities for property sold, leased, licensed, assigned or disposed of, for services rendered, for a policy of insurance issued or to be issued, for a secondary obligation, arising out of a credit card or a health-care insurance receivable, in whatever form, owing to Borrower f rom any person, firm, governmental authority, corporation or any other entity, all security therefor, all of which whether now existing or hereafter acquired, in each case excluding any Foreign Subsidiary Interest.

(ii) “Chattel paper”, which means,  in addition to the definition now and hereafter contained in the Uniform Commercial Code, all chattel paper and records that evidence both a monetary obligation and a security interest or lease in specific goods and software used in the goods, a lease of specific goods or a lease of specific goods and license of software used in the goods, including electronic chattel paper or whatever form, owing to Borrower or in which the Borrower has an interest, all of which whether now existing or hereafter acquired.

(iii) “Commercial tort claims”, which means, in addition to the definition now and hereafter contained in the Uniform Commercial Code, all claims arising in tort in the course of the Borrower’s business more specifically described on the attachment hereto (if any), all of which whether now existing or hereafter acquired.

(iv) “Deposit accounts”, which mean, in addition to the definition now and hereafter contained in the Uniform Commercial Code, all deposit accounts, whether demand, time, savings, passbook or similar accounts maintained by the Borrower at any bank, all of which  whether now existing or hereafter acquired.

(v) “Equipment”, which means, in addition to the definition now and hereafter contained in the Uniform Commercial Code, all equipment, machinery, furniture and all other related goods, all replacements, repairs, modifications, alterations, additions, controls and operating accessories therefor, all substitutions and replacements therefor, all accessions and additions thereto of the Borrower, all of which whether now existing or hereafter acquired.

(vi) “General intangibles”, which means, in addition to the definition now and hereafter contained in the Uniform Commercial Code, all general intangibles and payment intangibles and any and all personal property, choses-in-action, and things in action, leases, income tax refunds, copyrights, licenses, rights, patents, patent rights, franchise rights, distributorship rights, trademarks, trade names, service marks, trademark rights, formulae, customer lists and goodwill of the Borrower, all of which whether now existing or hereafter acquired, in each case excluding any Foreign Subsidiary Interest.

 

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(vii) “Goods”, which means, in addition to the definition now and hereafter contained in the Uniform Commercial Code, all goods, fixtures, manufactured homes and embedded computer programs and all things and property of the Borrower which are not otherwise defined in this Exhibit A, all of which whether now existing or hereafter acquired.

(viii) “Instruments”, which means, in addition to the definition now and hereafter contained in the Uniform Commercial Code, all instruments, negotiable instruments or other writings that evidence a right of the Borrower to payment of a monetary obligation that is transferable in the ordinary course of the Borrower’s business with any necessary endorsement or assignment, all of which whether now existing or hereafter acquired, in each case excluding any Foreign Subsidiary Interest.

(ix) “Inventory”, which means, in addition to the definition now and hereafter contained in the Uniform Commercial Code, all inventory and all goods, merchandise or other personal property held by the Borrower for sale or lease or under a contract of service or to be furnished under labels and other devices, names or marks affixed thereto for purposes of selling or identification, and all right, title and interest of the Borrower therein and thereto, all raw materials, packaging and shipping materials, work or goods in process or materials and supplies of every nature used, consumed or to be consumed in the Borrower’s business, all of which whether now existing or hereafter acquired.

(x) “Investment property”, which means, in addition to the definition now and hereafter contained in the Uniform Commercial Code, and all of the Borrower’s certificated or uncertificated securities, security entitlements, securities accounts, commodity contracts or commodity accounts whether now existing or hereafter acquired, in each case excluding any Foreign Subsidiary Interest or Inactive Subsidiary Interest.

(xi) “Letter of credit rights”, which means, in addition to the definition now and hereafter contained in the Uniform Commercial Code, all of the Borrower’s rights to payment or performance under a letter of credit, whether or not the beneficiary has demanded or is at the time entitled to demand payment or performance, whether now existing or hereafter acquired.

 
 

(xii) All promissory notes, documents, software and supporting obligations (and security interests and liens securing them) of the Borrower as now and hereafter defined in the Uniform Commercial Code whether now existing or hereafter acquired,

(xiii) As to all of the foregoing (i) through (xii) inclusive, all cash proceeds, non-cash proceeds and products thereof, additions and accessions thereto, replacements and substitutions therefor.

 

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EXHIBIT B

PATENT AND TRADEMARK  COLLATERAL ASSIGNMENT

Optional:  Use as opening paragraph for already issued patents/trademarks:

WHEREAS, _________________________ (the “Grantor”) is the owner of the entire right, title and interest in and to the United States Patents and Trademarks, Trade names and registrations listed on Schedule “A” attached hereto and made a part hereof (the “Patents and Trademarks”), which are registered in the United States Patent and Trademark Office; and

Optional:  If patent or trademark application, use the following opening paragraph:

WHEREAS,   ________________________. (the “Grantor”) is the owner of the entire right, title and interest in and to the United States Patents and Trademarks, Trade names and registration applications and/or as they may hereafter be granted and listed on Schedule “A” attached hereto and made a part hereof (the “Patents and Trademarks”), which are registered in the United States Patent and Trademark Office; and

WHEREAS, _____________ BANK, having offices at _______________, identified as the “Agent” and a “Lender” under that certain Revolving Loan and Security Agreement dated _____________________ (as the same may be supplemented, modified, amended or restated from time to time, the “Loan Agreement”), is desirous of acquiring a collateral assignment of and continuing security interest in said Patents and Trademarks as Agent for the benefit of all of the Lenders (in such capacity, the “Grantee”);

NOW, THEREFORE, for good and valuable consideration, receipt of which is hereby acknowledged, and intending to be legally bound hereby, the Grantor, its successors and assigns does hereby collaterally transfer, assign and set over, and grants a continuing security interest, to Grantee, its successors, transferees and assigns, all of its present and future right, title and interest in and to the Patents and Trademarks and all proceeds thereof and all goodwill associated therewith.   The terms and provisions of the Loan Agreement are hereby incorporated by reference into this assignment as if they were fully set forth herein and this assignment were the Agreement referred to therein.

IN WITNESS WHEREOF, the undersigned has caused this Patent and Trademark Collateral Assignment to be executed on this ________ day of _______________.

	(Name of Grantor)
	By its Attorney in Fact
	STERLING BANK
	By: ______________________

 

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EXHIBIT C

FORM OF ASSIGNMENT AND TRANSFER AGREEMENT

ASSIGNMENT AND TRANSFER AGREEMENT

                Reference is made to the Revolving Loan, Term Loan and Security Agreement dated as of ________, 2010 (as amended, restated supplemented or otherwise modified and in effect from time to time, the “Agreement”) among __________, a _____________ (the “Borrower”), the financial institutions from time to time party thereto, as lenders (collectively, the “Lenders”, and individually, each a “Lender”), and ________________________, as agent for the Lenders (in such capacity, the “Agent”).  Capitalized terms used in this Assignment and Transfer Agreement (this “Agreement”) and not otherwise defined will have the meanings given to such terms in the Agreement.  This Agreement, between the Assignor (as defined and set forth on Schedule 1, which is made a part of this Agreement) and the Assignee (as defined and set forth on Schedule 1) is effective as of Transfer Date (as set forth on Schedule 1).

