4.	Credit Facilities and Other Debt

Domestic Credit Facilities

North Mill Capital Credit Facility

April 10, 2019,

the Company repaid and replaced its

2018

credit facility with PNC Bank, National Association ("PNC"), with a new secured revolving credit facility in the United States and Canada (the "NM Credit Facility") with North Mill Capital, LLC ("NM").

In order to obtain, document and govern the NM Credit Facility: SGRP and certain of its direct and indirect subsidiaries in the United States and Canada, namely SPAR Marketing Force ("SMF"), Inc., and SPAR Canada Company ("SCC") (each, a "NM Borrower" and collectively, the "NM Borrowers"), and SPAR Canada, Inc., SPAR Acquisition, Inc., SPAR Assembly and Installation, Inc., and SPAR Trademarks, Inc. (together with SGRP, each a "NM Guarantor" and collectively, the "NM Guarantors), entered into

eighteen

(

) month individual Loan and Security Agreements with NM dated as of

April 10, 2019 (

the "NM Loan Agreements"), which governs the obligations of the NM Loan Parties to NM and secures them with pledges of substantially all of the assets of the NM Loan Parties (other than SGRP's foreign subsidiaries, certain designated domestic subsidiaries, and their respective equity and assets); the SMF Borrower issued its

$10.5

million Revolving Credit Master Promissory Note to NM dated

April 10, 2019,

and the SCC Borrower issued its

$1.5

million Revolving Credit Master Promissory Note to NM dated

April 10, 2019 (

the "NM Notes"), which evidences the NM Borrowers' loans and other obligations to NM; the NM Guarantors entered into a Guaranty Agreement with NM dated as of

April 10, 2019 (

the "NM Guaranty"), which guaranties the NM Borrowers' loans and other obligations to NM. The NM Loan Agreements have an approved maximum borrowing capacity of

$12.5

million for the SMF Borrower and

$2.5

million for the SCC Borrower. As of

June 30, 2019,

the SMF Borrower requested and was granted an increase in its NM Laon Agreement from

$10.5

million to

$12.5

million.

April 10, 2019,

the Company drew down an initial advance under the NM Credit Facility of approximately

$9.8

million, which was used to repay the Company's existing credit facility with PNC.

The NM Note currently requires the NM Borrowers to pay interest on the loans thereunder equal to (A) Prime Rate designated by Wells Fargo Bank, plus (B)

one hundred twenty

five

basis points (

1.25%

). In addition, the Company is paying a fee to NM in the amount of

1.5%

of the Promissory Notes or

$180,000

payable at

$10,000

per month over the term of the agreement. The Company utilized a broker to assist in this financing and has paid a fee of

$120,000

for their services. On

June 30, 2019,

the aggregate interest rate under that formula was

6.75%

per annum, and the outstanding loan balance was

$12.2

million. Outstanding amounts are classified as short-term debt.

Revolving loans are available to the Borrowers under the NM Credit Facility based upon the borrowing base formula defined in the NM Loan Agreement (principally

85%

of "eligible" accounts receivable less certain reserves and

60%

of eligible unbilled accounts receivable at a maximum limit of

$4.5

million).

The NM Credit Facility contains certain financial and other restrictive covenants and also limits certain expenditures by the NM Loan Parties, including, maintaining a positive trailing EBITDA for each Borrower and limits on capital expenditures and other investments.

PNC Credit Facility

In order to obtain, document and govern the PNC Credit Facility: SGRP and certain of its direct and indirect subsidiaries in the United States and Canada, namely SPAR Marketing Force ("SMF"), Inc., SPAR Assembly & Installation, Inc., and SPAR Canada Company (each, a "PNC Borrower" and collectively, the "PNC Borrowers"), and SPAR Canada, Inc., SPAR Acquisition, Inc., SPAR Group International, Inc., and SPAR Trademarks, Inc. (together with SGRP, each a "PNC Guarantor" and collectively, the "PNC Guarantors), entered into a Loan Agreement with PNC dated as of

January 16, 2018 (

the "PNC Loan Agreement"); the PNC Borrowers issued their

million Committed Line Of Credit Note to PNC dated

January 16, 2018 (

the "Original PNC Note"), which evidences the PNC Borrowers' loans and other obligations to PNC; the PNC Guarantors entered into a Guaranty and Suretyship Agreement with PNC dated as of

January 16, 2018 (

the "PNC Guaranty"), which guaranties the PNC Borrowers' loans and other obligations to PNC; and the PNC Borrowers and PNC Guarantors (each, a "PNC Loan Party" and collectively, the "PNC Loan Parties") entered into a Security Agreement with PNC dated as of

January 16, 2018 (

the "PNC Security Agreement"), which secures the obligations of the PNC Loan Parties to PNC with pledges of substantially all of the assets of the PNC Loan Parties (other than SGRP's foreign subsidiaries, certain designated domestic subsidiaries, and their respective equity and assets).

An amendment to the PNC Credit Facility dated as of

July 3, 2018,

among other things, increased the maximum principal amount of the Revolving Loans to

$9.5

million.

January 2018,

the Company repaid and replaced its credit facility with Sterling Bank with a secured revolving credit facility in the United States and Canada (as amended the "PNC Credit Facility") with PNC Bank, National Association.

