JOINT VENTURE SHAREHOLDERS AGREEMENT

                                     between

                      FRIEDSHELF 401 (PROPRIETARY) LIMITED

                                       and

                         SPAR GROUP INTERNATIONAL, INC.

                                       and

                                  DEREK O'BRIEN

                                       and

                                   BRIAN MASON

                                       and

                                 SMD MERIDIAN CC

                                       and

                MERIDIAN SALES & MERCHANDISING (WESTERN CAPE) CC

                                       and

                          RETAIL CONSUMER MARKETING CC

                                       and

                              MERHOLD HOLDING TRUST

                                  in respect of

               SGRP MERIDIAN (PROPRIETARY) LIMITED ("THE COMPANY")




                                                Mallinicks Attorneys

                                                     Telephone +27 21 410 2200
                                                     Fax +27 21 410 9000

                                                     3rd Floor Granger Bay Court
                                                     Beach Road, V&A Waterfront
                                                     Cape Town 8001
                                                     PO Box 3667 Cape Town 8000

<PAGE>



                                TABLE OF CONTENTS


1.    CONDITIONS PRECEDENT.....................................................3
2.    EFFECTIVE DATE...........................................................4
3.    ESTABLISHMENT............................................................5
4.    BUSINESS PURPOSES........................................................5
5.    LOCATION.................................................................5
6.    MEMORANDUM AND ARTICLES OF ASSOCIATION...................................5
7.    CAPITAL..................................................................6
8.    PREPARATION OF ESTABLISHMENT OF THE COMPANY..............................6
9.    SECTION 197 TRANSFER.....................................................8
10.   ORDINARY AND EXTRAORDINARY GENERAL MEETINGS..............................9
11.   QUORUM AND RESOLUTION....................................................9
12.   MINORITY PROTECTIONS....................................................10
13.   EARNINGS AND LOSSES.....................................................10
14.   CAPITAL CONTRIBUTIONS...................................................11
15.   DIRECTORS...............................................................11
16.   ACCOUNTING PERIOD.......................................................18
17.   AUDITORS................................................................18
18.   INSPECTION OF ACCOUNTING RECORDS AND BOOKS..............................18
19.   INCREASE OF CAPITAL.....................................................19
20.   DEADLOCK................................................................19
21.   RESTRICTIONS ON TRANSFER OF SHARES......................................20
22.   PRE-EMPTIVE RIGHT AND OPTION............................................20
23.   CO-OPERATION IN FINANCING...............................................22
24.   BUSINESS AND SOFTWARE SUPPORT...........................................22
25.   NON-COMPETITION.........................................................23
26.   PUBLIC OFFERING.........................................................25
27.   CONFIDENTIAL INFORMATION................................................25
28.   TERMINATION.............................................................26
29.   FORCE MAJEURE...........................................................27
30.   NOTICES.................................................................27
31.   ASSIGNMENT..............................................................28
32.   ARBITRATION.............................................................28
33.   IMPLEMENTATION..........................................................29
34.   GOVERNING LAW...........................................................29
35.   WAIVER..................................................................29
36.   JOINT AND SEVERAL.......................................................30
37.   CO-OPERATION AND GOOD FAITH.............................................30
38.   ENTIRE AGREEMENT........................................................30
39.   COSTS...................................................................31
40.   HEADINGS AND INTERPRETATION.............................................31





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                                                                          Page 2


This  agreement  is made as on this day of 2004 by and  between  Friedshelf  401
(Pty) Ltd (registration number 2004/000538/07), a company organised and existing
under  the  laws  of  the   Republic  of  South   Africa   (hereinafter   called
"Friedshelf"),  SPAR Group  International  Inc. a company organized and existing
under  the laws of the State of  Nevada,  USA,  having  its  principal  place of
business at 580 White Plains Road, Tarrytown, NY, USA, 10591 (hereinafter called
"SPAR"), SMD Meridian CC (CK No. 2001/062950/23), Meridian Sales & Merchandising
(Western Cape) CC (CK No.  1998/55070/23),  Retail Consumer Marketing CC (CK No.
1996/00917/23) and Friedshelf  Holding Trust  (registration no. IT 151/99) Derek
Michael  O'Brien  (identity  number 451011 5047 18 9 ("O'Brien") and Brian Peter
Mason, identity number 551201 5030 08 2 ("Mason").



RECORDAL

WHEREAS,  SMD Meridian CC,  Meridian  Sales &  Merchandising  (Western Cape) CC,
Retail Consumer  Marketing CC and Merhold Holding Trust (together referred to as
the  "Meridian  Entities")  are engaged in the  business of retail  solution and
merchandising  services in South Africa, having a wide range of clients and also
having  knowledge and human  resources  with respect to retailing  businesses in
South Africa;

WHEREAS,  SPAR is  engaged  in 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;

WHEREAS,  Friedshelf and SPAR have  incorporated a company,  SGRP Meridian (Pty)
Ltd (the "Company")  (registration  number  2003/012518/07),  the equity whereof
will be held as to 49% (forty nine percent) by  Friedshelf  and as to 51% (fifty
one  percent)  by SPAR to jointly  conduct a retail  solution  business in South
Africa (hereinafter called "territory"); and

WHEREAS,  SPAR  proposes to  contribute a software  licence  agreement,  annexed
hereto as annexure "A", software set-up,  software  training,  computer hardware
and business support to the Company;

WHEREAS,  the Meridian Entities and Friedshelf will procure that they contribute
the existing client base and certain office equipment and office supplies of the
Meridian  Entities to the Company and WHEREAS  such client base will require the
proper  rendering of services to ensure its optimal use, the Company  undertakes
to appoint  Friedshelf or such other company as agreed  between SPAR,  Mason and
O'Brien as a  consultant  to the  Company to oversee  and


<PAGE>
                                                                          Page 3


manage the  day-to-day  operations  and management of the business in accordance
with the terms of the consultancy agreement annexed hereto as annexure "B".

NOW,  THEREFORE,  in  consideration of the mutual covenants and agreement herein
contained, the parties hereto agree as follows:


1.       CONDITIONS PRECEDENT

         1.1      This  agreement  is  conditional  on the  satisfaction  of the
                  following conditions precedent:

                  1.1.1    that the net  turnover of the  Meridian  Entities for
                           the financial year ending 30 September 2003, will not
                           be less than R38 000  000,00  (thirty  eight  million
                           Rand),  calculated  on the same  basis  and using the
                           same  accounting  policies and  principles as used in
                           the 30 September  2003 year-end  accounts  previously
                           disclosed  to  SPAR  which  are  attached  hereto  as
                           annexure "C" (the "Accounts");

                  1.1.2    that the net  turnover of the  Meridian  Entities for
                           the 6 (six) months ending 31 March 2004,  will not be
                           less  than R15 000  000,00  (fifteen  million  Rand),
                           calculated  on the  same  basis  and  using  the same
                           accounting  policies  and  principles  as used in the
                           Accounts;

                  1.1.3    that  the   Meridian   Entities   will  not  have  an
                           accumulated  loss in  excess  of R1 100  000,00  (one
                           million one hundred  thousand Rand) for the financial
                           year ending 30 September 2003, calculated on the same
                           basis and using the same accounting  policies as used
                           in the Accounts;

                  1.1.4    that  the   Meridian   Entities   will  not  have  an
                           accumulated  loss in  excess  of R1 350  000,00  (one
                           million  three hundred and fifty  thousand  Rand) for
                           the 6 (six) months  ending 31 March 2004,  calculated
                           on the same  basis  and  using  the  same  accounting
                           policies as used in the Accounts;

                  1.1.5    that  the  Meridian   Entities  and  Friedshelf  will
                           transfer  to the  Company  the legal  and  beneficial
                           ownership of the Meridian client


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                                                                          Page 4


                           base and such office  equipment  and office  supplies
                           utilised  by  the  Meridian  Entities   necessary  to
                           properly conduct of their business;

                  1.1.6    the  completion,  to the  satisfaction  of SPAR, of a
                           financial  and legal due  diligence  on the  Meridian
                           Entities and Friedshelf; and

                  1.1.7    that  Friedshelf,  or such  other  company  as agreed
                           between  SPAR,  Mason and O'Brien,  will enter into a
                           consultancy  agreement  with the  Company in the form
                           annexed hereto as annexure "B";

         1.2      The  conditions  precedent are  stipulated  for the benefit of
                  SPAR who shall be entitled,  in its sole discretion,  to waive
                  them, either in whole or in part.