                1.           The Assignor hereby irrevocably sells and assigns to the Assignee, without recourse to the Assignor, and the Assignee hereby irrevocably purchases and assumes from the Assignor, without recourse to the Assignor, as of the Transfer Date, an undivided interest (the “Assigned Interest”) in and to all of the Assignor’s rights and obligations under the Agreement respecting those, and only those, portions of the financing facilities contained in the Agreement as are set forth on Schedule 1 (collectively, the “Assigned Facilities”), in an amount for each of the Assigned Facilities as set forth on Schedule 1.

                2.           The Assignor: (i) makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with the Agreement or any other instrument, document or agreement executed or delivered in connection therewith (collectively the “Revolving Loan Documents”), or the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Agreement, any Collateral thereunder or any of the other Revolving Loan Documents, other than a representation and warranty t hat the Assignor is the legal and beneficial owner of the Assigned Interest and that the Assigned Interest is free and clear of any adverse claim; and (ii) makes no representation or warranty and assumes no responsibility with respect to (x) the financial condition of the Borrower or any Guarantor, or (y) the performance or observance by the Borrower or any Guarantor of any of their respective obligations under the  Agreement or any of the Revolving Loan Documents.

                3.           The Assignee (i) represents and warrants that it is legally authorized to enter into this Agreement, (ii) confirms that it has received a copy of the Agreement as amended through the Transfer Date, together with the copies of the most recent financial statements of the Borrower, and such other documents and information as the Assignee has deemed appropriate to make its own credit analysis, (iii) agrees that the Assignee will, independently and without reliance upon the Agent, the Assignor or any other Lender and based on such documents and information as the Assignee  deems appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Agreement, (iv) appoints and authorizes the Agent to take such action as agent on

 

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the Assignee’s behalf and to exercise such powers under the Agreement as are delegated to the Agent by the terms thereof, together with such powers as are reasonably incidental thereto, (v) agrees that the Assignee will be bound by the provisions of the Agreement and will perform in accordance with its terms all the obligations which by the terms of the  Agreement are required to be performed by it as Lender, and (vi) if the Assignee is organized under the laws of a jurisdiction outside the United States, attaches the forms prescribed by the Internal Revenue Service of the United States certifying as to the Assignee’s exemption from United States withholding taxes with respect to all payments to be made to the Assignee under the  Agreement or such other documents as are necessary to indicate that all suc h payments are subject to such tax at a rate reduced by an applicable tax treaty.

4.           Following the execution of this Assignment and Transfer Agreement, such agreement will be delivered to the Agent for acceptance by the Agent, effective as of the Transfer Date.

5.           Upon such acceptance, from and after the Transfer Date, the Agent is to make all payments in respect of the Assigned Interest (including payments of principal, interest, fees and other amounts) for the benefit of the Assignee, whether such amounts have accrued prior to the Transfer Date or accrue subsequent to the Transfer Date.  The Assignor and the Assignee are to make all other appropriate adjustments in payments for periods prior to the Transfer Date made by the Agent or with respect to the making of this assignment directly between themselves.

 

6.           From and after the Transfer Date, (i) the Assignee is a party to the  Agreement and, to the extent provided in this Agreement, has the rights and obligations of a Lender thereunder, and (ii) the Assignor is, to the extent provided in this Agreement, deemed to have relinquished its rights and released from its obligations under the  Agreement.

7.           THIS ASSIGNMENT AND TRANSFER AGREEMENT WILL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective duly authorized officers on Schedule 1 hereto.

__________________________________

 

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Schedule 1

 to

 Assignment and Transfer Agreement

Name of Assignor:                                __________________________

Name of Assignee:                                __________________________

Effective Date of Assignment:                                         ________, 200__

Assigned Facilities Assigned	Percentage of Facilities Assigned	Dollar Amount
Revolving Loan	_____%	$________

ASSIGNOR:	ASSIGNEE:
_____________________________	_____________________________
By: __________________________	By: __________________________
Its:___________________________	Its:___________________________

Accepted by the Agent:

________________________

________________________, as Agent as aforesaid

By: __________________________

                                              Its:___________________________

 

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EXHIBIT D

CERTAIN ADDITIONAL DEFINED TERMS AND INTERPRETATIVE PROVISIONS

 

 

“Domestic Subsidiary” shall mean any Subsidiary of SGRP organized in a state or territory of the United States of America, whether wholly or partially owned, and whether now existing or hereafter acquired or created, but excluding SPAR Canada, Inc., and excluding each Inactive Subsidiary.  Although SPAR Canada Inc., is a Nevada corporation, it is classified as a Foreign Subsidiary for the purposes of this Agreement and the other Loan Documents.

 

 

“Foreign Subsidiary” means SPAR Canada, Inc., a Nevada Corporation, or any direct or indirect Subsidiary of SGRP organized in any jurisdiction outside of the United States, whether wholly or partially owned, and whether now existing or hereafter acquired or created.

 

 

“Foreign Subsidiary Interest” shall mean any equity investment in, any security or other investment property issued by, any loan or other advance to, any account or other payable from, or any asset or property of any Foreign Subsidiary.

 

 

“Inactive Subsidiary” shall mean any of the following direct and indirect subsidiaries of  SGRP: Pacific Indoor Display Co , Inc., a California corporation; Pivotal Field Services, Inc., a Nevada corporation; Retail Resources, Inc., a Nevada corporation; SPAR All Store Marketing Services, Inc., a Nevada corporation; SPAR Bert Fife, Inc., a Nevada corporation; SPAR Marketing, Inc., a Nevada corporation; SPAR Marketing, Inc. (f/k/a SPAR Acquisition, Inc.), a Delaware corporation; SPAR Megaforce, Inc., a Nevada corporation; SPAR/PIA Retail Services, Inc., a Nevada corporation; and SPAR Technology Group, Inc. (f/k/a SPARinc.com, Inc.), a Nevada corporation.

 

 

“Inactive Subsidiary Interest” shall mean any equity investment in, any security or other investment property issued by, any loan or other advance to, any account or other payable from, or any asset or property of any Inactive Subsidiary.

 

 

“Permitted Indebtedness” shall mean any indebtedness or liability on account of either borrowed money, the deferred purchase price of property, or the lease of assets or property for the conduct of business consisting of any of the following:

 

(a)	the Debt to Agent and Lenders;

 

(b)	any trade payable incurred or trade credit received in the normal course of business;

 

(c)	any such indebtedness or liability under any operating lease for Equipment or real property incurred in the normal course of business;

 

(d)

any purchase money indebtedness, capital lease obligation or related liability incurred in the purchase or lease of Equipment in the ordinary course of business, or any extension, renewal or refinancing thereof, so long as each is secured only by the applicable Permitted Liens and the aggregate amount of all purchase money indebtedness and allocated principal amounts under such capitalized leases does not exceed $2,000,0000 at any time;

 

(e)	any such indebtedness or liability under the Subordinated Anthony Facility;

 

(f)	any such indebtedness or liability under any unsecured corporate credit card;

 

(g)	any such indebtedness or liability under any Permitted Guaranty;

 

 

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(h)	any such indebtedness or liability on terms approved in its sole discretion by the Agent in writing, including any subordination terms required by the Agent, all in form and substance acceptable to the Agent, as evidenced by the Agent’s execution thereof;

 

(i)	any such indebtedness or liability (i) set forth on Schedule 1 annexed hereto, (ii) otherwise permitted by this Agreement or any other Loan Document, or (iii) disclosed in the Delivered Financials;

 

(j)	any extension, renewal or refinancing of any such indebtedness or liability on substantially equivalent or better terms (but without any increase of the original maximum principal amount).

