Broker Partnership Program
Broker Partnership Program
THE KNOTEL BROKER PROGRAM (2019)
TERMS AND CONDITIONS
The terms and conditions set forth herein (as the same may be modified from time to time, the "Terms and Conditions"), govern participation in this Knotel Broker Program (the "Program"), which sets forth the compensation level that Knotel, Inc. (together with its affiliates and subsidiaries, "Knotel") shall pay to a licensed broker ("Broker") for each Knotel customer agreement ("Customer Agreement") executed by a customer of Knotel ("Customer") represented by such Broker. The payment of any commissions by Knotel (the "Fee") to Broker shall be made pursuant to a separate commission agreement ("Commission Agreement") to be executed between Knotel and Broker. Knotel reserves the right to modify or terminate the Program and the Fees paid thereunder at any time and without notice. In the event of a conflict between these Terms and Conditions (as the same may be modified from time to time) and the specific Commission Agreement, the Commission Agreement will control. These Terms and Conditions amend, restate and replace any prior terms and conditions relating to the matters contained herein.
I. THE KNOTEL BROKER PROGRAM
Broker will be eligible to participate in the the Program subject to these Terms and Conditions as determined by Knotel in its sole discretion. Knotel pays Brokers on a sliding scale based on the Status that the individual broker has achieved. Status levels are based on the cumulative total contract value ("TCV") (calculated by aggregating the monthly service rate payable for each month of the initial term of a Customer Agreement) of all Customer Agreements an individual Broker (or a team headed by an individual Broker) has brought to Knotel ("Status") in a particular calendar year. For the avoidance of doubt, Brokers working in a team shall be considered a single Broker for purposes of the Program and any credit earned shall pertain to the named Broker only. Broker's Status shall be used to determine the Fee paid to Broker on a particular transaction for the remainder of the calendar year in which such Status is achieved and for the entirety of the following calendar year as further set forth below. All Brokers are eligible for "Standard" (hereinafter defined) rates prior to the achievement of any Status.
TCV for any Customer Agreement shall be determined based on the TCV on the date of initial execution of the Customer Agreement subject to adjustment as further set forth in these Terms and Conditions. By way of example only, a Customer Agreement for a 3 year term signed in 2019 with $1.1 million annual contract value ("ACV") for year 1 (months 1-12), $1.2 million ACV for year 2 (months 13-24), and $1.3 million ACV for year 3 (months 25-36), would have a TCV of $3.6 million.
In order to achieve each Status level, Broker must have achieved a cumulative TCV for all Customer Agreements that surpasses the achievement level of a particular Status. Those achievement levels for the US and Europe are as follows:
|Status||Total Contract Value|
|Standard||< $3 million|
|Silver||≥ $3 million|
|Gold||≥ $8 million|
|Platinum||≥ $15 million|
|Status||Total Contract Value|
|Standard||< €3 million|
|Silver||≥ €3 million|
|Gold||≥ €8 million|
|Platinum||≥ €15 million|
|Status||Total Contract Value|
|Standard||< ￡3 million|
|Silver||≥ ￡3 million|
|Gold||≥ ￡8 million|
|Platinum||≥ ￡15 million|
If Broker has not reached the Silver Status level Broker is considered to be "Standard" for the purposes of Fee calculations and any related perks or promotions.
Status Membership Period
There are two timelines associated with Broker Status Membership – the Qualification Period and the Membership Period.
Qualification Period: Current calendar year
Membership Period: Beginning on the date any Status is achieved through December 31 of the following year.
For example, if Broker reaches Silver Status by closing ≥ $3 million of TCV on June 1, 2019, Broker will reach Silver Status on that date, and such Status will be valid through the end of 2020. In this example, once Silver Status is achieved, any Customer Agreements signed after June 1, 2019 will pay Broker according to the fee schedule for that Status level. As soon as Broker qualifies for a higher level, Knotel will automatically upgrade Broker's Status and Broker's new benefits will be effective.
To serve as an example:
Deal 1 of 2019
- Customer Agreement signed between Customer and Knotel on April 1, 2019.
- TCV of Customer Agreement is $2.5 million on a 3-year term
- Brooker is still "Standard" since no Status level has been achieved.
- Entire $2.5 million is paid on the "Standard" rates based on the fee schedule below.
Deal 2 of 2019
- Customer Agreement signed between Customer and Knotel on June 20, 2019.
- TCV of Customer Agreement is $4 million
- 2-year term; $2 million per year
- The first $500K is based on the fee schedule of "Standard"
- The second $1.5 million is based on the fee schedule of Silver Status
- Year 1 Fee is paid at the new revenue rate of 10% of $500k + 12% of $1.5 million
- Year 2 Fee is paid at the recurring revenue rate of 2% of $2 million
- Silver Status has been achieved, and therefore Broker will be eligible to be paid at the higher Silver Status rates through the end of the Membership Period (i.e. December 31, 2020)
- After Deal 2, TCV earned in 2019 by Broker is $6.5 million. If and when Broker achieves another $1.5 million of TCV in 2019 to reach the $8 million threshold, Broker will have earned "Gold Status" for the remainder of 2019 and all of 2020. The same applies for achieving Platinum at $15 million.
The Qualification Period to determine Status shall reset at the beginning of each calendar year. Therefore, in the example above, Broker earned Silver Status in 2019 by closing $6.5 million TCV. If Broker were to close a Customer Agreement with $2 million of TCV on February 1, 2020, the Fees would be paid based on the Silver Status fee schedule since the full 2020 calendar year is within the Membership Period for Silver Status earned in the 2019 Qualification Year. The $2 million of TCV signed on February 1, 2020 counts towards the Broker's Status in the 2020 Qualification Year.
