COMMISSION RATES AND STRUCTURE

1. INTRODUCTION

This Schedule A forms part of the Smackdab Inc. Solution & Affiliate Partner Agreement (“S&A Agreement”) and sets forth the Commission rates, calculation methodologies, and payment terms applicable to each Partner type and tier. In the event of any conflict between this Schedule A and the S&A Agreement, this Schedule A shall prevail with respect to Commission rates and structure.

2. COMMISSION RATES BY PARTNER TYPE AND TIER

2.1. Affiliate Partner Commission Rates

Partner Tier	Commission Rate (First-Year Subscription Revenue)
Standard Affiliate	15%
Silver Affiliate	20%
Gold Affiliate	25%

2.2. Solution Partner Commission Rates

Partner Tier	Commission Rate (First-Year Subscription Revenue)
Authorized Partner	20%
Silver Partner	25%
Gold Partner	30%
Platinum Partner	35%

2.3. Reseller Discount Structure

For Solution Partners authorized to resell the Services, the following reseller discounts apply instead of the standard Commission structure:

Partner Tier	Reseller Discount (Off List Price)
Gold Partner	35%
Platinum Partner	40%

⚠️ ATTORNEY REVIEW NOTE: Review commission rates and reseller discounts to ensure they do not create potential price fixing or antitrust concerns, particularly as they relate to Partner’s freedom to set end-client pricing in resale arrangements.

3. MULTI-YEAR CONTRACT COMMISSION STRUCTURE

For multi-year contracts, Commissions shall be calculated as follows:

3.1. First Year

100% of the applicable tier-based Commission rate on first-year subscription revenue.

3.2. Second Year

50% of the applicable tier-based Commission rate on second-year subscription revenue.

3.3. Third Year

25% of the applicable tier-based Commission rate on third-year subscription revenue.

3.4. Fourth Year and Beyond

10% of the applicable tier-based Commission rate on subscription revenue.

3.5. Payment Schedule for Multi-Year Contracts

For multi-year contracts paid in advance, Commissions shall be paid as follows:

3.5.1. Upfront Payment Option

When a Client pays for multiple years in advance:

First-year Commission shall be paid within thirty (30) days after receipt of payment from the Client.
Second-year, third-year, and subsequent year Commissions shall be paid within thirty (30) days after the start of each respective contract year.

3.5.2. Annual Payment Option

When a Client pays annually:

Commissions shall be paid within thirty (30) days after receipt of each annual payment from the Client.

⚠️ ATTORNEY REVIEW NOTE: Verify the multi-year commission structure complies with revenue recognition principles under ASC 606 and is properly aligned with Smackdab’s financial accounting practices to avoid potential discrepancies during financial audits.

4. CONTRACT EXPANSIONS AND UPGRADES

4.1. Eligible Transactions

Partner shall be eligible for additional Commissions when an existing Client referred by Partner:

Purchases additional user licenses or seats;
Upgrades to a higher tier of the Services; or
Adds premium features or modules not included in the original subscription.

4.2. Attribution Period

Partner shall be eligible for Commissions on expansions and upgrades that occur within twenty-four (24) months from the date of the initial Qualified Sale.

4.3. Commission Rates for Expansions and Upgrades

Transaction Type	Commission Rate
Additional user licenses/seats	100% of the applicable tier-based Commission rate
Tier upgrades	100% of the applicable tier-based Commission rate on the incremental revenue
Premium features/modules	100% of the applicable tier-based Commission rate

4.4. Multi-Year Expansions and Upgrades

For expansions and upgrades that include multi-year terms, the multi-year Commission structure in Section 3 shall apply to the incremental revenue.

5. PREMIUM SERVICES AND ADD-ONS

5.1. Commission-Eligible Premium Services

Commissions shall be payable on the following premium Services and add-ons:

Premium Service/Add-On	Commission Rate
Advanced Analytics Module	100% of the applicable tier-based Commission rate
Enterprise Security Package	100% of the applicable tier-based Commission rate
API Access Package	100% of the applicable tier-based Commission rate
Custom Integrations	100% of the applicable tier-based Commission rate
Mobile Access Add-On	100% of the applicable tier-based Commission rate

5.2. Non-Commission-Eligible Items

Commissions shall not be payable on the following items:

Implementation services fees
Training services fees
Support services fees (beyond standard support included with subscription)
Custom development services
Third-party integrations or applications
Hardware or physical goods

6. SPECIAL COMMISSION PROGRAMS

6.1. New Market Incentives

6.1.1. Definition of New Market Territories

For purposes of this Schedule A, “New Market Territories” shall be defined as:

Geographic regions where Smackdab has had fewer than ten (10) active clients for less than six (6) months;
Industry verticals specifically designated by Smackdab as strategic growth markets; or
Other territories or markets specifically designated in writing by Smackdab as “New Market Territories.”