         1.3      Unless the  conditions  precedent  are fulfilled or waived (as
                  the case may be),  by 1 May 2004 (or such later date as may be
                  mutually  agreed between the parties) this agreement  shall be
                  of no force or effect.

         1.4      The parties shall use all reasonable endeavours to procure the
                  fulfillment of the conditions precedent.

         1.5      Should this  agreement  become of no force or effect by reason
                  of the  provisions  of clause 1.3,  then the parties  shall be
                  restored, as near as may be possible, to the position in which
                  they would have been had this  agreement not been entered into
                  and no shareholder  shall have any claims against the other as
                  a result of the failure of the  conditions  precedent,  except
                  for such  damages  (if any) as may  result  from a breach  the
                  provisions of clause 1.4.


2.       EFFECTIVE DATE

         This agreement  shall become  effective on 1 April 2004,  regardless of
         the date of execution hereof.





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                                                                          Page 5




ORGANIZATION OF THE COMPANY
---------------------------


3.       ESTABLISHMENT

         It is  recorded  that the  parties  have  caused  the  "Company"  to be
         incorporated under the laws of the Republic of South Africa.


4.       BUSINESS PURPOSES

         The business  purposes of the Company  shall include but not be limited
         to the following:

         4.1      providing  retail  merchandising  and  product   demonstration
                  services

         4.2      agency, assistance, instruction and report of storefront sales
                  activities;

         4.3      implementation  of market  research  and  analysis  of results
                  thereof;

         4.4      assembly of setups used for sales promotion;

         4.5      consulting regarding store management;

         4.6      development and sale of management system regarding retailing;

         4.7      designing and sale of database; and

         4.8      any and all  businesses  incidental  or relating to any of the
                  foregoing.


5.       LOCATION

         The  Company  shall  have its main  office at such  address as shall be
         mutually agreed between the shareholders.


6.       MEMORANDUM AND ARTICLES OF ASSOCIATION

         The  memorandum  and articles of association of the Company shall be in
         the form attached hereto as annexure "D".


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                                                                          Page 6



7.       CAPITAL

         7.1      The  Company  is  a  private  company  duly   incorporated  in
                  accordance  with the  company  laws of the  Republic  of South
                  Africa and shall,  at the effective  date,  have an authorised
                  share capital of R1 000.00 (one thousand  Rand) divided into 1
                  000 (one thousand) shares with a par value of R1.00 (one Rand)
                  each, ranking pari passu in all respects.

         7.2      On the  effective  date or so soon  thereafter  as  reasonably
                  possible:

                  7.2.1    SPAR shall  subscribe  in cash for 510 (five  hundred
                           and ten)  shares in the  Company  at their par value;
                           and

                  7.2.2    Friedshelf  shall  subscribe  in cash  for 490  (four
                           hundred  and  ninety)  shares in the Company at their
                           par value.

         7.3      The issued share  capital of the Company will  accordingly  be
                  held as follows:

                  7.3.1    Friedshelf:  490 (four  hundred  and  ninety)  shares
                           representing   49%  (forty   nine   percent)  of  the
                           Company's total issued share capital; and

                  7.3.2    SPAR: 510 (five hundred and ten) shares  representing
                           51% (fifty one percent) of the Company's total issued
                           share capital.


PREPARATION OF ESTABLISHMENT OF THE NEW COMPANY
-----------------------------------------------

8.       PREPARATION OF ESTABLISHMENT OF THE COMPANY

         8.1      Each  party  shall  take its role as  described  below for the
                  preparation of the commencement of the Company's business.

         8.2      SPAR shall, for no consideration:

                  8.2.1    make certain  proprietary  software  available to the
                           Company pursuant to a licence  agreement to the value
                           of US$540 000 (five  hundred  and forty  thousand  US
                           dollars),  such  licence  agreement to be in the form
                           attached   hereto  as  annexure  "C"  (the   "license
                           agreement").  For  reference,  the license  agreement
                           includes the obligations of SPAR to:

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                                                                          Page 7


                           8.2.1.1  localize  and set up  software  provided  by
                                    SPAR to work in South Africa;

                           8.2.1.2  consult on the organization of merchandising
                                    services: and;

                           8.2.1.3  give advice on budgeting and  development of
                                    each business plan.

                  8.2.2    provide  software  set up to the Company to the value
                           of US$40 000.00;

                  8.2.3    provide software training to the Company to the value
                           of US$25 000.00;

                  8.2.4    provide  computer  hardware  set up to the Company to
                           the value of US$20 000.00; and

                  8.2.5    provide  3 (three)  years'  business  support  to the
                           Company to the value of US$165 000.00.

         8.3      The  Meridian   Entities,   Mason  and  O'Brien  undertake  or
                  undertake   to  procure   that   Friedshelf   shall,   for  no
                  consideration:

                  8.3.1    contribute  the  existing  business  of the  Meridian
                           Entities to the Company which business shall comprise
                           at least the client base,  certain  office  equipment
                           and office supplies;

                  8.3.2    arrange  meetings  with  their  existing  clients  to
                           promote the Company's business; and

                  8.3.3    contribute  the  employees  employed by the  Meridian
                           Entities as at 1 April 2004 to the Company.

         8.4      For the avoidance of doubt, it is recorded that the Company is
                  not:

                  8.4.1    acquiring  any of the accounts  receivable,  accounts
                           payable,   fixed   assets   or   stock  in  trade  or
                           inventories of the Meridian Entities; and

                  8.4.2    acquiring any of the assets of the Meridian Entities,
                           other  than the  client  base,  office  supplies  and
                           office furniture; and

<PAGE>
                                                                          Page 8

                  8.4.3    assuming any liabilities of the Meridian Entities.


9.       SECTION 197 TRANSFER

         9.1      As a  consequence  of the  contributions  made by the Meridian
                  Entities to the Company in accordance with clause 8.3, part of
                  the business of the Meridian  Entities will be  transferred to
                  the  Company  on  1  April  2004  ("date  of  transfer")   and
                  accordingly,  the parties agree that Section 197 of the Labour
                  Relations  Act,  No. 66 of 1995 ("the  LRA"),  as amended,  is
                  applicable  to  the  transfer.   Accordingly,   the  following
                  provisions   will  apply  as  between   the  Company  and  the
                  employees:

                  9.1.1    the Company is automatically substituted in the place
                           of the Meridian  Entities in respect of all contracts
                           of   employment   of  the   employees   in  existence
                           immediately before the date of transfer;

                  9.1.2    all the rights and  obligations  between the Meridian
                           Entities  and an employee at the time of the transfer
                           continue  in force as if they  had  been  rights  and
                           obligations between the Company and the employee;

                  9.1.3    anything  done before the  transfer by or in relation
                           to the Meridian Entities,  including the dismissal of
                           an employee  or the  commission  of an unfair  labour
                           practice   or  act  of  unfair   discrimination,   is
                           considered to have been done by or in relation to the
                           Company; and

                  9.1.4    the  transfer   does  not   interrupt  an  employee's
                           continuity of employment  and an employee's  contract
                           of employment  continues  with the Company as if with
                           the Meridian Entities.

         9.2      The Company shall be bound by any arbitration  award (referred
                  to in 197(5)(b)(1)) and any collective agreements (referred to
                  in  197(5)(b)(ii)  and  (iii))  which were  applicable  to the
                  employees prior to the date of transfer.

         9.3      The  parties  acknowledge  that in terms of Section 197 of the
                  LRA,  the  parties  are  required  to  agree in  writing  to a
                  valuation (hereinafter referred to as the statutory valuation)
                  in respect of the items listed in Section  197(7)(a)(i)-(iii).
                  The  parties  have  agreed to the  statutory  valuation  which
                  written agreement is annexed hereto as Annexure "E".

