As filed with the Securities and Exchange Commission on April 29, 1996
Securities Act Registration No. 33-86006
Investment Company Act Registration No. 811-8850
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. _____ [ ]
Post-Effective Amendment No. 4 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940[X]
Amendment No. 5 [X]
ICAP FUNDS, INC.
(Exact Name of Registrant as Specified in Charter)
225 West Wacker Drive, Suite 2400
Chicago, Illinois 60606
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (312) 424-9100
Pamela H. Conroy
225 West Wacker Drive, Suite 2400
Chicago, Illinois 60606
(Name and Address of Agent for Service)
Copies to:
Carol A. Gehl
Godfrey & Kahn, S.C.
780 North Water Street
Milwaukee, Wisconsin 53202
Registrant has registered an indefinite amount of securities
pursuant to Rule 24f-2 under the Investment Company Act of 1940;
the Registrant's Rule 24f-2 Notice for the year ended December 31,
1996 will be filed on or before February 28, 1997.
It is proposed that this filing will become effective (check
appropriate box).
[ ] immediately upon filing pursuant to paragraph
(b) of Rule 485
[X] on April 30, 1996 pursuant to paragraph (b) of
Rule 485
[ ] 60 days after filing pursuant to paragraph
(a)(1) of Rule 485
[ ] on (date) pursuant to paragraph (a)(1) of Rule
485
[ ] 75 days after filing pursuant to paragraph
(a)(2) of Rule 485
[ ] on (date) pursuant to paragraph (a)(2) of Rule
485
<PAGE>
CROSS REFERENCE SHEET
(Pursuant to Rule 481 showing the location in the
Prospectus and the Statement of Additional Information of the
responses to the Items of Parts A and B of Form N-1A).
Caption or Subheading in
Prospectus or Statement
Item No. on Form N-1A of Additional Information
PART A - INFORMATION REQUIRED IN PROSPECTUS
1. Cover Page Cover Page
2. Synopsis Summary; Summary of Portfolio
Expenses
3. Condensed Financial Financial Highlights
Information
4. General Description of Organization; Investment
Registrant Objectives and Policies;
Investment Techniques and
Risks; Investment Restrictions
5. Management of the Fund Management; Portfolio Expenses
5A. Management's Discussion of *
Fund Performance
6. Capital Stock and Other Dividends, Capital Gain
Securities Distributions and Tax
Treatment; Organization
7. Purchase of Securities Being How to Purchase Shares;
Offered Determination of Net Asset
Value; Exchange Privilege
8. Redemption or Repurchase How to Redeem Shares;
Determination of Net Asset
Value; Exchange Privilege
9. Pending Legal Proceedings **
<PAGE>
PART B - INFORMATION REQUIRED IN STATEMENT OF ADDITIONAL
INFORMATION
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and Included in Prospectus under
History the heading Organization
13. Investment Objectives and Investment Restrictions;
Policies Investment Policies and
Techniques
14. Management of the Fund Directors and Officers
15. Control Persons and Principal Principal Shareholders;
Holders of Securities Directors and Officers;
Investment Adviser
16. Investment Advisory and Other Investment Adviser; Management
Services (in Prospectus); Custodian;
Transfer Agent and Dividend-
Disbursing Agent; Independent
Accountants
17. Brokerage Allocation and Other Portfolio Transactions and
Practices Brokerage
18. Capital Stock and Other Included in Prospectus under
Securities the heading Organization
19. Purchase, Redemption and Included in Prospectus under
Pricing of the headings How to
Securities Being Offered Purchase Shares;
Determination of Net Asset
Value; How to Redeem
Shares; Exchange Privilege; and
in the Statement of Additional
Information under the
heading Investment Adviser
20. Tax Status Included in Prospectus under
the heading Dividends,
Capital Gain Distributions and
Tax Treatment
21. Underwriters **
22. Calculations of Performance Information
Performance Data
23. Financial Statements Financial Statements
- -----------------------------------
* The information called for by this item is contained in the
Annual Report of the Registrant.
