PRINCIPAL UNDERWRITING AGREEMENT
Separate Account D
This UNDERWRITING AGREEMENT made as of the _____ day of February 1993, by
and between Walnut Street Securities, Inc. (hereinafter "the Underwriter") and
Paragon Life Insurance Company (hereinafter "the Insurance Company"), on its own
behalf and on behalf of Paragon Life Insurance Company Separate Account D
(hereinafter "the Account"), a separate account of the Insurance Company;
WITNESSETH as follows:
WHEREAS, the Account was established under authority of a resolution of the
Insurance Company's Board of Directors on January 3, 1995, in order to set aside
and invest assets attributable to certain flexible premium variable life
contracts (hereinafter "Contracts") issued by the Insurance Company;
WHEREAS, the Insurance Company has registered the Account as a unit
investment trust under the Investment Company Act of 1940 (the "Investment
Company Act") and has registered the Contracts under the Securities Act of 1933;
WHEREAS, the Underwriter is registered as a broker-dealer with the
Securities and Exchange Commission (the "SEC") under the Securities Exchange Act
of 1934, as amended (the "1934 Act"), and is a member of the National
Association of Securities Dealers, Inc. (the "NASD"); and
WHEREAS, the Insurance Company and the Account desire to have Contracts
sold and distributed through the Underwriter and the Underwriter is willing to
sell and distribute such Contracts under the terms stated herein;
NOW, THEREFORE, the parties hereto agree as follows:
1. The Insurance Company grants to the Underwriter the right to be, and the
Underwriter agrees to serve as distributor and principal underwriter of the
Contracts during the term of this Agreement. The Underwriter agrees to use its
best efforts to solicit applications for the Contracts at its own expense, and
otherwise to perform all duties and functions which are necessary and proper for
the distribution of the Contracts.
2. All premiums for Contracts shall be remitted promptly to the Insurance
Company in full together with appropriate application forms and any other
required documentation. Checks or money orders in payment of premiums shall be
drawn to the order of "Paragon Life Insurance Company".
3. The Underwriter agrees to offer the Contracts for sale in accordance with
the prospectus for them then in effect. The Underwriter is not authorized to
give any information or to make any representations concerning the Contracts
other than those contained in the current prospectus filed with the SEC or in
such sales literature as may be developed and authorized by the Insurance
Company in conjunction with the Underwriter.
4. On behalf of the Account, the Insurance Company shall furnish the
Underwriter with copies of all prospectuses, financial statements, and other
documents which the Underwriter reasonably requests for use in connection with
the distribution of the Contracts.
5. The Underwriter represents that it is duly registered as a broker-dealer
under the 1934 Act, and is a member in good standing of the NASD, and -- to the
extent necessary to offer the Contracts -- shall be duly registered or otherwise
qualified under the securities
laws of any state or other jurisdiction. The Underwriter shall be responsible
for carrying out its sales and underwriting obligations hereunder in continued
compliance with the NASD Rules of Fair Practice, and applicable federal and
state securities laws and regulations. Without limiting the generality of the
foregoing, the Underwriter agrees that it shall be fully responsible for:
(a) ensuring that no person shall offer or sell the Contracts on its
behalf until such person is duly registered as a representative of the
Underwriter; duly licensed and appointed by the Insurance Company; and
appropriately licensed, registered, or otherwise qualified to offer and sell
such Contracts under the federal securities laws and any applicable securities
laws of each state or other jurisdiction in which the Insurance Company is
licensed to sell the Contracts and in which such persons shall offer or sell the
Contracts; and
(b) training, supervising, and controlling of all such persons for
purposes of complying on a continuous basis with the NASD Rules of Fair Practice
and with federal and state securities law requirements applicable in connection
with the offering and sale of the Contracts. In this connection, the Underwriter
shall:
(1) conduct such training (including the preparation and utilization
of training materials) as in the opinion of the Underwriter is necessary to
accomplish the purposes of this Agreement;
(2) establish and implement reasonable written procedures for
supervision of sales practices of agents, representatives, or brokers
selling the Contracts: and
(3) take reasonable steps to ensure that its associated persons
shall not
make recommendations to an applicant to purchase and shall not sell a
Contract in the absence of reasonable grounds to believe that the purchase
of the Contract is suitable for such applicant.
6. Notwithstanding anything in this Agreement to the contrary, the Underwriter
is hereby authorized to enter into sales agreements with other independent
broker-dealers for the sale of the Contracts. All such sales agreements entered
into by the Underwriter shall provide that each independent broker-dealer will
assume full responsibility for continued compliance by itself and its associated
persons with the NASD Rules of Fair Practice and applicable federal and state
securities laws. All associated persons of such independent broker-dealers
soliciting applications for the Contracts shall be duly and appropriately
licensed or appointed by the Insurance Company for the sale of the Contracts
under the insurance laws of the applicable states or jurisdictions in which such
persons shall offer or sell the Contracts.
7. The Insurance Company shall apply for the proper insurance licenses in the
appropriate states or jurisdictions for persons associated with the Underwriter;
or with other independent broker-dealers which have entered into agreements with
the Underwriter for the sale of the Contracts and are designated to sell the
Contracts provided that the Insurance Company reserves the right to refuse to
appoint any proposed associated person as an agent or broker, and to terminate
an agent or broker once appointed.