 

 

“Permitted Guaranty” shall mean any Guaranty:

 

(a)	that the supporting Borrower could have incurred directly without violation of this Agreement;

 

(b)	under the Subordinated Anthony Facility;

 

(c)	any such agreement or obligation on terms approved in its sole discretion by the Agent in writing, including any subordination terms required by the Agent, all in form and substance acceptable to the Agent, as evidenced by the Agent’s execution thereof;

 

(d)	any Guaranty of Indebtedness not exceeding $1,000,000 in the aggregate at any time outstanding;

 

(e)	any such agreement or obligation (i) set forth on Schedule 1 annexed hereto, (ii) otherwise permitted by this Agreement or any other Loan Document, or (iii) disclosed in the Delivered Financials;

 

(f)	any such obligation or liability in favor of the Agent for the benefit of the Lenders; or

 

(g)	any extension, renewal or refinancing of any such indebtedness or liability on substantially equivalent or better terms (but without any increase of the original maximum supported principal amount).

 

 

“Permitted Investment” shall mean any of the following:

 

(a)	the existence or continuation of any and all then existing investments in any other Domestic Subsidiary, Inactive Subsidiary or Foreign Subsidiary and any new investment permitted by Section 7.1;

 

(b)	deposit or other accounts established with the Agent or any Lender;

 

(c)

investments in direct obligations of the United States of America or any of its political subdivisions whose obligations constitute the full faith and credit obligations of the United States of America and have a maturity of one year or less, commercial paper issued by U.S. corporations rated “A-1” or “A-2” by Standard & Poor’s Ratings Services or “P-1” or “P-2” by Moody’s Investors Service or certificates of deposit or bankers’ acceptances having a maturity of one year or less issued by members of the Federal Reserve System having deposits in excess of $100,000,000 (which certificates of deposit or bankers’ acceptances are fully insured by the Federal Deposit Insurance Cooperation) provided that such investments are maintained by, with, or with the consent of Agent.

 

 

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“Permitted Lien” shall mean any of the following Liens:

 

(a)	Liens for taxes, levies, claims or other governmental charges that are either (i) not yet delinquent, (ii) being contested in good faith and supported by reasonably sufficient reserves established in accordance with GAAP, or (iii) immaterial in amount;

 

(b)	Liens in favor of Agent or any Lender created, contemplated or permitted by this Agreement or any other Loan Document;

 

(c)

Liens of mechanics, carrier, warehousemen, suppliers and laborers arising by operation of law securing obligations that are either (i) not yet delinquent, (ii) being contested in good faith and supported by reasonably sufficient reserves established in accordance with GAAP, (iii) immaterial in amount, or (iv) subordinated on terms reasonably acceptable to Agent;

 

(d)	easements, rights-of-way, restrictions and other similar encumbrances that, in the aggregate, do not materially interfere with the use or occupation of those properties or assets;

 

(e)

any statutory Lien incurred in the ordinary course business respecting worker’s compensation, unemployment insurance, statutory obligations or social security legislation, or required by law as a condition precedent to the transaction of business or the exercise of any related privilege or license subject to such Lien, so long as the underlying obligations secured by such Liens are either (i) not yet delinquent, (ii) being contested in good faith and supported by reasonably sufficient reserves established in accordance with GAAP, or (iii) immaterial in amount;

 

(f)	any Lien arising under or in respect of any judgment, award or other court order that is effectively discharged or stayed (as to levy, execution or other recovery) within 30 days from the inception thereof;

 

(g)	any deposit made or similar security granted in the ordinary course of business to secure the performance of any tender, bid, lease, customer or vendor contract or similar obligation;

 

(h)	any contractual right, title, interest, defense or claim of any other party (or its assignee) under and respecting any account, contract or other general intangible, instrument, insurance policy, lease, note, warranty or other intangible of the Borrower;

 

(i)

any Liens encumbering or deemed to encumber (A) any Equipment purchased or leased with a financing permitted by clause (f) of the definition of Permitted Indebtedness, or (B) any Equipment or other asset or property leased by the Borrower under any operating lease, in each case so long as such Liens secure only the corresponding financing or lease obligations and only encumber such Equipment and related property (i.e., all improvements and accessions thereto, all related insurance, warranty and contract rights and general intangibles, and all products and proceeds thereof);

 

(j)	the Liens granted by Borrower under the Subordinated Anthony Facility;

 

(k)	any other Lien granted by Borrower that is approved in its sole discretion by the Agent in writing, subject to such lien subordination (if any) as the Agent may require, all in form and substance acceptable to the Agent, as evidenced by the Agent’s execution thereof;

 

(l)	those Liens (i) set forth on Schedule 1 annexed hereto, (ii) otherwise permitted by this Agreement or any other Loan Document, or (iii) disclosed in the Delivered Financials;  or

 

(m)

any extension, renewal or replacement of any such Lien in connection with any permitted extension, renewal or replacement of the corresponding Permitted Indebtedness or Permitted Guaranty so long as such Lien is not extended to encumber any unrelated asset or property and remains subject to any applicable existing subordination agreements.

 

 

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Certain Interpretative Provisions.  In this Agreement and each other Loan Document: (a) the meaning of each term defined in singular form also shall apply to the plural form of such term, and vice versa; each singular pronoun shall be deemed to include the plural variation thereof, and vice versa; and each gender specific pronoun shall be deemed to include the neuter, masculine and feminine, in each case as the context may permit or required; (b) any table of contents or caption, section or other heading is for reference purposes only and shall not affect the meaning or interpretation of such document; (c) each reference to any Section, subsection, Exhibit, Schedule and the like shall mean those of or attached to such docu ment unless otherwise expressly provided; (d) the words “hereof”, “herein” and “hereunder” and words of similar import shall refer to such document as a whole and not to any particular provision of such document; (e) the words “include”, “includes” and “including” shall be deemed to be followed by the phrase “(without limitation)”, whether or not so stated, and in any event shall not in any way limit the generality of the preceding provision or preclude any other applicable item that could be encompassed by the preceding provision; and (f) unless the context clearly requires otherwise, the word “or” shall have both the inclusive and alternative meaning represented by the phrase “and/or”.

 

 

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Exhibit 10.2

SECURED REVOLVING LOAN NOTE

$5,000,000.00		__________________, 2010
		New York   NY

                As and when provided by the terms of that certain Revolving Loan and Security Agreement of even date herewith, or as it may be subsequently amended, signed by the undersigned as “Borrower” (“Loan Agreement”), For Value Received, the undersigned (the “Borrower”) jointly and severally promises to pay to the order of STERLING NATIONAL BANK (the “Lender”), in care of Sterling National Bank, as Agent pursuant to the Loan Agreement (the “Agent”), at  500 Seventh Avenue, New York NY 10018-4502, the principal sum of Five Million Dollars ($5,000,000.00), or such lesser principal amount actually advanced pursuant to the Loan Agreement.