6.1.2. Enhanced Commission Rates

For Partners operating in New Market Territories, the following enhanced Commission rates shall apply for a period of twelve (12) months from the date of the Partner’s first Qualified Sale in such territory:

Partner Type/Tier	Enhanced Commission Rate
All Affiliate Partners	+5 percentage points above standard tier rate
All Solution Partners	+5 percentage points above standard tier rate

6.1.3. New Market Territory Designation

Smackdab shall maintain a current list of New Market Territories in the Partner Portal
Smackdab shall provide at least thirty (30) days’ notice before removing a designation of New Market Territory
Partners operating in a territory that loses its New Market Territory designation shall continue to receive enhanced Commission rates for the remainder of their twelve (12) month eligibility period for existing opportunities

⚠️ ATTORNEY REVIEW NOTE: Review the New Market Incentives structure to ensure compliance with anti-competition laws across different jurisdictions. Consider adding specific territory-by-territory restrictions based on applicable local laws.

6.2. Strategic Industry Incentives

For Qualified Sales to Clients in the following strategic industries, enhanced Commission rates shall apply:

Industry	Enhanced Commission Rate
Healthcare	+3 percentage points above standard tier rate
Financial Services	+3 percentage points above standard tier rate
Manufacturing	+3 percentage points above standard tier rate
Education	+3 percentage points above standard tier rate

6.3. Enterprise Client Incentives

For Qualified Sales to Enterprise Clients (defined as Clients with annual subscription revenue exceeding $100,000 USD), the following enhanced Commission rates shall apply:

Partner Type/Tier	Enhanced Commission Rate
All Affiliate Partners	+2 percentage points above standard tier rate
All Solution Partners	+2 percentage points above standard tier rate

6.4. Incentive Stacking Limitations

6.4.1. Maximum Enhancement

The total enhancement to Commission rates through stacking of incentive programs shall not exceed ten (10) percentage points above the standard tier-based Commission rate.
In the event multiple incentives would exceed this maximum enhancement, the incentives shall be applied in the following order until the maximum is reached: (a) New Market Incentives (b) Enterprise Client Incentives (c) Strategic Industry Incentives

6.4.2. Exclusions

Smackdab may, at its discretion, exclude certain transactions from incentive programs due to competitive pricing, strategic importance, or other business factors
Any such exclusions shall be communicated to Partner in writing prior to the finalization of the transaction

7. COMMISSION PAYMENT PROCEDURES

7.1. Payment Methods

Commissions shall be paid via one of the following methods, as selected by Partner in the Partner Portal:

Direct deposit/ACH (U.S. Partners only)
Wire transfer (International Partners)
PayPal
Check (U.S. Partners only, subject to $5.00 processing fee)

7.2. Payment Currency

All Commission payments shall be made in United States Dollars (USD), unless otherwise agreed in writing.

7.3. Minimum Payment Threshold

Commissions will not be paid until the total accrued unpaid Commissions exceed $50 USD. Accrued amounts below this threshold will roll over to the next payment period.

7.4. Payment Timeline

Commissions shall be paid within thirty (30) days after the end of each calendar month for Qualified Sales where payment has been received during that month.

7.5. Commission Reports

Smackdab shall provide Partner with a detailed Commission report each month, which shall include:

List of Qualified Sales
Commission calculation for each sale
Contract term and value for each sale
Total Commission amount
Payment details

8. TAX CONSIDERATIONS

8.1. Tax Responsibility

Partner is solely responsible for determining and paying all taxes applicable to Commissions received under this Agreement.

8.2. Required Tax Documentation

Partner shall provide Smackdab with appropriate tax documentation as required by applicable law, including:

For U.S. Partners: IRS Form W-9
For non-U.S. Partners: IRS Form W-8BEN (individuals) or W-8BEN-E (entities)
VAT registration information (for Partners in VAT jurisdictions)
Any other tax documentation required by applicable law

8.3. Tax Withholding

8.3.1. U.S. Tax Withholding

Smackdab may withhold taxes from Commission payments if required by applicable U.S. federal, state, or local law, unless Partner provides documentation showing that an exemption applies.
For U.S. Partners who fail to provide a valid Form W-9, Smackdab shall withhold at the backup withholding rate prescribed by the Internal Revenue Service.

