EXHIBIT 5(a)
Underwriting Agreement Among
Great American Reserve Insurance Company,
Rydex Advisor Variable Annuity Account,
and PADCO Financial Services, Inc.
PRINCIPAL UNDERWRITING AGREEMENT
FOR THE CONTRACTS FUNDED BY
RYDEX ADVISOR VARIABLE ANNUITY ACCOUNT
AGREEMENT made this 1st day of November, 1996, by and
among PADCO Financial Services, Inc., a Maryland corporation
("PFS"), on its own behalf and on behalf of Rydex Insurance
Agency, its insurance agency subsidiary (collectively with
PFS, PADCO ), Great American Reserve Insurance Company, a
stock company organized under the laws of the State of Texas
( Great American Reserve ), and Rydex Advisor Variable Annuity
Account, a managed separate account of Great American Reserve
(the Annuity Account ).
WITNESSETH:
WHEREAS, Great American Reserve has established the
Annuity Account to segregate assets funding the variable
benefits provided by individual, flexible premium, deferred
annuity contracts (the Contracts ), as well as by other
contracts that may be offered by Great American Reserve in the
future;
WHEREAS, the Annuity Account is registered as an open-end
management investment company under the Investment Company Act
of 1940, as amended (the 1940 Act ), and currently consists
of eight separate subaccounts and may consist of additional
subaccounts in the future (collectively, the Subaccounts );
WHEREAS, Great American Reserve and the Annuity Account
have registered the Contracts under the Securities Act of
1933, as amended (the 1933 Act ), and desire to retain PADCO
t o distribute the Contracts, and PADCO is willing to
distribute the Contracts in the manner and on the terms set
forth herein;
WHEREAS, PFS is registered as a broker-dealer under the
Securities Exchange Act of 1934, as amended (the 1934 Act ),
and is a member of the National Association of Securities
Dealers, Inc. ( NASD );
WHEREAS, under the applicable insurance licensing laws
and other insurance-licensing requirements of certain states
and other jurisdictions in which Contracts may be offered and
sold, Contracts may be offered and sold only through persons
who are licensed to market the Contracts in these states or
other jurisdictions; and
WHEREAS, Great American Reserve is willing to compensate
PADCO for the services to be provided in the manner and on the
terms set forth herein.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants herein contained, Great American Reserve, the
Annuity Account, and PADCO hereby agree as follows:
1. Distribution of the Contracts
(a) Great American Reserve and the Annuity Account
hereby grant to PADCO the exclusive right, subject to the
applicable requirements of the 1933 Act, the 1934 Act, the
1940 Act, state law, and the terms set forth herein, to
distribute the Contracts during the term of this Agreement.
PADCO agrees to use commercially reasonable efforts to
distribute the Contracts.
(b) To the extent necessary to offer and sell the
Contracts, PADCO shall be duly registered or otherwise
qualified under the securities and insurance laws of any state
or other jurisdiction in which the Contracts lawfully may be
sold and in which PADCO is licensed or otherwise authorized to
sell the Contracts. In addition, to the extent necessary,
e a c h of PADCO's agents or representatives soliciting
applications for Contracts also shall be duly licensed,
registered, or otherwise qualified for the offer and sale of
C o ntracts under the applicable insurance laws and any
a p p l i c able securities laws of each state or other
jurisdictions in which these agents or representatives are
soliciting applications for Contracts. PADCO shall be
responsible for the training, supervision, and control of its
registered representatives for the purpose of the NASD Rules
of Fair Practice and federal and state securities law
requirements applicable in connection with the distribution of
the Contracts. In this connection, PADCO shall maintain
written supervisory procedures in compliance with Rule 3010 of
the NASD Conduct Rules.
(c) Unless otherwise permitted by applicable law, each
person engaged in the distribution of Contracts under this
Agreement shall be both an agent of Great American Reserve and
a person associated with a broker or dealer, within the
meaning attributed to that phrase under the 1934 Act (each
such person, an "Agent," and, collectively, "Agents"). With
respect to all Agents, PADCO or, in connection with the Sales
Agreements authorized under section 2 of this Agreement, the
broker-dealers which have agreed to participate in the
distribution of Contracts pursuant to said Sales Agreements
(the "Participating Broker-Dealers"), as appropriate, will be
responsible for the training, qualification, registration,
supervision, and control of the Agents in the manner and to
the extent required by the applicable rules of the Securities
and Exchange Commission (the "Commission") and the NASD and by
any applicable securities laws or rules of the various states
relating to the distribution of the Contracts.