** Answer negative or inapplicable.
iv<PAGE>
Exhibit 9.1
TRANSFER AGENCY AGREEMENT
THIS AGREEMENT made as of the 1st day of November,
1995 by and between ICAP FUNDS, INC., a Maryland
corporation having its principal place of business at
225 West Wacker Drive, Suite 2400, Chicago, Illinois,
60606 (the "Corporation"), and SUNSTONE FINANCIAL
GROUP, INC., a Wisconsin corporation, having its
principal place of business at 207 East Buffalo Street,
Suite 400, Milwaukee, Wisconsin, 53202 (the
"Sunstone"):
WITNESSETH:
WHEREAS, the Corporation is registered under the
Investment Company Act of 1940, as amended (the "1940
Act"), as an open-end management investment company and
is authorized to issue shares of common stock
("Shares") in separate series with each such series
representing the interests in a separate portfolio of
securities and other assets;
WHEREAS, the Corporation desires to retain Sunstone
to render the transfer agency and other services
contemplated hereby with respect to each of the
investment portfolios of the Corporation as are listed
on Exhibit A hereto and any additional investment
portfolios the Corporation and Sunstone may agree upon
and include on Exhibit A as such Exhibit may be amended
from time to time (such investment portfolios and any
additional investment portfolios are individually
referred to as a "Fund" and collectively the "Funds"),
and Sunstone is willing to render such services.
NOW, THEREFORE, in consideration of the mutual
promises and agreements herein contained and other good
and valuable consideration, the receipt of which is
hereby acknowledged, the parties hereto, intending to
be legally bound, do hereby agree as follows:
ARTICLE I
APPOINTMENT OF TRANSFER AGENT
A. Appointment. The Corporation hereby
constitutes and appoints Sunstone as transfer agent and
dividend disbursing agent of all the Shares of the
Funds during the period of this Agreement, and Sunstone
hereby accepts appointment as transfer agent and
dividend disbursing agent and agrees to perform the
duties thereof as hereinafter set forth.
B. Documents/Records.
1. In connection with such appointment, the
Corporation shall deliver the following documents to
Sunstone:
a) A copy of the Articles of Incorporation
of the Corporation and all amendments thereto certified
by the Secretary of the Corporation;
<PAGE>
b) A copy of the By-Laws of the
Corporation certified by the Secretary of the
Corporation;
c) A copy of the resolutions of the Board
of Directors of the Corporation certified by the
Secretary of the Corporation appointing Sunstone and
authorizing the execution of this Transfer Agency
Agreement on behalf of the Funds and designating
certain persons to sign stock certificates and give
written or oral instructions and requests on behalf of
the Funds;
d) A certificate signed by the Secretary
of the Corporation specifying: the number of
authorized Shares and the number of such authorized
Shares issued and currently outstanding; the names and
specimen signatures of the officers of the Corporation
authorized to sign written stock certificates and the
individuals authorized to provide oral instructions and
to sign written instructions and requests; and the name
and address of the legal counsel for the Funds;
e) In the event the Corporation issues
Share certificates, specimen Share certificates for
each Fund in the form approved by the Board of
Directors of the Corporation (and in a format
compatible with Sunstone's operating system), together
with a Certificate signed by the Secretary of the
Corporation as to such approval;
f) Copies of the Corporation's
Registration Statement, as amended to date, and the
most recently filed Post-Effective Amendment thereto,
filed by the Corporation with the Securities and
Exchange Commission under the Securities Act of 1933,
as amended (the "1933 Act"), and under the 1940 Act, as
amended, together with any applications filed in
connection therewith; and
g) Opinion of counsel for the Corporation
with respect to the Corporation's organization and
existence under the laws of its state of organization,
the validity of the authorized and outstanding Shares,
whether such Shares are fully paid and non-assessable
and the status of such Shares under the 1933 Act, and
any other applicable federal law or regulation (i.e.,
if subject to registration, that they have been
registered and that the Registration Statement has
become effective or, if exempt, the specific grounds
therefor.)
2. The Corporation agrees to deliver or to
cause to be delivered to Sunstone in Milwaukee,
Wisconsin, at the Corporation's expense, all of its
shareholder account records relating to the Funds in a
format acceptable to Sunstone.
C. Scope of Appointment.
1. Sunstone, utilizing the Phoenix Systems
Funds/Net Shareholder Accounting System (the
"System"), a computerized data processing recordkeeping
system for securityholder accounting, shall perform the
transfer agent and dividend disbursing agent services
described on Exhibit B hereto. To the extent that a
Fund requests Sunstone to perform any additional
services in a manner not consistent with Sunstone's
then current
<PAGE>
utilization of the System or Sunstone's
usual processing procedures, Sunstone and the Fund
shall mutually agree as to the services to be
accomplished, the manner of accomplishment and the
compensation to which Sunstone shall be entitled with
respect thereto.