This Note bears interest during each calendar month from the date hereof until paid as set forth in the Loan Agreement.  Interest is to be paid at time intervals as set forth in the Loan Agreement.  In no event is the interest rate to be higher than the maximum lawful rate.  Interest is calculated on a daily basis upon the unpaid balance with each day representing 1/360th of a year.

All payments on this Note are to be made in immediately available lawful money of the United States by the Agent’s direct charge to Borrower’s and Guarantor’s deposit accounts with the Agent.  In addition to the provision above for direct charge of payments due, the Agent is hereby authorized, at its sole and absolute discretion, to debit any other of the Borrower’s or Guarantor’s accounts for payments due as set forth in the Loan Agreement.  This authorization does not affect the Borrower’s obligations to pay when due all amounts payable under this Note, whether or not there are sufficient funds therefor in such accounts.  The foregoing authorization is in addition to, and not in limitation of, any rights of setoff.

In the event and during the continuance of a Default (as defined in the Loan Agreement), the Agent in its discretion may  impose the accrual of default  interest  on all amounts payable hereunder at a rate equal to five (5%) percent per annum (the “Default Rate”) in addition to the interest rate otherwise payable hereunder.  Borrower acknowledges that: (i) such additional Default Rate is a material inducement to Lender to make the loan; (ii) Lender would not have made the loan in the absence of the agreement of the Borrower to pay such additional Default Rate; (iii) such additional Default Rate represents compensation for increased risk  to Lender that the loan will not be repaid; and (iv) such additional Default Rate is not a penalty and represents a reasonable estimate of (a) the cost to Lender in allocating its resources (both personnel and financial) to the ongoing review, monitoring, administration and collection of the loan and (b) compensation to Lender for losses that are difficult to ascertain.

In the event any payment is received by the Agent more than ten (10) days after the date due, the Agent may assess, in its discretion, and the undersigned is to pay, to the extent permitted by law, to Lender a late charge of five (5%) percent of the overdue payment.  Any such late charge so assessed by Agent is immediately due and payable.  Any payment received after 3:00 P.M. on a banking day (other than as advanced or debited later than such time by the Agent or any Lender) is deemed received on the next succeeding banking day.

 

 

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This Note is secured by the Collateral as defined in the Loan Agreement.  Capitalized terms  used and not otherwise defined in this Note have the meaning set forth in the Loan Agreement.  The terms and provisions of the Loan Agreement are incorporated herein by reference.  In the event of conflict, ambiguity or inconsistency between the terms of the Loan Agreement and the terms hereof, the terms of the Loan Agreement prevail.

Except as otherwise specified in the Loan Agreement, each payment made in respect of this Note is to be applied first to the payment of any expenses or charges payable hereunder and accrued interest, and the balance applied to principal amounts due under this Note.

The undersigned hereby waives demand, notice of non-payment, protest,  and all other  notices or demands whatsoever, and hereby consents that without notice to and without releasing the liability  of any party, the obligations evidenced by this Note or the Loan Agreement may from time to time,  in whole or part, be renewed, extended, modified, accelerated, compromised, settled or released by  Lender.

Lender’s books and records are prima facie evidence of the amount of the obligations and are binding upon Borrower absent manifest error.

Lender is hereby authorized to fill in any blank spaces in  this  Note and to date this  Note as of the applicable date and to correct patent errors herein.

Pursuant to Section 5-1401 of the New York General Obligations Law, the substantive laws of the State of New York, without regard to the choice of law principles that might otherwise apply to defer to the substantive laws of another jurisdiction, shall govern the validity, construction, enforcement and interpretation of this Note.

BORROWER, AGENT AND LENDERS EACH HEREBY WAIVES ALL RIGHTS TO A TRIAL BY JURY IN ANY LITIGATION RELATING TO THIS NOTE OR OTHER LOAN DOCUMENTS AS AN INDUCEMENT TO THE ACCEPTANCE BY LENDER OF THIS NOTE.

Witness: /s/  Lawrence David Swift Lawrence David Swift, Esq	SPAR Group, Inc.    By:  /s/ James R. Segreto                                                       James R. Segreto Chief Financial Officer, Treasurer and Secretary
Witness: /s/  Lawrence David Swift Lawrence David Swift, Esq	SPAR Incentive Marketing, Inc.    By:  /s/ James R. Segreto                                                       James  R. Segreto Chief Financial Officer, Treasurer and Secretary

Signatures continued on following page…..

 

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…. Continuation of signatures to Revolving Loan Note

Witness: /s/  Lawrence David Swift Lawrence David Swift, Esq	PIA Merchandising Co., Inc.    By:  /s/ James R. Segreto                                                       James R. Segreto Chief Financial Officer, Treasurer and Secretary
Witness: /s/  Lawrence David Swift Lawrence David Swift, Esq	Pivotal Sales Company    By:  /s/ James R. Segreto                                                       James R. Segreto Chief Financial Officer, Treasurer and Secretary
Witness: /s/  Lawrence David Swift Lawrence David Swift, Esq	National Assembly Services, Inc.    By:  /s/ James R. Segreto                                                       James R. Segreto Chief Financial Officer, Treasurer and Secretary
Witness: /s/  Lawrence David Swift Lawrence David Swift, Esq	SPAR Acquisition, Inc.    By:  /s/ James R. Segreto                                                       James R. Segreto Chief Financial Officer, Treasurer and Secretary
Witness: /s/  Lawrence David Swift Lawrence David Swift, Esq	SPAR Trademarks, Inc.    By:  /s/ James R. Segreto                                                       James R. Segreto Chief Financial Officer, Treasurer and Secretary
Witness: /s/  Lawrence David Swift Lawrence David Swift, Esq.	SPAR Marketing Force, Inc.    By:  /s/ James R. Segreto                                                       James R. Segreto Chief Financial Officer, Treasurer and Secretary
Witness: /s/  Lawrence David Swift Lawrence David Swift, Esq.	SPAR, Inc.    By:  /s/ James R. Segreto                                                       James R. Segreto Chief Financial Officer, Treasurer and Secretary

Signatures continued on following page…..

 

3

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…. Continuation of signatures to Revolving Loan Note

Witness: /s/  Lawrence David Swift Lawrence David Swift, Esq.	SPAR/Burgoyne Retail Services, Inc. f/k/a Retail Information, Inc.    By:  /s/ James R. Segreto                                                       James R. Segreto Chief Financial Officer, Treasurer and Secretary
Witness: /s/  Lawrence David Swift Lawrence David Swift, Esq.	SPAR Group International, Inc.    By:  /s/ James R. Segreto                                                       James R. Segreto Chief Financial Officer, Treasurer and Secretary

 

 

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Exhibit 10.3

SECURED REVOLVING LOAN NOTE

$1,500,000.00

July 6, 2010                                                        New York  NY

                As and when provided by the terms of that certain Revolving Loan and Security Agreement of even date herewith, or as it may be subsequently amended, signed by the undersigned as “Borrower” (“Loan Agreement”), For Value Received, the undersigned (the “Borrower”) jointly and severally promises to pay to the order of CORNERSTONE BANK (the “Lender 221;),  in care of Sterling National Bank, as Agent pursuant to the Loan Agreement (the “Agent”) at 500 Seventh Avenue, New York NY 10018-4502, the principal sum of One Million Five Hundred Thousand Dollars ($1,500,000.00), or such lesser principal amount actually advanced pursuant to the Loan Agreement.

