Blackburn Studios Profit Participation Agreement

Representatives and above must review and accept the Blackburn Studios Profit Participation Agreement before receiving payments.

Blackburn Studios Profit Participation Agreement

This Profit Participation Agreement (“Agreement”) is entered into between Blackburn HQ Inc., operating Blackburn Studios (“Blackburn HQ”), and the individual accepting this Agreement (“Participant”).

1. Purpose

Blackburn Studios provides eligible community leaders with an opportunity to participate in a level-based profit participation pool.

This Agreement explains the terms governing eligibility, calculation, distribution, and continuation of profit participation.

Profit participation is intended to reward eligible Participants for helping support the growth, strength, and culture of Blackburn Studios.

2. Eligibility

Profit participation is available only to individuals who:

• Hold an officially recognized Blackburn Studios level of Representative or above
• Have received an official promotion email confirming their current level
• Have accepted the current version of this Agreement
• Are enrolled in the Blackburn HQ Ambassadors Program
• Are actively enrolled in both Blackburn Studios LIVE and Blackburn Studios Shop
• Maintain both LIVE and Shop enrollment throughout the applicable distribution period, except during an approved written exception
• Have provided all required tax and payment information
• Remain in good standing with Blackburn HQ and Blackburn Studios

Creators are not eligible for profit participation unless and until they are officially promoted to Representative and satisfy the full LIVE and Shop enrollment requirements above. Participation in only LIVE or only Shop does not qualify a Participant for profit participation.

Submitting the acceptance form adds the designation profit participation eligible to the Participant’s Blackburn HQ account.

Eligibility does not guarantee that a payment will be available or issued.

3. Nature of Profit Participation

Profit participation is a contractual compensation opportunity.

It is not:

• Equity or stock in Blackburn HQ Inc.
• Ownership in Blackburn HQ or Blackburn Studios
• A partnership, joint venture, or franchise
• A voting right
• A guaranteed wage, salary, commission, dividend, or payment
• A promise that Blackburn HQ will generate a profit

Participation does not give the Participant authority to bind Blackburn HQ, enter into contracts on its behalf, incur expenses on its behalf, or represent that they are an owner or employee of Blackburn HQ.

4. Participation Levels

Eligible Participants are assigned only to the profit participation structure associated with their current officially recognized Blackburn Studios level.

Eligible levels include:

• Representative
• Associate
• Manager
• Director
• Vice President
• Chief Executive Staff

Profit participation is level-specific and is not cumulative. A Participant participates only at their current official level unless Blackburn HQ expressly provides otherwise in writing. A Participant does not also participate in the pools or allocations for lower levels simply because they previously held, recruited into, supervised, or advanced through those levels.

5. Net Income and Distributable Profit

“Net Income” means net income attributable to Blackburn Studios for the applicable distribution period after ordinary and necessary business expenses, refunds, chargebacks, taxes, and other recorded financial obligations attributable to Blackburn Studios have been accounted for using Blackburn HQ’s financial records and established accounting practices.

Net Income is not the same as revenue, gross sales, platform volume, creator earnings, or cash received.

For each applicable distribution period, up to twenty percent (20%) of Blackburn Studios Net Income will be designated for the Blackburn Studios Profit Participation Model, subject to the level allocations and individual allocations described below.

If Blackburn Studios has no positive Net Income for a distribution period, there will be no Distributable Profit or profit-participation distribution for that period.

Distributable Profit will then be allocated under the level structure described in Sections 6 and 7. For clarity, this Agreement does not impose a fee on Creators. Blackburn Studios may separately earn a standard agency or service fee from an applicable platform or partner program. Unless a separate written agreement provides otherwise, the current standard Blackburn Studios agency fee is ten percent (10%) of the applicable agency-side amount and is treated as Blackburn Studios revenue when received.

6. Profit Participation Pool Allocation

For each applicable distribution period, the Profit Participation Model may allocate up to twenty percent (20%) of Blackburn Studios Net Income across the level structure below.

That Distributable Profit will be allocated as follows:

• Representative Pool: 5% of Net Income
• Associate Pool: 5% of Net Income
• Manager Pool: 5% of Net Income
• Director Pool: 1% of Net Income
• Vice President Pool: 2% of Net Income
• Chief Executive Staff Allocation: up to 2% of Net Income

Together, these level allocations establish a maximum program allocation of twenty percent (20%) of Net Income. Amounts reserved for a higher level are not automatically divided equally and are payable only to the extent an eligible Participant has an applicable individual allocation for that level.

The Representative, Associate, and Manager allocations operate as shared pools. Director and Vice President participation is based on the individual percentages stated in Section 7. Chief Executive Staff participation is based on the individual percentage or allocation designated in writing by Blackburn HQ for the applicable role. Any portion of a level allocation that is not payable under these terms remains with Blackburn HQ unless Blackburn HQ designates otherwise in writing.

