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EXHIBIT 23D(1)
THE PENN STREET FUND, INC.
AGREEMENT FOR INVESTMENT ADVISORY SERVICES
THIS AGREEMENT is made as of this 23rd day of May, 2002, between The Penn
Street Fund, Inc. (the "Company") and Citco-Quaker Fund Advisors, Inc., a
Delaware corporation (the "Adviser").
RECITALS
WHEREAS, the Company is organized under the laws of the state of Maryland
as a corporation and operates and is registered as an open-end management
investment company of the series type under the Investment Company Act of 1940,
as amended (the "1940 Act"); and
WHEREAS, the Company is authorized by its Articles of Incorporation and
by-laws to issue separate Portfolios of shares representing interests in
separate investment portfolios (the "Portfolios"), and
WHEREAS, The Company has authorized the issuance of shares of beneficial
interest ("Shares") in the Portfolios which are identified on Schedule A
attached hereto and incorporated herein, which Schedule A may be amended from
time to time by mutual agreement of the Company and Adviser (the "Portfolios"),
and;
WHEREAS, Adviser is registered as an investment adviser under the
Investment Advisers Act of 1940, as amended (the "Advisers Act") and engages in
the business of asset management; and
WHEREAS, the Company desires to retain Adviser to furnish investment
advisory services to the Portfolios, and such other Portfolios as may be added
from time to time by mutual agreement of the parties, pursuant to the terms and
conditions of this Agreement, and Adviser is willing to so furnish such
services;
NOW THEREFORE, in consideration of the foregoing and the agreements and
covenants herein contained, the parties hereto, intending to be legally bound,
agree as follows:
1. Appointment
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The Company hereby appoints Adviser to act as investment adviser to the
Portfolios for the periods and pursuant to the terms and conditions as set forth
in this Agreement. Adviser accepts the appointment and agrees to furnish the
services herein set forth for the compensation herein provided.
2. Delivery of Documents
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The Company has furnished Adviser with properly certified or authenticated
copies of each of the following:
a. The Company's Articles of Incorporation as filed with the State of
Maryland;
b. The Company's By-Laws;
c. Resolutions of the Company's Board of Directors authorizing the
appointment of Adviser and approving this Agreement;
d. The Company's most current Registration Statement on form N-1A
promulgated under the 1940 Act and under the Securities Act of 1933,
as amended (the "1933 Act");
e. The Company's current Prospectus and Statement of Additional
Information (together called the "Prospectus")
The Company will furnish Adviser from time to time with properly certified
or authenticated copies of all amendments of or supplements to the foregoing at
the same time as such documents are required to be filed with the SEC and/or
state authorities.
3. Management
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Subject to the general supervision of the Company's Board of Directors (the
"Board"), Adviser will be responsible for providing a continuous investment
program for the Portfolios, including investment research and management with
respect to all securities, investments, cash and cash equivalents held by the
Portfolios.