8.3.2. International Tax Withholding

For non-U.S. Partners, Smackdab shall withhold taxes at the applicable rates required by U.S. law, which may be reduced by an applicable tax treaty if Partner provides proper documentation (e.g., a valid Form W-8BEN or W-8BEN-E claiming treaty benefits).
Partner acknowledges that Smackdab’s withholding obligations may change based on changes to applicable law, tax treaty status, or Partner’s circumstances.

8.3.3. Tax Documentation Updates

Partner shall promptly notify Smackdab of any changes to its tax status or circumstances that may affect tax withholding requirements.
Partner shall provide updated tax documentation upon request by Smackdab or when current documentation expires.

⚠️ ATTORNEY REVIEW NOTE: Review international tax withholding provisions to ensure compliance with the latest IRS regulations and OECD guidelines. Consider adding territory-specific provisions for Smackdab’s anticipated 2026 international expansion.

8.4. Tax Indemnification

Partner shall indemnify, defend, and hold harmless Smackdab from any claims, liabilities, penalties, interest, or additional taxes assessed against Smackdab arising from:

Partner’s failure to provide accurate or complete tax information;
Partner’s failure to pay applicable taxes on Commissions; or
Any determination by a tax authority that contradicts the tax treatment applied by Smackdab based on information provided by Partner.

9. MODIFICATIONS TO COMMISSION STRUCTURE

9.1. Scheduled Reviews

Smackdab shall review this Commission structure at least once annually and may make updates to remain competitive in the market and align with business objectives.

9.2. Notice of Changes

Smackdab shall provide at least sixty (60) days’ advance notice of any changes to Commission rates or structure, unless shorter notice is required by law or exigent business circumstances.

9.3. Application of Changes

Any changes to Commission rates or structure shall apply only to new Qualified Sales made after the effective date of such changes, unless otherwise specified.

9.4. Grandfathering Provisions

Existing Commissions for Qualified Sales made prior to any change in Commission rates or structure shall continue to be paid according to the rates and structure in effect at the time of the Qualified Sale.

10. EXAMPLES OF COMMISSION CALCULATIONS

10.1. Standard Affiliate Example

Client: ABC Company
Product: Basic Subscription
Annual Value: $10,000 USD
Commission Rate: 15%
Commission Amount: $1,500 USD

10.2. Multi-Year Contract Example

Client: XYZ Corporation
Product: Premium Subscription
Contract: 3-year term
Annual Value: $25,000 USD
Partner Tier: Gold Solution Partner (30% Commission Rate)
Commission Calculation:
- Year 1: $25,000 × 30% = $7,500
- Year 2: $25,000 × 30% × 50% = $3,750
- Year 3: $25,000 × 30% × 25% = $1,875
- Total Commission: $13,125 USD

10.3. Expansion Example

Original Sale: 50 user licenses at $100/user/month ($60,000 annual value)
Expansion: Additional 25 user licenses at $100/user/month ($30,000 annual value)
Partner Tier: Silver Affiliate (20% Commission Rate)
Commission on Expansion: $30,000 × 20% = $6,000 USD

11. RESELLER COMMISSION RECONCILIATION

11.1. Relationship Between Reseller Discount and Commission Models

For Gold and Platinum Solution Partners who operate under both the referral model (earning Commissions) and resale model (purchasing at a discount), the following provisions shall apply:

11.1.1. Model Segregation

Partner shall clearly designate whether each Client opportunity will proceed under the referral model or the resale model
Partner may not change the designated model after a Client has signed an agreement without Smackdab’s written consent
Partner may not apply both models to the same Client subscription

11.1.2. Financial Equivalence Principle

The reseller discount rates specified in Section 2.3 of this Schedule are designed to provide approximately equivalent financial outcomes to the Commission rates in Sections 2.1 and 2.2, accounting for the additional responsibilities and risks assumed under the resale model
This equivalence is based on standard market conditions and assumptions about Partner’s operating costs

11.2. Model Comparison and Selection Guidance

11.2.1. Referral Model Advantages

Reduced administrative burden for Partner
No invoicing or collection responsibility
No tax collection or remittance obligation
Simplified sales process
Lower cash flow requirements

