UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------
FORM 10-K/A
Amendment No. 1
FOR ANNUAL AND TRANSITIONAL REPORTS
PURSUANT TO SECTIONS 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One)
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- --- EXCHANGE ACT OF 1934 for the fiscal year ended December 31, 2003
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- --- EXCHANGE ACT OF 1934 for the transition period from _______ to _______
Commission file number 0-27824
SPAR GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware 33-0684451
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
580 White Plains Road, Tarrytown, New York 10591
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (914) 332-4100
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to section 12(g) of the Act: Common Stock,
par value $.01 per share
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding twelve months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES [X] NO [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K [ ].
Indicate by check mark whether the registrant is an accelerated filer
(as defined in Exchange Rule 12b-2 of the Act.) YES [ ] NO [X]
The aggregate market value of the Common Stock of the Registrant held
by non-affiliates of the Registrant on June 30, 2003, based on the closing price
of the Common Stock as reported by the Nasdaq National Market on such date, was
approximately $20,892,441.
The number of shares of the Registrant's Common Stock outstanding as of
December 31, 2003, was 18,858,972 shares.
DOCUMENTS INCORPORATED BY REFERENCE
None.
Introduction
This Form 10-K/A (Amendment No. 1) amends the Annual Report for the Fiscal Year
ended December 31, 2003 on Form 10-K by amending and restating certain portions
of the Notes to the Consolidated Financial Statements substituting for such
items are the following replacements as indicated. The following paragraph in
Note 6, Joint Venture Guarantee is restated to change the currency from Yen in
the last sentence. The following table in Note 9 is amended and restated to
indicate the number of options outstanding as of December 31, 2000. The
following list of Exhibits and Reports on Form 8-K is amended and restated to
include recently filed Periodic Reports on Form 8-K and the exhibits filed
therewith (other than earning reports previously reported on Form 10-Q). In
order to complete the list of amendments to the existing Third Amended and
Restated Revolving Credit and Security Agreement with Webster Business Credit
Corporation (Exhibit 10.14, as previously filed), attached hereto as Exhibit
10.16 is a copy of the existing Waiver and Amendment thereto dated as of
January, 2004.
6. Commitments and Contingencies
Joint Venture Guarantee
In May 2001, the Company and Paltac, Inc. ("Paltac"), a large Japanese
distributor, entered into a joint venture to create a Japanese company, SPAR FM.
SPAR FM entered into a Yen 300 million Revolving Credit Agreement with a
Japanese bank. The bank required Paltac guarantee the outstanding balance on the
revolving credit facility. As part of the joint venture agreement, should Paltac
be required to make a payment on its guarantee to the bank, then the Company has
agreed to remit to Paltac 50% of any such payment up to a maximum of Yen 150
million or approximately $1.4 million. As of December 31, 2003, SPAR FM has
borrowed Yen 100 million under its Revolving Credit Agreement. Therefore, the
Company's current exposure to Paltac respecting outstanding loans to SPAR FM at
December 31, 2003 would be Yen 50 million or approximately $470,000. The Company
has recorded approximately $0.3 million in long-term liabilities for its share
of the cumulative losses associated with this joint venture.
9. Stock Options (continued)
The following table summarizes stock option activity under the Company's plans:
Weighted Average
Shares Exercise Price
----------------------------------------
Options outstanding, December 31, 2000 2,989,849 $ 4.82
Granted 2,564,844 $ 1.31
Exercised (309,492) 1.30
Canceled or expired (2,761,474) 5.00
---------------------
Options outstanding, December 31, 2001 2,483,727 $ 1.42
Granted 332,792 $ 2.01
Exercised (230,463) 1.23
Canceled or expired (487,875) 5.05
---------------------
Options outstanding, December 31, 2002 2,098,181 $ 1.52
Granted 401,020 $ 3.51
Exercised (143,641) 1.17
Canceled or expired (86,500) 2.38
---------------------
Options outstanding, December 31, 2003 2,269,060 $ 1.85
Option price range at end of year $0.01 to $14.00
2003 2002 2001
--------------------------------------------------
Grant Date weighted average fair value of
options granted during the year $ 2.33 $ 1.60 $ 1.28
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Exhibits and Reports on Form 8-K.