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(d) PADCO agrees to offer the Contracts for sale in
accordance with the then-current prospectus and statement of
additional information ( SAI ) therefor filed with the
Commission. The costs of preparing the prospectus and SAI
shall be borne jointly by PADCO and Great American Reserve, as
appropriate.
(e) Great American Reserve shall furnish PADCO with all
application materials and other documentation that Great
American Reserve requires applicants to complete in connection
with their purchase of Contracts. Great American Reserve also
shall furnish PADCO with copies of all financial statements
and other documents which PADCO reasonably requires for use in
connection with the distribution of the Contracts. PADCO will
be entitled to rely on all documentation and information
furnished to it by Great American Reserve s or the Annuity
Account s management. To the extent required by law, PADCO
shall file all marketing materials with the NASD, the
Commission, and other securities regulatory authorities, and
Great American Reserve shall file all marketing materials with
state insurance regulatory authorities, and PADCO and Great
American Reserve shall each exert commercially reasonable
efforts to obtain any necessary approvals of such marketing
materials from the respective regulatory authorities.
(f) Great American Reserve shall accept the initial
purchase payment under the Contract, which payment must be
paid in full to Great American Reserve and be accompanied by a
completed application and/or such other documentation or
information that Great American Reserve may require in
connection with the purchase of a Contract. Any check, draft,
or money order used by the applicant to cover the initial
purchase payment shall be made payable to "Great American
Reserve Insurance Company," and Great American Reserve shall
return to the applicant any check, draft, or money order made
payable to any person or entity other than Great American
Reserve. It is understood that Great American Reserve
reserves the right to reject any Contract application in its
sole discretion.
(g) PADCO shall not accept payments made by a Contract
owner, either initially or subsequent to the initial purchase
payment under the Contract, and PADCO shall remit to Great
American Reserve any such payments, as well as any application
materials, received by PADCO.
(h) P A D CO or the Participating Broker-Dealer, as
appropriate, shall take reasonable steps to ensure that the
Agents shall not make recommendations to an applicant to
purchase Contracts in the absence of reasonable grounds to
believe that the purchase of Contracts is suitable for such
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a p p licant. While not limited to the following, the
determination by PADCO or the Participating Broker-Dealer, as
appropriate, of suitability shall be based on information
furnished to an Agent after reasonable inquiry concerning the
applicant s insurance and investment objectives and financial
situation and needs.
(i) PADCO shall have no authority to, and shall not: (i)
add, alter, waive or discharge any Contract or application
provision or prospectus provision or represent that such can
be done by Great American Reserve or PADCO; (ii) extend the
time of making any payments; (iii) alter or substitute Great
American Reserve's forms in any manner; (iv) give or offer to
give, on behalf of Great American Reserve, any tax or legal
advice related to the purchase of a Contract; (v) guarantee
the issuance of any Contract or the reinstatement of any
lapsed Contract; or (vi) exercise any authority on behalf of
Great American Reserve other than that expressly conferred on
PADCO by this Agreement.
(j) Except as may be necessary to comply with the
requirements of any applicable law or regulation, PADCO shall
not, absent Great American Reserve's consent, actively promote
the replacement of any Contract or the redirection of the cash
value of a Contract into any other product. "Actively
promote" shall include mailings specifically sent to or
conversations specifically held with Contract owners or
licensed agents of PADCO which induce or attempt to induce a
Contract owner to surrender the Contract and replace it with
another variable annuity product (other than a product offered
by Great American Reserve or its affiliates), or to direct
premiums, cash values or deposits from a Contract to any other
variable annuity product (other than a product offered by
Great American Reserve or its affiliates). Notwithstanding
the foregoing, in no event shall this provision prevent PADCO
from concurrently or subsequently offering and selling to a
Contract owner any non-variable annuity product, whether or
not offered by Great American Reserve or its affiliates. This
provision shall not be violated in connection with business
contacts by PADCO with, or investment decisions made by,
registered investment advisers performing tactical asset
allocation services with respect to the Contracts. This
provision shall survive this Agreement for one (1) year after
its termination, and Great American Reserve shall have the
right to cease commission payments to PADCO in the event of
its violation.
