JOINT VENTURE AGREEMENT

Joint Venture JV Agreement

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SPAR GROUP INC | Solutions Integrated Marketing Services Ltd | SPAR Group International, Inc.

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Title: JOINT VENTURE AGREEMENT
Governing Law: Nevada Date: 4/12/2005
Industry: Business Services Sector: Services

JOINT VENTURE AGREEMENT

This Joint Venture Agreement is made as of this 26th day of March 2004

By and Between

Solutions Integrated Marketing Services Ltd, a company incorporated and existing

under the [Indian] Companies Act, 1956, and having its registered office at 3rd

Floor, Chandra Bhawan 67-68, Nehru Place, New Delhi, India, 110019 (hereinafter

called "SOLUTIONS"),

And

SPAR Group International, Inc. a company organized and existing under the laws

of the State of Nevada, having its principal place of business at 580 White

Plains Road, Tarrytown, NY, USA (hereinafter called "SPAR"),

WITNESSETH THAT:

WHEREAS:

1. SOLUTIONS is an integrated marketing-services company offering a broad

range of marketing. & sales support services to a large number of

clients, in India, South Asia, ASEAN & other markets. Retail solutions

& merchandising services are part of this broad portfolio of services,

and SOLUTIONS knowledge as well as human resources with respect to the

retailing businesses in India;

2. SPAR is engaged in the retail solution businesses in the USA, having

computer software useful for agency, assistance, instruction and

reporting of storefront activities and also having operational know-how

with respect to such software;

3. In pursuance of the Statement of Understanding recorded on December 22,

2003, the Parties now intend to establish and develop a joint venture

company in India to undertake the business of conducting retail

solutions businesses in the Territory (hereinafter defined); and

4. The Parties are desirous of recording inter alia their intention and

agreement as regards the establishment of the proposed joint venture

company under the name and style "SPAR Solutions India Private Limited"

("Company"), it's management and capital structure, and the

responsibilities to be undertaken by each party in connection with the

formation and operation of the said Company.

NOW, THEREFORE, in consideration of the mutual covenants and agreement herein

contained, the parties hereto agree as follows:

I. In this Agreement each of the following expressions, unless repugnant

to the context, shall have the meaning hereinbelow assigned:

<PAGE>

"Act" shall mean the [Indian] Companies Act, 1956 and the rules and

regulations made thereunder and shall include any re-enactment's

thereof, amendments and or modifications thereto for the time being in

force.

"Affiliate" means, with respect to either Party or any third Person,

any other Person which, directly or indirectly, through one or more

intermediaries, controls, is controlled by, or is under common control

with, such Party. The term "control" means the power to vote ten

percent (10%) or more of the securities or other equity interests of a

Person having ordinary voting power, or the possession, directly or

indirectly, of any other power to direct or cause the direction of the

management and policies of a Person, whether through ownership of

voting securities, by contract or otherwise.

"Agreed Form" shall mean in the context of any document a version of

such document as mutually agreed to and initialed by both Parties.

"Agreement" or "this Agreement" shall mean this Joint Venture Agreement

as amended, modified or supplemented by the Parties hereto in writing

from time to time.

"Approval(s)" shall mean all authorisations, approvals, clearances,

permissions, consents, validations, confirmations, licenses, and

exemptions of, registrations and filings with and reports to any

central, state, municipal or local authority, or political subdivision

thereof, and any government or any person exercising executive,

legislative, regulatory or administrative functions of or pertaining to

government, and any corporation or other entity owned or controlled,

through stock or capital ownership or otherwise, by any of the

foregoing ,required to be obtained in order to implement the provisions

of this Agreement.

"Board" or "Board of Directors" shall mean the board of directors of

the Company, as reconstituted from time to time.

"Business" shall have the meaning assigned to it in Article 2 below.

"Company" means an Indian company to be incorporated by the Parties,

for the purpose of implementation of the joint venture project of SPAR

and ,SOLUTIONS, under the name and style "SPAR Solutions India Private

Limited" or such other name as may be approved by the Registrar of

Companies, Delhi & Haryana.