(a) Exhibits.
Exhibit
Number Description
- ------ -----------
3.1 Certificate of Incorporation of SPAR Group, Inc. (referred to therein
under its former name of PIA Merchandising Services, Inc.), as amended
(which exhibit is hereby incorporated by reference its Registration
Statement on Form S-1 (Registration No. 33-80429), as filed with the
Securities and Exchange Commission (the "SEC") on December 14, 1995
(the "Form S-1")), and the Certificate of Amendment filed with the
Secretary of State of the State of Delaware on July 8, 1999 (which
exhibit is hereby incorporated by reference from Exhibit 3.1 to SGRP's
Form 10-Q for the 3rd Quarter ended September 30, 1999), which
amendment (among other things) changed its name to SPAR Group, Inc.
3.2 Amended and Restated By-Laws of SPAR Group, Inc. Dated and Effective as
of May 18, 2004 (which exhibit is hereby incorporated by reference from
Exhibit 3.1 to SGRP's Form 8-K dated May 18, 2004, as filed with the
SEC on May 27, 2004).
3.3 Amended and Restated Charter of the Audit Committee of the Board of
Directors of SPAR Group, Inc. Dated (as of) May 18, 2004 (which exhibit
is hereby incorporated by reference from Exhibit 3.2 to SGRP's Form 8-K
dated May 18, 2004, as filed with the SEC on May 27, 2004).
3.4 Charter of the Compensation Committee of the Board of Directors of SPAR
Group, Inc. Dated (as of) May 18, 2004 (which exhibit is hereby
incorporated by reference from Exhibit 3.3 to SGRP's Form 8-K dated May
18, 2004, as filed with the SEC on May 27, 2004).
3.5 Charter of the Governance Committee of the Board of Directors of SPAR
Group, Inc. Dated (as of) May 18, 2004 (which exhibit is hereby
incorporated by reference from Exhibit 3.4 to SGRP's Form 8-K dated May
18, 2004, as filed with the SEC on May 27, 2004).
3.6 SPAR Group, Inc. Statement of Policy Respecting Stockholder
Communications with Directors dated as of May 18, 2004 (which exhibit
is hereby incorporated by reference from Exhibit 3.5 to SGRP's Form 8-K
dated May 18, 2004, as filed with the SEC on May 27, 2004).
3.7 SPAR Group, Inc. Statement of Policy Regarding Director Qualifications
and Nominations of dated as of May 18, 2004 (which exhibit is hereby
incorporated by reference from Exhibit 3.6 to SGRP's Form 8-K dated May
18, 2004, as filed with the SEC on May 27, 2004).
4.1 Registration Rights Agreement entered into as of January 21, 1992, by
and among RVM Holding Corporation, RVM/PIA, a California Limited
Partnership, The Riordan Foundation and Creditanstalt-Bankverine (which
exhibit is hereby incorporated by reference to the Form S-1).
10.1 2000 Stock Option Plan, as amended, (which exhibit is hereby
incorporated by reference from Annex A to SGRP's Proxy Statement for
the Company's Annual meeting held on August 2, 2001, as filed with the
SEC on July 12, 2001).
10.2 2001 Employee Stock Purchase Plan (which exhibit is hereby incorporated
by reference from Annex B to SGRP's Proxy Statement for the Company's
Annual meeting held on August 2, 2001, as filed with the SEC on July
12, 2001).
10.3 2001 Consultant Stock Purchase Plan (which exhibit is hereby
incorporated by reference from Annex C to SGRP's Proxy Statement for
the Company's Annual meeting held on August 2, 2001, as filed with the
SEC on July 12, 2001).
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10.4 Business Manager Agreement dated as of July 8, 1999, by and between
SPAR Marketing Force, Inc., and SPAR Marketing Services, Inc. (which
exhibit is hereby incorporated by reference from Exhibit 10.18 to
SGRP's Form 10-K/A (Amendment No. 1) for the fiscal year ended December
31, 1999).
