SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10Q

Quarterly report pursuant to Section 13 or 15(d) of the Securities  Exchange Act
of 1934

For the second quarterly period ended June 30, 2002

Commission file number: 027824

SPAR GROUP, INC.
(Exact name of registrant as specified in its charter)

Delaware                                         330684451
State of Incorporation                       IRS Employer Identification No.

580 White Plains Road, Tarrytown, New York, 10591
(Address of principal executive offices, including zip code)

Registrant's telephone number, including area code: (914) 3324100

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 12 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: [ X ] Yes

On August 7, 2002, there were 18,601,997 shares of Common Stock outstanding.

SPAR GROUP, INC.

Index

PART I:    FINANCIAL INFORMATION

Item 1:       Financial Statements

Condensed Consolidated Balance Sheets

as of June 30, 2002 and December 31, 2001........................3

Condensed Consolidated Statements of Operations for

the six months ended June 30, 2002 and June 30, 2001.............4

Condensed Consolidated Statements of Cash Flows
for the six months ended June 30, 2002 and
June 30, 2001....................................................5

Notes to Condensed Consolidated Financial Statements.............6

Item 2:       Management's Discussion and Analysis of Financial

Condition and Results of Operations.............................10

Item 3:       Quantitative and Qualitative Disclosures About Market Risk......19

PART II:        OTHER INFORMATION

Item 1:  Legal Proceedings...............................................20

Item 2:  Changes in Securities and Use of Proceeds.......................20

Item 3:  Defaults upon Senior Securities.................................20

Item 4:  Submission of Matters to a Vote of Security Holders.............20

Item 5:  Other Information...............................................20

Item 6:  Exhibits and Reports on Form 8-K................................20

SIGNATURES....................................................................22

PART I:    FINANCIAL INFORMATION

ITEM 1:    FINANCIAL STATEMENTS

SPAR GROUP, INC.

Condensed Consolidated Balance Sheets
(In thousands, except share data)

JUNE 30,         DECEMBER 31,
2002               2001
---------------    ---------------
(Unaudited)        (Note)

ASSETS
Current assets:
Cash and cash equivalents                                          $    --            $    --
Accounts receivable, net                                            21,084             21,144
Prepaid expenses and other current assets                              446                440
Deferred income taxes                                                3,241              3,241
-------            -------
Total current assets                                                   24,771             24,825

Property and equipment, net                                             1,926              2,644
Goodwill and other intangibles, net                                     8,357              8,357
Deferred income taxes                                                     389                389
Other assets                                                              374                110
Net assets from discontinued operations                                    --              4,830
-------            -------
Total assets                                                          $35,817            $41,155
=======            =======

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable                                                   $   747            $   440
Accrued expenses and other current liabilities                       7,013              5,868
Restructuring and other charges, current                             1,426              1,597
Due to certain stockholders                                          2,455              2,655
Current portion of long-term debt                                       --                 57
Net liabilities from discontinued operations                            --              5,732
-------            -------
Total current liabilities                                              11,641             16,349

Line of credit and long-term liabilities, net of current                
portion                                                              9,100             11,287

Long-term debt due to certain stockholders                              2,000              2,000
Restructure and other charges, long-term                                  578                585

Commitments and contingencies

Stockholders' equity:
Preferred stock, $.01 par value:
Authorized shares - 3,000,000
Issued and outstanding shares - none                                  --                 --
Common stock, $.01 par value:
Authorized shares - 47,000,000
Issued and outstanding shares - 18,600,628 - June 30,
2002 and
18,585,615 - December 31, 2001                                    186                186
Additional paid-in capital                                          10,544             10,531
Retained earnings                                                    1,768                217
-------            -------
Total stockholders' equity                                             12,498             10,934
-------            -------
Total liabilities and stockholders' equity                            $35,817            $41,155
=======            =======

Note:    The  Balance  Sheet at  December  31,  2001 has been  derived  from the
audited  financial  statements at that date but does not include any of
the  information  and  footnotes  required  by  accounting   principles
generally   accepted  in  the  United  States  for  complete  financial
statements.

See accompanying notes.

3

SPAR GROUP, INC.

Condensed Consolidated Statements of Operations
(unaudited)
(In thousands, except per share data)

THREE MONTHS ENDED                      SIX MONTHS ENDED
--------------------------------------------------------------------------------
JUNE 30,             JUNE 30,          JUNE 30,            JUNE 30,
2002                 2001              2002                2001
--------------------- ----------------------------------------------------------

Net revenues                                            $17,542            $ 16,091             $33,588            $ 31,032
Cost of revenues                                         10,591               9,860              20,342              18,608
-------            --------             -------            --------
Gross profit                                              6,951               6,231              13,246              12,424

Selling, general and administrative expenses              4,675               4,210               9,642               8,986
Depreciation and amortization                               460                 680                 877               1,310
-------            --------             -------            --------
Operating income                                          1,816               1,341               2,727               2,128

Interest expense                                             38                 172                  86                 326
Other expense                                                52                  --                 134                   0
-------            --------             -------            --------
Income before provision for income taxes                  1,726               1,169               2,507               1,802

Provision for income taxes                                  657                 466                 956                 732
-------            --------             -------            --------

Income from continuing operations                         1,069                 703               1,551               1,070

Loss from discontinued operations, net                       --                (384)                 --                 (74)
-------            --------             -------            --------

Net income                                              $ 1,069            $    319             $ 1,551            $    996
=======            ========             =======            ========

Basic/diluted net income per common share:

Income from continuing operations                    $  0.06            $   0.04             $  0.08            $   0.06

Loss from discontinued operations, net                  0.00               (0.02)               0.00               (0.01)
-------            --------             -------            --------

Net Income                                           $  0.06            $   0.02             $  0.08            $   0.05
=======            ========             =======            ========

Weighted average common shares - basic                18,593              18,272              18,592              18,272
=======            ========             =======            ========

Weighted average common shares - diluted              19,021              18,336              19,021              18,329
=======            ========             =======            ========

See accompanying notes 

4

SPAR GROUP, INC.

Condensed Consolidated Statements of Cash Flows
(unaudited) (In thousands)

SIX MONTHS ENDED
--------------------------------------
JUNE 30,             JUNE 30,
2002                 2001
-----------------    -----------------

OPERATING ACTIVITIES

Net income                                                                 $ 1,551               $   996
Adjustments to reconcile net income to net cash  provided by (used                                 
in) operating activities:                                                                 
Depreciation                                                              878                 1,073
Amortization                                                               --                   815
Changes in operating assets and liabilities:                                               
Accounts receivable                                                      60                 3,968
Prepaid expenses and other current assets and prepaid                                    
program costs                                                         (6)                  920
Other assets                                                           (264)                  (80)
Accounts payable, accrued expenses and other current                                     
liabilities                                                         1,452                (1,711)
Restructuring charges                                                  (178)               (1,010)
Deferred revenue                                                         --                (3,742)
Discontinued operations                                                (902)                   --
-------               -------
Net cash provided by operating activities                                    2,591                 1,229

INVESTING ACTIVITIES                                                                            

Purchases of property and equipment                                           (160)               (1,100)
-------               -------
Net cash used in investing activities                                         (160)               (1,100)

FINANCING ACTIVITIES                                                                            

Net (payments of) borrowings on line of credit                              (2,187)                  779
Net proceeds from employee stock purchase plan                                  13                    --
Net payments of other long-term debt                                           (57)                 (606)
Net payments to certain shareholders                                          (200)                 (302)
-------               -------
Net cash used in financing activities                                       (2,431)                 (129)

Net change in cash                                                              --                    --
Cash at beginning of period                                                     --                    --
-------               -------
Cash at end of period                                                      $    --               $    --
=======               =======

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION                                                

Interest paid                                                              $   319               $   997
=======               =======

See accompanying notes.

5

SPAR GROUP INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

1.      BASIS OF PRESENTATION

The accompanying  unaudited condensed consolidated financial statements
of SPAR Group, Inc. , and its subsidiaries  (collectively,  the "Company" or the
"SPAR  Group")  have been  prepared in  accordance  with  accounting  principles
generally  accepted in the United States for interim  financial  information and
with  the   instructions  to  Form  10-Q  and  Article  10  of  Regulation  S-X.
Accordingly,  they do not include all of the information and footnotes  required
by accounting  principles  generally  accepted in the United States for complete
financial statements. In the opinion of management,  all adjustments (consisting
of normal recurring accruals)  considered necessary for a fair presentation have
been  included in the financial  statements.  However,  these interim  financial
statements  should  be read  in  conjunction  with  the  consolidated  financial
statements  and notes  thereto for the Company as contained in Form 10-K for the
year ended December 31, 2001, as filed with the Securities  Exchange  Commission
on April 1, 2002.  The results of  operations  for the  interim  periods are not
necessarily  indicative of the operating results for the entire year. 

2.      SALE OF SPAR PERFORMANCE GROUP, INC.

On  June  30,  2002,  SPAR  Incentive   Marketing,   Inc.  ("SIM"),   a
wholly-owned  subsidiary of the Company,  entered into a Stock Purchase and Sale
Agreement  with  Performance  Holdings,  Inc.  ("PHI"),  a Delaware  corporation
headquartered in Carrollton,  Texas. SIM sold all of the stock of its subsidiary
SPAR Performance Group, Inc. ("SPG") to PHI for $6.0 million.  As a condition of
the sale,  PHI issued and  contributed  1,000,000  shares of its common stock to
Performance  Holdings,  Inc. Employee Stock Ownership Plan which became the only
shareholder of PHI.

The $6.0 million sales price was evidenced by two Term Loans, an Initial
Term Loan  totaling  $2.5  million and an  Additional  Term Loan  totaling  $3.5
million  (collectively  the "Term Loans").  The Term Loans are guaranteed by SPG
and  secured by  pledges  of all the assets of PHI and SPG.  The Term Loans bear
interest at a rate of 12% per annum  through  December 31,  2003.  On January 1,
2004 and on January 1 each year  thereafter,  the  interest  rate is adjusted to
equal the higher of the median or mean of the High Yield Junk Bond interest rate
as reported in the Wall Street Journal (or similar publication or service if the
Wall Street Journal no longer reports such rate) on the last business day in the
immediately  preceding December.  The Initial Term Loan is required to be repaid
in quarterly  installments  that increase over the term of the loan,  commencing
March 31, 2003 with a balloon payment  required at maturity on June 30, 2007. In
addition to the preceding  payments of the Initial Term Loan, PHI is required to
make annual  mandatory  prepayments  of the Term Loans on February  15th of each
year, commencing on February 15, 2004 equal to:

6

SPAR GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited) (continued)

o    40% of the  amount  of  Adjusted  Cash  Flow (as  defined  in the
Revolver,  which is defined below) for the immediately  preceding
fiscal year ended December 31; and

o    35% of the  amount  of  excess  targeted  Adjusted  Cash Flow (as
defined in the Revolver)  for the  immediately  preceding  fiscal
year ended December 31.

These payments will be applied first to accrued and unpaid  interest on
the Term Loans and Revolver (as defined below), then to the Additional Term Loan
until repaid, and then to the Initial Term Loan.

Because  collection  of the notes  depends on the future  operations of
PHI, the $6.0 million notes were fully reserved pending collection.

In addition to the Term  Loans,  SIM agreed to provide a  discretionary
revolving line of credit to SPG not to exceed $2.0 million (the "Revolver"). The
Revolver  is secured by a pledge of all the assets of SPG and is  guaranteed  by
PHI. The Revolver  provides for advances in excess of the borrowing base through
September 30, 2003.  Through  September 30, 2003, the Revolver bears interest at
the higher of the Term Loans interest rate or the prime commercial  lending rate
as  announced in the Wall Street  Journal plus 4.0% per annum.  As of October 1,
2003, the Revolver will include a borrowing base calculation (principally 85% of
eligible accounts receivable).  Prior to September 1, 2003, SPG may request that
SIM provide  advances of up to $1,000,000  in excess of the  borrowing  base. If
advances are limited to the  borrowing  base on and after  October 1, 2003,  the
interest rate will be reduced to the higher of the Term Loans interest rate less
4.0% per annum or the prime  commercial  lending  rate as  announced in the Wall
Street Journal plus 4.0% per annum.  If SPG requests that advances be allowed in
excess of the borrowing base, the interest rate will remain  unchanged.  On June
30, 2002, there was approximately  $1.2 million  outstanding under the Revolver.
Due to the  speculative  nature of the loan SIM has  established  a reserve  for
collection  of  approximately  $1.0  million at June 30,  2002.  The net loan of
approximately $0.2 million is included in Other Assets.

7

SPAR GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited) (continued)

3.      RESTRUCTURING AND OTHER CHARGES

In connection  with the PIA Merger,  the  Company's  Board of Directors
approved  a  plan  to   restructure   the   operations  of  the  PIA  Companies.
Restructuring  costs are composed of committed  costs  required to integrate the
SPAR Companies' and the PIA Companies' field organizations and the consolidation
of administrative functions to achieve beneficial synergies and costs savings.

The Company recognized  termination costs in accordance with EITF 95-3,
Recognition of Liabilities in Connection with a Business Combination.

The following  table displays a  roll-forward  of the  liabilities  for
restructuring  and other  charges  from  December  31, 2001 to June 30, 2002 (in
thousands):

SIX MONTHS ENDED      
DECEMBER 31, 2001     JUNE 30, 2002       JUNE 30, 2002
RESTRUCTURING AND      DEDUCTIONS/        RESTRUCTURING
OTHER CHARGES        (ADDITIONS)       AND OTHER CHARGES
--------------------------------------------------------------

Restructuring Costs:
Equipment lease settlements              $       1,762               $ 338                $1,424
Office lease settlements                           420                  --                   420
--------------------------------------------------------------
Total restructuring costs                $       2,182               $ 338                $1,844
Other charges                                         --                (160)                  160
--------------------------------------------------------------
Total Restructuring & Other Charges        $       2,182               $ 178                $2,004
==============================================================

Management  believes that the remaining  reserves for restructuring are
adequate to complete its plan.

8

SPAR GROUP, INC.

Notes to Condensed Consolidated Financial Statements
(unaudited) (continued)

4.      EARNINGS PER SHARE

The  following  table sets forth the  computations  of basic and diluted
earnings per share (in thousands, except per share data):

THREE MONTHS ENDED                        SIX MONTHS ENDED
-------------------------------------     ------------------------------------
JUNE 30, 2002      JUNE 30, 2001         JUNE 30, 2002      JUNE 30, 2001
-------------------------------------     ------------------------------------

Numerator:                                   
Actual net income from continuing
operations                                         $  1,069           $    703           $ 1,551          $  1,070
Actual income from operations of
discontinued division, net                               --               (384)                                (74)
-----------------------------------------------------------------------------
Actual net income                                  $  1,069           $    319           $ 1,551          $    996
=============================================================================
Denominator:
Shares used in basic earnings per share
calculation                                          18,593             18,272            18,592            18,272

Effect of diluted securities:
Employee stock options                                428                 64               429                57
-----------------------------------------------------------------------------

Shares used in diluted earnings per share
calculation                                          19,021             18,336            19,021            18,329
=============================================================================

Actual basic and diluted earnings per
common share:

Income from continuing operations                  $   0.06           $   0.04           $  0.08          $   0.06
Income from operations of discontinued
division, net                                            --              (0.02)               --             (0.01)
-----------------------------------------------------------------------------

Net Income                                            $   0.06           $   0.02           $  0.08          $   0.05
=============================================================================

9

SPAR GROUP, INC.

ITEM 2:  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

FORWARD-LOOKING STATEMENTS
--------------------------

This   Quarterly   Report  on  Form  10-Q   includes   "forward-looking
statements"  within the meaning of Section 27A of the Securities Act and Section
21E of the Exchange Act,  including,  in particular,  the  statements  about the
Company's plans and strategies under the headings  "Management's  Discussion and
Analysis of Financial Condition and Results of Operations". Although the Company
believes that its plans,  intentions and expectations  reflected in or suggested
by such  forward-looking  statements are reasonable,  it cannot assure that such
plans,  intentions  or  expectations  will be  achieved.  Certain,  but not all,
factors  that  could  cause  actual  results  to  differ   materially  from  the
forward-looking  statements  made in this Quarterly  Report on Form 10-Q are set
forth in this  Quarterly  Report on Form 10-Q.  All  forward-looking  statements
attributable  to the  Company  or persons  acting on its  behalf  are  expressly
qualified by the cautionary  statements  contained in this  Quarterly  Report on
Form 10-Q or on the  Company's  Annual  Report  on Form 10-K for the year  ended
December 31, 2001, as previously filed with the Security Exchange  Commission on
April 1, 2002.

The Company does not undertake  any  obligation to update or revise any
forward-looking  statement or risk factor or to publicly  announce any revisions
to any of them to reflect future events, developments or circumstances.

OVERVIEW
--------

The  Company is a supplier  of  in-store  merchandising  and  marketing
services  throughout  the United  States,  Canada,  and Japan.  The Company also
provides   database   marketing,    teleservices,    marketing   research,   and
Internet-based  software.  The  Company's  operations  are  divided  into  three
divisions:  the Merchandising Services Division, the Technology Division and the
International Division.

MERCHANDISING SERVICES DIVISION

The  Company's  Merchandising  Services  Division  consists of (1) SPAR
Marketing,  Inc.,  a  Delaware  corporation  ("SMI")  (an  intermediate  holding
company),  SPAR Marketing Force,  Inc. ("SMF"),  SPAR Marketing,  Inc., a Nevada
corporation ("SMNEV"),  SPAR/Burgoyne Retail Services,  Inc. ("SBRS"), and SPAR,
Inc.  ("SINC")  (collectively,  the  "SPAR  Marketing  Companies"),  and (2) PIA
Merchandising Co. Inc.,  Pacific Indoor Display d/b/a Retail Resources,  Pivotal
Sales  Company  and PIA  Merchandising  Ltd.  (collectively,  "PIA"  or the "PIA
Companies").

Merchandising   services  generally  consist  of  special  projects  or
regularly  scheduled routed services  provided at stores for a specific retailer
or  multiple  manufacturers  primarily  under  single or  multi-year  contracts.
Services also include stand-alone  large-scale  implementations.  These services
may include sales  

10

SPAR GROUP, INC.

enhancing  activities  such as ensuring  that  client  products  authorized  for
distribution  are in  stock  and on the  shelf,  adding  new  products  that are
approved  for  distribution  but not  presently on the shelf,  setting  category
shelves in accordance with approved store schematics, ensuring shelf tags are in
place,  checking for the overall  salability of client  products and selling new
and promotional items.  Specific in-store services can be initiated by retailers
and manufacturers, such as new product launches, special seasonal or promotional
merchandising,  focused  product support and product  recalls.  The Company also
provides database marketing, teleservices and research services.

TECHNOLOGY DIVISION

The  Company  has  developed  and is  utilizing  several  Internet-based
software products. In addition, the Company has developed and, in the past, sold
internet-based  software through its other divisions.  The Technology  Division,
SPAR Technology  Group,  Inc., was  established to market these  applications to
businesses with multiple locations and large workforces or numerous distributors
desiring to improve day-to-day efficiency and overall productivity.

INTERNATIONAL DIVISION

The  Company   believes   there  is  a   significant   market  for  its
merchandising services throughout the world. The domestic merchandising services
business has been  developed  utilizing  Internet-based  technology  that can be
modified to accommodate foreign markets. The International  Division, SPAR Group
International,  Inc., was established to cultivate  foreign markets,  modify the
necessary  systems and implement the Company's  merchandising  services business
model worldwide with an initial focus on Japan and the Pacific Rim region.

CRITICAL ACCOUNTING POLICIES
----------------------------

The Company's critical accounting policies,  including the assumptions,
judgments  and  estimations,  are  disclosed in the form 10-K for the year ended
December 31, 2001, as filed with the Securities  Exchange Commission on April 2,
2002. Two of the more significant  areas of estimation are unbilled  receivables
and the accounts receivable allowance for bad debt. Historically,  the Company's
estimates on such items have not differed materially from the actual results.

11

SPAR GROUP, INC.

RESULTS OF OPERATIONS
---------------------

THREE MONTHS ENDED JUNE 30, 2002 COMPARED TO THREE MONTHS ENDED JUNE 30, 2001
-----------------------------------------------------------------------------

The following  table sets forth  selected  financial  data and data as a
percentage of net revenues for the periods indicated.

Three Months Ended
------------------------------------------------------------------------------
June 30, 2002                June 30, 2001
-------------                -------------
(amounts in thousands)                                  Incr.
Amount               %          Amount              %           (Decr.)
------               -          ------              -           -------

Net Revenues                                        $17,542           100.0%       $16,091           100.0%           9.0%

Cost of revenues                                     10,591            60.4%         9,860            61.3%           7.4%

Selling, general, and administrative expense          4,675            26.6%         4,210            26.2%          11.0%

Depreciation and amortization                           460             2.6%           680             4.2%         (32.3)%

Interest expense                                         38             0.2%           172             1.0%         (77.6)%

Other expense                                            52             0.3%            --             0.0%
-------------------------------------------------------
Income before provision for income taxes              1,726             9.9%         1,169             7.3%          47.6%

Provision for income taxes                              657             3.7%           466             2.9%          41.0%
-------------------------------------------------------
Income from continuing operations                     1,069             6.2%           703             4.4%          52.1%

Loss from discontinued operations, net                   --                           (384)
-------                          ------

Net income                                          $ 1,069                         $  319
=======                         =======

Net revenues from continuing operations for the three months ended June
30, 2002,  were $17.5  million,  compared to $16.1  million for the three months
ended June 30,  2001, a 9.0%  increase.  The increase of 9.0% in net revenues is
primarily  attributed to increased  business in mass merchandiser and drug store
chains.

12

SPAR GROUP, INC.

One  customer  accounted  for  29.1%  and  32.3% of the  Company's  net
revenues for the three months ended June 30, 2002, and 2001, respectively.  This
customer also accounted for approximately 38.1% and 15.1% of accounts receivable
at June 30, 2002, and 2001, respectively.

Approximately  19.9% and 24.6% of the  Company's  net  revenues for the
three  months  ended  June 30,  2002,  and  2001,  respectively,  resulted  from
merchandising  services  performed for others at the stores of one retailer that
recently  filed  for  protection  under  the U.S.  Bankruptcy  Code.  While  the
Company's  customers and the resultant  contractual  relationships  are with the
manufacturers and not this retailer, a significant  reduction of this retailer's
stores or cessation of this  retailer's  business  would  negatively  impact the
Company.

Cost of revenues consists of in-store labor and field management wages,
related  benefits,  travel and other  direct  labor-related  expenses,  of which
approximately  $8.4  million or 79.2% and $4.3  million or 43.4% were  purchased
from the Company's affiliates, SPAR Marketing Services, Inc. and SPAR Management
Services, Inc. in the three months ended June 30, 2002, and 2001,  respectively.
Cost of revenues as a percentage of net revenues decreased 0.9% to 60.4% for the
three months  ended June 30, 2002,  compared to 61.3% for the three months ended
June 30, 2001. This decrease is principally attributable to cost improvements.

Operating expenses include selling, general and administrative expenses
as well as depreciation and amortization.  Selling,  general and  administrative
expenses include corporate overhead, project management, information technology,
executive compensation, human resources expenses, legal and accounting expenses.
The  following  table sets forth the  operating  expenses as a percentage of net
revenues for the time periods indicated:

Three Months Ended
---------------------------------------------------------------------
Incr.
June 30, 2002                  June 30, 2001            (Decr.)
-----------------------      -------------------------     ----------

Amount            %            Amount            %             %
------            -            ------            -             -
(amounts in millions)

Selling, general and administrative       $  4.7            26.6%          $  4.2          26.2%        11.0%

Depreciation and amortization                0.5             2.6              0.7           4.2        (32.3)
-------           -----          ------          -----       

Total Operating Expenses                  $  5.2            29.2%          $  4.9          30.4%         5.0%
=======           =====          ======          =====

Selling, general and administrative expenses increased by $0.5 million,
or 11.0%,  for the three months ended June 30, 2002, to $4.7 million compared to
$4.2 million for the three months ended June 30, 2001 due primarily to increased
spending on  information  technology.  The  Company  purchased  $0.4  million of
information  technology  from its affiliate  SPAR  Infotech,  Inc. for the three
months ended June 30, 2002.

13

SPAR GROUP, INC.

Depreciation and  amortization  decreased by $0.2 million for the three
months ended June 30, 2002, due primarily to the change in accounting  rules for
goodwill amortization adopted by the Company effective January 1, 2002.

INTEREST EXPENSE

Interest expense decreased $0.1 million for the three months ended June
30, 2002, due primarily to decreased interest rates in 2002.

OTHER EXPENSE

The Company  recognized a loss of  approximately  $52,000 for the three
months ended June 30, 2002 for its share of the Japan joint venture loss.

INCOME TAXES

The income  tax  provision  for the three  months  ended June 30,  2002
represents  a combined  federal and state income tax rate of 38% compared to 40%
for the three months ended June 30, 2001.

NET INCOME

The Company had net income from  continuing  operations of $1.1 million
for the three  months  ended June 30, 2002 or $0.06 per basic and diluted  share
compared to income from continuing operations of $0.7 million or $0.04 per basic
and diluted share for the  corresponding  period last year. For the three months
ending June 30,  2001,  the Company had net income of $0.3  million or $0.02 per
basic and diluted  share  after  reporting  losses of $0.4  million or $0.02 per
basic and diluted share from discontinued operations.

14

SPAR GROUP, INC.

RESULTS OF OPERATIONS

SIX MONTHS ENDED JUNE 30, 2002 COMPARED TO SIX MONTHS ENDED JUNE 30, 2001
-------------------------------------------------------------------------

The following  table sets forth  selected  financial data and data as a
percentage of net revenues for the periods indicated.

Six Months Ended
--------------------------------------------------------------------
June 30, 2002                     June 30, 2001
-------------                     -------------
(amounts in thousands)         Incr.
Amount          %        Amount          %          (Decr.)
------          -        ------          -          -------

Net Revenues                                    $33,588        100.0%    $31,032        100.0%        8.2%

Cost of Revenues                                 20,342         60.6%     18,608         60.0%        9.3%

Selling, general and administrative expense       9,642         28.7%      8,986         28.9%        7.3%

Depreciation and amortization                       877          2.6%      1,310          4.2%      (33.1)%

Interest expense                                     86          0.3%        326          1.1%      (73.6)%

Other Expense                                       134          0.4%         --          0.0%
----------------------------------------------
Income before provision for income taxes          2,507          7.4%      1,802          5.8%       39.1%

Provision for income taxes                          956          2.8%        732          2.4%       30.6%
----------------------------------------------
Income from continuing operations                 1,551          4.6%      1,070          3.4%       45.0%

Loss from discontinued operations, net               --                      (74)
-------                   ------
Net Income                                      $ 1,551                   $  996
=======                   ======

Net  revenues  for the six  months  ended  June 30,  2002,  were  $33.6
million,  compared to $31.0  million for the six months ended June 30, 2001,  an
8.2% increase.  The increase of 8.2% in net revenues is primarily  attributed to
increased  business in mass  merchandiser  and drug store  chains.  

One  customer  accounted  for  28.6%  and  26.4% of the  Company's  net
revenues for the six months ended June 30, 2002,  and 2001,  respectively.  This
customer also accounted for approximately 38.1% and 15.1% of accounts receivable
at June 30, 2002, and 2001, respectively.

15

SPAR GROUP, INC.

Approximately 19.5% and 23.4% of the Company's net revenues for the six
months ended June 30, 2002, and 2001, respectively,  resulted from merchandising
services  performed for others at the stores of one retailer that recently filed
for protection under the U.S. Bankruptcy Code. While the Company's customers and
the resultant contractual  relationships are with the manufacturers and not this
retailer, a significant reduction of this retailer's stores or cessation of this
retailer's business would negatively impact the Company.

Cost of revenues from continuing  operations consists of in-store labor
and  field  management  wages,   related  benefits,   travel  and  other  direct
labor-related  expenses,  of which approximately $14.7 million or 72.2% and $7.7
million or 41.6% were  purchased from the Company's  affiliates,  SPAR Marketing
Services,  Inc. and SPAR Management Services,  Inc. in the six months ended June
30,  2002,  and 2001,  respectively.  Cost of  revenues as a  percentage  of net
revenues  increased  0.6% to 60.6%  for the six  months  ended  June  30,  2002,
compared  to 60.0% for the six months  ended June 30,  2001.  This  increase  is
principally attributable to the mix of business.

Operating expenses include selling, general and administrative expenses
as well as depreciation and amortization.  Selling,  general and  administrative
expenses include corporate overhead, project management, information technology,
executive compensation, human resources expenses, legal and accounting expenses.
The  following  table sets forth the  operating  expenses as a percentage of net
revenues for the time periods indicated:

Six Months Ended
------------------------------------------------------------------------
Incr.
June 30, 2002              June 30, 2001               (Decr.)
--------------------       ----------------------        --------------
Amount         %            Amount            %               %
------         -            ------            -               -
(amounts in millions)             

Selling, general and administrative   $   9.6       28.7%        $   9.0           28.9%           7.3%
Depreciation and amortization             0.9        2.6             1.3            4.2          (33.1)
-------       ----         -------           ----            --- 

Total Operating Expenses              $  10.5       31.3%        $  10.3           33.2%           2.2%
=======       ====         =======           ====            === 

Selling, general and administrative expenses increased by $0.6 million,
or 7.3%,  for the six months  ended June 30, 2002,  to $9.6 million  compared to
$9.0 million for the six months  ended June 30, 2001 due  primarily to increased
spending on  information  technology.  The  Company  purchased  $0.8  million in
information technology from its affiliate SPAR Infotech, Inc.

Depreciation  and  amortization  decreased  by $0.4 million for the six
months ended June 30, 2002, due primarily to the change in accounting  rules for
goodwill amortization adopted by the Company effective January 1, 2002.

16

SPAR GROUP, INC.

INTEREST EXPENSE

Interest  expense  decreased $0.2 million for the six months ended June
30, 2002, due to decreased interest rates in 2002.

OTHER EXPENSE

The Company  recognized  a loss of  approximately  $134,000 for the six
months ended June 30, 2002 for its share of the Japan joint venture loss.

INCOME TAXES

The  income  tax  provision  for the six  months  ended  June 30,  2002
represents a combined federal and state income tax rate of 38% compared to 41.3%
for the six months ended June 30, 2001.

NET INCOME

The  Company had net income of $1.6  million  for the six months  ended
June 30,  2002 or $0.08 per basic and  diluted  share  compared to net income of
$1.0 million or $0.05 per basic and diluted  share for the six months ended June
30, 2001.  For the six months ended June 30,  2001,  net income  included a $0.1
million loss or $0.01 per basic and diluted share from discontinued operations.

LIQUIDITY AND CAPITAL RESOURCES

For the six months ended June 30, 2002, the Company had a net income of
$1.6 million. Net cash provided by operating activities for the six months ended
June 30, 2002,  was $2.6 million,  compared with net cash provided by operations
of $1.2  million  for the six  months  ended June 30,  2001.  Cash  provided  by
operating activities in 2002 was primarily a result of net operating profits and
decreases in accounts  receivable  and  increases in accounts  payable,  accrued
expenses  and  other  current  liabilities,  partially  offset by  decreases  in
restructuring   charges  and  decrease  in  net  liabilities  from  discontinued
operations.

Net cash used in investing activities for the six months ended June 30,
2002, was $0.2 million,  compared with net cash used of $1.1 million for the six
months ended June 30, 2001.  The net cash used in investing  activities  in 2002
and 2001 was primarily due to purchases of property and equipment.

Net cash used by financing activities for the six months ended June 30,
2002, was $2.4 million,  compared with net cash provided by financing activities
of $0.1  million for the six months  ended June 30,  2001.  The net cash used by
financing activities in 2002 was primarily a result of repayments of the line of
credit, shareholder and other long-term debt.

The above activity  resulted in no change in cash and cash  equivalents
for the six months ended June 30, 2002.

17

SPAR GROUP, INC.

At June 30,  2002,  the Company had positive  working  capital of $13.1
million as  compared  to positive  working  capital of $8.5  million at June 30,
2001.  The  increase in working  capital is due  primarily  to a decrease in net
liabilities from discontinued operations offset by increases in accounts payable
and accrued expenses and other current liabilities.  The Company's current ratio
was 2.13 and 1.52 at June 30, 2002, and 2001, respectively.

In 1999, IBJ Whitehall  Business Credit  Corporation  ("IBJ Whitehall")
and the members of the SPAR Group  (other than PIA  Canada)  (collectively,  the
"Borrowers")  entered into a Revolving Credit,  Term Loan and Security Agreement
as amended (the "Bank Loan  Agreement").  The Bank Loan  Agreement  provides the
Borrowers with a $15.0 million Revolving Credit facility and a $2.5 million term
loan. The Revolving  Credit  facility allows the Borrowers to borrow up to $15.0
million  based  upon a  borrowing  base  formula  as  defined  in the  Agreement
(principally 85% of "eligible" accounts  receivable).  The Bank Loan Agreement's
revolving  credit loans of $15.0  million were  scheduled to mature on September
21, 2002. As of March 2, 2002, IBJ Whitehall  extended the maturity date to July
31, 2003. The revolving loans bear interest at IBJ  Whitehall's  "Alternate Base
Rate" plus  one-half of one percent  (0.50%) (a total of 5.25% per annum at June
30,  2002).  The  facility is secured with all the assets of the Company and its
subsidiaries.

The Bank Loan  Agreement  contains  an option for the Bank to  purchase
16,667  shares of common  stock of the  Company for $0.01 per share in the event
that the Company's  average closing share price over a ten  consecutive  trading
day period exceeds $15.00 per share. This option expires September 22, 2002.

The Bank Loan Agreement contains certain financial  covenants that must
be met by the Borrowers on a consolidated  basis, among which are a minimum "Net
Worth",  a  "Fixed  Charge  Coverage  Ratio",  a  minimum  twelve  month  EBITDA
requirement,  and a minimum  EBITDA,  as such terms are defined in the Bank Loan
Agreement.  The Company was in compliance with such financial  covenants on June
30, 2002.

The  balances  outstanding  on the  revolving  line of credit were $9.1
million and $11.3 million at June 30, 2002, and December 31, 2001, respectively.
As of June 30, 2002,  based upon the borrowing base formula,  the SPAR Group had
availability  of $5.1  million  of the $5.9  million  unused  revolving  line of
credit.

As  of  June  30,  2002,  the  Company  is  obligated,   under  certain
circumstances,  to pay costs in connection with the Merger (restructure charges)
of approximately  $1.8 million.  In addition,  the Company incurred  substantial
cost in  connection  with  the  transaction,  including  legal,  accounting  and
investment  banking fees  estimated to be an aggregate  unpaid  obligation as of
June 30,  2002,  of  approximately  $1.1  million.  The Company has also accrued
approximately  $1.0  million for  expenses  incurred by PIA prior to the Merger,
which have not been paid as of June 30,  2002.  Management  believes the current
bank credit  facilities are sufficient to fund  operations and working  capital,
including the current maturities of debt obligations.

18

SPAR GROUP, INC.

As of June 30,  2002,  a total  of $4.5  million  in  loans to  certain
principal stockholders of the Company remain outstanding, which bear an interest
rate of 8% and are due on demand. During 2002, $0.2 million of such indebtedness
has been repaid by the Company. The current Bank Loan Agreement contains certain
restrictions on the repayment of stockholder  debt and accordingly  $2.0 million
at both June 30, 2002 and December 31, 2001 is classified as long-term.

Management  believes  that based  upon the  Company's  current  working
capital position and the existing credit facilities,  funding will be sufficient
to support ongoing  operations over the next twelve months.  However,  delays in
collection of  receivables  due from any of the Company's  major  clients,  or a
significant reduction in business from such clients, or the inability to acquire
new  clients,  would  have a  material  adverse  effect  on the  Company's  cash
resources and its ongoing ability to fund operations.

ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is exposed to market risk related to the variable  interest
rate on the line of credit.  The  Company's  accounting  policies for  financial
instruments and disclosures  relating to financial  instruments require that the
Company's   consolidated   balance  sheets   include  the  following   financial
instruments:  cash and cash equivalents,  accounts receivable,  accounts payable
and long term debt. The Company considers carrying amounts of current assets and
liabilities in the  consolidated  financial  statements to approximate  the fair
value for these financial  instruments because of the relatively short period of
time between origination of the instruments and their expected realization.  The
carrying amounts of long-term debt approximate fair value because the obligation
bears  interest at a floating rate.  The Company  monitors the risks  associated
with interest rates and financial instrument positions. The Company's investment
policy objectives require the preservation and safety of the principal,  and the
maximization  of the return on  investment  based upon the safety and  liquidity
objectives.

Currently,  the Company's revenue derived from international operations
is not material and,  therefore,  the risk related to foreign currency  exchange
rates is not material.

INVESTMENT PORTFOLIO

The Company  has no  derivative  financial  instruments  or  derivative
commodity  instruments  in its cash and cash  equivalents  and  investments,  as
available cash is generally utilized to pay down the outstanding line of credit.

19

SPAR GROUP, INC.

PART II:  OTHER INFORMATION

ITEM 1.           LEGAL PROCEEDINGS

No change.

ITEM 2:  CHANGES IN SECURITIES AND USE OF PROCEEDS

Item 2(a): Not applicable 

Item 2(b): Not applicable

Item 2(c): Not Applicable

Item 2(d): Not Applicable

ITEM 3:  DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4:  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Not applicable.

ITEM 5:  OTHER INFORMATION

Not applicable.

ITEM 6:  EXHIBITS AND REPORTS ON FORM 8-K.

EXHIBITS.

10.16 Amendment No. 6 to Second Amended and Restated Revolving Credit,
Term Loan and Security  Agreement by and among the SPAR  Borrowers and
the Lender, effective as of June 30, 2002, and filed herewith.

10.17  Stock  Purchase  and Sale  Agreement  by and among  Performance
Holdings,  Inc. and SPAR Incentive  Marketing,  Inc.,  effective as of
June 30, 2002, and filed herewith.

10.18 Revolving Credit,  Guaranty and Security  Agreement by and among
SPAR Performance  Group,  Inc.,  Performance  Holdings,  Inc. and SPAR
Incentive  Marketing,  Inc.,  effective as of June 30, 2002, and filed
herewith.

20

10.19  Term  Loan,  Guaranty  and  Security  Agreement  by  and  among
Performance  Holdings,  Inc., SPAR  Performance  Group,  Inc. and SPAR
Incentive  Marketing,  Inc.,  effective as of June 30, 2002, and filed
herewith.

99.1  Certification  of  the  CEO  pursuant  to  Section  906  of  the
Sarbanes-Oxley Act of 2002, and filed herewith.

99.2  Certification  of  the  CFO  pursuant  to  Section  906  of  the
Sarbanes-Oxley Act of 2002, and filed herewith.

REPORTS ON FORM 8-K.

NONE.

21

SPAR GROUP, INC.

SIGNATURES

Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  Registrant  has duly  caused  this report to be signed on its behalf by the
undersigned thereunto duly authorized.

Date: August 14, 2002                SPAR Group, Inc., Registrant
---------------

By:    /s/ Charles Cimitile
------------------------------
Charles Cimitile
Chief Financial Officer 
and Secretary

22

EXHIBIT INDEX
-------------

EXHIBITS.

10.16  Amendment  No.  6 to  Second  Amended  and  Restated  Revolving
Credit,  Term Loan and Security Agreement by and among the SPAR
Borrowers  and the Lender,  effective as of June 30, 2002,  and
filed herewith.

10.17  Stock  Purchase  and Sale  Agreement  by and among  Performance
Holdings, Inc. and SPAR Incentive Marketing, Inc., effective as
of June 30, 2002, and filed herewith.

10.18  Revolving Credit,  Guaranty and Security Agreement by and among
SPAR Performance Group, Inc.,  Performance  Holdings,  Inc. and
SPAR Incentive Marketing,  Inc., effective as of June 30, 2002,
and filed herewith.

10.19  Term  Loan,  Guaranty  and  Security  Agreement  by  and  among
Performance  Holdings,  Inc., SPAR Performance  Group, Inc. and
SPAR Incentive Marketing,  Inc., effective as of June 30, 2002,
and filed herewith.

99.1   Certification  of  the  CEO  pursuant  to  Section  906  of the
Sarbanes-Oxley Act of 2002, and filed herewith.

99.2   Certification  of  the  CFO  pursuant  to  Section  906  of the
Sarbanes-Oxley Act of 2002, and filed herewith.

EXHIBIT 10.16

CONSENT, RELEASE AND AMENDMENT NO. 6 TO
SECOND AMENDED AND RESTATED
REVOLVING CREDIT, TERM LOAN AND SECURITY AGREEMENT

THIS CONSENT, RELEASE AND AMENDMENT NO. 6 ("Amendment") is entered into as
of June 30, 2002, by and between SPAR Marketing Force, Inc., a Nevada
corporation ("SMF"), SPAR, Inc., a Nevada corporation ("SPAR"), SPAR/Burgoyne
Retail Services, Inc., an Ohio corporation ("SBRS"), SPAR Group, Inc., a
Delaware corporation ("SGI"), SPAR Incentive Marketing, Inc., a Delaware
corporation ("SIM"), SPAR Trademarks, Inc., a Nevada corporation ("STM"), SPAR
Marketing, Inc. (DE), a Delaware corporation ("SMIDE"), SPAR Marketing, Inc.
(NV), a Nevada corporation ("SMINV"), SPAR Acquisition, Inc., a Nevada
corporation ("SAI"), PIA Merchandising Co., Inc., a California corporation
("PIA"), Pacific Indoor Display Co., Inc., a California corporation ("Pacific"),
Pivotal Sales Company, a California corporation ("Pivotal") and SPAR Performance
Group, Inc. (f/k/a SPAR MCI Performance Group, Inc.), a Delaware corporation
("SPG") (each a "Borrower" and collectively, the "Borrowers") and IBJ Whitehall
Business Credit Corporation ("Lender").

BACKGROUND

Borrowers and Lender are parties to a Second Amended and Restated Revolving
Credit, Term Loan and Security Agreement dated as of September 22, 1999 (as
amended, supplemented or otherwise modified from time to time, the "Loan
Agreement"), pursuant to which Lender provides Borrowers with certain financial
accommodations.

Borrowers have requested that Lender (i) consent to (a) the release of SPG
as a Borrower, (b) the sale of the stock of SPG to SPG Holdings and (c) SGI's
making of inter-company loans to SPG, and (ii) amend certain provisions of the
Loan Agreement and Lender is willing to do so on the terms and conditions
hereafter set forth.

NOW, THEREFORE, in consideration of any loan or advance or grant of credit
heretofore or hereafter made to or for the account of the Borrowers by Lender,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto hereby agree as follows:

1. Definitions. All capitalized terms not otherwise defined herein shall
have the meanings given to them in the Loan Agreement.

2. Amendment to Loan Agreement. Subject to satisfaction of the conditions
precedent set forth in Section 5 below, the Loan Agreement is hereby amended as
follows:

(a) Section 1(A) of the Loan Agreement is amended as follows:

(i) the following defined terms are added in their appropriate
alphabetical order:

"Intercompany Loan Agreement" shall mean that certain Revolving
Credit, Guaranty and Security Agreement dated as of June 30, 2002 among
SIM, SPG Holdings and SPG.

"Intercompany Loans" shall mean loans made by SGI pursuant to the
Intercompany Loan Agreement.

"Sixth Amendment" shall mean this Consent, Release and Amendment
No. 6 to Second Amended and Restated Revolving Credit, Term Loan and
Security Agreement dated as of June 30, 2002.

"Sixth Amendment Effective Date" shall mean the date upon which
all the conditions precedent set forth in Section 5 of the Sixth
Amendment have been satisfied.

"SPG" shall mean SPAR Performance Group, Inc. (f/k/a SPAR MCI
Performance Group, Inc.), a Delaware corporation.

"SPG Holdings" shall mean Performance Holdings, Inc., a Delaware
corporation.

"SPG Holdings Term Loan Agreement" shall mean that certain Term
Loan, Guaranty and Security Agreement entered into as of June 30, 2002
by and between SIM and SPG Holdings.

"SPG Holdings Term Notes" shall mean collectively, (i) that
certain Term Note in the amount of $2,500,000 and (ii) that certain
Term Note in the amount of $3,500,000, in each case issued by SPG
Holdings in favor of SIM.

"Stock Purchase Agreement" shall mean that certain Stock Purchase
and Sale Agreement dated as of June 30, 2002 by and between SPG
Holdings and SIM.

"Supplemental Amount" shall mean, for each period of time, the
amount set forth below opposite such time period:

Time Period                        Supplemental Amount

08/14/2002 through 12/31/2002                 $750,000
01/01/2003 through 01/31/2003                 $500,000
02/01/2003 through 02/28/2003                 $450,000
03/01/2003 through 03/31/2003                 $400,000
04/01/2003 through 04/30/2003                 $350,000
05/01/2003 through 05/31/2003                 $300,000
06/01/2003 through 06/30/2003                 $250,000
07/01/2003 through 07/31/2003                 $200,000
08/01/2003 through 08/31/2003                 $150,000

2

09/01/2003 through 09/30/2003                 $100,000
10/01/2003 through 10/31/2003                 $ 50,000
11/01/2003 and thereafter                     $0.

(ii) the following defined terms are amended and restated in
their entirety to provide as follows:

"Fixed Charge Coverage Ratio" shall mean and include with respect
to any fiscal period the ratio of (a) (i) EBITDA of Borrowers on a
consolidated basis, minus (ii) capital expenditures made during such
period (including, without limitation, expenditures for software) to
(b) (i) all principal and interest payments made on the Loans
hereunder, plus (ii) all dividends and other payments or distributions
made or paid with respect to any indebtedness for money borrowed during
such period, plus (iii) income or franchise taxes paid in cash during
such period, plus (iv) payments on the Shareholders Notes during such
period under Section 12(n)(iii) of this Agreement, plus, (v) payments
made to vendors during such period on payables associated with the
acquisition of PIA under the SPAR Merger Agreement, such payments not
to exceed $4,600,000 in the aggregate.

"Receivables Availability" means the amount of Revolving Advances
against Eligible Receivables Lender may from time to time during the
term of this Agreement make available to Borrowers (i) up to 85%
("Receivables Advance Rate") of the net face amount of Borrowers'
Eligible Receivables.

"SPAR Borrowers" shall mean, individually and collectively, SGI,
SMF, SPAR, SBRS, STM, SMIDE, SMINV and SAI.

"Subsidiary Stock" means all of the issued and outstanding shares
of stock owned by (1) PIA of Pacific and Pivotal, (2) SAI of SIM, STM
and SMIDE, (3) SMIDE of SMF, SMINV, SPAR and SBRS and (4) SGI of PIA
and SAI.

"Unbilled Receivables Availability" means the amount of Revolving
Advances against Eligible Unbilled Receivables Lender may from time to
time during the term of this Agreement make available to Borrowers up
to 70% ("Unbilled Receivables Advance Rate") of the net face amount of
Borrowers' Eligible Unbilled Receivables.

(iii) the defined term "Special Advance Amount" is hereby deleted
in its entirety.

(b) All references in the Loan Agreement and the Ancillary Agreements to
SMCI shall be deemed to be references to SPAR Performance Group, Inc. (f/k/a
SPAR MCI Performance Group, Inc.).

3

(c) Section 2(a)(A)(b)(y)(iii) of the Loan Agreement is amended in its
entirety to provide as follows:

"(iii) the Supplemental Amount, minus

(d) Section 5(b)(vii) of the Loan Agreement is hereby amended in its
entirety to provide as follows:

"(vii) Supplemental Amount Fees.
------------------------

SPAR Borrowers shall pay to Lender (x) a fee equal to $833
per month commencing on the first day of the month following the
Sixth Amendment Effective Date and on the first day of each month
thereafter during which the Supplemental Amount is greater than
$0, and (y) a Supplemental Amount use fee to the extent the
outstanding Revolving Advances to the SPAR Borrowers and the
undrawn amount of outstanding Letters of Credit issued for the
account of the SPAR Borrowers exceeds the SPAR Borrowers Formula
Amount (calculated as if the Supplemental Amount was $500,000),
equal to two percent (2%) per annum of such excess, calculated
daily on the basis of a 360 day year for the actual number of
days elapsed but payable monthly, in arrears on the first day of
each month following the Sixth Amendment Effective Date and the
last day of the Term. All fees payable hereunder shall be deemed
earned in full on the date when the same is due and payable
hereunder and shall not be subject to rebate or proration upon
termination of this Agreement for any reason."

(e) Section 10 of the Loan Agreement is amended by adding a new sentence
to the end thereof to provide as follows:

"At the request of Lender, SIM shall arrange with SPG to have
Lender or its employees or agents designated as SIM's
representative for purposes of Section 5.03 of the Intercompany
Loan Agreement."

(f) Section 11 of the Loan Agreement is amended by adding a new
subsection (d) to the end of the first sentence thereof to provide as follows:

"(d) as soon as available, but in any event within five (5)
Business Days after any Borrower's receipt thereof, all financial
statements of SPG that are delivered to Borrowers pursuant to the
terms of the Intercompany Loan Agreement."

(g) Section 12(m) of the Loan Agreement is amended by (1) deleting the
"and" before the "(xi)" and (2) adding new subsections (xii) and (xiii) at the
end thereof to provide as follows:

"(xii) any amendment to either the Intercompany Loan Agreement or
the SPG Holdings Term Loan Agreement; and

4

(xiii) any material default by (A) SPG or SPG Holdings under the
Intercompany Loan Agreement or (B) SPG Holdings under the SPG
Holdings Term Loan Agreement."

(h) Section 12(n) of the Loan Agreement is amended by (1) replacing the
"or" before the "(xii)" with a semicolon, (2) adding the word "or" at the end of
the "(xiii)" thereof and (3) adding a new subsection (xiv) at the end thereof to
provide as follows:

"(xiv) amend either the Intercompany Loan Agreement or the SPG
Holdings Term Loan Agreement in a manner which adversely affects
the rights of Lender;"

(i) Section 12(n)(ii) of the Loan Agreement is amended in its entirety
to provide as follows:

"(ii) declare, pay or make any dividend or distribution on any
shares of its common stock or preferred stock, or apply any of
its funds, property or assets to the purchase, redemption or
other retirement of any common or preferred stock;"

(j) Section 12(n)(iii) of the Loan Agreement is amended in its entirety
to provide as follows:

"(iii) directly or indirectly, prepay any indebtedness (other
than to Lender or any other Borrowers permitted in this section);
make any principal payment on the Shareholder Notes in excess of
$250,000 for any fiscal quarter commencing with the Fiscal
Quarter beginning October 1, 2002 (or such greater amount to
which Lender may consent in its sole discretion), together with
interest at 8% per annum payable quarterly, provided, however,
that no such payment may be made on the Shareholder Notes if,
after giving effect to any such payment, (A) the Borrowers shall
have an average Undrawn Availability of less than $2,500,000 for
the previous Fiscal Quarter (assuming the Supplemental Amount was
$0), (B) the Borrowers shall have, on a consolidated basis, a
Fixed Charge Coverage Ratio as of the date of such payment with
respect to the previous twelve (12) fiscal months then ended (for
purposes of this proviso, clause (b)(iv) of the defined term
Fixed Charge Coverage Ratio shall be deemed to include the
proposed payment as well as any actual payments made during the
applicable fiscal period) of not less than 1.3 to 1.0 and (C) a
Default or an Event of Default shall have occurred; or
repurchase, redeem, retire or otherwise acquire any indebtedness
of Borrowers in advance of the maturity thereof,"

(k) Section 12(n)(iv) of the Loan Agreement is amended by replacing the
"and" before the "(c)" with a comma and by adding new provisions (D) and (E) at
the end thereof to provide as follows:

5

"(D) loans made by SIM to SPG Holdings pursuant to the SPG
Holdings Term Loan Agreement, and (E) loans made by SGI to SPG
pursuant to the Intercompany Loan Agreement, provided, however,
that the initial amount of Intercompany Loans under the
Intercompany Loan Agreement shall not exceed $2,300,000,
provided, further, that during the period commencing as of the
Amendment No. 6 Effective Date through the end of the Term, the
outstanding amount of Intercompany Loans shall not exceed
$3,500,000;"

(l) Section 12(x) of the Loan Agreement is amended in its entirety to
provide as follows:

"(x) Intentionally Omitted;"

(m) Section 12(q) of the Loan Agreement is amended in its entirety to
provide as follows:

"(q) it will not make capital expenditures (including, without
limitation, expenditures for software) in any fiscal year in an
aggregate amount in excess of $2,000,000 for all Borrowers;"

(n) Section 19 of the Loan Agreement is amended by (1) deleting the "or"
at the end of "(xviii)", (2) replacing the period at the end of "(xix)" with ";
or" and (3) adding a new subsection (xx) at the end thereof to provide as
follows:

"(xx) a default by SIM of any of its obligations under the
Intercompany Loan Agreement."

(o) Schedule 12(b) of the Loan Agreement is hereby amended and restated
in its entirety as set forth on Schedule 12(b) attached hereto.

3. Releases. 
--------

(a) Subject to the satisfaction of the conditions precedent set forth in
Section 5 below, (i) SPG is hereby released as a Borrower under the Loan
Agreement and Ancillary Agreements and from any and all actions and causes of
action, judgments, executions, suits, debts, claims, demands, liabilities,
obligations, damages and expenses of any and every character, known or unknown,
direct and/or indirect, at law or in equity, of whatsoever kind or nature, for
or because of any matter or things done, omitted or suffered to be done by SPG
prior to and including the time of execution hereof (provided that the
Intercompany Loan Agreement, the SPG Holdings Term Loan Agreement, the SPG
Holdings Term Notes, the Stock Purchase Agreement and each Collateral Assignment
with respect to the foregoing agreements shall be deemed, for purposes hereof,
to have been executed immediately following the execution hereof), and in any
way directly or indirectly arising out of or in any way connected to the Loan
Agreement and Ancillary Agreements and (ii) any reference to Borrowers under the
Loan Agreement and the Ancillary Agreements shall not include SPG. Lender shall
file UCC-3 Termination Statements with respect to UCC-1 financing statements
which were originally filed by Lender.

6

(b) SPG hereby releases, remises, acquits and forever discharges Lender
and its employees, agents, representatives, consultants, attorneys, fiduciaries,
officers, directors, partners, predecessors, successors and assigns, subsidiary
corporations, affiliates, parent corporations, and related corporate divisions
(all of the foregoing hereinafter called the "Released Parties"), from any and
all actions and causes of action, judgments, executions, suits, debts, claims,
demands, liabilities, obligations, damages and expenses of any and every
character, known or unknown, direct and/or indirect, at law or in equity, of
whatsoever kind or nature, for or because of any matter or things done, omitted
or suffered to be done by any of the Released Parties prior to and including the
date of execution hereof, and in any way directly or indirectly arising out of
or in any way connected to the Loan Agreement or the Ancillary Agreements (all
of the foregoing hereinafter called the "Released Matters"). SPG acknowledges
that the agreements in this Section are intended to be in full satisfaction of
all or any alleged injuries or damages arising in connection with the Released
Matters.

4. Consent.
-------

Subject to the satisfaction of the conditions precedent set forth in
Section 5 below, Lender hereby consents to (i) SIM entering into the Stock
Purchase Agreement and (ii) the sale of SPG to SPG Holdings pursuant to the
Stock Purchase Agreement.

5. Conditions of Effectiveness. This Amendment shall become effective upon
satisfaction of the following conditions precedent: (a) Lender's receipt of:

(i) four (4) copies of this Amendment executed by Borrower and consented
and agreed to by the Guarantors,

(ii) a $30,000 amendment fee, which fee shall be charged to Borrowers'
loan account as a Revolving Advance,

(iii) a copy of the Articles of Incorporation and the By-Laws of SPG
Holdings,

(iv) a copy of the executed Stock Purchase Agreement,

(v) a copy of the executed (A) SPG Holdings Term Loan Agreement and (B)
SPG Holdings Term Notes,

(vi) a copy of the executed Intercompany Loan Agreement and related
documents,

(vii) a copy of all documentation executed in connection with the SPG
ESOP transaction,

(viii) a UCC-3 Assignment to Lender of SIM's first priority perfected
security interest in all assets of SPG (which security interest is security
for SPG's obligations under the Intercompany Loan Agreement),

7

(ix) a UCC-3 Assignment of SIM's second priority perfected security
interest in all assets of SPG (which security interest is security for
SPG's obligations as guarantor of the obligations of SPG Holdings under the
SPG Holdings Term Loan Agreement),

(x) a UCC-3 Assignment of SIM's first priority perfected security
interest in all assets of SPG Holdings,

(xi) a Collateral Assignment of SIM's rights under the Intercompany Loan
Agreement, executed by SIM, SPG and SPG Holdings,

(xii) a Collateral Assignment of SIM's rights under the Stock Purchase
Agreement and the SPG Holdings Term Notes, executed by SIM, SPG and SPG
Holdings,

(xiii) proforma financial statements of (a) Borrowers on a consolidated
and consolidating basis and (b) SPG Holdings and SPG on a consolidating
basis, dated June 30, 2002 reflecting a valuation of all assets and
liabilities both before and after giving effect to all transactions
contemplated by this Amendment, the Intercompany Loan Agreement, the SPG
Holdings Term Loan Agreement and the Stock Purchase Agreement;

(xiv) a certificate from an officer of SIM setting forth the amount of
the initial advance under the Intercompany Loan Agreement; and

(xv) such other certificates, instruments, documents and agreements as
may be required by Lender or its counsel, each of which shall be in form
and substance satisfactory to Lender and its counsel; and

(b) the consummation of the transactions described in (i) the Stock
Purchase Agreement (ii) the ESOP documentation, (iii) the Intercompany Loan
Agreement and (iv) the SPG Holdings Term Loan Agreement.

6. Representations and Warranties. Each Borrower hereby represents and
warrants as follows:

(a) This Amendment and the Loan Agreement, as amended hereby, constitute
legal, valid and binding obligations of such Borrower and are enforceable
against such Borrower in accordance with their respective terms.

(b) Upon the effectiveness of this Amendment, such Borrower hereby
reaffirms that all continuing covenants, representations and warranties made in
the Loan Agreement, to the extent the same are not amended hereby, are true and
correct in all material respects and agrees that all such continuing covenants,
representations and warranties shall be deemed to have been remade as of the
effective date of this Amendment, excluding, however, those events subject to an
express written waiver or consent from us or those expressly permitted or not
prohibited by the covenants, provided, however, that any representation or
warranty incorporating schedules speak only as of the Closing Date, subject to
Borrower's obligation under Section 12(m) of the Loan Agreement to notify Lender
of certain occurrences or events.

8

(c) No Event of Default or Default has occurred and is continuing or
would exist after giving effect to this Amendment, excluding, however, those
events subject to an express written waiver or consent from us.

(d) As of the date hereof, Borrower has no defense, counterclaim or
offset with respect to the Loan Agreement.

(e) In conjunction with the consummation of the transactions set forth
in the Stock Purchase Agreement, SIM has taken all actions necessary to perfect
its liens and security interests in the assets of SPG and SPG Holdings which
were granted pursuant to the Intercompany Loan Agreement and the SPG Holdings
Term Loan Agreement.

7. Effect on the Loan Agreement.
----------------------------

(a) Upon the effectiveness of this Amendment hereof, each reference in
the Loan Agreement to "this Agreement," "hereunder," "hereof," "herein" or words
of like import shall mean and be a reference to the Loan Agreement as amended
hereby.

(b) Except as specifically amended herein, the Loan 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.

(c) Except as expressly provided in this Amendment, the execution,
delivery and effectiveness of this Amendment shall not operate as a waiver of
any right, power or remedy of Lender, nor constitute a waiver of any provision
of the Loan Agreement, or any other documents, instruments or agreements
executed and/or delivered under or in connection therewith.

8. Governing Law. This Amendment shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns and
shall be governed by and construed in accordance with the laws of the State of
New York.

9. Headings. Section headings in this Amendment are included herein for
convenience of reference only and shall not constitute a part of this Amendment
for any other purpose.

10. Counterparts. This Amendment may be executed by the parties hereto in
one or more counterparts, each of which shall be deemed an original and all of
which when taken together shall constitute one and the same agreement.

[SIGNATURE PAGES TO FOLLOW]

9

IN WITNESS WHEREOF, this Amendment has been duly executed as of the day and
year first written above.

SPAR MARKETING FORCE, INC.
SPAR, INC.
SPAR/BURGOYNE RETAIL SERVICES, INC.
SPAR INCENTIVE MARKETING, INC.
SPAR TRADENAMES, INC.
SPAR MARKETING, INC. (DE)
SPAR MARKETING, INC. (NV)
SPAR ACQUISITION, INC.
SPAR PERFORMANCE GROUP, INC., as Borrowers

By:/s/ Charles Cimitile
------------------------------
Name:  Charles Cimitile
Title: Chief Financial Officer of
each of the foregoing entities

PIA MERCHANDISING CO., INC.
PACIFIC INDOOR DISPLAY CO., INC.
PIVOTAL SALES COMPANY
SPAR GROUP, INC., as Borrowers

By:/s/ Charles Cimitile
------------------------------
Name:  Charles Cimitile
Title: Chief Financial Officer of
each of the foregoing entities

IBJ WHITEHALL BUSINESS CREDIT CORPORATION

By: /s/ Edward A. Jesser
------------------------------
Name:  Edward A. Jesser
Title: SVP

10

CONSENTED AND AGREED TO:

/s/ Robert G. Brown
-------------------------------
Robert G. Brown, a Guarantor

/s/ William H. Bartels
-------------------------------
William H. Bartels, a Guarantor

PIA MERCHANDISING LIMITED,
a Guarantor

By:/s/ Charles Cimitile
----------------------------
Name:  Charles Cimitile
Title: Chief Financial Officer

11

Schedule 12 (b)

Subsidiaries

EXHIBIT 10.17

STOCK PURCHASE AND SALE AGREEMENT
---------------------------------

THIS STOCK PURCHASE AND SALE AGREEMENT,  dated as of June 30, 2002, is
by and between  PERFORMANCE  HOLDINGS,  INC., a Delaware  corporation  currently
having an address at 2245 Keller Way, Carrollton, Texas 75006 (the "Purchaser"),
and SPAR INCENTIVE MARKETING,  INC., a Delaware corporation  currently having an
address at 580 White Plains Road, Tarrytown, New York 10591 (the "Seller").

RECITALS
--------

SPAR PERFORMANCE GROUP, INC., a Delaware corporation  currently having
an address at 2245 Keller Way,  Carrollton,  Texas  75006  ("SPG"),  is a wholly
owned  subsidiary  of the Seller and is  currently  engaged in the  business  of
incentive  merchandising  services,  including  program  design,  communications
(including   communications   via  telephone,   internet,   etc.),   merchandise
fulfillment (which includes providing retail  certificates,  debit or cash cards
or  merchandise as rewards in incentive  programs),  travel  fulfillment  (which
provides travel as rewards in incentive programs) and travel, travel related and
meeting registration services,  including registration via telephone,  internet,
etc.,  but  excluding  the  SPAR  eTraining  Business  as  hereinafter   defined
(collectively, the "SPG Business"). The Texas based management of SPG has formed
the  Purchaser in order to buy from the Seller all of the common stock issued by
SPG (the "SPG Stock"),  and following such purchase  intends to cause all of the
stock of the Purchaser to be held by an employee  stock benefit plan created for
the benefit of the  employees of the  Purchaser and SPG (referred to as the ESOP
Plan below). To enable such  transaction,  the Seller has agreed to finance such
purchase  pursuant  to  the  Term  Loan  Agreement  (as  hereinafter   defined).
Accordingly,  the  Seller  has  agreed  to  sell  all of its  SPG  Stock  to the
Purchaser,  and the  Purchaser  has agreed to buy the SPG Stock and refrain from
engaging in any aspect of the SPAR Business (as hereinafter  defined),  all upon
the terms and provisions and subject to the conditions hereinafter set forth.

AGREEMENT
---------

In consideration of the foregoing, the mutual covenants and agreements
hereinafter set forth,  and other good and valuable  consideration  (the receipt
and  adequacy of which is hereby  acknowledged  by the  Purchaser),  the parties
hereto hereby agree as follows:

ARTICLE I

DEFINITIONS AND INTERPRETATION
------------------------------

Section 1.01.  Certain Defined Terms.  As used in this Agreement,  the
following capitalized terms and non-capitalized words and phrases shall have the
meanings respectively assigned to them below:

"Affiliate"  of a  referenced  Person  shall mean (a) any other Person
controlling,  controlled by or under common control with such referenced Person,
(b) any other Person  beneficially  owning or  controlling  ten percent (10%) or
more of the  outstanding  voting  securities or rights or of the interest in the
capital,  distributions or profits of the referenced  Person,  provided that the
Seller shall not under any  circumstance be deemed an Affiliate of the Purchaser
or any of its  subsidiaries  as a result of any securities  pledge or otherwise,
(c) any other Person operating the business or substantially all of the property
of the referenced  Person,  or vice versa, or (d) any director or officer if the
referenced  Person is a corporation,  any manager,  general partner or member if
the  referenced  person is a  partnership,  limited  liability  company or joint
venture,  or any other similar  executive in the referenced Person or such other
Person.  If the referenced  Person in clause (a) or (b) of this definition is an
individual,  then  the  term  "Affiliate"  also  shall  include  members  of the
immediate family (including parents, spouse and children) of such individual and
any  "Affiliate" of one or more of those family  members.  The terms  "control",
"controlling",  "controlled"  and the like  shall  mean the  direct or  indirect
possession  of the power to direct or cause the  direction of the  management or
policies of a Person or the  disposition  of its assets or  properties,  whether
through ownership, by contract, arrangement or understanding, or otherwise.

"Agreement"  shall  mean  this  Stock  Purchase  and  Sale  Agreement,
together  with  all  schedules  and  exhibits   hereto,   as  the  same  may  be
supplemented,  modified,  amended, restated or replaced from time to time in the
manner provided herein.

"Applicable  Law" shall mean any applicable  law,  including  (without
limitation) any: (a) federal,  state,  territorial,  county,  municipal or other
governmental or quasi-governmental  law, statute,  ordinance,  rule, regulation,
requirement or use or disposal  classification or restriction,  whether domestic

-1-

or   foreign;   (b)   judicial,   administrative   or  other   governmental   or
quasi-governmental   order,   injunction,   writ,  judgment,   decree,   ruling,
interpretation,  finding or other directive,  whether  domestic or foreign;  (c)
common law or other legal or quasi-legal precedent; (d) arbitrator's, mediator's
or referee's decision,  finding, award or recommendation;  or (e) charter, rule,
regulation  or other  organizational  or  governance  document  of any  national
securities  exchange or market or other  self-regulatory  or  governing  body or
organization.

"Authority"   shall  mean  any   governmental  or   quasi-governmental
authority,  including  (without  limitation)  any federal,  state,  territorial,
county,  municipal or other  government or  governmental  or  quasi-governmental
agency,  board,  branch,  bureau,   commission,   court,   department  or  other
instrumentality  or political unit or subdivision,  whether domestic or foreign,
or any  national  securities  exchange  or  market or other  self-regulatory  or
governing body or organization.

"Bankruptcy  Proceeding"  shall have the meaning assigned to it in the
Term Loan Agreement.

"Books and Records",  "Books" and "Records" each shall mean all of the
referenced  Person's books and records,  including (without  limitation) any and
all (i) corporate, partnership or limited liability company books and minutes or
other records of proceedings,  stock,  partner or membership  books and transfer
ledgers,  (ii) other instruments,  indentures,  agreements,  charters,  by-laws,
certificates  or  other  documents  or  statutory  equivalents   respecting  the
referenced Person or its organization,  governance or operation, (iii) financial
books, ledgers,  bills and other invoices,  canceled checks and check registers,
and other receipt, disbursement or financial records and data, (iv) customer and
vendor lists,  rent rolls, and computer and other data bases, (v) bills of sale,
contracts,  invoices,  and other evidence of sales, leases or other dispositions
and purchases,  leases or other acquisitions,  (vi) tax returns,  registrations,
reports and other filings with  Authorities,  (vii) leases,  contracts and other
agreements,  (viii) insurance policies, (ix) correspondence,  memoranda,  notes,
files and folders,  and (x) other documents,  papers, data and other collections
of  information;  in each case whether on paper,  film or other  tangible  copy,
stored on disc or tape,  in computer  memory or other  electronic  storage or in
some other storage medium, whether transmitted or received by email, internet or
other  transmission  method or medium,  and whether or not in the  possession of
such  Person  or a third  party  service  provider,  and as each  has  been  and
hereafter may be supplemented, renewed, extended, modified, amended, restated or
replaced  from time to time,  and in each case whether now existing or hereafter
acquired, created, executed, modified or otherwise existing (including,  without
limitation, during the pendency of any Bankruptcy Proceeding).

"Business  Day" shall mean any day during  which the Senior  Lender is
open for  business in New York,  New York,  other than any  Saturday,  Sunday or
other applicable legal holiday.

"Cash Purchase Price" shall have the meaning assigned to it in Section
2.05 hereof.

"Closing Date" shall mean June 30, 2002.

"Continuing  Liability" and  "Continuing  Liabilities"  shall have the
meanings respectively assigned to them in Section 2.03 hereof.

"Conveyance   Instruments"  shall  mean  the  deeds,  bills  of  sale,
assignments and other documents required by Section 2.08 hereof.

"ESOP Plan" shall mean the Performance  Holdings,  Inc. Employee Stock
Ownership Plan established pursuant to the ESOP Plan Declaration.

"ESOP Plan Declaration"  shall mean the document entitled  Performance
Holdings,  Inc. Employee Stock Ownership Plan dated as of July 1, 2002, together
with all  schedules  and  exhibits  thereto,  as the  same may be  supplemented,
modified, amended, restated or replaced from time to time in the manner provided
therein.

"ESOP   Related   Document"  and  "ESOP   Related   Documents"   shall
respectively mean any one or more of the ESOP Plan  Declaration,  the ESOP Trust
Agreement,  the ESOP Trustee Indemnity  Agreement and the ESOP Trustee Retention
Agreement,  and the  various  assignments,  agreements,  instruments  and  other
documents executed by the requisite  Person(s) pursuant to or in connection with
any of the foregoing and accepted or delivered by the ESOP Trustee or Purchaser,
as  applicable  (whether  prior to, on or from  time to time  after the  Closing
Date),  and any and all  waivers,  consents,  agreements,  reports,  statements,
certificates,  schedules and other documents executed by the requisite Person(s)
pursuant to or in connection with any of the foregoing and accepted or delivered
by the ESOP Trustee or Purchaser,  as 

-2-

applicable  (whether  prior to, on or from time to time after the Closing Date),
as each may have been and  hereafter  may be  supplemented,  modified,  amended,
restated or replaced from time to time in the manner provided therein.

"ESOP Trust" shall mean the Performance Holdings,  Inc. Employee Stock
Ownership  Trust  (under  which the ESOP  Trustee  is the  trustee)  established
pursuant to the ESOP Plan Declaration and the ESOP Trust Agreement.

"ESOP  Trust  Agreement"  shall mean the Trust  Agreement  between the
Purchaser  and the ESOP  Trustee  dated as of July 1,  2002,  together  with all
schedules  and  exhibits  thereto,  as the same may be  supplemented,  modified,
amended, restated or replaced from time to time in the manner provided therein.

"ESOP Trustee" shall mean GREATBANC TRUST COMPANY, and its successors,
permitted assigns and legal Representatives,  not in its corporate capacity, but
in its capacity as trustee under the ESOP Trust. [NEED ASSIGNMENT AND ASSUMPTION
OF TRUSTEESHIP BETWEEN HSBC AND GREAT BANK]

"ESOP  Trustee  Indemnity  Agreement"  shall mean the  Indemnification
Agreement  between SPG and the ESOP Trustee  dated as of July 1, 2002,  together
with all  schedules  and  exhibits  thereto,  as the  same may be  supplemented,
modified, amended, restated or replaced from time to time in the manner provided
therein.

"ESOP Trustee  Retention  Agreement"  shall mean the retention  letter
agreement  between SPG and the ESOP Trustee  dated as of July 1, 2002,  together
with all  schedules  and  exhibits  thereto,  as the  same may be  supplemented,
modified, amended, restated or replaced from time to time in the manner provided
therein.

"event"  shall include  (without  limitation)  any event,  occurrence,
circumstance, condition or state of facts.

"Excluded  Asset"  and  "Excluded  Assets"  shall  have  the  meanings
respectively assigned to them in Section 2.02 hereof.

"Excluded  Liability"  and  "Excluded   Liabilities"  shall  have  the
meanings respectively assigned to them in Section 2.04 hereof.

"hereunder",  "herein",  "hereof"  and other words and phrases of like
import shall refer to each and every term and provision of this Agreement.

"Lien" and "Liens" shall  respectively refer to any one or more of the
following to which the referenced or relevant  Person is a party or by which the
referenced  or relevant  Person,  any of its assets or  properties  or any other
referenced  assets or properties  may be bound or subject:  (a) any  assignment,
pledge,  mortgage,  hypothecation or security interest  (irrespective of whether
the  referenced  Person is personally  obligated  with respect to any obligation
thereby  secured);  (b) any filed  financing  statement  (other  than as secured
party); (c) any consignment,  finance lease,  conditional sale contract or other
title  retention  agreement;  (d) any  assignment,  pledge  or  other  transfer,
restriction  or  encumbrance  of any  right  to  receive  any  income  or  other
distributions  or  proceeds;  (e) any  sale/leaseback  transaction  in which the
referenced Person is the  seller/lessee;  (f) any lien,  charge,  claim or other
encumbrance  arising under any Applicable Law,  whether in favor of an Authority
or otherwise,  including (without  limitation) liens for taxes,  assessments and
other  governmental  charges  and  liens  of  mechanics,  carriers,  warehouses,
suppliers and laborers;  (g) any restrictive covenant,  lease, license, right of
use,  possession or first  refusal,  infringement,  community  property or other
joint  ownership  interest,  limitation  or  restriction  on  use  or  transfer,
exception to title, or other  limitation or restriction on the extent,  exercise
or  enforcement of any right or interest  respecting any asset or property;  (h)
with  respect  to  any  Real  Estate,  any  easement,  right-of-way,  servitude,
encroachment,  restrictive covenant,  reservation,  or other exception to title;
(i)  any  counterclaim,  setoff,  right  of  recoupment,  abatement,  reduction,
community  property right or other claim or  determination,  including  (without
limitation) any right of set off or other claim against assets in the possession
of the  claimant  (whether or not intended as  collateral);  (j) any other lien,
encumbrance  or adverse right or claim of any nature in, to or against any asset
or  property,  or (k) any  covenant  or  agreement  with any  other  Person to a
"Negative  Pledge" (i.e., that the referenced or relevant Person will not (A) do
or permit any one or more of the things  specified in the  preceding  clauses of
this definition or (B) sell, lease,  sublease,  transfer,  exchange,  abandon or
otherwise dispose of, surrender  management,  physical possession or control of,
physically alter or relocate all or any portion of its assets or properties).

-3-

"Loan" and "Loans"  shall have the meanings  respectively  assigned to
them in the Term Loan Agreement.

"Loss"  and  "Losses"  shall  respectively  mean each and every  loss,
damage, injury, harm, detriment, decline in value, lost opportunity,  liability,
exposure,  claim, demand, action, suit, investigation,  proceeding,  settlement,
judgment, award, fine, penalty, tax, fee, charge, cost or expense (including any
disbursement,  expense or reasonable fee or other reasonable  amount paid to any
attorney or other professional advisor and any costs of investigation).

"Material  Adverse  Effect" shall mean: (a) in the case of the Seller,
any material and adverse effect,  whether individually or in the aggregate,  (i)
upon the assets and properties,  business and financial  condition of the Seller
and (as the same are known to the  Seller)  SPG that  would be  material  to the
Seller  and SPG taken as a whole,  other than as would be  reasonably  likely to
result from the events specified in Schedule 1.01MAE hereto, or (ii) the ability
of the  Seller  to sell the SPG  Stock  to the  Purchaser  as and when  required
hereunder;  and (b) in the  case of the  Purchaser,  any  material  and  adverse
effect,  whether  individually  or in the  aggregate,  (i) upon the  assets  and
properties,  business and  financial  condition of the  Purchaser  that would be
material to the Purchaser,  or (ii) the ability of the Purchaser to purchase the
SPG Stock from the Seller as and when required hereunder.

"Material Document" shall mean any instrument,  indenture,  agreement,
document,  arrangement or other  obligation that: (a) in the case of the Seller,
are  material to the Seller and SPG taken as a whole and either (i) to which the
Seller is a party; or (ii) by which the Seller or SPG Stock is bound or subject;
and (b) in the case of the  Purchaser,  are material to the Purchaser and either
(i) to which the  Purchaser is a party;  or (ii) by which the Purchaser is bound
or subject; in each case as each may have been supplemented,  modified, amended,
restated or replaced from time to time.

"Organizational  Document"  shall mean any articles or  certificate of
incorporation,  charter,  by-laws,  limited  liability  company  certificate  or
agreement,  partnership certificate or agreement, or other instrument, agreement
or document  or any  statutory  equivalent  in whole or in part  respecting  the
organization, governance, power or authority of the referenced Person, or of any
direct or indirect general partner, manager, trustee or similar principal of the
referenced  Person  that  is not a  natural  Person,  as  applicable,  including
(without  limitation)  (i) the  Certificate of  Incorporation  or By-Laws of the
referenced  Person;  (ii) any resolution with  continuing  effect adopted by the
Board of Directors,  the management or other applicable  committee of directors,
the managers,  or the shareholders or members of a referenced  Person, or of any
direct or indirect general partner, manager, trustee or similar principal of the
referenced Person,  that is a corporation,  limited liability company or similar
entity,  or (iii) any agreement,  trust or  arrangement  among any of its equity
holders  respecting the securities  issued by or any of the beneficiaries of the
referenced  Person,  or of any  direct or  indirect  general  partner,  manager,
trustee or similar  principal of the  referenced  Person,  that is not a natural
Person;  in  each  case  as and  when  executed,  adopted,  filed  or  otherwise
effectuated (as applicable)  from time to time (whether  before,  as of or after
the date hereof),  and  irrespective of whether reduced to writing,  and as each
has  been  and  hereafter  may be  supplemented,  renewed,  extended,  modified,
amended, restated or replaced from time to time.

"Party" and "Parties" shall  respectively  mean any one or more of the
Purchaser  or  Seller  and  to  the  extent  of  their  limited  agreements  and
obligations hereunder, SPG and SGRP.

"Person" shall include (without limitation) any manner of association,
business trust, company,  corporation,  estate, governmental or other Authority,
group  (including one under Section  13(d)(3) of the  Securities  Exchange Act),
joint venture,  limited liability  company,  natural Person (i.e., human being),
partnership, syndicate, trust or other entity.

"Purchase  Document" and "Purchase  Documents" shall respectively mean
any one or more of this Agreement, the Conveyance Instruments, the various other
assignments,  instruments and other  documents  creating or evidencing the sale,
assignment  or other  transfer or delivery of any asset of SPG or  assumption of
any Continuing  Liability,  the SPAR  Confidentiality  Agreement,  the Trademark
Agreement,  the SPAR eTraining Agreement,  the Transitional  Services Agreement,
and all other  agreements  and  documents  and all waivers,  consents,  reports,
statements,  certificates  and  schedules  executed by the  requisite  Person(s)
pursuant to or in connection with any of the foregoing and accepted or delivered
by the  Purchaser  (whether  prior to, on or from time to time after the Closing
Date), as each may be supplemented,  modified,  amended or restated from time to
time in the manner provided therein.

"Purchase Price shall have the meaning  assigned to it in Section 2.05
hereof.

-4-

"Purchaser" shall have the meaning assigned to it in the Introduction.

"Representative" and "Representatives"  shall respectively mean any or
all of: (a) in the case of any referenced Person (including, without limitation,
the  Seller),   such  referenced  Person's  Affiliates,   directors,   officers,
employees,  attorneys, agents and other Representatives;  and (b) in addition in
the case of the  Seller  or any other  financial  institution,  such  referenced
Person's  participants,   correspondents,   confirming  banks,   custodians  and
designees  and their  respective  Affiliates,  directors,  officers,  employees,
attorneys, agents and other Representatives.

"Revolving  Credit Loan" and  "Revolving  Credit Loans" shall have the
meanings respectively assigned to them in the Revolving Credit Agreement.

"Revolving Credit Agreement" shall mean the Revolving Credit, Guaranty
and Security Agreement among SPG (as borrower), the Purchaser (as guarantor) and
the Seller (as lender)  dated as of June 30, 2002,  together  with all schedules
and  exhibits  thereto,  as the same  may be  supplemented,  modified,  amended,
restated or replaced from time to time in the manner provided therein.

"Revolving  Credit  Document" and "Revolving  Credit  Documents" shall
respectively mean any one or more of the Revolving Credit  Agreement,  Revolving
Credit Notes and other "Loan  Instruments"  (as defined in the Revolving  Credit
Agreement),  as the same may be  supplemented,  modified,  amended,  restated or
replaced from time to time in the manner provided therein.

"Revolving  Credit Note" and  "Revolving  Credit Notes" shall have the
meanings respectively assigned to them in the Revolving Credit Agreement.

"securities"  of any Person  shall mean any and all equity  securities
and debt securities, general or limited partnership interests, limited liability
company memberships or interests, investment contracts, and any other instrument
or interest commonly understood to be a security issued by that Person.

"Securities Act" shall mean the Securities Act of 1933, as amended, or
any  corresponding  provisions  of any  Applicable  Law in any state or  foreign
jurisdiction,  or any corresponding or succeeding  provisions of Applicable Law,
and the rules and regulations promulgated  thereunder;  in each case as the same
may have been and hereafter may be supplemented,  modified, amended, restated or
replaced from time to time.

"Securities  Exchange Act" shall mean the  Securities  Exchange Act of
1934, as amended,  or any corresponding  provisions of any Applicable Law in any
state or foreign jurisdiction,  or any corresponding or succeeding provisions of
Applicable Law, and the rules and regulations  promulgated  thereunder;  in each
case as the same may have  been and  hereafter  may be  supplemented,  modified,
amended, restated or replaced from time to time.

"Seller" shall have the meaning assigned to it in the Introduction.

"Senior Borrower" and "Senior  Borrowers" shall  respectively mean any
one  or  more  of the  borrowers  under  the  Senior  Loan  Documents,  and  the
successors,  assigns  and  legal  Representatives  of  each,  and  any  and  all
additional or replacement borrower(s) under any Senior Loan Document. The Senior
Borrowers currently include the Seller, SGRP and most of its Affiliates.

"Senior Lender" shall mean IBJ WHITEHALL BUSINESS CREDIT  CORPORATION,
its successors, assigns and legal Representatives, and any and all additional or
replacement lender(s) under any restated or replacement Senior Loan Document.

"Senior Loan" and "Senior Loans" shall respectively mean the principal
amounts outstanding from time to time (including future advances) respecting any
and all of advances,  loans,  letter of credit  advances  and the other  amounts
advanced  from  time  to  time to or on  behalf  of one or  more  of the  Senior
Borrowers by the Senior Lender thereunder or its designee pursuant to any Senior
Loan  Document  (including,  without  limitation,  during  the  pendency  of any
Bankruptcy Proceeding).

"Senior Loan  Agreement"  the Second  Amended and  Restated  Revolving
Credit,  Term Loan and Security  Agreement dated as of September 22, 1999, among
the Senior  Borrowers  and the Senior  Lender,  together  with all schedules and
exhibits  thereto,  as each may have  been and  hereafter  may be  supplemented,
modified, amended, restated or replaced from time to time in the manner provided
therein.

-5-

"Senior Loan Document" and "Senior Loan Documents" shall  respectively
mean any one or more of the Senior Loan Agreement,  each and every note,  letter
of credit  application,  security  agreement,  guaranty,  hypothecation or other
instrument,  agreement  or document  with or issued or given by any  borrower or
surety  thereunder in direct or indirect support (in whole or in part) of any of
the  Senior  Loan  Obligations  or related  surety's  obligations,  the  various
mortgages, assignments,  agreements, guaranties, instruments and other documents
creating, evidencing, perfecting, governing or supporting any of the Senior Loan
Obligations  or any related  surety's  obligations or any interest of the Senior
Lender in any  collateral  securing or intended to secure any of the Senior Loan
Obligations  or  related  surety's  obligations,   and  all  waivers,  consents,
agreements,  reports,  statements,  certificates,  schedules and other documents
executed by the requisite Person(s) pursuant to or in connection with any of the
foregoing and accepted or delivered by the Senior Lender  (whether  prior to, on
or from  time to time  after  the  Closing  Date),  as each  may  have  been and
hereafter may be supplemented, modified, amended, restated or replaced from time
to time in the manner provided therein.

"Senior Loan Obligations" as of any date shall mean any and all of the
obligations of the Senior Borrowers (i) to repay the balance of the Senior Loans
then  outstanding  (including  future  advances),  including  accrued and unpaid
interest  thereon,  (ii) to pay or otherwise perform or satisfy all of the other
amounts to be paid and obligations to be performed or otherwise satisfied by any
Senior Borrower under any Senior Loan Document (whether  individually,  jointly,
severally or otherwise), (iii) to pay or otherwise perform or satisfy all of the
other amounts to be paid and obligations to be performed or otherwise  satisfied
by any Senior  Borrower  under any interest rate  protection,  foreign  currency
exchange,  or other  interest  or  exchange  rate swap or hedging  agreement  or
arrangement  (whether  individually,  jointly,  severally or otherwise) with the
Senior Lender or any of its Affiliates, and (iv) to pay or otherwise satisfy any
and all overdrafts of any Senior  Borrower  honored by the Senior Lender (in its
sole and absolute discretion) and other indebtedness, liabilities or obligations
(whether under any note,  guaranty or other instrument or document or otherwise)
now or  hereafter  owed to the  Senior  Lender by any Senior  Borrower  (whether
individually, jointly, severally or otherwise), together with accrued and unpaid
interest  thereon;  in each  case  including,  without  limitation,  any and all
interest,  fees and other  amounts  accrued,  accruing or  otherwise  applicable
during the pendency of any Bankruptcy  Proceeding,  irrespective of whether such
interest,  fees and other amounts are allowed or allowable as claims in any such
proceeding.

"SGRP"  shall  mean SPAR  Group,  Inc.,  a  Delaware  corporation  and
ultimate parent of the Seller.

"Significant Shareholder" shall mean either Robert G. Brown or William
H. Bartels.

"SPAR  Business"  shall  mean any and all of the  projects,  products,
services or business of the SPAR Group,  including (without limitation) in-store
and other  merchandising  and  marketing  services,  product  sampling,  mystery
shopping,  internet  training,  database  marketing,   teleservices,   marketing
research,  internet-based applications and software, the SPAR eTraining Business
and the other  business  described in SGRP's  annual report on Form 10-K for the
year  ended  December  31,  2001,  as filed  with the  Securities  and  Exchange
Commission.

"SPAR  Confidentiality  Agreement" shall mean the  Confidentiality and
Non-Compete  Agreement  among the Purchaser,  SPG, and SGRP dated as of June 30,
2002,  respecting  (among other things)  confidential  treatment of  information
pertaining  to the SPAR  Business and  non-competition  therewith by SPG and the
Purchaser,  as the same may be  supplemented,  modified,  amended,  restated  or
replaced from time to time in the manner provided therein.

"SPAR eTraining Agreement" shall mean that certain SPG Agreement among
SPG and SGRP dated as of January  11,  2002,  together  with all  schedules  and
exhibits thereto,  including,  without limitation,  the "SPAR Standard Terms and
Provisions Exhibit" and the "SPAR Supplemental Terms and Provisions Exhibit", as
the same may be supplemented,  modified, amended, restated or replaced from time
to time in the manner provided therein.

"SPAR  eTraining  Business"  shall mean (a) any and all  training  and
related  services,  including  (without  limitation) any and all related program
development,   programming,   access,   registration  and  other  communication,
training, testing, incentive and other awards, redemptions,  reporting,  support
and web hosting, whether via telephone,  internet or otherwise, and (b) anything
covered by U.S. Patent Application No. 09/951,321  (continuing and incorporating
provisional  application No. 60/240,328) titled "Incentive Based Training System
and Method", or any derivative or related application,  whether or not described
in clause  (a),  irrespective  of  whether  any such  patent  or other  right or
protection has been or can be sought,  issued or obtained;  in each case whether
now existing or hereafter acquired,  licensed,  created,  executed,  modified or
otherwise existing.

-6-

"SPAR  eTraining  Intellectual  Property"  shall  mean any and all (a)
patents, copyrights and copyrighted materials, logos, service marks, trademarks,
trade names, domain names, computer programs and other know how and intellectual
properties  pertaining  to  the  SPAR  eTraining  Business,  including  (without
limitation) any and all applications,  invention  disclosures and pending items,
any  and  all  designs,  discoveries,  formulae,  ideas,  inventions,  products,
programs,  software  and  firmware  (whether  in  source  code,  object  code or
otherwise,  and including (without  limitation) all "shrink-wrap"  licenses that
accompanied  any item of equipment or software when  obtained),  specifications,
styles,  techniques,  and other trade  secrets and works of  authorship  for the
current and  intended  business,  products  and  prospects,  any and all license
royalties and other payment intangibles,  the proceeds of infringement suits and
other proceeds, the right to sue for past, present and future infringement,  all
rights corresponding thereto throughout the world, and all reissues,  divisions,
continuations,  renewals, extensions and continuations-in-part  thereof, and the
good will of the business to which each of them  relates,  (b) Books and Records
evidencing or pertaining to any of the  foregoing,  and (c) anything  covered by
U.S. Patent Application No. 09/951,321 (continuing and incorporating provisional
application No. 60/240,328) titled "Incentive Based Training System and Method",
or any  derivative  or related  application,  whether or not described in clause
(a),  irrespective  of whether any such patent or other right or protection  has
been or can be sought,  issued or obtained; in each case whether now existing or
hereafter acquired,  licensed, created, executed, modified or otherwise existing
(including,   without   limitation,   during  the  pendency  of  any  Bankruptcy
Proceeding),  and  irrespective of whether any patent,  copyright,  trademark or
other  right or  protection  has been or can be sought,  issued or  obtained  in
connection therewith.

"SPAR  Group"  shall  mean  SGRP.,  each of its  direct  and  indirect
subsidiaries  (including,  without  limitation,  SPAR  Acquisition,  Inc.,  SPAR
Marketing, Inc., SPAR/Burgoyne Retail Services, Inc., SPAR, Inc., SPAR Marketing
Force,  Inc., STMI, SPAR Group  International,  Inc.,  SPAR/PIA Retail Services,
Inc.,  SPAR  Technology  Group,  Inc.,  Retail  Resources,  Inc.,  Pivotal Field
Services, Inc., PIA Merchandising Co., Inc., Pacific Indoor Display d/b/a Retail
Resources,  Pivotal Sales Company,  and PIA Merchandising  Ltd.), its affiliates
(including,  without  limitation,  SPAR Marketing Services Inc., SPAR Management
Services,  Inc.,  and SPAR  InfoTech,  Inc.),  and each other  entity  under the
control of or common control with any of the foregoing entities.  However,  SPAR
Group shall not include SPG or the Purchaser.

"SPG" shall have the meaning assigned to it in the Recitals, above.

"SPG Business" shall have the meaning assigned to it in the Recitals.

"SPG  Confidentiality  Agreement" shall mean the  Confidentiality  and
Non-Compete  Agreement  among the Purchaser,  SPG, and SGRP dated as of June 30,
2002,  respecting  (among other things)  confidential  treatment of  information
pertaining to the SPG Travel Business (as defined  therein) and  non-competition
therewith  by SGRP  and  its  subsidiaries,  as the  same  may be  supplemented,
modified, amended, restated or replaced from time to time in the manner provided
therein.

"SPG  Stock"  shall have the meaning  assigned to it in the  Recitals,
above..

"STMI" shall mean SPAR  Trademarks,  Inc., a Delaware  corporation and
indirect subsidiary of SGRP.

"subsidiary"  shall mean any corporation or other entity in respect of
which a Person at the time shall own  directly,  or  indirectly  (through one or
more corporations, nominees or other Persons or otherwise), at least one-half of
the aggregate  voting  interests of such  corporation  or other entity,  whether
owned or held (i) of record or  beneficially  or (ii)  individually,  jointly or
otherwise.

"Tax" shall mean any tax,  drug tax,  poll tax  (including  any income
tax,  franchise tax,  capital gains tax, gross  receipts tax,  value-added  tax,
surtax, excise tax, ad valorem tax, transfer tax, stamp tax, sales tax, use tax,
property tax, inventory tax,  occupancy tax,  withholding tax, payroll tax, gift
tax,  estate  tax  or  inheritance  tax),  levy,  assessment,   tariff,  impost,
imposition,  toll, duty (including any customs duty), deficiency or fee, and any
related  charge or amount  (including any fine,  penalty or interest),  imposed,
assessed  or  collected  by or for any  authority  or  payable  pursuant  to any
tax-sharing agreement or pursuant to any agreement, arrangement or understanding
relating to the sharing or payment of any such tax,  levy,  assessment,  tariff,
impost, imposition, toll, duty, deficiency or fee.

"Tax Code" shall mean the United States Internal Revenue Code of 1986,
as  amended,   any  corresponding   Applicable  Law  of  any  state  or  foreign
jurisdiction,  or any corresponding or succeeding  provisions of Applicable Law,
in each  case as the same  may have  been  and  hereafter  may be  supplemented,
modified, amended, restated or replaced from time to time.

-7-

"Term  Loan" and "Term  Loans"  shall have the  meanings  respectively
assigned to them in the Term Loan Agreement.

"Term Loan Agreement" shall mean the Term Loan,  Guaranty and Security
Agreement  among the Purchaser (as borrower),  SPG (as guarantor) and the Seller
(as lender) dated as of June 30, 2002,  together with all schedules and exhibits
thereto,  as the  same  may be  supplemented,  modified,  amended,  restated  or
replaced from time to time in the manner provided therein.

"Term Loan Document" and "Term Loan Documents" shall respectively mean
any  one or more  of the  Term  Loan  Agreement,  Term  Notes  and  other  "Loan
Instruments"  (as  defined  in the  Term  Loan  Agreement),  as the  same may be
supplemented,  modified,  amended, restated or replaced from time to time in the
manner provided therein.

"Term  Note" and "Term  Notes"  shall have the  meanings  respectively
assigned to them in the Term Loan Agreement.

"Trademark  Agreement" shall mean Trademark  License Agreement between
SPG and STMI dated as of June 30, 2002, together with all schedules and exhibits
thereto,  as the  same  may be  supplemented,  modified,  amended,  restated  or
replaced from time to time in the manner provided therein.  "Transition Services
Agreement"  shall mean Transition  Services  Agreement among SPG, the Seller and
SGRP  dated as of June  30,  2002,  together  with all  schedules  and  exhibits
thereto,  as the  same  may be  supplemented,  modified,  amended,  restated  or
replaced from time to time in the manner provided therein.

Section  1.02.  Certain   Definitions  in  Other  Purchase  Documents.
Capitalized  terms used and not otherwise  defined in this Agreement  shall have
the  meanings  respectively  assigned to them in the other  applicable  Purchase
Documents or in the Term Loan Agreement, as applicable.

Section  1.03.  Singular and Plural  Terms.  Each  definition  in this
Agreement or any other Purchase  Document using a singular  capitalized  term or
other word or phrase also shall  apply to the plural form of such term,  word or
phrase, and vice versa, and all references to the masculine gender shall include
reference to the feminine or neuter gender,  and vice versa, in each case as the
context may permit or require.

Section  1.04.  Pronouns.  Each  use in this  Agreement  or any  other
Purchase  Document of a neuter pronoun shall be deemed to include  references to
the masculine and feminine  variations  thereof,  and vice versa, and a singular
pronoun shall be deemed to include a reference to the plural variation  thereof,
and vice versa, in each case as the context may permit or require.

Section 1.05.  Including.  The term "including"  shall mean "including
(without  limitation)",  whether  or  not  so  stated.  The  terms  "including",
"including,  but not limited to", "including  (without  limitation)" and similar
phrases (i) mean that the items specifically listed after such term are examples
of the provision  preceding  such term and are not intended to be all inclusive,
(ii)  shall  not in any way  limit (or be  deemed  or  construed  to limit)  the
generality of the provision  preceding such term, and (iii) shall not in any way
preclude  (or be deemed or  construed to  preclude)  any other  applicable  item
encompassed by the provision preceding such term.

Section 1.06.  Section and Other  Headings.  The table of contents and
section  and  other  headings  contained  in this  Agreement  are for  reference
purposes  only and  shall not  affect  the  meaning  or  interpretation  of this
Agreement.

ARTICLE II

PURCHASE OF STOCK; PAYMENT
--------------------------

Section 2.01.  Stock to be Transferred.  Upon the terms and subject to
the conditions set forth in this  Agreement,  the Seller hereby sells,  assigns,
transfers,  conveys and  delivers to the  Purchaser,  and the  Purchaser  hereby
purchases  and accepts  from the Seller,  all right,  title and  interest of the
Seller in and to all of the SPG Stock,  effective as of 11:59 p.m. New York City
time, June 30, 2002 (the "Effective Time").

Section  2.02.   Excluded  Assets.  At  the  Closing  the  assets  and
properties of SPG shall not include any of the following  assets and  properties
(individually,  an "Excluded Asset", and collectively,  the "Excluded  Assets"),
irrespective of whether SPG may have had any right, title or interest therein or
lease, license or other right to the exploitation or use thereof:

-8-

(a)  any right,  title or interest in the SPAR eTraining  Business or other SPAR
Business or any Intellectual Property of the SPAR Group, including (without
limitation) the SPAR eTraining  Intellectual  Property, the name "SPAR" and
their other trademarks and tradenames,  and the SPAR accounting,  email and
payroll systems;

(b)  any right to participate,  or for the employees of SPG to  participate,  in
any pension, welfare or benefit plan, insurance or other SPAR Group benefit
or coverage, and any administrative or other service directly or indirectly
provided  to or for the  benefit  of SPG by any member of the SPAR Group or
their Affiliates;

(c)  any federal,  state,  local or foreign  income or franchise  tax benefit or
refund of SPG or the  Seller  attributable  to  periods  on or  before  the
Closing Date;

(d)  any and all of SPG's  Books and  Records at any SPAR Group  location  other
than Texas,  provided  that the Seller shall  deliver to SPG an  electronic
copy of SPG's  accounting data stored on SGRP's  "Solomon"  computer system
such  time as SPG  ceases  to use  such  computer  system  pursuant  to the
Transition Services Agreement;

(e)  any and all assets of the Seller or any other member of the SPAR Group used
at any time or from time to time by SPG and not located on the  premises of
the SPG,  including  (without  limitation) the computers and accounting and
other software of the SPAR Group ;

(f)  any liability or other obligations owed to SPG by the Seller, any Affiliate
of the Seller or any Significant  Shareholders  (other than any that may be
owed to SPG under the Purchase  Documents,  Revolving  Credit  Documents or
Term Loan Documents);

(g)  any right, power, privilege,  remedy or interest of the Seller or any other
member of the SPAR Group  under any  Purchase  Document,  Revolving  Credit
Document, Term Loan Document or Senior Loan Document; and

(h)  any other asset or property listed on Schedule 2.02 hereto.

SPG  acknowledges  and agrees  that any right,  title or interest  in,  lease or
license of or other right to exploit or use any and all Excluded Assets that SPG
has or may have  (whether  known or unknown)  (i) will  terminate as of June 30,
2002, and (ii) will be separately  sold,  assigned,  conveyed and transferred at
the   Closing  to  the  Seller  or  its   designee,   all  without  any  further
consideration;  provided that in the event any such right,  title or interest is
not so separately sold,  assigned,  conveyed and transferred,  SPG hereby sells,
assigns,  conveys and  transfers it to the Seller and its  succesors and assigne
forever   effective  as  of  the  Effective   Time,   all  without  any  further
consideration.

Section 2.03. Continuing  Liabilities.  At the Closing the obligations
and liabilities of SPG shall include (without limitation), and to the extent not
previously owed directly or assumed by SPG, SPG shall expressly assume and agree
to be  solely  responsible  for such  obligations  and  liabilities,  and  shall
thereafter pay, satisfy and discharge as and when due (and uncontested),  all of
the  liabilities and obligations of SPG and the SPG Business on the Closing Date
(other  than  any  Excluded  Liability),   including  (without  limitation)  the
following liabilities and obligations of the Seller to the extent the same shall
exist  on  the  Closing  Date  (individually,   a  "Continuing  Liability",  and
collectively, the "Continuing Liabilities"):

(a)  any  and  all  unpaid  liabilities  and  obligations  of SPG to  landlords,
lessors,  suppliers,  vendors and other trade Persons (other than loans and
advances owed to the Seller, any Affiliate of the Seller or any Significant
Shareholder);

(b)  any and all liabilities and obligations of SPG under all customer and sales
contracts, purchase orders and other contracts, agreements, instruments and
other documents;

(c)  any and all direct or indirect liabilities and obligations of SPG under the
Purchase Documents, Revolving Credit Documents or Term Loan Documents; and

(d)  any and all Taxes with respect to SPG other than as  expressly  excluded in
Section 2.04() hereof.

Section 2.04.  Liabilities Not Continuing with SPG. At the Closing the
obligations  and  liabilities  of SPG shall not  include,  and to the extent not
previously  extinguished or assumed by the Seller or any of its Affiliates,  the
Seller shall extinguish or cause to be extinguished, or the Seller or SGRP shall
expressly  assume and agree to be solely  responsible for (in each case pursuant
to such option as the Seller 

-9-

may elect), and if so assumed, the Seller or such Affiliate (as the case may be)
shall thereafter pay,  satisfy and discharge as and when due (and  uncontested),
any of the following  listed  liabilities  and  obligations of the Seller to the
extent  the  same  shall  exist  at  the  Effective  Time  (each,  an  "Excluded
Liability",  and collectively,  the "Excluded Liabilities"),  including (without
limitation) the following:

(a)  any liability or other obligation for any action, suit or proceeding to the
extent,  and limited as provided,  in Schedule  2.04 hereto with respect to
John Wile and Mark Whitney;

(b)  any liability or other obligation of SPG under any employment  agreement or
in respect of any pension, benefit or other welfare plan of the SPAR Group;

(c)  any liability or other obligation of the Seller for any income or franchise
Tax arising out of the transactions contemplated by this Agreement;

(d)  any liability or other obligations owed by SPG to the Seller, any Affiliate
of the Seller or any  Significant  Shareholders  (other  than any direct or
indirect  liabilities and obligations of SPG under the Purchase  Documents,
Revolving Credit Documents or Term Loan Documents);

(e)  any federal,  state,  local or foreign income or franchise tax liability or
obligation  of  SPG  attributable  to  periods  before  the  Closing  Date,
provided,   however,   that  such  liabilities  and  obligations  shall  be
Continuing Liabilities,  rather than Excluded Liabilities, if SPG shall not
have  upon  request  fully and  timely  cooperated  with the SPAR  Group as
contemplated in Section 2.11 hereof;

(f)  any  liabilities  and obligations of SPG under the Senior Loan Documents on
the date hereof; or

(g)  any Reserve for Disposal Costs (which will have been  transferred  from the
Books of SPG to those of the Seller or SGRP on or before the Closing Date).

Section 2.05. Purchase Price and Payment. The aggregate purchase price
for the Assets (the "Purchase Price") shall be an amount equal to the sum of (i)
a cash purchase price (the "Cash Purchase Price") equal to $6,000,000, plus (ii)
the total amount of all Continuing Liabilities. The Cash Purchase Price shall be
paid at the completion of the Closing by the Purchaser  through the issuance and
delivery to the Seller of the Term Notes and Term Loan Agreement, which shall be
paid as provided therein.

Section 2.06.  Allocation of Purchase Price.  The Purchase Price shall
be allocated as provided in Schedule 2.06 hereto. The Purchaser shall, and shall
cause SPG to, execute and deliver to the Seller a 338(h)(10)  election under the
Tax Code if the  Seller so  requests.  The  Seller  and the  Purchaser  agree to
report,  pursuant to Section 1060 of the Code, an  allocation of such  Aggregate
Purchase  Price in accordance  with such schedule and agree to act in accordance
therewith in the preparation and filing of all income tax returns.

Section  2.07.  Taxes.  The  Purchaser  shall be  responsible  for the
payment  of  any  and  all  Taxes  relating  to  the  transactions  contemplated
hereunder,  excluding,  however,  such Taxes as are imposed on the Seller by the
United  States of  America  or the  jurisdiction  of its  organization  or chief
executive  office (or any  political  subdivision  thereof)  with respect to the
income or franchise of the Seller.

Section 2.08.  Instruments of  Conveyance.  (a) In order to effectuate
the transfer of the Excluded Assets  contemplated  by Section 2.02 hereof,  upon
the request of the Seller,  SPG will execute and deliver,  dated on or as of the
Closing  Date,  all such bills of sale and other  documents  or  instruments  of
assignment,  transfer  or  conveyance  as the  Seller  shall deem  necessary  or
appropriate to vest in or confirm to the Seller good and marketable title to the
Excluded Assets, in each case free and clear of all Liens.

(b) In order to  effectuate  the transfer of the Excluded  Liabilities
contemplated by Section 2.04 hereof,  upon the request of SPG, the Seller or its
designated  Affiliate  will execute and  deliver,  dated on or as of the Closing
Date,  all such  assumption  agreements  and other  documents or  instruments of
assumption, transfer or conveyance as SPG shall deem necessary or appropriate to
vest in or  confirm  to SPG that  the  Seller  has  assumed  full  and  complete
liability for the Excluded Liabilities.

(c) In executing any of the  foregoing,  no Party shall be required to
assume any greater duty,  obligation or liability than is already required of it
under this Agreement and the other Purchase Documents.

Section  2.09.  Investment  Intent,  Independent  Decision,  Etc.  The
Purchaser  hereby  represents  and  warrants  to the Seller,  and  acknowledges,
understands and agrees with the Seller, that: (a) the 

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SPG Stock is not currently  being  registered  under the Securities Act; (b) the
purchase  and sale of the SPG Stock  hereunder  is  intended  to be exempt  from
registration  under  the  Securities  Act  by  virtue  of  Section  4(1)  of the
Securities  Act  based,  in  part,  upon  the  representations,  warranties  and
agreements  of  the  Purchaser   contained  herein;   (c)  the  Purchaser  is  a
sophisticated and knowledgeable investor, both generally and with respect to the
SPG  Stock  and the SPG  Business,  and has such  knowledge  and  experience  in
financial,  tax and  business  matters so as to enable  Purchaser to utilize the
information made available to it in connection with Purchaser's  purchase of the
SPG Stock to evaluate the merits and risks of an investment in the SPG Stock and
to make  an  informed  investment  decision  with  respect  thereto;  (d) as the
management  of the  Purchaser  is the  same  as the  current  management  of SPG
continuing in such capacities following the Closing Date, the Purchaser is fully
familiar  with  all  aspects  of SPG and the SPG  Business,  including  (without
limitation)  SPG's  assets,  business,   capitalization,   equipment,  expenses,
financial condition,  inventory,  liabilities,  loans,  management,  operations,
properties, prospects, working capital, and other matters, and has had access to
all documents and information with respect thereto deemed necessary or desirable
by the Purchaser to make its  investment  decision;  (e) the Purchaser  does not
require any other  documents or information  prior to completing its purchase of
the SPG Stock;  (h) the Purchaser has reviewed,  and evaluated all financial and
other  information  necessary  or  prudent  to make the  Purchaser's  investment
decision;  (i) the  Purchaser  is  acquiring  the SPG Stock  solely  for its own
account for investment and not with a view to resale or  distribution  of any of
the SPG Stock;  (j) the  Purchaser  may be required to bear the economic risk of
the  investment  indefinitely  because  none  of the  SPG  Stock  may  be  sold,
hypothecated or otherwise disposed of unless  subsequently  registered under the
Securities  Act or an exemption  from  registration  is  available;  (k) neither
Seller nor SPG is obligated to register the SPG Stock under the Securities  Act;
and (l) the  certificates  evidencing  the SPG Stock have legends  placed on the
back  thereof  to the  effect  that such  shares of common  stock  have not been
registered under the Securities Act.