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                                                                          Page 9


         9.4      The Meridian Entities, Mason and O'Brien warrant and represent
                  to the  Company  and to SPAR that there are no claims  whether
                  actual or  pending,  against any of the  Meridian  Entities in
                  respect  of any  of the  employees  to be  transferred  to the
                  Company pursuant to this clause 9.

         9.5      The  Meridian   Entities,   Mason  and  O'Brien  undertake  to
                  indemnify the Company  against any claim of whatsoever  nature
                  arising out of a breach of the warranty and representation set
                  out in 9.4 together with all costs associated therewith.


GENERAL MEETING OF SHAREHOLDERS


10.      ORDINARY AND EXTRAORDINARY GENERAL MEETINGS

         10.1     The annual general meeting of  shareholders  shall be convened
                  by  resolution  of the  board of  directors  and held in South
                  Africa or any other place  within 3 (three)  months  after the
                  expiration of each financial year end of the Company or at any
                  other  time  agreed  to  by  the   shareholders   (subject  to
                  compliance with the Companies Act 61 of 1973).

         10.2     An extraordinary  general meeting of the shareholders shall be
                  convened by a resolution  of the board of  directors  whenever
                  deemed necessary.


11.      QUORUM AND RESOLUTION

         11.1     A quorum  necessary  for a valid  meeting of the  shareholders
                  shall be at least so many shareholders representing 55% (fifty
                  five percent) of the Company's total issued share capital.

         11.2     All  resolutions  of  shareholders  shall  be  adopted  by the
                  affirmative  vote of  shareholders  holding  not less than 55%
                  (fifty  five  percent) of the  Company's  total  issued  share
                  capital  save for  those  resolutions  which,  in terms of the
                  Companies Act 61 of 1973, require a higher level of acceptance
                  to be effective.

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                                                                         Page 10


12.      MINORITY PROTECTIONS

         Notwithstanding anything to the contrary contained in this agreement or
         the memorandum  and articles of association of the Company,  a majority
         shareholder  vote shall consist of at least 55% (fifty five percent) of
         the  Company's  total  issued  share  capital to be  considered a valid
         majority.  Any shareholder vote consisting of less than 55% (fifty five
         percent)  of  the  Company's   total  issued  share  capital  shall  be
         considered a minority.


EARNINGS AND LOSSES
-------------------


13.      EARNINGS AND LOSSES

         13.1     SPAR and Friedshelf shall, subject to 13.2 below, share in the
                  net  earnings  or  losses  of the  Company  based  upon  their
                  respective ownership.

         13.2     Notwithstanding  13.1 above,  for the first three years of the
                  Company's  operation  after the  effective  date (the "Maximum
                  Loss  Period"),  if in any year during the Maximum Loss Period
                  the net loss of the Company exceeds R2 200 000,00 (two million
                  two  hundred   thousand  Rand)  (the  Annual  Maximum  Loss"),
                  Friedshelf,  O'Brien and Mason jointly and severally undertake
                  to make a cash  payment to the Company  equal to the amount of
                  the  Company's  net loss in excess of the Annual  Maximum Loss
                  (the  "Annual  Maximum  Loss  Payment"),   provided  that,  in
                  calculating  the Annual Maximum Loss for the first 12 (twelve)
                  month  period  during the  Maximum  Loss  Period,  the parties
                  shall, in calculating  whether the Company's loss is in excess
                  of the  Annual  Maximum  Loss,  allow up to the amount of R500
                  000,00 (five  hundred  thousand  Rand) to be excluded from the
                  calculation  of any Annual  Maximum Loss which the Company may
                  incur, provided that Friedshelf can reasonably  demonstrate to
                  SPAR  that  such  amount of up to R500  000,00  (five  hundred
                  thousand  Rand)  represents  start-up  costs  incurred  by the
                  Company in  establishing  and setting up the new joint venture
                  business.  For the  avoidance of doubt,  the allowance of R500
                  000,00 (five hundred thousand Rand) in respect of the start-up
                  costs of the Company  shall only apply in respect of the first
                  12  (twelve)  months  following  the  effective  date  and not
                  thereafter.

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                                                                         Page 11

         13.3     Any  payment  pursuant  to  clause  13.2  shall  increase  the
                  shareholders' equity in the Company.

         13.4     The Annual  Maximum Loss Payment  shall be paid by  Friedshelf
                  and/or   O'Brien   and/or  Mason  to  the  Company  within  45
                  (forty-five)  days after the issue of the annual  audit report
                  by the Company's auditors.

         13.5     Given that the  effective  date of this  agreement  is 1 April
                  2004,  the Annual  Maximum  Loss  Payment  calculated  for the
                  period  ending  December  31,  2004  will be  calculated  on a
                  nine-month  period,  being the 9 (nine)  month period from the
                  effective date to 31 December 2004.

         13.6     If any Annual  Maximum  Loss Payment  calculation  is for less
                  than a 12 month  period,  the  Annual  Maximum  Loss  shall be
                  reduced  by  an  amount  equal  to  the  Annual  Maximum  Loss
                  multiplied  by the  product of the  remainder  of 12 minus the
                  number  of  months  included  in the  calculation  divided  by
                  twelve.

         13.7     It is the  intention  of the  parties  that the  Maximum  Loss
                  Period  shall  continue for a period of 36 (thirty six) months
                  commencing on the effective  date.  Therefore,  a short-period
                  Annual  Maximum Loss Payment will be calculated for the period
                  of 1 January 2007 through 31 March 2007.

         13.8     If the effective  date of this agreement is later than 1 April
                  2004, the period on which the short-period Annual Maximum Loss
                  Payment is  calculated  shall be  adjusted so that the Maximum
                  Loss Period shall equal 36 (thirty six) months.


14.      CAPITAL CONTRIBUTIONS

         Capital contributions  necessary for the working capital of the Company
         will be made as to 51% (fifty one percent) by SPAR and as to 49% (forty
         nine percent) by Friedshelf.


BOARD OF DIRECTORS AND OFFICERS
-------------------------------


15.      DIRECTORS

         15.1     The overall supervision, control and management of the affairs
                  of the  Company  shall be  vested  in the  board  who shall be
                  entitled to delegate the

<PAGE>
                                                                         Page 12


                  day-to-day  running  and  management  of the  business  of the
                  Company to officers nominated by the board.

         15.2     Friedshelf  and SPAR shall each be  entitled  but shall not be
                  obliged to appoint  two  directors  to the board and to remove
                  any such  director or to replace any such  director  who is so
                  removed or who ceases for any other reason to be a director of
                  the Company.

         15.3     Each  director  shall be appointed  for an initial term of one
                  year and shall on the expiry of the initial period be entitled
                  to stand for re-election.

         15.4     The   shareholders   may  appoint   additional   non-executive
                  directors  to the  board to add  value  and  expertise  to the
                  Company  at a fee to be  agreed  between  the  board  and such
                  non-executive directors.

         15.5     Each director  shall be entitled,  in writing,  to appoint any
                  other  director as his  alternate  at any meeting of directors
                  and such  alternate  shall be entitled to exercise the vote of
                  the  director  whom  he  represents  in  accordance  with  the
                  instructions  of such  director or in the  absence  thereof in
                  such manner that the  alternate  deems fit, in addition to the
                  vote which he may exercise in his capacity as director.

         15.6     Any appointment  and/or removal and/or replacement in terms of
                  this clause  shall be made by written  notice to the  Company,
                  signed by the  shareholder  exercising such right and shall be
                  operative  as soon as such  written  notice is received at the
                  registered offices of the Company.

         15.7     The quorum  necessary for the  transacting  of business of the
                  board shall be at least 3 (three) directors.

         15.8     If a  quorum  is not  present  at a  directors'  meeting,  the
                  chairman  of the meeting  shall  postpone  such  meeting for a
                  period of 7 (seven) days and notice of such postponed  meeting
                  including the date,  time and place of such postponed  meeting
                  shall be sent to the  directors in terms of the  provisions of
                  this agreement.