This Note bears interest during each calendar month from the date hereof until paid as set forth in the Loan Agreement.  Interest is to be paid at time intervals as set forth in the Loan Agreement.  In no event is the interest rate to be higher than the maximum lawful rate.  Interest is calculated on a daily basis upon the unpaid balance with each day representing 1/360th of a year.

All payments on this Note are to be made in immediately available lawful money of the United States as provided in the Loan Agreement to Sterling National Bank, as Agent for Lender. The foregoing authorization is in addition to, and not in limitation of, any rights of setoff.

In the event and during the continuance of a Default (as defined in the Loan Agreement), the Agent in its discretion may  impose the accrual of default  interest  on all amounts payable hereunder at a rate equal to five (5%) percent per annum (the “Default Rate”) in addition to the interest rate otherwise payable hereunder.  Borrower acknowledges that: (i) such additional Default Rate is a material inducement to Lender to make the loan; (ii) Lender would not have made the loan in the absence of the agreement of the Borrower to pay such additional Default Rate; (iii) such additional Default Rate represents compensation for increased risk  to Lender that the loan will not be repaid; and (iv) such additional Default Rate is not a penalty and represents a reasonable estimate of (a) the cost to Lender in allocating its resources (both personnel and financial) to the ongoing review, monitoring, administration and collection of the loan and (b) compensation to Lender for losses that are difficult to ascertain.

In the event any payment is received by the Agent more than ten (10) days after the date due,  the Agent may assess, in its discretion, and the undersigned is to pay, to the extent permitted by law, to Agent a late charge of five (5%) percent of the overdue payment.  Any such late charge so assessed by Agent is immediately due and payable.  Any payment received after 3:00 P.M. on a banking day (other than as advanced or debited later than such time by the Agent or any Lender) is deemed received on the next succeeding banking day.

This Note is secured by the Collateral as defined in the Loan Agreement.  Capitalized terms used and not otherwise defined in this Note have the meaning set forth in the Loan Agreement.   The terms and provisions of the Loan Agreement are incorporated herein by reference.  In the event of conflict,

 

 

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ambiguity or inconsistency between the terms of the Loan Agreement and the terms hereof, the terms of the Loan Agreement prevail.

Except as otherwise specified in the Loan Agreement, each payment made in respect of  this Note is to be applied first to the payment of any expenses or charges payable hereunder and accrued interest, and the balance applied to principal amounts due under this Note.

The undersigned hereby waives demand, notice of non-payment, protest, and all other  notices or demands whatsoever, and hereby consents that without notice to and without releasing the liability  of any party, the obligations evidenced by this Note or the Loan Agreement may from time to time, in whole or part, be renewed, extended, modified, accelerated, compromised, settled or released by Agent.

Agent’s books and records are prima facie evidence of the amount of the obligations and are binding upon Borrower absent manifest error.

Agent is hereby authorized to fill in any blank spaces in this  Note and to date this  Note as of the applicable date and to correct patent errors herein.

Pursuant to Section 5-1401 of the New York General Obligations Law, the substantive laws of the State of New York, without regard to the choice of law principles that might otherwise apply to defer to the substantive laws of another jurisdiction, shall govern the validity, construction, enforcement and interpretation of this Note.

BORROWER, AGENT AND LENDERS EACH HEREBY WAIVES ALL RIGHTS TO A TRIAL BY JURY IN ANY LITIGATION RELATING TO THIS NOTE OR  OTHER  LOAN DOCUMENTS  AS  AN INDUCEMENT TO THE ACCEPTANCE BY LENDER OF THIS NOTE.

Witness: /s/  Lawrence David Swift Lawrence David Swift, Esq	SPAR Group, Inc.   By:  /s/ James R. Segreto                                            James R. Segreto Chief Financial Officer, Treasurer and Secretary
Witness: /s/  Lawrence David Swift Lawrence David Swift, Esq	SPAR Incentive Marketing, Inc.   By:  /s/ James R. Segreto                                            James  R. Segreto Chief Financial Officer, Treasurer and Secretary

 

2

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Witness: /s/  Lawrence David Swift Lawrence David Swift, Esq	PIA Merchandising Co., Inc.   By:  /s/ James R. Segreto                                            James R. Segreto Chief Financial Officer, Treasurer and Secretary
Witness: /s/  Lawrence David Swift Lawrence David Swift, Esq	Pivotal Sales Company   By:  /s/ James R. Segreto                                            James R. Segreto Chief Financial Officer, Treasurer and Secretary
Witness: /s/  Lawrence David Swift Lawrence David Swift, Esq	National Assembly Services, Inc.   By:  /s/ James R. Segreto                                            James R. Segreto Chief Financial Officer, Treasurer and Secretary
Witness: /s/  Lawrence David Swift Lawrence David Swift, Esq	SPAR Acquisition, Inc.   By:  /s/ James R. Segreto                                            James R. Segreto Chief Financial Officer, Treasurer and Secretary
Witness: /s/  Lawrence David Swift Lawrence David Swift, Esq	SPAR Trademarks, Inc.   By:  /s/ James R. Segreto                                            James R. Segreto Chief Financial Officer, Treasurer and Secretary
Witness: /s/  Lawrence David Swift Lawrence David Swift, Esq.	SPAR Marketing Force, Inc.   By:  /s/ James R. Segreto                                            James R. Segreto Chief Financial Officer, Treasurer and Secretary
Witness: /s/  Lawrence David Swift Lawrence David Swift, Esq.	SPAR, Inc.   By:  /s/ James R. Segreto                                            James R. Segreto Chief Financial Officer, Treasurer and Secretary

 

3

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Witness: /s/  Lawrence David Swift Lawrence David Swift, Esq.	SPAR/Burgoyne Retail Services, Inc. f/k/a Retail Information, Inc.   By:  /s/ James R. Segreto                                            James R. Segreto Chief Financial Officer, Treasurer and Secretary
Witness: /s/  Lawrence David Swift Lawrence David Swift, Esq.	SPAR Group International, Inc.   By:  /s/ James R. Segreto                                            James R. Segreto Chief Financial Officer, Treasurer and Secretary

 

 

4 

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Exhibit 10.4

LIMITED CONTINUING GUARANTY

 

 

STATEMENTS

 

A.   SPAR Group, Inc., SPAR Incentive Marketing, Inc., PIA Merchandising Co., Inc., Pivotal Sales Company, National Assembly Services, Inc., SPAR Acquisition, Inc., SPAR Trademarks, Inc., SPAR Marketing Force, Inc., SPAR, Inc. SPAR Group International, Inc .,  and SPAR/Burgoyne Retail Services, Inc., (f/k/a Retail Information, Inc.) (jointly and severally, "Borrower") has or is about to receive a loan and may desire in the future to obtain financial accommo dations from Sterling National Bank and Cornerstone Bank ("Lenders").

