JOINT VENTURE AGREEMENT
This Agreement is made as of this 14th day of
December, 2004 by and between
Field Insights S.R.L, a
company organized and
existing under the law of Romania
and having its headquarters at Aleea Ilioara nr. 1, Bloc PM29,
Sc. B, Etaj
4,
Ap. 55, Sector 3,
Bucharest,
Romania (hereinafter called "FI"), Spar Group
International Inc., a Nevada corporation, with an office at 580 White
Plains
Road, Tarrytown New York, USA
(hereinafter called "SPAR"), and Adinel Tudor, a
Romanian citizen identified with Identity Card
series DP no. 104864,
Personal
Numerical Code 1771115100037, domiciled at Calea Dorobantilor nr. 73, Ap. 3,
Sector 1, Bucharest
("Tudor"),
WITNESSETH THAT:
WHEREAS, FI is engaged in the retail
solution businesses in
Romania, having
a
wide range of clients and
also having various knowledge and human resources with
respect to the retailing
businesses in Romania;
WHEREAS, 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; and
WHEREAS, FI and SPAR are
desirous of organizing a corporation to jointly conduct
retail solution businesses in
Romania (hereinafter called "Territory").
NOW, THEREFORE, in consideration of the mutual
covenants and agreement herein
contained, the parties hereto
agree as follows:
CHAPTER I: ORGANIZATION OF THE NEW COMPANY
-------------------------------
Article l.
Establishment
Promptly after the effective date of this
Agreement,
the parties hereto
shall
cause a new company to be
organized under the laws of Territory (hereinafter
called "SPAR Romania
S.R.L." or "New
Company").
Upon formation, New Company
shall become a party to this
Agreement through
approval by the
General Meeting
of Shareholders of New
Company and signature for acknowledgement of all
original
copies.
Article 2. Business
Purposes
The business purposes of the
New Company shall consist of the following:
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1. Provide retail
merchandising and product demonstration services;
2. Agency, assistance,
instruction and report of storefront sales activities;
3. Implementation of market
research and analysis of results thereof;
4. Assembly of setups used
for sales promotion;
5. Consulting regarding store
management;
6. Development and sale of
management system regarding retailing;
7. Designing and sale of
database; and
8. Any and all businesses
incidental or relating to any of the foregoing.
Article 3. Trade
Name
The New Company shall be
named in Territory as S.C. SPAR Romania S.R.L. and in
English as SPAR Romania
Ltd.
Article 4.
Location
The New Company shall have its headquarters at Strada Vasile Lascar nr.
18, ap. 8, etaj 1,
Sector 2, 020491
Bucharest,
Romania.
Article 5.
Constitutive Act
The Constitutive Act of the New
Company shall be in the form attached hereto as
Exhibit A.
Article 6.
Capital
The total number of shares
which New Company shall issue at incorporation shall
be fifteen thousand shares and the par value of each
share shall be 100,000
Romanian lei. At the time of establishment of New Company, shares shall be
issued and fully subscribed
by the parties hereto as follows:
o SPAR:
51% 7,650
social parts
o FI:
42% 6,300
social parts
o Tudor:
7%
1,050 social parts.
All the shares to be issued
by New Company shall be nominal and ordinary shares.
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Article 7. Payment
Each of the parties hereto shall pay in Romanian lei and in cash the
amount
equivalent to its subscribed
shares at par value
upon issuance of the shares of
New Company.
CHAPTER II: PREPARATION OF ESTABLISHMENT OF THE NEW
COMPANY
-----------------------------------------------
Article 8.
Preparation of Establishment of the New Company
Each party shall take its
role as described
below for the
preparation
of the
commencement of New Company's business. All expenses in connection
with this
Agreement, the setting up of the New Company and the preparation of the
commencement of New Company's business will be advanced by FI
and/or SPAR and
reimbursed by the New Company
if set up. If the joint venture is not completed,
each party will pay their own
costs.