Section 2.10. No Representations,  Warranties or Liability  Respecting
SPG, Etc. (a) The Purchaser  hereby  represents and warrants to the Seller,  and
acknowledges,  understands  and agrees with the Seller,  that the  Purchaser  is
acquiring the SPG Stock without any  representation  or warranty  respecting any
aspect of SPG or the SPG Business  whatsoever,  including  (without  limitation)
without any representation or warranty with respect to any of the following:

(i)  the past,  present or future  financial  condition of SPG or any  financial
statements or projections pertaining thereto;

(ii) any past, present or future assets,  business,  capitalization,  equipment,
expenses, inventory, loans, management,  operations, properties, prospects,
or working capital,  or except as otherwise  expressly  provided in Article
III hereof, any past, present or future liabilities or other matters;

(iii)the  value,  validity,   effectiveness,   genuineness,   enforceability  or
sufficiency  of any contract or other  document to which SPG is or may be a
party;

(iv) the  willingness,  ability or likelihood of SPG to perform its  obligations
under any Term Loan Document or Revolving Credit Document.

(b) The Purchaser  hereby  represents and warrants to the Seller,  and
acknowledges,  understands and agrees with the Seller, that, except as expressly
and specifically  provided in this Agreement:  (a) none of the Seller,  the SPAR
Group or any of  their  respective  Representatives  shall  have any  liability,
obligation  or  responsibility  whatsoever  for  any  acts or  omissions  of any
officer, employee or agent of SPG or any of its Representatives; and (b) neither
the Seller nor any of its  Representatives  has, or shall be deemed or construed
to have, any agreement, duty or obligation to inform the Purchaser of any matter
relating to any aspect of SPG or the SPG Business or to furnish to the Purchaser
any information pertaining thereto.

(c)  Without  limiting  any of the  foregoing,  the  Purchaser  hereby
represents and warrants to the Seller, and acknowledges,  understands and agrees
with the Seller,  that,  except as expressly and  specifically  provided in this
Agreement,   none  of  the   Seller,   the  SPAR  Group  and  their   respective
Representatives  has (and none of them shall be deemed or construed to have) (i)
made any representation or warranty, (ii) offered any advice or analysis,  (iii)
made any assumption of any liability or  responsibility,  (iv) made any guaranty
or assurance or (v) assumed any other  recourse  whatsoever,  whether  orally or
otherwise,   and  whether  express  or  implied,  with  respect  to  any  matter
whatsoever,  including (without limitation) respecting any of the matters in the
other  subsections  of  this  Section  or any  other  aspect  of SPG or the  SPG
Business.

Section 2.11. Tax Audits, Further Assurances. Notwithstanding anything
to the contrary in this Agreement or any other Purchase Document, the Seller and
the SPAR  Group  shall have the sole and  exclusive  right at their own cost and
expense to manage,  conduct,  defend and conclude each and every audit, 

-11-

inquiry,  proceeding,  lawsuit or claim respecting any federal,  state, local or
foreign income or franchise tax liability or obligation of SPG  attributable  to
any period  ending on or before the Closing  Date.  The  Purchaser  and SPG each
shall  provide  (as,  when and within the  timeframes  requested)  such  access,
information  and  assistance,  do such further acts and things,  and execute and
deliver  such  statements,   assignments,   agreements,  instruments  and  other
documents as the Seller or its Representatives  from time to time reasonably may
request  in  connection  therewith,  each in such form and  substance  as may be
reasonably  acceptable to the Seller;  provided,  however,  that notwithstanding
anything  in this  Agreement  to the  contrary,  SPG  shall  be  liable  for the
applicable costs, expenses and Taxes if it does not timely and fully comply with
this Section in connection therewith.  Neither the Purchaser, nor SPG nor any of
their  respective  Representatives  shall take any action with  respect  thereto
other than pursuant to and in  accordance  with the express  written  request or
instructions of the Seller.

Section  2.12.  SPAR  eTraining   Business  and  Technology,   Further
Assurances.  Notwithstanding  anything to the contrary in this  Agreement or any
other Purchase  Document,  the Purchaser and SPG each acknowledge and agree that
the  Seller  and the SPAR  Group  have  and  shall  have the sole and  exclusive
ownership of the SPAR  eTraining  Business and the SPAR  eTraining  Intellectual
Property.  To the extent SPG has or may have any right,  title or interest in or
to the SPAR  eTraining  Business and the SPAR  eTraining  Intellectual  Property
(whether known or unknown,  and  irrespective of whether any patent,  copyright,
trademark  or other  right or  protection  has been or can be sought,  issued or
obtained  in  connection  therewith),  SPG hereby  sells,  assigns,  conveys and
transfers  to SGRP and its  successors  and assigns  forever each and every such
right, title, and interest,  all without any further consideration and effective
as of the Effective Time. The Purchaser and SPG each shall provide (as, when and
within the timeframes  requested) such access,  information  and assistance,  do
such  further  acts  and  things,  and  execute  and  deliver  such  statements,
assignments,  agreements,  instruments  and other documents as the Seller or its
Representatives from time to time reasonably may request in connection therewith
to confirm the SPAR Groups ownership thereof,  to assist in their prosecution of
any patent,  copyright,  trademark  or other right or  protection  with  respect
thereto,  and to transfer and relinquish any residual right or development  with
respect thereto, each in such form and substance as may be reasonably acceptable
to the  Seller.  Neither  the  Purchaser,  nor SPG nor any of  their  respective
Representatives  shall  take any  action  with  respect  thereto  other than (i)
pursuant to and in accordance  with the express  written request or instructions
of SGRP or (ii) as  licensee  under,  pursuant  to and in  accordance  with  the
express terms of the SPAR eTraining Agreement.

Section 2.13. Liability of Certain Officers.  Notwithstanding anything
to the  contrary in this  Agreement,  the Parties do not intend that Mr.  Thomas
Hunter have, and each Party agrees that he will not have, any personal liability
for the obligations of SPG or Holdings under this Agreement, in each case except
to the  extent  occasioned  by his own acts or  omissions  amounting  to willful
breach of duty or contract,  gross  negligence or willful  misconduct.  However,
nothing in the foregoing is intended, or shall be deemed or construed, to in any
way limit the  personal  liability  (if any) that such Person may have under any
agreement, certificate,  instrument or other document to which he is a signatory
(other than where his  expressly  signing  for SPG or  Holdings),  whether  such
personal liability may arise under the terms thereof or Applicable Law.

Section  2.14.   Release  of  Former  SPG/SGRP   Representatives   and
Stockholders.  The Purchaser and SPG, for itself and its successors and assigns,
each hereby forever expressly, unconditionally and irrevocably releases, acquits
and discharges (i) each  Representative  of SGRP or any other member of the SPAR
Group who at any time  previously  severed  (whether  formally or informally and
whether directly or indirectly) as a Representative  of SPG, and (ii) each prior
direct or indirect  stockholder of SPG (except for the express  obligations  and
liabilities  of the  Seller and SGRP  under  this  Agreement),  from any and all
claims,  actions,   causes,  debts,  contracts,   damages,  demands  and  Losses
whatsoever  (whether  at law,  in  equity or  otherwise,  and  whether  known or
unknown) arising from any  representation  or services  rendered by or any other
act or omission of any such Person (whether to or on behalf of SPG or otherwise)
at any time up to the conclusion of the Closing hereunder.

Section   2.15.   Excluded  Wile  and  Whitney   Litigation,   Further
Assurances.  Notwithstanding  anything to the contrary in this  Agreement or any
other Purchase  Document,  the Seller and the SPAR Group shall have the sole and
exclusive  right at their own cost and  expense to manage,  conduct,  defend and
conclude each and every aspect of any arbitration,  proceeding, lawsuit or claim
respecting any aspect of the Excluded  Liabilities  respecting  Mark Whitney and
John Wile.  The  Purchaser  and SPG each shall  provide (as, when and within the
timeframes requested) such access,  information and assistance,  do such further
acts  and  things,  and  execute  and  deliver  such  statements,   assignments,
agreements, instruments and other documents as the Seller or its Representatives
from time to time reasonably may request in connection  therewith,  each in such
form and  substance as may be  reasonably  acceptable  to the Seller;  provided,
however,  that notwithstanding  anything in this Agreement to the contrary,  SPG
shall be liable for the  applicable  costs,  expenses  and Losses if it does not
timely and fully comply with this Section in 

-12-

connection therewith. Neither the Purchaser, nor SPG nor any of their respective
Representatives  shall take any action with respect  thereto other than pursuant
to and in accordance  with the express  written  request or  instructions of the
Seller.

Section 2.16.  Continuing  Liabilities for kForce Litigation,  Further
Assurances.  Notwithstanding  anything to the contrary in this  Agreement or any
other Purchase Document, the Purchaser and SPG shall have the sole and exclusive
right at their own cost and expense to manage, conduct, defend and conclude each
and every aspect of any arbitration, proceeding, lawsuit or claim respecting any
aspect of the Continuing Liabilities respecting kForce. The Seller and SGRP each
shall provide (as, when and within the  timeframes  reasonably  requested)  such
access, information and assistance, do such further acts and things, and execute
and deliver such  statements,  assignments,  agreements,  instruments  and other
documents as SPG or its Representatives from time to time reasonably may request
in connection therewith (at the sole cost and expense of SPG), each in such form
and substance as may be reasonably acceptable to the Seller; provided,  however,
that  notwithstanding  anything in this  Agreement to the  contrary,  the Seller
shall be liable for the  applicable  costs,  expenses  and Losses if it does not
comply in all  material  respects  with this  Section in  connection  therewith.
Neither the Seller, nor SGRP nor any of their respective  Representatives  shall
take any action with respect  thereto  other than  pursuant to and in accordance
with the express written request or instructions of the Purchaser or SPG.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE SELLER
--------------------------------------------

To induce the  Purchaser  to enter into this  Agreement  and the other
Purchase  Documents  to which it is a party and to purchase  the SPG Stock,  the
Seller represents and warrants to the Purchaser that:

Section  3.01.  Organization,  Powers,  Etc.  The Seller:  (a) is duly
organized,  validly existing and in good standing under the laws of its state of
incorporation,  which state is correctly  set forth in the  Introduction  hereto
(i.e.,  first paragraph of this  Agreement);  (b) has the power and authority to
carry on its business as now conducted and to own or hold under lease the assets
and  properties it purports to own or hold under lease;  (c) is duly  qualified,
licensed or  registered  to transact its business and in good  standing in every
jurisdiction  in which it purports to or carries on its  business or holds under
lease  any of its  assets  and  properties  and the  failure  to do so  would be
reasonably  likely to have a Material Adverse Effect;  and (d) has the corporate
power and authority to execute and deliver this  Agreement and each of the other
Purchase  Documents  to which it is or will be a party and to perform all of its
obligations hereunder and thereunder.

Section 3.02. Consents,  Etc. Except as already obtained,  no consent,
approval or authorization  of, or registration,  declaration or filing with, any
Authority or other Person (including,  without  limitation,  the shareholders of
the Seller) is required as a condition precedent, concurrent or subsequent to or
in connection with the due and valid execution,  delivery and performance by the
Seller of this Agreement or any other  Purchase  Document to which the Seller is
or will be a party or the legality,  validity,  binding effect or enforceability
of any of their  respective  representations,  warranties,  covenants  and other
terms and provisions.

Section 3.03. Authorization, Conflicts and Validity. The execution and
delivery  by the  Seller  of  this  Agreement  and  each of the  other  Purchase
Documents to which it is or will be a party and the performance by the Seller of
all of its obligations  hereunder and thereunder:  (a) have been duly authorized
by all requisite  corporate action;  (b) will not violate or be in conflict with
any term or provision of (i) any Applicable Law, (ii) any judgment, order, writ,
injunction, decree or consent of any court or other judicial Authority, or (iii)
any Organizational  Document of the Seller; (c) will not violate, be in conflict
with,  result in a breach of or constitute a default (with or without the giving
or receipt of notice, the acquisition of knowledge or the passage of time or any
combination thereof) under any term or provision of any Organizational  Document
or other Material Document; and (d) except as specifically  contemplated by this
Agreement  or any other  Purchase  Document,  will not result in the creation or
imposition of any Lien of any nature upon any of its assets and properties.

Section 3.04. Enforceable Agreement.  This Agreement is, and the other
Purchase  Documents to which the Seller is or will be a party when  executed and
delivered  will  be,  legal,  valid  and  binding  obligations  of  the  Seller,
enforceable in accordance with their respective terms and provisions,  except as
enforceability  may  be  limited  by  (a)  applicable  bankruptcy,   insolvency,
reorganization  and other laws  affecting  the rights or remedies  of  creditors
generally  and (b) rules of equity  affecting  the  enforcement  of  obligations
generally (whether at law or in equity).

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Section 3.05. Litigation. Except as set forth in Schedule 3.05 hereto,
to the knowledge of the Seller, there are no actions,  suits,  investigations or
proceedings  (whether or not purportedly on behalf of the Seller) pending or, to
the best knowledge of the Seller,  threatened or contemplated at law, in equity,
in arbitration or by or before any other Authority  involving or affecting:  (a)
the Seller that, if adversely  determined,  could have a Material Adverse Effect
on the  Seller;  (b) any  alleged  criminal  act or  activity on the part of the
Seller or (to the knowledge of the Seller) any of its  Representatives;  (c) any
ESOP Related Document,  Senior Loan Document, or any Organizational  Document of
the Seller; (d) any Material Document that, if adversely determined,  could have
a  Material  Adverse  Effect  on  the  Seller;  or (e)  any of the  transactions
contemplated  in this  Agreement and the other Purchase  Documents;  nor, to the
knowledge of the Seller,  is there any reasonable  basis for the  institution of
any such action, suit, investigation or proceeding.

Section  3.06.  No  Defaulted  Judgments,  Etc.  The  Seller is not in
default with respect to any judgment, order, writ, injunction, decree or consent
of any court or other judicial Authority,  which default could have or has had a
Material Adverse Effect.

Section  3.07.  SPG Stock.  SPG is authorized to issue 2,500 shares of
common  stock with no par value,  of which 72 shares  are  currently  issued and
outstanding.  The  Seller  is the  record  and  beneficial  owner  of  all  such
outstanding  shares of SPG Stock.  Except for the normal  restrictions on public
offerings and the like under the Securities  Act,  except for the pledges of the
SPG Stock to the Seller (as lender)  under the  Revolving  Credit  Documents and
Term Loan Documents to be made at the conclusion of the Closing,  and except for
the pledges being  released (at the  conclusion of the Closing) of the SPG Stock
to the Senior Lender under the Senior Loan Documents,  none of those outstanding
securities:  (i) is subject to any warrant,  option, put, call or other right to
acquire, redeem, sell, transfer or encumber it; (ii) is governed by or otherwise
subject to any  shareholders  agreement,  voting  trust or similar  agreement or
arrangement;  and (iii) is limited or otherwise restricted in any way respecting
assignability,  transferability or any voting,  dividend,  distribution or other
ownership right (whether or not reflected on the face of the certificate, in any
Organizational  Document,  or otherwise).  Each of the outstanding shares of SPG
Stock  (a)  was  duly  authorized  and  validly   issued,   is  fully  paid  and
non-assessable,  and is not and will not be subject to any preemptive or similar
right or  restriction,  and (b) was acquired from the issuer in a transaction in
compliance with and exempt from registration  under the Securities Act and other
Applicable Law.

Section 3.08. Certain SPG Liabilities.  To the knowledge of Seller and
SGRP,  no officer of SGRP  (whether in his  capacity as an officer of SGRP or of
SPG)  has  created  any  continuing  contractual  liability  on the part of SPG,
excluding,  however,  any  liability  that either (a) has been  extinguished  or
assumed  as  contemplated  hereunder,  (b)  has  been  identified  in any of the
financial statements of SPG, this Agreement or any other Purchase Document,  (c)
is known by or has been disclosed to (or the underlying  obligations,  claims or
facts that may  reasonably be expected to give rise thereto are known by or have
been disclosed to) any past or present SPG officer (other than one who is also a
SGRP  officer),  or (d)  was  created  by or  with  the  assistance  of (or  the
underlying  obligations  or facts that may  reasonably  be expected to give rise
thereto  were  created by or with the  assistance  of ) any past or present  SPG
officer (other than one who is also a SGRP officer).

Section 3.09. Senior Loan Agreement Amendment.  All of the "Conditions
to  Effectiveness"  set forth in Section 5 of that certain Consent,  Release and
Amendment No. 6 to the Senior Loan Agreement have been satisfied or waived as of
the date of  execution  and  delivery  thereof  by the Senior  Lender,  and such
Amendment has taken effect as of the date hereof.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
-----------------------------------------------

To induce  the  Seller  to enter  into  this  Agreement  and the other
Purchase  Documents  to  which  it is a party  and to sell  the SPG  Stock,  the
Purchaser represents and warrants to the Seller that:

Section 4.01.  Organization,  Powers, Etc. The Purchaser:  (a) is duly
organized,  validly existing and in good standing under the laws of its state of
incorporation,  which state is correctly  set forth in the  Introduction  hereto
(i.e.,  first paragraph of this  Agreement);  (b) has the power and authority to
carry on its business as now conducted and to own or hold under lease the assets
and  properties it purports to own or hold under lease;  (c) is duly  qualified,
licensed or  registered  to transact its business and in good  standing in every
jurisdiction  in which it purports to or carries on its  business or holds under
lease  any of its  assets  and  properties  and the  failure  to do so  would be
reasonably  likely to have a Material Adverse Effect;  and (d) has the corporate
power and authority to execute and deliver this  Agreement and each of the other
Purchase  Documents  to which it is or will be a party and to perform all of its
obligations hereunder and thereunder.

-14-

Section 4.02. Consents,  Etc. Except as already obtained,  no consent,
approval or authorization  of, or registration,  declaration or filing with, any
Authority or other Person (including,  without  limitation,  the shareholders of
the Purchaser) is required as a condition precedent, concurrent or subsequent to
or in connection with the due and valid  execution,  delivery and performance by
the  Purchaser  of this  Agreement or any other  Purchase  Document to which the
Purchaser is or will be a party or the  legality,  validity,  binding  effect or
enforceability of any of their respective representations, warranties, covenants
and other terms and provisions.

Section 4.03. Authorization, Conflicts and Validity. The execution and
delivery  by the  Purchaser  of this  Agreement  and each of the other  Purchase
Documents to which it is or will be a party and the performance by the Purchaser
of  all of  its  obligations  hereunder  and  thereunder:  (a)  have  been  duly
authorized  by all  requisite  corporate  action;  (b) will not violate or be in
conflict  with  any  term or  provision  of (i) any  Applicable  Law,  (ii)  any
judgment,  order,  writ,  injunction,  decree or  consent  of any court or other
judicial Authority, or (iii) any Organizational  Document of the Purchaser;  (c)
will not violate,  be in conflict  with,  result in a breach of or  constitute a
default  (with or without the giving or receipt of notice,  the  acquisition  of
knowledge or the passage of time or any  combination  thereof) under any term or
provision of any  Organizational  Document or other Material  Document;  and (d)
except as  specifically  contemplated  by this  Agreement or any other  Purchase
Document,  will not  result in the  creation  or  imposition  of any Lien of any
nature upon any of its assets and properties.

Section 4.04. Enforceable Agreement.  This Agreement is, and the other
Purchase  Documents to which the  Purchaser is or will be a party when  executed
and delivered  will be, legal,  valid and binding  obligations of the Purchaser,
enforceable in accordance with their respective terms and provisions,  except as
enforceability  may  be  limited  by  (a)  applicable  bankruptcy,   insolvency,
reorganization  and other laws  affecting  the rights or remedies  of  creditors
generally  and (b) rules of equity  affecting  the  enforcement  of  obligations
generally (whether at law or in equity).

Section 4.05. Litigation. Except as set forth in Schedule 3.05 hereto,
there are no  actions,  suits,  investigations  or  proceedings  (whether or not
purportedly on behalf of the Purchaser) pending or, to the best knowledge of the
Purchaser, threatened or contemplated at law, in equity, in arbitration or by or
before any other  Authority  involving or affecting:  (a) the Purchaser that, if
adversely determined, could have a Material Adverse Effect on the Purchaser; (b)
any alleged  criminal  act or activity on the part of the  Purchaser  or (to the
knowledge of the  Purchaser)  any of its  Representatives;  (c) any ESOP Related
Document,  Term Loan Document, or any Organizational  Document of the Purchaser;
(d) any Material Document that, if adversely  determined,  could have a Material
Adverse Effect on the Purchaser; or (e) any of the transactions  contemplated in
this  Agreement and the other Purchase  Documents;  nor, to the knowledge of the
Purchaser, is there any reasonable basis for the institution of any such action,
suit,  investigation or proceeding.  Section 4.06. No Defaulted Judgments,  Etc.
The  Purchaser  is not in default  with respect to any  judgment,  order,  writ,
injunction,  decree or consent of any court or other judicial  Authority,  which
default could have or has had a Material Adverse Effect.

ARTICLE V

INDEMNIFICATION AND CERTAIN OTHER CONTINUING OBLIGATIONS
--------------------------------------------------------

Section  5.01.  Indemnification  by the  Seller.  The  Purchaser,  its
Affiliates  and their  respective  accountants,  attorneys  and  Representatives
(individually,   a  "Purchaser's  Indemnified  Person",  and  collectively,  the
"Purchaser's  Indemnified  Persons") each shall be  indemnified,  reimbursed and
held harmless by the Seller upon demand,  and (at the request of the  Purchaser)
defended at the expense of the Seller  with  counsel  selected by the Seller and
reasonably  acceptable  to the  Purchaser,  from and against any and all claims,
liabilities,   expenses  (including,   without  limitation,  the  disbursements,
expenses and  reasonable  fees of their  respective  attorneys) and other Losses
that may be imposed  upon,  incurred  by or  asserted  against  any  Purchaser's
Indemnified  Person  resulting  from,  arising out of or directly or  indirectly
related to: (a) any Excluded  Liability;  (b) any inaccuracy in or omission from
any representation, warranty or other information contained in this Agreement or
any other Purchase Document; or (c) any default (whether in whole or in part) in
the due or timely  observance,  performance or  satisfaction  of any covenant or
other term or provision of this Agreement or any other Purchase  Document by the
Seller or any other Person (other than the ESOP Trustee, the Purchaser or SPG).

Section  5.02.  Indemnification  by the  Purchaser.  The  Seller,  its
Affiliates  and their  respective  accountants,  attorneys  and  Representatives
(individually,  a "Seller's Indemnified Person", and collectively, the "Seller's
Indemnified Persons") each shall be indemnified, reimbursed and held harmless by
the Purchaser  upon demand,  and (at the request of the Seller)  defended at the
expense of the Purchaser  with 

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counsel selected by the Purchaser and reasonably  acceptable to the Seller, from
and  against  any and all  claims,  liabilities,  expenses  (including,  without
limitation, the disbursements,  expenses and reasonable fees of their respective
attorneys)  and other Losses that may be imposed  upon,  incurred by or asserted
against  any  Seller's  Indemnified  Person  resulting  from,  arising out of or
directly or indirectly  related to: (a) SPG, the SPG Business or any  Continuing
Liability;  (b) any inaccuracy in or omission from any representation,  warranty
or other information contained in this Agreement or any other Purchase Document;
or  (c)  any  default  (whether  in  whole  or in  part)  in the  due or  timely
observance,  performance  or  satisfaction  of any  covenant  or  other  term or
provision of this  Agreement or any other  Purchase  Document by the  Purchaser,
SPG, the ESOP Trustee or any other Person (other than the Seller).

Section  5.03.   Brokerage   Disclaimer  and  Indemnity.   Each  Party
represents  and  warrants  to the other that  neither  such Party nor any of its
Representatives has any contact or dealings regarding the Business or the Assets
or any part thereof or any  communication  in connection with the subject matter
of the  transactions  contemplated  herein  with any  finder,  agent or  broker,
whether or not licensed  herein as such, and each Party  covenants and agrees to
hold the other  harmless with respect  thereto as hereinafter  provided.  In the
event that any  finder,  agent or broker  perfects a claim for a  commission  or
finder's fee based upon such  contracts,  dealings or  communication,  the Party
whose acts gave rise to such claim shall indemnify, hold harmless and defend the
other  Party from and  against  said claim,  and all costs,  expenses  and other
liabilities  (including  reasonable attorneys' fees) incurred by the other Party
in defending against the same.

Section  5.04.  Access  to Books and  Records.  (a) From and after the
Closing Date, at all reasonable times and as often as the Seller  reasonably may
request,  on at least one Business Days prior notice,  the Purchaser  shall, and
shall  cause SPG and each of its  Affiliates  to,  permit  the  Seller  (and its
accountants,   other  Representatives  or  attorneys),   to  have  complete  and
unrestricted  access to all Books and Records retained by SPG or received by the
Purchaser  relating  to SPG or the SPG  Business  as the Seller  may  reasonably
require,  and to make copies and excerpts from them and to discuss with them the
Purchaser's  officers,   directors,   employees,   accountants  and  agents,  in
connection  with (i) the  preparation,  filing or audit of the  federal,  state,
local or foreign  income or other tax returns of the Seller or any  Affiliate of
the Seller, or with respect to any dispute, refund, claim or litigation relating
to  those  returns  and the  taxes  due  pursuant  to  those  returns,  (ii) the
initiation,  prosecution or defense of any other litigation by the Seller or any
Affiliate of the Seller, (iii) compliance by the Seller or any of its Affiliates
with any legal or  regulatory  obligation of those  entities,  (iv) any Excluded
Asset,  (v) the assumption or defense of any Excluded  Liability or any Lien, or
(vi) the  administration,  enforcement or adjudication of this Agreement and the
other Purchase  Documents.  The Purchaser  shall maintain all retained Books and
Records  for at least six years  following  the  Closing  Date,  except that the
Purchaser from time to time at its cost and expense may deliver portions thereof
to the Seller.

(b) From and after the Closing  Date, at all  reasonable  times and as
often as the Purchaser or SPG reasonably  may request,  on at least one Business
Days  prior  notice,  the  Seller  shall,  and  shall  cause SPG and each of its
Affiliates  to,  permit  the  Purchaser  or  SPG  (and  its  accountants,  other
Representatives or attorneys),  to have complete and unrestricted  access to all
accounting  records  of SPG  retained  by  SGRP  as  the  Purchaser  or SPG  may
reasonably  require,  and to make copies and  excerpts  from them and to discuss
with them the Seller's officers, directors,  employees,  accountants and agents,
in connection with (i) the preparation,  filing or audit of the federal,  state,
local or  foreign  income  or other tax  returns  of the  Purchaser  or SPG with
respect to any period  after the date  hereof,  or with  respect to any dispute,
refund, claim or litigation relating to those returns and the taxes due pursuant
to those  returns,  (ii) the  collection  of any account  receivable,  (iii) the
initiation,  prosecution or defense of any other  litigation by the Purchaser or
SPG,  (iv)  compliance  by the  Purchaser  or SPG with any  legal or  regulatory
obligation of those  entities,  (v) the  assumption or defense of any Continuing
Liability or any Lien, or (vi) the  administration,  enforcement or adjudication
of this  Agreement and the other Purchase  Documents.  The Seller shall maintain
all such retained  accounting Books and Records for at least six years following
the  Closing  Date,  except  that the  Seller  from time to time may  deliver an
electronic copy or other portions thereof to the Purchaser.

Section 5.05. Further Assurances. Each Party agrees to do such further
acts and  things  and to  execute  and  deliver  such  statements,  assignments,
agreements, instruments and other documents as the other Party from time to time
reasonably  may request (a) in order to evidence or confirm (i) the  transfer of
any Excluded Asset,  the retention of any  non-Excluded  Asset or enforcement of
any transferred or retained right, power,  privilege,  remedy or interest,  (ii)
the  assumption  of  any  liability  expressly  assumed  hereunder,   (iii)  the
continuation  of any  liability  not expressly  assumed  hereunder,  or (iv) the
release of any Excluded  Liability or any Lien,  or (b) in  connection  with the
administration,  enforcement  or  adjudication  of this  Agreement and the other
Purchase  Documents,  in order to  effectuate  the  purpose  and the  terms  and
provisions of this Agreement and the other Purchase Documents, each in such form
and substance as may be reasonably  acceptable to the Parties;  provided that in
connection  with the foregoing no Party shall be required to limit or relinquish
any retained asset,  right, power,  privilege,  remedy or interest or assume any

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greater duty,  obligation or liability than is already required of it under this
Agreement and the other Purchase Documents.

ARTICLE VI

OTHER REMEDIES, ETC.
--------------------

Section 6.01.  Enforcement,  Etc. Any Party,  in its sole and absolute
discretion,  may proceed to exercise  or enforce  any right,  power,  privilege,
remedy or  interest  that such Party may have under  this  Agreement,  any other
Purchase  Document or  Applicable  Law: (a) at law, in equity,  in rem or in any
other  forum  available  under  Applicable  Law;  (b) without  notice  except as
otherwise  expressly  provided  herein;  (c)  without  pursuing,  exhausting  or
otherwise exercising or enforcing any other right, power,  privilege,  remedy or
interest  that such Party may have  against or in respect of the other  Party or
any other Person or thing; and (d) without regard to any act or omission of such
Party or any  other  Person.  Any Party may  institute  one or more  proceedings
(which may be separate  proceedings)  with respect to this Agreement and each of
the other  Purchase  Documents in such order and at such times as such Party may
elect in its sole and absolute discretion. This Agreement and the other Purchase
Documents may be enforced with respect to the other Party (Parties)  without the
presence or  participation  of any other Person  (other than such other Party or
Parties),  whether through lack of jurisdiction,  venue or service or otherwise,
and  no  Party  will   raise,   and  each  Party   hereby   forever   expressly,
unconditionally  and irrevocably waives, any objection or defense respecting the
need for any such presence or participation.

Section 6.02.  Consent to  Jurisdiction,  Waiver of Personal  Service,
Etc. The Parties each hereby  consents and agrees that the Supreme  Court of the
State of New York for the County of Westchester  and the United States  District
Court for the Southern  District of New York  (Westchester  Division) each shall
have  exclusive  personal  jurisdiction  and proper  venue  with  respect to any
dispute  between the Parties  under any Purchase  Document.  In any dispute,  no
Party will raise, and each Party hereby forever expressly,  unconditionally  and
irrevocably  waives,  any  objection or defense to any such  jurisdiction  as an
inconvenient  forum.  Without in any way  limiting  the  preceding  consents  to
jurisdiction  and venue, the Parties agree to submit to the jurisdiction of such
New York courts in accordance with Section 5-1402 of the General Obligations Law
of the State of New York or any corresponding or succeeding  provisions thereof.
The Purchaser hereby forever expressly,  unconditionally  and irrevocably waives
personal  service  of any  summons,  complaint  or other  process,  which may be
delivered by any of the means  permitted  for notices under Section 7.01 hereof.
In  addition  to (and  without  limitation  of) any such  delivery  or any other
delivery  permitted  under  Applicable  Law, the Purchaser  agrees to execute an
deliver  to the  Seller  a  Designation  of  Agent  for  Service  appointing  CT
CORPORATION SYSTEM as the agent of the Purchaser for service in the State of New
York, which the Purchaser hereby irrevocably  authorizes the Seller to date with
such date (if undated) and file with the  appropriate  Authority at such time as
the Seller in its sole and absolute  discretion  may elect.  Within  thirty (30)
days after  service of  process,  the  Purchaser  agrees to appear or answer any
summons or complaint of the Seller,  and should the Purchaser  fail to appear or
answer within said thirty-day  period,  the Purchaser shall be deemed in default
under that action and  judgment  may be  requested  by the Seller and entered in
favor of the  Seller  against  the  Purchaser  for the  relief  demanded  in any
complaint so served. Each Party acknowledges and agrees that a final judgment in
any such action,  suit or proceeding  shall be  conclusive  and binding upon the
Parties and may be enforced against the applicable Party or any of its assets or
properties  in any other  appropriate  jurisdiction  selected by the  prevailing
Party (in its sole and absolute  discretion) by an action, suit or proceeding in
such  other  jurisdiction.  To the  extent  that any  Party may be  entitled  to
immunity  (whether  by  reason of  sovereignty  or  otherwise)  from suit in any
jurisdiction,  from  the  jurisdiction  of any  court or from  any  other  legal
process,  such Party hereby forever expressly,  unconditionally  and irrevocably
waives such immunity.

Section  6.03.  Waiver  of  Setoff,  Special  Damages,  Etc.  (a)  The
Purchaser hereby forever expressly,  unconditionally and irrevocably waives, and
agrees  that it will not  exercise,  any and all rights of  setoff,  recoupment,
abatement  or  reduction  respecting  any payment due  (whether as  scheduled or
required,  upon  acceleration or as sought in any action,  suit or proceeding by
the  Seller)  under this  Agreement,  any other  Purchase  Document or any other
agreement, facility or relationship with the Seller that may now or hereafter be
accorded to the Purchaser under  Applicable Law or otherwise.  To the extent not
required as a compulsory  counterclaim  in any related ongoing  proceeding,  the
Purchaser  (i) shall  pursue  separate  exercise and  enforcement  of any right,
power, privilege,  remedy or interest retained (and not waived) by the Purchaser
under  this  Agreement,  the other  Purchase  Documents,  any  other  agreement,
facility or relationship  with the Seller and Applicable Law, and (ii) shall not
seek to exercise or enforce any such right, power, privilege, remedy or interest
in any  proceeding  instituted by the Seller under or in respect of any Purchase
Document, 

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whether  through  joinder,   consolidation,   setoff,   recoupment,   abatement,
reduction, counterclaim, defense or otherwise.

(b) In any dispute with the Seller,  each Party  covenants  and agrees
that it will not seek,  recover or retain  any,  and each Party  hereby  forever
expressly,   unconditionally  and  irrevocably  waives  any  and  all,  special,
exemplary,  punitive,  statutory and/or  consequential  damages (whether through
action,  suit,  counterclaim or otherwise and whether in contract,  tort, strict
liability or otherwise)  to the extent  waiver is not limited  under  Applicable
Law.

Section 6.04.  Relationship of the Purchaser and the Seller,  Etc. (a)
The Parties acknowledges and agrees that: (i) the Seller is acting solely in the
capacity of a seller respecting this Agreement and the other Purchase Documents;
(ii) the sole  relationship  of the Seller with the Purchaser under the Purchase
Documents is that of  arm's-length  seller and purchaser,  respectively,  and no
term or provision of this Agreement or any other  Purchase  Document is intended
to create,  nor shall any such term or  provision be deemed or construed to have
created,  any joint venture,  partnership,  trust,  agency or other fiduciary or
advisory  relationship with the Purchaser,  any of its  subsidiaries,  or any of
their  respective  Affiliates;   (iii)  the  Purchaser  is  experienced  in  the
ownership,  operation  and financing of its current and  contemplated  business,
assets and properties;  (iv) the Purchaser has  independently and fully reviewed
and evaluated the Purchase Documents,  the transactions  contemplated thereunder
and  the  potential  effects  of  such  transactions  on the  assets,  business,
operations,  properties  and  condition  (financial or otherwise) of each of the
Purchaser,  SPG and the  subsidiaries  and Affiliates of the Purchaser (if any),
which review and  evaluation  was made  together with counsel and (to the extent
deemed prudent by the Purchaser)  financial and other advisors to the Purchaser;
and (v) neither the Purchaser nor any of its  Affiliates is relying upon (A) the
expertise, business acumen or advice of the Seller in connection with any aspect
of the ownership,  operation or financing of its business,  assets or properties
or its condition  (financial or otherwise),  or (B) any oral or written  advice,
analysis or assurance of any kind whatsoever from the Seller.

(b) The  Purchaser  acknowledges  and  agrees  that  the  Seller,  its
Affiliates  and its  Representatives  may be providing  debt  financing,  equity
capital or other services  (including SPAR Business services) to other companies
or  Persons in respect of which the  Purchaser  may have  conflicting  interests
regarding the transactions  described  herein and otherwise.  The Purchaser also
acknowledges  and agrees that  neither the Seller nor any of its  Affiliates  or
Representatives  has any obligation to use in connection  with the  transactions
contemplated by any Purchase Document, or to advise the Purchaser of, or furnish
to the Purchaser,  any confidential or other information  obtained by the Seller
or any of their  Affiliates  or  Representatives  from or with  respect to other
transactions, companies or Persons.

Section 6.05. Reliance.  (a) The Seller shall be entitled to rely upon
any notice, consent, certificate, affidavit, statement, paper, document, writing
or other  communication  (which  to the  extent  permitted  hereunder  may be by
telecopy or  telephone)  reasonably  believed by the Seller to be genuine and to
have  been  signed,  sent or made by the  proper  Person  or  Persons,  and upon
opinions  and advice of legal  counsel  (including  counsel for the  Purchaser),
independent  public  accountants and other experts  selected by the Seller.  The
Seller shall be entitled to rely,  and in entering  into this  Agreement and the
other  Purchase  Documents  in  fact  has  relied,  upon  the   representations,
warranties  and other  information  respecting  the Purchaser  contained in this
Agreement and the other Purchase  Documents  notwithstanding  any investigation,
analysis or evaluation  that may have been made or from time to time may be made
by the  Seller  or its  designees  of all or any part of the  assets,  business,
operations, properties or condition (financial or otherwise) of the Purchaser or
any other Person.

(b) The Purchaser shall be entitled to rely upon any notice,  consent,
certificate,   affidavit,   statement,   paper,   document,   writing  or  other
communication  (which to the extent  permitted  hereunder  may be by telecopy or
telephone)  reasonably  believed by the Purchaser to be genuine and to have been
signed,  sent or made by the proper  Person or Persons,  and upon  opinions  and
advice of legal counsel (including  counsel for the Seller),  independent public
accountants and other experts selected by the Purchaser.  The Purchaser shall be
entitled to rely,  and in entering into this  Agreement  and the other  Purchase
Documents in fact has relied,  upon the  representations,  warranties  and other
information  respecting  the Seller  contained in this  Agreement  and the other
Purchase Documents  notwithstanding  any  investigation,  analysis or evaluation
that may have been made or from time to time may be made by the Purchaser or its
designees of all or any part of the assets, business, operations,  properties or
condition (financial or otherwise) of the Seller or any other Person.

Section  6.06.  Exculpation.   (a)  Except  to  the  extent  otherwise
expressly provided in this Agreement or any other Purchase Document, no Seller's
Indemnified  Person  shall incur any  liability  or Loss for acts and  omissions
resulting  from,  arising  out of or  related  directly  or  indirectly  to this
Agreement,  any other Purchase Document,  SPG's assets or liabilities or the SPG
Business;   and  the   Purchaser   and  SPG  each  

-18-

hereby forever  expressly,  unconditionally  and irrevocably  waives any and all
claims,  actions and Losses against each and every Seller's  Indemnified  Person
resulting from,  arising out of or related directly or indirectly to any and all
of the foregoing acts,  omissions and circumstances;  in each case except to the
extent  occasioned by such Seller's  Indemnified  Person's own acts or omissions
breaching a duty owed to the  Purchaser  and  amounting to gross  negligence  or
willful  misconduct  as  finally  determined  pursuant  to  Applicable  Law by a
governmental authority having jurisdiction;  provided,  however, that nothing in
this  subsection is intended,  or shall be deemed or  construed,  to release any
Party from its express representations,  warranties,  covenants, obligations and
agreements under this Agreement and the other Purchase Agreement.

(b)  Except  to  the  extent  otherwise  expressly  provided  in  this
Agreement or any other  Purchase  Document,  no Purchaser's  Indemnified  Person
shall incur any liability or Loss for acts and omissions resulting from, arising
out of or related  directly or indirectly to this  Agreement  (but not any other
Purchase  Document or any Revolving Credit Document or Term Loan Document),  and
the  Seller  and  SGRP  each  hereby  forever  expressly,   unconditionally  and
irrevocably waives any and all claims, actions and Losses against each and every
Purchaser's  Indemnified Person resulting from, arising out of or related to any
and all of the foregoing acts, omissions and circumstances;  in each case except
to the extent  occasioned by such Purchaser's  Indemnified  Person's own acts or
omissions breaching a duty owed to the Seller and amounting to breach of duty or
contract,  negligence or willful  misconduct as finally  determined  pursuant to
Applicable  Law  by a  governmental  authority  having  jurisdiction;  provided,
however,  that nothing in this  subsection  is  intended,  or shall be deemed or
construed,  to release any Party from its express  representations,  warranties,
covenants,  obligations  and  agreements  under  this  Agreement  and the  other
Purchase Agreement.

Section 6.07. Sole Discretion of the Seller. Wherever pursuant to this
Agreement  (a)  the  Seller  exercises  any  right  given  to it to  approve  or
disapprove,  (b) any arrangement or term is to be satisfactory to the Seller, or
(c) any  other  decision  or  determination  is to be made  by the  Seller,  the
decision of the Seller to approve,  disapprove or make such determination  shall
be in the sole and absolute discretion of the Seller, except as may be otherwise
expressly and specifically provided in this Agreement.

ARTICLE VII

MISCELLANEOUS
-------------

Section 7.01.  Notices,  Etc. Except as otherwise  expressly provided,
any notice,  request,  demand or other communication permitted or required to be
given under this Agreement or any other  Purchase  Document shall be in writing,
shall be signed by the party  giving it,  shall be sent by one of the  following
means to the  addressee  at the  address  set forth in [Exhibit C] hereto (or at
such  other  address  as shall be  designated  hereunder  by notice to the other
parties and Persons receiving  copies,  effective upon actual receipt) and shall
be  deemed  conclusively  to have been  given:  (i) on the  first  Business  Day
following  the day timely  deposited for next Business Day delivery with Federal
Express  (or other  equivalent  national  overnight  courier)  or United  States
Express Mail for overnight delivery, in either case designated for next Business
Day  delivery and with the cost of such  delivery  prepaid or for the account of
the  sender;  (ii) on the  fifth  Business  Day  following  the day duly sent by
certified or registered  United States mail,  postage prepaid and return receipt
requested;  or (iii) when  otherwise  actually  received by the  addressee  on a
Business Day (or on the next Business Day if received  after the close of normal
business hours or on any non-Business  Day). If a certificate,  signed notice or
other signed item is expressly  required by another  provision of this Agreement
or any other Purchase Document,  a manually signed original must be delivered by
the party giving it; any other notice,  request,  demand or other  communication
instead may be sent by telecopy,  with the cost of  transmission  prepaid or for
the account of the sender,  and shall  (except as  otherwise  specified  in this
Agreement or any other Purchase  Document) be deemed  conclusively  to have been
given on the first  Business Day following the day duly sent.  Refusal to accept
delivery of any item shall be deemed to be receipt of such item by the  refusing
party.  Copies of notices to Persons  specified in Exhibit C hereto (if any) may
be sent by regular first-class mail, postage prepaid,  to such Persons,  but any
failure or delay in sending  copies  shall not affect the  validity  of any such
notice, request, demand or other communication so given to a party.

Section  7.02.  Expenses of the  Seller.  The  Purchaser  shall pay or
reimburse  on demand  any and all costs and  expenses  incurred  by the  Seller,
whether  directly  or  indirectly,  in  connection  with  (a)  the  preparation,
execution  and  delivery  of the  Seller's  term  sheet,  (b)  the  preparation,
execution and closing of this  Agreement and the other Purchase  Documents,  and
all waivers, releases, discharges,  satisfactions,  modifications and amendments
thereof and  approvals  and  consents  with  respect  thereto,  (c) all mortgage
recording,  documentary,  transfer,  intangible, note or other similar Taxes and
revenue  stamps,  and all filings and  recordings,  and (d) the  administration,
maintenance,  enforcement and adjudication of this Agreement, 

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the other  Purchase  Documents  and the  Seller's  rights,  powers,  privileges,
remedies and other interests  thereunder and under  Applicable Law, in each case
including (without  limitation) the disbursements,  expenses and fees of counsel
to the Seller (including,  without  limitation,  the allocated costs of in-house
counsel),   currently   Jenkens  &  Gilchrist   Parker   Chapin  LLP,   and  the
disbursements, expenses and fees of any local or special counsel retained by the
Seller or its counsel.

Section 7.03. Interpretation.  The Parties acknowledge and agree that:
each Party and its counsel have reviewed and negotiated the terms and provisions
of this Agreement  (excluding  schedules) and have  contributed to its revision;
the normal rule of construction, to the effect that any ambiguities are resolved
against the drafting Party,  shall not be employed in the  interpretation of it;
and its terms and provisions  shall be construed fairly as to all Parties hereto
and not in favor  of or  against  any  Party,  regardless  of  which  Party  was
generally responsible for the preparation of this Agreement.

Section 7.04.  Governing  Law. This  Agreement and the other  Purchase
Documents:  (a) have been executed and  delivered in the State of New York;  and
(b) shall be governed by and construed in  accordance  with the  Applicable  Law
pertaining in the State of New York (other than those conflict of law provisions
that would defer to the substantive  laws of another  jurisdiction).  Without in
any way limiting the  preceding  choice of law, the Parties elect to be governed
by New York law in  accordance  with,  and are  relying  (at  least in part) on,
Section 5-1401 of the General Obligations Law of the State of New York.

Section 7.05. Severability. In the event that any term or provision of
this Agreement or any other Purchase Document shall be finally  determined to be
superseded,  invalid,  illegal or otherwise unenforceable pursuant to Applicable
Law by an Authority having  jurisdiction and venue, that determination shall not
impair or otherwise affect the validity,  legality or  enforceability  (a) by or
before that  Authority of the remaining  terms and  provisions of this Agreement
and  the  other  Purchase   Documents,   which  shall  be  enforced  as  if  the
unenforceable  term or  provision  were  deleted,  or (b) by or before any other
Authority of any of the terms and  provisions  of this  Agreement  and the other
Purchase Documents.

Section 7.06.  Survival of  Representations,  Etc. Each of the payment
obligations,  collateral  grants,  representations  and  warranties  (as  of the
date(s) made or deemed  made),  covenants,  waivers and other  agreements of the
Purchaser  contained in this  Agreement and the other  Purchase  Documents:  (a)
shall be absolute,  irrevocable and unconditional,  irrespective of (among other
things) the validity,  legality,  binding effect or enforceability of any of the
other terms and provisions of this  Agreement or any other Purchase  Document or
any other  act,  event or  circumstance  described  in this  Section;  (b) shall
survive the  execution  and delivery of this  Agreement  and the other  Purchase
Documents, provided, however, that the representations and `warranties set forth
in (i)  Articles III hereof and Article IV hereof shall remain in full force and
effect only  through the fifth  anniversary  of the Closing  Date,  and provided
further that the  expiration  of such periods shall not affect any pending claim
duly made prior thereto;  (c) shall remain and continue in full force and effect
without  regard (i) to whether the applicable  obligations  are now or hereafter
existing,  acquired or  created,  (ii) to any  extension  or change in the time,
manner,  place and other terms and  provisions of payment or  performance of any
one or more of the applicable  obligations,  (iii) to any waiver,  modification,
extension, renewal,  consolidation,  spreading,  amendment or restatement of any
other term or provision of any  Purchase  Document  (except as and to the extent
expressly modified by the terms and provisions of any such waiver, modification,
extension, renewal, consolidation, spreading, amendment or restatement), (iv) to
any acceptance by the Seller of (A) any partial or late payment, which shall not
constitute a satisfaction or waiver of the full amount then due or the resulting
default, or (B) any payment during the continuance of a default, which shall not
constitute  a waiver or cure  thereof;  and the  Seller may accept or reject any
such payment without affecting any of its rights, powers,  privileges,  remedies
and other  interests  under this  Agreement,  the other  Purchase  Documents and
Applicable  Law; (v) to any full,  partial or non-exercise of any of the rights,
powers,  privileges,  remedies  and  interests  of the Seller under any Purchase
Document or Applicable Law,  against the Purchaser,  or any other Person or with
respect to any of the  obligations,  any other  obligations or any collateral or
security  interest  therein,  which  exercise  or  enforcement  may be  delayed,
discontinued  or  otherwise  not  pursued  or  exhausted  for  any or no  reason
whatsoever,  or which may be  waived,  omitted or  otherwise  not  exercised  or
enforced   (whether   intentionally  or  otherwise),   (vi)  to  any  surrender,
repossession,  sequestration,  foreclosure, conveyance or assignment (by deed in
lieu or otherwise),  sale, lease or other realization,  dealing,  liquidation or
disposition  respecting any collateral or setoff respecting any account or other
asset in accordance with the Purchase Documents or Applicable Law (except as and
to the extent the applicable  obligations have been  permanently  reduced by the
application   of  the  net  proceeds   thereof),   (vii)  to  the  perfected  or
non-perfected  status or priority of any mortgage or other security  interest in
any such  collateral,  which may be held  without  recordation,  filing or other
perfection  (whether  intentionally  or  otherwise),   (viii)  to  any  release,
settlement,  adjustment,  subordination  or impairment of all or any part of the
applicable obligations,  any other obligations or any collateral or any security
interest  therein,  whether  intentionally  or  otherwise  (except as and to the
extent  expressly  modified  by the terms and  provisions  of any such  release,
settlement or adjustment), (ix) to any extension, stay, 

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moratorium  or  statute of  limitations  or similar  time  constraint  under any
Applicable Law, (x) to any  investigation,  analysis or evaluation by the Seller
or its designees of the assets,  business,  operations,  properties or condition
(financial  or  otherwise) of the  Purchaser,  or any other Person,  (xi) to any
application  to any  obligations  of the Purchaser of (A) any payments from such
Person not  specifically  designated  for  application  or (B) any  proceeds  of
collateral  from  such  Person,  (xii)  to  any  sale,  conveyance,  assignment,
participation or other transfer by the Seller (in whole or in part) to any other
Person of any one or more of this Agreement and the other Purchase  Documents or
any one or more of the rights, powers, privileges,  remedies or interests of the
Seller  herein  or  therein,  (xiii) to any act or  omission  on the part of the
Seller or any other  Person or (xiv) to any other act,  event,  or  circumstance
that otherwise might  constitute a legal or equitable  counterclaim,  defense or
discharge of a borrower, co-obligor,  indemnitor,  guarantor, pledgor or surety;
in each case in such  manner  and  order,  upon such  terms and  provisions  and
subject to such  conditions as the Seller may deem necessary or desirable in its
sole and absolute  discretion,  and without notice to or further assent from the
Purchaser  (except for such notices as may be expressly  required to be given to
such party under the applicable Purchase Document);  (d) shall not be subject to
any defense, counterclaim,  setoff, right of recoupment, abatement, reduction or
other claim or  determination  that the Purchaser may have against the Seller or
any other  Person;  (e) shall  not be  diminished  or  qualified  by the  death,
disability, dissolution,  reorganization,  insolvency, bankruptcy, custodianship
or receivership of the Purchaser or any other Person, or the inability of any of
them to pay its debts or perform or otherwise  satisfy its  obligations  as they
become due for any reason whatsoever;  and (f) shall remain and continue in full
force  and  effect  without  regard  to any of the  foregoing  acts,  events  or
circumstances  (A) until all of the applicable  obligations have been fully paid
and satisfied and (B) thereafter with respect to acts,  events or  circumstances
occurring prior to such payment and satisfaction.

Section  7.07.  Counterparts.  This  Agreement  or any other  Purchase
Document  may be  executed  in two or  more  counterpart  copies  of the  entire
document or of signature pages to the document, each of which may be executed by
one or more of the  parties  hereto or  thereto,  but all of which,  when  taken
together,  shall constitute a single  agreement  binding upon all of the parties
hereto or thereto (as the case may be).

Section 7.08.  Successors  and Assigns;  Assignment.  Whenever in this
Agreement or any other Purchase  Document  reference is made to any Party,  such
reference  shall be deemed to include the successors,  assigns,  heirs and legal
Representatives  of such party,  and,  without  limiting the  generality  of the
foregoing, all representations,  warranties, covenants and other agreements made
by or on behalf  of the  Purchaser  in this  Agreement  and the  other  Purchase
Documents  shall  inure to the  benefit  of the  successors  and  assigns of the
Seller;  provided,  however, that nothing herein shall be deemed to authorize or
permit the  Purchaser  or SPG to assign any of its rights or  obligations  under
this  Agreement or any other Purchase  Document to any other Person  (whether or
not an Affiliate of the Purchaser),  and the Purchaser covenants and agrees that
it shall not make any such  assignment.  The Seller  from time to time:  (a) may
assign  or sell  aall  or any  portion(s)  of the  rights,  powers,  privileges,
remedies and interests of and/or the  obligations  owed to the Seller under this
Agreement  or any other  Purchase  Document to any  Person;  (b) may furnish and
disclose financial statements, documents and other information pertaining to the
Purchaser to any potential assignee or participant permitted hereunder;  and (c)
may take any and all other  actions that the Seller may  determine  (in its sole
and absolute  discretion) to be necessary or appropriate in connection  with any
such assignment or  participation;  in each case without notice to or consent of
the  Purchaser or any other Person.  Without in any way limiting the  foregoing,
each Party  acknowledges  and agrees that (A) the Seller and SGRP may assign any
and all of the rights, powers, privileges,  remedies and interests of and/or the
obligations  owed to the Seller  and/or SGRP under this  Agreement  or any other
Purchase  Document to the Senior Lender  pursuant to the Senior Loan  Documents,
(B) the Senior  Lender  shall be  entitled  to  exercise  or enforce  any of the
rights,  powers,  privileges,  remedies and interests of and/or the  obligations
owed to the  Seller  and/or  SGRP  under this  Agreement  or any other  Purchase
Document in accordance  with the Purchase  Documents,  the Senior Loan Documents
and/or  Applicable  Law, and (C) the Senior Lender shall not be  responsible  or
liable for any of the acts, omissions, duties, liabilities or obligations of the
Seller or SGRP.

Section 7.09. No Third Party Rights. The  representations,  warranties
and  other  terms  and  provisions  of this  Agreement  and the  other  Purchase
Documents are for the exclusive  benefit of the Parties  hereto,  and, except as
otherwise  expressly  provided  herein or therein,  no other  Person,  including
creditors of any Party  hereto,  shall have any right or claim against any party
by reason of any of those terms and  provisions or be entitled to enforce any of
those terms and provisions against any party.

Section  7.10.  No Waiver  by  Action,  Etc.  Any  waiver  or  consent
respecting any representation,  warranty, covenant or other term or provision of
this  Agreement or any other  Purchase  Document  shall be effective only in the
specific  instance and for the specific purpose for which given and shall not be
deemed,  regardless of frequency given, to be a further or continuing  waiver or
consent.  The  failure  or delay  of a Party  at any  time or  times to  require
performance  of, or to exercise its rights with respect 

-21-

to, any  representation,  warranty,  covenant or other term or provision of this
Agreement or other Purchase Document in no manner (except as otherwise expressly
provided  herein)  shall  affect its right at a later  time to enforce  any such
provision.  No notice to or demand on any Party in any case shall  entitle  such
Party to any other or  further  notice or demand in the same,  similar  or other
circumstances.  The  acceptance  by any Party of (a) any partial or late payment
shall not constitute a satisfaction or waiver of the full amount then due or the
resulting Event of Default or (b) any payment during the continuance of an Event
of Default  shall not  constitute  a waiver or cure  thereof;  and any Party may
accept or reject any such payment without  affecting any of its rights,  powers,
privileges,  remedies  and  other  interests  under  this  Agreement,  the other
Purchase  Documents  and  Applicable  Law.  All   representations,   warranties,
covenants and  agreements of the Purchaser and all rights,  powers,  privileges,
remedies and other  interests of each Party  hereunder  are  cumulative  and not
alternatives,  and they are in  addition  to and  shall  not  limit  (except  as
otherwise expressly provided herein) any other right, power,  privilege,  remedy
or other  interest  of such  Party  under  this  Agreement,  any other  Purchase
Document or Applicable Law.

[END OF PAGE]

-22-

Section 7.11. Waiver of Jury Trial. In any action,  suit or proceeding
in any  jurisdiction  arising out of or related  directly or  indirectly to this
Agreement or any other Purchase Document,  whether brought by the Seller against
the Purchaser, or the Purchaser against the Seller, the Purchaser and the Seller
each hereby forever expressly,  unconditionally  and irrevocably waives trial by
jury.

Section  7.12.  Modification,  Amendment,  Etc.  Except  as  otherwise
expressly provided in a particular Purchase Document with respect thereto,  each
and every  supplement or amendment to or  modification  or  restatement  of this
Agreement or any other  Purchase  Document shall be in writing and signed by all
of the Parties hereto or the respective parties thereto, as the case may be, and
each and every waiver of, or consent to any departure from, any  representation,
warranty,  covenant or other term or  provision  of this  Agreement or any other
Purchase  Document  shall be in writing and signed by each affected party hereto
or thereto, respectively.

Section 7.13. Entire Agreement.  This Agreement and the other Purchase
Documents  contain the entire  agreement of the Parties and  supersede all other
representations,  warranties,  agreements and understandings (including, without
limitation,  all previous  discussion  letters and term sheets from the Seller),
oral or  otherwise,  among the Parties  with  respect to the  matters  contained
herein and therein.

-23-

IN WITNESS  WHEREOF,  the Parties  hereto have  executed and delivered
this Agreement as of the date first written above.

PERFORMANCE HOLDINGS, INC.

By: /s/ Thomas F. Hunter
-------------------------------
Name:   Thomas F. Hunter
Title:  CEO

SPAR INCENTIVE MARKETING, INC.

By: /s/ Robert G. Brown
-------------------------------
Name:   Robert G. Brown
Title:  CEO

SPAR PERFORMANCE GROUP, INC., HEREBY JOINS IN
THOSE PROVISIONS THAT EXPRESSLY INCLUDES IT BY NAME
(I.E., SPG) OR AS A "PARTY".

SPAR PERFORMANCE GROUP, INC.

By: /s/ Thomas F. Hunter
-------------------------------
Name:   Thomas F. Hunter
Title:  CEO

SPAR GROUP, INC., HEREBY GUARANTIES THE PERFORMANCE BY
SPAR INCENTIVE MARKETING, INC., OF ITS OBLIGATIONS UNDER THE
FOREGOING AGREEMENT AND HEREBY JOINS IN THOSE PROVISIONS THAT
EXPRESSLY INCLUDES IT BY NAME (I.E., SGRP) OR AS A "PARTY".

SPAR GROUP, INC.

By: /s/ Robert G. Brown
-------------------------------
Name:   Robert G. Brown
Title:  CEO

-24-

STATE OF NEW YORK       )
:  SS.:
COUNTY OF NEW YORK      )

On this 30th day of June in the year 2002 before me, the  undersigned,
a Notary  Public in and for said State,  personally  appeared  Thomas F. Hunter,
personally known to me or proved to me on the basis of satisfactory  evidence to
be the  individual  whose  name  is  subscribed  to the  within  instrument  and
acknowledged to me that he/she executed the same in his/her capacity as CEO, and
that by his/her signature on the instrument, the Person upon behalf of which the
individual acted (i.e., SPAR INCENTIVE MARKETING, INC.) executed the instrument.

(Signature and office of individual taking acknowledgment.)

STATE OF NEW YORK       )
:  SS.:
COUNTY OF NEW YORK      )

On this 30th day of June in the year 2002 before me, the  undersigned,
a Notary  Public in and for said  State,  personally  appeared  Robert G. Brown,
personally known to me or proved to me on the basis of satisfactory  evidence to
be the  individual  whose  name  is  subscribed  to the  within  instrument  and
acknowledged to me that he/she executed the same in his/her capacity as CEO, and
that by his/her signature on the instrument, the Person upon behalf of which the
individual acted (i.e., PERFORMANCE HOLDINGS, INC.) executed the instrument.

On this 30th day of June in the year 2002 before me, the  undersigned,
a Notary  Public in and for said State,  personally  appeared  Thomas F. Hunter,
personally known to me or proved to me on the basis of satisfactory  evidence to
be the  individual  whose  name  is  subscribed  to the  within  instrument  and
acknowledged to me that he/she executed the same in his/her capacity as CEO, and
that by his/her signature on the instrument, the Person upon behalf of which the
individual acted (i.e., SPAR INCENTIVE MARKETING, INC.) executed the instrument.

(Signature and office of individual taking acknowledgment.)

-25-

EXHIBIT 10.18

REVOLVING CREDIT, GUARANTY AND SECURITY AGREEMENT

AMONG

SPAR PERFORMANCE GROUP, INC.

PERFORMANCE HOLDINGS, INC.

and

SPAR INCENTIVE MARKETING, INC.

DATED AS OF:  June 30, 2002

SPAR ESOP Revolving Credit Agreement

Table of Contents

Provision                         Heading                                   Page

SPAR ESOP Revolving Credit Agreement   -i-                   NYC Doc. No. 808896

Exhibit A           Form of Revolving Promissory Note
Exhibit B           [INTENTIONALLY OMITTED]
Exhibit C           Addresses for Notices and Service
Exhibit D           Schedule of Targeted Adjusted Cash Flows
Exhibit E           Form of Financial Covenants Compliance Certificate
Schedule 1.01       Material Adverse Effect
Schedule 3.03       Certain Required Consents, Etc.
Schedule 3.05       Certain Conflicts, Etc.
Schedule 3.06       Litigation
Schedule 3.08(b)    Certain Existing Defaults and Adverse Agreements
Schedule 3.10(a)    Existing Indebtedness
Schedule 3.10(b)    Existing Guaranties and other Credit Support
Schedule 3.10(c)    Existing ERISA Plans
Schedule 3.11       Existing Subsidiaries, Partnerships, Ventures and Other 
Investments
Schedule 3.12(b)    Existing Liens and Encumbrances
Schedule 3.12(d)    Insurance Policies
Schedule 3.12(e)    Other Locations of Collateral
Schedule 3.12(f)    Existing Employee Contracts and Arrangements
Schedule 3.12(g)    Certain General Intangibles
Schedule 3.14(a)    Machinery, Equipment and other Fixed Assets
Schedule 3.14(b)    Real Estate Leases
Schedule 3.14(c)    Real Estate Owned
Schedule 3.14(d)    Equipment and other Personal Property Leases
Schedule 3.15       Intellectual Properties
Schedule 3.17       Pledged Securities
Schedule 3.19       Loan Party Securities
Schedule 6.11(b)    Permitted Bonuses

SPAR ESOP Revolving Credit Agreement                      -i-

INTRODUCTION

THIS REVOLVING CREDIT, GUARANTY AND SECURITY AGREEMENT, dated as of June
30, 2002, is by and among SPAR PERFORMANCE GROUP,  INC., a Delaware  corporation
currently  having an address at 2245  Keller Way,  Carrollton,  Texas 75006 (the
"Borrower"), PERFORMANCE HOLDINGS, INC., a Delaware corporation currently having
an address at 2245 Keller Way,  Carrollton,  Texas 75006 ("Holdings"),  and SPAR
INCENTIVE MARKETING, INC., a Delaware corporation currently having an address at
580 White Plains Road, Tarrytown, New York 10591 (the "Lender").

RECITALS

Holdings has entered into the Stock  Purchase  Agreement and other Stock
Purchase Documents (as "Stock Purchase  Agreement",  "Stock Purchase  Documents"
and the other  terms,  words and phrases  used in these  Recitals are defined in
Article I hereof) in order  purchase all of the  outstanding  SPG Stock from the
Lender  pursuant  to  the  Stock  Purchase  Documents  for  the  benefit  of the
Borrower's  and  Holdings'  employees  as further  provided in the ESOP  Related
Documents.  Holdings has entered  into the Term Loan  Agreement in order to fund
such purchase of the SPG Stock.

The Borrower and Holdings have requested that the Lender establish,  and
the Lender desires to establish, a revolving line of credit under which advances
may be  requested  from time to time from the  Lender in an amount not to exceed
the Line of Credit through the Overadvance  Conversion  Date, and thereafter the
lesser of the then applicable Borrowing Base or the Line of Credit, the proceeds
of which will be used to fund the  refinancing  of the  Borrower's  share of the
existing Senior Loans and from time to time to finance the working capital needs
of the  Borrower.  All Advances will be subject to (among other things) the sole
and absolute  discretion  of the Lender and the  availability  of  corresponding
advances under the Senior Loan Agreement.

The  Borrower  has agreed to  collateralize  these Loans with all of its
assets and properties. In order to further induce the Lender to make those Loans
and enter into this  Agreement,  (a) the  Borrower  has agreed to  guaranty  the
Senior Loan Obligations and to secure those  obligations with a pledge of all of
its assets and  properties,  and (b)  Holdings  has agreed to  guaranty  (i) the
Obligations  pursuant to its guaranty contained in this Agreement,  and (ii) the
Senior Loan Obligations pursuant to the Senior Loan Guaranty, which each will be
secured by a pledge of all of Holdings' assets and properties.

Immediately  following the closings  contemplated  in this Agreement and
the Stock Purchase Agreement,  Holdings will established the ESOP Trust pursuant
to the ESOP Related  Documents),  will issue and contribute  1,000,000 shares of
its  common  stock to for the  benefit  of the  employees  of the  Borrower  and
Holdings as further provided in the ESOP Related Documents,  and will repurchase
all of its shares of common stock not owned by the ESOP Trust.

Accordingly,  the  Borrower,  Holdings  and the Lender have entered into
this  Agreement  in order to provide  for (among  other  things)  the making and
repayment   of  the  Loans,   Holdings'   guaranty  of  the   Obligations,   the
collateralization  of the  Obligations  of the  Borrower and  Guarantor  and the
documentation  of  the  various  representations  of  and  agreements  with  the
Borrower,  all upon the terms  and  provisions  and  subject  to the  conditions
hereinafter set forth.

AGREEMENT

In consideration  of the foregoing,  the mutual covenants and agreements
hereinafter set forth,  and other good and valuable  consideration  (the receipt
and  adequacy  of which is hereby  acknowledged  by the  Borrower),  the parties
hereto hereby agree as follows:

ARTICLE I.

DEFINITIONS AND INTERPRETATION

Section 1.01.  Certain  Defined Terms.  As used in this  Agreement,  the
following capitalized terms and non-capitalized words and phrases shall have the
meanings respectively assigned to them below:

"Accounts Receivable" shall mean all of the referenced Person's accounts
(as defined in the UCC) and other rights to receive  payments for any inventory,
goods or other products, assets or properties sold, 

-1-

SPAR ESOP Revolving Credit Agreement

leased or otherwise disposed of or for services rendered,  whether or not earned
by performance, recognized by the referenced Person or recorded on its books and
records,  and  irrespective  of  whether  any  may  not be  characterized  as or
constitute an account (as defined in the UCC) or may be characterized as or also
constitute a chattel paper, chose-in-action, contract right, general intangible,
instrument,  invoice,  letter of credit right, note, payment intangible or other
collateral  type in any document,  by any Person or under any Applicable Law, in
each case  whether  now  existing  or  hereafter  acquired,  created,  executed,
modified  or  otherwise  existing  (including,  without  limitation,  during the
pendency of any Bankruptcy Proceeding).

"Adjusted Capital Expenditures" of Holdings and its subsidiaries for any
referenced  Computation Period shall mean the aggregate capital  expenditures of
Holdings and its subsidiaries for such Computation Period, each as determined in
accordance with GAAP consistently applied.

"Adjusted  Cash  Flow"  shall  mean,  as at any  date of  determination,
Adjusted EBITDA for the Computation Period ending at such date, plus (a) the sum
of  all  extraordinary   gains  and  ESOP  contributions   deducted  during  the
Computation  Period  ending  at such  date,  minus  (b) the sum of all (i)  cash
interest payments on all Indebtedness, (ii) permitted capital expenditures (iii)
actual ESOP contributions,  but not more than the ESOP Maximum Contribution, and
(iv)  principal  payments on the Term Loans made during the  Computation  Period
ending at such date.

"Adjusted  Current Assets" shall mean, as at any date of  determination,
the  current  assets of  Holdings  and its  subsidiaries  at such date,  each as
determined in accordance with GAAP consistently applied.

"Adjusted   Current   Liabilities"   shall  mean,  as  at  any  date  of
determination,  the current liabilities of Holdings and its subsidiaries at such
date as determined  in  accordance  with GAAP  consistently  applied,  including
(without  limitation)  the current  portion of all Adjusted Debt of Holdings and
its subsidiaries at such date.

"Adjusted Debt" shall mean, as at any date of determination,  the sum of
the aggregate  amount of all Indebtedness and Credit Support of Holdings and its
subsidiaries at such date determined in accordance with the definitions thereof,
which  Indebtedness shall include the unadvanced amount of all letters of credit
as if fully  advanced at such date,  and which  Credit  Support  shall equal the
amount of the Indebtedness thereby supported (including the unadvanced amount of
all  letters  of  credit  as if  fully  advanced)  at such  date,  in each  case
irrespective of any other treatment under GAAP.

"Adjusted   Debt  Service   Ratio"  shall  mean,   as  at  any  date  of
determination,  the  ratio  of (a)  the  Adjusted  EBITDA  of  Holdings  and its
subsidiaries for the Computation Period ending at such date, to (b) the Adjusted
Debt Service and Adjusted Lease Service of Holdings and its subsidiaries for the
Computation Period ending at such date.

"Adjusted Debt Service" shall mean, as at any date of determination, the
sum of all payments of principal  and interest on  Indebtedness  of Holdings and
its subsidiaries (including, without limitation, all commissions,  discounts and
other fees and charges  owed with respect to any and all  commitments,  lines of
credit,  banker's acceptances,  letters of credit, and interest rate protection,
foreign  currency  exchange,  or other interest or exchange rate swap or hedging
agreements  or  arrangements,  and the  interest  and  principal  components  of
capitalized leases) paid or payable during the Computation Period ending at such
date.

"Adjusted  Debt  to  EBITDA  Ratio"  shall  mean,  as  at  any  date  of
determination,  the  ratio  of  (a)  the  Adjusted  Debt  of  Holdings  and  its
subsidiaries  at such  date,  to (b) the  Adjusted  EBITDA of  Holdings  and its
subsidiaries at such date.

"Adjusted  Debt  to  Equity  Ratio"  shall  mean,  as  at  any  date  of
determination,  the  ratio  of  (a)  the  Adjusted  Debt  of  Holdings  and  its
subsidiaries  at such date,  to (b) the  Adjusted  Net Worth of Holdings and its
subsidiaries at such date.

"Adjusted  EBITDA" of Holdings and its  subsidiaries  for any referenced
Computation  Period  shall  mean the  aggregate  earnings  of  Holdings  and its
subsidiaries  before  interest,  income and franchise  taxes,  amortization  and
depreciation for such Computation Period, excluding extraordinary items, each as
determined in accordance with GAAP consistently applied.

"Adjusted  Lease Service"  shall mean, as at any date of  determination,
the sum of all rent,  additional  rent and other  amounts  on each lease of Real
Estate or Equipment or other personal  property by Holdings and its subsidiaries
(including,  without limitation, all assessments,  commissions and fees) paid or
payable during the Computation Period ending at such date.

SPAR ESOP Revolving Credit Agreement

-2-

"Adjusted  Leverage Ratio" shall mean, as at any date of  determination,
the ratio of (a) the Adjusted  Liabilities of Holdings and its  subsidiaries  at
such date,  to (b) the Adjusted Net Worth of Holdings  and its  subsidiaries  at
such date.

"Adjusted Liabilities" shall mean, as at any date of determination,  the
sum of (i)  the  aggregate  amount  of all  Adjusted  Debt of  Holdings  and its
subsidiaries  at  such  date,  and  (ii)  the  aggregate  amount  of  all  other
liabilities of Holdings and its subsidiaries at such date, each as determined in
accordance with GAAP  consistently  applied,  except that Adjusted Debt shall be
determined in accordance with the definition thereof.

"Adjusted  Net Worth" shall mean, as at any date of  determination,  (a)
the  aggregate  book value of all  assets and  properties  of  Holdings  and its
subsidiaries  at such date,  minus the Adjusted  Liabilities of Holdings and its
subsidiaries   at  such  date,  each  as  determined  in  accordance  with  GAAP
consistently  applied,  except that Adjusted  Liabilities shall be determined in
accordance with the definition thereof.

"Adjusted Quick Assets" shall mean, as at any date of determination, the
quick assets (consisting of cash, marketable securities and Accounts Receivable)
of Holdings and its  subsidiaries at such date, each as determined in accordance
with GAAP consistently applied.

"Adjusted Quick Ratio" shall mean, as at any date of determination,  the
ratio of (a) the Adjusted  Current  Assets of Holdings and its  subsidiaries  at
such  date,  to (b)  the  Adjusted  Current  Liabilities  of  Holdings  and  its
subsidiaries at such date  (excluding from current  liabilities for this purpose
the current portion of long term Adjusted Debt).

"Advance"  shall have the  meaning  assigned  to it in  Section  2.01(b)
hereof.

"Advance  Date"  shall mean  either (i) the date duly  requested  by the
Borrower under Section 2.01(b) for a particular  Advance,  or such later date as
may be proposed  by the Lender,  or (ii) the actual date of the Advance if made,
as applicable.

"Affiliate"  of a  referenced  Person  shall  mean (a) any other  Person
controlling,  controlled by or under common control with such referenced Person,
(b) any other Person  beneficially  owning or  controlling  ten percent (10%) or
more of the  outstanding  voting  securities or rights or of the interest in the
capital,  distributions or profits of the referenced  Person,  provided that the
Lender shall not under any  circumstance  be deemed an Affiliate of the Borrower
or any of its  subsidiaries  as a result of any securities  pledge or otherwise,
(c) any other Person operating the business or substantially all of the property
of the referenced Person, or vice versa, or (d) any director,  officer,  manager
or other  executive of or partner,  member or joint  venturer in the  referenced
Person or such other Person. If the referenced Person is an individual, then the
term "Affiliate"  also shall include members of the immediate family  (including
parents,  spouse and children) of such  individual and any "Affiliate" of one or
more of those family members. The terms "control",  "controlling",  "controlled"
and the like shall mean the direct or indirect possession of the power to direct
or cause  the  direction  of the  management  or  policies  of a  Person  or the
disposition of its assets or properties, whether through ownership, by contract,
arrangement or understanding, or otherwise.

"Agreement"  shall mean this  Revolving  Credit,  Guaranty  and Security
Agreement,  together with all schedules and exhibits hereto,  as the same may be
supplemented,  modified,  amended, restated or replaced from time to time in the
manner provided herein.

"Alternate  Base Rate" shall mean a fluctuating  annual rate of interest
in effect from time to time that for any day shall be equal to the highest of:

(i)  the rate of interest  then  applicable  to the Term Loans under the Term
Loan  Agreement,  provided,  however,  that  if the  Overadvance  Amount
selected by the Borrower  pursuant to Section 2.02 hereof is zero,  then
after the  Overadvance  Conversion  Date such rate shall be equal to the
rate of interest  then  applicable to the Term Loans under the Term Loan
Agreement minus four percent (4.00%) per annum; and

(ii) the prime commercial  lending rate for such day as announced in the Wall
Street Journal for such day plus four percent (4.00%) per annum.

"Applicable  Law"  shall mean any  applicable  law,  including  (without
limitation) any: (a) federal,  state,  territorial,  county,  municipal or other
governmental or quasi-governmental  law, statute,  ordinance,  rule, regulation,
requirement or use or disposal  classification or restriction,  whether domestic
or   foreign;   (b)   judicial,   administrative   or  other   governmental   or
quasi-governmental   order,   injunction,   writ,  judgment,   decree,   

SPAR ESOP Revolving Credit Agreement

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ruling, interpretation, finding or other directive, whether domestic or foreign;
(c)  common  law or other  legal or  quasi-legal  precedent;  (d)  arbitrator's,
mediator's  or referee's  decision,  finding,  award or  recommendation;  or (e)
charter,  rule, regulation or other organizational or governance document of any
national  securities  exchange or market or other  self-regulatory  or governing
body or organization.

"Authority" shall mean any governmental or quasi-governmental authority,
including  (without  limitation)  any  federal,  state,   territorial,   county,
municipal or other  government or  governmental  or  quasi-governmental  agency,
board, branch, bureau, commission, court, department or other instrumentality or
political  unit or  subdivision,  whether  domestic or foreign,  or any national
securities  exchange or market or other  self-regulatory  or  governing  body or
organization.

"Bankruptcy  Law" shall  mean the  United  States  Bankruptcy  Code,  as
amended,  or any other present or future  Applicable Law respecting  bankruptcy,
reorganization,   insolvency,   readjustment   of  debts,   relief  of  debtors,
dissolution or  liquidation,  any  corresponding  Applicable Law of any State or
foreign  jurisdiction,  or any  succeeding  Applicable  Law,  and the  rules and
regulations promulgated  thereunder;  in each case as the same may have been and
hereafter may be supplemented, modified, amended, restated or replaced from time
to time.

"Bankruptcy  Proceeding"  shall  mean the  filing or  submission  of any
petition or other document for relief, bankruptcy,  insolvency,  receivership or
other remedy, or the existence of any case, action, suit, or proceeding, whether
voluntary  or  involuntary,   under  any  Bankruptcy  Law,   including  (without
limitation) any event referenced in Section 8.01(h) or 8.01(i) hereof.

"Books and Records",  "Books" and  "Records"  each shall mean all of the
referenced  Person's books and records,  including (without  limitation) any and
all (i) corporate, partnership or limited liability company books and minutes or
other records of proceedings,  stock,  partner or membership  books and transfer
ledgers,  (ii) other instruments,  indentures,  agreements,  charters,  by-laws,
certificates  or  other  documents  or  statutory  equivalents   respecting  the
referenced Person or its organization,  governance or operation, (iii) financial
books, ledgers,  bills and other invoices,  canceled checks and check registers,
and other receipt, disbursement or financial records and data, (iv) customer and
vendor lists,  rent rolls, and computer and other data bases, (v) bills of sale,
contracts,  invoices,  and other evidence of sales, leases or other dispositions
and purchases,  leases or other acquisitions,  (vi) tax returns,  registrations,
reports and other filings with  Authorities,  (vii) leases,  contracts and other
agreements,  (viii) insurance policies, (ix) correspondence,  memoranda,  notes,
files and folders,  and (x) other documents,  papers, data and other collections
of  information;  in each case whether on paper,  film or other  tangible  copy,
stored on disc or tape,  in computer  memory or other  electronic  storage or in
some other storage medium, whether transmitted or received by email, internet or
other  transmission  method or medium,  and whether or not in the  possession of
such  Person  or a third  party  service  provider,  and as each  has  been  and
hereafter may be supplemented, renewed, extended, modified, amended, restated or
replaced  from time to time,  and in each case whether now existing or hereafter
acquired, created, executed, modified or otherwise existing (including,  without
limitation, during the pendency of any Bankruptcy Proceeding).

"Borrower"  shall have the meaning  assigned to it in the  Introduction,
above.

"Borrowing  Base" shall mean the amount  determined  as of a  particular
date  equal to the sum of:  (a) 85% of the book  value  of all  Eligible  Billed
Receivables of the Borrower then outstanding;  plus (b) 60% of the book value of
all Eligible Unbilled Receivables of the Borrower then outstanding; plus (c) the
then applicable  Overadvance Amount; minus (d) any and all reserves (whether for
doubtful  accounts,  customer  deposits or  otherwise)  then  maintained  by the
Borrower or required by the Lender in its or their sole and absolute  discretion
(without duplication); provided, however, that (i) only Collateral for which the
Borrower's  representations  and  warranties  under this Agreement and the other
Loan  Instruments  are true and  correct  at the  time of  calculation  shall be
included in the aggregate  Borrowing  Base, (ii) the Lender at any time and from
time to time may adjust the preceding percentages or modify or add categories of
eligibility  in order to reflect  the  composition  of and  experience  with its
Accounts  Receivable,  and (iii) if the Lender at any time  determines  any such
method of valuation  overstates  the actual fair market  value at the time,  the
Lender  may  recalculate  those  values to fair  market  value.  The  Lender may
determine the Borrowing  Base at any time and from time to time,  which may (but
need not) be based upon the periodic report of the Borrower in the most recently
delivered Borrowing Base Certificate required under Section 5.02(e) hereof.

"Borrower's  Obligations"  shall  mean any and all (i) Loans  (including
future advances),  together with accrued and unpaid interest thereon, (ii) other
amounts  to be paid and all  other  obligations  to be  performed  or  otherwise
satisfied by the Borrower under any Note or any other Loan  Instrument  (whether
individually, jointly, severally or otherwise), (iii) any amounts to be paid and
obligations  to be performed or  otherwise  satisfied by the Borrower  under any
Stock  Purchase   Document   (whether   individually,   jointly,   severally  or

SPAR ESOP Revolving Credit Agreement

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otherwise), and (iv)  overdrafts  of the Borrower  honored by the Lender (in its
sole and absolute discretion) and other indebtedness, liabilities or obligations
(whether under any note,  guaranty or other instrument or document or otherwise)
now or  hereafter  owed to the  Lender by the  Borrower  (whether  individually,
jointly,  severally or otherwise);  in each case including,  without limitation,
any and all  interest,  fees and other  amounts  accrued,  accruing or otherwise
applicable  during the pendency of any Bankruptcy  Proceeding,  irrespective  of
whether such interest, fees and other amounts are allowed or allowable as claims
in any such proceeding.

"Business Day" shall mean any day during which the Senior Lender is open
for business in New York,  New York,  other than any  Saturday,  Sunday or other
applicable legal holiday.

"Collateral"  shall have the  meaning  assigned  to it in  Section  7.01
hereof.

"Computation  Period" shall mean any period of twelve consecutive fiscal
months of Holdings and its subsidiaries (including any fiscal year).

"Confidentiality   Agreement"   shall  mean  the   Confidentiality   and
Non-Compete Agreement among the Borrower,  Holdings,  and the Lender dated as of
June 30, 2002, as the same may be supplemented,  modified,  amended, restated or
replaced from time to time in the manner provided therein.

"Credit  Support"  shall  respectively  mean  any  and  all  agreements,
arrangements  and  obligations   whereby  the  referenced   Person  directly  or
indirectly has guarantied, assumed or otherwise become liable or responsible for
the Indebtedness or other obligation of any other Person,  whether contingent or
otherwise,  and whether or not recourse is limited to  specified  amounts or any
asset or property of the referenced Person,  including (without  limitation) (a)
any guaranty or other  assurance of payment or  performance of any obligation of
any other Person, (b) any  indemnification,  hold harmless or similar agreement,
arrangement or obligation respecting any obligation of any other Person, (c) any
pledge,  hypothecation or other encumbrance,  or any loan or other availability,
of any asset or property of the  referenced  Person in respect of any obligation
of any other Person,  or (d) any agreement,  arrangement or other obligation (i)
to purchase, repurchase or otherwise acquire any obligation of any other Person,
(ii) to purchase, repurchase, sell, lease or otherwise provide any securities or
other assets and  properties  in  connection  with any  obligation  of any other
Person,  (iii) to provide any  discounts,  services or other  accommodations  in
connection  with any  obligation of any other  Person,  (iv) to make any capital
contribution,  advance or loan in  connection  with the  obligation of any other
Person or (v) to otherwise enhance,  support,  repay or discharge any obligation
of any  other  Person;  excluding,  however,  any  endorsement  of a  negotiable
instrument  for  collection or deposit in the ordinary  course of the referenced
Person's business. The amount of an item of Credit Support shall be equal to the
maximum  amount of  Indebtedness  thereby  supported  irrespective  of any other
treatment under GAAP.

"Default"  shall  mean any event  that,  with or  without  the giving or
receipt of notice,  the  acquisition of knowledge or the passage of time (or any
combination thereof), would constitute an Event of Default.

"Effective  Date" shall have the meaning  assigned to it in Section 9.10
hereof.

"Eligible  Billed  Receivables"  as of a particular  time shall mean all
accounts receivable then outstanding for inventory and other goods,  merchandise
and tangible  assets and  properties  sold or services  rendered in the ordinary
course  of the  Borrower's  business  (as  then  conducted)  (collectively,  the
"Products")  as  determined  in  accordance  with  GAAP  and  that  qualify  for
eligibility  as  determined  from  time to time by the  Lender  in its  sole and
absolute discretion. However, no account receivable will be included in Eligible
Receivables  where:  (a) the invoice is more than 90 days past due;  (b) a final
invoice has not been issued;  (c) delivery of the  invoiced  Product(s)  has not
been  completed;  (d) the invoice is  conditional,  permits returns or restricts
collection rights or assignments in any respect; (e) the invoice permits payment
(i) more than 30 days after the invoice  date,  (ii) in any currency  other than
United States Dollars,  or (iii) at any location outside the United States;  (f)
the  obligation  to pay is  evidenced  by  chattel  paper  or any  note or other
instrument  (unless duly endorsed and delivered to the Lender or Senior Lender);
(g) the invoiced Product(s) have been rejected, returned or disputed in any way,
whether in whole or in part,  or the customer has attempted to  renegotiate  the
invoiced  price,  other  than  because  of  mistake  or in  accordance  with the
customary credit and collection practices of the Borrower;  (h) the customer has
asserted any right or reduction,  setoff,  recoupment,  counterclaim or defense;
(i) the account  receivable is one in which the Lender does not have a perfected
first  priority  security  interest;  (j) the invoice or  corresponding  account
receivable is the subject of any financing statement,  lien or other encumbrance
other than in favor of the Lender;  (k) the customer and its affiliates  account
for more than 25% of all of the Borrower's  accounts receivable then outstanding
if and to the extent the Lender  determines  such  concentration  poses a credit
risk; (l) the customer or any affiliate has a history of late payments, returns,
rejections,  

SPAR ESOP Revolving Credit Agreement

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renegotiations or disputes;  (m) the customer is an affiliate of the Borrower or
any Surety; (n) the customer is any governmental authority;  (o) the customer is
located  outside  the  United  States;  (p)  the  customer  does  not  meet  the
established credit standards of the Borrower or the Lender; (q) the customer has
taken or committed  any of the actions  specified in Section  8.01(g)  hereof in
respect of itself or all or  substantially  all of its assets and  properties or
has had any of those  actions  taken  against  it;  (r) the  account  receivable
exceeds any credit limit  established  by the Lender in its sole  discretion for
the customer's accounts receivable with the Borrower; (s) the account receivable
does not conform at the time to the Borrower's representations and in good faith
the  exercise  of  warranties  respecting  Collateral  in  general  or  accounts
receivable  in  particular;  (t) the Lender has  determined in good faith in the
exercise of its  discretion  that the  account  receivable  should be  excluded,
whether  individually,  by  customer,  by amount or  otherwise  in a  reasonable
manner;  or (t) would not otherwise  qualify as an "Eligible  Receivable"  under
(and as defined in) the Senior Loan  Agreement;  provided that the Lender in its
sole and  absolute  discretion  may  permit  the  partial  inclusion  of certain
excluded accounts  receivable having some value,  which shall be subject to such
criteria, limitations, valuations and discounts as the Lender may establish from
time to time.

"Eligible  Unbilled  Receivables" as of a particular time shall mean all
accounts receivable then outstanding for inventory and other goods,  merchandise
and tangible  assets and  properties  sold or services  rendered in the ordinary
course  of the  Borrower's  business  (as  then  conducted)  (collectively,  the
"Products") as determined in accordance  with GAAP and that were created no more
than 60 days  prior to such  time and if  billed  would  otherwise  qualify  for
eligibility as Eligible  Billed  Receivables as determined  from time to time by
the Lender in its sole and absolute discretion.

"Environmental  Claim" shall mean: (a) any responsibility,  liability or
unlawful  act or  omission  under any  Environmental  Law  (whether  alleged  or
otherwise); (b) any tortious act or omission or breach of contract pertaining to
any  Environmental  Substance  (whether alleged or otherwise);  or (c) any other
violation  or  claim  under  any   Environmental   Law  or  in  respect  of  any
Environmental Substance (whether alleged or otherwise).

"Environmental Law" and "Environmental Laws" shall respectively mean any
one or more of the Applicable Laws  pertaining to: (a) any emission,  discharge,
release,  runoff,  disposal or presence in the environment of any  Environmental
Substance; (b) any cleanup,  containment,  manufacturing,  treatment,  handling,
transportation,  storage  or  sale  of  or  other  activity  pertaining  to  any
Environmental Substance; or (c) any other peril to public or occupational health
or safety or to the environment that may be posed by an Environmental Substance.

"Environmental  Substance"  shall  mean any toxic  substance,  hazardous
material,  contaminant,  waste,  pollutant or other similar product or substance
that may pose a threat  to  public  or  occupational  health or safety or to the
environment.

"Equipment"  shall mean any and all equipment,  goods and other tangible
personal  assets and  properties of the Borrower,  wherever  located,  including
(without   limitation)   any  and  all   accessions,   accessories,   additions,
communications and computer hardware (including all network,  control,  routing,
storage, printing and display devices), equipment, Fixtures, furnishings, goods,
machinery,   manuals,  materials,  parts,  replacements,   supplies,  tools  and
vehicles,  whether or not located  upon or affixed to any of the  foregoing,  in
each case  whether  now  existing or  hereafter  acquired,  created,  installed,
modified  or  otherwise  existing  (including,  without  limitation,  during the
pendency of any Bankruptcy Proceeding).

"ERISA" shall mean the Employee  Retirement Income Security Act of 1974,
as amended, or any corresponding or succeeding provisions of Applicable Law, and
the rules and regulations promulgated  thereunder;  in each case as the same may
have been and  hereafter may be  supplemented,  modified,  amended,  restated or
replaced from time to time.

"ERISA Affiliate" and "ERISA Affiliates" shall respectively mean any one
or more of any  trade,  business,  Person  or  persons  that  together  with the
Borrower would be deemed to be a single  employer  within the meaning of Section
4001 of ERISA.

"ERISA  Effect"  shall mean any material  and adverse  effect on (a) any
Plan,  (b) the assets  and  properties  of any Plan or (c) any  funding or other
liability of any one or more of the  Borrower or any ERISA  Affiliate in respect
of any Plan (individually or in the aggregate).

SPAR ESOP Revolving Credit Agreement

-6-

"ERISA  Event"  shall  mean  any (a)  "accumulated  funding  deficiency"
(whether or not waived),  "prohibited  transaction",  "reportable  event" (other
than any event  for  which the  30-day  notice  requirement  has been  waived by
regulation), "disqualification",  "partial withdrawal" or "withdrawal", "partial
termination" or "termination", "insolvency", "reorganization", or the imposition
of any "penalty" or "withdrawal  liability" in respect of any Plan under (and as
such words and phrases are defined in) ERISA or the Tax Code, as applicable, (b)
any other  violation  of  ERISA,  the Tax Code or any  other  Applicable  Law in
respect of any Plan (whether alleged or otherwise),  (c) supplement or amendment
to or  modification  or  restatement  of any Plan that  could have or has had an
ERISA Effect, or (d) imposition, increase or other adverse change in any funding
obligation  or other  liability  of any one or more of the Borrower or any ERISA
Affiliate in respect of any Plan or to the Pension Benefit Guaranty  Corporation
(individually or in the aggregate).

"ESOP Maximum  Contribution"  shall mean for any Computation  Period the
minimum amount required under ERISA and the Code for ESOP Plan compliance.

"ESOP Plan" shall mean the  Performance  Holdings,  Inc.  Employee Stock
Ownership Plan established by Holdings pursuant to the ESOP Plan Declaration.

"ESOP Plan  Declaration"  shall mean the document  entitled  Performance
Holdings,  Inc. Employee Stock Ownership Plan dated as of July 1, 2002, together
with all  schedules  and  exhibits  thereto,  as the  same may be  supplemented,
modified, amended, restated or replaced from time to time in the manner provided
therein.

"ESOP Related Document" and "ESOP Related  Documents" shall respectively
mean any one or more of the ESOP Plan Declaration, the ESOP Trust Agreement, the
ESOP Trustee Indemnity Agreement and the ESOP Trustee Retention  Agreement,  the
Holdings  Contribution  Agreement,  the Holdings Redemption  Agreement,  and the
various assignments, agreements, instruments and other documents executed by the
requisite  Person(s)  pursuant to or in connection with any of the foregoing and
accepted or delivered by the ESOP Trustee or Borrower,  as  applicable  (whether
prior to,  on or from time to time  after  the  Effective  Date)and  any and all
waivers, consents, agreements, reports, statements,  certificates, schedules and
other documents executed by the requisite Person(s) pursuant to or in connection
with any of the  foregoing  and  accepted or  delivered  by the ESOP  Trustee or
Borrower,  as  applicable  (whether  prior to, on or from time to time after the
Effective  Date),  as each may  have  been and  hereafter  may be  supplemented,
modified, amended, restated or replaced from time to time in the manner provided
therein.

"ESOP  Trustee  Retention  Agreement"  shall mean the  retention  letter
agreement  between  Holdings  and the ESOP  Trustee  dated  as of July 1,  2002,
together  with  all  schedules  and  exhibits  thereto,   as  the  same  may  be
supplemented,  modified,  amended, restated or replaced from time to time in the
manner provided therein.

"ESOP Trust" shall mean the SPAR Performance  Group, Inc. Employee Stock
Ownership  Trust (under which the ESOP  Trustee is the trustee)  established  by
Holdings pursuant to the ESOP Plan Declaration and the ESOP Trust Agreement.

"ESOP Trust Agreement"  shall mean the Trust Agreement  between Holdings
and the ESOP Trustee  dated as of July 1, 2002,  together with all schedules and
exhibits thereto, as the same may be supplemented,  modified,  amended, restated
or replaced from time to time in the manner provided therein.

"ESOP Trustee" shall mean GreatBanc  Trust Company,  and its successors,
permitted assigns and legal representatives,  not in its corporate capacity, but
in its capacity as trustee under the ESOP Trust.

"ESOP  Trustee  Indemnity  Agreement"  shall  mean  the  Indemnification
Agreement  between  Holdings  and the ESOP  Trustee  dated  as of July 1,  2002,
together  with  all  schedules  and  exhibits  thereto,   as  the  same  may  be
supplemented,  modified,  amended, restated or replaced from time to time in the
manner provided therein.

"event"  shall  include  (without  limitation)  any  event,  occurrence,
circumstance, condition or state of facts.

"Event of Default" shall have the meaning assigned to it in Section 8.01
hereof.

"Fixture" shall mean any fixture as defined in the UCC.

SPAR ESOP Revolving Credit Agreement

-7-

"GAAP" shall mean generally accepted accounting principles in the United
States of America  consistent  with  those  applied  in the  preparation  of the
financial statements referred to in Section 3.07 hereof.

"Guarantor" and "Guarantors"  shall respectively mean any one or more of
Holdings and any subsidiary of Holdings  (other than the Borrower)  executing an
assumption of the Guarantor's  obligations  hereunder as contemplated in Section
5.11 hereof.

"Guarantors' Obligations" shall mean any and all of (i) each Guarantor's
joint, several, absolute,  unconditional and irrevocable guaranty of the payment
and  performance  of the  Borrower's  Obligations  and the support  thereof with
security interests in the Collateral,  (ii) the other amounts to be paid and all
other obligations to be performed or otherwise  satisfied by any Guarantor under
this  Agreement or any other Loan  Instrument  (whether  individually,  jointly,
severally  or  otherwise),  (iii) any amounts to be paid and  obligations  to be
performed  or  otherwise  satisfied by any  Guarantor  under any Stock  Purchase
Document  (whether  individually,  jointly,  severally or  otherwise),  and (iv)
overdrafts  of any  Guarantor  honored by the  Lender (in its sole and  absolute
discretion) and other  indebtedness,  liabilities or obligations  (whether under
any  note,  guaranty  or other  instrument  or  document  or  otherwise)  now or
hereafter owed to the Lender by any Guarantor  (whether  individually,  jointly,
severally or otherwise); in each case including, without limitation, any and all
interest,  fees and other  amounts  accrued,  accruing or  otherwise  applicable
during the pendency of any Bankruptcy  Proceeding,  irrespective of whether such
interest,  fees and other amounts are allowed or allowable as claims in any such
proceeding.

"hereunder",  "herein",  "hereof"  and other  words and  phrases of like
import shall refer to each and every term and provision of this Agreement.

"Holdings"  shall have the meaning  assigned  to it in the  Introduction
hereto.

"Holdings  Contribution  Agreement"  shall  mean  the  letter  agreement
between the Borrower  and the Seller dated as of June 30, 2002,  as the same may
be supplemented,  modified,  amended,  restated or replaced from time to time in
the manner provided therein.

"Holdings Redemption  Agreement" shall mean the letter agreement between
the Borrower and its sole  shareholder  (prior to the  contribution  to the ESOP
Trust contemplated under the Holdings  Contribution  Agreement) dated as of June
30,  2002,  as the same may be  supplemented,  modified,  amended,  restated  or
replaced from time to time in the manner provided therein.

"Holdings  Stock Plan"  shall mean the any stock  option  plan,  phantom
stock plan or the like of Performance Holdings,  Inc., as approved by the Lender
in its sole discretion,  as the same may be adopted and thereafter supplemented,
modified, amended, restated or replaced from time to time in the manner provided
therein.

"Holdings Warrant" shall mean the Warrant Agreement dated as of June 30,
2002,  between  Holdings  and the  Seller  granting  to the  Seller the right to
acquire 10% of the outstanding shares of common stock issued by Holdings, as the
same may be supplemented,  modified,  amended, restated or replaced from time to
time in the manner provided therein..

"Holdings  Warrant  Shares"  shall  mean the  number of shares of common
stock  issued by Holdings  that are then  purchasable  from  Holdings  under the
Holdings  Warrant,  which  number may  fluctuate  from time to time as result of
anti-dilution adjustments,  or as a result of the adjustment pursuant to Section
2.02 hereof.

"Improvements"  shall mean all land development,  construction and other
improvements to Real Estate, whether planned,  authorized, under construction or
completed, and whether or not enhancing the value of the referenced Real Estate,
including  (without  limitation) all demolitions,  excavations,  fills and other
site work, roads and sidewalks,  water,  sewer and utility lines,  buildings and
other structures, and all fixtures, furnishings and Equipment located on or used
in connection with the referenced Real Estate, whether or not affixed thereto.

"Indebtedness"   of  any  referenced  Person  shall  mean  any  and  all
obligations of the referenced Person: (a) for borrowed money, however evidenced;
(b) evidenced by any promissory note,  bond,  debenture or other similar written
obligation  to pay  money;  (c) for the  deferred  purchase  price of any asset,
property or service;  (d) under any interest rate  protection,  foreign currency
exchange,  or other  interest  or  exchange  rate swap or hedging  agreement  or
arrangement;  (e) in respect of any letter of credit or banker's acceptance; (f)
to reimburse or compensate any other Person  respecting any provisional or other
temporary   credit  in  advance  of  

SPAR ESOP Revolving Credit Agreement

-8-

collection for deposits of any checks,  instruments  or other  documents made by
the referenced Person or any of its Affiliates;  (g) as lessee under leases that
have been capitalized or should be capitalized  under GAAP; (h) respecting loans
or advances from any subsidiary or other Affiliate; (i) respecting any preferred
stock issued by the referenced Person bearing any mandatory  dividend,  interest
or other return, or subject to any repurchase or redemption,  that is payable in
cash or any other property (other than as payable only with common stock or like
preferred stock);  (j) respecting  unfunded accrued benefits under plans covered
by Title IV of ERISA and unfunded  accrued  post-retirement  benefits  under any
"welfare  benefit  plan" (as defined in ERISA);  or (k)  respecting  other items
treated as liabilities under GAAP;  provided,  however,  that Indebtedness shall
not  include  any trade  liability  owed by the  referenced  Person to any other
Person that arose from the  purchase or sale from such other  Person of goods or
services by the referenced  Person in the ordinary course of its business and is
treated (in its entirety) as a current accounts payable under GAAP. In the event
the referenced Person is a corporation with one or more  subsidiaries,  the term
"Indebtedness"  shall  mean  the  Indebtedness  of all of them  consolidated  in
accordance with GAAP consistently applied as of the date of calculation.  Except
as otherwise  provided in the financial covenant  definitions,  the amount of an
item of Indebtedness shall include all unused availability under lines of credit
and  commitments as if fully advanced  irrespective of any other treatment under
GAAP.

"Intellectual  Property"  shall  mean  (a) any and  all  copyrights  and
copyrighted materials,  logos, patents, service marks, trademarks,  trade names,
domain  names,  computer  programs  and other , know how and other  intellectual
properties of the referenced Person,  including (without limitation) any and all
applications,  invention  disclosures  and pending  items,  any and all designs,
discoveries,  formulae,  ideas,  inventions,  products,  programs,  software and
firmware  (whether in source  code,  object  code or  otherwise,  and  including
(without  limitation) all  "shrink-wrap"  licenses that  accompanied any item of
Equipment or software when obtained),  specifications,  styles,  techniques, and
other  trade  secrets  and works of  authorship  for the  current  and  intended
business,  products  and  prospects,  any and all  license  royalties  and other
payment intangibles,  the proceeds of infringement suits and other proceeds, the
right to sue for past, present and future infringement, all rights corresponding
thereto  throughout  the  world,  and all  reissues,  divisions,  continuations,
renewals,  extensions  and  continuations-in-part  thereof,  and, in the case of
trademarks,  the  good  will of the  business  to  which  each of them  relates,
including  (without  limitation) the name "SPAR Performance Group, Inc." and any
and  all  derivatives  thereof;  (b) any and  all  proprietary  or  confidential
information  or  trade  secrets  pertaining  to  any of  the  assets,  business,
finances,  liabilities,  operations,  procedures  or prospects of the  Borrower,
including (without  limitation) any and all accounting  standards,  policies and
variances,  advertisements  and  other  promotional  materials  (whether  or not
copyrighted),  analyses and  methodologies,  bids, books and records,  business,
claims  and  controversies,   correspondence,  costs,  credit,  customer  lists,
identities,  contacts and other information,  data, debt, disbursements,  discs,
tapes and other media, documents,  expenses,  financial information,  forecasts,
instructions,  interpretations,  invoices, leases, ledgers, licenses, litigation
and other proceedings,  loans, manuals,  materials,  methods,  orders, payables,
payroll,  personnel,  policies,   presentations,   prices,  products,  programs,
proposals,  prospects,  receipts,  registrations,  reports, services,  software,
source code, strategies,  suppliers, systems, targets, taxes, techniques, terms,
trade  secrets,  and  qualifications;  and (c) any and  all  Books  and  Records
evidencing  or  pertaining  to any of the  foregoing;  in each case  whether now
existing  or  hereafter  acquired,  licensed,  created,  executed,  modified  or
otherwise existing  (including,  without limitation,  during the pendency of any
Bankruptcy  Proceeding),  and  irrespective  of whether any  patent,  copyright,
trademark  or other  right or  protection  has been or can be sought,  issued or
obtained in connection therewith.

"Inventory"   shall  mean  any  and  all   inventory  and  other  goods,
merchandise and other items held by the referenced Person (or on its behalf) for
manufacture,  sale,  lease or other delivery or consumption,  wherever  located,
whether raw materials,  supplies,  parts or other components,  work-in-progress,
finished goods,  returned goods or otherwise,  in each case whether now existing
or  hereafter  acquired,  created,  modified,  finished  or  otherwise  existing
(including,   without   limitation,   during  the  pendency  of  any  Bankruptcy
Proceeding).

"Investment"  shall mean, with respect to any referenced Person, (a) any
stock,  warrant,   option,  put,  call,  bond,   debenture,   commercial  paper,
governmental  obligation,  note,  certificate of deposit,  partnership  interest
(general or limited),  limited liability company membership or interest or trust
interest,  any  commodity  or future , any  commodity,  future,  swap,  ceiling,
collar,  straddle or other hedge or  protection,  any foreign  currency or other
money, any bank, brokerage,  deposit, securities,  trading or other account, any
other security,  investment property,  financial asset,  investment or interest,
any other  obligation or right to acquire or benefit from any such item, (b) any
direct or indirect capital or other equity contribution to any other Person made
or committed to by the  referenced  Person,  (c) any purchase by the  referenced
Person of all or  substantially  all of the assets and  properties  of any other
Person or any discrete division or other business unit of such other Person, (d)
any agreement or arrangement by or with the referenced Person for the purpose of
entering into any partnership or joint venture with or providing funds or credit
to or for the  benefit of any other  Person,  (e) any direct or  indirect  loan,
advance or Credit Support by the referenced  Person to or for the benefit of any
other 

SPAR ESOP Revolving Credit Agreement

-9-

Person (including  interest),  each related governing  document,  and any right,
power,  privilege,  remedies or interest under, in or with respect to any of the
foregoing  items in this  subsection,  or (f) any security  entitlement or other
right,  power,  privilege,  remedy or  interest  (whether  under  any  governing
document  or other  related  contract,  instrument,  agreement  or  document  or
otherwise)  of the  referenced  Person  under,  in or with respect to any of the
foregoing  items in this  definition,  in each  case  whether  now  existing  or
hereafter   acquired,   created,   executed,   modified  or  otherwise  existing
(including,   without   limitation,   during  the  pendency  of  any  Bankruptcy
Proceeding), excluding, however, any (i) current trade liability (other than any
Indebtedness)  owed to the referenced Person by any other Person that arose from
the  purchase  or sale from the  referenced  Person of goods or  services in the
ordinary course of its business, or (ii) for the purposes of Articles III, V and
VI of this  Agreement  only,  prepayment of expenses (A) where such expenses are
being incurred by the referenced  Person in the ordinary course of its business,
(B) such expenses are of a type customarily  prepaid, and (C) such prepayment is
in a commercially  reasonable amount for a commercially  reasonable  period. The
amount of any Investment shall be the original cost of such Investment, plus the
cost of all additions thereto,  and minus the amount of any return of capital or
principal to the extent such return is in cash with respect to such  Investment,
without,  however,  any  adjustments  for  increases  or  decreases  in value or
write-ups, write-downs or write-offs with respect to such Investment.

"Investment  Company Act" shall mean the Investment Company Act of 1940,
as amended, or any corresponding or succeeding  provisions of any Applicable Law
in  any  foreign  jurisdiction,   and  the  rules  and  regulations  promulgated
thereunder,  in each  case as the  same  may  have  been  and  hereafter  may be
supplemented, modified, amended or restated from time to time.

"Lender"  shall have the  meaning  assigned  to it in the  Introduction,
above.

"Letter of Credit" and "Letters of Credit" shall mean  respectively  any
one or more of the letters of credit  issued for the account of the  Borrower or
Guarantor  pursuant to Section  2.18  hereof,  whether  issued by or through the
actions  of  the  Lender  or any  other  issuer  thereof,  as  the  same  may be
transferred,  renewed, modified, amended, restated or replaced from time to time
in the manner provided therein.

"Letter of Credit  Advance"  shall mean any payment or advance  under or
with respect to any Letter of Credit by the Lender,  any other issuer thereof or
their respective designees.

"Letter of Credit Amount" as of a particular  date shall mean the sum of
(i) the  aggregate  issued but  unadvanced  face amount of all Letters of Credit
then  outstanding  under this  Agreement and (ii) the  principal  balance of the
Letter of Credit Advances then outstanding and not converted  voluntarily by the
Borrower to Revolving Credit Loans.

"Letter of Credit  Beneficiary" shall have the meaning assigned to it in
Section 2.18(b) hereof.

"Letter  of Credit  Expiration  Date"  shall mean such  "expiration"  or
"expiry"  date as may be  specified  in a Letter of Credit,  as and if  extended
pursuant thereto.

"Letter of Credit Fee" shall have the meaning  assigned to it in Section
2.18(e) hereof.

"Letter of Credit  Issuance  Date"  shall mean  either (i) the date duly
requested (if the date actually made) by the Borrower under Section  2.18(b) for
the  issuance,  renewal or extension of a particular  Letter of Credit,  or such
later date as may be proposed by the Lender or any other issuer thereof, or (ii)
the actual date of  issuance,  renewal or  extension  of the Letter of Credit if
issued, as applicable.

"Lien" and "Liens"  shall  respectively  refer to any one or more of the
following to which the referenced or relevant  Person is a party or by which the
referenced  or relevant  Person,  any of its assets or  properties  or any other
referenced  assets or properties  may be bound or subject:  (a) any  assignment,
pledge,  mortgage,  hypothecation or security interest  (irrespective of whether
the  referenced  Person is personally  obligated  with respect to any obligation
thereby  secured);  (b) any filed  financing  statement  (other  than as secured
party); (c) any consignment,  finance lease,  conditional sale contract or other
title  retention  agreement;  (d) any  assignment,  pledge  or  other  transfer,
restriction  or  encumbrance  of any  right  to  receive  any  income  or  other
distributions  or  proceeds;  (e) any  sale/leaseback  transaction  in which the
referenced Person is the  seller/lessee;  (f) any lien,  charge,  claim or other
encumbrance  arising under any Applicable Law,  whether in favor of an Authority
or otherwise,  including (without  limitation) liens for taxes,  assessments and
other  governmental  charges  and  liens  of  mechanics,  carriers,  warehouses,
suppliers and laborers;  (g) any restrictive covenant,  lease, license, right of
use,  possession or first  refusal,  infringement,  community  property or other
joint  ownership  interest,  limitation  or  restriction  on  use  or  transfer,
exception to title, or other  limitation or restriction on the extent,  exercise
or  enforcement of any right or interest  respecting any asset or property;  (h)
with  respect  

SPAR ESOP Revolving Credit Agreement

-10-

to  any  Real  Estate,  any  easement,  right-of-way,  servitude,  encroachment,
restrictive  covenant,  reservation,  or  other  exception  to  title;  (i)  any
counterclaim,  setoff,  right of  recoupment,  abatement,  reduction,  community
property right or other claim or determination,  including (without  limitation)
any right of set off or other  claim  against  assets in the  possession  of the
claimant  (whether  or  not  intended  as  collateral);   (j)  any  other  lien,
encumbrance  or adverse right or claim of any nature in, to or against any asset
or  property,  or (k) any  covenant  or  agreement  with any  other  Person to a
"Negative  Pledge" (i.e., that the referenced or relevant Person will not (A) do
or permit any one or more of the things  specified in the  preceding  clauses of
this definition or (B) sell, lease,  sublease,  transfer,  exchange,  abandon or
otherwise dispose of, surrender  management,  physical possession or control of,
physically alter or relocate all or any portion of its assets or properties).