The percentages above apply to Blackburn Studios Net Income, not revenue, gross sales, platform volume, creator earnings, or cash received.

Blackburn HQ may modify the pool structure, allocation percentages, or distribution method prospectively by providing reasonable notice to affected Participants.

7. Distribution by Participation Level

The method of participation depends on the Participant’s current level. Shared-pool levels are divided as stated below; higher-level allocations are paid at the Participant’s stated individual percentage and are not divided equally among all people at that level.

For the initial version of the Profit Participation Model:

• The Representative Pool will be divided equally among eligible Representatives.
• The Associate Pool will be divided equally among eligible Associates.
• The Manager Pool will be divided equally among eligible Managers.
• Each eligible Director is assigned an individual participation allocation of 0.1% of Blackburn Studios Net Income for an eligible distribution period, subject to the requirements of this Agreement.
• Each eligible Vice President is assigned an individual participation allocation of 0.2% of Blackburn Studios Net Income for an eligible distribution period, subject to the requirements of this Agreement.

The Director level supports up to ten (10) Director allocations. The Vice President level supports up to ten (10) Vice President allocations. At the current individual percentages, ten Director positions at 0.1% each use the full 1% Director allocation, and ten Vice President positions at 0.2% each use the full 2% Vice President allocation. Chief Executive Staff allocations, if any, are established individually in writing by Blackburn HQ and are not presumed to be equal.

Blackburn HQ may change the distribution method or individual allocation structure prospectively, including adopting a performance-based, contribution-based, tenure-based, prorated, fixed-percentage, or blended allocation model, subject to the notice requirements of this Agreement.

Any change will apply only to future distribution periods after reasonable notice is provided.

Except for an individual percentage expressly stated in this Agreement or separately designated in writing by Blackburn HQ for the applicable period, no Participant is guaranteed a fixed individual percentage or equal share in future distribution periods. Any stated individual percentage remains subject to eligibility, positive Net Income, good standing, proration, and prospective program changes made in accordance with this Agreement.

8. Participation Period and Level Changes

A Participant’s eligibility begins on the later of:

• The effective date stated in their official promotion email
• The date they accept this Agreement

All required tax and payment information must also be complete before payment can be issued.

Eligibility requires active enrollment and good standing in both Blackburn Studios LIVE and Blackburn Studios Shop throughout the applicable distribution period. Withdrawal, removal, or loss of enrollment from either program suspends eligibility beginning on the effective date of that status change.

Blackburn HQ may approve a written exception or temporary leave for circumstances such as health-related leave or a platform-imposed restriction outside the Participant's reasonable control. An exception is not automatic and must be confirmed in writing by Blackburn HQ. Eligibility may resume prospectively when full LIVE and Shop enrollment is restored and confirmed by Blackburn HQ.

When a Participant is promoted to another level, their participation moves completely to the new level according to the effective date stated in the official promotion communication. Participation does not stack or accumulate across levels; after the effective promotion date, the Participant no longer participates in the prior level’s pool or allocation except for any prorated amount attributable to the period before the promotion became effective.

Blackburn HQ may prorate participation when a Participant:

• Becomes eligible during a payment period
• Changes levels during a payment period
• Becomes inactive
• Resigns
• Is suspended or removed
• Fails to maintain good standing

9. Payment Conditions

A Participant must satisfy all applicable requirements before receiving payment.

Payments are subject to:

• Continued eligibility
• Available Distributable Profit
• Good standing
• Acceptance of the current Agreement
• Complete and accurate tax documentation
• Complete and accurate payment information
• Compliance with Blackburn HQ policies

Blackburn HQ may hold a payment until missing or inaccurate information is corrected.

A held payment is not guaranteed and remains subject to this Agreement.

10. Payment Timing

Profit participation will be calculated on a quarterly basis.

Each distribution period will end on the final day of the applicable calendar quarter.

After the quarter closes, Blackburn HQ will complete its financial review and calculate Net Income, Distributable Profit, and each eligible Participant’s allocation.

Approved distributions will be paid within sixty (60) days after the end of the applicable quarter.

Blackburn HQ may reasonably delay payment when necessary to:

• Complete or correct financial records
• Resolve refunds, disputes, chargebacks, or accounting errors
• Verify eligibility
• Obtain required tax or payment information
• Comply with legal or tax requirements

A delay will not eliminate a Participant’s approved allocation unless the Participant is determined to have been ineligible for that distribution period.

No distribution is due for a quarter in which Blackburn Studios has no positive Net Income.

11. Taxes

The Participant is responsible for reporting and paying all taxes associated with payments received under this Agreement.

Blackburn HQ may report payments using the tax forms required by applicable law.

The Participant must provide accurate and current tax information through the Blackburn HQ Ambassadors Program or another system designated by Blackburn HQ.

Blackburn HQ may withhold payments or apply backup withholding when required by law.