2. Sunstone may, in its discretion, appoint in
writing other parties qualified to perform transfer
agency and shareholder services reasonably acceptable
to the Funds (individually, a "Sub-transfer Agent") to
carry out some or all of its responsibilities under
this Agreement with respect to a Fund; provided,
however, that unless the Fund shall enter into a
written agreement with such Sub-transfer Agent, the
Sub-transfer Agent shall be the agent of Sunstone and
not the agent of the Corporation or such Fund and, in
such event Sunstone shall be fully responsible for the
acts or omissions of such Sub-transfer Agent and shall
not be relieved of any of its responsibilities
hereunder by the appointment of such Sub-transfer
Agent.
3. Subject to Sunstone's duty to act in good
faith with respect to the services described in this
Agreement, Sunstone shall have no duties or
responsibilities whatsoever hereunder except such
duties and responsibilities as are specifically set
forth in this Agreement, and no covenant or obligation
shall be implied in this Agreement against Sunstone.
ARTICLE II
COMPENSATION & EXPENSES
A. Compensation. In consideration for its
services hereunder as transfer agent and dividend
disbursing agent, the Corporation, on behalf of each
Fund will pay to Sunstone such compensation as shall be
set forth in a separate fee schedule to be agreed to by
the Corporation and Sunstone from time to time. A copy
of the initial fee schedule is attached hereto as
Exhibit C.
B. Expenses. The Corporation, on behalf of the
Funds also agrees to promptly reimburse Sunstone for
all reasonable out-of-pocket expenses or disbursements
incurred by Sunstone in connection with the performance
of services under this Agreement including, but not
limited to, expenses for postage, express delivery
services, freight charges, envelopes, checks, drafts,
forms (continuous or otherwise), specially requested
reports and statements, telephone calls, telegraphs,
stationery supplies, outside printing and mailing
firms, magnetic tapes, reels or cartridges (if sent to
a Fund or to third party at the Fund's request) and
magnetic tape handling charges, off-site record
storage, media for storage of records (e.g., microfilm,
microfiche, optical platters, computer tapes), computer
equipment installed at a Fund's request at the Fund's
or a third party's premises, telecommunications
equipment, telephone/telecommunication lines between a
Fund and its agents, on one hand, and Sunstone on the
other, proxy soliciting, processing and/or tabulating
costs, second site backup computer facility,
transmission of statement data for remote printing or
processing, and transaction fees to the extent any of
the foregoing are paid by Sunstone. Such expenses
shall not include personnel changes except with the
prior written approval of an Officer (as hereinafter
defined). The Corporation agrees to pay postage
expenses in advance if so
<PAGE>
requested by Sunstone. In
addition, any other expenses incurred by Sunstone at
the written request or with the written consent of the
Corporation will be promptly reimbursed by the
Corporation.
C. Payment Procedures.
1. Amounts due hereunder shall be due and paid
by the Corporation, on behalf of the respective Fund on
or before the thirtieth (30th) day after the date of
the statement therefor (the "Due Date"). The
Corporation is aware that its failure to pay all
amounts in a timely fashion so that they will be
received by Sunstone on or before the Due Date will
give rise to costs to Sunstone not contemplated by this
Agreement, including but not limited to carrying,
processing and accounting charges. Accordingly, in the
event that any amounts due hereunder are not received
by Sunstone by the Due Date, the Corporation shall pay
a late charge equal to one percent (1.0%) per month or
the maximum amount permitted by law, whichever is less,
until paid in full. In addition, the Corporation shall
pay reasonable attorney's fees and court costs of
Sunstone if any amounts due Sunstone are collected by
or through an attorney. The parties hereby agree that
such late charge represents a fair and reasonable
computation of the costs incurred by reason of late
payment or payment of amounts not properly due.
Acceptance of such late charge shall in no event
constitute a waiver of the Corporation's default or
prevent the nondefaulting party from exercising any
other rights and remedies available to it.
2. In the event that any charges are disputed,
the Corporation shall, on or before the Due Date, pay
all undisputed amounts due hereunder and notify
Sunstone in writing of any disputed charges for out-of-
pocket expenses which it is disputing in good faith.
Payment for such disputed charges shall be due on or
before the close of the fifth (5th) business day after
the day on which Sunstone provides to the Corporation
documentation which an objective observer would agree
reasonably supports the disputed charges (the "Revised
Due Date"). Late charges shall not begin to accrue as
to charges disputed in good faith until the first day
after the Revised Due Date.