8. The Insurance Company and the Underwriter shall cause to be maintained and
preserved for the periods prescribed such accounts, books, and other documents
as are required of them by the Investment Company Act, the 1934 Act, and any
other applicable laws and regulations. The books, accounts and records of the
Insurance Company, the Account, and the Underwriter as to all transactions
hereunder shall be maintained so as to
disclose clearly and accurately the nature and details of the transactions. The
Insurance Company shall maintain such books and records of the Underwriter
pertaining to the sale of the Contracts and required by the 1934 Act as may be
mutually agreed upon from time to time by the Insurance Company and the
Underwriter; provided that such books and records shall be the property of the
Underwriter, and shall at all times be subject examination by the SEC and all
other regulatory bodies having jurisdiction. The Insurance Company shall be
responsible for sending all confirmations on customer regulations, as modified
by an exemption or other relief obtained by the Insurance Company. The
Underwriter shall cause the Insurance Company to be furnished with such reports
as the Insurance Company may reasonably request for the purpose of meeting its
reporting and recordkeeping obligations under the insurance laws of the State of
Missouri and any other states or jurisdictions.
9. Ownership and control of records shall not be affected by this Agreement.
10. Each party to this Agreement has the right to inspect, audit, and copy all
pertinent records of the other party pertaining to performance under this
Agreement.
11. Each party to this Agreement will keep any information obtained in the
course of its relationship to the other party in confidence and will not use
such information for its own benefit or disclose it except as authorized by the
other party or as required by regulatory authorities having jurisdiction.
12. The Insurance Company shall pay commissions as per Maximum Commission
Schedule to the Underwriter. The Underwriter shall have the responsibility for
paying (i) all commissions or other fees to associated persons of the
Underwriter which are due for the sale of the Contracts and (ii) any
compensation to other independent broker-dealers and their associated persons
due under the terms of any sales agreements between the Underwriter
and such broker-dealers. Notwithstanding the preceding sentence, no associated
person or broker-dealer shall have an interest in any deductions or other fees
payable to the Underwriter as set forth herein.
13. The Insurance Company agrees to indemnify the Underwriter for any losses
incurred as a result of any action taken or omitted by the Underwriter, or any
of its officers, agents, or employees, in performing their responsibilities
under this Agreement in good faith and without willful misfeasance, gross
negligence, or reckless disregard of such obligations.
14. The Insurance Company undertakes to guarantee the performance of all of
Underwriter's obligations imposed by Section 27(f) of the Investment Company
Act, as amended, and Rule 27d-2 adopted by the SEC, to make refunds of the
premiums or charges to owners of Contracts required by Section 27(f) or the
conditions of any exemptions therefrom.
15. (a) This Agreement may be terminated by either party hereto upon 60 days'
written notice to the other party.
(b) This Agreement may be terminated upon written notice of one party to
the other party hereto in the event of bankruptcy or insolvency of
such party to which notice is given.
(c) This Agreement may be terminated at any time upon the mutual written
consent of the parties thereto.
(d) The Underwriter shall not assign or delegate its responsibilities
under this Agreement without the written consent of the Insurance
Company.
Without limiting the generality of the foregoing, the term "assigned"
shall not include any transaction exempted from section 15(b)(2) of
the Investment Company Act.
(e) This Agreement may be terminated by either party without penalty.
(f) In the event either party to this Agreement fails to perform in a
satisfactory manner the other party may cancel this Agreement.
(g) Upon termination of this Agreement, all authorizations, rights, and
obligations shall cease except the obligation to settle accounts
hereunder, including payments (or premiums or contributions)
subsequently received for Contracts in effect at the time of
termination or issued pursuant to applications received by the
Insurance Company prior to termination.
(h) In the event this Agreement is ended for any reason each party agrees
to return all records belonging to the other party promptly and free
from all claims.
16. This Agreement shall be subject to the provisions of the Investment Company
Act and the 1934 Act and the rules, regulations, and rulings thereunder and of
the NASD, from time to time in effect, including such exemptions from the
Investment Company Act as the SEC may grant, and the terms hereof shall be
interpreted and construed in accordance therewith.
17. Each party to this Agreement expressly reserves unto itself the ultimate
authority and responsibility for conduct of its business.
18. Each party to this Agreement shall furnish to regulatory authorities having
jurisdiction such information as may be requested in order for such authorities
to ascertain that Insurance Company's variable life insurance operations are
being conducted in accordance with applicable laws and regulations.
19. Each party to this Agreement shall be liable for its own misconduct and
negligence.
20. Neither party to this Agreement shall attempt to immunize itself from
liability solely in reliance upon an opinion of that party's own counsel.
21. Neither party to this Agreement shall undertake any activity which might
conflict with its faithful discharge of the duties outlined in this Agreement.
22. The statutes of limitations contained in the laws applicable to this
Agreement shall govern.
23. If any provision of this Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall not
be affected thereby.
24. This Agreement shall be construed and enforced in accordance with and
governed by the laws of the State of Missouri.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their respective officials thereunder duly authorized and seals to be
affixed, as of the day and year first above written.
WALNUT STREET SECURITIES, INC.
Attest:
by:
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Secretary President
Attest: PARAGON LIFE INSURANCE COMPANY
by:
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Secretary President
