Success Fee & Business Support Agreement

Sovereign 30-Day Operator Program · Post-Success Business Support + Success Fee Terms

This Success Fee & Business Support Agreement ("Agreement") is entered into as of [DATE] between:

• Sponsor: JML Distributing LLC, a New York limited liability company, operating Sovereign ("Sponsor," "we," "us")
• Operator: [STUDENT FULL LEGAL NAME], residing at [ADDRESS] ("Operator," "you")

This Agreement is supplemental to, and incorporates by reference, the Sovereign Terms of Service and Refund Policy. In case of conflict, this Agreement controls for matters of Business Support and the Success Fee; the Terms control for matters of program participation.

1. Purpose

Operator is enrolled in the Sovereign 30-Day Operator Program. This Agreement establishes (a) a Success Fee payable to Sponsor on Net Collected Revenue when Operator passes the program, and (b) a Post-Success Business Support arrangement for higher-performing Operators who cross the 5-Figure Milestone defined below.

2. Thresholds

This Agreement defines two independent thresholds:

• Pass Threshold (Point of No Return). The moment Operator crosses $2,000 USD in cumulative gross revenue in the Venture during the 30-day program window. Crossing the Pass Threshold means Operator has "passed" the program (the program demonstrably worked) and triggers the Success Fee obligation under Section 5.
• 5-Figure Milestone. The moment Operator crosses $10,000 USD in cumulative gross revenue in the Venture during the 30-day program window. Crossing the 5-Figure Milestone, in addition to the Pass Threshold, makes Operator eligible for the Post-Success Business Support described in Section 3.

Crossover for either threshold is verified via platform statements (Stripe, Shopify, brokerage, bank, etc.).

If Operator does not cross the Pass Threshold during the program, this Agreement has no operative financial effect — no Success Fee is owed, no Business Support is disbursed, and the Refund Policy and Terms of Service govern your relationship with Sovereign.

3. Post-Success Business Support (5-Figure Milestone)

If Operator achieves the 5-Figure Milestone and is in good standing, Sponsor will cover the following business-formation expenses for the Venture:

• LLC filing fee with the state of Operator's chosen jurisdiction (up to [$500]).
• Operating agreement template or reimbursement — Sponsor may, at its election, (a) provide Operator with access to a standard, non-customized operating agreement template prepared by a third-party document service, or (b) reimburse Operator's documented cost of obtaining a standard operating agreement from independent counsel or a recognized document service. Sponsor does not provide legal services or legal advice and does not act as Operator's attorney. Operator is encouraged to retain independent counsel for any custom drafting or review.
• EIN application guidance — general informational assistance with preparing and filing IRS Form SS-4. Sponsor does not provide tax advice, does not act as Operator's tax preparer, and does not act as Operator's tax advisor. Operator is encouraged to retain a qualified CPA or tax professional.
• Other formation expenses approved in writing by Sponsor (e.g. state publication requirements, certified copies).

Total Business Support under this Agreement is capped at $[1,500]. Expenses exceeding the cap are Operator's responsibility.

Sponsor may, at Sponsor's election, disburse Business Support by (a) paying vendors directly, (b) reimbursing Operator for receipts submitted within 30 days of expense, or (c) any other reasonable method.

Independence from Success Fee: Business Support is separate from and additional to the Success Fee in Section 5. The Success Fee applies to any Operator who crosses the Pass Threshold, whether or not the 5-Figure Milestone is achieved and whether or not Business Support is accepted. Business Support is available only to Operators who cross the 5-Figure Milestone.

4. Ownership

Operator owns the Venture, including all business entities, accounts, brand, IP, customer lists, and revenue generated. Sponsor's interest under this Agreement is limited to:

• A success fee interest in the Venture's Net Collected Revenue as defined in Section 5.
• No equity, ownership, or control of the Venture itself.

5. Success Fee

Trigger. The Success Fee is owed by any Operator who has crossed the Pass Threshold ($2,000+ in cumulative gross revenue during the program window) and completed the program in good standing. The Success Fee applies regardless of whether the 5-Figure Milestone is achieved and regardless of whether Business Support is accepted. If Operator does not cross the Pass Threshold, no Success Fee is owed under this Agreement.

Rate. Operator agrees to pay Sponsor a success fee equal to 5% of Net Collected Revenue of the Venture (the "Success Fee," historically called "Royalty" in earlier drafts).