2. Sales Agreements
(a) Great American Reserve and PADCO may, from time to
t i m e, enter into separate written agreements ( Sales
Agreements ), on such terms and conditions as Great American
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Reserve and PADCO may determine not to be inconsistent with
this Agreement, with broker-dealers which agree to participate
in the distribution of Contracts. Such Participating Broker-
X x xxxxx and their agents or representatives soliciting
applications for Contracts shall be duly licensed, registered,
or otherwise qualified for the offer and sale of Contracts
under the applicable insurance laws and any other applicable
laws of each state or other jurisdiction in which Great
American Reserve is licensed to sell the Contracts. Each such
Participating Broker-Dealer shall be both registered as a
broker-dealer under the 1934 Act and a member of the NASD, or,
if not so registered or not such a member, then the agents and
representatives of such organization soliciting applications
for Contracts shall be agents and registered representatives
of a registered broker-dealer and NASD member which is the
parent or other affiliate of such organization and which
maintains full responsibility for the training, supervision,
a n d control of the agents and representatives selling
Contracts. In addition, each such Participating Broker-Dealer
also shall be licensed to sell insurance policies and
contracts in each state or other jurisdiction in which the
Participating Broker-Dealer solicits sales of the Contracts.
Such Sales Agreements with Participating Broker-Dealers shall
be subject to approval by Great American Reserve.
(b) PADCO shall have the responsibility for training,
monitoring, and supervising all such Participating Broker-
Dealers involved in the offer and sale of the Contracts to the
extent required by applicable law. Application materials for
Contracts solicited by such Participating Broker-Dealers
through their agents or representatives shall be forwarded to
Great American Reserve. All initial purchase payments shall
be remitted promptly by such Participating Broker-Dealers
directly to Great American Reserve.
(c) All compensation payable for sales of Contracts by
such Participating Broker-Dealers involved in the offer and
sale of the Contracts shall be paid by Great American Reserve
to such Participating Broker-Dealers on behalf of PADCO in the
form of commissions and service fees pursuant to the terms and
conditions set forth in the applicable Sales Agreements.
3. State Insurance Agent Licensing Requirements
(a) As to any activities that would require either PADCO
or any of PADCO s Agents to be licensed as an insurance agent
in a particular state or jurisdiction, neither PADCO nor any
of PADCO s Agents (as the case may be) shall engage in such
activities until such persons are properly licensed in such
state or jurisdiction. As used herein, "properly licensed"
includes the filing of an appointment by Great American
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Reserve when required by the laws or regulations of the
applicable state or jurisdiction.
(b) PADCO, from time to time, shall advise Great
American Reserve of the identity of all persons or entities
that PADCO desires Great American Reserve to appoint as Great
American Reserve insurance agents. In that connection, PADCO,
either on its own or in conjunction with the efforts of other
broker-dealers with whom PADCO has contracted to offer the
product, will ensure that, after careful investigation, the
insurance agents selected to engage in the sale of the
Contracts are trained and qualified to make such sales. PADCO
shall prepare and submit completed agent appointment forms for
Great American Reserve's approval, and Great American Reserve
shall forward all approved agent appointment forms in a timely
manner to the appropriate state insurance departments. PADCO
shall pay all required appointment fees.
(c) With respect to each agent appointment executed by
Great American Reserve, Great American Reserve shall take all
a c tion necessary to effect the renewals of the agent
appointments, however, PADCO shall be responsible for the
payment of all required renewal fees paid to state insurance
authorities.
4. Books and Records
(a) Great American Reserve, the Annuity Account, and
PADCO shall cause to be maintained and preserved all required
books of account and related financial records as each is
required to maintain and preserve under the 1934 Act, the
NASD, and any other applicable laws and regulations, including
state insurance laws and regulations.