ARTICLE III
PROCESSING AND PROCEDURES
A. Issuance, Redemption and Transfer of Shares.
1. Sunstone acknowledges that it has received
a copy of the Funds' Prospectus, which Prospectus
describes how sales and redemption of shares of each
Fund shall be made and Sunstone agrees to accept
purchase orders and redemption requests with respect to
Fund shares on each Fund Business Day in accordance
with such Prospectus. "Fund Business Day" shall be
deemed to be each day on which the New York Stock
Exchange is open for trading, and "Prospectus" shall
mean the last Fund prospectus actually received by
Sunstone from the Funds with respect to which the Funds
have indicated a registration statement under the 1933
Act has become effective, including the Statement of
Additional Information, incorporated by reference therein.
<PAGE>
2. On each Fund Business Day Sunstone shall,
as of the time at which the Funds compute the net asset
value of each Fund, issue to and redeem from the
accounts specified in a purchase order or redemption
request, which in accordance with the Prospectus is
effective on such day, the appropriate number of full
and fractional Shares based on the net asset value per
Share of such Fund specified in an advice received on
such Fund Business Day from or on behalf of the Fund.
3. Upon the issuance of any Shares in
accordance with this Agreement, Sunstone shall not be
responsible for the payment of any original issue or
other taxes required to be paid by a Fund in connection
with such issuance of any Shares.
4. Sunstone shall not be required to issue any
Shares after it has received from an Officer of the
Corporation or from an appropriate federal or state
authority written notification that the sale of Shares
has been suspended or discontinued, and Sunstone shall
be entitled to rely upon such written notification.
"Officer" shall be deemed to be the Corporation's
President, any Vice President, Secretary, Treasurer,
Controller, any Assistant Controller, any Assistant
Treasurer and any Assistant Secretary of the
Corporation, and any other person duly authorized by
the Board of Directors of the Corporation to execute
any certificate, instruction, notice or other
instrument or provide oral instructions on behalf of
the Corporation and disclosed in writing to Sunstone,
as such individuals may be amended from time to time
and disclosed in writing to Sunstone, and any person
reasonably believed by Sunstone to be such a person.
5. Upon receipt of a proper redemption request
and monies paid to it by the Custodian in connection
with a redemption of Shares, Sunstone shall cancel the
redeemed Shares and after making appropriate deduction
for any withholding of taxes required of it by
applicable law, make payment in accordance with the
Funds' redemption and payment procedures described in
the Prospectus.
6. (a) Except as otherwise provided in sub-
paragraph (b) of this paragraph, Shares will be
transferred or redeemed upon presentation to Sunstone
of Share certificates, if any, or instructions properly
endorsed for transfer or redemption, accompanied by
such documents as Sunstone deems necessary to evidence
the authority of the person making such transfer or
redemption, and bearing satisfactory evidence of the
payment of stock transfer taxes. Sunstone reserves the
right to refuse to transfer or redeem Shares until it
is satisfied that the endorsement on the stock
certificate, if any, or instructions is valid and
genuine, and for that purpose it will require, unless
otherwise instructed by an Officer or except as
provided in sub-paragraph (b) of this paragraph, a
guarantee of signature by an "Eligible Guarantor
Institution" as that term is defined by SEC Rule
17Ad-15. Sunstone also reserves the right to refuse to
transfer or redeem Shares until it is satisfied that
the requested transfer or redemption is legally
authorized, and it shall incur no liability for the
refusal, in good faith, to make transfers or
redemptions which Sunstone, in its judgment, deems
improper or unauthorized, or until it is satisfied that
there is no basis to any claims adverse to such
transfer or redemption. Sunstone may, in effecting
transfers and redemptions of Shares, rely upon those
provisions of the Uniform Act for the Simplification of
Fiduciary Security Transfers or the Uniform Commercial
Code, as the same may be amended from time to
<PAGE>
time,
applicable to the transfer of securities, and the
applicable Fund or Funds shall indemnify Sunstone for
any act done or omitted by it in good faith in reliance
upon such laws. In no event will a Fund indemnify
Sunstone for any act done by it as a result of willful
misfeasance, bad faith, negligence or reckless
disregard of its duties.
