DISTRIBUTION AGREEMENT

      THIS AGREEMENT is made as of July 27, 2005, by and between THE PENN STREET
FUND, INC. (the "Fund"), a Maryland corporation having its principal place of
business at 83 General Warren Boulevard, Suite 200, Malvern, PA 19355 and CITCO
MUTUAL FUND DISTRIBUTORS, INC., (the "Underwriter") a Delaware corporation, with
its principal place of business at 83 General Warren Boulevard, Suite 200,
Malvern, PA 19355.

      WHEREAS, the Fund is an open-end management investment company registered
under the Investment Company Act of 1940, as amended (the "Act"); and

            WHEREAS, the Fund 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 Fund has authorized the issuance of shares of beneficial
interest ("Shares") in the Portfolios which are identified on Exhibit A attached
hereto, which Exhibit A may be amended from time to time by mutual agreement of
the Fund and Underwriter, and;

      WHEREAS, Underwriter is a broker-dealer registered with the Securities and
Exchange Commission and a member of the National Association of Securities
Dealers, Inc., (the "NASD"); and

      NOW, THEREFORE, in consideration of the promises and agreements of the
parties contained herein, the parties agree as follows:

      1. Appointment. The Fund hereby appoints Underwriter as exclusive agent
for the distribution of Shares of the Portfolios listed in Exhibit A hereto, and
Underwriter hereby accepts such appointment under the terms of this Agreement.
Notwithstanding any other provision hereof, the Fund may terminate, suspend or
withdraw the offering of Shares of any Portfolio whenever, in its sole
discretion, it deems such action to be desirable.

      2. Sale and Repurchase of Shares.

            (a) Underwriter, as agent for the Fund, will sell Shares to the
public against orders therefore at the public offering price, all such sales to
comply with the provisions of the Act and the rules and regulations of the
Securities and Exchange Commission promulgated thereunder.

            (b) Underwriter will also have the right to take, as agent for the
Fund, all actions, which, in Underwriter's judgment, are necessary to carry into
effect the distribution of the Shares.

            (c) The net asset value of the Shares of each Portfolio (or Class of
Shares of a Portfolio) shall be determined in the manner provided in the
Registration Statement, and when determined shall be applicable to transactions
as provided for in the Registration Statement. The net asset value of the Shares
of each Portfolio (or each Class of Shares of a Portfolio) shall be calculated
by the Fund or by another entity on behalf of the Fund. Underwriter shall have
no duty to inquire into or liability for the accuracy of the net asset value per
share is calculated.


On every sale, the Fund shall receive the applicable public offering price of
the Shares promptly, but in no event later than the third business day following
the date on which Underwriter shall have received an order for the purchase of
the Shares.

            (d) Upon receipt of purchase instructions, Underwriter will transmit
such instructions to the Fund or its transfer agent for registration of the
Shares purchased.

            (e) Nothing in the Agreement shall prevent Underwriter or any
affiliated person (as defined in the Act) of Underwriter from acting as
underwriter or distributor for any other person, firm or corporation (including
other investment companies) or in any way limit or restrict Underwriter or any
such affiliated person from buying, selling or trading any securities for its or
their own account or for the accounts of others for whom it or they may be
acting; provided, however, that Underwriter expressly represents that it will
undertake no activities which, in its judgment, will adversely affect the
performance of its obligations to the Fund under this Agreement.

            (f) Underwriter, as agent of the Fund and for the account of the
Portfolios, may repurchase the Shares at such prices and upon such terms and
conditions as shall be specified in the Fund's Registration Statement. At the
end of each business day, the Underwriter shall notify the Fund and the Fund's
transfer agent of the number of Shares redeemed for each Portfolio, and the
identity of the shareholders or dealers offering Shares for repurchase. Upon
such notice, the Fund shall pay the Underwriter the net asset value of the
redeemed shares in cash or in the form of a credit against monies due the Fund
from the Underwriter as proceeds from the sale of Shares. The Fund reserves the
right to suspend such repurchase right upon written notice to the Underwriter.
The Underwriter further agrees to act as agent for the Fund to receive and
transmit promptly to the Fund's transfer agent, shareholder and dealer requests
for redemption of Shares in the Portfolios.

      3. Sales of Shares by the Fund. The Fund reserves the right to issue or
sell Shares of the Portfolios directly to the public at any time.

      4. Basis of Sale of Shares. Underwriter does not agree to sell any
specific number of Shares. Underwriter, as agent for the Fund, undertakes to
sell Shares of the Portfolios on a best effort basis only against orders
therefore.