(b) All the books and records (including completed
applications and/or such other documentation or information
that Great American Reserve may require in connection with the
purchase of a Contract) maintained by Great American Reserve
in connection with the offer and sale of the Contracts shall
b e m a intained and preserved in conformity with the
requirements of the 1934 Act, to the extent that such
requirements are applicable to the obligations imposed on the
parties under this Agreement. All such books and records
shall be maintained and held by Great American Reserve, whose
property these books and records are and shall remain. Such
books and records shall be at all times subject to inspection
by the Commission in accordance with Section 17(a) of the 1934
Act and shall be made accessible to PADCO.
(c) Great American Reserve shall have the responsibility
for maintaining the records of any sales commissions paid by
Great American Reserve on behalf of PADCO to broker-dealers
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a n d /or sales representatives licensed, registered, and
otherwise qualified to sell the Contracts.
5. Reports
PADCO shall cause Great American Reserve and/or the
Annuity Account to be furnished with such reports as either or
both may reasonably request in connection with the offer and
sale of Contracts for the purpose of meeting reporting and
record keeping requirements under the insurance laws of the
S x x x x of Texas and any other applicable states or
jurisdictions. Likewise, Great American Reserve and/or the
Annuity Account shall cause PADCO to be furnished with such
reports as PADCO reasonably may request in connection with the
offer and sale of Contracts for the purpose of meeting
reporting and record keeping requirements under applicable
federal or state securities laws or regulations.
6. Compensation and Expenses
(a) In consideration of the services performed by PADCO
hereunder, Great American Reserve shall compensate PADCO
weekly (or, to the extent applicable law requires that such
compensation be paid to an Agent of PADCO, to such Agent).
The amount of this compensation shall be based on a percentage
of all premiums received by Great American Reserve and
allocated to the Annuity Account under the Contracts. The
current rate of compensation is shown on Schedule A, attached
hereto.
(b) The Annuity Account shall not be liable to PADCO (or
Great American Reserve) for any expense incurred for services
related to the distribution of the Contracts (except to the
extent that profits from the mortality and expense risk charge
paid to Great American Reserve were to be used by Great
American Reserve to cover a portion of Great American
Reserve's obligations to pay such distribution expenses).
PADCO shall be responsible for all expenses relating to the
distribution of the Contracts, including, but not limited to:
(i) t h e costs and expenses of providing the
n e c xxxxxx facilities, personnel, office equipment, and
supplies, telephone services, and other utility service
necessary to carry out PADCO s obligations hereunder;
(ii) charges and expenses of outside legal counsel
r e t a i xxx with respect to activities related to the
distribution of the Contracts;
(iii) the costs and expenses of underwriting and
issuance of the Contracts;
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(iv) the costs and expenses of printing definitive
p r ospectuses and SAIs and any supplements thereto for
prospective purchasers;
(v) expenses incurred in connection with PADCO s
registration as a broker or dealer or in the registration or
q u a l ification of PADCO's officers, directors, or
representatives under federal and state securities laws;
(vi) the costs of designing and printing
promotional, sales, and advertising material;
(vii) the costs of licensing PADCO and PADCO's
Agents pursuant to state insurance laws, as required under
section 3 of this Agreement; and
(viii) a n y expenses incurred by PADCO or its
representatives in connection with performing the obligations
of PADCO under this Agreement.
7. Non-Exclusivity
Great American Reserve and the Annuity Account agree that
the services to be provided by PADCO hereunder are not to be
deemed exclusive and PADCO is free to act as distributor or
underwriter of other variable insurance products, investment
company shares, or other securities or instruments issued by
entities other than Great American Reserve and the Annuity
Account. PADCO shall, for all purposes herein, be deemed to
be an independent contractor of Great American Reserve and the
Annuity Account. Neither PADCO nor Great American Reserve
shall exercise any authority on behalf of the other except to
the extent such authority is expressly conferred under this
Agreement, and, in connection therewith, PADCO shall have no
authority to act for or represent Great American Reserve or
the Annuity Account in any way or otherwise be deemed an agent
of Great American Reserve or the Annuity Account other than in
furtherance of PADCO s duties and responsibilities as set
forth in this Agreement.