(b) Notwithstanding the foregoing or any
other provision contained in this Agreement to the
contrary, Sunstone shall be fully protected by the
Funds in not requiring any instruments, documents,
assurances, endorsements or guarantees, including,
without limitation, any signature guarantees, in
connection with a redemption, or transfer, of Shares
whenever Sunstone reasonably believes that requiring
the same would be inconsistent with the transfer and
redemption procedures as described in the Prospectus.
7. Notwithstanding any provision contained in
this Agreement to the contrary, Sunstone shall not be
required or expected to require, as a condition to any
transfer of any Shares pursuant to paragraph 6 of this
Article or any redemption of any Shares pursuant to a
computer tape or electronic data transmission, any
documents to evidence the authority of the person
requesting the transfer or redemption and/or the
payment of any stock transfer taxes, unless Sunstone
has some basis upon which to question said authority,
and shall be fully protected in acting in accordance
with the applicable provisions of this Article.
8. In connection with each purchase and each
redemption of Shares, Sunstone shall send such
statements as are prescribed by the Federal securities
laws applicable to transfer agents or as described in
the Prospectus. If the Prospectus indicates that
certificates for Shares are available and if
specifically requested in writing by any shareholder,
or if otherwise required hereunder, Sunstone will
countersign, issue and mail to such shareholder at the
address set forth in the records of Sunstone a Share
certificate for any full Share requested.
9. On each Fund Business Day Sunstone shall
supply the Funds with a statement specifying with
respect to the immediately preceding Fund Business Day:
the total number of Shares of each Fund (including
fractional Shares) issued and outstanding at the
opening of business on such day; the total number and
the dollar amount of Shares of each Fund sold on such
day; the total number of Shares of each Fund and the
dollar amount redeemed from Shareholders by Sunstone on
such day; and the total number of Shares of each Fund
issued and outstanding at the close of business on such
day. Sunstone shall use its best efforts to supply
such statement to the Funds by 9:00 a.m. C.S.T. on each
Fund Business Day.
10. Sunstone upon written notice to the Funds
may establish such additional procedures, rules and
regulations governing the transfer or registration of
Share certificates, if any, or the purchase, redemption
or transfer of Shares, as it may deem advisable and
consistent with such rules and regulations generally
adopted by mutual fund transfer agents.
B. Dividends and Distributions.
<PAGE>
1. The Corporation shall furnish to Sunstone a
copy of a resolution of its Board of Directors,
certified by the Secretary or any Assistant Secretary,
either (i) setting forth the date of the declaration of
a dividend or distribution, the date of accrual or
payment, as the case may be, thereof, the record date
as of which shareholders entitled to payment, or
accrual, as the case may be, shall be determined, the
amount per Share of such dividend or distribution, the
payment date on which all previously accrued and unpaid
dividends are to be paid, and the total amount, if any,
payable to Sunstone on such payment date, or (ii)
authorizing the declaration of dividends and
distributions on a daily or other periodic basis and
authorizing Sunstone to rely on a Certificate, signed
by any Officer, setting forth the information described
in subsection (i) of this paragraph.
2. In connection with a reinvestment of a
dividend or distribution of Shares of a Fund, Sunstone
shall as of each Fund Business Day, as specified in a
Certificate or resolution described in paragraph 1,
issue Shares of the Fund based on the net asset value
per Share of such Fund specified in an advice received
from or on behalf of the Fund on such Fund Business
Day.
3. Upon the mail date specified in such
Certificate or resolution, as the case may be, the
Corporation shall, in the case of a cash-dividend or
distribution, cause the Custodian to deposit in an
account in the name of Sunstone on behalf of the Funds,
an amount of cash, if any, sufficient for Sunstone to
make the payment, as of the mail date, specified in
such Certificate or resolution, as the case may be, to
the Shareholders who were of record on the record date.
Sunstone will, upon receipt of any such cash, make
payment of such cash dividends or distributions to the
shareholders of record as of the record date. Sunstone
shall not be liable for any improper payments made in
good faith and without negligence, in accordance with a
Certificate or resolution described in paragraph 1. If
Sunstone shall not receive from the Custodian
sufficient cash to make payments of any cash dividend
or distribution to all shareholders of a Fund as of the
record date, Sunstone shall, upon prompt notification
to the Funds, withhold payment to all shareholders of
record as of the record date until sufficient cash is
provided to Sunstone.