         15.9     If a quorum is not present at a postponed  meeting as referred
                  to in clause 15.8 and after proper notice has been given,  any
                  directors' resolution to be taken at such meeting shall:

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                                                                         Page 13


                  15.9.1   fall away and be of no effect; and

                  15.9.2   be referred to a shareholders' meeting to be convened
                           for that purpose  within 14  (fourteen)  days of such
                           postponed meeting.

         15.10    The Company undertakes to procure that:-

                  15.10.1  at least 7 (seven) days' prior  written  notice shall
                           be given to the directors of any directors'  meetings
                           provided that the directors may unanimously  agree to
                           reduce this period or waive the  requirement  for any
                           particular meeting;

                  15.10.2  at  least  7  (seven)  days  before  any   directors'
                           meeting, the agenda of the matters to be discussed at
                           such directors' meeting is given to the directors. If
                           the agenda for the meeting is not given  timeously to
                           the  directors,  no  meeting  shall be held until the
                           agenda is given  timeously to the  directors,  unless
                           the directors unanimously agree otherwise.

         15.11    The following provisions shall apply to voting by directors:

                  15.11.1  each director  shall have 1 (one) vote on all matters
                           submitted to the board;

                  15.11.2  the  affirmative  vote of the  majority of  directors
                           shall be required to approve any proposed  resolution
                           which   shall   include,   but  not  be  limited  to,
                           resolutions relating to the following matters;;

                           15.11.2.1    any  amendment  or  modification  to the
                                        articles of association;

                           15.11.2.2    any   increase   or   decrease   in  the
                                        authorised   share  capital  or  paid-in
                                        capital of the company;

                           15.11.2.3    any  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 contemplated in clause 26;

                           15.11.2.4    any issuance of debentures;

<PAGE>
                                                                         Page 14

                           15.11.2.5    any change in number or length of tenure
                                        of directors;

                           15.11.2.6    the establishment or the acquisition and
                                        purchase  of  other  businesses,  either
                                        directly  or   indirectly  by  means  of
                                        purchasing  shares  in or  assets of the
                                        company  to  which  such   business  may
                                        belong;

                           15.11.2.7    any change in the main  business  of the
                                        company;

                           15.11.2.8    any  disposal  of  the  business  or the
                                        assets  of the  Company  (in the case of
                                        assets, otherwise than for full value in
                                        the  normal  course of  business  of the
                                        Company);

                           15.11.2.9    the   appointment  of  or  dismissal  of
                                        senior executives of the Company;

                           15.11.2.10   any matter  relating to the financing or
                                        capital  of  borrowings  of the  Company
                                        which  would have the effect of directly
                                        or indirectly reducing the proportionate
                                        shareholding  of any  shareholder in the
                                        Company;

                           15.11.2.11   the  payment  of  any  dividend  by  the
                                        Company;

                           15.11.2.12   the issue or  giving of any  guarantees,
                                        suretyships, letters of comfort or other
                                        similar   undertakings   of  any  nature
                                        whatsoever;

                           15.11.2.13   the pledging, mortgaging,  hypothecating
                                        or  encumbering  of  any  assets  of the
                                        company in any manner whatsoever;

                           15.11.2.14   the   borrowing  of  any  money  or  the
                                        incurring of any debt  otherwise than in
                                        accordance with the annual budget;

                           15.11.2.15   any capital expenditure in excess of the
                                        annual budget from time to time;

<PAGE>
                                                                         Page 15

                           15.11.2.16   any change in the basis of accounting or
                                        accounting   policies  from  those  used
                                        during   the    immediately    preceding
                                        financial   year   otherwise   than   in
                                        accordance   with   Generally   Accepted
                                        Accounting Practice;

                           15.11.2.17   the purchase,  sale, hiring,  letting or
                                        sub-letting  of any  immovable  property
                                        otherwise  than in  accordance  with the
                                        Company's annual budget;

                           15.11.2.18   any  agreement  between  the company and
                                        any   shareholder   or  any   associated
                                        Company of any shareholder;

                           15.11.2.19   the  determination  of the  scope of any
                                        director's   or  group   of   directors'
                                        authority  and  the  delegation  of  any
                                        powers    including    the    power   to
                                        re-delegate;

                           15.11.2.20   any decision not to insure (or to insure
                                        for a lesser amount)  against such risks
                                        as may be  recommended  by the Company's
                                        insurance brokers;

                           15.11.2.21   any  termination  of or amendment to the
                                        Company's   retirement  or  medical  aid
                                        funding (if any);

                           15.11.2.22   the   delegation  of  the  functions  or
                                        actions referred to above in this clause
                                        15 to any one  director or  committee of
                                        directors   or  any   other   person  or
                                        persons;

                           15.11.2.23   any  proposal to the general  meeting of
                                        shareholders  or  action by the board of
                                        directors for the matters as provided in
                                        clause 15 hereof;

                           15.11.2.24   any  investment  or  commitment  of  the
                                        Company  in  amounts   individually   in
                                        excess of R150 000.00  (one  hundred and
                                        fifty thousand Rand) or in the aggregate
                                        in excess  of R250 000 .00 (two  hundred
                                        and fifty thousand Rand).

<PAGE>
                                                                         Page 16

                           15.11.2.25   any loan or credit  taken by the Company
                                        otherwise than in the ordinary course of
                                        business  or in  excess  of R150  000.00
                                        (one hundred and fifty thousand Rand);

                           15.11.2.26   execution,  amendment or  termination of
                                        agreements    or    commitments     with
                                        Friedshelf,  SPAR or their  subsidiaries
                                        or affiliates;

                           15.11.2.27   adoption  or  amendment  of  the  annual
                                        budgets  and  business  plan  subject to
                                        consequent approval by the shareholder's
                                        general meeting;

                           15.11.2.28   adoption or any material modification of
                                        major    regulations    or   procedures,
                                        including   any   employee    rules   or
                                        handbook;

                           15.11.2.29   initiating  or settling any  litigation,
                                        arbitration   or  other  formal  dispute
                                        settlement  procedures or forgiveness of
                                        any  obligation  owed to the  Company in
                                        excess of R150 000.00  (one  hundred and
                                        fifty thousand Rand);

                           15.11.2.30   approval   of   the   Company's   annual
                                        financial statements and changing of the
                                        Company's    accounting   policies   and
                                        practices;

                           15.11.2.31   establishment   or   amendment   to  the
                                        conditions    of   employment   of   the
                                        Company's officers;

                           15.11.2.32   the  formation of any  subsidiary of the
                                        Company,   entry  into  (or   subsequent
                                        termination   of)  any  joint   venture,
                                        partnership or similar agreements;

                           15.11.2.33   entering  into,  amending or terminating
                                        any contract  with/or  commitment to any
                                        director or shareholder; and

                           15.11.2.34   entering    into   any    agreement   or
                                        commitment  to provide goods or services
                                        outside the territory;

<PAGE>
                                                                         Page 17

                  15.11.3  should  the  board  be  unable  to  pass  or  reach a
                           decision on any resolution  then that resolution will
                           be deemed to  constitute  a deadlock.  Such  deadlock
                           between  the  directors  will not afford a ground for
                           the  winding-up  of  the  Company  but  will,  at the
                           request  of any  director,  then  be  dealt  with  in
                           accordance   with  the   provisions   of   clause  20
                           (Deadlock);

                  15.11.4  the   directors'   remuneration   and  fees  will  be
                           determined from time to time by the  shareholders and
                           shall constitute  market-related  packages taking all
                           relevant factors into consideration provided that any
                           director who is employed by the Company  shall not be
                           entitled  to  additional  remuneration  for holding a
                           board position.

         15.12    The  shareholders  may appoint the chairman of the board,  who
                  shall have  neither a second nor casting  vote at any board or
                  shareholders' meeting.

         15.13    The board hereby appoints Brian Mason as its managing director
                  to manage the day-to-day business of the Company.