"Line of Credit" shall mean the discretionary line of credit established
by the Lender  hereunder to make  revolving  loans to the Borrower  from time to
time in the aggregate  principal  amount  outstanding  (including  the Letter of
Credit Amount as if all  outstanding  Letters of Credit were fully  advanced and
outstanding)  at  any  one  time  not to  exceed  $2,000,000.00  (including  any
Overadvance  Amount),  as  such  amount  may be  reduced  from  time  to time or
terminated pursuant to the terms of this Agreement.

"Line of Credit  Fee" shall have the  meaning  assigned to it in Section
2.07 hereof.

"Loan"  and  "Loans"  shall  respectively  mean  the  principal  amounts
outstanding from time to time (including future advances) respecting any and all
of (i) the  Advances  and  Revolving  Credit  Loans,  (ii) the  Letter of Credit
Advances, and (iii) the other amounts advanced from time to time to or on behalf
of the Borrower by the Lender or its designee  pursuant to this Agreement or any
other Loan Instrument (including, without limitation, during the pendency of any
Bankruptcy Proceeding).

"Loan Instrument" and "Loan Instruments" shall respectively mean any one
or more of this Agreement,  the Notes,  the Letters of Credit,  the applications
for Letters of Credit, any other security agreement, guaranty,  hypothecation or
other instrument,  agreement or document with or issued or given by the Borrower
or any Surety in direct or indirect  support (in whole or in part) of any of the
Borrower's  Obligations or Surety's  Obligations (as hereinafter  defined),  the
various mortgages, assignments,  agreements,  guaranties,  instruments and other
documents creating, evidencing,  perfecting,  governing or supporting any of the
Obligations  or any  Surety's  Obligations  or any interest of the Lender in any
collateral  securing or intended  to secure any of the  Obligations  or Surety's
Obligations,  and  all  waivers,  consents,  agreements,   reports,  statements,
certificates,  schedules and other documents executed by the requisite Person(s)
pursuant to or in connection with any of the foregoing and accepted or delivered
by the Lender  (whether  prior to, on or from time to time  after the  Effective
Date), as each may be supplemented, modified, amended, restated or replaced from
time to time in the manner provided therein.

"Loan Party" and "Loan Parties" shall  respectively mean any one or more
of the Borrower and the Guarantors.

"Margin  Stock"  shall  mean  any  "margin  stock"  as  defined  in  any
applicable Margin Stock Regulations.

"Margin Stock  Regulations"  shall mean  Regulation T, U and/or X of the
Board of  Governors  of the Federal  Reserve  System,  as  applicable,  , or any
corresponding  or succeeding  provisions  of  Applicable  Law, and the rules and
regulations promulgated  thereunder;  in each case as the same may have been and
hereafter may be supplemented, modified, amended, restated or replaced from time
to time.

"Material  Adverse  Effect" shall mean any material and adverse  effect,
whether individually or in the aggregate, upon (a) the assets, business, income,
operations,  properties or condition, financial or otherwise, of Holdings or any
of its subsidiaries, other than as would be reasonably likely to result from the
events  specified  in Schedule  1.01 hereto (but  subject to any  conditions  or
limits  noted  therein),  (b) the ability of the Borrower to make payment as and
when due of all or any part of the  Obligations,  or (c) the  Collateral  or its
value or the  validity,  enforceability,  perfection or priority of any security
interest of the Lender in any Collateral.

"Material Document" shall mean any ESOP Related Document, Stock Purchase
Document,   Organizational   Document,   Custody   Document  or  other  material
instrument, indenture, agreement, document, arrangement or other obligation: (a)
to which  the  Borrower  or any  Surety  is or may be a party;  (b) by which the
Borrower,  any Surety or any of the Collateral is or may be bound or subject; or
(c) by which any of the other material  assets and properties of the Borrower or
any Surety is or may be bound or subject;  in each case  whether now existing or
hereafter existing,  acquired or created, and irrespective of whether reduced to
writing,  and as each has  been and  hereafter  may be  supplemented,  modified,
amended, restated or replaced from time to time.

SPAR ESOP Revolving Credit Agreement

-11-

"Maturity  Date"  shall mean the  earliest of (a) the  Revolving  Credit
Maturity  Date  with  respect  to  the   Revolving   Credit  Loans  and  related
Obligations, and (b) with respect to all Loans and other Obligations the date on
which the  maturity of the  Obligations  shall have been  accelerated  or deemed
accelerated pursuant to Section 8.02 hereof or Applicable Law.

"mortgage" shall mean any mortgage,  deed or trust,  assignment or rents
or leases or other security deed or security interest in Real Estate.

"Note"  and  "Notes"  shall  respectively  mean  any  one or more of the
Revolving  Credit  Note and any  other  note or other  instrument  issued by the
Borrower to the Lender hereunder.

"Obligations"  as of any date shall mean any and all of the  obligations
of the Borrower's Obligations and Guarantors' Obligations.

"Organizational  Document"  shall mean any  articles or  certificate  of
incorporation,  charter,  by-laws,  limited  liability  company  certificate  or
agreement,  partnership certificate or agreement, or other instrument, agreement
or document  or any  statutory  equivalent  in whole or in part  respecting  the
organization, governance, power or authority of the referenced Person, or of any
direct or indirect general partner, manager, trustee or similar principal of the
referenced  Person  that  is not a  natural  Person,  as  applicable,  including
(without  limitation)  (i) the  Certificate of  Incorporation  or By-Laws of the
Borrower;  (ii) any resolution  with  continuing  effect adopted by the Board of
Directors,  the  management  or other  applicable  committee of  directors,  the
managers,  or the  shareholders  or members of a  referenced  Person,  or of any
direct or indirect general partner, manager, trustee or similar principal of the
referenced Person,  that is a corporation,  limited liability company or similar
entity,  or (iii) any agreement,  trust or  arrangement  among any of its equity
holders  respecting the securities  issued by or any of the beneficiaries of the
referenced  Person,  or of any  direct or  indirect  general  partner,  manager,
trustee or similar  principal of the  referenced  Person,  that is not a natural
Person;  in  each  case  as and  when  executed,  adopted,  filed  or  otherwise
effectuated (as applicable)  from time to time (whether  before,  as of or after
the date hereof),  and  irrespective of whether reduced to writing,  and as each
has  been  and  hereafter  may be  supplemented,  renewed,  extended,  modified,
amended, restated or replaced from time to time.

"Other  Taxes"  shall have the meaning  assigned  to it in Section  2.09
hereof.

"Overadvance  Amount"  shall have the meaning  assigned to it in Section
2.02 hereof.

"Overadvance Conversion Date" shall mean September 30, 2003.

"Permitted   Investments"  shall  mean:  (a)  certificates  of  deposit,
commercial  paper or other market rate  instruments  with final  maturities of 7
days or less issued by and normal business banking accounts with (i) the Lender,
(ii) the Senior Lender,  (iii) any commercial  bank that is organized  under the
laws of the United States or any state thereof, has total capital and surplus in
excess of  $1,000,000,000,  or (iv) the holding  company of any such bank or any
subsidiary of such holding  company;  (b) securities or other  obligations  with
final  maturities  of 7 days or less  from the  date of  acquisition  issued  or
unconditionally  guarantied by the government of the United States of America or
any agency or instrumentality thereof (but only to the extent backed by the full
faith and credit of the United States of America);  and (d) investments in money
market funds having net assets in excess of $1,000,000,000 that invest, and that
are restricted by their respective charters to invest,  solely in investments of
the type described in the immediately preceding subsections (a), (b), and (c) of
this definition;  provided,  however, that any such item shall only constitute a
Permitted  Investment as and to the extent held by the Lender, its designee or a
financial  institution  approved by the Lender pursuant and subject to a control
agreement in form and substance acceptable to the Lender.

"Permitted  Lien"  for  a  referenced  Person  shall  mean  any  of  the
following: (a) statutory liens incurred in the ordinary course of the referenced
Person's  business (i) for taxes,  assessments  or other  governmental  charges,
levies  or  claims,  (ii) of  mechanics,  carriers,  warehouses,  suppliers  and
laborers,  (iii)  respecting  worker's  compensation,   unemployment  insurance,
statutory obligations or social security legislation, or (iv) required by law as
a condition  precedent to the transaction of the referenced Person's business or
the  exercise of any of the  privileges  or licenses  by the  referenced  Person
subject to such Lien, in each case so long as (1) the underlying obligations are
not then required to be paid under Section 5.06 hereof, (2) any reserve has been
established  and any bond or  insurance  has been  obtained  as required by that
Section,  and (3) no such underlying  obligation exceeds $10,000 individually or
in the aggregate with other such underlying  obligations;  (b) liens incurred in
respect  of  judgments  and  awards  discharged  within 30 days from the  making
thereof  so  long  as  the  underlying   obligation   does  not  exceed  $10,000
individually or in the aggregate with other such underlying obligations;  (c) in
the  case  of Real  Estate  other  than  Collateral,  easements,  rights-of-way,
restrictions, covenants and other agreements of record and other similar charges
or encumbrances not interfering with the ordinary 

SPAR ESOP Revolving Credit Agreement

-12-

conduct of the business of the  referenced  Person;  (d) in the case of personal
assets and properties other than Collateral, any deposits made or other security
interests incurred in the ordinary course of the referenced Person's business to
secure the  performance  of its tenders,  bids,  leases (other than  capitalized
leases),  contracts  (other than for  Indebtedness or guaranties or other Credit
Support), and similar obligations arising as a result of progress payments under
government  contracts;  (e) the security  interests or liens  (including  leases
treated as security  interests  or liens)  encumbering  Equipment  purchased  or
property leased by the referenced  Person with  financings  permitted by Section
6.02(a)(iii)  hereof so long as they respectively  secure only the corresponding
purchase money  Indebtedness  or capitalized  lease  obligations;  (f) the Liens
granted  from time to time to the Lender  (whether or not assigned to the Senior
Lender);  and (g)  currently  existing  Liens that (A) are disclosed in Schedule
3.12(b)  hereto,  (B) do  not  secure  Indebtedness  (including  purchase  money
obligations),  and (C) secure underlying  obligations that do not exceed $10,000
individually  or in the aggregate with other such  underlying  obligations,  but
those  Liens  shall not be  increased,  renewed or extended or extended to other
Indebtedness  unless  otherwise  permitted by the terms and  provisions  of this
Agreement.

"Permitted  Option"  shall have the  meaning  assigned  to it in Section
6.07(a) hereof.

"Person" shall include  (without  limitation) any manner of association,
business trust, company,  corporation,  estate, governmental or other Authority,
group  (including one under Section  13(d)(3) of the  Securities  Exchange Act),
joint venture,  limited liability  company,  natural person (i.e., human being),
partnership, syndicate, trust or other entity.

"Plan" and "Plans" shall have the meanings respectively assigned to them
in Section 3.10(c) hereof.

"Products"  shall have the meaning  assigned to it in the  definition of
Eligible Billed Receivables.

"Pro Forma  Effect"  shall mean the  effect(s) any action or other event
proposed  by or on behalf  of the  Borrower  (if it were to happen as  proposed)
could have on (a) the assets,  business,  operations,  properties  or condition,
financial or otherwise, of the Borrower, (b) the ability of the Borrower to make
payment,  or to  otherwise  perform  or  satisfy,  of  all or  any  part  of the
Obligations  as  and  when  due,  or  (c)  the  Collateral,  including  (without
limitation) the effect(s) of including any proposed sale or disposition,  new or
altered Indebtedness or other obligation (and the payments required thereunder),
payment or other  action or event in a pro forma  recalculation  of (among other
things) the  various  financial  measurements  and  covenants  set forth in this
Agreement for or as at the end of the applicable computation or reporting period
then most recently  ended (based on the then most recently  required  compliance
calculations  and any and all subsequent pro forma  calculations on a cumulative
basis with respect to other  action(s)  or  event(s),  if and to the extent they
occurred or continue to be proposed).

"Real Estate" shall include (without limitation) (a) all land, leasehold
interests,  easements,  licenses,  rights-of-way or use, appurtenances and other
rights and interests in real  property,  (b) all buildings and other  structures
and Improvements,  (c) all fixtures,  furnishings,  Equipment and other personal
property  (including,  without limitation,  leasehold interests in such personal
property  and mobile homes of the type  usually  installed on a developed  site)
located on or used in connection therewith,  whether or not affixed thereto, (d)
all leases and subleases thereof,  and (e) all rents,  profits and other income,
payments and proceeds  with respect to any and all of the  foregoing;  provided,
however, that "Real Estate" shall not include mortgages or interests therein.

"Representative"  and  "Representatives"  shall respectively mean any or
all of: (a) in the case of any referenced Person (including, without limitation,
the Lender or Letter of Credit  issuer),  such referenced  Person's  Affiliates,
directors, officers, employees, attorneys, agents and other representatives; and
(b) in addition in the case of the  Lender,  any Letter of Credit  issuer or any
other   financial   institution,    such   referenced   Person's   participants,
correspondents,  confirming banks, custodians and designees and their respective
Affiliates,   directors,  officers,  employees,   attorneys,  agents  and  other
representatives.

"Revolving  Credit  Loans"  shall  have the  meaning  assigned  to it in
Section 2.01(a) hereof.

"Revolving  Credit  Maturity  Date"  shall  mean  with  respect  to  the
Revolving  Credit  Loans and related  Obligations  the first to occur of (a) the
Revolving Credit  Termination Date, (b) the Term Maturity Date, and (c) the date
on which the maturity of the Obligations  shall have been  accelerated or deemed
accelerated pursuant to Section 8.02 hereof or Applicable Law.

"Revolving  Credit Note" shall mean the Revolving  Promissory Note dated
as of June 30,  2002,  issued by the  Borrower  to the  Lender to  evidence  the
Revolving  Credit Loans (as referenced in Section 2.03(a)  

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hereof), as the same may be modified, amended, restated or replaced from time to
time in the manner provided therein.

"Revolving  Credit  Period"  shall mean that  period  commencing  on the
Effective Date and terminating on the first to occur of (a) the Revolving Credit
Termination  Date,  (b) the Revolving  Credit  Maturity Date and (c) the date on
which the  maturity of the  Obligations  shall have been  accelerated  or deemed
accelerated pursuant to Section 8.02 hereof or Applicable Law.

"Revolving  Credit  Termination  Date"  shall mean the first to occur of
(a)September  30, 2005, (b) the date on which the Line of Credit shall have been
reduced  permanently to zero, and (c) the first to occur of the "Maturity  Date"
or the payment in full of all of the "Obligations"  under (and as such terms are
defined in) the Term Loan Agreement.

"Rule 144" shall mean Rule 144, as promulgated  under the Securities Act
or any corresponding or succeeding provisions of Applicable Law; in each case as
the same may have been and hereafter  may be  supplemented,  modified,  amended,
restated or replaced from time to time.

"securities" of any Person shall mean any and all equity  securities and
debt securities,  general or limited  partnership  interests,  limited liability
company memberships or interests, investment contracts, and any other instrument
or interest commonly understood to be a security issued by that Person.

"Securities  Act" shall mean the Securities Act of 1933, as amended,  or
any  corresponding  provisions  of any  Applicable  Law in any state or  foreign
jurisdiction,  or any corresponding or succeeding  provisions of Applicable Law,
and the rules and regulations promulgated  thereunder;  in each case as the same
may have been and hereafter may be supplemented,  modified, amended, restated or
replaced from time to time.

"Securities  Exchange  Act" shall mean the  Securities  Exchange  Act of
1934, as amended,  or any corresponding  provisions of any Applicable Law in any
state or foreign jurisdiction,  or any corresponding or succeeding provisions of
Applicable Law, and the rules and regulations  promulgated  thereunder;  in each
case as the same may have  been and  hereafter  may be  supplemented,  modified,
amended, restated or replaced from time to time.

"Senior Borrower" and "Senior Borrowers" shall respectively mean any one
or more of the borrowers  under the Senior Loan  Documents,  and the successors,
assigns  and  legal  representatives  of  each,  and any and all  additional  or
replacement  borrower(s)  under any Senior Loan Document.  The Senior  Borrowers
currently include SGRP and most of its subsidiaries (including the Lender).

"Senior Lender" shall mean IBJ WHITEHALL  BUSINESS  CREDIT  CORPORATION,
its successors, assigns and legal representatives, and any and all additional or
replacement lender(s) under any restated or replacement Senior Loan Document.

"Senior Loan" and "Senior Loans" shall  respectively  mean the principal
amounts outstanding from time to time (including future advances) respecting any
and all of advances,  loans,  letter of credit  advances  and the other  amounts
advanced  from  time  to  time to or on  behalf  of one or  more  of the  Senior
Borrowers by the Senior Lender thereunder or its designee pursuant to any Senior
Loan  Document  (including,  without  limitation,  during  the  pendency  of any
Bankruptcy Proceeding).

"Senior  Loan  Agreement"  the Second  Amended  and  Restated  Revolving
Credit,  Term Loan and Security  Agreement dated as of September 22, 1999, among
the Senior  Borrowers  and the Senior  Lender,  together  with all schedules and
exhibits  thereto,  as each may have  been and  hereafter  may be  supplemented,
modified, amended, restated or replaced from time to time in the manner provided
therein.

"Senior Loan Document" and "Senior Loan  Documents"  shall  respectively
mean any one or more of the Senior Loan Agreement,  each and every note,  letter
of credit  application,  security  agreement,  guaranty,  hypothecation or other
instrument,  agreement  or document  with or issued or given by any  borrower or
surety  thereunder in direct or indirect support (in whole or in part) of any of
the  Senior  Loan  Obligations  or related  surety's  obligations,  the  various
mortgages, assignments,  agreements, guaranties, instruments and other documents
creating, evidencing, perfecting, governing or supporting any of the Senior Loan
Obligations  or any related  surety's  obligations or any interest of the Senior
Lender in any  collateral  securing or intended to secure any of the Senior Loan
Obligations  or  related  surety's  obligations,   and  all  waivers,  consents,
agreements,  reports,  statements,  certificates,  schedules and other documents
executed by the requisite Person(s) pursuant to or in connection with any of the
foregoing and accepted or delivered by the Senior Lender  (whether  prior to, on

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or from  time to time  after  the  Effective  Date),  as each may have  been and
hereafter may be supplemented, modified, amended, restated or replaced from time
to time in the manner provided therein.

"Senior Loan  Obligations"  as of any date shall mean any and all of the
obligations of the Senior Borrowers (i) to repay the balance of the Senior Loans
then  outstanding  (including  future  advances),  including  accrued and unpaid
interest  thereon,  (ii) to pay or otherwise perform or satisfy all of the other
amounts to be paid and obligations to be performed or otherwise satisfied by any
Senior Borrower under any Senior Loan Document (whether  individually,  jointly,
severally or otherwise), (iii) to pay or otherwise perform or satisfy all of the
other amounts to be paid and obligations to be performed or otherwise  satisfied
by any Senior  Borrower  under any interest rate  protection,  foreign  currency
exchange,  or other  interest  or  exchange  rate swap or hedging  agreement  or
arrangement  (whether  individually,  jointly,  severally or otherwise) with the
Senior Lender or any of its Affiliates, and (iv) to pay or otherwise satisfy any
and all overdrafts of any Senior  Borrower  honored by the Senior Lender (in its
sole and absolute discretion) and other indebtedness, liabilities or obligations
(whether under any note,  guaranty or other instrument or document or otherwise)
now or  hereafter  owed to the  Senior  Lender by any Senior  Borrower  (whether
individually, jointly, severally or otherwise), together with accrued and unpaid
interest  thereon;  in each  case  including,  without  limitation,  any and all
interest,  fees and other  amounts  accrued,  accruing or  otherwise  applicable
during the pendency of any Bankruptcy  Proceeding,  irrespective of whether such
interest,  fees and other amounts are allowed or allowable as claims in any such
proceeding.

"SGRP" shall mean SPAR Group, Inc., a Delaware  corporation and ultimate
parent of the Lender.

"SPAR eTraining  Agreement"  shall mean that certain SPG Agreement among
SPG and SGRP dated as of January  11,  2002,  together  with all  schedules  and
exhibits thereto,  including,  without limitation,  the "SPAR Standard Terms and
Provisions Exhibit" and the "SPAR Supplemental Terms and Provisions Exhibit", as
the same may be supplemented,  modified, amended, restated or replaced from time
to time in the manner provided therein.

"SPG"  shall  mean  SPAR  Performance  Group,  a  Delaware   corporation
currently  having an address at 2245 Keller Way,  Carrollton,  Texas 75006,  and
wholly-owned subsidiary of the Borrower.

"SPG  Stock"  shall  mean the  shares  of  common  stock  issued  by the
Borrower.

"STMI"  shall mean SPAR  Trademarks,  Inc., a Delaware  corporation  and
indirect subsidiary of SGRP.

"Stock  Purchase  Agreement"  shall  mean the Stock  Purchase  Agreement
between  Holdings and the Lender dated as of June 30,  2002,  together  with all
schedules  and  exhibits  thereto,  as the same may be  supplemented,  modified,
amended, restated or replaced from time to time in the manner provided therein.

"Stock  Purchase   Document"  and  "Stock  Purchase   Documents"   shall
respectively  mean any one or more of the  Stock  Purchase  Agreement,  the SPAR
eTraining Agreement, the Trademark Agreement, the Confidentiality Agreement, and
the various assignments, agreements, instruments and other documents executed by
the requisite  Person(s)  pursuant to or in connection with any of the foregoing
and accepted or delivered  by the Lender  (whether  prior to, on or from time to
time after the  Effective  Date)and any and all waivers,  consents,  agreements,
reports, statements, certificates, schedules and other documents executed by the
requisite  Person(s)  pursuant to or in connection with any of the foregoing and
accepted or delivered by the Lender  (whether  prior to, on or from time to time
after  the  Effective  Date),  as  each  may  have  been  and  hereafter  may be
supplemented,  modified,  amended, restated or replaced from time to time in the
manner provided therein.

"Subordinated  Right" and "Subordinated  Rights" shall respectively mean
for each  Guarantor any and all: (a)  advances,  loans,  indebtedness  and other
similar  amounts  (including  interest)  directly  or  indirectly  owed  to such
Guarantor  by  the  Borrower,   any  other  Guarantor  or  any  Surety  (whether
individually,  jointly, severally or otherwise); (b) subrogation,  contribution,
reimbursement, restitution and other similar rights of such Guarantor against or
in respect of (i) the Borrower,  any other Guarantor or any Surety,  or (ii) any
of their respective  assets and properties,  whether  resulting from any payment
made by such Guarantor or otherwise;  and (c) security  interests or other liens
or encumbrances  securing,  or guaranties or other credit support  securing for,
any such advances, loans, indebtedness,  amounts or rights; in each case whether
now or hereafter existing, acquired or created.

"subsidiary"  shall mean any  corporation  or other entity in respect of
which a Person at the time shall own  directly,  or  indirectly  (through one or
more corporations, nominees or other persons or otherwise), at 

SPAR ESOP Revolving Credit Agreement

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least one-half of the aggregate  voting  interests of such  corporation or other
entity,   whether  owned  or  held  (i)  of  record  or   beneficially  or  (ii)
individually, jointly or otherwise.

"Surety" and "Sureties" shall  respectively  mean any one or more of any
Guarantor or other co-obligor,  indemnitor,  guarantor,  pledgor or surety of or
other Person providing Credit Support for any of the Obligations or any Surety's
Obligations, whether or not disclosed to the Borrower or any other Surety.

"Surety's  Adverse  Effect" shall mean any material and adverse  effect,
whether  individually  or in the  aggregate,  upon  (a)  the  assets,  business,
operations,  properties or condition, financial or otherwise, of any Surety, (b)
the ability of any Surety to pay or  otherwise  satisfy (as and when due) any of
its  obligations  under  any of the  Loan  Instruments,  or (c)  any  collateral
provided by any Surety or its value or the validity, enforceability,  perfection
or priority of any security interest of the Lender in any collateral provided by
any Surety.

"Surety's   Obligations"  shall  mean  any  and  all:  (a)  "Guarantor's
Obligations"  or  "Guarantors'  Obligations"  under  (and  as  defined  in)  any
Guaranty,  as applicable;  and (b) other Credit  Support and  obligations of any
other Surety under any Loan Instrument.

"Tax Code" shall mean the United States  Internal  Revenue Code of 1986,
as  amended,   any  corresponding   Applicable  Law  of  any  State  or  foreign
jurisdiction,  or any corresponding or succeeding  provisions of Applicable Law,
in each  case as the same  may have  been  and  hereafter  may be  supplemented,
modified, amended, restated or replaced from time to time.

"Taxes" shall have the meaning assigned to it in Section 2.09 hereof.

"Term  Loan" and  "Term  Loans"  shall  have the  meanings  respectively
assigned to them in the Term Loan Agreement.

"Term Loan  Agreement"  shall mean the Term Loan,  Guaranty and Security
Agreement  among Holdings (as  borrower),  the Borrower (as a guarantor) and the
Lender  dated as of June 30,  2002,  together  with all  schedules  and exhibits
thereto,  as the  same  may be  supplemented,  modified,  amended,  restated  or
replaced from time to time in the manner provided therein.

"Term  Loan  Documents"  shall  mean the Term Loan  Agreement,  the Term
Notes,  any  other  security   agreement,   guaranty,   hypothecation  or  other
instrument,  agreement  or  document  with or issued or given by  Holdings,  the
Borrower  or any Surety in direct or  indirect  support (in whole or in part) of
any of the "Borrower's Obligations" or "Surety's Obligations" (as defined in the
Term  Loan  Agreement),   the  various   mortgages,   assignments,   agreements,
guaranties,  instruments and other documents creating,  evidencing,  perfecting,
governing or  supporting  any of such  Borrower's  Obligations  or such Surety's
Obligations,  and  all  waivers,  consents,  agreements,   reports,  statements,
certificates,  schedules and other documents executed by the requisite Person(s)
pursuant to or in connection with any of the foregoing and accepted or delivered
by the Lender  (whether  prior to, on or from time to time after the  "Effective
Date"  under  and as  defined  in the  Term  Loan  Agreement),  as  each  may be
supplemented,  modified,  amended, restated or replaced from time to time in the
manner provided therein..

"Term  Note" and  "Term  Notes"  shall  have the  meanings  respectively
assigned to them in the Term Loan Agreement.

"Trademark Agreement" shall mean the Trademark License Agreement between
the Borrower and STMI dated as of June 30, 2002, together with all schedules and
exhibits thereto, as the same may be supplemented,  modified,  amended, restated
or replaced from time to time in the manner provided therein.

"UCC" shall mean the Uniform  Commercial  Code of the State of New York,
or any corresponding or succeeding  provisions of Applicable Law of the State of
New York, or any  corresponding  or succeeding  provisions of Applicable Law, in
each case as the same may have been and hereafter may be supplemented, modified,
amended, restated or replaced from time to time.

Section 1.02. Certain Definitions in Other Loan Instruments. Capitalized
terms used and not otherwise  defined in this Agreement  shall have the meanings
respectively assigned to them in the other applicable Loan Instruments.

Section  1.03.  UCC  Definitions.  The  following  terms  shall have the
meanings respectively assigned to them in the UCC: "chattel paper";  "commercial
tort claim"; "deposit account";  "equipment"; "farm 

SPAR ESOP Revolving Credit Agreement

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product";   "financial  asset";  "fixture";   "general  intangibles";   "goods";
"instrument";  "inventory";  "investment  property";  "letter of credit rights";
"payment intangible";  "proceeds";  "products";  "securities account"; "security
entitlement";  and  "software".  The  term  "document  of  title"  shall  mean a
"document" as defined in the UCC.

Section  1.04.  Singular  and  Plural  Terms.  Each  definition  in this
Agreement  or any other Loan  Instrument  using a singular  capitalized  term or
other word or phrase also shall  apply to the plural form of such term,  word or
phrase, and vice versa, and all references to the masculine gender shall include
reference to the feminine or neuter gender,  and vice versa, in each case as the
context may permit or require.

Section  1.05.  Pronouns.  Each use in this  Agreement or any other Loan
Instrument  of a neuter  pronoun  shall be deemed to include  references  to the
masculine  and  feminine  variations  thereof,  and vice  versa,  and a singular
pronoun shall be deemed to include a reference to the plural variation  thereof,
and vice versa, in each case as the context may permit or require.

Section 1.06.  Including.  The term  "including"  shall mean  "including
(without  limitation)",  whether  or  not  so  stated.  The  terms  "including",
"including,  but not limited to", "including  (without  limitation)" and similar
phrases (i) mean that the items specifically listed after such term are examples
of the provision  preceding  such term and are not intended to be all inclusive,
(ii)  shall  not in any way  limit (or be  deemed  or  construed  to limit)  the
generality of the provision  preceding such term, and (iii) shall not in any way
preclude  (or be deemed or  construed to  preclude)  any other  applicable  item
encompassed by the provision preceding such term.

Section  1.07.  Section and Other  Headings.  The table of contents  and
section  and  other  headings  contained  in this  Agreement  are for  reference
purposes  only and  shall not  affect  the  meaning  or  interpretation  of this
Agreement.

Section 1.08. Amended Documents. The inclusion in this Agreement and the
other Loan Instruments of supplements, modifications,  amendments, restatements,
replacements   and  the  like  in  the   definitions   of   Material   Document,
Organizational  Document,  ESOP Related Documents,  Stock Purchase Documents, or
other  term  for  any  instrument,  agreement  or  document  (other  than a Loan
Instrument) or group thereof shall not, and shall not be deemed or construed to,
(a) limit or otherwise  modify or affect any term or provision of this Agreement
or any other Loan Instrument requiring notice to or the consent of the specified
parties thereunder to any supplement,  modification,  amendment,  restatement or
replacement  of any such item, or (b) be permission  for or acceptance of any of
the foregoing by the parties required under any such term or provision.

ARTICLE II.

AMOUNTS AND TERMS OF THE OBLIGATIONS

Section 2.01. The  Discretionary  Revolving  Credit Loans.  (a) Upon the
terms and provisions and subject to the conditions  contained in this Agreement,
the Lender will consider making  revolving  credit loans (with all such loans by
the Lender being referred to collectively as the "Revolving  Credit Loans") from
time to time during the  Revolving  Credit Period to the Borrower at its request
(as provided in  subsection  (b),  below) up to an aggregate  maximum  principal
amount  outstanding at any one time (including the Letter of Credit Amount as if
all outstanding  Letters of Credit were fully advanced and  outstanding)  not to
exceed  the Line of Credit;  provided  that (i) after the  Overdraft  Conversion
Date,  the  maximum  obligation  of the Lender  shall be further  limited to the
amount of the  Borrowing  Base from time to time if the  Borrowing  Base is less
than the Line of Credit,  (ii) once duly  requested,  the decision of whether to
make any requested  Advance shall be in the sole and absolute  discretion of the
Lender, and (iii) each requested Advance shall be subject to the availability of
a  corresponding  amount under the Senior Loan  Documents  based on the Lender's
"borrowing  base"  thereunder.  Subject  to the  terms  and  provisions  of this
Agreement,  during the  Revolving  Credit  Period the  Borrower  may  request to
reborrow Advances previously repaid by it.

(b) The  Borrower  from time to time may request an advance of Revolving
Credit Loans  pursuant to subsection (a) of this Section (as made by the Lender,
an "Advance") by giving the Lender a signed notice of its request,  or by giving
the Lender  notice of its request  both by  telephone  and  telecopy of a signed
notice and promptly  confirming  its request by delivery of an original  copy of
the signed notice to the Lender.  The notice  requesting an Advance (i) shall be
delivered to the Lender at least one Business Day prior to the requested Advance
Date, or such greater  number of Business Days as may be required for the Lender
to obtain a corresponding  advance under the Senior Loan Agreement if applicable
(unless  the Lender  permits a shorter  

SPAR ESOP Revolving Credit Agreement

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notice period in its sole and absolute discretion), (ii) shall be deemed to have
been  delivered on the following  Business Day unless  actually  received by the
Lender prior to 11:00 A.M. (New York City time) on a Business  Day,  (iii) shall
be  irrevocable  once given,  and (iv) shall specify (A) the  requested  Advance
Date, (B) the principal  amount of the requested  Advance and (C) the purpose or
purposes to which the  Borrower  will apply the  requested  Advance.  Subject to
compliance  with the terms and  provisions  of this  Agreement  and the Lender's
approval  in its  sole  and  absolute  discretion,  the  Lender  shall  make the
requested  Advance on the proposed  Advance Date.  Each Advance shall be made by
crediting the demand deposit account  maintained by the Borrower with the Senior
Lender.

(c) The Borrower may voluntarily elect to permanently reduce the Line of
Credit in whole at any time, or in part from time to time in integral  multiples
of $100,000 , by giving the Lender a signed notice of its election, or by giving
the Lender  notice of its election  both by  telephone  and telecopy of a signed
notice and promptly  confirming  its election by delivery of an original copy of
the signed notice to the Lender; provided, however, that no such reduction shall
be made  unless and until the Term Loans and all related  obligations  have been
repaid in full. Notice of such reduction  election (i) shall be delivered to the
Lender at least  three  Business  Days  prior to the  requested  reduction  date
(unless  the Lender  permits a shorter  notice  period in its sole and  absolute
discretion),  (ii)  shall be  deemed  to have been  delivered  on the  following
Business Day unless  actually  received by the Lender  prior to 11:00 A.M.  (New
York City time) on a Business  Day, and (iii) shall be  irrevocable  once given.
Each such reduction shall be accompanied by a prepayment of the Revolving Credit
Loans  in the  amount,  if any,  necessary  to make  the  aggregate  outstanding
principal  balance  of the  Revolving  Credit  Loans  plus the  Letter of Credit
Amount, after giving effect to the prepayment,  not more than the Line of Credit
(as so reduced) prior to the Overadvance Conversion Date and thereafter not more
than the lesser of Line of Credit (as so reduced) or the Borrowing Base.

(d) The Borrower and Guarantor hereby each  acknowledges,  certifies and
represents  to and  covenants  and agrees with the Lender  that:  (a) the Lender
shall be deemed to have made an Advance to the Borrower of  $1,240,347.00 on the
date  hereof,  which is  reflected on the  Borrower's  June 30, 2002,  pro forma
balance  sheet as "Line of Credit" or "Long-Term  Bank Line of Credit",  and the
Lender  shall be deemed to have caused the issuance of a Letter of Credit at the
Borrower's  request by the Senior  Lender in the  principal  amount of  $70,000,
which is reflected on the  Borrower's  June 30, 2002, pro forma balance sheet as
"Line  of  Credit"  or  "Long-Term  Bank  Line of  Credit",  each of  which  are
outstanding  as of the date of this  Agreement;  and (b) the  obligations of the
Borrower to repay those Loans and Letter of Credit  Advances (with  interest) to
the Lender, and to perform or otherwise satisfy its related Obligations, (i) are
not  subject  to  any  defense,  counterclaim,   setoff,  right  of  recoupment,
abatement,  reduction  or other claim or  determination,  and (ii) are and shall
continue  to be  governed  and  secured  by the  terms  and  provisions  of this
Agreement and other Loan Instruments.

Section 2.02.  Overadvance Election.  (a) At least 30, but not more than
90, days prior to the Overadvance  Conversion  Date, the Borrower shall have the
right (by  written  notice to the Lender  during  such  period)  to  irrevocably
designate  the  amount  (the  "Overadvance  Amount")  the  Borrower  desires  be
available under the Line of Credit in excess of the actual Borrowing Base (i.e.,
without  regard to the  Overadvance  Amount)  during the one or two year  period
following the Overadvance  Conversion Date (the "Overadvance  Period"),  as such
Overadvance  Period may be  designated  by the  Borrower in such  notice,  which
Overadvance  Amount shall be either zero or  increments of $100,000 but not less
than $500,000 (other than a zero election) or more than $1,000,000. In the event
the Borrower fails to so designate an Overadvance Amount, the Overadvance Amount
shall be deemed to be zero.  Upon and after the  expiration  of any  Overadvance
Period, the Overadvance Amount shall be zero.

(b) If the  Overadvance  Amount  that  takes  effect on the  Overadvance
Conversion Date is zero,  Holdings shall have the right to repurchase the entire
Holdings Warrant for a total of $100.

(c) If the  Overadvance  Amount  that  takes  effect on the  Overadvance
Conversion  Date is more than zero,  Holdings  shall have the right to reduce by
the number of Holdings Warrant Shares  purchasable  under the Holdings  Warrant,
for a total of $100, in accordance with the following table:

OVERDRAFT      # OF HOLDINGS         TOTAL # OF                         LENDER'S
OVERADVANCE        PERIOD      WARRANT SHARES     SHARES (AS DEFINED    REDUCTION       REMAINING
AMOUNT         (IN YEARS)    PURCHASABLE BY      IN THE HOLDINGS        AMOUNT      WARRANT SHARES
LENDER          WARRANT) (FULLY
DILUTED)
----------------------------------------------------------------------------------------------------------

$  500,000              1            130,000            1,300,000            93,750             36,250
$  600,000              1            130,000            1,300,000            87,500             42,500
$  700,000              1            130,000            1,300,000            81,250             48,750

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$  800,000              1            130,000            1,300,000            75,000             55,000
$  900,000              1            130,000            1,300,000            68,750             61,250
$1,000,000              1            130,000            1,300,000            62,500             67,500
$  500,000              2            130,000            1,300,000            62,500             67,500
$  600,000              2            130,000            1,300,000            50,000             80,000
$  700,000              2            130,000            1,300,000            37,500             92,500
$  800,000              2            130,000            1,300,000            25,000            105,000
$  900,000              2            130,000            1,300,000            12,500            117,500
$1,000,000              2            130,000            1,300,000                --            130,000

In the event the  quantity of Warrant  Securities  (as  defined in the  Holdings
Warrant)  purchasable by the Lender under the Warrant  changes,  the "reduction"
and "remaining" amounts specified above shall be adjusted proportionally.

(d) If  Holdings  is  permitted  to  repurchase  all or a portion of the
warrant shares covered by the Holdings  Warrants,  it shall do so within 60 days
following the Overadvance Conversion Date.

Section 2.03. The Notes. (a) The obligation of the Borrower to repay the
Revolving  Credit  Loans,  together with interest  thereon  (including,  without
limitation,  any and all interest,  fees and other amounts accrued,  accruing or
otherwise   applicable  during  the  pendency  of  any  Bankruptcy   Proceeding,
irrespective  of whether such  interest,  fees and other  amounts are allowed or
allowable as claims in any such proceeding), shall be evidenced by the Revolving
Promissory Note issued by the Borrower to the Lender in the aggregate  principal
amount of $2,000,000.00 in the form of Exhibit A hereto and dated as of the date
hereof.

(b) [INTENTIONALLY OMITTED]

(c) [INTENTIONALLY OMITTED]

Section 2.04.  Interest;  Additional  Interest.  (a) Except as otherwise
provided in this Section,  the Loans shall bear interest  (computed on the basis
of the  actual  number of days  elapsed  and a year of 360  days) on the  unpaid
principal  balance  of those  Loans  outstanding  from  time to time,  from (and
including) the Effective Date to (and including) the date such principal balance
of such  Loans is repaid in full  (including,  without  limitation,  any and all
interest,  fees and other  amounts  accrued,  accruing or  otherwise  applicable
during the pendency of any Bankruptcy  Proceeding,  irrespective of whether such
interest,  fees and other amounts are allowed or allowable as claims in any such
proceeding),  at a fluctuating  rate that shall be equal to the  Alternate  Base
Rate per annum,  which rate shall change with each  corresponding  change in the
Alternate Base Rate. Interest on those Loans shall be payable by the Borrower in
arrears:  (x)  prior to the  Maturity  Date,  on the last  Business  Day of each
calendar  month;  (y) in full on the Maturity  Date; and (z) on demand after the
Maturity Date.

(b) Any payment of principal,  interest or other amount that is not paid
when due under this Agreement or any other Loan Instrument, and all of the Loans
during the continuance of any Event of Default,  shall, to the extent  permitted
by Applicable Law, bear interest  (computed on the basis of the actual number of
days elapsed and a year of 360 days),  until the overdue  amount is paid in full
(with interest) or such Event of Default is no longer continuing,  as applicable
(including,  without  limitation,  any and all interest,  fees and other amounts
accrued,  accruing or otherwise applicable during the pendency of any Bankruptcy
Proceeding,  irrespective  of whether such interest,  fees and other amounts are
allowed or allowable as claims in any such proceeding),  at a fluctuating annual
rate equal to the sum of (i) the Alternate  Base Rate per annum,  plus (ii) four
percent (4.00%) per annum (which  fluctuating  annual rate under this subsection
shall change from time to time  simultaneously with each change in the Alternate
Base Rate), which interest rate shall be payable by the Borrower with respect to
such  amount(s)  instead of the rate (if any)  established  by subsection (b) of
this Section with respect thereto, and which interest amount(s) shall be payable
upon demand (including, without limitation, any and all interest, fees and other
amounts  accrued,  accruing or otherwise  applicable  during the pendency of any
Bankruptcy  Proceeding,  irrespective  of whether such interest,  fees and other
amounts are allowed or  allowable  as claims in any such  proceeding),  subject,
however,  to the maximum rate permitted by Applicable Law as provided in Section
2.11 hereof.

Section 2.05. Increased Costs, Capital Adequacy.  (a) In addition to the
payment of  principal,  interest  and fees as stated in this  Article,  if there
shall be any increase in the direct or indirect  costs to the Lender of lending,
funding or maintaining  any Loan, or any reduction in any amount  received or to
be received by the Lender hereunder, due to:

SPAR ESOP Revolving Credit Agreement

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(i)     the  introduction  of or  any  change  in  any  Applicable  Law  or  the
interpretation or administration thereof, including (without limitation)
the imposition,  modification or application of, or increase in, (A) any
reserve,  capital  adequacy,  special  deposit,  assessment  or  similar
requirements,  (B) any requirement to withhold or deduct from any amount
payable  to  the  Lender  any  taxes,  levies,  imposts,  duties,  fees,
deductions,  withholdings  or charges of a similar  nature  (other  than
federal,  state and local income and  franchise  taxes  imposed upon the
Lender),  or any interest thereon or any penalties with respect thereto,
imposed,  levied,  collected,  assessed,  withheld  or  deducted  by any
Authority, including subdivisions and taxing authorities thereof, or (C)
any other  restriction or condition  affecting a Loan, the interest rate
applicable thereto or this Agreement or any other Loan Instrument;

(ii)    the compliance by the Lender with any  regulation,  guideline or request
or change therein from any central Lender or other Authority (whether or
not having the force of law);

(iii)   therepayment, prepayment or other reduction, in whole or in part, of any
Loan prior to the natural expiration of the applicable  Interest Period,
whether as a result of miscalculation,  change in circumstance,  consent
of the Lender, acceleration of the Obligations or otherwise;

(iv)    the failure by the Borrower to pay the accrued and unpaid interest on or
repay the  outstanding  principal  balance of any Loan,  or any  portion
thereof, when required by the terms and provisions of this Agreement; or

(v)     any  increase  in the  Lender's  cost of funds  under  the  Senior  Loan
Documents, including (without limitation) any increase in interest rates
or fees or any reimbursement to the Senior Lender of the kinds described
in clauses (i) through (iv) of this subsection;

then the Borrower from time to time, upon demand by the Lender, shall pay to the
Lender  additional  amounts  sufficient  to  indemnify  the Lender  against  and
reimburse  it for such  increased  costs and reduced  receipts  (but only to the
extent such increased  cost or reduced  receipt has not already been included in
the  calculation of any interest rate or fee or otherwise  reimbursed  under any
other  subsection  of this  Section),  including  (without  limitation)  amounts
sufficient  to  compensate  the Lender for any  breakage  or other costs and any
decrease in margin or other return  incurred in connection  with the  repayment,
prepayment or other reduction of any Loan and the liquidation or redeployment of
the affected  deposits or other funding  arrangements,  in each case  including,
without  limitation,   any  and  all  amounts  accrued,  accruing  or  otherwise
applicable  during the pendency of any Bankruptcy  Proceeding  (irrespective  of
whether such interest, fees and other amounts are allowed or allowable as claims
in any such proceeding).  In the event the Senior Lender requires the payment of
any similar amount under the Senior Loan  Documents,  the Lender may demand that
the Borrower pay to the Lender or its Affiliate additional amounts sufficient to
compensate  it for the portion of such amount  proportional  to the ratio of the
Loans to the Senior  Loans.  A  certificate  as to the amount of such  increased
costs and reduced  receipts  submitted  to the  Borrower by the Lender  shall be
conclusive as to the existence and amount thereof absent  manifest error. If the
Lender has not received  payment for such amounts  within five (5) Business Days
of the date of such  certificate,  the  Lender may apply all or a portion of the
next succeeding payment or prepayment made by the Borrower,  whether intended by
the Borrower to be interest,  principal or otherwise,  first to the reduction of
the amounts of such increased costs and reduced receipts.

(b) In addition to the payment of interest or fees under this Agreement,
if the Lender or any of its  Affiliates  determines or has  determined  that (i)
compliance  with any  existing  or future  Applicable  Law,  including  (without
limitation) any regulation,  guideline or request from any central bank or other
Authority  (whether or not having the force of law), or any change therein or in
the interpretation or administration thereof, affects or would affect the amount
of capital  required or expected to be maintained by the Lender or its Affiliate
(taking into account its policies  with respect to capital  adequacy and desired
rate of return on capital),  and (ii) the amount of such capital is increased by
or based upon any commitment or funding to the Borrower or any other  obligation
of the Lender or its Affiliates  under or related to this Agreement or any other
Loan Instrument (using such averaging, attribution and allocation methods as the
Lender may reasonably  deem  appropriate),  then the Borrower from time to time,
upon demand by the Lender,  shall pay to the Lender or its Affiliate  additional
amounts  sufficient  to  compensate  it for  those  circumstances,  in each case
including,  without  limitation,  any  and  all  amounts  accrued,  accruing  or
otherwise   applicable   during  the  pendency  of  any  Bankruptcy   Proceeding
(irrespective  of whether such amounts are allowed or allowable as claims in any
such  proceeding).  In the event the Senior  Lender  requires the payment of any
similar amount under the Senior Loan  Documents,  the Lender may demand that the
Borrower pay to the Lender or its  Affiliate  additional  amounts  sufficient to
compensate  it for the portion of such amount  proportional  to the ratio of the
Loans to the Senior Loans. A certificate  as to the amount of such  compensation
submitted to the Borrower by the Lender shall be  conclusive as to the existence
and amount thereof absent manifest error. If the Lender has not received payment
for such amounts within five (5) Business Days of the date of such  certificate,
the  Lender  may  apply  all or a  

SPAR ESOP Revolving Credit Agreement

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portion of the next  succeeding  payment  or  prepayment  made by the  Borrower,
whether intended by the Borrower to be interest,  principal or otherwise,  first
to the reduction of such billed amount.

(c) In addition to the payment of increased  costs and reduced  receipts
as provided in this Section (but without  duplication of such amounts),  as well
as the payment of principal,  interest and fees as stated elsewhere herein,  the
Borrower  acknowledges  and agrees  that:  in extending  the Loans  (rather than
receiving a cash payment under the Stock Purchase  Agreement) the Lender will be
carrying a corresponding  higher level of loans under the Senior Loan Documents;
and  accordingly,  from time to time,  upon demand by the Lender,  the  Borrower
shall pay to the  Lender  or its  Affiliate  additional  amounts  sufficient  to
compensate it for its pro rata share (based on the ratio of the then outstanding
balance  of the Loans to the then  outstanding  balance  of the loans  under the
Senior Loan Documents) of any and all fees, costs,  reimbursements,  expenses or
other amounts (other than principal and interest and without  duplication of the
amounts  covered by subsections  (a) and (b) of this Section) owed by any Senior
Borrower  under the  Senior  Loan  Documents,  in each case  including,  without
limitation, any and all amounts accrued, accruing or otherwise applicable during
the pendency of any Bankruptcy Proceeding  (irrespective of whether such amounts
are allowed or allowable as claims in any such proceeding).

Section 2.06.  Voluntary and  Mandatory  Payments.  (a) The Borrower may
voluntarily prepay the Revolving Credit Loans, whether in full at any time or in
part from time to time in integral multiples of $10,000 in an amount that is not
less than  $100,000,  in either case without  premium or penalty,  by giving the
Lender a signed  notice of its  election,  or by giving the Lender notice of its
election  both by  telephone  and  telecopy of a signed  notice.  Notice of such
prepayment election (i) shall be delivered to the Lender at least three Business
Days prior to the requested prepayment date (unless the Lender permits a shorter
notice period in its sole and absolute  discretion)and (ii) shall be irrevocable
once  given.  The  Borrower  shall repay the Loans on the date and in the amount
specified in such notice of prepayment election.

(b) Each  payment  received  by the Lender  (including  any such  amount
received  by the Senior  Lender and  applied to the Senior  Loans or any related
obligation) on an Account Receivable of the Borrower (whether or not an Eligible
Receivable,  Eligible Unbilled Receivable or otherwise included in the Borrowing
Base) as and when  collected  shall be  applied  (or deemed to be applied in the
case of such application by the Senior Lender) as a mandatory  prepayment of the
Obligations   hereunder.   In  the  event  no  monetary   Obligations  are  then
outstanding,  such payments shall be deemed to be held as cash Collateral by the
Lender with interest  thereon at the Federal Funds Rate,  although such payments
in  actuality  may be  commingled  with the  other  funds of the  Lender  or its
affiliates,  or used to repay the Senior Loans and related Obligations,  so long
as a credit  therefore  is  carried  on the Books of the  Lender in favor of the
Borrower.

(c) Each  voluntary and  mandatory  prepayment  made on the  Obligations
shall be applied first to reduce any unpaid or unreimbursed fees and expenses of
the Lender  under the Loan  Instruments  and Term Loan  Documents  until paid in
full, then to reduce any accrued and unpaid interest until paid in full, then to
reduce the  Revolving  Credit  Loans until  repaid in full,  and  thereafter  in
accordance with Section 2.08(d) hereof.

(d) The Borrower shall repay the Revolving  Credit Loans  immediately at
any time and from time to time in an amount by which the  outstanding  principal
balance of the Revolving  Credit Loans plus the Letter of Credit Amount together
exceeds (i) the Line of Credit prior to the Overadvance Conversion Date and (ii)
the lesser of Line of Credit or the Borrowing Base on and after the  Overadvance
Conversion Date.

(e) [INTENTIONALLY OMITTED]

(f) The Borrower  shall repay the  principal  balance  then  outstanding
under the Revolving Credit Loans in full on the Maturity Date.

(g) The Borrower  shall make an additional  mandatory  prepayment of the
Loans  promptly,  but in any event within three  Business  Days,  following each
receipt of net cash  proceeds by the Borrower in an amount equal to the net cash
proceeds  received in connection with (1) any voluntary sale,  lease,  transfer,
assignment,  liquidation or other  disposition of (A) any equity interest in the
Borrower or (B) any Collateral  other than  Inventory as expressly  permitted by
Section   7.03(a)   hereof  or  (2)  any   involuntary   transfer,   assignment,
discontinuation,  liquidation, condemnation, destruction or other disposition of
any  Collateral,  in each case  applied  first as  required  under the Term Loan
Agreement until all "Obligations"  thereunder (and as defined therein) have been
paid in full,  and  thereafter  as provided in  subsection  (c) of this Section;
provided,  however, that the first $10,000 in the aggregate of net cash proceeds
received by the Borrower in connection  with any such asset  disposition  within
any fiscal year shall be excluded for the purpose of determining such additional
mandatory  prepayments;  and provided further that nothing in this subsection is
intended,  or shall be deemed or  construed,  to authorize or permit any sale or
other  disposition  of any  Collateral  in violation of any term or 

SPAR ESOP Revolving Credit Agreement

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provision  of  this  Agreement  or any  other  Loan  Instrument.  To the  extent
applicable and not already  reflected,  the Borrower may in determining such net
cash proceeds deduct reasonable and usual costs of voluntary  disposition (other
than  payments to  Affiliates),  and real  property and  transfer  taxes paid or
currently payable in respect to the transaction, as well as the principal amount
of any  permitted  purchase  money  indebtedness  required to be repaid from the
proceeds of any  disposition  of the underlying  collateral.  The Borrower shall
give the  Lender  prompt  notice  of any  occurrence  that  could  result or has
resulted in any of the events  described  above  involving  net cash proceeds in
excess of $1,000,  which notice shall  specify the terms  thereof,  and upon the
request of the Lender the Borrower  shall give the Lender  copies of all related
documentation as it becomes available to the Borrower.

(h) Notwithstanding anything to the contrary contained in this Agreement
or any other Loan  Instrument,  the  Borrower  acknowledges  and agrees that the
Letter of Credit  Advances  and any  reimbursable  amount  or  expense  or other
advance  that is not  described  elsewhere  in this Section and for which no due
date or time period for payment is specified in this Agreement or any other Loan
Instrument,  together with interest  thereon as provided in Section 2.04 hereof,
shall be due and payable on demand,  and that the  representations,  warranties,
covenants and other terms and  provisions  of this  Agreement and the other Loan
Instruments  set forth  herein and  therein  are not  intended  and shall not be
deemed  or  construed  to limit the  demand  nature  of the  obligations  of the
Borrower  in respect  of such other  amount,  expense or advance  hereunder  and
thereunder, without, however, in any way limiting the applicability of the terms
and  provisions of this  Agreement and the other Loan  Instruments in respect of
any collateral or any of the other Loans or other Obligations of the Borrower.

(i) The Obligations then outstanding shall be due and payable in full on
the Maturity Date, and to the extent arising thereafter shall be due and payable
on  demand,  in  each  case  notwithstanding  anything  in this  Article  to the
contrary.

Section 2.07.  Line of Credit Fee. The Borrower  shall pay to the Lender
on the first  Business  Day of  January,  April,  July and  October of each year
during the Revolving Credit Period,  and on the last day of the Revolving Credit
Period,  in arrears,  commencing on the first such date  following the Effective
Date,  a fee  respecting  the  availability  of the Line of Credit (the "Line of
Credit  Fee") equal to two percent  (2.00%) per annum  (computed on the basis of
the actual  number of days elapsed and a year of 360 days) of the average  daily
unadvanced portion of the Line of Credit during the then most recently concluded
calendar  quarter or portion  thereof  (with the Letter of Credit  Amount  being
considered an advance under the Line of Credit).

Section 2.08. Payments and Applications.  (a) All payments of principal,
interest,  fees and other amounts due the Lender  pursuant to this Agreement and
the  other  Loan  Instruments  shall  be  made in U.S.  Dollars  in  immediately
available funds by 12:30 P.M. (New York City time) on the date payment is due to
the Lender at its offices at 580 White Plains Road,  Tarrytown,  New York 10591,
as  otherwise  provided  in  subsection  (b) of this  Section,  or as  otherwise
instructed  by the Lender.  All  advances  and  payments  made  pursuant to this
Agreement  and the other Loan  Instruments  may be recorded by the Lender on its
books and  records,  and such books and records  shall be  conclusive  as to the
existence and amounts thereof absent manifest error.  The Lender in its sole and
absolute  discretion  at any time and from  time to time  (whether  prior to any
transfer or production of any Note or otherwise)  may endorse or otherwise  list
(in whole or in part) on any Note or on any  schedule  thereto  prepared  by the
Lender the date,  amount,  type and/or  other  pertinent  characteristic  of any
advance or other Loan or any interest rate or Interest Period applicable thereto
and/or all payments of principal on any Loan or other Obligation.

(b) The parties  intend that  payments of the  Obligations  will be made
through the wire transfer of immediately  available  funds to the Lender to such
account  as the Lender  from time to time may  direct by  written  notice to the
Borrower,  as and when such  Obligations  become due. The  Obligations  shall be
deemed  to have  been  paid or  repaid  only to the  extent  of the  immediately
available  funds  actually  received  from any Loan  Party  and  applied  to the
Obligations  notwithstanding  any  internal  procedure  of  the  Lender  to  the
contrary.

(c) Should any  payment  become due and payable on other than a Business
Day, the maturity thereof shall be extended to the next succeeding Business Day,
and, in the case of any payment of principal,  interest shall be payable thereon
at the rate per annum specified in this Agreement during such extension.

(d) Except as otherwise provided in this Agreement,  so long as no Event
of Default or Default is then continuing,  any funds received by the Lender from
or on  behalf  of any Loan  Party  (whether  pursuant  to any of the  terms  and
provisions of this Agreement or any other Loan  Instrument)  shall be applied to
the  following  items in the  manner  and  order  reasonably  designated  by the
Borrower to the extent  permitted by 

SPAR ESOP Revolving Credit Agreement

-22-

Applicable Law;  provided,  however,  that absent such designation or during the
continuance of any such Event of Default or Default,  those funds (including the
net cash proceeds from any  Collateral)  instead may be applied by the Lender to
the following  items in such order and manner as may be determined by the Lender
in its sole and absolute discretion to the extent permitted by Applicable Law:

(i)     the payment to or  reimbursement of the Lender for any fees and expenses
for which it is entitled to be paid or reimbursed pursuant to any of the
provisions of this Agreement and the other Loan Instruments;

(ii)    the  payment of accrued  and unpaid  interest  on the  Revolving  Credit
Loans;

(iii)   the payment of due and unpaid principal on the Revolving Credit Loans;

(iv)    the  establishment  or  maintenance of any cash  collateral  required or
permitted under any Loan Instrument;

(v)     the payment in full of all other  Obligations  under this  Agreement and
the other Loan Instruments; and

(vi)    the payment in full of all  "Obligations"  under (and as defined in) the
Term Loan Agreement.

Section 2.09.  Taxes.  Any and all payments made by any Loan Party under
this Agreement or any other Loan Instrument  shall be made free and clear of and
without any reduction for any and all present or future taxes, levies,  imposts,
deductions, charges or withholdings, and any and all liabilities and obligations
with  respect  thereto,  excluding,  however,  such taxes as are  imposed on the
Lender by the  jurisdiction of its organization or its lending office engaged in
the Loans (or any political  subdivision  thereof) with respect to the income or
franchise  of  the  Lender  (all  such  non-excluded  taxes,  levies,   imposts,
deductions,  charges or withholdings being hereinafter  collectively referred to
as the  "Taxes").  In addition,  the Loan Parties  shall (on a joint and several
basis) pay, as and when due, any and all present or future stamp or  documentary
taxes or other  excise or  property  taxes,  charges or similar  levies that may
arise from any execution,  delivery,  performance,  existence or registration of
this  Agreement or any other Loan  Instrument  or any payment made  hereunder or
thereunder (collectively, "Other Taxes"). If any Loan Party shall be required by
Applicable  Law to deduct any Taxes or Other Taxes from or in respect of any sum
payable to the Lender under this Agreement or any other Loan Instrument, (i) the
sum payable  shall be increased  as may be  necessary so that,  after making all
required  deductions,  the Lender  shall  receive an amount equal to the sum the
Lender would have received if no such  deductions  had been made,  (ii) the Loan
Party  shall make such  deductions,  and (iii) the Loan Party shall pay the full
amount  deducted  to the  relevant  taxation  Authority  or other  Authority  in
accordance  with Applicable Law. Within 30 days after the date of any payment of
Taxes or Other Taxes by a Loan Party,  the Loan Party will furnish to the Lender
the  original  or a  certified  copy of a receipt  evidencing  payment  or other
documentation reasonably satisfactory to the Lender evidencing payment. The Loan
Parties will furnish to the Lender, upon the Lender's request from time to time,
an officer's certificate stating that, to the knowledge of the signer, all Taxes
and Other  Taxes that are or have  become due have been paid.  The Loan  Parties
shall (on a joint and  several  basis)  indemnify  and  reimburse  the Lender on
demand  (payable  within 30 days of written demand) for the full amount of Taxes
or Other  Taxes paid by the Lender (as the case may be) and any and all  claims,
liabilities,  losses and expenses  (including,  without  limitation,  penalties,
interest, and attorneys and other professional expenses, disbursements and fees)
of the Lender  arising  therefrom  or related  directly or  indirectly  thereto,
whether or not such Taxes or Other Taxes were correctly or legally asserted.  In
the event the Senior Lender requires the payment of any similar amount under the
Senior Loan Documents, the Lender may demand that the Borrower pay to the Lender
or its Affiliate  additional amounts sufficient to compensate it for the portion
of such amount proportional to the ratio of the Loans to the Senior Loans.

Section 2.10. Lost or Damaged Notes. In the event of the loss,  theft or
destruction  of a Note,  the Borrower shall execute and deliver an identical new
Note to the Lender in substitution  therefor upon the receipt by the Borrower of
(i) notice from the Lender  confirming  such event and (ii) if  requested by the
Borrower,  an indemnity  agreement from the Lender in such form and substance as
may be acceptable to the Lender and  reasonably  acceptable to the Borrower.  In
the event of the  mutilation  of or other damage to a Note,  the Borrower  shall
execute  and  deliver  an  identical  new  Note to the  Lender  in  substitution
therefor,  following  which the Lender will return the mutilated or damaged Note
to the Borrower.

Section 2.11.  Maximum  Interest Rate. It is the intention of the Lender
and the  Borrower  that the interest (as defined  under  Applicable  Law) on the
Loans that may be charged to, collected from or received from the Borrower shall
not exceed the maximum  rate  permissible  under  Applicable  Law.  Accordingly,
anything  in this  Agreement,  any  Note or any  other  Loan  Instrument  to the
contrary  notwithstanding,  in the event any interest (as so defined) is charged
to,  collected from or received from the Borrower by the Lender  pursuant hereto
or  thereto  in excess of such  maximum  lawful  rate,  then the  excess of such
payment over that maximum 

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shall be applied to the reduction of the  outstanding  principal  balance of the
Loans and the other Obligations (without any prepayment premium or penalty), and
any portion of such excess payment  remaining after payment and  satisfaction in
full of the Obligations shall be returned by the Lender to the Borrower.

Section  2.12.  Guaranty of Payment and Expenses.  Each  Guarantor (on a
joint  and  several  basis  with  the  other  Guarantors)   hereby   absolutely,
unconditionally  and irrevocably  guaranties to the Lender the full and punctual
payment and satisfaction of the Borrower's  Obligations as and when due, whether
at stated maturity, by acceleration or otherwise,  and agrees to pay and satisfy
in full any and all  expenses  that may be paid or incurred by the Lender in the
collection of all or any portion of the  Borrower's  Obligations or the exercise
or  enforcement  of any one or more of the  other  rights,  powers,  privileges,
remedies  and  interests  of the Lender  under this  Agreement or any other Loan
Instrument,  irrespective  of the  manner  or  success  of any such  collection,
exercise or enforcement, and whether or not such expenses constitute part of the
Borrower's Obligations.  The Lender in its sole and absolute discretion shall be
entitled to demand payment of the Borrower's  Obligations (in whole at any time,
or in part from time to time) from the  Guarantors  (or any of them)  under this
Agreement  upon the  occurrence  and  during  the  continuance  of any  Event of
Default. If the Lender makes such a demand: (a) any and all principal,  interest
and other  Borrower's  Obligations  outstanding or accrued under any Note and/or
any other Loan  Instrument  shall be deemed to be immediately due and payable in
full (or for the  item(s)  in the  amount(s)  demanded  if a partial  demand was
made), all without  presentment,  protest,  demand or notice of any kind, all of
which  are  expressly  waived  by each  Guarantor  (and in the case of a partial
demand,  without in any way affecting any of the  Guarantors'  Obligations  with
respect to the balance of the Borrower's Obligations not demanded); and (b) each
Guarantor  (on a joint  and  several  basis  with the  other  Guarantors)  shall
immediately pay to the Lender the amount demanded in full.

Section 2.13.  Continuing Guaranty and Agreement,  Payment in Accordance
with Terms,  Etc. Each  Guarantor  covenants  and agrees that:  (a) its guaranty
hereunder  is  a  continuing  guaranty  of  the  full  and  timely  payment  and
satisfaction of the Borrower's Obligations,  and not guarantying  collectibility
only, and the security interests granted by it hereunder are continuing security
interests  securing  the  full  and  timely  payment  and  satisfaction  of  the
Borrower's  Obligations  or  the  Guarantors'  Obligations,   and  not  securing
collectibility  only,  in each case whether the  Borrower's  Obligations  or the
Guarantors' Obligations are now or hereafter existing,  acquired or created, and
irrespective  of the fact that from time to time under the terms and  provisions
of the Loan  Instruments  monies may be advanced,  repaid and readvanced and the
outstanding  balance of the Loans may be zero; (b) the Mortgagor's  Guaranty may
not be revoked or terminated by any Guarantor  until such time as the Borrower's
Obligations  and the  Guarantors'  Obligations  shall  have been  fully paid and
satisfied; (c) none of the Borrower's Obligations or the Guarantors' Obligations
shall be deemed to have been  otherwise  fully paid and satisfied so long as any
Loan Instrument (other than the Mortgagor's  Guaranty) shall have any continuing
force  or  effect;  and  (d) the  Borrower's  Obligations  and  the  Guarantors'
Obligations  will be paid and satisfied in full in accordance with the terms and
provisions of the Loan  Instruments  without regard to any applicable law now or
hereafter in effect in any  jurisdiction,  including  (without  limitation)  any
applicable law that might in any manner affect any of those terms and provisions
or any of the rights, powers,  privileges,  remedies and interests of the Lender
with respect thereto, or that might cause or permit to be invoked any alteration
in the time,  amount or manner of payment of any of the Borrower's  Obligations,
the  Guarantors'  Obligations or any Surety's  Obligations by the Borrower,  any
Guarantor, any Surety or any other person (other than the Lender).

Section 2.14. Agreement Absolute, Survival of Representations, Etc. Each
of  the   collateral   grants,   guaranties   and  other  payment   obligations,
representations  and  warranties  (as of  the  date(s)  made  or  deemed  made),
covenants,  waivers and other agreements of each Guarantor (whether  individual,
joint,  several or  otherwise)  contained in this  Agreement  and the other Loan
Instruments: (a) shall be absolute, irrevocable and unconditional,  irrespective
of (among other things) the validity, legality, binding effect or enforceability
of any of the other terms and  provisions  of this  Agreement  or any other Loan
Instrument or any other event  described in this Section;  (b) shall survive the
execution and delivery of this Agreement and the other Loan Instruments, and any
and all advances,  repayments  and  readvances of any or all of the monies to be
lent hereunder and  thereunder;  (c) shall remain and continue in full force and
effect without regard (i) to whether the Loans or other Borrower's  Obligations,
Guarantors'  Obligations or Surety's  Obligations are now or hereafter existing,
acquired or created,  and  irrespective of the fact that from time to time under
the terms and provisions of the Loan Instruments monies may be advanced,  repaid
and readvanced and the outstanding balance of the Loans may be zero, (ii) to any
extension or change in the time, manner, place and other terms and provisions of
payment  or  performance  of any one or more of the  Loans or  other  Borrower's
Obligations,  any Guarantors' Obligations or any Surety's Obligations,  (iii) to
any  waiver,  modification,   extension,  renewal,   consolidation,   spreading,
amendment or restatement of any term or provision of this Agreement or any other
Loan Instrument (except as and to the extent expressly modified by the terms and
provisions of any such waiver, modification,  extension, renewal, consolidation,
spreading,  amendment or  restatement),  (iv) to any acceptance by the Lender of
(A) any partial or late payment,  which shall not constitute a  satisfaction  or
waiver of the full amount then due or the 

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resulting Default or Event of Default, or (B) any payment during the continuance
of any Default or Event of Default,  which shall not constitute a waiver or cure
thereof;  and the Lender may accept or reject any such payment without affecting
any of its rights, powers,  privileges,  remedies and other interests under this
Agreement,  the other Loan  Instruments  and  applicable  law;  (v) to any full,
partial or non-exercise of any of the rights, powers,  privileges,  remedies and
interests of the Lender under any Loan Instrument or applicable law, against the
Borrower,  any  Surety  or  any  other  Person  or  with  respect  to any of the
Borrower's Obligations,  Guarantors' Obligations,  any Surety's Obligations, any
other obligations or any collateral or security interest therein, which exercise
or  enforcement  may be  delayed,  discontinued  or  otherwise  not  pursued  or
exhausted for any or no reason  whatsoever,  or which may be waived,  omitted or
otherwise not exercised or enforced (whether  intentionally or otherwise),  (vi)
to  any  surrender,  repossession,  sequestration,  foreclosure,  conveyance  or
assignment (by deed in lieu or  otherwise),  sale,  lease or other  realization,
dealing,   liquidation  or  disposition  respecting  any  collateral  or  setoff
respecting any account or other asset in accordance with the Loan Instruments or
applicable law (except as and to the extent the Borrower's Obligations have been
permanently  reduced by the application of the net proceeds  thereof),  (vii) to
the  perfected  or  non-perfected  status or priority  of any  mortgage or other
security interest in any such collateral, which may be held without recordation,
filing or other perfection (whether  intentionally or otherwise),  (viii) to any
release, settlement, adjustment,  subordination or impairment of all or any part
of  the   Borrower's   Obligations,   Guarantors'   Obligations,   any  Surety's
Obligations,  any other  obligations or any collateral or any security  interest
therein,  whether  intentionally  or  otherwise  (except  as and  to the  extent
expressly  modified by the terms and provisions of any such release,  settlement
or  adjustment),   (ix)  to  any  extension,  stay,  moratorium  or  statute  of
limitations  or similar time  constraint  under any  applicable  law, (x) to any
investigation,  analysis or  evaluation  by the Lender or its  designees  of the
assets, business,  operations,  properties or condition (financial or otherwise)
of the Borrower,  any Guarantor,  any other Surety, or any other person, (xi) to
any application to any  obligations of the Borrower,  any Guarantor or any other
Surety  other  than  any  Borrower's  Obligations,  Guarantors'  Obligations  or
Surety's  Obligations  of (A) any  payments  from such  person not  specifically
designated  for   application  to  the   Borrower's   Obligations,   Guarantors'
Obligations or Surety's  Obligations or (B) any proceeds of collateral from such
person  other  than  from  the  Collateral,   (xii)  to  any  sale,  conveyance,
assignment,  participation or other transfer by the Lender (in whole or in part)
to any other  person  of any one or more of this  Agreement  and the other  Loan
Instruments or any one or more of the rights,  powers,  privileges,  remedies or
interests of the Lender herein or therein,  (xiii) to any act or omission on the
part of the  Lender  or any  other  person,  or  (xiv)  to any  other  event  or
circumstance that otherwise might constitute a legal or equitable  counterclaim,
defense or discharge of a borrower, co-obligor,  indemnitor,  guarantor, pledgor
or surety; in each case in such manner and order, upon such terms and provisions
and subject to such  conditions as the Lender may deem necessary or desirable in
its sole and absolute  discretion,  and without notice to or further assent from
the Borrower,  any Guarantor,  any other Surety, or any other person (except for
such  notices as may be  expressly  required to be given to such party under the
applicable  Loan  Instrument);   (d)  shall  not  be  subject  to  any  defense,
counterclaim,  setoff, right of recoupment,  abatement, reduction or other claim
or  determination  that may have  against  the  Lender,  any Surety or any other
person;  (e) shall not be  diminished  or  qualified  by the death,  disability,
dissolution,   reorganization,    insolvency,   bankruptcy,   custodianship   or
receivership  of the Borrower,  any  Guarantor,  any other Surety,  or any other
person, or the inability of any of them to pay their respective debts or perform
or otherwise  satisfy their  respective  obligations  as they become due for any
reason  whatsoever;  and (f) shall  remain and continue in full force and effect
without regard to any of the foregoing acts,  circumstances  or events (i) until
all of the Borrower's  Obligations and Guarantors'  Obligations  have been fully
paid and  satisfied  and (ii)  thereafter  with  respect  to any and all  events
occurring  prior to such  payment  and  satisfaction  and any and all  resulting
claims,  liabilities,  losses and expenses (including,  without limitation,  the
attorneys'  disbursements,  expenses and fees),  whenever  incurred or asserted.
Notwithstanding the foregoing in this Section,  however,  each Guarantor retains
the defense of indefeasible payment to the extent actually paid.

Section   2.15.   Subordination   of   Indebtedness,   Subrogation   and
Contribution  Rights,  Etc. Each  Guarantor  covenants and agrees that until the
Borrower's  Obligations  and  Guarantors'  Obligations  have been fully paid and
satisfied,   any  and  all  Subordinated  Rights  of  such  Guarantor  shall  be
subordinate  and inferior in priority and dignity to the Borrower's  Obligations
and  Guarantors'  Obligations  and  shall  not be  entitled  to any  payment  or
satisfaction (in whole or in part) until, all of the Borrower's  Obligations and
Guarantors' Obligations have been fully paid and satisfied.  Until such time (if
ever) as the Borrower's Obligations and Guarantors'  Obligations have been fully
paid and  satisfied:  (A) no  Guarantor  shall seek any  payment or  exercise or
enforce any right, power, privilege,  remedy or interest that such Guarantor may
have  with  respect  to any  Subordinated  Right and (B) any  payment,  asset or
property  delivered  to or for the  benefit of any  Guarantor  in respect of any
Subordinated  Right shall be accepted in trust for the benefit of the Lender and
shall be promptly  paid or delivered to the Lender to be credited and applied to
the payment and  satisfaction  of the  Borrower's  Obligations  and  Guarantors'
Obligations,  whether  contingent,  matured or  unmatured,  or to be held by the
Lender  as  additional  collateral,  as the  Lender  may  elect  in its sole and
absolute discretion. Each Guarantor hereby acknowledges and agrees that pursuant
to this Agreement such Guarantor has granted to the Lender a continuing security
interest in and to any and all Subordinated  Rights of such Guarantor,  together
with 

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the  proceeds  thereof and all  payments  and other  distributions  with respect
thereto. In addition to the rights,  powers,  privileges,  remedies and interest
accorded  to the Lender by this  Agreement  or  applicable  law,  the Lender may
exercise any voting,  consent,  enforcement  or other right,  power,  privilege,
remedy or interest pertaining to any Subordinated Right to the same extent as if
the Lender were the outright owner thereof.

Section 2.16. Waiver of Impairment of Subrogation and Other Rights. Each
Guarantor   acknowledges  and  agrees  that:  (a)  the  amounts  (if  any)  that
potentially  could be realized by such  Guarantor (or any other  Guarantor),  as
well  as  the  enforceability,  practicality  or  value  of  any  right,  power,
privilege, remedy or interest of such Guarantor (or any other Guarantor),  under
or in respect of any Subordinated Right may be substantially  reduced or limited
or  completely   eliminated  by  any  one  or  more  of  the  following  (either
individually or in the aggregate):  (i) the delay inherent in the  subordination
of those  rights  under this  Agreement,  (ii)  payments  by the  Borrower,  any
Guarantor,  any Surety or any other  person to the  Lender or any other  person,
(iii) any  foreclosure,  sale,  lease or other  liquidation  or  disposition  or
realization respecting any collateral, (iv) any action or inaction by the Lender
or any other person  authorized or waived by the Borrower,  any Guarantor or any
other  authorized  person,  whether  under  this  Agreement  or  otherwise,   or
contemplated,  permitted  or provided for under this  Agreement,  any other Loan
Instrument or applicable  law, (v) the exercise or  enforcement by the Lender of
any  one or  more  of the  Lender's  rights,  powers  privileges,  remedies  and
interests of the Lender under any Loan Instrument or applicable law, or (vi) any
adverse  change  (however  material)  in  the  assets,   business,   operations,
properties,   or  condition  (financial  or  otherwise)  of  the  Borrower,  any
Guarantor,  any Surety or any other person arising out of or related directly or
indirectly  to any of the  foregoing;  (b) the Lender is not acting as an agent,
trustee or other representative (regarding collateral or otherwise) with respect
to any  Subordinated  Right;  (c) the Lender may  exercise or enforce any of the
Lender's  rights,  powers,  privileges,  remedies  or  interests  under the Loan
Instruments  or  applicable  law without any  consideration  of or regard to any
Subordinated  Right or any direct or indirect adverse effect thereupon  (however
material);  (d) no Guarantor  shall be entitled to any payment or other asset or
property (or any part thereof)  delivered to or otherwise realized by the Lender
on account of the Borrower's  Obligations,  Guarantors'  Obligations or Surety's
Obligations or to any  accounting  thereof;  (e) none of the foregoing  (whether
individually or in the aggregate)  shall (i) release,  limit or otherwise affect
the liability of any  Guarantor to the Lender under this  Agreement or any other
Loan Instrument, or (ii) give rise to any action, claim, counterclaim,  right of
setoff or recoupment,  defense, or other remedy on the part of the Borrower, any
Guarantor, any Surety or any other person,  irrespective of frequency, direct or
indirect  effect,  materiality  or direct or indirect  consequences;  and (f) no
Guarantor  shall  raise any,  and each  Guarantor  hereby  expressly  waives and
releases each and every, such action, claim,  counterclaim,  right of setoff, or
recoupment, defense, or other remedy.

Section 2.17. Bankruptcy. In the event the Lender is not permitted or is
otherwise unable (because of the pendency of any Bankruptcy  Proceeding or other
proceeding) to accelerate or demand payment of any of the Borrower's Obligations
or Guarantors' Obligations,  but otherwise would have been permitted to do so at
such time  pursuant  to any Loan  Instrument,  the Lender may demand  payment in
full, may proceed against any of the Collateral and may exercise and enforce the
Lender's other rights,  powers,  privileges,  remedies and interests  under this
Agreement or any other Loan  Instrument  to which any Guarantor is a party as if
the  Borrower's  Obligations  and/or  Guarantors'   Obligations  had  been  duly
accelerated  and payment had been duly demanded,  and no Guarantor  shall raise,
and each Guarantor hereby  expressly  waives and releases,  any claim or defense
with respect to such deemed acceleration.

Section 2.18.  Letters of Credit.  (a) Upon the terms and provisions and
subject to the conditions contained in this Agreement, in lieu of a cash advance
under the Line of Credit  the  Lender in its sole and  absolute  discretion  may
issue or cause the  issuance  of  Letters  of Credit  from time to time upon the
request of the Borrower up to a cumulative  maximum face amount  (whether or not
advanced) not to exceed $250,000  (unless the Lender permits a greater amount in
its sole and absolute discretion) in order to secure the debts or obligations of
the Borrower or its designee;  provided that the Lender's  agreement to consider
the issuance of Letters of Credit  shall  terminate on the first to occur of the
Maturity Date and the expiration of the Revolving  Credit  Period;  and provided
further that the Lender may not consider the issuance of any Letter of Credit if
the face  amount of the Letter of Credit to be issued plus the sum of the Letter
of Credit  Amount and the  principal  balance  outstanding  under the  Revolving
Credit  Loans  together  would  exceed  (i) the  Line  of  Credit  prior  to the
Overadvance  Conversion  Date and  (ii)  the  lesser  of Line of  Credit  or the
Borrowing Base on and after the Overadvance Conversion Date.

(b) The Borrower may request that a Letter of Credit be issued  pursuant
to  subsection  (a) of this Section by giving the Lender a signed  notice of its
request,  or by giving the Lender  notice of its request both by  telephone  and
telecopy of a signed notice and promptly  confirming  its request by delivery of
the original  copy of the signed notice to the Lender.  The notice  requesting a
Letter of Credit (i) shall be delivered to the Lender at least ten Business Days
prior to the requested Letter of Credit Issuance Date (unless the Lender permits
a shorter  notice  period in its sole and  absolute  discretion),  (ii) shall be
deemed to have been  delivered on 

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the following Business Day unless actually received by the Lender prior to 11:00
A.M. (New York City time) on a Business  Day,  (iii) shall be  irrevocable  once
given,  and (iv) shall specify (A) the requested Letter of Credit Issuance Date,
face  amount  and  expiration  date of the  desired  Letter of  Credit,  (B) the
beneficiary to whom it is to be issued (each a "Letter of Credit  Beneficiary"),
and (C) the  purpose  for which the Letter of Credit is being  requested.  On or
before the  requested  Letter of Credit  Issuance  Date,  the Borrower also must
complete and deliver to the Lender an application  for each requested  Letter of
Credit in form and  substance  acceptable  to the  Lender and issuer and pay the
issuer's  normal  application  and issuance  fees for each  requested  Letter of
Credit.  Each  requested  Letter of Credit shall be in a face amount of not less
than  $10,000 and shall  terminate  no later than the first  anniversary  of the
Letter of Credit  Issuance  Date or the  scheduled  expiration  of the Revolving
Credit Period,  whichever occurs first. The issuance of each Letter of Credit is
subject to compliance on the Letter of Credit  Issuance Date with the conditions
precedent to obtaining an Advance  under this  Agreement,  subject to the Lender
being able to obtain such issuance  from the Senior Lender or other issuer,  and
subject always to the sole and absolute discretion of the Lender. Each Letter of
Credit will be issued on a standard  form of the  issuing  bank then in effect .
Unless the issuer's  standard  form  provides  otherwise,  each Letter of Credit
shall be governed by and construed in accordance  with: (a) the Uniform  Customs
and Practice for Documentary Credits,  1993 Revision,  ICC Publication 500LF, as
supplemented, revised and restated from time to time (the "UCP"); and (b) to the
extent the UCP is not dispositive, the Applicable Law pertaining in the State of
New York (including the UCC). The requested Letter of Credit may be delivered by
the Lender to the Letter of Credit Beneficiary, to the Borrower or to such other
Person as the Borrower reasonably may request.  The Letters of Credit may not be
transferred or assigned  without (x) the prior written consent of the Lender and
issuer, (y) submission to the Lender of a notice of transfer in the form annexed
to the Letter of Credit,  and (z) the payment of the  issuer's  normal  transfer
fee.

(c) Each of the  Letters of Credit may be drawn upon by  presentment  to
the Lender, at its office (or such other office as may be specified therein), of
the original Letter of Credit, duly endorsed by the Letter of Credit Beneficiary
(which presentment may be waived by the Lender with respect to Letters of Credit
permitting multiple drawings), together with a sight draft payable to the Letter
of  Credit  Beneficiary  or its order  and the  Letter  of Credit  Beneficiary's
certificate  that it is entitled to the amount of the sight draft as a result of
nonpayment of the obligations  thereby secured,  each  substantially in the form
annexed  to the  relevant  Letter  of  Credit.  The  promissory  note  or  other
instrument  evidencing  the  obligation  thereby  secured,  duly endorsed to the
Lender,  also shall be  presented  with the Letter of Credit if that  obligation
will be paid in full as a result of the payment in accordance with the Letter of
Credit.  If the relevant note or other  instrument  will not be so paid in full,
the Lender (in its sole and  absolute  discretion)  may require  that the Person
presenting the Letter of Credit present it to the Lender for copying and return.
The  Lender or issuer  may  accept  any  draft,  certificate  or other  document
reasonably conforming in form and substance to the requirements described in the
Letter of Credit  and the forms  annexed  thereto,  and may afford the Letter of
Credit Beneficiary notice of and an opportunity to correct  non-conforming items
capable  of cure,  each in the sole and  absolute  discretion  of the  Lender or
issuer and without any notice to or assent from the  Borrower.  The Lender,  any
other issuer and their  respective  Representatives  may in good faith  (without
inquiry) with respect to a particular Letter of Credit: (i) act in reliance upon
any  written,  telegraphic,  facsimile,  electronic,  telephonic,  oral or other
request,  notice  or  communication  believed  to be from,  by,  on behalf of or
authorized by the Borrower, the Letter of Credit Beneficiary or their respective
Representatives,  successors  or  assigns,  whether  or not from or signed by an
authorized  Person;  (ii)  accept  or pay as  complying  with  the  terms of the
relevant  Letter of Credit any drafts or other  documents  that  appear on their
face (A) to be reasonably  conforming to the required  forms or (B) to be issued
or signed by the Letter of Credit  Beneficiary  or other  proper  party or their
respective   Representatives,   successors   or  assigns   (including,   without
limitation,  any  bankruptcy  trustee or  similar  official);  (iii)  reject any
presentment,  draft  or  other  document  that it  determines  (in its  sole and
absolute  discretion) to not conform to the requirements of the Letter of Credit
or this  Agreement;  or (iv) act or refrain  from acting in reliance  upon or in
accordance  with  the  UCP,  Applicable  Law  (including,   without  limitation,
statutes, orders, regulations,  decisions or directives) or customs in effect in
the place of issuance, confirmation,  presentment, negotiation or payment of the
Letter of Credit.

(d) Each amount paid by the Lender or its designee  pursuant to a Letter
of Credit or otherwise in respect of the obligation  thereby  secured (a "Letter
of Credit  Advance")  shall be repaid by the  Borrower to the Lender on the same
day payment is made by the Lender or its designee. If a Letter of Credit Advance
is not so repaid (without,  however, in any way consenting to such non-payment),
(i) such  Letter  of  Credit  Advance  shall be  deemed  to be an  Advance  of a
Revolving  Credit Loan and shall be repayable ON DEMAND,  together with interest
thereon at the rate specified in this Article for overdue  payments of the Loans
(including,  without  limitation,  any and all interest,  fees and other amounts
accrued,  accruing or otherwise applicable during the pendency of any Bankruptcy
Proceeding,  irrespective  of whether such interest,  fees and other amounts are
allowed or  allowable as claims in such  proceeding),  pursuant to the terms and
provisions of this Agreement  notwithstanding any term or provision contained in
any Letter of Credit application to the contrary, and (ii) the resulting default
shall not be deemed or construed to have been cured until  payment has 

SPAR ESOP Revolving Credit Agreement

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been duly made.  Nothing in this subsection,  however,  is intended to limit the
ability of the Borrower to request an Advance prior to an anticipated  Letter of
Credit payment date or (assuming  satisfaction  of the requisite  conditions) to
apply the proceeds thereof to the payment of a Letter of Credit Advance.

(e) The  Borrower  shall  pay to the  Lender  on  each of the  quarterly
anniversaries of the issuance of each outstanding  Letter of Credit, in advance,
a fee  respecting  each  Letter of Credit (the  "Letter of Credit  Fee") for the
quarter commencing with that date (computed on the basis of the actual number of
days in such  quarter and a year of 360 days)  equal to six  percent  (6.00%)per
annum of the unadvanced face amount thereof,  with such amount being  determined
as of  the  Business  Day  immediately  preceding  the  quarterly  payment  date
(including,  without  limitation,  any and all interest,  fees and other amounts
accrued,  accruing or otherwise applicable during the pendency of any Bankruptcy
Proceeding,  irrespective  of whether such interest,  fees and other amounts are
allowed  or  allowable  as claims  in any such  proceeding);  provided  that the
Borrower  shall pay that fee on the Letter of Credit  Issuance Date, in advance,
for the forthcoming quarter[;  and provided further that the minimum fee for any
Letter of Credit shall be two percent (2.00%) of the face amount irrespective of
any  shorter  expiry.  The  Borrower  also  shall pay to the  Lender any and all
customary fees (without  duplication  of the Letter of Credit Fee),  commissions
and/or charges of the Lender for any increase,  extension, renewal, amendment or
transfer of the Letter of Credit.  The Borrower  also shall pay to the Lender or
issuer any and all customary  fees (without  duplication of the Letter of Credit
Fee),  commissions  and/or  charges of the Lender for any  increase,  extension,
renewal,  amendment or transfer of the Letter of Credit. The Borrower also shall
pay to the  Lender  any  fees  or  other  charges  of any  other  issuer  or any
participant, correspondent, confirming bank, custodian or designee of the Lender
or other issuer involved with the Letter of Credit.

(f) In  addition  to the  payments of  principal,  interest  and fees as
stated above,  if there shall be any increase in the direct or indirect costs to
the Lender of  issuing,  causing  the  issuance  of or  maintaining  a Letter of
Credit,  or any reduction in any amount  received or to be received with respect
to a Letter of Credit by the Lender hereunder, due to:

(i)     the  introduction  of or  any  change  in  any  Applicable  Law  or  the
interpretation or administration thereof, including (without limitation)
the imposition,  modification or application of (A) any reserve, capital
adequacy, special deposit,  assessment or similar requirement respecting
Letters of Credit  issued by,  assets held by, or deposits in or for the
account  of the Lender or other  issuer of a Letter of  Credit,  (B) any
requirement  to withhold or deduct from any amount payable to the Lender
hereunder,  or payable  directly or indirectly to the issuer of a Letter
of  Credit,  any  taxes,  levies,  imposts,  duties,  fees,  deductions,
withholdings  or charges of a similar nature (other than federal,  state
and local income and franchise  taxes  imposed upon the Lender),  or any
interest thereon or any penalties with respect thereto, imposed, levied,
collected, assessed, withheld or deducted by any governmental Authority,
including  subdivisions and taxing authorities thereof, or (C) any other
restriction or condition affecting a Letter of Credit or this Agreement;
or

(ii)    the  compliance by the Lender or other issuer of a Letter of Credit with
any  regulation,  guideline  or request  from any central  bank or other
Authority (whether or not having the force of law);

then the Borrower from time to time, upon demand by the Lender, shall pay to the
Lender  additional  amounts  sufficient  to indemnify the Lender or other issuer
against and  reimburse the Lender or other issuer for such  increased  costs and
reduced  receipts.  A certificate as to the amount of such  increased  costs and
reduced receipts  submitted to the Borrower by the Lender shall be conclusive as
to the existence and amount thereof absent manifest error. If the Lender has not
received  payment for such amounts by the time it receives from the Borrower the
next succeeding  payment or prepayment of a portion of the Obligations,  whether
intended by the Borrower to be interest,  principal or otherwise, the Lender may
apply such payment or  prepayment  first to the reduction of the amounts of such
costs and receipts.

(g) The  Obligations  shall not  otherwise  be deemed to have been fully
paid or  satisfied  until all of the  Letters of Credit  have been paid (and the
corresponding  Letter of Credit  Advance  repaid by the  Borrower)  or have been
surrendered  to the  Lender  for  return to and  cancellation  by the  issuer(s)
thereof;  provided  that any Letter of Credit  that has not been  presented  for
payment  shall  be  deemed  for  this  purpose  to  have  been  canceled  on the
forty-fifth day following the stated expiry date,  without,  however,  relieving
the Borrower of any of the Obligations with respect to any such Letter of Credit
that is in the process of payment.

(h) In  addition  to the  payment  of fees and other  amounts  as stated
above,  after  notice  from the Lender  during the  continuance  of any Event of
Default prior to maturity,  and at all times on and after the Maturity Date, the
Borrower  shall  pay to the  Lender  a fee  respecting  the  Letters  of  Credit
outstanding  from  time to time  during  such  period(s)  equal to four  percent
(4.00%) per annum of the outstanding face amount thereof  (computed on the basis
of the actual  number of days  elapsed  and a year of 360 days),  which  amounts
shall be  

SPAR ESOP Revolving Credit Agreement

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payable by the  Borrower at the same times as the regular  interest  payments on
the  Loans  required  by  Section  2.04 of this  Agreement  (including,  without
limitation,  any and all interest,  fees and other amounts accrued,  accruing or
otherwise   applicable  during  the  pendency  of  any  Bankruptcy   Proceeding,
irrespective  of whether such fees and other amounts are allowed or allowable as
claims in any such proceeding),  subject, however, to the maximum rate permitted
by Applicable Law as provided in Section 2.11, hereof.

(i) Each of the payment obligations, covenants and other obligations and
agreements  of the  Borrower  contained  in this  Agreement  and the other  Loan
Instruments  shall be paid and satisfied by the Borrower  strictly in accordance
with their terms in each case without  regard to, none of the Lender,  any other
issuer  and  their  respective   Representative  shall  have  any  liability  or
responsibility  for,  and the  Borrower  hereby  expressly  waives  any claim or
defense  against or in  respect of each such  Person  with  respect  to: (i) any
payment  or other  action or  inaction  under or with  respect  to any Letter of
Credit in accordance  with the terms and  provisions  of the relevant  Letter of
Credit,  this Agreement or any other Loan  Instrument;  (ii) any payment against
presentation of any required draft or other document that does not reference, or
incompletely or incorrectly references,  the existence,  amount, date, number or
other aspect of the relevant Letter of Credit;  (iii) any presentment or payment
under or with  respect  to any  Letter of Credit  after the  expiry  thereof  in
reliance upon or in accordance with the UCP, Applicable Law (including,  without
limitation,  statutes, orders, regulations,  decisions or directives) or customs
in effect in the place of issuance,  confirmation,  presentment,  negotiation or
payment  of  the  Letter  of  Credit;  (iv)  the  form,  validity,  sufficiency,
completeness, accuracy, genuineness or legal effect of (A) any Letter of Credit,
(B) any draft or other document  required or permitted under the relevant Letter
of Credit, this Agreement or any other Loan Instrument, or (C) any instrument or
document  transferring or assigning the Letter of Credit, any rights or benefits
thereunder  or any proceeds  thereof (in whole or in part),  or purporting to do
so,  even  if any of them  should  in fact  prove  to be in any or all  respects
invalid,  insufficient,   ineffective,  incomplete,  inaccurate,  fraudulent  or
forged; (v) the failure of any Person to surrender, obtain, forward or otherwise
deal with the Letter of Credit or any other  document  other than the  surrender
and  obtaining  of any drafts or other  documents  specifically  required by the
terms of the Letter of Credit;  (vi) any failure to note the amount of any draft
on the  reverse of the Letter of Credit;  (vii) any and all  errors,  omissions,
interruptions  or delays in  transmission  or delivery  of any notice,  request,
demand or other  communication  permitted  or  required  to be given  under this
Agreement  or any other  Loan  Instrument,  whether by mail,  cable,  telegraph,
telex,  telecopy or otherwise,  whether or not an error in  processing,  cipher,
translation or otherwise or an error in  interpretation  (of technical  terms or
otherwise);  (viii) any loss or delay in the delivery of any draft,  document or
proceeds; (ix) the existence,  character, quality, quantity, condition, packing,
value,  or  delivery  of any goods or other  property  relating to any Letter of
Credit,  the time, place,  manner or order in which shipment may have been made,
the  existence,  form,  validity,  sufficiency  or legal effect of any insurance
covering  or  purporting  or  required  to cover any such  goods,  or any act or
omission of any insurer, shipper, warehouseman,  carrier, correspondent or other
Person;  or (x) without limiting the foregoing,  any  consequences  arising from
causes  beyond  the  control  of the  Lender,  any other  issuer or any of their
respective  Representatives  or any act or  omission  by any of them not done or
omitted in bad faith (each of which  provision,  if  contained  in the Letter of
Credit  itself,  may be  waived by the  Lender  or other  issuer in its sole and
absolute  discretion).  If the Letter of Credit  provides  that payment is to be
made by a designated  Representative of the Lender or other issuer,  none of the
Lender, any other issuer or any of their respective  Representatives (other than
such designated Representative) shall be responsible or otherwise liable for the
failure of any document specified in the Letter of Credit to come into the hands
of the Lender or other issuer or for any delay in connection therewith,  and the
obligation  of the  Borrower  to  reimburse  the Lender or any other  issuer for
payments made or  obligations  incurred shall not be affected by such failure or
delay in the  receipt  by the  Lender or any other  issuer of any or all of such
documents  whether  sent to the  Lender or any other  issuer in one or  multiple
mailings.  In any  event,  neither  the  Lender  nor any other  issuer  shall be
responsible  for any error,  neglect,  suspension  or  insolvency  of any of the
Representatives  of the Lender or other issuer designated to confirm or pay with
respect to any Letter of Credit. The Borrower  acknowledges and agrees that this
Agreement  has been entered into and all Letters of Credit have been obtained by
the Borrower for commercial purposes. The Borrower agrees that it will not raise
(as a defense or  otherwise),  and hereby  expressly  waives,  any  immunity  or
exemption  from  liability,  jurisdiction,  forum  or  service  that  may now or
hereafter be accorded to the Borrower,  its  Representatives or their respective
assets and  properties.  The preceding  agreements  and waivers are not intended
(and  shall  not be  deemed  or  construed)  to in any way  qualify,  condition,
diminish,  restrict,  limit or otherwise affect any (and is in addition to each)
other release, waiver, consent, waiver, exculpation, indemnification,  permitted
action or other  similar term or  provision of this  Agreement or any other Loan
Instrument.

SPAR ESOP Revolving Credit Agreement

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ARTICLE III.

REPRESENTATIONS AND WARRANTIES

To induce  the Lender to enter  into this  Agreement  and the other Loan
Instruments  to which it is a party  and to make and  continue  the Loans to the
Loan Parties,  the Loan Parties  jointly and severally  represent and warrant to
the Lender as follows in each Section of this Article:

Section 3.01.  Organization,  Powers,  Etc. Each Loan Party: (a) is duly
organized,  validly existing and in good standing under the laws of its state of
incorporation,  which state is correctly  set forth in the  Introduction  hereto
(i.e.,  first paragraph of this  Agreement);  (b) has the power and authority to
carry on its business as now conducted and to own or hold under lease the assets
and  properties it purports to own or hold under lease;  (c) is duly  qualified,
licensed or  registered  to transact its business and in good  standing in every
jurisdiction  in which it purports to or carries on its  business or holds under
lease any of its  assets  and  properties;  (d) has the power and  authority  to
execute and deliver this  Agreement  and each of the other Loan  Instruments  to
which it is or will be a party and to perform all of its  obligations  hereunder
and thereunder; and (e) has its executive office and principal place of business
at the  address  set  forth in the  Introduction,  which  has been so since  its
organization.

Section 3.02.  Separate  Legal Entity,  Etc. (a) The full,  complete and
correct  legal name of each Loan Party is set forth in the  Introduction  hereto
(i.e.,  first paragraph of this Agreement) and on the signature page hereto, and
has never been  changed and is and has been the only name ever used by such Loan
Party. Each Loan Party has at all times: (i) done business exclusively under its
own name and employer and taxpayer  identification  numbers,  held itself out to
the public as a legal entity  separate  and distinct  from any other Person (and
not  as  a  department  or  division  of  someone   else),   and  corrected  any
misunderstandings  known to it  regarding  the  separate  identity  of each Loan
Party; (ii) used its own separate  stationery,  invoices and checks;  (iii) used
its own logos and  trademarks  and not shared any common logo or trademark  with
any other Person;  (iv) observed all  corporate or  equivalent  formalities  for
maintaining its status as a valid separate  entity;  (v) maintained its records,
books of account,  bank  accounts and other assets and  properties  separate and
apart from those of any other Person and not commingle any of them with those of
any other Person; (vi) promptly corrected any other Person's misunderstanding as
to (A) the  identity  of such Loan Party or any  Affiliate  with whom such other
Person is transacting business, or (B) such Loan Party's alleged  responsibility
for the Indebtedness or other  obligations of any other Person;  (vii) allocated
fairly and reasonably  any overhead  expenses that are shared with each relevant
Affiliate,  including  paying for office  space and  services  performed  by any
employee of an  Affiliate  or vice versa;  and (viii)  maintained  a  sufficient
number  of  employees  or  independent  contractors  in  light  of its  business
operations.

(b) No Loan  Party has at any  time:  (i)  engaged  in any  business  or
activity other than the ownership and operation and maintenance of its incentive
marketing business,  and activities  incidental thereto;  (ii) acquired or owned
any assets other than the securities of such subsidiaries and such assets as may
be incidental thereto; (iii) merged into or with or consolidated with any Person
or entity or changed its legal structure; and (iv) entered into any agreement or
arrangement  that  would not have been  permitted  after the date  hereof  under
Section 6.11 hereof.

Section 3.03.  Consents,  Etc. Except as already  obtained and listed on
Schedule 3.03 hereto, no consent, approval or authorization of, or registration,
declaration  or filing with, any Authority or other Person  (including,  without
limitation,  the  shareholders  of any Loan  Party) is  required  as a condition
precedent,  concurrent or subsequent to or in connection  with the due and valid
execution,  delivery and  performance by any Loan Party of this Agreement or any
other  Loan  Instrument  to which  such Loan  Party is or will be a party or the
legality,  validity, binding effect or enforceability of any of their respective
representations,  warranties,  covenants  and other terms and  provisions.  Each
franchise,  license,  certificate,  authorization,  approval or consent from any
Authority  necessary to the present  conduct of the business and  operations  of
each Loan  Party,  or  required  for the  acquisition,  ownership,  improvement,
operation  or  maintenance  by each Loan Party of any  portion of the assets and
properties  it now owns,  operates or  maintains,  has been obtained and validly
granted,  is in full  force and  effect  and  constitutes  valid and  sufficient
authorization therefor.

Section  3.04. No  Restriction  on Borrowing  Ability,  Etc. (a) No Loan
Party is regulated by or otherwise  subject to any  Applicable Law that directly
or  indirectly  limits or  otherwise  restricts or governs its ability to incur,
continue or repay  Indebtedness,  to provide Credit Support or to grant security
interests or other Liens in or to any of its assets and  properties  as security
for the  Indebtedness  of itself or others or its  Credit  Support  for  others.
Without limiting the generality of the foregoing:

(b) Except as expressly permitted by Section 6.09 hereof, no part of the
proceeds  of the Loans will be used to purchase  or carry any Margin  Stock,  to
extend  credit to any other Person for the purpose of purchasing or carrying any
Margin  Stock or in any way or for any  purpose  that  otherwise  violates or is
inconsistent  with any  applicable  Margin Stock  Regulations.  No Loan Party is
engaged principally,  or as one of 

SPAR ESOP Revolving Credit Agreement

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its important activities, in the business of extending credit for the purpose of
purchasing or carrying any Margin Stock.

(c) No Loan Party is an "investment  company",  an "affiliated  person",
"promoter" or "principal underwriter" of an "investment company" or "controlled"
by an "investment  company" (as such terms are defined in the Investment Company
Act). None of the transactions contemplated by this Agreement and the other Loan
Instruments  (including  the  making of the Loans and the  permitted  use of the
proceeds thereof) will violate any provision of the Investment Company Act.

(d)  No  Loan  Party  is a  "holding  company"  or an  "Affiliate"  or a
"subsidiary  company"  of a "holding  company"  within the meaning of the Public
Utility Holding Company Act of 1935, as amended, or any corresponding provisions
of any Applicable Law in any foreign jurisdiction, and as the same may have been
and hereafter may be  supplemented,  modified,  amended or restated from time to
time, and the rules and regulations promulgated thereunder, or any corresponding
or succeeding provisions of Applicable Law.

(e) No Loan Party is an  "employee  benefit  plan"  governed  by (and as
defined  in)  ERISA,  and  none of the  assets  or  properties  of the  Borrower
constitutes  or will  constitute  "plan assets"  governed by (and as defined in)
ERISA.

(f) No Loan  Party is a  "foreign  Person"  under  (and as  defined  in)
ss.1455(f)(3) of the Tax Code or any successor provision.

Section 3.05. Authorization, Conflicts and Validity. Except as set forth
in Schedule  3.05 hereto,  the execution and delivery by each Loan Party of this
Agreement  and each of the other  Loan  Instruments  to which it is or will be a
party and the performance by each Loan Party of all of its obligations hereunder
and thereunder: (a) have been duly authorized by all requisite corporate action;
(b) will not violate or be in  conflict  with any term or  provision  of (i) any
Applicable Law (including,  without limitation,  any applicable usury or similar
law), (ii) any judgment, order, writ, injunction, decree or consent of any court
or other judicial Authority,  or (iii) any Organizational  Document of each Loan
Party or any Surety;  (c) will not  violate,  be in conflict  with,  result in a
breach of or  constitute  a default  (with or  without  the giving or receipt of
notice,  the  acquisition of knowledge or the passage of time or any combination
thereof)  under any term or  provision of any  Organizational  Document or other
Material Document; and (d) except as specifically contemplated by this Agreement
or any other Loan  Instrument,  will not result in the creation or imposition of
any Lien of any nature upon any of its assets and properties. This Agreement and
each Note are,  and the other  Loan  Instruments  to which each Loan Party is or
will be a party when  executed and delivered  will be, legal,  valid and binding
obligations of such Loan Party,  enforceable in accordance with their respective
terms and provisions,  except as enforceability may be limited by (a) applicable
bankruptcy,  insolvency,  reorganization  and other laws affecting the rights or
remedies  of  creditors   generally  and  (b)  rules  of  equity  affecting  the
enforcement of obligations generally (whether at law or in equity).

Section 3.06.  Litigation.  Except as set forth in Schedule 3.06 hereto,
there are no  actions,  suits,  investigations  or  proceedings  (whether or not
purportedly  on behalf  of any one or more of the Loan  Parties  or any  Surety)
pending  or,  to  the  best  knowledge  of  the  Loan  Parties,   threatened  or
contemplated  at law,  in  equity,  in  arbitration  or by or  before  any other
Authority  involving or  affecting:  (a) any Loan Party or any Surety  that,  if
adversely  determined,  could have a Material Adverse Effect or Surety's Adverse
Effect;  (b) any alleged  criminal act or activity on the part of any Loan Party
or (to the  knowledge of the Loan Parties) any of its  representatives;  (c) any
ESOP Related Document,  Stock Purchase Document, or any Organizational  Document
of any  Loan  Party  or any  Surety;  (d)  any  Material  Document  (other  than
Collateral) that, if adversely determined,  could have a Material Adverse Effect
or Surety's  Adverse Effect;  (e) any  Environmental  Claim  respecting any Loan
Party or any part of the Collateral;  (f) the  Obligations;  (g) any part of the
Collateral;  or (h) any of the  transactions  contemplated in this Agreement and
the other Loan Instruments;  nor, to the best knowledge of the Loan Parties,  is
there  any  reasonable  basis  for the  institution  of any such  action,  suit,
investigation  or  proceeding.  None of the Loan  Parties  nor any  Surety is in
default with respect to any judgment, order, writ, injunction, decree or consent
of any court or other judicial Authority,  which default could have or has had a
Material Adverse Effect or Surety's Adverse Effect.

Section  3.07.  Financial   Statements,   No  Material  Adverse  Change,
Solvency,  Etc.  (a) The  Borrower  heretofore  has  provided  to the Lender the
balance sheet of Holdings as at December 31, 2001, and the related statements of
earnings,  shareholders' equity, and cash flow for the fiscal year ended on that
date, as part of SGRP's consolidated  financial  statements audited and reported
upon by Ernst & Young, independent certified public accountants. Those financial
statements and reports of the Borrower and the related notes and  schedules,  as
well as those related to later periods (whenever  delivered),  (i) were prepared
in accordance  with GAAP  consistently  applied  throughout  the period  covered
thereby,  except as otherwise  expressly  noted therein,  and (ii) are complete,
accurate and a fair  presentation of the financial  condition of the Borrower as
of the date  thereof and the results of its  operations  for the period  covered
thereby  (subject in the case of interim  statements  to normal  year-end  audit
adjustments).

(b)  The  Borrower   heretofore  has  provided  to  the  Lender  the  pro  forma
consolidated  and  consolidating  balance  sheet of the  Borrower as at June 30,
2002, and the related pro forma  consolidated  and  consolidating  statements of
earnings,  shareholders' equity, and cash flow for the six-month period ended on
that  date.  Those  financial   statements  and  reports  of  Holdings  and  its
subsidiaries  and the related notes and  schedules,  as well as those related to
later periods  (whenever  delivered),  (i) were prepared in accordance with GAAP
consistently  applied throughout the period covered thereby,  (ii) fully reflect
all of the Accounts Receivable,  trade payables and other assets and liabilities
of  Holdings  and its  subsidiaries,  (iii) 

SPAR ESOP Revolving Credit Agreement

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are complete,  accurate and a fair  presentation  of the financial  condition of
Holdings  and its  subsidiaries  as of the date  thereof  and the results of its
operations  for the  period  covered  thereby  (subject  in the case of  interim
statements to normal  year-end  audit  adjustments),  provided  that  statements
relating to or incorporating the period January 1, 2002,  through June 30, 2002,
have been or will have been  prepared  on a pro forma  basis to reflect  the pro
forma  balance  sheet of  Holdings  and its  subsidiaries  as at June 30,  2002,
immediately  after the  conclusion of the closing  under this  Agreement and the
Stock  Purchase  Agreement and to include the results of operations for Holdings
for such periods,  and (iv) have been separately  certified to the Lender by the
chief executive officer and chief financial officer (or controller or other most
senior accounting officer or employee if there is no chief financial officer) of
the Borrower as satisfying clauses (i), (ii) and (iii) of this subsection.