10.5 Trademark License Agreement dated as of July 8, 1999, by and between
SPAR Marketing Services, Inc., and SPAR Trademarks, Inc. (which exhibit
is hereby incorporated by reference from Exhibit 10.6 to SGRP's Form
10-K for the fiscal year ended December 31, 2002).
10.6 Trademark License Agreement dated as of July 8, 1999, by and between
SPAR Infotech, Inc., and SPAR Trademarks, Inc. (which exhibit is hereby
incorporated by reference from Exhibit 10.7 to SGRP's Form 10-K for the
fiscal year ended December 31, 2002).
10.7 Amended and Restated Field Service Agreement dated and effective as of
January 1, 2004, by and between SPAR Marketing Services, Inc., SPAR
Marketing Force, Inc. (which exhibit is hereby incorporated by
reference from Exhibit 10.1 to SGRP's Form 10-Q for the first quarter
ended March 31, 2004).
10.8 Amended and Restated Field Management Agreement dated and effective as
of January 1, 2004, by and between SPAR Management Services, Inc., and
SPAR Marketing Force, Inc. (which exhibit is hereby incorporated by
reference from Exhibit 10.2 to SGRP's Form 10-Q for the first quarter
ended March 31, 2004).
10.9 Amended and Restated Programming and Support Agreement dated and
effective as of January 1, 2004, by and between SPAR InfoTech, Inc.,
and SPAR Marketing Force, Inc. (which exhibit is hereby incorporated by
reference from Exhibit 10.3 to SGRP's Form 10-Q for the first quarter
ended March 31, 2004).
10.10 [Reserved.]
10.11 Stock Purchase and Sale Agreement by and among Performance Holdings,
Inc. and SPAR Incentive Marketing, Inc., effective as of June 30, 2002
(which exhibit is hereby incorporated by reference from Exhibit 10.17
to SGRP's Form 10-Q for the quarter ended June 30, 2002).
10.12 Revolving Credit, Guaranty and Security Agreement by and among
Performance Holdings, Inc. and SPAR Incentive Marketing, Inc.,
effective as of June 30, 2002 (which exhibit is hereby incorporated by
reference from Exhibit 10.18 to SGRP's Form 10-Q for the quarter ended
June 30, 2002).
10.13 Term Loan, Guaranty and Security Agreement by and among Performance
Holdings, Inc. and SPAR Incentive Marketing, Inc., effective as of June
30, 2002 (which exhibit is hereby incorporated by reference from
Exhibit 10.19 to SGRP's Form 10-Q for the quarter ended June 30, 2002).
10.14 Third Amended and Restated Revolving Credit and Security Agreement by
and among Whitehall Business Credit Corporation (the "Lender") with
SPAR Marketing Force, Inc., SPAR Group, Inc., SPAR, Inc., SPAR/Burgoyne
Retail Services, Inc., SPAR Incentive Marketing, Inc., SPAR Trademarks,
Inc., SPAR Marketing, Inc. (DE), SPAR Marketing, Inc. (NV), SPAR
Acquisition, Inc., SPAR Group International, Inc., SPAR Technology
Group, Inc., SPAR/PIA Retail Services, Inc., Retail Resources, Inc.,
Pivotal Field Services Inc., PIA Merchandising Co., Inc., Pacific
Indoor Display Co. and Pivotal Sales Company (collectively, the
"Existing Borrowers"), dated as of January 24, 2003 (which exhibit is
hereby incorporated by reference from Exhibit 10.13 to SGRP's Form 10-K
for the fiscal year ended December 31, 2002).
10.15 Consent, Joinder, Release and Amendment Agreement dated as of October
31, 2003, by and among the Lender, the Existing Borrowers and SPAR All
Store Marketing, Inc., as a Borrower (which exhibit is hereby
incorporated by reference from Exhibit 10.14 to SGRP's Form 10-K for
the fiscal year ended December 31, 2003).
10.16 Waiver and Amendment to Third Amended and Restated Revolving Credit and
Security Agreement by and among the Lender and the Borrowers dated as
of January, 2004, and filed herewith.