Net Collected Revenue. "Net Collected Revenue" means all cash amounts actually received by Operator or the Venture from the sale of products or services related to the Venture during the applicable reporting period, minus only:

• (a) refunds actually issued to customers;
• (b) chargebacks actually incurred;
• (c) payment processor fees actually charged (including Stripe, Shopify Payments, PayPal, or similar transaction-processing fees);
• (d) sales tax, VAT, or similar transaction taxes actually collected from customers and remitted to a governmental authority; and
• (e) direct cost of goods sold solely to the extent the Venture involves physical inventory sold to customers.

Net Collected Revenue does not include deductions for advertising spend, contractor payments, payroll, software subscriptions, rent, travel, owner draws, general overhead, or any other discretionary or operating expenses.

Term. The Success Fee term is 90 days, beginning on the day the 30-day program ends ("Program End Date"). Success Fee accrued during the 30-day program itself is owed but not deducted in real time — see "Deferral" below.

Deferral during program. During the 30-day program, Operator keeps 100% of revenue in real time. Success Fee accrued during the program is calculated and owed to Sponsor but is not deducted from program-window revenue. The first Success Fee payment (covering the program window's accrued Royalty) is due 15 days after the Program End Date.

Payment schedule. During the 90-day Success Fee term, Success Fee is calculated monthly on the Venture's Net Collected Revenue for the prior calendar month and is due on the 15th of the following month.

End of obligation. The Success Fee obligation ends at the earlier of:

• (a) expiration of the 90-day term; or
• (b) Operator's exercise of the Buyout option in Section 6.

6. Buyout option

At any time during the 90-day Success Fee term, Operator may extinguish the Success Fee obligation by paying a one-time Buyout Amount to Sponsor. The Buyout Amount is calculated as:

"Months remaining" is computed as (days remaining in the 90-day term) ÷ 30, rounded up to the nearest whole month.

"Trailing 30-day Net Collected Revenue" is the Net Collected Revenue of the Venture for the 30 calendar days immediately preceding the Buyout election, verified via platform statements.

Why this rewards speed: The faster Operator exercises the Buyout, the smaller their trailing revenue is, and the cheaper the Buyout. As the Venture scales, the same calculation gets more expensive.

How to exercise: Email Sponsor with subject "Buyout Election — [Your Name]" attaching trailing-30-day revenue statements. Sponsor will calculate the Buyout Amount within 5 business days and provide payment instructions. Buyout is complete upon Sponsor's receipt of payment, at which point the Success Fee obligation terminates.

7. Reporting

If the 5-Figure Milestone is achieved and Business Expense Coverage is accepted, Operator agrees to:

• Provide Sponsor with a monthly revenue report within ten (10) days after the close of each calendar month during the 90-day Success Fee term, showing gross receipts, all deductions claimed in calculating Net Collected Revenue, and the resulting Net Collected Revenue for that month.
• Support each report with reasonably sufficient source documentation, including platform statements, payout reports, payment processor statements, refund/chargeback logs, sales-tax records, and, if applicable, inventory or cost-of-goods-sold documentation.
• Maintain complete and accurate books and records relating to Venture revenue for at least twenty-four (24) months following the end of the Success Fee term.
• Permit Sponsor, on at least fourteen (14) days' written notice and not more than twice during the Success Fee term (unless fraud or material misreporting is reasonably suspected), to inspect or audit such records solely for purposes of verifying amounts due under this Agreement.

If any audit or review reveals an underpayment of more than five percent (5%) for any reporting period, Operator shall promptly pay the deficiency, together with a ten percent (10%) underpayment penalty, and reimburse Sponsor for the reasonable cost of the audit.

Revenue verification disputes. If platform records are mixed, incomplete, or in dispute, the parties agree to resolve revenue figures in the following order: (1) bank deposit records reflecting actual money received in Operator's primary business account; (2) settled payment-processor reports (Stripe, Shopify Payments, PayPal, brokerage settlement statements); (3) order-level export data from the underlying platform. Pending revenue, unsettled transactions, refunds-in-progress, and chargebacks-in-flight are excluded from Net Collected Revenue until settled. If a dispute remains after applying this hierarchy, the parties will jointly retain an independent CPA at shared cost (each party 50%) to determine the figure; the CPA's determination is binding.

8. If Operator quits or fails to complete the program

Good standing for purposes of this Agreement has the same meaning as in Refund Policy Section 3, which controls. In summary, Operator must, during the 30-day program: (a) miss no more than 2 daily check-ins; (b) miss no more than 1 scheduled mentor call without rescheduling at least 48 hours in advance; (c) complete each milestone gate (Day 7, 14, 21, 30); (d) complete all documented mentor-assigned actions (tasks recorded in the operator portal, written mentor directives sent via portal/email/Slack, or platform-tracked task completions) within their assigned timeframes; (e) produce verifiable work product in their major (screenshots, listings, content posted, trades executed, code shipped, customer outreach, etc.); and (f) report in good faith without fabrication. To the extent the Refund Policy is updated, that updated definition controls.