8. Indemnification
(a) Great American Reserve agrees to indemnify and hold
harmless PADCO and its affiliates and each Agent, officer, and
director thereof, and each person, if any, who is associated
with PADCO within the meaning of the 1934 Act, and each person
who controls PADCO within the meaning of the 1933 Act or the
1934 Act (collectively, the "PADCO Indemnitees"), against any
losses, claims, damages, or liabilities, joint or several, to
which any of the PADCO Indemnitees may become subject, under
the 1933 Act or otherwise, insofar as such losses, claims,
damages, or liabilities (or actions in respect thereof) arise
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out of or are based upon any untrue statement or alleged
untrue statement of a material fact, or omission or alleged
omission required to be stated therein or necessary to make
the statements therein not misleading, contained:
(i) in any registration statement, or prospectus,
or any amendment thereof, or
(ii) in any document executed by Great American
Reserve filed with any state insurance authority for the
purpose of qualifying the Contracts for sale under the
insurance laws of any jurisdiction, or
(iii) in any sales materials relating to the
Contracts prepared by Great American Reserve.
Great American Reserve will reimburse each of the PADCO
Indemnitees for any legal or other expenses reasonably
incurred by PADCO or such officer or director of PADCO in
connection with investigating or defending any such loss,
claim, damages, liability, or action; provided, that Great
American Reserve will not be liable in any such case to the
extent that such loss, claim, damage, or liability arises out
of, or is based upon, an untrue statement or alleged untrue
statement or omission or alleged omission made in reliance
upon and in conformity with information (including, without
limitation, negative responses to inquiries) furnished to
Great American Reserve by or on behalf of PADCO specifically
for use in the preparation of any registration statement, or
prospectus, or any amendment thereof, or any submission to a
state insurance authority, or supplement thereto, or any sales
materials for use in connection with the Contracts. This
indemnity agreement will be in addition to any liability which
Great American Reserve may otherwise have.
(b) PADCO agrees to indemnify and hold harmless Great
American Reserve and its officers and directors and each
person, if any, who controls Great American Reserve within the
meaning of the 1933 Act or the 1934 Act (collectively, the
"Great American Reserve Indemnitees"), against any losses,
claims, damages, or liabilities, joint or several, to which
any of the Great American Reserve Indemnitees may become
subject, under the 1933 Act or otherwise, insofar as such
losses, claims, damages, or liabilities (or actions in respect
thereof) arise out of or are based upon:
(i) A n y untrue statement or alleged untrue
statement of a material fact or omission or alleged omission
to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading,
contained (a) in any registration statement, or prospectus, or
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any amendments thereof, or (b) in any submission to a state
insurance authority, in each case to the extent, but only to
the extent that the untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance
upon and in conformity with information (including, without
limitation, negative responses to inquiries) furnished to
Great American Reserve by PADCO specifically for use in the
preparation of any registration statement, or prospectus, or
any amendments thereof or any submission to a state insurance
authority or supplement thereto; or
(ii) Any unauthorized use of sales materials or
any verbal or written misrepresentations or any unlawful sales
practices concerning the Contracts by PADCO; or
(iii) C l aims by agents or representatives or
employees of PADCO for commissions, service fees, expense
allowances, or other compensation or remuneration of any type.
PADCO will reimburse each of the Great American Reserve
Indemnitees for any legal or other expenses reasonably
incurred by Great American Reserve, such director, officer, or
c o ntrolling person in connection with investigating or
defending any such loss, claim, damage, liability, or action.
This indemnity agreement will be in addition to any liability
which PADCO may otherwise have.
(c) Promptly after receipt by a party entitled to
indemnification ( indemnified party ) under this section 8 of
notice of the commencement of any action, if a claim in
respect thereof is to be made against any person obligated to
provide indemnification under this section 8 ( indemnifying
party ), the indemnified party will notify the indemnifying
party in writing of the commencement thereof, but the omission
to so notify the indemnifying party will not relieve the
indemnifying party from any liability under this section 8,
except to the extent that the omission results in a failure of
actual notice to the indemnifying party and the indemnifying
party is damaged solely as a result of the failure to give
such notice. In case any such action is brought against any
indemnified party, and the indemnified party notifies the
i n d e m nifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein,
and to the extent that the indemnifying party may wish, to
a s s u m e the defense thereof, within separate counsel
satisfactory to the indemnified party. Such participation
shall not relieve the indemnifying party of the obligation to
reimburse the indemnified party for reasonable legal and other
expenses incurred by the indemnifying party in defending
i t s e lf, except for such expenses incurred after the
indemnifying party has deposited funds sufficient to effect
the settlement, with prejudice, of the claim in respect of
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which indemnity is sought. An indemnifying party shall not be
liable to an indemnified party on account of any settlement of
any claim or action effected without the consent of the
indemnifying party.