-4-
10.17 Waiver And Amendment No. 3 To Third Amended And Restated Revolving
Credit And Security Agreement by and among the Lender and the Borrowers
entered into as of March 26, 2004 (which exhibit is hereby incorporated
by reference from Exhibit 10.1 to SGRP's Form 8-K dated March 26, 2004,
as filed with the SEC on May 26, 2004).
10.18 Joinder, Waiver And Amendment No. 4 To Third Amended And Restated
Revolving Credit And Security Agreement by and among the Lender and the
Borrowers entered into as of May 17, 2004 (which exhibit is hereby
incorporated by reference from Exhibit 10.2 to SGRP's Form 8-K dated
March 26, 2004, as filed with the SEC on May 26, 2004.)
14.1 SPAR Group Code of Ethical Conduct for its Directors, Senior Executives
and Employees dated (as of) May 1, 2004 (which exhibit is hereby
incorporated by reference from Exhibit 14.1 to SGRP's Form 8-K dated
May 1, 2004, as filed with the SEC on May 5, 2004).
14.2 SPAR Group Statement of Policy Regarding Personal Securities
Transaction in SGRP Stock and Non-Public Information Dated, Amended and
Restated as of May 1, 2004 (which exhibit is hereby incorporated by
reference from Exhibit 14.2 to SGRP's Form 8-K dated May 1, 2004, as
filed with the SEC on May 5, 2004).
21.1 List of Subsidiaries (which exhibit is hereby incorporated by reference
from Exhibit 21.1 to SGRP's Form 10-K for the year ended December 31,
2003).
21.2 Consent of Ernst & Young LLP (which exhibit is hereby incorporated by
reference from Exhibit 21.2 to SGRP's Form 10-K for the year ended
December 31, 2003).
31.1 Certification of the CEO pursuant to 18 U.S.C. Section 1350 as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, and filed
herewith.
31.2 Certification of the CFO pursuant to 18 U.S.C. Section 1350 as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, and filed
herewith.
32.1 Certification of the CEO pursuant to 18 U.S.C. Section 1350 as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and filed
herewith.
32.2 Certification of the CFO pursuant to 18 U.S.C. Section 1350 as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and filed
herewith.
(b) Reports on Form 8-K.
1. Periodic Report on Form 8-K, dated November 10, 2003, filed with the
SEC on November 10, 2003, respecting the earnings press release for the
quarter ended September 30, 2003.
2. Periodic Report on Form 8-K, dated March 26, 2004, filed with the SEC
on May 26, 2004, respecting each of the following: (i) Waiver And
Amendment No. 3 To Third Amended And Restated Revolving Credit And
Security Agreement by and among the Lender and the Borrowers entered
into as of March 26, 2004 (Exhibit 10.17, above); and (ii) Joinder,
Waiver And Amendment No. 4 To Third Amended And Restated Revolving
Credit And Security Agreement by and among the Lender and the Borrowers
entered into as of May 17, 2004 (Exhibit 10.18, above).
3. Periodic Report on Form 8-K, dated May 1, 2004, filed with the SEC on
May 5, 2004, respecting the adoption and filing of each of the
following: (i) SPAR Group Code of Ethical Conduct for its Directors,
Senior Executives and Employees dated (as of) May 1, 2004 (Exhibit
14.1, above); and (ii) SPAR Group Statement of Policy Regarding
Personal Securities Transaction in SGRP Stock and Non-Public
Information Dated, Amended and Restated as of May 1, 2004 (Exhibit
14.2, above).
4. Periodic Report on Form 8-K, dated May 18, 2004, filed with the SEC on
May 27, 2004, respecting the adoption and filing of each of the
following: (i) Amended and Restated By-Laws of SPAR Group, Inc.