"Closing Date" shall have the meaning set forth in Article 5.3 below.

"Deed of Adherence" means the deed or instrument to be entered into

between a transferor Shareholder and a transferee of Shares whereby the

transferee agrees to adhere to and be bound by the terms of this

Agreement.

"Effective Date" shall have the meaning assigned to it in Article 31 of

this Agreement.

"Governmental Body" shall mean any court or tribunal in any

jurisdiction or any public, governmental, legislative or regulatory

body, agency, department, commission, board, bureau or other authority

or instrumentality.

<PAGE>

"Party" and "Parties" shall mean SOLUTIONS and SPAR, individually and

collectively as the context may require.

"Person" means an individual, corporation, limited liability company,

partnership, association, trust, business trust, joint venture, joint

stock company, pool, syndicate, sole proprietorship, unincorporated

organization, Governmental Body or other form of entity or group

thereof.

"Security Interests" means and includes any interest or equity of any

person, authority or body (including, without prejudice to the

generality of the foregoing, any right to acquire, option or right of

pre-emption, or requirement for consent) or any mortgage, charge,

pledge, lien, or assignment or any other encumbrance, priority or

security interest over or in the relevant property or arrangement of

whatsoever nature which restrict or affect negatively the value, or

impedes or restricts the right to enjoy such property.

"Share" means an equity share of the Company of face value of Rupees

10/- each issued by the Company from time to time.

"Shareholder" means a holder of Shares of the Company and registered in

the Register of Members of the Company.

"Territory" shall mean the geographical territory and extent of the

Republic of India.

"Transfer" means the disposal of any interest in the Shares including

by way of sale or assignment or the grant or the creation of any

Security Interest over, including any option or right of pre-emption

over the Shares or the mortgage of, creation of charge over or the

subjecting of the Shares to an encumbrance.

II. Unless otherwise stated or unless the context otherwise requires, in

this Agreement:

(a) Headings are for convenience only and shall not affect its

interpretation.

(b) References to the Agreement shall mean and include an

appropriate reference to the schedules, exhibits and annexes

hereto.

enactment's, rules and regulations (as modified, amended or

re-enacted as of the appropriate date) in force.

CHAPTER 1: FORMATION OF THE COMPANY

Article 1. Establishment of the Company

(a) Promptly after the Effective Date of this Agreement, SOLUTIONS shall be

responsible for incorporation of the Company as a private limited

company in the State of Delhi under the provisions of the Act.

<PAGE>

(i) For the purposes of incorporation of the said Company,

SOLUTIONS shall nominate two resident Indians as the

subscribers to the Memorandum and Articles of Association of

the Company and shall subscribe to a minimum of 10,000 equity

Shares in order to comply with the minimum paid up capital of

Rs. 1,00,000/(Rupees One Lakh Only) prescribed under the Act.

(ii) The nominees of SOLUTIONS shall be the first Directors of the

Company.

(iii) The Company will be incorporated with an authorised share

capital of Rs. 50,00,000/- (Rupees Fifty Lakhs Only) divided

into 5,00,000 Shares (Five Lakhs Only) of par value of Rs.

10/- (Rupees Ten Only) each. Upon incorporation of the

Company, the Parties shall cause the Company to enter into a

deed or instrument in the nature of a deed of adherence to be

executed by the Company in Agreed Form (attached hereto as

Exhibit A) to evidence its agreement to adhere to and be bound

by the terms hereof. It is agreed that the process of

incorporation of the Company shall be initiated no later than

15 days from the Effective Date and SOLUTIONS shall use

reasonable endeavours to complete the incorporation process

within 60 days of the Effective Date. It is agreed that SPAR

will provide and render all assistance as may be required by

SOLUTIONS for the purposes of incorporation of the said

Company.

(b) The Company shall be incorporated under the name and style "SPAR

Solutions India Private Limited" (or such other name as may be approved

by the Registrar of Companies, Delhi & Haryana) and shall conduct its

Business operations under such name. However, it is clarified that such

name is suggestive and that in the event, for any reason the Company

cannot be incorporated with such a name, this shall not entitle any

Party hereto to resile from its obligations under this Agreement and in

such an event the Parties shall endeavour to agree upon another name

for the Company.

