LINE OF CREDIT AGREEMENT

State Street Bank and Trust Company (the “Bank”) is pleased to confirm that it holds available a $100,000,000.00 committed, unsecured line of credit (the “Committed Line”) to Baron Investment Funds Trust, a Massachusetts business trust registered under the Investment Company Act (the “Borrower”), on behalf of its fund series from time to time listed on Appendix I attached hereto (each such fund series, a “Fund”), on the following terms and conditions:

1. Term. The Committed Line shall commence on the date hereof and expire July 18, 2008 (the “Expiration Date”), unless extended by mutual agreement of the Bank and the Borrower or, with respect to any Fund, terminated by the Borrower on behalf of such Fund as provided herein. The Borrower, on behalf of a Fund, may terminate the Committed Line with respect to such Fund upon three (3) days prior written notice and payment of all outstanding principal, interest, fees, costs, expenses and other amounts owing by such Fund to the Bank hereunder on the effective date of termination.

2. Notice and Manner of Borrowings. Subject to the terms and conditions hereof, the Bank shall make revolving loans to the Borrower on behalf of any Fund under the Committed Line (each such loan, a “Loan”); provided that, in each case after giving effect to the requested Loan, (i) the aggregate outstanding Indebtedness for borrowed money of such Fund (including the aggregate principal amount of all Loans outstanding to such Fund) shall not exceed the Maximum Amount applicable to such Fund, (ii) the aggregate principal amount of Loans outstanding to such Fund hereunder shall not exceed the Committed Line Amount, and (iii) the aggregate principal amount of Loans outstanding to the Borrower, on behalf of all Funds hereunder, shall not exceed the Committed Line Amount. Each request for a Loan hereunder, shall be made in writing by the Borrower, on behalf of a Fund, by delivering a completed loan request in the form of Exhibit B attached hereto and such other information or documentation as the Bank may reasonably request. Each such Loan request shall be made by the Borrower, on behalf of a Fund, and received by the Bank not later than 3:00 p.m., Boston time, on the Business Day on which such Loan is to be made. Each Loan request hereunder shall be deemed to be a confirmation by the Borrower, on behalf of the applicable Fund, that no Default or Event of Default has occurred and is continuing hereunder with respect to the Borrower or such Fund, that the representations and warranties of the Borrower, on behalf of such Fund, described below remain true and correct, and that no borrowing limitations applicable to the Fund or the Committed Line (including those set forth in clauses (i) through (iii) of the proviso above in this Section) will be exceeded after giving effect to the requested Loan, each of which shall be a precondition to the making of any Loan hereunder.

3. Evidence of Indebtedness. All Loans will be evidenced by a promissory note in the form attached hereto as Exhibit A executed by the Borrower, on behalf of each of the Funds (as amended, restated, extended, replaced or otherwise modified and in effect from time to time, the “Note”). The

Borrower, on behalf of each Fund, hereby authorizes the Bank to record each Loan and the corresponding information on the schedule forming part of the Note, and, absent manifest error, this record shall govern and control. The failure by the Bank to record, or any error in so recording, any such amount on the Bank’s books and records, such schedule, or any other record maintained by the Bank, shall not limit or otherwise affect the obligation of the Borrower, on behalf of each Fund, to make payments of principal of and interest on each Loan as provided herein and in the Note.

4. Interest Rate. Principal on each outstanding Loan shall bear interest at a variable rate per annum equal to the Federal Funds Rate, as determined by the Bank, plus one half of one percent (0.50%) per annum, but not to exceed the maximum rate permitted by law. Interest on each Loan shall be calculated on the basis of a 360-day year for the actual number of days elapsed. Following and during the continuance of a Default or an Event of Default hereunder, unpaid principal on any Loan, and to the extent permitted by applicable law, unpaid interest on any Loan, shall thereafter bear interest, compounded monthly and payable on demand, until paid in full (after as well as before judgment) at a rate per annum equal to two percent (2%) above the rate otherwise applicable to such Loan hereunder, but not to exceed the maximum rate permitted by law.

5. Payments and Prepayments; Recourse. (a) The Borrower, on behalf of each of the Funds, hereby promises to pay accrued interest on all Loans monthly in arrears on the first day of each calendar month for the immediately preceding calendar month; provided, however, that in each such case if such day on which interest on any Loans is due is not a Business Day, interest shall be payable on the next preceding Business Day. The Borrower, on behalf of each of the Funds, hereby promises to repay the principal amount of each outstanding Loan, together with all accrued and unpaid interest thereon, upon the earliest of (i) 60 days following the date on which such Loan is made, (ii) the date on which such Loan becomes due pursuant to Section II(4) below following the occurrence of an Event of Default, or (iii) the Expiration Date, provided that the Borrower may not have one or more Loans outstanding hereunder with respect to any one Fund for a period in excess of 60 consecutive calendar days. The Borrower, on behalf of each Fund, further covenants and agrees to immediately repay (1) the outstanding aggregate principal amount of any Indebtedness for borrowed money of any such Fund at any time (including the then outstanding aggregate principal amount of all Loans to such Fund) to the extent such amount exceeds the Maximum Amount applicable to such Fund at such time, and (2) any amount by which the then outstanding aggregate principal amount of all Loans to any such Fund at any time exceeds the Committed Line Amount, in each case upon the earlier to occur of the Borrower first becoming aware of any such circumstance or demand by the Bank. The Borrower, on behalf of each Fund having Loans outstanding at any time, further covenants and agrees that it shall make such repayments of the Loans outstanding to each such Fund at any time to the extent required such that the then outstanding aggregate principal amount of all Loans to all Funds hereunder shall at no time exceed the Committed Line Amount, in each case upon the earlier to occur of the Borrower first becoming aware of any such circumstance or demand by the Bank. Loans may be prepaid at the option of the Borrower without penalty or premium, and any amounts prepaid may be reborrowed subject to the terms hereof.

(b) All payments by the Borrower, on behalf of each Fund, hereunder and under any of the other Loan Documents shall be made not later than 3:00 p.m. Boston time on the date due in immediately available United States dollars at the Bank’s office at 225 Franklin Street, Boston, Massachusetts or as otherwise directed in writing by the Bank. All such payments by the Borrower, on behalf of each Fund, hereunder and under any of the other Loan Documents shall be made without recoupment, setoff or counterclaim and free and clear of and without deduction for any taxes, levies,

imposts, duties, charges, fees, deductions, withholdings, compulsory loans, restrictions or conditions of any nature now or hereafter imposed or levied by any jurisdiction or any political subdivision thereof or taxing or other authority therein unless the Borrower is compelled by law to make such deduction or withholding. If any such obligation is imposed upon the Borrower with respect to any amount payable by it hereunder or under any of the Loan Documents, the Borrower will pay to the Bank, on the date on which such amount is due and payable hereunder or under the Loan Documents, such additional amount in United States dollars as shall be necessary to enable the Bank to receive the same net amount which the Bank would have received on such due date had no such obligation been imposed upon the Borrower. The Borrower will deliver promptly to the Bank certificates or other valid vouchers for all taxes or other charges deducted from or paid with respect to payments made by the Borrower hereunder or under the Loan Documents.