         15.14    Meetings of the board will be held at least quarterly provided
                  that any director shall by written notice,  accompanied by the
                  full agenda for the meeting, to the Company (at its registered
                  office) and to all of the  directors,  have the right,  at any
                  time, to convene a meeting of the board.

         15.15    A resolution of the directors of the Company signed by all the
                  directors of the Company shall be valid and effective as if it
                  had been adopted at a duly convened meeting of directors.  Any
                  such resolution may consist of several documents in like form,
                  each signed by one or more of such directors.

         15.16    Directors  of the  Company may  participate  in and act at any
                  board  meeting  through the use of a  conference  telephone or
                  other  communication  equipment  by means of which all persons
                  participating  in  the  meeting  can  hear  each  other.  Such
                  participation  shall  constitute  attendance  and  presence in
                  person  at  the   meetings   by  the   person  or  persons  so
                  participating.

         15.17    The  directors  shall  be  entitled  to be  reimbursed  by the
                  Company  in  respect  of all  reasonable  costs  and  expenses
                  properly  incurred  by them in  respect  of the  exercise  and
                  performance  of their  duties  provided  that the  appropriate

<PAGE>
                                                                         Page 18

                  documentation in substantiation  thereof shall be submitted to
                  the Company upon request.

         15.18    A written record of all meetings of the board of directors and
                  all  decisions  made  by it  shall  be  made  as  promptly  as
                  practicable  after each  meeting of the board of  directors by
                  any  director  nominated  by the  board  or any  other  person
                  nominated  by the board and such  record  shall be kept by the
                  company and signed by each of the directors.


16.      ACCOUNTING PERIOD

         Each  accounting  period  of the  Company  shall end on the 31st day of
         December in each year.


17.      AUDITORS

         17.1     Notwithstanding  anything to the  contrary  contained  in this
                  agreement or in the Company's  articles of  association,  SPAR
                  shall  have the  sole and  absolute  discretion  and  right to
                  nominate  and vary the  auditors of the  Company.  The initial
                  appointee shall be Ernst & Young.

         17.2     Notwithstanding  clause 17.1 above, any shareholder shall have
                  the right,  at its own  expense,  to  appoint  an  independent
                  auditor  to  conduct  a  review  of  the  Company's  financial
                  position  for any purpose  contemplated  in this  agreement or
                  otherwise and the parties shall afford such auditor reasonable
                  access to the Company's accounting books and records.


18.      INSPECTION OF ACCOUNTING RECORDS AND BOOKS

         18.1     The Company  shall  arrange an annual audit on the  accounting
                  records  and books and shall  submit a report of such audit to
                  each  shareholder  within thirty (30) days from the completion
                  of the audit.

         18.2     The auditors of the Company shall be appointed  from a list of
                  the top five South African  accounting  firms. Such accounting
                  firm  shall  audit  the  accounting  records  and books of the
                  Company   and  any  other   matters   relating,   directly  or
                  indirectly,  to the  financial  condition of the Company.  The
                  auditors'

<PAGE>
                                                                         Page 19

                  fee for the  inspection  and audit  mentioned  above  shall be
                  borne by the Company.


         18.3     The Company  shall keep true and accurate  accounting  records
                  and books with regard to all of its  operations  in accordance
                  with generally  accepted  accounting  principals  consistently
                  applied ("GAAP") in the territory.  All accounting records and
                  books shall be kept ready for  inspection by the  shareholders
                  or by their authorized  representative.  If requested by SPAR,
                  the Company shall  co-operate  with respect to each  financial
                  period to provide  such  information  as  required  by SPAR to
                  reconcile the Company's  financial  statements  with U.S. GAAP
                  reporting requirements of SPAR.


19.      INCREASE OF CAPITAL

         If at any time after its  formation,  the Company  increases  its share
         capital,  Friedshelf  and SPAR  shall have a  pre-emptive  right to new
         shares to be issued for such capital  increase in  proportion  to their
         respective shareholding in the Company.


20.      DEADLOCK

         20.1     Should:

                  20.1.1   there be any  deadlock  at any  meeting of  directors
                           and/or at any general meeting of the Company; or

                  20.1.2   a quorum at any  meeting of  directors  and/or at any
                           general meeting of the Company be broken;

                  then in such event the parties  shall attempt to resolve these
                  issues by  mediation  as soon as  possible  and  failing  such
                  resolution  within 21 (twenty one)  business days after having
                  been referred to mediation,  any director or  shareholder  (as
                  the case may be) shall be  entitled  by written  notice to the
                  Company  to claim  that all or any of the  matters  which were
                  under discussion  and/or were to be discussed at that meeting,
                  be submitted to and decided by  arbitration in terms of clause
                  32.

         20.2     Notwithstanding  that a deadlock  may have  arisen in terms of
                  clause 20.1, such deadlock shall not alone constitute a ground
                  for any  shareholder  to apply to court for the  winding up of
                  the Company.

<PAGE>
                                                                         Page 20


TRANSFER OF SHARES
------------------


21.      RESTRICTIONS ON TRANSFER OF SHARES

         Except as provided in clause 22 hereof, no shareholder  shall,  without
         the prior  written  consent  of the other  shareholder,  assign,  sell,
         transfer,  pledge, mortgage, or otherwise dispose of all or any part of
         its shares  (including  its right to  subscribe  to new  shares) in the
         Company to any third party.


22.      PRE-EMPTIVE RIGHT AND OPTION

         22.1     After  three  (3)  years  from  the  effective  date  of  this
                  agreement, if either party hereto (hereinafter called "selling
                  party")  wishes to  transfer  and sell all but not part of its
                  shares in the Company,  the selling party shall furnish to the
                  other party (hereinafter  called "recipient") a written notice
                  of the proposed  purchaser,  the offer  purchase price for the
                  shares  and any other  material  terms and  conditions  of the
                  proposed sale.

         22.2     The recipient  shall have the right to purchase such shares by
                  giving the selling  party  written  notice of its intention to
                  purchase  the same  within  ninety  (90) days from the date of
                  receipt by the recipient of the selling party's  notice,  upon
                  the same terms and  conditions  as  described  in the  selling
                  party's notice.

         22.3     In the event that the recipient elects to purchase the selling
                  party's  shares within the 90 (ninety) day period  referred to
                  in clause 22.2, the recipient shall be obliged to complete the
                  sale and purchase of the shares  within 14 (fourteen  days (or
                  such  further  period  of time as may be  agreed  between  the
                  selling  party and the  recipient)  of receipt by the  selling
                  party of the  recipient's  notice of its intention to purchase
                  the shares, failing which, the selling party shall be entitled
                  to sell the shares at the same price and on the same terms and
                  conditions as described in the selling party's notice given in
                  terms of clause 22.1.

         22.4     The  selling  party may sell such shares at the same price and
                  on the same terms and  conditions  as  described in its notice
                  after  ninety  (90)  days have  elapsed  after the date of the
                  recipient's  receipt of such notice unless the recipient gives
                  a notice to the selling  party of its intention to acquire the
                  selling party's shares.

<PAGE>
                                                                         Page 21

         22.5     Any  person to whom  shares  in the  Company  are  transferred
                  pursuant to this clause 22 shall be bound by the terms of this
                  agreement.

         22.6     Three (3) years after the  effective  date of this  agreement,
                  either  party (the  "offeror")  may at any time make a written
                  offer (which shall specify the price offered per share) to buy
                  all of the  other  party's  (the  "recipient")  shares  in the
                  Company. The recipient shall then, either accept the offer and
                  sell all of its shares under the terms and  conditions  of the
                  offer, or purchase the offeror's  shares at the same price and
                  on the same terms and  conditions as stipulated in the written
                  offer.

         22.7     If the  recipient  does not  respond in writing to the initial
                  offer  within 120 (one  hundred and twenty) days of receipt of
                  the  written  offer,  the  recipient  shall be  deemed to have
                  accepted the offer to sell its shares to the offeror.