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      5. Compliance with NASD and Government Rules.

            (a) Underwriter will conform to the Rules of Fair Practice of the
NASD and the securities laws of any jurisdiction in which it sells Shares of the
Portfolios.

            (b) The Fund agrees to furnish to the Underwriter sufficient copies
of any agreements, plans or other materials it intends to use in connection with
sales of Shares in adequate time for the Underwriter to file and clear them with
the proper authorities before they are put in use, and not to use them until so
filed and cleared.

            (c) Underwriter, at its own expense, will qualify as dealer or
broker, or otherwise, under all applicable State or federal laws required in
order that Shares may be sold in such States as may be mutually agreed upon by
the parties, except for expenses described in Exhibit A hereto, which will be
paid by the Adviser.

            (d) Underwriter shall not make, or permit any representative, broker
or dealer to make, in connection with any sale or solicitation of a sale of the
Shares, any representations concerning the Shares except those contained in the
Fund's then current prospectus and statement of additional information covering
the Shares and in printed information approved by the Fund as information
supplemental to such prospectus and statement of additional information. Copies
of the Fund's then effective prospectus and statement of additional information
and any such printed supplemental information will be supplied by the Adviser to
Underwriter in reasonable quantities upon request.

      6. Records to be Supplied by Fund. The Fund shall furnish to Underwriter
copies of all information, financial statements and other papers which
Underwriter may reasonably request for use in connection with the distribution
of Shares of the Portfolio(s).

      7. Expenses to be Borne by Fund. The Fund will bear the following
expenses:

      i.    preparation, setting in type, printing of sufficient copies of the
            prospectus and statement of additional information for distribution
            to shareholders, and the distribution to shareholders of the
            prospectus and statement of additional information;

      ii.   preparation, printing and distribution of reports and other
            communications to shareholders;

      iii.  registration of the Shares under the federal securities law;

      iv.   qualification of the Shares for sale in the jurisdictions designated
            by Fund and Underwriter;

      v.    maintaining facilities for the issue and transfer of the Shares;


                                  Page 3 of 8


      vi.   supplying information, prices and other data to be furnished by the
            Fund under this Agreement; and

      vii.  any original issue taxes or transfer taxes applicable to the sale or
            delivery of the Shares of certificates therefore.

      8. Indemnification.

      (a) The Fund agrees to indemnify, defend and hold the Underwriter, its
officers, and directors, and any person who controls the Underwriter within the
meaning of Section 15 of the Securities Act of 1933 Act (the "1933 Act") or
Section 20 of the Securities Exchange Act of 1934, as amended (the "1934 Act"),
free and harmless from and against any and all claims, demands or liabilities
and expenses (including the cost of investigating or defending such claims,
demands or liabilities and any counsel fees incurred in connection therewith)
which the Underwriter, its officers, directors or any such controlling persons
may incur under the 1933 Act, the 1934 Act, or under common law or otherwise,
arising out of or based upon any untrue statement of a material fact contained
in the Registration Statement or Prospectus or arising out of or based upon any
alleged omission to state a material fact required to be stated in either
thereof or necessary to make the statements in either thereof not misleading,
except insofar as such claims, demands, liabilities or expenses arise out of or
are based upon any such untrue statement or omission or alleged untrue statement
or omission made in reliance upon and in conformity with information furnished
in writing by the Underwriter to the Fund for use in the Registration Statement.
The Underwriter agrees to comply with all of the applicable terms and provisions
of the 1934 Act.

      (b) The Underwriter agrees to indemnify, defend, and hold the Fund, its
officers, directors, employees shareholders and agents, and any person who
controls the Fund within the meaning of Section 15 of the 1933 Act of Section 20
of the 1934 Act, free and harmless from and against any and all claims, demands,
liabilities and expenses (including the cost of investigating or defending
against such claims, demands or liabilities and any counsel fees incurred in
connection therewith) which the Fund, its directors, officers, employees,
shareholders and agents, or any such controlling person may incur under the 1933
Act, the 1934 Act or under common law or otherwise arising out of or based upon
any untrue statement of a material fact contained in information furnished in
writing by the Underwriter to the Fund for use in the Registration Statement, or
arising out of or based upon any omission or alleged omission to state a
material fact in connection with such information required to be stated in the
Registration Statement necessary to make such information not misleading.


