EXHIBIT (3)(a)
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PRINCIPAL UNDERWRITING AGREEMENT
BY AND BETWEEN
TRANSAMERICA LIFE INSURANCE COMPANY ON ITS OWN BEHALF
AND ON BEHALF OF THE MUTUAL FUND ACCOUNT,
AND AFSG SECURITIES CORPORATION.
PRINCIPAL UNDERWRITING AGREEMENT
THIS PRINCIPAL UNDERWRITING AGREEMENT made and effective as of the
1/st/ day of August, 2001, by and between AFSG SECURITIES CORPORATION ("AFSG"),
a Pennsylvania corporation, and TRANSAMERICA LIFE INSURANCE COMPANY
("Transamerica"), an Iowa corporation, on its own behalf and on behalf the
separate investment accounts of Transamerica set forth in Exhibit A attached
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hereto and made a part hereof (collectively, the "Account").
WITNESSETH:
WHEREAS, the Account was established or acquired by TRANSAMERICA under
the laws of the State of Iowa, pursuant to a resolution of Transamerica's Board
of Directors in order to set aside the investment assets attributable to certain
flexible premium, multi-funded annuity contracts ("Contracts") issued by
Transamerica;
WHEREAS, Transamerica has registered or will register the Account with
the Securities and Exchange Commission ("SEC") as a unit investment trust under
the Investment Company Act of 1940 (the "1940 Act");
WHEREAS, Transamerica has registered or will register the Contracts
under the Securities Act of 1933 (the "1933 Act");
WHEREAS, AFSG is and will continue to be registered as a broker-dealer
with the SEC under the Securities Exchange Act of 1934 (the "1934 Act"), and a
member of the National Association of Securities Dealers, Inc. (the "NASD")
prior to the offer and sale of the Contracts; and
WHEREAS, Transamerica proposes to have the Contracts sold and
distributed through AFSG, and AFSG is willing to sell and distribute such
Contracts under the terms stated herein;
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NOW, THEREFORE, the parties, intending to be legally bound, hereby
agree as follows:
1. Appointment as Distributor/Principal Underwriter. Transamerica
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grants to AFSG the exclusive right to be, and AFSG agrees to serve as,
distributor and principal underwriter of the Contracts during the term of this
Agreement. AFSG agrees to use its best efforts to solicit applications for the
Contracts and otherwise perform all duties and functions which are necessary and
proper for the distribution of the Contracts.
2. Prospectus. AFSG agrees to offer the Contracts for sale in
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accordance with the registration statements and prospectus therefor then in
effect. AFSG is not authorized to give any information or to make any
representations concerning the Contracts other than those contained in the
current prospectus therefor filed with the SEC or in such sales literature as
may be authorized by Transamerica.
3. Considerations. All premiums, purchase payments or other moneys
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payable under the Contracts shall be remitted promptly in full together with
such application, forms and any other required documentation to Transamerica or
its designated servicing agent and shall become the exclusive property of
Transamerica. Checks or money orders in payment under the Contracts shall be
drawn to the order of "Transamerica Life Insurance Company" and funds may be
remitted by wire if prior written approval is obtained from Transamerica.
4. Copies of Information. On behalf of the Account, Transamerica shall
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furnish AFSG with copies of all prospectuses, financial statements and other
documents which AFSG reasonably requests for use in connection with the
distribution of the Contracts.
5. Representations. AFSG represents that it is (a) duly registered as a
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broker-dealer under the 1934 Act, (b) a member in good standing of the NASD and
(c) to the extent necessary to offer the Contracts, duly registered or otherwise
qualified under the securities laws of any state or other jurisdiction. AFSG
shall be responsible for carrying out its sales and underwriting
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obligations hereunder in continued compliance with the NASD Rules and federal
and state securities and insurance laws and regulations. Further, AFSG
represents and warrants that it will adopt, abide by and enforce the principles
set forth in the Principles and Code of Ethical Market Conduct of the Insurance
Marketplace Standards Association as adopted by the Company.
6. Other Broker-Dealer Agreements. AFSG is hereby authorized to enter
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into written sales agreements with other independent broker-dealers for the sale
of the Contracts. All such sales agreements entered into by AFSG shall provide
that each independent broker-dealer will assume full responsibility for
continued compliance by itself and by its associated persons with the NASD Rules
and applicable federal and state securities and insurance laws, shall provide
that each independent broker-dealer will adopt, abide by and enforce the
principles set forth in the Principles and Code of Ethical Market Conduct of the
Insurance Marketplace Standards Association as adopted by the Company, and shall
be in such form and contain such other provisions as Transamerica may from time
to time require. All associated persons of such independent broker-dealers
soliciting applications for the Contracts shall be duly and appropriately
registered by the NASD and licensed and appointed by Transamerica for the sale
of Contracts under the insurance laws of the applicable states or jurisdictions
in which such Contracts may be lawfully sold. All applications for Contracts
solicited by such broker-dealers through their representatives, together with
any other required documentation and premiums, purchase payments and other
moneys, shall be handled as set forth in paragraph 3 above.
7. Insurance Licensing and Appointments. Transamerica shall apply for
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the proper insurance licenses and appointments in appropriate states or
jurisdictions for the designated persons associated with AFSG or with other
independent broker-dealers that have entered into sales agreements with AFSG for
the sale of Contracts, provided that Transamerica reserves the right to refuse
to appoint any proposed registered representative as an agent or broker, and to
terminate an agent or broker once appointed.
