EtchExpress Operator Term Sheet

1

The Relationship

Structure Operator Agreement — Marshall operates as an independent contractor, not an employee or equity partner. No employment relationship is created.

Operator Role Domain expert, market developer, and customer success lead for the EtchExpress vertical. Responsible for sales, customer relationships, and industry expertise.

Candlefish Role Technology platform, product development, infrastructure, billing, support systems, and operational backbone. CF builds and maintains the software.

What This Means

Marshall brings the trophy industry expertise and customer relationships. Candlefish builds and operates the technology. Together we create EtchExpress — a vertical SaaS product for trophy & awards businesses.

2

Economics

Operator Status Founding Operator — Enhanced economics in recognition of early partnership risk and contribution to vertical development.

Platform Fee Waived — Standard operators pay 12% platform fee. Founding operators pay 0% for the life of the agreement.

Vertical ARR	Standard Operator Share	Founding Operator Share (Marshall)
$0 - $500k	22% of Net Profit	50% of Net Profit
$500k - $1M	25% of Net Profit	50% of Net Profit
$1M+	27% of Net Profit	50% of Net Profit

Key Benefit

Founding Operator Advantage

Marshall receives 50% profit share at every ARR level, with no platform fee. A standard operator would receive 22-27% after a 12% platform fee — effectively 19-24% of gross revenue. Marshall receives 50% of net profit with no platform fee deduction, at any scale.

Example: $30,000 Monthly Revenue

Gross Revenue $30,000

Platform Fee (waived) $0

Direct Costs (hosting, payments ~8%) -$2,400

Net Profit $27,600

Marshall's Share (50%) $13,800/month

Net Profit Defined Gross Revenue minus Direct Costs. Direct Costs are limited to: (a) payment processing fees, (b) hosting and infrastructure costs specifically allocated to EtchExpress, (c) third-party software costs specific to EtchExpress, (d) marketing expenses for the vertical, and (e) vertical-specific usage costs for shared platform tools (see Support Tooling Costs below). Excludes: CF employee salaries, general overhead, shared platform development costs, base subscriptions for platform-wide tools, and corporate administrative expenses.

Support Tooling Costs Hybrid allocation. Base subscriptions for customer support platforms (e.g., Intercom) are CF overhead — not a Direct Cost. However, vertical-specific usage is a Direct Cost, including: (a) AI resolution fees attributable to EtchExpress customers, (b) dedicated operator seats beyond CF-provided allocation, (c) SMS/messaging costs for EtchExpress communications, and (d) proactive campaign costs for the vertical. This ensures Marshall benefits from CF's tooling investment while sharing variable costs that scale with vertical growth.

Payment Timing Monthly. Books close 15 days after month end, statement delivered 20 days after month end, payment within 5 business days of statement.

Verification Marshall may request an annual review of profit calculations. CF will provide reasonable supporting documentation within 30 days of request.

Tier Movement Automatic UP when ARR threshold hit (verified quarterly). Discretionary DOWN with 30-day notice and opportunity to cure. Note: Founding operator rate is locked at 50% regardless of tier.

3

Vertical Scope & Exclusivity

Vertical Definition Trophy and awards manufacturing, retail, and related engraving services, including businesses classified under NAICS 339914 (Costume Jewelry and Novelty Manufacturing, which includes trophies and awards) and NAICS 323113 (Commercial Screen Printing, which includes engraving services).

Territory United States

Exclusivity During the Term, Candlefish will not engage another operator for the same vertical scope and territory. Marshall has exclusive operating rights for US trophy & awards.

Marshall's Exclusivity Includes

US trophy shops
US awards retailers
US engraving services
Related recognition products

Candlefish Reserves

Trophy operators outside US
Adjacent verticals (signage, medals, promotional)
Enterprise accounts requiring co-sign
Platform features for all verticals

4

Term & Termination

Initial Term 12 months from Effective Date

Renewal Annual renewal is automatic if Operator has met engagement metrics for at least 9 of the preceding 12 months. If Operator is meeting metrics, CF may elect non-renewal only for documented strategic reasons unrelated to Operator performance. Non-renewal requires 60-day advance written notice.

Effective Date

Day 1

Metrics Begin

Day 91

Renewal Notice

Day 275

Initial Term Ends

Day 365

Termination Types

For Cause: Material breach, fraud, gross negligence. Immediate. No royalty tail.
At-Will: Either party, 45-day notice. Triggers royalty tail.
Non-Renewal: CF elects not to renew. 60-day notice. Triggers royalty tail.

Royalty Tail

If terminated at-will or via non-renewal (but NOT for cause), Marshall receives a declining royalty on EtchExpress net profit for 36 months post-termination, paid quarterly:

Months 1-12: 5% of vertical net profit
Months 13-24: 3% of vertical net profit
Months 25-36: 1% of vertical net profit

Buyout Option: Candlefish may extinguish the royalty tail by paying 10× the trailing 3-month average royalty payment. This option must be exercised within 90 days of termination.