Company will be such that the Company shall be entitled to carry on the

Business. The Parties shall at all times mutually agree upon any

modifications or amendments to the Memorandum of Association and/or the

Articles of Association of the Company which are contrary to or a

change in the terms of this Agreement. In case of any conflict between

this Agreement and the Memorandum of Association and Articles of

Association of the Company, the provisions of this Agreement shall

prevail as between SOLUTIONS and SPAR.

Upon incorporation of the Company, and upon fulfillment of the terms of

Article 5.2 hereof, a Board Meeting of the Company shall be held

whereat in particular the Board of Directors shall:

(i) approve the allotment of Shares to SPAR such that SPAR holds

51% of the entire Share capital of the Company;

(ii) approve the transfer of Shares held by the subscribers to

SOLUTIONS and also approve the allotment of such number of

Shares as would be necessary to ensure that SOLUTIONS holds

49% of the entire Share capital of the Company;

<PAGE>

(iii) appoint the nominees of SPAR on the Board of Directors of the

Company;

(iv) take on record the terms of this Agreement and the deed of

adherence to be executed by the Company in the Agreed Form

attached to this Agreement to evidence the Company's agreement

to adhere to and be bound by the terms of this Agreement and

authorise a representative of the Company to execute the said

deed of adherence; and

(v) shall take necessary steps to call for an extraordinary

general meeting of the Shareholders to adopt the memorandum of

association and articles of association of the Company amended

to reflect the provisions of this Agreement (being

substantially in the form attached hereto as Exhibit A).

All expenses for the setting up and incorporation of the Company will be paid by

the Company. Upon incorporation the said Company shall reimburse all

incorporation expenses to SOLUTIONS. If this Agreement is not consummated each

Party shall pay its own costs.

Article 2. Business Purpose

The Business of the Company shall consist of the following:

1. Provide retail i.e. instore merchandising services in relation to

setting up and merchandising of retail stores;

2. Agency, assistance, instruction and report of instore or retail

merchandising activities;

3. Implementation of market research and analysis (of results thereof)

pertaining to retail merchandising;

4. Assembly of setups used for retail merchandising;

5. Consulting regarding store management;

6. Development and sale of management system regarding retail

merchandising;

7. Designing and sale of database pertaining to retail merchandising; and

Article 3. Memorandum of Association and Articles of Association

Upon incorporation of the Company and upon fulfillment of the terms of Article

5.2 hereof, the Parties hereby undertake to take all necessary actions to give

effect to the Agreed Form of the Memorandum of Association and the Articles of

Association of the Company amended to reflect the provisions of this Agreement

(attached hereto as Exhibit B).

Article 4. Conditions to Subscription.

4.1. Conditions Precedent: Each of the following is a condition precedent to

the obligation of each of SPAR and SOLUTIONS to subscribe for the

Shares of the Company as described in Article 5.1

<PAGE>

(a) the execution of a License Agreement between SPAR and the

Company in the Agreed Form attached hereto as Exhibit C in

terms whereof SPAR shall be obliged to localize and set up

software provided by SPAR to work in India, consult on the

organisation of merchandising services, train the Company's

personnel in how to operate the merchandising software and

give advice on budgeting and development of each business plan

(the "License Agreement");

(b) the execution of a User Agreement between SOLUTIONS and the

Company in the Agreed Form attached hereto as Exhibit D for

the provision of office space, facilities and services to the

Company ("User Agreement");

whether from the Government of India through the Foreign

Investment Promotion Board/ Secretariat for Industrial

Assistance or the Reserve Bank of India or any other

Governmental Body, as may be required for the consummation of

the transactions contemplated hereunder;

(d) Passing of a resolution by the Board of Directors of the

Company for issue of the Shares in the manner as detailed in

Article 5 hereunder.

Each Party agrees to notify the other Party that the conditions

precedent set forth in this aforesaid Article have been satisfied or

waived in accordance with the provisions of this Agreement.

