Exhibit (h)(6)(i)
OPERATING EXPENSES AGREEMENT
THIS OPERATING EXPENSES AGREEMENT (the "Agreement") is effective as of
the 1st day of April, 1999, by and between Metropolitan West Funds, a Delaware
business trust (hereinafter called the "Trust"), on behalf of each series of the
Trust listed in Appendix A hereto, as may be amended from time to time
(hereinafter referred to individually as a "Fund" and collectively as the
"Funds"), and METROPOLITAN WEST ASSET MANAGEMENT, LLC, a limited liability
company organized and existing under the laws of the State of California
(hereinafter called the "Manager").
WITNESSETH:
WHEREAS, the Manager renders advice and services to the Funds pursuant
to the terms and provisions of an Investment Management Agreement between the
Trust and the Manager, dated March 31, 1997 and amended and restated on May 18,
1998 (the "Investment Management Agreement"); and
WHEREAS, the Funds are responsible for, and have assumed the obligation
for, payment of certain expenses pursuant to Subparagraph 7(b) of the Investment
Management Agreement that have not been assumed by the Manager; and
WHEREAS, the Manager desires to limit the Funds' respective Operating
Expenses (as that term is defined in Paragraph 2 of this Agreement) pursuant to
the terms and provisions of this Agreement, and the Trust (on behalf of the
Funds) desires to allow the Manager to implement those limits;
NOW, THEREFORE, in consideration of the covenants and the mutual
promises hereinafter set forth, the parties hereto, intending to be legally
bound hereby, mutually agree as follows:
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1. Limit on Operating Expenses. The Manager hereby agrees to limit each
Fund's Operating Expenses to the respective annual rate of total Operating
Expenses specified for that Fund in Appendix A of this Agreement.
2. Definition. For purposes of this Agreement, the term "Operating
Expenses" with respect to a Fund is defined to include all expenses necessary or
appropriate for the operation of the Fund including the Manager's investment
advisory or management fee under Paragraph 8 of the Investment Management
Agreement, and other expenses described in Paragraph 7 of the Investment
Management Agreement, but does not include any Rule 12b-1 fees, front-end or
contingent deferred loads, taxes, interest, dividend expenses, brokerage
commissions, expenses incurred in connection with any merger or reorganization
or extraordinary expenses such as litigation.
3. Reimbursement of Fees and Expenses. The Manager, under Subparagraph 8(d)
of the Investment Management Agreement, retains its right to receive
reimbursement of reductions of its investment management fee and Operating
Expenses paid by it that are not its responsibility under Paragraph 7 of the
Investment Management Agreement.
4. Term. This Agreement shall become effective on the date specified herein
and shall remain in effect for a period of one (1) year, unless sooner
terminated as provided in Paragraph 5 of this Agreement. This Agreement shall
continue in effect thereafter for additional periods not exceeding one (1) year
so long as such continuation is approved for each Fund at least annually by the
Board of Trustees of the Trust (and separately by the disinterested Trustees of
the Trust).
5. Termination. This Agreement may be terminated at any time, and without
payment of any penalty, by either the Trust or by the Board of Trustees of the
Trust, on behalf of any one or more of the Funds, upon sixty (60) days' written
notice to the Manager.
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The Manager may decline to renew this Agreement by written notice to the Trust
at least thirty (30) days before its annual expiration date.
6. Assignment. This Agreement and all rights and obligations hereunder may
not be assigned without the written consent of the other party.
7. Severability. If any provision of this Agreement shall be held or made
invalid by a court decision, statute or rule, or shall be otherwise rendered
invalid, the remainder of this Agreement shall not be affected thereby.
8. Captions. The captions in this Agreement are included for convenience of
reference only and in no way define or limit any of the provisions hereof or
otherwise affect their construction of effect.
9. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of California without giving effect to
the conflict of laws principles thereof; provided that nothing herein shall be
construed to preempt, or to be inconsistent with, any federal law, regulation or
rule, including the Investment Company Act of 1940, as amended, and the
Investment Advisers Act of 1940, as amended, and any rules and regulations
promulgated thereunder.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and attested by their duly authorized officers, all on the day and
year first above written.
METROPOLITAN WEST FUNDS METROPOLITAN WEST ASSET
MANAGEMENT, LLC
By: /s/ Xxxxx Dubchansky By: /s/ Xxxxxx Xxxxxxxxx
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Title: Chairman Title: Chief Financial Officer
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Appendix A to
Operating Expenses
Agreement
(Amendment Effective June 27, 2002)
Class M Class I
Operating Expense Operating Expense
Fund Limit* Limit
Metropolitan West Total Return Bond Fund 0.65% 0.44%
Metropolitan West Low Duration Bond Fund 0.58% 0.39%
Metropolitan West Short-Term Investment Fund 0.50% 0.34%
Metropolitan West AlphaTrak 500 Fund** 0.90% N/A
(undesignated class)
Metropolitan West High Yield Bond Fund 0.80% 0.55%
Metropolitan West Intermediate Bond Fund 0.65% 0.44%
* Includes Rule 12b-1 fees paid by Class M shares of the Funds. There are no
Rule 12b-1 fees assessable for Class I shares of the Funds.
** Assumes the maximum management fee of 0.70%.
METROPOLITAN WEST FUNDS METROPOLITAN WEST ASSET
MANAGEMENT, LLC
By: /s/ Xxxxx Dubchansky By: /s/ Xxxxxx Xxxxxxxxx
----------------------------- -----------------------------
Title: Chairman Title: Chief Financial Officer
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