Adviser may, with the prior written consent of the Board and the approval of the
appropriate Company shareholders, as required, employ persons or entities to
serve as sub-advisers to one or more Portfolios. The Adviser and/or such
sub-advisers, if any, may, in their sole discretion, determine from time to time
what securities and other investments will be purchased, retained or sold by the
Portfolios. The investment activities of such sub-advisers, if any, as such
services relate to the Portfolios, will at all times be subject to the general
supervision and control of Adviser. Adviser will provide, through its own
efforts itself and/or through the medium of its previously approved
sub-adviser(s), the services under this Agreement in accordance with each
Portfolio's investment objectives, policies and restrictions as such are set
forth in the Prospectus from time to time. Adviser further agrees that it:
(a) Will conform its activities to all applicable Rules and Regulations of the
SEC and will, in addition, conduct its activities under this agreement in
accordance with the regulations of any other Federal and State agencies
which may now or in the future have jurisdiction over its activities under
this Agreement;
(b) Will monitor the investment activities of any sub-adviser which it employs
to insure that such sub-adviser conducts its activities with respect to the
applicable Portfolio(s) in accordance with the Prospectus and any and all
federal and/or state laws and regulations relating to the applicable
Portfolio(s);
(c) Will place orders, or monitor the placement of orders by sub-advisers,
pursuant to good faith investment determinations for the Portfolios either
directly with the respective issuers or with appropriate brokers and
dealers. In placing orders with brokers or dealers, the Advisor, or
sub-adviser(s) under the supervision of Adviser, will attempt to obtain the
best net price and the most favorable execution of its orders. Consistent
with this obligation, when Adviser, or Adviser's duly authorized
sub-adviser(s), believes two or more brokers or dealers are comparable in
price and execution, Adviser, or Adviser's duly authorized sub-adviser(s),
may prefer: (I) brokers and dealers who provide the Portfolio(s) with
research advice and other services, or who recommend or sell Company
shares, and (II) brokers who are affiliated with the Company, Adviser or
sub-adviser; provided, however, that in no instance will portfolio
securities be purchased from or sold to Adviser or any sub-adviser in
principal transactions;
(d) Will provide, at its own cost, all office space, facilities and equipment
necessary for the conduct of its advisory activities on behalf of the
Company.
4. Services not Exclusive
The services to be furnished by Adviser hereunder are not to be considered
exclusive, and Adviser shall be free to furnish similar services to others so
long as its services under this Agreement are not impaired thereby; provided,
however, that without the prior written consent of the Board, Adviser will not
serve as an investment advisor to any other investment company having a similar
investment objective to that of the Company.
5. Books and Records
In compliance with Rule 31a-3 promulgated under the 1940 Act, Adviser hereby
agrees that all records which it maintains for the benefit of the Company are
the property of the Company and further agrees to surrender promptly to the
Company any of such records upon the Company's request. Adviser further agrees
to preserve for the periods prescribed by Rule 31a-2 the records required to be
maintained by it pursuant to such Rule that are not maintained by others on
behalf of the Company.
6. Expenses
During the term of this Agreement, Adviser will pay all expenses incurred by it
in connection with its investment advisory services furnished to the Company
other than the costs of securities and other investments (including brokerage
commissions and other transaction charges) purchased or sold for the Portfolios.
7. Compensation
The Company will pay Adviser, and Adviser will accept as full compensation for
its services rendered hereunder, the investment advisory fees for each Portfolio
as set forth on Schedule B attached hereto and incorporated herein, which
Schedule B may be amended from time to time by mutual agreement of the Company,
Adviser and shareholders as applicable. All fees payable to Adviser pursuant to
this Agreement shall be computed at the end of each month and payable within
five (5) business days thereafter, and shall be computed as an annual rate as a
percentage of the average daily net assets of the applicable Portfolio. All
parties to this Agreement do hereby expressly authorize and instruct the
Company's Administrator, Declaration Service Company or its successor, to
provide, in accordance with the fees set forth on Schedule B, a calculation each
month of the gross amounts due Adviser for each Portfolio and to remit such fee
payments hereunder promptly to Adviser.
8. Limitation of Liability
Adviser shall not be liable for any error of judgment, mistake of law or for any
other loss suffered by the Company or any Portfolio in connection with the
performance of this Agreement, except a loss resulting from a breach of
fiduciary duty with respect to the receipt of compensation for services or a
loss resulting from willful malfeasance, bad faith or gross negligence on
Adviser's part in the performance of its duties or from reckless disregard by it
of its obligations or duties under this Agreement.
9. Duration and Termination
This Agreement shall become effective as of the date first written above and,
unless sooner terminated as provided herein, shall continue in effect until
March 31, 2004. Thereafter, this Agreement shall be renewable for successive
periods of one year each, provided such continuance is specifically approved
annually:
(a) By the affirmative vote of a majority of those members of the Board
who are not parties to the Agreement or interested persons of any such
party (as that term is defined in the 1940 Act), cast in person at a
meeting called for the purpose of voting on such approval; and
(b) By affirmative vote of either a majority of the entire Board or a
majority (as that term is defined in the 0000 Xxx) of the outstanding
voting securities of the Company.