4.2. Failure to Satisfy Conditions. In the event that all of the conditions

precedent set forth in Article 4.1 are not satisfied or waived (to the

extent waivable) to the mutual satisfaction of SOLUTIONS and SPAR on or

before May 30, 2004, either Party shall have the right to terminate

this Agreement by giving written notice to the other Party. Upon any

such termination, this Agreement shall be of no further force or

effect, and neither Party shall have any further obligations hereunder,

except that Article 30 and 36 and the Parties' respective obligations

thereunder, shall survive any such termination.

Article 5. Subscription and Issuance

5.1. The initial issued, subscribed and paid up equity Share capital of the

Company shall be Indian Rupees Rs 36,76,000, which shall be subscribed

to and held as follows:

<TABLE>

Party Percentage Number Equity capital

Ownership of Shares (in Rupees)

SPAR 51% 187476 Rs 18,74,760

SOLUTIONS 49% 180124 Rs 18,01,240

TOTAL 100% 367600 3676000

</TABLE>

5.2. For the purposes. of this Agreement and in order to enable the issuance

of the number of fully paid Shares referred to in Article 5.1 by the

Company to SPAR and SOLUTIONS, promptly after all of the conditions

precedent set forth in Article 4.1 are satisfied or waived (to the

extent waivable) to the mutual satisfaction of SOLUTIONS and SPAR, and

not more than thirty (30) days thereafter:

<PAGE>

(a) SPAR shall be obliged to pay into the account of the Company,

as payment towards Share subscription a sum of Rs 18,74,760

(Indian Rupees Eighteen Lakhs Seventy Four Thousand Seven

Hundred and Sixty Only) ("SPAR Subscription Amount"); and

(b) SOLUTIONS shall be obliged to pay into the account of the

Company as payment towards Share subscription a sum of Rs

18,01,240 (Indian Rupees Eighteen Lakhs One Thousand Two

Hundred and Forty Only) ("Solutions Subscription Amount").

In the event one of the Parties does not pay their respective

subscription amount, within twenty four hours of the expiry of the

aforesaid thirty (30) days and the other Party has paid its respective

subscription amount, the Company shall within a reasonable period of

time and subject to receipt of requisite Approvals if any, return the

respective subscription amount received from such Party who has made

the payment and this Agreement shall stand terminated. In the event of

such termination of this Agreement, SOLUTIONS and/or SPAR shall take

all such steps as may be necessary to wind up the Company in accordance

with the provisions of the Act or alternately take all such steps as

may be necessary to change tl1e name of the Company in accordance with

the Act, such that the name of the Company does not include reference

to SPAR or SOLUTIONS as the case may be.

5.3. The Parties agree that within twenty four hours of receipt by the

Company of both the SPAR Subscription Amount and the Solutions

Subscription Amount, the Company shall simultaneously issue and allot

to SPAR and SOLUTIONS the number of Shares referred to in Article 5.1.

The date on which such allotment occurs shall be the "Closing Date".

Upon such issue and allotment of the Shares of the Company, SPAR shall

hold Shares representing 51% of the paid up equity Share capital of the

Company and SOLUTIONS shall hold 49% of the paid up equity Share

capital of the Company. In addition, the Parties shall ensure that the

Company makes all such filings and satisfies all such reporting

requirements as may be necessary in terms of the Foreign Exchange

Management Act, 1999 and the Regulations issued thereunder, and the

Act, in a timely manner;

On the Closing Date, the issued and paid-up Share capital of the

Company shall be Rs 36,76,000/- (Indian Rupee equivalent of USD

75,000)/- divided into 367600 Shares of face value of Rupees 10 each.

Article 6A Representations and Warranties and Indemnification

1. Representations and Warranties of SPAR: SPAR hereby represents and

warrants that:

(a) SPAR is a company duly incorporated and validly existing in

good standing under laws of Nevada and it has the corporate

power to own its property and to carry on its business as now

being conducted.