(c) The  Borrower  heretofore  has  provided to the Lender the  separate
actual  balance  sheets  of  the  Borrower  and  Holdings  as at  May  31,  2002
(immediately  preceding Holding's purchase of the SPG Stock), and the Borrower's
related  statements  of earnings,  shareholders'  equity,  and cash flow for the
six-month period ended on that date. Those financial  statements and reports and
the  related  notes and  schedules,  as well as those  related to later  periods
(whenever  delivered),  (i) were prepared in accordance  with GAAP  consistently
applied  throughout  the period covered  thereby,  (ii) fully reflect all of the
Accounts  Receivable,  trade  payables and other assets and  liabilities  of the
Borrower and Holdings,  respectively,  (iii) are  complete,  accurate and a fair
presentation   of  the  financial   condition  of  the  Borrower  and  Holdings,
respectively, as of the date thereof and in the case of the Borrower the results
of its operations for the period covered thereby (subject in the case of interim
statements to normal year-end audit adjustments),  and (iv) have been separately
certified  to the  Lender by the chief  executive  officer  and chief  financial
officer (or  controller or other most senior  accounting  officer or employee if
there is no chief financial  officer) of the Borrower as satisfying clauses (i),
(ii) and (iii) of this subsection;

(d) Since  December  31,  2001,  no event or events have  occurred  that
individually  or in the  aggregate  could  have  or has had a  Material  Adverse
Effect.

(e) After  giving  effect to the direct and  indirect  Indebtedness  and
other  liabilities  and  obligations  of each  Loan  Party  arising  under  this
Agreement  and the  other  Loan  Instruments,  whether  absolute  or  contingent
(treating all guaranties,  pledges and other  contingent  credit support and all
unused  availability  under  lines of credit  and  commitments  as fully  funded
indebtedness in the maximum amount thereof),  the Loan Parties taken as a whole:
(i) are solvent (i.e.,  the aggregate fair value of their assets exceeds the sum
of their liabilities); (ii) have adequate working capital; and (iii) are able to
pay their debts as they mature.

(f) No Loan  Party is or has ever  been the  subject  of any  Bankruptcy
Proceeding,  and no Loan Party is currently taking or considering or planning to
take,  and has not ever taken or considered or planned to take, any action under
any  Bankruptcy  Law or any of the other  actions  specified in Section  8.01(h)
hereof,  and to the  knowledge  of each Loan Party no other  Person is currently
considering or planning, or has ever considered or planned, to take any of those
actions.

Section  3.08.  Document  Delivery;  Absence  of  Defaults  and  Certain
Agreements.  (a) Each Loan Party has  delivered  to the  Lender and its  counsel
true, complete and correct copies of each  Organizational  Document of each Loan
Party and each Surety, ESOP Related Document,  and Stock Purchase Document,  and
Material Document,  together with all supplements,  modifications and amendments
thereto and restatements and replacements thereof.

(b) Except as set forth in Schedule 3.08(b) hereto,  no act or event has
occurred and is continuing  that  violates,  is in conflict  with,  results in a
breach of or  constitutes  a default  (with or without  the giving or receipt of
notice,  the  acquisition of knowledge or the passage of time or any combination
thereof)  under any term or  provision  of (i) this  Agreement or any other Loan
Instrument,  (ii) any ESOP Related Document, or Stock Purchase Document;  (d) or
other Material Document, or (iii) any Organizational  Document of any Loan Party
or any  Surety.  No Loan  Party  nor any  Surety  is a party to any  instrument,
indenture,  

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agreement,  document, arrangement or other obligation, or subject to any charter
or other  restriction,  that could have or has had a Material  Adverse Effect or
Surety's Adverse Effect.

Section 3.09.  Payment of Taxes and Debts,  Compliance  with  Applicable
Law, Etc.. (a) Each Loan Party:  (i) has filed all required tax returns with the
appropriate taxing authorities respecting its operations, assets and properties;
and (ii) has paid or caused to be paid all taxes  shown on those  returns to the
extent due,  which with  respect to federal  income  taxes and returns is to the
knowledge of the Loan Parties  prior to June 30, 2002;  except in either case to
the  extent  that (A)  extensions  of time to make  such  filing  have been duly
granted by the  appropriate  taxing  authorities  and those  extensions have not
expired, or (B) payment is not yet required pursuant to Section 5.06 hereof.

(b) Each Loan Party is current in its  payment of debts and  performance
of obligations (other than taxes) except to the extent payment or performance is
not yet required pursuant to Section 5.06 hereof.

(c)  Each  Loan  Party  is  in  compliance  with  and  conforms  to  all
Environmental  Laws and other  Applicable Law, and has so complied and conformed
since its organization.

Section 3.10. Indebtedness,  Guaranties,  ERISA Plans, Etc. (a) Schedule
3.10(a)  hereto (as and if updated  pursuant to Section 5.02 hereof)  contains a
complete and accurate list of all direct and indirect  Indebtedness of each Loan
Party (whether individual, joint, several or otherwise),  including commitments,
lines of credit and other  credit  availabilities,  identifying  with respect to
each the respective parties,  amounts and maturities,  excluding,  however,  the
Loans.

(b) Schedule  3.10(b) hereto (as and if updated pursuant to Section 5.02
hereof) contains a complete and accurate list of all guaranties and other Credit
Support by each Loan Party (whether  individual,  joint,  several or otherwise),
identifying  with respect to each the respective  parties to such Credit Support
and parties, amounts and maturities of the underlying obligations.

(c)  Schedule  3.10(c)  contains a  complete  and  accurate  list of all
"employee  pension  benefit  plans" and  "employee  welfare  benefit  plans" (as
defined in ERISA)  established,  funded or  maintained  by any Loan Party or any
ERISA Affiliate,  whether currently or since its  organization,  or to which any
Loan Party or any ERISA  Affiliate  is  required to  contribute  (as each may be
supplemented, modified, amended, restated or replaced from time to time pursuant
to ERISA or the Tax  Code,  as  applicable,  a  "Plan",  and  collectively,  the
"Plans").  Except as set forth in that schedule:  (i) each Plan is in full force
and effect and has been (or is expected to be)  determined to be duly  qualified
under ERISA and the Tax Code,  as  applicable;  (ii) no ERISA Event is currently
continuing,  and none has occurred  since its  organization;  (iii) each report,
statement or other document has been timely prepared and delivered in accordance
with, and conforms in form and substance to the  requirements  of, ERISA and the
Tax  Code;  (iv)  each  Plan  complies  with  ERISA,  the Tax Code and all other
Applicable  Law in all other  respects;  (v) the  present  value of all  accrued
benefits  under each Plan  subject to Title IV of ERISA does not, and did not as
of the last annual  valuation date,  exceed the value of the assets of such Plan
allocable to such accrued  benefits  (which  benefit  value shall be  determined
either on an ongoing basis, using the Plan's reasonable  actuarial  assumptions,
or on a termination basis, using the assumptions employed by the Pension Benefit
Guaranty Corporation in connection with plan terminations,  as applicable); (vi)
there are no  actions,  suits,  investigations  or  proceedings  (whether or not
purportedly on behalf of any  fiduciary,  sponsor,  participant or  beneficiary)
pending,  or  to  the  best  knowledge  of  the  Loan  Parties,   threatened  or
contemplated  at law, in equity,  in  arbitration  or by or before any Authority
involving or affecting any Plan or any assets and  properties of a Plan that, if
adversely  determined,  could have an ERISA Effect;  (vii) there are no facts or
circumstances that might give rise to any liability of or claim against any Loan
Party,  any Surety or the Collateral under Title IV of ERISA; and (viii) none of
the Plans is, and no Loan Party or any ERISA Affiliate in the past  established,
funded,   maintained,   contributed  or  was  required  to  contribute  to,  any
"multi-employer  plan" (as defined in ERISA).  The present  value of all accrued
post-retirement  benefits under each "employee welfare benefit plan" (as defined
in ERISA) to which one or more of the Loan Parties and their ERISA Affiliates is
required to contribute does not in the aggregate  exceed the assets of such plan
allocable to such benefits (determined using the actuarial and other assumptions
required under FAS106).

Section 3.11. Subsidiaries, Other Ventures, Loans and Other Investments.
Schedule  3.11 hereto  contains a complete and accurate  list of: (a) all of the
subsidiaries  of each  Loan  Party or any of its  subsidiaries,  including  with
respect  to  each   subsidiary  (i)  its  state  of   incorporation,   (ii)  all
jurisdictions  (if any) in which the subsidiary is qualified to do business as a
foreign  corporation,  (iii) the name of the  owner and the  number of shares of
capital stock of the subsidiary  owned,  specifying  whether owned  beneficially
and/or of record,  and if that is less than all of the outstanding shares issued
by the subsidiary,  stating the total outstandings, and (iv) all related funding
commitments and obligations of any Loan Party and/or any other 

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subsidiary  of any  Loan  Party to  contribute  capital  or other  funds to such
subsidiary;  (b) all  partnerships and other ventures in which any Loan Party or
any of its subsidiaries is a member or venturer,  including with respect to each
such  partnership or venture (i) its  jurisdiction of organization and any other
jurisdiction in which it is qualified to do business as a foreign  entity,  (ii)
the  name  of the  owner  and  the  percentage  and  type  of  interest  in such
partnership or venture owned,  specifying whether owned  beneficially  and/or of
record,  (iii) all related funding commitments and obligations of any Loan Party
and/or any subsidiary of any Loan Party to contribute  capital or other funds to
such  venture,  and (iv)  the  names  and  addresses  of the  other  members  or
venturers;  (c) any and all loans or advances  from any Loan Party to any Surety
or to any of the Affiliate of any Loan Party,  identifying  with respect to each
the respective parties, amounts and maturities; and (d) all other Investments of
any Loan Party other than Permitted Investments.

Section 3.12. Assets, Liens and Collateral. (a) The Loan Parties are the
holders  and  severally  are the legal and  beneficial  owners of, and have good
title to the Collateral,  which  constitutes all of the assets and properties of
the Loan Parties (i) reflected on the most recent report or financial  statement
furnished to the Lender or (ii) subsequently acquired;  excluding, however, such
assets and properties as may have been sold or otherwise  disposed of (1) in the
ordinary  course  of  business  prior  to the date of this  Agreement  or (2) as
permitted  by this  Agreement  after the date  hereof.  Each Loan Party has full
corporate power and authority and the unconditional right to grant to the Lender
the  mortgages  and  other   security   interests   respecting   the  Collateral
contemplated  in this Agreement and the other Loan  Instruments.  The Lender has
received legal, valid, binding,  enforceable and perfected security interests in
and to the Collateral pursuant to this Agreement and the other Loan Instruments.

(b) No part of the  Collateral  is  subject  to any Lien or any  adverse
claim of any kind whatsoever, except (A) those in favor of the Lender, (B) those
permitted  by Section  6.04 hereof (if any) and (C) those  described in Schedule
3.12(b) annexed hereto.

(c) There are no claims of third parties that would prevent any assignee
or  purchaser  of all or  any  portion  of the  Collateral  from  receiving  any
payments,  distributions and proceeds with respect thereto,  if any, without any
defense, counterclaim,  setoff, right of recoupment, abatement or other claim or
determination whatsoever.

(d) All of the  Collateral  has been and currently is operated,  insured
and maintained as respectively  required by Sections 5.05, 5.07 and 5.08 hereof.
Each Loan Party currently is, and since the Effective Date has been,  insured as
required by Section  5.07 hereof,  and was insured in a comparable  manner since
its organization.  No fact,  circumstance or other event currently exists or has
occurred  that (i) could  violate or has  violated  any term or provision of any
insurance  policy,  (ii) could permit or has  permitted any insurer to cancel or
refuse to renew (upon similar terms) any such insurance  policy,  or (iii) could
prevent  or has  prevented  any Loan Party from  obtaining  a similar  insurance
policy on similar  terms.  Schedule  3.12(d)  hereto  contains  a  complete  and
accurate list of all insurance policies,  contracts and arrangements of any Loan
Party with, individually or jointly, any other Loan Party.

(e) The Loan Parties have full possession and control of the Collateral,
and all of the  Collateral  is located (or in the case of  accounts  and general
intangibles  are deemed to be located) at the  addresses of the Loan Parties set
forth in the  Introduction,  except  (i) that  certain  items may be  physically
located at the other locations listed in Schedule 3.12(e) hereto, which schedule
contains a complete  and  accurate  description  of each other  location and the
items  located  there,  (ii) for  items  physically  held by the  Lender  or its
designee,  and  (iii)  for  items  physically  held for the  benefit  and at the
direction of the Loan Parties by the persons identified in that schedule.

(f) Schedule 3.12(f) hereto contains a complete and accurate list of all
employee  contracts and  arrangements  of any Loan Party (with  individually  or
jointly with any other Loan Party). All employees of each Loan Party have signed
confidentiality  and  non-compete  agreements  appropriate  to their  respective
levels of access.

(g) Each note, stock certificate,  security, financial asset, investment
property,,  instrument,  agreement,  account, document or intangible of any Loan
Party  included in the  Collateral:  (i) was duly  executed  and  delivered in a
written  instrument  or document  and to the best  knowledge of the Loan Parties
contains no forgeries or unauthorized signatures;  (ii) is legal, valid, binding
and enforceable  against the signer in accordance with its terms and provisions;
(iii) does not violate or conflict with any  provision of  Applicable  Law; (iv)
has not been  amended or modified  in any respect or prepaid;  (v) except as set
forth  in  Schedule   3.12(g)   hereto,   fully   reflects  all  agreements  and
understandings with the signer with respect thereto; (vi) is assignable, and has
been duly  assigned to the Lender in  accordance  with the terms and  provisions
hereof and thereof; and (vii) is maintained at the chief executive office of the
Loan Parties (or at such other office as may have been  specified 

SPAR ESOP Revolving Credit Agreement

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in a  notice  to the  Lender)  in a file and  location  that  would  be  readily
identifiable  by anyone  examining  the books and  records of the Loan  Parties,
except (A) that certain items may be physically  located at the other  locations
listed in  Schedule  3.12(e)  hereto,  which  schedule  contains a complete  and
accurate description of each other location and the items located there, (B) for
items  physically  held  by the  Lender  or its  designee,  and  (C)  for  items
physically  held for the benefit and at the direction of the Loan Parties by the
Person identified in that schedule.

(h) To the best  knowledge  of the Loan  Parties,  there is no existing,
proposed or contemplated plan, study or effort by any governmental  Authority or
other Person that in any way affects or could affect the continued authorization
of the  present  or  contemplated  ownership,  financing,  construction,  use or
operation of any part of the Collateral, or that could result or has resulted in
any tax or other charge being levied or assessed against,  or in the creation of
any Lien upon, any part of the Collateral.

Section  3.13.  Environmental  Compliance.  The  procurement,   storage,
containment, presence, manufacture, distribution, removal and disposition of all
Environmental  Substances  by or on  behalf  of any Loan  Party  and the use and
operation of all assets and properties owned,  leased or used by or on behalf of
any Loan Party (including, without limitation, machinery, Equipment, Real Estate
and  Improvements),  as  now  or  previously  existing  (whenever  created),  as
conducted by or for any Loan Party, or as  contemplated,  are in full compliance
with and conform to all  Environmental  Laws and other  Applicable Law.  Without
limiting  the   generality  of  the  foregoing:   (i)  all  permits,   licenses,
authorizations,  consents or approvals of authorities necessary or desirable for
such activities  have been obtained and they are in full force and effect;  (ii)
no  part  of  those  activities  or  the  Collateral  is  in  violation  of  any
Environmental  Law or other  Applicable  Law and (iii) no notice has been served
upon any Loan Party (other than a notice  subsequently  withdrawn or with regard
to a violation  subsequently  cured) from any  governmental  Authority  or other
Person  claiming,   nor  does  there  currently  exist,  any  violation  of  any
Environmental  Law or  other  Applicable  Law in  connection  with  any of those
activities or the Collateral.

Section 3.14.  Machinery,  Equipment and Real Estate. (a) The machinery,
Equipment  and other fixed assets owned or leased by each Loan Party are in good
working order and condition  (ordinary wear and tear and  retirement  excepted),
all of the  machinery,  Equipment and other fixed assets owned or leased by each
Loan Party are used or usable in the current  conduct of its business,  and each
of the Loan Parties has all of the  machinery,  Equipment and other fixed assets
necessary for the current conduct of its business.  Schedule  3.14(a) contains a
complete and accurate copy of the Borrower's fixed asset schedule as of the date
hereof;  provided that if the Borrower  does not have such a schedule,  Schedule
3.14(a) shall consist of a complete and accurate list of all items of machinery,
Equipment  and other  fixed  assets  owned or leased by each Loan  Party  having
individual book values in excess of $10,000 as of the date hereof.

(b) (i) No Loan Party leases any interest in or has any license or other
agreement to use any Real Estate other than its  leasehold  interests  under the
leases and licenses under the agreements  listed in Schedule  3.14(b) hereto (as
the same may have been or  hereafter  may be  supplemented,  modified,  amended,
restated or replaced from time to time in the manner  provided  therein,  each a
"Lease" and collectively  the "Leases");  (ii) each Loan Party is the tenant and
user under each Lease, and each Loan Party has furnished to the Lender copies of
each Lease, certified to be true, complete and correct by each Loan Party; (iii)
each Lease  contains the entire  agreement of the parties  thereto in respect of
those  premises  and their use by each Loan  Party;  (iv) except as set forth in
Schedule 3.08(b) hereto, each Loan Party is in full compliance under each Lease,
no default or event that (with or without  the giving or receipt of notice,  the
acquisition  of  knowledge  or the passage of time or any  combination  thereof)
would  constitute a default has occurred and is continuing  under any Lease, and
each  Lease is in full  force and  effect;  (v) each Loan Party has the right to
quiet  use  and  enjoyment  of  those   premises  to  the  extent   respectively
contemplated in the Lease; and (vi) no Lease provides for termination on account
of or is  otherwise  affected  by any  employee  strike,  lockout  or other work
stoppage.

(c) Schedule 3.14(c) contains a complete and accurate description of all
of the Real  Estate  owned by each Loan  Party,  which to the extent  applicable
includes  lot,  block and section or other  identifying  numbers;  and each Loan
Party  has  good  and  marketable  fee  title  thereto.   All  portions  of  the
Improvements,  if  any,  to the  Property  have  been,  are  being  or  will  be
constructed  and  completed  within the perimeter of the land owned or leased by
each Loan Party and in  accordance  with:  (i) all zoning  ordinances  and other
Applicable  Law;  (ii)  the  requirements  of  governmental  authorities  having
jurisdiction,  including  all land use and  construction  licenses,  permits and
approvals  relating  to the  Improvements;  (iii)  accepted  standards  of  good
materials and workmanship;  (iv) the plans and  specifications  for such work as
furnished to the Lender and to the authorities having jurisdiction,  if any; and
(v) all covenants, conditions, restrictions and agreements of any kind or nature
affecting the Improvements,  including the applicable contracts and construction
loan agreements and instruments.  To the best knowledge of each Loan Party there
are no  design  or  structural  defects  in any  part of the  Improvements.  The
Property  and  Improvements  are,  or are  capable  of being,  connected  to and
serviced  by  

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water,  sewage  disposal,   gas,  electric,   transportation  and  communication
facilities that are adequate for the intended use of the Improvements.  There is
no  existing,  or to  the  best  knowledge  of  each  Loan  Party,  proposed  or
contemplated  eminent domain proceeding or public  Improvement that would affect
the Property or the Improvements in any way, including (without  limitation) any
plan that would widen, modify or realign any street,  highway,  park,  wetlands,
preserve  or other  public  or  utility  easement  or other  right of  access or
enjoyment, whether public or private.

(d) Schedule 3.14(d) hereto contains a complete and accurate list of all
equipment and other personal property leases,  contracts and arrangements of any
Loan Party (with individually or jointly with any other Loan Party), identifying
with respect to each the lessor, term and monthly payment).

Section 3.15. Intellectual Properties. Schedule 3.15 contains a complete
and  accurate  list of all  Intellectual  Properties  licensed  to or  owned  or
otherwise used by each Loan Party, which indicates the relevant  jurisdiction of
registration  and the extent of each Loan  Party's  interest  in each such item.
Except as set forth in Schedule 3.15 hereto, each of the Intellectual Properties
owned by any Loan Party and each of the Intellectual  Properties licensed to any
Loan  Party:  (i) is  subsisting  and has not been  determined  to be invalid or
unenforceable by any Authority; (ii) to the best knowledge of each Loan Party is
legal, valid, binding and enforceable; (iii) is not and has not been the subject
of any claim of  infringement  or other adverse claim;  (iv) has been maintained
and used in accordance with all Applicable  Law; and (v) is assignable,  and has
been duly collaterally  assigned, to the Lender in accordance with the terms and
provisions  hereof  and  thereof.  Each Loan  Party has all of the  Intellectual
Properties necessary for the current conduct of its business.

Section 3.16. Accounts  Receivable.  (a) Each account receivable of each
Loan Party arose in the ordinary course of business in a bona fide  arm's-length
transaction,  has been fully  reflected  on its books and records in  accordance
with GAAP consistently applied, and is represented by a written invoice or other
written  document  that:  (i) was duly  executed and  delivered  and to the best
knowledge of the Loan Parties contains no forgeries or unauthorized  signatures;
(ii) is legal, valid, binding and enforceable against the customer in accordance
with its terms and  provisions;  (iii)  does not  violate or  conflict  with any
provision  of  Applicable  Law;  (iv) has not been  amended or  modified  in any
respect;  (v) fully reflects all agreements and understandings with the customer
with respect  thereto;  (vi) is  assignable,  and has been duly  assigned to the
Lender  in  accordance  with the  terms  and  provisions  hereof;  and  (vii) is
maintained at the chief  executive  office of the Loan Parties (or at such other
office  as may have been  specified  in a notice  to the  Lender)  in a file and
location that would be readily identifiable by anyone examining the Loan Party's
Accounts Receivable . The reserves for uncollectible accounts established by the
Loan  Parties are  adequate in the  'judgment of the Loan Parties to fully cover
current and future uncollectible Accounts Receivable.

(b) Each Account Receivable booked by any Loan Party is a receivable for
which a final or permitted  interim  invoice has been issued unless it is booked
separately as an unbilled receivable. Amounts booked as unbilled receivables are
a good faith estimate and a fair  approximation  of the amount to be billed.  No
Account  Receivable  (whether  billed or  unbilled)  has been booked by any Loan
Party as a receivable  (whether billed or unbilled)  where: (i) delivery has not
been completed of the invoiced program(s),  product(s) or service(s), except for
invoiced  program  deposits;  or (ii) the  customer is an  affiliate of any Loan
Party or any Surety.

Section 3.17.  Pledged  Securities.  (a) Schedule 3.17 hereto contains a
complete and accurate list of all  Investments  currently owned of record and/or
beneficially  by each Loan Party (whether  individually,  jointly or otherwise),
identifying  with respect to each the issuer,  certificate or other  identifying
number(s), type and amount(s) and, if held by a clearing corporation,  custodian
or other financial  intermediary,  the account(s),  account  number(s),  account
holder(s) and name(s) and address(es) of the relevant  office(s).  Each of those
Investments is owned beneficially and of record by the applicable Loan Party, is
assignable,  and has been duly  assigned and  transferred  as  collateral to the
Lender.

(b)  Each  of  those  Investments  was  acquired  in  a  transaction  in
compliance  with and  registered  under or exempt  from  registration  under the
Securities  Act and  other  Applicable  Law,  and in the  case  of  such  exempt
acquisitions  has been  held  for at  least  one  year  following  full  payment
therefor.  Except for the normal  restrictions on public  offerings and the like
under the  Securities  Act,  none of those  Investments:  (i) is  subject to any
warrant,  option, put, call or other right to acquire, redeem, sell, transfer or
encumber it (other than such call and  redemption  rights as may be intrinsic to
such  securities  where issued by a Person not Affiliated with any Loan Party or
any  Surety);  (ii) is  governed  by or  otherwise  subject to any  shareholders
agreement,  voting  trust or  similar  agreement  or  arrangement;  and (iii) is
limited  or  otherwise   restricted   in  any  way   respecting   assignability,
transferability or any voting,  dividend,  distribution or other ownership right
(whether or not reflected on the face of the certificate,  in any Organizational
Document,  or  otherwise).  To the best  

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knowledge of the Loan Parties, each of those Investments was duly authorized and
validly  issued,  is fully paid and  non-assessable,  and is not and will not be
subject to any preemptive or similar right or restriction.

Section 3.18. The Loan Parties' Independent  Investment  Decision,  Etc.
Each Loan Party hereby  acknowledges and agrees that: (a) each Loan Party (i) is
a sophisticated and knowledgeable  investor,  both generally and with respect to
each item of Collateral,  (ii) has received  directly from each holder or issuer
of  Collateral  (which for the  purpose of this  Section  shall be deemed not to
include the Lender), reviewed, and evaluated all financial and other information
necessary  or prudent to make the Loan  Party's  investment  decision,  and will
continue to do so, and (iii) has made,  and will  continue to make,  independent
investment  selections and decisions  respecting the Collateral without reliance
upon  or  regard  to  any  evaluation  or  investigation  by the  Lender  of any
Collateral or any holder or issuer of any Collateral; (b) neither the Lender nor
any of its Representatives has, and none of them shall be deemed or construed to
have,  (i) made any  representation,  warranty  or  guaranty,  (ii)  offered  or
furnished  any  recommendation,   advice,  analysis  or  information,  or  (iii)
undertaken  or  assumed  any  liability,   responsibility  or  other  obligation
whatsoever  respecting any Collateral or any holder or issuer of any Collateral,
whether oral or otherwise,  and whether express or implied,  including  (without
limitation)  anything  with  respect to any  existing  or future (A)  existence,
enforceability, genuineness, value or condition of any Collateral or (B) assets,
business, financial condition, investments, prospects, reputation, or strategies
of any holder or issuer of  Collateral  or any other  Person;  (c)  neither  the
Lender nor any of its  Representatives  shall have any liability,  obligation or
responsibility  whatsoever  for any acts or omissions of any issuer or holder of
Collateral  or any other  Person or any  failure by anyone to perform any of its
obligations under or with respect to any of the Collateral;  and (d) neither the
Lender nor any of its  representatives  has, or shall be deemed or  construed to
have, any  agreement,  duty or obligation to inform any Loan Party of any matter
relating  to  any of  the  Collateral  or any  holder  or  issuer  of any of the
Collateral or to furnish to any Loan Party any information pertaining thereto.

Section 3.19. Loan Party Securities,  Etc. (a) Holdings is authorized to
issue  2,000,000  shares of common stock with a par value of $0.00001 per share,
of which 1 share is currently issued and outstanding.  The Holdings Contribution
Agreement  requires  that,  immediately  after the closing of the Stock Purchase
Agreement and the advance of the Loans,  Holdings issue and contribute 1,000,000
shares of Holdings' capital stock to the ESOP Trust, and the Holdings Redemption
Agreement  requires  that  Holdings  redeem  (immediately  after such ESOP Trust
contribution)  all shares of its capital  stock held by its  shareholders  other
than the ESOP Trust,  and thereafter the ESOP Trust is the record and beneficial
owner of all of Holding's issued and outstanding  capital stock.  Except for the
Permitted  Options  and  Holdings  Warrant,   there  are  no  other  outstanding
securities  issued by Holdings or any warrant,  option or other right to acquire
from Holdings any securities issued by it. Except for the normal restrictions on
public offerings and the like under the Securities Act, except for the Permitted
Options,  except as otherwise  provided in its  Organizational  Documents or the
ESOP Related Documents,  except as otherwise provided in the Term Loan Agreement
and this  Agreement,  and except as otherwise set forth in Schedule 3.19 hereto,
none of those  outstanding  securities:  (i) is subject to any warrant,  option,
put, call or other right to acquire, redeem, sell, transfer or encumber it; (ii)
is governed by or otherwise subject to any shareholders agreement,  voting trust
or  similar  agreement  or  arrangement;  and  (iii)  is  limited  or  otherwise
restricted in any way respecting  assignability,  transferability or any voting,
dividend, distribution or other ownership right (whether or not reflected on the
face of the certificate,  in any Organizational Document, or otherwise).  Except
as  otherwise  set forth in  Schedule  3.19  hereto,  each of those  outstanding
securities  was  duly  authorized  and  validly   issued,   is  fully  paid  and
non-assessable,  and is not and will not be subject to any preemptive or similar
right or restriction. Each of those outstanding securities was acquired from the
issuer in a transaction in compliance  with and exempt from  registration  under
the Securities Act and other Applicable Law.

(b) The  Borrower is  authorized  to issue 2,500  shares of common stock
with no par value,  of which 72 shares  are  currently  issued and  outstanding.
Holdings  is the record and  beneficial  owner of all of the  outstanding  stock
issued by the Borrower and each Guarantor  (other than  Holdings).  There are no
other outstanding securities issued by the Borrower or any Guarantor (other than
Holdings) or any  warrant,  option or other right to acquire from any Loan Party
any securities  issued by the Borrower or any Guarantor  (other than  Holdings).
Except for the normal  restrictions  on public  offerings and the like under the
Securities Act, except the pledge of any and all such securities  under the Loan
Instruments,  and except as otherwise set forth in Schedule 3.19 hereto, none of
those outstanding securities:  (i) is subject to any warrant,  option, put, call
or other  right to acquire,  redeem,  sell,  transfer  or  encumber  it; (ii) is
governed by or otherwise subject to any shareholders agreement,  voting trust or
similar agreement or arrangement;  and (iii) is limited or otherwise  restricted
in any way respecting  assignability,  transferability or any voting,  dividend,
distribution  or other  ownership right (whether or not reflected on the face of
the  certificate,  in any  Organizational  Document,  or  otherwise).  Except as
otherwise  set  forth  in  Schedule  3.19  hereto,  each  of  those  outstanding
securities  was  duly  authorized  and  validly   issued,   is  fully  paid  and
non-assessable,  and is not and will not be subject to any preemptive or similar
right or restriction. Each of those outstanding securities was acquired from the
issuer  (or 

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from the Lender in the case of the SPG  Stock) in a  transaction  in  compliance
with and exempt from registration  under the Securities Act and other Applicable
Law.

Section 3.20. Relationship of the Loan Parties and Guarantors.  The Loan
Parties  are  engaged  as  an  integrated  group  in  the  business  of  owning,
developing,  operating and selling  their  incentive  marketing  business and of
providing  the  required  services  and other  facilities  for those  integrated
operations. The Loan Parties are seeking the Loans and Letters of Credit for the
purpose of  refinancing  the Borrower's  share of the existing  Senior Loans and
funding the working  capital needs of the Borrower for the benefit of all of the
employees  of the Loan  Parties.  Each of the Loan  Parties  expects  to  derive
financial and other benefit,  directly or indirectly,  in return for undertaking
their   respective   obligations   under  this  Agreement  and  the  other  Loan
Instruments, both individually and as a member of the integrated group.

Section   3.21.   No   Misrepresentation   by  the  Loan   Parties.   No
representation or warranty of any Loan Party made or contained in this Agreement
or any  other  Loan  Instrument  (whether  with  respect  to any  Loan  Party or
otherwise) and no report, statement,  certificate, schedule or other document or
information  furnished  or to be  furnished by or on behalf of any Loan Party in
connection  with the  transactions  contemplated by this Agreement and the other
Loan Instruments  (whether with respect to any Loan Party or otherwise) contains
or will contain a misstatement of a material fact or omits or will omit to state
a material fact required to be stated  therein in order to make it, in the light
of the circumstances under which made, not misleading.

Section 3.22. No  Misrepresentation  by any Surety. No representation or
warranty  of any Surety  made or  contained  in the  Guaranty  or any other Loan
Instrument  (whether  with  respect to any Surety or  otherwise)  and no report,
statement,  certificate,  schedule or other document or information furnished or
to  be  furnished  by or  on  behalf  of  any  Surety  in  connection  with  the
transactions  contemplated  by this  Agreement,  the Guaranty and the other Loan
Instruments  (whether with respect to any Surety or otherwise)  contains or will
contain  a  misstatement  of a  material  fact or omits or will  omit to state a
material fact required to be stated therein in order to make it, in the light of
the circumstances under which made, not misleading.

ARTICLE IV.

CONDITIONS TO LENDING

The  obligation  of the  Lender to  consider  making  any  discretionary
Advance of a Revolving  Credit Loan  hereunder  and consider the issuance of any
requested  Letter of Credit  hereunder is subject to the satisfaction in full of
all of the conditions  precedent set forth in and the other terms and provisions
of each of the  Sections  of this  Article,  unless  the Lender (in its sole and
absolute discretion) shall consent otherwise in writing:

Section 4.01.  Representations and Warranties. (a) On the Effective Date
and on each Advance Date and Letter of Credit  Issuance Date,  both prior to and
after  giving  effect to any  applicable  Advance  or Letter of Credit  issuance
(whether   through   any  Pro   Forma   Effect  or   otherwise),   each  of  the
representations,  warranties, acknowledgements and certifications of each of the
Loan  Parties and the Sureties  set forth in this  Agreement  and the other Loan
Instruments  shall be true and  correct in all  respects  on and as of that date
with the same effect as though those  representations  and  warranties  had been
made on and as of such Effective Date.

Section 4.02. No Default. On the Effective Date and on each Advance Date
and Letter of Credit Issuance Date, both prior to and after giving effect to any
applicable  Advance or Letter of Credit issuance  (whether through any Pro Forma
Effect or otherwise), no Default and no Event of Default shall have occurred and
be continuing.

Section 4.03. No Material  Adverse Effect.  On the Effective Date and on
each Advance Date and Letter of Credit  Issuance  Date,  both prior to and after
giving effect to any applicable  Advance or Letter of Credit  issuance  (whether
through any Pro Forma  Effect or  otherwise),  no event or events have  occurred
that  individually  or in the  aggregate  could have,  or since the date of this
Agreement has had, a Material Adverse Effect.

Section 4.04. Loan Parties'  Bringdown;  Financial  Covenant  Compliance
Certificate. On the Effective Date, the Loan Parties shall have delivered to the
Lender a  financial  covenant  compliance  certificate  in the form of Exhibit E
hereto,  dated that date and signed by an executive officer of the Loan Parties.
By each  request for an Advance or Letter of Credit  issuance,  the Loan Parties
shall be deemed to have delivered to the Lender a bringdown certificate (clauses
(i) through (n) of such form) dated the date of such Advance or Letter of Credit
issuance  . The  Lender  in its sole and  absolute  discretion  may  accept  the
certificate  of the  officer  of the Loan  Parties  delivered  (or  deemed to be
delivered)  pursuant  to this  Section as evidence  of the  

SPAR ESOP Revolving Credit Agreement

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satisfaction  of the conditions  precedent  specified in Sections 4.01, 4.02 and
4.03 hereof  without in any way waiving or limiting any of the Lender's  rights,
powers,  privileges,  remedies and interests under any term or provision of this
Agreement or any other Loan Instrument.

Section 4.05. Delivery of the Loan Instruments, Collateral and Fees. (a)
On or before the Effective  Date, the Lender or its designee shall have received
delivery of: (i) the Note provided for in Section 2.03 hereof,  duly executed by
the Loan Parties;  and (ii) payment of the  disbursements,  fees and expenses of
Jenkens & Gilchrist Parker Chapin LLP,  counsel to the Lender,  and of any local
or special counsel retained by them or the Lender.

(b) On or before the Effective  Date,  the Lender or its designee  shall
have received delivery of: (i) the insurance policies and endorsements  required
by Section 5.07 hereof; and (ii) the other instruments and documents required by
this  Agreement or any other Loan  Instrument  or listed in the final version of
the  Checklist of Closing  Documents  delivered to the Loan Parties on or before
the  Effective  Date,  which  instruments  and  documents  shall  have been duly
executed by the appropriate parties.

(c) Each of the foregoing  instruments  and  documents  shall be in such
form and substance as may be acceptable to the Lender.

Section  4.06.  Additional  Conditions  Precedent.   On  or  before  the
Effective Date, the Lender shall have received:

(a)     certified  copies  of  all  (i)  other  material  documents,   and  (ii)
organizational and governing  documents and (if applicable)  authorizing
resolutions for each Loan Party and each Surety, in each case as amended
to date, and a satisfactory review of each of them by the Lender and its
counsel;

(b)     the  approval  by the  Senior  Lender  (as and to the extent it deems it
necessary  or  desirable)  of the  ESOP  Related  Documents,  the  Stock
Purchase Documents, the Holdings Stock Plan, the Term Loan Documents and
the Loan Instruments;

(c)     satisfactory  (i) pro forma  consolidated  and  consolidating  financial
statements for Holdings and its  subsidiaries as at the date of the most
recent  balance sheet  delivered  pursuant to the  preceding  paragraph,
adjusted  to  give  effect  to  the  consummation  of  the  transactions
contemplated  hereby as if such  transactions had occurred on such date,
and  (ii)  consolidated  and  consolidating  financial  projections  and
operating  budgets for Holdings and its subsidiaries for the forthcoming
[five and one half] fiscal years  (commencing with respect to the fiscal
quarter beginning July 1, 2002),  including (without limitation) balance
sheets and the related statements of earnings,  shareholders' equity and
cash  flow  for such  periods,  all  certified  by the  chief  executive
officer,  chief  financial  officer (or  controller or other most senior
accounting  officer or employee if there is no chief financial  officer)
and other  executive  officers  of each Loan  Party as (i)  having  been
prepared in accordance with GAAP consistently  applied,  and (ii) a fair
estimate of the  financial  condition of each Loan Party as of such date
and the reasonably  likely results of operations for the periods covered
thereby;

(d)     evidence  satisfactory to the Lender that the Collateral is owned by the
pledging  parties  free and clear of all security  interests,  liens and
other claims and encumbrances;

(e)     a favorable  fairness opinion  respecting  Holdings and its subsidiaries
from an independent appraiser acceptable to the Lender reflecting (among
other  things)  the  fairness  to the  shareholders  of  Holdings of the
transactions  contemplated  by the ESOP  Related  Documents,  the  Stock
Purchase  Documents,  the  Revolving  Credit  Documents,  and  the  Loan
Instruments;

(f)     evidence  satisfactory  to the Lender  that there has not  occurred  any
Material Adverse Effect since December 31, 2001;

(g)     evidence  satisfactory  to the  Lender  that,  except  as set  forth  in
Schedule  3.06  hereto,  there  is  no  action,   suit,   investigation,
proceeding  or other claim  pending or  threatened  respecting  any Loan
Party, any Surety or any collateral to be pledged by any of them;

(h)     execution  and delivery of the Stock  Purchase  Documents,  the Holdings
Contribution  Agreement,  the Holdings Redemption Agreement and the Term
Loan Documents; and

(i)     a certificate from the chief executive officer,  chief financial officer
(or  controller or other most senior  accounting  officer or employee if
there  is no chief  financial  officer)  and  other  executive  officers

SPAR ESOP Revolving Credit Agreement

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certifying  that (i)  each  has  read  this  Agreement  and  other  Loan
Instruments  and the  financial  statements  referenced  in Section 3.07
hereof,  (ii) each has made an examination  sufficient in the opinion of
the signer(s) to make informed  statements in such  certificate that the
financial  statements  and other  information  furnished  to the  Lender
pursuant hereto and representations and warranties of any Loan Party set
forth in this  Agreement  and the other  Loan  Instruments  are true and
correct in all respects.

Section 4.07. Organizational Documents. On or before the Effective Date,
the Loan Parties shall have  furnished to the Lender the following  certificates
and  other  documents  with  respect  to  each  Loan  Party:  (a) a copy  of its
certificate of incorporation and all modifications,  amendments and restatements
thereof, certified as of a recent date by the Secretary of State of its state of
incorporation;  (b) a copy of its  by-laws,  together  with  all  modifications,
amendments  and  restatements  thereof,  certified  as of a  recent  date by its
Secretary;  (c) a  certificate  of  the  Secretary  of  State  of its  state  of
incorporation, dated as of a recent date, as to its existence and good standing;
(d) a  certificate  of  its  Secretary  or an  Assistant  Secretary,  dated  the
Effective  Date,  as to the due  authorization  of the  negotiation,  execution,
delivery  and  performance  by it of this  Agreement  and each of the other Loan
Instruments to which it is or becomes a party (with the appropriate  resolutions
adopted by its directors and shareholders  attached thereto and reflecting among
other  things the  appointment  of the ESOP  Trustee  and  approval of the Stock
Purchase  Documents,  Loan Instruments and ESOP Related Documents to which is or
becomes a party and the transactions contemplated thereunder) and the incumbency
and  signatures of its officers and directors who are  authorized to execute any
instrument,  agreement or other  document in  connection  with the  transactions
contemplated by this Agreement and the other Loan Instruments; (e) copies of all
agreements  and trusts  respecting  securities  of its issue or related  rights,
together with all modifications,  amendments and restatements thereof, certified
as of a recent date by its Secretary;  and (f) such Organizational Documents and
additional  supporting  documents  and other  information  with  respect  to the
Collateral or the  organization,  operations  and affairs of each Loan Party and
those of its  subsidiaries,  partnerships  and other  ventures as the Lender may
request.

Section 4.08. Acceptable Documents. All certificates and other documents
provided  to the  Lender  pursuant  to this  Article  shall be in such  form and
substance as may be acceptable to the Lender and its counsel.

Section 4.09.  Additional  Condition to All  Advances.  On the Effective
Date and on each Advance Date and Letter of Credit  Issuance Date, both prior to
and after giving effect to any applicable  Advance or Letter of Credit  issuance
(whether through any Pro Forma Effect or otherwise), the Lender shall be able to
borrow the full amount of the requested  Advance or obtain the requested  Letter
of Credit from the Senior Lender under the Senior Loan Documents.

ARTICLE V.

AFFIRMATIVE COVENANTS

The Loan Parties jointly and severally covenant and agree that each will
comply  in all  respects  on a  timely  basis  (except  as  otherwise  expressly
provided) and at its own expense with each, and will not cause, suffer or permit
any  violation  of any,  of the terms and  provisions  of each  Section  in this
Article, from the date hereof and until the Obligations have been fully paid and
satisfied, unless the Lender (in its sole and absolute discretion) shall consent
otherwise in writing (as provided in Section 9.15 hereof):

Section 5.01. Required Notices. The Loan Parties shall give, or cause to
be given,  immediate  written notice to the Lender of any of the following,  but
without in any way  authorizing or approving any event  requiring the consent of
the Lender hereunder:

(a)     any change in the name (whether  change in legal name, use of other name
or otherwise),  name(s) of  controlling  equity  owner(s),  the state or
other  jurisdiction  of  incorporation  or  other  organization  or  the
location of the chief executive office of any Loan Party or any Surety;

(b)     the  institution  or, to the best  knowledge  of the Loan  Parties,  the
threat or contemplation  of, or any adverse  determination or change in,
any  action,   suit,   investigation  or  proceeding   (whether  or  not
purportedly  on  behalf  of any Loan  Party or any  Surety)  at law,  in
equity, in arbitration or by or before any other Authority  involving or
affecting   (i)  any  Loan  Party  or  any  Surety  that,  if  adversely
determined,  could 

SPAR ESOP Revolving Credit Agreement

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have a Material  Adverse  Effect or Surety's  Adverse  Effect,  (ii) any
alleged criminal act or activity on the part of any Loan Party or any of
its  representatives,  (iii) any ESOP Related  Document,  Stock Purchase
Document,  or any  Organizational  Document  of any  Loan  Party  or any
Surety;  (iv)  any  Material  Document,   (v)  any  Environmental  Claim
respecting any Loan Party or any part of the  Collateral,  (vi) any Plan
or any assets and  properties of a Plan that,  if adversely  determined,
could have an ERISA Effect, (vii) any part of the Collateral, (viii) any
of the Obligations, or (ix) any of the transactions contemplated in this
Agreement and the other Loan Instruments;

(c)     the occurrence of any ERISA Event;

(d)     the occurrence of any act or event that  violates,  is in conflict with,
results in a breach of or  constitutes  a default  (with or without  the
giving or receipt of notice, the acquisition of knowledge or the passage
of time or any combination  thereof) under any term or provision of: (i)
any  ESOP   Related   Document,   Stock   Purchase   Document,   or  any
Organizational  Document  of any Loan Party or any  Surety;  or (ii) any
Material Document;

(e)     any labor  dispute to which any of the Loan  Parties may become a party,
any strikes or walkouts relating to any of its offices,  plants or other
facilities, or the expiration of any labor contract;

(f)     any change in location or change in the status of the  Collateral  other
than as expressly permitted in Section 7.03 or 7.09 hereof;

(g)     any attachment,  confiscation,  detention, levy, requisition, seizure or
other taking of any part of the  Collateral,  whether through process of
law or  otherwise,  the filing or other  imposition of any Lien known to
any  Loan  Party  against  any  part of the  Collateral  (other  than as
expressly permitted by Section 6.04 hereof), or any destruction or other
loss of or any damage to any part of the Collateral; or

(h)      to the extent not otherwise  enumerated in this Section, the occurrence
of any other act or event that (i) has  resulted or could result in any
Default or Event of  Default,  or (ii) has had or could have a Material
Adverse Effect or a Surety's Adverse Effect.

Section 5.02.  Accounts and Reports.  The Loan Parties shall  maintain a
standard system of accounting in accordance with GAAP consistently  applied, and
the Loan Parties shall provide to the Lender the following:

(a)     as soon as  available  and in any event  within 45 days after the end of
each fiscal year of the Borrower,  commencing with the fiscal year ended
December 31, 2002, a  consolidated  and  consolidating  balance sheet of
Holdings and its  subsidiaries as at the end of that fiscal year and the
related   consolidated   and   consolidating   statements  of  earnings,
shareholders'  equity  and  cash  flow for such  fiscal  year,  all with
accompanying notes, in reasonable detail and stating in comparative form
the figures as at the end of and for the previous fiscal year,  prepared
in accordance with GAAP consistently  applied,  and audited and reported
upon by Ernst & Young or other independent  certified public accountants
of recognized  standing  regularly retained by the Borrower to audit its
books and approved by the Lender;

(b)     concurrently with the delivery of the financial  statements described in
subsection  (a) above,  the annual  auditor's  report  prepared by those
independent  certified public  accountants,  and  concurrently  with the
delivery of the financial  statements described in subsections (a) above
and (c) below, a letter to the Lender signed by Holding's accountants to
the  effect  that,  having  read  this  Agreement,  (i)  the  compliance
calculations of the Loan Parties  delivered under  subsection  (d)(i) of
this  Section  were  correct and (ii)  nothing  came to their  attention
during the  course of their  regular  examination  that  caused  them to
believe  any  Event of  Default  or  Default  had  occurred  and had not
theretofore been reported and remedied,  or if any such Event of Default
or  Default  had  occurred  and was  continuing  or was  not  previously
reported, specifying the facts with respect thereto;

(c)     as soon as  available,  and in any event within 15 days after the end of
each month  (including  December)  of each fiscal  year of the  Borrower
(commencing  with the month ending July 31, 2002),  a  consolidated  and
consolidating  balance sheet of Holdings and its  subsidiaries as at the
end of  such  month  and  the  related  consolidated  and  consolidating
statements  of  earnings,  shareholders'  equity  and cash  flow for the
period from the  beginning of such fiscal year to the end of such month,
unaudited  but  certified  by the  chief  executive  officer  and  chief
financial officer (or controller or other most senior accounting officer
or employee if there is no chief  financial  officer) of the Borrower as
(i) prepared in accordance with GAAP  consistently  applied,  (ii) fully
reflecting  all of the  Accounts  Receivable,  trade  payables and other
liabilities  of  Holdings  and its  subsidiaries,  and  (iii)  complete,
accurate and a fair presentation of the financial  condition of Holdings
and its  subsidiaries  as of such date and the results of operations for
the  period   covered   thereby,   subject  to  normal   year-end  audit
adjustments, and in the case of quarterly statements audited or reviewed
by such independent  certified  public  accountants to the extent deemed
necessary by SGRP's  auditors in  connection  with the SPAR Group annual
audit or quarterly review;

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(d)     concurrently with the delivery of the documents  described in subsection
(c),  above,  (i) a certificate  in the form of Exhibit E hereto setting
forth the calculations of and establishing  compliance with (among other
things) the financial  covenants set forth in Section 6.01,  6.02,  6.03
and 6.08 of this  Agreement for the  Computation  Period just ended,  as
well as the calculation of any prepayment required under Section 2.06(f)
and 2.06(h) hereof and a bringdown of the Loan Parties'  representations
and  warranties,  (ii) a certificate  respecting  the  completeness  and
accuracy  of  the  attached  aging  summaries  of the  consolidated  and
consolidating  receivables and payables of Holdings and its subsidiaries
as at the end of the month just ended,  and (iii) a certificate  listing
any  changes  in   Indebtedness,   Credit   Support  and   corresponding
information  for each Loan Party of the types  required to be  scheduled
under any of Sections  3.10(a) and 3.10(b)  hereof since the delivery of
Schedules  3.10(a)  and 3.10(b)  (as and if  previously  modified by all
supplements  thereto  delivered  to the Lender under this clause) in the
same form as  Schedules  3.10(a) and 3.10(b)  hereto,  in each case with
such  certificate  being  dated  as of the  last  day  of  the  relevant
reporting  period and signed by the chief  executive  officer  and chief
financial officer (or controller or other most senior accounting officer
or employee if there is no chief financial  officer) of the Loan Parties
and  further  certifying  each  has  read  this  Agreement  and  made an
examination  sufficient in the opinion of the signer(s) to make informed
statements in such certificate;

(e)     as soon as  available,  and in any event  within 5 days after the end of
each month (including  December) of each fiscal year of the Borrower,  a
Borrowing Base Certificate in the form of Exhibit D hereto setting forth
the  Borrowing  Base as at the  end of such  month,  provided  that  the
Borrowing Base  Certificate may be requested as frequently as the Lender
requires,  in each case with such certificate being dated as of the last
day of the relevant  reporting  period and signed by the chief executive
officer and chief financial  officer (or controller or other most senior
accounting  officer or employee if there is no chief financial  officer)
of the Loan Parties and further  certifying each has read this Agreement
and made an  examination  sufficient  in the opinion of the signer(s) to
make informed statements in such certificate;

(f)     as soon as  available,  and in any  event  within  30 days  prior to the
commencement  of each fiscal  year,  a  consolidated  and  consolidating
annual budget and projections for Holdings and its  subsidiaries for the
forthcoming  fiscal  year  (commencing  with  respect to the fiscal year
beginning  January 1, 2003) certified by the chief executive officer and
chief financial  officer (or controller or other most senior  accounting
officer or employee if there is no chief financial  officer) of the Loan
Parties;

(g)     as soon as available,  and in any event not more than five Business Days
after  receipt,  a copy of any annual  management  letter  issued by any
accountant or auditor to any Loan Party;

(h)     on or  before  each  anniversary  of the  date  of  this  Agreement,  an
independent   insurance  broker's   certificate  stating  (i)  that  the
insurance  required by Section  5.07 of this  Agreement is in full force
and effect,  (ii) that all premiums  under those policies have been paid
to the extent due  through  the date of the  certificate,  and (iii) the
amounts  and due dates of  premiums  due within the  following  12-month
period;  and, as soon as  received,  copies of all  insurance  policies,
endorsements  and  certificates  received  from time to time by any Loan
Party;

(i)     promptly,  and in any event not more than five Business Days,  following
execution,  but without in any way  authorizing  or  approving  any such
action  requiring  the  consent of the Lender  hereunder,  copies of all
loan,   security  and  other   instruments,   agreements  and  documents
respecting  Indebtedness  of  any  Loan  Party  in  excess  of  $10,000,
individually or in the aggregate, including commitments, lines of credit
and other credit availabilities,  and of all guaranties and other Credit
Support  by  any  Loan  Party   respecting  any  Indebtedness  or  other
obligation of any other Person in excess of $10,000,  individually or in
the aggregate, except those to which the Lender also is a party;

(j)     as soon as available,  and in any event not more than five Business Days
after receipt, a copy of any notice or other communication  alleging any
nonpayment  or other  breach or  default,  or any  foreclosure  or other
action  respecting  any  part of its  assets  and  properties,  received
respecting  any of the  Indebtedness  of any Loan Party  (other than the
Obligations),  or any  demand or other  request  for  payment  under any
guaranty  or other  Credit  Support  by any Loan  Party  respecting  any
Indebtedness  or other  obligation  of any other  Person,  including any
received from any Person  acting on behalf of the holder or  beneficiary
thereof,  provided  that the no Loan Party shall wait for such copies to
become available to give any notice required under the  circumstances by
any other provision hereof;

(k)     as soon as available,  and in any event not more than five Business Days
after receipt,  a copy of any summons or complaint,  or any other notice
of any action, suit, investigation or proceeding, involving or affecting
any Loan  Party  where the  damages  sought  exceed,  or if  unspecified
reasonably could exceed, $10,000 individually or in the aggregate;

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(l)     as soon  as  available,  a copy of any  notice  or  other  communication
alleging the invalidity,  non-binding effect or unenforceability of, any
error or other defect in, any omission  from, or any nonpayment or other
breach  or  default  under any ESOP  Related  Document,  Stock  Purchase
Document,  or any  Organizational  Document  of any  Loan  Party  or any
Surety,  or any note,  stock  certificate,  security,  financial  asset,
investment  property,   instrument,   agreement,  account,  document  or
intangible of any Loan Party included in the  Collateral,  provided that
no Loan Party shall wait for such copies to become available to give any
notice required under the circumstances by any other provision hereof;

(m)     as soon as  available,  and in any event not less than 15 days  prior to
adoption,  but  without in any way  authorizing  or  approving  any such
action  requiring  the consent of the Lender  hereunder,  copies of each
proposed  modification,  waiver,  amendment or termination of any of the
terms  and  provisions  of any ESOP  Related  Document,  Stock  Purchase
Document,  or any Term Loan Document of any Loan Party or any Surety, or
any note,  stock  certificate,  security,  financial  asset,  investment
property,  instrument,  agreement, account (other than account writeoffs
of  $10,000  or less in the  aggregate  for any  customer  in any year),
document or intangible of the Loan Parties included in the Collateral;

(n)     as soon as  available,  and in any event not less than 30 days  prior to
adoption,  but  without in any way  authorizing  or  approving  any such
action  requiring  the consent of the Lender  hereunder,  copies of each
proposed  modification,  waiver,  amendment or termination of any of the
terms and provisions of any Organizational  Document respecting any Loan
Party or any Surety or any  agreement  between the  shareholders  of any
Loan Party or any Surety; promptly following adoption, copies of each of
the foregoing  certified as to the accuracy  thereof by the Secretary of
State or the  Secretary  or  similar  official  of the Loan  Parties  or
Surety,  as  applicable;  and  promptly  following  request,  such other
supporting documents of the kind specified in Section 4.06 hereof as the
Lender from time to time may request;

(o)     as soon as possible,  and in any event not more than five  Business Days
after filing,  copies of all tax returns,  informational  statements and
reports filed by any Loan Party with the Internal Revenue Service of the
United States of America;

(p)     promptly upon the request of the Lender, copies of each notice,  report,
statement  or other  document  or  communication,  whether  periodic  or
otherwise,  concerning  the  occurrence,  existence or correction of any
ERISA Event in any respect, any responsive  communication on the part of
any Loan Party or any of its ERISA  Affiliates,  or any  preliminary  or
final  determination of any Authority in respect thereof,  provided that
no Loan Party shall wait for such request or copies to become  available
to give any notice required by any other provision hereof; and

(q)     contemporaneously  with each submission or filing, a copy of any report,
registration statement, proxy statement,  financial statement, notice or
other  document,  whether  periodic or  otherwise:  (i) submitted to the
shareholders of any Loan Party in their capacities as  shareholders;  or
(ii)  submitted to or filed by any Loan Party with any  governmental  or
self-regulatory Authority involving or affecting (A) any Loan Party, (B)
the  Obligations,  (C)  any  part  of the  Collateral  or (D) any of the
transactions   contemplated   in  this   Agreement  or  the  other  Loan
Instruments,  provided  that no Loan Party shall wait for such copies to
become available to give any notice required under the  circumstances by
any other provision of Section 5.01 hereof;

together  with  such  supplements  to any of the  aforementioned  documents  and
additional   accounts,   reports,   certificates,   statements,   documents  and
information  as the Lender from time to time may request,  each in such form and
substance as may be acceptable to the Lender.

Section  5.03.  Access  to  Premises,  Records  and  Collateral.  At all
reasonable  times and as often as the Lender  reasonably may request,  each Loan
Party shall permit representatives designated by the Lender to (a) have complete
and  unrestricted  access  to the  premises  of each Loan  Party,  the books and
records  of each Loan  Party  and the  Collateral,  provided  that so long as no
Default or Event of Default is then continuing,  the Lender shall give each Loan
Party at least one Business Day's prior notice (which may be given by telephone)
prior to any such visit,  (b) make copies of, or excerpts from,  those books and
records,  and (c) discuss the  Collateral  or the  accounts,  assets,  business,
operations,  properties or condition,  financial or otherwise,  of the each Loan
Party with its officers, directors, employees, accountants and agents.

Section 5.04.  Good  Standing,  Qualifications,  Powers,  Separate Legal
Existence, Organizational Documents, Etc. (a) Each Loan Party shall do, or cause
to be done,  all  things,  or proceed  with due  diligence  with any  actions or
courses of action,  that may be necessary (i) to maintain its due  organization,
valid existence and good standing under the laws of its state of  incorporation,
and (ii) to  preserve  and keep in 

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full  force and  effect  all  foreign  and other  qualifications,  licenses  and
registrations  required in those jurisdictions in which each Loan Party conducts
business or has any assets or properties.

(b)  Except  for its  agreements  under the Loan  Instruments  and Stock
Purchase  Documents,  each Loan Party shall at all times  maintain  its full and
unrestricted  right,  power and  authority,  and shall not, and shall not cause,
suffer or permit  anyone else to, take or fail to take any action (with  respect
to itself or  otherwise),  or offer,  commit or enter into to any  agreement  or
arrangement,  that would, or could, in any way restrict,  limit, make subject to
third-party  approval or otherwise impair its right, power or authority,  (A) to
carry on its  business  as now  conducted  or (B) to  execute  or  deliver  this
Agreement or any other Loan  Instrument to which it is or becomes a party or any
supplement,  modification  or amendment  thereto or  restatement  or replacement
thereof from time to time in the manner provided therein,  or (C) to perform any
of its obligations hereunder or thereunder.

(c) No Loan Party shall at any time  cause,  suffer or permit any change
in its name  (whether a change in legal name,  use of other name or  otherwise),
the state or other  jurisdiction of its  incorporation or other  organization or
the location of its chief executive office.

(d) Each Loan Party  shall at all  times:  (i) do  business  exclusively
under its own name(s) and  employer and taxpayer  identification  numbers,  hold
itself out to the public as a legal entity  separate and distinct from any other
Person (and not as a department  or division of someone  else),  and correct any
misunderstandings  known to it  regarding  the  separate  identity  of each Loan
Party; (ii) use its own separate stationery,  invoices and checks; (iii) use its
own  logos  and  trademarks  and  (other  than  as  permitted  by the  Trademark
Agreement)  not share any common logo or trademark  with any other Person;  (iv)
observe all corporate or equivalent  formalities for maintaining its status as a
valid separate entity; (v) maintain its records, books of account, bank accounts
(other than as required by the Loan Instruments) and other assets and properties
separate and apart from those of any other Person and not  commingle any of them
with  those of any other  Person;  (vi)  promptly  correct  any  other  Person's
misunderstanding  as to (A) the identity of any Loan Party or any Affiliate with
whom such other Person is transacting business, or (B) each Loan Party's alleged
responsibility  for the  Indebtedness or other  obligations of any other Person;
(vii) allocate fairly and reasonably any overhead  expenses that are shared with
an Affiliate,  including  paying for office space and services  performed by any
employee of an Affiliate or vice versa; and (viii) maintain a sufficient  number
of employees or independent  contractors in light of its  contemplated  business
operations.

(e) No  Loan  Party  shall  cause,  suffer  or  permit  any  supplement,
modification  or amendment to, or any waiver of any term or provision of, any of
its  Organizational  Documents  without the prior written consent of the Lender,
which consent will not be  unreasonably  withheld if the same will not adversely
affect any of the rights,  powers,  privileges,  remedies  and  interests of the
Lender under this Agreement or any other Loan Instrument.

Section 5.05.  Compliance  with Applicable  Law;  Operations.  Each Loan
Party shall  promptly  and fully  comply  with,  conform to and obey any and all
Applicable  Law  now or  hereafter  in  effect,  other  than to the  extent  the
noncompliance  therewith or violation  thereof could not have a Material Adverse
Effect.  In any  event,  the each Loan  Party  shall  procure,  store,  contain,
manufacture,  distribute, remove and dispose of all Environmental Substances and
use and  operate  all  assets and  properties  (including,  without  limitation,
machinery,  Equipment, Real Estate and Improvements) in full compliance with and
conformity to all  Environmental  Laws and other Applicable Law in all respects,
including  (without  limitation)  all applicable  permits,  licenses,  and other
authorizations, consents or approvals of Authorities.

Section 5.06.  Payment of Debts,  Taxes,  Etc. Each Loan Party shall (a)
pay, or cause to be paid,  all of its  Indebtedness  and other  liabilities  and
lawful claims (whether for services, labor, materials, supplies or otherwise) as
and when due,  (b) perform,  or cause to be  performed,  all of its  obligations
promptly and in accordance with the respective terms and provisions thereof, and
(c) promptly pay and discharge,  or cause to be paid and discharged,  all taxes,
assessments  and other  governmental  charges and levies imposed upon any of the
Loan  Parties,  upon their  respective  income or  receipts or upon any of their
respective assets and properties on or before the last day on which the same may
be paid  without  penalty;  provided,  however,  that it shall not  constitute a
breach of this Section if any Loan Party fails to perform any such obligation or
to pay any such  Indebtedness or other liability  (except for the  Obligations),
tax, assessment,  or governmental or other charge, levy or claim (i) that (A) is
being  delayed,  in the case of trade payables (but not other  obligations),  in
accordance with the normal payment  practices of the Loan Party,  but not beyond
any demand in payment  therefor,  or (B) is being contested in good faith and by
proper proceedings diligently pursued, (ii) if the effect of such failure to pay
or perform will not (A) cause or permit the  acceleration of the maturity of any
other  Indebtedness  or obligation  of any Loan Party (i.e.,  other than the one
being  contested)  or (B) subject any part of the assets and  properties  of any
Loan Party to attachment, levy or forfeiture, (iii) for which the Loan Party has

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obtained a bond or insurance, or established a reserve, in such amount as may be
required  by GAAP  and  that in the  judgment  of the  Lender  is  adequate  and
satisfactory,  and (iv) so long as the aggregate  amount of such unpaid  overdue
items for all of the Loan Parties does not at any time exceed $10,000.

Section 5.07.  Insurance.  Each Loan Party shall maintain or cause to be
maintained,  at its own  expense,  insurance  in  form,  substance  and  amounts
(including  deductibles)  acceptable  to the Lender (i)  adequate  to insure all
assets and properties of the Loan Parties,  which assets and properties are of a
character  usually insured by persons  engaged in the same or similar  business,
against loss or damage  resulting  from fire,  flood,  hurricanes or other risks
included in an extended coverage policy, (ii) against ESOP liability, (as and to
the extent the same is  available),  public  liability,  directors  and officers
liability and other tort claims that may be incurred by or asserted  against the
Loan  Parties or any of their  Representatives,  (iii) as may be required by the
other Loan Instruments or Applicable Law and (iv) as may be reasonably requested
by the Lender,  all with  adequate,  financially  sound and  reputable  insurers
acceptable to the Lender, and all naming the Lender as an additional insured and
loss payee under a standard mortgagee's endorsement as the Lender's interest may
appear. In the event the Lender receives any insurance  proceeds  respecting any
loss, damage or destruction of any insured Collateral,  the Lender at its option
may (1) hold and disburse the proceeds (or a portion  thereof) to fund the costs
of such repair, rebuilding or replacement as the Loan Parties may elect (subject
to such conditions as the Lender may  establish),  or (2) apply the proceeds (or
any remaining  balance) as provided in Section 2.08(d) hereof.  In the event any
Loan Party receives any insurance  proceeds (other than  disbursements  from the
Lender),  the Loan Party  shall  accept  and hold  those  funds in trust for the
benefit of the Lender and shall  promptly pay or deliver  those  proceeds to the
Lender for application as provided above.

Section 5.08. Maintenance of Assets,  Intellectual Properties,  Etc. (a)
Each Loan Party shall  maintain or cause to be maintained  all of its assets and
properties  in good  working  order and  condition  (ordinary  wear and tear and
retirement  excepted),  making all  necessary  repairs  thereto and renewals and
replacements  thereof.  Each Loan Party shall  perform all  servicing,  repairs,
overhauls, replacements,  modifications,  improvements and tests, or shall cause
them to be performed, (i) with personnel duly qualified for the applicable task,
(ii) in accordance and compliance with the manuals and service  bulletins of the
applicable  manufacturer(s) and (iii) with suitable  replacement,  substitute or
additional  parts  or  components  (A)  in  good  operating  condition,  (B)  of
equivalent or better  performance,  durability,  utility and value than the item
replaced,  (C) owned  solely by such Loan Party,  and (D) free of any Lien other
than any Permitted Lien.

(b) Each Loan Party shall maintain or cause to be maintained, at its own
expense,   all  of  its   Intellectual   Property  rights,   registrations   and
applications,  including  (without  limitation)  the  diligent  pursuit  of  all
applications,  the  payment  of all  maintenance,  license  or  other  fees  and
expenses, and the vigorous prosecution of suits and proceedings to enforce those
rights  and  applications  and to  object or oppose  the  conflicting  rights or
applications of any other Person,  except in each case where the applicable Loan
Party  decides in good faith that a particular  item is of  negligible  economic
value to the  business of such Loan Party or where the cost of doing so would be
reasonably  likely to exceed the  economic  value of such item,  such Loan Party
notifies  the Lender of such  decision  and the Lender does not object  thereto.
Each Loan Party (i) shall  continue to use each  trademark and trade name of the
Loan Parties in its business  and on its goods,  (ii) shall use the  appropriate
symbol of  registration  with each use of a trademark  or trade name by the Loan
Parties,  (iii)  shall not reduce  the  quality of  existing  goods or  services
bearing a trademark or trade name of the Loan Parties or use any such  trademark
or trade name with any other goods or services of less than comparable  quality,
and (iv) shall not take, or cause suffer,  suffer or permit anyone else to take,
any action that may invalidate the  registration of any trademark or trade name,
except in each case where the applicable Loan Party decides in good faith that a
particular  item is of  negligible  economic  value to the business of such Loan
Party or where the cost of doing so would be  reasonably  likely  to exceed  the
economic  value of such  item,  such  Loan  Party  notifies  the  Lender of such
decision and the Lender does not object thereto.  The Loan Parties shall seek or
cause to be sought,  at its own  expense,  (i) patent  applications  and patents
respecting all unpatented but patentable inventions made or obtained by the Loan
Parties,  (ii) trademark  applications and registered  trademarks on registrable
but unregistered trademarks developed, used or obtained by the Loan Parties, and
(iii) trade name  applications  and registered  trade names on  registrable  but
unregistered trade names developed, used or obtained by the Loan Parties, except
in each case  where the  applicable  Loan  Party  decides  in good  faith that a
particular  item is of  negligible  economic  value to the business of such Loan
Party or where the cost of doing so would be  reasonably  likely  to exceed  the
economic  value of such  item,  such  Loan  Party  notifies  the  Lender of such
decision and the Lender does not object thereto.

Section 5.09.  Preservation  and Defense of  Collateral,  Etc. Each Loan
Party shall maintain,  enforce, preserve and defend in all respects: (a) any and
all of the rights, powers, privileges,  remedies and interests of the Loan Party
and the Lender under or with respect to each note, stock certificate,  security,
financial asset or other account,  chattel paper, commercial tort claim, deposit
account, document of title, general intangible, instrument, investment property,
letter of credit, letter-of-credit-right, oil, gas or mineral before 

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extraction, money or other intangible included in the Collateral and each of the
Organizational  Documents and other instruments and documents  relating thereto;
and (b) all of the right, title and interest of any Loan Party and the Lender in
and to each and every part of the  Collateral  against  all manner of claims and
demands;  in each  case on a  timely  basis  to the  full  extent  permitted  by
Applicable  Law. In the event any of the Collateral is attached or levied or any
Lien is imposed on any of the  Collateral  (other than a Permitted  Lien),  then
(without  limiting the  generality of the  preceding  sentence) the Loan Parties
shall pay, discharge or bond the underlying  obligation and cause the release of
such Collateral  therefrom  within five days of any attachment or levy or thirty
days of the  imposition  of any Lien,  but in any case before the  claimant  may
defeat the right of the relevant Loan Party to bond, contest or redeem.

Section 5.10. Margin Stock Regulation Compliance.  (a) From time to time
at the request of the Lender,  and in any event prior to (i) using any  proceeds
of any of the Loans and other  credit  from the Lender  directly  or  indirectly
secured by any Margin  Stock to  directly  or  indirectly  purchase or carry any
Margin  Stock,  or (ii)  making any  permitted  substitution  or  withdrawal  of
Collateral if before or after such  substitution  or withdrawal any such loan or
other credit is or would be directly or indirectly  secured by any Margin Stock,
in each case as determined by the Lender (in its sole and absolute  discretion),
each  Loan  Party  will  provide  to the  Lender  duly  completed  and  executed
statements on Federal  Reserve Form U-1 and any other  statement that the Lender
may  deem to be  necessary  or  desirable  under  any  applicable  Margin  Stock
Regulations.

(b) If at any  time the  Lender  determines  (in its  sole and  absolute
discretion)  that  (i) any of the  Loans or other  Obligations  or other  credit
extended by the Lender (A) are being or have been directly or indirectly used to
purchase or carry any Margin Stock and (B) are directly or indirectly secured by
any Margin  Stock,  and (ii) the  aggregate  value of the Margin Stock and other
assets and  properties  directly and  indirectly  securing  them  (computed  and
discounted in accordance with applicable  Borrowing Base criteria,  Margin Stock
Regulations  and policies of the Lender then in effect) is insufficient to fully
cover the  outstanding  Loans and other  included  credit from the Lender,  then
immediately  after  receipt of notice  from the Lender the  relevant  Loan Party
shall repay the Loans in such amount(s) as the Lender may have requested in such
notice in order to comply with any  applicable  Margin Stock  Regulations.  This
Section  imposes a continuing  test, and the Lender at any time and from time to
time may  demand  such  payment  and  delivery  whenever  such a  deficiency  is
determined by the Lender (in its sole and absolute discretion).

Section  5.11.  Additional  Subsidiary  Guarantor.  Without  in any  way
authorizing  or approving  any such action  requiring  the consent of the Lender
hereunder under Section 6.07 hereof,  as soon as  practicable,  and in any event
within thirty days  following  formation or  acquisition,  each Loan Party shall
cause each newly formed or acquired corporation, venture or other Person meeting
the definition of "subsidiary" of the Loan Parties to execute and deliver to the
Lender an assumption of the obligations of a Guarantor and Loan Party hereunder,
which (a) shall be  accomplished  by such  Person's  written  assumption of this
Agreement and the other Loan Documents to which any Guarantor is a party in form
and  substance  acceptable to the Lender and (b) shall not require any notice to
or the  consent  of any  other  Loan  Party.  Such  assumption  shall  be a Loan
Instrument  hereunder and an amendment of this Agreement,  but shall not require
the signature of any other Loan Party.

Section  5.12.  Management  and Board of  Directors,  Etc. (a) No Person
shall be hired or made any binding offer for any position with any Loan Party as
a director, chief executive officer, chief operating officer, chief financial or
accounting officer,  controller or any other position performing a substantially
similar  function  without first  obtaining  the prior  written  approval of the
Lender, which approval shall not be unreasonably withheld.

(b) For so long as the Loans are outstanding,  each Loan Party shall (i)
cause [a]  designee  of the Lender to be elected as a director of the Loan Party
and each of its subsidiaries,  and (ii) not cause, suffer or permit the Board of
Directors  of the Loan  Parties  or any of its  subsidiaries  to have  more than
[three]  directors.  The  Lender's  designee[s]  shall  be  covered  by the Loan
Parties' D&O policy,  which policy shall be provide SGRP's  policies will not be
taken into account in any way in defending or indemnifying  such designee[s] and
otherwise shall satisfy the requirements of Section 5.07 hereof.

ARTICLE VI.

NEGATIVE COVENANTS

The Loan Parties jointly and severally covenant and agree that they will
comply in all  respects  with  each,  and will not  cause,  suffer or permit any
violation of any, of the terms and  provisions  of each Section in this Article,
from the date hereof until the  Obligations  have been fully paid and satisfied,
unless the Lender (in its sole and absolute  discretion) shall consent otherwise
in writing (as provided in Section 9.15 hereof):

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Section 6.01. Certain Financial Requirements. The financial measurements
used in the following covenants: (i) shall be determined in accordance with GAAP
(as of the  date of  calculation)  consistently  applied  except  to the  extent
otherwise  specified  by a  particular  definition  or  covenant;  (ii) shall be
computed  for  the  Loan  Parties  and  all of its  subsidiaries  (if  any) on a
consolidated  basis in  accordance  with  GAAP  except to the  extent  otherwise
specified in a particular definition or provision;  and (iii) shall refer to the
corresponding  items in the  financial  statements  of the Loan  Parties and its
subsidiaries  (if any) for the relevant  periods except to the extent  otherwise
specified or defined herein. (The Loan Parties and the Lender covenant and agree
to reset in good faith the financial  covenants  set forth in this  Section,  as
well as the  corresponding  provisions  of the  financial  covenants  compliance
certificate  required  by Section  5.02(d)  hereof,  from time to time with each
change in GAAP so as to maintain the integrity and intent of such covenants.)

(a) The consolidated  Selling,  General and  Administrative  Expenses of
Holdings and its  subsidiaries  (inclusive of sales commission but excluding tax
deductible  pension  payments to the ESOP  Trust)  shall not exceed 24% of their
total consolidated revenue in any fiscal quarter.

(b) The Adjusted  Net Worth of the Loan  Parties and their  subsidiaries
shall not be less than:  (i)  $(900,000)  at December 31,  2002,  or at any time
thereafter  through March 30, 2003;  (ii)  $(1,150,000) at March 31, 2003, or at
any time thereafter through June 29, 2003; (iii) $(680,000) at June 30, 2003, or
at any time thereafter  through September 29, 2003; (iv) $(670,000) at September
30, 2003, or at any time thereafter through December 30, 2003; (v) $(780,000) at
December 31,  2003,  or at any time  thereafter  through  March 30,  2004;  (vi)
$(580,000) at March 31, 2004, or at any time  thereafter  through June 29, 2004;
(vii) $(380,000) at June 30, 2004, or at any time thereafter  through  September
29, 2004;  (viii)  $(180,000) at September  30, 2004, or at any time  thereafter
through  December  30,  2004,  (ix) $0 at  December  31,  2004,  or at any  time
thereafter  through  March 30, 2005;  (x) $475,000 at March 31, 2005,  or at any
time thereafter through June 29, 2005; (xi) $950,000 at June 30, 2005, or at any
time thereafter  through  September 29, 2005;  (xii) $1,425,000 at September 30,
2005, or at any time thereafter  through December 30, 2005, (xiii) $1,900,000 at
December 31,  2005,  or at any time  thereafter  through  March 30, 2006;  (xiv)
$2,700,000 at March 31, 2006, or at any time  thereafter  through June 29, 2006;
(xv)  $3,500,000 at June 30, 2006, or at any time thereafter  through  September
29, 2006;  (xvi)  $4,300,000 at September  30, 2006,  or at any time  thereafter
through  December 30, 2006,  (xvii)  $5,100,000  at December 31, 2006, or at any
time  thereafter  through  March 30, 2007;  and (xviii)  $6,300,000 at March 31,
2007, or at any time thereafter.

(c) The Adjusted  EBITDA of Holdings and its  subsidiaries  shall not be
less than: (i) $(400,000) for the six  consecutive  fiscal months ended December
31, 2002; (ii) $(30,000) for the three consecutive fiscal months ended March 31,
2003; (ii) $700,000 for the six  consecutive  fiscal months ended June 30, 2003;
(iv) $970,000 for the nine  consecutive  fiscal months ended September 30, 2003;
(vi)  $1,090,000 for for the Computation  Period ended December 31, 2003;  (vii)
$350,000 for the three  consecutive  fiscal months ended March 31, 2004;  (viii)
$700,000  for  the  six   consecutive   fiscal   months  ended  June  30,  2004;
(ix)$1,050,000  for the nine consecutive fiscal months ended September 30, 2004;
(x) $1,400,000 for the Computation Period ended December 31, 2004; (xi) $580,000
for the three  consecutive  fiscal months ended March 31, 2005; (xii) $1,160,000
for the six consecutive fiscal months ended June 30, 2005;  (xiii)$1,740,000 for
the nine  consecutive  fiscal months ended September 30, 2005;  (xiv) $2,300,000
for the Computation  Period ended December 31, 2005; (xv) $850,000 for the three
consecutive  fiscal months ended March 31, 2006;  (xvi)  $1,700,000  for the six
consecutive  fiscal months ended June 30, 2005;  (xvii)  $2,550,000 for the nine
consecutive  fiscal months ended September 30, 2005;  (xviii) $3,400,000 for the
Computation  Period  ended  December 31, 2006;  (xix)  $1,250,000  for the three
consecutive  fiscal  months  ended  March  31,  2007 or for any  fiscal  quarter
thereafter.

(d) The  Adjusted  Debt Service  Ratio of Holdings and its  subsidiaries
shall not be less than: (i) (1.37):1.00  for the six  consecutive  fiscal months
ended December 31, 2002;  (ii)  (10.77):1.00  for the three  consecutive  fiscal
months ended March 31, 2003;  (iii)  .80:1.00 for the three  consecutive  fiscal
months ended June 30, 2003;  (iv)  1.45:1.00  for the three  consecutive  fiscal
months ended September 30, 2003; (v) 2.39:1.00 for the three consecutive  fiscal
months ended December 31, 2003; (vi) 1.45:1.00 for the Computation  Period ended
December 31, 2003 and any quarter  thereafter  through September 30, 2004; (vii)
1.09:1.00  for the  Computation  Period ended  December 31, 2004 and any quarter
thereafter  through  September  30, 2005;  (viii)  .84:1.00 for the  Computation
Period ended December 31, 2005, and any quarter thereafter through September 30,
2006; (ix) .73:1.00 for the Computation  Period ended December 31, 2006; and (x)
.63:1.00 for the three consecutive fiscal months ended March 31, 2007, or at the
end of any fiscal quarter thereafter.

(e) The Adjusted  Debt to EBITDA Ratio of Holdings and its  subsidiaries
shall not exceed:  (i) 4.92:1:00 at December 31, 2003 and any quarter thereafter
through  September 30, 2004; (ii) 3.31:1:00 at December 31, 2004 and any quarter
thereafter  through September 30, 2005; (iii) 1.48:1.00 at December 31, 

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2005 and any quarter thereafter through September 30, 2006; and (iv) .41:1.00 at
December 31, 2006 or at the end of any fiscal quarter thereafter.

(f) The Adjusted  Capital  Expenditures of Holdings and its subsidiaries
shall not exceed $65,000 in any fiscal year.

(g) The Adjusted Lease Service of Holdings and its  subsidiaries for the
referenced Computation Period shall not exceed $100,000 in any fiscal quarter.

(h) The Loan  Parties  shall  not cause or  permit  any  change of their
fiscal year from a calendar year of each year without the prior written  consent
of the Lender.

Section  6.02.  Indebtedness.  (a)  No  Loan  Party  shall  directly  or
indirectly create, incur, assume, permit to exist, increase, renew or extend any
Indebtedness  on its part,  including  commitments,  lines of  credit  and other
credit  availabilities,  or apply for or offer, commit or agree to do any of the
foregoing, excluding, however:

(i) Indebtedness owed to the Lender under any of the Loan Instruments;

(ii) Indebtedness under the Term Loan Agreement;

(iii) purchase money Indebtedness  incurred in the purchase of Equipment
in the  ordinary  course of business  so long as each is secured  only by the
Equipment  purchased,   and  obligations   constituting   Indebtedness  under
generally  accepted  accounting  principles  arising under capitalized leases
entered into in the ordinary course of business,  in each case so long as (A)
the aggregate amount of all such purchase money  Indebtedness and capitalized
lease amounts does not at any time exceed  $65,000 during the 18 month period
ended December 31, 2003,  $130,000 during 2004, or $195,000  thereafter,  and
(B) no Default  or Event of Default  then  exists or could  result  therefrom
(whether  through any Pro Forma Effect or otherwise),  provided that the Loan
Parties may continue  such  purchase  money  Indebtedness  and capital  lease
obligations  within  those  limits,  but  without  any  increase,  renewal or
extension, once incurred as so permitted; and

(iv) the  continuation of the  Indebtedness  listed in Schedule  3.10(a)
hereto,  excluding,  however,  any  increase  therein or renewal or extension
thereof  or the  continuation  of any  Indebtedness  being  retired  with the
proceeds of the Loans.

(b) No Loan Party shall prepay,  acquire or otherwise satisfy,  in whole
or in  part,  any  of its  Indebtedness  prior  to  when  due,  except  (i)  for
Indebtedness  owed to the  Lender  under any of the Loan  Instruments,  (ii) for
Indebtedness  permitted under Section  6.02(a)(iii) hereof so long as no Default
or Event of Default then exists or could result  therefrom  (whether through any
Pro Forma Effect or otherwise),  or (iv) as permitted by agreement or consent of
the Lender.

Section 6.03.  Guaranties and other Credit Support.  No Loan Party shall
directly or indirectly make, create, incur, assume,  permit to exist,  increase,
renew  or  extend  any  guaranty  or  other  Credit  Support  on its part of any
Indebtedness or other obligation of any other Person, or offer,  commit or agree
to do so,  excluding,  however:  (a) any guaranty of or other Credit Support for
Indebtedness  or other  obligations  owed to the Lender;  (b) the Credit Support
under the Term Loan Agreement;  and (c) the continuation of those guaranties and
other Credit Support listed in Schedule 3.10(b) hereto, excluding,  however, any
increase therein or renewal or extension thereof.

Section 6.04.  Liens and  Encumbrances.  No Loan Party shall directly or
indirectly make, create, incur, assume or permit to exist any Lien of any nature
in, to or against any part of the  Collateral,  or offer,  commit or agree to or
cause or assist the inception or  continuation  of any of such Lien;  excluding,
however,  any  Permitted  Lien to the extent  otherwise  not  prohibited by this
Agreement.

Section 6.05.  Sale or  Disposition  of  Collateral,  Etc. No Loan Party
shall directly or indirectly:  (a) sell, lease,  sublease,  transfer,  exchange,
abandon or otherwise dispose of, surrender  management,  physical  possession or
control of,  physically  alter or relocate all or any portion of the Collateral,
other than as expressly  permitted by Section 7.03 hereof; (b) cause,  suffer or
permit any  supplement,  modification or amendment to, or any waiver of any term
or  provision  or any  termination  of, any material  note,  stock  certificate,
security, financial asset, investment property,, instrument, agreement, account,
document or intangible of any Loan Party included in the Collateral,  other than
as expressly  permitted by Section 7.03 hereof; or (c) offer, commit or agree to
or cause or assist the inception or continuation of any of the foregoing.

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Section 6.06.  Investments,  Loans,  Advances,  Etc. No Loan Party shall
directly or indirectly  purchase or otherwise  acquire or hold any Investment or
make any Investment in or for the benefit of any other Person, or offer,  commit
or agree to do so, except for: (a) securities  received in connection  with past
contributions  to or  Investments  in the  subsidiaries  and ventures  listed in
Schedule 3.11 hereto; (b) the continuation of the existing Investments listed on
Schedule 3.11 hereto; (c) the Permitted  Investments;  (d) any guaranty or other
Credit  Support  permitted  under  Section 6.03 hereof;  and (e) any  collateral
account  established under this Agreement or any other Loan Instrument;  and (f)
any loans or  advances of salary to any officer or employee of any Loan Party or
any of its  subsidiaries  in the  ordinary  course of its  business  that in the
aggregate  do not at any time  exceed  (i) 5% of that  Person's  regular  annual
salary,  and  (ii)  $10,000  for all such  officers  and  employees,  excluding,
however,  usual and  customary  draws in the ordinary  course of business by any
non-salaried salesperson against his or her reasonably expected commissions over
the next succeeding twelve months.

Section 6.07. Certain Fundamental  Changes. No Loan Party shall directly
or indirectly effect,  enter into or offer, commit or agree to: (a) award, grant
or issue any  option to any  Person to  purchase  any  shares of the  Borrower's
capital stock, phantom stock or similar right, or offer or agree to do so, other
than (A) an option or right that (i) is  exercisable  at or set to a price equal
to the fair market value thereof at the time of issuance, (ii) does not vest (in
whole or in part) before the Term Loans have been repaid in full, (iii) has been
awarded, granted or issued pursuant to the approved form of Holdings Stock Plan,
(iv) is in form and substance  acceptable to the Lender in its sole  discretion,
and (v)is  otherwise  acceptable,  and is being awarded,  granted or issued to a
Person  who is  acceptable,  to the Lender in its sole and  absolute  discretion
(each a  "Permitted  Option") and (B) the Holdings  Warrant;  (b) any  issuance,
sale, transfer, pledge or other disposition or encumbrance of any capital stock,
partnership  or membership  interests or other equity  securities  issued by any
Loan Party (other than pursuant to the Permitted Options and Holdings Warrants),
the  registration of such securities for sale or resale under Applicable Law, or
the issuance of any option (other than a Permitted Option),  warrant (other than
the  Holdings  Warrant) or other right to acquire any such  securities;  (c) any
capital reorganization or reclassification of the capital stock,  partnership or
membership  interests  or other  securities  issued by any Loan  Party;  (d) any
transaction in which the capital stock,  partnership or membership  interests or
other  securities  issued by any Loan Party  prior to the  transaction  would be
changed into or exchanged for different securities, whether of that or any other
Person,  or for any other assets or properties  (other than as such transactions
may be permitted  by Section  6.08  hereof);  (e) any sale,  lease,  assignment,
conveyance,  spin-off or other transfer or disposition of all or any substantial
part of the business or assets and properties of any Loan Party; (f) any merger,
consolidation,  reincorporation  or reorganization in a different  jurisdiction,
dissolution, liquidation or winding up of any Loan Party; (g) the acquisition or
establishment  of any new subsidiary or joint venture by any Loan Party; (h) the
acquisition  by any Loan  Party of all or  substantially  all of the  assets and
properties of any other Person or any discrete  division or other  business unit
thereof; or (i) any material change in the character of the business of any Loan
Party as  conducted on the date of this  Agreement or any adverse  change in the
method by which that business is conducted.

Section  6.08.  Distributions  to  Shareholders.  No  Loan  Party  shall
directly  or  indirectly:  (a)  declare or make any  dividend,  payment or other
distribution of cash,  assets or property with respect to any equity  securities
issued by any Loan Party,  whether now  existing or hereafter  outstanding;  (b)
redeem, purchase or otherwise acquire any securities issued by any Loan Party or
any option or other  right to  acquire  any such  securities;  (c)  covenant  or
otherwise arrange with any Person (other than the Lender in any Loan Instrument)
to directly or indirectly limit or otherwise  restrict any dividend,  advance or
other  payment or  distribution  (whether of cash or  otherwise);  or (d) offer,
commit  or  agree  to do any of  the  foregoing;  excluding,  however,  (i)  the
redemptions pursuant to the Holdings Redemption Agreement, (ii) distributions by
the Borrower to Holdings to permit Holdings to pay the Obligations under (and as
defined in) the Term Loan Agreement, and (iii) so long as no Default or Event of
Default then exists or could  result  therefrom  (whether  through any Pro Forma
Effect or  otherwise)  distributions  by the  Borrower to Holdings to fund,  and
Holding's  use of such funds to either (A) redeem its common stock from the ESOP
Plan, or (B) make  contributions  to the ESOP Trust to fund its  redemptions  of
Holding's  stock,  in each case to the extent  required  under the ESOP  Related
Documents in connection with the termination of participants.

Section  6.09.  Use of  Loans.  (a) No  Loan  Party  shall  directly  or
indirectly use any portion of the Loans, or cause, assist,  suffer or permit the
use of any  portion  of the  Loans,  in whole or in part,  other than use of the
Loans for the funding of the  refinancing  the Borrower's  share of the existing
Senior Loans and funding the working capital needs of the Borrower.

(b) No part of the proceeds of the Loans or other credit from the Lender
shall be used at any time directly or indirectly to purchase or carry any Margin
Stock  or  otherwise  in  any  way  or  for  any  purpose  that  violates  or is
inconsistent with any applicable Margin Stock Regulations.

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Section  6.10.  ERISA  Plans.  (a) Except  for the Plans,  no Loan Party
shall,  and no Loan  Party  shall  cause,  suffer  or  permit  any of its  ERISA
Affiliates  to,  directly or indirectly  establish,  maintain,  participate  in,
contribute  to or  permit  to  exist  any  "employee  pension  benefit  plan" or
"employee  welfare benefit  plan"(as  defined in ERISA) for any employees of any
Loan Party or any ERISA Affiliate; provided, however, that any Loan Party or any
ERISA Affiliate from time to time may establish any such plan in accordance with
Applicable Law (including ERISA and the Tax Code) with the prior written consent
of the  Lender.  The Loan  Parties  shall use their  best  efforts  to obtain or
continue  the  qualification  of each Plan  under  ERISA  and the Tax  Code,  as
applicable,  shall prepare and deliver each report,  statement or other document
required  by ERISA and the Tax Code  within the  periods  specified  therein and
conforming in form and substance to the provisions thereof, and shall administer
each Plan in all respects in accordance  with ERISA,  the Tax Code and all other
Applicable  Law, as  applicable;  and shall use their best  efforts to cause its
ERISA Affiliates to do each of the foregoing.  In any event, no Loan Party shall
cause,  suffer or permit any of its ERISA Affiliates to: (i) incur,  continue or
fail to  correct  in any  respect  any ERISA  Event;  (ii) fail to file with the
appropriate  Authority any required notice or report  respecting any Plan as and
when due;  (iii)  fail to  respond  in a timely  fashion  to any notice or other
communication respecting any Plan from any Authority; (iv) increase or adversely
modify any funding  obligation or other liability of any one or more of the Loan
Parties or any ERISA Affiliate (individually or in the aggregate) under any Plan
(whether through amendment or termination)  without the prior written consent of
the Lender  (which  will not be withheld  unreasonably);  (v) permit the present
value of all accrued  benefits  under each Plan  subject to Title IV of ERISA to
exceed the value of the assets of such Plan  allocable to such accrued  benefits
(which benefit value shall be determined  either on an ongoing basis,  using the
Plan's reasonable  actuarial  assumptions,  or on a termination basis, using the
assumptions  employed by the Pension Benefit Guaranty  Corporation in connection
with plan terminations, as applicable); or (vi) enter into any "employee welfare
benefit plan" (as defined in ERISA) to which one or more of the Loan Parties and
its ERISA Affiliates is required to contribute.

(b) No Loan Party shall, and no Loan Party shall cause, suffer or permit
any of its  subsidiaries  to,  directly or  indirectly  contribute to or for the
benefit of the Plans or its  participants  thereunder more than the ESOP Maximum
Contribution in the aggregate in any fiscal year.

Section 6.11.  Transactions  with  Affiliates,  Etc..  (a) No Loan Party
shall directly or indirectly  enter into any transaction  with, or use any asset
or property of, any Affiliate of any Loan Party (including,  without limitation,
the lease,  purchase,  sale or exchange of any asset or property, any advance or
loan,  the  provision  of any  services,  or any  allocation  of  administrative
salaries,  expenses  and other  general  overhead),  other than in the  ordinary
course and pursuant to the reasonable  requirements  of the business of any Loan
Party and upon fair and reasonable terms and provisions no less favorable to any
Loan Party  than it would  have been  reasonably  likely to have  obtained  in a
comparable arm's-length transaction with a Person who is not an Affiliate of any
Loan Party.

(b) The Loan Parties shall not  (individually or in the aggregate):  (i)
pay or accrue to or for the  benefit of any  Person  aggregate  compensation  in
excess of $250,000 in any year other than (A) permitted sales  commissions,  and
(B) any bonus due to the officers of SPG listed in Schedule 6.11(b) hereto under
their  bonus  formulas  in  effect on the date  hereof  (as  summarized  in such
schedule) (a "Permitted Bonus"); (ii) pay or accrue to or for the benefit of any
Person any sales commission in excess of 17% of the actual gross profits (before
internal labor  allocations)  from that persons  eligible  sales; or (iii) enter
into any new  employment  agreement or extend or renew any  existing  employment
agreement.  In addition,  all officers and employees of the Loan Parties,  as of
the date  hereof  and from time to time  hereafter  as  Persons  enter into such
positions or change  levels of access,  shall  execute and deliver to Lender the
appropriate non-compete and confidentiality  agreements with the Loan Parties in
the form agreed to by the Loan Parties and the Lender.

Section 6.12.  Execution and Modification of the ESOP Related Documents,
Etc.  (a) No Loan Party shall enter into any new ESOP  Related  Document,  enter
into or cause, suffer or permit any supplement to or any waiver (of its rights),
modification,  amendment or restatement of any ESOP Related Document existing on
the date hereof or  hereafter  approved by the Lender,  or commit or agree to do
any of the  foregoing,  without the prior  written  consent of the  Lender.  The
inclusion  of  supplements,  modifications,  restatements  and  the  like in the
various definitions of the ESOP Related Documents is not intended, and shall not
be  deemed  or  construed,  to be  permission  for or  acceptance  of any of the
foregoing by the Lender,  which will not be unreasonably  withheld to the extent
such change is required under ERISA or the Code.

(b) No Loan Party shall remove or replace,  or consent to any change in,
the ESOP Trustee, or commit or agree to do so, without the prior written consent
of the Lender, which will not be unreasonably withheld to the extent such change
is to an  institutional  trustee that is not an Affiliate of the Borrower or the
Lender.

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Section  6.13.   Execution  and   Modification  of  the  Stock  Purchase
Documents,  Etc. No Loan Party shall enter into any new Stock Purchase Document,
enter into or cause,  suffer or permit any  supplement  to or any waiver (of its
rights),  modification,  amendment or restatement of any Stock Purchase Document
existing on the date hereof or  hereafter  approved by the Lender,  or commit or
agree to do any of the  foregoing,  without  the prior  written  consent  of the
Lender. The inclusion of supplements,  modifications,  restatements and the like
in the various definitions of the Stock Purchase Documents is not intended,  and
shall not be deemed or construed,  to be permission  for or acceptance of any of
the foregoing by the Lender.

Section 6.14.  Execution and  Modification  of the Term Loan  Documents,
Etc. No Loan Party shall  enter into any new Term Loan  Document,  enter into or
cause,  suffer  or permit  any  supplement  to or any  waiver  (of its  rights),
modification, amendment or restatement of any Term Loan Document existing on the
date hereof or hereafter approved by the Lender, or commit or agree to do any of
the foregoing, without the prior written consent of the Lender. The inclusion of
supplements, modifications, restatements and the like in the various definitions
of the  Term  Loan  Documents  is not  intended,  and  shall  not be  deemed  or
construed,  to be  permission  for or  acceptance of any of the foregoing by the
Lender.

Section 6.15.  Execution and Modification of the Holdings Stock Plan. No
Loan Party shall enter into any new stock option plan, phantom stock plan or the
like, no Loan party shall award, grant or issue any stock option,  phantom stock
or similar right other than the issuance of Permitted  Options by Holdings,  and
Holdings  shall not enter into or cause,  suffer or permit any  supplement to or
any  waiver (of its  rights),  modification,  amendment  or  restatement  of any
Permitted Option approved by the Lender or the Holdings Stock Plan, or commit or
agree to do any of the  foregoing,  without  the prior  written  consent  of the
Lender. The inclusion of supplements,  modifications,  restatements and the like
in the various definitions of the Holdings Stock Plan is not intended, and shall
not be deemed or  construed,  to be  permission  for or acceptance of any of the
foregoing by the Lender.

Section 6.16.  Certain  Accounts.  No Loan Party will render any invoice
that:  (i) is expressly  conditional,  permits  returns or restricts  collection
rights or assignments in any respect; (ii) permits payment (A) more than 30 days
after the invoice date, (B) in any currency other than United States Dollars, or
(C) at any  location  outside  the  United  States;  or (iii)  provides  for the
underlying  obligation  to be  evidenced  by chattel  paper or any note or other
instrument;  provided,  however,  that a Loan Party may do so if and only to the
extent  specifically  authorized in advance to do so by the Lender in writing in
its sole and absolute discretion.

ARTICLE VII.

COLLATERAL

Section  7.01.  Grant of  Security  Interest.  Each  Loan  Party  hereby
pledges, assigns, conveys, mortgages,  transfers and delivers to the Lender, and
grants to the Lender a continuing security interest in and to, all of the assets
and properties of the Loan Party,  including  (without  limitation)  each of the
following,  in each case whether now or hereafter existing,  acquired or created
and wherever located:

(a)     any and all Accounts Receivable of the Loan Party;

(b)     any and all Inventory of the Loan Party, wherever located, including any
and all raw materials, work-in-progress and finished goods;

(c)     any and all of the Real Estate of the Loan Party,  any and all  Fixtures
and Improvements  thereto,  and any and all interests therein,  wherever
located;

(d)     any and all Equipment and other tangible  personal assets and properties
of the Loan Party, wherever located,  including (without limitation) any
and  all  accessions,   accessories,   additions,  Equipment,  Fixtures,
furnishings,    goods,   Inventory,    machinery,    materials,   parts,
replacements,  supplies, tools and vehicles, whether or not located upon
or affixed to any of the foregoing;

(e)     any and all of the Intellectual Property of the Loan Party;

(f)     any  and all (i)  Investments  of the  Loan  Party,  including  (without
limitation)  the SPG  Stock  in the  case of  Holdings  (ii) any and all
dividends, interest and distributions on, under or related to any of the
foregoing  items  (whether  cash,  stock or  otherwise)  and  splits and
reclassifications thereof, (iii) any and all options, warrants and other
rights to acquire any such  Investments,  and (iv) any and all  security
entitlements  and  other  rights,  powers,   privileges,   remedies  and
interests  of the  referenced  Person  in,  to 

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and  under  any  and all the  foregoing  and any and all  Organizational
Documents and Custody Documents pertaining thereto;

(g)     any and all (i)  advances,  loans,  and other  Indebtedness  and amounts
(including  interest)  directly or indirectly  owed to the Loan Party by
any Surety,  (ii) subrogation,  contribution and other similar rights of
the Loan Party against or in respect of any Surety, or any of its assets
and  properties,  whether  resulting  from any payment  made by the Loan
Party or otherwise,  and (iii) Liens or Credit Support securing any such
advances, loans, Indebtedness, amounts or rights;

(h)     any and all other  accounts,  instruments,  chattel paper,  documents of
title  and  trust  receipts  (and the goods  covered  thereby,  wherever
located),   letter  of  credit  rights,  financial  assets,   investment
property,  security  entitlements,  deposit  accounts,  contract rights,
warranties, casualty and other insurance policies and rights, commercial
tort  claims  and  other  litigation  claims  and  rights,   tradenames,
software, payment intangibles, and other general intangibles of the Loan
Party,  and any and all  computer  programming  data and other books and
records of the Loan Party; and

(i)     any and all  deposit  accounts  and  other  deposits  of the Loan  Party
(whether  general or special,  time or demand,  provisional or final, or
individual  or  joint)   maintained  with  the  Lender  or  any  of  its
Affiliates,   custodians,   participants  or  designees;   any  and  all
Indebtedness  and other amounts and obligations at any time owing by the
Lender or any of its  Affiliates or  participants  to or for the credit,
account  or  benefit  of the  Loan  Party;  and any and all  assets  and
properties  of the Loan Party in the  possession,  custody or control of
the Lender, or any of the Lender's Affiliates, custodians,  participants
or designees,  including (without limitation) other monies, certificates
of deposit,  securities,  instruments  of debt or credit,  documents  of
title  and  trust  receipts  (and the goods  covered  thereby,  wherever
located), and other instruments and documents;

in each  case  whether  any of the  foregoing  items is now or  hereafter  owned
beneficially  or of record and  whether  now or  hereafter  owned  individually,
jointly or  otherwise,  together  with the products and  proceeds  thereof,  all
collections,  payments and other  distributions  and  realizations  with respect
thereto, any and all other rights, powers, privileges, remedies and interests of
the  Loan  Party  therein,  thereto  or  thereunder,  and any and all  renewals,
substitutions,  modifications  and extensions of any and all of the items in the
foregoing  subsections  (the foregoing items will be referred to collectively as
the "Collateral"),  as security for the timely and full payment and satisfaction
of the  Obligations as and when due.  However,  items released in writing by the
Lender  from time to time  from the lien of this  Agreement  and the other  Loan
Instruments shall no longer be considered to be "Collateral" hereunder.

Section  7.02.  Collateral  Documentation.  (a) The Loan  Parties  shall
deliver  to  the  Lender  on  or  before  the  Effective   Date  and  thereafter
concurrently  with each item  becoming  Collateral  such  assignments,  pledges,
deeds,  mortgages,  financing  statements,   attornments,   estoppels,  waivers,
consents,  recognitions,   bailments,  legal  opinions  and  other  instruments,
documents and  agreements as the Lender from time to time may request to further
evidence,  confirm,  effect or perfect any mortgage or other  security  interest
granted  or  required  to be  granted  under  this  Agreement  or any other Loan
Instrument, each in such form and substance as may be acceptable to the Lender.

(b) Without in any way  limiting  the right,  power or  authority of the
Lender under the UCC or other Applicable Law, each Loan Party hereby irrevocably
authorizes the Lender in its sole and absolute discretion,  at any time and from
time to time: (i) to file without the review,  approval or signature of the Loan
Party any and all  financing  statements,  modifications  and  continuations  in
respect of the Collateral, the Loan Party, any other or additional debtor or the
transactions contemplated by this Agreement or any other Loan Instrument in such
jurisdictions as the Lender deems necessary or desirable;  (ii) to sign any such
statement,  modification  or  continuation  on behalf  of the Loan  Party if the
Lender deems such signature  necessary or desirable  under  Applicable  Law; and
(iii) to file a carbon,  photographic  or other  reproduction  of any  financing
statement or modification if the Lender deems such filing necessary or desirable
under  Applicable  Law;  provided  that so long as no Event of  Default  is then
continuing,  if possible the Lender  shall  endeavor to accord the Loan Party an
opportunity to review any proposed financing  statement or modification (but not
continuation),  but if the Loan Party has not  reviewed  it within a  reasonable
period of time (not to exceed  30 days from the date  sent),  the  Lender at any
time  thereafter may exercise its authority  under this Agreement and Applicable
Law to file such  proposed  financing  statement or  modification;  and provided
further that the failure to send any such copy for review or signature shall not
affect the  validity or  enforceability  of any such  signature or filing by the
Lender.  Without in any way  limiting  the  foregoing,  each Loan  Party  hereby
acknowledges and agrees that, prior to the execution of this Agreement, the Loan
Party  reviewed the initial UCC financing  statements  respecting the Collateral
prepared by the Lender and authorized the Lender to file them (i.e.,  "prefile")
in such jurisdictions as the Lender deemed necessary or desirable,  and the Loan
Party hereby confirms 

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and  ratifies the  authority of the Lender to make each such filing.  The Lender
shall  endeavor to send a copy of any such filing to each Loan Party;  provided,
however,  that the  failure to send that copy shall not affect the  validity  or
enforceability  of any such  filing.  The  Lender  shall not be  liable  for any
mistake  in  or  failure  to  file  any   financing   statement,   modification,
continuation or other perfection document.

(c) The Lender from time to time may request that items of Collateral be
legended or otherwise marked from time to time to reflect the Lender's  security
interests  therein,  and each Loan Party shall promptly mark each requested item
in a prominent location with such legend as the Lender may direct,  which may be
affixed directly or on a permanently  attached plaque of customary size. No Loan
Party  shall,  and no Loan Party shall cause,  suffer or permit  anyone else to,
alter, cover, deface or remove any such legend without the prior written consent
of the Lender, except that such legend may be removed from items released by the
Lender in writing from time to time from the security  interests  created  under
this Agreement and the other Loan Instruments as provided herein or therein.

(d) The  Borrower  shall  enter  into one or more  lock box and  control
agreements  with the  Lender  and the  Senior  Lender,  its  affiliates  or such
commercial bank(s) as may be acceptable to the Lender (the "Depository"),  which
agreements  shall be in such  form and  substance  as may be  acceptable  to the
Lender.  The Borrower shall instruct each person who from time to time is billed
any amount by the Borrower or owes any amount to the Borrower  under any Account
Receivable  to all  payments  to the  Borrower  in  care of the  Depository  for
collection  and  deposit  in a  designated  lock  box  account  (the  "Lock  Box
Account").  All of the Borrower's Account Receivable collections and any and all
other  sources  of  revenue,  income  or cash  flow of the  Borrower,  including
(without  limitation)  any and all cash,  check,  credit card or other receipts,
shall be the subject of such lock box  agreements by no later than 10 days after
such  request.  Amounts  in the  Lock  Box  Account  shall  be  collected  in or
periodically  transferred  to the Lender's  account  with the Senior  Lender for
application  as provided in Section  2.06(b)  hereof  Nothing  contained in this
Agreement,  however,  shall be deemed to alter or amend the  Obligations  of the
Borrower,  and neither the assignment of the accounts receivable nor any receipt
of any payments  thereunder shall be deemed to constitute a payment with respect
to any of the Obligations absent an exercise by the Lender of its rights to make
any application of collected funds under this Agreement.

Section 7.03.  Rights of the Borrower to the Collateral.  Subject to the
terms and  provisions of this  Agreement and until such time as the Lender shall
give notice to the Loan Parties to the contrary  during the  continuance  of any
Event of Default or Default, without regard to whether any other action has been
taken by the Lender under this Agreement or any other Loan Instrument, each Loan
Party  shall  have  the  right  to do  the  things  expressly  permitted  by any
subsection of this Section notwithstanding the restrictions contained in Section
6.05  hereof  (but shall not have such right after such notice has been given to
the extent specified in such notice):

(a) Each Loan  Party  shall  have the full  power and  authority  in the
ordinary course of business with reasonable  business prudence (i) to use in its
business any item of Collateral  (other than  instruments,  securities and other
general intangibles in the possession of the Lender), (ii) to sell, lease or use
any Inventory,  (iii) to relocate finished goods Inventory to one or more public
warehouses  from  which  the Loan  Party has  obtained  recognition  and  access
agreements  acceptable  to the Lender,  (iv) to  maintain,  repair,  replace and
retire  Equipment in  accordance  with Section  5.08(a)  hereof  (subject to the
provisions  of Section  2.06(g)  hereof),  (v) to sell or otherwise  voluntarily
dispose of any unused  Equipment or other goods  (subject to the  provisions  of
Section 2.06(g) hereof,  (vi) except as otherwise  provided herein,  to hire and
fire officers and other employees,  and to waive, release,  supplement,  modify,
amend,  restate or replace any of the Loan Party 's contracts  with officers and
other  employees,  (vi) to exercise in good faith any and all voting,  waiver or
consensual rights and powers relating or pertaining to the Collateral covered by
Section  6.05(b)  hereof or any part  thereof,  or waive,  release,  supplement,
modify,  amend,  restate  or replace  any term or  provision  thereof,  (vii) to
diligently  service and  collect the  proceeds  of any  Accounts  Receivable  or
Investment, which may include such discounts,  reductions and settlements as may
be usual and customary and consistent  with its past practice,  (viii) to use in
its business the cash proceeds from such Inventory and Accounts Receivable,  and
(ix)  to  deposit,  withdraw  and  use in its  business  funds  and  other  cash
equivalents  constituting  Collateral  under Section 7.01(i)  hereof;  provided,
however,  that such power is not  authorized  and shall not be  exercised to the
extent such exercise could in any way (individually or in conjunction with other
such actions  contemplated or taken by the Loan Party) (A) adversely  affect the
business or  operations  of the Loan Party or the value of the  Collateral,  (B)
diminish  any of the rights,  powers,  privileges,  remedies or interests of the
Loan Party in any item of the  Collateral  (other than  through  such  permitted
sales, replacements and retirements,  use of cash proceeds or withdrawals),  (C)
conflict with or prejudice the continued  perfection of any security interest of
the Lender,  or (D) result in any Event of Default or Default  (whether  through
any Pro Forma Effect or otherwise).