Fifth Third Credit Facility

January 9, 2018,

the Company completed its acquisition of a

51%

interest in its new subsidiaries, Resource Plus of North Florida, Inc., and related companies (collectively, "Resource Plus"). When acquired, Resource Plus was a party to a revolving line of credit facility it secured on

May 23, 2016, (

the "Fifth Third Credit Facility") from Fifth Third Bank for

$3.5

million, which was scheduled to expire on

May 23, 2018.

Effective

April 11, 2018,

the term of the Fifth Third Credit Facility was extended and is currently scheduled to become due on

April 23, 2020.

As there are

provisions (other than defaults) requiring the pay down of the loan until

April 23, 2020,

any amounts outstanding are classified as short-term debt.

Revolving loans of up to

$3.5

million are available to Resource Plus under the Fifth Third Credit Facility based upon the borrowing base formula defined in the agreement (principally

80%

of "eligible" accounts receivable less certain reserves). As of

June 30, 2019,

there was

outstanding balance. The Fifth Third Credit Facility is secured by substantially all assets of Resource Plus.

The Fifth Third Credit Facility currently requires Resource Plus to pay interest on the loans thereunder equal to (A) the Daily LIBOR Rate (as defined in the agreement) per annum, plus (B)

two hundred fifty

basis points (

2.50%

). On

June 30, 2019,

the aggregate interest rate under that formula was

5.23%

per annum.

Other Debt

Effective with the closing of the Resource Plus acquisition, the Company entered into promissory notes with the sellers totaling

$2.3

million. The notes are payable in annual installments at various amounts due on

December

31st

of each year starting with

December 31, 2018

and continuing through

December 31, 2023.

As such these notes are classified as both short term and long term for the appropriate amounts. The total balance owed at

June 30, 2019

was approximately

$2.0

million.

International Credit Facilities:

SPARFACTS Australia Pty. Ltd. has a secured line of credit facility with National Australia Bank, effective

October 31, 2017,

for

$800,000

(Australian) or approximately

$562,000

USD (based upon the exchange rate at

June 30, 2019).

The facility provides for borrowing based upon a formula, as defined in the agreement (principally

80%

of eligible accounts receivable less certain deductions). The outstanding balance with National Australia Bank as of

June 30, 2019

was

$258,000

(Australian) or

$181,000

USD and is due on demand.

SPAR Todopromo has secured a line of credit facility with BBVA Bancomer Bank for

5.0

million Mexican Pesos or approximately

$261,000

USD (based upon the exchange rate at

June 30, 2019).

The revolving line of credit was secured on

March 15, 2016,

and originally expired

March 2018.

The facility has been amended to extend the terms to

April 2020.

The variable interest rate is TIIE (Interbank Interest Rate) +

4%,

which resulted in an annual interest rate of

12.5%

as of

June 30, 2019.

There was

outstanding balance as of

June 30, 2019.

May 29, 2018,

SPAR Brazil established a line of credit facility with Banco Bradesco for

1.2

million Brazilian Real or approximately

$312,000

USD (based upon the exchange rate at

June 30, 2019).

The facility provides for borrowing with

formal guarantees. The agreement expires on

November 29, 2019.

The outstanding balance at

June 30, 2019,

was approximately

68,000

Brazilian Real or approximately

$18,000

USD.

October 5, 2018

SPAR Brazil secured a line of credit facility with Branco Bradesco for approximately

3.5

million Brazilian Real or approximately

$917,000

USD (based upon the exchange rate at

June 30, 2019).

The outstanding balance as of

June 30, 2019

was approximately

1.6

million Brazilian Real or approximately

$419,000

USD. The note is due

December 19, 2019,

with varying monthly payments.

October 5, 2018

SPAR Brazil secured a line of credit facility with Branco Santander for approximately

381,000

Brazilian Real or approximately

$99,000

USD (based upon the exchange rate at

June 30, 2019).

The outstanding balance as of

June 30, 2019

was approximately

293,000

Brazilian Real or approximately

$76,000

USD.

	Interest Rate as of June 30, 2019				2019		2020		2021		2022		2023		2024
Brazil – Bradesco			16.56%		$	437	$	–	$	–	$	–	$	–	$	–
Brazil - Santander		4.45	-	10.99%		76		–		–		–		–		–
USA – North Mill Capital			6.75%			12,155		–		–		–		–		–
USA – Fifth Third Bank			5.23%			–		–		–		–		–		–
USA – Resource Plus Seller Notes			1.85%			333		334		300		300		700		–
Australia - National Australia Bank			6.56%			181		–		–		–		–		–
Mexico – BBVA Shareholder			12.5%			–		–		–		–		–		–
Total					$	13,182	$	334	$	300	$	300	$	700	$	–

Summary of

Unused

Company Credit and Other Debt Facilities (in thousands):

	June 30, 2019		December 31, 2018
Unused Availability:
United States	$	4,788	$	4,253
Australia		381		238
Brazil		294		304
Mexico		261		102
Total Unused Availability	$	5,724	$	4,897

Management believes that based upon the continuation of the Company's existing credit facilities, projected results of operations, vendor payment requirements and other financing available to the Company (including amounts due to affiliates), sources of cash availability should be manageable and sufficient to support ongoing operations over the next year. However, delays in collection of receivables due from any of the Company's major clients, or a significant reduction in business from such clients could have a material adverse effect on the Company's cash resources and its ongoing ability to fund operations.