INVESTMENT ADVISORY AGREEMENT
MONETTA FUND, INC., a Maryland corporation registered under the
Investment Company Act of 1940 (1940 Act) as an open-end diversified management
investment company (Fund), and MONETTA FINANCIAL SERVICES, INC., a Delaware
corporation registered under the Investment Advisers Act of 1940 as an
investment adviser (Adviser), agree that:
1. Engagement of Adviser. Adviser shall manage the investment and
reinvestment of the assets of Fund, subject to the supervision of the board of
directors of Fund, for the period and on the terms set forth in this agreement.
Adviser shall give due consideration to the investment policies and restrictions
and the other statements concerning Fund in Fund's charter, bylaws, and
registration statements under the 1940 Act and the Securities Act of 1933 (1933
Act), and to the provisions of the Internal Revenue Code applicable to Fund as a
regulated investment company. Adviser shall be deemed for all purposes to be an
independent contractor and not an agent of Fund, and unless otherwise expressly
provided or authorized, shall have no authority to act for or represent Fund in
any way.
Adviser is authorized to make the decisions to buy and sell securities
of Fund, to place Fund's portfolio transactions with securities broker-dealers,
and to negotiate the terms of such transactions, including brokerage commissions
on brokerage transactions, on behalf of Fund. Adviser is authorized to exercise
discretion within Fund's policy concerning allocation of its portfolio
brokerage, as permitted by law, including but not limited to section 28(e) of
the Securities Exchange Act of 1934, and in so doing shall not be required to
make any reduction in its investment advisory fees.
2. Expenses to be paid by Adviser. Adviser shall furnish, at its
own expense, office space to Fund and all necessary office facilities, equipment
and personnel for managing the assets of Fund. Adviser shall also assume and pay
all other expenses incurred by it in connection with managing the assets of
Fund, all expenses of marketing shares of Fund; all expenses of maintaining the
registration of shares of Fund under the 1933 Act and of qualifying and
maintaining qualification of shares of Fund under the securities laws of such
United States jurisdictions as Fund may from time to time reasonably designate;
all expenses in determination of daily price computations, placement of
securities orders and related bookkeeping; and all other expenses of Fund not
allocated to Fund pursuant to section 3.
3. Expenses to be paid by Fund. Fund shall pay the fees of Adviser
pursuant to section 4; all charges of depositories, custodians and other
agencies for the safekeeping and servicing of its cash, securities and other
property and of its transfer agents and registrars and its dividend disbursing
and redemption agents, if any; all taxes and corporate fees payable to federal,
state or other governmental agencies, domestic or foreign; all stamp or other
transfer taxes; all expenses of printing and mailing certificates for shares of
Fund; all costs of borrowing money by Fund; and all extraordinary expenses,
including litigation expenses, not incurred in the ordinary course of the Fund's
operations. In addition to the payment of expenses, Fund shall also
pay all brokers' commissions and other charges relative to the purchase and sale
of portfolio securities.
4. Compensation of Adviser. For the services to be rendered and the
charges and expenses to be assumed and to be paid by Adviser hereunder, Fund
shall pay to Adviser a monthly fee of 1/12 of 1% of the average daily net asset
value of Fund. The fee for any month or portion thereof shall be paid no later
than the fifteenth day of the following month.
5. Limitation of expenses of Fund. The total expenses of Fund,
exclusive of taxes, of interest and of extraordinary litigation expenses, but
including fees paid to Adviser, shall not in any year exceed the most
restrictive limits prescribed by any state in which Fund's shares are then being
offered for sale, and Adviser agrees to reimburse Fund for any sums expended for
such expenses in excess of that amount. Brokers' commissions and other charges
relative to the purchase and sale of portfolio securities shall not be regarded
as expenses.
6. Services of Adviser not exclusive. The services of Adviser to
Fund hereunder are not to be deemed exclusive, and Adviser shall be free to
render similar services to others so long as its services under this agreement
are not impaired by such other activities.
7. Services other than as Adviser. Adviser (or any affiliate of
Adviser) may act as broker for Fund in connection with the purchase or sale of
securities by or to Fund if and to the extent permitted by procedures adopted
from time to time by the board of directors of Fund. Such brokerage services
are not within the scope of the duties of Adviser under this agreement, and,
within the limits permitted by law and the board of directors of Fund, Adviser
(or any affiliate of Adviser) may receive brokerage commissions, fees or other
remuneration from Fund for such services in addition to its fee for services as
Adviser. Within the limits permitted by law Adviser may receive compensation
from Fund for other services performed by it for Fund which are not within the
scope of the duties of Adviser under this agreement.
8. Limitation of Liability of Adviser. Adviser shall not be liable
to Fund or its shareholders for any loss suffered by Fund or its shareholders
from or as a consequence of any act or omission of Adviser, or of any of the
directors, officers, employees or agents of Adviser, in connection with or
pursuant to this agreement, except by reason of willful misfeasance, bad faith
or gross negligence on the part of Adviser in the performance of its duties or
by reason of reckless disregard by Adviser of its obligations and duties under
this agreement.
9. Duration and renewal. Unless terminated as provided in section
10, this agreement shall continue in effect until two years from the date of its
execution, and thereafter from year to year only so long as such continuance is
specifically approved at least annually (a) by a majority of those directors who
are not interested persons of Fund or of Adviser, voting in person at a meeting
called for the purpose of voting on such approval, and (b) by either the board
of directors of Fund or vote of the holders of a "majority of the outstanding
shares of Fund" (which term as used throughout this agreement shall be construed
in accordance with the definition of "vote of a majority of the outstanding
voting securities of a company" in section 2(a)(42) of the 1940 Act).
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10. Termination. This agreement may be terminated at any time,
without payment of any penalty, by the board of directors of Fund, or by a vote
of the holders of a majority of the outstanding shares of Fund, upon 60 days'
written notice to Adviser. This agreement may be terminated by Adviser at any
time upon 60 days' written notice to Fund. This agreement shall terminate
automatically in the event of its assignment (as defined in section 2(a)(4) of
the 1940 Act).
11. Amendment. This agreement may not be amended without the
affirmative vote (a) of a majority of those directors who are not "interested
persons" (as defined in section 2(a)(19) of the 0000 Xxx) of Fund or of Adviser,
voting in person at a meeting called for the purpose of voting on such approval,
and (b) of the holders of a majority of the outstanding shares of Fund.
12. Use of Adviser's Name. Fund may use the name Monetta Fund, Inc.
or any other name using or derived from the name "Monetta" only for so long as
this agreement or any extension, renewal or amendment hereof remains in effect,
including any similar agreement with any organization which shall have succeeded
to the business of the Adviser as investment adviser. At such time as this
agreement or any extension, renewal or amendment hereof, or such other similar
agreement shall no longer be in effect, Fund will (by corporate action, if
necessary) cease to use any name using or derived from the name "Monetta," any
name similar thereto or any other name indicating that it is advised by or
otherwise connected with Adviser, or with any organization that shall have
succeeded to Adviser's business as investment adviser.
Dated November 8, 1988
MONETTA FUND, INC.
By /s/ Xxxxxx X. Xxxxxxxxx
-----------------------------
President
MONETTA FINANCIAL SERVICES, INC.
By /s/ Xxxxxx X. Xxxxxxxxx
-----------------------------
President
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