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(b) Each Loan Party  shall be entitled to exercise in good faith any and
all voting, waiver or consensual rights and powers relating or pertaining to the
Collateral or any part thereof for any purpose not  inconsistent  with the terms
of this  Agreement;  provided,  however,  that  each  Loan  Party  shall  not be
permitted to exercise or refrain from exercising any such right or power if such
exercise  or  nonexercise  could (A) have an adverse  effect on the value of the
Collateral  or any part thereof in the sole judgment of the Lender or (B) result
in any Default or Event of Default;  and  provided  further that each Loan Party
shall give the Lender at least five (5) Business  Days' prior written  notice of
the manner in which the Loan Party  intends to exercise or not exercise any such
right or power  that  could  have  such an  effect,  together  with any  reasons
therefor,  except that notice need not be given with respect to any  re-election
of directors.

Section  7.04.  Performance  by the Lender.  In the event any Loan Party
fails to pay or otherwise perform or satisfy any of its obligations to others or
under or in respect of any of the  Collateral  or any ESOP  Related  Document as
required by this Agreement or any other Loan  Instrument,  the Lender shall have
the right in its sole and  absolute  discretion  (but  shall be under no duty or
obligation) to make any such payment or cause the performance or satisfaction of
any other such  obligation,  including  (without  limitation) the payment of any
tax, claim or insurance  premium,  the maintenance or defense of any part of the
Collateral  or the  purchase  or  discharge  of any  Lien  on  any  part  of the
Collateral.  The Lender will  endeavor  to give the Loan  Parties  prior  notice
(which may be by telephone or telecopy) of any such payment or action; provided,
however,  that the failure to give such notice or any time to perform  shall not
affect the validity of the payment or action or the reimbursement obligations of
the Loan Parties' with respect thereto.  The Loan Parties shall pay or reimburse
on demand any and all amounts advanced or expenses incurred by the Lender or its
designee under this subsection,  which shall  constitute  additional Loans under
(and secured by) this  Agreement and shall bear interest at the rate  applicable
to the Loans.  No  payment  made or action  taken by the Lender or its  designee
shall be  deemed  or  construed  to be a  waiver,  cure or  satisfaction  of the
underlying  default,  which default shall be deemed to be continuing  until such
time (if ever) as the Loan Parties have, prior to the Maturity Date, (i) resumed
the payment,  performance  and  satisfaction  required by this Agreement and the
other Loan  Instruments and (ii) repaid all Loans advanced for such payments and
actions,  together with interest thereon, and paid all others to whom the Lender
has requested direct payment respecting such payments and actions.

Section 7.05.  Litigation Respecting  Collateral.  (a) In the event that
any action,  suit or other  proceeding  (whether or not purportedly on behalf of
any Loan Party) at law, in equity,  in arbitration or before any other Authority
involving or affecting the Collateral (a  "Proceeding")  is  contemplated by any
Loan Party or is otherwise  commenced by or against any party  hereto,  the Loan
Parties shall give the Lender immediate  notice thereof.  Within twenty Business
Days after its receipt of such notice,  the Lender shall notify the Loan Parties
that  either  (i) the  Lender  will  join in the  Proceeding,  (ii) a  specified
designee of the Lender will join in the  Proceeding,  or (iii) the Loan  Parties
may  prosecute the  Proceeding  without the  participation  of the Lender or its
designee,  which  Proceeding in any event shall be conducted in accordance  with
the provisions of subsection (b) of this Section.  In the event the Lender fails
to respond to such notice of the Proceeding within that period, the Lender shall
be deemed to have elected  alternative  (iii) above,  and the Loan Parties shall
prosecute the proceeding accordingly, without, however, waiving any other right,
power,  privilege,  remedy or interest of the Lender under this  Agreement,  the
other Loan Instruments and Applicable Law.

(b) If any Loan Party  elects to commence a  Proceeding  or a Proceeding
has otherwise  commenced by or against any party hereto,  the Loan Parties shall
cause the same to be prosecuted  (A) in such a manner that all the rights of the
Lender are preserved and protected to the fullest extent reasonably possible and
(B) with counsel to that Loan Party that is  acceptable to and  represents  both
that Loan Party and the Lender.  Subject to  compliance by the Loan Parties with
the  foregoing,  (x) the Lender  (if named as a party by someone  other than the
Borrower or any Surety) shall join in the  Proceeding  and take any other action
reasonably requested by counsel to that Loan Party to facilitate the prosecution
thereof,  all at the sole  cost and  expense  of that  Loan  Party,  and (y) the
Proceeding  may be  prosecuted  by that Loan  Party in such  manner as that Loan
Party and its counsel  reasonably deem appropriate.  In any event, if the Lender
determines at any time during the pendency of a Proceeding  (after  consultation
with  counsel to the Lender)  that the  interests  of the Lender are at variance
with the  interests  of any Loan  Party,  the Lender may appoint its own counsel
(whose expenses, disbursements and fees shall be paid for by that Loan Party) to
represent  the Lender in the  Proceeding,  and the Loan  Parties and its counsel
shall  cooperate with the Lender and its counsel to the fullest extent  possible
in that Proceeding.

(c) Each Loan Party acknowledges that pursuant to Section 7.01 hereof it
granted to the Lender a senior security  interest in and to, among other things,
all such Proceedings by or for the benefit of the Loan Party, whether related to
any of the enumerated Collateral or otherwise.

Section 7.06. Power of Attorney.  With respect to the various assets and
properties included or required to be included in the Collateral hereunder, each
Loan Party hereby irrevocably makes, constitutes 

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and appoints the Lender and the Lender's  executive  officers (Vice President or
above),  and each of them,  with  full  power of  substitution,  as the true and
lawful  attorney-in-fact  of the Loan Party,  with full power and authority from
time to time in the name,  place and stead of the Loan  Party to:  (a) do any of
the things  specified in Section  7.07(b)  hereof in the name of the Loan Party,
utilizing  the Loan Party 's  letterhead  (or an  approximation  thereof) to the
extent the Lender may deem necessary or desirable;  (b) pay any  Indebtedness or
other liability or perform any other obligation required to be paid or performed
under this Agreement or any other Loan Instrument by any Loan Party,  any Surety
or any other Person  (other than the Lender);  (c) prepare and execute on behalf
of each Loan Party any additional Note as contemplated in Section 2.03(c) hereof
and any mortgage,  financing  statement or other evidence of a security interest
contemplated by this Agreement, or any modification,  refiling,  continuation or
extension thereof;  (d) take any other action  contemplated by this Agreement or
any other Loan Instrument; and (e) sign, execute, acknowledge, swear to, verify,
deliver,  file,  record and publish any one or more of the foregoing;  provided,
however,  that the  above-named  attorneys-in-fact  may  exercise the powers set
forth in  subsections  (a),  (b),  and (d) of this Section  only  following  the
Lender's  written  notice  pursuant to Section 7.07 of this Agreement and during
the continuance of the subject Event of Default, whether or not any reference to
this Power of Attorney is made in that notice, and without regard to whether any
other action has been taken by the Lender under this Agreement or any other Loan
Instrument.  This Power of Attorney is hereby declared to be  irrevocable,  with
full power of substitution and coupled with an interest.  This Power of Attorney
shall survive the  dissolution,  reorganization  or bankruptcy of any Loan Party
and shall extend to and be binding upon the successors, assigns, heirs and legal
representatives  of each Loan Party. This Power of Attorney may be exercised (i)
by any one of the above-named attorneys-in-fact, or by any substitute designated
by any of those  attorneys-in-fact,  and  (ii) by  signing  for any  Loan  Party
individually  on any  document  or  instrument  or by listing two or more of the
persons,  including  the Loan  Parties,  for whom any document or  instrument is
being signed and signing once, with a single  signature by the  attorney-in-fact
or substitute  being effective to exercise the Powers of Attorney of all persons
so listed.  A facsimile  signature shall be effective if so affixed.  The Lender
shall not be liable for any  failure to collect or enforce the payment of any of
those assets and properties.

Section 7.07. Rights of the Lender to the Collateral, Deficiencies, Etc.
If any Event of Default shall have occurred and is then  continuing,  the Lender
may take  (and/or may cause one or more of its  designees to take) any or all of
the following actions, after giving the Loan Parties prior written notice, or in
the case of  subsection  (e) of this  Section  after  giving the Loan Parties at
least three (3) Business  Days' prior  written  notice (which notice period each
Loan Party acknowledges and agrees to be adequate and reasonable), with a single
such notice being  sufficient to entitle the Lender from time to time thereafter
to take any one or more of the actions described below:

(a)     prohibit any Loan Party from taking any action respecting any Collateral
otherwise permitted by this Agreement and the other Loan Instruments;

(b)     (i) notify each of the account debtors,  obligors,  issuers,  securities
intermediaries,  financial institutions, custodians, lessees or lessors,
mortgagors,  and other parties under or with respect to or interested in
any  item of the  Collateral  of the  security  interest  of the  Lender
therein  (without  limiting  the  right of the  Lender to do so at other
times as permitted by this Agreement or any other Loan Instrument) or of
any action proposed to be taken with respect thereto,  and direct one or
more of those parties to make all payments,  distributions  and proceeds
with respect thereto otherwise payable to any Loan Party directly to the
Lender  or  its  order  until  notified  by  the  Lender  that  all  the
Obligations  have been fully paid and satisfied,  (ii) demand,  collect,
receive and retain any and all payments,  distributions  and proceeds of
any kind  with  respect  to any and all of the  Collateral,  demand  and
direct other performance,  enforce payment or other performance by legal
proceedings  as  permitted  by law,  and  give  receipts,  releases  and
acquittances in connection  therewith,  (iii) take possession or control
of, and execute or endorse (to the Lender or otherwise)  and  negotiate,
present or otherwise collect, any item of Collateral and any one or more
notes,  checks,  drafts,  bills of  exchange,  money  orders,  invoices,
freight  bills,  bills of lading  or other  instruments,  agreements  or
documents  received  in  payment  for  or  under  or on  account  of any
Collateral,  (iv)  receive,  open and  dispose  of all  mail  and  other
deliveries  to any Loan Party,  take over any Loan  Party's  post office
boxes and request postal  authorities  and others to change the delivery
address(es)  for any Loan  Party or make  other  arrangements  with such
authorities  as the Lender may deem  necessary  or desirable in order to
receive  any Loan  Party's  mail and other  deliveries,  (v)  negotiate,
settle,  adjust,  compromise,  discharge,  release,  extend or renew any
account,  instrument,  payment  intangible or other agreement,  right or
claim  of any Loan  Party  included  in the  Collateral,  whether  as an
inducement  to  prompt  payment  or  performance   and  whether  or  not
meritorious,  customary  or in the  ordinary  course  of  business,  and
commence,  prosecute,  defend,  settle,  abandon or withdraw any claims,
suits or  proceedings  pertaining  to or arising out of any  Collateral,
(vi) prepare,  file and sign any Loan Party's name on any proof of claim
in bankruptcy,  notice of Lien,  assignment or  satisfaction  of Lien or
similar  document in any action or proceeding  by,  against or otherwise
involving to any obligor under any Collateral,  (vii) use or disclose in
any way any of the  information  contained in any Loan Party's 

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Books and Records,  and (viii)  exercise and enforce all of the any Loan
Party's other rights,  powers,  privileges,  remedies and interests with
respect  to  the  Accounts  Receivable,  other  accounts,   instruments,
documents  of  title,  chattel  paper,   financial  assets,   investment
property,  payment  intangibles and general intangibles and other assets
and properties included in the Collateral, whether against ;

(c)     direct the Loan  Parties or any other holder of  Collateral  to assemble
and  deliver  such  Collateral  to the  Lender or its  designee  at such
time(s) and  place(s) as the Lender from time to time may  specify,  all
without any risk or expense to the Lender;  and enter any premises where
any item of  Collateral  may be located,  with or without  permission or
process of law but  without  breach of the  peace,  and seize and remove
such  Collateral or remain upon such premises and use or dispose of such
Collateral  as  contemplated  under  this  Agreement  and the other Loan
Instruments;

(d)     request the judicial appointment of a receiver respecting the Collateral
(excluding  funds  in  the  possession  of the  Lender  and  such  other
Collateral as the Lender may specify in its request) in any action, suit
or proceeding in which claims are asserted against the Collateral by the
Lender or its designee,  irrespective  of the solvency of any Loan Party
or any other  Person or the  adequacy  of any  collateral,  and  without
notice to or the approval of the Loan Party,  which  receiver shall have
the power to  manufacture,  operate,  sell,  lease or rent such items of
Collateral  pending the sale of all of the Collateral and to collect the
rent, issues and profits  therefrom,  together with such other powers as
may have been  requested  by the  Lender,  and shall  apply the  amounts
received (net of all proper charges and expenses) to the  Obligations as
provided in this Agreement;

(e)     take  any  action  with  respect  to the  offer,  sale,  lease  or other
disposition,  and delivery of the whole of, or from time to time any one
or more items of, the Collateral,  including, without limitation: (i) to
sell,  assign,  lease or otherwise dispose of the whole of, or from time
to time any part of, the Collateral, or offer, commit or agree to do so,
in any  established  market or at any  broker's  board,  private sale or
public  auction or sale (with or without demand on any Loan Party or any
advertisement  or other notice of the time,  place or terms of sale) for
cash,  credit or any other asset or  property,  for  immediate or future
delivery,  and for such consideration and upon such terms and subject to
such  conditions as the Lender in its sole and absolute  discretion  may
determine,  and the Lender may purchase (the consideration for which may
consist  in whole or in part of  cancellation  of  Indebtedness)  or any
other  Person  may  purchase  the whole or any one or more  items of the
Collateral,  and all items  purchased shall be free and clear of any and
all rights,  powers,  privileges,  remedies  and  interests  of the Loan
Parties (whether individual,  joint,  several or otherwise),  which each
Loan Party has expressly waived pursuant to Section 7.08 hereof; (ii) to
postpone  or adjourn any such  auction,  sale or other  disposition,  to
cause  the same to be  postponed  or  adjourned  from  time to time to a
subsequent time and place, or to abandon or cause the abandonment of the
same, all without any  advertisement or other notice thereof;  and (iii)
to carry out any  agreement to sell any item or items of the  Collateral
in  accordance   with  the  terms  and  provisions  of  such  agreement,
notwithstanding  that,  after the Lender shall have entered into such an
agreement, all the Obligations may have been paid and satisfied in full;

(f)     exercise  any  voting,  consent,  enforcement  or  other  right,  power,
privilege,  remedy or interest of any Loan Party  pertaining to any item
of  Collateral  to the same  extent as if the Lender  were the  outright
owner  thereof,  provided  that the  Lender  shall  not be  entitled  to
exercise any of the voting  rights of any Loan Party  pertaining  to any
equity  interest in another Person unless and until the Lender has given
specific written notice to the Loan Parties, apart from the notice first
referred to in this subsection, of the Lender's election to exercise one
or more, or all, such voting rights;

(g)     take possession of and thereafter deal with or use from time to time all
or any part of the  Collateral in all respects as if the Lender were the
outright owner thereof,  which shall include  (without  limitation)  the
right to manufacture,  operate, sell, lease or rent items of Collateral,
as well as to sell parts of the  Collateral  pending  the sale of all of
the Collateral, and to collect the rent, issues and profits therefrom;

(h)     transfer or cause the  transfer of the  ownership  of all or any part of
the  Collateral  to its own name or any designee and have such  transfer
recorded in any  jurisdiction(s)  and  publicized  in any manner  deemed
appropriate by the Lender; and

(i)     in  addition  to,  and not by way of  limitation  of,  any of the rights
specified  above,  exercise  or  enforce  any  and all  rights,  powers,
privileges,  remedies  and  interests  afforded to the Lender under this
Agreement,  the other Loan  Instruments  and any and all  provisions  of
Applicable Law (including,  without  limitation,  the UCC), whether as a
secured  party  or  mortgagee,  whether  in  possession  or  control  of
collateral or otherwise.

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Each Loan Party  acknowledges  and agrees that the term "default" as used in the
UCC includes (without limitation) any Default or Event of Default.

Section 7.08. Certain  Acknowledgments  and Waivers by the Loan Parties.
(a) Each Loan Party acknowledges and agrees that the rights, powers, privileges,
remedies and interests granted to or conferred upon the Lender in respect of any
of the  Collateral by this  Agreement,  the other Loan  Instruments  (in certain
cases) and Applicable Law are purely  discretionary and shall not, and shall not
be deemed or construed to,  impose upon the Lender any duty or other  obligation
(i) to sell, foreclose or otherwise realize upon any of the Collateral,  (ii) to
protect,  preserve,  process,  prepare, repair or improve any of the Collateral,
whether  or  not in the  possession  or  control  of  the  Lender  or any of its
designees, (iii) to perform or satisfy any obligation under or respecting any of
the Collateral or any Loan Party, (iv) to make any representation or warranty or
assume any liability or  obligation in its  liquidation  or  disposition  of any
Collateral,  (v) to mitigate or  otherwise  reduce any damage or other loss,  or
(vi) to otherwise exercise or enforce any such right, power,  privilege,  remedy
or  interest.  Any  sale,  foreclosure  or  other  realization  upon  any of the
Collateral,  or any other  exercise or  enforcement  of any such  right,  power,
privilege,  remedy or  interest,  if  undertaken  by the  Lender in its sole and
absolute  discretion,  may be delayed,  discontinued or otherwise not pursued or
exhausted for any reason whatsoever (whether intentionally or otherwise).

(b) Each Loan Party  acknowledges and agrees that: (i) the Lender may be
unable to effect a public sale of certain of the Collateral by reason of certain
prohibitions  contained in the Securities  Act, and may be otherwise  delayed or
adversely  affected  in  effecting  any sale by  reason  of  present  or  future
restrictions   thereon   imposed   by   governmental    Authorities   ("Affected
Collateral"),  and a ready market may not exist for Affected  Collateral that is
not traded as such on a national  securities  exchange or quoted on an automated
quotation  system;  (ii) as a consequence of such  prohibitions and restrictions
the Lender may be deem it necessary  or  desirable  (A) to resort to one or more
private sales to a restricted  group of purchasers who will be obliged to agree,
among other things,  to acquire Affected  Collateral for their own account,  for
investment and not with a view to the  distribution  or resale  thereof,  (B) to
seek  regulatory  approval of any  proposed  sale or sales,  or (C) to limit the
amount of Affected  Collateral sold to any Person or group:  (iii) private sales
so made may be at prices and upon terms less  favorable to the Loan Parties than
if such Affected  Collateral was sold either at public sales or at private sales
not subject to such restrictions; (iv) the Lender has no obligation to delay the
sale of any Affected  Collateral  for the period of time necessary to permit any
Loan Party or any other  Person to register or  otherwise  qualify them under or
exempt  them from any  applicable  restriction,  even if any Loan Party or other
Person  would  agree to register or  otherwise  qualify or exempt such  Affected
Collateral so as to permit a public sale under the  Securities Act or applicable
state  law;  and  (v)  the  use  of  private  sales  made  under  the  foregoing
circumstances  to  dispose  of  Affected   Collateral  shall  be  deemed  to  be
dispositions in a commercially reasonable manner.

(c) Without  limiting the generality of the  foregoing,  each Loan Party
hereby irrevocably, unconditionally and expressly waives forever (to the fullest
extent  permitted by Applicable  Law) each and every claim or defense,  and each
Loan  Party  agrees  that it  will  not  assert  or  pursue  (by  action,  suit,
counterclaim or otherwise) any claim or defense, respecting, and each Loan Party
acknowledges  and agrees that it would not be commercially  unreasonable for the
Lender to make or effect,  (i) any settlement or compromise  with any obligor or
other  third  party under any Account  Receivable,  account,  note,  instrument,
agreement,   document  or  general   intangible   included  in  the  Collateral,
irrespective  of any reduction in the  potential  proceeds  therefrom,  (ii) the
selection or order of disposition  of any Collateral  (which may be at random or
in any  order(s)  the Lender may  select in its sole and  absolute  discretion),
(iii) any disposition of any Collateral in its then current  condition,  in each
case  without  any  processing,   preparation,   repair,  or  improvement,   any
registration,  qualification  or other approval or change therein,  or any other
beneficial  action  respecting  any  Collateral,  any of which the Lender in its
discretion  may  (but  shall  not be  required  to)  undertake  and  which if so
undertaken may be delayed, discontinued or otherwise not pursued or exhausted by
the  Lender  in  its  discretion  for  any  or  no  reason  whatsoever  (whether
intentionally or otherwise),  (iv) any private sale or other  disposition of any
Collateral in a commercially reasonable manner, whether or not any public market
exists,  or any sale,  redemption  or other  disposition  of any  Collateral  in
accordance with the applicable  Collateral  Acknowledgment,  Custody Document or
Organizational Document, (v) the choice or timing of any disposition date (which
the Lender  may select in its sole and  absolute  discretion),  irrespective  of
whether  greater  proceeds or other  amounts  would be realizable on a different
date, (vi) the choice of whether to sell, lease, license or otherwise dispose of
any Collateral (which the Lender may select in its discretion),  irrespective of
whether  greater  proceeds or other amounts would be realizable  (immediately or
otherwise)  with a  different  form of  disposition,  (vii)  any  sale or  other
disposition  of  Collateral  irrespective  of (A) the amount of the  proceeds or
other  amounts  received,  whether  such amounts are the maximum  possible,  and
whether such amounts are adequate to satisfy the  Obligations,  or (B) any other
term or condition  of any  disposition  of any  Collateral,  including  (without
limitation)  any  disposition  by the  Lender  "as  is" or  with  limited  or no
representations  or warranties from the Lender respecting  title,  infringement,
interference,  merchantability,  fitness  for  a  particular  purpose  or  other
condition,  circumstance  or  event,  (viii)  any 

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sale or other  disposition of Collateral to the first Person to receive an offer
or make a bid,  (ix) the  selection of any  purchaser  or other  acquiror of any
Collateral,  or (x) any action or  inaction  in the event of any  default by any
purchaser or other acquiror of any Collateral. Neither the Lender nor any of its
representatives  shall incur any  liability  in  connection  with any sale of or
other action taken  respecting any Collateral in accordance  with the provisions
of this Agreement, any other Loan Instrument or Applicable Law.

(d) Each Loan Party hereby  unconditionally,  irrevocably  and expressly
waives forever the  applicability of each and every Applicable Law pertaining to
notice  (other  than  notices  required  by this  Agreement  or any  other  Loan
Instrument),  appraisal, valuation, stay, extension,  moratorium,  marshaling of
assets,  exemption and equity of redemption  and similar  provisions  respecting
collateral or its disposition  that are or may be in conflict with the terms and
provisions of this Agreement and the other Loan  Instruments  now or at any time
in the future to the extent waiver is not limited under Applicable Law.

(e)  Notwithstanding  anything  herein to the contrary,  each Loan Party
shall remain liable under each note, instrument, agreement, account, document or
similar  general  intangible of the Loan Party (each a "Pledged  Agreement")  or
other item of  Collateral  to observe  and  perform  all the terms,  provisions,
conditions and obligations to be observed and performed by it thereunder, all in
accordance  with  the  terms  thereof.   Neither  the  Lender  nor  any  of  its
Representatives  shall have any duty,  obligation or liability under any Pledged
Agreement or any other Collateral by reason of or arising out of this Agreement,
the security  interests granted hereunder or the receipt by the Lender or any of
its Affiliates or designees of any payment  relating to any Account  Receivable,
Pledged  Agreement or other item of  Collateral,  nor shall the Lender or any of
its Representatives be obligated in any manner to perform any of the obligations
of any  Loan  Party  or  any  other  party  under  or  pursuant  to any  Account
Receivable,  Pledged Agreement or other item of Collateral, to make any payment,
to make any inquiry as to the nature or the sufficiency of any payment  received
by it or as to the sufficiency of any performance by any party under any Account
Receivable,  Pledged  Agreement or other item of Collateral,  to present or file
any claim,  to take any  action to enforce  any  performance  or to collect  the
payment of any amounts  which may have been assigned to it or to which it may be
entitled at any time or times.

Section 7.09. Application of Proceeds;  Liability for Deficiencies.  (a)
The Lender  shall  collect  the cash  proceeds  received  from any sale or other
disposition of Collateral,  and, after deducting all costs and expenses incurred
by the Lender and any Person designated by the Lender to take any of the actions
enumerated  in this  Article or under  Applicable  Law in  connection  with such
collection and sale or disposition (including attorneys' disbursements, expenses
and fees),  the Lender  shall  apply the same in  accordance  with the terms and
provisions  of this  Agreement  unless the Lender  shall  elect (in its sole and
absolute discretion) to retain the same as additional or substitute  Collateral.
In the event any funds remain  after  satisfaction  in full of the  Obligations,
then the remainder shall be returned to each Loan Party,  subject,  however,  to
any other  rights or  interests  the  Lender  may have  therein  under any other
instrument, agreement or document or Applicable Law.

(b) If the  amount  of all  proceeds  received  with  respect  to and in
liquidation  of  the  Collateral  that  shall  be  applied  to  payment  of  the
Obligations  shall be  insufficient to pay and satisfy all of the Obligations in
full,  each Loan Party  acknowledges  and agrees that it shall remain liable for
any deficiency (i.e., any Obligations remaining unpaid),  together with interest
thereon and costs of collection  thereof  (including  attorneys'  disbursements,
expenses  and  fees),  in  accordance  with the  terms  and  provisions  of this
Agreement and the other Loan Instruments.

Section  7.10.  Partial  Releases.  The  Lender  from time to time shall
release portions of the Collateral from the liens and security interests granted
under this Agreement and the other Loan Instruments qualifying for release under
(and subject to the terms and  conditions  of)  subsection  [(a) or (b)] of this
Section,  shall  execute and deliver the  documentation  reasonably  required to
effect each such release (in such form and substance as may be acceptable to the
Lender),  all upon the terms and provisions and subject to the conditions of the
subsections  of this  Section,  in each case  subject to receipt of evidence and
documentation in such form and substance as may be acceptable to the Lender that
those terms and  conditions  have been  satisfied;  provided  that no Default or
Event of Default then exists or could result therefrom  (whether through any Pro
Forma Effect or otherwise),  unless,  after giving effect to the consummation of
the  transaction  for which the release was requested and the application of the
net cash proceeds thereof, if any, toward the prepayment of the Obligations, the
default or other  event shall  cease to exist.  Any and all  actions  under this
Section  shall be without any recourse to or  representation  or warranty by the
Lender and shall be at the sole cost and expense of the Loan Parties.

(a) In the  event  of any sale or other  disposition  of any  Collateral
expressly  permitted under Section 7.03(a) hereof or any other term or provision
of this  Agreement  or any other Loan  Instrument,  the Lender will release that
item,  subject to receipt by the Lender of any  payment or  prepayment  from any
Loan Party required by this Agreement or any other Loan Instrument.

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(b) In the  event  any  debtor  under any  indenture,  agreement,  note,
instrument  or  account  receivable  pledged  to the  Lender  pursuant  to  this
Agreement  shall have paid all  amounts  due  thereunder  in full and shall have
complied with all other terms and  conditions  thereof,  the Lender will release
that item and if requested return the applicable instruments and other documents
to the applicable  Loan Party or its designee,  subject to receipt by the Lender
of any payment or prepayment from the Loan Parties required by this Agreement or
any other Loan Instrument.

Section 7.11. Termination of Security Interests.  The security interests
granted to the Lender  hereunder  shall  terminate when the Line of Credit shall
have been fully  extinguished and the Obligations shall have been fully paid and
satisfied.  Upon such complete  extinguishment,  payment and  satisfaction:  the
Lender shall reassign, release and/or deliver to the Loan Parties all Collateral
then held by or at the direction of the Lender under the Loan Instruments;  and,
if requested by the Loan  Parties,  the Lender shall  execute and deliver to the
Loan  Parties  for  filing  in each  office in which  any  financing  statement,
mortgage,  or lease, or assignment thereof,  relating to the Collateral,  or any
part thereof, shall have been filed, a termination statement under the UCC or an
appropriate  satisfaction,  release,  reconveyance or reassignment releasing the
Lender's  interest  therein,  and any other instrument or document that the Loan
Parties deem  reasonably  necessary to evidence the  termination of the Lender's
security  interest,  each in such form and substance as may be acceptable to the
Lender.  Any and all actions under this Section shall be without any recourse to
or  representation  or  warranty by the Lender and shall be at the sole cost and
expense of the Loan Parties.

ARTICLE VIII.

DEFAULTS AND REMEDIES

Section  8.01.  Events of Default.  Each of the  following  events shall
constitute  a  default  under  this  Agreement  (each an  "Event  of  Default"):

(a)     any representation,  warranty,  acknowledgement or certification made in
this  Agreement  or any other Loan  Instrument  shall prove to have been
false or misleading in any material  respect when made (or deemed made);
or any report,  statement,  certificate,  schedule or other  document or
information furnished (whether prior to, on or after the Effective Date)
in connection  with this Agreement or any of the other Loan  Instruments
shall prove to have been false or  misleading  in any  material  respect
when furnished (or deemed furnished);

(b)     any default,  whether in whole or in part, shall occur in the payment of
the  principal of, the interest on or any other amount  respecting:  (i)
the Loans or any of the other  Obligations;  (ii) any other Indebtedness
of any Loan Party or any Surety to the Lender or any of its  Affiliates;
or (iii) any guaranty or other Credit Support from any Loan Party or any
Surety  to  the  Lender  or  any  of  its   Affiliates   respecting  any
Indebtedness of any other Person;

(c)     any default,  whether in whole or in part, shall occur in the payment or
satisfaction  of any  amount  required  under  Section  2.06(h)  of this
Agreement,  and such default shall continue (after the earlier of notice
thereof to or knowledge thereof by any Loan Party) for a period of three
(3) Business Days;

(d)     any  default,  whether  in  whole  or in  part,  shall  occur in the due
observance  or  performance  of any  covenant,  term or  provision to be
performed  under Article VI of this Agreement  (other than under Section
6.10 or 6.11 hereof) or the Confidentiality  Agreement, and such default
shall  continue  after the  earlier of notice  thereof  to or  knowledge
thereof by any Loan Party;

(e)     any  default,  whether  in  whole  or in  part,  shall  occur in the due
observance or performance of any other covenant, term or provision to be
performed under this Agreement and the other Loan Instruments, any Stock
Purchase  Document or any ESOP Related  Document by any Loan Party,  any
Surety or any other party thereto (other than the Lender), which default
is not  described  in any other  subsection  of this  Section,  and such
default  shall  continue for a period of ten (10) days after the earlier
of notice  thereof to or knowledge  thereof by the  Borrower;  provided,
however,  that if such  default  is  capable  of being  cured and if the
Borrower,  any Surety or such other party shall have  commenced  to cure
such default within such period and shall proceed  continuously  in good
faith and with due  diligence  to cure such  default,  then such  period
instead shall be thirty (30) days;

(f)     any Event of Default, whether in whole or in part, shall occur under the
Term Loan Agreement;

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(g)     any payment default shall occur and continue beyond any applicable grace
period under any instrument or agreement  (other than a Loan Instrument)
respecting  any  Indebtedness  of any Loan  Party or any  Surety  or any
Indebtedness  of any other  Person  covered (in whole or in part) by any
guaranty or other Credit  Support from any Loan Party or any Surety;  or
any  default,  whether  in  whole  or in  part,  shall  occur in the due
observance or  performance of any term or provision of any instrument or
agreement (other than a Loan Instrument)  respecting any Indebtedness of
any Loan Party or any Surety,  or any guaranty or other  Credit  Support
from any Loan Party or any Surety  respecting any  Indebtedness or other
obligations of any other Person, that shall cause or permit acceleration
of any  such  Indebtedness  or  demand  for  payment  or any  additional
interest or other amount under any such  Indebtedness or Credit Support,
which default is not described in any other  subsection of this Section,
unless  payment  shall be made or action  shall be taken within five (5)
Business  Days after such default in an amount or manner  sufficient  to
cure it and the  Lender  receives  confirmation  of such  cure  from the
lender  thereunder,  provided  that such payment or -------- ---- action
will not result in a breach of any term or provision  of this  Agreement
and the other Loan Instruments;

(h)     any Loan  Party  or any  Surety  shall  (i) fail  to,  be  unable  to or
otherwise  not generally pay its debts as they become due, (ii) conceal,
remove or transfer  any of its assets and  properties  in  violation  or
evasion of any bankruptcy,  fraudulent  conveyance or similar Applicable
Law,  (iii) make an assignment  for the benefit of its  creditors,  (iv)
petition  or apply for or  consent  to the  appointment  of a  receiver,
trustee,  assignee,  custodian,  sequestrator,   liquidator  or  similar
official for itself or any of its assets and properties,  (v) commence a
voluntary  case for relief as a debtor under any  Bankruptcy  Law,  (vi)
file  with  or  otherwise  submit  to  any  governmental  Authority  any
petition,  answer or other document seeking (A)  reorganization,  (B) an
arrangement with creditors or (C) to take advantage of any other present
or  future   Applicable  Law  respecting   bankruptcy,   reorganization,
insolvency,  readjustment  of debts,  relief of debtors,  dissolution or
liquidation, (vii) file or otherwise submit any answer or other document
admitting or failing to contest the material  allegations  of a petition
or  other  document  filed  or  otherwise  submitted  against  it in any
proceeding  under  any such  Applicable  Law,  (viii) be  adjudicated  a
bankrupt  or  insolvent,  or (ix) take any  action  for the  purpose  of
effecting any of the foregoing;

(i)     any petition shall be filed or case, proceeding or other action shall be
commenced  against  any Loan  Party or any  Surety  for the  purpose  of
effecting, or an order, judgment or decree shall be entered by any court
of  competent  jurisdiction  approving  (in whole or in part),  anything
specified in subsection (h) of this Section,  or any receiver,  trustee,
assignee, custodian, sequestrator, liquidator or other official shall be
appointed  with  respect  to any Loan Party or any  Surety,  or shall be
appointed to take or shall  otherwise  acquire  possession or control of
all or a substantial part of the assets and properties of any Loan Party
or any Surety, and any of the foregoing involuntary actions shall not be
vigorously  contested  in good  faith by such  party and shall  continue
unstayed and in effect for any period of 30 days;

(j)     one or more  final  judgments  for the  payment of money in excess of an
aggregate  of $10,000  shall be  rendered  against any Loan Party or any
Surety  (other  than fully  insured  losses)  and the same shall  remain
undischarged  for a period of 30 days  during  which levy and  execution
shall not be effectively stayed or contested in good faith;

(k)     any ERISA  Event shall  occur,  or any action,  suit,  investigation  or
proceeding  involving or affecting  any Plan or any assets or properties
of any Plan shall be adversely determined;  any fiduciary or sponsor of,
or  participant  in, any Plan  shall  take or commit any of the  actions
specified  in  subsection  (h) of this Section in respect of the Plan or
all or  substantially  all of its assets and properties;  or any action,
suit or proceeding shall otherwise be commenced  against any Plan or any
of  its  fiduciaries,  sponsors  or  participants  for  the  purpose  of
effecting,  or any  order,  judgment  or decree  shall be entered by any
court  of  competent  jurisdiction  approving  (in  whole  or in  part),
anything  specified in subsection  (h) of this Section in respect of any
Plan or all or  substantially  all of its assets and properties,  or any
receiver,  trustee,  assignor,  custodian,  sequestrator,  liquidator or
other  official  shall be appointed with respect to any Plan or all or a
substantial part of its assets and properties,  or shall be appointed to
take or  shall  otherwise  acquire  possession  or  control  of all or a
substantial  part of the assets and  properties of any Plan,  and any of
the foregoing shall continue unstayed and in effect for any period of 30
days;

(l)     any   seizure,   levy,   attachment,   distraint,   loss,   destruction,
termination,   foreclosure   or  other   material   loss,   destruction,
termination,  foreclosure or other material impairment, deterioration or
diminution,  in whole or in part, shall occur with respect to all or any
part of (i) the  Collateral  or any  collateral  granted  by any  Surety
(other than fully insured casualty losses to the extent the Lender has a
perfected first priority  security interest in and actually receives all
insurance  proceeds with respect  thereto to the extent required by this
Agreement  and  the  other  Loan  Instruments),  or  (ii)  the  Lender's
perfected  security  

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interest therein, or any Loan Party or any Surety shall do or fail to do
or resist,  or cause,  suffer or permit anyone else to do, anything that
would so affect any such collateral or security interest;

(m)     any Loan Instrument (in whole or in part) at any time and for any reason
whatsoever (i) shall cease to be in full force and effect, (ii) shall be
declared null and void, (iii) shall be contested or otherwise challenged
as to its validity or  enforceability by any Loan Party or any Surety or
(iv) shall be the  subject of any denial by any Loan Party or any Surety
of any liability or obligation of such party thereunder;

(n)     any Loan  Party or any  Surety  shall be or become  the  subject of or a
party to any criminal indictment or conviction;

(o)     a change  shall  occur in the  identity  or control of the ESOP  Trustee
unless replaced by an institutional trustee that (i) is not an Affiliate
of the  Borrower or the Lender and (ii) has been  approved in advance of
such  change  in  writing  by the  Lender,  which  approval  will not be
withheld unreasonably;

(p)     any  Loan  Party  or any of its  subsidiaries  shall  cease  to be or be
qualified to be a subchapter "S" corporation under the Tax Code;

(q)     the failure of Holdings to issue  1,000,000  shares of its capital stock
to the ESOP Trust  immediately  after the closing of the sale of the SPG
Stock under the Stock Purchase Agreement,  or the failure of Holdings to
redeem  (immediately  after  its  delivery  of the Term  Notes  and such
issuance to the ESOP Trust) its  capital  stock from its  shareholder(s)
other than the ESOP Trust;

(r)     any  Person  shall be or become a record  holder  of any of the  capital
stock  issued by the  Borrower  other than (i) the ESOP Trust,  (ii) the
employees of the Borrower or Holdings as expressly  permitted  under the
ESOP Plan,  (iii) the employees of the Borrower or Holdings  pursuant to
the exercise of any Permitted  Option in accordance  with its terms,  or
(iv) the holder(s) of the Holdings Warrant;

(s)     any Person other than Holdings shall be or become a record or beneficial
owner of any capital stock issued by the Borrower or any other Guarantor
(other  than  Holdings),  or a change  shall occur in the control of any
Surety, whether by a change in ownership or otherwise;

(t)     if either of Tom Hunter or John Hawkins shall cease to actively function
and  continue  in their  current  positions  with any Loan Party  unless
replaced  within 30 days  thereof by a Person  approved by the Lender in
writing, which approval shall not be unreasonably withheld; or

(u)     there  shall  occur  any event or events  that  (individually  or in the
aggregate  with any other  event(s))  could  have or has had a  Material
Adverse Effect or Surety's  Adverse Effect,  as determined by the Lender
in the exercise of its  reasonable  judgment,  and the Lender shall have
given the Loan Parties notice of such determination.

Section 8.02. Remedies upon Default.  Upon the occurrence or at any time
thereafter  during the  continuance  of any Event of Default,  the Lender,  upon
notice to the Loan Parties,  shall be entitled,  without limiting its ability to
do so at other times (each Loan Party  hereby  acknowledging  that all Letter of
Credit Advances and interest  thereon and certain other  Obligations are payable
on demand as  provided  in Article II hereof  notwithstanding  anything  in this
Section  or in  Section  8.01 to the  contrary):  (a) to  terminate  the Line of
Credit; (b) to declare the Loans and all other Obligations to be immediately due
and payable,  whether  principal,  interest or otherwise,  without  presentment,
demand,  protest or other notice of any kind, all of which are hereby  expressly
waived by each Loan Party, notwithstanding anything contained in this Agreement,
any Note or any of the other Loan  Instruments to the contrary;  (c) to exercise
or enforce any one or more of the Lender's rights, powers, privileges,  remedies
and interests  under this  Agreement,  each Note,  the Guaranty,  the other Loan
Instruments and Applicable  Law; and (d) to demand the immediate  deposit by the
Borrower of cash  Collateral in a non-interest  bearing  demand deposit  account
with the Lender or such other  institution  as the  Lender may  designate  in an
amount equal to the aggregate  unadvanced  face amounts of the Letters of Credit
then  outstanding in order to further  secure  repayment of all Letter of Credit
Advances,  together with interest  thereon,  and all of the other Obligations in
full,  which  deposits shall remain  Collateral  until the all of the Letters of
Credit have been paid (and the corresponding  Letter of Credit Advance repaid by
the  Borrower)  or  have  been  surrendered  to the  Lender  for  return  to and
cancellation by the issuers thereof (provided that any Letter of Credit that has
not been  presented  for payment  shall be deemed for this  purpose to have been
canceled on the  forty-fifth  day  following  the stated  expiry date,  without,
however,  relieving the Borrower of any of the  Obligations  with respect to any
such Letter of Credit  that is in the  process of payment)  and all of the other
Obligations have been fully paid and satisfied,  and which obligation to deposit
is itself  secured by the  Collateral  pursuant to this  Agreement and the other
Loan Instruments;  provided, however, that in the event of the occurrence of any
of the 

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Events of Default  respecting  each Loan Party set forth in subsections  (h) and
(i) of Section  8.01,  then  simultaneously  with that  event,  and  without the
necessity of any notice or other action by the Lender,  the Line of Credit shall
be  automatically  extinguished  and the Loans and all of the other  Obligations
shall be accelerated and immediately due and payable as stated above.

Section  8.03.  Enforcement,  Etc. The Lender,  in its sole and absolute
discretion,  may proceed to exercise  or enforce  any right,  power,  privilege,
remedy or interest that the Lender may have under this Agreement, any other Loan
Instrument  or  Applicable  Law:  (a) at law, in equity,  in rem or in any other
forum  available  under  Applicable  Law; (b) without notice except as otherwise
expressly  provided  herein;  (c)  without  pursuing,  exhausting  or  otherwise
exercising or enforcing any other right,  power,  privilege,  remedy or interest
that  the  Lender  may  have  against  or in  respect  of any  Loan  Party,  the
Collateral,  any Surety, or any other co-obligor,  guarantor,  surety,  pledgor,
collateral  or other  Person  or  thing;  and (d)  without  regard to any act or
omission of the Lender or any other Person. The Lender may institute one or more
proceedings  (which may be separate  proceedings) with respect to this Agreement
and each of the other  Loan  Instruments  in such order and at such times as the
Lender may elect in its sole and absolute  discretion.  This  Agreement  and the
other Loan  Instruments  may be enforced  without  possession of any Note or its
production in any action, suit or proceeding.  This Agreement and the other Loan
Instruments  may be enforced with respect to any Loan Party without the presence
or participation of any Surety or any co-obligor (joint or several),  guarantor,
pledgor or surety,  whether  through lack of  jurisdiction,  venue or service or
otherwise,  and no Loan Party will raise,  and each Loan Party hereby  expressly
waives,  any objection or defense  respecting  the need for any such presence or
participation.

Section 8.04.  Equitable Relief. Each Loan Party acknowledges and agrees
that it may be  impossible  to  measure in money the damage to the Lender in the
event of a breach  of or  default  under  any of the  terms  and  provisions  of
Sections 6.04,  6.05,  6.07,  6.08,  6.11, 6.12, 7.03, 7.05, and 7.07(a) of this
Agreement,  and that, in the event of any such breach or default, the Lender, in
addition to all other rights, powers,  privileges and remedies that it may have,
shall be entitled  to  injunctive  relief,  specific  performance  or such other
equitable relief as the Lender may request to exercise or otherwise  enforce any
of the terms  and  provisions  of those  Sections  and to  enjoin  or  otherwise
restrain  any act  prohibited  thereby,  and no Loan Party will raise and hereby
expressly  waives any  objection  or defense  that there is an  adequate  remedy
available at law.

Section  8.05.  Reinstatement.  In  the  event  any  payment  of or  any
application of any amount,  asset or property to any of the Obligations,  or any
part thereof, at any time is rescinded or must otherwise be restored or returned
by the Lender upon the  insolvency,  bankruptcy  or  reorganization  of any Loan
Party,  any Surety or any other  Person,  whether by order of any court,  by any
settlement approved by any court, or otherwise, then the terms and provisions of
this Agreement  shall  continue to apply,  or shall be reinstated if not then in
effect,  as the case may be,  with  respect  to the  Obligations  so  rescinded,
restored or returned,  all as though such payment or application  had never been
made.

Section 8.06.  Waivers of Notice,  Etc. Except for any written notice or
demand  expressly  required  under this  Agreement or any other Loan  Instrument
under the circumstances,  each Loan Party hereby expressly waives: (a) notice of
acceptance  of this  Agreement or any other Loan  Instrument;  (b) notice of any
action  taken or omitted in reliance  hereon;  (c)  presentment;  (d) demand for
payment; (e) protest or notice of protest; (f) notice of any nonpayment or other
event that constitutes,  or with or without the giving or receipt of notice, the
acquisition  of  knowledge or the passage of time (or any  combination  thereof)
would constitute,  any nonpayment,  nonperformance,  misrepresentation  or other
breach or default under this Agreement or any other Loan Instrument;  (g) notice
of any material and adverse  effect,  whether  individually or in the aggregate,
upon (i) the assets, business, operations, properties or condition (financial or
otherwise) of any Loan Party,  any Surety or any other Person,  (ii) the ability
of any of them to pay or  otherwise  satisfy  (as and  when  due)  any of  their
respective  obligations  under  any  of  the  Loan  Instruments,  or  (iii)  any
collateral securing the obligations of any of them under the Loan Instruments or
its  value  or the  validity,  enforceability,  perfection  or  priority  of any
security  interest  of the Lender  therein;  or (h) any other  proof,  notice or
demand of any kind  whatsoever  with respect to any or all of the Obligations or
Surety's  Obligations  or  promptness  in making any claim or demand  under this
Agreement  or any  other  Loan  Instrument.  No act or  omission  of any kind in
connection with any of the foregoing shall in any way impair or otherwise affect
the  legality,  validity,  binding  effect  or  enforceability  of any  term  or
provision  of  this  Agreement  or  any  other  Loan  Instrument  or  any of the
Obligations or Surety's Obligations.

Section 8.07. Consent to Jurisdiction,  Waiver of Personal Service, Etc.
Each Loan Party hereby  consents and agrees that the Supreme  Court of the State
of New York for the County of Westchester  and the United States  District Court
for the Southern  District of New York  (Westchester  Division)  each shall have
personal  jurisdiction  and proper venue with respect to any dispute between the
Lender and the Loan Party under any Loan Instrument; provided that the foregoing
consent  shall not  deprive  the  Lender  of the right in its sole and  absolute
discretion  to  voluntarily  commence  or  participate  in any  action,  suit or
proceeding in any other court 

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having  jurisdiction  and venue over any Loan  Party.  In any  dispute  with the
Lender,  no Loan Party will raise, and each Loan Party hereby expressly  waives,
any  objection or defense to any such  jurisdiction  as an  inconvenient  forum.
Without in any way limiting the preceding  consents to  jurisdiction  and venue,
the  parties  agree to submit  to the  jurisdiction  of such New York  courts in
accordance  with Section 5-1402 of the General  Obligations  Law of the State of
New York or any corresponding or succeeding  provisions thereof. Each Loan Party
hereby  expressly  waives  personal  service of any summons,  complaint or other
process,  which may be delivered by any of the means permitted for notices under
Section  9.01  hereof.  In  addition  to (and  without  limitation  of) any such
delivery or any other delivery  permitted under  Applicable Law, each Loan Party
agrees to execute an deliver to the Lender a  Designation  of Agent for  Service
appointing CT  CORPORATION  SYSTEM as the agent of the Loan Party for service in
the State of New York,  which the Loan Party hereby  irrevocably  authorizes the
Lender  to date  with  such  date (if  undated)  and file  with the  appropriate
Authority  at such time as the Lender in its sole and  absolute  discretion  may
elect. Within thirty (30) days after service of process,  each Loan Party agrees
to appear or answer any summons or complaint of the Lender, and should that Loan
Party fail to appear or answer within said  thirty-day  period,  that Loan Party
shall be deemed in default  under that action and  judgment  may be requested by
the Lender and  entered in favor of the Lender  against  that Loan Party for the
relief  demanded in any complaint so served.  Each Loan Party  acknowledges  and
agrees that a final  judgment in any such action,  suit or  proceeding  shall be
conclusive  and binding  upon that Loan Party and may be enforced  against  that
Loan  Party  or  any of its  assets  or  properties  in  any  other  appropriate
jurisdiction  selected by the Lender (in its sole and absolute discretion) by an
action, suit or proceeding in such other  jurisdiction.  To the extent that that
Loan Party may be  entitled to immunity  (whether  by reason of  sovereignty  or
otherwise) from suit in any jurisdiction,  from the jurisdiction of any court or
from any other legal  process,  each Loan Party hereby  irrevocably  waives such
immunity.

Section  8.08.  Waiver of Setoff,  Special  Damages,  Etc. (a) Each Loan
Party hereby expressly waives, and agrees that it will not exercise, any and all
rights  of  setoff,  recoupment,  abatement  or  reduction  or other  claims  or
counterclaims respecting any payment due (whether as scheduled or required, upon
acceleration or as sought in any action, suit or proceeding by the Lender) under
this Agreement,  any other Loan Instrument,  any Stock Purchase Document` or any
other  agreement,  facility  or  relationship  with the  Lender  that may now or
hereafter be accorded to the Loan Party under  Applicable  Law or otherwise.  To
the extent not  required as a  compulsory  counterclaim  in any related  ongoing
proceeding,  each Loan Party (i) shall pursue separate  exercise and enforcement
of any right, power, privilege,  remedy or interest retained (and not waived) by
the Loan Party  under this  Agreement,  the other  Loan  Instruments,  any other
agreement, facility or relationship with the Lender and Applicable Law, and (ii)
shall not seek to exercise or enforce any such right, power,  privilege,  remedy
or interest in any  proceeding  instituted  by the Lender under or in respect of
any Loan Instrument, whether through joinder, consolidation, setoff, recoupment,
abatement, reduction, counterclaim, defense or otherwise.

(b) In any dispute with the Lender, each Loan Party covenants and agrees
that it will not  seek,  recover  or retain  any,  and each  Loan  Party  hereby
expressly waives any and all,  special,  exemplary,  punitive,  statutory and/or
consequential  damages (whether through action, suit,  counterclaim or otherwise
and whether in contract,  tort,  strict  liability or  otherwise)  to the extent
waiver is not limited under Applicable Law.

Section 8.09. Relationship of the Borrower and the Lender, Etc. (a) Each
Loan Party represents, warrants, acknowledges and agrees that: (i) the Lender is
acting solely in the capacity of lender  respecting  this  Agreement,  the other
Loan  Instruments,  and the Collateral;  (ii) the sole relationship of each Loan
Party with the Lender is that of debtor and creditor,  respectively, and no term
or  provision  of this  Agreement  or any other Loan  Instrument  is intended to
create,  nor shall any such term or  provision  be deemed or  construed  to have
created,  any joint venture,  partnership,  trust,  agency or other fiduciary or
advisory  relationship with any Loan Party, any of its subsidiaries,  any Surety
or any of their respective  Affiliates;  (iii) Each Loan Party is experienced in
the ownership, operation and financing of its current and contemplated business,
assets and  properties;  (iv) Each Loan Party and each Surety has  independently
and  fully  reviewed  and  evaluated  the  Loan  Instruments,  the  transactions
contemplated  thereunder and the potential  effects of such  transactions on the
assets, business, operations,  properties and condition (financial or otherwise)
of each of the Loan  Parties and the  subsidiaries  and  Affiliates  of any Loan
Party (if any),  which review and  evaluation was made together with counsel and
(to the extent deemed prudent by the Loan Party) financial and other advisors to
each Loan Party and each  Surety;  and (v) neither  Loan Party nor any Surety is
relying  upon (A) the  expertise,  business  acumen or  advice of the  Lender in
connection  with any aspect of the  ownership,  operation  or  financing  of its
business, assets or properties or its condition (financial or otherwise), or (B)
any oral or written  advice,  analysis or assurance of any kind  whatsoever from
the Lender.

(b) Each  Loan  Party  acknowledges  and  agrees  that the  Lender,  its
Affiliates  and its  representatives  may be providing  debt  financing,  equity
capital or other services (including merchandising, research, financial advisory
or other  services)  to other  companies or persons in respect of which the Loan
Party or a Surety may have  conflicting  interests  regarding  the  transactions
described  herein and  otherwise.  Neither the 

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Lender  nor  any  of its  Affiliates  will  use or  disclose  to  third  parties
confidential information obtained from any Loan Party or any Surety by virtue of
the transactions contemplated by the Loan Instruments or its other relationships
with any Loan Party in  connection  with the  performance  by it of services for
other  companies  or persons,  and neither the Lender nor any of its  Affiliates
will furnish any such information to other companies or persons. Each Loan Party
also  acknowledges  and agrees that neither the Lender nor any of its Affiliates
or representatives has any obligation to use in connection with the transactions
contemplated by any Loan  Instrument,  or to advise any Loan Party or any Surety
of, or  furnish  to any Loan  Party or any  Surety,  any  confidential  or other
information obtained by the Lender or any of their Affiliates or representatives
from or with respect to other transactions, companies or persons.

(c) By accepting  or approving  any  certificate,  statement,  report or
other document or information  required to be given to the Lender  (whether as a
required  notice  or  report,  for  approval  or  otherwise),   or  any  alleged
performance of anything  required to be observed,  performed or fulfilled by any
Loan  Party  or any  Surety,  pursuant  to this  Agreement  and the  other  Loan
Instruments,  neither the Lender nor any of its  Representatives  shall have, or
shall be deemed or construed to have, made any  representation or warranty to or
agreement with any Loan Party or any Surety with respect  thereto (other than as
expressly   provided  therein)  or  affirmed  the  sufficiency,   the  legality,
enforceability, effectiveness or financial impact or other effect thereof.

Section 8.10.  Lender's  Right of Setoff,  Etc. Upon the  occurrence and
during the continuance of any Event of Default,  the Lender hereby is authorized
at any time and from time to time,  without  notice to any Loan  Party (any such
notice being hereby expressly waived by each Loan Party),  to set off and apply,
directly  or  through  any  of  its  Affiliates,  custodians,  participants  and
designees,  any and all deposits  (whether  general or special,  time or demand,
provisional or final, or individual or joint) and other assets and properties at
any time held in the possession,  custody or control of the Lender or any of its
Affiliates,  custodians,  participants  and designees,  and any  Indebtedness or
other amount or obligation (including,  without limitation, any obligation under
any interest rate protection,  foreign currency exchange, or other interest rate
or exchange rate swap or hedging  agreement or arrangement) at any time owing by
the  Lender or any of its  Affiliates  or  participants,  to or for the  credit,
account or benefit of any Loan Party against any and all of the  Obligations now
or  hereafter  existing  under this  Agreement  or the other  Loan  Instruments,
whether  or not the  Lender  shall have  declared  a  default,  accelerated  the
obligations or made any demand or taken any other action under this Agreement or
any other Loan  Instrument,  and although such  obligations may be contingent or
unmatured.  Each Loan Party acknowledges that pursuant to Section 7.01 hereof it
granted to the Lender a senior security  interest in and to, among other things,
all such deposits, assets, properties and Indebtedness in the possession of each
of the Affiliates,  custodians,  participants  and designees of the Lender,  and
each Loan Party hereby  authorizes each such Person to so set off and apply such
amounts at such times and in such  manner as the Lender may direct  pursuant  to
this  Section,  in each case to the  fullest  extent  possible  as if the Person
making the setoff were a direct creditor of the Loan Party in the full amount of
the Obligations.  The Lender shall notify the Loan Parties after any such setoff
and application;  provided,  however, that the failure to give such notice shall
not affect the  validity of such setoff and  application.  In debiting  any such
account, the Obligations shall be deemed to have been paid or repaid only to the
extent of the funds  actually  available  in that  account  notwithstanding  any
internal  procedure  of  the  Lender  or  any  of  its  Affiliates,  custodians,
participants and designees to the contrary.  The rights of the Lender under this
Section are in addition to and without  limitation of any other rights,  powers,
privileges,  remedies and other interests (including,  without limitation, other
rights of setoff  and  security  interests)  that the Lender may have under this
Agreement, the other Loan Instruments and Applicable Law.

Section  8.11.  Reliance.  The Lender shall be entitled to rely upon any
notice, consent, certificate,  affidavit, statement, paper, document, writing or
other communication  (which to the extent permitted hereunder may be by telecopy
or telephone)  reasonably  believed by the Lender to be genuine and to have been
signed,  sent or made by the proper  Person or persons,  and upon  opinions  and
advice of legal counsel  (including  counsel for the Loan Parties),  independent
public accountants and other experts selected by the Lender. The Lender shall be
entitled  to rely,  and in  entering  into this  Agreement  and the  other  Loan
Instruments in fact has relied, upon the  representations,  warranties and other
information  respecting  each  Loan  Party  and each  Surety  contained  in this
Agreement  and the other Loan  Instruments  notwithstanding  any  investigation,
analysis or evaluation  that may have been made or from time to time may be made
by the  Lender  or its  designees  of all or any part of the  assets,  business,
operations,  properties or condition (financial or otherwise) of any Loan Party,
any Surety or any other Person.

Section  8.12.  Exculpation  and  Indemnification.  The  Lender  and its
participants,  Affiliates  and  designees,  and their  respective  shareholders,
partners,  members,  directors,  officers,  managers,  employees,  attorneys and
agents  (together with the Lender,  each an  "indemnitee"),  shall not incur any
liability for any acts or omissions (and each Loan Party hereby expressly waives
any and all  related  claims and  actions  against  each  indemnitee),  and each
indemnitee shall be indemnified,  reimbursed and held harmless by any Loan Party
on demand,  and (at the  request of the  Lender)  defended at the expense of any
Loan Party with  counsel  selected by 

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the  Lender,  from and  against  any and all  claims,  liabilities,  losses  and
expenses (including, without limitation, the disbursements, expenses and fees of
their respective  attorneys) that may be imposed upon,  incurred by, or asserted
against  any  indemnitee,  in each case  arising  out of or related  directly or
indirectly to this Agreement, any other Loan Instrument,  any of the Collateral,
any of the  Loans or  Letters  of  Credit  or the  application  of any  proceeds
thereof, any ERISA violation or claim, or any Environmental Claim, except to the
extent  occasioned by the  indemnitee's  own acts or omissions  breaching a duty
owed to any Loan Party and amounting to gross  negligence or willful  misconduct
as finally  determined  pursuant to Applicable Law by a  governmental  Authority
having  jurisdiction.  The preceding general  exculpation and indemnification is
not  intended  (and  shall not be deemed or  construed)  to in any way  qualify,
condition, diminish, restrict, limit or otherwise affect any (and is in addition
to each) other release, waiver, consent, acknowledgment, agreement or other term
or provision of this Agreement or any other Loan Instrument.

Section 8.13. Sole Discretion of the Lender.  Wherever  pursuant to this
Agreement  (a)  the  Lender  exercises  any  right  given  to it to  approve  or
disapprove,  (b) any arrangement or term is to be satisfactory to the Lender, or
(c) any  other  decision  or  determination  is to be made  by the  Lender,  the
decision of the Lender to approve,  disapprove or make such determination  shall
be in the sole and absolute discretion of the Lender, except as may be otherwise
expressly and specifically provided in this Agreement.

ARTICLE IX.

MISCELLANEOUS

Section 9.01. Notices, Etc. Except as otherwise expressly provided,  any
notice, request, demand or other communication permitted or required to be given
under this Agreement or any other Loan Instrument shall be in writing,  shall be
signed by the party  giving it, shall be sent by one of the  following  means to
the  addressee  at the  address  set forth in Exhibit C hereto (or at such other
address as shall be  designated  hereunder  by notice to the other  parties  and
persons  receiving  copies,  effective upon actual  receipt) and shall be deemed
conclusively to have been given: (i) on the first Business Day following the day
timely  deposited for next Business Day delivery with Federal  Express (or other
equivalent  national  overnight  courier)  or  United  States  Express  Mail for
overnight delivery, in either case designated for next Business Day delivery and
with the cost of such delivery prepaid or for the account of the sender; (ii) on
the fifth  Business Day  following  the day duly sent by certified or registered
United States mail, postage prepaid and return receipt requested;  or (iii) when
otherwise  actually  received by the addressee on a Business Day (or on the next
Business  Day if  received  after the close of normal  business  hours or on any
non-Business  Day).  If a  certificate,  signed  notice or other  signed item is
expressly  required by another  provision  of this  Agreement  or any other Loan
Instrument, a manually signed original must be delivered by the party giving it;
any other notice,  request, demand or other communication instead may be sent by
telecopy,  with the  cost of  transmission  prepaid  or for the  account  of the
sender, and shall (except as otherwise  specified in this Agreement or any other
Loan Instrument) be deemed conclusively to have been given on the first Business
Day following the day duly sent. Refusal to accept delivery of any item shall be
deemed to be receipt of such item by the  refusing  party.  Copies of notices to
persons  specified  in  Exhibit  C  hereto  (if  any)  may be  sent  by  regular
first-class mail, postage prepaid, to such persons,  but any failure or delay in
sending copies shall not affect the validity of any such notice, request, demand
or other communication so given to a party.

Section  9.02.  Expenses  of the  Lender.  Each Loan Party  shall pay or
reimburse  on demand  any and all costs and  expenses  incurred  by the  Lender,
whether  directly  or  indirectly,  in  connection  with  (a)  the  preparation,
execution and delivery of the Lender's term sheet or commitment  letter, (b) any
syndication of this facility, (c) the preparation, execution and closing of this
Agreement and the other Loan Instruments, and all waivers, releases, discharges,
satisfactions,  modifications and amendments  thereof and approvals and consents
with respect thereto,  (d) all payments made and actions taken thereunder in the
name or on behalf of any Loan Party, any Surety or any other  guarantor,  surety
or pledgor under any Loan  Instrument,  (e) all periodic  collateral  audits and
other  evaluations  and  the  ongoing  monitoring  of the  Accounts  Receivable,
Inventory and other Collateral (including, without limitation, the per diem fees
and expenses of the Lender and its designees in performing such audits and other
evaluations),  (f) all searches (whether respecting financing statements, unpaid
taxes and other liens or otherwise),  surveys and appraisals, title examinations
and insurance, surety bond premiums, mortgage recording, documentary,  transfer,
intangible,  note or other similar taxes and revenue stamps, and all filings and
recordings,   and  (g)  the   administration,   maintenance,   enforcement   and
adjudication  of this  Agreement,  the other Loan  Instruments  and the Lender's
rights,  powers,  privileges,  remedies and other interests thereunder and under
Applicable Law, in each case including  (without  limitation) the disbursements,
expenses and fees of counsel to the Lender (including,  without limitation,  the
allocated  costs of in-house  

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counsel),   currently   Jenkens  &  Gilchrist   Parker   Chapin  LLP,   and  the
disbursements, expenses and fees of any local or special counsel retained by the
Lender or its counsel.

Section  9.03.  Further  Assurances.  Each Loan Party  agrees to do such
further acts and things and to execute and deliver such statements, assignments,
agreements,  instruments  and other  documents  as the Lender  from time to time
reasonably  may  request in  connection  with the  administration,  maintenance,
enforcement or adjudication of this Agreement and the other Loan  Instruments in
order (a) to  evidence,  confirm,  perfect or protect any  security  interest or
other Lien granted or required to have been granted under this Agreement and the
other Loan Instruments,  (b) to give the Lender or its designee confirmation and
assurance of the Lender's  rights,  powers,  privileges,  remedies and interests
under this  Agreement,  the other Loan  Instruments  and Applicable  Law, (c) to
better enable the Lender to exercise any such right, power, privilege or remedy,
or (d) to otherwise  effectuate the purpose and the terms and provisions of this
Agreement and the other Loan Instruments, each in such form and substance as may
be acceptable  to the Lender.  The Lender shall execute and deliver to each Loan
Party such  documents  (in form and  substance  acceptable to the Lender) as any
Loan Party  reasonably  may request in order to effectuate the purpose and terms
and provisions of this Agreement.

Section 9.04.  Interpretation.  The parties  acknowledge and agree that:
each party and its counsel have reviewed and negotiated the terms and provisions
of this Agreement  (excluding  schedules) and have  contributed to its revision;
the normal rule of construction, to the effect that any ambiguities are resolved
against the drafting party,  shall not be employed in the  interpretation of it;
and its terms and provisions  shall be construed fairly as to all parties hereto
and not in favor  of or  against  any  party,  regardless  of  which  party  was
generally responsible for the preparation of this Agreement.

Section 9.05.  Provisions of the Notes and Collateral Loan  Instruments.
The Notes and the various Loan  Instruments  creating or evidencing the Lender's
interest in the Collateral are each subject to the covenants and other terms and
provisions contained in this Agreement to the same extent and effect as if fully
set  forth  therein;  and in the  event  that  any  term or  provision  of those
instruments  and  documents  conflicts  or is  inconsistent  with  any  term  or
provision  of this  Agreement,  the term or provision  of this  Agreement  shall
control and be given effect.

Section  9.06.   Governing  Law.  This  Agreement  and  the  other  Loan
Instruments:  (a) have been executed and delivered in the State of New York; and
(b) shall be governed by and construed in  accordance  with the  Applicable  Law
pertaining in the State of New York (other than those conflict of law provisions
that would defer to the substantive  laws of another  jurisdiction).  Without in
any way limiting the  preceding  choice of law, the parties elect to be governed
by New York law in  accordance  with,  and are  relying  (at  least in part) on,
Section 5-1401 of the General Obligations Law of the State of New York.

Section 9.07.  Severability.  In the event that any term or provision of
this Agreement or any other Loan  Instrument  shall be finally  determined to be
superseded,  invalid,  illegal or otherwise unenforceable pursuant to Applicable
Law by an Authority having  jurisdiction and venue, that determination shall not
impair or otherwise affect the validity,  legality or  enforceability  (a) by or
before that  Authority of the remaining  terms and  provisions of this Agreement
and the other Loan Instruments,  which shall be enforced as if the unenforceable
term or provision were deleted,  or (b) by or before any other  Authority of any
of the terms and provisions of this Agreement and the other Loan Instruments.

Section  9.08.  Survival of  Representations,  Etc.  Each of the payment
obligations,  collateral  grants,  representations  and  warranties  (as  of the
date(s) made or deemed  made),  covenants,  waivers and other  agreements of the
Loan Parties  contained in this  Agreement and the other Loan  Instruments:  (a)
shall be absolute,  irrevocable and unconditional,  irrespective of (among other
things) the validity,  legality,  binding effect or enforceability of any of the
other terms and provisions of this Agreement or any other Loan Instrument or any
other act, event or  circumstance  described in this Section;  (b) shall survive
the execution and delivery of this Agreement and the other Loan Instruments, and
any and all advances,  repayments  and readvances of any or all of the monies to
be lent  hereunder and  thereunder;  (c) shall remain and continue in full force
and effect without regard (i) to whether the Loans or other  Obligations are now
or hereafter  existing,  acquired or created,  and irrespective of the fact that
from time to time under the terms and provisions of the Loan Instruments  monies
may be advanced,  repaid and readvanced and the outstanding balance of the Loans
may be zero,  (ii) to any  extension  or change in the time,  manner,  place and
other terms and  provisions of payment or  performance of any one or more of the
Loans or other  Obligations  or any Surety's  Obligations,  (iii) to any waiver,
modification,   extension,  renewal,  consolidation,   spreading,  amendment  or
restatement of any other term or provision of any Loan Instrument (except as and
to the extent expressly modified by the terms and provisions of any such waiver,
modification,   extension,  renewal,  consolidation,   spreading,  amendment  or
restatement),  (iv) to any  acceptance  by the Lender of (A) any partial or late
payment,  which shall not constitute a satisfaction or waiver of the full amount
then due or the resulting Default or Event of Default, or (B) any payment during
the  continuance of a 

SPAR ESOP Revolving Credit Agreement

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Default  or Event of  Default,  which  shall  not  constitute  a waiver  or cure
thereof;  and the Lender may accept or reject any such payment without affecting
any of its rights, powers,  privileges,  remedies and other interests under this
Agreement,  the other Loan  Instruments  and  Applicable  Law;  (v) to any full,
partial or non-exercise of any of the rights, powers,  privileges,  remedies and
interests of the Lender under any Loan Instrument or Applicable Law, against any
Loan  Party,  any  Surety or any  other  Person  or with  respect  to any of the
Obligations,  any Surety's Obligations,  any other obligations or any collateral
or security  interest  therein,  which exercise or  enforcement  may be delayed,
discontinued  or  otherwise  not  pursued  or  exhausted  for  any or no  reason
whatsoever,  or which may be  waived,  omitted or  otherwise  not  exercised  or
enforced   (whether   intentionally  or  otherwise),   (vi)  to  any  surrender,
repossession,  sequestration,  foreclosure, conveyance or assignment (by deed in
lieu or otherwise),  sale, lease or other realization,  dealing,  liquidation or
disposition  respecting any collateral or setoff respecting any account or other
asset in accordance  with the Loan  Instruments or Applicable Law (except as and
to the extent the Obligations have been  permanently  reduced by the application
of the net proceeds thereof),  (vii) to the perfected or non-perfected status or
priority of any  mortgage  or other  security  interest in any such  collateral,
which  may be held  without  recordation,  filing or other  perfection  (whether
intentionally  or  otherwise),  (viii) to any release,  settlement,  adjustment,
subordination or impairment of all or any part of the Obligations,  any Surety's
Obligations,  any other  obligations or any collateral or any security  interest
therein,  whether  intentionally  or  otherwise  (except  as and  to the  extent
expressly  modified by the terms and provisions of any such release,  settlement
or  adjustment),   (ix)  to  any  extension,  stay,  moratorium  or  statute  of
limitations  or similar time  constraint  under any  Applicable  Law, (x) to any
investigation,  analysis or  evaluation  by the Lender or its  designees  of the
assets, business,  operations,  properties or condition (financial or otherwise)
of any Loan Party,  any Surety or any other Person,  (xi) to any  application to
any  obligations  of any Loan Party or any Surety other than any  Obligations or
Surety's  Obligations  of (A) any  payments  from such  Person not  specifically
designated for application to the Obligations or Surety's Obligations or (B) any
proceeds of collateral from such Person other than from the Collateral, (xii) to
any sale, conveyance, assignment,  participation or other transfer by the Lender
(in whole or in part) to any other  Person of any one or more of this  Agreement
and the  other  Loan  Instruments  or any one or  more  of the  rights,  powers,
privileges, remedies or interests of the Lender herein or therein, (xiii) to any
act or  omission  on the part of the Lender or any other  Person or (xiv) to any
other act,  event, or  circumstance  that otherwise might  constitute a legal or
equitable  counterclaim,  defense  or  discharge  of a Loan  Party,  co-obligor,
indemnitor, guarantor, pledgor or surety; in each case in such manner and order,
upon such terms and provisions and subject to such  conditions as the Lender may
deem  necessary or desirable  in its sole and absolute  discretion,  and without
notice to or further assent from the Borrower, the Guarantor or any other Surety
(except for such notices as may be expressly  required to be given to such party
under the applicable Loan Instrument);  (d) shall not be subject to any defense,
counterclaim,  setoff, right of recoupment,  abatement, reduction or other claim
or determination  that any Loan Party may have against any Surety, the Lender or
any other  Person;  (e) shall  not be  diminished  or  qualified  by the  death,
disability, dissolution,  reorganization,  insolvency, bankruptcy, custodianship
or  receivership  of any Loan  Party,  any  Surety or any other  Person,  or the
inability  of any of them to pay its debts or perform or  otherwise  satisfy its
obligations as they become due for any reason  whatsoever;  and (f) shall remain
and  continue in full force and effect  without  regard to any of the  foregoing
acts,  events or circumstances  (A) until all of the Obligations have been fully
paid  and  satisfied  and  (B)  thereafter  with  respect  to  acts,  events  or
circumstances occurring prior to such payment and satisfaction.

Section 9.09. Counterparts.  This Agreement or any other Loan Instrument
may be executed in two or more  counterpart  copies of the entire document or of
signature pages to the document, each of which may be executed by one or more of
the parties  hereto or thereto,  but all of which,  when taken  together,  shall
constitute a single agreement  binding upon all of the parties hereto or thereto
(as the case may be).

Section 9.10.  Effective  Date. This Agreement shall be effective on the
date (the "Effective  Date") as of which (a) this Agreement shall be executed by
all the parties  hereto and  delivered to the Lender and (b) all the  conditions
precedent  required  to have been  satisfied  on or before  the  Effective  Date
pursuant  to Article  IV hereof  shall have been  satisfied  or waived  (whether
temporarily or otherwise) in writing by the Lender.  The Lender shall notify the
Loan Parties of the Effective Date if other than the date of the closing of this
Agreement;  provided,  however,  that the failure to give such notice  shall not
alter the Effective Date.

Section  9.11.  Successors  and  Assigns;  Assignment.  Whenever in this
Agreement  or any other Loan  Instrument  reference  is made to any party,  such
reference  shall be deemed to include the successors,  assigns,  heirs and legal
representatives  of such party,  and,  without  limiting the  generality  of the
foregoing, all representations,  warranties, covenants and other agreements made
by or on  behalf  of any  Loan  Party  in  this  Agreement  and the  other  Loan
Instruments  shall  inure to the  benefit of the  successors  and assigns of the
Lender;  provided,  however, that nothing herein shall be deemed to authorize or
permit  any Loan Party to assign  any of its  rights or  obligations  under this
Agreement or any other Loan  Instrument  to any other Person  (whether or not an
Affiliate of any Loan Party),  and each Loan Party  covenants and agrees that it
shall not make any such assignment. The Lender from time to time: (a) may assign
or sell a participation interest in all or any portion(s) 

SPAR ESOP Revolving Credit Agreement

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of the rights,  powers,  privileges,  remedies and interests of and/or the loans
and other  obligations owed to the Lender under this Agreement or any other Loan
Instrument  (i) to any Affiliate of the Lender or to any Federal  Reserve Lender
(as collateral or otherwise),  or (ii) to any other Person;  (b) may furnish and
disclose financial statements, documents and other information pertaining to any
Loan Party or any Surety to any  potential  assignee  or  participant  permitted
hereunder;  and (c) may take any and all  other  actions  that  the  Lender  may
determine (in its sole and absolute  discretion)  to be necessary or appropriate
in connection  with any such assignment or  participation;  in each case without
notice to or consent of any Loan Party or any other  Person.  Without in any way
limiting the  foregoing,  each Loan Party  acknowledges  and agrees that (A) the
Lender may assign any and all of the rights,  powers,  privileges,  remedies and
interests  of and/or the loans and other  obligations  owed to the Lender  under
this Agreement or any other Loan Instrument to the Senior Lender pursuant to the
Senior Loan  Documents,  (B) the Senior  Lender shall be entitled to exercise or
enforce any of the rights, powers, privileges,  remedies and interests of and/or
the loans and other  obligations  owed to the Lender under this Agreement or any
other Loan Instrument in accordance with the Loan  Instruments,  the Senior Loan
Documents and/or  Applicable Law, (C) the Senior Lender shall not be responsible
or liable for any of the acts, omissions,  duties, liabilities or obligations of
the Lender  hereunder , including  (without  limitation)  any  application of or
failure to apply payments or proceeds as contemplated  under any Loan Instrument
or Revolving  Credit  Document,  and (D) in no event shall the Senior  Lender be
obligated  or liable in any manner to the  Borrower  or any Surety (i) to return
any cash  Collateral  obtained  pursuant to Section 2.06(a) of this Agreement to
the  Borrower  to the extent  received  by the  Senior  Lender in payment of the
Lender's obligations, or (ii) for any failure by Senior Lender to make available
to Lender any requested revolving advances or letters of credit under the Senior
Loan Documents.

Section 9.12. No Third Party Rights. The representations, warranties and
other terms and provisions of this Agreement and the other Loan  Instruments are
for the  exclusive  benefit of the  parties  hereto,  and,  except as  otherwise
expressly provided herein or therein,  no other Person,  including  creditors of
any party  hereto,  shall have any right or claim against any party by reason of
any of those terms and  provisions  or be entitled to enforce any of those terms
and provisions against any party.

Section 9.13. No Waiver by Action, Etc. Any waiver or consent respecting
any  representation,  warranty,  covenant  or other  term or  provision  of this
Agreement or any other Loan  Instrument  shall be effective only in the specific
instance and for the  specific  purpose for which given and shall not be deemed,
regardless of frequency given, to be a further or continuing  waiver or consent.
The failure or delay of a party at any time or times to require  performance of,
or to  exercise  its  rights  with  respect  to, any  representation,  warranty,
covenant or other term or provision of this  Agreement or other Loan  Instrument
in no manner (except as otherwise  expressly  provided  herein) shall affect its
right at a later time to enforce any such  provision.  No notice to or demand on
any Loan Party or any Surety in any case shall  entitle  such party to any other
or further  notice or demand in the same,  similar or other  circumstances.  The
acceptance by the Lender of (a) any partial or late payment shall not constitute
a satisfaction  or waiver of the full amount then due or the resulting  Event of
Default or (b) any payment  during the  continuance of an Event of Default shall
not constitute a waiver or cure thereof; and the Lender may accept or reject any
such payment without affecting any of its rights, powers,  privileges,  remedies
and other  interests  under  this  Agreement,  the other  Loan  Instruments  and
Applicable  Law. All  representations,  warranties,  covenants and agreements of
each Loan Party and all rights, powers, privileges, remedies and other interests
of the Lender  hereunder are  cumulative and not  alternatives,  and they are in
addition to and shall not limit (except as otherwise  expressly provided herein)
any other right, power, privilege,  remedy or other interest of the Lender under
this Agreement, any other Loan Instrument or Applicable Law.

[END OF PAGE]

SPAR ESOP Revolving Credit Agreement

-68-

Section 9.14. Waiver of Jury Trial. In any action, suit or proceeding in
any  jurisdiction  arising  out of or related  directly  or  indirectly  to this
Agreement or any other Loan  Instrument,  whether  brought by the Lender against
any Loan Party,  or any Loan Party  against the Lender,  each Loan Party and the
Lender each hereby expressly and irrevocably waives trial by jury.

Section  9.15.  Modification,   Amendment,   Etc.  Except  as  otherwise
expressly  provided in a particular  Loan  Instrument  with respect  thereto and
except as otherwise  provided or permitted under  applicable law with respect to
any UCC financing  statement,  modification,  continuation or the like, each and
every  supplement  or  amendment  to or  modification  or  restatement  of  this
Agreement or any other Loan  Instrument  (other than a UCC financing  statement)
shall be in writing  and signed by all of the parties  hereto or the  respective
parties thereto, as the case may be, and each and every waiver of, or consent to
any departure  from,  any  representation,  warranty,  covenant or other term or
provision  of this  Agreement  or any other Loan  Instrument  (other  than a UCC
financing  statement)  shall be in  writing  and signed by each  affected  party
hereto or thereto, respectively.

Section  9.16.  Entire  Agreement.  This  Agreement  and the other  Loan
Instruments  contain the entire agreement of the parties and supersede all other
representations,  warranties,  agreements and understandings (including, without
limitation,  all previous  discussion  letters and term sheets from the Lender),
oral or  otherwise,  among the parties  with  respect to the  matters  contained
herein and therein.

SPAR ESOP Revolving Credit Agreement

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IN WITNESS WHEREOF,  the parties hereto have executed and delivered this
Agreement as of the date first written above.

SPAR PERFORMANCE GROUP, INC.

By: /s/ Thomas F. Hunter
----------------------------------
Name:  Thomas P. Hunter
Title: President

PERFORMANCE HOLDINGS, INC.

By: /s/ Thomas F. Hunter
----------------------------------
Name:  Thomas P. Hunter
Title: CEO

SPAR INCENTIVE MARKETING, INC.

By: /s/ Robert G. Brown
----------------------------------
Name:  Robert G. Brown
Title: CEO

SPAR ESOP Revolving Credit Agreement

-70-

STATE OF NEW YORK  )
: SS.:
COUNTY OF NEW YORK )

On this 30th day of June in the year 2002 before me, the undersigned,  a
Notary  Public in and for said  State,  personally  appeared  Thomas F.  Hunter,
personally known to me or proved to me on the basis of satisfactory  evidence to
be the  individual  whose  name  is  subscribed  to the  within  instrument  and
acknowledged  to me that  he/she  executed  the  same  in  his/her  capacity  as
President,  and that by his/her  signature  on the  instrument,  the Person upon
behalf of which the  individual  acted  (i.e.,  SPAR  PERFORMANCE  GROUP,  INC.)
executed the instrument.

(Signature  and  office  of individual taking acknowledgment.)

STATE OF NEW YORK  )
: SS.:
COUNTY OF NEW YORK )

On this 30th day of June in the year 2002 before me, the undersigned,  a
Notary  Public in and for said  State,  personally  appeared  Thomas F.  Hunter,
personally known to me or proved to me on the basis of satisfactory  evidence to
be the  individual  whose  name  is  subscribed  to the  within  instrument  and
acknowledged to me that he/she executed the same in his/her capacity as CEO, and
that by his/her signature on the instrument, the Person upon behalf of which the
individual acted (i.e., HOLDINGS, INC.) executed the instrument.

(Signature  and  office  of individual taking acknowledgment.)

STATE OF NEW YORK  )
: SS.:
COUNTY OF NEW YORK )

On this 30th day of June in the year 2002 before me, the undersigned,  a
Notary  Public in and for said  State,  personally  appeared  Robert  G.  Grown,
personally known to me or proved to me on the basis of satisfactory  evidence to
be the  individual  whose  name  is  subscribed  to the  within  instrument  and
acknowledged to me that he/she executed the same in his/her capacity as CEO, and
that by his/her signature on the instrument, the Person upon behalf of which the
individual acted (i.e., SPAR INCENTIVE MARKETING, INC.) executed the instrument.

(Signature  and  office  of individual taking acknowledgment.)

SPAR ESOP Revolving Credit Agreement

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EXHIBIT A
to

REVOLVING CREDIT, GUARANTY AND SECURITY AGREEMENT
with
SPAR PERFORMANCE GROUP, INC.

REVOLVING PROMISSORY NOTE

$2,000,000.00                                                Tarrytown, New York
Dated as of June 30, 2002

FOR VALUE  RECEIVED,  SPAR  PERFORMANCE  GROUP,  INC. (the  "Borrower"),
promises to pay to the order of SPAR INCENTIVE  MARKETING,  INC. (the "Lender"),
at 580 White Plains Road,  Tarrytown,  New York 10591, or at such other place as
may be  designated  in writing by the holder of this Note,  the principal sum of
TWO MILLION DOLLARS  ($2,000,000.00),  or so much thereof as may be advanced and
outstanding, with interest thereon, to be computed on each advance from the date
of its disbursement,  all as provided in that certain Revolving Credit, Guaranty
and Security Agreement among the Borrower,  Performance Holdings,  Inc., and the
Lender  dated as of June 30,  2002 (as the same may be  supplemented,  modified,
amended,  restated or replaced from time to time in the manner provided therein,
the "Loan Agreement").  Capitalized terms used and not otherwise defined in this
Note  shall  have  the  meanings  respectively  assigned  to  them  in the  Loan
Agreement.

This Note is the Revolving  Credit Note and one of the Notes referred to
in the Loan  Agreement.  Principal  and  interest  shall be due and  payable  as
provided in the Loan Agreement,  and all of the terms and provisions of the Loan
Agreement,   including  (without   limitation)   provision  for  prepayment  and
acceleration of maturity,  are incorporated  herein by reference and made a part
hereof.  This Note is  secured  by certain  collateral  pledged by the  Borrower
pursuant to the Loan Agreement and the other Loan Instruments.

Presentment for payment, notice of dishonor,  protest, notice of protest
and all similar notices are hereby expressly  waived by the Borrower.  This Note
has been made and  delivered  in the County of  Westchester,  State of New York,
where all advances and repayments shall be made (except as otherwise provided in
the Loan Agreement).  This Note shall be governed by and construed in accordance
with the  Applicable  Law  pertaining in the State of New York (other than those
that would defer to the substantive laws of another jurisdiction).  This Note is
a Loan  Instrument and shall be governed by and construed in accordance with the
applicable  terms  and  provisions  of  the  Loan  Agreement.   Each  and  every
supplement,  modification  or  amendment  to this Note shall be in  writing  and
signed by the Borrower  and the Lender,  each and every waiver of, or consent to
any departure  from,  any term or provision of this Note shall be in writing and
signed by the Lender, and each and every restatement or replacement of this Note
shall be in  writing,  shall be signed by the  Borrower  and shall  require  the
written consent of the Lender.

SPAR PERFORMANCE GROUP, INC.

By: __________________________________
[Borrower's  Signer's Name],  
[Borrower's  Signer's Title]

SPAR ESOP Revolving Credit Agreement

-1-

STATE OF NEW YORK  )
: SS.:
COUNTY OF NEW YORK )

On this  _____  day of  __________  in the  year  ____  before  me,  the
undersigned,  a  Notary  Public  in and  for  said  State,  personally  appeared
[BORROWER'S SIGNER'S NAME],  personally known to me or proved to me on the basis
of  satisfactory  evidence to be the individual  whose name is subscribed to the
within  instrument  and  acknowledged  to me that  he/she  executed  the same in
his/her capacity as [BORROWER'S  SIGNER'S TITLE],  and that by his/her signature
on the instrument,  the Person upon behalf of which the individual  acted (i.e.,
SPAR PERFORMANCE GROUP, INC.) executed the instrument.

(Signature  and  office  of individual taking acknowledgment.)

SPAR ESOP Revolving Credit Agreement

-2-

EXHIBIT B
to

REVOLVING CREDIT, GUARANTY AND SECURITY AGREEMENT
with
SPAR PERFORMANCE GROUP, INC.

[INTENTIONALLY OMITTED]

SPAR ESOP Revolving Credit Agreement

C-1

EXHIBIT C
to

REVOLVING CREDIT, GUARANTY AND SECURITY AGREEMENT
with
SPAR PERFORMANCE GROUP, INC.

ADDRESSES FOR NOTICE AND SERVICE

I.       Address for Notices and Service to the Loan Parties:

SPAR PERFORMANCE GROUP, INC.

________________________________
Attention:  ____________________
Telephone:  (   ) ___-____
Telecopy:   (   ) ___-____
E-Mail`:    __________@___

With a copy of notices from the Lender under Section 7.07 or 8.02 to:

________________________________
Attention:  ____________________
Telephone:  (   ) ___-____
Telecopy:   (   ) ___-____
E-Mail`:    __________@___

II.      Address for notices to the Lender:

SPAR INCENTIVE MARKETING, INC.

580 White Plains Road
Tarrytown, New York 10591
Attention:  Charles Cimitile, Chief Financial Officer
Telephone:  (914) 332-4100
Telecopy:   (914) 332-0741
E-Mail:     CCimitile@SPARinc.com

With a copy of any default  notice or other notice  under  
Section 5.01 to:

Jenkens & Gilchrist Parker Chapin LLP
The Chrysler Building
405 Lexington Avenue
New York, New York  10174
Attention:  Lawrence David Swift, Esq.
Telephone:  (212) 704-6147
Telecopy:   (212) 704-6159/6288
E-Mail:     LDSwift@Jenkens.com

SPAR ESOP Revolving Credit Agreement

C-2

EXHIBIT D
to

REVOLVING CREDIT, GUARANTY AND SECURITY AGREEMENT
with
SPAR PERFORMANCE GROUP, INC.

BORROWING BASE CERTIFICATE

RESPECTING
SPAR PERFORMANCE GROUP, INC.

AS OF [MONTH & DATE], 200___

Pursuant to the Loan and  Security  Agreement  dated as of June 30, 2002
(as the same may be supplemented,  modified,  amended, restated or replaced from
time to time in the manner provided therein,  the "Loan  Agreement"),  I, [PRINT
NAME] , the [PRINT TITLE] , of SPAR PERFORMANCE  GROUP,  INC. (the  "Borrower"),
hereby certify to SPAR INCENTIVE MARKETING,  INC. (the "Lender"), as of the date
hereof that:

(a) The  following is a true,  complete and correct  calculation  of the
Borrowing Base as of the last day of [Month] , 200__ (the "Reporting Date"):

(i)  Determination  of  discounted  Eligible  Billed  Receivables  amount at the
Reporting Date:

(A)   Billed Accounts Receivable aging (gross book value) at the Reporting
Date                                                                     $________

(B)   Minus the sum of the ineligible  Accounts Receivable included in (A)
at the Reporting Date included in (A), including the following items
(which are summarized from and qualified by the actual provisions of
the Loan Agreement, which shall control), without duplication:

(1)   more than 90 days past due                                         $________

(2)   permits payment more than 30 days after invoice date               $________

(3)   no final invoice has been issued                                   $________

(4)   incomplete delivery of the product(s) or service(s)                $________

(5)   conditional or permits returns                                     $________

(6)   restricts collection rights or assignments                         $________

(7)   permits payment in any foreign currency                            $________

(8)   permits payment at any non-USA location                            $________

(9)   evidenced  by  chattel  paper or any note or other  instrument
(unless duly endorsed and delivered to the Lender                  $________

(10)  rejected,  returned or disputed  products or services,  or the
attempted  lowering of the invoiced price,  other than because
of  mistake or in  accordance  with the  customary  credit and
collection practices of the Borrower                               $________ 

(11)  customer's  assertion  of  any  right  or  reduction,  setoff,
recoupment, counterclaim or defense                                $________

(12)  Lender does not have a perfected first priority Lien               $________

(13)  subject to any other financing statement or Lien                   $________

(14)  customer and its  affiliates  account for more than 25% of all
of the Borrower's  accounts  receivable  then  outstanding and
Lender has given notice such concentration poses a credit risk
$________

SPAR ESOP Revolving Credit Agreement

D-1

(15)  the customer or any affiliate has a history of late  payments,
returns, rejections, renegotiations or disputes                    $________

(16)  the  customer is an  affiliate  of the  Borrower or any Surety     $________

(17)  the customer is any governmental authority                         $________

(18)  the customer is located  outside the United  States                $________

(19)  the customer does not meet the established credit standards of
the Borrower or the Lender                                         $________

(20)  the  customer  has  taken  or  committed  any of  the  actions
specified  in Section  8.01(g)  hereof in respect of itself or
all or  substantially  all of its assets and properties or has
had any of those actions taken against it                          $________

(21)  the account receivable exceeds any credit limit established by
the Lender in its sole discretion for the customer's  accounts
receivable with the Borrower                                       $________

(22)  the  account  receivable  does not  conform at the time to the
Borrower's    representations   and   warranties    respecting
Collateral  in general or accounts  receivable  in  particular     $________

(23)  the Lender has determined that the account  receivable  should
be excluded,  whether individually,  by customer, by amount or
otherwise in a reasonable manner                                   $________

(24)  Deposits accounts receivable                                       $________

(C)   Total Ineligible  Accounts  Receivable (the sum of (1) through (23))     $________

(D)   Eligible Billed Receivables ((A) minus (C))                              $________

(E)   Discounted  Eligible Billed  Receivables  (0.85 times (D))               $________

(ii) Determination of discounted  Eligible  Unbilled  Receivables  amount at the
Reporting Date:

(A)   Unbilled  Accounts  Receivable  aging  (gross  book  value)  at  the
Reporting Date                                                           $________

(B)   Minus  the  sum  of  the  ineligible  Unbilled  Accounts  Receivable
included in (A) at the Reporting Date included in (A), including the
following  items  (which are  summarized  from and  qualified by the
actual  provisions  of the Loan  Agreement,  which  shall  control),
without duplication:

(1)   created more than 60 days to this borrowing  base  certificate
date                                                               $________

(2)   no final invoice has been issued                                   $________

(3)   incomplete delivery of the product(s) or service(s)                $________

(4)   conditional or permits returns                                     $________

(5)   restricts collection rights or assignments                         $________

(6)   permits payment more than 30 days after invoice date               $________

SPAR ESOP Revolving Credit Agreement

D-2

(7)   permits payment in any foreign currency                            $________

(8)   permits payment at any non-USA location                            $________

(9)   evidenced  by  chattel  paper or any note or other  instrument
(unless duly  endorsed and  delivered to the Lender                $________

(10)  rejected,  returned or disputed  products or services,  or the
attempted  lowering of the invoiced price,  other than because
of  mistake or in  accordance  with the  customary  credit and
collection practices of the Borrower                               $________

(11)  customer's  assertion  of  any  right  or  reduction,  setoff,
recoupment, counterclaim or defense                                $________

(12)  Lender does not have a perfected first priority Lien               $________

(13)  subject to any other financing statement or Lien                   $________

(14)  customer and its  affiliates  account for more than 25% of all
of the Borrower's  accounts  receivable  then  outstanding and
Lender has given notice such concentration poses a credit risk     $________

(15)  the customer or any affiliate has a history of late  payments,
returns,  rejections,  renegotiations  or  disputes                $________

(16)  the  customer is an  affiliate  of the  Borrower or any Surety     $________

(17)  the customer is any governmental authority                         $________

(18)  the customer is located outside the United States                  $________

(19)  the customer does not meet the established credit standards of
the Borrower or the Lender                                         $________

(20)  the  customer  has  taken  or  committed  any of  the  actions
specified  in Section  8.01(g)  hereof in respect of itself or
all or  substantially  all of its assets and properties or has
had any of those actions taken against it                          $________

(21)  the account receivable exceeds any credit limit established by
the Lender in its sole discretion for the customer's  accounts
receivable with the Borrower                                       $________

(22)  the  account  receivable  does not  conform at the time to the
Borrower's    representations   and   warranties    respecting
Collateral  in general or accounts  receivable  in  particular     $________

(23)  the Lender has determined that the account  receivable  should
be excluded,  whether individually,  by customer, by amount or
otherwise in a reasonable manner                                   $________

(C)   Total  Ineligible  Unbilled  Accounts  Receivable  (the  sum  of (1)
through (21))                                                            $________

(D)   Eligible Unbilled Receivables ((A) minus (C))                            $________

(E)   Discounted Eligible Unbilled Receivables (0.60 times (D))                $________

(iii) Applicable Overadvance Amount on the Reporting Date                            $________

SPAR ESOP Revolving Credit Agreement

D-3

(iv)   any and all reserves (whether for doubtful accounts, customer deposits or
otherwise)  then  maintained by the Borrower or required by the Lender in
its  or  their  sole  and  absolute  discretion   (without   duplication)     $________

(v)    Borrowing  Base on the Reporting  Date (sum of items (i)(E),  (ii)(E) and
(iii), minus (iv))                                                            $________

(vi)   Gross  Availability:  the  lesser of the Line of Credit or the  Borrowing
Base (item (v))                                                               $________

(vii)  Revolving Credit Loans outstanding on the Reporting Date                      $________

(viii) Letters of credit outstanding on the Reporting Date                           $________

(ix)   Other                                                                         $________

(x)    REMAINING AVAILABILITY (item (vi) minus items (vii), (viii) and (ix), but
not less than zero)                                                           $________

(xi)   PAYMENT  DUE  (item  (vii)  minus  item  (vi),  but not less  than  zero)     $________

(b)  Each of the  representations,  warranties,  acknowledgements  and
certifications of each of the Loan Parties and each Surety set forth in the Loan
Agreement  and other  Loan  Instruments  are true and  correct  in all  material
respects with the same effect as though those representations and warranties had
been made on and as of the date hereof.

(c) No Default or Event of Default  has  occurred  and is  continuing,
excluding, however, those events subject to an express written waiver or consent
from the Lender, if any.

(d) No event or  events  have  occurred  that  individually  or in the
aggregate  could have,  or since the date of the  Agreement  has had, a Material
Adverse Effect.

(e)  The  information  set  forth  in  the  Secretary's  or  Officer's
Certificate  most  recently  delivered  to the Lender  respecting  (among  other
things) the authorizing resolutions,  organizational and governing documents and
the  incumbency  of the  officers of each of the Loan Parties and each Surety is
true and complete as if those  certificates  had been delivered on and as of the
date hereof.

(f) There are no actions, suits or proceedings pending or, to the best
knowledge of the  undersigned,  threatened or contemplated by any Person for the
liquidation or dissolution of any Loan Party or Surety or otherwise  threatening
their respective existences or challenging or calling into question the power or
authority of any Loan Party or Surety to execute or deliver any Loan  Instrument
to  which  it is or  will  be a  party  or to  perform  any of  its  obligations
thereunder.

(g) The  Obligations of the Borrower under the Loan  Agreement,  Notes
and other  Loan  Instruments  and the  obligations  of each other Loan Party and
Surety  under  its  Loan  Instruments  (i)  are  not  subject  to  any  defense,
counterclaim,  setoff, right of recoupment,  abatement, reduction or other claim
or determination  against the Lender or any other Person and (ii) remain and are
currently in full force and effect,  enforceable against them in accordance with
their respective terms and provisions.

Capitalized terms and  non-capitalized  words and phrases used and not
otherwise  defined  in this  Certificate  shall have the  meanings  respectively
assigned to them in the Loan  Agreement,  except that certain terms refer to the
applicable  captions  or  headings of the  financial  statements  and reports of
Holdings  and its  subsidiaries.  This  Certificate  may be  relied  upon by the
successors,  assigns and participants of the Lender and by counsel to the Lender
in giving any opinion or advice requested of such counsel.

SPAR ESOP Revolving Credit Agreement

D-4

---------------------------------
(SIGNATURE)

DATE SIGNED:  _________ __, 200__

SPAR ESOP Revolving Credit Agreement

D-5

EXHIBIT E
to
REVOLVING CREDIT, GUARANTY AND SECURITY AGREEMENT
with
SPAR PERFORMANCE GROUP, INC.

FINANCIAL COVENANTS COMPLIANCE CERTIFICATE
RESPECTING
SPAR PERFORMANCE GROUP, INC.

[MONTH AND DATE], 200_

Pursuant to the Revolving Credit Loan, Guaranty and Security Agreement
dated as of June 30, 2002 (as the same may be supplemented,  modified,  amended,
restated or replaced from time to time in the manner provided therein, the "Loan
Agreement"), I, [PRINT NAME] , the [PRINT TITLE] of SPAR PERFORMANCE GROUP, INC.
(the "Loan  Party"),  hereby  certify to SPAR  INCENTIVE  MARKETING,  INC.  (the
"Lender"), as of the date hereof that:

(a) The  Adjusted  Net Worth of Holdings  and its  subsidiaries  as at
__________  __,  200__ (the  "Reporting  Date"),  was not less than the  minimum
required for such date ($_______) by Section 6.01(b) of the Loan Agreement, with
compliance calculated as follows:

(i)    Aggregate  amount of all  assets and  properties  on the  Reporting  Date     $________

(ii)   Minus the Adjusted Liabilities of the Loan Parties and their Subsidiaries
as at the Reporting Date:                                                    [$________]

(The Adjusted Debt of the Loan Parties and their Subsidiaries
as at the Reporting Date included in the above was  $________)

(iii)  Adjusted Net Worth (actual) as at the Reporting Date                          $________

(b) The  Adjusted  EBITDA of  Holdings  and its  subsidiaries  for the
Computation  Period ending on the  Reporting  Date was not less than the minimum
required  for  such  date  (_________:1.00)  by  Section  6.01(c)  of  the  Loan
Agreement, with compliance calculated as follows:

(i)    Net Income (or Loss) of  Holdings  and its  subsidiaries  for such period     $________

(ii)   Plus the sum of the  following  adjustments  to the  extent  included  in
determining such income:

(A)      Consolidated extraordinary or unusual loss(es)                       $_________

(B)      Consolidated interest expense                                        $_________

(C)      Total federal, state, local and foreign income and
franchise taxes accrued during such period                           $_________

(D)      Consolidated Depreciation                                            $_________

(E)      Consolidated Amortization                                            $_________

(iii)  Total  Additions to Income:  (the sum of items (ii)(A)  through  (ii)(E))     $_________

(iv)   Minus:  Extraordinary  or unusual  gain(s)  included in determining  such
income                                                                       [$_________]

(v)    Adjusted EBITDA (item (i) plus item (iii) minus item (iv))                    $_________

(c) The Adjusted Debt Service  Ratio of Holdings and its  subsidiaries
for the  Computation  Period ending on the Reporting  Date was not less than the
minimum  required  for  such  date (  :1.00)  by  Section  6.01(d)  of the  Loan
Agreement, with compliance calculated as follows:

SPAR ESOP Revolving Credit Agreement

E-1

(i)    Adjusted EBITDA for such period (from (b)(iv) above):                         $_________

(ii)   Adjusted  Debt  Service  for such  period,  consisting  of the sum of the
following:

(A)  Interest expense (from (b)(ii)(B) above):                                $_________

(B)  Principal payments on Indebtedness for such period:                      $_________

(C)  Consolidated  capitalized  lease  payments  for such  period (to the
extent not already included in (A) or (B))                               $_________

(D)  All other payments with respect to Incebtedness  during such period,
including (without limitation) all commissions,  discounts and other
fees and charges owed with respect to any and all commitments, lines
of credit,  banker's  acceptances,  letters of credit,  and interest
rate  protection,  foreign currency  exchange,  or other interest or
exchange  rate swap or hedging  agreements or  arrangements  (to the
extent not already included in (A), (B) or (C))                          $_________ 

(iii)     Total  Adjusted  Debt  Service  (the sum of  (ii)(A)  through  (ii)(D)     $_________

(iv)      Adjusted Lease Service for such period                                     $_________

(v)      Adjusted Debt Lease Service for such period (the sum of (iii) and (iv))     $_________

(vi)      Adjusted Debt Service Ratio (the ratio of (i) to (v))                      _____:1.00

(d)  The  Adjusted   Debt  to  EBITDA  Ratio  of  Holdings  and  its
subsidiaries  for the  Computation  Period ending on the Reporting  Date was not
less than the minimum required for such date  (_______:1.00)  by Section 6.01(e)
of the Loan Agreement, with compliance calculated as follows:

(i)       Adjusted Debt at the end of such period for such period (from (a)(iii)
above):                                                                    $_________

(ii)      Adjusted EBITDA for such period (from (b)(v) above):                       $_________

(iii)     Adjusted Debt to EBITDA Ratio (the ratio of (i) to (ii))                   _____:1.00

(e)  The  Adjusted   Capital   Expenditures   of  Holdings  and  its
subsidiaries  for the fiscal  quarter ended on such Reporting Date was $_______,
which did not  exceed the  maximum  permitted  for such  quarter ($ ) by Section
6.01(f) of the Loan Agreement.

(f) The Adjusted Lease Service of Holdings and its  subsidiaries for
the fiscal quarter ended on such Reporting Date was $_______ ____, which did not
exceed the maximum  permitted  for such  quarter ($ ) by Section  6.01(g) of the
Loan Agreement.

(g) The consolidated Selling, General and Administrative Expenses of
Holdings and its  subsidiaries  (inclusive of sales commission but excluding tax
deductible  pension  payments to the ESOP Trust) for the fiscal quarter ended on
such  Reporting  Date was ______% of their total  consolidated  revenue for such
quarter,  which did not exceed the maximum  permitted  for such  quarter ( %) by
Section 6.01(a) of the Loan Agreement.

(h) Holdings and its  subsidiaries  incurred  consolidated  purchase
money   Indebtedness  in  the  purchase  of  Equipment  and  capitalized  leases
constituting  Indebtedness  that  aggregated  $ during the _______  month period
ended on the Reporting Date, which did not exceed the maximum permitted for such
period ($________) by Section 6.02(a)(iii) of the Loan Agreement.

(i) Each of the  representations,  warranties,  acknowledgements and
certifications of each of the Loan Parties and each Surety set forth in the Loan
Agreement  and other  Loan  Instruments  are true and  correct  in all  material
respects with the same effect as though those representations and warranties had
been made on and as of the date hereof.

SPAR ESOP Revolving Credit Agreement

E-2

(j) No Default or Event of Default has occurred  and is  continuing,
excluding, however, those events subject to an express written waiver or consent
from the Lender, if any.

(k) No event or events have  occurred  that  individually  or in the
aggregate  could have,  or since the date of the  Agreement  has had, a Material
Adverse Effect.

(l) The  information  set  forth  in the  Secretary's  or  Officer's
Certificate  most  recently  delivered  to the Lender  respecting  (among  other
things) the authorizing resolutions,  organizational and governing documents and
the  incumbency  of the  officers of each of the Loan Parties and each Surety is
true and complete as if those  certificates  had been delivered on and as of the
date hereof.

(m) There are no actions,  suits or  proceedings  pending or, to the
best knowledge of the undersigned,  threatened or contemplated by any Person for
the  liquidation  or  dissolution  of any Loan  Party  or  Surety  or  otherwise
threatening their respective  existences or challenging or calling into question
the power or  authority  of any Loan Party or Surety to  execute or deliver  any
Loan  Instrument  to  which it is or will be a party  or to  perform  any of its
obligations thereunder.

(n) The Obligations of Holdings under the Loan Agreement,  Notes and
other Loan  Instruments  and the obligations of each other Loan Party and Surety
under its Loan  Instruments  (i) are not subject to any  defense,  counterclaim,
setoff,   right  of   recoupment,   abatement,   reduction  or  other  claim  or
determination  against  the Lender or any other  Person and (ii)  remain and are
currently in full force and effect,  enforceable against them in accordance with
their respective terms and provisions.

Capitalized terms and non-capitalized words and phrases used and not
otherwise  defined  in this  Certificate  shall have the  meanings  respectively
assigned to them in the Loan  Agreement,  except that certain terms refer to the
applicable  captions  or  headings of the  financial  statements  and reports of
Holdings  and its  subsidiaries.  This  Certificate  may be  relied  upon by the
successors,  assigns and participants of the Lender and by counsel to the Lender
in giving any opinion or advice requested of such counsel.

------------------------------------
(SIGNATURE)

DATE SIGNED:  ____________ __, 200__

SPAR ESOP Revolving Credit Agreement

E-3

SPAR ESOP Revolving Credit Agreement

F-1

EXHIBIT 10.19

TERM LOAN, GUARANTY AND SECURITY AGREEMENT

AMONG

PERFORMANCE HOLDINGS, INC.

SPAR PERFORMANCE GROUP, INC.

and

SPAR INCENTIVE MARKETING, INC.

DATED AS OF:  June 30, 2002

SPAR ESOP Term Loan Agreement

-1-

Table of Contents

Provision                           Heading                                 Page

SPAR ESOP Term Loan Agreement

-i-

Exhibit A         Form of $2,500,000 Term Promissory Note
Exhibit B         Form of $3,500,000 Term Promissory Note
Exhibit C         Addresses for Notices and Service
Exhibit D         Schedule of Targeted Adjusted Cash Flows
Exhibit E         Form of Financial Covenants Compliance Certificate

Schedule 1.01     Material Adverse Effect
Schedule 3.03     Certain Required Consents, Etc.
Schedule 3.05     Certain Conflicts, Etc.
Schedule 3.06     Litigation
Schedule 3.08(b)  Certain Existing Defaults and Adverse Agreements
Schedule 3.10(a)  Existing Indebtedness
Schedule 3.10(b)  Existing Guaranties and other Credit Support
Schedule 3.10(c)  Existing ERISA Plans
Schedule 3.11     Existing  Subsidiaries,   Partnerships,   Ventures  and  Other
Investments
Schedule 3.12(b)  Existing Liens and Encumbrances
Schedule 3.12(d)  Insurance Policies  
Schedule 3.12(e)  Other Locations of Collateral  
Schedule 3.12(f)  Existing Employee Contracts and Arrangements  
Schedule 3.12(g)  Certain General Intangibles 
Schedule 3.14(a)  Machinery, Equipment and other Fixed Assets
Schedule 3.14(b)  Real Estate Leases 
Schedule 3.14(c)  Real Estate Owned 
Schedule 3.14(d)  Equipment and other Personal Property Leases 
Schedule 3.15     Intellectual Properties  
Schedule 3.17     Pledged Securities 
Schedule 3.19     Loan Party Securities
Schedule 6.11(b)  Permitted Bonuses

SPAR ESOP Term Loan Agreement

-ii-

INTRODUCTION

THIS TERM LOAN, GUARANTY AND SECURITY AGREEMENT,  dated as of June 30,
2002,  is by and  among  PERFORMANCE  HOLDINGS,  INC.,  a  Delaware  corporation
currently  having an address at 2245  Keller Way,  Carrollton,  Texas 75006 (the
"Borrower"),  SPAR PERFORMANCE  GROUP,  INC., a Delaware  corporation  currently
having an address at 2245 Keller Way, Carrollton,  Texas 75006 ("SPG"), and SPAR
INCENTIVE MARKETING, INC., a Delaware Corporation currently having an address at
580 White Plains Road, Tarrytown, New York 10591 (the "Lender").