SPAR shall enter into New
Company with a license
agreement in the form attached
hereto as Exhibit B (the "License Agreement"). For reference, the License
Agreement includes the
obligations of SPAR to:
1. localize and set up
software provided by SPAR to work in Territory; and
2. consult on the
organization of merchandising services; and
3. train the New Company's personnel in how to operate the merchandising
software; and
4. give advice on budgeting
and development of each business plan
and FI shall
1. provide office and facility space
to New Company under the terms of a supply
agreement described in
Article 26 herein; and
2. arrange meetings with current
clients to promote New Company's services
CHAPTER III: GENERAL MEETING OF SHAREHOLDERS
-------------------------------
Article 9. Ordinary
and Extraordinary General Meeting
The Ordinary General Meeting
of Shareholders shall
be convened by resolution of
the Board of Directors and
held in Territory or any other place that FI and SPAR
may agree within 3 months from the last day of each
accounting
period of
New
Company.
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An Extraordinary General Meeting shall be convened
by a resolution of the Board
of Directors whenever deemed
necessary.
Article 10.
Quorum
A quorum of the General Meeting of Shareholders shall be the shareholders
present either in person or
by proxy representing
at least 51% of all
the paid
share capital of New
Company.
Article 11.
Resolution
Except as expressly otherwise
provided in the Constitutive Act of New Company or
this Agreement, all resolutions of the General
Meeting of Shareholders shall be
adopted by the affirmative vote of Shareholders holding at least 51% of
the
shares present or represented
at meeting for which there is quorum.
Article 12. Important
Matters
In addition to such matters
as required by the
Constitutive Act of
New Company
or the applicable laws in
Romania, any
resolutions of the following matters by
the General Meeting of
Shareholders require the affirmative vote of
shareholders
representing at least
two-thirds of the paid-in social capital:
1. any amendment or
modification of the Constitutive Act;
2. increase, decrease or change of structure in
the social capital,
but only
subject to
provisions of Chapter VI;
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 Article 30);
4. issuance of
debentures;
5. transfer of any part or
whole of business;
6. approval, rejection or change of the balance
sheet, profit
assignment and
dividends of New
Company;
7. splitting, dissolution or
amalgamation;
8. dismissal, replacement, change of powers, change in number or length
of
tenure of
Directors, subject to the rights of FI and SPAR under Article
13;
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9. any decision given by the
applicable laws or by the Constitutive Act to the
Directors.
CHAPTER IV: BOARD OF DIRECTORS AND OFFICERS
-------------------------------
Article 13. Election of
Directors
The Board of Directors of the
New Company shall
consist of four (4)
Directors;
two (2) of whom shall be
elected from among
those appointed by FI and 2 whom
shall be elected by those appointed by SPAR. The Chairman of the Board of
Directors shall be elected
from the Directors by the mutual consultation of both
parties. In case of any increase or decrease in the number
of Directors,
the
representation stipulated
above shall be unchanged and pro-rata at all times.
Article 14. Election of
Officers
Officers shall be appointed by the Board of
directors and serve at the pleasure
of the Board of Directors.
The Chief Executive
Officer of New Company
shall in
any case be elected from
among candidates nominated by FI.
Article 15. Office of
Director
The term of office of each
Director shall expire at the close of the
Ordinary
General Meeting of
Shareholders,
which relates to the
closing of accounts last
to occur within three (3)
years from his assumption of office.
Article 16.
Quorum
Each Director shall have one
(1) voting right in the Board of Directors. Except
as otherwise required in the Constitutive Act
of New Company or this Agreement,
a majority of the
Directors shall constitute a quorum at any meeting
of their
Board of Directors, and all
resolutions shall be adopted by the affirmative vote
of more than two-thirds of
the votes of the Directors present.
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<PAGE>
Article 17.