-5-
Dated and Effective as of May 18, 2004 (Exhibit 3.2, above); (ii)
Amended and Restated Charter of the Audit Committee of the Board of
Directors of SPAR Group, Inc. Dated (as of) May 18, 2004 (Exhibit 3.3,
above); (iii) Charter of the Compensation Committee of the Board of
Directors of SPAR Group, Inc. Dated (as of) May 18, 2004 (Exhibit 3.4,
above); (iv) Charter of the Governance Committee of the Board of
Directors of SPAR Group, Inc. Dated (as of) May 18, 2004 (Exhibit 3.5,
above); (v) SPAR Group, Inc. Statement of Policy Respecting Stockholder
Communications with Directors dated as of May 18, 2004 (Exhibit 3.6,
above); and (vi) SPAR Group, Inc. Statement of Policy Regarding
Director Qualifications and Nominations of dated as of May 18, 2004
(Exhibit 3.7, above).
-6-
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this amendment to the
report to be signed on its behalf by the undersigned, thereunto duly authorized.
SPAR Group, Inc.
By: /s/ Charles Cimitile
--------------------
Charles Cimitile
Chief Financial Officer and duly
authorized signatory
Dated: June 28, 2004
-7-
Exhibit 10.16
WHITEHALL BUSINESS CREDIT CORPORATION
One State Street
New York, New York 10004
as of January __, 2004
SPAR Group, Inc.
580 White Plains Road
Tarrytown, New York 10591
Gentlemen:
Reference is hereby made to that certain Third Amended and Restated
Revolving Credit and Security Agreement (as the same may be amended, restated,
supplemented or otherwise modified from time to time, the "Credit Agreement")
dated as of January 24, 2003 among SPAR Marketing Force, Inc., SPAR, Inc.,
SPAR/Burgoyne Retail Services, Inc., SPAR Group, Inc., SPAR Incentive Marketing,
Inc., SPAR Trademarks, Inc., SPAR Marketing, Inc. (DE), SPAR Marketing, Inc.
(NV), SPAR Acquisition, Inc., SPAR Group International, Inc., SPAR Technology
Group, Inc., SPAR/PIA Retail Services, Inc., Retail Resources, Inc., Pivotal
Field Services, Inc., PIA Merchandising Co., Inc., Pacific Indoor Display Co.,
Pivotal Sales Company, SPAR All Store Marketing Services, Inc., (collectively,
the "Borrower") and Whitehall Business Credit Corporation ("Lender"). All
capitalized terms not otherwise defined herein shall have the meanings given to
them in the Credit Agreement.
At the present time, certain Events of Default have occurred and are
continuing under the Credit Agreement, specifically the Events of Default under
Section 19(iii) of the Credit Agreement resulting from the failure of Borrower
to perform, keep or observe the covenant contained in (a) Section 12(p) of the
Credit Agreement by not maintaining the required Fixed Charge Coverage Ratio for
the four fiscal quarters ended December 31, 2003 and (b) Section 12(r) of the
Credit Agreement as a result of Borrower's violation of the EBITDA covenant for
the four fiscal quarters ended December 31, 2003 (the "Designated Defaults"). In
addition, Borrower has informed Lender that it intends to cause SPAR Bert Fife,
Inc. ("SBFI") to purchase all or substantially all of the assets and assume
certain liabilities (the "Acquisition") of Bert Fife & Associates, Inc. ("Fife")
pursuant to the Asset Purchase and Sale Agreement, dated as of January 12, 2004
(the "Acquisition Agreement").
As a result of the existence of the Designated Defaults the Acquisition
is excluded from Permitted Acquisitions unless Lender waives requirement that no
Default or Event of Default has occurred ("Default Requirement"). In addition,
Lender and Borrower have agreed to amend the Credit Agreement as hereafter set
forth subject to the satisfaction of the conditions precedent herein.
In order to permit the Acquisition to be treated as a Permitted
Acquisition, despite the existence of certain Events of Default, Lender hereby
waives the Default Requirement solely with respect to the Acquisition; provided,
however, the Acquisition shall be completed on substantially the terms as set
forth in the Acquisition Agreement and; provided, further, Lender shall have
received, no later than April 5, 2004, four (4) copies of a Joinder Agreement
executed by Lender, Borrower and SBFI, in form and substance satisfactory to
Lender.