(b) SPAR has full power and authority to enter into this

Agreement, to subscribe to, purchase and own the Shares so as

to have a 51% percentage ownership of the

<PAGE>

outstanding equity Shares of the Company and to perform its

other obligations under this Agreement, all of which have been

duly authorized by all proper and necessary corporate action

by SPAR. No consent or approval of stockholders or consent or

approval of, notice to or filing with any governmental

authority is required as a condition to the validity or

enforceability of this Agreement as to SPAR.

agreement of SPAR enforceable in accordance with its terms.

(d) There are no provisions of its memorandum of association,

articles of association or other organizational documents, and

no proceedings pending or threatened before any court or

governmental or administrative agency, that would reasonably

be expected to affect the validity or enforceability of this

Agreement as to SPAR or that would reasonably be expected to

materially adversely affect the financial condition or

operations of SPAR.

(e) SPAR is not a party to or otherwise bound by any contract or

agreement which in any manner would prohibit SPAR from

subscribing to or owning its 51% percentage ownership in the

Company or performing any of its other obligations under this

Agreement.

2. Representations and Warranties of SOLUTIONS: SOLUTIONS hereby

represents and warrants that:

(a) SOLUTIONS is a corporation duly organized and validly existing

in good standing under the laws of India and it has the

corporate power to own its property and to carry on its

business as now being conducted.

(b) SOLUTIONS has full power and authority to enter into this

Agreement, to subscribe to, purchase and own Shares so as to

have a 49% percentage ownership of the outstanding Shares of

the Company and to perform its other obligations under this

Agreement, all of which have been duly authorized by all

proper and necessary corporate action by SOLUTIONS. No consent

or approval of stockholders or consent or approval of, notice

to or filing with any governmental authority is required as a

condition to the validity or enforceability of this Agreement

as to SOLUTIONS.

agreement of SOLUTIONS enforceable in accordance with its

terms.

(d) There are no provisions of its organizational documents, and

no proceedings pending or threatened before any court or

governmental or administrative agency, that would reasonably

be expected to affect the validity or enforceability of this

Agreement as to SOLUTIONS or that would reasonably be expected

to materially adversely affect the financial condition or

operations of SOLUTIONS.

<PAGE>

(e) SOLUTIONS is not a party to or otherwise bound by any contract

or agreement which in any manner would prohibit SOLUTIONS.

from subscribing to or owning its 49% percentage ownership in

the Company or performing any of its other obligations under

this Agreement.

3. Indemnification

(a) A Shareholder ("Indemnifying Shareholder") shall indemnify and

hold harmless the other Shareholder (the "Indemnified

Shareholder"), their nominee Directors on the Board of

Directors of the Company from and against any and all costs,

losses, claims, damages and liabilities, including reasonable

attorneys' fees, incurred by the Indemnified Shareholders or

such other Persons, arising out of (i) any representation or

warranty of the Indemnifying Shareholder hereunder being

untrue or incorrect and/or (ii) the Indemnifying Shareholder's

failure to comply with any of its obligations under this

Agreement including the other terms, conditions or agreements

contained herein.

(b) The Company, to the extent permitted by applicable law, shall

indemnify and hold harmless each relevant Shareholder and

their nominee Directors on the Board of Directors of the

Company (each an "Indemnified Person") from and against any

and all costs, losses, claims, damages and liabilities,

including reasonable attorneys' fees, incurred by such

Indemnified Person or to which such Indemnified Person may be

subject arising out of or in connection with any legal action

(and the defense thereof) commenced as a result of, or in

connection with or arising out of the Indemnified Person's

actions or position with respect to the Company, except to the

extent of the fraud, gross negligence or willful misconduct of

the Indemnified Person.

If an Indemnified Shareholder makes a claim under this Article 6A (3) for

payment or reimbursement of expenses, the same shall be paid or reimbursed

promptly upon receipt of appropriate documentation relating thereto and shall be

paid in full by the Party to whom the claim is made.

Article 6B Additional Fund Requirements

Additional fund requirements of the Company in excess of the Share capital may

be met either through:

(i) the cash flow from time to time of the Company;

(ii) the borrowings facilities which the Company has from all

sources including from one or more Shareholders or through

borrowings from such reputable financial institutions or banks

as the Board of Directors may from time to time determine;

provided, however, the Company shall not raise funds through a

stock market transaction unless SPAR and SOLUTIONS mutually

agree to do so.