         22.8     The  parties  shall  co-operate  to effect the closing of such
                  purchase  and sale of the  shares  held by the  selling  party
                  within 14  (fourteen)  days of the elapse of the period of 120
                  (one  hundred  and  twenty)  days  referred  to above (or such
                  further period as may be agreed between the parties).

         22.9     At such closing, the purchasing party shall pay to the selling
                  party the purchase  price in cash, and the selling party shall
                  deliver   to   the   purchasing   party   share   certificates
                  representing  all of the  selling  party's  shares held in the
                  Company, free and clear of any liens and encumbrances.

         22.10    For the avoidance of doubt,  neither SPAR nor Friedshelf shall
                  have the right to sell, cede,  alienate or in any way transfer
                  any of its  shares  in the  Company  for a period of 3 (three)
                  years from the effective date.

         22.11    For the purposes of this  agreement,  an offer shall be deemed
                  to be received at the following times:

                  22.11.1  if delivered by hand during the normal business hours
                           of the addressee at the  addressee's  domicilium  for
                           the  time  being,  it shall be  presumed,  until  the
                           contrary  is  proved,  to have been  received  by the
                           addressee at the time of delivery; or

                  22.11.2  if given by telex or by facsimile, it shall be deemed
                           (in the  absence  of proof to the  contrary)  to have
                           been  received  within  24  (twenty

<PAGE>
                                                                         Page 22

                           four) hours of  transmission  where it is transmitted
                           during  normal   business   hours  of  the  receiving
                           instrument  and  within  48  (forty  eight)  hours of
                           transmission  where it is  transmitted  outside those
                           business hours.


23.      CO-OPERATION IN FINANCING

         23.1     SPAR and  Friedshelf  shall  agree  on an  initial  amount  of
                  working  capital  for the  Company  and will  provide  working
                  capital loans to the Company on the same terms.

         23.2     SPAR will  provide a loan equal to 51% (fifty one  percent) of
                  the Company's  necessary  working  capital and Friedshelf will
                  provide  a loan  equal  to 49%  (forty  nine  percent)  of the
                  Company's necessary working capital.

         23.3     The  interest  rate of the  shareholder  loans shall equal the
                  "prime  rate".  For the purposes of clause 23.3,  "prime rate"
                  means  the  rate of  interest  per  annum  which  is  equal to
                  Standard  Bank  Limited's  published  minimum  lending rate of
                  interest per annum, compounded monthly in arrears,  charged by
                  such bank on the unsecured  overdrawn  current accounts of its
                  most  favoured  corporate  clients in the private  sector from
                  time to time.  (In the case of a  dispute  as to the  rates so
                  payable,  the  rate  shall  be  certified  by any  manager  or
                  assistant  manager  of any  branch  of the  said  bank,  whose
                  decision shall be final and binding on the parties).

         23.4     Any future working  capital loans will be provided on the same
                  basis.


ROLE OF CONTRACTING PARTIES
---------------------------


24.      BUSINESS AND SOFTWARE SUPPORT

         24.1     SPAR shall for the first  three (3) years  provide up to 3 000
                  (three thousand) hours of business support in aggregate.  This
                  support may be in the form of general  business,  consultation
                  or programming  support to modify or enhance the merchandising
                  software. SPAR will maintain ownership of all software.

         24.2     If support  provided  by SPAR  exceeds 3 000 (three  thousand)
                  hours the additional  hours will billed by SPAR to the Company
                  at fifty five USD  ($55.00)

<PAGE>
                                                                         Page 23

                  per  hour.   However  a  lower   price  will  be  charged  for
                  programming  costs if a less expensive way to hire IT staff is
                  found.

         24.3     The  Company  will  be  able  to  hire  its  own IT  staff  as
                  appropriate.


25.      NON-COMPETITION

         25.1     For the  duration of this  agreement,  SPAR,  Friedshelf,  the
                  Meridian  Entities,  Mason and  O'Brien  and their  affiliates
                  undertake  to each other that they will not  without the prior
                  consent of the others of them,  engage in, whether directly or
                  indirectly,  merchandising services (as defined in the license
                  agreement) in Southern  Equatorial  Africa,  including but not
                  limited  to  Angola,  Zambia,  Zimbabwe,  Malawi,  Mozambique,
                  Namibia,   Botswana,   Lesotho,   Swaziland,   South   Africa,
                  Madagascar,  Mauritius and the Seychelles (the "territory" for
                  the  purposes  of this clause 25) or any other  business  then
                  competitive  with the Company in the territory,  provided that
                  if the  Company  shall  during any 12  (twelve)  month  period
                  commencing 1 December  2005,  generate  less than US$50 000,00
                  (fifty  thousand US dollars) in revenue in any financial  year
                  in any of the countries  comprising the  territory,  then SPAR
                  shall no longer be bound by the non-compete provisions set out
                  in this  clause  25  insofar  as such  non-compete  provisions
                  relate to the country in which  revenue has fallen below US$50
                  000,00 (fifty thousand US dollars) in any year.

         25.2     Notwithstanding  clause  25.1  above,  in the event  that SPAR
                  enters into an agreement with a customer that covers more than
                  one country and the scope of such agreement  includes services
                  in the territory,  SPAR shall not be prohibited  from entering
                  into or performing such agreement, provided that SPAR shall be
                  obliged to notify the Company of such agreement(s)  (including
                  global  agreements)  and the  SPAR  shall  use all  reasonable
                  endeavours  to procure  that the  Company has a right of first
                  refusal to enter into and perform such agreement(s).

         25.3     In the event that the Company elects to enter into and perform
                  such agreement(s) it shall, within 3 (three) days of receiving
                  such  notification  from SPAR,  notify  SPAR in writing of its
                  intention to enter into and perform such  agreement(s)  on the
                  terms and conditions offered to SPAR.


<PAGE>
                                                                         Page 24


         25.4     In the event that the Company  fails within such 3 (three) day
                  period  to  notify  SPAR of its  election  or,  alternatively,
                  elects not to enter into and perform  such  agreement(s),  the
                  Company   shall  be  deemed  to  have  waived  its  rights  to
                  participate in such agreement(s) and SPAR shall be entitled to
                  enter into and perform such  agreement(s) for its own benefit,
                  provided  that it shall not be on terms  (whether as to price,
                  conditions  or  any  other  material  factor)  which  is  more
                  advantageous than that offered to the Company.

         25.5     It is recorded  that Mason and O'Brien are members in Prestige
                  Retail Services CC ("PRS"), a close corporation which provides
                  services to Spar Group Limited  ("SGL").  It is hereby agreed,
                  subject  to 25.7  below,  that such  interest  in PRS will not
                  constitute   a  breach  of  the   non-competition   provisions
                  contained in this clause 25.

         25.6     Mason, O'Brien, the Meridian Entities and Friedshelf undertake
                  to SPAR and to the  Company  that they will  procure  that the
                  client  base of PRS will not be  extended  beyond  the  single
                  existing client of SGL.

         25.7     The Meridian Entities,  Friedshelf,  Mason and O'Brien warrant
                  and represent to the Company and to SPAR that:

                  25.7.1   the only customer or client of PRS is SGL;

                  25.7.2   the annual nett  profit of PRS before  taxes will not
                           exceed R500 000.00 (five hundred thousand Rand);

                  25.7.3   Mason and O'Brien  will not  together,  in any single
                           week,  commit or spend in excess of 5 (five) hours of
                           their  combined time during  normal  working hours in
                           relation to the business of PRS; and

                  25.7.4   the rendering of services by Mason and O'Brien to PRS
                           will not  materially  adversely  interfere  or affect
                           their  ability to fully and  properly  perform  their
                           obligations  to the Company  pursuant to the terms of
                           the consultancy agreement.

         25.8     In the event that SGL agrees, the Company shall be entitled to
                  acquire  the  members'  interest  or  business  of PRS,  for a
                  nominal amount of R100.00 (one hundred Rand).