(c) The Bank and the Borrower acknowledge and agree that the Bank shall look solely to the property of each Fund for the enforcement of any claim against such Fund. None of the trustees, officers, employees, agents or shareholders of the Borrower or any Fund assumes any personal liability for the obligations entered into by the Borrower, on behalf of each Fund, with respect to the Committed Line. In addition, the principal amount of any Loan, and accrued interest thereon, and any fees, costs, expenses, indemnities or other amounts payable in connection with or relating to any Fund or any Loan pursuant to this Agreement (other than any fees, costs, expenses, indemnities or other amounts payable to the Bank pursuant to the terms hereof not specific or identifiable to any Fund or Funds or any particular Loan), shall be paid or repaid solely from the assets of such Fund (or the Fund to which such Loan is made), and the Bank shall have no right of recourse or offset against the assets of any other Fund or any other series of the Borrower for such amounts. Each Fund shall be severally liable to the Bank hereunder for fees, costs, expenses, indemnities or other amounts owed to the Bank pursuant to the terms hereof that are not specific or identifiable to any Fund or Funds or any particular Loan in accordance with such Fund’s Ratable Percentage thereof from time to time.

6. Use of Loan Proceeds. Proceeds of Loans may be used only (a) for temporary or emergency purposes consistent with the then current investment objectives and fundamental investment restrictions of the Fund on behalf of which a Loan is made, provided that each such Loan shall constitute an “Exempted Transaction” under Federal Reserve Regulation U, (b) to temporarily finance the purchase or sale of securities for prompt delivery if the Loan is to be repaid promptly in the ordinary course of business upon completion of such purchase or sale transaction or (c) to finance the redemption of the shares of an investor of the Fund on behalf of which a Loan is made. Each Loan shall be made in compliance with, and subject to, Federal Reserve Regulation U and no portion of any proceeds of any Loan shall be used directly or indirectly in violation of any provision of any statute, regulation, order or restriction applicable to the Bank, the Borrower or any Fund.

7. Addition of Borrowers and Funds. With the prior written consent of the Bank in its sole discretion and in any event no more than once per calendar quarter, the Borrower may request the addition to the terms of this Agreement of any additional fund series of the Borrower. In no event will any such additional fund series be added to the terms of this Agreement if such fund series is advised or sub-advised by an affiliate of the Bank. The addition of any such fund series shall be subject to consent by the Bank in its sole discretion and completion of an appropriate amendment to this Agreement and such other documentation as the Bank may require, including without limitation current prospectus and related information; corporate, trust or similar existence and authorization documentation; and appropriate legal opinions, in each case with respect to any proposed new Fund as the Bank may require.

8. Commitment Fee. The Borrower shall pay to the Bank a commitment fee at the rate of 0.08% per annum on the unused portion of the Committed Line Amount. Such commitment fee shall accrue from and including the date hereof to but excluding the Expiration Date. Accrued commitment fees payable by the Borrower hereunder shall be payable quarterly in arrears on the fifteenth (15^th) day of each April, July, October and January for the immediately preceding calendar quarter and on the Expiration Date or any earlier date upon which the Committed Line hereunder may be terminated (including pursuant to Article II, Section 4 hereof upon the occurrence of an Event of Default).

9. Underwriting Fee. The Borrower hereby agrees to pay to the Bank for its own account on the date hereof a $5,000 structuring fee, payable as a condition precedent to closing. Such fee shall be non-refundable and shall be deemed fully earned by the Bank on the date hereof.

1. Covenants. Until all obligations of the Borrower and each Fund with respect to the Committed Line have been paid in full and the Committed Line has been terminated, unless otherwise consented to in writing by the Bank, the Borrower hereby covenants and agrees on behalf of each Fund:

(a) not to create, assume or suffer to exist any Indebtedness for borrowed money such that the outstanding principal amount of Indebtedness for borrowed money (including Loans hereunder) of any one Fund at any time exceeds the Borrowing Percentage applicable to such Fund multiplied by the Adjusted Net Assets of such Fund at such time;

(b) not to issue any preferred stock or create, incur, assume, suffer to exist, or guarantee, any Indebtedness other than, to the extent permitted by the relevant Prospectus: (i) Indebtedness owing to the Bank; (ii) Indebtedness owing to the Custodian of the Borrower or Fund incurred in connection with such custody relationship; (iii) other Indebtedness existing as of the date of this Agreement and disclosed on Exhibit C hereto; (iv) preferred stock or Indebtedness issued or incurred with the prior written consent of the Bank; (v) other Indebtedness incurred in the ordinary course of the Borrower’s or a Fund’s business in connection with portfolio investments and investment techniques permissible under the Investment Company Act (and not for the primary purpose of borrowing money), but only to the extent such Indebtedness is reflected as a liability in the calculation of the relevant Fund’s Adjusted Net Assets;

(c) not to create, incur, assume or suffer to exist any mortgage, pledge, security interest, lien, hypothecation, or other charge or encumbrance upon any of its assets or properties, or enter into any agreement preventing it from encumbering any such assets or properties other than, to the extent permitted by the relevant Prospectus (i) those in favor of the Bank or its affiliates or subsidiaries; (ii) those existing on the date hereof and described on Exhibit D hereto; (iii) those in favor of the Custodian of the Borrower or a Fund securing Indebtedness permitted by Section II(1)(b)(ii) above; (iv) those for which the Bank has given its prior written consent; (v) those arising in the ordinary course of the Borrower’s or Fund’s business out of or in connection with portfolio investments and investment techniques securing Indebtedness permitted by Section II(1)(b)(v) above; and (vi) liens for taxes, fees, assessments and other governmental charges not yet due and payable and with respect to which reserves or other appropriate provisions as may be required by generally accepted accounting principles are being maintained;