 

B.   Robert G. Brown, currently having a residence at __________________ ________________ , and William Bartels, currently having a residence at __________________ ________________ (jointly and severally "Guarantor"), have agreed to guaranty in writing the performance of all debts, liabilities and duties of the Borrower, limited as hereinafter provided, to Lenders i n order to induce Lenders to render or to continue to render financial accommodations to the Borrower.

 

NOW, THEREFORE, in consideration of the promises, covenants and understandings set forth in this Limited Continuing Guaranty ("Guaranty") and the benefits to be received from the performance of such promises, covenants and understandings and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Guarantor agrees as follows:

 

LIMITED GUARANTY

 

ARTICLE 1.  LIMITED GUARANTY OF THE OBLIGATIONS OF THE BORROWER

 

Subject to the aggregate maximum limit to the Guarantor's liability under Section 1.7 hereof:

 

Section 1.1  Existing Obligations

 

The Guarantor agrees to unconditionally pay and perform on demand, all debts, liabilities, duties, representations, covenants and warranties of the Borrower to Lenders, whether now or in the future existing, direct, indirect or acquired by negotiation, or the result of any derivative transaction, purchase, discount or assignment, primary or secondary, joint or several, fixed or contingent, (regardless of form, existence of collateral therefor, whether guaranteed, or subject to a participation agreement) secured or unsecured, whether arising from an extension of credit, funds transfers, letter of credit, deposit relationship, or otherwise, and any amendments, extensions or renewals t hereof, together with all costs, taxes, expenses and attorneys' fees (whether or not charged by outside counsel) incurred in connection therewith relating to or incurred in connection with the Revolving Loan and Security Agreement of even date herewith, or as it may be subsequently amended ("Loan Agreement").  Capitalized terms used and not otherwise defined herein shall have the meanings respectively assigned to them in the Loan Agreement.

 

 

 

 

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Section 1.2  Future Advances

 

The Guarantor agrees to unconditionally pay and perform on demand, future advances, loans, debts, liabilities, duties, representations, covenants and warranties of the Borrower to Lenders, whether now or in the future existing, direct, indirect or acquired by negotiation, or the result of any derivative transaction, purchase, discount or assignment, primary or secondary, joint or several, fixed or contingent, (regardless of form, existence of collateral therefor, whether guaranteed, or subject to a participation agreement) secured or unsecured, whether arising from an extension of credit, funds transfers, letter of credit, deposit relationship, or otherwise, and any amendments, extensions or renewals thereof, together with all costs, taxes, expenses and attorneys' fees (whether or not charged by outside counsel) incurred in connection with the Loan Agreement.

 

Section 1.3  Expenses in Preserving Interests of Lenders

 

The Guarantor agrees to unconditionally pay on demand, such advances made by Lenders to or for the account of the Borrower, including advances for insurance, repairs to any Collateral, taxes, and such costs incurred by Lenders (in its discretion and regardless as to whether any such advance increases the unpaid balance of the Loan or the Debt) in the discharge of any lien, security interest, encumbrance, lease, pledge or assignment whether prior to or following judgment, relating to or incurred in connection with the Loan Agreement.

 

Section 1.4  Obligations to Lenders Affiliates

 

The Guarantor agrees to unconditionally pay and perform on demand, all other debts, liabilities, duties, representations, covenants and warranties of the Borrower under the Loan Documents to any Affiliate or Participant of Lenders, whether now or in the future existing, direct, indirect or acquired by negotiation, or the result of any related derivative transaction, purchase, discount or assignment, primary or secondary, joint or several, fixed or contingent (regardless of form, existence of collateral therefor, whether guaranteed, or subject to a participation agreement), secured or unsecured, whether arising from an extension of credit, funds transfers, letter of credit, deposit relationship, or otherwise, and any amendments, extensions or renewals thereof, together with all costs, taxes, expenses and attorneys' fees (including the reasonable allocated charges of in-house counsel) incurred in connection therewith relating to or incurred in connection with the Loan Agreement.

 

Section 1.5  Expenses in Realizing Upon Security Interest

 

The Guarantor agrees to unconditionally pay, on demand, all costs and expenses, including reasonable attorneys fees of both outside and in-house counsel, incurred by Lenders to preserve, collect, protect, foreclose, sell, or otherwise realize upon its security interest in any security agreement executed by the Borrower, or any indorser (other than any Lender) or guarantor (other than the Guarantor) in favor of the Lenders, whether prior to or following judgment, relating to or incurred in connection with the Loan Agreement.

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Section 1.6  Expenses in Enforcing and Defending Rights

 

(a)           The Guarantor agrees to unconditionally pay, on demand, all costs and expenses, including reasonable attorneys fees of both outside and in-house counsel, incurred by Lenders in the prosecution or defense of any action or proceeding relating to the subject matter of any agreement or instrument executed by the Borrower  or any indorser (other than any Lender) or guarantor (other than the Guarantor) of the obligations of the Borrower to Lenders, whether prior to or following judgment, relating to or incurred in connection with the Loan Agreement.

 

(b)           The Guarantor agrees to unconditionally pay, on demand, all costs and expenses, including reasonable attorneys fees of both outside and in-house counsel, incurred by Lenders in the prosecution or defense of any action or proceeding relating to the subject matter of any agreement or instrument executed by the Guarantor, whether prior to or following judgment, relating to or incurred in connection with the Loan Agreement or this Guaranty.

 

Section 1.7  Limit of Liability

 

Notwithstanding anything in this Guaranty to the contrary:

 

(a)           The liability of the Guarantor set forth in this Guaranty is not to exceed, in the aggregate, the principal sum of Two Million Five Hundred Thousand Dollars ($2,500,000.00) at any time outstanding less any payments made on account thereof by the Guarantor plus any expenses referred to in Sections 1.3, 1.5 or 1.6.

 

(b)           The Lender may make any required demand hereunder only following the acceleration or other maturity (whether actual or deemed) of the Revolving Loan and other Debt under the Loan Agreement.

 

Section 1.8  Guarantors' Right of Contribution Against Each Other.

 

(a)           As between themselves, each Guarantor hereby agrees with the other Guarantor as follows: (i) Mr. Brown shall have 44/72 and Mr. Bartels shall have 28/72 of the aggregate liability of the Guarantors under Article 1 of this Guaranty (each a "Proportionate Share"), which reflects the relative proportions of their approximate ownership interests in SGRP; and (ii) to the extent that a Guarantor shall have paid more than his proportionate share of any payment made under Article 1 of this Guaranty, such Guarantor shall b e entitled to seek and receive contribution from and against the other Guarantor hereunder in the amount necessary to adjust the payments of each to his Proportionate Share of the aggregate payments to the Agent and Lenders (excluding for this purpose the amount of the Agent's expenses of enforcement against the Guarantors).

 

(b)           The Guarantors acknowledge and agree with the Agent and Lenders that the provisions of this Section shall in no way limit the obligations and liabilities of any Guarantor to the Agent or any Lender, and each Guarantor shall remain liable to the Purchasers for the full amount guarantied by the Guarantors under Section 1.7 hereof.

