Document:

exv10wxqy

 

Exhibit 10(q)

AMENDMENT NO. 3 TO LOAN AGREEMENT

          THIS
AMENDMENT NO. 3 TO LOAN AGREEMENT (this “Amendment”) is
made and entered into as of June 2, 2006, with respect to that certain Loan Agreement dated as of
November 17, 2004 (as heretofore amended, restated, supplemented or otherwise modified from time to
time, the “Loan Agreement”), by and among G&K RECEIVABLES CORP., a Minnesota corporation, as
“Borrower”, G&K SERVICES, INC., a Minnesota corporation, in its capacity as the initial “Servicer”,
THREE PILLARS FUNDING LLC, a Delaware limited liability company (together with its successors and
permitted assigns, the “Lender”), and SUNTRUST CAPITAL MARKETS, INC., a Tennessee corporation, as
agent and administrator for Lender (in such capacity, together with its successor and assigns in
such capacity, the “Administrator”). Capitalized terms used and not otherwise defined herein are
used with the meanings attributed thereto in the Loan Agreement.

BACKGROUND

     The parties wish to amend the Loan Agreement on the terms and subject to the
conditions hereinafter set forth.

          NOW, THEREFORE, in consideration of the premises and the mutual agreements herein
contained, the parties hereto agree as follows:

          1. Amendments.

          1.1. The definition of “Facility Limit” in Section 1.1 of the Loan Agreement is
hereby amended and restated in its entirety to read as follows:

    “Facility Limit” means $60,000,000.

          1.2. The definition of “Loss Horizon Ratio” in Section 1.1 of the Loan
Agreement is hereby amended and restated in its entirety to read as follows:

     “Loss Horizon Ratio” means, on any date of determination, the ratio computed as
of the most recent Calculation Date by dividing (a) Credit Sales for the most recent
four (4) Calculation Periods, by (b) an amount equal to the Aggregate Unpaid Balance
as of such Calculation Date, minus the aggregate Excess Concentration Amount
as of such Calculation Date.

          1.3. Section 9.1.5(b)(i) of the Loan Agreement is hereby amended and
restated in its entirety to read as follows:

          “(i) [intentionally omitted]”

          1.4. Section 9.1,5(e) of the Loan Agreement is hereby amended and
restated in its entirety to read as follows:

     (e)
Collateral Review. On or before the Closing Date, and annually
thereafter, a report of Commercial Lending Consultants or another firm

 

 

acceptable to Administrator (each such report, a “Collateral Review”) which
satisfies the requirements set forth on Schedule 9.1.5.

          2. Representations. In order to induce the Administrator and the Lender to enter
into this Amendment, the Borrower hereby represents and warrants to the Administrator and the
Lender that no Significant Event or Unmatured Significant Event exists and is continuing as of
the date hereof.

          3. Effectiveness. This Amendment shall become effective and shall inure to the
benefit of the Borrower, the Servicer, the Lender, the Administrator and their respective
successors and assigns as of the date first above written when the Administrator shall have
received:

     (a) one or more counterparts hereof duly executed and delivered by each
of the parties hereto,

     (b) an amendment and restatement of the Lender Note, duly executed by
the Borrower, in the face principal amount of $60,000,000,

     (c) one or more counterparts of an amendment and restatement of the Fee
Letter, duly executed and delivered by each of the parties thereto, and

     (d) a copy of the resolutions of the Borrower’s Boards of Directors
authorizing or ratifying the execution, delivery and performance of the Loan
Agreement, as amended hereby, and of the amended and restated Fee Letter and
Lender Note referenced above in this Section 3.

          4. Ratification. Except as expressly amended above, the Loan Agreement
remains unaltered and in full force and effect and is hereby ratified and confirmed,

          5. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK
(WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF
(OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW)).

          6. Counterparts. This Amendment may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original and all of
which
when taken together shall constitute one and the same agreement. Delivery of an executed
counterpart of a signature page to this Amendment by facsimile shall be effective as delivery
of a
manually executed counterpart of this Amendment.

[signature pages begin on next page]

-2-

 

          IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by their
respective officers thereunto duly authorized as of the day and year first above written.