(d) to (i) duly observe and comply in all material respects with all applicable laws, including, without limitation, the Investment Company Act and any asset coverage and borrowing restrictions and restrictions on Indebtedness and extensions of credit contained therein and applicable to the Borrower or Fund, and applicable securities laws and regulations, in each case except to the extent that any failure to observe or comply could not reasonably be expected to have a Material Adverse Effect; (ii) pay all taxes and governmental charges prior to the time they become delinquent, unless such taxes or charges are being contested in good faith by appropriate proceedings and as to which such reserves or other appropriate provisions as may be required by generally accepted accounting principles are being maintained; (iii) maintain in full force and effect all licenses and permits necessary in any material respect for the proper conduct of its business; (iv) maintain its status as an open-end management investment company registered under the Investment Company Act and its status as a regulated investment company under Subchapter M of the Internal Revenue Code; (v) operate in compliance with its certificate or articles of incorporation, declaration of trust, by-laws and/or other organizational documents, its Prospectus and all applicable investment policies and restrictions and agreements relating thereto; (vi) except for Permitted Mergers, not merge or consolidate with or into any entity or purchase all or substantially all of the assets or stock of any entity or sell or otherwise transfer all or any substantial portion of the Borrower’s or any Fund’s assets (other than the sale of portfolio assets in the ordinary course of business as described in its Prospectus); (vii) not permit there to occur a change in the investment adviser from the Investment Adviser without the prior written consent of the Bank; (viii) not permit there to occur a change in the custodian of any Fund’s assets from the Custodian without the prior written consent of the Bank; (ix) not permit any change in the investment objectives or in the fundamental investment restrictions of the Borrower or Fund as described in its Prospectus, in any such case without the prior written consent of the Bank; (x) comply with all terms and provisions of all documents evidencing or securing any Indebtedness to or with the Bank and any other Indebtedness owing to any party other than the Bank (“Other Indebtedness”); (xi) promptly notify the Bank of any event of default with respect to any Other Indebtedness and of any default under, or termination of, any agreement with the Custodian or with the Investment Adviser and provide to the Bank a copy of any notice or claim of any such default or termination; (xii) promptly notify the Bank of any material litigation or governmental proceeding or investigation commenced or threatened in writing against the Borrower or any Fund; and (xiii) promptly notify the Bank of the occurrence of any Default or Event of Default hereunder;

(e) to permit the Bank or its representatives and agents to visit and inspect the properties of the Borrower and each Fund and to make copies or abstracts from the Borrower’s or Fund’s books and records at reasonable times and upon reasonable request;

(f) to pay all reasonable fees, costs and expenses incurred or paid by the Bank, including the fees and expenses of the Bank’s outside legal counsel, in connection with the administration of the Committed Line, including without limitation the documentation of amendments, consents, waivers or other modifications to the Committed Line or the Loan Documents, and in connection with the enforcement of the Bank’s rights and remedies in connection with any default, waiver, forbearance, collection or termination under the Loan Documents;

(g) to provide to the Bank: (i) within 60 days after the end of each semi-annual period in each fiscal year, each Fund’s semi-annual or annual, as the case may be, financial statements, including a statement of assets, liabilities and investments as of the end of each such period in a form that complies with requirements of the United States Securities and Exchange Commission and, in the case of annual statements, audited by a nationally recognized public accounting firm qualified to audit investment companies registered under the Investment Company Act; (ii) promptly, all proxy materials, reports to shareholders and other information delivered to shareholders of the Borrower or Fund; (iii) promptly, all material reports, documents or other information relating to the financial condition of the Borrower or Fund that are delivered to the United States Securities and Exchange Commission, including in any event, copies of any material change to any Prospectus or registration statement; (iv) prior to any Loan request or advance, and daily prior to 3:00 p.m. (Boston time) on each Business Day during which any Loans are outstanding, a certificate in the form attached as Exhibit B showing compliance with the borrowing limitations in Section I(2) above; and (v) such other financial statements and information as to the Borrower, any Fund or the Investment Adviser as the Bank may reasonably request from time to time (all financial statements required hereunder to be prepared in accordance with generally accepted accounting principles consistently applied); and

(h) execute and deliver such additional instruments and take such further actions as the Bank may from time to time reasonably request to effect the purpose of the Loan Documents and the Loans.

Notwithstanding anything to the contrary in Section II(1)(g) above, but without in any way limiting the rights of the Bank set forth therein, unless the Bank shall request paper copies of the financial and other information otherwise required to be furnished by the Borrower to the Bank pursuant to subsections (i) and (ii) of such Section II(1)(g) above, the Borrower may deliver all such information to the Bank in a printable format by electronic means. The Borrower may make such electronic delivery by: (i) sending such information as an electronic mail attachment to such electronic mail addresses as shall be designated by the Bank, as applicable; or (ii) notifying the Bank by electronic mail (to such electronic mail addresses as shall be designated by the Bank, as applicable) that the documents are available on a website accessible to the Bank and further indicating a website hyperlink directing the user directly to the referenced documents posted thereon; provided that such information shall be made available on or before the dates specified in said subsections (i) and (ii) of such Section II(1)(g) above. Nothing contained in this paragraph shall require the Bank to maintain copies of the financial and other information referred to in this paragraph, and the Bank shall be solely responsible for requesting physical delivery of such information, or maintaining any such information, as applicable. The Borrower, on behalf of each Fund, acknowledges that the distribution of material through an electronic medium is not necessarily secure and that there may be confidentiality and other risks associated with such distribution. In no event shall the Bank or any of its officers, directors, employees, agents, advisors or representatives have any liability to the Borrower or any Funds for damages of any kind, including without limitation, direct or indirect, special, incidental or consequential damages, losses or expenses arising out of the Borrower’s transmission of communications through the internet.

2. Representations and Warranties. The Borrower represents and warrants to the Bank, for itself and as to each Fund, as applicable, that:

(a) the Borrower (i) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization; (ii) is registered as an open-end

management investment company under the Investment Company Act; (iii) is qualified as a regulated investment company within the meaning of the Internal Revenue Code; (iv) has all requisite power and authority to own its property and conduct its business as is now conducted and is duly authorized to do business in each jurisdiction where the nature of its properties or business requires such qualification and where failure to be so qualified would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; (v) is in compliance with its certificate or articles of incorporation, declaration of trust, by-laws and/or other organizational documents and applicable law, including, without limitation, the Investment Company Act and Federal Reserve Regulations U and X; and (vi) has filed all required income tax returns and has paid all taxes due pursuant to such returns, and the charges, accruals and reserves on the books and records of the Borrower and each of the Funds with respect to such taxes and charges are adequate;