11.2.2. Resale Model Advantages

Greater pricing flexibility
Ability to bundle Services with Partner’s other offerings
Direct contractual relationship with Client
Potential for higher margins through value-added services
Control over billing relationship

11.2.3. Selection Factors

Partner should consider the following factors when selecting between models:

Client preference for vendor relationships
Complexity of the transaction
Contract value and term
Partner’s cash flow considerations
Tax implications in the applicable jurisdiction
Partner’s ability to provide front-line support
Bundling opportunities with other services

11.3. Transitioning Between Models

11.3.1. Client Contract Renewal Transitions

Partner may request to transition a Client from the referral model to the resale model (or vice versa) at the time of contract renewal
Such requests must be submitted at least sixty (60) days before the renewal date
Smackdab shall review and approve or deny such requests within fifteen (15) business days
Transitions require the Client’s consent and new contract execution

11.3.2. Mid-Term Transitions

Mid-term transitions between models are generally not permitted
In exceptional circumstances, Partner may request a mid-term transition by submitting a written request detailing the business justification
Smackdab shall review such requests on a case-by-case basis
If approved, the transition shall be effective from the beginning of the next billing cycle

11.4. Financial Reconciliation for Transitions

11.4.1. Referral to Resale Transition

Any prepaid but unearned Commissions shall be reconciled against future reseller purchases
Partner shall reimburse Smackdab for any Commissions paid for periods after the transition effective date
Smackdab shall provide a detailed reconciliation statement for Partner’s review

11.4.2. Resale to Referral Transition

Partner shall receive pro-rated Commission credit for any prepaid subscription fees covering periods after the transition effective date
The Commission rate applicable to such credit shall be the rate in effect at the time of transition
Smackdab shall apply such credit against future Commission payments

11.4.3. Client Data and Service Continuity During Transitions

Partner shall ensure that Client data and service continuity are maintained throughout any transition
Partner shall cooperate with Smackdab to migrate Client data, configuration settings, and customizations as needed
Partner shall provide Clients with clear communication regarding the transition, including any changes to support contacts, billing procedures, or contract terms
Partner shall remain responsible for Client satisfaction and service continuity during the transition period

⚠️ ATTORNEY REVIEW NOTE: Review the transition provisions to ensure clear delineation of responsibilities for client data privacy, security, and service continuity during model transitions. Consider adding specific provisions about the handling of client consent for transitions, especially for international clients subject to GDPR or similar regulations.

11.5. Reporting Requirements

11.5.1. Model Distribution Reporting

Partner shall provide quarterly reports showing the distribution of Clients between the referral and resale models
Reports shall include:
- Number of Clients under each model
- Total contract value under each model
- Conversion rates between models at renewal
- Client satisfaction ratings by model

11.5.2. Financial Impact Reporting

Smackdab shall provide Partner with quarterly reports comparing the financial outcomes of both models
Reports shall include:
- Comparative revenue analysis
- Renewal rates by model
- Expansion rates by model
- Overall program impact analysis

12. COMMISSION DISPUTES AND RECONCILIATION

12.1. Dispute Notification and Documentation

12.1.1. Notification Timeframe

Partner must report any Commission discrepancies or disputes within sixty (60) days from the date the Commission was paid or should have been paid
Failure to report within this timeframe constitutes acceptance of the Commission payment and waiver of any related claims

12.1.2. Required Documentation

Partner’s dispute notification must include:

Commission report date and identifier
Transaction details for disputed Commission(s)
Specific calculations in dispute
Supporting documentation (e.g., registration confirmations, contracts, payment records)
Estimated correct Commission amount with calculation methodology

12.2. Dispute Resolution Process

12.2.1. Initial Review

Smackdab shall acknowledge receipt of the dispute notification within five (5) business days
Smackdab shall conduct an initial review and respond within fifteen (15) business days
The response shall include Smackdab’s position, supporting documentation, and proposed resolution

12.2.2. Negotiation Period

If Partner disagrees with Smackdab’s initial position, the parties shall engage in good faith negotiations
Such negotiations shall commence within ten (10) business days of Partner’s response
The parties shall designate qualified representatives with authority to resolve the dispute
The negotiation period shall not exceed thirty (30) days unless extended by mutual agreement

12.2.3. Escalation Procedure

If the dispute is not resolved through initial negotiations:

The dispute shall be escalated to senior management representatives from each party
Such representatives shall meet (in person or virtually) within fifteen (15) business days
If senior management cannot resolve the dispute, either party may proceed to formal dispute resolution under Section 9 of the General Agreement

