Common use of PARTICIPATION BY TVG UPON SALE OF SLEEK Clause in Contracts

PARTICIPATION BY TVG UPON SALE OF SLEEK. 10.1 As noted above herein, TVG will pay certain items on behalf of Sleek; which payments will be credited as payments towards/for equity in Sleek. TVG agrees to pay, on Sleek’s behalf, $250,000 for tooling (for the wireless headphone Product) as specified in Section 2.3 above. TVG shall also deliver an additional $250,000 (within 5 business days of the execution of this Agreement) directly to Sleek which shall be utilized by Sleek as working capital, which shall include Sleek’s delivery of the minimum of 2,500 complete headphone Product Units for TVG’s use during the Test Period. In return for the investment of five hundred thousand dollars ($500,000) , Sleek shall issue to TVG a number of membership interests in Sleek equal to five (5%) percent of Sleek’s outstanding membership interests after giving effect to such issuance. When TVG has made both payments specified in Section 10.1 above, Sleek shall deliver the certificate for the said five (5%) percent. Sleek also hereby grants TVG a right of first refusal, during the Term hereof, to acquire the exclusive ownership rights in and to the Product(s) should Sleek seek to offer this asset (and its accompanying rights thereto) for sale to third parties; provided however such right shall be of no force and effect in connection with any merger, sale of substantially all the assets, consolidation, reorganization or sale of control of Sleek.

PARTICIPATION BY TVG UPON SALE OF SLEEK. 10.1 10.1. As noted above herein, TVG will pay certain items on behalf of Sleek; which payments will be credited as payments towards/for equity in Sleek. TVG agrees to pay, on Sleek’s behalf, $250,000 for tooling (for the wireless headphone Product) as specified in Section 2.3 above. TVG shall also deliver an additional $250,000 (within 5 business days of the execution of this Agreement) directly to Sleek which shall be utilized by Sleek as working capital, which shall include Sleek’s delivery of the minimum of 2,500 complete headphone Product Units for TVG’s use during the Test Period. In return for the investment of five hundred thousand dollars ($500,000) , Sleek shall issue to TVG a number of membership interests in Sleek equal to five (5%) percent of Sleek’s outstanding membership interests after giving effect to such issuance. When TVG has made both payments specified in Section 10.1 above, Sleek shall deliver the certificate for the said five (5%) percent. Sleek also hereby grants TVG a right of first refusal, during the Term hereof, to acquire the exclusive ownership rights in and to the Product(s) should Sleek seek to offer this asset (and its accompanying rights thereto) for sale to third parties; provided however such right shall be of no force and effect in connection with any merger, sale of substantially all the assets, consolidation, reorganization or sale of control of Sleek. 10.2. During the Term hereof, TVG shall also be entitled to earn participation percentages (the “Participation Percentage”) in the net proceeds of any sale of Sleek or substantially all of its assets, made or negotiated during the Term hereof, or within six (6) months of the termination of this Agreement (the “Sale”). Should TVG meet the criteria to earn Participation Percentages in the manner specified below, the Participation Percentage shall be added to TVG’s then current equity position to determine if the sum of TVG’s membership interests and TVG’s Participation Percentages is equal to 10. For each one million five hundred thousand ($1,500,000) dollars TVG pays Sleek in Royalties (as per Section 6.1.1 above) (the “Participation Royalty”), during an applicable period, TVG shall be entitled to earn up to one Participation Percentage. The calculation to determine the Participation Percentage TVG shall receive upon the payment of each unit of the Participation Royalty is as follows: First, combine TVG’s and Sleek’s total gross sales for the period beginning with the execution of this Agreement and up to the payment by TVG of a unit or multiple units of the Participation Royalty (taken on a cumulative basis of the payments made by TVG). Then if TVG’s gross sales are equal to or in excess of seventy-five percent (75%) of that combined figure during that period, TVG shall have earned one of the five available Participation Percentages. If TVG’s gross sales are equal to fifty percent (50%) but less than seventy-five percent (75%) it shall be entitled to only three-quarters of a Participation Percentage for the payment of that Participation Royalty, (the “Royalty Participation Royalty Calculation”). The second period will begin after the payment by TVG of a participation Royalty and will run through the time until another Participation Royalty level is paid by TVG to Sleek. In the above calculations, items sold by Sleek not bearing the Sleek By 50 indicia, in the price range where TVG is selling/marketing items with the Sleek By 50 indicia, such sales by Sleek are to be excluded in determining Sleek’s gross sales. 10.3. The intent of the Parties is that, pursuant to the provisions of this Section 10, TVG shall have the right based upon performance to earn additional Participation Percentages which when added to TVG’s Participating Percentages and the percentage of outstanding Sleek membership interests owned by TVG equals ten (10), subject to Sleek’s rights set forth in this subsection 10.3. In furtherance thereof, Sleek agrees that, during the Term hereof, notwithstanding anything to the contrary herein, to the extent TVG’s percentage ownership of the outstanding membership interests is less than five percent (5%) on the date TVG has earned the full five percent (5%) Participating Percentages with respect to its right to participate in a Sale (the “Differential Date”), TVG may earn up to a maximum additional Participating Percentages equal to the difference between five percent (5%) and its then percentage ownership of the outstanding membership interests of Sleek, to the extent its then percentage ownership is less (the “Differential”). The aggregate of (i) the number of TVG’s Participating Percentage, (ii) TVG percentage ownership of Sleek’s outstanding membership interests, and (iii) the Differential, to the extent earned and subject to Sleek’s rights shall not exceed ten (10) The determination of and the right to such Differential shall be made on one occasion only; provided, however, TVG may earn up to the Differential only to the extent Sleek receives Royalty payments following the Differential Date where such Royalty payments are $1.5 million or more in excess of the then Minimum Royalty based on the same gross sales ratios as set forth in Section 10.2 hereof; provided further, however, TVG shall have no right to earn the Differential if Sleek, not later than one hundred and twenty (120) days following the Differential Date, notifies TVG in writing that it is offering TVG the right to purchase for ninety (90) days a number of Sleek membership interests equal to the Differential at the then fair market value (applicable at the time of such notice of the offering is given by Sleek) of such membership interests. Fair market value shall be equal to the price received by Sleek in any sale of membership interests by the Company within six (6) months of the Differential Date or if no such sale has occurred, then as determined by a qualified investment banker. In the event Sleek is engaged in a distribution of its securities on the Differential Date or has signed a commitment with a third party with respect to a financing, then the date by which Sleek must provide written notice to TVG that it is electing to offer TVG the right to purchase the membership interests shall be postponed until ninety (90) days following the completion of such financing; provided however, that if within ninety (90) days following the purchase by TVG of a number of membership interests equal to the Differential, Sleek hereby agrees to sell any membership interests to a third party, it shall offer to TVG the right to purchase a number of membership interests equal to the then applicable Differential.