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ARTICLE 2.  COLLATERAL SECURITY

 

The Guarantor acknowledges and agrees that the validity and enforceability of this Guaranty is not affected by the existence, value or condition of any collateral security for any of the provisions of Article 1.

 

ARTICLE 3. VARIATIONS OF THE TERMS OF
THE OBLIGATIONS OF THE BORROWER

 

The Guarantor acknowledges and agrees that, without notice, the performance or payment by the Borrower of any of its debts, liabilities, duties, representations, covenants and warranties may be waived, modified, accelerated, extended, compromised, renewed or subordinated (in whole or in part), or any collateral of either the Guarantor or the Borrower may be exchanged, surrendered, ignored or disposed of, and any liens or security interests may be abandoned, extended, modified or discharged, by Lenders without affecting the liability of the Guarantor in this Guaranty.  The Guarantor expressly waives any defense that Lenders, by its action or inaction, has impaired any such collateral or any rights of subrogation.  The Guarantor waives (1) the option to demand that any collateral for this Guaranty or any obligation of the Borrower to Lenders be marshaled and (2) the exercise or enforcement of any right of subrogation as long as any obligation(s) described in this Guaranty remain outstanding or unsatisfied.

 

ARTICLE 4.  GUARANTOR OBLIGATED TO BE INFORMED

 

The Guarantor has established adequate means of obtaining, on a continuing basis, all facts pertaining to the risks of this Guaranty.  The Guarantor assumes the responsibility for being and keeping itself informed of all the facts pertaining to such risks and agrees that Lenders has no duty to disclose any such facts to the Guarantor.  The Guarantor recognizes that this Guaranty imposes certain risks upon the Guarantor and that these risks may increase in the future due to changing circumstances.  Any such risks, increases in such risks, or future risks do not and will not alter the liability of the Guarantor in this Guaranty.

 

ARTICLE 5.  COLLATERAL FOR LIMITED CONTINUING GUARANTY

 

To secure this Guaranty, the Guarantor hereby pledges, sets over, assigns and grants a security interest and right of set-off to Lenders in every deposit account of the Guarantor with Lenders or its affiliates, in any other property, rights and instruments of the Guarantor which may be delivered or come into the possession, custody or control of Lenders (as such terms are defined in the Uniform Commercial Code), and such additional security interests which may be granted by the Guarantor to Lenders in any separate agreement executed between the Guarantor and Lenders.

 

ARTICLE 6.  CONTINUING NATURE OF GUARANTY

 

This Guaranty is a continuing guaranty and is not affected by any change in circumstances or events including those by which the Borrower may be deemed to be in default or breach to Lenders.  The Borrower or any co-guarantor may be released or discharged by Lenders without affecting the liability or obligations of the Guarantor.

 

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ARTICLE 7.  FINANCIAL STATEMENTS

 

The Guarantor agrees to provide to Lenders such financial statements, in such form otherwise required by Lenders, on an annual basis, and at the same time as the Borrower submits its annual financial statements to Lenders.

 

ARTICLE 8.  NO CONDITIONS

 

The Guarantor agrees that this Guaranty is effective irrespective of and hereby waives notice of default, notice of dishonor, notice of protest, notice of presentment, notice of acceptance or acceptance of this Guaranty, any other suretyship or similar event, defense or claim, notice of any nonpayment, Material Adverse Effect or other Default, and any other proof, notice, claim or demand of any kind whatsoever respecting any exercise or enforcement of any right or remedy of the Agent or any Lender against any Borrower, any other person or any Collateral, in respect of any of the Debt, or otherwise under any Loan Document or applicable law.  This is a guaranty of payment, n ot collection.

 

ARTICLE 9.  RECOVERY OF PREFERENCE

 

The Guarantor agrees that if, at any time, all or any part of any payment previously applied by Lenders on account of this Guaranty or obligation of the Borrower must be returned by Lenders for any reason, whether by court order, administrative order, or settlement, the Guarantor remains liable for the full amount returned as if such payment had never been received by Lenders, and notwithstanding any termination by Lenders of this Guaranty or the cancellation of any instrument(s) evidencing the obligations of the Borrower.

 

ARTICLE 10. REPRESENTATIONS AND WARRANTIES OF THE GUARANTOR

 

Section 10.1  Consent; Payments to Agent

 

The Guarantor consents to all of the terms and conditions of any and all documents, agreements or instruments evidencing the debts, liabilities, duties, representations, covenants and warranties of the Borrower to Lenders, including the Loan Agreement.  All payments made by Guarantor hereunder are to be made to Sterling National Bank, as Agent, pursuant to the Loan Agreement.

 

Section 10.2  Notice of Material Adverse Effect

 

The Guarantor agrees that so long as this Guaranty is effective, the Guarantor will notify Agent in writing of any Material Adverse Effect to the extent that it relates to the Guarantor.  Guarantor agrees to provide to Lenders such tax returns, financial information, data and documents as may be requested from time to time by Lenders.

 

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ARTICLE 11.  NO ADVERSE ACTIONS

 

Each Guarantor agrees that it is not to take any action, or fail to take any action, which would render any representation, warranty, covenant or obligation of itself or the Borrower to Lenders to be untrue or incapable of performance in any material respect.

 

ARTICLE 12.  BINDING EFFECT

 

This Guaranty inures to the benefit of and is enforceable by and as to the estate, personal representatives, successors and assigns of Lenders and the Guarantor. This Guaranty is not assignable by the Guarantor without the prior written consent of Lenders.

 

ARTICLE 13.  NON WAIVER; AMENDMENTS

 

    The Guarantor agrees that no failure or delay on the part of Lenders, or its successors and assigns, in the exercise of any right, power or privilege is to operate as a waiver.  A partial exercise of any right, power, or privilege by Lenders is not to preclude any further right, power, or privilege, nor be deemed a waiver.  Any waiver or modification to this Guaranty or any other document, instrument or agreement executed by the Guarantor is to be in a writing consented to by Lenders.

 

ARTICLE 14.  NOTICES

 

Each demand, notice, or other communication by Lenders to the Guarantor or by the Guarantor to Lenders is to be deemed sent as provided in the Loan Agreement and the Guarantor consents and acknowledges that notice to the Borrower is deemed notice to Guarantor.

 

ARTICLE 15.  CAPTIONS

 

The captions and titles appearing in this Guaranty are inserted for the convenience of the parties hereto and are intended to refer to specified representations, warranties, covenants and other terms and conditions of this Guaranty.

 

ARTICLE 16.  ENTIRE AGREEMENT

 

There are no understandings, agreements, representations, warranties or covenants, express or implied, which are not specified herein, or in the other written instruments, documents, or agreements referred to in this Guaranty.  All prior oral understandings, negotiations, or agreements are deemed to be superseded by the terms of this Guaranty and such other written instruments, documents or agreements referred to in this Guaranty.

 

ARTICLE 17.  SEVERABILITY

 

In the event that any portion of this Guaranty is deemed unenforceable by a Court of competent jurisdiction, such provision declared to be unenforceable is to be deemed to have been omitted from this Guaranty, and all such remaining terms and conditions of this Guaranty are to continue in full force and effect.