Subject to these Terms and Conditions, and provided all conditions set forth in the Commission Agreement are met, including payment in full of any security deposit and advance installments of the Monthly Service Rate due to Knotel from Customer under the Customer Agreement, Knotel will pay Broker a Fee equal to the applicable percentage of each year's annual contract value ("ACV") agreed to in the initial Customer Agreement, in accordance with the Fee schedules set forth below. Fees are calculated based on the Status that Broker holds on the date the Customer Agreement is executed.
|Renewal||At end of existing term||5.00%||6.00%||7.00%||8.00%|
- On the initial year of the Customer Agreement, Broker shall be paid the rate applicable to new revenue on the first year ACV.
- On any subsequent year, Broker shall be paid the rate applicable to recurring revenue on the ACV of the prior year plus the new revenue rate for any excess ACV for that year over the prior year's ACV.
- Upon expiration of the term of the existing Customer Agreement, provided Broker remains the Broker of record for the Tenant (as indicated by Tenant in such extension or renewal agreement), then Broker shall be entitled to the renewal rate on the first year ACV and the recurring rate on any subsequent revenue earned in the following years of the renewal terms. Any annual increases year over year will be paid at the "new revenue" rate.
Fees may be paid at a blended rate based on the achievement of a new Status. For example, if, before a $4 million Customer Agreement is signed, Broker has closed $2.5 million of TCV towards their Status, then by signing this new Customer, Broker will have Silver Status and their new TCV will be $6.5 million. However, since Silver Status was achieved at $3 million, the first $500k of the $4 million TCV would be paid using the Standard fee schedule and the remaining $3.5 million will be paid using the Silver Status fee schedule.
To further the example above, if this is a 4 year ($1 million per year) Customer Agreement with $4 million TCV, the first $500k would be paid at 10% (Year 1 Standard rate for new revenue), the second $500K of Year 1 would be paid at 12% (new revenue rate for Silver Status Brokers), and each of the successive years would be paid at 2% assuming the monthly service rate remained constant.
If a Customer Agreement included annual increases to the Monthly Service Rate, with ACV as set forth below, the Fee would be paid on a blended basis each year based on the Broker's Status at the time of execution of the Customer Agreement. For example:
Year 1 ACV : $1 million
Year 2 ACV: $1.1 million
Year 3 ACV: $1.3 million
Year 4 ACV: $1.6 million
|YEAR||ACV||AMOUNT||REV TYPE||STATUS||FEE %|
|Year 1||1.0 MILLION||500k||New||Standard||10%|
|Year 2||1.1 MILLION||1 million||Recurring||Silver||2%|
|Year 3||1.3 MILLION||1.1 million||Recurring||Silver||2%|
|Year 4||1.6 MILLION||1.3 million||Recurring||Silver||2%|
The TCV applicable to Broker's Status is calculated on the execution date of the Customer Agreement. Timing and conditions to payment of the Fee shall be set forth in the Commission Agreement executed by Knotel. Broker shall be responsible for invoicing Knotel for the Fee. Broker should submit the invoice to email@example.com, and should copy the Knotel Account Executive responsible for the Customer relationship.
All communication regarding the amount of the Fee and the schedule of payments shall come from the Knotel Broker Partnerships team. Any questions or concerns regarding these terms and the referral program should be addressed to the Knotel Broker Partnerships team at firstname.lastname@example.org. While Broker may receive unofficial contact from other Knotel departments regarding Broker's referral, please be advised that any such communication shall be considered advisory only, any information provided to Broker by such other team may not be correct or valid, and no determinations, especially regarding validity of a referral, made by such other team may be considered binding. The Knotel Growth team shall be responsible for the final determinations regarding all referrals made pursuant to the Knotel Broker Program.
Knotel reserves the right in its sole discretion to make any determination under these Terms and Conditions, including, without limitation, the determination of Broker's eligibility for the achievement of any Status or eligibility for any Fees. If Knotel determines, in its sole discretion, that Broker has violated these Terms and Conditions, Broker will not be eligible for the Fees and Knotel reserves the right to disqualify Broker from the Program. Nothing in these rules grants Broker or any other party any right, title or license to use any of Knotel's trademark or other intellectual property rights. By submitting introductions, Broker will not be deemed to be an employee or agent of Knotel. Broker will not act as an agent of Knotel nor are Broker entitled to make any commitments on behalf of Knotel.
Knotel reserves the right to amend the Terms and Conditions, the rules contained herein, the Program and the Fees at any time without prior notice. Broker consents that we may also transfer the personal information collected by us and make it available to our personnel, advisors, professionals, subcontractors, independent consultants, external third-party services providers and our affiliates for the foregoing purposes. Some of these transferees may not be located in Broker's country, and therefore Broker's information may be transferred to countries that may or may not guarantee a level of privacy and data protection that is equivalent to the level of privacy and data protection set by the laws in Broker's country.
These terms of service and any dispute arising out of these terms (including any non-contractual disputes) will be governed by and interpreted according to the laws of the State of New York, without giving effect to its principles or rules of conflict of laws.
Any proceedings to resolve or litigate any dispute under these Terms and Conditions will be conducted solely on an individual basis. Neither Broker nor Knotel will seek to have any such dispute heard as a class action or in any other proceeding in which either party acts or proposes to act in a representative capacity. No proceeding will be combined with another without the prior written consent of all parties to all affected proceedings.
Questions? Reach out to Broker Partnerships at email@example.com.
Posted as of: March 11, 2019