5

Market Engagement Requirements

Philosophy Activity-based, not outcome-based. We measure market engagement, not revenue targets — the question is: Is the operator actively working the market?

Ramp Period 90 days from Effective Date. Engagement metrics begin Day 91. The first 90 days are for product training, market learning, and building initial relationships without metric pressure.

Metric	Monthly Target	Definition
Qualified Conversations	15	Demos, discovery calls, or substantive prospect meetings documented in CRM
Pipeline Opportunities	3	Prospects who've seen product and expressed buying interest

The Partnership

How We Work Together

We're patient on revenue results — sales cycles vary, product-market fit takes time. Our commitment: if Marshall is engaging the market and building pipeline, we stay invested and supportive. These metrics exist so we can identify obstacles early and solve them together.

6

Intellectual Property

Marshall's Pre-IP Industry knowledge, relationships, and expertise Marshall brings INTO the relationship remain his. CF will not share this with competing operators in the same scope.

Candlefish Pre-IP Platform, codebase, infrastructure, and technology CF brings INTO the relationship remain CF's property.

Co-Created IP 100% owned by Candlefish. The EtchExpress product, features, workflows, and all work product created during the relationship is CF property. Marshall's compensation for contributing to product development is reflected in the economics (50% profit share), not through IP ownership.

Confidentiality Mutual and indefinite. Marshall's pre-existing industry knowledge is protected — CF will not share it with operators competing in the same vertical scope. Similarly, Marshall will protect CF's confidential business information, technology, and strategy. Confidentiality obligations survive termination without time limit for both parties.

Usage Outside Territory Candlefish may utilize Marshall's contributed knowledge, and the EtchExpress product built from it, outside the United States without additional compensation to Marshall. Within the US territory, Marshall's exclusivity and confidentiality protections apply in full.

7

What Candlefish Provides

Technology & Platform

EtchExpress product development
Hosting & infrastructure
Billing & payments
Customer support tooling
CRM & analytics

Go-to-Market Support

Marketing materials
Sales enablement
Onboarding playbooks
Training resources
Brand & positioning

Sales Hiring CF may hire additional sales resources for EtchExpress if mutually agreed performance thresholds are not being met. Thresholds to be defined in the definitive agreement. Any sales hiring costs would be deducted from the Operator's profit share, not from CF's share. Sales compensation costs charged to Operator shall not exceed 20% of Operator's monthly participation.

Sales Approvals Approval thresholds for discounts, custom pricing, enterprise deals, or non-standard terms to be defined in the definitive agreement. Marshall leads sales by default.

Customer Support Split responsibility. Candlefish handles technical support (platform bugs, outages, infrastructure issues, software troubleshooting). Marshall handles customer success support (business questions, training, account management, feature requests, onboarding assistance). Escalation path: Marshall triages incoming requests and escalates technical issues to CF engineering. Cost allocation: See Support Tooling Costs in Section 2 — base platform subscriptions are CF overhead; vertical-specific usage (AI resolutions, operator seats, messaging) are Direct Costs. Response SLAs to be defined in the definitive agreement.

8

What Marshall Commits To

Market Development Actively pursue trophy & awards customers. Meet market engagement requirements as defined in Section 5.

Customer Success Serve as primary relationship owner for EtchExpress customers. Ensure onboarding, training, and ongoing success.

Industry Expertise Provide domain knowledge to guide product development. Communicate market needs, competitive landscape, and customer feedback.

Non-Compete During Term + 12 months, Marshall will not operate or advise competing trophy SaaS products in the US market.

Non-Solicit During Term + 12 months, Marshall will not directly solicit Candlefish employees, other operators, or contractors. General job postings are permitted.

Time Commitment Marshall determines his own hours (independent contractor). However, meeting engagement requirements implies substantial ongoing effort.

Customer Contact Upon termination, Marshall will not contact or solicit customers from the EtchExpress vertical. At exit, Marshall will receive only anonymized, aggregate data regarding vertical performance — no individual customer information, contact details, or account-level data.

9

Definitive Agreement

Final Documentation This term sheet will be incorporated into a definitive Operator Agreement reviewed by legal counsel for both parties.

Change of Control In the event of a sale, merger, or acquisition of Candlefish AI, Marshall's Founding Operator economics (50% profit share, waived platform fee) shall survive and bind the successor entity for 12 months following the change of control, regardless of the remaining Term. Successor may elect non-renewal after this 12-month period per standard terms.

Vertical Discontinuation If Candlefish decides to discontinue the EtchExpress vertical or the underlying platform technology, CF will provide Marshall with 180 days advance written notice before discontinuation takes effect.

Additional Provisions The definitive agreement will include standard legal provisions not detailed here, including: governing law and jurisdiction, dispute resolution procedures, notice requirements, force majeure, assignment rights, indemnification, and representations and warranties.

Legal Review Both parties are encouraged to have the definitive agreement reviewed by independent legal counsel before execution.