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8. Recordkeeping. Transamerica and AFSG shall cause to be maintained
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and preserved for the periods prescribed such accounts, books, and other
documents as are required of them by the 1940 Act, and 1934 Act, and any other
applicable laws and regulations. The books, accounts and records of
Transamerica, of the Account, and of AFSG as to all transactions hereunder shall
be maintained so as to disclose clearly and accurately the nature and details of
the transactions. Transamerica (or such other entity engaged by Transamerica for
this purpose), on behalf of and as agent for AFSG, shall maintain AFSG's books
and records pertaining to the sale of Contracts to the extent as mutually agreed
upon from time to time by Transamerica and AFSG; provided that such books and
records shall be the property of AFSG, and shall at all times be subject to such
reasonable periodic, special or other audit or examination by the SEC, NASD, any
state insurance commissioner and/or all other regulatory bodies having
jurisdiction. Transamerica shall be responsible for sending on behalf of and as
agent for AFSG all required confirmations on customer transactions in compliance
with applicable regulations, as modified by an exemption or other relief
obtained by Transamerica. AFSG shall cause Transamerica to be furnished with
such reports as Transamerica may reasonably request for the purpose of meeting
its reporting and recordkeeping requirements under the insurance laws of the
State of Iowa and any other applicable states or jurisdictions. Transamerica
agrees that its records relating to the sale of Contracts shall be subject to
such reasonable periodic, special or other audit or examination by the SEC,
NASD, and any state insurance commissioner and/or all other regulatory bodies
having jurisdiction.
9. Commissions. Transamerica shall have the responsibility for paying
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on behalf of AFSG (a) any compensation to other independent broker-dealers and
their associated persons due under the terms of any sales agreements entered
into pursuant to paragraph 6 above, between AFSG and such broker-dealers as
agreed to by Transamerica and (b) all commissions or other fees to associated
persons of AFSG which are due for the sale of the Contracts in the amounts
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and on such terms and conditions as Transamerica and AFSG determine.
Notwithstanding the preceding sentence, no broker-dealer, associated person or
other individual or entity shall have an interest in any deductions or other
fees payable to AFSG as set forth herein.
10. Expense Reimbursement. Transamerica shall reimburse AFSG for all
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costs and expenses incurred by AFSG in furnishing the services, materials, and
supplies required by the terms of this Agreement.
11. Indemnification. Transamerica agrees to indemnify AFSG for any
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losses incurred as a result of any action taken or omitted by AFSG, 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.
12. Regulatory Investigations. AFSG and Transamerica agree to cooperate
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fully in any insurance or judicial regulatory investigation or proceeding
arising in connection with Contracts distributed under this Agreement. AFSG and
Transamerica further agree to cooperate fully in any securities regulatory
inspection, inquiry, investigation or proceeding or any judicial proceeding with
respect to Transamerica, AFSG, their affiliates and their representatives to the
extent that such inspection, inquiry, investigation or proceeding or judicial
proceeding is in connection with Contracts distributed under this Agreement.
Without limiting the foregoing:
(a) AFSG will be notified promptly of any customer complaint or notice
of any regulatory inspection, inquiry investigation or proceeding or judicial
proceeding received by Transamerica with respect to AFSG or any representative
or which may affect Transamerica's issuance of any Contracts marketed under this
Agreement; and
(b) AFSG will promptly notify Transamerica of any customer complaint or
notice of any regulatory inspection, inquiry, investigation or judicial
proceeding received by AFSG or any representative with respect to Transamerica
or its affiliates in connection with any Contracts distributed under this
Agreement.
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In the case of a customer complaint, AFSG and Transamerica will
cooperate in investigating such complaint and shall arrive at a mutually
satisfactory response.
13. Termination.
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(a) This Agreement may be terminated by either party hereto upon 60
days' prior 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 hereto.
(d) AFSG shall not assign or delegate its responsibilities under this
Agreement without the written consent of Transamerica.
(e) Upon termination of this Agreement, all authorizations, rights
and obligations shall cease except the obligations 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 Transamerica prior to termination.
14. Regulatory Impact. This Agreement shall be subject to, among
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other laws, the provisions of the 1940 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 1940 Act as the SEC may grant, and
the terms hereof shall be interpreted and construed in accordance therewith.
AFSG shall submit to all regulatory and administrative bodies having
jurisdiction over the operations of the Account, present or future; and will
provide any information, reports or other material which any such body by reason
of this Agreement may request or require pursuant to applicable laws or
regulations.
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15. Severability. If any provision of this Agreement shall be held or
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made invalid by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby.
16. Choice of Law. This Agreement shall be construed, enforced and
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governed by the laws of the State of Iowa.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their respective duly authorized officials as of the day and year
first above written.
AFSG SECURITIES CORPORATION TRANSAMERICA LIFE INSURANCE
COMPANY
By: /s/ Xxxx X. Xxxxxxxxxx By: /s/ Xxxxx X. Xxxxxx
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Xxxx X. Xxxxxxxxxx Xxxxx X. Xxxxxx
Title: Vice President Title: President
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EXHIBIT A
1. Separate Account VA B
2. PFL Endeavor Target Account
3. Retirement Builder Variable Annuity Account
4. PFL Xxxxxx Variable Annuity Account
5. Separate Account VA A
6. Separate Account VA C
7. Separate Account VA D
8. Separate Account VA E
9. Separate Account VA F
10. Separate Account VA I
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