SALE PROCEEDS AGREEMENT
This Sale proceeds Agreement (the "Agreement") is entered into this 10th day of September 2004 (the "Effective
Date"), among Stimulys, Inc., a Delaware corporation and any successors (collectively "Stimulys"), whose
address is 2245 Keller Way, Carrollton, Texas 75006, and Spar Incentive Marketing, Inc., a Delaware
corporation ("Spar"), whose address is 580 White Plains Road, 6th Floor, Tarrytown, New York 10591.
A. Stimulys is a wholly-owned subsidiary of Performance Holdings, Inc., a Delaware corporation ("PHI"). PHI is
indebted to Spar in the amount of approximately $7,664,019 as of the Effective Date, pursuant to (i) two Term
Promissory Notes dated as of June 30, 2002 (the "Term Notes") in the original principal amounts of $2,500,000
and $3,500,000, respectively, issued by PHI, as borrower, to Spar, as lender, and (ii) that certain Term Loan,
Guaranty and Security Agreement dated as of June 30, 2002 (the "Term Loan Agreement") among PHI, as
borrower, Stimulys, as guarantor, and Spar, as lender. The loan made pursuant to the Term Notes and the Term
Loan Agreement is referred to as the "Term Loan."
B. All assets of PHI and Stimulys are pledged as collateral to secure repayment of the Term Loan.
C. The parties wish to restructure the obligations of Stimulys and PHI to Spar pursuant to the Term Loan. The
parties wish to enter into this Agreement to memorialize the terms of such restructuring.
TERMS AND PROVISIONS
In consideration of the mutual promises made in this Agreement and other good and valuable consideration, the
receipt and sufficiency of which are acknowledged, the parties agree as follows:
1. Definitions. As used in this Agreement, the following terms shall have the meanings indicated:
- "Change of Control" means either (i) a sale, transfer or other disposition of over 50% of the assets of Stimulys
outside the ordinary course of Stimulys' business, to a Non-Affiliate that is not related to any of the stockholders
in the broadcast definition