Exhibit 23(d)(3)
INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT made this day of January 2000, by and between PENN
STREET FUND, INC., a Maryland corporation (the "Fund") and Penn Street
Advisors, Inc., a Pennsylvania corporation (the "Manager").
1. Duties of Advisor
The Fund hereby employs the Manager to manage the investment and
reinvestment of the assets of the Penn Street Fund Inc. Sector Portfolio
which, if this Agreement is approved by the Stockholders of the Portfolio,
as provided in section 7 below, will be renamed the Penn Street Advisors
Sector Portfolio (the "Portfolio"), to continuously review, supervise and
administer the Portfolio's investment program, to determine in its
discretion the securities to be purchased or sold and the portion of the
Portfolio's assets to be uninvested, to provide the Fund with records
concerning the Manager's activities which the Fund is required to maintain,
and to render regular reports to the Fund's officers and the Board of
Directors of the Fund, all in compliance with the objectives, policies and
limitations set forth in the Fund's registration statement. The Manager
accepts such employment and agrees to provide, at its own expense, the
office space, furnishings and equipment and the personnel required by it to
perform the services described herein on the terms and for the compensation
provided herein.
2. Portfolio Transactions
The Manager is authorized to select the brokers or dealers that
will execute the purchases and sales of portfolio securities for the
Portfolio and is directed to use its best efforts to obtain the best
available price and most favorable execution. It is understood, however,
that the Manager shall not be deemed to have acted unlawfully, or to have
breached a fiduciary duty to the Fund or in respect of the Portfolio, or be
in breach of any obligation owing to the Fund or in respect of the
Portfolio under this Agreement, or otherwise, solely by reason of its
having caused the Portfolio to pay a member of a securities exchange, a
broker or a dealer a commission for effecting a securities transaction for
the Portfolio in excess of the amount of commission another member of an
exchange, broker or dealer would have charged if the Manager determines in
good faith that the commission paid was reasonable in relation to the
brokerage or research services provided by such member, broker or dealer,
viewed in terms of that particular transaction or the Manager's overall
responsibilities with respect to its accounts, including the Fund, as to
which it exercises investment discretion. The Manager will promptly
communicate to the officers and directors of the Fund such information
relating to transactions for the Portfolio as they may reasonably request.
3. Compensation of the Manager
For the services to be rendered by the Manager as provided in
Section 1 of this Agreement, the Fund shall pay to the Manager, at the end
of each month, a fee equal to one-twelfth of .60 percent of the average
daily net assets of the Portfolio. In the event that this Agreement is
terminated at other than a month-end, the fee for such month shall be
prorated. The forgoing provisions of this section 3 notwithstanding, the
fee provided herein shall be accrued but not paid until this Agreement is
approved by the stockholders of the Portfolio as required by section 15 of
the Investment Company Act of 1940 ("Act").
4. Reports
The Fund and the Manager agree to furnish to each other
information with regard to their respective affairs as each may reasonably
request.
5. Status of the Manager
The services of the Manager to the Fund or in respect of the
Portfolio, are not to be deemed exclusive, and the Manager shall be free to
render similar services to others as long as its services to the Fund, or
in respect of the Portfolio, are not impaired thereby. The Manager shall
be deemed to be an independent contractor and shall, unless otherwise
expressly provided or authorized, have no authority to act for or represent
the Fund in any way or otherwise be deemed an agent of the Fund.
6. Liability of Manager
The Manager shall not be liable to the Fund or any shareholder
thereof for errors of judgment in the performance of its duties hereunder.
No provision of this Agreement shall be deemed to protect the
Manager against any liability to the Fund to which it might otherwise be
subject by reason of willful misfeasance, bad faith or gross negligence in
the performance of its duties or the reckless disregard of its obligations
under this Agreement.
7. Duration and Termination
This Agreement shall become effective on January 2000 (the
"Effective Date") and shall continue in effect until January , 2002,
provided that it is approved in accordance with Section 15 of the Act by
the stockholders of the Portfolio at the next Special Meeting of
Stockholders held after execution of this Agreement. Thereafter, this
Agreement may be continued in effect for successive one-year periods
provided each such continuance is approved at least annually by a vote of
the Fund's Board of Directors, including the vote of a majority of the
directors who are not parties to this Agreement or interested persons of
any such party, cast in person, at a meeting called for the purpose of
voting such approval. In addition, the question of continuance of this
Agreement may be presented to the shareholders of the Fund; in such event,
such continuance shall be effected only if approved by the affirmative vote
of the holders of a majority of the outstanding voting securities of the
Portfolio.
This Agreement may at any time be terminated without payment of
any penalty either by vote of the Board of Directors of the Fund or by vote
of the holders of a majority of the outstanding voting securities of the
Portfolio, on sixty days written notice to the Manager.
This Agreement shall automatically terminate in the event of its
assignment.
This Agreement may be terminated by the Manager after ninety days
written notice to the Fund.
Any notice under this Agreement shall be given in writing,
addressed and delivered, or mailed postpaid, to the other party at any
office of such party.
As used in this Section 7, the terms "assignment," "interested
persons," and a "vote of the holders of a majority of the outstanding
securities" shall have the respective meanings set forth in Section
2(a)(4), Section 2(a)(19), Section 2(a)(42) of the Act and Rule l8f-2
thereunder.
8. Severability
If any provision of this Agreement shall be held or made invalid
by a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby.
IN WITNESS WHEREOF, the parties hereby have caused this Agreement to
be executed this _______day of ____________ 2000.
Penn Street Advisors, Inc. Penn Street Fund, Inc.
By:_____________________ By:_________________________
Vice President President
4
02/07/00/SL1 39071v1/02488.001