RECITALS

The Borrower has entered into the Stock  Purchase  Agreement and other
Stock  Purchase  Documents  (as  "Stock  Purchase  Agreement",  "Stock  Purchase
Documents"  and the other terms,  words and phrases  used in these  Recitals are
defined in Article I hereof) in order to  purchase  all of the  outstanding  SPG
Stock from the Lender  pursuant to the Stock Purchase  Documents for the benefit
of the  Borrower's and SPG's  employees as further  provided in the ESOP Related
Documents.  The  Borrower has entered  into this  Agreement  and issued the Term
Notes in order to fund such purchase of the SPG Stock.

The Borrower has agreed to  collateralize  these Loans with all of its
assets and properties. In order to further induce the Lender to make those Loans
and enter into this  Agreement,  (a) the  Borrower  has agreed to  guaranty  the
Senior Loan Obligations and to secure those  obligations with a pledge of all of
its  assets  and  properties,  and  (b)  SPG  has  agreed  to  guaranty  (i) the
Obligations  pursuant to its guaranty contained in this Agreement,  and (ii) the
Senior Loan Obligations pursuant to the Senior Loan Guaranty, which each will be
secured by a pledge of all of SPG's assets and properties.

Immediately  following the closings contemplated in this Agreement and
the Stock  Purchase  Agreement,  the Borrower  will  established  the ESOP Trust
pursuant to the ESOP Related  Documents),  will issue and  contribute  1,000,000
shares of its common  stock to for the benefit of the  employees of the Borrower
and SPG as further provided in the ESOP Related  Documents,  and will repurchase
all of its shares of common stock not owned by the ESOP Trust.

Accordingly,  the Borrower,  SPG and the Lender have entered into this
Agreement in order to provide for (among other  things) the making and repayment
of the Loans, SPG's guaranty of the Obligations,  the  collateralization  of the
Obligations of the Borrower and Guarantor and the  documentation  of the various
representations  of and  agreements  with the  Borrower,  all upon the terms and
provisions and subject to the conditions hereinafter set forth.

AGREEMENT

In consideration of the foregoing, the mutual covenants and agreements
hereinafter set forth,  and other good and valuable  consideration  (the receipt
and  adequacy  of which is hereby  acknowledged  by the  Borrower),  the parties
hereto hereby agree as follows:

ARTICLE I

DEFINITIONS AND INTERPRETATION

Section 1.01.  Certain Defined Terms.  As used in this Agreement,  the
following capitalized terms and non-capitalized words and phrases shall have the
meanings respectively assigned to them below:

"Accounts  Receivable"  shall  mean  all  of the  referenced  Person's
accounts  (as defined in the UCC) and other  rights to receive  payments for any
inventory,  goods or other  products,  assets  or  properties  sold,  leased  or
otherwise  disposed  of or for  services  rendered,  whether  or not  earned  by
performance,  recognized by the  referenced  Person or recorded on its books and
records,  and  irrespective  of  whether  any  may  not be  characterized  as or
constitute an account (as defined in the UCC) or may be characterized as or also
constitute a chattel paper, chose-in-action, contract right, general intangible,
instrument,  invoice,  letter of credit right, note, payment intangible or other
collateral  type in any document,  by any Person or under any Applicable Law, in
each case  whether  now  existing  or  hereafter  acquired,  created,  executed,
modified  or  otherwise  existing  (including,  without  limitation,  during the
pendency of any Bankruptcy Proceeding).

"Additional  Term  Loan"  shall  have the  meaning  assigned  to it in
Section 2.02(b) hereof.

SPAR ESOP Term Loan Agreement

-1-

"Adjusted  Capital  Expenditures" of the Borrower and its subsidiaries
for  any  referenced   Computation  Period  shall  mean  the  aggregate  capital
expenditures of the Borrower and its subsidiaries  for such Computation  Period,
each as determined in accordance with GAAP consistently applied.

"Adjusted  Cash Flow"  shall  mean,  as at any date of  determination,
Adjusted EBITDA for the Computation Period ending at such date, plus (a) the sum
of  all  extraordinary   gains  and  ESOP  contributions   deducted  during  the
Computation  Period  ending  at such  date,  minus  (b) the sum of all (i)  cash
interest  payments on all  Indebtedness,  (ii) permitted  capital  expenditures,
(iii)   actual  ESOP   contributions,   but  not  more  than  the  ESOP  Maximum
Contribution,  and (iv)  principal  payments  on the Term Loans made  during the
Computation Period ending at such date.

"Adjusted Current Assets" shall mean, as at any date of determination,
the current assets of the Borrower and its  subsidiaries  at such date,  each as
determined in accordance with GAAP consistently applied.

"Adjusted  Current   Liabilities"  shall  mean,  as  at  any  date  of
determination,  the current  liabilities of the Borrower and its subsidiaries at
such date as determined in accordance with GAAP consistently applied,  including
(without  limitation)  the current  portion of all Adjusted Debt of the Borrower
and its subsidiaries at such date.

"Adjusted Debt" shall mean, as at any date of  determination,  the sum
of the aggregate  amount of all  Indebtedness and Credit Support of the Borrower
and its  subsidiaries at such date determined in accordance with the definitions
thereof,  which  Indebtedness shall include the unadvanced amount of all letters
of credit as if fully  advanced at such date,  and which  Credit  Support  shall
equal the amount of the Indebtedness thereby supported (including the unadvanced
amount of all letters of credit as if fully advanced) at such date, in each case
irrespective of any other treatment under GAAP.

"Adjusted   Debt  Service  Ratio"  shall  mean,  as  at  any  date  of
determination,  the ratio of (a) the  Adjusted  EBITDA of the  Borrower  and its
subsidiaries for the Computation Period ending at such date, to (b) the Adjusted
Debt Service and Adjusted Lease Service of the Borrower and its subsidiaries for
the Computation Period ending at such date.

"Adjusted Debt Service"  shall mean, as at any date of  determination,
the sum of all  payments  of  principal  and  interest  on  Indebtedness  of the
Borrower and its subsidiaries (including,  without limitation,  all commissions,
discounts  and  other  fees  and  charges  owed  with  respect  to any  and  all
commitments,  lines of credit,  banker's  acceptances,  letters  of credit,  and
interest  rate  protection,  foreign  currency  exchange,  or other  interest or
exchange rate swap or hedging  agreements or arrangements,  and the interest and
principal   components  of  capitalized  leases)  paid  or  payable  during  the
Computation Period ending at such date.

"Adjusted  Debt  to  EBITDA  Ratio"  shall  mean,  as at any  date  of
determination,  the  ratio  of (a) the  Adjusted  Debt of the  Borrower  and its
subsidiaries  at such date,  to (b) the Adjusted  EBITDA of the Borrower and its
subsidiaries at such date.

"Adjusted  Debt  to  Equity  Ratio"  shall  mean,  as at any  date  of
determination,  the  ratio  of (a) the  Adjusted  Debt of the  Borrower  and its
subsidiaries at such date, to (b) the Adjusted Net Worth of the Borrower and its
subsidiaries at such date.

"Adjusted  EBITDA"  of the  Borrower  and  its  subsidiaries  for  any
referenced  Computation Period shall mean the aggregate earnings of the Borrower
and its subsidiaries before interest,  income and franchise taxes,  amortization
and depreciation for such Computation  Period,  excluding  extraordinary  items,
each as determined in accordance with GAAP consistently applied.

"Adjusted Lease Service" shall mean, as at any date of  determination,
the sum of all rent,  additional  rent and other  amounts  on each lease of Real
Estate  or  Equipment  or  other  personal  property  by the  Borrower  and  its
subsidiaries (including,  without limitation,  all assessments,  commissions and
fees) paid or payable during the Computation Period ending at such date.

"Adjusted Leverage Ratio" shall mean, as at any date of determination,
the ratio of (a) the Adjusted  Liabilities of the Borrower and its  subsidiaries
at such date, to (b) the Adjusted Net Worth of the Borrower and its subsidiaries
at such date.

"Adjusted  Liabilities"  shall mean, as at any date of  determination,
the sum of (i) the aggregate amount of all Adjusted Debt of the Borrower and its
subsidiaries  at  such  date,  and  (ii)  the  aggregate  amount  of  all  other
liabilities  of the  Borrower  and  its  subsidiaries  at  such  date,  each  as
determined 

SPAR ESOP Term Loan Agreement

-2-

in accordance with GAAP consistently applied, except that Adjusted Debt shall be
determined in accordance with the definition thereof.

"Adjusted Net Worth" shall mean, as at any date of determination,  (a)
the  aggregate  book value of all assets and  properties of the Borrower and its
subsidiaries  at such date,  minus the Adjusted  Liabilities of the Borrower and
its  subsidiaries  at such date,  each as  determined  in  accordance  with GAAP
consistently  applied,  except that Adjusted  Liabilities shall be determined in
accordance with the definition thereof.

"Adjusted  Quick Assets" shall mean, as at any date of  determination,
the  quick  assets  (consisting  of cash,  marketable  securities  and  Accounts
Receivable)  of the  Borrower  and  its  subsidiaries  at  such  date,  each  as
determined in accordance with GAAP consistently applied.

"Adjusted  Quick Ratio" shall mean,  as at any date of  determination,
the  ratio  of  (a)  the  Adjusted  Current  Assets  of  the  Borrower  and  its
subsidiaries  at such  date,  to (b) the  Adjusted  Current  Liabilities  of the
Borrower and its  subsidiaries at such date (excluding from current  liabilities
for this purpose the current portion of long term Adjusted Debt).

"Affiliate"  of a  referenced  Person  shall mean (a) any other Person
controlling,  controlled by or under common control with such referenced Person,
(b) any other Person  beneficially  owning or  controlling  ten percent (10%) or
more of the  outstanding  voting  securities or rights or of the interest in the
capital,  distributions or profits of the referenced  Person,  provided that the
Lender shall not under any  circumstance  be deemed an Affiliate of the Borrower
or any of its  subsidiaries  as a result of any securities  pledge or otherwise,
(c) any other Person operating the business or substantially all of the property
of the referenced Person, or vice versa, or (d) any director,  officer,  manager
or other  executive of or partner,  member or joint  venturer in the  referenced
Person or such other Person. If the referenced Person is an individual, then the
term "Affiliate"  also shall include members of the immediate family  (including
parents,  spouse and children) of such  individual and any "Affiliate" of one or
more of those family members. The terms "control",  "controlling",  "controlled"
and the like shall mean the direct or indirect possession of the power to direct
or cause  the  direction  of the  management  or  policies  of a  Person  or the
disposition of its assets or properties, whether through ownership, by contract,
arrangement or understanding, or otherwise.

"Agreement"   shall  mean  this  Term  Loan,   Guaranty  and  Security
Agreement,  together with all schedules and exhibits hereto,  as the same may be
supplemented,  modified,  amended, restated or replaced from time to time in the
manner provided herein.

"Alternate Base Rate" shall mean a fluctuating annual rate of interest
in effect from time to time that for any day shall be equal to the highest of:

(i)    the highest  applicable rate of interest for such day under the Senior
Loan Documents plus six percent per annum; and

(ii)   the Federal Funds Rate for such day plus ten percent per annum.

"Applicable  Law" shall mean any applicable  law,  including  (without
limitation) any: (a) federal,  state,  territorial,  county,  municipal or other
governmental or quasi-governmental  law, statute,  ordinance,  rule, regulation,
requirement or use or disposal  classification or restriction,  whether domestic
or   foreign;   (b)   judicial,   administrative   or  other   governmental   or
quasi-governmental   order,   injunction,   writ,  judgment,   decree,   ruling,
interpretation,  finding or other directive,  whether  domestic or foreign;  (c)
common law or other legal or quasi-legal precedent; (d) arbitrator's, mediator's
or referee's decision,  finding, award or recommendation;  or (e) charter, rule,
regulation  or other  organizational  or  governance  document  of any  national
securities  exchange or market or other  self-regulatory  or  governing  body or
organization.

"Authority"   shall  mean  any   governmental  or   quasi-governmental
authority,  including  (without  limitation)  any federal,  state,  territorial,
county,  municipal or other  government or  governmental  or  quasi-governmental
agency,  board,  branch,  bureau,   commission,   court,   department  or  other
instrumentality  or political unit or subdivision,  whether domestic or foreign,
or any  national  securities  exchange  or  market or other  self-regulatory  or
governing body or organization.

"Bankruptcy  Law" shall mean the United  States  Bankruptcy  Code,  as
amended,  or any other present or future  Applicable Law respecting  bankruptcy,
reorganization,   insolvency,   readjustment   of  debts,   relief  of  debtors,
dissolution or  liquidation,  any  corresponding  Applicable Law of any State or
foreign  jurisdiction,  or any  succeeding  Applicable  Law,  and the  rules and
regulations promulgated  thereunder;  in 

SPAR ESOP Term Loan Agreement

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each case as the same may have been and hereafter may be supplemented, modified,
amended, restated or replaced from time to time.

"Bankruptcy  Proceeding"  shall mean the filing or  submission  of any
petition or other document for relief, bankruptcy,  insolvency,  receivership or
other remedy, or the existence of any case, action, suit, or proceeding, whether
voluntary  or  involuntary,   under  any  Bankruptcy  Law,   including  (without
limitation) any event referenced in Section 8.01(h) or 8.01(i) hereof.

"Books and Records",  "Books" and "Records" each shall mean all of the
referenced  Person's books and records,  including (without  limitation) any and
all (i) corporate, partnership or limited liability company books and minutes or
other records of proceedings,  stock,  partner or membership  books and transfer
ledgers,  (ii) other instruments,  indentures,  agreements,  charters,  by-laws,
certificates  or  other  documents  or  statutory  equivalents   respecting  the
referenced Person or its organization,  governance or operation, (iii) financial
books, ledgers,  bills and other invoices,  canceled checks and check registers,
and other receipt, disbursement or financial records and data, (iv) customer and
vendor lists,  rent rolls, and computer and other data bases, (v) bills of sale,
contracts,  invoices,  and other evidence of sales, leases or other dispositions
and purchases,  leases or other acquisitions,  (vi) tax returns,  registrations,
reports and other filings with  Authorities,  (vii) leases,  contracts and other
agreements,  (viii) insurance policies, (ix) correspondence,  memoranda,  notes,
files and folders,  and (x) other documents,  papers, data and other collections
of  information;  in each case whether on paper,  film or other  tangible  copy,
stored on disc or tape,  in computer  memory or other  electronic  storage or in
some other storage medium, whether transmitted or received by email, internet or
other  transmission  method or medium,  and whether or not in the  possession of
such  Person  or a third  party  service  provider,  and as each  has  been  and
hereafter may be supplemented, renewed, extended, modified, amended, restated or
replaced  from time to time,  and in each case whether now existing or hereafter
acquired, created, executed, modified or otherwise existing (including,  without
limitation, during the pendency of any Bankruptcy Proceeding).

"Borrower" shall have the meaning assigned to it in the  Introduction,
above.

"Borrower's  Contribution  Agreement"  shall mean the letter agreement
between the Borrower  and the Seller dated as of June 30, 2002,  as the same may
be supplemented,  modified,  amended,  restated or replaced from time to time in
the manner provided therein.

"Borrower's  Obligations"  shall mean any and all (i) Loans (including
future advances),  together with accrued and unpaid interest thereon, (ii) other
amounts  to be paid and all  other  obligations  to be  performed  or  otherwise
satisfied by the Borrower under any Note or any other Loan  Instrument  (whether
individually, jointly, severally or otherwise), (iii) any amounts to be paid and
obligations  to be performed or  otherwise  satisfied by the Borrower  under any
Stock Purchase Document (whether individually, jointly, severally or otherwise),
and (iv)  overdrafts  of the  Borrower  honored  by the  Lender (in its sole and
absolute discretion) and other indebtedness, liabilities or obligations (whether
under any note,  guaranty or other  instrument or document or otherwise)  now or
hereafter  owed to the Lender by the Borrower  (whether  individually,  jointly,
severally or otherwise); in each case including, without limitation, any and all
interest,  fees and other  amounts  accrued,  accruing or  otherwise  applicable
during the pendency of any Bankruptcy  Proceeding,  irrespective of whether such
interest,  fees and other amounts are allowed or allowable as claims in any such
proceeding.

"Borrower's  Redemption  Agreement"  shall mean the  letter  agreement
between the Borrower and its sole shareholder  (prior to the contribution to the
ESOP Trust contemplated under the Borrower's Contribution Agreement) dated as of
June 30, 2002, as the same may be supplemented,  modified,  amended, restated or
replaced from time to time in the manner provided therein.

"Business  Day" shall mean any day during  which the Senior  Lender is
open for  business in New York,  New York,  other than any  Saturday,  Sunday or
other applicable legal holiday.

"Collateral"  shall have the meaning  assigned  to it in Section  7.01
hereof.

"Computation  Period"  shall  mean any  period of  twelve  consecutive
fiscal months of the Borrower and its subsidiaries (including any fiscal year).

"Confidentiality   Agreement"  shall  mean  the   Confidentiality  and
Non-Compete  Agreement among the Borrower,  SPG, and the Lender dated as of June
30,  2002,  as the same may be  supplemented,  modified,  amended,  restated  or
replaced from time to time in the manner provided therein.

SPAR ESOP Term Loan Agreement

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"Credit  Support"  shall  respectively  mean  any and all  agreements,
arrangements  and  obligations   whereby  the  referenced   Person  directly  or
indirectly has guarantied, assumed or otherwise become liable or responsible for
the Indebtedness or other obligation of any other Person,  whether contingent or
otherwise,  and whether or not recourse is limited to  specified  amounts or any
asset or property of the referenced Person,  including (without  limitation) (a)
any guaranty or other  assurance of payment or  performance of any obligation of
any other Person, (b) any  indemnification,  hold harmless or similar agreement,
arrangement or obligation respecting any obligation of any other Person, (c) any
pledge,  hypothecation or other encumbrance,  or any loan or other availability,
of any asset or property of the  referenced  Person in respect of any obligation
of any other Person,  or (d) any agreement,  arrangement or other obligation (i)
to purchase, repurchase or otherwise acquire any obligation of any other Person,
(ii) to purchase, repurchase, sell, lease or otherwise provide any securities or
other assets and  properties  in  connection  with any  obligation  of any other
Person,  (iii) to provide any  discounts,  services or other  accommodations  in
connection  with any  obligation of any other  Person,  (iv) to make any capital
contribution,  advance or loan in  connection  with the  obligation of any other
Person or (v) to otherwise enhance,  support,  repay or discharge any obligation
of any  other  Person;  excluding,  however,  any  endorsement  of a  negotiable
instrument  for  collection or deposit in the ordinary  course of the referenced
Person's business. The amount of an item of Credit Support shall be equal to the
maximum  amount of  Indebtedness  thereby  supported  irrespective  of any other
treatment under GAAP.

"Default"  shall mean any event  that,  with or without  the giving or
receipt of notice,  the  acquisition of knowledge or the passage of time (or any
combination thereof), would constitute an Event of Default.

"Effective Date" shall have the meaning assigned to it in Section 9.10
hereof.

"Environmental Claim" shall mean: (a) any responsibility, liability or
unlawful  act or  omission  under any  Environmental  Law  (whether  alleged  or
otherwise); (b) any tortious act or omission or breach of contract pertaining to
any  Environmental  Substance  (whether alleged or otherwise);  or (c) any other
violation  or  claim  under  any   Environmental   Law  or  in  respect  of  any
Environmental Substance (whether alleged or otherwise).

"Environmental  Law" and "Environmental  Laws" shall respectively mean
any  one or  more of the  Applicable  Laws  pertaining  to:  (a)  any  emission,
discharge,  release,  runoff,  disposal or presence  in the  environment  of any
Environmental Substance; (b) any cleanup, containment, manufacturing, treatment,
handling, transportation, storage or sale of or other activity pertaining to any
Environmental Substance; or (c) any other peril to public or occupational health
or safety or to the environment that may be posed by an Environmental Substance.

"Environmental  Substance" shall mean any toxic  substance,  hazardous
material,  contaminant,  waste,  pollutant or other similar product or substance
that may pose a threat  to  public  or  occupational  health or safety or to the
environment.

"Equipment" shall mean any and all equipment, goods and other tangible
personal  assets and  properties of the Borrower,  wherever  located,  including
(without   limitation)   any  and  all   accessions,   accessories,   additions,
communications and computer hardware (including all network,  control,  routing,
storage, printing and display devices), equipment, Fixtures, furnishings, goods,
machinery,   manuals,  materials,  parts,  replacements,   supplies,  tools  and
vehicles,  whether or not located  upon or affixed to any of the  foregoing,  in
each case  whether  now  existing or  hereafter  acquired,  created,  installed,
modified  or  otherwise  existing  (including,  without  limitation,  during the
pendency of any Bankruptcy Proceeding).

"ERISA"  shall mean the  Employee  Retirement  Income  Security Act of
1974, as amended,  or any  corresponding or succeeding  provisions of Applicable
Law, and the rules and regulations promulgated  thereunder;  in each case as the
same may  have  been  and  hereafter  may be  supplemented,  modified,  amended,
restated or replaced from time to time.

"ERISA Affiliate" and "ERISA  Affiliates" shall  respectively mean any
one or more of any trade,  business,  Person or persons that  together  with the
Borrower would be deemed to be a single  employer  within the meaning of Section
4001 of ERISA.

"ERISA  Effect" shall mean any material and adverse  effect on (a) any
Plan,  (b) the assets  and  properties  of any Plan or (c) any  funding or other
liability of any one or more of the  Borrower or any ERISA  Affiliate in respect
of any Plan (individually or in the aggregate).

SPAR ESOP Term Loan Agreement

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"ERISA  Event"  shall mean any (a)  "accumulated  funding  deficiency"
(whether or not waived),  "prohibited  transaction",  "reportable  event" (other
than any event  for  which the  30-day  notice  requirement  has been  waived by
regulation), "disqualification",  "partial withdrawal" or "withdrawal", "partial
termination" or "termination", "insolvency", "reorganization", or the imposition
of any "penalty" or "withdrawal  liability" in respect of any Plan under (and as
such words and phrases are defined in) ERISA or the Tax Code, as applicable, (b)
any other  violation  of  ERISA,  the Tax Code or any  other  Applicable  Law in
respect of any Plan (whether alleged or otherwise),  (c) supplement or amendment
to or  modification  or  restatement  of any Plan that  could have or has had an
ERISA Effect, or (d) imposition, increase or other adverse change in any funding
obligation  or other  liability  of any one or more of the Borrower or any ERISA
Affiliate in respect of any Plan or to the Pension Benefit Guaranty  Corporation
(individually or in the aggregate).

"ESOP Maximum  Contribution" shall mean for any Computation Period the
minimum amount required under ERISA and the Code for ESOP Plan compliance.

"ESOP Plan" shall mean the Performance  Holdings,  Inc. Employee Stock
Ownership  Plan   established  by  the  Borrower   pursuant  to  the  ESOP  Plan
Declaration.

"ESOP Plan Declaration"  shall mean the document entitled  Performance
Holdings,  Inc. Employee Stock Ownership Plan dated as of July 1, 2002, together
with all  schedules  and  exhibits  thereto,  as the  same may be  supplemented,
modified, amended, restated or replaced from time to time in the manner provided
therein.

"ESOP   Related   Document"  and  "ESOP   Related   Documents"   shall
respectively mean any one or more of the ESOP Plan  Declaration,  the ESOP Trust
Agreement,  the ESOP Trustee Indemnity  Agreement and the ESOP Trustee Retention
Agreement,  the Borrower's  Contribution  Agreement,  the Borrower's  Redemption
Agreement,  and the  various  assignments,  agreements,  instruments  and  other
documents executed by the requisite  Person(s) pursuant to or in connection with
any of the  foregoing and accepted or delivered by the ESOP Trustee or Borrower,
as  applicable  (whether  prior to, on or from time to time after the  Effective
Date)and  any  and  all  waivers,  consents,  agreements,  reports,  statements,
certificates,  schedules and other documents executed by the requisite Person(s)
pursuant to or in connection with any of the foregoing and accepted or delivered
by the ESOP Trustee or Borrower,  as  applicable  (whether  prior to, on or from
time to time after the Effective  Date), as each may have been and hereafter may
be supplemented,  modified,  amended,  restated or replaced from time to time in
the manner provided therein.

"ESOP Trustee  Retention  Agreement"  shall mean the retention  letter
agreement  between the Borrower  and the ESOP Trustee  dated as of July 1, 2002,
together  with  all  schedules  and  exhibits  thereto,   as  the  same  may  be
supplemented,  modified,  amended, restated or replaced from time to time in the
manner provided therein.

"ESOP Trust" shall mean the Performance Holdings,  Inc. Employee Stock
Ownership  Trust  (under  which the ESOP  Trustee  is the  trustee)  established
pursuant to the ESOP Plan Declaration and the ESOP Trust Agreement.

"ESOP  Trust  Agreement"  shall mean the Trust  Agreement  between the
Borrower  and the ESOP  Trustee  dated  as of July 1,  2002,  together  with all
schedules  and  exhibits  thereto,  as the same may be  supplemented,  modified,
amended, restated or replaced from time to time in the manner provided therein.

"ESOP Trustee" shall mean GREATBANC TRUST COMPANY, and its successors,
permitted assigns and legal representatives,  not in its corporate capacity, but
in its capacity as trustee under the ESOP Trust.

"ESOP  Trustee  Indemnity  Agreement"  shall mean the  Indemnification
Agreement  between the Borrower  and the ESOP Trustee  dated as of July 1, 2002,
together  with  all  schedules  and  exhibits  thereto,   as  the  same  may  be
supplemented,  modified,  amended, restated or replaced from time to time in the
manner provided therein.

"event"  shall include  (without  limitation)  any event,  occurrence,
circumstance, condition or state of facts.

"Event of Default"  shall have the  meaning  assigned to it in Section
8.01 hereof.

"Fixture" shall mean any fixture as defined in the UCC.

SPAR ESOP Term Loan Agreement

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"GAAP" shall mean  generally  accepted  accounting  principles  in the
United States of America consistent with those applied in the preparation of the
financial statements referred to in Section 3.07 hereof.

"Guarantor" and "Guarantors"  shall  respectively mean any one or more
of SPG and any other  subsidiary of the Borrower  executing an assumption of the
Guarantor's obligations hereunder as contemplated in Section 5.11 hereof.

"Guarantors'   Obligations"  shall  mean  any  and  all  of  (i)  each
Guarantor's joint, several, absolute,  unconditional and irrevocable guaranty of
the  payment  and  performance  of the  Borrower's  Obligations  and the support
thereof with security interests in the Collateral,  (ii) the other amounts to be
paid and all other  obligations  to be performed  or otherwise  satisfied by any
Guarantor   under  this  Agreement  or  any  other  Loan   Instrument   (whether
individually, jointly, severally or otherwise), (iii) any amounts to be paid and
obligations  to be performed or otherwise  satisfied by any Guarantor  under any
Stock Purchase Document (whether individually, jointly, severally or otherwise),
and (iv)  overdrafts  of any  Guarantor  honored  by the Lender (in its sole and
absolute discretion) and other indebtedness, liabilities or obligations (whether
under any note,  guaranty or other  instrument or document or otherwise)  now or
hereafter owed to the Lender by any Guarantor  (whether  individually,  jointly,
severally or otherwise); in each case including, without limitation, any and all
interest,  fees and other  amounts  accrued,  accruing or  otherwise  applicable
during the pendency of any Bankruptcy  Proceeding,  irrespective of whether such
interest,  fees and other amounts are allowed or allowable as claims in any such
proceeding.

"hereunder",  "herein",  "hereof"  and other words and phrases of like
import shall refer to each and every term and provision of this Agreement.

"High  Yield  Rate"  shall  mean a fixed  rate of  interest  per annum
established with respect to each year the Loans are outstanding,  which interest
rate (a) shall be equal to 12% per annum through  December 31, 2003, and (b) for
2004 and each year thereafter shall be equal to the higher of the median or mean
as of July 1, 2002 of the rates per annum  reported  as the high yield junk bond
interest rates in the Wall Street Journal (or similar  publication or service if
the Wall  Street  Journal  no  longer  reports  such  rate)  on the  immediately
preceding  December 31 (or on the closest business day preceding  December 31 on
which it reports  such rate if December 31 is not a business day or such rate is
reported earlier in the month).

"Holdings  Stock Plan" shall mean the any stock option  plan,  phantom
stock plan or the like of Performance Holdings,  Inc., as approved by the Lender
in its sole discretion,  as the same may be adopted and thereafter supplemented,
modified, amended, restated or replaced from time to time in the manner provided
therein.

"Holdings  Warrant"  shall  have  the  meaning  assigned  to it in the
Revolving Credit Agreement.

"Improvements" shall mean all land development, construction and other
improvements to Real Estate, whether planned,  authorized, under construction or
completed, and whether or not enhancing the value of the referenced Real Estate,
including  (without  limitation) all demolitions,  excavations,  fills and other
site work, roads and sidewalks,  water,  sewer and utility lines,  buildings and
other structures, and all fixtures, furnishings and Equipment located on or used
in connection with the referenced Real Estate, whether or not affixed thereto.

"Indebtedness"  of any  referenced  Person  shall  mean  any  and  all
obligations of the referenced Person: (a) for borrowed money, however evidenced;
(b) evidenced by any promissory note,  bond,  debenture or other similar written
obligation  to pay  money;  (c) for the  deferred  purchase  price of any asset,
property or service;  (d) under any interest rate  protection,  foreign currency
exchange,  or other  interest  or  exchange  rate swap or hedging  agreement  or
arrangement;  (e) in respect of any letter of credit or banker's acceptance; (f)
to reimburse or compensate any other Person  respecting any provisional or other
temporary   credit  in  advance  of  collection  for  deposits  of  any  checks,
instruments  or other  documents  made by the  referenced  Person  or any of its
Affiliates;  (g) as lessee under leases that have been  capitalized or should be
capitalized  under GAAP; (h) respecting loans or advances from any subsidiary or
other  Affiliate;  (i) respecting  any preferred  stock issued by the referenced
Person bearing any mandatory  dividend,  interest or other return, or subject to
any  repurchase  or  redemption,  that is payable in cash or any other  property
(other than as payable  only with common  stock or like  preferred  stock);  (j)
respecting  unfunded  accrued  benefits under plans covered by Title IV of ERISA
and unfunded accrued  post-retirement  benefits under any "welfare benefit plan"
(as defined in ERISA);  or (k)  respecting  other items  treated as  liabilities
under GAAP;  provided,  however,  that Indebtedness  shall not include any trade
liability owed by the referenced  Person to any other Person that arose from the
purchase or sale from such other  Person of goods or services by the  

SPAR ESOP Term Loan Agreement

-7-

referenced  Person in the ordinary course of its business and is treated (in its
entirety) as a current  accounts payable under GAAP. In the event the referenced
Person is a corporation with one or more subsidiaries,  the term  "Indebtedness"
shall mean the Indebtedness of all of them  consolidated in accordance with GAAP
consistently applied as of the date of calculation. Except as otherwise provided
in the financial  covenant  definitions,  the amount of an item of  Indebtedness
shall include all unused  availability  under lines of credit and commitments as
if fully advanced irrespective of any other treatment under GAAP.

"Initial  Term Loan" shall have the meaning  assigned to it in Section
2.02(a) hereof.

"Intellectual  Property"  shall  mean (a) any and all  copyrights  and
copyrighted materials,  logos, patents, service marks, trademarks,  trade names,
domain  names,  computer  programs  and other , know how and other  intellectual
properties of the referenced Person,  including (without limitation) any and all
applications,  invention  disclosures  and pending  items,  any and all designs,
discoveries,  formulae,  ideas,  inventions,  products,  programs,  software and
firmware  (whether in source  code,  object  code or  otherwise,  and  including
(without  limitation) all  "shrink-wrap"  licenses that  accompanied any item of
Equipment or software when obtained),  specifications,  styles,  techniques, and
other  trade  secrets  and works of  authorship  for the  current  and  intended
business,  products  and  prospects,  any and all  license  royalties  and other
payment intangibles,  the proceeds of infringement suits and other proceeds, the
right to sue for past, present and future infringement, all rights corresponding
thereto  throughout  the  world,  and all  reissues,  divisions,  continuations,
renewals,  extensions  and  continuations-in-part  thereof,  and, in the case of
trademarks,  the  good  will of the  business  to  which  each of them  relates,
including (without limitation) the name "Performance Holdings, Inc." and any and
all derivatives thereof; (b) any and all proprietary or confidential information
or  trade  secrets  pertaining  to  any  of  the  assets,  business,   finances,
liabilities,  operations,  procedures  or prospects of the  Borrower,  including
(without limitation) any and all accounting  standards,  policies and variances,
advertisements  and other  promotional  materials  (whether or not copyrighted),
analyses  and  methodologies,  bids,  books and  records,  business,  claims and
controversies,   correspondence,  costs,  credit,  customer  lists,  identities,
contacts and other  information,  data, debt,  disbursements,  discs,  tapes and
other   media,   documents,   expenses,   financial   information,    forecasts,
instructions,  interpretations,  invoices, leases, ledgers, licenses, litigation
and other proceedings,  loans, manuals,  materials,  methods,  orders, payables,
payroll,  personnel,  policies,   presentations,   prices,  products,  programs,
proposals,  prospects,  receipts,  registrations,  reports, services,  software,
source code, strategies,  suppliers, systems, targets, taxes, techniques, terms,
trade  secrets,  and  qualifications;  and (c) any and  all  Books  and  Records
evidencing  or  pertaining  to any of the  foregoing;  in each case  whether now
existing  or  hereafter  acquired,  licensed,  created,  executed,  modified  or
otherwise existing  (including,  without limitation,  during the pendency of any
Bankruptcy  Proceeding),  and  irrespective  of whether any  patent,  copyright,
trademark  or other  right or  protection  has been or can be sought,  issued or
obtained in connection therewith.

"Inventory"  shall  mean  any  and  all  inventory  and  other  goods,
merchandise and other items held by the referenced Person (or on its behalf) for
manufacture,  sale,  lease or other delivery or consumption,  wherever  located,
whether raw materials,  supplies,  parts or other components,  work-in-progress,
finished goods,  returned goods or otherwise,  in each case whether now existing
or  hereafter  acquired,  created,  modified,  finished  or  otherwise  existing
(including,   without   limitation,   during  the  pendency  of  any  Bankruptcy
Proceeding).

"Investment"  shall mean, with respect to any referenced  Person,  (a)
any stock,  warrant,  option,  put, call,  bond,  debenture,  commercial  paper,
governmental  obligation,  note,  certificate of deposit,  partnership  interest
(general or limited),  limited liability company membership or interest or trust
interest,  any  commodity  or future , any  commodity,  future,  swap,  ceiling,
collar,  straddle or other hedge or  protection,  any foreign  currency or other
money, any bank, brokerage,  deposit, securities,  trading or other account, any
other security,  investment property,  financial asset,  investment or interest,
any other  obligation or right to acquire or benefit from any such item, (b) any
direct or indirect capital or other equity contribution to any other Person made
or committed to by the  referenced  Person,  (c) any purchase by the  referenced
Person of all or  substantially  all of the assets and  properties  of any other
Person or any discrete division or other business unit of such other Person, (d)
any agreement or arrangement by or with the referenced Person for the purpose of
entering into any partnership or joint venture with or providing funds or credit
to or for the  benefit of any other  Person,  (e) any direct or  indirect  loan,
advance or Credit Support by the referenced  Person to or for the benefit of any
other Person  (including  interest),  each related governing  document,  and any
right, power,  privilege,  remedies or interest under, in or with respect to any
of the foregoing items in this  subsection,  or (f) any security  entitlement or
other right, power,  privilege,  remedy or interest (whether under any governing
document  or other  related  contract,  instrument,  agreement  or  document  or
otherwise)  of the  referenced  Person  under,  in or with respect to any of the
foregoing  items in this  definition,  in each  case  whether  now  existing  or
hereafter   acquired,   created,   executed,   modified  or  otherwise  existing
(including,   without   limitation,   during  the  pendency  of  any  Bankruptcy
Proceeding), excluding, however, any (i) current trade liability (other than any
Indebtedness)  owed to the referenced Person by any other Person that arose from
the  

SPAR ESOP Term Loan Agreement

-8-

purchase or sale from the referenced Person of goods or services in the ordinary
course of its  business,  or (ii) for the purposes of Articles  III, V and VI of
this  Agreement  only,  prepayment of expenses (A) where such expenses are being
incurred by the referenced  Person in the ordinary  course of its business,  (B)
such expenses are of a type customarily prepaid, and (C) such prepayment is in a
commercially  reasonable amount for a commercially reasonable period. The amount
of any Investment shall be the original cost of such  Investment,  plus the cost
of all  additions  thereto,  and minus the  amount of any  return of  capital or
principal to the extent such return is in cash with respect to such  Investment,
without,  however,  any  adjustments  for  increases  or  decreases  in value or
write-ups, write-downs or write-offs with respect to such Investment.

"Investment  Company  Act" shall mean the  Investment  Company  Act of
1940,  as  amended,  or  any  corresponding  or  succeeding  provisions  of  any
Applicable  Law in any  foreign  jurisdiction,  and the  rules  and  regulations
promulgated thereunder, in each case as the same may have been and hereafter may
be supplemented, modified, amended or restated from time to time.

"Lender"  shall have the meaning  assigned to it in the  Introduction,
above.

"Lien" and "Liens" shall  respectively refer to any one or more of the
following to which the referenced or relevant  Person is a party or by which the
referenced  or relevant  Person,  any of its assets or  properties  or any other
referenced  assets or properties  may be bound or subject:  (a) any  assignment,
pledge,  mortgage,  hypothecation or security interest  (irrespective of whether
the  referenced  Person is personally  obligated  with respect to any obligation
thereby  secured);  (b) any filed  financing  statement  (other  than as secured
party); (c) any consignment,  finance lease,  conditional sale contract or other
title  retention  agreement;  (d) any  assignment,  pledge  or  other  transfer,
restriction  or  encumbrance  of any  right  to  receive  any  income  or  other
distributions  or  proceeds;  (e) any  sale/leaseback  transaction  in which the
referenced Person is the  seller/lessee;  (f) any lien,  charge,  claim or other
encumbrance  arising under any Applicable Law,  whether in favor of an Authority
or otherwise,  including (without  limitation) liens for taxes,  assessments and
other  governmental  charges  and  liens  of  mechanics,  carriers,  warehouses,
suppliers and laborers;  (g) any restrictive covenant,  lease, license, right of
use,  possession or first  refusal,  infringement,  community  property or other
joint  ownership  interest,  limitation  or  restriction  on  use  or  transfer,
exception to title, or other  limitation or restriction on the extent,  exercise
or  enforcement of any right or interest  respecting any asset or property;  (h)
with  respect  to  any  Real  Estate,  any  easement,  right-of-way,  servitude,
encroachment,  restrictive covenant,  reservation,  or other exception to title;
(i)  any  counterclaim,  setoff,  right  of  recoupment,  abatement,  reduction,
community  property right or other claim or  determination,  including  (without
limitation) any right of set off or other claim against assets in the possession
of the  claimant  (whether or not intended as  collateral);  (j) any other lien,
encumbrance  or adverse right or claim of any nature in, to or against any asset
or  property,  or (k) any  covenant  or  agreement  with any  other  Person to a
"Negative  Pledge" (i.e., that the referenced or relevant Person will not (A) do
or permit any one or more of the things  specified in the  preceding  clauses of
this definition or (B) sell, lease,  sublease,  transfer,  exchange,  abandon or
otherwise dispose of, surrender  management,  physical possession or control of,
physically alter or relocate all or any portion of its assets or properties).

"Loan" and  "Loans"  shall  respectively  mean the  principal  amounts
outstanding from time to time (including future advances) respecting any and all
of (i) [Intentionally Omitted], (ii) the Term Loans, and (iii) the other amounts
advanced  from time to time to or on behalf of the Borrower by the Lender or its
designee  pursuant to this  Agreement or any other Loan  Instrument  (including,
without limitation, during the pendency of any Bankruptcy Proceeding).

"Loan Instrument" and "Loan  Instruments"  shall respectively mean any
one or more  of  this  Agreement,  the  Notes,  any  other  security  agreement,
guaranty,  hypothecation  or other  instrument,  agreement  or document  with or
issued or given by the Borrower or any Surety in direct or indirect  support (in
whole or in part) of any of the Borrower's  Obligations or Surety's  Obligations
(as  hereinafter  defined),  the  various  mortgages,  assignments,  agreements,
guaranties,  instruments and other documents creating,  evidencing,  perfecting,
governing or supporting any of the  Obligations  or any Surety's  Obligations or
any interest of the Lender in any collateral  securing or intended to secure any
of  the  Obligations  or  Surety's  Obligations,   and  all  waivers,  consents,
agreements,  reports,  statements,  certificates,  schedules and other documents
executed by the requisite Person(s) pursuant to or in connection with any of the
foregoing and accepted or delivered by the Lender  (whether prior to, on or from
time to time after the Effective Date), as each may be  supplemented,  modified,
amended, restated or replaced from time to time in the manner provided therein.

"Loan Party" and "Loan  Parties"  shall  respectively  mean any one or
more of the Borrower and the Guarantors.

"Margin  Stock"  shall  mean any  "margin  stock"  as  defined  in any
applicable Margin Stock Regulations.

SPAR ESOP Term Loan Agreement

-9-

"Margin Stock  Regulations" shall mean Regulation T, U and/or X of the
Board of  Governors  of the Federal  Reserve  System,  as  applicable,  , or any
corresponding  or succeeding  provisions  of  Applicable  Law, and the rules and
regulations promulgated  thereunder;  in each case as the same may have been and
hereafter may be supplemented, modified, amended, restated or replaced from time
to time.

"Material  Adverse Effect" shall mean any material and adverse effect,
whether individually or in the aggregate, upon (a) the assets, business, income,
operations,  properties or condition, financial or otherwise, of Holdings or any
of its subsidiaries, other than as would be reasonably likely to result from the
events  specified  in Schedule  1.01 hereto (but  subject to any  conditions  or
limits  noted  therein),  (b) the ability of the Borrower to make payment as and
when due of all or any part of the  Obligations,  or (c) the  Collateral  or its
value or the  validity,  enforceability,  perfection or priority of any security
interest of the Lender in any Collateral.

"Material  Document"  shall  mean any  ESOP  Related  Document,  Stock
Purchase Document,  Organizational Document,  Custody Document or other material
instrument, indenture, agreement, document, arrangement or other obligation: (a)
to which  the  Borrower  or any  Surety  is or may be a party;  (b) by which the
Borrower,  any Surety or any of the Collateral is or may be bound or subject; or
(c) by which any of the other material  assets and properties of the Borrower or
any Surety is or may be bound or subject;  in each case  whether now existing or
hereafter existing,  acquired or created, and irrespective of whether reduced to
writing,  and as each has  been and  hereafter  may be  supplemented,  modified,
amended, restated or replaced from time to time.

"Maturity  Date" shall mean the earliest of (a) the Term Maturity Date
with respect to the Term Loan and related  Obligations,  and (b) with respect to
all  Loans  and  other  Obligations  the  date  on  which  the  maturity  of the
Obligations  shall  have been  accelerated  or deemed  accelerated  pursuant  to
Section 8.02 hereof or Applicable Law.

"mortgage" shall mean any mortgage, deed or trust, assignment or rents
or leases or other security deed or security interest in Real Estate.

"Note" and "Notes" shall respectively mean any one or more of the Term
Notes.

"Obligations" as of any date shall mean any and all of the obligations
of the Borrower's Obligations and Guarantors' Obligations.

"Organizational  Document"  shall mean any articles or  certificate of
incorporation,  charter,  by-laws,  limited  liability  company  certificate  or
agreement,  partnership certificate or agreement, or other instrument, agreement
or document  or any  statutory  equivalent  in whole or in part  respecting  the
organization, governance, power or authority of the referenced Person, or of any
direct or indirect general partner, manager, trustee or similar principal of the
referenced  Person  that  is not a  natural  Person,  as  applicable,  including
(without  limitation)  (i) the  Certificate of  Incorporation  or By-Laws of the
Borrower;  (ii) any resolution  with  continuing  effect adopted by the Board of
Directors,  the  management  or other  applicable  committee of  directors,  the
managers,  or the  shareholders  or members of a  referenced  Person,  or of any
direct or indirect general partner, manager, trustee or similar principal of the
referenced Person,  that is a corporation,  limited liability company or similar
entity,  or (iii) any agreement,  trust or  arrangement  among any of its equity
holders  respecting the securities  issued by or any of the beneficiaries of the
referenced  Person,  or of any  direct or  indirect  general  partner,  manager,
trustee or similar  principal of the  referenced  Person,  that is not a natural
Person;  in  each  case  as and  when  executed,  adopted,  filed  or  otherwise
effectuated (as applicable)  from time to time (whether  before,  as of or after
the date hereof),  and  irrespective of whether reduced to writing,  and as each
has  been  and  hereafter  may be  supplemented,  renewed,  extended,  modified,
amended, restated or replaced from time to time.

"Other  Taxes"  shall have the meaning  assigned to it in Section 2.09
hereof.

"Permitted  Investments"  shall  mean:  (a)  certificates  of deposit,
commercial  paper or other market rate  instruments  with final  maturities of 7
days or less issued by and normal business banking accounts with (i) the Lender,
(ii) the Senior Lender,  (iii) any commercial  bank that is organized  under the
laws of the United States or any state thereof, has total capital and surplus in
excess of  $1,000,000,000,  or (iv) the holding  company of any such bank or any
subsidiary of such holding  company;  (b) securities or other  obligations  with
final  maturities  of 7 days or less  from the  date of  acquisition  issued  or
unconditionally  guarantied by the government of the United States of America or
any agency or instrumentality thereof (but only to the extent backed by the full
faith and credit of the United States of America);  and (d) investments in money
market funds having net assets in excess of $1,000,000,000 that invest, and that
are restricted by their respective charters to invest,  solely in investments of
the type described in the immediately preceding 

SPAR ESOP Term Loan Agreement

-10-

subsections (a), (b), and (c) of this definition;  provided,  however,  that any
such item shall only constitute a Permitted Investment as and to the extent held
by the Lender,  its designee or a financial  institution  approved by the Lender
pursuant and subject to a control agreement in form and substance  acceptable to
the Lender.

"Permitted  Lien"  for a  referenced  Person  shall  mean  any  of the
following: (a) statutory liens incurred in the ordinary course of the referenced
Person's  business (i) for taxes,  assessments  or other  governmental  charges,
levies  or  claims,  (ii) of  mechanics,  carriers,  warehouses,  suppliers  and
laborers,  (iii)  respecting  worker's  compensation,   unemployment  insurance,
statutory obligations or social security legislation, or (iv) required by law as
a condition  precedent to the transaction of the referenced Person's business or
the  exercise of any of the  privileges  or licenses  by the  referenced  Person
subject to such Lien, in each case so long as (1) the underlying obligations are
not then required to be paid under Section 5.06 hereof, (2) any reserve has been
established  and any bond or  insurance  has been  obtained  as required by that
Section,  and (3) no such underlying  obligation exceeds $10,000 individually or
in the aggregate with other such underlying  obligations;  (b) liens incurred in
respect  of  judgments  and  awards  discharged  within 30 days from the  making
thereof  so  long  as  the  underlying   obligation   does  not  exceed  $10,000
individually or in the aggregate with other such underlying obligations;  (c) in
the  case  of Real  Estate  other  than  Collateral,  easements,  rights-of-way,
restrictions, covenants and other agreements of record and other similar charges
or encumbrances not interfering with the ordinary conduct of the business of the
referenced  Person; (d) in the case of personal assets and properties other than
Collateral,  any  deposits  made or other  security  interests  incurred  in the
ordinary course of the referenced Person's business to secure the performance of
its tenders, bids, leases (other than capitalized leases), contracts (other than
for Indebtedness or guaranties or other Credit Support), and similar obligations
arising as a result of progress  payments under  government  contracts;  (e) the
security  interests or liens (including leases treated as security  interests or
liens)  encumbering  Equipment  purchased or property  leased by the  referenced
Person with financings  permitted by Section 6.02(a)(iii) hereof so long as they
respectively  secure  only the  corresponding  purchase  money  Indebtedness  or
capitalized  lease  obligations;  (f) the Liens granted from time to time to the
Lender  (whether  or not  assigned  to the  Senior  Lender);  and (g)  currently
existing  Liens that (A) are disclosed in Schedule  3.12(b)  hereto,  (B) do not
secure  Indebtedness  (including  purchase  money  obligations),  and (C) secure
underlying  obligations  that  do  not  exceed  $10,000  individually  or in the
aggregate with other such underlying  obligations,  but those Liens shall not be
increased,  renewed  or  extended  or  extended  to  other  Indebtedness  unless
otherwise permitted by the terms and provisions of this Agreement.

"Permitted  Option"  shall have the meaning  assigned to it in Section
6.07(a) hereof.

"Person" shall include (without limitation) any manner of association,
business trust, company,  corporation,  estate, governmental or other Authority,
group  (including one under Section  13(d)(3) of the  Securities  Exchange Act),
joint venture,  limited liability  company,  natural person (i.e., human being),
partnership, syndicate, trust or other entity.

"Plan" and "Plans"  shall have the meanings  respectively  assigned to
them in Section 3.10(c) hereof.

"Products"  shall have the meaning assigned to it in the definition of
Eligible Billed Receivables.

"Pro Forma  Effect" shall mean the effect(s) any action or other event
proposed  by or on behalf  of the  Borrower  (if it were to happen as  proposed)
could have on (a) the assets,  business,  operations,  properties  or condition,
financial or otherwise, of the Borrower, (b) the ability of the Borrower to make
payment,  or to  otherwise  perform  or  satisfy,  of  all or  any  part  of the
Obligations  as  and  when  due,  or  (c)  the  Collateral,  including  (without
limitation) the effect(s) of including any proposed sale or disposition,  new or
altered Indebtedness or other obligation (and the payments required thereunder),
payment or other  action or event in a pro forma  recalculation  of (among other
things) the  various  financial  measurements  and  covenants  set forth in this
Agreement for or as at the end of the applicable computation or reporting period
then most recently  ended (based on the then most recently  required  compliance
calculations  and any and all subsequent pro forma  calculations on a cumulative
basis with respect to other  action(s)  or  event(s),  if and to the extent they
occurred or continue to be proposed).

"Real  Estate"  shall  include  (without  limitation)  (a)  all  land,
leasehold interests,  easements,  licenses,  rights-of-way or use, appurtenances
and other rights and  interests in real  property,  (b) all  buildings and other
structures and Improvements, (c) all fixtures, furnishings,  Equipment and other
personal property  (including,  without limitation,  leasehold interests in such
personal  property and mobile homes of the type usually installed on a developed
site)  located  on or used  in  connection  therewith,  whether  or not  affixed
thereto,  (d) all leases and subleases thereof,  and (e) all rents,  profits and
other  income,  payments  and  

SPAR ESOP Term Loan Agreement

-11-

proceeds with respect to any and all of the foregoing;  provided,  however, that
"Real Estate" shall not include mortgages or interests therein.

"Representative" and "Representatives"  shall respectively mean any or
all of: (a) in the case of any referenced Person (including, without limitation,
the  Lender),   such  referenced  Person's  Affiliates,   directors,   officers,
employees,  attorneys, agents and other representatives;  and (b) in addition in
the case of the  Lender  or any other  financial  institution,  such  referenced
Person's  participants,   correspondents,   confirming  banks,   custodians  and
designees  and their  respective  Affiliates,  directors,  officers,  employees,
attorneys,  agents  and  other  representatives.  "Revolving  Credit  Loan"  and
"Revolving Credit Loans" shall have the meanings  respectively  assigned to them
in the Revolving Credit Agreement.

"Revolving Credit Agreement" shall mean the Revolving Credit, Guaranty
and  Security  Agreement  among  Holdings  (as  borrower),  the  Borrower  (as a
guarantor) and the Lender dated as of June 30, 2002, together with all schedules
and  exhibits  thereto,  as the same  may be  supplemented,  modified,  amended,
restated or replaced from time to time in the manner provided therein.

"Revolving   Credit   Documents"   shall  mean  the  Revolving  Credit
Agreement,  the Revolving Credit Notes, any other security agreement,  guaranty,
hypothecation or other instrument, agreement or document with or issued or given
by Holdings,  the Borrower or any Surety in direct or indirect support (in whole
or in part) of any of the "Borrower's Obligations" or "Surety's Obligations" (as
defined in the Revolving Credit Agreement), the various mortgages,  assignments,
agreements,  guaranties,  instruments and other documents creating,  evidencing,
perfecting,  governing or supporting any of such Borrower's  Obligations or such
Surety's  Obligations,   and  all  waivers,   consents,   agreements,   reports,
statements,   certificates,  schedules  and  other  documents  executed  by  the
requisite  Person(s)  pursuant to or in connection with any of the foregoing and
accepted or delivered by the Lender  (whether  prior to, on or from time to time
after  the  "Effective  Date"  under  and as  defined  in the  Revolving  Credit
Agreement), as each may be supplemented, modified, amended, restated or replaced
from time to time in the manner provided therein..

"Revolving  Credit Note" and  "Revolving  Credit Notes" shall have the
meanings respectively assigned to them in the Revolving Credit Agreement.

"Rule 144" shall mean Rule 144, as  promulgated  under the  Securities
Act or any  corresponding  or succeeding  provisions of Applicable  Law; in each
case as the same may have  been and  hereafter  may be  supplemented,  modified,
amended, restated or replaced from time to time.

"securities"  of any Person  shall mean any and all equity  securities
and debt securities, general or limited partnership interests, limited liability
company memberships or interests, investment contracts, and any other instrument
or interest commonly understood to be a security issued by that Person.

"Securities Act" shall mean the Securities Act of 1933, as amended, or
any  corresponding  provisions  of any  Applicable  Law in any state or  foreign
jurisdiction,  or any corresponding or succeeding  provisions of Applicable Law,
and the rules and regulations promulgated  thereunder;  in each case as the same
may have been and hereafter may be supplemented,  modified, amended, restated or
replaced from time to time.

"Securities  Exchange Act" shall mean the  Securities  Exchange Act of
1934, as amended,  or any corresponding  provisions of any Applicable Law in any
state or foreign jurisdiction,  or any corresponding or succeeding provisions of
Applicable Law, and the rules and regulations  promulgated  thereunder;  in each
case as the same may have  been and  hereafter  may be  supplemented,  modified,
amended, restated or replaced from time to time.

"Senior Borrower" and "Senior  Borrowers" shall  respectively mean any
one  or  more  of the  borrowers  under  the  Senior  Loan  Documents,  and  the
successors,  assigns  and  legal  representatives  of  each,  and  any  and  all
additional or replacement borrower(s) under any Senior Loan Document. The Senior
Borrowers  currently  include SGRP and most of its  subsidiaries  (including the
Lender).

"Senior Lender" shall mean IBJ WHITEHALL BUSINESS CREDIT  CORPORATION,
its successors, assigns and legal representatives, and any and all additional or
replacement lender(s) under any restated or replacement Senior Loan Document.

"Senior Loan" and "Senior Loans" shall respectively mean the principal
amounts outstanding from time to time (including future advances) respecting any
and all of advances,  loans,  letter of credit  

SPAR ESOP Term Loan Agreement

-12-

advances and the other amounts advanced from time to time to or on behalf of one
or more of the Senior Borrowers by the Senior Lender  thereunder or its designee
pursuant to any Senior Loan Document (including,  without limitation, during the
pendency of any Bankruptcy Proceeding).

"Senior Loan  Agreement"  the Second  Amended and  Restated  Revolving
Credit,  Term Loan and Security  Agreement dated as of September 22, 1999, among
the Senior  Borrowers  and the Senior  Lender,  together  with all schedules and
exhibits  thereto,  as each may have  been and  hereafter  may be  supplemented,
modified, amended, restated or replaced from time to time in the manner provided
therein.

"Senior Loan Document" and "Senior Loan Documents" shall  respectively
mean any one or more of the Senior Loan Agreement,  each and every note,  letter
of credit  application,  security  agreement,  guaranty,  hypothecation or other
instrument,  agreement  or document  with or issued or given by any  borrower or
surety  thereunder in direct or indirect support (in whole or in part) of any of
the  Senior  Loan  Obligations  or related  surety's  obligations,  the  various
mortgages, assignments,  agreements, guaranties, instruments and other documents
creating, evidencing, perfecting, governing or supporting any of the Senior Loan
Obligations  or any related  surety's  obligations or any interest of the Senior
Lender in any  collateral  securing or intended to secure any of the Senior Loan
Obligations  or  related  surety's  obligations,   and  all  waivers,  consents,
agreements,  reports,  statements,  certificates,  schedules and other documents
executed by the requisite Person(s) pursuant to or in connection with any of the
foregoing and accepted or delivered by the Senior Lender  (whether  prior to, on
or from  time to time  after  the  Effective  Date),  as each may have  been and
hereafter may be supplemented, modified, amended, restated or replaced from time
to time in the manner provided therein.

"Senior Loan Obligations" as of any date shall mean any and all of the
obligations of the Senior Borrowers (i) to repay the balance of the Senior Loans
then  outstanding  (including  future  advances),  including  accrued and unpaid
interest  thereon,  (ii) to pay or otherwise perform or satisfy all of the other
amounts to be paid and obligations to be performed or otherwise satisfied by any
Senior Borrower under any Senior Loan Document (whether  individually,  jointly,
severally or otherwise), (iii) to pay or otherwise perform or satisfy all of the
other amounts to be paid and obligations to be performed or otherwise  satisfied
by any Senior  Borrower  under any interest rate  protection,  foreign  currency
exchange,  or other  interest  or  exchange  rate swap or hedging  agreement  or
arrangement  (whether  individually,  jointly,  severally or otherwise) with the
Senior Lender or any of its Affiliates, and (iv) to pay or otherwise satisfy any
and all overdrafts of any Senior  Borrower  honored by the Senior Lender (in its
sole and absolute discretion) and other indebtedness, liabilities or obligations
(whether under any note,  guaranty or other instrument or document or otherwise)
now or  hereafter  owed to the  Senior  Lender by any Senior  Borrower  (whether
individually, jointly, severally or otherwise), together with accrued and unpaid
interest  thereon;  in each  case  including,  without  limitation,  any and all
interest,  fees and other  amounts  accrued,  accruing or  otherwise  applicable
during the pendency of any Bankruptcy  Proceeding,  irrespective of whether such
interest,  fees and other amounts are allowed or allowable as claims in any such
proceeding.

"SGRP"  shall  mean SPAR  Group,  Inc.,  a  Delaware  corporation  and
ultimate parent of the Lender.

"SPAR eTraining Agreement" shall mean that certain SPG Agreement among
SPG and SGRP dated as of January  11,  2002,  together  with all  schedules  and
exhibits thereto,  including,  without limitation,  the "SPAR Standard Terms and
Provisions Exhibit" and the "SPAR Supplemental Terms and Provisions Exhibit", as
the same may be supplemented,  modified, amended, restated or replaced from time
to time in the manner provided therein.

"SPG"  shall  mean SPAR  Performance  Group,  a  Delaware  corporation
currently  having an address at 2245 Keller Way,  Carrollton,  Texas 75006,  and
wholly-owned subsidiary of the Borrower.

"SPG Stock" shall mean the shares of common stock issued by SPG.

"STMI" shall mean SPAR  Trademarks,  Inc., a Delaware  corporation and
indirect subsidiary of SGRP.

"Stock  Purchase  Agreement"  shall mean the Stock Purchase  Agreement
between the Borrower and the Lender dated as of June 30, 2002, together with all
schedules  and  exhibits  thereto,  as the same may be  supplemented,  modified,
amended, restated or replaced from time to time in the manner provided therein.

"Stock  Purchase  Document"  and  "Stock  Purchase   Documents"  shall
respectively  mean any one or more of the  Stock  Purchase  Agreement,  the SPAR
eTraining Agreement, the Trademark Agreement, 

SPAR ESOP Term Loan Agreement

-13-

the  Confidentiality   Agreement,  and  the  various  assignments,   agreements,
instruments and other documents executed by the requisite  Person(s) pursuant to
or in  connection  with any of the  foregoing  and  accepted or delivered by the
Lender  (whether prior to, on or from time to time after the Effective  Date)and
any and all waivers, consents,  agreements,  reports, statements,  certificates,
schedules and other documents executed by the requisite Person(s) pursuant to or
in connection  with any of the foregoing and accepted or delivered by the Lender
(whether  prior to, on or from time to time after the Effective  Date),  as each
may have been and hereafter may be supplemented,  modified, amended, restated or
replaced from time to time in the manner provided therein.

"Subordinated Right" and "Subordinated Rights" shall respectively mean
for each  Guarantor any and all: (a)  advances,  loans,  indebtedness  and other
similar  amounts  (including  interest)  directly  or  indirectly  owed  to such
Guarantor  by  the  Borrower,   any  other  Guarantor  or  any  Surety  (whether
individually,  jointly, severally or otherwise); (b) subrogation,  contribution,
reimbursement, restitution and other similar rights of such Guarantor against or
in respect of (i) the Borrower,  any other Guarantor or any Surety,  or (ii) any
of their respective  assets and properties,  whether  resulting from any payment
made by such Guarantor or otherwise;  and (c) security  interests or other liens
or encumbrances  securing,  or guaranties or other credit support  securing for,
any such advances, loans, indebtedness,  amounts or rights; in each case whether
now or hereafter existing, acquired or created.

"subsidiary"  shall mean any corporation or other entity in respect of
which a Person at the time shall own  directly,  or  indirectly  (through one or
more corporations, nominees or other persons or otherwise), at least one-half of
the aggregate  voting  interests of such  corporation  or other entity,  whether
owned or held (i) of record or  beneficially  or (ii)  individually,  jointly or
otherwise.

"Surety" and "Sureties" shall respectively mean any one or more of any
Guarantor or other co-obligor,  indemnitor,  guarantor,  pledgor or surety of or
other Person providing Credit Support for any of the Obligations or any Surety's
Obligations, whether or not disclosed to the Borrower or any other Surety.

"Surety's  Adverse Effect" shall mean any material and adverse effect,
whether  individually  or in the  aggregate,  upon  (a)  the  assets,  business,
operations,  properties or condition, financial or otherwise, of any Surety, (b)
the ability of any Surety to pay or  otherwise  satisfy (as and when due) any of
its  obligations  under  any of the  Loan  Instruments,  or (c)  any  collateral
provided by any Surety or its value or the validity, enforceability,  perfection
or priority of any security interest of the Lender in any collateral provided by
any Surety.

"Surety's  Obligations"  shall  mean  any and  all:  (a)  "Guarantor's
Obligations"  or  "Guarantors'  Obligations"  under  (and  as  defined  in)  any
Guaranty,  as applicable;  and (b) other Credit  Support and  obligations of any
other Surety under any Loan Instrument.

"Tax Code" shall mean the United States Internal Revenue Code of 1986,
as  amended,   any  corresponding   Applicable  Law  of  any  State  or  foreign
jurisdiction,  or any corresponding or succeeding  provisions of Applicable Law,
in each  case as the same  may have  been  and  hereafter  may be  supplemented,
modified, amended, restated or replaced from time to time.

"Taxes" shall have the meaning assigned to it in Section 2.09 hereof.

"Term Loan" and "Term Loans"  shall  respectively  mean the  principal
amounts outstanding from time to time (including future advances) respecting any
and all of (i) the  Initial  Term  Loan and (ii) each  Additional  Term Loan (if
any).

"Term  Maturity  Date"  shall  mean the first to occur of (a) June 30,
2007, with respect to the Term Loans and related Obligations and (b) the date on
which the  maturity of the  Obligations  shall have been  accelerated  or deemed
accelerated pursuant to Section 8.02 hereof or Applicable Law.

"Term Note" and "Term Notes" shall  respectively  mean any one or more
of the separate Term  Promissory  Notes issued by the Borrower to the Lender (i)
to evidence the Initial Term Loan (as referenced in Section  2.03(b) hereof) and
dated as of the date hereof and (ii) to evidence  the  Additional  Term Loan (as
referenced in Section 2.03(c)  hereof) and dated as of the date hereof,  in each
case as the same may be issued pursuant hereto and thereafter modified, amended,
restated or replaced from time to time in the manner provided therein.

SPAR ESOP Term Loan Agreement

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"Trademark  Agreement"  shall  mean the  Trademark  License  Agreement
between SPG and STMI dated as of June 30, 2002,  together with all schedules and
exhibits thereto, as the same may be supplemented,  modified,  amended, restated
or replaced from time to time in the manner provided therein.

"UCC" shall mean the Uniform Commercial Code of the State of New York,
or any corresponding or succeeding  provisions of Applicable Law of the State of
New York, or any  corresponding  or succeeding  provisions of Applicable Law, in
each case as the same may have been and hereafter may be supplemented, modified,
amended, restated or replaced from time to time.

Section  1.02.   Certain   Definitions  in  Other  Loan   Instruments.
Capitalized  terms used and not otherwise  defined in this Agreement  shall have
the  meanings  respectively  assigned  to  them  in the  other  applicable  Loan
Instruments.

Section 1.03.  UCC  Definitions.  The  following  terms shall have the
meanings respectively assigned to them in the UCC: "chattel paper";  "commercial
tort claim"; "deposit account";  "equipment"; "farm product"; "financial asset";
"fixture";   "general   intangibles";   "goods";   "instrument";    "inventory";
"investment  property";   "letter  of  credit  rights";   "payment  intangible";
"proceeds";   "products";  "securities  account";  "security  entitlement";  and
"software".  The term  "document of title" shall mean a "document" as defined in
the UCC.

Section  1.04.  Singular and Plural  Terms.  Each  definition  in this
Agreement  or any other Loan  Instrument  using a singular  capitalized  term or
other word or phrase also shall  apply to the plural form of such term,  word or
phrase, and vice versa, and all references to the masculine gender shall include
reference to the feminine or neuter gender,  and vice versa, in each case as the
context may permit or require.

Section 1.05.  Pronouns.  Each use in this Agreement or any other Loan
Instrument  of a neuter  pronoun  shall be deemed to include  references  to the
masculine  and  feminine  variations  thereof,  and vice  versa,  and a singular
pronoun shall be deemed to include a reference to the plural variation  thereof,
and vice versa, in each case as the context may permit or require.

Section 1.06.  Including.  The term "including"  shall mean "including
(without  limitation)",  whether  or  not  so  stated.  The  terms  "including",
"including,  but not limited to", "including  (without  limitation)" and similar
phrases (i) mean that the items specifically listed after such term are examples
of the provision  preceding  such term and are not intended to be all inclusive,
(ii)  shall  not in any way  limit (or be  deemed  or  construed  to limit)  the
generality of the provision  preceding such term, and (iii) shall not in any way
preclude  (or be deemed or  construed to  preclude)  any other  applicable  item
encompassed by the provision preceding such term.

Section 1.07.  Section and Other  Headings.  The table of contents and
section  and  other  headings  contained  in this  Agreement  are for  reference
purposes  only and  shall not  affect  the  meaning  or  interpretation  of this
Agreement.

Section 1.08. Amended  Documents.  The inclusion in this Agreement and
the  other  Loan   Instruments  of   supplements,   modifications,   amendments,
restatements, replacements and the like in the definitions of Material Document,
Organizational  Document,  ESOP Related Documents,  Stock Purchase Documents, or
other  term  for  any  instrument,  agreement  or  document  (other  than a Loan
Instrument) or group thereof shall not, and shall not be deemed or construed to,
(a) limit or otherwise  modify or affect any term or provision of this Agreement
or any other Loan Instrument requiring notice to or the consent of the specified
parties thereunder to any supplement,  modification,  amendment,  restatement or
replacement  of any such item, or (b) be permission  for or acceptance of any of
the foregoing by the parties required under any such term or provision.

ARTICLE II

AMOUNTS AND TERMS OF THE OBLIGATIONS

Section 2.01. [INTENTIONALLY OMITTED]

Section 2.02.  The Term Loans.  (a) On the  Effective  Date the Lender
made a term loan to the Borrower of $2,500,000 (the "Initial Term Loan"),  which
at the  Borrower's  direction was retained by the Lender and applied to fund the
Borrower's  payment of a  corresponding  amount of the cash purchase price under
the Stock Purchase  Agreement,  which  direction,  retention and application are
hereby acknowledged, confirmed and ratified in all respects by the Borrower.

(b) On the Effective  Date the Lender made an additional  term loan to
the Borrower of $3,500,000 (the "Additional Term Loan"), which at the Borrower's
direction was retained by the Lender and applied to fund the Borrower's  payment
of a  corresponding  amount of the cash purchase  price under the 

SPAR ESOP Term Loan Agreement

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Stock Purchase Agreement, which direction,  retention and application are hereby
acknowledged, confirmed and ratified in all respects by the Borrower.

(c)  The  Borrower  may  not  reborrow  portions  of  the  Term  Loans
previously repaid by it.

Section 2.03. The Notes. (a) [INTENTIONALLY OMITTED]

(b) The  obligation  of the  Borrower to repay the Initial  Term Loan,
together with  interest  thereon  (including,  without  limitation,  any and all
interest,  fees and other  amounts  accrued,  accruing or  otherwise  applicable
during the pendency of any Bankruptcy  Proceeding,  irrespective of whether such
interest,  fees and other amounts are allowed or allowable as claims in any such
proceeding), shall be evidenced by a Term Promissory Note issued by the Borrower
to the Lender in the aggregate principal amount of $2,5000,000.00 in the form of
Exhibit A hereto and dated as of the date hereof.

(c) The obligation of the Borrower to repay the Additional  Term Loan,
together with  interest  thereon  (including,  without  limitation,  any and all
interest,  fees and other  amounts  accrued,  accruing or  otherwise  applicable
during the pendency of any Bankruptcy  Proceeding,  irrespective of whether such
interest,  fees and other amounts are allowed or allowable as claims in any such
proceeding), shall be evidenced by a Term Promissory Note issued by the Borrower
to the Lender in the aggregate principal amount of the $3,500,000.00 in the form
of Exhibit B hereto and dated as of the date hereof.

Section 2.04. Interest;  Additional Interest.  (a) Except as otherwise
provided in this Section,  the Loans shall bear interest  (computed on the basis
of the  actual  number of days  elapsed  and a year of 360  days) on the  unpaid
principal  balance  of those  Loans  outstanding  from  time to time,  from (and
including) the Effective Date to (and including) the date such principal balance
of such  Loans is repaid in full  (including,  without  limitation,  any and all
interest,  fees and other  amounts  accrued,  accruing or  otherwise  applicable
during the pendency of any Bankruptcy  Proceeding,  irrespective of whether such
interest,  fees and other amounts are allowed or allowable as claims in any such
proceeding),  at a  fluctuating  rate that shall be equal to the High Yield Rate
per annum,  which rate shall change with each  corresponding  change in the High
Yield Rate (as determined  annually in accordance with the definition  thereof).
Interest on those Loans shall be payable by the  Borrower in arrears:  (x) prior
to the Maturity  Date, on the last Business Day of each calendar  month;  (y) in
full on the Maturity Date; and (z) on demand after the Maturity Date.

(b) Any payment of  principal,  interest  or other  amount that is not
paid when due under this Agreement or any other Loan Instrument,  and all of the
Loans  during the  continuance  of any Event of  Default,  shall,  to the extent
permitted by Applicable Law, bear interest  (computed on the basis of the actual
number of days elapsed and a year of 360 days), until the overdue amount is paid
in full (with  interest)  or such Event of Default is no longer  continuing,  as
applicable (including,  without limitation, any and all interest, fees and other
amounts  accrued,  accruing or otherwise  applicable  during the pendency of any
Bankruptcy  Proceeding,  irrespective  of whether such interest,  fees and other
amounts  are  allowed  or  allowable  as  claims in any such  proceeding),  at a
fluctuating annual rate equal to the sum of (i) the higher of (A) the High Yield
Rate per annum or (B) the Alternate Base Rate per annum,  plus (ii) four percent
(4.00%) per annum (which  fluctuating  annual rate under this  subsection  shall
change from time to time  simultaneously with each change in the High Yield Rate
or Alternate  Base Rate),  which  interest rate shall be payable by the Borrower
with  respect  to such  amount(s)  instead of the rate (if any)  established  by
subsection  (b) of  this  Section  with  respect  thereto,  and  which  interest
amount(s) shall be payable upon demand (including,  without limitation,  any and
all interest,  fees and other amounts accrued,  accruing or otherwise applicable
during the pendency of any Bankruptcy  Proceeding,  irrespective of whether such
interest,  fees and other amounts are allowed or allowable as claims in any such
proceeding),  subject,  however, to the maximum rate permitted by Applicable Law
as provided in Section 2.11 hereof.

Section 2.05.  Increased Costs,  Capital Adequacy.  (a) In addition to
the payment of principal,  interest and fees as stated in this Article, if there
shall be any increase in the direct or indirect  costs to the Lender of lending,
funding or maintaining  any Loan, or any reduction in any amount  received or to
be received by the Lender hereunder, due to:

(i)    the  introduction  of or  any  change  in  any  Applicable  Law or the
interpretation   or   administration   thereof,   including   (without
limitation)  the  imposition,   modification  or  application  of,  or
increase  in, (A) any  reserve,  capital  adequacy,  special  deposit,
assessment or similar requirements, (B) any requirement to withhold or
deduct  from any amount  payable  to the  Lender  any  taxes,  levies,
imposts,  duties,  fees,  deductions,  withholdings  or  charges  of a
similar  nature  (other  than  federal,  state  and local  income  and
franchise taxes imposed upon the Lender),  or any interest  thereon or
any  penalties  with  respect  thereto,  imposed,  levied,  collected,
assessed,   withheld   or  deducted   by  any   Authority,   including
subdivisions  and  

SPAR ESOP Term Loan Agreement

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taxing authorities  thereof, or (C) any other restriction or condition
affecting  a  Loan,  the  interest  rate  applicable  thereto  or this
Agreement or any other Loan Instrument;

(ii)   the compliance by the Lender with any regulation, guideline or request
or change therein from any central Lender or other Authority  (whether
or not having the force of law);

(iii)  the repayment,  prepayment or other reduction, in whole or in part, of
any Loan prior to the natural  expiration of the  applicable  Interest
Period, whether as a result of miscalculation, change in circumstance,
consent of the Lender, acceleration of the Obligations or otherwise;

(iv)   the failure by the Borrower to pay the accrued and unpaid  interest on
or repay the outstanding principal balance of any Loan, or any portion
thereof,  when required by the terms and provisions of this Agreement;
or

(v)    any  increase  in the  Lender's  cost of funds  under the Senior  Loan
Documents,  including  (without  limitation)  any increase in interest
rates or fees or any  reimbursement  to the Senior Lender of the kinds
described in clauses (i) through (iv) of this subsection;

then the Borrower from time to time, upon demand by the Lender, shall pay to the
Lender  additional  amounts  sufficient  to  indemnify  the Lender  against  and
reimburse  it for such  increased  costs and reduced  receipts  (but only to the
extent such increased  cost or reduced  receipt has not already been included in
the  calculation of any interest rate or fee or otherwise  reimbursed  under any
other  subsection  of this  Section),  including  (without  limitation)  amounts
sufficient  to  compensate  the Lender for any  breakage  or other costs and any
decrease in margin or other return  incurred in connection  with the  repayment,
prepayment or other reduction of any Loan and the liquidation or redeployment of
the affected  deposits or other funding  arrangements,  in each case  including,
without  limitation,   any  and  all  amounts  accrued,  accruing  or  otherwise
applicable  during the pendency of any Bankruptcy  Proceeding  (irrespective  of
whether such interest, fees and other amounts are allowed or allowable as claims
in any such proceeding).  In the event the Senior Lender requires the payment of
any similar amount under the Senior Loan  Documents,  the Lender may demand that
the Borrower pay to the Lender or its Affiliate additional amounts sufficient to
compensate  it for the portion of such amount  proportional  to the ratio of the
Loans to the Senior  Loans.  A  certificate  as to the amount of such  increased
costs and reduced  receipts  submitted  to the  Borrower by the Lender  shall be
conclusive as to the existence and amount thereof absent  manifest error. If the
Lender has not received  payment for such amounts  within five (5) Business Days
of the date of such  certificate,  the  Lender may apply all or a portion of the
next succeeding payment or prepayment made by the Borrower,  whether intended by
the Borrower to be interest,  principal or otherwise,  first to the reduction of
the amounts of such increased costs and reduced receipts.

(b) In  addition  to the  payment  of  interest  or  fees  under  this
Agreement,  if the Lender or any of its Affiliates  determines or has determined
that (i)  compliance  with any  existing  or future  Applicable  Law,  including
(without limitation) any regulation,  guideline or request from any central bank
or other  Authority  (whether  or not  having  the force of law),  or any change
therein or in the  interpretation  or administration  thereof,  affects or would
affect the amount of capital required or expected to be maintained by the Lender
or its  Affiliate  (taking  into  account its  policies  with respect to capital
adequacy  and desired  rate of return on  capital),  and (ii) the amount of such
capital is increased by or based upon any  commitment or funding to the Borrower
or any other obligation of the Lender or its Affiliates under or related to this
Agreement or any other Loan Instrument  (using such  averaging,  attribution and
allocation  methods as the Lender may  reasonably  deem  appropriate),  then the
Borrower from time to time,  upon demand by the Lender,  shall pay to the Lender
or its  Affiliate  additional  amounts  sufficient  to  compensate  it for those
circumstances,  in each case including,  without limitation, any and all amounts
accrued,  accruing or otherwise applicable during the pendency of any Bankruptcy
Proceeding  (irrespective  of whether  such  amounts are allowed or allowable as
claims in any such  proceeding).  In the event the Senior  Lender  requires  the
payment of any similar  amount under the Senior Loan  Documents,  the Lender may
demand that the Borrower pay to the Lender or its Affiliate  additional  amounts
sufficient to compensate it for the portion of such amount  proportional  to the
ratio of the Loans to the Senior Loans.  A certificate  as to the amount of such
compensation  submitted to the Borrower by the Lender shall be  conclusive as to
the existence and amount thereof absent  manifest  error.  If the Lender has not
received  payment for such amounts  within five (5) Business Days of the date of
such  certificate,  the Lender may apply all or a portion of the next succeeding
payment or prepayment made by the Borrower,  whether intended by the Borrower to
be  interest,  principal  or  otherwise,  first to the  reduction of such billed
amount.

(c) In addition to the payment of increased costs and reduced receipts
as provided in this Section (but without  duplication of such amounts),  as well
as the payment of principal,  interest and fees as stated elsewhere herein,  the
Borrower  acknowledges  and agrees  that:  in extending  the Loans  (rather than

SPAR ESOP Term Loan Agreement

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receiving a cash payment under the Stock Purchase  Agreement) the Lender will be
carrying a corresponding  higher level of loans under the Senior Loan Documents;
and  accordingly,  from time to time,  upon demand by the Lender,  the  Borrower
shall pay to the  Lender  or its  Affiliate  additional  amounts  sufficient  to
compensate it for its pro rata share (based on the ratio of the then outstanding
balance  of the Loans to the then  outstanding  balance  of the loans  under the
Senior Loan Documents) of any and all fees, costs,  reimbursements,  expenses or
other amounts (other than principal and interest and without  duplication of the
amounts  covered by subsections  (a) and (b) of this Section) owed by any Senior
Borrower  under the  Senior  Loan  Documents,  in each case  including,  without
limitation, any and all amounts accrued, accruing or otherwise applicable during
the pendency of any Bankruptcy Proceeding  (irrespective of whether such amounts
are allowed or allowable as claims in any such proceeding).

Section 2.06.  Voluntary and Mandatory Payments.  (a) The Borrower may
voluntarily  prepay the Term Loans,  whether in full at any time or in part from
time to time in integral multiples of $10,000 in an amount that is not less than
$100,000,  in either case  without  premium or  penalty,  by giving the Lender a
signed  notice of its  election,  or by giving the Lender notice of its election
both by telephone and telecopy of a signed notice;  provided,  however, that the
Borrower  may not prepay any portion of the Initial Term Loan prior to repayment
of the  Additional  Term Loan in full.  Notice of such  prepayment  election (i)
shall be  delivered  to the  Lender at least  three  Business  Days prior to the
requested  prepayment date (unless the Lender permits a shorter notice period in
its sole and absolute  discretion)and  (ii) shall be irrevocable once given. The
Borrower  shall repay the Loans on the date and in the amount  specified in such
notice of prepayment election.

(b) Each voluntary or mandatory  prepayment of the Term Loans shall be
accompanied  by  payment  in  full  of  all  interest  accrued  to the  date  of
prepayment.

(c) Each  voluntary  and  mandatory  prepayment  (e.g.,  other  than a
scheduled  installment of the Initial Term Loan) made on the Term Loans shall be
applied  first to reduce any unpaid or  unreimbursed  fees and  expenses  of the
Lender under the Loan  Instruments and Revolving  Credit Documents until paid in
full, then to reduce any accrued and unpaid interest until paid in full, then to
reduce the Additional Term Loan until repaid in full,  thereafter to the Initial
Term Loan to  reduce  the  installment  (if any) and  final  payments  due under
subsection  (d) of this  Section in the inverse  order of their  respective  due
dates, and thereafter in accordance with Section 2.08(d) hereof.

(d) The  Borrower  shall repay the Initial  Term Loan (i) in quarterly
installments  of (A)  $25,000  each on the last  Business  Day of each  calendar
quarter,  commencing with the quarter ending March 31, 2003, (B) $50,000 each on
the last  Business Day of each  calendar  quarter,  commencing  with the quarter
ending  March 31,  2004,  (C)  $100,000  each on the last  Business  Day of each
calendar  quarter,  commencing  with the quarter  ending March 31, 2005, and (D)
$200,000 each on the last Business Day of each calendar quarter, commencing with
the quarter  ending March 31, 2006;  (ii) in an installment of $250,000 on March
31, 2007; and (iii) in an installment of $750,000 on June 30, 2007.

(e) The Borrower  shall make a mandatory  prepayment of the Term Loans
on the 15th day of each February of each year,  commencing on February 15, 2004,
with respect to the fiscal year ended December 31, 2003, equal to:

(i)    40% of the amount of Adjusted Cash Flow for the immediately  preceding
fiscal year, irrespective of amount; and in addition;

(ii)   35% of the amount of Adjusted Cash Flow for the immediately  preceding
fiscal  year in excess  of the  targeted  Adjusted  Cash Flow for such
fiscal year in Exhibit D hereto;

in each case applied as provided in subsection (c) of this Section.

(f) The Borrower  shall repay the principal  balance then  outstanding
under the Term Loans in full on the Maturity Date.

(g) The Borrower shall make an additional  mandatory prepayment of the
Loans  promptly,  but in any event within three  Business  Days,  following each
receipt of net cash  proceeds by the Borrower in an amount equal to the net cash
proceeds  received in connection with (1) any voluntary sale,  lease,  transfer,
assignment,  liquidation or other  disposition of (A) any equity interest in the
Borrower or (B) any Collateral  other than  Inventory as expressly  permitted by
Section   7.03(a)   hereof  or  (2)  any   involuntary   transfer,   assignment,
discontinuation,  liquidation, condemnation, destruction or other disposition of
any Collateral,  in each case applied first to reduce any unpaid or unreimbursed
fees and expenses of the Lender under the Revolving  Credit Documents until paid
in full,  then to reduce any accrued  and unpaid  interest  

SPAR ESOP Term Loan Agreement

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under the  Revolving  Credit  Documents  until paid in full,  then to reduce the
Revolving  Credit  Loans  until paid in full,  and  thereafter  as  provided  in
subsection (c) of this Section; provided, however, that the first $10,000 in the
aggregate of net cash proceeds  received by the Borrower in connection  with any
such asset disposition  within any fiscal year shall be excluded for the purpose
of determining such additional mandatory prepayments;  and provided further that
nothing in this  subsection  is intended,  or shall be deemed or  construed,  to
authorize or permit any sale or other disposition of any Collateral in violation
of any term or provision of this Agreement or any other Loan Instrument.  To the
extent  applicable  and not already  reflected,  the Borrower may in determining
such  net  cash  proceeds  deduct   reasonable  and  usual  costs  of  voluntary
disposition (other than payments to Affiliates),  and real property and transfer
taxes paid or currently  payable in respect to the  transaction,  as well as the
principal  amount of any permitted  purchase money  indebtedness  required to be
repaid from the proceeds of any  disposition of the underlying  collateral.  The
Borrower shall give the Lender prompt notice of any occurrence that could result
or has resulted in any of the events described above involving net cash proceeds
in excess of $1,000,  which notice shall specify the terms thereof, and upon the
request of the Lender the Borrower  shall give the Lender  copies of all related
documentation as it becomes available to the Borrower.

(h)  Notwithstanding  anything  to  the  contrary  contained  in  this
Agreement or any other Loan  Instrument,  the Borrower  acknowledges  and agrees
that any  reimbursable  amount or expense or other advance that is not described
elsewhere  in this  Section and for which no due date or time period for payment
is  specified  in this  Agreement or any other Loan  Instrument,  together  with
interest thereon as provided in Section 2.04 hereof, shall be due and payable on
demand, and that the representations,  warranties, covenants and other terms and
provisions of this Agreement and the other Loan Instruments set forth herein and
therein  are not  intended  and shall not be  deemed or  construed  to limit the
demand  nature of the  obligations  of the  Borrower  in  respect  of such other
amount,  expense or advance hereunder and thereunder,  without,  however, in any
way limiting the applicability of the terms and provisions of this Agreement and
the other Loan  Instruments  in respect  of any  collateral  or any of the other
Loans or other Obligations of the Borrower.

(i) The Obligations then outstanding  shall be due and payable in full
on the Maturity  Date,  and to the extent  arising  thereafter  shall be due and
payable on demand, in each case notwithstanding  anything in this Article to the
contrary.

Section  2.07.  [Intentionally  Omitted]  

Section  2.08.   Payments  and  Applications.   (a)  All  payments  of
principal,  interest,  fees and other  amounts  due the Lender  pursuant to this
Agreement  and the  other  Loan  Instruments  shall be made in U.S.  Dollars  in
immediately  available  funds by 12:30  P.M.  (New York  City  time) on the date
payment is due to the Lender at its offices at 580 White Plains Road, Tarrytown,
New York 10591, as otherwise  provided in subsection (b) of this Section,  or as
otherwise  instructed by the Lender.  All advances and payments made pursuant to
this Agreement and the other Loan  Instruments  may be recorded by the Lender on
its books and records,  and such books and records shall be conclusive as to the
existence and amounts thereof absent manifest error.  The Lender in its sole and
absolute  discretion  at any time and from  time to time  (whether  prior to any
transfer or production of any Note or otherwise)  may endorse or otherwise  list
(in whole or in part) on any Note or on any  schedule  thereto  prepared  by the
Lender the date,  amount,  type and/or  other  pertinent  characteristic  of any
advance or other Loan or any interest rate or Interest Period applicable thereto
and/or all payments of principal on any Loan or other Obligation.

(b) The parties intend that payments of the  Obligations  will be made
through the wire transfer of immediately  available  funds to the Lender to such
account  as the Lender  from time to time may  direct by  written  notice to the
Borrower,  as and when such  Obligations  become due. The  Obligations  shall be
deemed  to have  been  paid or  repaid  only to the  extent  of the  immediately
available  funds  actually  received  from any Loan  Party  and  applied  to the
Obligations  notwithstanding  any  internal  procedure  of  the  Lender  to  the
contrary.

(c) Should any payment become due and payable on other than a Business
Day, the maturity thereof shall be extended to the next succeeding Business Day,
and, in the case of any payment of principal,  interest shall be payable thereon
at the rate per annum specified in this Agreement during such extension.

(d) Except as  otherwise  provided  in this  Agreement,  so long as no
Event of Default or Default is then continuing, any funds received by the Lender
from or on behalf of any Loan Party  (whether  pursuant  to any of the terms and
provisions of this Agreement or any other Loan  Instrument)  shall be applied to
the  following  items in the  manner  and  order  reasonably  designated  by the
Borrower to the extent  permitted by Applicable  Law;  provided,  however,  that
absent such  designation or during the  continuance of any such Event of Default
or Default,  those funds  (including the net cash proceeds from any  Collateral)
instead  may 

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be applied by the Lender to the following  items in such order and manner as may
be  determined  by the Lender in its sole and absolute  discretion to the extent
permitted by Applicable Law:

(i)    the  payment  to or  reimbursement  of the  Lender  for any  fees  and
expenses for which it is entitled to be paid or reimbursed pursuant to
any  of  the   provisions  of  this   Agreement  and  the  other  Loan
Instruments;

(ii)   the payment of accrued and unpaid interest on the Term Loans;

(iii)  the payment of due and unpaid principal on the Term Loans;

(iv)   the  establishment  or maintenance of any cash collateral  required or
permitted under any Loan Instrument;

(v)    the payment in full of all other  Obligations under this Agreement and
the other Loan Instruments; and

(vi)   the payment in full of all "Obligations" under (and as defined in) the
Revolving Credit Agreement;

provided,  however,  that (A)  collections on the Accounts  Receivable  shall be
applied as provided in the Revolving Credit Agreement, and (B) in the event of a
foreclosure  upon the Collateral  granted by SPG, the proceeds  thereof shall be
applied first as provided in the Revolving Credit Agreement.

Section 2.09. Taxes. Any and all payments made by any Loan Party under
this Agreement or any other Loan Instrument  shall be made free and clear of and
without any reduction for any and all present or future taxes, levies,  imposts,
deductions, charges or withholdings, and any and all liabilities and obligations
with  respect  thereto,  excluding,  however,  such taxes as are  imposed on the
Lender by the  jurisdiction of its organization or its lending office engaged in
the Loans (or any political  subdivision  thereof) with respect to the income or
franchise  of  the  Lender  (all  such  non-excluded  taxes,  levies,   imposts,
deductions,  charges or withholdings being hereinafter  collectively referred to
as the  "Taxes").  In addition,  the Loan Parties  shall (on a joint and several
basis) pay, as and when due, any and all present or future stamp or  documentary
taxes or other  excise or  property  taxes,  charges or similar  levies that may
arise from any execution,  delivery,  performance,  existence or registration of
this  Agreement or any other Loan  Instrument  or any payment made  hereunder or
thereunder (collectively, "Other Taxes"). If any Loan Party shall be required by
Applicable  Law to deduct any Taxes or Other Taxes from or in respect of any sum
payable to the Lender under this Agreement or any other Loan Instrument, (i) the
sum payable  shall be increased  as may be  necessary so that,  after making all
required  deductions,  the Lender  shall  receive an amount equal to the sum the
Lender would have received if no such  deductions  had been made,  (ii) the Loan
Party  shall make such  deductions,  and (iii) the Loan Party shall pay the full
amount  deducted  to the  relevant  taxation  Authority  or other  Authority  in
accordance  with Applicable Law. Within 30 days after the date of any payment of
Taxes or Other Taxes by a Loan Party,  the Loan Party will furnish to the Lender
the  original  or a  certified  copy of a receipt  evidencing  payment  or other
documentation reasonably satisfactory to the Lender evidencing payment. The Loan
Parties will furnish to the Lender, upon the Lender's request from time to time,
an officer's certificate stating that, to the knowledge of the signer, all Taxes
and Other  Taxes that are or have  become due have been paid.  The Loan  Parties
shall (on a joint and  several  basis)  indemnify  and  reimburse  the Lender on
demand  (payable  within 30 days of written demand) for the full amount of Taxes
or Other  Taxes paid by the Lender (as the case may be) and any and all  claims,
liabilities,  losses and expenses  (including,  without  limitation,  penalties,
interest, and attorneys and other professional expenses, disbursements and fees)
of the Lender  arising  therefrom  or related  directly or  indirectly  thereto,
whether or not such Taxes or Other Taxes were correctly or legally asserted.  In
the event the Senior Lender requires the payment of any similar amount under the
Senior Loan Documents, the Lender may demand that the Borrower pay to the Lender
or its Affiliate  additional amounts sufficient to compensate it for the portion
of such amount proportional to the ratio of the Loans to the Senior Loans.

Section 2.10. Lost or Damaged Notes.  In the event of the loss,  theft
or  destruction  of a Note,  the Borrower shall execute and deliver an identical
new Note to the Lender in substitution therefor upon the receipt by the Borrower
of (i) notice from the Lender confirming such event and (ii) if requested by the
Borrower,  an indemnity  agreement from the Lender in such form and substance as
may be acceptable to the Lender and  reasonably  acceptable to the Borrower.  In
the event of the  mutilation  of or other damage to a Note,  the Borrower  shall
execute  and  deliver  an  identical  new  Note to the  Lender  in  substitution
therefor,  following  which the Lender will return the mutilated or damaged Note
to the Borrower.

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Section 2.11. Maximum Interest Rate. It is the intention of the Lender
and the  Borrower  that the interest (as defined  under  Applicable  Law) on the
Loans that may be charged to, collected from or received from the Borrower shall
not exceed the maximum  rate  permissible  under  Applicable  Law.  Accordingly,
anything  in this  Agreement,  any  Note or any  other  Loan  Instrument  to the
contrary  notwithstanding,  in the event any interest (as so defined) is charged
to,  collected from or received from the Borrower by the Lender  pursuant hereto
or  thereto  in excess of such  maximum  lawful  rate,  then the  excess of such
payment over that maximum shall be applied to the  reduction of the  outstanding
principal balance of the Loans and the other Obligations (without any prepayment
premium or  penalty),  and any portion of such excess  payment  remaining  after
payment and  satisfaction  in full of the  Obligations  shall be returned by the
Lender to the Borrower.

Section 2.12.  Guaranty of Payment and Expenses.  Each Guarantor (on a
joint  and  several  basis  with  the  other  Guarantors)   hereby   absolutely,
unconditionally  and irrevocably  guaranties to the Lender the full and punctual
payment and satisfaction of the Borrower's  Obligations as and when due, whether
at stated maturity, by acceleration or otherwise,  and agrees to pay and satisfy
in full any and all  expenses  that may be paid or incurred by the Lender in the
collection of all or any portion of the  Borrower's  Obligations or the exercise
or  enforcement  of any one or more of the  other  rights,  powers,  privileges,
remedies  and  interests  of the Lender  under this  Agreement or any other Loan
Instrument,  irrespective  of the  manner  or  success  of any such  collection,
exercise or enforcement, and whether or not such expenses constitute part of the
Borrower's Obligations.  The Lender in its sole and absolute discretion shall be
entitled to demand payment of the Borrower's  Obligations (in whole at any time,
or in part from time to time) from the  Guarantors  (or any of them)  under this
Agreement  upon the  occurrence  and  during  the  continuance  of any  Event of
Default. If the Lender makes such a demand: (a) any and all principal,  interest
and other  Borrower's  Obligations  outstanding or accrued under any Note and/or
any other Loan  Instrument  shall be deemed to be immediately due and payable in
full (or for the  item(s)  in the  amount(s)  demanded  if a partial  demand was
made), all without  presentment,  protest,  demand or notice of any kind, all of
which  are  expressly  waived  by each  Guarantor  (and in the case of a partial
demand,  without in any way affecting any of the  Guarantors'  Obligations  with
respect to the balance of the Borrower's Obligations not demanded); and (b) each
Guarantor  (on a joint  and  several  basis  with the  other  Guarantors)  shall
immediately pay to the Lender the amount demanded in full.

Section 2.13. Continuing Guaranty and Agreement, Payment in Accordance
with Terms,  Etc. Each  Guarantor  covenants  and agrees that:  (a) its guaranty
hereunder  is  a  continuing  guaranty  of  the  full  and  timely  payment  and
satisfaction of the Borrower's Obligations,  and not guarantying  collectibility
only, and the security interests granted by it hereunder are continuing security
interests  securing  the  full  and  timely  payment  and  satisfaction  of  the
Borrower's  Obligations  or  the  Guarantors'  Obligations,   and  not  securing
collectibility  only,  in each case whether the  Borrower's  Obligations  or the
Guarantors' Obligations are now or hereafter existing,  acquired or created, and
irrespective  of the fact that from time to time under the terms and  provisions
of the Loan  Instruments  monies may be advanced,  repaid and readvanced and the
outstanding  balance of the Loans may be zero; (b) the Mortgagor's  Guaranty may
not be revoked or terminated by any Guarantor  until such time as the Borrower's
Obligations  and the  Guarantors'  Obligations  shall  have been  fully paid and
satisfied; (c) none of the Borrower's Obligations or the Guarantors' Obligations
shall be deemed to have been  otherwise  fully paid and satisfied so long as any
Loan Instrument (other than the Mortgagor's  Guaranty) shall have any continuing
force  or  effect;  and  (d) the  Borrower's  Obligations  and  the  Guarantors'
Obligations  will be paid and satisfied in full in accordance with the terms and
provisions of the Loan  Instruments  without regard to any applicable law now or
hereafter in effect in any  jurisdiction,  including  (without  limitation)  any
applicable law that might in any manner affect any of those terms and provisions
or any of the rights, powers,  privileges,  remedies and interests of the Lender
with respect thereto, or that might cause or permit to be invoked any alteration
in the time,  amount or manner of payment of any of the Borrower's  Obligations,
the  Guarantors'  Obligations or any Surety's  Obligations by the Borrower,  any
Guarantor, any Surety or any other person (other than the Lender).

Section 2.14.  Agreement Absolute,  Survival of Representations,  Etc.
Each  of the  collateral  grants,  guaranties  and  other  payment  obligations,
representations  and  warranties  (as of  the  date(s)  made  or  deemed  made),
covenants,  waivers and other agreements of each Guarantor (whether  individual,
joint,  several or  otherwise)  contained in this  Agreement  and the other Loan
Instruments: (a) shall be absolute, irrevocable and unconditional,  irrespective
of (among other things) the validity, legality, binding effect or enforceability
of any of the other terms and  provisions  of this  Agreement  or any other Loan
Instrument or any other event  described in this Section;  (b) shall survive the
execution and delivery of this Agreement and the other Loan Instruments, and any
and all advances,  repayments  and  readvances of any or all of the monies to be
lent hereunder and  thereunder;  (c) shall remain and continue in full force and
effect without regard (i) to whether the Loans or other Borrower's  Obligations,
Guarantors'  Obligations or Surety's  Obligations are now or hereafter existing,
acquired or created,  and  irrespective of the fact that from time to time under
the terms and provisions of the Loan Instruments monies may be advanced,  repaid
and readvanced and the 

SPAR ESOP Term Loan Agreement

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outstanding balance of the Loans may be zero, (ii) to any extension or change in
the time, manner, place and other terms and provisions of payment or performance
of any one or more of the Loans or other Borrower's Obligations, any Guarantors'
Obligations  or any  Surety's  Obligations,  (iii) to any waiver,  modification,
extension, renewal,  consolidation,  spreading,  amendment or restatement of any
term or provision of this Agreement or any other Loan Instrument  (except as and
to the extent expressly modified by the terms and provisions of any such waiver,
modification,   extension,  renewal,  consolidation,   spreading,  amendment  or
restatement),  (iv) to any  acceptance  by the Lender of (A) any partial or late
payment,  which shall not constitute a satisfaction or waiver of the full amount
then due or the resulting Default or Event of Default, or (B) any payment during
the continuance of any Default or Event of Default, which shall not constitute a
waiver or cure  thereof;  and the Lender  may accept or reject any such  payment
without  affecting  any of its rights,  powers,  privileges,  remedies and other
interests under this Agreement,  the other Loan  Instruments and applicable law;
(v) to any  full,  partial  or  non-exercise  of  any  of  the  rights,  powers,
privileges,  remedies and  interests of the Lender under any Loan  Instrument or
applicable  law,  against the  Borrower,  any Surety or any other Person or with
respect  to any of the  Borrower's  Obligations,  Guarantors'  Obligations,  any
Surety's  Obligations,  any other  obligations  or any  collateral  or  security
interest therein, which exercise or enforcement may be delayed,  discontinued or
otherwise not pursued or exhausted for any or no reason whatsoever, or which may
be waived, omitted or otherwise not exercised or enforced (whether intentionally
or otherwise), (vi) to any surrender, repossession,  sequestration, foreclosure,
conveyance or assignment  (by deed in lieu or otherwise),  sale,  lease or other
realization,  dealing,  liquidation or disposition  respecting any collateral or
setoff  respecting  any  account  or  other  asset in  accordance  with the Loan
Instruments  or  applicable  law  (except as and to the  extent  the  Borrower's
Obligations have been permanently reduced by the application of the net proceeds
thereof),  (vii) to the  perfected  or  non-perfected  status or priority of any
mortgage or other security  interest in any such  collateral,  which may be held
without  recordation,  filing  or other  perfection  (whether  intentionally  or
otherwise),  (viii) to any release,  settlement,  adjustment,  subordination  or
impairment  of all or  any  part  of  the  Borrower's  Obligations,  Guarantors'
Obligations,  any Surety's Obligations,  any other obligations or any collateral
or any security interest therein,  whether intentionally or otherwise (except as
and to the extent  expressly  modified by the terms and  provisions  of any such
release,  settlement or adjustment),  (ix) to any extension, stay, moratorium or
statute of limitations or similar time constraint  under any applicable law, (x)
to any  investigation,  analysis or evaluation by the Lender or its designees of
the  assets,  business,  operations,   properties  or  condition  (financial  or
otherwise)  of the  Borrower,  any  Guarantor,  any other  Surety,  or any other
person,  (xi)  to any  application  to any  obligations  of  the  Borrower,  any
Guarantor or any other Surety other than any Borrower's Obligations, Guarantors'
Obligations  or Surety's  Obligations  of (A) any payments  from such person not
specifically   designated  for   application  to  the  Borrower's   Obligations,
Guarantors'   Obligations  or  Surety's  Obligations  or  (B)  any  proceeds  of
collateral from such person other than from the  Collateral,  (xii) to any sale,
conveyance, assignment,  participation or other transfer by the Lender (in whole
or in part) to any  other  person of any one or more of this  Agreement  and the
other Loan  Instruments  or any one or more of the rights,  powers,  privileges,
remedies or  interests  of the Lender  herein or  therein,  (xiii) to any act or
omission  on the part of the Lender or any other  person,  or (xiv) to any other
event or  circumstance  that  otherwise  might  constitute  a legal or equitable
counterclaim,  defense  or  discharge  of a  borrower,  co-obligor,  indemnitor,
guarantor,  pledgor or surety;  in each case in such manner and order, upon such
terms and  provisions  and  subject  to such  conditions  as the Lender may deem
necessary or desirable in its sole and absolute  discretion,  and without notice
to or further assent from the Borrower, any Guarantor,  any other Surety, or any
other person  (except for such notices as may be expressly  required to be given
to such party under the applicable Loan Instrument); (d) shall not be subject to
any defense, counterclaim,  setoff, right of recoupment, abatement, reduction or
other claim or determination that may have against the Lender, any Surety or any
other person; (e) shall not be diminished or qualified by the death, disability,
dissolution,   reorganization,    insolvency,   bankruptcy,   custodianship   or
receivership  of the Borrower,  any  Guarantor,  any other Surety,  or any other
person, or the inability of any of them to pay their respective debts or perform
or otherwise  satisfy their  respective  obligations  as they become due for any
reason  whatsoever;  and (f) shall  remain and continue in full force and effect
without regard to any of the foregoing acts,  circumstances  or events (i) until
all of the Borrower's  Obligations and Guarantors'  Obligations  have been fully
paid and  satisfied  and (ii)  thereafter  with  respect  to any and all  events
occurring  prior to such  payment  and  satisfaction  and any and all  resulting
claims,  liabilities,  losses and expenses (including,  without limitation,  the
attorneys'  disbursements,  expenses and fees),  whenever  incurred or asserted.
Notwithstanding the foregoing in this Section,  however,  each Guarantor retains
the defense of indefeasible payment to the extent actually paid.

Section  2.15.   Subordination   of   Indebtedness,   Subrogation  and
Contribution  Rights,  Etc. Each  Guarantor  covenants and agrees that until the
Borrower's  Obligations  and  Guarantors'  Obligations  have been fully paid and
satisfied,   any  and  all  Subordinated  Rights  of  such  Guarantor  shall  be
subordinate  and inferior in priority and dignity to the Borrower's  Obligations
and  Guarantors'  Obligations  and  shall  not be  entitled  to any  payment  or
satisfaction (in whole or in part) until, all of the Borrower's  Obligations and
Guarantors' Obligations have been fully paid and satisfied.  Until such time (if
ever) as the Borrower's Obligations and Guarantors'  Obligations have been fully
paid and  satisfied:  (A) no  Guarantor  shall seek any  

SPAR ESOP Term Loan Agreement

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payment or exercise or enforce any right, power, privilege,  remedy or interest
that such Guarantor may have with respect to any Subordinated  Right and (B) any
payment,  asset or property  delivered to or for the benefit of any Guarantor in
respect of any Subordinated  Right shall be accepted in trust for the benefit of
the Lender and shall be promptly  paid or delivered to the Lender to be credited
and applied to the payment and  satisfaction  of the Borrower's  Obligations and
Guarantors' Obligations, whether contingent, matured or unmatured, or to be held
by the Lender as additional collateral,  as the Lender may elect in its sole and
absolute discretion. Each Guarantor hereby acknowledges and agrees that pursuant
to this Agreement such Guarantor has granted to the Lender a continuing security
interest in and to any and all Subordinated  Rights of such Guarantor,  together
with the proceeds thereof and all payments and other  distributions with respect
thereto. In addition to the rights,  powers,  privileges,  remedies and interest
accorded  to the Lender by this  Agreement  or  applicable  law,  the Lender may
exercise any voting,  consent,  enforcement  or other right,  power,  privilege,
remedy or interest pertaining to any Subordinated Right to the same extent as if
the Lender were the outright owner thereof.

Section 2.16.  Waiver of Impairment of  Subrogation  and Other Rights.
Each  Guarantor  acknowledges  and agrees  that:  (a) the  amounts (if any) that
potentially  could be realized by such  Guarantor (or any other  Guarantor),  as
well  as  the  enforceability,  practicality  or  value  of  any  right,  power,
privilege, remedy or interest of such Guarantor (or any other Guarantor),  under
or in respect of any Subordinated Right may be substantially  reduced or limited
or  completely   eliminated  by  any  one  or  more  of  the  following  (either
individually or in the aggregate):  (i) the delay inherent in the  subordination
of those  rights  under this  Agreement,  (ii)  payments  by the  Borrower,  any
Guarantor,  any Surety or any other  person to the  Lender or any other  person,
(iii) any  foreclosure,  sale,  lease or other  liquidation  or  disposition  or
realization respecting any collateral, (iv) any action or inaction by the Lender
or any other person  authorized or waived by the Borrower,  any Guarantor or any
other  authorized  person,  whether  under  this  Agreement  or  otherwise,   or
contemplated,  permitted  or provided for under this  Agreement,  any other Loan
Instrument or applicable  law, (v) the exercise or  enforcement by the Lender of
any  one or  more  of the  Lender's  rights,  powers  privileges,  remedies  and
interests of the Lender under any Loan Instrument or applicable law, or (vi) any
adverse  change  (however  material)  in  the  assets,   business,   operations,
properties,   or  condition  (financial  or  otherwise)  of  the  Borrower,  any
Guarantor,  any Surety or any other person arising out of or related directly or
indirectly  to any of the  foregoing;  (b) the Lender is not acting as an agent,
trustee or other representative (regarding collateral or otherwise) with respect
to any  Subordinated  Right;  (c) the Lender may  exercise or enforce any of the
Lender's  rights,  powers,  privileges,  remedies  or  interests  under the Loan
Instruments  or  applicable  law without any  consideration  of or regard to any
Subordinated  Right or any direct or indirect adverse effect thereupon  (however
material);  (d) no Guarantor  shall be entitled to any payment or other asset or
property (or any part thereof)  delivered to or otherwise realized by the Lender
on account of the Borrower's  Obligations,  Guarantors'  Obligations or Surety's
Obligations or to any  accounting  thereof;  (e) none of the foregoing  (whether
individually or in the aggregate)  shall (i) release,  limit or otherwise affect
the liability of any  Guarantor to the Lender under this  Agreement or any other
Loan Instrument, or (ii) give rise to any action, claim, counterclaim,  right of
setoff or recoupment,  defense, or other remedy on the part of the Borrower, any
Guarantor, any Surety or any other person,  irrespective of frequency, direct or
indirect  effect,  materiality  or direct or indirect  consequences;  and (f) no
Guarantor  shall  raise any,  and each  Guarantor  hereby  expressly  waives and
releases each and every, such action, claim,  counterclaim,  right of setoff, or
recoupment, defense, or other remedy.