Ordinary Meeting of the Board of Directors
The Ordinary Meeting of the Board of Directors
shall be held quarterly, and an
Extraordinary Meeting of the board of Directors
shall be held when
necessary,
both of which shall be convened in accordance with the provisions of the
Constitutive Act. To the extent then permitted, any meeting of the Board
of
Directors may be held by interactive video conference or other similar
electronic or telephonic
means, and any action that may be taken by the Board of
Directors at a meeting
thereof (whether in person or video
conference) may
be
effected in lieu of such meeting by unanimous written consent resolution
executed by each member of
the Board of Directors. The parties hereto confirm
that the interpretation in
Territory is that meetings of boards of directors may
be held by interactive videoconference if stipulated expressly in the
Constitutive Act of SPAR
Romania S.R.L. For any proposed meeting of the Board of
Directors for which SPAR
requests, SPAR Romania
S.R.L. and SPAR shall cooperate
to arrange for such meetings
to be held by video conference. A written record in
Romanian of all meetings of
the Board of Directors and all decisions made by it
together with English translation thereof shall be made as promptly as
practicable after each meeting of the Board of
Directors by one of the Board
selected by the Board of
Directors at each
meeting, kept in the
records of the
Company and signed or sealed
by each of the Directors.
Article 18. Important
Matters
In addition to such matter as
required by Constitutive Act of New Company, the
following matters of the Board of Directors meeting shall require the
affirmative vote of more than
two-thirds of the votes of the Directors:
1. Any proposal to the General
Meeting of
Shareholders or action by the Board
of Directors for
the matters as provided in Article 12 hereof;
2. any investment or commitment of New Company in amounts
individually
in
excess of
US$50,000 or in the aggregate in excess of US$50,000;
3. any loan or credit taken by
New Company;
4. execution, amendment or termination of
agreements or commitments with FI,
SPAR or their
subsidiaries or affiliates;
5. adoption or amendment of the
annual budgets and business plan;
6. adoption or any material
modification of major
regulations or
procedures,
including any
employee rules or handbook;
7. change of the auditing firm
as provided in Article 21;
8. initiating or settling any
litigation,
arbitration or other formal dispute
settlement
procedures or
forgiveness
of any obligation owed to the New
Company in
excess of US$25,000;
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9. approval of annual closing of the books of New Company and the New
Company's annual
financial statements,
and changing of accounting policies
and practices or
the New Company's accounting periods;
10. establishment or amendment to the condition of employment of New
Company
officers,
provided that the
affirmatives vote of SPAR-nominated Directors
shall not be
withheld unreasonably;
11. sale or disposition of or granting a lien,
security interest or similar
obligation
with respect to, in
one or a series of related transactions of
New Company or with respect to any major strategic asset of New Company
that is crucial
to New Company' business;
12. Formation of any subsidiary of New Company, entry into (or subsequent
termination of)
any joint venture, partnership or similar agreements;
13. entering into, amending or terminating any
contract with/or
commitment to
any Director or
shareholder; and
14. entering into any agreement or commitment to provide goods or services
outside
Territory.
CHAPTER V: AUDIT
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Article 19. Accounting
Period
The accounting periods of New Company shall end
on the 31st day of December of
each year or another date if
permitted by applicable law.
Article 20. Statutory
Auditors (where required)
A Statutory Auditor shall be appointed by New
Company if required by applicable
law. The parties confirm that
presently a Statutory Auditor is not required.
Article 21. Inspection of
Accounting Records and Books
The New Company shall yearly
arrange audit on the
accounting records and
books
and shall submit a report of such audit to
each of the parties
hereto within
thirty (30) days from the
completion of the audit.
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An internationally recognized
auditing firm shall be the accounting firm engaged
by New Company. Such accounting firm shall audit the accounting records and
books of New Company and any
other matters relating, directly or indirectly,
to
the financial condition of New Company. Any fee for the certified public
accountant for inspection and audit mentioned above shall be borne by New
Company. New Company shall keep true and
correct accounting
records and
books
with regard to all of its
operations
in accordance with generally accepted
accounting principals
consistently applied ("GAAP") in Territory. All
accounting
records and books shall be
kept ready for inspection by the parties hereto or by
their authorized representative. If requested by SPAR, New Company shall
cooperate with respect to
each financial period
to provide such
information as
required by SPAR to reconcile
New Company's financial statements with U.S.
GAAP
reporting requirements of SPAR. SPAR and FI shall each have the right at
any
time to have an outside auditor inspect all the books and records of New
Company, and New Company
shall cooperate fully with any such audit.
Article 22. Increase of
Capital
In case of capital
increase of the New
Company after its establishment, FI,
Tudor and SPAR shall have the preemptive right to new shares to be issued
for
such capital