If Operator withdraws from, is terminated from, or otherwise fails to complete the 30-day program in good standing as defined above, this Agreement has no operative effect — no Business Expense Coverage is disbursed, no Royalty is owed. The Refund Policy governs any refund eligibility.

If coverage was disbursed prior to the failure, Operator agrees to reimburse Sponsor for the disbursed amount within 60 days, as a return of conditional support that did not satisfy the success condition. This reimbursement is not a loan and bears no interest; it is the refund of an advance contingent on a milestone that was not achieved.

9. Sponsor is not a partner, employer, or co-owner

Nothing in this Agreement creates a partnership, joint venture, employment, agency, or franchise relationship. Sponsor is a passive royalty holder. Operator is solely responsible for the operation, legal compliance, tax filings, and outcomes of the Venture. Sponsor has no liability for Operator's business decisions, losses, taxes, regulatory issues, customer disputes, or any other Venture liabilities.

Operator agrees to indemnify and hold Sponsor harmless from any claims arising from the operation of the Venture.

10. No professional advice

Operator acknowledges that Sponsor and its mentors may, in the course of providing the Sovereign program, reference legal, tax, accounting, financial, or business topics. None of this constitutes legal, tax, accounting, financial, or investment advice. Sponsor and its mentors are not Operator's attorney, accountant, financial advisor, or investment advisor, and no fiduciary, attorney-client, accountant-client, or advisor-client relationship is created by this Agreement or by Operator's participation in the program.

Operator is solely responsible for retaining qualified independent professionals — including but not limited to a licensed attorney for legal matters, a CPA or tax professional for tax matters, and a licensed financial advisor for investment matters — to advise on Operator's specific situation.

11. Taxes

Sponsor will determine the appropriate tax classification and reporting treatment for Business Expense Coverage and Success Fee payments in consultation with Sponsor's tax advisor. At year-end, Sponsor will provide Operator with any tax forms required by law in connection with this Agreement (which may include, for example, IRS Form 1099-NEC or 1099-MISC, as applicable).

Operator is solely responsible for (a) all taxes on revenue earned from the Venture, (b) the proper tax treatment of any coverage received from Sponsor in Operator's own filings, and (c) retaining a qualified independent CPA or tax professional. Each party will rely on its own tax advisor; nothing in this Agreement constitutes tax advice from one party to the other.

12. Default

An event of default occurs if Operator:

• Fails to pay a Success Fee payment within 30 days of its due date.
• Fails to provide reporting required under Section 7 within 30 days of due date.
• Provides materially false revenue figures.
• Files for bankruptcy or assigns assets for creditors.

Notice and cure. Before accelerating or pursuing remedies for any default, Sponsor will provide Operator with written notice of the default (by email to Operator's address of record) and a 10 business-day opportunity to cure. If Operator cures within that window, no further action will be taken. If not cured, Sponsor may accelerate the full remaining Success Fee term as immediately due based on then-current Net Collected Revenue, and pursue any available legal remedies including attorney's fees and costs.

The notice-and-cure requirement does not apply to defaults arising from materially false revenue figures or bankruptcy, which constitute incurable defaults.

13. Confidentiality

Each party agrees to keep confidential any non-public information shared during the program and Success Fee term, including revenue figures, strategies, and operations. This obligation survives termination.

14. Assignment

Operator may not assign this Agreement during the Success Fee term without Sponsor's prior written consent. Sponsor may assign its success fee interest to a successor entity on notice to Operator.

15. Dispute resolution

Disputes will first be addressed by good-faith communication for 30 days. Unresolved disputes will be settled by binding arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules, conducted in New York, in English. The prevailing party in any arbitration or any subsequent action to enforce or confirm an arbitration award is entitled to recover reasonable attorneys' fees and costs (including arbitration filing fees and arbitrator fees) from the non-prevailing party. The parties waive any right to a jury trial or class action.

16. Governing law

This Agreement is governed by the laws of the State of New York, United States, without regard to conflicts-of-laws principles.

17. Severability and entire agreement

If any provision is unenforceable, the rest remains in effect. This Agreement, together with the Terms of Service and Refund Policy, constitutes the entire agreement between the parties regarding Business Expense Coverage and Royalty and supersedes all prior discussions.

18. Amendments

Any amendment must be in writing and signed by both parties.

Sovereign Success Fee & Business Support Agreement · This document is a binding contract between Operator and JML Distributing LLC, conditional on achievement of the 5-Figure Milestone defined herein.