	 	 	 	 	 
	G&K RECEIVABLES CORP., As Borrower	 	 
	 
	 	 	 	 
	By:

	 	Jeffrey L. Wright
	 	 
	 

	 	 	 	 
	Name:

	 	Jeffrey L. Wright	 	 
	Title:

	 	Chief Financial Officer	 	 
	 
	 	 	 	 
	G&K SERVICES, INC., As Initial Servicer	 	 
	 
	 	 	 	 
	By:

	 	Jeffrey L. Wright	 	 
	 

	 	 	 	 
	Name:

	 	Jeffrey L. Wright	 	 
	Title:

	 	Chief Financial Officer	 	 

-3-

 

	 	 	 	 	 
	THREE PILLARS FUNDING LLC, As Lender	 	 
	 
	 	 	 	 
	By:

	 	Doris J. Hearn	 	 
	 

	 	 	 	 
	Name:

	 	Doris J. Hearn	 	 
	Title:

	 	Vice President	 	 

-4-

 

	 	 	 	 	 
	SUNTRUST CAPITAL MARKETS, INC., As Administrator
	 
	 	 	 	 
	By:

	 	Michael G. Maza
	 	 
	 

	 	 	 	 
	Name:

	 	Michael G. Maza	 	 
	Title:

	 	Managing Director	 	 

-5-

 

EXHIBIT A

AMENDED AND RESTATED LENDER NOTE

			
	 	 	 
	$60,000,000.00
	 	June 2, 2006

          FOR VALUE RECEIVED, G&K RECEIVABLES CORP., A MINNESOTA CORPORATION (the “Borrower”), promises
to pay to the order of THREE PILLARS FUNDING LLC, a Delaware limited liability company (the
“Lender”) on or before the Scheduled Commitment Termination Date, the principal sum of Sixty
Million and no/100 Dollars ($60,000,000.00) or, if less, the aggregate unpaid principal amount of
all Loans shown on the schedule attached hereto (and/or any continuation thereof and/or in the
records of the Lender) made by the Lender pursuant to that certain Loan Agreement, dated as of
November 17, 2004 (together with all amendments and other modifications, if any, from time to time
thereafter made thereto, the “Loan Agreement”), among Borrower, G&K Services, Inc., as servicer,
the Lender and SunTrust Capital Markets, Inc., as Administrator (the “Administrator”). This note
amends and restates in its entirety that certain Lender Note dated November 17, 2004.

          Borrower also promises to pay interest on the unpaid principal amount hereof from time to time
outstanding from the date hereof until maturity (whether by acceleration or otherwise) and, after
maturity, until paid, at the rates per annum and on the dates specified in the Loan Agreement.

          Payments of both principal and interest are to be made in lawful money of the United States of
America in immediately available funds to the account designated by Administrator pursuant to the
Loan Agreement.

          This promissory note is the “Lender Note” referred to in, and evidences indebtedness incurred
under, the Loan Agreement, and the holder hereof is entitled to the benefits of the Loan Agreement,
to which reference is made for a description of the security for this Lender Note and for a
statement of the terms and conditions on which Borrower is permitted and required to make
prepayments and repayments of principal of the indebtedness evidenced hereby and on which such
indebtedness may be declared to be immediately due and payable. Unless otherwise defined,
capitalized terms used herein have the meanings provided in the Loan Agreement.

          All parties hereto, whether as makers, endorsers, or otherwise, severally waive presentment
for payment, demand, protest and notice of dishonor.

          THIS LENDER NOTE SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL
LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ANY OTHERWISE APPLICABLE PRINCIPLES OF CONFLICTS OF
LAWS (OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW).

-6-

 

	 	 	 	 	 	 
	 	 	G&K RECEIVABLES CORP.
	 
	 	 	 	 
	 

	 	By
	 	Jeffrey L. Wright
	 

	 	 	 	 
	 

	 	Name:
	 	Jeffrey L. Wright, CFO
	 

	 	Title:
	 	Chief Financial Officer

-7-

 

Schedule attached to

Amended and Restated Lender Note dated June 2, 2006 of 

G&K Receivables Corp.