                                  Page 4 of 8


      (c) A party seeking indemnification hereunder (the Indemnitee) shall give
prompt written notice to the party from whom indemnification is sought
("Indemnitor") of a written assertion or claim of any threatened or pending
legal proceeding which may be subject to indemnity under this Section; provided,
however, that failure to notify the Indemnitor of such written assertion or
claim shall not relieve the indemnitor of any liability arising from this
Section. The Indemnitor shall be entitled, if it so elects, to assume the
defense of any suit brought to enforce a claim subject to this Agreement and
such defense shall be conducted by counsel chosen by the Indemnitor and
satisfactory to the Indemnitee; provided, however, that if the defendants
include both the Indemnitee and the Indemnitor, and the Indemnitee shall have
reasonably concluded that there may be one or more legal defenses available to
it which are different from or additional to those available to the Indemnitor
("conflict of interest"), the Indemnitor shall have the right to select separate
counsel to defend such claim on behalf of the Indemnitee. In the event that the
Indemnitor elects to assume the defense of any suit pursuant to the preceding
sentence and retains counsel satisfactory to the Indemnitee, the Indemnitee
shall bear the fees and expenses of additional counsel retained by it except for
reasonable investigation costs which shall be borne by the Indemnitor. If the
Indemnitor (i) does not elect to assume the defense of a claim, (ii) elects to
assume the defense of a claim but chooses counsel that is not satisfactory to
the Indemnitee or (iii) has no right to assume the defense of a claim because of
a conflict of interest, the Indemnitor shall advance or reimburse the
Indemnitee, at the election of the Indemnitee, reasonable fees and disbursements
of any counsel retained by Indemnitee, including reasonable investigation costs.

      9. Advances of Expenses. The Fund shall advance attorney's fees or other
expenses incurred by a Covered Person in defending a proceeding only to the
extent permitted by 1933 Act and the Act.

      10. Termination and Amendment of this Agreement. This Agreement shall
automatically terminate, without the payment of any penalty, in the event of its
assignment. This Agreement may be amended only if such amendment is approved (i)
by Underwriter, (ii) either by action of the Board of Directors of the Fund or
at a meeting of the Shareholders of the Fund by the affirmative vote of a
majority of the outstanding Shares, and (iii) by a majority of the Directors of
the Fund who are not interested persons of the Fund or of Underwriter, by vote
cast in person at a meeting called for the purpose of voting on such approval.
Either the Fund or Underwriter may at any time terminate this Agreement on sixty
(60) days' written notice delivered or mailed by registered mail, postage
prepaid, to the other party.

      11. Effective Period of This Agreement. This Agreement shall take effect
upon its execution and shall remain in full force and effect until July 27, 2007
(unless terminated automatically as set forth in paragraph 10 and from year to
year thereafter), subject to annual approval (i) by Underwriter, (ii) by the
Board of Directors of the Fund or a vote of a majority of the outstanding
Shares, and (iii) by a majority of the Directors of the Fund who are not
interested persons of the Fund or of Underwriter, by vote cast in person at a
meeting called for the purpose of voting on such approval.

      12. Limitation of Fund's Liability. The Term "Covered Persons" means and
refers to the directors and officers from time to time serving under the Fund's
Articles of Incorporation as the same may subsequently thereto have been, or
subsequently hereto be, amended. It is expressly agreed that the obligations of
the Fund hereunder shall not be binding upon any of the Directors, Shareholders,
nominees, officers, agents or employees of the Fund personally, but bind only
the property of the Fund, as provided in Fund's Articles of Incorporation. The
execution and delivery of this Agreement have been authorized by the Directors
and Shareholders of the Fund and signed by the officers of the Fund and Adviser,
acting as such, and neither such authorization by such Directors and
Shareholders, nor such execution and delivery by such officers shall be deemed
to have been made by any of them individually or to impose any liability on them
personally, but shall bind only the trust property of the Fund as provided in
its Articles of Incorporation. A copy of the Articles of Incorporation of the
Fund is on file with the Secretary of State of Maryland.


                                  Page 5 of 8


      13. Successor Investment Company. Unless this Agreement has been
terminated in accordance with Paragraph 10, the terms and provisions of this
Agreement shall become automatically applicable to any investment company which
is a successor to the Fund as a result of a reorganization, recapitalization or
change of domicile.

      14. Severability. In the event any provision of this Agreement is
determined to be void or unenforceable, such determination shall not affect the
remainder of this Agreement, which shall continue to be in force.

      15. Questions of Interpretation.

      (a) This Agreement shall be governed by the laws of the State of
Pennsylvania.

