Page 40 - BOGmanual_2025Jan

• Additional 5% Royalty on Upgrades: During the term of the agreement, the LSBA will also
be eligible to receive a flat, one-time, 5% royalty on the total contract value (TCV) of any
first-time Smokeball subscription plan upgrades by an LSBA member who originally signs up
for Smokeball through the LSBA free Smokeball Bill offer and then upgrades to a paid
subscription plan on a higher Smokeball tier (i.e., Boost, Grow, or Prosper+).
o Note: TCV will not include any migrations or onboarding fees of any subscription plan
upgrade and shall only include the initial term of such upgraded subscription, not any
further renewal or upgrades thereafter.

B) Offer Option 2:

LSBA pays Smokeball 15% of the cost of providing free Bill subscriptions to LSBA members + LSBA
eligible for a 10% royalty on upgrades.
• Cost for the LSBA (15% of Bill subscription costs per/month): During the term of the
agreement, Smokeball will cover 85% of the costs of providing free Smokeball Bill
subscriptions to LSBA members that claim this offer (i.e., $41.65 per user/month) and the
LSBA will pay Smokeball 15% of the costs of providing the free Smokeball Bill subscriptions
(i.e., $7.35 per user/month). LSBA members will receive Smokeball Bill for free.
• Additional 10% Royalty on Upgrades: During the term of the agreement, the LSBA will also
be eligible to receive a flat, one-time, 10% royalty on the total contract value (TCV) of any
first-time Smokeball subscription plan upgrades by an LSBA member who originally signs up
for Smokeball through the LSBA free Smokeball Bill offer and then upgrades to a paid
subscription plan on a higher Smokeball tier (i.e., Boost, Grow, or Prosper+).
o Note: TCV will not include any migrations or onboarding fees of any subscription plan
upgrade and shall only include the initial term of such upgraded subscription, not any
further renewal or upgrades thereafter.

C) Example Revenue the LSBA Could Earn

This upgrade royalty offer would enable the LSBA to receive non-dues revenue from members that
upgrade from the free Bill subscription to a higher Smokeball tier for the first time. Below is an
example of the potential additional revenue the LSBA could earn from these royalties under each
option:

Option 1 Example: 5% Upgrade Royalty

New free Smokeball Bill subscribers 1000
*Free Smokeball Bill subscription costs per user $588
% of Smokeball Bill subscription costs paid by Smokeball 100%
% of Smokeball Bill subscription costs paid by the LSBA 0%
Amount the LSBA pays Smokeball $0

Estimated % of LSBA members that upgrade 50% (500 users)
*Estimated TCV of upgrade per user $4,698
Upgrade Royalty % Payable 5% of TCV

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CONFIDENTIAL