Subject to the terms and conditions set forth below the Credit
Agreement is hereby amended to provide as follows:
1. The definition of Supplemental Amount contained in Section 1 is hereby
amended in its entirety to provide as follows:
"Supplemental Amount" shall mean, for each period of time, the amount
set forth below opposite such time period:
Time Period Supplemental Amount
----------- -------------------
Closing Date through 3/31/2003 $1,500,000
04/01/2003 through 06/30/2003 $1,300,000
07/01/2003 to but not including the
Letter Amendment No. 1 Effective Date $1,100,000
Letter Amendment No.1 Effective Date
and thereafter $0
2. Section 1 of the Credit Agreement is hereby amended by adding the
following defined terms in their appropriate alphabetical order:
"Fife Acquisition" shall mean the acquisition of all or substantially
all of the assets and the assumption of certain liabilities by SPAR
Bert Fife, Inc. of Bert Fife & Associates, Inc. pursuant to the
Acquisition Agreement.
"Fife Acquisition Agreement" shall mean that certain Asset Purchase and
Sale Agreement, dated as of January 12, 2004 among Bert McCoy Fife,
Bert Fife & Associates, Inc., The Field Force, Inc., The Marketing
Development Group, Inc. and SBFI.
"Letter Amendment No. 1" shall mean Letter Amendment No. 1 to this
Agreement by and among Borrowers and Lender.
"Letter Amendment No. 1 Effective Date" shall mean January ___, 2004.
"SBFI" shall mean SPAR Bert Fife, Inc., a Nevada corporation.
"SBFI Reserve" shall mean the amount of not less than $800,000, as of
the closing date of the Fife Acquisition, subject to reduction by the
amount of additional availability created as a result of the Fife
Acquisition, as determined by a field exam by Lender which shall
calculate availability as of the closing date of the Fife Acquisition;
provided, however, such reserve shall not be reduced by the amount of
such additional availability until the following conditions have been
satisfied: (i) receipt by Lender of the executed Fife Acquisition
Agreement and related documents, (ii) satisfactory field exam conducted
by Lender as of the closing date of the Fife Acquisition and (iii)
receipt by Lender of adequate documentation required for Lender to
obtain a first priority perfected security interest in the assets of
SBFI; provided, further, the amount of the SBFI Reserve shall be
reduced to $0 at such time as Borrowers maintain a Fixed Charge
Coverage Ratio of at least 1.2 to 1.0 for each of two consecutive
fiscal quarters.
3. Section 2(a)(y)(v) of the Credit Agreement is hereby amended by adding
after the word "Reserve" the following: ", SBFI Reserve".
4. Section 12(n)(ii) of the Credit Agreement is hereby amended by deleting
the amount of "$500,000" contained in the ninth line therein and
inserting in lieu thereof the sum of "$100,000".
This letter agreement shall become effective upon the receipt by Lender
of (i) four (4) copies of this letter agreement executed by the parties hereto
within three (3) Business Days of receipt thereof by Borrower, (ii) executed
copies of the Acquisition Agreement and all documents related thereto and (iii)
such other certificates, instruments, documents, agreements and opinions of
counsel as may be required by Lender or its counsel, each of which shall be in
form and substance satisfactory to Lender and its counsel.
In addition, although Lender is not taking any immediate action with
respect to the above Designated Defaults, Lender hereby reserves all of its
rights and remedies under the Credit Agreement and applicable law, including,
without limitation, its right to charge interest at the Default Rate. Lender's
election not to exercise any such right or remedy at the present time shall not
(a) limit in any manner whatsoever Borrower's obligation to comply with, and
Lender's right to insist on Borrower's compliance with, each and every term of
the Credit Agreement or (b) constitute a waiver of any Event of Default or any
right or remedy available to Lender under the Credit Agreement or applicable
law, and Lender hereby expressly reserves its rights with respect to the same.
Except as set forth herein, the Credit Agreement, and all other
documents, instruments and agreements executed and/or delivered in connection
therewith, shall remain in full force and effect, and are hereby ratified and
confirmed. The execution, delivery and effectiveness of this waiver letter shall
not, except as set forth herein, operate as a waiver of any right, power or
remedy of Lender, nor constitute a waiver of any provision of the Credit
Agreement, or any other documents, instruments or agreements executed and/or
delivered under or in connection therewith.