(b) the execution, delivery and performance of each of the Loan Documents (i) are, and will be, within the Borrower’s or Fund’s power and authority; (ii) have been authorized by all necessary trust or corporate proceedings, as the case may be; (iii) do not, and will not, require the consent of any shareholders or other equity holders of the Borrower or Fund or approvals of any governmental authority, other than those which have been received; (iv) will not contravene any provision of, or exceed any limitation contained in, the certificate or articles of incorporation, declaration of trust, by-laws and/or other organizational documents of the Borrower or Fund or its Prospectus or any judgment, decree or order or any law, rule or regulation applicable to the Borrower or Fund, including, without limitation, the Investment Company Act; (v) are, and will be, in compliance with Federal Reserve Regulations U and X and the Investment Company Act; (vi) do not constitute a default under any other agreement, order or undertaking binding on the Borrower or Fund; and (vii) do not require the consent or approval of any obligee or holder of any instrument relating to any Other Indebtedness or any other party other than for those consents and approvals which have been received;

(c) no portion of any proceeds of any Loan shall be used directly or indirectly in violation of any provision of any statute, regulation, order or restriction applicable to the Bank, the Borrower or any Fund, including Federal Reserve Regulation U;

(d) each of the Loan Documents constitutes the legal, valid, binding and enforceable obligation the Borrower, on behalf of each Fund, except as the same may be limited by bankruptcy, insolvency, reorganization, moratorium or other laws affecting the enforcement of creditors’ rights generally and by general equitable principles;

(e) all financial statements of the Funds previously furnished to the Bank by the Borrower were prepared in accordance with generally accepted accounting principles and present fairly and completely the financial position of such Fund; since the date of the most recent audited financial statements furnished to the Bank prior to the date of this Agreement, there has been no material adverse change in the assets, liabilities, financial condition or business of the Borrower or any of its Funds, other than in the ordinary course of business; and the Borrower has disclosed to the Bank any and all facts which, to the best of the Borrower’s knowledge, after due inquiry, materially and adversely affect or could reasonably be expected to materially and adversely affect, the business, assets, operations or financial condition of the Borrower or any Fund or the ability of the Borrower or Fund to perform its obligations under the Loan Documents;

(f) the Borrower has good and marketable title to all its material properties, assets and rights of every name and nature purportedly owned by it on behalf of each Fund except for encumbrances permitted by Section II(1)(c) above;

(g) there is no litigation, arbitration, proceeding or investigation pending or, to the best of the Borrower’s knowledge, overtly threatened against, the Borrower or any Fund or the Investment Adviser which could reasonably be expected to result in a Material Adverse Effect, except those described on Exhibit E attached hereto;

(h) the shares of the Borrower and its Funds have been registered under the Securities Act of 1933 and are eligible for sale under applicable state and federal securities laws and regulations;

(i) with regard to the Employee Retirement Income Security Act of 1974, and the rules and regulations thereunder, collectively, as amended and in effect from time to time (“ERISA”), none of the Borrower or its Funds is treated as a single employer with any other person under ERISA, and none has any liability with respect to any benefit arrangement, plan or multi-employer plan subject to ERISA;

(j) neither the Borrower nor any of its Funds is an “Affiliated Person”, as defined in the Investment Company Act, of the Bank;

(k) the Investment Adviser serves as investment adviser to each of the Funds, and the Custodian serves as custodian for the assets of each of the Funds; and

(l) the Borrower and each Fund has complied with, and is in compliance with, the investment objectives and policies and investment restrictions set forth in its Prospectus.

The making of each Loan hereunder to the Borrower, on behalf of any Fund, shall be deemed to be a reaffirmation by the Borrower, on behalf of such Fund, as to the representations and warranties contained in this Section II(2) and confirmation that no Default or Event of Default has occurred hereunder or will occur after giving effect to the making of such Loan.

3. Default. It will be a default hereunder with respect to any Fund if any of the following events (each, an “Event of Default”) occurs with respect to such Fund, with respect to the Borrower acting on behalf of such Fund or, as applicable, with respect to the Investment Adviser:

(a) the Borrower, acting on behalf of a Fund, fails (i) to pay when due any amount of principal of any Loan, whether on demand, at maturity, upon acceleration, pursuant to a mandatory repayment or prepayment provision hereof or otherwise, or (ii) to pay within three Business Days of when due any amount of interest on any Loan or any fees or expenses or other amounts payable under any of the Loan Documents; or

(b) the Borrower or Fund, (i) shall fail to perform any term, covenant or agreement contained in any of Sections II(1)(a)-(c) hereof or in any of Sections II(1)(d)(iv)–(xiii) hereof; or (ii) shall fail to perform any term, covenant or agreement contained in any of the Loan Documents (other than those specified elsewhere in this Section II(3)) or a default or event of default occurs thereunder and, in the case of this clause (ii), such failure or default or event of default shall continue for a period of thirty (30) days; or

(c) any material representation or warranty of the Borrower or Fund made in any of the Loan Documents or as an inducement for the Bank to make any Loan shall prove to have been false in any material respect upon the date when made or deemed to have been made; or

(d) the Borrower, acting on behalf of a Fund (i) fails to pay or perform when due any Obligation, whether now existing or hereafter arising, other than those referred to above in this Section II(3), or (ii) fails to pay at maturity, or within any applicable period of grace, any obligations for Other Indebtedness, or (iii) fails to observe or perform beyond any applicable grace period any term, covenant or agreement evidencing or securing such Other Indebtedness; or

(e) the Borrower or a Fund or the Investment Adviser (i) applies for or consents to the appointment of, or the taking of possession by, a receiver, custodian, trustee, liquidator or similar official of itself or of all or a substantial part of its property; (ii) is generally not paying its debts as such debts become due; (iii) makes a general assignment for the benefit of its creditors; (iv) commences any case or proceeding under the Federal Bankruptcy Code or any other law relating to bankruptcy, insolvency, reorganization, winding-up or composition or adjustment of debts, or any other law providing for the relief of debtors; (v) fails to contest in a timely or appropriate manner, or acquiesces in writing to, any petition filed against it in an involuntary case under the Federal Bankruptcy Code or any other law relating to bankruptcy, insolvency, reorganization, winding-up or composition or adjustment of debts, or any other law providing for the relief of debtors; (vi) takes any action under the laws of its jurisdiction of incorporation or organization similar to any of the foregoing; or (vii) discontinues its business; or

(f) a proceeding or case shall be commenced against the Borrower or Fund or the Investment Adviser without the application or consent of such party, in any court of competent jurisdiction, seeking (i) the liquidation, reorganization, dissolution, winding-up, or composition or readjustment of its debts; (ii) the appointment of a trustee, receiver, custodian, liquidator or the like of it or of all or any substantial part of its assets; or (iii) similar relief in respect of it, under any law relating to bankruptcy, insolvency, reorganization, winding-up, or composition or adjustment of debts or any other law providing for the relief of debtors, and such proceeding or case shall continue undismissed, or unstayed and in effect, for a period of 60 days; or an order for relief shall be entered in an involuntary case under the Federal Bankruptcy Code, against the Borrower or Fund or the Investment Adviser or action under the laws of the jurisdiction of incorporation or organization of the Borrower or Fund or the Investment Adviser similar to any of the foregoing shall be taken with respect to the Borrower or Fund or the Investment Adviser and shall continue unstayed and in effect for any period of 60 days; or