<PAGE>
                                                                         Page 25


AMENDMENT FOR PUBLIC OFFERING
-----------------------------


26.      PUBLIC OFFERING

         The  shareholders  acknowledge that the Company may attempt to become a
         listed  company  or  over-the-counter  company on the  territory  Stock
         Exchange or any other stock  exchange or public market in the territory
         (public offering).  The shareholders acknowledge that conversion of the
         Company type and structure,  the number of issued shares, the number of
         shareholders,  the  paid-up  capital and profit  transaction  with each
         shareholder  will be  reviewed  and  instructed  for  amendment  by the
         relevant  governmental  or regulatory  authorities  in accordance  with
         those  bodies'  rules  or  guidelines  for  public  offering.   If  the
         shareholders  agree to undertake a public offering,  they shall discuss
         and  reasonably  co-operate  with each other to amend the  articles  of
         association  and/or the  license  agreement  in order to  complete  the
         public  offering of the Company.  Any changes to the license  agreement
         (annexed hereto as annexure "A") will be effective upon consummation of
         the public  offering  (but not before),  and subject to the approval of
         the boards of directors of the Company, Friedshelf and SPAR.


CONFIDENTIALITY
---------------


27.      CONFIDENTIAL INFORMATION

           Friedshelf  and SPAR shall for the duration of this  agreement,  keep
           secret  and  retain in  strict  confidence  any and all  confidential
           information  and use it only for the  purpose of this  agreement  and
           shall not  disclose  it to a third party  without  the prior  written
           consent of the other party unless the receiving party can demonstrate
           that such  information:  (i) has become public other than as a result
           of  disclosure  by the  receiving  party,  (ii) was  available to the
           receiving party prior to the disclosure by the disclosing  party with
           the right to disclose,  or (iii) has been  independently  acquired or
           developed by the receiving party.





<PAGE>
                                                                         Page 26



GENERAL PROVISIONS
------------------


28.      TERMINATION

         28.1     If either  shareholder  transfers its shares in the Company to
                  the other party  hereto in  accordance  with clause 22 hereof,
                  this agreement shall terminate.

         28.2     If either  shareholder  transfers its shares in the Company to
                  another party, unless expressly agreed by the non-transferring
                  party in  writing,  this  agreement  shall be  assigned to and
                  binding upon such third  party,  provided  that the  assigning
                  shareholder  shall  remain  liable  for all  legal  acts  with
                  respect to this agreement or the Company which occurred before
                  the effective date of such assignment.

         28.3     If any shareholder  breaches a material term of this agreement
                  and fails to remedy  such  breach  within  ninety (90) days of
                  written notice being given to such shareholder the shareholder
                  not in  breach  shall be  entitled  to cancel  this  agreement
                  without  prejudice to any other rights or remedies  which such
                  shareholder may have.

         28.4     Either  shareholder  may  terminate  this  agreement by giving
                  notice in the event of one or more of the following:

                  28.4.1   appointment  of a trustee or receiver  for all or any
                           part of the assets of the other party;

                  28.4.2   insolvency or bankruptcy of the other party;

                  28.4.3   assignment  of the  other  party for the  benefit  of
                           creditor;

                  28.4.4   attachment of the assets of the other party;

                  28.4.5   expropriation  of the business or assets of the other
                           party; and

                  28.4.6   dissolution or liquidation of the other shareholder.

                  If  either  shareholder  is  involved  in any  of  the  events
                  enumerated  in  28.4.1   through   28.4.6   above,   it  shall
                  immediately  notify the other shareholder of the occurrence of
                  such event.

<PAGE>
                                                                         Page 27



         28.5     In the event of the termination of this agreement  pursuant to
                  clause 28.3 or clause 28.4,  the  shareholder  terminating  in
                  accordance  with  this  agreement  shall  have  an  option  to
                  purchase the shares of the other shareholder at the book value
                  to be decided by an internationally recognized accounting firm
                  that  is  not  the   principal   accounting   firm  of  either
                  shareholder or to have the Company dissolved.

         28.6     Upon  termination  of this agreement or SPAR's ceasing to hold
                  at least 51% (fifty one percent) of the shares in the Company,
                  the license agreement shall terminate  immediately if still in
                  effect, unless otherwise agreed by the shareholders.


29.      FORCE MAJEURE

         Neither  shareholder  shall be  liable  to the  other  shareholder  for
         failure or delay in the  performance  of any of its  obligations  under
         this  agreement for the time and to the extent such failure or delay is
         caused by riots, civil commotions,  wars,  hostilities between nations,
         governmental  laws,  orders or regulations,  embargoes,  actions by the
         government  or  any  agency  thereof,   acts  of  God,  storms,  fires,
         accidents,   strikes,   sabotages,   explosions,   or   other   similar
         contingencies beyond the reasonable control of the respective parties.


30.      NOTICES

         30.1     The parties hereby choose domicilia  citandi et executandi for
                  all purposes under this agreement at the following  respective
                  addresses:

                  Meridian:     No.16 Ennisdale Drive,  Durban North, 4051, Kwa-
                                Zulu Natal, South Africa;

                  SPAR:         SPAR Group, Inc. Attention: Mr. Robert G. Brown,
                                Chairman  580  White Plains Road, Tarrytown, NY,
                                USA 10591;

                  Friedshelf:   No.16 Ennisdale Drive, Durban North, 4051, Kwa-
                                Zulu Natal, South Africa, contact: Brian Mason.

         30.2     Each of the parties  shall be entitled  from time to time,  by
                  written  notice  to the  other to vary its  domicilium  to any
                  other address which is not a post office box or post restante.

<PAGE>
                                                                         Page 28

         30.3     Any notice given and any payment made by a party to any of the
                  others (the "addressee") which:

                  30.3.1   is delivered by hand during the normal business hours
                           of the addressee at the  addressee's  domicilium  for
                           the time being shall be presumed, unless the contrary
                           is proved by the addressee,  to have been received by
                           the addressee at the time of delivery;

                  30.3.2   is posted by prepaid registered post to the addressee
                           at the  addressee's  domicilium  for the  time  being
                           shall be  presumed,  unless the contrary is proved by
                           the addressee, to have been received by the addressee
                           on the seventh day after the date of posting.

         30.4     Where,  in  terms  of  this  agreement  any  communication  is
                  required to be in writing,  the term  "writing"  shall include
                  communications  by telex and/or  facsimile.  Communications by
                  telex and/or facsimile shall, unless the contrary is proved by
                  the  addressee,  be  deemed  to  have  been  received  by  the
                  addressee   24  (twenty   four)   hours   after  the  time  of
                  transmission.


31.      ASSIGNMENT

         This agreement and the rights and obligations hereunder are personal to
         the parties hereto,  and shall not be assigned by either of the parties
         to any third.


32.      ARBITRATION

         All disputes, controversies, or differences which may arise between the
         parties  hereto,  out of or in relation to or in  connection  with this
         agreement,  or arising out of deadlock  referred to in clause 21, shall
         be finally  settled by arbitration in the territory in accordance  with
         the rules of the  Arbitration  Foundation of Southern  Africa  ("AFSA")
         except  where  provided  otherwise  in  this  agreement.  Prior  to any
         dispute,  difference or agreement  being  referred to  arbitration  the
         parties shall seek to resolve the matter as follows:

         32.1     The matter shall be referred to the chief  executives  of each
                  party for  consideration  but if they are not able to  resolve
                  the  matter   within   ninety  (90)  days   provisions  as  to
                  arbitration shall take effect.