PAYABLE TO THE ORDER OF Three Pillars Funding LLC

	 	 	 	 	 	 	 
							
	Date of	 	 	Amount of	 	 	Amount of
	Loan	 	 	Loan	 	 	repayment
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 

-8-<PAGE>

                                                                  Exhibit 4(lll)

                              JANUS ADVISER SERIES

                          INVESTMENT ADVISORY AGREEMENT

                      JANUS ADVISER RISK-MANAGED CORE FUND

         THIS INVESTMENT ADVISORY AGREEMENT (the "Agreement") is made this 1st
day of July, 2004, as amended this 1st day of January, 2006, between JANUS
ADVISER SERIES, a Delaware statutory trust (the "Trust"), and JANUS CAPITAL
MANAGEMENT LLC, a Delaware limited liability company ("JCM").

                                   WITNESSETH:

         WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act"),
and has registered its shares for public offering under the Securities Act of
1933, as amended (the "1933 Act"); and

         WHEREAS, the Trust is authorized to create separate funds, each with
its own separate investment portfolio of which the beneficial interests are
represented by a separate series of shares; one of such funds created by the
Trust being designated as the Janus Adviser Risk-Managed Core Fund (the "Fund");
and

         WHEREAS, the Trust and JCM deem it mutually advantageous that JCM
should be appointed as investment adviser to the Fund.

         NOW, THEREFORE, the parties agree as follows:

         1. Appointment. The Trust hereby appoints JCM as investment adviser and
manager with respect to the Fund for the period and on the terms set forth in
this Agreement. JCM hereby accepts such appointment and agrees to render the
services herein set forth, for the compensation herein provided.

         2. Investment Advisory Services. JCM shall determine the securities or
other assets to be purchased, sold or held and shall place orders for the
purchase or sale of such securities or other assets with brokers, dealers or
others. JCM shall furnish continuous advice and recommendations to the Fund as
to the acquisition, holding, or disposition of any or all of the securities or
other assets which the Fund may own or contemplate acquiring from time to time.
JCM shall give due consideration to the investment policies and restrictions and
the other statements concerning the Fund in the Trust Instrument, bylaws, and
registration statements under the 1940 Act and the 1933 Act, and to the
provisions of the Internal Revenue Code, as amended from time to time,
applicable to the Fund as a regulated investment company. In addition, JCM shall
cause its officers to attend meetings and furnish oral or written reports, as
the Trust may reasonably require, in order to keep the Trustees and appropriate
officers of the Trust fully informed as to the condition of the investment
portfolio of the Fund, the investment recommendations of JCM, and the investment
considerations which have given rise to those recommendations. Subject to the
approval of the Trustees of the Trust and, if required, the shareholders of the
Fund, JCM is authorized to engage one or more subadvisers in connection

                                                                          PAGE 1

<PAGE>

with JCM's duties and responsibilities under this Agreement, which subadvisers
may be affiliates of JCM.

         3. Other Services. JCM is hereby authorized (to the extent the Trust
has not otherwise contracted) but not obligated (to the extent it so notifies
the Trustees at least 60 days in advance), to perform (or arrange for the
performance by affiliates of or duly appointed subadvisers or affiliates of) the
management and administrative services necessary for the operation of the Fund.
JCM is specifically authorized, on behalf of the Trust, to conduct relations
with custodians, depositories, transfer and pricing agents, accountants,
attorneys, underwriters, brokers and dealers, corporate fiduciaries, insurance
company separate accounts, insurers, banks and such other persons in any such
other capacity deemed by JCM to be necessary or desirable. JCM shall generally
monitor and report to Fund officers the Fund's compliance with investment
policies and restrictions as set forth in the currently effective prospectus and
statement of additional information relating to the shares of the Fund under the
1933 Act. JCM shall make reports to the Trustees of its performance of services
hereunder upon request therefor and furnish advice and recommendations with
respect to such other aspects of the business and affairs of the Fund as it
shall determine to be desirable. JCM is also authorized, subject to review by
the Trustees, to furnish such other services as JCM shall from time to time
determine to be necessary or useful to perform the services contemplated by this
Agreement.