(iii) the issue of such additional securities as are permitted under

the Act (including additional equity Shares, subject to

Article 10.2 hereof).

<PAGE>

Notwithstanding the foregoing the Parties as Shareholders may decide

that any monies referred to above may be made available to the Company

in such other manner as may be agreed between them.

It is understood that and it is a term of this Agreement that any

borrowings by the Company shall always be consistent with sound

financial policies.

CHAPTER II: GENERAL MEETING OF SHAREHOLDERS

Article 7. Annual and Extraordinary General Meeting

Annual General Meeting: Subject to the provisions of the Act and the Articles of

Association of the Company, the Annual General Meeting of the Shareholders of

the Company shall be convened by a resolution of the Board of Directors of the

Company and held at the registered office of the Company. The Company shall hold

in each year in addition to any other meetings of the Shareholders of the

Company, a general meeting as its "Annual General Meeting" and shall specify the

meeting as such in the notice calling it. The Parties agree and undertake that

they shall exercise their voting rights at meetings of the Shareholders in such

a manner so as to ensure that the provisions of this Agreement are upheld.

Extraordinary General Meeting: Subject to the provisions of the Act and the

Articles of Association of the Company, an Extraordinary General Meeting of the

Company shall be convened by a resolution of the Board of Directors of the

Company whenever deemed necessary. Such meetings shall be held upon the issuance

of a notice in this behalf, which written notice shall be as per the

requirements under the Act and shall be held with at least 21 days notice,

provided that shorter notice may be given with the consent of the Shareholders

of the Company.

Article 8. Quorum

The quorum for the General Meetings of Shareholders of the Company shall

constitute of at least one duly appointed representative each of SPAR and

SOLUTIONS. No business shall be transacted at any General Meeting unless the

requisite quorum is present.

Article 9. Resolution

Except as expressly otherwise provided in the Act, including any subsequent

legislation substituting the same, this Agreement and all resolutions of the

General Meeting of Shareholders of the Company shall be adopted by the

affirmative vote of the Shareholders holding a majority of the Shares present or

represented at meeting for which there is quorum.

Article 10. Important Matters

Any resolution on the following matters by the General Meeting of the

Shareholders of the Company shall require the affirmative vote of at least

three-fourths of the votes of the Shareholders present:

1. Any amendment or modification of the Memorandum and Articles of

Association of the Company;

<PAGE>

2. Increase or decrease in the authorized capital or paid-up Share capital

of the Company beyond the limit specified in Article 5.1 hereinabove;

3. Issuance of new Shares or any other kind of equity securities or

instruments convertible into equity securities or the decision to

undertake a Public Offering (as defined on Article29);

4. Issuance of debentures;

5. Transfer of any part or whole of Business of the Company or any change

in the Business of the Company;

6. Any and all matters relating to dividends of the Company;

7. Dissolution, voluntary winding up or amalgamation of the Company;

8. Change in number or length of tenure of Directors on the Board of the

Company;

9. Investment in other companies by the Company.

CHAPTER IV: BOARD OF DIRECTORS AND OFFICERS

Article 11. Appointment of Board of Directors of the Company

The Board of Directors of the Company shall consist of four (4) Directors; two

(2) of whom shall be nominated by SPAR and two (2) of whom shall be nominated by

SOLUTIONS. In case of any increase or decrease in the total number of Directors,

the representation stipulated above shall be unchanged and pro-rata at all

times. The Directors shall not be entitled to receive any compensation.

The Chairman of the Board of Directors of the Company for the first three years

from the Closing Date shall be a nominee of SOLUTIONS. In case of equality of

votes, the Chairman shall not have a second/ casting vote.

The management of the Company shall vest with the Board of Directors and all

decisions at the Board shall be by way of majority vote. The nominee Directors

of either Party shall hold office at the pleasure of their respective nominators

and shall be subject to removal by their respective nominating Party. Each Party

agrees to vote for appointment or removal of a Director who has been nominated

by the other Party, upon

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