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EXHIBIT 10.41
August __, 1998
XXXXX/XXXXXX, INC.
0000 Xxx Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000-0000
Attn: Xxx Xxxx, President & CEO
RE: JOINT PRODUCT DEVELOPMENT AND PRODUCTION AGREEMENT
This letter outlines the general terms on which Xxxxx/Xxxxxx, Inc. ("CB") and
Phoenix Home Life Mutual Insurance Company ("PHL") have agreed to enter into a
Joint Product Development and Production Agreement (the "Agreement"). The terms
are as follows:
1. The parties will jointly develop a life insurance product (the
"Product") to be written by PHL (or an appropriate insurance
subsidiary thereof) and exclusively distributed by CB. The parties
will use their commercial best efforts to have the Product ready for
distribution on or before December 31, 1999.
2. CB will use its best efforts to sell and service the Product with both
existing and future clients and/or clients of companies acquired by
CB. This effort will require CB to illustrate and present the Product
to all appropriate potential clients.
3. CB shall have exclusive rights to distribute the Product provided that
the production requirements set forth below are met and subject to
PHL's requirements that CB make the Product available for distribution
by PHL's Career Agency sales force on terms and conditions reasonably
acceptable to CB.
4. CB will commit for a period of five years after the Product is
available for sale, that sales of the Product will comprise at least
seven and one-half percent (7.5%) of CB's total annualized new
premiums in the markets in which similar products are sold subject to
a minimum production level of $15 million of annualized new premiums
from the Product (the "Product Target Production"). For purposes of
determining Product Target Production, the term "annualized new
premium" means annual target premium plus ten
2
percent (10%) of excess premium, and shall exclude premium from
supplemental offset plans.
5. For the period commencing on the effective date of the Agreement
and ending on the earlier of the fifth anniversary of such effective
date and the date on which the Product is available for sale (the
"Pre-Product Period), CB will commit that sales by CB of PHL insurance
products (or those of PHL's insurance subsidiaries) will satisfy the
following minimum production requirements (the "Pre-Product Target
Production"): (a) $2.5 million of annualized new premiums for the
first twelve month period (or portion thereof on a pro-rated basis) of
the Pre-Product Period, and (b) $5 million of annualized new premiums
(or a portion thereof on a pro-rated basis) for each subsequent twelve
month period (or portion thereof on a pro-rated basis). For this
purposed, the term "annualized new premium" will be defined in the
same way as it is defined for purposes of determining compliance with
Target Production above.
6. At the end of each twelve month period, PHL will determine if the
Product Target Production or the Pre-Product Target Production
requirements, whichever apply, have been met. If CB fails to meet the
applicable requirements, the penalty for non-compliance for each
twelve month period will be $100,000.
7. This letter agreement, which shall be binding upon CB and PHL,
shall be incorporated into a formal document on or before _____, 1998,
which agreement shall contain provisions regarding, among other
things, term and termination, confidentiality, governing laws, and
other customary terms and conditions.
Signed: Signed:
_________________________ __________________________________
Xxxxx/Xxxxxx, Inc. Phoenix Home Life Mutual Insurance
Company