12. Independent Relationship

Nothing in this Agreement creates an employment relationship.

The Participant is not entitled to employee wages, benefits, paid leave, unemployment benefits, workers’ compensation benefits, or other employee benefits solely because of this Agreement.

The Participant controls whether, when, where, and how they participate, subject to Blackburn HQ’s standards concerning brand use, community safety, legal compliance, and eligibility.

The parties acknowledge that the actual nature of their working relationship, rather than the title used in this Agreement, determines legal classification.

13. Good Standing

To remain eligible, the Participant must remain in good standing.

Good standing may include:

• Following the Blackburn Way
• Complying with applicable Blackburn HQ and Blackburn Studios policies
• Acting honestly and professionally
• Protecting confidential or private information
• Avoiding fraud, manipulation, harassment, or harmful conduct
• Maintaining accurate account, tax, and payment information
• Not being suspended, removed, or otherwise declared ineligible

Blackburn HQ may temporarily suspend eligibility while reviewing a possible policy violation.

14. Inactivity, Resignation, Suspension, or Removal

A Participant may lose eligibility upon:

• Resignation from Blackburn Studios
• Withdrawal, removal, or loss of enrollment from either Blackburn Studios LIVE or Blackburn Studios Shop, unless Blackburn HQ approves a written exception
• Removal from an eligible level
• Suspension
• Inactivity under applicable program standards
• Failure to maintain good standing
• Failure to provide required tax or payment information
• Violation of this Agreement or other applicable policies

Unless Blackburn HQ states otherwise in writing, participation ends on the effective date of the status change.

Former Participants have no continuing right to future distributions.

15. No Transfer or Assignment

A Participant may not sell, transfer, pledge, assign, or give their participation rights to another person or entity.

Profit participation rights do not pass to heirs, beneficiaries, creditors, or third parties except where required by law or expressly approved in writing by Blackburn HQ.

16. Corrections and Overpayments

Blackburn HQ may correct calculation, accounting, eligibility, or payment errors.

If a Participant receives an overpayment, Blackburn HQ may:

• Deduct the amount from a future payment
• Request repayment
• Use another lawful method to recover the amount

Blackburn HQ will make reasonable efforts to explain material corrections.

17. Program Changes

Blackburn HQ may modify, pause, replace, or end the Profit Participation Model on a prospective basis.

Material changes may include changes to:

• Eligibility requirements
• Pool percentages
• Distribution methods
• Payment schedules
• Documentation requirements
• Level structures

Blackburn HQ will provide written notice of any material change at least thirty (30) days before the change takes effect.

Notice will be sent by email to the Participant’s email address on file with Blackburn HQ.

Changes will apply only to future distribution periods and will not reduce or eliminate an allocation already earned for a completed distribution period.

Participants are responsible for keeping their email address current.

18. Confidentiality

Nonpublic financial information, payment calculations, internal records, business strategies, and individual Participant information must be treated as confidential unless Blackburn HQ authorizes disclosure or disclosure is required by law.

This section does not prohibit a Participant from discussing their own compensation or exercising any legal right that cannot lawfully be waived.

19. Records and Electronic Acceptance

Electronic acceptance of this Agreement has the same effect as a handwritten signature to the extent permitted by law.

Blackburn HQ may maintain electronic records showing:

• The Participant’s name and email address
• The Agreement version accepted
• The date and time of acceptance
• The Participant’s acknowledged level
• Applicable account tags or status

The Participant is responsible for saving or printing a copy of the Agreement for their records.

20. Governing Law

This Agreement will be governed by the laws of the State of Texas, without regard to conflict-of-law principles.

Any dispute-resolution, arbitration, venue, jury-waiver, class-action-waiver, or attorney-fee provisions should be added only after legal review.

21. Entire Agreement

This Agreement, together with any incorporated Blackburn HQ policies or written program terms, contains the understanding between the parties concerning profit participation.

It replaces prior verbal or written statements concerning the same subject.

If any provision is found unenforceable, the remaining provisions will continue to apply to the fullest extent permitted by law.

22. Acceptance

By submitting the Profit Participation Agreement Acceptance form, the Participant confirms that they:

• Have read and understood this Agreement
• Had the opportunity to save and review it before accepting
• Understand that profit participation is not equity, ownership, voting rights, or guaranteed compensation
• Understand that profit participation is level-specific and non-cumulative, and that payments depend on eligibility, available Distributable Profit, good standing, required tax documentation, and this Agreement
• Understand that active enrollment and good standing in both Blackburn Studios LIVE and Blackburn Studios Shop are required for profit participation eligibility, unless Blackburn HQ approves a written exception
• Agree to be bound by the current version of this Agreement

Nothing in this Agreement creates an employer-employee relationship. Participants operate independently and are responsible for their own business activities, schedules, methods, expenses, insurance, and tax obligations, except as otherwise required by law.