Section 2.17. Bankruptcy.  In the event the Lender is not permitted or
is otherwise  unable  (because of the pendency of any  Bankruptcy  Proceeding or
other  proceeding)  to  accelerate  or demand  payment of any of the  Borrower's
Obligations or Guarantors' Obligations,  but otherwise would have been permitted
to do so at such time  pursuant  to any Loan  Instrument,  the Lender may demand
payment in full, may proceed  against any of the Collateral and may exercise and
enforce the Lender's other rights,  powers,  privileges,  remedies and interests
under this  Agreement or any other Loan  Instrument  to which any Guarantor is a
party as if the Borrower's  Obligations and/or Guarantors'  Obligations had been
duly  accelerated  and payment had been duly  demanded,  and no Guarantor  shall
raise, and each Guarantor  hereby  expressly  waives and releases,  any claim or
defense with respect to such deemed acceleration.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

To induce the Lender to enter into this  Agreement  and the other Loan
Instruments  to which it is a party  and to make and  continue  the Loans to the
Loan Parties,  the Loan Parties  jointly and severally  represent and warrant to
the Lender as follows in each Section of this Article:

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Section 3.01. Organization,  Powers, Etc. Each Loan Party: (a) is duly
organized,  validly existing and in good standing under the laws of its state of
incorporation,  which state is correctly  set forth in the  Introduction  hereto
(i.e.,  first paragraph of this  Agreement);  (b) has the power and authority to
carry on its business as now conducted and to own or hold under lease the assets
and  properties it purports to own or hold under lease;  (c) is duly  qualified,
licensed or  registered  to transact its business and in good  standing in every
jurisdiction  in which it purports to or carries on its  business or holds under
lease any of its  assets  and  properties;  (d) has the power and  authority  to
execute and deliver this  Agreement  and each of the other Loan  Instruments  to
which it is or will be a party and to perform all of its  obligations  hereunder
and thereunder; and (e) has its executive office and principal place of business
at the  address  set  forth in the  Introduction,  which  has been so since  its
organization.

Section 3.02.  Separate Legal Entity,  Etc. (a) The full, complete and
correct  legal name of each Loan Party is set forth in the  Introduction  hereto
(i.e.,  first paragraph of this Agreement) and on the signature page hereto, and
has never been  changed and is and has been the only name ever used by such Loan
Party. Each Loan Party has at all times: (i) done business exclusively under its
own name and employer and taxpayer  identification  numbers,  held itself out to
the public as a legal entity  separate  and distinct  from any other Person (and
not  as  a  department  or  division  of  someone   else),   and  corrected  any
misunderstandings  known to it  regarding  the  separate  identity  of each Loan
Party; (ii) used its own separate  stationery,  invoices and checks;  (iii) used
its own logos and  trademarks  and not shared any common logo or trademark  with
any other Person;  (iv) observed all  corporate or  equivalent  formalities  for
maintaining its status as a valid separate  entity;  (v) maintained its records,
books of account,  bank  accounts and other assets and  properties  separate and
apart from those of any other Person and not commingle any of them with those of
any other Person; (vi) promptly corrected any other Person's misunderstanding as
to (A) the  identity  of such Loan Party or any  Affiliate  with whom such other
Person is transacting business, or (B) such Loan Party's alleged  responsibility
for the Indebtedness or other  obligations of any other Person;  (vii) allocated
fairly and reasonably  any overhead  expenses that are shared with each relevant
Affiliate,  including  paying for office  space and  services  performed  by any
employee of an  Affiliate  or vice versa;  and (viii)  maintained  a  sufficient
number  of  employees  or  independent  contractors  in  light  of its  business
operations.

(b) No Loan  Party has at any time:  (i)  engaged in any  business  or
activity other than the ownership and operation and maintenance of its incentive
marketing business,  and activities  incidental thereto;  (ii) acquired or owned
any assets other than the securities of such subsidiaries and such assets as may
be incidental thereto; (iii) merged into or with or consolidated with any Person
or entity or changed its legal structure; and (iv) entered into any agreement or
arrangement  that  would not have been  permitted  after the date  hereof  under
Section 6.11 hereof.

Section 3.03. Consents,  Etc. Except as already obtained and listed on
Schedule 3.03 hereto, no consent, approval or authorization of, or registration,
declaration  or filing with, any Authority or other Person  (including,  without
limitation,  the  shareholders  of any Loan  Party) is  required  as a condition
precedent,  concurrent or subsequent to or in connection  with the due and valid
execution,  delivery and  performance by any Loan Party of this Agreement or any
other  Loan  Instrument  to which  such Loan  Party is or will be a party or the
legality,  validity, binding effect or enforceability of any of their respective
representations,  warranties,  covenants  and other terms and  provisions.  Each
franchise,  license,  certificate,  authorization,  approval or consent from any
Authority  necessary to the present  conduct of the business and  operations  of
each Loan  Party,  or  required  for the  acquisition,  ownership,  improvement,
operation  or  maintenance  by each Loan Party of any  portion of the assets and
properties  it now owns,  operates or  maintains,  has been obtained and validly
granted,  is in full  force and  effect  and  constitutes  valid and  sufficient
authorization therefor.

Section 3.04. No  Restriction on Borrowing  Ability,  Etc. (a) No Loan
Party is regulated by or otherwise  subject to any  Applicable Law that directly
or  indirectly  limits or  otherwise  restricts or governs its ability to incur,
continue or repay  Indebtedness,  to provide Credit Support or to grant security
interests or other Liens in or to any of its assets and  properties  as security
for the  Indebtedness  of itself or others or its  Credit  Support  for  others.
Without limiting the generality of the foregoing:

(b) Except as expressly  permitted by Section 6.09 hereof,  no part of
the proceeds of the Loans will be used to purchase or carry any Margin Stock, to
extend  credit to any other Person for the purpose of purchasing or carrying any
Margin  Stock or in any way or for any  purpose  that  otherwise  violates or is
inconsistent  with any  applicable  Margin Stock  Regulations.  No Loan Party is
engaged principally,  or as one of its important activities,  in the business of
extending credit for the purpose of purchasing or carrying any Margin Stock.

(c) No Loan Party is an "investment  company", an "affiliated person",
"promoter" or "principal underwriter" of an "investment company" or "controlled"
by an "investment  company" (as such 

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terms are  defined in the  Investment  Company  Act).  None of the  transactions
contemplated  by this  Agreement and the other Loan  Instruments  (including the
making of the Loans and the permitted use of the proceeds  thereof) will violate
any provision of the Investment Company Act.

(d) No Loan  Party  is a  "holding  company"  or an  "Affiliate"  or a
"subsidiary  company"  of a "holding  company"  within the meaning of the Public
Utility Holding Company Act of 1935, as amended, or any corresponding provisions
of any Applicable Law in any foreign jurisdiction, and as the same may have been
and hereafter may be  supplemented,  modified,  amended or restated from time to
time, and the rules and regulations promulgated thereunder, or any corresponding
or succeeding provisions of Applicable Law.

(e) No Loan Party is an "employee  benefit  plan"  governed by (and as
defined  in)  ERISA,  and  none of the  assets  or  properties  of the  Borrower
constitutes  or will  constitute  "plan assets"  governed by (and as defined in)
ERISA.

(f) No Loan Party is a  "foreign  Person"  under  (and as defined  in)
ss.1455(f)(3) of the Tax Code or any successor provision.

Section 3.05.  Authorization,  Conflicts  and Validity.  Except as set
forth in Schedule 3.05 hereto,  the execution and delivery by each Loan Party of
this Agreement and each of the other Loan  Instruments to which it is or will be
a party  and  the  performance  by each  Loan  Party  of all of its  obligations
hereunder  and  thereunder:  (a) have  been  duly  authorized  by all  requisite
corporate  action;  (b)  will not  violate  or be in  conflict  with any term or
provision  of  (i)  any  Applicable  Law  (including,  without  limitation,  any
applicable usury or similar law), (ii) any judgment,  order,  writ,  injunction,
decree  or  consent  of any  court or other  judicial  Authority,  or (iii)  any
Organizational  Document of each Loan Party or any Surety; (c) will not violate,
be in conflict  with,  result in a breach of or  constitute  a default  (with or
without the giving or receipt of notice,  the  acquisition  of  knowledge or the
passage of time or any  combination  thereof) under any term or provision of any
Organizational   Document  or  other  Material  Document;   and  (d)  except  as
specifically  contemplated by this Agreement or any other Loan Instrument,  will
not result in the creation or  imposition  of any Lien of any nature upon any of
its assets and properties.  This Agreement and each Note are, and the other Loan
Instruments  to which each Loan Party is or will be a party  when  executed  and
delivered  will be,  legal,  valid and binding  obligations  of such Loan Party,
enforceable in accordance with their respective terms and provisions,  except as
enforceability  may  be  limited  by  (a)  applicable  bankruptcy,   insolvency,
reorganization  and other laws  affecting  the rights or remedies  of  creditors
generally  and (b) rules of equity  affecting  the  enforcement  of  obligations
generally (whether at law or in equity).

Section 3.06. Litigation. Except as set forth in Schedule 3.06 hereto,
there are no  actions,  suits,  investigations  or  proceedings  (whether or not
purportedly  on behalf  of any one or more of the Loan  Parties  or any  Surety)
pending  or,  to  the  best  knowledge  of  the  Loan  Parties,   threatened  or
contemplated  at law,  in  equity,  in  arbitration  or by or  before  any other
Authority  involving or  affecting:  (a) any Loan Party or any Surety  that,  if
adversely  determined,  could have a Material Adverse Effect or Surety's Adverse
Effect;  (b) any alleged  criminal act or activity on the part of any Loan Party
or (to the  knowledge of the Loan Parties) any of its  representatives;  (c) any
ESOP Related Document,  Stock Purchase Document, or any Organizational  Document
of any  Loan  Party  or any  Surety;  (d)  any  Material  Document  (other  than
Collateral) that, if adversely determined,  could have a Material Adverse Effect
or Surety's  Adverse Effect;  (e) any  Environmental  Claim  respecting any Loan
Party or any part of the Collateral;  (f) the  Obligations;  (g) any part of the
Collateral;  or (h) any of the  transactions  contemplated in this Agreement and
the other Loan Instruments;  nor, to the best knowledge of the Loan Parties,  is
there  any  reasonable  basis  for the  institution  of any such  action,  suit,
investigation  or  proceeding.  None of the Loan  Parties  nor any  Surety is in
default with respect to any judgment, order, writ, injunction, decree or consent
of any court or other judicial Authority,  which default could have or has had a
Material Adverse Effect or Surety's Adverse Effect.

Section  3.07.  Financial  Statements,  No  Material  Adverse  Change,
Solvency,  Etc.  (a) The  Borrower  heretofore  has  provided  to the Lender the
balance  sheet of SPG as at December 31,  2001,  and the related  statements  of
earnings,  shareholders' equity, and cash flow for the fiscal year ended on that
date, as part of SGRP's consolidated  financial  statements audited and reported
upon by Ernst & Young, independent certified public accountants. Those financial
statements and reports of the Borrower and the related notes and  schedules,  as
well as those related to later periods (whenever  delivered),  (i) were prepared
in accordance  with GAAP  consistently  applied  throughout  the period  covered
thereby,  except as otherwise  expressly  noted therein,  and (ii) are complete,
accurate and a fair  presentation of the financial  condition of the Borrower as
of the date  thereof and the results of its  operations  for the period  covered
thereby  (subject in the case of interim  statements  to normal  year-end  audit
adjustments).

SPAR ESOP Term Loan Agreement

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(b) The Borrower  heretofore  has provided to the Lender the pro forma
consolidated  and  consolidating  balance  sheet of the  Borrower as at June 30,
2002, and the related pro forma  consolidated  and  consolidating  statements of
earnings,  shareholders' equity, and cash flow for the six-month period ended on
that date.  Those  financial  statements  and  reports of the  Borrower  and its
subsidiaries  and the related notes and  schedules,  as well as those related to
later periods  (whenever  delivered),  (i) were prepared in accordance with GAAP
consistently  applied throughout the period covered thereby,  (ii) fully reflect
all of the Accounts Receivable,  trade payables and other assets and liabilities
of the Borrower and its  subsidiaries,  (iii) are complete,  accurate and a fair
presentation of the financial  condition of the Borrower and its subsidiaries as
of the date  thereof and the results of its  operations  for the period  covered
thereby  (subject in the case of interim  statements  to normal  year-end  audit
adjustments),  provided that statements  relating to or incorporating the period
January 1, 2002,  through June 30, 2002, have been or will have been prepared on
a pro forma basis to reflect the pro forma balance sheet of the Borrower and its
subsidiaries  as at June 30,  2002,  immediately  after  the  conclusion  of the
closing under this Agreement and the Stock Purchase Agreement and to include the
results of operations  for SPG for such periods,  and (iv) have been  separately
certified  to the  Lender by the chief  executive  officer  and chief  financial
officer (or  controller or other most senior  accounting  officer or employee if
there is no chief financial  officer) of the Borrower as satisfying clauses (i),
(ii) and (iii) of this subsection.

(c) The  Borrower  heretofore  has provided to the Lender the separate
actual  balance  sheets of the Borrower and SPG as at May 31, 2002  (immediately
preceding  the  Borrower's  purchase  of  the  SPG  Stock),  and  SPG's  related
statements of earnings,  shareholders'  equity,  and cash flow for the six-month
period  ended on that date.  Those  financial  statements  and  reports  and the
related notes and schedules, as well as those related to later periods (whenever
delivered),  (i) were  prepared in  accordance  with GAAP  consistently  applied
throughout  the period covered  thereby,  (ii) fully reflect all of the Accounts
Receivable,  trade payables and other assets and liabilities of the Borrower and
SPG, respectively,  (iii) are complete,  accurate and a fair presentation of the
financial  condition  of the  Borrower  and  SPG,  respectively,  as of the date
thereof  and in the case of SPG the  results  of its  operations  for the period
covered  thereby  (subject in the case of interim  statements to normal year-end
audit adjustments), and (iv) have been separately certified to the Lender by the
chief executive officer and chief financial officer (or controller or other most
senior accounting officer or employee if there is no chief financial officer) of
the Borrower as satisfying clauses (i), (ii) and (iii) of this subsection;

(d) Since  December 31, 2001,  no event or events have  occurred  that
individually  or in the  aggregate  could  have  or has had a  Material  Adverse
Effect.

(e) After giving  effect to the direct and indirect  Indebtedness  and
other  liabilities  and  obligations  of each  Loan  Party  arising  under  this
Agreement  and the  other  Loan  Instruments,  whether  absolute  or  contingent
(treating all guaranties,  pledges and other  contingent  credit support and all
unused  availability  under  lines of credit  and  commitments  as fully  funded
indebtedness in the maximum amount thereof),  the Loan Parties taken as a whole:
(i) are solvent (i.e.,  the aggregate fair value of their assets exceeds the sum
of their liabilities); (ii) have adequate working capital; and (iii) are able to
pay their debts as they mature.

(f) No Loan Party is or has ever been the  subject  of any  Bankruptcy
Proceeding,  and no Loan Party is currently taking or considering or planning to
take,  and has not ever taken or considered or planned to take, any action under
any  Bankruptcy  Law or any of the other  actions  specified in Section  8.01(h)
hereof,  and to the  knowledge  of each Loan Party no other  Person is currently
considering or planning, or has ever considered or planned, to take any of those
actions.

Section  3.08.  Document  Delivery;  Absence of  Defaults  and Certain
Agreements.  (a) Each Loan Party has  delivered  to the  Lender and its  counsel
true, complete and correct copies of each  Organizational  Document of each Loan
Party and each Surety, ESOP Related Document,  and Stock Purchase Document,  and
Material Document,  together with all supplements,  modifications and amendments
thereto and restatements and replacements thereof.

(b) Except as set forth in Schedule  3.08(b)  hereto,  no act or event
has occurred and is continuing that violates,  is in conflict with, results in a
breach of or  constitutes  a default  (with or without  the giving or receipt of
notice,  the  acquisition of knowledge or the passage of time or any combination
thereof)  under any term or  provision  of (i) this  Agreement or any other Loan
Instrument,  (ii) any ESOP Related Document, or Stock Purchase Document;  (d) or
other Material Document, or (iii) any Organizational  Document of any Loan Party
or any  Surety.  No Loan  Party  nor any  Surety  is a party to any  instrument,
indenture,  agreement,  document, arrangement or other obligation, or subject to
any charter or other restriction,  that could have or has had a Material Adverse
Effect or Surety's Adverse Effect.

SPAR ESOP Term Loan Agreement

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Section 3.09.  Payment of Taxes and Debts,  Compliance with Applicable
Law, Etc.. (a) Each Loan Party:  (i) has filed all required tax returns with the
appropriate taxing authorities respecting its operations, assets and properties;
and (ii) has paid or caused to be paid all taxes  shown on those  returns to the
extent due,  which with  respect to federal  income  taxes and returns is to the
knowledge of the Loan Parties  prior to June 30, 2002;  except in either case to
the  extent  that (A)  extensions  of time to make  such  filing  have been duly
granted by the  appropriate  taxing  authorities  and those  extensions have not
expired, or (B) payment is not yet required pursuant to Section 5.06 hereof.

(b) Each Loan Party is current in its payment of debts and performance
of obligations (other than taxes) except to the extent payment or performance is
not yet required pursuant to Section 5.06 hereof.

(c)  Each  Loan  Party  is in  compliance  with  and  conforms  to all
Environmental  Laws and other  Applicable Law, and has so complied and conformed
since its organization.

Section 3.10. Indebtedness, Guaranties, ERISA Plans, Etc. (a) Schedule
3.10(a)  hereto (as and if updated  pursuant to Section 5.02 hereof)  contains a
complete and accurate list of all direct and indirect  Indebtedness of each Loan
Party (whether individual, joint, several or otherwise),  including commitments,
lines of credit and other  credit  availabilities,  identifying  with respect to
each the respective parties,  amounts and maturities,  excluding,  however,  the
Loans.

(b)  Schedule  3.10(b)  hereto (as and if updated  pursuant to Section
5.02 hereof)  contains a complete and accurate list of all  guaranties and other
Credit  Support  by each Loan  Party  (whether  individual,  joint,  several  or
otherwise),  identifying  with  respect to each the  respective  parties to such
Credit   Support  and  parties,   amounts  and   maturities  of  the  underlying
obligations.

(c) Schedule  3.10(c)  contains a complete  and  accurate  list of all
"employee  pension  benefit  plans" and  "employee  welfare  benefit  plans" (as
defined in ERISA)  established,  funded or  maintained  by any Loan Party or any
ERISA Affiliate,  whether currently or since its  organization,  or to which any
Loan Party or any ERISA  Affiliate  is  required to  contribute  (as each may be
supplemented, modified, amended, restated or replaced from time to time pursuant
to ERISA or the Tax  Code,  as  applicable,  a  "Plan",  and  collectively,  the
"Plans").  Except as set forth in that schedule:  (i) each Plan is in full force
and effect and has been (or is expected to be)  determined to be duly  qualified
under ERISA and the Tax Code,  as  applicable;  (ii) no ERISA Event is currently
continuing,  and none has occurred  since its  organization;  (iii) each report,
statement or other document has been timely prepared and delivered in accordance
with, and conforms in form and substance to the  requirements  of, ERISA and the
Tax  Code;  (iv)  each  Plan  complies  with  ERISA,  the Tax Code and all other
Applicable  Law in all other  respects;  (v) the  present  value of all  accrued
benefits  under each Plan  subject to Title IV of ERISA does not, and did not as
of the last annual  valuation date,  exceed the value of the assets of such Plan
allocable to such accrued  benefits  (which  benefit  value shall be  determined
either on an ongoing basis, using the Plan's reasonable  actuarial  assumptions,
or on a termination basis, using the assumptions employed by the Pension Benefit
Guaranty Corporation in connection with plan terminations,  as applicable); (vi)
there are no  actions,  suits,  investigations  or  proceedings  (whether or not
purportedly on behalf of any  fiduciary,  sponsor,  participant or  beneficiary)
pending,  or  to  the  best  knowledge  of  the  Loan  Parties,   threatened  or
contemplated  at law, in equity,  in  arbitration  or by or before any Authority
involving or affecting any Plan or any assets and  properties of a Plan that, if
adversely  determined,  could have an ERISA Effect;  (vii) there are no facts or
circumstances that might give rise to any liability of or claim against any Loan
Party,  any Surety or the Collateral under Title IV of ERISA; and (viii) none of
the Plans is, and no Loan Party or any ERISA Affiliate in the past  established,
funded,   maintained,   contributed  or  was  required  to  contribute  to,  any
"multi-employer  plan" (as defined in ERISA).  The present  value of all accrued
post-retirement  benefits under each "employee welfare benefit plan" (as defined
in ERISA) to which one or more of the Loan Parties and their ERISA Affiliates is
required to contribute does not in the aggregate  exceed the assets of such plan
allocable to such benefits (determined using the actuarial and other assumptions
required under FAS106).

Section  3.11.   Subsidiaries,   Other   Ventures,   Loans  and  Other
Investments.  Schedule 3.11 hereto contains a complete and accurate list of: (a)
all of the subsidiaries of each Loan Party or any of its subsidiaries, including
with  respect  to each  subsidiary  (i) its  state  of  incorporation,  (ii) all
jurisdictions  (if any) in which the subsidiary is qualified to do business as a
foreign  corporation,  (iii) the name of the  owner and the  number of shares of
capital stock of the subsidiary  owned,  specifying  whether owned  beneficially
and/or of record,  and if that is less than all of the outstanding shares issued
by the subsidiary,  stating the total outstandings, and (iv) all related funding
commitments and obligations of any Loan Party and/or any other subsidiary of any
Loan Party to  contribute  capital or other  funds to such  subsidiary;  (b) all
partnerships  and  other  ventures  in  which  any  Loan  Party  or  any  of its
subsidiaries  is a member  or  venturer,  including  with  respect  to each such
partnership  or  venture  (i) its  jurisdiction  of  organization  and any other
jurisdiction in 

SPAR ESOP Term Loan Agreement

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which it is qualified to do business as a foreign  entity,  (ii) the name of the
owner and the  percentage  and type of interest in such  partnership  or venture
owned, specifying whether owned beneficially and/or of record, (iii) all related
funding  commitments  and obligations of any Loan Party and/or any subsidiary of
any Loan Party to contribute  capital or other funds to such  venture,  and (iv)
the names and addresses of the other members or venturers; (c) any and all loans
or advances  from any Loan Party to any Surety or to any of the Affiliate of any
Loan Party, identifying with respect to each the respective parties, amounts and
maturities; and (d) all other Investments of any Loan Party other than Permitted
Investments.

Section 3.12. Assets,  Liens and Collateral.  (a) The Loan Parties are
the holders and severally are the legal and beneficial  owners of, and have good
title to the Collateral,  which  constitutes all of the assets and properties of
the Loan Parties (i) reflected on the most recent report or financial  statement
furnished to the Lender or (ii) subsequently acquired;  excluding, however, such
assets and properties as may have been sold or otherwise  disposed of (1) in the
ordinary  course  of  business  prior  to the date of this  Agreement  or (2) as
permitted  by this  Agreement  after the date  hereof.  Each Loan Party has full
corporate power and authority and the unconditional right to grant to the Lender
the  mortgages  and  other   security   interests   respecting   the  Collateral
contemplated  in this Agreement and the other Loan  Instruments.  The Lender has
received legal, valid, binding,  enforceable and perfected security interests in
and to the Collateral pursuant to this Agreement and the other Loan Instruments.

(b) No part of the  Collateral  is subject to any Lien or any  adverse
claim of any kind whatsoever, except (A) those in favor of the Lender, (B) those
permitted  by Section  6.04 hereof (if any) and (C) those  described in Schedule
3.12(b) annexed hereto.

(c) There  are no  claims of third  parties  that  would  prevent  any
assignee or purchaser of all or any portion of the Collateral from receiving any
payments,  distributions and proceeds with respect thereto,  if any, without any
defense, counterclaim,  setoff, right of recoupment, abatement or other claim or
determination whatsoever.

(d) All of the Collateral has been and currently is operated,  insured
and maintained as respectively  required by Sections 5.05, 5.07 and 5.08 hereof.
Each Loan Party currently is, and since the Effective Date has been,  insured as
required by Section  5.07 hereof,  and was insured in a comparable  manner since
its organization.  No fact,  circumstance or other event currently exists or has
occurred  that (i) could  violate or has  violated  any term or provision of any
insurance  policy,  (ii) could permit or has  permitted any insurer to cancel or
refuse to renew (upon similar terms) any such insurance  policy,  or (iii) could
prevent  or has  prevented  any Loan Party from  obtaining  a similar  insurance
policy on similar  terms.  Schedule  3.12(d)  hereto  contains  a  complete  and
accurate list of all insurance policies,  contracts and arrangements of any Loan
Party with, individually or jointly, any other Loan Party.

(e)  The  Loan  Parties  have  full  possession  and  control  of  the
Collateral, and all of the Collateral is located (or in the case of accounts and
general  intangibles  are deemed to be  located)  at the  addresses  of the Loan
Parties  set forth in the  Introduction,  except (i) that  certain  items may be
physically  located at the other  locations  listed in Schedule  3.12(e) hereto,
which  schedule  contains  a complete  and  accurate  description  of each other
location and the items  located  there,  (ii) for items  physically  held by the
Lender or its designee,  and (iii) for items physically held for the benefit and
at the direction of the Loan Parties by the persons identified in that schedule.

(f) Schedule  3.12(f) hereto  contains a complete and accurate list of
all employee  contracts and arrangements of any Loan Party (with individually or
jointly with any other Loan Party). All employees of each Loan Party have signed
confidentiality  and  non-compete  agreements  appropriate  to their  respective
levels of access.

(g)  Each  note,  stock   certificate,   security,   financial  asset,
investment property,, instrument,  agreement, account, document or intangible of
any Loan Party included in the  Collateral:  (i) was duly executed and delivered
in a  written  instrument  or  document  and to the best  knowledge  of the Loan
Parties contains no forgeries or unauthorized signatures;  (ii) is legal, valid,
binding  and  enforceable  against the signer in  accordance  with its terms and
provisions;  (iii) does not violate or conflict with any provision of Applicable
Law; (iv) has not been amended or modified in any respect or prepaid; (v) except
as set forth in Schedule  3.12(g)  hereto,  fully  reflects all  agreements  and
understandings with the signer with respect thereto; (vi) is assignable, and has
been duly  assigned to the Lender in  accordance  with the terms and  provisions
hereof and thereof; and (vii) is maintained at the chief executive office of the
Loan Parties (or at such other office as may have been  specified in a notice to
the Lender) in a file and location that would be readily  identifiable by anyone
examining  the books and records of the Loan  Parties,  except (A) that  certain
items may be  physically  located  at the  other  locations  listed in  Schedule
3.12(e) hereto,  which schedule contains a complete and accurate  description of
each other location and the items located there,  (B) for items  physically 

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held by the Lender or its designee,  and (C) for items  physically  held for the
benefit and at the  direction  of the Loan Parties by the Person  identified  in
that schedule.

(h) To the best  knowledge of the Loan Parties,  there is no existing,
proposed or contemplated plan, study or effort by any governmental  Authority or
other Person that in any way affects or could affect the continued authorization
of the  present  or  contemplated  ownership,  financing,  construction,  use or
operation of any part of the Collateral, or that could result or has resulted in
any tax or other charge being levied or assessed against,  or in the creation of
any Lien upon, any part of the Collateral.

Section 3.13.  Environmental  Compliance.  The  procurement,  storage,
containment, presence, manufacture, distribution, removal and disposition of all
Environmental  Substances  by or on  behalf  of any Loan  Party  and the use and
operation of all assets and properties owned,  leased or used by or on behalf of
any Loan Party (including, without limitation, machinery, Equipment, Real Estate
and  Improvements),  as  now  or  previously  existing  (whenever  created),  as
conducted by or for any Loan Party, or as  contemplated,  are in full compliance
with and conform to all  Environmental  Laws and other  Applicable Law.  Without
limiting  the   generality  of  the  foregoing:   (i)  all  permits,   licenses,
authorizations,  consents or approvals of authorities necessary or desirable for
such activities  have been obtained and they are in full force and effect;  (ii)
no  part  of  those  activities  or  the  Collateral  is  in  violation  of  any
Environmental  Law or other  Applicable  Law and (iii) no notice has been served
upon any Loan Party (other than a notice  subsequently  withdrawn or with regard
to a violation  subsequently  cured) from any  governmental  Authority  or other
Person  claiming,   nor  does  there  currently  exist,  any  violation  of  any
Environmental  Law or  other  Applicable  Law in  connection  with  any of those
activities or the Collateral.

Section 3.14. Machinery, Equipment and Real Estate. (a) The machinery,
Equipment  and other fixed assets owned or leased by each Loan Party are in good
working order and condition  (ordinary wear and tear and  retirement  excepted),
all of the  machinery,  Equipment and other fixed assets owned or leased by each
Loan Party are used or usable in the current  conduct of its business,  and each
of the Loan Parties has all of the  machinery,  Equipment and other fixed assets
necessary for the current conduct of its business.  Schedule  3.14(a) contains a
complete and accurate copy of SPG's fixed asset  schedule as of the date hereof;
provided  that if SPG does not have  such a  schedule,  Schedule  3.14(a)  shall
consist of a complete and accurate list of all items of machinery, Equipment and
other fixed  assets owned or leased by each Loan Party  having  individual  book
values in excess of $10,000 as of the date hereof.

(b) (i) No Loan Party  leases any  interest  in or has any  license or
other agreement to use any Real Estate other than its leasehold  interests under
the leases and licenses under the agreements  listed in Schedule  3.14(b) hereto
(as the same may have been or hereafter may be supplemented,  modified, amended,
restated or replaced from time to time in the manner  provided  therein,  each a
"Lease" and collectively  the "Leases");  (ii) each Loan Party is the tenant and
user under each Lease, and each Loan Party has furnished to the Lender copies of
each Lease, certified to be true, complete and correct by each Loan Party; (iii)
each Lease  contains the entire  agreement of the parties  thereto in respect of
those  premises  and their use by each Loan  Party;  (iv) except as set forth in
Schedule 3.08(b) hereto, each Loan Party is in full compliance under each Lease,
no default or event that (with or without  the giving or receipt of notice,  the
acquisition  of  knowledge  or the passage of time or any  combination  thereof)
would  constitute a default has occurred and is continuing  under any Lease, and
each  Lease is in full  force and  effect;  (v) each Loan Party has the right to
quiet  use  and  enjoyment  of  those   premises  to  the  extent   respectively
contemplated in the Lease; and (vi) no Lease provides for termination on account
of or is  otherwise  affected  by any  employee  strike,  lockout  or other work
stoppage.

(c) Schedule 3.14(c)  contains a complete and accurate  description of
all of the Real Estate owned by each Loan Party,  which to the extent applicable
includes  lot,  block and section or other  identifying  numbers;  and each Loan
Party  has  good  and  marketable  fee  title  thereto.   All  portions  of  the
Improvements,  if  any,  to the  Property  have  been,  are  being  or  will  be
constructed  and  completed  within the perimeter of the land owned or leased by
each Loan Party and in  accordance  with:  (i) all zoning  ordinances  and other
Applicable  Law;  (ii)  the  requirements  of  governmental  authorities  having
jurisdiction,  including  all land use and  construction  licenses,  permits and
approvals  relating  to the  Improvements;  (iii)  accepted  standards  of  good
materials and workmanship;  (iv) the plans and  specifications  for such work as
furnished to the Lender and to the authorities having jurisdiction,  if any; and
(v) all covenants, conditions, restrictions and agreements of any kind or nature
affecting the Improvements,  including the applicable contracts and construction
loan agreements and instruments.  To the best knowledge of each Loan Party there
are no  design  or  structural  defects  in any  part of the  Improvements.  The
Property  and  Improvements  are,  or are  capable  of being,  connected  to and
serviced  by  water,   sewage  disposal,   gas,  electric,   transportation  and
communication  facilities  that  are  adequate  for  the  intended  use  of  the
Improvements. There is no existing, or to the best knowledge of each Loan Party,
proposed or contemplated  eminent domain  proceeding or public  Improvement that
would affect the Property or the  Improvements  in any way,  including  (without
limitation)  

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any plan that  would  widen,  modify  or  realign  any  street,  highway,  park,
wetlands,  preserve or other public or utility easement or other right of access
or enjoyment, whether public or private.

(d) Schedule  3.14(d) hereto  contains a complete and accurate list of
all equipment and other personal property leases,  contracts and arrangements of
any Loan  Party  (with  individually  or  jointly  with any other  Loan  Party),
identifying with respect to each the lessor, term and monthly payment.

Section  3.15.  Intellectual  Properties.  Schedule  3.15  contains  a
complete and accurate list of all Intellectual  Properties  licensed to or owned
or otherwise used by each Loan Party, which indicates the relevant  jurisdiction
of registration  and the extent of each Loan Party's interest in each such item.
Except as set forth in Schedule 3.15 hereto, each of the Intellectual Properties
owned by any Loan Party and each of the Intellectual  Properties licensed to any
Loan  Party:  (i) is  subsisting  and has not been  determined  to be invalid or
unenforceable by any Authority; (ii) to the best knowledge of each Loan Party is
legal, valid, binding and enforceable; (iii) is not and has not been the subject
of any claim of  infringement  or other adverse claim;  (iv) has been maintained
and used in accordance with all Applicable  Law; and (v) is assignable,  and has
been duly collaterally  assigned, to the Lender in accordance with the terms and
provisions  hereof  and  thereof.  Each Loan  Party has all of the  Intellectual
Properties necessary for the current conduct of its business.

Section 3.16. Accounts Receivable. (a) Each account receivable of each
Loan Party arose in the ordinary course of business in a bona fide  arm's-length
transaction,  has been fully  reflected  on its books and records in  accordance
with GAAP consistently applied, and is represented by a written invoice or other
written  document  that:  (i) was duly  executed and  delivered  and to the best
knowledge of the Loan Parties contains no forgeries or unauthorized  signatures;
(ii) is legal, valid, binding and enforceable against the customer in accordance
with its terms and  provisions;  (iii)  does not  violate or  conflict  with any
provision  of  Applicable  Law;  (iv) has not been  amended or  modified  in any
respect;  (v) fully reflects all agreements and understandings with the customer
with respect  thereto;  (vi) is  assignable,  and has been duly  assigned to the
Lender  in  accordance  with the  terms  and  provisions  hereof;  and  (vii) is
maintained at the chief  executive  office of the Loan Parties (or at such other
office  as may have been  specified  in a notice  to the  Lender)  in a file and
location that would be readily identifiable by anyone examining the Loan Party's
Accounts Receivable . The reserves for uncollectible accounts established by the
Loan  Parties are  adequate in the  'judgment of the Loan Parties to fully cover
current and future uncollectible Accounts Receivable.

(b) Each Account  Receivable  booked by any Loan Party is a receivable
for which a final or  permitted  interim  invoice has been  issued  unless it is
booked  separately  as  an  unbilled  receivable.  Amounts  booked  as  unbilled
receivables are a good faith estimate and a fair  approximation of the amount to
be billed. No Account Receivable (whether billed or unbilled) has been booked by
any Loan Party as a receivable  (whether billed or unbilled) where: (i) delivery
has not been  completed of the invoiced  program(s),  product(s) or  service(s),
except for invoiced  program  deposits;  or (ii) the customer is an affiliate of
any Loan Party or any Surety.

Section 3.17. Pledged Securities.  (a) Schedule 3.17 hereto contains a
complete and accurate list of all  Investments  currently owned of record and/or
beneficially  by each Loan Party (whether  individually,  jointly or otherwise),
identifying  with respect to each the issuer,  certificate or other  identifying
number(s), type and amount(s) and, if held by a clearing corporation,  custodian
or other financial  intermediary,  the account(s),  account  number(s),  account
holder(s) and name(s) and address(es) of the relevant  office(s).  Each of those
Investments is owned beneficially and of record by the applicable Loan Party, is
assignable,  and has been duly  assigned and  transferred  as  collateral to the
Lender.

(b)  Each of  those  Investments  was  acquired  in a  transaction  in
compliance  with and  registered  under or exempt  from  registration  under the
Securities  Act and  other  Applicable  Law,  and in the  case  of  such  exempt
acquisitions  has been  held  for at  least  one  year  following  full  payment
therefor.  Except for the normal  restrictions on public  offerings and the like
under the  Securities  Act,  none of those  Investments:  (i) is  subject to any
warrant,  option, put, call or other right to acquire, redeem, sell, transfer or
encumber it (other than such call and  redemption  rights as may be intrinsic to
such  securities  where issued by a Person not Affiliated with any Loan Party or
any  Surety);  (ii) is  governed  by or  otherwise  subject to any  shareholders
agreement,  voting  trust or  similar  agreement  or  arrangement;  and (iii) is
limited  or  otherwise   restricted   in  any  way   respecting   assignability,
transferability or any voting,  dividend,  distribution or other ownership right
(whether or not reflected on the face of the certificate,  in any Organizational
Document,  or  otherwise).  To the best  knowledge of the Loan Parties,  each of
those  Investments  was duly  authorized and validly  issued,  is fully paid and
non-assessable,  and is not and will not be subject to any preemptive or similar
right or restriction.

Section 3.18. The Loan Parties' Independent Investment Decision,  Etc.
Each Loan Party hereby  acknowledges and agrees that: (a) each Loan Party (i) is
a sophisticated and knowledgeable  investor, 

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both  generally and with respect to each item of  Collateral,  (ii) has received
directly from each holder or issuer of Collateral (which for the purpose of this
Section shall be deemed not to include the Lender),  reviewed, and evaluated all
financial  and other  information  necessary or prudent to make the Loan Party's
investment  decision,  and will continue to do so, and (iii) has made,  and will
continue to make, independent investment selections and decisions respecting the
Collateral without reliance upon or regard to any evaluation or investigation by
the  Lender of any  Collateral  or any holder or issuer of any  Collateral;  (b)
neither the Lender nor any of its Representatives has, and none of them shall be
deemed or construed to have, (i) made any representation,  warranty or guaranty,
(ii) offered or furnished any recommendation,  advice,  analysis or information,
or (iii) undertaken or assumed any liability, responsibility or other obligation
whatsoever  respecting any Collateral or any holder or issuer of any Collateral,
whether oral or otherwise,  and whether express or implied,  including  (without
limitation)  anything  with  respect to any  existing  or future (A)  existence,
enforceability, genuineness, value or condition of any Collateral or (B) assets,
business, financial condition, investments, prospects, reputation, or strategies
of any holder or issuer of  Collateral  or any other  Person;  (c)  neither  the
Lender nor any of its  Representatives  shall have any liability,  obligation or
responsibility  whatsoever  for any acts or omissions of any issuer or holder of
Collateral  or any other  Person or any  failure by anyone to perform any of its
obligations under or with respect to any of the Collateral;  and (d) neither the
Lender nor any of its  representatives  has, or shall be deemed or  construed to
have, any  agreement,  duty or obligation to inform any Loan Party of any matter
relating  to  any of  the  Collateral  or any  holder  or  issuer  of any of the
Collateral or to furnish to any Loan Party any information pertaining thereto.

Section  3.19.  Loan  Party  Securities,  Etc.  (a)  The  Borrower  is
authorized  to issue  2,000,000  shares  of  common  stock  with a par  value of
$0.00001 per share, of which 1 share is currently  issued and  outstanding.  The
Borrower's  Contribution  Agreement requires that, immediately after the closing
of the Stock Purchase  Agreement and the advance of the Term Loans, the Borrower
issue and contribute  1,000,000  shares of the  Borrower's  capital stock to the
ESOP Trust,  and the  Borrower's  Redemption  Agreement  requires  that Holdings
redeem  (immediately  after  such ESOP  Trust  contribution)  all  shares of its
capital stock held by its shareholders other than the ESOP Trust, and thereafter
the ESOP  Trust is the  record  and  beneficial  owner of all of the  Borrower's
issued and  outstanding  capital  stock.  Except for the  Permitted  Options and
Holdings  Warrant,  there  are no other  outstanding  securities  issued  by the
Borrower or any warrant,  option or other right to acquire from the Borrower any
securities issued by it. Except for the normal  restrictions on public offerings
and the like under the Securities Act, except for the Permitted Options,  except
as  otherwise  provided  in its  Organizational  Documents  or the ESOP  Related
Documents,  except as otherwise  provided in the Revolving  Credit Agreement and
this Agreement,  and except as otherwise set forth in Schedule 3.19 hereto, none
of those outstanding  securities:  (i) is subject to any warrant,  option,  put,
call or other right to acquire,  redeem,  sell, transfer or encumber it; (ii) is
governed by or otherwise subject to any shareholders agreement,  voting trust or
similar agreement or arrangement;  and (iii) is limited or otherwise  restricted
in any way respecting  assignability,  transferability or any voting,  dividend,
distribution  or other  ownership right (whether or not reflected on the face of
the  certificate,  in any  Organizational  Document,  or  otherwise).  Except as
otherwise  set  forth  in  Schedule  3.19  hereto,  each  of  those  outstanding
securities  was  duly  authorized  and  validly   issued,   is  fully  paid  and
non-assessable,  and is not and will not be subject to any preemptive or similar
right or restriction. Each of those outstanding securities was acquired from the
issuer in a transaction in compliance  with and exempt from  registration  under
the Securities Act and other Applicable Law.

(b) SPG is  authorized  to issue 2,500  shares of common stock with no
par value, of which 72 shares are currently issued and outstanding. The Borrower
is the record and  beneficial  owner of all of the  outstanding  stock issued by
each  Guarantor.  There  are  no  other  outstanding  securities  issued  by any
Guarantor  or any warrant,  option or other right to acquire from any  Guarantor
any  securities  issued by it.  Except  for the  normal  restrictions  on public
offerings and the like under the  Securities  Act,  except the pledge of any and
all such  securities  under the Loan  Instruments,  and except as otherwise  set
forth in Schedule  3.19 hereto,  none of those  outstanding  securities:  (i) is
subject to any warrant,  option,  put,  call or other right to acquire,  redeem,
sell,  transfer or encumber it; (ii) is governed by or otherwise  subject to any
shareholders  agreement,  voting trust or similar agreement or arrangement;  and
(iii) is limited or otherwise  restricted in any way  respecting  assignability,
transferability or any voting,  dividend,  distribution or other ownership right
(whether or not reflected on the face of the certificate,  in any Organizational
Document, or otherwise).  Except as otherwise set forth in Schedule 3.19 hereto,
each of those outstanding  securities was duly authorized and validly issued, is
fully  paid  and  non-assessable,  and is not and  will  not be  subject  to any
preemptive or similar right or restriction. Each of those outstanding securities
was  acquired  from the issuer (or from the Lender in the case of the SPG Stock)
in a  transaction  in  compliance  with and exempt from  registration  under the
Securities Act and other Applicable Law.

Section 3.20.  Relationship  of the Loan Parties and  Guarantors.  The
Loan  Parties  are  engaged as an  integrated  group in the  business of owning,
developing,  operating and selling  their  incentive  marketing  business and of
providing  the  required  services  and other  facilities  for those  integrated
operations.  

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The  Loan  Parties  are  seeking  the  Loans  for the  purpose  of  funding  the
acquisition of the SPG Stock by the Borrower, which will permit the contribution
of the Borrower's stock to the ESOP Trust (and indirectly such business) for the
benefit of all of the  employees of the Loan  Parties.  Each of the Loan Parties
expects to derive financial and other benefit, directly or indirectly, in return
for undertaking their respective obligations under this Agreement, and the other
Loan Instruments, both individually and as a member of the integrated group.

Section  3.21.   No   Misrepresentation   by  the  Loan  Parties.   No
representation or warranty of any Loan Party made or contained in this Agreement
or any  other  Loan  Instrument  (whether  with  respect  to any  Loan  Party or
otherwise) and no report, statement,  certificate, schedule or other document or
information  furnished  or to be  furnished by or on behalf of any Loan Party in
connection  with the  transactions  contemplated by this Agreement and the other
Loan Instruments  (whether with respect to any Loan Party or otherwise) contains
or will contain a misstatement of a material fact or omits or will omit to state
a material fact required to be stated  therein in order to make it, in the light
of the circumstances under which made, not misleading.

Section 3.22. No Misrepresentation by any Surety. No representation or
warranty  of any Surety  made or  contained  in the  Guaranty  or any other Loan
Instrument  (whether  with  respect to any Surety or  otherwise)  and no report,
statement,  certificate,  schedule or other document or information furnished or
to  be  furnished  by or  on  behalf  of  any  Surety  in  connection  with  the
transactions  contemplated  by this  Agreement,  the Guaranty and the other Loan
Instruments  (whether with respect to any Surety or otherwise)  contains or will
contain  a  misstatement  of a  material  fact or omits or will  omit to state a
material fact required to be stated therein in order to make it, in the light of
the circumstances under which made, not misleading.

ARTICLE IV

CONDITIONS TO LENDING

The  obligation  of the  Lender  to make the Term  Loan  hereunder  is
subject to the satisfaction in full of all of the conditions precedent set forth
in and the other terms and  provisions  of each of the Sections of this Article,
unless the Lender (in its sole and absolute  discretion) shall consent otherwise
in writing:

Section 4.01.  Representations  and  Warranties.  (a) On the Effective
Date, both prior to and after giving effect to any applicable  advance  (whether
through  any Pro  Forma  Effect  or  otherwise),  each  of the  representations,
warranties,  acknowledgements and certifications of each of the Loan Parties and
the Sureties set forth in this Agreement and the other Loan Instruments shall be
true and correct in all  respects on and as of that date with the same effect as
though  those  representations  and  warranties  had been made on and as of such
Effective Date.

Section 4.02. No Default.  On the  Effective  Date,  both prior to and
after giving effect  (whether  through any Pro Forma Effect or otherwise) to any
requested  Term Loan  advance,  no Default  and no Event of  Default  shall have
occurred and be continuing.

Section 4.03. No Material Adverse Effect.  On the Effective Date, both
prior to and after  giving  effect  (whether  through  any Pro  Forma  Effect or
otherwise) to any requested Term Loan advance,  no event or events have occurred
that  individually  or in the  aggregate  could have,  or since the date of this
Agreement has had, a Material Adverse Effect.

Section 4.04. Loan Parties'  Bringdown;  Financial Covenant Compliance
Certificate. On the Effective Date, the Loan Parties shall have delivered to the
Lender a  financial  covenant  compliance  certificate  in the form of Exhibit E
hereto,  dated that date and signed by an executive officer of the Loan Parties.
By each request for a Term Loan  advance,  the Loan  Parties  shall be deemed to
have delivered to the Lender a bringdown certificate (clauses (_) through (_) of
such form) dated the date of such  advance.  The Lender in its sole and absolute
discretion  may  accept  the  certificate  of the  officer  of the Loan  Parties
delivered  (or deemed to be  delivered)  pursuant to this Section as evidence of
the  satisfaction of the conditions  precedent  specified in Sections 4.01, 4.02
and 4.03  hereof  without in any way  waiving or  limiting  any of the  Lender's
rights, powers,  privileges,  remedies and interests under any term or provision
of this Agreement or any other Loan Instrument.

Section 4.05.  Delivery of the Loan Instruments,  Collateral and Fees.
(a) On or before  the  Effective  Date,  the Lender or its  designee  shall have
received  delivery of: (i) the Notes  provided for in Section 2.03 hereof,  duly
executed by the Loan Parties;  and (ii) payment of the  disbursements,  fees and

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expenses of Jenkens & Gilchrist Parker Chapin LLP, counsel to the Lender, and of
any local or special counsel retained by them or the Lender.

(b) On or before the Effective  Date, the Lender or its designee shall
have received delivery of: (i) the insurance policies and endorsements  required
by Section 5.07 hereof; and (ii) the other instruments and documents required by
this  Agreement or any other Loan  Instrument  or listed in the final version of
the  Checklist of Closing  Documents  delivered to the Loan Parties on or before
the  Effective  Date,  which  instruments  and  documents  shall  have been duly
executed by the appropriate parties.

(c) Each of the foregoing  instruments  and documents shall be in such
form and substance as may be acceptable to the Lender.

Section  4.06.  Additional  Conditions  Precedent.  On or  before  the
Effective Date, the Lender shall have received:

(a)    certified copies of all (i) material  documents,  and (ii) organizational
and governing documents and (if applicable)  authorizing  resolutions for
each Loan Party and each Surety,  in each case as amended to date,  and a
satisfactory review of each of them by the Lender and its counsel;

(b)    the  approval  by the  Senior  Lender  (as and to the  extent it deems it
necessary or desirable) of the ESOP Related Documents, the Stock Purchase
Documents,  the Holdings Stock Plan, the Revolving  Credit  Documents and
the Loan Instruments;

(c)    satisfactory  (i) pro  forma  consolidated  and  consolidating  financial
statements  for the Borrower and its  subsidiaries  as at the date of the
most recent balance sheet delivered pursuant to the preceding  paragraph,
adjusted  to  give  effect  to  the   consummation  of  the  transactions
contemplated  hereby as if such  transactions  had occurred on such date,
and  (ii)  consolidated  and  consolidating   financial  projections  and
operating   budgets  for  the  Borrower  and  its  subsidiaries  for  the
forthcoming  [five and one half] fiscal years (commencing with respect to
the  fiscal  quarter   beginning  July  1,  2002),   including   (without
limitation)  balance  sheets  and the  related  statements  of  earnings,
shareholders' equity and cash flow for such periods, all certified by the
chief executive officer,  chief financial officer (or controller or other
most senior accounting officer or employee if there is no chief financial
officer)  and other  executive  officers of each Loan Party as (i) having
been prepared in accordance with GAAP  consistently  applied,  and (ii) a
fair  estimate of the  financial  condition of each Loan Party as of such
date and the  reasonably  likely  results of  operations  for the periods
covered thereby;

(d)    evidence  satisfactory  to the Lender that the Collateral is owned by the
pledging  parties  free and clear of all  security  interests,  liens and
other claims and encumbrances;

(e)    a favorable fairness opinion respecting the Borrower and its subsidiaries
from an independent  appraiser acceptable to the Lender reflecting (among
other  things) the  fairness to the  shareholders  of the Borrower of the
transactions  contemplated  by the  ESOP  Related  Documents,  the  Stock
Purchase  Documents,   the  Revolving  Credit  Documents,  and  the  Loan
Instruments;

(f)    evidence  satisfactory  to the  Lender  that there has not  occurred  any
Material Adverse Effect since December 31, 2001;

(g)    evidence satisfactory to the Lender that, except as set forth in Schedule
3.06 hereto, there is no action, suit, investigation, proceeding or other
claim pending or threatened  respecting any Loan Party, any Surety or any
collateral to be pledged by any of them;

(h)    execution and delivery of the Stock  Purchase  Documents,  the Borrower's
Contribution  Agreement,  the  Borrower's  Redemption  Agreement  and the
Revolving Credit Documents; and

(i)    a certificate from the chief executive  officer,  chief financial officer
(or  controller  or other most senior  accounting  officer or employee if
there  is no  chief  financial  officer)  and  other  executive  officers
certifying  that  (i)  each  has  read  this  Agreement  and  other  Loan
Instruments  and the  financial  statements  referenced  in Section  3.07
hereof,  (ii) each has made an  examination  sufficient in the opinion of
the signer(s) to make informed  statements in such  certificate  that the
financial  statements  and  other  information  furnished  to the  Lender
pursuant hereto and  representations and warranties of any Loan Party set
forth in this  Agreement  and the  other  Loan  Instruments  are true and
correct in all respects.

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Section  4.07.  Organizational  Documents.  On or before the Effective
Date,  the Loan  Parties  shall  have  furnished  to the  Lender  the  following
certificates  and other documents with respect to each Loan Party: (a) a copy of
its  certificate  of  incorporation  and  all   modifications,   amendments  and
restatements thereof, certified as of a recent date by the Secretary of State of
its  state  of  incorporation;  (b) a copy of its  by-laws,  together  with  all
modifications,  amendments and  restatements  thereof,  certified as of a recent
date by its Secretary;  (c) a certificate of the Secretary of State of its state
of  incorporation,  dated  as of a recent  date,  as to its  existence  and good
standing;  (d) a certificate of its Secretary or an Assistant  Secretary,  dated
the Effective Date, as to the due  authorization of the negotiation,  execution,
delivery  and  performance  by it of this  Agreement  and each of the other Loan
Instruments to which it is or becomes a party (with the appropriate  resolutions
adopted by its directors and shareholders  attached thereto and reflecting among
other  things the  appointment  of the ESOP  Trustee  and  approval of the Stock
Purchase Documents, Loan Instruments,  and ESOP Related Documents to which is or
becomes a party and the transactions contemplated thereunder) and the incumbency
and  signatures of its officers and directors who are  authorized to execute any
instrument,  agreement or other  document in  connection  with the  transactions
contemplated by this Agreement and the other Loan Instruments; (e) copies of all
agreements  and trusts  respecting  securities  of its issue or related  rights,
together with all modifications,  amendments and restatements thereof, certified
as of a recent date by its Secretary;  and (f) such Organizational Documents and
additional  supporting  documents  and other  information  with  respect  to the
Collateral or the  organization,  operations  and affairs of each Loan Party and
those of its  subsidiaries,  partnerships  and other  ventures as the Lender may
request.

Section  4.08.  Acceptable  Documents.   All  certificates  and  other
documents  provided to the Lender pursuant to this Article shall be in such form
and substance as may be acceptable to the Lender and its counsel.

ARTICLE V

AFFIRMATIVE COVENANTS

The Loan Parties  jointly and  severally  covenant and agree that each
will comply in all  respects on a timely basis  (except as  otherwise  expressly
provided) and at its own expense with each, and will not cause, suffer or permit
any  violation  of any,  of the terms and  provisions  of each  Section  in this
Article, from the date hereof and until the Obligations have been fully paid and
satisfied, unless the Lender (in its sole and absolute discretion) shall consent
otherwise in writing (as provided in Section 9.15 hereof):

Section 5.01. Required Notices.  The Loan Parties shall give, or cause
to be given, immediate written notice to the Lender of any of the following, but
without in any way  authorizing or approving any event  requiring the consent of
the Lender hereunder:  (a) any change in the name (whether change in legal name,
use of other name or otherwise),  name(s) of controlling  equity  owner(s),  the
state or other  jurisdiction  of  incorporation  or  other  organization  or the
location of the chief executive office of any Loan Party or any Surety;

(b)    the institution or, to the best knowledge of the Loan Parties, the threat
or  contemplation  of, or any  adverse  determination  or change  in, any
action, suit,  investigation or proceeding (whether or not purportedly on
behalf of any Loan Party or any Surety) at law, in equity, in arbitration
or by or before any other  Authority  involving or affecting (i) any Loan
Party or any Surety that, if adversely determined,  could have a Material
Adverse Effect or Surety's Adverse Effect,  (ii) any alleged criminal act
or activity on the part of any Loan Party or any of its  representatives,
(iii)  any  ESOP  Related  Document,  Stock  Purchase  Document,  or  any
Organizational  Document  of any  Loan  Party  or any  Surety;  (iv)  any
Material Document,  (v) any Environmental Claim respecting any Loan Party
or any part of the Collateral, (vi) any Plan or any assets and properties
of a Plan that,  if  adversely  determined,  could have an ERISA  Effect,
(vii) any part of the Collateral,  (viii) any of the Obligations, or (ix)
any of the transactions contemplated in this Agreement and the other Loan
Instruments;

(c)    the occurrence of any ERISA Event;

(d)    the  occurrence of any act or event that  violates,  is in conflict with,
results in a breach of or  constitutes  a default  (with or  without  the
giving or receipt of notice,  the acquisition of knowledge or the passage
of time or any  combination  thereof) under any term or provision of: (i)
any ESOP Related Document, Stock Purchase Document, or any Organizational
Document of any Loan Party or any Surety; or (ii) any Material Document;

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(e)    any labor  dispute to which any of the Loan  Parties  may become a party,
any strikes or walkouts  relating to any of its offices,  plants or other
facilities, or the expiration of any labor contract;

(f)    any change in  location or change in the status of the  Collateral  other
than as expressly permitted in Section 7.03 or 7.09 hereof;

(g)    any attachment,  confiscation,  detention, levy, requisition,  seizure or
other taking of any part of the  Collateral,  whether  through process of
law or otherwise, the filing or other imposition of any Lien known to any
Loan Party  against any part of the  Collateral  (other than as expressly
permitted by Section 6.04 hereof), or any destruction or other loss of or
any damage to any part of the Collateral; or

(h)    to the extent not otherwise enumerated in this Section, the occurrence of
any  other  act or event  that (i) has  resulted  or could  result in any
Default  or Event of  Default,  or (ii) has had or could  have a Material
Adverse Effect or a Surety's Adverse Effect.

Section 5.02. Accounts and Reports.  The Loan Parties shall maintain a
standard system of accounting in accordance with GAAP consistently  applied, and
the Loan Parties shall provide to the Lender the following:

(a)    as soon as  available  and in any event  within 45 days  after the end of
each fiscal year of the Borrower,  commencing  with the fiscal year ended
December 31, 2002, a consolidated and consolidating  balance sheet of the
Borrower and its  subsidiaries  as at the end of that fiscal year and the
related   consolidated   and   consolidating   statements   of  earnings,
shareholders'  equity  and  cash  flow  for such  fiscal  year,  all with
accompanying  notes, in reasonable detail and stating in comparative form
the figures as at the end of and for the previous  fiscal year,  prepared
in accordance with GAAP  consistently  applied,  and audited and reported
upon by Ernst & Young or other independent  certified public  accountants
of recognized  standing  regularly  retained by the Borrower to audit its
books and approved by the Lender;

(b)    concurrently with the delivery of the financial  statements  described in
subsection  (a) above,  the annual  auditor's  report  prepared  by those
independent  certified  public  accountants,  and  concurrently  with the
delivery of the financial  statements  described in subsections (a) above
and  (c)  below,  a  letter  to  the  Lender  signed  by  the  Borrower's
accountants  to the effect  that,  having  read this  Agreement,  (i) the
compliance  calculations of the Loan Parties  delivered under  subsection
(d)(i)  of this  Section  were  correct  and (ii)  nothing  came to their
attention during the course of their regular examination that caused them
to  believe  any Event of Default or  Default  had  occurred  and had not
theretofore  been reported and remedied,  or if any such Event of Default
or  Default  had  occurred  and  was  continuing  or was  not  previously
reported, specifying the facts with respect thereto;

(c)    as soon as  available,  and in any event  within 15 days after the end of
each month  (including  December)  of each  fiscal  year of the  Borrower
(commencing  with the month ending July 31,  2002),  a  consolidated  and
consolidating  balance sheet of the Borrower and its  subsidiaries  as at
the end of such  month and the  related  consolidated  and  consolidating
statements of earnings, shareholders' equity and cash flow for the period
from  the  beginning  of such  fiscal  year  to the  end of  such  month,
unaudited  but  certified  by  the  chief  executive  officer  and  chief
financial officer (or controller or other most senior accounting  officer
or employee if there is no chief  financial  officer) of the  Borrower as
(i) prepared in accordance  with GAAP  consistently  applied,  (ii) fully
reflecting  all of the  Accounts  Receivable,  trade  payables  and other
liabilities  of the Borrower and its  subsidiaries,  and (iii)  complete,
accurate  and a fair  presentation  of  the  financial  condition  of the
Borrower  and  its  subsidiaries  as of such  date  and  the  results  of
operations for the period  covered  thereby,  subject to normal  year-end
audit  adjustments,  and in the case of quarterly  statements  audited or
reviewed by such independent  certified public  accountants to the extent
deemed  necessary by SGRP's  auditors in  connection  with the SPAR Group
annual audit or quarterly review;

(d)    concurrently  with the delivery of the documents  described in subsection
(c),  above,  (i) a certificate  in the form of Exhibit E hereto  setting
forth the calculations of and  establishing  compliance with (among other
things) the financial covenants set forth in Section 6.01, 6.02, 6.03 and
6.08 of this Agreement for the Computation  Period just ended, as well as
the  calculation  of any prepayment  required  under Section  2.06(f) and
2.06(h) hereof and a bringdown of the Loan Parties'  representations  and
warranties,  (ii) a certificate  respecting the completeness and accuracy
of the attached aging  summaries of the  consolidated  and  consolidating
receivables  and payables of the Borrower and its  subsidiaries as at the
end of the month just ended, and (iii) a certificate  listing any changes
in Indebtedness,  Credit Support and  corresponding  information for each
Loan Party of the 

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types required to be scheduled under any of Sections  3.10(a) and 3.10(b)
hereof  since the  delivery of  Schedules  3.10(a) and 3.10(b) (as and if
previously  modified by all supplements  thereto  delivered to the Lender
under this  clause) in the same form as  Schedules  3.10(a)  and  3.10(b)
hereto, in each case with such certificate being dated as of the last day
of the  relevant  reporting  period  and  signed by the  chief  executive
officer and chief  financial  officer (or controller or other most senior
accounting officer or employee if there is no chief financial officer) of
the Loan Parties and further  certifying each has read this Agreement and
made an  examination  sufficient  in the opinion of the signer(s) to make
informed statements in such certificate;

(e)    as soon as  available,  and in any  event  within  30 days  prior  to the
commencement of each fiscal year, a consolidated and consolidating annual
budget and  projections  for the  Borrower and its  subsidiaries  for the
forthcoming  fiscal  year  (commencing  with  respect to the fiscal  year
beginning  January 1, 2003) certified by the chief executive  officer and
chief  financial  officer (or controller or other most senior  accounting
officer or employee if there is no chief  financial  officer) of the Loan
Parties;

(f)    as soon as  available,  and in any event not more than five Business Days
after  receipt,  a copy of any  annual  management  letter  issued by any
accountant or auditor to any Loan Party;

(g)    on or  before  each  anniversary  of  the  date  of  this  Agreement,  an
independent insurance broker's certificate stating (i) that the insurance
required by Section  5.07 of this  Agreement is in full force and effect,
(ii) that all premiums  under those policies have been paid to the extent
due  through the date of the  certificate,  and (iii) the amounts and due
dates of premiums due within the following 12-month period;  and, as soon
as  received,   copies  of  all  insurance  policies,   endorsements  and
certificates received from time to time by any Loan Party;

(h)    promptly,  and in any event not more than five Business  Days,  following
execution,  but  without in any way  authorizing  or  approving  any such
action requiring the consent of the Lender hereunder, copies of all loan,
security  and other  instruments,  agreements  and  documents  respecting
Indebtedness  of any Loan Party in excess of $10,000,  individually or in
the aggregate,  including  commitments,  lines of credit and other credit
availabilities,  and of all  guaranties  and other Credit  Support by any
Loan Party  respecting any  Indebtedness or other obligation of any other
Person in excess of $10,000,  individually  or in the  aggregate,  except
those to which the Lender also is a party;

(i)    as soon as  available,  and in any event not more than five Business Days
after receipt, a copy of any notice or other  communication  alleging any
nonpayment or other breach or default, or any foreclosure or other action
respecting any part of its assets and properties, received respecting any
of the  Indebtedness of any Loan Party (other than the  Obligations),  or
any demand or other  request  for  payment  under any  guaranty  or other
Credit  Support by any Loan Party  respecting any  Indebtedness  or other
obligation  of any other  Person,  including any received from any Person
acting on behalf of the holder or beneficiary thereof,  provided that the
no Loan Party shall wait for such copies to become  available to give any
notice required under the circumstances by any other provision hereof;

(j)    as soon as  available,  and in any event not more than five Business Days
after receipt, a copy of any summons or complaint, or any other notice of
any action, suit, investigation or proceeding, involving or affecting any
Loan Party where the damages sought exceed, or if unspecified  reasonably
could exceed, $10,000 individually or in the aggregate;

(k)    as soon  as  available,  a copy  of any  notice  or  other  communication
alleging the invalidity,  non-binding effect or unenforceability  of, any
error or other defect in, any omission  from, or any  nonpayment or other
breach  or  default  under  any ESOP  Related  Document,  Stock  Purchase
Document, or any Organizational Document of any Loan Party or any Surety,
or any note, stock  certificate,  security,  financial asset,  investment
property,  instrument,  agreement, account, document or intangible of any
Loan Party included in the Collateral,  provided that no Loan Party shall
wait for such  copies to become  available  to give any  notice  required
under the circumstances by any other provision hereof;

(l)    as soon as  available,  and in any event  not less than 15 days  prior to
adoption, but without in any way authorizing or approving any such action
requiring  the consent of the Lender  hereunder,  copies of each proposed
modification,  waiver,  amendment or  termination of any of the terms and
provisions of any ESOP Related Document,  Stock Purchase Document, or any
Revolving  Credit Document of any Loan Party or any Surety,  or any note,
stock  certificate,   security,  financial  asset,  investment  property,
instrument,  agreement,  account (other than account writeoffs of $10,000
or less in the  aggregate  for any  customer  in any year),  document  or
intangible of the Loan Parties included in the Collateral;

SPAR ESOP Term Loan Agreement

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(m)    as soon as  available,  and in any event  not less than 30 days  prior to
adoption, but without in any way authorizing or approving any such action
requiring  the consent of the Lender  hereunder,  copies of each proposed
modification,  waiver,  amendment or  termination of any of the terms and
provisions of any  Organizational  Document  respecting any Loan Party or
any Surety or any agreement between the shareholders of any Loan Party or
any Surety; promptly following adoption,  copies of each of the foregoing
certified  as to the  accuracy  thereof by the  Secretary of State or the
Secretary  or  similar  official  of  the  Loan  Parties  or  Surety,  as
applicable;   and  promptly  following  request,  such  other  supporting
documents of the kind specified in Section 4.06 hereof as the Lender from
time to time may request;

(n)    as soon as possible,  and in any event not more than five  Business  Days
after filing,  copies of all tax returns,  informational  statements  and
reports filed by any Loan Party with the Internal  Revenue Service of the
United States of America;

(o)    promptly upon the request of the Lender,  copies of each notice,  report,
statement  or  other  document  or  communication,  whether  periodic  or
otherwise,  concerning  the  occurrence,  existence or  correction of any
ERISA Event in any respect,  any responsive  communication on the part of
any Loan  Party or any of its ERISA  Affiliates,  or any  preliminary  or
final determination of any Authority in respect thereof, provided that no
Loan Party shall wait for such  request or copies to become  available to
give any notice required by any other provision hereof; and

(p)    contemporaneously  with each submission or filing,  a copy of any report,
registration statement, proxy statement,  financial statement,  notice or
other  document,  whether  periodic or  otherwise:  (i)  submitted to the
shareholders of any Loan Party in their  capacities as  shareholders;  or
(ii)  submitted  to or filed by any Loan Party with any  governmental  or
self-regulatory  Authority involving or affecting (A) any Loan Party, (B)
the  Obligations,  (C)  any  part  of the  Collateral  or (D)  any of the
transactions   contemplated   in  this   Agreement   or  the  other  Loan
Instruments,  provided  that no Loan Party  shall wait for such copies to
become  available to give any notice required under the  circumstances by
any other provision of Section 5.01 hereof;

together  with  such  supplements  to any of the  aforementioned  documents  and
additional   accounts,   reports,   certificates,   statements,   documents  and
information  as the Lender from time to time may request,  each in such form and
substance as may be acceptable to the Lender.

Section  5.03.  Access to  Premises,  Records and  Collateral.  At all
reasonable  times and as often as the Lender  reasonably may request,  each Loan
Party shall permit representatives designated by the Lender to (a) have complete
and  unrestricted  access  to the  premises  of each Loan  Party,  the books and
records  of each Loan  Party  and the  Collateral,  provided  that so long as no
Default or Event of Default is then continuing,  the Lender shall give each Loan
Party at least one Business Day's prior notice (which may be given by telephone)
prior to any such visit,  (b) make copies of, or excerpts from,  those books and
records,  and (c) discuss the  Collateral  or the  accounts,  assets,  business,
operations,  properties or condition,  financial or otherwise,  of the each Loan
Party with its officers, directors, employees, accountants and agents.

Section 5.04. Good Standing,  Qualifications,  Powers,  Separate Legal
Existence, Organizational Documents, Etc. (a) Each Loan Party shall do, or cause
to be done,  all  things,  or proceed  with due  diligence  with any  actions or
courses of action,  that may be necessary (i) to maintain its due  organization,
valid existence and good standing under the laws of its state of  incorporation,
and (ii) to  preserve  and keep in full force and effect all  foreign  and other
qualifications,  licenses and registrations  required in those  jurisdictions in
which each Loan Party conducts business or has any assets or properties.

(b) Except for its  agreements  under the Loan  Instruments  and Stock
Purchase  Documents,  each Loan Party shall at all times  maintain  its full and
unrestricted  right,  power and  authority,  and shall not, and shall not cause,
suffer or permit  anyone else to, take or fail to take any action (with  respect
to itself or  otherwise),  or offer,  commit or enter into to any  agreement  or
arrangement,  that would, or could, in any way restrict,  limit, make subject to
third-party  approval or otherwise impair its right, power or authority,  (A) to
carry on its  business  as now  conducted  or (B) to  execute  or  deliver  this
Agreement or any other Loan  Instrument to which it is or becomes a party or any
supplement,  modification  or amendment  thereto or  restatement  or replacement
thereof from time to time in the manner provided therein,  or (C) to perform any
of its obligations hereunder or thereunder.

(c) No Loan Party shall at any time cause, suffer or permit any change
in its name  (whether a change in legal name,  use of other name or  otherwise),
the state or other  jurisdiction of its  incorporation or other  organization or
the location of its chief executive office.

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(d) Each Loan Party shall at all times:  (i) do  business  exclusively
under its own name(s) and  employer and taxpayer  identification  numbers,  hold
itself out to the public as a legal entity  separate and distinct from any other
Person (and not as a department  or division of someone  else),  and correct any
misunderstandings  known to it  regarding  the  separate  identity  of each Loan
Party; (ii) use its own separate stationery,  invoices and checks; (iii) use its
own  logos  and  trademarks  and  (other  than  as  permitted  by the  Trademark
Agreement)  not share any common logo or trademark  with any other Person;  (iv)
observe all corporate or equivalent  formalities for maintaining its status as a
valid separate entity; (v) maintain its records, books of account, bank accounts
(other than as required by the Loan Instruments) and other assets and properties
separate and apart from those of any other Person and not  commingle any of them
with  those of any other  Person;  (vi)  promptly  correct  any  other  Person's
misunderstanding  as to (A) the identity of any Loan Party or any Affiliate with
whom such other Person is transacting business, or (B) each Loan Party's alleged
responsibility  for the  Indebtedness or other  obligations of any other Person;
(vii) allocate fairly and reasonably any overhead  expenses that are shared with
an Affiliate,  including  paying for office space and services  performed by any
employee of an Affiliate or vice versa; and (viii) maintain a sufficient  number
of employees or independent  contractors in light of its  contemplated  business
operations.  (e) No Loan Party  shall  cause,  suffer or permit any  supplement,
modification  or amendment to, or any waiver of any term or provision of, any of
its  Organizational  Documents  without the prior written consent of the Lender,
which consent will not be  unreasonably  withheld if the same will not adversely
affect any of the rights,  powers,  privileges,  remedies  and  interests of the
Lender under this Agreement or any other Loan Instrument.

Section 5.05.  Compliance with Applicable Law;  Operations.  Each Loan
Party shall  promptly  and fully  comply  with,  conform to and obey any and all
Applicable  Law  now or  hereafter  in  effect,  other  than to the  extent  the
noncompliance  therewith or violation  thereof could not have a Material Adverse
Effect.  In any  event,  the each Loan  Party  shall  procure,  store,  contain,
manufacture,  distribute, remove and dispose of all Environmental Substances and
use and  operate  all  assets and  properties  (including,  without  limitation,
machinery,  Equipment, Real Estate and Improvements) in full compliance with and
conformity to all  Environmental  Laws and other Applicable Law in all respects,
including  (without  limitation)  all applicable  permits,  licenses,  and other
authorizations, consents or approvals of Authorities.

Section 5.06. Payment of Debts,  Taxes, Etc. Each Loan Party shall (a)
pay, or cause to be paid,  all of its  Indebtedness  and other  liabilities  and
lawful claims (whether for services, labor, materials, supplies or otherwise) as
and when due,  (b) perform,  or cause to be  performed,  all of its  obligations
promptly and in accordance with the respective terms and provisions thereof, and
(c) promptly pay and discharge,  or cause to be paid and discharged,  all taxes,
assessments  and other  governmental  charges and levies imposed upon any of the
Loan  Parties,  upon their  respective  income or  receipts or upon any of their
respective assets and properties on or before the last day on which the same may
be paid  without  penalty;  provided,  however,  that it shall not  constitute a
breach of this Section if any Loan Party fails to perform any such obligation or
to pay any such  Indebtedness or other liability  (except for the  Obligations),
tax, assessment,  or governmental or other charge, levy or claim (i) that (A) is
being  delayed,  in the case of trade payables (but not other  obligations),  in
accordance with the normal payment  practices of the Loan Party,  but not beyond
any demand in payment  therefor,  or (B) is being contested in good faith and by
proper proceedings diligently pursued, (ii) if the effect of such failure to pay
or perform will not (A) cause or permit the  acceleration of the maturity of any
other  Indebtedness  or obligation  of any Loan Party (i.e.,  other than the one
being  contested)  or (B) subject any part of the assets and  properties  of any
Loan Party to attachment, levy or forfeiture, (iii) for which the Loan Party has
obtained a bond or insurance, or established a reserve, in such amount as may be
required  by GAAP  and  that in the  judgment  of the  Lender  is  adequate  and
satisfactory,  and (iv) so long as the aggregate  amount of such unpaid  overdue
items for all of the Loan Parties does not at any time exceed $10,000.

Section 5.07. Insurance. Each Loan Party shall maintain or cause to be
maintained,  at its own  expense,  insurance  in  form,  substance  and  amounts
(including  deductibles)  acceptable  to the Lender (i)  adequate  to insure all
assets and properties of the Loan Parties,  which assets and properties are of a
character  usually insured by persons  engaged in the same or similar  business,
against loss or damage  resulting  from fire,  flood,  hurricanes or other risks
included in an extended coverage policy,  (ii) against ESOP liability (as and to
the extent the same is  available),  public  liability,  directors  and officers
liability and other tort claims that may be incurred by or asserted  against the
Loan  Parties or any of their  Representatives,  (iii) as may be required by the
other Loan Instruments or Applicable Law and (iv) as may be reasonably requested
by the Lender,  all with  adequate,  financially  sound and  reputable  insurers
acceptable to the Lender, and all naming the Lender as an additional insured and
loss payee under a standard mortgagee's endorsement as the Lender's interest may
appear. In the event the Lender receives any insurance  proceeds  respecting any
loss, damage or destruction of any insured Collateral,  the Lender at its option
may (1) hold and disburse the proceeds (or a portion  thereof) to fund the costs
of such repair, rebuilding or replacement as the Loan Parties may elect 

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(subject  to such  conditions  as the  Lender may  establish),  or (2) apply the
proceeds (or any remaining  balance) first to reduce any unpaid or  unreimbursed
fees and expenses of the Lender under the Revolving  Credit Documents until paid
in full,  then to reduce any accrued  and unpaid  interest  under the  Revolving
Credit  Documents until paid in full, then to reduce the Revolving  Credit Loans
until paid in full, then to reduce any unpaid or unreimbursed  fees and expenses
of the Lender under the Loan Instruments  until paid in full, then to reduce any
accrued and unpaid interest under the Loan Instruments  until paid in full, then
to reduce the  Additional  Term Loan  until  repaid in full,  thereafter  to the
Initial  Term Loan to reduce the  installment  (if any) and final  payments  due
under  subsection  (d) of this Section in the inverse order of their  respective
due dates,  and thereafter in accordance  with Section  2.08(d)  hereof.  In the
event any Loan Party receives any insurance  proceeds (other than  disbursements
from the Lender),  the Loan Party shall accept and hold those funds in trust for
the benefit of the Lender and shall  promptly pay or deliver  those  proceeds to
the Lender for application as provided above.

Section 5.08. Maintenance of Assets, Intellectual Properties, Etc. (a)
Each Loan Party shall  maintain or cause to be maintained  all of its assets and
properties  in good  working  order and  condition  (ordinary  wear and tear and
retirement  excepted),  making all  necessary  repairs  thereto and renewals and
replacements  thereof.  Each Loan Party shall  perform all  servicing,  repairs,
overhauls, replacements,  modifications,  improvements and tests, or shall cause
them to be performed, (i) with personnel duly qualified for the applicable task,
(ii) in accordance and compliance with the manuals and service  bulletins of the
applicable  manufacturer(s) and (iii) with suitable  replacement,  substitute or
additional  parts  or  components  (A)  in  good  operating  condition,  (B)  of
equivalent or better  performance,  durability,  utility and value than the item
replaced,  (C) owned  solely by such Loan Party,  and (D) free of any Lien other
than any Permitted Lien.

(b) Each Loan Party shall maintain or cause to be  maintained,  at its
own  expense,  all  of  its  Intellectual  Property  rights,  registrations  and
applications,  including  (without  limitation)  the  diligent  pursuit  of  all
applications,  the  payment  of all  maintenance,  license  or  other  fees  and
expenses, and the vigorous prosecution of suits and proceedings to enforce those
rights  and  applications  and to  object or oppose  the  conflicting  rights or
applications of any other Person,  except in each case where the applicable Loan
Party  decides in good faith that a particular  item is of  negligible  economic
value to the  business of such Loan Party or where the cost of doing so would be
reasonably  likely to exceed the  economic  value of such item,  such Loan Party
notifies  the Lender of such  decision  and the Lender does not object  thereto.
Each Loan Party (i) shall  continue to use each  trademark and trade name of the
Loan Parties in its business  and on its goods,  (ii) shall use the  appropriate
symbol of  registration  with each use of a trademark  or trade name by the Loan
Parties,  (iii)  shall not reduce  the  quality of  existing  goods or  services
bearing a trademark or trade name of the Loan Parties or use any such  trademark
or trade name with any other goods or services of less than comparable  quality,
and (iv) shall not take, or cause suffer,  suffer or permit anyone else to take,
any action that may invalidate the  registration of any trademark or trade name,
except in each case where the applicable Loan Party decides in good faith that a
particular  item is of  negligible  economic  value to the business of such Loan
Party or where the cost of doing so would be  reasonably  likely  to exceed  the
economic  value of such  item,  such  Loan  Party  notifies  the  Lender of such
decision and the Lender does not object thereto.  The Loan Parties shall seek or
cause to be sought,  at its own  expense,  (i) patent  applications  and patents
respecting all unpatented but patentable inventions made or obtained by the Loan
Parties,  (ii) trademark  applications and registered  trademarks on registrable
but unregistered trademarks developed, used or obtained by the Loan Parties, and
(iii) trade name  applications  and registered  trade names on  registrable  but
unregistered trade names developed, used or obtained by the Loan Parties, except
in each case  where the  applicable  Loan  Party  decides  in good  faith that a
particular  item is of  negligible  economic  value to the business of such Loan
Party or where the cost of doing so would be  reasonably  likely  to exceed  the
economic  value of such  item,  such  Loan  Party  notifies  the  Lender of such
decision and the Lender does not object thereto.

Section 5.09.  Preservation and Defense of Collateral,  Etc. Each Loan
Party shall maintain,  enforce, preserve and defend in all respects: (a) any and
all of the rights, powers, privileges,  remedies and interests of the Loan Party
and the Lender under or with respect to each note, stock certificate,  security,
financial asset or other account,  chattel paper, commercial tort claim, deposit
account, document of title, general intangible, instrument, investment property,
letter of credit, letter-of-credit-right, oil, gas or mineral before extraction,
money  or  other  intangible   included  in  the  Collateral  and  each  of  the
Organizational  Documents and other instruments and documents  relating thereto;
and (b) all of the right, title and interest of any Loan Party and the Lender in
and to each and every part of the  Collateral  against  all manner of claims and
demands;  in each  case on a  timely  basis  to the  full  extent  permitted  by
Applicable  Law. In the event any of the Collateral is attached or levied or any
Lien is imposed on any of the  Collateral  (other than a Permitted  Lien),  then
(without  limiting the  generality of the  preceding  sentence) the Loan Parties
shall pay, discharge or bond the underlying  obligation and cause the release of
such Collateral  therefrom  within five days of any attachment or levy or thirty
days of the  imposition  of any Lien,  but in any case before the  claimant  may
defeat the right of the relevant Loan Party to bond, contest or redeem.

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Section 5.10.  Margin Stock  Regulation  Compliance.  (a) From time to
time at the  request  of the  Lender,  and in any  event  prior to (i) using any
proceeds  of any of the Loans and  other  credit  from the  Lender  directly  or
indirectly  secured by any Margin  Stock to directly or  indirectly  purchase or
carry any Margin Stock, or (ii) making any permitted  substitution or withdrawal
of Collateral if before or after such  substitution  or withdrawal any such loan
or other  credit is or would be  directly  or  indirectly  secured by any Margin
Stock,  in each  case as  determined  by the  Lender  (in its sole and  absolute
discretion),  each Loan Party will  provide to the  Lender  duly  completed  and
executed statements on Federal Reserve Form U-1 and any other statement that the
Lender may deem to be necessary or desirable  under any applicable  Margin Stock
Regulations.

(b) If at any time the  Lender  determines  (in its sole and  absolute
discretion)  that  (i) any of the  Loans or other  Obligations  or other  credit
extended by the Lender (A) are being or have been directly or indirectly used to
purchase or carry any Margin Stock and (B) are directly or indirectly secured by
any Margin  Stock,  and (ii) the  aggregate  value of the Margin Stock and other
assets and  properties  directly and  indirectly  securing  them  (computed  and
discounted in accordance with applicable  Borrowing Base criteria,  Margin Stock
Regulations  and policies of the Lender then in effect) is insufficient to fully
cover the  outstanding  Loans and other  included  credit from the Lender,  then
immediately  after  receipt of notice  from the Lender the  relevant  Loan Party
shall repay the Loans in such amount(s) as the Lender may have requested in such
notice in order to comply with any  applicable  Margin Stock  Regulations.  This
Section  imposes a continuing  test, and the Lender at any time and from time to
time may  demand  such  payment  and  delivery  whenever  such a  deficiency  is
determined by the Lender (in its sole and absolute discretion).

Section  5.11.  Additional  Subsidiary  Guarantor.  Without in any way
authorizing  or approving  any such action  requiring  the consent of the Lender
hereunder under Section 6.07 hereof,  as soon as  practicable,  and in any event
within thirty days  following  formation or  acquisition,  each Loan Party shall
cause each newly formed or acquired corporation, venture or other Person meeting
the definition of "subsidiary" of the Loan Parties to execute and deliver to the
Lender an assumption of the obligations of a Guarantor and Loan Party hereunder,
which (a) shall be  accomplished  by such  Person's  written  assumption of this
Agreement and the other Loan Documents to which any Guarantor is a party in form
and  substance  acceptable to the Lender and (b) shall not require any notice to
or the  consent  of any  other  Loan  Party.  Such  assumption  shall  be a Loan
Instrument  hereunder and an amendment of this Agreement,  but shall not require
the signature of any other Loan Party.

Section 5.12.  Management  and Board of Directors,  Etc. (a) No Person
shall be hired or made any binding offer for any position with any Loan Party as
a director, chief executive officer, chief operating officer, chief financial or
accounting officer,  controller or any other position performing a substantially
similar  function  without first  obtaining  the prior  written  approval of the
Lender, which approval shall not be unreasonably withheld.

(b) For so long as the Loans are  outstanding,  each Loan Party  shall
(i) cause [a]  designee  of the Lender to be  elected as a director  of the Loan
Party and each of its  subsidiaries,  and (ii) not  cause,  suffer or permit the
Board of Directors of the Loan Parties or any of its  subsidiaries  to have more
than [three]  directors.  The Lender's  designee[s] shall be covered by the Loan
Parties' D&O policy,  which policy shall be provide SGRP's  policies will not be
taken into account in any way in defending or indemnifying  such designee[s] and
otherwise shall satisfy the requirements of Section 5.07 hereof.

ARTICLE VI

NEGATIVE COVENANTS

The Loan Parties  jointly and  severally  covenant and agree that they
will comply in all respects with each, and will not cause,  suffer or permit any
violation of any, of the terms and  provisions  of each Section in this Article,
from the date hereof until the  Obligations  have been fully paid and satisfied,
unless the Lender (in its sole and absolute  discretion) shall consent otherwise
in writing (as provided in Section 9.15 hereof):

Section   6.01.   Certain   Financial   Requirements.   The  financial
measurements  used in the  following  covenants:  (i)  shall  be  determined  in
accordance with GAAP (as of the date of calculation) consistently applied except
to the extent otherwise specified by a particular  definition or covenant;  (ii)
shall be computed for the Loan Parties and all of its subsidiaries (if any) on a
consolidated  basis in  accordance  with  GAAP  except to the  extent  otherwise
specified in a particular definition or provision;  and (iii) shall refer to the
corresponding  items in the  financial  statements  of the Loan  Parties and its
subsidiaries  (if any) for the relevant  periods except to the extent  otherwise
specified or defined herein. (The Loan Parties and the Lender covenant and agree
to reset in good faith the financial  covenants  set forth in this  Section,  as
well as the  

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corresponding  provisions  of the  financial  covenants  compliance  certificate
required by Section 5.02(d)  hereof,  from time to time with each change in GAAP
so as to maintain the integrity and intent of such covenants.)

(a) The consolidated Selling,  General and Administrative  Expenses of
the Borrower and its  subsidiaries  (inclusive of sales commission but excluding
tax deductible pension payments to the ESOP Trust) shall not exceed 24% of their
total consolidated revenue in any fiscal quarter.

(b) The Adjusted Net Worth of the Loan Parties and their  subsidiaries
shall not be less than:  (i)  $(900,000)  at December 31,  2002,  or at any time
thereafter  through March 30, 2003;  (ii)  $(1,150,000) at March 31, 2003, or at
any time thereafter through June 29, 2003; (iii) $(680,000) at June 30, 2003, or
at any time thereafter  through September 29, 2003; (iv) $(670,000) at September
30, 2003, or at any time thereafter through December 30, 2003; (v) $(780,000) at
December 31,  2003,  or at any time  thereafter  through  March 30,  2004;  (vi)
$(580,000) at March 31, 2004, or at any time  thereafter  through June 29, 2004;
(vii) $(380,000) at June 30, 2004, or at any time thereafter  through  September
29, 2004;  (viii)  $(180,000) at September  30, 2004, or at any time  thereafter
through  December  30,  2004,  (ix) $0 at  December  31,  2004,  or at any  time
thereafter  through  March 30, 2005;  (x) $475,000 at March 31, 2005,  or at any
time thereafter through June 29, 2005; (xi) $950,000 at June 30, 2005, or at any
time thereafter  through  September 29, 2005;  (xii) $1,425,000 at September 30,
2005, or at any time thereafter  through December 30, 2005, (xiii) $1,900,000 at
December 31,  2005,  or at any time  thereafter  through  March 30, 2006;  (xiv)
$2,700,000 at March 31, 2006, or at any time  thereafter  through June 29, 2006;
(xv)  $3,500,000 at June 30, 2006, or at any time thereafter  through  September
29, 2006;  (xvi)  $4,300,000 at September  30, 2006,  or at any time  thereafter
through  December 30, 2006,  (xvii)  $5,100,000  at December 31, 2006, or at any
time  thereafter  through  March 30, 2007;  and (xviii)  $6,300,000 at March 31,
2007, or at any time thereafter.

(c) The Adjusted EBITDA of the Borrower and its subsidiaries shall not
be less  than:  (i)  $(400,000)  for the six  consecutive  fiscal  months  ended
December 31, 2002; (ii) $(30,000) for the three consecutive  fiscal months ended
March 31, 2003; (ii) $700,000 for the six  consecutive  fiscal months ended June
30, 2003; (iv) $970,000 for the nine  consecutive  fiscal months ended September
30, 2003;  (vi)  $1,090,000  for for the  Computation  Period ended December 31,
2003;  (vii)  $350,000 for the three  consecutive  fiscal months ended March 31,
2004; (viii) $700,000 for the six consecutive fiscal months ended June 30, 2004;
(ix)$1,050,000  for the nine consecutive fiscal months ended September 30, 2004;
(x) $1,400,000 for the Computation Period ended December 31, 2004; (xi) $580,000
for the three  consecutive  fiscal months ended March 31, 2005; (xii) $1,160,000
for the six consecutive fiscal months ended June 30, 2005;  (xiii)$1,740,000 for
the nine  consecutive  fiscal months ended September 30, 2005;  (xiv) $2,300,000
for the Computation  Period ended December 31, 2005; (xv) $850,000 for the three
consecutive  fiscal months ended March 31, 2006;  (xvi)  $1,700,000  for the six
consecutive  fiscal months ended June 30, 2005;  (xvii)  $2,550,000 for the nine
consecutive  fiscal months ended September 30, 2005;  (xviii) $3,400,000 for the
Computation  Period  ended  December 31, 2006;  (xix)  $1,250,000  for the three
consecutive  fiscal  months  ended  March  31,  2007 or for any  fiscal  quarter
thereafter.

(d)  The  Adjusted   Debt  Service  Ratio  of  the  Borrower  and  its
subsidiaries  shall not be less than: (i)  (1.37):1.00  for the six  consecutive
fiscal  months  ended  December  31,  2002;  (ii)  (10.77):1.00  for  the  three
consecutive  fiscal  months ended March 31, 2003;  (iii)  .80:1.00 for the three
consecutive  fiscal  months ended June 30, 2003;  (iv)  1.45:1.00  for the three
consecutive  fiscal months ended September 30, 2003; (v) 2.39:1.00 for the three
consecutive  fiscal  months  ended  December 31, 2003;  (vi)  1.45:1.00  for the
Computation  Period ended December 31, 2003 and any quarter  thereafter  through
September 30, 2004;  (vii) 1.09:1.00 for the  Computation  Period ended December
31, 2004 and any quarter  thereafter through September 30, 2005; (viii) .84:1.00
for the  Computation  Period ended December 31, 2005 and any quarter  thereafter
through  September  30, 2006;  (ix)  .73:1.00 for the  Computation  Period ended
December 31, 2006;  and (x) .63:1.00  for the three  consecutive  fiscal  months
ended March 31, 2007, or at the end of any fiscal quarter thereafter.

(e)  The  Adjusted  Debt  to  EBITDA  Ratio  of the  Borrower  and its
subsidiaries  shall not  exceed:  (i)  4.92:1:00  at  December  31, 2003 and any
quarter  thereafter  through  September 30, 2004; (ii) 3.31:1:00 at December 31,
2004 and any quarter  thereafter  through September 30, 2005; (iii) 1.48:1.00 at
December 31, 2005 and any quarter  thereafter  through  September 30, 2006;  and
(iv)  .41:1.00  at  December  31,  2006  or at the  end of  any  fiscal  quarter
thereafter.  The  Adjusted  Capital  Expenditures  of the Loan Parties and their
subsidiaries shall not exceed $65,000 in any fiscal year.

(f) The Adjusted  Lease  Service of the Borrower and its  subsidiaries
for the referenced  Computation  Period shall not exceed  $100,000 in any fiscal
quarter.  

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(g) The Loan  Parties  shall not cause or permit  any  change of their
fiscal year from a calendar year of each year without the prior written  consent
of the Lender.

Section  6.02.  Indebtedness.  (a) No Loan  Party  shall  directly  or
indirectly create, incur, assume, permit to exist, increase, renew or extend any
Indebtedness  on its part,  including  commitments,  lines of  credit  and other
credit  availabilities,  or apply for or offer, commit or agree to do any of the
foregoing, excluding, however:

(i)    Indebtedness owed to the Lender under any of the Loan Instruments;

(ii)   Indebtedness under the Revolving Credit Agreement;

(iii)  purchase money Indebtedness  incurred in the purchase of Equipment in the
ordinary  course  of  business  so long as  each is  secured  only by the
Equipment  purchased,  and obligations  constituting  Indebtedness  under
generally accepted accounting principles arising under capitalized leases
entered into in the ordinary course of business,  in each case so long as
(A) the aggregate  amount of all such  purchase  money  Indebtedness  and
capitalized  lease amounts does not at any time exceed $65,000 during the
18 month  period  ended  December 31,  2003,  $130,000  during  2004,  or
$195,000  thereafter,  and (B) no Default or Event of Default then exists
or could  result  therefrom  (whether  through  any Pro  Forma  Effect or
otherwise),  provided  that the Loan Parties may continue  such  purchase
money Indebtedness and capital lease obligations within those limits, but
without  any  increase,   renewal  or  extension,  once  incurred  as  so
permitted; and

(iv)   the continuation of the  Indebtedness  listed in Schedule 3.10(a) hereto,
excluding,  however, any increase therein or renewal or extension thereof
or the continuation of any  Indebtedness  being retired with the proceeds
of the Loans.

(b) No Loan Party shall prepay, acquire or otherwise satisfy, in whole
or in  part,  any  of its  Indebtedness  prior  to  when  due,  except  (i)  for
Indebtedness  owed to the  Lender  under any of the Loan  Instruments,  (ii) for
Indebtedness  permitted under Section  6.02(a)(iii) hereof so long as no Default
or Event of Default then exists or could result  therefrom  (whether through any
Pro Forma Effect or otherwise),  or (iv) as permitted by agreement or consent of
the Lender.

Section 6.03. Guaranties and other Credit Support. No Loan Party shall
directly or indirectly make, create, incur, assume,  permit to exist,  increase,
renew  or  extend  any  guaranty  or  other  Credit  Support  on its part of any
Indebtedness or other obligation of any other Person, or offer,  commit or agree
to do so,  excluding,  however:  (a) any guaranty of or other Credit Support for
Indebtedness  or other  obligations  owed to the Lender;  (b) the Credit Support
under  the  Revolving  Credit  Agreement;  and (c)  the  continuation  of  those
guaranties  and  other  Credit  Support  listed  in  Schedule   3.10(b)  hereto,
excluding, however, any increase therein or renewal or extension thereof.

Section 6.04. Liens and Encumbrances.  No Loan Party shall directly or
indirectly make, create, incur, assume or permit to exist any Lien of any nature
in, to or against any part of the  Collateral,  or offer,  commit or agree to or
cause or assist the inception or  continuation  of any of such Lien;  excluding,
however,  any  Permitted  Lien to the extent  otherwise  not  prohibited by this
Agreement.

Section 6.05.  Sale or Disposition  of Collateral,  Etc. No Loan Party
shall directly or indirectly:  (a) sell, lease,  sublease,  transfer,  exchange,
abandon or otherwise dispose of, surrender  management,  physical  possession or
control of,  physically  alter or relocate all or any portion of the Collateral,
other than as expressly  permitted by Section 7.03 hereof; (b) cause,  suffer or
permit any  supplement,  modification or amendment to, or any waiver of any term
or  provision  or any  termination  of, any material  note,  stock  certificate,
security, financial asset, investment property, instrument,  agreement, account,
document or intangible of any Loan Party included in the Collateral,  other than
as expressly  permitted by Section 7.03 hereof; or (c) offer, commit or agree to
or cause or assist the inception or continuation of any of the foregoing.

Section 6.06.  Investments,  Loans, Advances, Etc. No Loan Party shall
directly or indirectly  purchase or otherwise  acquire or hold any Investment or
make any Investment in or for the benefit of any other Person, or offer,  commit
or agree to do so, except for: (a) securities  received in connection  with past
contributions  to or  Investments  in the  subsidiaries  and ventures  listed in
Schedule 3.11 hereto; (b) the continuation of the existing Investments listed on
Schedule 3.11 hereto; (c) the Permitted  Investments;  (d) any guaranty or other
Credit  Support  permitted  under  Section 6.03 hereof;  and (e) any  collateral
account  established under this Agreement or any other Loan Instrument;  and (f)
any loans or  advances of salary to any officer or employee of any Loan Party or
any of its  subsidiaries  in the  ordinary  course of its  business  that 

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in the  aggregate  do not at any time  exceed  (i) 5% of that  Person's  regular
annual salary, and (ii) $10,000 for all such officers and employees,  excluding,
however,  usual and  customary  draws in the ordinary  course of business by any
non-salaried salesperson against his or her reasonably expected commissions over
the next succeeding twelve months.

Section  6.07.  Certain  Fundamental  Changes.  No  Loan  Party  shall
directly  or  indirectly  effect,  enter into or offer,  commit or agree to: (a)
award,  grant or issue any  option to any Person to  purchase  any shares of the
Borrower's  capital stock,  phantom stock or similar right, or offer or agree to
do so, other than (A) an option or right that (i) is  exercisable at or set to a
price equal to the fair market value thereof at the time of issuance,  (ii) does
not vest (in whole or in part)  before the Term Loans have been  repaid in full,
(iii) has been  awarded,  granted or issued  pursuant  to the  approved  form of
Holdings Stock Plan,  (iv) is in form and substance  acceptable to the Lender in
its sole  discretion,  and (v) is otherwise  acceptable,  and is being  awarded,
granted or issued to a Person who is  acceptable,  to the Lender in its sole and
absolute  discretion (each a "Permitted  Option") and (B) the Holdings  Warrant;
(b) any issuance, sale, transfer,  pledge or other disposition or encumbrance of
any  capital  stock,   partnership  or  membership  interests  or  other  equity
securities  issued by any Loan  Party  (other  than  pursuant  to the  Permitted
Options and Holdings  Warrant),  the registration of such securities for sale or
resale  under  Applicable  Law,  or the  issuance  of any option  (other  than a
Permitted  Option),  warrant (other than the Holdings Warrant) or other right to
acquire any such securities;  (c) any capital reorganization or reclassification
of the capital stock,  partnership or membership  interests or other  securities
issued  by any Loan  Party;  (d) any  transaction  in which the  capital  stock,
partnership or membership interests or other securities issued by any Loan Party
prior to the  transaction  would be  changed  into or  exchanged  for  different
securities,  whether  of that or any other  Person,  or for any other  assets or
properties  (other than as such  transactions  may be  permitted by Section 6.08
hereof); (e) any sale, lease, assignment, conveyance, spin-off or other transfer
or  disposition  of all or any  substantial  part of the  business or assets and
properties of any Loan Party; (f) any merger, consolidation,  reincorporation or
reorganization in a different jurisdiction,  dissolution, liquidation or winding
up of any Loan Party; (g) the acquisition or establishment of any new subsidiary
or joint venture by any Loan Party; (h) the acquisition by any Loan Party of all
or  substantially  all of the assets and  properties  of any other Person or any
discrete division or other business unit thereof;  or (i) any material change in
the character of the business of any Loan Party as conducted on the date of this
Agreement  or any  adverse  change  in the  method  by which  that  business  is
conducted.

Section  6.08.  Distributions  to  Shareholders.  No Loan Party  shall
directly  or  indirectly:  (a)  declare or make any  dividend,  payment or other
distribution of cash,  assets or property with respect to any equity  securities
issued by any Loan Party,  whether now  existing or hereafter  outstanding;  (b)
redeem, purchase or otherwise acquire any securities issued by any Loan Party or
any option or other  right to  acquire  any such  securities;  (c)  covenant  or
otherwise arrange with any Person (other than the Lender in any Loan Instrument)
to directly or indirectly limit or otherwise  restrict any dividend,  advance or
other  payment or  distribution  (whether of cash or  otherwise);  or (d) offer,
commit  or  agree  to do any of  the  foregoing;  excluding,  however,  (i)  the
redemptions pursuant to the Borrower's Redemption Agreement,  (ii) distributions
by any Guarantor to the Borrower to permit the Borrower to pay the  Obligations,
and (iii) so long as no Default or Event of Default  then exists or could result
therefrom  (whether through any Pro Forma Effect or otherwise)  distributions by
any Guarantor to the Borrower to fund,  and the  Borrower's use of such funds to
either (A) redeem its common stock from the ESOP Plan, or (B) make contributions
to the ESOP Trust to fund its redemptions of the Borrower's  stock, in each case
to the extent  required under the ESOP Related  Documents in connection with the
termination of participants.

Section  6.09.  Use of Loans.  (a) No Loan  Party  shall  directly  or
indirectly use any portion of the Loans, or cause, assist,  suffer or permit the
use of any portion of the Loans, in whole or in part, other than use of the Term
Loans for the funding of the SPG Stock purchase.

(b) No part of the  proceeds  of the  Loans or other  credit  from the
Lender shall be used at any time directly or indirectly to purchase or carry any
Margin  Stock or  otherwise  in any way or for any purpose  that  violates or is
inconsistent with any applicable Margin Stock Regulations.

Section  6.10.  ERISA Plans.  (a) Except for the Plans,  no Loan Party
shall,  and no Loan  Party  shall  cause,  suffer  or  permit  any of its  ERISA
Affiliates  to,  directly or indirectly  establish,  maintain,  participate  in,
contribute  to or  permit  to  exist  any  "employee  pension  benefit  plan" or
"employee  welfare  benefit plan" (as defined in ERISA) for any employees of any
Loan Party or any ERISA Affiliate; provided, however, that any Loan Party or any
ERISA Affiliate from time to time may establish any such plan in accordance with
Applicable Law (including ERISA and the Tax Code) with the prior written consent
of the  Lender.  The Loan  Parties  shall use their  best  efforts  to obtain or
continue  the  qualification  of each Plan  under  ERISA  and the Tax  Code,  as
applicable,  shall prepare and deliver each report,  statement or other document
required  by ERISA and the Tax Code  within the  periods  specified  therein and
conforming in form 

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and substance to the provisions  thereof,  and shall administer each Plan in all
respects in accordance with ERISA, the Tax Code and all other Applicable Law, as
applicable; and shall use their best efforts to cause its ERISA Affiliates to do
each of the foregoing. In any event, no Loan Party shall cause, suffer or permit
any of its ERISA  Affiliates  to: (i) incur,  continue or fail to correct in any
respect any ERISA Event;  (ii) fail to file with the  appropriate  Authority any
required  notice or report  respecting  any Plan as and when due;  (iii) fail to
respond in a timely fashion to any notice or other communication  respecting any
Plan  from  any  Authority;  (iv)  increase  or  adversely  modify  any  funding
obligation  or other  liability  of any one or more of the Loan  Parties  or any
ERISA  Affiliate  (individually  or in the  aggregate)  under any Plan  (whether
through  amendment  or  termination)  without the prior  written  consent of the
Lender (which will not be withheld  unreasonably);  (v) permit the present value
of all accrued  benefits  under each Plan subject to Title IV of ERISA to exceed
the value of the assets of such Plan allocable to such accrued  benefits  (which
benefit value shall be determined  either on an ongoing basis,  using the Plan's
reasonable  actuarial  assumptions,   or  on  a  termination  basis,  using  the
assumptions  employed by the Pension Benefit Guaranty  Corporation in connection
with plan terminations, as applicable); or (vi) enter into any "employee welfare
benefit plan" (as defined in ERISA) to which one or more of the Loan Parties and
its ERISA Affiliates is required to contribute.

(b) No Loan Party  shall,  and no Loan Party  shall  cause,  suffer or
permit any of its subsidiaries  to, directly or indirectly  contribute to or for
the  benefit  of the  Plans or its  participants  thereunder  more than the ESOP
Maximum Contribution in the aggregate in any fiscal year.

Section 6.11.  Transactions  with Affiliates,  Etc.. (a) No Loan Party
shall directly or indirectly  enter into any transaction  with, or use any asset
or property of, any Affiliate of any Loan Party (including,  without limitation,
the lease,  purchase,  sale or exchange of any asset or property, any advance or
loan,  the  provision  of any  services,  or any  allocation  of  administrative
salaries,  expenses  and other  general  overhead),  other than in the  ordinary
course and pursuant to the reasonable  requirements  of the business of any Loan
Party and upon fair and reasonable terms and provisions no less favorable to any
Loan Party  than it would  have been  reasonably  likely to have  obtained  in a
comparable arm's-length transaction with a Person who is not an Affiliate of any
Loan Party.

(b) The Loan Parties shall not (individually or in the aggregate): (i)
pay or accrue to or for the  benefit of any  Person  aggregate  compensation  in
excess of $250,000 in any year other than (A) permitted sales  commissions,  and
(B) any bonus due to the officers of SPG listed in Schedule 6.11(b) hereto under
their  bonus  formulas  in  effect on the date  hereof  (as  summarized  in such
schedule) (a "Permitted Bonus"); (ii) pay or accrue to or for the benefit of any
Person any sales commission in excess of 17% of the actual gross profits (before
internal labor  allocations)  from that persons  eligible  sales; or (iii) enter
into any new  employment  agreement or extend or renew any  existing  employment
agreement. In addition, all officers and employees of the Loan Parties as of the
date  hereof,  and from  time to time  hereafter  as  Persons  enter  into  such
positions or change  levels of access,  shall  execute and deliver to Lender the
appropriate non-compete and confidentiality  agreements with the Loan Parties in
the form agreed to by the Loan Parties and the Lender.

Section  6.12.   Execution  and   Modification  of  the  ESOP  Related
Documents,  Etc.  (a) No Loan  Party  shall  enter  into  any new  ESOP  Related
Document,  enter into or cause, suffer or permit any supplement to or any waiver
(of its  rights),  modification,  amendment or  restatement  of any ESOP Related
Document  existing on the date hereof or  hereafter  approved by the Lender,  or
commit or agree to do any of the foregoing, without the prior written consent of
the Lender.  The inclusion of supplements,  modifications,  restatements and the
like in the various  definitions of the ESOP Related  Documents is not intended,
and shall not be deemed or construed,  to be permission for or acceptance of any
of the foregoing by the Lender,  which will not be unreasonably  withheld to the
extent such change is required under ERISA or the Code.

(b) No Loan Party shall remove or replace, or consent to any change in, the ESOP
Trustee,  or commit or agree to do so, without the prior written  consent of the
Lender, which will not be unreasonably  withheld to the extent such change is to
an institutional trustee that is not an Affiliate of the Borrower or the Lender.

Section  6.13.  Execution  and  Modification  of  the  Stock  Purchase
Documents,  Etc. No Loan Party shall enter into any new Stock Purchase Document,
enter into or cause,  suffer or permit any  supplement  to or any waiver (of its
rights),  modification,  amendment or restatement of any Stock Purchase Document
existing on the date hereof or  hereafter  approved by the Lender,  or commit or
agree to do any of the  foregoing,  without  the prior  written  consent  of the
Lender. The inclusion of supplements,  modifications,  restatements and the like
in the various definitions of the Stock Purchase Documents is not intended,  and
shall not be deemed or construed,  to be permission  for or acceptance of any of
the foregoing by the Lender.

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Section 6.14.  Execution  and  Modification  of the  Revolving  Credit
Documents,  Etc.  No Loan  Party  shall  enter  into  any new  Revolving  Credit
Document,  enter into or cause, suffer or permit any supplement to or any waiver
(of its rights), modification,  amendment or restatement of any Revolving Credit
Document  existing on the date hereof or  hereafter  approved by the Lender,  or
commit or agree to do any of the foregoing, without the prior written consent of
the Lender.  The inclusion of supplements,  modifications,  restatements and the
like  in the  various  definitions  of the  Revolving  Credit  Documents  is not
intended,  and  shall  not be  deemed  or  construed,  to be  permission  for or
acceptance of any of the foregoing by the Lender.

Section 6.15.  Execution and  Modification of the Holdings Stock Plan.
No Loan Party shall enter into any new stock option plan,  phantom stock plan or
the like, no Loan party shall award,  grant or issue any stock  option,  phantom
stock or similar  right  other than the  issuance  of  Permitted  Options by the
Borrower,  and the Borrower shall not enter into or cause,  suffer or permit any
supplement  to or  any  waiver  (of  its  rights),  modification,  amendment  or
restatement of any Permitted Option approved by the Lender or the Holdings Stock
Plan, or commit or agree to do any of the  foregoing,  without the prior written
consent of the Lender. The inclusion of supplements, modifications, restatements
and the  like in the  various  definitions  of the  Holdings  Stock  Plan is not
intended,  and  shall  not be  deemed  or  construed,  to be  permission  for or
acceptance of any of the foregoing by the Lender.

Section 6.16. Certain Accounts.  No Loan Party will render any invoice
that:  (i) is expressly  conditional,  permits  returns or restricts  collection
rights or assignments in any respect; (ii) permits payment (A) more than 30 days
after the invoice date, (B) in any currency other than United States Dollars, or
(C) at any  location  outside  the  United  States;  or (iii)  provides  for the
underlying  obligation  to be  evidenced  by chattel  paper or any note or other
instrument;  provided,  however,  that a Loan Party may do so if and only to the
extent  specifically  authorized in advance to do so by the Lender in writing in
its sole and absolute discretion.