(g) a final judgment or final order for the payment of money is entered against the Borrower or Fund by any court of competent jurisdiction, or an execution or similar process is issued or levied against property of the Borrower or Fund, that in the aggregate exceeds 5% of the value of the Net Assets of the Borrower or Fund and such judgment, order, warrant or process is not within 30 days after entry thereof discharged or stayed pending appeal or is not discharged within 30 days after the expiration of such stay; or

(h) there occurs a change in the business, assets or financial condition of the Borrower or Fund resulting in a Material Adverse Effect (which shall not include a decline in the Net Assets of such Fund resulting from redemptions by shareholders of such Fund or a decline in market value of securities held by such Fund); or

(i) the Borrower or Fund shall challenge the validity or enforceability of any portion of any of the Loan Documents; or

(j) any investment advisory agreement which is in effect on the date hereof relating to such Fund shall terminate, or the Investment Adviser shall cease to serve as the investment adviser for such Fund unless the successor thereto is an affiliate of the Investment Adviser, or the Custodian shall cease to serve as the custodian for such Fund’s assets, in each instance without the prior written consent of the Bank; or

(k) the Borrower or Fund shall violate, or take any action that would result in a material deviation from, any of its fundamental investment policies or restrictions as in effect from time to time, including those as set forth in its Prospectus.

4. Remedies. Upon the occurrence of an Event of Default described in Section II(3)(e) or (f), immediately and automatically; and upon the occurrence of any other Event of Default at any time thereafter while such Event of Default is continuing, at the Bank’s option and upon the Bank’s declaration:

(a) the Committed Line established hereunder shall terminate with respect to the applicable Fund(s);

(b) the unpaid principal amount of the Loans to the Borrower on behalf of the applicable Fund(s), together with accrued and unpaid interest thereon, all fees, expenses and other Obligations, shall become immediately due and payable without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived; and

(c) the Bank may exercise any and all rights it has under any of the Loan Documents and proceed to protect and enforce the Bank’s rights by any action at law, in equity or other appropriate proceeding as it relates to the applicable Fund(s).

Subject to the terms of Section I(5)(c) above, the Borrower, on behalf of each Fund, authorizes the Bank and the Custodian, following the occurrence and during the continuance of an Event of Default, to charge and setoff against any deposit account or other account maintained with either the Bank or the Custodian on behalf of the Borrower, on behalf of each Fund, and apply the proceeds thereof against repayment of any unpaid Obligations of the Borrower on behalf of such Fund, as appropriate. In addition, the Custodian, following the occurrence and during the continuance of an Event of Default, is hereby directed by the Borrower, on behalf of each Fund, to dispose of such Fund’s assets as selected by the Investment Adviser to the extent necessary to repay all amounts due to the Bank from the Borrower, on behalf of such Fund, to the extent that the Obligations of the Borrower, on behalf of such Fund, have not been paid when due or if any other Event of Default has occurred. If the Investment Adviser does not select a sufficient amount of assets to repay all amounts due to the Bank from the Borrower, on behalf of such Fund, within a reasonable time, the Custodian is hereby directed by the Borrower, on behalf of such Fund, upon one day’s prior written notice to the Borrower, on behalf of such Fund, and its Investment Adviser, to dispose of such Fund’s assets to the extent necessary to repay all amounts due to the Bank

from the Borrower, on behalf of such Fund. The foregoing shall be deemed to be continuing and irrevocable “proper instructions” to the Custodian for all purposes under the applicable custody agreement between the Borrower, on behalf of such Fund, and the Custodian. The foregoing shall be in addition to any other rights or remedies the Bank and the Custodian may have against the Borrower, on behalf of such Fund, following the occurrence of an Event of Default hereunder.

No right of the Bank shall be exclusive of any other right of the Bank now or hereafter available under the Loan Documents, at law, in equity or otherwise, and no course of dealing or delay by the Bank in exercising any right shall operate as a waiver thereof or otherwise affect any rights or remedies of the Bank.

5. Notices. All notices hereunder shall be in writing and shall be deemed to have been given one Business Day after delivery to an overnight courier or when delivered by hand or by facsimile to the addresses or facsimile numbers given below and in each case such delivery is confirmed to have been made. Notices (a) to the Bank shall be given to State Street Bank and Trust Company, 225 Franklin Street, MAO 7, Boston, Massachusetts 02110, to the attention of: Mutual Fund Lending Department Head, and (b) to the Borrower or any Fund shall be deemed to have been given if given at the address stated at the beginning of this Agreement, to the attention of: Chief Financial Officer.

6. Amendments and Waivers. No waivers shall be effective unless in writing. No right of the Bank shall be exclusive of any other right of the Bank now or hereafter available under the Loan Documents, at law, in equity or otherwise; or by statute or any other provision of law; and no course of dealing or delay by the Bank in exercising any right hereunder shall operate as a waiver thereof or otherwise affect any rights or remedies of the Bank. All amendments hereto must be in writing signed by all parties hereto.

7. Assignments and Participations. No Borrower or Fund may assign or transfer or participate any of its rights under any of the Loan Documents without the prior written consent of the Bank. The Bank may assign or transfer its rights hereunder to any other person or entity with the prior consent of the Borrower, on behalf of a Fund, such consent not to be unreasonably, provided that such consent shall not be required following the occurrence of an Event of Default. The Bank may also pledge or participate its rights hereunder to any Federal Reserve Bank or to any other person or entity without the consent of the Borrower or Fund; provided however, that no such person or entity taking solely a participation interest in any of the Obligations, without the consent of the Borrower, on behalf of a Fund, shall have any rights with respect to such participation other than the right to vote on changes in interest, fees, line amount, principal payments, maturity or other payment dates, and any advance rates or borrowing limitations described herein.

8. Setoff. Any amounts owing from the Bank to the Borrower, on behalf of any Fund, including deposits (general or special, time or demand, provisional or final), may, at any time following the occurrence and during the continuance of an Event of Default, be set off and applied against the obligations of the Borrower, on behalf of such Fund, to the Bank.