Very truly yours,
WHITEHALL BUSINESS CREDIT CORPORATION
By: /s/ Joseph Zautra
---------------------
Name: Joseph Zautra
Title: Vice President
ACCEPTED AND AGREED:
SPAR MARKETING FORCE, INC.,
as Borrowing Agent
By: /s/ Charles Cimitile
---------------------
Name: Charles Cimitile
Title: Chief Financial Officer
SPAR GROUP, INC.
PIA MERCHANDISING CO., INC.
PACIFIC INDOOR DISPLAY CO.
PIVOTAL SALES COMPANY
SPAR MARKETING FORCE, INC.
SPAR, INC.
SPAR/BURGOYNE RETAIL SERVICES, INC.
SPAR INCENTIVE MARKETING, INC.
SPAR TRADEMARKS, INC.
SPAR MARKETING, INC. (DE)
SPAR MARKETING, INC. (NV)
SPAR ACQUISITION, INC.
SPAR TECHNOLOGY GROUP, INC.
SPAR/PIA RETAIL SERVICES, INC.
RETAIL RESOURCES, INC.
PIVOTAL FIELD SERVICES, INC.
SPAR ALL STORE MARKETING SERVICES, INC.
By: /s/ Charles Cimitile
--------------------
Name: Charles Cimitile
Title: Chief Financial Officer
of each of the foregoing Borrowers
Exhibit 31.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Robert G. Brown, certify that:
1. I have reviewed this amendment no. 1 to the annual report on Form
10-K/A of SPAR Group, Inc.;
2. Based on my knowledge, this annual report does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this
annual report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
(a) Designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this annual report is being prepared;
(b) Evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of this
annual report (the "Evaluation Date"); and
(c) Presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent functions):
(a) All significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
(b) Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in
this annual report whether there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
Date: June 28, 2004 /s/ Robert G. Brown
-------------------
Robert G. Brown
Chairman, President and
Chief Executive Officer
Exhibit 31.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Charles Cimitile, certify that:
1. I have reviewed this amendment no. 1 to the annual report on Form
10-K/A of SPAR Group, Inc.;
2. Based on my knowledge, this annual report does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this
annual report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
(a) Designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this annual report is being prepared;
(b) Evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of this
annual report (the "Evaluation Date"); and
(c) Presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent functions):
(a) All significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
(b) Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in
this annual report whether there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
Date: June 28, 2004 /s/ Charles Cimitile
--------------------
Charles Cimitile
Chief Financial Officer,
Treasurer and Secretary
EXHIBIT 32.1
Certification of Chief Executive Officer Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
In connection with Amendment No. 1 to the Annual Report on Form 10-K/A for the
year ended December 31, 2003 (the "Report"), by SPAR Group, Inc. (the
"Registrant"), the undersigned hereby certifies that, to his knowledge:
1. The Report fully complies with the requirements of section 13(a) or 15(d) of
the Securities Exchange Act of 1934, as amended, and
2. The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Registrant.
/s/ Robert G. Brown
------------------------------------------
Robert G. Brown
Chairman, President and
Chief Executive Officer
June 28, 2004
A signed original of this written statement required by Section 906 has been
provided to SPAR Group, Inc. and will be retained by SPAR Group, Inc., and
furnished to the Securities and Exchange Commission or its staff upon request.
EXHIBIT 32.2
Certification of Chief Financial Officer Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
In connection with Amendment No. 1 to the Annual Report on Form 10-K/A for the
year ended December 31, 2003 (the "Report"), by SPAR Group, Inc. (the
"Registrant"), the undersigned hereby certifies that, to his knowledge:
1. The Report fully complies with the requirements of section 13(a) or 15(d) of
the Securities Exchange Act of 1934, as amended, and
2. The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Registrant.
/s/ Charles Cimitile
-----------------------------------
Charles Cimitile
Chief Financial Officer, Treasurer
and Secretary
June 28, 2004
A signed original of this written statement required by Section 906 has been
provided to SPAR Group, Inc. and will be retained by SPAR Group, Inc., and
furnished to the Securities and Exchange Commission or its staff upon request.