(d) The indemnity agreements contained in this section 8
s h all remain operative and in full force and effect,
regardless of:
(i) any investigation made by or on behalf of
PADCO or any officer or director thereof or by or on behalf of
Great American Reserve or any officer or director thereof;
(ii) d e livery of any Contracts and payments
therefore; and
(iii) any termination of this Agreement.
(e) A successor by law of PADCO or of any of the parties
to this Agreement, as the case may be, shall be entitled to
the benefits of the indemnity agreements contained in this
section 8.
9. Liability
(a) PADCO shall not be liable for any error of judgment
or mistake of law or for any loss suffered by the Annuity
Account in connection with the matters to which this Agreement
relates. Nothing herein contained shall be construed to
protect PADCO against any liability resulting from the willful
malfeasance, bad faith, or gross negligence of PADCO in the
performance of its obligations and duties or from reckless
disregard of its obligations and duties under this Agreement
or by virtue of violation of any applicable law.
(b) In no event shall any party under this Agreement be
liable for lost profits or for exemplary, special, or punitive
damages alleged to have been sustained by another party.
10. Regulation
(a) This Agreement shall be subject to the applicable
provisions of applicable state law and the 1940 Act, the 1934
Act, and the rules, regulations, and rulings thereunder, and
the rules, regulations, and rulings of the NASD, as in effect
from time to time, including such exemptions and other relief
as the Commission, its staff, or the NASD may grant, and the
terms hereof shall be interpreted and construed in accordance
therewith. Without limiting the generality of the foregoing,
the term assigned shall not include any transactions
exempted from Section 15(b)(2) of the 1940 Act.
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(b) PADCO shall submit to all regulatory and
administrative bodies having jurisdiction over the present and
future operations of the Annuity Account, 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. Without limiting the generality of the
foregoing, PADCO shall furnish the Commission, and/or the
S x x x x of Texas Superintendent of Insurance with any
information or reports which the Commission, and/or the
Superintendent of Insurance may request in order to ascertain
whether the operations of the Annuity Account are being
conducted in a manner consistent with the applicable laws or
regulations.
11. Investigations and Proceedings
(a) Great American Reserve, the Annuity Account, and
PADCO agree to cooperate fully in any insurance or securities
regulatory inspection, inquiry, investigation, or proceeding,
or any judicial proceeding with respect to Great American
Reserve, the Annuity Account, or PADCO, their affiliates and
their representatives, to the extent that the inspection,
inquiry, investigation, or proceeding is in connection with
the Contracts distributed under this Agreement.
(b) Great American Reserve, the Annuity Account, and
PADCO will cooperate in investigating customer complaints and
shall arrive at mutually satisfactory responses to such
complaints.
12. Confidentiality
S u bject to the requirements of legal process and
regulatory authority, each of the parties hereto shall treat
as confidential (a) the identity of existing or prospective
Contract owners, (b) any financial or other information
provided by existing or prospective Contract owners, and (c)
any other information reasonably identified as confidential in
writing by any other party hereto (collectively "confidential
information"). Except as permitted by this Agreement, none of
the parties hereto shall disclose, disseminate, or utilize any
confidential information without the express written consent
of the affected party until such time as such confidential
information may come into the public domain, except as
permitted by this Agreement or as otherwise necessary to
service the Contracts and/or to respond to appropriate
regulatory authorities. Each of the parties hereto shall take
a l l reasonable precautions to prevent the unauthorized
disclosure of any confidential information.
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13. Licenses
(a) PADCO owns all rights, title, and interest in and to
the name, trademark, and service xxxx "PADCO," and such other
trade names, trademarks, and service marks identified in
Schedule B, attached hereto (the "PADCO licensed marks" or the
"licensor's licensed marks"). PADCO hereby grants to Great
American Reserve a non-exclusive license to use the PADCO
licensed marks in connection with Great American Reserve s
performance of the services contemplated under this Agreement,
subject to the terms and conditions set forth in this Section
13.