9. Expenses. Subject to the terms of Section I(5)(c) above, the Borrower agrees, on behalf of each Fund, to pay on demand all reasonable expenses of the Bank in connection with the preparation, negotiation and closing of this Agreement and the other Loan Documents, including fees of outside legal counsel, if any, and all reasonable expenses of the Bank in connection with the amendment, waiver,

default or collection of the Obligations to the Bank or in connection with the Bank’s exercise or enforcement, following an Event of Default, of any of its rights, remedies or options thereunder, including, without limitation, reasonable fees of outside legal counsel, accounting, consulting, brokerage or other similar professional fees or expenses; and the amount of all such expenses shall, to the extent not paid within thirty (30) days after written demand therefore by the Bank, bear interest at the rate applicable to the Loans (including any default rate) until paid in full.

10. Indemnification. Subject to the terms of Section I(5)(c) above, the Borrower agrees, on behalf of each Fund, (a) to indemnify the Bank against any transfer taxes, documentary taxes, assessments or charges made by any governmental authority by reason of the execution and delivery of this Agreement and the Note; and (b) to indemnify and hold harmless the Bank and its directors, officers, employees, agents and affiliates from and against any and all liabilities, losses, damages, costs, and expenses of any kind, including, without limitation, the reasonable fees and disbursements of counsel, which may be incurred by the Bank in connection with any civil, investigative, administrative or judicial proceeding (whether or not the Bank shall be a designated party thereto) relating to or arising out of this Agreement or any of the other Loan Documents or any actual or proposed use of proceeds of any Loans hereunder, provided that the Bank shall not have the right to be indemnified hereunder for its own gross negligence or willful misconduct as finally determined by a court of competent jurisdiction.

11. Waiver of Jury Trial. Except as prohibited by law, neither the Borrower or any Fund nor the Bank nor any assignee or successor of any of them, shall seek a jury trial in any lawsuit, proceeding, counterclaim or any other litigation procedure based upon or arising out of any of the Loan Documents. Neither the Borrower or any Fund nor the Bank will seek to consolidate any such action in which a jury trial has been waived with any other action in which a jury trial has not been waived. THE PROVISIONS OF THIS SECTION HAVE BEEN FULLY DISCUSSED BY THE PARTIES HERETO, AND THE PROVISIONS HEREOF SHALL BE SUBJECT TO NO EXCEPTIONS. NO PARTY HERETO HAS IN ANY WAY AGREED WITH OR REPRESENTED TO ANY OTHER PARTY THAT THE PROVISIONS OF THIS SECTION WILL NOT BE FULLY ENFORCED IN ALL INSTANCES.

12. Jurisdiction. EACH OF THE LOAN DOCUMENTS SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). THE BORROWER, ON BEHALF OF EACH OF THE FUNDS, AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF ANY OF THE LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR ANY FEDERAL COURT SITTING THEREIN AND CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURT AND THE SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON THE BORROWER BY MAIL AT THE ADDRESS SPECIFIED ABOVE. THE BORROWER, ON BEHALF OF EACH OF THE FUNDS, HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT COURT.

13. Counterparts. This Agreement may be executed in any number of counterparts each of which shall be deemed to be an original document, but all of which together shall constitute one and the same instrument.

14. Definitions. Except as otherwise defined herein, all financial terms shall be defined in accordance with generally accepted accounting principles. The following defined terms as used herein shall have the following meanings:

“Adjusted Net Assets” shall mean, as applied to any Fund at any time, (i) the value of the Total Assets of such Fund at such time, less (ii) Total Liabilities (excluding Indebtedness for borrowed money) of such Fund at such time, less (iii) without duplication, the value of any assets segregated for the benefit of, or otherwise subject to any pledge, security interest, hypothecation or other lien or encumbrance in favor of, any party other than the Bank, less (iv) without duplication, the value of any assets the sale of which by such Fund or the Bank is restricted by any contractual, statutory, regulatory or other similar restrictions under applicable law in any relevant jurisdictions.

“Agreement” shall mean this letter agreement and all appendices, exhibits and schedules attached hereto, as any of the same may be amended, restated, extended, replaced or otherwise modified and in effect from time to time.

“Borrower” shall have the meaning given to such term in the preamble hereto.

“Borrowing Percentage” shall mean, with respect to any Fund, the percentage set forth opposite such Fund’s name on Appendix I hereto.

“Business Day” shall mean any day excluding Saturday and Sunday and excluding any other day which shall be in Boston, Massachusetts a legal holiday or a day on which banking institutions are required or authorized by law to close.

“Committed Line” shall have the meaning given to such term in the preamble hereto.

“Custodian” shall mean State Street Bank and Trust Company, in its capacity as custodian of the assets of each Fund.

“Default” shall mean any event which, with the giving of notice or the lapse of time or both, would constitute an Event of Default.

“ERISA” shall have the meaning given to such term in Section II(2)(i) hereof.

“Event of Default” shall have the meaning given to such term in Section II(3) hereof.

“Expiration Date” shall have the meaning given to such term in Section I(1) hereof.

“Federal Funds Rate” shall mean, at the relevant time of reference thereto, the rate that appears on Bloomberg page BTMM, as quoted by Garban Limited, as of 9:30 a.m. (Boston time), as the “Federal Funds Ask” rate, or, if unavailable, the quotation received by the Bank from a federal funds broker of recognized standing as selected by the Bank in its reasonable discretion.

“Fund” shall mean each fund series of the Borrower from time to time listed on Appendix I hereto.

“Indebtedness” shall mean (a) all obligations for borrowed money or extensions of credit; (b) all obligations evidenced by bonds, debentures, notes or other similar instruments; (c) all obligations to pay the deferred purchase price of property or services, except trade accounts payable arising in the ordinary course of business; (d) all obligations under any lease which are or should be capitalized in accordance with generally accepted accounting principles; (e) all guarantees, endorsements and other contingent obligations, whether direct or indirect, in respect of Indebtedness of others, including any obligation to supply funds to or in any manner to invest in, directly or indirectly, the debtor (whether by way of loan, stock purchase, capital contribution or otherwise), to purchase Indebtedness, or to assure the owner of Indebtedness against loss, through an agreement to purchase goods, supplies or services for the purpose of enabling the debtor to make payment of the Indebtedness held by such owner or otherwise, and the obligations to reimburse the issuer in respect of any letters of credit or performance or surety bonds, or other similar obligations; (f) all obligations in respect of judgments; (g) all obligations in respect of banker’s acceptances and under reverse repurchase agreements; and (h) all obligations in respect of swaps, futures contracts, options, options on futures contracts and other similar portfolio investments and investment techniques, including all liabilities secured by any mortgage, pledge, security interest, lien, charge or other encumbrance existing on property owned or acquired subject thereto, or with respect to which assets have been segregated, whether or not the liability secured thereby shall have been assumed, including without limitation, any cash or securities held or otherwise pledged as collateral in connection with any such portfolio investments or investment techniques.