      (b) Any question of interpretation of any term or provision of this
Agreement having a counterpart in or otherwise derived from a term or provision
of the Act shall be resolved by reference to such term or provision of the Act
and to interpretation thereof, if any, by the United States courts or in the
absence of any controlling decision of any such court, by rules, regulations or
orders of the Securities and Exchange Commission issued pursuant to said Act. In
addition, where the effect of a requirement of the Act, reflected in any
provision of this Agreement is revised by rule, regulation or order of the
Securities and Exchange Commission, such provision shall be deemed to
incorporate the effect of such rule, regulation or order.

      16. Notices. Any notices under this Agreement shall be in writing,
addressed and delivered or mailed postage paid to the other party at such
address as such other party may designate for the receipt of such notice. Until
further notice to the other party, it is agreed that for this purpose the
address of the Fund is 83 General Warren Boulevard, Suite 83, Malvern, PA 19355,
Attn: President, and of the Underwriter shall be 83 General Warren Boulevard,
Suite 200, Malvern, PA 19355, Attn: President.

      17. Counterparts. This Agreement may be in one or more counterparts, each
of which shall be deemed an original but all of which together shall constitute
one and the same instrument.

      18. Binding Effect. Each of the undersigned expressly warrants and
represents that he has the full power and authority to sign this Agreement on
behalf of the party indicated, and that his signature will operate to bind the
party indicated to the foregoing terms.

      19. Force Majeure. If Underwriter shall be delayed in its performance of
services or prevented entirely or in part from performing services due to causes
or events beyond its control, including and without limitation, acts of God,
interruption of power or other utility, transportation or communication
services, acts of civil or military authority, sabotages, national emergencies,
explosion, flood, accident, earthquake or other catastrophe, fire, strike or
other labor problems, legal action, present or future law, governmental order,
rule or regulation, or shortages or suitable parts, materials, labor or
transportation, such delay or non-performance shall be excused and a reasonable
time for performance in connection with the Agreement shall be extended to
include the period of such delay or non-performance.


                                  Page 6 of 8


      20. Compensation.

      The Fund shall pay for the services to be provided by Underwriter under
this Agreement in accordance with, and in the manner set forth in, Schedule B
attached hereto, as such Schedule B may be amended from time to time by
agreement of the parties.

      If this Agreement becomes effective subsequent to the first day of a month
or terminates before the last day of a month, Underwriter's compensation for
that part of the month in which the Agreement is in effect shall be prorated in
a manner consistent with the calculation of the fees as set forth above. Payment
of Underwriter's compensation for the preceding month shall be made promptly.

      IN WITNESS WHEREOF, the Fund and Underwriter have each caused this
Agreement to be signed on its behalf, all as of the day and year first above
written.

ATTEST:                             CITCO MUTUAL FUND DISTRIBUTORS, INC.


s/George Chamberlain                By: s/Paul Giorgio
----------------------------            --------------------------------
Name: George Chamberlain            Name: Paul Giorgio
Title: Secretary                    Title: Chief Financial Officer

ATTEST:                             THE PENN STREET FUND, INC.


s/George Chamberlain                By: s/John G. Roman
----------------------------            --------------------------------
Name: George Chamberlain            Name:  John G. Roman
Title: Secretary                    Title: President


                                  Page 7 of 8


                             DISTRIBUTION AGREEMENT

                                    EXHIBIT A

      The following Portfolios are hereby made subject to the underwriting
Agreement dated July 27, 2005, with Citco Mutual Fund Distributors, Inc..
("Underwriter") and The Penn Street Fund, Inc., (the "Fund"), and each agree to
be bound by all the terms and conditions contained in said Agreement:

1.    The McGlinn Balanced Portfolio
2.    The Berkshire Advisors Select Equity Portfolio
3.    The Cumberland Taxable Income Portfolio
4.    The Baldwin Large-Cap Growth Portfolio
5.    The Penn Street Advisors Sector Rotational Fund

                             DISTRIBUTION AGREEMENT

                                    EXHIBIT B

      The following fees are hereby made subject to the underwriting Agreement
dated July 27, 2005, with Citco Mutual Fund Distributors, Inc. ("Underwriter")
and The Penn Street Fund, Inc., (the "Fund"), and each agree to be bound by all
the terms and conditions contained in said Agreement:

Underwriter will charge the Fund a flat fee of $12,000 per year for underwriting
services provided for Portfolios of the Fund that offer No-Load Shares only.

Underwriter will receive the underwriting concession set forth in the Fund's
current prospectus as full compensation for underwriting services provided for
Portfolios of the Fund that offer Share Classes that charge sales loads.


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