12.3. Payment During Disputes

12.3.1. Undisputed Amounts

Smackdab shall pay all undisputed Commission amounts according to the regular payment schedule
The existence of a dispute regarding certain Commissions shall not delay payment of unrelated or undisputed Commissions

12.3.2. Disputed Amounts

Disputed amounts shall be held in abeyance pending resolution
Upon resolution, any amounts determined to be owed shall be paid within thirty (30) days
If applicable, interest shall accrue on overdue amounts at a rate of 1% per month (or the maximum rate permitted by law, if lower)

12.4. Audit Rights and Procedures

12.4.1. Audit Initiation

Partner may initiate an audit of Commission calculations no more than once per calendar year
Audit requests must be submitted in writing at least thirty (30) days in advance
Audit scope must be clearly defined in the request

12.4.2. Audit Conduct

Audits shall be conducted during normal business hours
Audits may be conducted by Partner or its authorized representative
Smackdab shall provide reasonable access to relevant records, subject to appropriate confidentiality protections
Audit activities shall not unreasonably interfere with Smackdab’s normal business operations

12.4.3. Audit Findings

Partner shall provide a written summary of audit findings within thirty (30) days of audit completion
Smackdab shall respond to the findings within thirty (30) days
Any discrepancies identified shall be resolved through the dispute resolution process outlined in Section 12.2

⚠️ ATTORNEY REVIEW NOTE: Review the commission dispute resolution procedures to ensure they align with the broader dispute resolution framework in the General Agreement while providing specific procedures for commission-related disputes. Consider adding provisions for international arbitration that may be necessary for the 2026 expansion.

13. LEGAL ENFORCEABILITY PROVISIONS

13.1. Deadlines for Commission Claims

All claims related to Commission calculations, payments, or disputes must be submitted in writing to Smackdab within sixty (60) days from the date the Commission was paid or should have been paid. Partner’s failure to submit a claim within this period constitutes a waiver of any claim related to such Commission.

13.2. Legal Compliance Notice

Partner is solely responsible for ensuring that its receipt and use of Commissions complies with all applicable laws, including but not limited to:

Anti-bribery and anti-corruption laws
Consumer protection laws
Industry-specific regulations
Tax laws and reporting requirements
Export control laws
Economic sanctions

13.3. Governing Law and Jurisdiction

This Schedule shall be governed by and construed in accordance with the laws of the State of Florida, United States of America, without regard to its conflict of law principles. Any legal action, suit, or proceeding arising out of or relating to this Schedule shall be brought exclusively in the federal or state courts located in Collier County, Florida, and each party irrevocably submits to the personal jurisdiction and venue of such courts.

13.4. Integration and Precedence

This Schedule constitutes the entire agreement between the parties regarding Commission rates and structure and supersedes all prior and contemporaneous agreements, proposals, or representations, written or oral, concerning its subject matter. In the event of any conflict between this Schedule and any other part of the S&A Agreement, this Schedule shall prevail with respect to Commission rates and structure.

13.5. Disclaimer of Warranties

THE COMMISSIONS UNDER THIS SCHEDULE ARE PROVIDED “AS IS” WITHOUT ANY WARRANTY OF ANY KIND. SMACKDAB DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE, AND NON-INFRINGEMENT. SMACKDAB MAKES NO WARRANTY THAT THE COMMISSION CALCULATIONS, METHODS, OR PAYMENTS WILL MEET PARTNER’S REQUIREMENTS OR BE UNINTERRUPTED, TIMELY, SECURE, OR ERROR-FREE.

13.6. Limitation of Liability for Commission-Related Claims

IN NO EVENT SHALL SMACKDAB BE LIABLE FOR ANY LOST PROFITS, REVENUES, OR INDIRECT, SPECIAL, INCIDENTAL, CONSEQUENTIAL, COVER, OR PUNITIVE DAMAGES, WHETHER AN ACTION IS IN CONTRACT OR TORT AND REGARDLESS OF THE THEORY OF LIABILITY, EVEN IF SMACKDAB HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, ARISING OUT OF OR RELATED TO THIS SCHEDULE.

⚠️ ATTORNEY REVIEW NOTE: Review the limitation of liability provisions to ensure they are enforceable under Florida law and in the context of commission-based agreements. Consider whether additional carve-outs for intentional misconduct or gross negligence should be included.