“Internal Revenue Code” shall mean the Internal Revenue Code of 1986, as amended, together with all related rules and regulations promulgated thereunder.

“Investment Adviser” shall mean shall mean BAMCO, Inc., a New York corporation.

“Investment Company Act” shall mean the Investment Company Act of 1940, as amended, together with all related rules and regulations promulgated by the United States Securities and Exchange Commission relating thereto.

“Loan Documents” shall mean this Agreement, the Note and any other documents executed in connection herewith, as any of the same may be amended, restated, extended, renewed, replaced or otherwise modified and in effect from time to time.

“Material Adverse Effect” shall mean a material adverse effect on (a) the business condition (financial or otherwise), operations, performance or properties of a Borrower or Fund, (b) the rights or remedies of the Bank under the Loan Documents, or (c) the ability of a Borrower or Fund to perform its obligations under the Loan Documents.

“Maximum Amount” shall mean, at any time with respect to any Fund, the lesser of (a) the Borrowing Percentage applicable to such Fund multiplied by the Adjusted Net Assets of such Fund at such time, and (b) the maximum amount which such Fund is permitted to borrow (after taking into

account all then outstanding Indebtedness) pursuant to its Prospectus, the Investment Company Act or any registration made thereunder, any vote of the shareholders of such Fund, any agreement of the Borrower or such Fund with any foreign, federal, state or local securities division to which the Borrower or such Fund is subject, any other applicable agreement or document to which the Borrower or such Fund is a party or any law, rule or regulation applicable to the Borrower or such Fund.

“Net Assets” shall mean, with respect to any Fund at any time, the value of the Total Assets of such Fund at such time less the Total Liabilities of such Fund at such time.

“Obligations” shall mean any and all obligations of the Borrower, on behalf of each Fund, to the Bank of every kind and description, direct or indirect, absolute or contingent, primary or secondary, due or to become due, now existing or hereafter arising, regardless of how they arise or by what agreement or instrument, if any, and including obligations to perform acts and refrain from taking action as well as obligations to pay money.

“Other Indebtedness” shall have the meaning given to such term in Section II(1)(d) hereof.

“Permitted Merger(s)” shall mean (a) the merger of one or more Funds with and into any other Fund, or (b) the merger of any fund series of a Borrower which is not a Fund hereunder with and into any Fund so long as the Fund is the survivor of such merger; provided that, in the case of any such merger pursuant to the foregoing clause (a) or (b), (i) the Borrower shall have provided written notice in reasonable detail to the Bank of its intention to effect such merger, together with a revised Appendix I hereto reflecting such merger, at least ten (10) Business Days prior to the effectiveness of such merger, and (b) no Default or Event of Default shall exist or result from such merger (including, without limitation, any failure to satisfy the borrowing limitations contained in Section I(2) as a result thereof).

“Prospectus” shall mean at any time the then current prospectus and statement of additional information of any relevant Fund.

“Ratable Percentage(s)” shall mean, with respect to any Fund at any time, the percentage that such Fund’s Net Assets at such time constitutes of the aggregate Net Assets of all Funds at such time. The sum of the Ratable Percentages of all Funds from time to time shall always be equal to one hundred percent (100%).

“Total Assets” shall mean, with respect to any Fund at any time, all assets of such Fund which in accordance with generally accepted accounting principles would be classified as assets on a balance sheet of such Fund at such time. For purposes of this definition, the value of each Fund’s assets shall be determined based upon the current market value thereof with reference to daily prices provided by independent pricing sources and otherwise in accordance with the Investment Company Act.

“Total Liabilities” shall mean, with respect to any Fund at any time, the aggregate amount of all items which would be set forth as liabilities on a balance sheet of such Fund at such time in accordance with generally accepted accounting principles.

If the foregoing satisfactorily sets forth the terms and conditions of the Committed Line, please execute and return to the undersigned each of the Loan Documents and such other documents and agreements as the Bank may request. We are pleased to provide the Committed Line hereunder and look forward to the ongoing development of our relationship.


Sincerely,

STATE STREET BANK AND TRUST COMPANY, as Bank

By:		/s/ Karen A. Gallagher
Name:		Karen A. Gallagher
Title:		Vice President

For value received, each of the undersigned hereby promises to pay to State Street Bank and Trust Company (the “Bank”), or order, at the head office of the Bank at 225 Franklin Street, Boston, Massachusetts 02110 in immediately available United States dollars, the principal amount of ONE HUNDRED MILLION AND 00/100 DOLLARS ($100,000,000.00), or such lesser original principal amount as shall be outstanding hereunder and not have been prepaid as provided herein, together with interest thereon as provided below. Each Loan shall be payable upon the earliest to occur of (a) the Expiration Date, (b) 60 calendar days following the date on which such Loan is made, or (c) the date on which such Loan otherwise becomes due and payable under the terms of the Loan Agreement referred to below, whether following the occurrence of an Event of Default or otherwise. Interest on the unpaid principal amount outstanding hereunder shall be payable at the rates and at the times as set forth in the Loan Agreement and shall be computed as set forth in the Loan Agreement. Interest shall be computed on the basis of a 360-day year for the actual number of days elapsed, including holidays or other days on which the Bank is not open for the conduct of banking business.

All Loans hereunder and all payments on account of principal and interest hereof shall be recorded by the Bank. The entries on the records of the Bank (including any appearing on this Note), absent manifest error, shall govern and control as to amounts outstanding hereunder, provided that the failure by the Bank to make any such entry shall not affect the obligation of the undersigned to make payments of principal and interest on all Loans as provided herein and in the Loan Agreement.

Following the occurrence of a Default or an Event of Default, unpaid principal on any Loan, and to the extent permitted by applicable law, unpaid interest on any Loan, shall thereafter bear interest, compounded monthly and be payable on demand, until paid in full (after as well as before judgment) at a rate per annum equal to two percent (2%) above the rate otherwise applicable to such Loan under the Loan Agreement.

This Note is issued pursuant to, and entitled to the benefits of, and is subject to, the provisions of a certain letter agreement dated July 20, 2007 by and among the undersigned and the Bank (herein, as the same may from time to time be amended, restated, supplemented, modified or extended, referred to as the “Loan Agreement”), but neither this reference to the Loan Agreement nor any provision thereof shall affect or impair the absolute and unconditional obligation of the undersigned makers of this Note to pay the principal of and interest on this Note as herein provided. All terms not otherwise defined herein shall be used as defined in the Loan Agreement.

The undersigned may at its option prepay all or any part of the principal of this Note subject to the terms of the Loan Agreement. Amounts prepaid may be reborrowed subject to the terms of the Loan Agreement.