(b) Great American Reserve is the owner of all rights,
title, and interest in and to the trade name, trademarks, and
service xxxx "Great American Reserve Insurance Company," and
s u c h other trade names, trademarks and service marks
identified in Schedule C, attached hereto (the "Great American
Reserve licensed marks" or the "licensor's licensed marks").
Great American Reserve hereby grants to PADCO a non-exclusive
license to use the Great American Reserve licensed marks in
c o n n e ction with PADCO's performance of the services
contemplated by this Agreement, subject to the terms and
conditions set forth in this Section 13.
(c) The grant of license by PADCO and Great American
Reserve (each, a "licensor") to the other (the "licensee")
shall terminate upon termination of this Agreement and the
licensee shall cease to use the licenses granted hereunder,
except that Great American Reserve shall have the right to
administer any outstanding Contracts bearing any of the PADCO
licensed marks and in connection therewith to use the PADCO
licensed marks.
(d) Notwithstanding any provision in this Agreement to
the contrary, a licensee shall obtain the prior written
approval of the licensor for the public release by such
licensee of any materials bearing the licensor s licensed
marks. The licensor s approval shall not be unreasonably
withheld.
(e) E a ch licensee hereunder: (i) acknowledges and
stipulates that the licensor's licensed marks are valid and
enforceable trademarks and/or service marks and that such
licensee does not own the licensor s licensed marks and claims
no rights therein other than as a licensee under this
Agreement; (ii) agrees never to contend otherwise in legal
proceedings or in other circumstances; and (iii) acknowledges
and agrees that the use of the licensor s licensed marks
pursuant to this grant of license shall inure to the benefit
of the licensor.
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14. Injunctive Relief
Each of the parties hereto agrees that monetary damages
may be an inadequate remedy in the event of a breach or
threatened breach of any of the covenants contained in Section
12 or Section 13 of this Agreement, and the covenants
contained in such sections shall be specifically enforceable
by temporary, preliminary, and permanent injunctive relief in
addition to, and not in limitation of, any other rights or
remedies, whether at law or in equity, that the party seeking
such injunctive relief may have. If any court shall determine
that any covenant contained in said sections of this Agreement
is invalid in whole or in part as to time or location, or as
to both, it is the intention of the parties hereto that such
covenant shall not thereby be terminated but shall be deemed
amended to the minimum extent required to render such covenant
valid and enforceable.
15. Duration and Termination of the Agreement
(a) This Agreement shall become effective with respect
to the Contracts as of the date first written above. This
A g r eement shall become effective with respect to any
subsequently offered contract when the contract has been
approved by the Board of Managers of the Annuity Account
(including a majority of the members thereof who are not
parties to this Agreement nor interested persons of any such
parties) specifically for such contract. Subsequently
offered contract means a contract issued and funded by the
Annuity Account subsequent to the initial effective date of
this Agreement.
(b) This Agreement shall continue in effect for two
years from the date of its execution and thereafter from year
to year, but only so long as such continuance is specifically
approved at least annually by (i) the Board of Managers of the
Annuity Account, or by the vote of a majority of the
outstanding voting securities of the Annuity Account, and (ii)
a vote of a majority of those members of the Board of Managers
of the Annuity Account who are not parties to this Agreement
nor interested persons of any such parties, cast in person at
a meeting called for the purpose of voting on such approval.
This Agreement shall continue in effect with respect to each
subsequently created Subaccount so long as such continuance is
s p ecifically approved at least annually in the manner
described in (i) and (ii) above of this section 15(b).
(c) This Agreement may be terminated, without the
payment of any penalty, by Great American Reserve, the Annuity
Account, or PADCO on sixty (60) days written notice to the
other parties. This Agreement shall automatically terminate
in the event of its assignment.
14
(d) U p o n termination of this Agreement, all
authorizations, rights, and obligations shall cease except the
obligation to settle accounts hereunder and the agreements
contained in sections 8, 11, 12, 13, and 14 of this Agreement.
16. Amendments
This Agreement may be amended at any time by mutual
consent of the parties, provided that the consent of the
Annuity Account shall be given in the manner contemplated
under section 15(b)(i) and (ii) of this Agreement.
17. Definitions
The terms assignment, interested person, and
majority of the outstanding voting securities, when used in
this Agreement, shall have the respective meanings specified
under the 1940 Act and the rules thereunder.