         4. Obligations of Trust. The Trust shall have the following obligations
under this Agreement:

                  (a)      to keep JCM continuously and fully informed as to the
                           composition of its investment portfolio and the
                           nature of all of its assets and liabilities from time
                           to time;

                  (b)      to furnish JCM with a certified copy of any financial
                           statement or report prepared for it by certified or
                           independent public accountants and with copies of any
                           financial statements or reports made to its
                           shareholders or to any governmental body or
                           securities exchange;

                  (c)      to furnish JCM with any further materials or
                           information which JCM may reasonably request to
                           enable it to perform its function under this
                           Agreement; and

                  (d)      to compensate JCM for its services and reimburse JCM
                           for its expenses incurred hereunder in accordance
                           with the provisions hereof.

         5. Compensation. The Trust shall pay to JCM for its investment advisory
services a monthly base fee of 1/12 of 0.50% of the average daily closing net
asset value of the Fund, adjusted by a performance fee as set forth in Schedule
A. For any period less than a month during which this Agreement is in effect,
the base fee shall be prorated according to the proportion which such period
bears to a full month of 28, 29, 30 or 31 days, as the case may be.

         6. Expenses Borne by JCM. In addition to the expenses which JCM may
incur in the performance of its investment advisory functions under this
Agreement, and the expenses which

                                                                          PAGE 2

<PAGE>

it may expressly undertake to incur and pay under other agreements with the
Trust or otherwise, JCM shall incur and pay the following expenses relating to
the Fund's operations without reimbursement from the Fund:

                  (a)      Reasonable compensation, fees and related expenses of
                           the Trust's officers and its Trustees, except for
                           such Trustees who are not "interested persons," as
                           defined in the 1940 Act, of JCM;

                  (b)      Rental of offices of the Trust; and

                  (c)      Fees of any subadviser engaged by JCM pursuant to the
                           authority granted in Section 2 hereof.

         7. Expenses Borne by the Trust. The Trust assumes and shall pay all
expenses incidental to its organization, operations and business not
specifically assumed or agreed to be paid by JCM pursuant to Sections 3 and 6
hereof, including, but not limited to, investment adviser fees; any
compensation, fees, or reimbursements which the Trust pays to its Trustees who
are not "interested persons," as defined in the 1940 Act, of JCM; compensation
of the Fund's custodian, transfer agent, registrar and dividend disbursing
agent; legal, accounting, audit and printing expenses; administrative, clerical,
recordkeeping and bookkeeping expenses; brokerage commissions and all other
expenses in connection with execution of portfolio transactions (including any
appropriate commissions paid to JCM or its affiliates for effecting exchange
listed, over-the-counter or other securities transactions); interest; all
federal, state and local taxes (including stamp, excise, income and franchise
taxes); costs of stock certificates and expenses of delivering such certificates
to purchasers thereof; expenses of local representation in Delaware; expenses of
shareholders' meetings and of preparing, printing and distributing proxy
statements, notices, and reports to shareholders; expenses of preparing and
filing reports and tax returns with federal and state regulatory authorities;
all expenses incurred in complying with all federal and state laws and the laws
of any foreign country applicable to the issue, offer, or sale of shares of the
Fund, including, but not limited to, all costs involved in the registration or
qualification of shares of the Fund for sale in any jurisdiction, the costs of
portfolio pricing services and compliance systems, and all costs involved in
preparing, printing and mailing prospectuses and statements of additional
information to Fund shareholders; and all fees, dues and other expenses incurred
by the Trust in connection with the membership of the Trust in any trade
association or other investment company organization.

         8. Termination. This Agreement may be terminated at any time, without
penalty, by the Trustees of the Trust, or by the shareholders of the Fund acting
by vote of at least a majority of its outstanding voting securities, provided in
either case that sixty (60) days advance written notice of termination be given
to JCM at its principal place of business. This Agreement may be terminated by
JCM at any time, without penalty, by giving sixty (60) days advance written
notice of termination to the Trust, addressed to its principal place of
business. The Trust agrees that, consistent with the terms of the Trust
Instrument, the Trust shall cease to use the name "Janus" in connection with the
Fund as soon as reasonably practicable following any termination of this
Agreement if JCM does not continue to provide investment advice to the Fund
after such termination.

