EXHIBIT 11(d)
Joint Account Agreement Between
Rydex Advisor Variable Annuity Account
and PADCO Advisors II, Inc.
JOINT ACCOUNT AGREEMENT
THIS JOINT ACCOUNT AGREEMENT (the "Agreement"), is made as
of this 1st day of November, 1996, by and among:
RYDEX ADVISOR VARIABLE ANNUITY ACCOUNT (the "Separate
Account"), a registered investment company established
as a managed separate account of Great American Reserve
Insurance Company ("Great American Reserve") under the
laws of the State of Texas on April 15, 1996, with its
principal place of business at 00000 Xxxxx Xxxxxxxxxxxx
Xxxxxx, Xxxxxx, Xxxxxxx 00000, and with offices at 0000
Xxxxxxxxx Xxxxxxxxx, Xxxxxxxxx, Xxxxxxxx 00000, on
behalf of the Separate Account and the Separate
Account's subaccounts of THE NOVA SUBACCOUNT, THE URSA
SUBACCOUNT, THE OTC SUBACCOUNT, THE PRECIOUS METALS
SUBACCOUNT, THE U.S. GOVERNMENT BOND SUBACCOUNT, THE
JUNO SUBACCOUNT, THE MONEY MARKET I SUBACCOUNT, and THE
MONEY MARKET II SUBACCOUNT (collectively, the
"Subaccounts"), and all future registered investment
companies for which PADCO Advisors II, Inc. acts as
i n vestment adviser (collectively, the "Future
Subaccounts") (the above-referenced Subaccounts and
Future Subaccounts hereinafter are collectively
referred to as the "Rydex Subaccounts");
PADCO ADVISORS II, INC. ("PADCO II"), a registered
investment adviser incorporated under the laws of the
State of Maryland on July 5, 1994, with its principal
p l a ce of business at 0000 Xxxxxxxxx Xxxxxxxxx,
Xxxxxxxxx, Xxxxxxxx 00000; and
any other persons which become parties hereto, as
contemplated by the application for an order under the
Investment Company Act of 1940 (the "1940 Act")
(Commission File No. 812-8788) (the "Application"), in
respect of which an Order of the Commission was granted
on March 15, 1994 (Investment Company Act Release No.
20136) (the "Order").
This Agreement is entered into by the aforementioned parties
under the following circumstances:
W I T N E S S E T H
WHEREAS, Rydex Series Trust (the "Trust") is a registered
investment company organized as a Delaware business trust on
March 9, 1993, with its principal place of business at 0000
Xxxxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxx 00000, and
currently is composed of eight separate series, including The
Nova Fund, The Ursa Fund, The Rydex OTC Fund, The Rydex Precious
Metals Fund, The Rydex U.S. Government Bond Fund, The Juno Fund,
The Rydex U.S. Government Money Market Fund, and The Rydex
Institutional Money Market Fund (collectively, the "Funds");
WHEREAS, PADCO Advisors, Inc. ("PADCO I"), is a registered
investment adviser incorporated under the laws of the State of
Maryland on February 5, 1993, with its principal place of
business at 0000 Xxxxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxxxx,
Xxxxxxxx 00000, and currently serves as the investment adviser
to the Funds;
WHEREAS, the Separate Account currently is composed of eight
separate Subaccounts, including The Nova Subaccount, The Ursa
Subaccount, The OTC Subaccount, The Precious Metals Subaccount,
The U.S. Government Bond Subaccount, The Juno Subaccount, The
Money Market I Subaccount, and The Money Market II Subaccount;
W H E R E AS, other separate Future Subaccounts may be
a u thorized, added, and registered under the 1940 Act as
subaccounts of the Separate Account in the future;
WHEREAS, the Separate Account is authorized as the signatory
to this Agreement on behalf of the Rydex Subaccounts, including
any Future Subaccounts;
WHEREAS, the Trust, on behalf of the Trust and the Funds,
and all future registered investment companies for which PADCO I
acts as investment adviser (collectively, the "Future Funds")
(the above-referenced Funds and Future Funds hereinafter are
collectively referred to as the "Rydex Funds"), and PADCO I have
obtained the Order, a copy of which is attached hereto as Exhibit
A, permitting the Rydex Funds to deposit their daily uninvested
cash balances into a single joint account to be used to enter
into repurchase agreements and to participate in such a joint
repurchase agreement account (the "Trust Joint Account") on the
basis set forth in the Application, a copy of which Application
is attached hereto as Exhibit B;
WHEREAS, the applicants under the Application are the Trust,
including the Rydex Funds, PADCO I, and all future registered
investment companies and series thereof for which PADCO I, or any
entity controlled by, controlling, or under common control with
PADCO I, serves as investment adviser (collectively, "Future
PADCO Companies");
WHEREAS, the terms and conditions of the Application and the
Order authorize all Future PADCO Companies to enter into joint
repurchase agreements and to deposit their daily uninvested cash
balances into a joint repurchase agreement account;
WHEREAS, PADCO I and PADCO II are under the common control
of Xxxxxx X. Xxxxxx, Xx., the Chairman of the Board of Directors,
the President, and the majority shareholder of PADCO I, and the
Chairman of the Board of Directors, the President, and the sole
shareholder of PADCO II;
W H E REAS, the managers of the Separate Account (the
"Managers") have determined that it would be in the best
interests of the Separate Account and the Rydex Subaccounts, to
authorize the Rydex Subaccounts to deposit their daily uninvested
cash balances into a single joint account to be used to enter
into repurchase agreements (the "Subaccount Joint Account");
WHEREAS, Condition M under the Application requires that the
Board of Managers of the Separate Account evaluate this joint
account arrangement annually and approve the continuation of said
participation in the Subaccount Joint Account only if the Board
of Managers determines that there is a reasonable likelihood that
the Subaccount Joint Account will benefit the Rydex Subaccounts
and their unitholders; and
WHEREAS, the Rydex Subaccounts desire that their respective
rights and obligations in respect of the Subaccount Joint Account
be reflected in this Agreement in form and substance consistent
w i t h representations and undertakings set forth in the
Application and Order.