18. Further Actions
Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate
the purposes hereof.
19. Governing Law
The provisions of this Agreement shall be construed and
interpreted in accordance with the laws of the State of
Maryland, as at the time in effect, and the applicable
provisions of the 1940 Act and rules thereunder or other
federal laws and regulations which may be applicable. To the
extent that the applicable law of the State of Maryland, or
any of the provisions herein, conflict with the applicable
provisions of the 1940 Act and rules thereunder or other
federal laws and regulations which may be applicable, the
latter shall control.
20. Counterparts
T h is Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and
all of which shall be deemed one instrument.
21. Notices
A l l notices and other communications provided for
hereunder shall be in writing and shall be delivered by hand
or mailed first class, postage prepaid, addressed as follows:
(a) If to Great American Reserve:
15
Great American Reserve Insurance Company
00000 Xxxxx Xxxxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxx 00000
Attention: Office of the General Counsel
(b) If to the Annuity Account:
Great American Reserve Insurance Company
00000 Xxxxx Xxxxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxx 00000
Attention: Office of the General Counsel
With a copy to:
Rydex Advisor Variable Annuity Account
0000 Xxxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Attention: President
(c) If to PADCO:
PADCO Financial Services, Inc.
0000 Xxxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Attention: President
or to such other address as Great American Reserve, the
Annuity Account, or PADCO shall designate by written notice to
the others.
22. Miscellaneous
Captions in this Agreement are included for convenience
or reference only and in no way define or limit any of the
provisions hereof or otherwise affect their construction or
effect.
16
IN WITNESS WHEREOF, Great American Reserve, the Annuity
Account, and PADCO, have caused this Agreement to be executed
in their names and on their behalf by and through their duly
authorized officers on the day and year first above written.
ATTEST: GREAT AMERICAN RESERVE
INSURANCE COMPANY
By: /s/ Xxxx X. Xxxxxxxx /s/ L. Xxxxxxx Xxxxxxxxx
Name: Xxxx X. Xxxxxxxx L. Xxxxxxx Xxxxxxxxx
Title: Second Vice President Senior Vice President
ATTEST: RYDEX ADVISOR VARIABLE
ANNUITY ACCOUNT
By: /s/ Xxxxxxx X. Xxxxx /s/ Xxxxxx X. Xxxxxx, Xx.
Name: Xxxxxxx X. Xxxxx Xxxxxx X. Xxxxxx, Xx.
Title: Assistant Secretary President
ATTEST: PADCO FINANCIAL
SERVICES, INC.
on its own behalf and on
behalf of its insurance
agency subsidiary
By: /s/ Xxxxxxx X. Xxxxx /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxx Xxxxxx X. Xxxxxx
Title: Secretary Vice President
17
SCHEDULE A
TO
PRINCIPAL UNDERWRITING AGREEMENT
FOR THE CONTRACTS FUNDED BY
RYDEX ADVISOR VARIABLE ANNUITY ACCOUNT
CURRENT RATE OF COMPENSATION
The amount payable weekly by Great American Reserve to
PADCO in consideration of the services performed by PADCO
under this Agreement is six percent (6.0%) of the premiums (as
that term is used in section 6(a) of this Agreement) received
by Great American Reserve and allocated to the Separate
Account under the Contracts during each week.
SCHEDULE B
TO
PRINCIPAL UNDERWRITING AGREEMENT
FOR THE CONTRACTS FUNDED BY
RYDEX ADVISOR VARIABLE ANNUITY ACCOUNT
PADCO LICENSED MARKS
PADCO owns all rights, title, and interest in and to the
following names, trademarks, and service marks:
PADCO
Padco
Rydex
SCHEDULE C
TO
PRINCIPAL UNDERWRITING AGREEMENT
FOR THE CONTRACTS FUNDED BY
RYDEX ADVISOR VARIABLE ANNUITY ACCOUNT
GREAT AMERICAN RESERVE INSURANCE COMPANY
LICENSED MARKS
Great American Reserve owns all rights, title, and
interest in and to the following names, trademarks, and
service marks:
Great American Reserve Insurance Company
Great American Reserve
GARCO
Garco
Great American Future Reserve