ARTICLE VII

COLLATERAL

Section  7.01.  Grant of  Security  Interest.  Each Loan Party  hereby
pledges, assigns, conveys, mortgages,  transfers and delivers to the Lender, and
grants to the Lender a continuing security interest in and to, all of the assets
and properties of the Loan Party,  including  (without  limitation)  each of the
following,  in each case whether now or hereafter existing,  acquired or created
and wherever located:

(a)    any and all Accounts Receivable of the Loan Party;

(b)    any and all Inventory of the Loan Party, wherever located,  including any
and all raw materials, work-in-progress and finished goods;

(c)    any and all of the Real  Estate of the Loan Party,  any and all  Fixtures
and Improvements  thereto,  and any and all interests  therein,  wherever
located;

(d)    any and all Equipment and other tangible  personal  assets and properties
of the Loan Party,  wherever located,  including (without limitation) any
and  all  accessions,   accessories,   additions,   Equipment,  Fixtures,
furnishings, goods, Inventory, machinery, materials, parts, replacements,
supplies,  tools and vehicles,  whether or not located upon or affixed to
any of the foregoing;

(e)    any and all of the Intellectual Property of the Loan Party;

(f)    any  and  all (i)  Investments  of the  Loan  Party,  including  (without
limitation)  the SPG Stock in the case of the Borrower,  (ii) any and all
dividends,  interest and distributions on, under or related to any of the
foregoing  items  (whether  cash,  stock or  otherwise)  and  splits  and
reclassifications  thereof, (iii) any and all options, warrants and other
rights to acquire  any such  Investments,  and (iv) any and all  security
entitlements and other rights, powers, privileges, remedies and interests
of the  referenced  Person in, to and under any and all the foregoing and
any and all  Organizational  Documents and Custody  Documents  pertaining
thereto;

(g)    any and all (i)  advances,  loans,  and other  Indebtedness  and  amounts
(including interest) directly or indirectly owed to the Loan Party by any
Surety,  (ii)  subrogation,  contribution and other similar rights of the
Loan Party against or in respect of any Surety,  or any of its assets and
properties,  whether resulting from any payment made by the Loan Party or
otherwise,  and (iii) Liens or Credit Support securing any such advances,
loans, Indebtedness, amounts or rights;

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(h)    any and all other  accounts,  instruments,  chattel  paper,  documents of
title  and  trust  receipts  (and the  goods  covered  thereby,  wherever
located), letter of credit rights, financial assets, investment property,
security  entitlements,  deposit accounts,  contract rights,  warranties,
casualty and other insurance policies and rights,  commercial tort claims
and other litigation  claims and rights,  tradenames,  software,  payment
intangibles, and other general intangibles of the Loan Party, and any and
all  computer  programming  data and other  books and records of the Loan
Party; and

(i)    any and all  deposit  accounts  and  other  deposits  of the  Loan  Party
(whether  general or special,  time or demand,  provisional or final,  or
individual or joint) maintained with the Lender or any of its Affiliates,
custodians, participants or designees; any and all Indebtedness and other
amounts  and  obligations  at any time  owing by the Lender or any of its
Affiliates or  participants  to or for the credit,  account or benefit of
the Loan Party;  and any and all assets and  properties of the Loan Party
in the  possession,  custody  or  control  of the  Lender,  or any of the
Lender's  Affiliates,  custodians,  participants or designees,  including
(without limitation) other monies,  certificates of deposit,  securities,
instruments of debt or credit, documents of title and trust receipts (and
the goods covered thereby,  wherever located),  and other instruments and
documents;

in each  case  whether  any of the  foregoing  items is now or  hereafter  owned
beneficially  or of record and  whether  now or  hereafter  owned  individually,
jointly or  otherwise,  together  with the products and  proceeds  thereof,  all
collections,  payments and other  distributions  and  realizations  with respect
thereto, any and all other rights, powers, privileges, remedies and interests of
the  Loan  Party  therein,  thereto  or  thereunder,  and any and all  renewals,
substitutions,  modifications  and extensions of any and all of the items in the
foregoing  subsections  (the foregoing items will be referred to collectively as
the "Collateral"),  as security for the timely and full payment and satisfaction
of the  Obligations as and when due.  However,  items released in writing by the
Lender  from time to time  from the lien of this  Agreement  and the other  Loan
Instruments shall no longer be considered to be "Collateral" hereunder.

Section  7.02.  Collateral  Documentation.  (a) The Loan Parties shall
deliver  to  the  Lender  on  or  before  the  Effective   Date  and  thereafter
concurrently  with each item  becoming  Collateral  such  assignments,  pledges,
deeds,  mortgages,  financing  statements,   attornments,   estoppels,  waivers,
consents,  recognitions,   bailments,  legal  opinions  and  other  instruments,
documents and  agreements as the Lender from time to time may request to further
evidence,  confirm,  effect or perfect any mortgage or other  security  interest
granted  or  required  to be  granted  under  this  Agreement  or any other Loan
Instrument, each in such form and substance as may be acceptable to the Lender.

(b) Without in any way limiting  the right,  power or authority of the
Lender under the UCC or other Applicable Law, each Loan Party hereby irrevocably
authorizes the Lender in its sole and absolute discretion,  at any time and from
time to time: (i) to file without the review,  approval or signature of the Loan
Party any and all  financing  statements,  modifications  and  continuations  in
respect of the Collateral, the Loan Party, any other or additional debtor or the
transactions contemplated by this Agreement or any other Loan Instrument in such
jurisdictions as the Lender deems necessary or desirable;  (ii) to sign any such
statement,  modification  or  continuation  on behalf  of the Loan  Party if the
Lender deems such signature  necessary or desirable  under  Applicable  Law; and
(iii) to file a carbon,  photographic  or other  reproduction  of any  financing
statement or modification if the Lender deems such filing necessary or desirable
under  Applicable  Law;  provided  that so long as no Event of  Default  is then
continuing,  if possible the Lender  shall  endeavor to accord the Loan Party an
opportunity to review any proposed financing  statement or modification (but not
continuation),  but if the Loan Party has not  reviewed  it within a  reasonable
period of time (not to exceed  30 days from the date  sent),  the  Lender at any
time  thereafter may exercise its authority  under this Agreement and Applicable
Law to file such  proposed  financing  statement or  modification;  and provided
further that the failure to send any such copy for review or signature shall not
affect the  validity or  enforceability  of any such  signature or filing by the
Lender.  Without in any way  limiting  the  foregoing,  each Loan  Party  hereby
acknowledges and agrees that, prior to the execution of this Agreement, the Loan
Party  reviewed the initial UCC financing  statements  respecting the Collateral
prepared by the Lender and authorized the Lender to file them (i.e.,  "prefile")
in such jurisdictions as the Lender deemed necessary or desirable,  and the Loan
Party hereby confirms and ratifies the authority of the Lender to make each such
filing. The Lender shall endeavor to send a copy of any such filing to each Loan
Party;  provided,  however,  that the failure to send that copy shall not affect
the  validity or  enforceability  of any such  filing.  The Lender  shall not be
liable  for  any  mistake  in  or  failure  to  file  any  financing  statement,
modification, continuation or other perfection document.

(c) The Lender from time to time may request that items of  Collateral
be  legended  or  otherwise  marked  from time to time to reflect  the  Lender's
security  interests  therein,  and each  Loan  Party  shall  promptly  mark each
requested  item in a  prominent  location  with such  legend as the  Lender  may
direct,  which may be affixed  directly or on a permanently  attached  plaque of
customary  size. No Loan Party shall,  

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and no Loan Party shall cause,  suffer or permit anyone else to,  alter,  cover,
deface or remove  any such  legend  without  the prior  written  consent  of the
Lender, except that such legend may be removed from items released by the Lender
in writing  from time to time from the  security  interests  created  under this
Agreement and the other Loan Instruments as provided herein or therein.

Section 7.03. Rights of the Borrower to the Collateral. Subject to the
terms and  provisions of this  Agreement and until such time as the Lender shall
give notice to the Loan Parties to the contrary  during the  continuance  of any
Event of Default or Default, without regard to whether any other action has been
taken by the Lender under this Agreement or any other Loan Instrument, each Loan
Party  shall  have  the  right  to do  the  things  expressly  permitted  by any
subsection of this Section notwithstanding the restrictions contained in Section
6.05  hereof  (but shall not have such right after such notice has been given to
the extent specified in such notice):

(a) Each Loan Party  shall have the full  power and  authority  in the
ordinary course of business with reasonable  business prudence (i) to use in its
business any item of Collateral  (other than  instruments,  securities and other
general intangibles in the possession of the Lender), (ii) to sell, lease or use
any Inventory,  (iii) to relocate finished goods Inventory to one or more public
warehouses  from  which  the Loan  Party has  obtained  recognition  and  access
agreements  acceptable  to the Lender,  (iv) to  maintain,  repair,  replace and
retire  Equipment in  accordance  with Section  5.08(a)  hereof  (subject to the
provisions  of Section  2.06(g)  hereof),  (v) to sell or otherwise  voluntarily
dispose of any unused  Equipment or other goods  (subject to the  provisions  of
Section 2.06(g) hereof,  (vi) except as otherwise  provided herein,  to hire and
fire officers and other employees,  and to waive, release,  supplement,  modify,
amend,  restate or replace any of the Loan Party 's contracts  with officers and
other  employees,  (vi) to exercise in good faith any and all voting,  waiver or
consensual rights and powers relating or pertaining to the Collateral covered by
Section  6.05(b)  hereof or any part  thereof,  or waive,  release,  supplement,
modify,  amend,  restate  or replace  any term or  provision  thereof,  (vii) to
diligently  service and  collect the  proceeds  of any  Accounts  Receivable  or
Investment, which may include such discounts,  reductions and settlements as may
be usual and customary and consistent  with its past practice,  (viii) to use in
its business the cash proceeds from such Inventory and Accounts Receivable,  and
(ix)  to  deposit,  withdraw  and  use in its  business  funds  and  other  cash
equivalents  constituting  Collateral  under Section 7.01(i)  hereof;  provided,
however,  that such power is not  authorized  and shall not be  exercised to the
extent such exercise could in any way (individually or in conjunction with other
such actions  contemplated or taken by the Loan Party) (A) adversely  affect the
business or  operations  of the Loan Party or the value of the  Collateral,  (B)
diminish  any of the rights,  powers,  privileges,  remedies or interests of the
Loan Party in any item of the  Collateral  (other than  through  such  permitted
sales, replacements and retirements,  use of cash proceeds or withdrawals),  (C)
conflict with or prejudice the continued  perfection of any security interest of
the Lender,  or (D) result in any Event of Default or Default  (whether  through
any Pro Forma Effect or otherwise).

(b) Each Loan Party  shall be  entitled  to exercise in good faith any
and all voting, waiver or consensual rights and powers relating or pertaining to
the  Collateral  or any part thereof for any purpose not  inconsistent  with the
terms of this Agreement;  provided,  however,  that each Loan Party shall not be
permitted to exercise or refrain from exercising any such right or power if such
exercise  or  nonexercise  could (A) have an adverse  effect on the value of the
Collateral  or any part thereof in the sole judgment of the Lender or (B) result
in any Default or Event of Default;  and  provided  further that each Loan Party
shall give the Lender at least five (5) Business  Days' prior written  notice of
the manner in which the Loan Party  intends to exercise or not exercise any such
right or power  that  could  have  such an  effect,  together  with any  reasons
therefor,  except that notice need not be given with respect to any  re-election
of directors.

Section 7.04.  Performance by the Lender.  In the event any Loan Party
fails to pay or otherwise perform or satisfy any of its obligations to others or
under or in respect of any of the  Collateral  or any ESOP  Related  Document as
required by this Agreement or any other Loan  Instrument,  the Lender shall have
the right in its sole and  absolute  discretion  (but  shall be under no duty or
obligation) to make any such payment or cause the performance or satisfaction of
any other such  obligation,  including  (without  limitation) the payment of any
tax, claim or insurance  premium,  the maintenance or defense of any part of the
Collateral  or the  purchase  or  discharge  of any  Lien  on  any  part  of the
Collateral.  The Lender will  endeavor  to give the Loan  Parties  prior  notice
(which may be by telephone or telecopy) of any such payment or action; provided,
however,  that the failure to give such notice or any time to perform  shall not
affect the validity of the payment or action or the reimbursement obligations of
the Loan Parties' with respect thereto.  The Loan Parties shall pay or reimburse
on demand any and all amounts advanced or expenses incurred by the Lender or its
designee under this subsection,  which shall  constitute  additional Loans under
(and secured by) this  Agreement and shall bear interest at the rate  applicable
to the Loans.  No  payment  made or action  taken by the Lender or its  designee
shall be  deemed  or  construed  to be a  waiver,  cure or  satisfaction  of the
underlying  default,  which default shall be deemed to be continuing  until such
time (if ever) as the Loan Parties have, prior to the Maturity Date, (i) resumed
the payment,  performance  and  satisfaction  required by this Agreement 

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and the other  Loan  Instruments  and (ii)  repaid all Loans  advanced  for such
payments and actions,  together  with interest  thereon,  and paid all others to
whom the Lender has  requested  direct  payment  respecting  such  payments  and
actions.

Section 7.05. Litigation Respecting Collateral.  (a) In the event that
any action,  suit or other  proceeding  (whether or not purportedly on behalf of
any Loan Party) at law, in equity,  in arbitration or before any other Authority
involving or affecting the Collateral (a  "Proceeding")  is  contemplated by any
Loan Party or is otherwise  commenced by or against any party  hereto,  the Loan
Parties shall give the Lender immediate  notice thereof.  Within twenty Business
Days after its receipt of such notice,  the Lender shall notify the Loan Parties
that  either  (i) the  Lender  will  join in the  Proceeding,  (ii) a  specified
designee of the Lender will join in the  Proceeding,  or (iii) the Loan  Parties
may  prosecute the  Proceeding  without the  participation  of the Lender or its
designee,  which  Proceeding in any event shall be conducted in accordance  with
the provisions of subsection (b) of this Section.  In the event the Lender fails
to respond to such notice of the Proceeding within that period, the Lender shall
be deemed to have elected  alternative  (iii) above,  and the Loan Parties shall
prosecute the proceeding accordingly, without, however, waiving any other right,
power,  privilege,  remedy or interest of the Lender under this  Agreement,  the
other Loan Instruments and Applicable Law.

(b) If any Loan Party elects to commence a Proceeding  or a Proceeding
has otherwise  commenced by or against any party hereto,  the Loan Parties shall
cause the same to be prosecuted  (A) in such a manner that all the rights of the
Lender are preserved and protected to the fullest extent reasonably possible and
(B) with counsel to that Loan Party that is  acceptable to and  represents  both
that Loan Party and the Lender.  Subject to  compliance by the Loan Parties with
the  foregoing,  (x) the Lender  (if named as a party by someone  other than the
Borrower or any Surety) shall join in the  Proceeding  and take any other action
reasonably requested by counsel to that Loan Party to facilitate the prosecution
thereof,  all at the sole  cost and  expense  of that  Loan  Party,  and (y) the
Proceeding  may be  prosecuted  by that Loan  Party in such  manner as that Loan
Party and its counsel  reasonably deem appropriate.  In any event, if the Lender
determines at any time during the pendency of a Proceeding  (after  consultation
with  counsel to the Lender)  that the  interests  of the Lender are at variance
with the  interests  of any Loan  Party,  the Lender may appoint its own counsel
(whose expenses, disbursements and fees shall be paid for by that Loan Party) to
represent  the Lender in the  Proceeding,  and the Loan  Parties and its counsel
shall  cooperate with the Lender and its counsel to the fullest extent  possible
in that Proceeding.

(c) Each Loan Party  acknowledges that pursuant to Section 7.01 hereof
it granted to the  Lender a senior  security  interest  in and to,  among  other
things,  all such  Proceedings by or for the benefit of the Loan Party,  whether
related to any of the enumerated Collateral or otherwise.

Section 7.06.  Power of Attorney.  With respect to the various  assets
and properties included or required to be included in the Collateral  hereunder,
each Loan Party hereby  irrevocably  makes,  constitutes and appoints the Lender
and the Lender's executive officers (Vice President or above), and each of them,
with full power of substitution,  as the true and lawful attorney-in-fact of the
Loan Party,  with full power and authority from time to time in the name,  place
and stead of the Loan Party to: (a) do any of the  things  specified  in Section
7.07(b)  hereof  in the  name of the Loan  Party,  utilizing  the Loan  Party 's
letterhead  (or an  approximation  thereof)  to the  extent  the Lender may deem
necessary or desirable;  (b) pay any  Indebtedness or other liability or perform
any other  obligation  required to be paid or performed  under this Agreement or
any other Loan  Instrument  by any Loan  Party,  any Surety or any other  Person
(other  than the  Lender);  (c) prepare and execute on behalf of each Loan Party
any  mortgage,  financing  statement  or other  evidence of a security  interest
contemplated by this Agreement, or any modification,  refiling,  continuation or
extension thereof;  (d) take any other action  contemplated by this Agreement or
any other Loan Instrument; and (e) sign, execute, acknowledge, swear to, verify,
deliver,  file,  record and publish any one or more of the foregoing;  provided,
however,  that the  above-named  attorneys-in-fact  may  exercise the powers set
forth in  subsections  (a),  (b),  and (d) of this Section  only  following  the
Lender's  written  notice  pursuant to Section 7.07 of this Agreement and during
the continuance of the subject Event of Default, whether or not any reference to
this Power of Attorney is made in that notice, and without regard to whether any
other action has been taken by the Lender under this Agreement or any other Loan
Instrument.  This Power of Attorney is hereby declared to be  irrevocable,  with
full power of substitution and coupled with an interest.  This Power of Attorney
shall survive the  dissolution,  reorganization  or bankruptcy of any Loan Party
and shall extend to and be binding upon the successors, assigns, heirs and legal
representatives  of each Loan Party. This Power of Attorney may be exercised (i)
by any one of the above-named attorneys-in-fact, or by any substitute designated
by any of those  attorneys-in-fact,  and  (ii) by  signing  for any  Loan  Party
individually  on any  document  or  instrument  or by listing two or more of the
persons,  including  the Loan  Parties,  for whom any document or  instrument is
being signed and signing once, with a single  signature by the  attorney-in-fact
or substitute  being effective to exercise the Powers of Attorney of all persons
so listed.  A facsimile  signature shall be 

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effective  if so  affixed.  The Lender  shall not be liable  for any  failure to
collect or enforce the payment of any of those assets and properties.

Section 7.07.  Rights of the Lender to the  Collateral,  Deficiencies,
Etc. If any Event of Default  shall have  occurred and is then  continuing,  the
Lender may take  (and/or may cause one or more of its  designees to take) any or
all of the  following  actions,  after  giving the Loan  Parties  prior  written
notice,  or in the case of subsection  (e) of this Section after giving the Loan
Parties at least three (3) Business  Days' prior  written  notice  (which notice
period each Loan Party  acknowledges  and agrees to be adequate and reasonable),
with a single such notice  being  sufficient  to entitle the Lender from time to
time thereafter to take any one or more of the actions described below:

(a)    prohibit any Loan Party from taking any action  respecting any Collateral
otherwise permitted by this Agreement and the other Loan Instruments;

(b)    (i) notify each of the account  debtors,  obligors,  issuers,  securities
intermediaries,  financial institutions,  custodians, lessees or lessors,
mortgagors,  and other  parties under or with respect to or interested in
any item of the Collateral of the security interest of the Lender therein
(without  limiting  the right of the  Lender  to do so at other  times as
permitted  by this  Agreement  or any other  Loan  Instrument)  or of any
action proposed to be taken with respect thereto,  and direct one or more
of those  parties to make all payments,  distributions  and proceeds with
respect  thereto  otherwise  payable  to any Loan Party  directly  to the
Lender or its order until notified by the Lender that all the Obligations
have been fully paid and  satisfied,  (ii) demand,  collect,  receive and
retain any and all payments,  distributions and proceeds of any kind with
respect  to any  and  all of the  Collateral,  demand  and  direct  other
performance, enforce payment or other performance by legal proceedings as
permitted  by law,  and  give  receipts,  releases  and  acquittances  in
connection therewith, (iii) take possession or control of, and execute or
endorse (to the Lender or otherwise) and negotiate,  present or otherwise
collect,  any  item of  Collateral  and any  one or more  notes,  checks,
drafts, bills of exchange, money orders,  invoices,  freight bills, bills
of lading or other  instruments,  agreements  or  documents  received  in
payment for or under or on account of any Collateral,  (iv) receive, open
and dispose of all mail and other deliveries to any Loan Party, take over
any Loan  Party's post office boxes and request  postal  authorities  and
others to change  the  delivery  address(es)  for any Loan  Party or make
other arrangements with such authorities as the Lender may deem necessary
or  desirable  in  order  to  receive  any Loan  Party's  mail and  other
deliveries,  (v)  negotiate,   settle,  adjust,  compromise,   discharge,
release, extend or renew any account,  instrument,  payment intangible or
other  agreement,  right  or  claim of any  Loan  Party  included  in the
Collateral, whether as an inducement to prompt payment or performance and
whether  or not  meritorious,  customary  or in the  ordinary  course  of
business,  and commence,  prosecute,  defend, settle, abandon or withdraw
any  claims,  suits or  proceedings  pertaining  to or arising out of any
Collateral,  (vi)  prepare,  file and sign any Loan  Party's  name on any
proof of claim in bankruptcy,  notice of Lien, assignment or satisfaction
of Lien or similar  document in any action or proceeding  by,  against or
otherwise  involving to any obligor  under any  Collateral,  (vii) use or
disclose in any way any of the information  contained in any Loan Party's
Books and  Records,  and (viii)  exercise and enforce all of the any Loan
Party's other rights,  powers,  privileges,  remedies and interests  with
respect  to  the  Accounts  Receivable,   other  accounts,   instruments,
documents of title, chattel paper, financial assets, investment property,
payment   intangibles  and  general  intangibles  and  other  assets  and
properties included in the Collateral, whether against ;

(c)    direct the Loan Parties or any other holder of Collateral to assemble and
deliver such Collateral to the Lender or its designee at such time(s) and
place(s)  as the Lender  from time to time may  specify,  all without any
risk or expense to the Lender;  and enter any premises  where any item of
Collateral may be located,  with or without  permission or process of law
but without breach of the peace,  and seize and remove such Collateral or
remain  upon such  premises  and use or  dispose  of such  Collateral  as
contemplated under this Agreement and the other Loan Instruments;

(d)    request the judicial  appointment of a receiver respecting the Collateral
(excluding  funds  in  the  possession  of  the  Lender  and  such  other
Collateral as the Lender may specify in its request) in any action,  suit
or proceeding in which claims are asserted  against the Collateral by the
Lender or its designee, irrespective of the solvency of any Loan Party or
any other Person or the adequacy of any collateral, and without notice to
or the approval of the Loan Party, which receiver shall have the power to
manufacture,  operate,  sell,  lease or rent  such  items  of  Collateral
pending the sale of all of the Collateral and to collect the rent, issues
and profits  therefrom,  together with such other powers as may have been
requested by the Lender, and shall apply the amounts received (net of all
proper  charges  and  expenses)  to the  Obligations  as provided in this
Agreement;

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(e)    take  any  action  with  respect  to the  offer,  sale,  lease  or  other
disposition,  and  delivery of the whole of, or from time to time any one
or more items of, the Collateral,  including,  without limitation: (i) to
sell, assign, lease or otherwise dispose of the whole of, or from time to
time any part of, the Collateral,  or offer, commit or agree to do so, in
any established  market or at any broker's board,  private sale or public
auction  or sale  (with  or  without  demand  on any  Loan  Party  or any
advertisement  or other  notice of the time,  place or terms of sale) for
cash,  credit or any other asset or  property,  for  immediate  or future
delivery,  and for such  consideration and upon such terms and subject to
such  conditions  as the Lender in its sole and absolute  discretion  may
determine,  and the Lender may purchase (the  consideration for which may
consist in whole or in part of cancellation of Indebtedness) or any other
Person may purchase the whole or any one or more items of the Collateral,
and all items  purchased  shall be free and clear of any and all  rights,
powers,  privileges,  remedies and interests of the Loan Parties (whether
individual,  joint,  several  or  otherwise),  which  each Loan Party has
expressly  waived  pursuant to Section 7.08  hereof;  (ii) to postpone or
adjourn any such auction, sale or other disposition, to cause the same to
be  postponed or  adjourned  from time to time to a  subsequent  time and
place,  or to abandon or cause the  abandonment  of the same, all without
any  advertisement  or other notice  thereof;  and (iii) to carry out any
agreement to sell any item or items of the Collateral in accordance  with
the terms and provisions of such agreement,  notwithstanding  that, after
the Lender shall have entered into such an agreement, all the Obligations
may have been paid and satisfied in full;

(f)    exercise  any  voting,  consent,   enforcement  or  other  right,  power,
privilege, remedy or interest of any Loan Party pertaining to any item of
Collateral  to the same extent as if the Lender were the  outright  owner
thereof,  provided  that the Lender shall not be entitled to exercise any
of the voting rights of any Loan Party  pertaining to any equity interest
in another Person unless and until the Lender has given specific  written
notice to the Loan  Parties,  apart from the notice first  referred to in
this  subsection,  of the Lender's  election to exercise one or more,  or
all, such voting rights;

(g)    take  possession of and thereafter deal with or use from time to time all
or any part of the  Collateral  in all respects as if the Lender were the
outright  owner thereof,  which shall include  (without  limitation)  the
right to manufacture,  operate,  sell, lease or rent items of Collateral,
as well as to sell parts of the Collateral pending the sale of all of the
Collateral, and to collect the rent, issues and profits therefrom;

(h)    transfer or cause the transfer of the ownership of all or any part of the
Collateral  to its own  name  or any  designee  and  have  such  transfer
recorded  in any  jurisdiction(s)  and  publicized  in any manner  deemed
appropriate by the Lender; and

(i)    in  addition  to,  and not by way of  limitation  of,  any of the  rights
specified  above,  exercise  or  enforce  any  and  all  rights,  powers,
privileges,  remedies  and  interests  afforded to the Lender  under this
Agreement,  the other  Loan  Instruments  and any and all  provisions  of
Applicable Law (including,  without  limitation,  the UCC),  whether as a
secured  party  or  mortgagee,   whether  in  possession  or  control  of
collateral or otherwise.

Each Loan Party  acknowledges  and agrees that the term "default" as used in the
UCC includes (without limitation) any Default or Event of Default.

Section7.08.  Certain Acknowledgments and Waivers by the Loan Parties.
(a) Each Loan Party acknowledges and agrees that the rights, powers, privileges,
remedies and interests granted to or conferred upon the Lender in respect of any
of the  Collateral by this  Agreement,  the other Loan  Instruments  (in certain
cases) and Applicable Law are purely  discretionary and shall not, and shall not
be deemed or construed to,  impose upon the Lender any duty or other  obligation
(i) to sell, foreclose or otherwise realize upon any of the Collateral,  (ii) to
protect,  preserve,  process,  prepare, repair or improve any of the Collateral,
whether  or  not in the  possession  or  control  of  the  Lender  or any of its
designees, (iii) to perform or satisfy any obligation under or respecting any of
the Collateral or any Loan Party, (iv) to make any representation or warranty or
assume any liability or  obligation in its  liquidation  or  disposition  of any
Collateral,  (v) to mitigate or  otherwise  reduce any damage or other loss,  or
(vi) to otherwise exercise or enforce any such right, power,  privilege,  remedy
or  interest.  Any  sale,  foreclosure  or  other  realization  upon  any of the
Collateral,  or any other  exercise or  enforcement  of any such  right,  power,
privilege,  remedy or  interest,  if  undertaken  by the  Lender in its sole and
absolute  discretion,  may be delayed,  discontinued or otherwise not pursued or
exhausted for any reason whatsoever (whether intentionally or otherwise).

(b) Each Loan Party  acknowledges  and agrees that: (i) the Lender may
be unable to effect a public  sale of  certain  of the  Collateral  by reason of
certain  prohibitions  contained  in the  Securities  Act,  and may be otherwise
delayed or  adversely  affected  in  effecting  any sale by reason of present or
future  

SPAR ESOP Term Loan Agreement

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restrictions   thereon   imposed   by   governmental    Authorities   ("Affected
Collateral"),  and a ready market may not exist for Affected  Collateral that is
not traded as such on a national  securities  exchange or quoted on an automated
quotation  system;  (ii) as a consequence of such  prohibitions and restrictions
the Lender may be deem it necessary  or  desirable  (A) to resort to one or more
private sales to a restricted  group of purchasers who will be obliged to agree,
among other things,  to acquire Affected  Collateral for their own account,  for
investment and not with a view to the  distribution  or resale  thereof,  (B) to
seek  regulatory  approval of any  proposed  sale or sales,  or (C) to limit the
amount of Affected  Collateral sold to any Person or group:  (iii) private sales
so made may be at prices and upon terms less  favorable to the Loan Parties than
if such Affected  Collateral was sold either at public sales or at private sales
not subject to such restrictions; (iv) the Lender has no obligation to delay the
sale of any Affected  Collateral  for the period of time necessary to permit any
Loan Party or any other  Person to register or  otherwise  qualify them under or
exempt  them from any  applicable  restriction,  even if any Loan Party or other
Person  would  agree to register or  otherwise  qualify or exempt such  Affected
Collateral so as to permit a public sale under the  Securities Act or applicable
state  law;  and  (v)  the  use  of  private  sales  made  under  the  foregoing
circumstances  to  dispose  of  Affected   Collateral  shall  be  deemed  to  be
dispositions in a commercially reasonable manner.

(c) Without limiting the generality of the foregoing,  each Loan Party
hereby irrevocably, unconditionally and expressly waives forever (to the fullest
extent  permitted by Applicable  Law) each and every claim or defense,  and each
Loan  Party  agrees  that it  will  not  assert  or  pursue  (by  action,  suit,
counterclaim or otherwise) any claim or defense, respecting, and each Loan Party
acknowledges  and agrees that it would not be commercially  unreasonable for the
Lender to make or effect,  (i) any settlement or compromise  with any obligor or
other  third  party under any Account  Receivable,  account,  note,  instrument,
agreement,   document  or  general   intangible   included  in  the  Collateral,
irrespective  of any reduction in the  potential  proceeds  therefrom,  (ii) the
selection or order of disposition  of any Collateral  (which may be at random or
in any  order(s)  the Lender may  select in its sole and  absolute  discretion),
(iii) any disposition of any Collateral in its then current  condition,  in each
case  without  any  processing,   preparation,   repair,  or  improvement,   any
registration,  qualification  or other approval or change therein,  or any other
beneficial  action  respecting  any  Collateral,  any of which the Lender in its
discretion  may  (but  shall  not be  required  to)  undertake  and  which if so
undertaken may be delayed, discontinued or otherwise not pursued or exhausted by
the  Lender  in  its  discretion  for  any  or  no  reason  whatsoever  (whether
intentionally or otherwise),  (iv) any private sale or other  disposition of any
Collateral in a commercially reasonable manner, whether or not any public market
exists,  or any sale,  redemption  or other  disposition  of any  Collateral  in
accordance with the applicable  Collateral  Acknowledgment,  Custody Document or
Organizational Document, (v) the choice or timing of any disposition date (which
the Lender  may select in its sole and  absolute  discretion),  irrespective  of
whether  greater  proceeds or other  amounts  would be realizable on a different
date, (vi) the choice of whether to sell, lease, license or otherwise dispose of
any Collateral (which the Lender may select in its discretion),  irrespective of
whether  greater  proceeds or other amounts would be realizable  (immediately or
otherwise)  with a  different  form of  disposition,  (vii)  any  sale or  other
disposition  of  Collateral  irrespective  of (A) the amount of the  proceeds or
other  amounts  received,  whether  such amounts are the maximum  possible,  and
whether such amounts are adequate to satisfy the  Obligations,  or (B) any other
term or condition  of any  disposition  of any  Collateral,  including  (without
limitation)  any  disposition  by the  Lender  "as  is" or  with  limited  or no
representations  or warranties from the Lender respecting  title,  infringement,
interference,  merchantability,  fitness  for  a  particular  purpose  or  other
condition,  circumstance  or event,  , (viii) any sale or other  disposition  of
Collateral  to the first  Person  to  receive  an offer or make a bid,  (ix) the
selection  of any  purchaser  or other  acquiror of any  Collateral,  or (x) any
action  or  inaction  in the  event of any  default  by any  purchaser  or other
acquiror of any  Collateral.  Neither the Lender nor any of its  representatives
shall incur any liability in  connection  with any sale of or other action taken
respecting any Collateral in accordance  with the provisions of this  Agreement,
any other Loan Instrument or Applicable Law.

(d) Each Loan Party hereby unconditionally,  irrevocably and expressly
waives forever the  applicability of each and every Applicable Law pertaining to
notice  (other  than  notices  required  by this  Agreement  or any  other  Loan
Instrument),  appraisal, valuation, stay, extension,  moratorium,  marshaling of
assets,  exemption and equity of redemption  and similar  provisions  respecting
collateral or its disposition  that are or may be in conflict with the terms and
provisions of this Agreement and the other Loan  Instruments  now or at any time
in the future to the extent waiver is not limited under Applicable Law.

(e) Notwithstanding  anything herein to the contrary,  each Loan Party
shall remain liable under each note, instrument, agreement, account, document or
similar  general  intangible of the Loan Party (each a "Pledged  Agreement")  or
other item of  Collateral  to observe  and  perform  all the terms,  provisions,
conditions and obligations to be observed and performed by it thereunder, all in
accordance  with  the  terms  thereof.   Neither  the  Lender  nor  any  of  its
Representatives  shall have any duty,  obligation or liability under any Pledged
Agreement or any other Collateral by reason of or arising out of this Agreement,
the security  interests granted hereunder or the receipt by the Lender or any of
its Affiliates or designees of any payment  relating to any Account  Receivable,
Pledged  Agreement or other item of  Collateral,  nor shall the Lender or 

SPAR ESOP Term Loan Agreement

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any of its  Representatives  be  obligated  in any manner to perform  any of the
obligations  of any Loan  Party or any  other  party  under or  pursuant  to any
Account Receivable,  Pledged Agreement or other item of Collateral,  to make any
payment,  to make any inquiry as to the nature or the sufficiency of any payment
received by it or as to the  sufficiency  of any  performance by any party under
any  Account  Receivable,  Pledged  Agreement  or other item of  Collateral,  to
present or file any claim,  to take any action to enforce any  performance or to
collect  the  payment of any  amounts  which may have been  assigned to it or to
which it may be entitled at any time or times.

Section 7.09. Application of Proceeds; Liability for Deficiencies. (a)
The Lender  shall  collect  the cash  proceeds  received  from any sale or other
disposition of Collateral,  and, after deducting all costs and expenses incurred
by the Lender and any Person designated by the Lender to take any of the actions
enumerated  in this  Article or under  Applicable  Law in  connection  with such
collection and sale or disposition (including attorneys' disbursements, expenses
and fees),  the Lender  shall  apply the same in  accordance  with the terms and
provisions  of this  Agreement  unless the Lender  shall  elect (in its sole and
absolute discretion) to retain the same as additional or substitute  Collateral.
In the event any funds remain  after  satisfaction  in full of the  Obligations,
then the remainder shall be returned to each Loan Party,  subject,  however,  to
any other  rights or  interests  the  Lender  may have  therein  under any other
instrument, agreement or document or Applicable Law.

(b) If the  amount of all  proceeds  received  with  respect to and in
liquidation  of  the  Collateral  that  shall  be  applied  to  payment  of  the
Obligations  shall be  insufficient to pay and satisfy all of the Obligations in
full,  each Loan Party  acknowledges  and agrees that it shall remain liable for
any deficiency (i.e., any Obligations remaining unpaid),  together with interest
thereon and costs of collection  thereof  (including  attorneys'  disbursements,
expenses  and  fees),  in  accordance  with the  terms  and  provisions  of this
Agreement and the other Loan Instruments.

Section  7.10.  Partial  Releases.  The Lender from time to time shall
release portions of the Collateral from the liens and security interests granted
under this Agreement and the other Loan Instruments qualifying for release under
(and subject to the terms and  conditions  of)  subsection  [(a) or (b)] of this
Section,  shall  execute and deliver the  documentation  reasonably  required to
effect each such release (in such form and substance as may be acceptable to the
Lender),  all upon the terms and provisions and subject to the conditions of the
subsections  of this  Section,  in each case  subject to receipt of evidence and
documentation in such form and substance as may be acceptable to the Lender that
those terms and  conditions  have been  satisfied;  provided  that no Default or
Event of Default then exists or could result therefrom  (whether through any Pro
Forma Effect or otherwise),  unless,  after giving effect to the consummation of
the  transaction  for which the release was requested and the application of the
net cash proceeds thereof, if any, toward the prepayment of the Obligations, the
default or other  event shall  cease to exist.  Any and all  actions  under this
Section  shall be without any recourse to or  representation  or warranty by the
Lender and shall be at the sole cost and expense of the Loan Parties.

(a) In the event of any sale or other  disposition  of any  Collateral
expressly  permitted under Section 7.03(a) hereof or any other term or provision
of this  Agreement  or any other Loan  Instrument,  the Lender will release that
item,  subject to receipt by the Lender of any  payment or  prepayment  from any
Loan Party required by this Agreement or any other Loan Instrument.

(b) In the event any  debtor  under any  indenture,  agreement,  note,
instrument  or  account  receivable  pledged  to the  Lender  pursuant  to  this
Agreement  shall have paid all  amounts  due  thereunder  in full and shall have
complied with all other terms and  conditions  thereof,  the Lender will release
that item and if requested return the applicable instruments and other documents
to the applicable  Loan Party or its designee,  subject to receipt by the Lender
of any payment or prepayment from the Loan Parties required by this Agreement or
any other Loan Instrument.

Section  7.11.   Termination  of  Security  Interests.   The  security
interests  granted to the Lender  hereunder shall terminate when the Obligations
shall  have been  fully  paid and  satisfied.  Upon such  complete  payment  and
satisfaction:  the Lender shall  reassign,  release  and/or  deliver to the Loan
Parties all Collateral  then held by or at the direction of the Lender under the
Loan  Instruments;  and, if  requested  by the Loan  Parties,  the Lender  shall
execute and  deliver to the Loan  Parties for filing in each office in which any
financing statement,  mortgage, or lease, or assignment thereof, relating to the
Collateral,  or any part thereof, shall have been filed, a termination statement
under  the  UCC  or  an  appropriate  satisfaction,   release,  reconveyance  or
reassignment  releasing the Lender's interest therein,  and any other instrument
or document  that the Loan  Parties  deem  reasonably  necessary to evidence the
termination of the Lender's security  interest,  each in such form and substance
as may be acceptable to the Lender. Any and all actions under this Section shall
be without any recourse to or representation or warranty by the Lender and shall
be at the sole cost and expense of the Loan Parties.

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ARTICLE VIII

DEFAULTS AND REMEDIES

Section 8.01.  Events of Default.  Each of the following  events shall
constitute a default under this Agreement (each an "Event of Default"):

(a)    any  representation,  warranty,  acknowledgement or certification made in
this  Agreement  or any other Loan  Instrument  shall  prove to have been
false or misleading  in any material  respect when made (or deemed made);
or any report,  statement,  certificate,  schedule  or other  document or
information  furnished (whether prior to, on or after the Effective Date)
in connection  with this  Agreement or any of the other Loan  Instruments
shall prove to have been false or misleading in any material respect when
furnished (or deemed furnished);

(b)    any default,  whether in whole or in part,  shall occur in the payment of
the principal of, the interest on or any other amount respecting: (i) the
Loans or any of the other Obligations; (ii) any other Indebtedness of any
Loan Party or any Surety to the Lender or any of its Affiliates; or (iii)
any guaranty or other Credit Support from any Loan Party or any Surety to
the Lender or any of its Affiliates  respecting any  Indebtedness  of any
other Person;

(c)    any default,  whether in whole or in part,  shall occur in the payment or
satisfaction  of any  amount  required  under  Section  2.06(h)  of  this
Agreement,  and such default shall continue  (after the earlier of notice
thereof to or knowledge  thereof by any Loan Party) for a period of three
(3) Business Days;

(d)    any  default,  whether  in  whole  or in  part,  shall  occur  in the due
observance  or  performance  of any  covenant,  term or  provision  to be
performed  under Article VI of this  Agreement  (other than under Section
6.10 or 6.11 hereof) or the Confidentiality  Agreement,  and such default
shall  continue  after the  earlier  of notice  thereof  to or  knowledge
thereof by any Loan Party;

(e)    any  default,  whether  in  whole  or in  part,  shall  occur  in the due
observance or performance of any other covenant,  term or provision to be
performed under this Agreement and the other Loan Instruments,  any Stock
Purchase  Document or any ESOP  Related  Document by any Loan Party,  any
Surety or any other party thereto (other than the Lender),  which default
is not  described  in any  other  subsection  of this  Section,  and such
default shall continue for a period of ten (10) days after the earlier of
notice  thereof  to or  knowledge  thereof  by  the  Borrower;  provided,
however,  that if such  default  is  capable  of being  cured  and if the
Borrower,  any Surety or such other  party shall have  commenced  to cure
such default  within such period and shall proceed  continuously  in good
faith and with due  diligence  to cure  such  default,  then such  period
instead shall be thirty (30) days;

(f)    any Event of Default,  whether in whole or in part, shall occur under the
Revolving Credit Agreement;

(g)    any payment default shall occur and continue beyond any applicable  grace
period under any instrument or agreement  (other than a Loan  Instrument)
respecting  any  Indebtedness  of any  Loan  Party or any  Surety  or any
Indebtedness  of any other  Person  covered  (in whole or in part) by any
guaranty or other Credit  Support  from any Loan Party or any Surety;  or
any  default,  whether  in  whole  or in  part,  shall  occur  in the due
observance or  performance  of any term or provision of any instrument or
agreement (other than a Loan  Instrument)  respecting any Indebtedness of
any Loan Party or any Surety,  or any  guaranty or other  Credit  Support
from any Loan Party or any Surety  respecting any  Indebtedness  or other
obligations of any other Person,  that shall cause or permit acceleration
of any such Indebtedness or demand for payment or any additional interest
or other  amount under any such  Indebtedness  or Credit  Support,  which
default is not described in any other subsection of this Section,  unless
payment  shall be made or action  shall be taken within five (5) Business
Days after such default in an amount or manner  sufficient to cure it and
the Lender receives confirmation of such cure from the lender thereunder,
provided  that such  payment or action will not result in a breach of any
term or provision of this Agreement and the other Loan Instruments;

(h)    any Loan Party or any Surety shall (i) fail to, be unable to or otherwise
not generally  pay its debts as they become due, (ii) conceal,  remove or
transfer any of its assets and  properties in violation or evasion of any
bankruptcy,  fraudulent  conveyance or similar Applicable Law, (iii) make
an assignment  for the benefit of its  creditors,  (iv) petition or apply
for or consent  to the  appointment  of a  receiver,  trustee,  assignee,
custodian, sequestrator, liquidator or similar official for itself or any
of its 

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assets and  properties,  (v)  commence a  voluntary  case for relief as a
debtor under any  Bankruptcy  Law, (vi) file with or otherwise  submit to
any governmental Authority any petition, answer or other document seeking
(A)  reorganization,  (B) an  arrangement  with  creditors or (C) to take
advantage  of any other  present  or  future  Applicable  Law  respecting
bankruptcy, reorganization,  insolvency, readjustment of debts, relief of
debtors,  dissolution or liquidation,  (vii) file or otherwise submit any
answer or other  document  admitting  or failing to contest the  material
allegations of a petition or other document filed or otherwise  submitted
against it in any proceeding  under any such  Applicable  Law,  (viii) be
adjudicated  a  bankrupt  or  insolvent,  or (ix) take any action for the
purpose of effecting any of the foregoing;

(i)    any petition shall be filed or case,  proceeding or other action shall be
commenced  against  any  Loan  Party or any  Surety  for the  purpose  of
effecting,  or an order, judgment or decree shall be entered by any court
of  competent  jurisdiction  approving  (in whole or in  part),  anything
specified in subsection  (h) of this Section,  or any receiver,  trustee,
assignee, custodian, sequestrator,  liquidator or other official shall be
appointed  with  respect  to any Loan  Party or any  Surety,  or shall be
appointed to take or shall otherwise acquire possession or control of all
or a substantial  part of the assets and  properties of any Loan Party or
any Surety,  and any of the  foregoing  involuntary  actions shall not be
vigorously  contested  in good  faith by such  party and  shall  continue
unstayed and in effect for any period of 30 days;

(j)    one or more  final  judgments  for the  payment  of money in excess of an
aggregate  of $10,000  shall be  rendered  against  any Loan Party or any
Surety  (other  than fully  insured  losses)  and the same  shall  remain
undischarged  for a period of 30 days  during  which  levy and  execution
shall not be effectively stayed or contested in good faith;

(k)    any ERISA  Event  shall  occur,  or any action,  suit,  investigation  or
proceeding involving or affecting any Plan or any assets or properties of
any Plan shall be adversely  determined;  any fiduciary or sponsor of, or
participant  in,  any  Plan  shall  take  or  commit  any of the  actions
specified in subsection (h) of this Section in respect of the Plan or all
or substantially all of its assets and properties; or any action, suit or
proceeding  shall  otherwise be commenced  against any Plan or any of its
fiduciaries,  sponsors or participants  for the purpose of effecting,  or
any order,  judgment or decree shall be entered by any court of competent
jurisdiction  approving  (in whole or in  part),  anything  specified  in
subsection  (h)  of  this  Section  in  respect  of  any  Plan  or all or
substantially all of its assets and properties, or any receiver, trustee,
assignor, custodian, sequestrator,  liquidator or other official shall be
appointed  with respect to any Plan or all or a  substantial  part of its
assets and  properties,  or shall be appointed to take or shall otherwise
acquire  possession or control of all or a substantial part of the assets
and  properties  of any Plan,  and any of the  foregoing  shall  continue
unstayed and in effect for any period of 30 days;

(l)    any seizure, levy, attachment, distraint, loss, destruction, termination,
foreclosure or other material loss, destruction, termination, foreclosure
or other material impairment, deterioration or diminution, in whole or in
part,  shall occur with respect to all or any part of (i) the  Collateral
or any  collateral  granted  by any  Surety  (other  than  fully  insured
casualty  losses to the extent the Lender has a perfected  first priority
security  interest in and actually  receives all insurance  proceeds with
respect  thereto to the extent  required by this  Agreement and the other
Loan  Instruments),  or (ii) the  Lender's  perfected  security  interest
therein,  or any  Loan  Party  or any  Surety  shall  do or fail to do or
resist, or cause, suffer or permit anyone else to do, anything that would
so affect any such collateral or security interest;

(m)    any Loan  Instrument (in whole or in part) at any time and for any reason
whatsoever (i) shall cease to be in full force and effect,  (ii) shall be
declared null and void, (iii) shall be contested or otherwise  challenged
as to its validity or  enforceability  by any Loan Party or any Surety or
(iv)  shall be the  subject of any denial by any Loan Party or any Surety
of any liability or obligation of such party thereunder;

(n)    any Loan Party or any Surety shall be or become the subject of or a party
to any criminal indictment or conviction;

(o)    a change  shall  occur in the  identity  or control  of the ESOP  Trustee
unless replaced by an institutional  trustee that (i) is not an Affiliate
of the  Borrower  or the Lender and (ii) has been  approved in advance of
such change in writing by the Lender, which approval will not be withheld
unreasonably;

(p)    any  Loan  Party  or any  of its  subsidiaries  shall  cease  to be or be
qualified to be a subchapter "S" corporation under the Tax Code;

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(q)    the  failure of the  Borrower  to issue  1,000,000  shares of its capital
stock to the ESOP Trust  immediately after the closing of the sale of the
SPG Stock  under the Stock  Purchase  Agreement,  or the  failure  of the
Borrower to redeem  (immediately after its delivery of the Term Notes and
such   issuance  to  the  ESOP   Trust)  its   capital   stock  from  its
shareholder(s) other than the ESOP Trust;

(r)    any Person shall be or become a record holder of any of the capital stock
issued by the Borrower other than (i) the ESOP Trust,  (ii) the employees
of the Borrower or SPG as expressly  permitted under the ESOP Plan, (iii)
the  employees  of the  Borrower or SPG  pursuant to the  exercise of any
Permitted  Option in accordance  with its terms; or (iv) the holder(s) of
the Holdings Warrant;

(s)    any  Person  other  than  the  Borrower  shall be or  become a record  or
beneficial  owner  of any  capital  stock  issued  by  SPG  or any  other
Guarantor,  or a change shall occur in the control of any Surety, whether
by a change in ownership or otherwise;

(t)    if either of Tom Hunter or John Hawkins shall cease to actively  function
and  continue  in their  current  positions  with any Loan  Party  unless
replaced  within 30 days  thereof by a Person  approved  by the Lender in
writing, which approval shall not be unreasonably withheld; or

(u)    there  shall  occur  any  event or events  that  (individually  or in the
aggregate  with any  other  event(s))  could  have or has had a  Material
Adverse Effect or Surety's Adverse Effect, as determined by the Lender in
the exercise of its reasonable judgment,  and the Lender shall have given
the Loan Parties notice of such determination.

Section 8.02.  Remedies upon  Default.  Upon the  occurrence or at any
time thereafter during the continuance of any Event of Default, the Lender, upon
notice to the Loan Parties,  shall be entitled,  without limiting its ability to
do so at  other  times  (each  Loan  Party  hereby  acknowledging  that  certain
Obligations   are   payable  on  demand  as   provided   in  Article  II  hereof
notwithstanding  anything in this Section or in Section  8.01 to the  contrary):
(a) to declare the Loans and all other  Obligations  to be  immediately  due and
payable, whether principal, interest or otherwise, without presentment,  demand,
protest or other notice of any kind, all of which are hereby expressly waived by
each Loan Party,  notwithstanding anything contained in this Agreement, any Note
or any of the other Loan  Instruments  to the  contrary;  and (b) to exercise or
enforce any one or more of the Lender's rights, powers, privileges, remedies and
interests  under  this  Agreement,  each  Note,  the  Guaranty,  the other  Loan
Instruments  and Applicable  Law;  provided,  however,  that in the event of the
occurrence of any of the Events of Default  respecting each Loan Party set forth
in subsections (h) and (i) of Section 8.01, then simultaneously with that event,
and without the necessity of any notice or other action by the Lender, the Loans
and all of the other  Obligations  shall be accelerated  and immediately due and
payable as stated above.

Section 8.03.  Enforcement,  Etc. The Lender, in its sole and absolute
discretion,  may proceed to exercise  or enforce  any right,  power,  privilege,
remedy or interest that the Lender may have under this Agreement, any other Loan
Instrument  or  Applicable  Law:  (a) at law, in equity,  in rem or in any other
forum  available  under  Applicable  Law; (b) without notice except as otherwise
expressly  provided  herein;  (c)  without  pursuing,  exhausting  or  otherwise
exercising or enforcing any other right,  power,  privilege,  remedy or interest
that  the  Lender  may  have  against  or in  respect  of any  Loan  Party,  the
Collateral,  any Surety, or any other co-obligor,  guarantor,  surety,  pledgor,
collateral  or other  Person  or  thing;  and (d)  without  regard to any act or
omission of the Lender or any other Person. The Lender may institute one or more
proceedings  (which may be separate  proceedings) with respect to this Agreement
and each of the other  Loan  Instruments  in such order and at such times as the
Lender may elect in its sole and absolute  discretion.  This  Agreement  and the
other Loan  Instruments  may be enforced  without  possession of any Note or its
production in any action, suit or proceeding.  This Agreement and the other Loan
Instruments  may be enforced with respect to any Loan Party without the presence
or participation of any Surety or any co-obligor (joint or several),  guarantor,
pledgor or surety,  whether  through lack of  jurisdiction,  venue or service or
otherwise,  and no Loan Party will raise,  and each Loan Party hereby  expressly
waives,  any objection or defense  respecting  the need for any such presence or
participation.

Section  8.04.  Equitable  Relief.  Each Loan Party  acknowledges  and
agrees that it may be impossible to measure in money the damage to the Lender in
the event of a breach of or  default  under any of the terms and  provisions  of
Sections 6.04,  6.05,  6.07,  6.08,  6.11, 6.12, 7.03, 7.05, and 7.07(a) of this
Agreement,  and that, in the event of any such breach or default, the Lender, in
addition to all other rights, powers,  privileges and remedies that it may have,
shall be entitled  to  injunctive  relief,  specific  performance  or such other
equitable relief as the Lender may request to exercise or otherwise  enforce any
of the terms  and  provisions  of those  Sections  and to  enjoin  or  otherwise
restrain  any act  prohibited  thereby,  and no Loan Party will raise and hereby
expressly  waives any  objection  or defense  that there is an  adequate  remedy
available at law.

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Section  8.05.  Reinstatement.  In the  event  any  payment  of or any
application of any amount,  asset or property to any of the Obligations,  or any
part thereof, at any time is rescinded or must otherwise be restored or returned
by the Lender upon the  insolvency,  bankruptcy  or  reorganization  of any Loan
Party,  any Surety or any other  Person,  whether by order of any court,  by any
settlement approved by any court, or otherwise, then the terms and provisions of
this Agreement  shall  continue to apply,  or shall be reinstated if not then in
effect,  as the case may be,  with  respect  to the  Obligations  so  rescinded,
restored or returned,  all as though such payment or application  had never been
made.

Section 8.06. Waivers of Notice, Etc. Except for any written notice or
demand  expressly  required  under this  Agreement or any other Loan  Instrument
under the circumstances,  each Loan Party hereby expressly waives: (a) notice of
acceptance  of this  Agreement or any other Loan  Instrument;  (b) notice of any
action  taken or omitted in reliance  hereon;  (c)  presentment;  (d) demand for
payment; (e) protest or notice of protest; (f) notice of any nonpayment or other
event that constitutes,  or with or without the giving or receipt of notice, the
acquisition  of  knowledge or the passage of time (or any  combination  thereof)
would constitute,  any nonpayment,  nonperformance,  misrepresentation  or other
breach or default under this Agreement or any other Loan Instrument;  (g) notice
of any material and adverse  effect,  whether  individually or in the aggregate,
upon (i) the assets, business, operations, properties or condition (financial or
otherwise) of any Loan Party,  any Surety or any other Person,  (ii) the ability
of any of them to pay or  otherwise  satisfy  (as and  when  due)  any of  their
respective  obligations  under  any  of  the  Loan  Instruments,  or  (iii)  any
collateral securing the obligations of any of them under the Loan Instruments or
its  value  or the  validity,  enforceability,  perfection  or  priority  of any
security  interest  of the Lender  therein;  or (h) any other  proof,  notice or
demand of any kind  whatsoever  with respect to any or all of the Obligations or
Surety's  Obligations  or  promptness  in making any claim or demand  under this
Agreement  or any  other  Loan  Instrument.  No act or  omission  of any kind in
connection with any of the foregoing shall in any way impair or otherwise affect
the  legality,  validity,  binding  effect  or  enforceability  of any  term  or
provision  of  this  Agreement  or  any  other  Loan  Instrument  or  any of the
Obligations or Surety's Obligations.

Section 8.07.  Consent to  Jurisdiction,  Waiver of Personal  Service,
Etc.  Each Loan Party hereby  consents and agrees that the Supreme  Court of the
State of New York for the County of Westchester  and the United States  District
Court for the Southern  District of New York  (Westchester  Division) each shall
have personal  jurisdiction and proper venue with respect to any dispute between
the Lender  and the Loan  Party  under any Loan  Instrument;  provided  that the
foregoing  consent  shall not  deprive  the  Lender of the right in its sole and
absolute  discretion to voluntarily  commence or participate in any action, suit
or  proceeding  in any other court having  jurisdiction  and venue over any Loan
Party. In any dispute with the Lender,  no Loan Party will raise,  and each Loan
Party hereby expressly waives, any objection or defense to any such jurisdiction
as an inconvenient forum.  Without in any way limiting the preceding consents to
jurisdiction  and venue, the parties agree to submit to the jurisdiction of such
New York courts in accordance with Section 5-1402 of the General Obligations Law
of the State of New York or any corresponding or succeeding  provisions thereof.
Each Loan  Party  hereby  expressly  waives  personal  service  of any  summons,
complaint or other process, which may be delivered by any of the means permitted
for notices  under Section 9.01 hereof.  In addition to (and without  limitation
of) any such delivery or any other delivery permitted under Applicable Law, each
Loan Party agrees to execute an deliver to the Lender a Designation of Agent for
Service  appointing  CT  CORPORATION  SYSTEM as the agent of the Loan  Party for
service  in the  State of New  York,  which the Loan  Party  hereby  irrevocably
authorizes  the  Lender to date with  such date (if  undated)  and file with the
appropriate  Authority  at such  time as the  Lender  in its sole  and  absolute
discretion  may elect.  Within thirty (30) days after  service of process,  each
Loan Party  agrees to appear or answer any summons or  complaint  of the Lender,
and  should  that Loan  Party fail to appear or answer  within  said  thirty-day
period,  that Loan  Party  shall be deemed in  default  under  that  action  and
judgment  may be  requested  by the  Lender  and  entered in favor of the Lender
against that Loan Party for the relief demanded in any complaint so served. Each
Loan Party  acknowledges  and agrees that a final  judgment in any such  action,
suit or proceeding  shall be conclusive and binding upon that Loan Party and may
be enforced  against that Loan Party or any of its assets or  properties  in any
other appropriate  jurisdiction selected by the Lender (in its sole and absolute
discretion) by an action, suit or proceeding in such other jurisdiction.  To the
extent that that Loan Party may be  entitled  to immunity  (whether by reason of
sovereignty or otherwise) from suit in any  jurisdiction,  from the jurisdiction
of any court or from any other legal process, each Loan Party hereby irrevocably
waives such immunity.

Section 8.08.  Waiver of Setoff,  Special Damages,  Etc. (a) Each Loan
Party hereby expressly waives, and agrees that it will not exercise, any and all
rights  of  setoff,  recoupment,  abatement  or  reduction  or other  claims  or
counterclaims respecting any payment due (whether as scheduled or required, upon
acceleration or as sought in any action, suit or proceeding by the Lender) under
this Agreement,  any other Loan Instrument,  any Stock Purchase Document` or any
other  agreement,  facility  or  relationship  with the  Lender  that may now or
hereafter be accorded to the Loan Party under  Applicable  Law or otherwise.  To
the extent not  required as a  compulsory  counterclaim  in any related  ongoing
proceeding,  each Loan Party (i) 

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shall pursue separate exercise and enforcement of any right,  power,  privilege,
remedy or  interest  retained  (and not  waived)  by the Loan  Party  under this
Agreement,  the  other  Loan  Instruments,  any  other  agreement,  facility  or
relationship  with the Lender  and  Applicable  Law,  and (ii) shall not seek to
exercise or enforce any such right, power, privilege,  remedy or interest in any
proceeding  instituted by the Lender under or in respect of any Loan Instrument,
whether  through  joinder,   consolidation,   setoff,   recoupment,   abatement,
reduction, counterclaim, defense or otherwise.

(b) In any dispute  with the  Lender,  each Loan Party  covenants  and
agrees that it will not seek,  recover or retain any, and each Loan Party hereby
expressly waives any and all,  special,  exemplary,  punitive,  statutory and/or
consequential  damages (whether through action, suit,  counterclaim or otherwise
and whether in contract,  tort,  strict  liability or  otherwise)  to the extent
waiver is not limited under Applicable Law.

Section 8.09.  Relationship  of the Borrower and the Lender,  Etc. (a)
Each Loan Party  represents,  warrants,  acknowledges  and agrees that:  (i) the
Lender is acting solely in the capacity of lender respecting this Agreement, the
other Loan Instruments,  and the Collateral;  (ii) the sole relationship of each
Loan Party with the Lender is that of debtor and creditor,  respectively, and no
term or provision of this Agreement or any other Loan  Instrument is intended to
create,  nor shall any such term or  provision  be deemed or  construed  to have
created,  any joint venture,  partnership,  trust,  agency or other fiduciary or
advisory  relationship with any Loan Party, any of its subsidiaries,  any Surety
or any of their respective  Affiliates;  (iii) Each Loan Party is experienced in
the ownership, operation and financing of its current and contemplated business,
assets and  properties;  (iv) Each Loan Party and each Surety has  independently
and  fully  reviewed  and  evaluated  the  Loan  Instruments,  the  transactions
contemplated  thereunder and the potential  effects of such  transactions on the
assets, business, operations,  properties and condition (financial or otherwise)
of each of the Loan  Parties and the  subsidiaries  and  Affiliates  of any Loan
Party (if any),  which review and  evaluation was made together with counsel and
(to the extent deemed prudent by the Loan Party) financial and other advisors to
each Loan Party and each  Surety;  and (v) neither  Loan Party nor any Surety is
relying  upon (A) the  expertise,  business  acumen or  advice of the  Lender in
connection  with any aspect of the  ownership,  operation  or  financing  of its
business, assets or properties or its condition (financial or otherwise), or (B)
any oral or written  advice,  analysis or assurance of any kind  whatsoever from
the Lender.

(b) Each Loan Party  acknowledges  and  agrees  that the  Lender,  its
Affiliates  and its  representatives  may be providing  debt  financing,  equity
capital or other services (including merchandising, research, financial advisory
or other  services)  to other  companies or persons in respect of which the Loan
Party or a Surety may have  conflicting  interests  regarding  the  transactions
described  herein and  otherwise.  Neither the Lender nor any of its  Affiliates
will use or disclose to third parties confidential information obtained from any
Loan Party or any Surety by virtue of the transactions  contemplated by the Loan
Instruments or its other  relationships  with any Loan Party in connection  with
the  performance by it of services for other  companies or persons,  and neither
the Lender nor any of its Affiliates will furnish any such  information to other
companies or persons.  Each Loan Party also acknowledges and agrees that neither
the Lender nor any of its  Affiliates or  representatives  has any obligation to
use in connection with the transactions  contemplated by any Loan Instrument, or
to advise  any Loan  Party or any Surety of, or furnish to any Loan Party or any
Surety,  any confidential or other information  obtained by the Lender or any of
their Affiliates or representatives  from or with respect to other transactions,
companies or persons.

(c) By accepting or approving any  certificate,  statement,  report or
other document or information  required to be given to the Lender  (whether as a
required  notice  or  report,  for  approval  or  otherwise),   or  any  alleged
performance of anything  required to be observed,  performed or fulfilled by any
Loan  Party  or any  Surety,  pursuant  to this  Agreement  and the  other  Loan
Instruments,  neither the Lender nor any of its  Representatives  shall have, or
shall be deemed or construed to have, made any  representation or warranty to or
agreement with any Loan Party or any Surety with respect  thereto (other than as
expressly   provided  therein)  or  affirmed  the  sufficiency,   the  legality,
enforceability, effectiveness or financial impact or other effect thereof.

Section 8.10.  Lender's Right of Setoff,  Etc. Upon the occurrence and
during the continuance of any Event of Default,  the Lender hereby is authorized
at any time and from time to time,  without  notice to any Loan  Party (any such
notice being hereby expressly waived by each Loan Party),  to set off and apply,
directly  or  through  any  of  its  Affiliates,  custodians,  participants  and
designees,  any and all deposits  (whether  general or special,  time or demand,
provisional or final, or individual or joint) and other assets and properties at
any time held in the possession,  custody or control of the Lender or any of its
Affiliates,  custodians,  participants  and designees,  and any  Indebtedness or
other amount or obligation (including,  without limitation, any obligation under
any interest rate protection,  foreign currency exchange, or other interest rate
or exchange rate swap or hedging  agreement or arrangement) at any time owing by
the  Lender or any of its  Affiliates  or  participants,  to or for the  credit,
account or benefit of any Loan Party 

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against any and all of the  Obligations  now or  hereafter  existing  under this
Agreement  or the other Loan  Instruments,  whether or not the Lender shall have
declared a default,  accelerated the obligations or made any demand or taken any
other action under this  Agreement  or any other Loan  Instrument,  and although
such  obligations may be contingent or unmatured.  Each Loan Party  acknowledges
that pursuant to Section 7.01 hereof it granted to the Lender a senior  security
interest in and to, among other things,  all such deposits,  assets,  properties
and  Indebtedness  in the  possession  of  each of the  Affiliates,  custodians,
participants and designees of the Lender,  and each Loan Party hereby authorizes
each such Person to so set off and apply such  amounts at such times and in such
manner as the Lender may direct  pursuant to this  Section,  in each case to the
fullest  extent  possible  as if the  Person  making  the  setoff  were a direct
creditor  of the Loan Party in the full  amount of the  Obligations.  The Lender
shall notify the Loan Parties after any such setoff and  application;  provided,
however,  that the failure to give such notice  shall not affect the validity of
such setoff and application. In debiting any such account, the Obligations shall
be deemed to have been paid or repaid  only to the extent of the funds  actually
available in that account  notwithstanding  any internal procedure of the Lender
or  any  of  its  Affiliates,  custodians,  participants  and  designees  to the
contrary.  The rights of the Lender  under this  Section  are in addition to and
without limitation of any other rights, powers,  privileges,  remedies and other
interests  (including,  without limitation,  other rights of setoff and security
interests)  that the  Lender  may have  under  this  Agreement,  the other  Loan
Instruments and Applicable Law.

Section 8.11. Reliance.  The Lender shall be entitled to rely upon any
notice, consent, certificate,  affidavit, statement, paper, document, writing or
other communication  (which to the extent permitted hereunder may be by telecopy
or telephone)  reasonably  believed by the Lender to be genuine and to have been
signed,  sent or made by the proper  Person or persons,  and upon  opinions  and
advice of legal counsel  (including  counsel for the Loan Parties),  independent
public accountants and other experts selected by the Lender. The Lender shall be
entitled  to rely,  and in  entering  into this  Agreement  and the  other  Loan
Instruments in fact has relied, upon the  representations,  warranties and other
information  respecting  each  Loan  Party  and each  Surety  contained  in this
Agreement  and the other Loan  Instruments  notwithstanding  any  investigation,
analysis or evaluation  that may have been made or from time to time may be made
by the  Lender  or its  designees  of all or any part of the  assets,  business,
operations,  properties or condition (financial or otherwise) of any Loan Party,
any Surety or any other Person.

Section  8.12.  Exculpation  and  Indemnification.  The Lender and its
participants,  Affiliates  and  designees,  and their  respective  shareholders,
partners,  members,  directors,  officers,  managers,  employees,  attorneys and
agents  (together with the Lender,  each an  "indemnitee"),  shall not incur any
liability for any acts or omissions (and each Loan Party hereby expressly waives
any and all  related  claims and  actions  against  each  indemnitee),  and each
indemnitee shall be indemnified,  reimbursed and held harmless by any Loan Party
on demand,  and (at the  request of the  Lender)  defended at the expense of any
Loan Party with  counsel  selected by the  Lender,  from and against any and all
claims,  liabilities,  losses and expenses (including,  without limitation,  the
disbursements,  expenses  and fees of their  respective  attorneys)  that may be
imposed  upon,  incurred by, or asserted  against any  indemnitee,  in each case
arising out of or related  directly or indirectly to this  Agreement,  any other
Loan Instrument,  any of the Collateral,  any of the Loans or the application of
any proceeds thereof,  any ERISA violation or claim, or any Environmental Claim,
except  to the  extent  occasioned  by the  indemnitee's  own acts or  omissions
breaching a duty owed to any Loan Party and  amounting  to gross  negligence  or
willful  misconduct  as  finally  determined  pursuant  to  Applicable  Law by a
governmental  Authority having  jurisdiction.  The preceding general exculpation
and indemnification is not intended (and shall not be deemed or construed) to in
any way qualify,  condition,  diminish,  restrict, limit or otherwise affect any
(and is in addition to each) other  release,  waiver,  consent,  acknowledgment,
agreement  or other  term or  provision  of this  Agreement  or any  other  Loan
Instrument.

Section 8.13. Sole Discretion of the Lender. Wherever pursuant to this
Agreement  (a)  the  Lender  exercises  any  right  given  to it to  approve  or
disapprove,  (b) any arrangement or term is to be satisfactory to the Lender, or
(c) any  other  decision  or  determination  is to be made  by the  Lender,  the
decision of the Lender to approve,  disapprove or make such determination  shall
be in the sole and absolute discretion of the Lender, except as may be otherwise
expressly and specifically provided in this Agreement.

ARTICLE IX

MISCELLANEOUS

Section 9.01.  Notices,  Etc. Except as otherwise  expressly provided,
any notice,  request,  demand or other communication permitted or required to be
given under this  Agreement  or any other Loan  Instrument  shall be in writing,
shall be signed by the party  giving it,  shall be sent by one of the  following
means to the  addressee  at the  address  set forth in [Exhibit C] hereto (or at
such  other  address  as shall be  

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designated  hereunder  by notice  to the other  parties  and  persons  receiving
copies,  effective upon actual receipt) and shall be deemed conclusively to have
been given: (i) on the first Business Day following the day timely deposited for
next Business Day delivery with Federal  Express (or other  equivalent  national
overnight  courier) or United  States  Express Mail for overnight  delivery,  in
either case  designated for next Business Day delivery and with the cost of such
delivery  prepaid or for the account of the sender;  (ii) on the fifth  Business
Day following  the day duly sent by certified or registered  United States mail,
postage prepaid and return receipt  requested;  or (iii) when otherwise actually
received by the  addressee  on a Business  Day (or on the next  Business  Day if
received after the close of normal business hours or on any  non-Business  Day).
If a  certificate,  signed notice or other signed item is expressly  required by
another  provision of this  Agreement or any other Loan  Instrument,  a manually
signed  original  must be delivered  by the party  giving it; any other  notice,
request, demand or other communication instead may be sent by telecopy, with the
cost of transmission prepaid or for the account of the sender, and shall (except
as otherwise specified in this Agreement or any other Loan Instrument) be deemed
conclusively to have been given on the first Business Day following the day duly
sent.  Refusal to accept  delivery  of any item shall be deemed to be receipt of
such item by the  refusing  party.  Copies of notices to  persons  specified  in
Exhibit  C hereto  (if any) may be sent by  regular  first-class  mail,  postage
prepaid,  to such persons,  but any failure or delay in sending copies shall not
affect the validity of any such notice,  request,  demand or other communication
so given to a party.

Section  9.02.  Expenses of the  Lender.  Each Loan Party shall pay or
reimburse  on demand  any and all costs and  expenses  incurred  by the  Lender,
whether  directly  or  indirectly,  in  connection  with  (a)  the  preparation,
execution and delivery of the Lender's term sheet or commitment  letter, (b) any
syndication of this facility, (c) the preparation, execution and closing of this
Agreement and the other Loan Instruments, and all waivers, releases, discharges,
satisfactions,  modifications and amendments  thereof and approvals and consents
with respect thereto,  (d) all payments made and actions taken thereunder in the
name or on behalf of any Loan Party, any Surety or any other  guarantor,  surety
or pledgor under any Loan  Instrument,  (e) all periodic  collateral  audits and
other  evaluations  and  the  ongoing  monitoring  of the  Accounts  Receivable,
Inventory and other Collateral (including, without limitation, the per diem fees
and expenses of the Lender and its designees in performing such audits and other
evaluations),  (f) all searches (whether respecting financing statements, unpaid
taxes and other liens or otherwise),  surveys and appraisals, title examinations
and insurance, surety bond premiums, mortgage recording, documentary,  transfer,
intangible,  note or other similar taxes and revenue stamps, and all filings and
recordings,   and  (g)  the   administration,   maintenance,   enforcement   and
adjudication  of this  Agreement,  the other Loan  Instruments  and the Lender's
rights,  powers,  privileges,  remedies and other interests thereunder and under
Applicable Law, in each case including  (without  limitation) the disbursements,
expenses and fees of counsel to the Lender (including,  without limitation,  the
allocated  costs of in-house  counsel),  currently  Jenkens &  Gilchrist  Parker
Chapin LLP,  and the  disbursements,  expenses  and fees of any local or special
counsel retained by the Lender or its counsel.

Section 9.03.  Further  Assurances.  Each Loan Party agrees to do such
further acts and things and to execute and deliver such statements, assignments,
agreements,  instruments  and other  documents  as the Lender  from time to time
reasonably  may  request in  connection  with the  administration,  maintenance,
enforcement or adjudication of this Agreement and the other Loan  Instruments in
order (a) to  evidence,  confirm,  perfect or protect any  security  interest or
other Lien granted or required to have been granted under this Agreement and the
other Loan Instruments,  (b) to give the Lender or its designee confirmation and
assurance of the Lender's  rights,  powers,  privileges,  remedies and interests
under this  Agreement,  the other Loan  Instruments  and Applicable  Law, (c) to
better enable the Lender to exercise any such right, power, privilege or remedy,
or (d) to otherwise  effectuate the purpose and the terms and provisions of this
Agreement and the other Loan Instruments, each in such form and substance as may
be acceptable  to the Lender.  The Lender shall execute and deliver to each Loan
Party such  documents  (in form and  substance  acceptable to the Lender) as any
Loan Party  reasonably  may request in order to effectuate the purpose and terms
and provisions of this Agreement.

Section 9.04. Interpretation.  The parties acknowledge and agree that:
each party and its counsel have reviewed and negotiated the terms and provisions
of this Agreement  (excluding  schedules) and have  contributed to its revision;
the normal rule of construction, to the effect that any ambiguities are resolved
against the drafting party,  shall not be employed in the  interpretation of it;
and its terms and provisions  shall be construed fairly as to all parties hereto
and not in favor  of or  against  any  party,  regardless  of  which  party  was
generally responsible for the preparation of this Agreement.

Section 9.05. Provisions of the Notes and Collateral Loan Instruments.
The Notes and the various Loan  Instruments  creating or evidencing the Lender's
interest in the Collateral are each subject to the covenants and other terms and
provisions contained in this Agreement to the same extent and effect as if fully
set  forth  therein;  and in the  event  that  any  term or  provision  of those
instruments  and  documents  conflicts  or is  inconsistent  with  any  term  or
provision  of this  Agreement,  the term or provision  of this  Agreement  shall
control and be given effect.

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Section  9.06.  Governing  Law.  This  Agreement  and the  other  Loan
Instruments:  (a) have been executed and delivered in the State of New York; and
(b) shall be governed by and construed in  accordance  with the  Applicable  Law
pertaining in the State of New York (other than those conflict of law provisions
that would defer to the substantive  laws of another  jurisdiction).  Without in
any way limiting the  preceding  choice of law, the parties elect to be governed
by New York law in  accordance  with,  and are  relying  (at  least in part) on,
Section 5-1401 of the General Obligations Law of the State of New York.

Section 9.07. Severability. In the event that any term or provision of
this Agreement or any other Loan  Instrument  shall be finally  determined to be
superseded,  invalid,  illegal or otherwise unenforceable pursuant to Applicable
Law by an Authority having  jurisdiction and venue, that determination shall not
impair or otherwise affect the validity,  legality or  enforceability  (a) by or
before that  Authority of the remaining  terms and  provisions of this Agreement
and the other Loan Instruments,  which shall be enforced as if the unenforceable
term or provision were deleted,  or (b) by or before any other  Authority of any
of the terms and provisions of this Agreement and the other Loan Instruments.

Section 9.08.  Survival of  Representations,  Etc. Each of the payment
obligations,  collateral  grants,  representations  and  warranties  (as  of the
date(s) made or deemed  made),  covenants,  waivers and other  agreements of the
Loan Parties  contained in this  Agreement and the other Loan  Instruments:  (a)
shall be absolute,  irrevocable and unconditional,  irrespective of (among other
things) the validity,  legality,  binding effect or enforceability of any of the
other terms and provisions of this Agreement or any other Loan Instrument or any
other act, event or  circumstance  described in this Section;  (b) shall survive
the execution and delivery of this Agreement and the other Loan Instruments, and
any and all advances,  repayments  and readvances of any or all of the monies to
be lent  hereunder and  thereunder;  (c) shall remain and continue in full force
and effect without regard (i) to whether the Loans or other  Obligations are now
or hereafter  existing,  acquired or created,  and irrespective of the fact that
from time to time under the terms and provisions of the Loan Instruments  monies
may be advanced,  repaid and readvanced and the outstanding balance of the Loans
may be zero,  (ii) to any  extension  or change in the time,  manner,  place and
other terms and  provisions of payment or  performance of any one or more of the
Loans or other  Obligations  or any Surety's  Obligations,  (iii) to any waiver,
modification,   extension,  renewal,  consolidation,   spreading,  amendment  or
restatement of any other term or provision of any Loan Instrument (except as and
to the extent expressly modified by the terms and provisions of any such waiver,
modification,   extension,  renewal,  consolidation,   spreading,  amendment  or
restatement),  (iv) to any  acceptance  by the Lender of (A) any partial or late
payment,  which shall not constitute a satisfaction or waiver of the full amount
then due or the resulting Default or Event of Default, or (B) any payment during
the  continuance of a Default or Event of Default,  which shall not constitute a
waiver or cure  thereof;  and the Lender  may accept or reject any such  payment
without  affecting  any of its rights,  powers,  privileges,  remedies and other
interests under this Agreement,  the other Loan  Instruments and Applicable Law;
(v) to any  full,  partial  or  non-exercise  of  any  of  the  rights,  powers,
privileges,  remedies and  interests of the Lender under any Loan  Instrument or
Applicable Law,  against any Loan Party,  any Surety or any other Person or with
respect  to  any  of  the  Obligations,  any  Surety's  Obligations,  any  other
obligations or any collateral or security  interest  therein,  which exercise or
enforcement  may be delayed,  discontinued or otherwise not pursued or exhausted
for any or no reason  whatsoever,  or which may be waived,  omitted or otherwise
not exercised or enforced  (whether  intentionally  or  otherwise),  (vi) to any
surrender, repossession,  sequestration,  foreclosure,  conveyance or assignment
(by deed in lieu or  otherwise),  sale,  lease or  other  realization,  dealing,
liquidation  or disposition  respecting any collateral or setoff  respecting any
account or other asset in accordance with the Loan Instruments or Applicable Law
(except as and to the extent the Obligations  have been  permanently  reduced by
the  application  of the  net  proceeds  thereof),  (vii)  to the  perfected  or
non-perfected  status or priority of any mortgage or other security  interest in
any such  collateral,  which may be held  without  recordation,  filing or other
perfection  (whether  intentionally  or  otherwise),   (viii)  to  any  release,
settlement,  adjustment,  subordination  or impairment of all or any part of the
Obligations,  any Surety's Obligations,  any other obligations or any collateral
or any security interest therein,  whether intentionally or otherwise (except as
and to the extent  expressly  modified by the terms and  provisions  of any such
release,  settlement or adjustment),  (ix) to any extension, stay, moratorium or
statute of limitations or similar time constraint  under any Applicable Law, (x)
to any  investigation,  analysis or evaluation by the Lender or its designees of
the  assets,  business,  operations,   properties  or  condition  (financial  or
otherwise)  of any Loan  Party,  any  Surety  or any other  Person,  (xi) to any
application  to any  obligations  of any Loan Party or any Surety other than any
Obligations  or Surety's  Obligations  of (A) any payments  from such Person not
specifically   designated  for   application  to  the  Obligations  or  Surety's
Obligations  or (B) any proceeds of collateral  from such Person other than from
the Collateral,  (xii) to any sale,  conveyance,  assignment,  participation  or
other  transfer  by the Lender (in whole or in part) to any other  Person of any
one or more of this Agreement and the other Loan  Instruments or any one or more
of the rights, powers, privileges, remedies or interests of the Lender herein or
therein,  (xiii) to any act or  omission  on the part of the Lender or any other
Person or (xiv) to any other act, event,  or  circumstance  that otherwise might
constitute  a legal or  equitable  counterclaim,  defense or discharge of a Loan
Party,  co-obligor,  indemnitor,  guarantor,  pledgor or surety; in each case in
such  manner  and  order,  

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upon such terms and provisions and subject to such  conditions as the Lender may
deem  necessary or desirable  in its sole and absolute  discretion,  and without
notice to or further assent from the Borrower, the Guarantor or any other Surety
(except for such notices as may be expressly  required to be given to such party
under the applicable Loan Instrument);  (d) shall not be subject to any defense,
counterclaim,  setoff, right of recoupment,  abatement, reduction or other claim
or determination  that any Loan Party may have against any Surety, the Lender or
any other  Person;  (e) shall  not be  diminished  or  qualified  by the  death,
disability, dissolution,  reorganization,  insolvency, bankruptcy, custodianship
or  receivership  of any Loan  Party,  any  Surety or any other  Person,  or the
inability  of any of them to pay its debts or perform or  otherwise  satisfy its
obligations as they become due for any reason  whatsoever;  and (f) shall remain
and  continue in full force and effect  without  regard to any of the  foregoing
acts,  events or circumstances  (A) until all of the Obligations have been fully
paid  and  satisfied  and  (B)  thereafter  with  respect  to  acts,  events  or
circumstances occurring prior to such payment and satisfaction.

Section  9.09.   Counterparts.   This  Agreement  or  any  other  Loan
Instrument  may be  executed  in two or more  counterpart  copies of the  entire
document or of signature pages to the document, each of which may be executed by
one or more of the  parties  hereto or  thereto,  but all of which,  when  taken
together,  shall constitute a single  agreement  binding upon all of the parties
hereto or thereto (as the case may be).

Section 9.10. Effective Date. This Agreement shall be effective on the
date (the "Effective  Date") as of which (a) this Agreement shall be executed by
all the parties  hereto and  delivered to the Lender and (b) all the  conditions
precedent  required  to have been  satisfied  on or before  the  Effective  Date
pursuant  to Article  IV hereof  shall have been  satisfied  or waived  (whether
temporarily or otherwise) in writing by the Lender.  The Lender shall notify the
Loan Parties of the Effective Date if other than the date of the closing of this
Agreement;  provided,  however,  that the failure to give such notice  shall not
alter the Effective Date.

Section 9.11.  Successors  and Assigns;  Assignment.  Whenever in this
Agreement  or any other Loan  Instrument  reference  is made to any party,  such
reference  shall be deemed to include the successors,  assigns,  heirs and legal
representatives  of such party,  and,  without  limiting the  generality  of the
foregoing, all representations,  warranties, covenants and other agreements made
by or on  behalf  of any  Loan  Party  in  this  Agreement  and the  other  Loan
Instruments  shall  inure to the  benefit of the  successors  and assigns of the
Lender;  provided,  however, that nothing herein shall be deemed to authorize or
permit  any Loan Party to assign  any of its  rights or  obligations  under this
Agreement or any other Loan  Instrument  to any other Person  (whether or not an
Affiliate of any Loan Party),  and each Loan Party  covenants and agrees that it
shall not make any such assignment. The Lender from time to time: (a) may assign
or sell a participation interest in all or any portion(s) of the rights, powers,
privileges,  remedies and  interests  of and/or the loans and other  obligations
owed to the Lender under this Agreement or any other Loan  Instrument (i) to any
Affiliate  of the Lender or to any  Federal  Reserve  Lender (as  collateral  or
otherwise),  or (ii) to any other Person; (b) may furnish and disclose financial
statements,  documents and other information pertaining to any Loan Party or any
Surety to any potential assignee or participant permitted hereunder; and (c) may
take any and all other  actions that the Lender may  determine  (in its sole and
absolute  discretion) to be necessary or appropriate in connection with any such
assignment or  participation;  in each case without  notice to or consent of any
Loan Party or any other Person. Without in any way limiting the foregoing,  each
Loan Party acknowledges and agrees that (A) the Lender may assign any and all of
the rights, powers,  privileges,  remedies and interests of and/or the loans and
other  obligations  owed to the Lender  under this  Agreement  or any other Loan
Instrument to the Senior Lender pursuant to the Senior Loan  Documents,  (B) the
Senior  Lender  shall be  entitled  to  exercise  or enforce  any of the rights,
powers,  privileges,  remedies  and  interests  of  and/or  the  loans and other
obligations owed to the Lender under this Agreement or any other Loan Instrument
in  accordance  with the Loan  Instruments,  the Senior  Loan  Documents  and/or
Applicable Law, (C) the Senior Lender shall not be responsible or liable for any
of the  acts,  omissions,  duties,  liabilities  or  obligations  of the  Lender
hereunder, including (without limitation) any application of or failure to apply
payments or proceeds as  contemplated  under any Loan  Instrument  or  Revolving
Credit  Document,  and (D) in no event shall the Senior  Lender be  obligated or
liable in any manner to the Borrower or any Surety to return any cash Collateral
obtained  pursuant to Section 2.06(a) of the Revolving  Credit  Agreement to the
Borrower to the extent  received by the Senior Lender in payment of the Lender's
obligations.

Section 9.12. No Third Party Rights. The  representations,  warranties
and other terms and provisions of this Agreement and the other Loan  Instruments
are for the exclusive  benefit of the parties  hereto,  and, except as otherwise
expressly provided herein or therein,  no other Person,  including  creditors of
any party  hereto,  shall have any right or claim against any party by reason of
any of those terms and  provisions  or be entitled to enforce any of those terms
and provisions against any party.

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Section  9.13.  No Waiver  by  Action,  Etc.  Any  waiver  or  consent
respecting any representation,  warranty, covenant or other term or provision of
this  Agreement  or any other Loan  Instrument  shall be  effective  only in the
specific  instance and for the specific purpose for which given and shall not be
deemed,  regardless of frequency given, to be a further or continuing  waiver or
consent.  The  failure  or delay  of a party  at any  time or  times to  require
performance  of, or to exercise its rights with respect to, any  representation,
warranty,  covenant or other term or provision  of this  Agreement or other Loan
Instrument in no manner (except as otherwise  expressly  provided  herein) shall
affect its right at a later time to enforce any such provision.  No notice to or
demand on any Loan Party or any Surety in any case shall  entitle  such party to
any  other  or  further  notice  or  demand  in  the  same,   similar  or  other
circumstances.  The  acceptance by the Lender of (a) any partial or late payment
shall not constitute a satisfaction or waiver of the full amount then due or the
resulting Event of Default or (b) any payment during the continuance of an Event
of Default  shall not  constitute a waiver or cure  thereof;  and the Lender may
accept or reject any such payment without  affecting any of its rights,  powers,
privileges,  remedies and other interests  under this Agreement,  the other Loan
Instruments and Applicable Law. All representations,  warranties,  covenants and
agreements of each Loan Party and all rights, powers,  privileges,  remedies and
other interests of the Lender hereunder are cumulative and not alternatives, and
they are in  addition  to and shall not limit  (except  as  otherwise  expressly
provided herein) any other right, power, privilege,  remedy or other interest of
the Lender under this Agreement, any other Loan Instrument or Applicable Law.

[END OF PAGE]

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Section 9.14. Waiver of Jury Trial. In any action,  suit or proceeding
in any  jurisdiction  arising out of or related  directly or  indirectly to this
Agreement or any other Loan  Instrument,  whether  brought by the Lender against
any Loan Party,  or any Loan Party  against the Lender,  each Loan Party and the
Lender each hereby expressly and irrevocably waives trial by jury.

Section  9.15.  Modification,  Amendment,  Etc.  Except  as  otherwise
expressly  provided in a particular  Loan  Instrument  with respect  thereto and
except as otherwise  provided or permitted under  applicable law with respect to
any UCC financing  statement,  modification,  continuation or the like, each and
every  supplement  or  amendment  to or  modification  or  restatement  of  this
Agreement or any other Loan  Instrument  (other than a UCC financing  statement)
shall be in writing  and signed by all of the parties  hereto or the  respective
parties thereto, as the case may be, and each and every waiver of, or consent to
any departure  from,  any  representation,  warranty,  covenant or other term or
provision  of this  Agreement  or any other Loan  Instrument  (other  than a UCC
financing  statement)  shall be in  writing  and signed by each  affected  party
hereto or thereto, respectively.

Section  9.16.  Entire  Agreement.  This  Agreement and the other Loan
Instruments  contain the entire agreement of the parties and supersede all other
representations,  warranties,  agreements and understandings (including, without
limitation,  all previous  discussion  letters and term sheets from the Lender),
oral or  otherwise,  among the parties  with  respect to the  matters  contained
herein and therein.

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IN WITNESS  WHEREOF,  the parties  hereto have  executed and delivered
this Agreement as of the date first written above.

PERFORMANCE HOLDINGS, INC.

By:/s/ Thomas F. Hunter
----------------------------------------
Name:  Thomas P. Hunter
Title: CEO

SPAR PERFORMANCE GROUP, INC.

By:/s/ Thomas F. Hunter
----------------------------------------
Name:  Thomas P. Hunter
Title: President

SPAR INCENTIVE MARKETING, INC.

By:/s/ Robert G. Brown
----------------------------------------
Name:  Robert G. Brown
Title: CEO

SPAR ESOP Term Loan Agreement

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STATE OF NEW YORK   )
:  SS.:
COUNTY OF NEW YORK  )

On this 30th day of June in the year 2002 before me, the  undersigned,
a Notary  Public in and for said  State,  personally  appeared  Thomas F. Hunter
personally known to me or proved to me on the basis of satisfactory  evidence to
be the  individual  whose  name  is  subscribed  to the  within  instrument  and
acknowledged to me that he/she executed the same in his/her  capacity as CEO and
that by his/her signature on the instrument, the Person upon behalf of which the
individual acted (i.e., PERFORMANCE HOLDINGS, INC.) executed the instrument.

(Signature  and  office  of individual taking acknowledgment.)

STATE OF NEW YORK   )
:  SS.:
COUNTY OF NEW YORK  )

On this 30th day of June in the year 2002 before me, the  undersigned,
a Notary  Public in and for said State,  personally  appeared  Thomas F. Hunter,
personally known to me or proved to me on the basis of satisfactory  evidence to
be the  individual  whose  name  is  subscribed  to the  within  instrument  and
acknowledged  to me that  he/she  executed  the  same  in  his/her  capacity  as
President,  and that by his/her  signature  on the  instrument,  the Person upon
behalf of which the  individual  acted  (i.e.,  SPAR  PERFORMANCE  GROUP,  INC.)
executed the instrument.

(Signature  and  office  of individual taking acknowledgment.)

STATE OF NEW YORK   )
:  SS.:
COUNTY OF NEW YORK  )

On this 30th day of June in the year 2002 before me, the  undersigned,
a Notary  Public in and for said  State,  personally  appeared  Robert G. Brown,
personally known to me or proved to me on the basis of satisfactory  evidence to
be the  individual  whose  name  is  subscribed  to the  within  instrument  and
acknowledged to me that he/she executed the same in his/her capacity as CEO, and
that by his/her signature on the instrument, the Person upon behalf of which the
individual acted (i.e., SPAR INCENTIVE MARKETING, INC.) executed the instrument.

(Signature  and  office  of individual taking acknowledgment.)

SPAR ESOP Term Loan Agreement

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EXHIBIT A
to
TERM LOAN, GUARANTY AND SECURITY AGREEMENT
with
PERFORMANCE HOLDINGS, INC.

TERM PROMISSORY NOTE

$2,500,000.00                                                Tarrytown, New York
Dated as of June 30, 2002

FOR VALUE  RECEIVED,  PERFORMANCE  HOLDINGS,  INC.  (the  "Borrower"),
promises to pay to the order of SPAR INCENTIVE  MARKETING,  INC. (the "Lender"),
at 580 White Plains Road,  Tarrytown,  New York 10591, or at such other place as
may be  designated  in writing by the holder of this Note,  the principal sum of
TWO MILLION FIVE HUNDRED  THOUSAND DOLLARS  ($2,500,000),  or so much thereof as
may be advanced and outstanding,  with interest thereon,  to be computed on each
advance from the date of its disbursement,  all as provided in that certain Term
Loan,  Guaranty and Security  Agreement  among the Borrower,  SPG and the Lender
dated as of June 30, 2002 (as the same may be supplemented,  modified,  amended,
restated or replaced from time to time in the manner provided therein, the "Loan
Agreement"). Capitalized terms used and not otherwise defined in this Note shall
have the meanings respectively assigned to them in the Loan Agreement.

This Note is the Initial Term Note and one of the Notes referred to in
the Loan Agreement.  Principal and interest shall be due and payable as provided
in the  Loan  Agreement,  and  all of  the  terms  and  provisions  of the  Loan
Agreement,   including  (without   limitation)   provision  for  prepayment  and
acceleration of maturity,  are incorporated  herein by reference and made a part
hereof.  This Note is  secured  by certain  collateral  pledged by the  Borrower
pursuant to the Loan Agreement and the other Loan Instruments.

Presentment  for  payment,  notice  of  dishonor,  protest,  notice of
protest and all similar  notices are hereby  expressly  waived by the  Borrower.
This Note has been made and delivered in the County of Westchester, State of New
York,  where all  advances  and  repayments  shall be made  (except as otherwise
provided in the Loan Agreement). This Note shall be governed by and construed in
accordance  with the  Applicable  Law pertaining in the State of New York (other
than those that would defer to the  substantive  laws of another  jurisdiction).
This  Note is a Loan  Instrument  and  shall be  governed  by and  construed  in
accordance with the applicable terms and provisions of the Loan Agreement.  Each
and every supplement, modification or amendment to this Note shall be in writing
and signed by the Borrower and the Lender,  each and every waiver of, or consent
to any  departure  from,  any term or provision of this Note shall be in writing
and signed by the Lender,  and each and every restatement or replacement of this
Note shall be in writing,  shall be signed by the Borrower and shall require the
written consent of the Lender.

PERFORMANCE HOLDINGS, INC.

By:________________________________________
[Borrower's Signer's Name], 
[Borrower's Signer's Title]

SPAR ESOP Term Loan Agreement

-1-

STATE OF NEW YORK  )
:  SS.:
COUNTY OF NEW YORK )

On this  _____ day of  __________  in the year  ____  before  me,  the
undersigned,  a  Notary  Public  in and  for  said  State,  personally  appeared
[BORROWER'S SIGNER'S NAME],  personally known to me or proved to me on the basis
of  satisfactory  evidence to be the individual  whose name is subscribed to the
within  instrument  and  acknowledged  to me that  he/she  executed  the same in
his/her capacity as [BORROWER'S  SIGNER'S TITLE],  and that by his/her signature
on the instrument,  the Person upon behalf of which the individual  acted (i.e.,
PERFORMANCE HOLDINGS, INC.) executed the instrument.

(Signature  and  office  of individual taking acknowledgment.)

SPAR ESOP Term Loan Agreement

-2-

EXHIBIT B
to
TERM LOAN, GUARANTY AND SECURITY AGREEMENT
with
PERFORMANCE HOLDINGS, INC.

TERM PROMISSORY NOTE

$3,500,000.00                                                Tarrytown, New York
Dated as of June 30, 2002

FOR VALUE  RECEIVED,  PERFORMANCE  HOLDINGS,  INC.  (the  "Borrower"),
promises to pay to the order of SPAR INCENTIVE  MARKETING,  INC. (the "Lender"),
at 580 White Plains Road,  Tarrytown,  New York 10591, or at such other place as
may be  designated  in writing by the holder of this Note,  the principal sum of
THREE MILLION FIVE HUNDRED THOUSAND DOLLARS ($3,500,000.00),  or so much thereof
as may be advanced and  outstanding,  with interest  thereon,  to be computed on
each advance from the date of its disbursement,  all as provided in that certain
Term Loan,  Guaranty  and Security  Agreement  among the  Borrower,  SPG and the
Lender  dated as of June 30,  2002 (as the same may be  supplemented,  modified,
amended,  restated or replaced from time to time in the manner provided therein,
the "Loan Agreement").  Capitalized terms used and not otherwise defined in this
Note  shall  have  the  meanings  respectively  assigned  to  them  in the  Loan
Agreement.

This Note is the Additional Term Note and one of the Notes referred to
in the Loan  Agreement.  Principal  and  interest  shall be due and  payable  as
provided in the Loan Agreement,  and all of the terms and provisions of the Loan
Agreement,   including  (without   limitation)   provision  for  prepayment  and
acceleration of maturity,  are incorporated  herein by reference and made a part
hereof.  This Note is  secured  by certain  collateral  pledged by the  Borrower
pursuant to the Loan Agreement and the other Loan Instruments.

Presentment  for  payment,  notice  of  dishonor,  protest,  notice of
protest and all similar  notices are hereby  expressly  waived by the  Borrower.
This Note has been made and delivered in the County of Westchester, State of New
York,  where all  advances  and  repayments  shall be made  (except as otherwise
provided in the Loan Agreement). This Note shall be governed by and construed in
accordance  with the  Applicable  Law pertaining in the State of New York (other
than those that would defer to the  substantive  laws of another  jurisdiction).
This  Note is a Loan  Instrument  and  shall be  governed  by and  construed  in
accordance with the applicable terms and provisions of the Loan Agreement.  Each
and every supplement, modification or amendment to this Note shall be in writing
and signed by the Borrower and the Lender,  each and every waiver of, or consent
to any  departure  from,  any term or provision of this Note shall be in writing
and signed by the Lender,  and each and every restatement or replacement of this
Note shall be in writing,  shall be signed by the Borrower and shall require the
written consent of the Lender.

PERFORMANCE HOLDINGS, INC.

By:________________________________________
[Borrower's Signer's Name], 
[Borrower's Signer's Title]

SPAR ESOP Term Loan Agreement
B-1

STATE OF NEW YORK   )
:  SS.:
COUNTY OF NEW YORK  )

On this  _____ day of  __________  in the year  ____  before  me,  the
undersigned,  a  Notary  Public  in and  for  said  State,  personally  appeared
[BORROWER'S SIGNER'S NAME],  personally known to me or proved to me on the basis
of  satisfactory  evidence to be the individual  whose name is subscribed to the
within  instrument  and  acknowledged  to me that  he/she  executed  the same in
his/her capacity as [BORROWER'S  SIGNER'S TITLE],  and that by his/her signature
on the instrument,  the Person upon behalf of which the individual  acted (i.e.,
PERFORMANCE HOLDINGS, INC.) executed the instrument.

(Signature  and  office  of individual taking acknowledgment.)

SPAR ESOP Term Loan Agreement

B-2

EXHIBIT C
to
TERM LOAN, GUARANTY AND SECURITY AGREEMENT
with
PERFORMANCE HOLDINGS, INC.

ADDRESSES FOR NOTICE AND SERVICE

I.       Address for Notices and Service to the Loan Parties:

PERFORMANCE HOLDINGS, INC.
2245 Keller Way
Carrollton, Texas 75006
Attention:        Mr. Thomas Hunter, President
Telephone:        (   ) ___-____
Telecopy:         (   ) ___-____
E-Mail`:          __________@____

With a copy of notices from the Lender under Section 7.07 or 8.02 to:
________________________
________________________
________________________
Attention:        ___________
Telephone:        (   ) ___-____
Telecopy:         (   ) ___-____
E-Mail:           __________@_________

II.      Address for notices to the Lender:

SPAR INCENTIVE MARKETING, INC.
580 White Plains Road
Tarrytown, New York 10591
Attention:        Charles Cimitile, Chief Financial Officer
Telephone:        (914) 332-4100
Telecopy:         (914) 332-0741
E-Mail:           CCimitile@SPARinc.com

With a copy of any default  notice or other notice  under  Section 5.01
to:

Jenkens & Gilchrist Parker Chapin LLP
The Chrysler Building
405 Lexington Avenue
New York, New York  10174
Attention:  Lawrence David Swift, Esq.
Telephone:        (212) 704-6147
Telecopy:         (212) 704-6159
E-Mail:           LDSwift@Jenkens.com

SPAR ESOP Term Loan Agreement

C-1

EXHIBIT D
to
TERM LOAN, GUARANTY AND SECURITY AGREEMENT
with
PERFORMANCE HOLDINGS, INC.

TARGETED ADJUSTED CASH FLOW

(TO BE COMPLETED)

SPAR ESOP Term Loan Agreement

F-1

EXHIBIT D
to
TERM LOAN, GUARANTY AND SECURITY AGREEMENT
with
PERFORMANCE HOLDINGS, INC.

FINANCIAL COVENANTS COMPLIANCE CERTIFICATE
RESPECTING
PERFORMANCE HOLDINGS, INC.

[MONTH AND DATE], 200_

Pursuant to the Term Loan, Guaranty and Security Agreement dated as of
June 30, 2002 (as the same may be supplemented,  modified,  amended, restated or
replaced  from  time  to  time  in  the  manner  provided  therein,   the  "Loan
Agreement"),  I, [PRINT NAME] , the [PRINT TITLE] of PERFORMANCE HOLDINGS,  INC.
(the "Loan  Party"),  hereby  certify to SPAR  INCENTIVE  MARKETING,  INC.  (the
"Lender"), as of the date hereof that:

(a) The Adjusted Net Worth of The Borrower and its  subsidiaries as at
________  ___,  200__  (the  "Reporting  Date"),  was not less than the  minimum
required for such date ($____) by Section  6.01(b) of the Loan  Agreement,  with
compliance calculated as follows:

(i)    Aggregate  amount of all assets and  properties on the Reporting  Date
$_________

(ii)   Minus  the  Adjusted   Liabilities  of  the  Loan  Parties  and  their
Subsidiaries as at the Reporting Date:                    [$_________]

(The Adjusted Debt of the Loan Parties and their Subsidiaries
as at the Reporting Date included in the above was  $________)

(iii)  Adjusted Net Worth (actual) as at the Reporting Date       $_________

(b) The Adjusted EBITDA of The Borrower and its subsidiaries for the Computation
Period ending on the Reporting  Date was not less than the minimum  required for
such  date ($ ) by  Section  6.01(c)  of the  Loan  Agreement,  with  compliance
calculated as follows:

(i)    Net Income (or Loss) of The  Borrower  and its  subsidiaries  for such
period                                                     $_________

(ii)   Plus the sum of the following  adjustments  to the extent  included in
determining such income:

(A)    Consolidated extraordinary or unusual loss(es)             $_________

(B)    Consolidated interest expense                              $_________

(C)    Total federal,  state,  local and foreign  income and franchise  taxes
accrued during such period                                 $_________

(D)    Consolidated Depreciation                                  $_________

(E)    Consolidated Amortization                                  $_________

(iii)  Total Additions to Income:  (the sum of items (ii)(A) through (ii)(E))
$_________

(iv)   Minus:  Extraordinary  or unusual gain(s) included in determining such
income                                                    [$_________]

(v)    Adjusted EBITDA (item (i) plus item (iii) minus item (iv)) $_________

SPAR ESOP Term Loan Agreement

F-2

(c)  The  Adjusted   Debt  Service  Ratio  of  The  Borrower  and  its
subsidiaries  for the  Computation  Period ending on the Reporting  Date was not
less than the minimum  required for such date ( :1.00) by Section 6.01(d) of the
Loan Agreement, with compliance calculated as follows:

(i)    Adjusted EBITDA for such period (from (b)(iv) above):       $_________

(ii)   Adjusted  Debt Service for such period,  consisting  of the sum of the
following:

(A)    Interest expense (from (b)(ii)(B) above):                   $_________

(B)    Principal payments on Indebtedness for such period:         $_________

(C)    Consolidated capitalized lease payments for such period $_________ (to
the extent not already included in (A) or (B))

(D)    All other  payments with respect to  Indebtedness  during such period,
including  (without  limitation) all commissions,  discounts and other
fees and charges owed with respect to any and all  commitments,  lines
of credit, banker's acceptances,  letters of credit, and interest rate
protection,  foreign currency exchange,  or other interest or exchange
rate swap or hedging  agreements  or  arrangements  (to the extent not
already included in (A), (B) or (C)) $_________

(iii)  Total  Adjusted  Debt  Service  (the sum of (ii)(A)  through  (ii)(D))
$_________

(iv)   Adjusted Lease Service for such period                      $_________

(v)    Adjusted  Debt Lease  Service  for such  period  (the sum of (iii) and
(iv))                                                       $_________

(vi)   Adjusted Debt Service Ratio (the ratio of (i) to (v) ) ______:1.00

(d)  The  Adjusted  Debt  to  EBITDA  Ratio  of The  Borrower  and its
subsidiaries  for the  Computation  Period ending on the Reporting  Date was not
less than the minimum  required for such date ( :1.00) by Section 6.01(e) of the
Loan Agreement, with compliance calculated as follows:

(i)    Adjusted Debt at the end of such period for such period (from (a)(iii)
above):                                                     $_________

(ii)   Adjusted EBITDA for such period (from (b)(v) above):        $_________

(iii)  Adjusted Debt to EBITDA Ratio (the ratio of (i) to (ii))   ______:1.00

(e)  The  Adjusted  Capital  Expenditures  of  The  Borrower  and  its
subsidiaries  for the fiscal  quarter ended on such  Reporting Date was $_______
____,  which did not exceed the maximum  permitted for such quarter  ($_____) by
Section 6.01(f) of the Loan Agreement.

(f) The Adjusted  Lease  Service of The Borrower and its  subsidiaries
for the fiscal quarter ended on such Reporting Date was $_______ ____, which did
not exceed the maximum permitted for such quarter ($ ) by Section 6.01(g) of the
Loan Agreement.

(g) The consolidated Selling,  General and Administrative  Expenses of
The Borrower and its  subsidiaries  (inclusive of sales commission but excluding
tax deductible  pension payments to the ESOP Trust) for the fiscal quarter ended
on such Reporting Date was ______% of their total consolidated  revenue for such
quarter,  which did not exceed the maximum  permitted  for such  quarter ( %) by
Section 6.01(a) of the Loan Agreement.

(h) The Borrower and its subsidiaries  incurred  consolidated purchase
money   Indebtedness  in  the  purchase  of  Equipment  and  capitalized  leases
constituting  Indebtedness  that  aggregated  $ during the _______  month period
ended on the Reporting Date, which did not exceed the maximum permitted for such
period ($________) by Section 6.02(a)(iii) of the Loan Agreement.

SPAR ESOP Term Loan Agreement

F-3

(i)  Each of the  representations,  warranties,  acknowledgements  and
certifications of each of the Loan Parties and each Surety set forth in the Loan
Agreement  and other  Loan  Instruments  are true and  correct  in all  material
respects with the same effect as though those representations and warranties had
been made on and as of the date hereof.

(j) No Default or Event of Default  has  occurred  and is  continuing,
excluding, however, those events subject to an express written waiver or consent
from the Lender, if any.

(k) No event or  events  have  occurred  that  individually  or in the
aggregate  could have,  or since the date of the  Agreement  has had, a Material
Adverse Effect.

(l)  The  information  set  forth  in  the  Secretary's  or  Officer's
Certificate  most  recently  delivered  to the Lender  respecting  (among  other
things) the authorizing resolutions,  organizational and governing documents and
the  incumbency  of the  officers of each of the Loan Parties and each Surety is
true and complete as if those  certificates  had been delivered on and as of the
date hereof.

(m) There are no actions, suits or proceedings pending or, to the best
knowledge of the  undersigned,  threatened or contemplated by any Person for the
liquidation or dissolution of any Loan Party or Surety or otherwise  threatening
their respective existences or challenging or calling into question the power or
authority of any Loan Party or Surety to execute or deliver any Loan  Instrument
to  which  it is or  will  be a  party  or to  perform  any of  its  obligations
thereunder.

(n) The  Obligations of the Borrower under the Loan  Agreement,  Notes
and other  Loan  Instruments  and the  obligations  of each other Loan Party and
Surety  under  its  Loan  Instruments  (i)  are  not  subject  to  any  defense,
counterclaim,  setoff, right of recoupment,  abatement, reduction or other claim
or determination  against the Lender or any other Person and (ii) remain and are
currently in full force and effect,  enforceable against them in accordance with
their respective terms and provisions.

Capitalized terms and  non-capitalized  words and phrases used and not
otherwise  defined  in this  Certificate  shall have the  meanings  respectively
assigned to them in the Loan  Agreement,  except that certain terms refer to the
applicable  captions or headings of the financial  statements and reports of The
Borrower  and its  subsidiaries.  This  Certificate  may be  relied  upon by the
successors,  assigns and participants of the Lender and by counsel to the Lender
in giving any opinion or advice requested of such counsel.

------------------------------------
(SIGNATURE)

DATE SIGNED:  ____________ __, 200__

SPAR ESOP Term Loan Agreement

F-4

EXHIBIT 99.1

CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the filing of the Quarterly Report on Form 10-Q for
the  Quarter  Ended June 30,  2002 (the  "Report"),  by SPAR  GROUP,  INC.  (the
"Registrant"),  the  undersigned  hereby  certifies  that,  to the  best  of 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, as applicable; and

2. The  information  contained in the Report fairly  presents,  in all
material  respects,  the  financial  condition  and  results  of  operations  of
Registrant.

/s/ Robert G. Brown
----------------------------------------
Robert G. Brown, Chairman,
President and Chief Executive Officer

EXHIBIT 99.2

CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the filing of the Quarterly Report on Form 10-Q for
the  Quarter  Ended June 30,  2002 (the  "Report"),  by SPAR  GROUP,  INC.  (the
"Registrant"),  the  undersigned  hereby  certifies  that,  to the  best  of 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, as applicable; and

2. The  information  contained in the Report fairly  presents,  in all
material  respects,  the  financial  condition  and  results  of  operations  of
Registrant.

/s/ Charles Cimitile
----------------------------------------
Charles Cimitile, Secretary
and Chief Financial Officer