NOW, THEREFORE, the parties hereto agree as follows:
1. R e purchase agreements entered into by the Rydex
Subaccounts pursuant to the Subaccount Joint Account are entered
into by each Rydex Subaccount severally, in proportion to its
interest in the Subaccount Joint Account, and not jointly. No
Rydex Subaccount shall be liable in respect of the obligations of
any other Rydex Subaccount in respect of any repurchase agreement
entered into pursuant to the Subaccount Joint Account. PADCO II
shall ensure that the documentation entered into by the Rydex
Subaccounts appropriately reflects the several, and not joint,
nature of each Rydex Subaccount's obligations.
2. No Rydex Subaccount shall create a negative balance in
the Subaccount Joint Account for any reason, and it is understood
and agreed that no Rydex Subaccount shall have any obligation to
any other party hereto to maintain any balance whatsoever in the
Subaccount Joint Account.
3. T h e Separate Account, on behalf of each Rydex
Subaccount, shall ensure that its Custodian Agreement with Boston
Safe Deposit and Trust Company, the custodian for the Rydex
Subaccounts, and with any future custodian(s) of the Rydex
Subaccounts, permits the establishment of a separate cash account
into which each Rydex Subaccount would cause its uninvested net
cash balances to be deposited daily. Each such Custodian
Agreement will be in form and substance identical to each other
such agreement.
4. Subject to the contrary determinations of the Board of
Managers of the Separate Account, the Separate Account, on behalf
o f e ach Rydex Subaccount, shall ensure that the Rydex
Subaccount's repurchase agreement standards are identical to the
standards adopted by each other Rydex Subaccount, except insofar
as the maximum amount of a Rydex Subaccount's assets subject to a
repurchase agreement with any single counter-party may be limited
by different absolute dollar amounts depending on the size of the
Rydex Subaccount. PADCO II acknowledges that, in effecting
repurchase agreements on behalf of the Rydex Subaccounts, each
repurchase agreement entered into by a Rydex Subaccount is
subject to the applicable standards and limitations adopted by
the Separate Account's Board of Managers.
5. Each Rydex Subaccount shall participate in the net
income earned or accrued in the Subaccount Joint Account on the
basis of the total amount in the Subaccount Joint Account on any
day represented by such Rydex Subaccount's proportionate share of
the Subaccount Joint Account.
6. PADCO II shall administer the investment of the cash
balance in the operation of the Subaccount Joint Account as part
of the duties of PADCO II under PADCO II's existing, or any
future, investment advisory contract with the Separate Account
and/or each Rydex Subaccount and no fees shall be payable by the
Rydex Subaccounts in respect of the Subaccount Joint Account
other than the fees based upon the assets of each Rydex
Subaccount, as provided in the Separate Account's and/or the
Rydex Subaccount's respective investment advisory contract.
7. This Agreement may be terminated by any party hereto
upon thirty (30) days' written notice to each other party hereto.
Upon any such termination, the Subaccount Joint Account shall be
liquidated in an orderly fashion and the proceeds of the
liquidation shall be distributed to each respective Rydex
Subaccount in proportion to the Rydex Subaccount's interest in
the Subaccount Joint Account.
8. A l l notices or other communications required or
permitted to be given hereunder shall be in writing and shall be
delivered or sent by prepaid, first-class letter posted to the
following addresses, or to such other address as shall be
designated in a notice given in accordance with this section, and
such notice shall be deemed to have been given at the time of
delivery of, if sent by post, five (5) week days after posting by
airmail.
If to the Separate Account:
Rydex Advisor Variable 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
If to PADCO II:
PADCO Advisors II, Inc.
0000 Xxxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Attention: President
9. This Agreement shall be governed by and construed in
accordance with the laws of the State of Maryland (without
reference to such state's conflict of law rules).
10. This Agreement may be executed in counterparts, each of
which shall be deemed an original, but which together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective corporate officers,
thereunto duly authorized, as of the date first hereinabove
written.
RYDEX ADVISOR VARIABLE ANNUITY ACCOUNT
By: /s/ L. Xxxxxxx Xxxxxxxxx
L. Xxxxxxx Xxxxxxxxx
Vice President
PADCO ADVISORS II, INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx.
Xxxxxx X. Xxxxxx, Xx.
President