                                                                          PAGE 3

<PAGE>

         9. Assignment. This Agreement shall terminate automatically in the
event of any assignment of this Agreement.

         10. Term. This Agreement shall continue in effect until January 1,
2007, unless sooner terminated in accordance with its terms, and shall continue
in effect from year to year thereafter only so long as such continuance is
specifically approved at least annually by (a) the vote of a majority of the
Trustees of the Trust who are not parties hereto or interested persons of any
such party, cast in person at a meeting called for the purpose of voting on the
approval of the terms of such renewal, and (b) either the Trustees of the Trust
or the affirmative vote of a majority of the outstanding voting securities of
the Fund. The annual approvals provided for herein shall be effective to
continue this Agreement from year to year if given within a period beginning not
more than ninety (90) days prior to January 1 of each applicable year,
notwithstanding the fact that more than three hundred sixty-five (365) days may
have elapsed since the date on which such approval was last given.

         11. Amendments. This Agreement may be amended by the parties only if
such amendment is specifically approved (i) by a majority of the Trustees,
including a majority of the Trustees who are not interested persons (as that
phrase is defined in Section 2(a)(19) of the 1940 Act) of any party to this
Agreement and, if required by applicable law, (ii) by the affirmative vote of a
majority of the outstanding voting securities of the Fund (as that phrase is
defined in Section 2(a)(42) of the 1940 Act).

         12. Other Series. The Trustees shall determine the basis for making an
appropriate allocation of the Trust's expenses (other than those directly
attributable to the Fund) between the Fund and the other series of the Trust.

         13. Limitation of Personal Liability. All the parties hereto
acknowledge and agree that all liabilities of the Trust arising, directly or
indirectly, under this Agreement, of any and every nature whatsoever, shall be
satisfied solely out of the assets of the Fund and that no Trustee, officer or
holder of shares of beneficial interest of the Trust shall be personally liable
for any of the foregoing liabilities. The Trust Instrument describes in detail
the respective responsibilities and limitations on liability of the Trustees,
officers and holders of shares of beneficial interest of the Trust.

         14. Limitation of Liability of JCM. JCM shall not be liable for any
error of judgment or mistake of law or for any loss arising out of any
investment or for any act or omission taken with respect to the Trust, except
for willful misfeasance, bad faith or gross negligence in the performance of its
duties, or by reason of reckless disregard of its obligations and duties
hereunder and except to the extent otherwise provided by law. As used in this
Section 14, "JCM" shall include any affiliate of JCM performing services for the
Trust contemplated hereunder and directors, officers and employees of JCM and
such affiliates.

         15. Activities of JCM. The services of JCM to the Trust hereunder are
not to be deemed to be exclusive, and JCM and its affiliates are free to render
services to other parties. It is understood that trustees, officers and
shareholders of the Trust are or may become interested in JCM as directors,
officers and shareholders of JCM, that directors, officers, employees and

                                                                          PAGE 4

<PAGE>

shareholders of JCM are or may become similarly interested in the Trust, and
that JCM may become interested in the Trust as a shareholder or otherwise.

         16. Certain Definitions. The terms "vote of a majority of the
outstanding voting securities," "assignment" and "interested persons" when used
herein, shall have the respective meanings specified in the 1940 Act, as now in
effect or hereafter amended, and the rules and regulations thereunder, subject
to such orders, exemptions and interpretations as may be issued by the
Securities and Exchange Commission under said Act and as may be then in effect.

         17. Governing Law. This Agreement shall be construed in accordance with
the laws of the State of Colorado (without giving effect to the conflicts of
laws principles thereof) and the 1940 Act. To the extent that the applicable
laws of the State of Colorado conflict with the applicable provisions of the
1940 Act, the latter shall control.

         This Agreement shall supercede all prior investment advisory agreements
entered into between JCM and the Trust, on behalf of the Fund.

         IN WITNESS WHEREOF, the parties have caused their duly authorized
officers to execute this Investment Advisory Agreement as of January 1, 2006.