<PAGE>
                                                                         Page 29

         32.2     The arbitration shall be conducted by three (3) arbitrators in
                  English in  accordance  with AFSA and the laws of South Africa
                  shall be applied  to the  dispute.  In case of a dispute  each
                  party shall appoint one arbitrator. The party having appointed
                  its  arbitrator  shall give  notice to the other party of such
                  appointment  upon  which the other  party  shall  appoint  its
                  arbitrator within 7 days of notice. The third arbitrator shall
                  be  chosen by the two  arbitrators  appointed  by the  parties
                  within 7 days of their  appointment.  In case the  arbitrators
                  cannot  agree on the third  arbitrator  the  third  arbitrator
                  shall be appointed by AFSA. The arbitrators shall conclude the
                  dispute  within 6 months  upon  their  first  gathering.  Such
                  period can only be extended by mutual written agreement of the
                  parties.  The decision of the  arbitrators  shall be final and
                  legally binding upon both parties


33.      IMPLEMENTATION

         The shareholders hereby agree, for themselves,  their successors, heirs
         and legal  representatives,  to vote at shareholders'  meetings, and to
         cause the  directors  they  nominate to vote at board  meetings  and to
         carry out their duties, to prepare,  execute and deliver or cause to be
         prepared,   executed  and  delivered  such  further   instruments   and
         documents,  to take such other  actions  and to cause the  articles  of
         association  of  the  Company  to be  amended  or  adopted  as  may  be
         reasonably  required  to  effect  the  provisions  and  intent  of this
         agreement and the transactions contemplated hereby.


34.      GOVERNING LAW

         This agreement  shall be governed by and interpreted in accordance with
         the laws of the Republic of South Africa.


35.      WAIVER

         Any failure of either  party to enforce,  at any time or for any period
         of time, any of the provisions of this agreement shall not be construed
         as a waiver of such provisions or of the right of such party thereafter
         to enforce each and every such provision.


<PAGE>
                                                                         Page 30


36.      JOINT AND SEVERAL

         36.1     Friedshelf, Derek O'Brien and Brian Mason shall be jointly and
                  severally  liable to SPAR for the due  performance  of all the
                  obligations of the Meridian Entities and Friedshelf under this
                  agreement.

         36.2     The said  parties  do hereby  waive the  legal  exceptions  of
                  excussion,  division  and cession of action,  the full meaning
                  whereof they acknowledge themselves to be fully acquainted.


37.      CO-OPERATION AND GOOD FAITH

         37.1     The parties agree, during the currency of this agreement,  not
                  to enter into an agreement  or do anything  which may conflict
                  with  this  agreement  or  be  detrimental  to  its  aims  and
                  objectives or which will  prejudice the business,  development
                  and activities of the parties.

         37.2     Each of the parties  undertakes to display the highest  degree
                  of  good  faith  towards  the  other  parties  in all  matters
                  relating to this  agreement  and  furthermore  undertakes,  in
                  favour of all the other  parties,  to  refrain  from  doing or
                  cause anything to be done,  whatsoever  which may prejudice or
                  harm (whether actually or potentially) the goodwill,  image or
                  business  operations  and acumen of any of the parties to this
                  agreement.  The provisions of this paragraph shall survive the
                  expiry of this agreement, provided however that the provisions
                  thereof  shall  not at any time  preclude  any of the  parties
                  during the currency of this agreement or  thereafter,  to take
                  whatever steps a party may deem  necessary  against a party in
                  breach of the terms and  conditions of this agreement so as to
                  protect the interests of the parties not in default.


38.      ENTIRE AGREEMENT

         This agreement  constitutes  the entire and only agreement  between the
         parties hereto with respect to the subject matter of this agreement and
         supersedes any other commitments, agreements or understandings, written
         or  verbal,  that the  parties  hereto may have had.  No  modification,
         change  and  amendment  of this  agreement  shall be  binding  upon the
         parties  hereto  except  by  mutual  express   consent  in  writing  of
         subsequent date signed by authorized  officer or representative of each
         of the parties hereto.

<PAGE>
                                                                         Page 31



39.      COSTS

         39.1     Subject to 39.2, prior to the effective date, SPAR, Friedshelf
                  and Meridian shall be responsible  for and pay their own costs
                  and expenses  associated with the establishment of the Company
                  (including   all  travel   costs)  and   including  all  costs
                  associated   with  the  negotiation  and  preparation  of  the
                  necessary legal documentation.

         39.2     Each party shall be  responsible  for and shall pay all legal,
                  accounting  and other costs incurred by it in carrying out its
                  due  diligence  investigation  on  any  other  party  to  this
                  transaction.

         39.3     All legal costs  incurred  after the  effective  date shall be
                  paid by the Company.


40.      HEADINGS AND INTERPRETATION

         40.1     The headings of articles and paragraphs used in this agreement
                  are inserted for  convenience  of reference only and shall not
                  affect  the  interpretation  of the  respective  articles  and
                  paragraphs of this agreement.

         40.2     In the event that there is any inconsistency between the terms
                  of this agreement and the Company's  articles of  association,
                  the terms of this agreement shall prevail.


IN WITNESS WHEREOF, the parties hereto have caused this agreement to be executed
in two (2) copies by their respective duly authorized  officer or representative
as of the day first above written.



SIGNED AT          ON THE                 DAY OF                           2004.

AS WITNESSES:
                                                For and on behalf of
1..............................                 FRIEDSHELF 401 (PTY) LTD


2..............................                 /s/ Derek O'Brien
                                                -------------------------------
                                                being duly authorised thereto


<PAGE>
                                                                         Page 32


SIGNED AT          ON THE                 DAY OF                           2004.

AS WITNESSES:
                                                For and on behalf of
1. ............................                 SPAR GROUP INTERNATIONAL INC


2..............................                 /s/ Robert G. Brown
                                                -------------------------------
                                                being duly authorised thereto

SIGNED AT          ON THE                 DAY OF                           2004.


AS WITNESSES:
                                                For and on behalf of
1..............................
                                                SGRP MERIDIAN (PTY) LTD


2..............................                 /s/ Brian Mason
                                                -------------------------------
                                                being duly authorised thereto


SIGNED AT          ON THE                 DAY OF                           2004.

AS WITNESSES:

1...............................                /s/ Derek O'Brien
                                                ------------------------------
                                                DEREK O'BRIEN
2.  ............................


SIGNED AT          ON THE                 DAY OF                           2004.

AS WITNESSES:

1................................               /s/ Brian Mason
                                                ------------------------------
                                                BRIAN MASON
2................................


<PAGE>
                                                                         Page 33


SIGNED AT          ON THE                 DAY OF                           2004.


AS WITNESSES:
                                                For and on behalf of
1................................               SMD MERIDIAN CC


2..............................                 /s/ Brian Mason
                                                -------------------------------
                                                being duly authorised thereto

SIGNED AT          ON THE                 DAY OF                           2004.


AS WITNESSES:
                                                For and on behalf of
1................................               MERIDIAN SALES & MERCHANDISING
                                                (WESTERN CAPE) CC

2..............................                 /s/ Brian Mason
                                                -------------------------------
                                                being duly authorised thereto

SIGNED AT          ON THE                 DAY OF                           2004.


AS WITNESSES:
                                                For and on behalf of
1................................               RETAIL CONSUMER MARKETING CC


2..............................                 /s/ Brian Mason
                                                -------------------------------
                                                being duly authorised thereto


SIGNED AT          ON THE                 DAY OF                           2004.


AS WITNESSES:
                                                For and on behalf of
1................................               MERHOLD HOLDING TRUST


2..............................                 /s/ Brian Mason
                                                -------------------------------
                                                being duly authorised thereto


<PAGE>
                                                                         Page 34




                                                                    ANNEXURE "A"
                                                                    ------------

                          AGREED FORM LICENCE AGREEMENT
                          -----------------------------



<PAGE>
                                                                         Page 35



                                                                    ANNEXURE "B"
                                                                    ------------

                              CONSULTANCY AGREEMENT
                              ---------------------



<PAGE>
                                                                         Page 36



                                                                    ANNEXURE "C"
                                                                    ------------

            30 SEPTEMBER YEAR-END ACCOUNTS FOR THE MERIDIAN ENTITITES
            ---------------------------------------------------------


<PAGE>
                                                                         Page 37



                                                                    ANNEXURE "D"
                                                                    ------------

              MEMORANDUM AND ARTICLES OF ASSOCIATION OF THE COMPANY
              -----------------------------------------------------


<PAGE>
                                                                         Page 38



                                                                    ANNEXURE "E"
                                                                    ------------

            STATUTORY VALUATION IN RELATION TO TRANSFERRING EMPLOYEES
            ---------------------------------------------------------