Notwithstanding the foregoing, this Agreement may be terminated by the Company
or by Adviser at any time upon sixty (60) days written notice, without payment
of any penalty; provided, however that termination by the Company must be
authorized by majority vote of the Board or by vote of a majority of the
outstanding voting securities of the Company. This Agreement will automatically
terminate in the event of its assignment (as that term is defined in the 1940
Act).
10. Amendment of this Agreement
No provision of this Agreement may be changed, waived, discharged, or terminated
orally, but only by a written instrument signed by the party against which
enforcement of the change, waiver, discharge or termination is sought. No
material amendment of this Agreement shall be effective until approved by vote
of the holders of a majority of the Fund's outstanding voting securities (as
defined in the 1940 Act).
11. Miscellaneous
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 or effect. If any provision of this Agreement shall be held
or made invalid by a court decision, statute, rule or otherwise, the remainder
of the Agreement shall not be affected thereby. This Agreement shall be binding
on, and shall inure to the benefit of, the parties hereto and their respective
successors.
12. Counterparts
This Agreement may be executed in counterparts by the parties hereto, each of
which shall constitute an original, and all of which, together, shall constitute
one Agreement.
13. Governing Law
This Agreement shall be construed in accordance with, and governed by, the laws
of the Commonwealth of Pennsylvania.
14. Notices
Except as otherwise provided in this Agreement, any notice or other
communication required by or permitted to be given in connection with this
Agreement will be in writing and will be delivered in person or sent by first
class mail, postage prepaid or by prepaid overnight delivery service to the
respective parties as follows:
If to the Company: If to the Adviser:
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The Penn Street Fund, Inc. Citco-Quaker Fund Advisors, Inc.
0000 Xxxxxx Xxxxx Xxxx, Xxxxx 00 0000 Xxxxxx Xxxxx Xxxx, Xxxxx 00
Xxxxxx Xxxxx, XX 00000 Xxxxxx Xxxxx, XX 00000
G. Xxxxxxx Xxxx Xxxxx X. Xxxxx
President President
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year first written
above.
Attest: THE PENN STREET FUND, INC.
By: _______________________ By: __________________________
Name: ____________________ G. Xxxxxxx Xxxx
Title: ____________________ Title: President
Attest: CITCO-QUAKER FUND ADVISORS, INC.
By: _______________________ By: ___________________________
Name: _____________________ Xxxxx X. Xxxxx
Title: ___________________ Title: President
Schedule A
The Penn Street Fund, Inc.
Portfolios of the Company
As Amended November 5, 2002
The following Portfolios and Classes of Shares are offered by the Company and
subject to this Agreement:
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Class A Class B Class C No-Load Shares
Name of Portfolio Shares Shares Shares
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The XxXxxxx Balanced Portfolio X
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The Walnut Asset Management Equity Portfolio X
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The Cumberland Taxable Income Portfolio X
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The Xxxxxxx Large-Cap Growth Portfolio X
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The Penn Street Advisors Sector Rotational Portfolio X
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The Berkshire Advisors Select Equity Portfolio X
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Schedule B
Citco-Quaker Fund Advisors, Inc.
Compensation Schedule
As Amended November 5, 2002
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Annual Fee Rate, as percentage of
Name of Portfolio average daily net assets
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The XxXxxxx Balanced Portfolio 1.00%
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The Walnut Asset Management Equity Portfolio 1.00%
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The Cumberland Taxable Income Portfolio 1.00%
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The Xxxxxxx Large-Cap Growth Portfolio 1.00%
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The Penn Street Advisors Sector Rotational Portfolio 1.00%
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The Berkshire Advisors Select Equity Portfolio 1.00%
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