                          JANUS CAPITAL MANAGEMENT LLC

                          By: /s/ David R. Martin
                              ----------------------------------------
                              David R. Martin, Chief Financial Officer
                              and Executive Vice President

                          JANUS ADVISER SERIES

                          By: /s/ Kelley A. Howes
                              ----------------------------------------
                              Kelley A. Howes, President and Chief
                              Executive Officer

                                                                          PAGE 5
<PAGE>

                                   SCHEDULE A
                             PERFORMANCE ADJUSTMENT

         Beginning with the Base Fee payable for January 2006 and in month 13
from the amended date of this Agreement, the Base Fee shall be adjusted monthly
based upon the investment performance of the Fund's Class A Shares (waiving the
upfront sales load) ("Class") in relation to the cumulative investment record of
the Fund's benchmark, the Standard & Poor's 500 Index (the "Index"), over the
"Performance Period" (such adjustment being referred to herein as the
"Performance Adjustment"). The "Performance Period" is defined as the shorter of
(a) the period from the date of this Agreement through the end of the month for
which the fee is being calculated, and (b) the 36 month period preceding the end
of the month for which the fee is being calculated.

         The Performance Adjustment shall be calculated by subtracting the
investment record of the Index from the investment performance of the Class. If
there is less than a 0.50% difference (plus or minus) between the investment
performance of the Class and the investment record of the Index, the Fund pays
JCM the Base Fee with no adjustment. If the difference between the investment
performance of the Class and the investment record of the Index is 0.50% or
greater during any Performance Period, the Base Fee will be subject to an upward
or downward performance adjustment of 1/12 of 0.01875% for every full 0.50%
increment by which the Class outperforms or underperforms the Index. The maximum
percentage used in calculating the Performance Adjustment (positive or negative)
in any month is 1/12 of 0.15%. The Performance Adjustment is applied against the
Fund's average daily net assets during the Performance Period.

         For purposes of computing the Base Fee and the Performance Adjustment,
net assets are averaged over different periods (average daily net assets during
the relevant month for the Base Fee versus average daily net assets during the
Performance Period for the Performance Adjustment). The Base Fee is calculated
and accrued daily. The Performance Adjustment is calculated monthly in arrears
and is accrued evenly each day throughout the month. The investment advisory fee
is paid monthly in arrears.

         The average daily net asset value of the Fund, or any class thereof,
shall be determined in the manner set forth in the Trust's Amended and Restated
Trust Instrument, Bylaws and registration statement, each as may be amended from
time to time.

         The investment performance of the Class will be the sum of:

         (1) the change in the Class's net asset value ("NAV") per share during
the Performance Period; plus

         (2) the value of the Class's cash distributions per share accumulated
to the end of the Performance Period; plus

         (3) the value of capital gains taxes per share paid or payable on
undistributed realized long-term capital gains accumulated to the end of the
Performance Period;

                                                                          PAGE 6

<PAGE>

expressed as a percentage of the Class's NAV per share at the beginning of the
Performance Period. For this purpose, the value of distributions per share of
realized capital gains, of dividends per share paid from investment income and
of capital gains taxes per share paid or payable on undistributed realized
long-term capital gains shall be treated as reinvested in shares of the Class at
the NAV in effect at the close of business on the record date for the payment of
such distributions and dividends and the date on which provision is made for
such taxes, after giving effect to such distributions, dividends and taxes.

         The investment record of the Index will be the sum of:

         (1) the change in the level of the Index during the Performance Period;
plus

         (2) the value, computed consistently with the Index, of cash
distributions made by companies whose securities comprise the Index accumulated
to the end of the Performance Period; expressed as a percentage of the Index
level at the beginning of the Performance Period. For this purpose, cash
distributions on the securities which comprise the Index shall be treated as
reinvested in the Index at least as frequently as the end of each calendar
quarter following the payment of the dividend.

         The Trustees have initially designated the Class to be used for
purposes of determining the Performance Adjustment. From time to time, the
Trustees may, by vote of the Trustees of the Trust voting in person, including a
majority of the Trustees who are not parties to this Agreement or "interested
persons" (as defined in the 1940 Act) of any such parties, determine that a
class of shares of the Fund other than the Class is the most appropriate for use
in calculating the Performance Adjustment. If a different class of shares
("Successor Class") is substituted in calculating the Performance Adjustment,
the use of that Successor Class of shares for purposes of calculating the
Performance Adjustment may apply to the entire Performance Period so long as
such Successor Class was outstanding at the beginning of such period. If the
Successor Class of shares was not outstanding for all or a portion of the
Performance Period, it may only be used in calculating that portion of the
Performance Adjustment attributable to the period during which such Successor
Class was outstanding and any prior portion of the Performance Period shall be
calculated using the class of shares previously designated.

                                                                          PAGE 7

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