Each of the undersigned makers and every endorser and guarantor hereof hereby waives presentment, demand, notice, protest and all other demands and notices in connection with the delivery, acceptance, performance, default or enforcement hereof and consents that this Note may be extended from time to time and that no such extension or other indulgence, and no substitution, release or

surrender of collateral and no discharge or release of any other party primarily or secondarily liable hereon, shall discharge or otherwise affect the liability of any of the undersigned or any such endorser or guarantor. No delay or omission on the part of the Bank in exercising any right hereunder shall operate as a waiver of such right or of any other right hereunder, and a waiver of any such right on any one occasion shall not be construed as a bar to or waiver of any such right on any future occasion.

This instrument shall be governed by and construed in accordance with the laws of the State of New York (without giving effect to any conflicts of laws provisions contained therein).


BARON INVESTMENT FUNDS TRUST,
on behalf of its fund series as set forth on Appendix I attached hereto

By:
Name:
Title:

In connection with the letter agreement dated July 20, 2007 and related documents currently in effect with State Street Bank and Trust Company (as amended, collectively, the “Agreement”), please increase/reduce (circle one) the outstanding balance on behalf of the above-indicated Fund by $ . Any requested Loan should be recorded on the books of the Fund with the Bank and interest payable to the Bank should be recorded at the agreed upon rate.


BARON INVESTMENT FUNDS TRUST, on behalf of [FUND]

By:
Name:
Title
Date:

Each of Baron Asset Fund, Baron Growth Fund, and Baron Small Cap Fund, in connection with an investment in Kerzner International Holdings, Ltd. (“Kerzner”), has agreed to guarantee its proportionate share (based upon each Fund’s ownership interest in Kerzner) of certain obligations relating to amounts that may become payable due to wind or storm damage at Kerzner’s Bahamas properties to the lenders that financed the acquisition of Kerzner by the above Funds. The guarantee is limited in amount to $5,317,983 in the case of Baron Asset Fund, $7,555,521 in the case of Baron Growth Fund, and $3,570,865 in the case of Baron Small Cap Fund. The guarantee by each of the Funds is secured by a pledge of certain shares as set forth on Exhibit D below. The guarantee by each of the Funds will expire in June 2009.

The above listed shares exist in a segregated account at the Custodian. The above listed Funds, in connection with an investment in Kerzner International Holdings, Ltd. (“Kerzner”), have each agreed to guarantee its proportionate share (based upon each Fund’s ownership interest in Kerzner) of certain obligations relating to amounts that may become payable due to wind or storm damage at Kerzner’s Bahamas properties to the lenders that financed the acquisition of Kerzner by the above Funds. The guarantee is limited in amount to $5,317,983 in the case of Baron Asset Fund, $7,555,521 in the case of Baron Growth Fund, and $3,570,865 in the case of Baron Small Cap Fund. The guarantee by each of the Funds will expire in June 2009.

Two individual plaintiffs have filed a class action complaint, captioned Mintz and Spear v. Ronald Baron, et al., 05 CV 4904, on behalf of shareholders of Baron Growth Fund and Baron Small Cap Fund (the “Funds”) (the “Lawsuit”). The Complaint, pending in the United States District Court for the Southern District of New York, names multiple individuals and entity defendants, including trustees of the Funds, Baron Capital, Inc. and BAMCO, Inc. Plaintiffs allege that defendants permitted the Funds to overcharge their shareholders for marketing and distribution related expenses pursuant to Rule 12b-1 under the Investment Company Act of 1940. A memorandum Opinion and Order (“Order”) of the United States District Court for the Southern District of New York (the “Court”) was issued on September 18, 2006 granting in part and denying in part Baron Capital’s motion to dismiss the complaint. Shortly thereafter, and in response to a recent Second Circuit decision, Baron Capital filed a motion for reconsideration. In response, the plaintiff filed an amended complaint and requested that a conference be held. The Court refused the plaintiff’s request for a conference. The Court’s decision in response to the motion for reconsideration is currently being awaited.


STATE STREET BANK AND TRUST COMPANY, as Custodian

By:		/s/ Joseph L. Hooley
Name:		Joseph L. Hooley
Title:		Executive Vice President


Name	Borrowing Percentage
Baron Investment Funds Trust, on behalf of each of:

Baron Asset Fund	5.00	%
Baron Growth Fund	15.00	%
Baron Small Cap Fund	15.00	%
Baron iOpportunity Fund	15.00	%
Baron Fifth Avenue Growth Fund	15.00	%


Date of Loan		Amount of Principal		Amount of Principal Paid		Outstanding Balance		Notation Made By


DATE:

TO:		STATE STREET BANK AND TRUST COMPANY

ATTN:		LOAN OPERATIONS CUSTOMER SERVICE UNIT telephone 617-664-3861 or 617-664-4005; fax 617-664-3941.

FROM:		BARON INVESTMENT FUNDS TRUST, on behalf of [ ] (the “Fund”)
		(Fund # ) (DDA # )


Name	Borrowing Percentage
Baron Investment Funds Trust, on behalf of each of:
Baron Asset Fund	5.00	%
Baron Growth Fund	15.00	%
Baron Small Cap Fund	15.00	%
Baron iOpportunity Fund	15.00	%
Baron Fifth Avenue Growth Fund	15.00	%


BARON INVESTMENT FUNDS TRUST, on behalf of its fund series as set forth on Appendix I attached hereto

By:		/s/ Linda S. Martinson
Name:		Linda S. Martinson
Title:		COO and General Counsel


(a)	Adjusted Net Assets of the Fund:

	(i)	Total Assets of the Fund	$

	(ii)	Total Liabilities (excluding Indebtedness for borrowed money) of the Fund	$

	(iii)	without duplication, the value of any segregated assets or assets otherwise subject to any pledge or other encumbrance	$

	(iv)	without duplication, the value of any assets the sale of which is restricted by any contractual, statutory, regulatory or other similar restrictions under applicable law	$

	(v)	item (a)(i) less item (a)(ii) less item (a)(iii) less item (a)(iv)	$


(b)	the “Borrowing Percentage” for the Fund (as set forth on Attachment 1 hereto) times item (a)(v)		$

(c)	(i)	Beginning Loan Balance:	$

	(ii)	Paydown Amount (if any):	$

	(iii)	Requested Loan (if any)	$

	(iv)	Requested Loans Balance ((i) minus (ii) or (i) plus (iii)):	$

(d)	The aggregate outstanding principal amount of Indebtedness for borrowed money of the Fund other than the Loans as of the date hereof		$

(e)	Total Indebtedness for borrowed money ((c)(iv) plus (d)):		$