Support Agreement with Affiliate
Support
Agreement with Affiliate
An
affiliate of the portfolio’s advisor (the “support provider”) entered into a
support agreement (the “agreement”) with the portfolio that would prevent any
losses realized on the portfolio's receivable for its Primary Fund redemption
proceeds (up to a maximum loss on the receivable of $27,850) from causing the
price at which the portfolio purchases and redeems its shares to drop below
$1.00 per share. Generally, upon a sale or other ultimate disposition
of the receivable, or receipt of payment on the receivable that is less than the
face amount of the receivable, the agreement obligates the support provider to
make a cash contribution to the portfolio, up to the loss incurred upon the
disposition, and subject to the maximum loss noted above, sufficient to restore
the portfolio’s market based net asset value per share to a level that would
allow the portfolio to purchase and redeem its shares at $1.00 per
share. The agreement terminates on October 31, 2009. The portfolio is
obligated to sell the receivable prior to the termination date if such a sale
would require the support provider to make a payment to the
portfolio. The agreement was entered into at no cost to the
portfolio, and the support provider is not entitled to obtain any shares or
other property from the portfolio in exchange for its payments under the
agreement.
The
portfolio treats the agreement as an asset of the portfolio in calculating its
market based net asset value. The value of the agreement may increase
or decrease on any day the portfolio calculates its market based net asset value
per share as a result of changes in the fair value of the receivable or other
factors. At June 30, 2009, the fair value of the agreement was
estimated to be $0.