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ARTICLE 18.  JOINT AND SEVERAL LIABILITY

 

The terms and conditions of this Guaranty are jointly and severally binding upon all parties identified herein as the "Guarantor".

 

ARTICLE 19.  APPLICABLE LAW

 

Pursuant to Section 5-1401 of the New York General Obligations Law, the substantive laws of the State of New York, without regard to the choice of law principles that might otherwise apply to defer to the substantive laws of another jurisdiction, shall govern the validity, construction, enforcement and interpretation of this Guaranty.

 

Guarantor hereby irrevocably consents to the jurisdiction of the Courts of the State of New York and their venue in the City and County of New York and to the jurisdiction of the United States District Court for the Southern District of New York, for the purpose of any suit, action or other proceeding arising out of or relating to this Guaranty or the Debt, or the subject matter hereof or thereof. Guarantor hereby waives and agrees not to assert in any such suit, action or proceeding any claim that it is not personally subject to such jurisdiction, or any right to remove an action brought in State to Federal Court, or any claim that such suit, action or proceeding is in an inconvenient forum or that the venue thereof is improper.  Guarantor hereby consents that it may be served with process by the notification procedure set forth in this Guaranty to the fullest extent permitted by applicable law.

 

ARTICLE 20.  REPRESENTATION BY COUNSEL

 

The Guarantor acknowledges the opportunity to consult independent counsel of its own choice, and that it has relied upon such counsel's advice concerning this Guaranty, the enforceability and interpretation of the terms contained in this Guaranty and the consummation of the transactions and matters covered by this Guaranty. Guarantor acknowledges that it has not executed this Guaranty under duress.

 

 

 

 

 

 

[Remainder of Page Left Intentionally Blank]

 

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ARTICLE 21.  WAIVE JURY TRIAL

 

THE GUARANTOR HEREBY WAIVES ALL RIGHTS TO A TRIAL BY JURY IN ANY LITIGATION RELATING TO THIS GUARANTY OR RELATED DOCUMENTS AS AN INDUCEMENT TO THE ACCEPTANCE OF THIS GUARANTY.

 

IN WITNESS WHEREOF, the Guarantor has executed this Guaranty effective July 6, 2010.

 

 

Witness:
/s/ James R. Segreto Print Name:	/s/ Robert G. Brown ROBERT BROWN
/s/ James R. Segreto Print Name:	/s/ William H. Bartels WILLIAM BARTELS

 

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STATE OF NEW YORK                    )

COUNTY OF WESTCHESTER        )ss:

 

 

 

On June 29, 2010, before me, the subscriber, a Notary Public of the State of New York, personally appeared Robert G. Brown and William H. Bartels who, I am satisfied, are the persons who signed the annexed Limited Continuing Guaranty, and having first made known to them the contents thereof, they acknowledged that they signed, sealed and delivered the same as their voluntary act and deed for the uses and purposes therein expressed.

 

/s/ Lawrence David Swift

 

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SPAR Group Secures New Line of Credit to Fuel Future Growth

Tarrytown, NY - July 8, 2010 - SPAR Group, Inc. (NASDAQ: SGRP) (the "Company" or "SPAR"), a leading supplier of retail merchandising and other marketing services throughout the United States and internationally, today announced that a multi-bank group led by Sterling National Bank will provide the Company with a $6.5 million revolving credit facility, which replaces its existing line of credit.  This new facility will provide additional working capital and resources to fuel the Company’s domestic growth strategy and foster further acquisitions by the Company, both domestically and internationally.

“It is with great pleasure that we finalize our agreement and increase our credit facility with Sterling National Bank as the lead institution for our new financial partners,” stated Gary Raymond, President and Chief Executive Officer of SPAR Group. “The increase in our revolving facility of up to $6.5 million will provide our company with more than adequate working capital to grow organically and also provides us with much needed flexibility to fuel the growth of our Company through acquisitions. Sterling National Bank and its bank group provide us with a broad range of product offerings and the proven financial experience to meet the needs of our growing company.”

Joseph Costanza, Senior Vice President and Managing Director of Sterling National Bank’s Commercial Lending Division, stated, “We are extremely pleased to support  SPAR Group with this credit facility and full suite of banking services as they continue to grow their business domestically and on a global basis.”

About SPAR Group

SPAR Group, Inc. is a diversified international merchandising and marketing services company that provides a broad array of services worldwide to help companies improve their sales, operating efficiency and profits at retail locations. SPAR Group provides product services, project services, in-store events, radio frequency identification ("RFID"), technology services and marketing research covering all product and trade classifications, including mass market, drug store, convenience store and grocery chains. Product services include product additions; placement, reordering, replenishment, labeling, evaluation and deletions, and project services include seasonal and special product promotions, product recalls and complete setups of departments and stores. The company operates throughout the United States and internationally in 11 of the most popul ated countries, including China and India. For more information, visit the SPAR Group's Web site at http://www.sparinc.com/.

About Sterling National Bank

Since 1929, Sterling National Bank (www.sterlingnationalbank.com) has successfully served the needs of businesses, professionals and individuals in the NY metropolitan area and beyond. Sterling is well-known for its high-touch, hands-on approach to customer service and a special focus on serving the business community.  Sterling National Bank is the principal banking subsidiary of Sterling Bancorp (NYSE: STL), a New York City-based financial corporation with assets exceeding $2 billion. Sterling offers clients a full range of depository and cash management services plus a broad portfolio of financing solutions – including working capital lines, accounts receivable and inventory financing, factoring, internationa l trade financing, payroll funding and processing, equipment leasing and financing, commercial and residential mortgages and trust and custodial account services.

Certain statements in this news release and such conference call are forward-looking, including (without limitation) growing revenues and profits through domestic growth and domestic and international acquisitions, attracting new business that will increase SPAR Group's revenues, continuing to maintain costs and consummating any transactions. Undue reliance should not be placed on such forward-looking statements because the matters they describe are subject to known and unknown risks, uncertainties and other unpredictable factors, many of which are beyond the company's control. The company's actual results, performance and trends could differ materially from those indicated or implied by such statements as a result of various factors, including (without limitation) the continued strengthening of SPAR Group's selling and marketing functions, conti nued customer satisfaction and contract renewal, new product development, continued availability of capable dedicated personnel, continued cost management, the success of its international efforts, success and availability of acquisitions, availability of acceptable acquisition financing and other factors, as well as by factors applicable to most companies such as general economic, competitive and other business and civil conditions. Information regarding certain of those and other risk factors and cautionary statements that could affect future results, performance or trends are discussed in SPAR Group's most recent annual report on Form 10-K, quarterly reports on Form 10-Q, and other filings made with the Securities and Exchange Commission from time to time. All of the company's forward-looking statements are expressly qualified by all such risk factors and other cautionary statements.

Contact:

James R. Segreto

SPAR Group, Inc.

(914) 332-4100

Investors:

Alan Sheinwald

Alliance Advisors, LLC

(914) 669-0222

asheinwald@allianceadvisors.net

Mark McPartland

Alliance Advisors, LLC

(910) 686-0455

markmcp@allianceadvisors.net