4. It is understood that Sunstone in its
capacity as transfer agent and dividend disbursing
agent shall in no way be responsible for the
determination of the rate or form of dividends or
capital gain distributions due to the shareholders
pursuant to the terms of this Agreement. It is
expressly agreed and understood that Sunstone is not
liable for any loss as a result of processing a
distribution based on information provided in the
Certificate that is incorrect. The Funds agree to pay
Sunstone for any and all costs, both direct and out-of-
pocket expenses, incurred in such corrective work as
necessary to remedy such error, provided that Sunstone
has acted in good faith and without negligence.
5. It is understood that Sunstone shall file
such appropriate information returns concerning the
payment of dividend and capital gain distributions with
the proper federal, state and local authorities as are
required by law to be filed by the Funds but shall in
no way be responsible for the collection or withholding
of taxes due on such dividends or distributions due to
shareholders, except and only to the extent, required
by applicable law.
<PAGE>
C. Authorization and Issuance of Shares.
1. The Corporation shall deliver to Sunstone
the following documents on or before the effective date
of any increase or decrease in the total number of
Shares authorized to be issued:
(a) A certified copy of the amendment to
the Articles of Incorporation giving effect to such
increase or decrease;
(b) In the case of an increase, an opinion
of counsel for the Corporation with respect to the
validity of the Shares and the status of such Shares
under the 1933 Act, and any other applicable law or
regulation (i.e., if subject to registration, that they
have been registered and that the Registration
Statement has become effective or, if exempt, the
specific grounds therefor); and
(c) In the case of an increase, if the
appointment of Sunstone was theretofore expressly
limited, a certified copy of a resolution of the Board
of Directors of the Corporation increasing the
authority of Sunstone.
2. Prior to the issuance of any additional
Shares pursuant to stock dividends or stock splits,
etc., and prior to any reduction in the number of
shares outstanding, the Fund shall deliver the
following documents to Sunstone:
(a) A certified copy of the resolution(s)
adopted by the Board of Directors of the Corporation
and/or the shareholders of the Fund or Funds effected
thereby, authorizing such issuance of additional Shares
or such reduction, as the case may be, and
(b) An opinion of counsel for the
Corporation with respect to the validity of the Shares
and the status of such Shares under the 1933 Act, and
any other applicable federal law or regulation (i.e.,
if subject to registration, that they have been
registered and that the Registration Statement has
become effective, or, if exempt, the specific grounds
therefor).
D. Recapitalization or Capital Adjustment.
1. In the case of any negative stock split,
recapitalization or other capital adjustment requiring
a change in the form of Share certificates, Sunstone
will issue Share certificates in the new form in
exchange for, or upon transfer of, outstanding Share
certificates in the old form, upon receiving:
(a) A Certificate, signed by any Officer,
authorizing the issuance of the Share certificates in
the new form;
(b) A certified copy of any amendment to
the Articles of Incorporation with respect to the
change;
<PAGE>
(c) In the event the Corporation issues
Share certificates, specimen Share certificates for
each class of Shares in the new form approved by the
Board of Directors of the Corporation, with a
Certificate signed by the Secretary of the Corporation
as to such approval; and
(d) An opinion of counsel for the
Corporation with respect to the validity of the Shares
in the new form and the status of such Shares under the
1933 Act, and any other applicable federal law or
regulation (i.e., if subject to registration, that the
Shares have been registered and that the Registration
Statement has become effective or, if exempt, the
specific grounds therefor.)
2. In the event the Corporation issues Share
certificates, the Corporation at its expense shall
furnish Sunstone with a sufficient supply of blank
Share certificates in the new form and from time to
time will replenish such supply upon the request of
Sunstone. Such blank Share certificates shall be
compatible with Sunstone's system and shall be properly
signed by facsimile or otherwise by Officers of the
Corporation authorized by law or by the By-Laws to sign
Share certificates and, if required, shall bear the
corporate Seal or facsimile thereof. The Corporation
agrees to indemnify and exonerate, save and hold
Sunstone harmless, from and against any and all claims
or demands that may be asserted against Sunstone with
respect to the genuineness of any Share certificate
supplied to Sunstone pursuant to this section.
ARTICLE IV
CONCERNING THE CORPORATION
A. Representations. The Corporation represents
and warrants to Sunstone that:
(a) It is a corporation duly organized and
existing under the laws of the State of Maryland.
(b) It is empowered under applicable laws and
by its Articles of Incorporation and By-Laws to enter
into and perform this Agreement.
(c) All requisite corporate proceedings have
been taken to authorize it to enter into and perform
this Agreement.
(d) It is an investment company registered
under the 1940 Act.
(e) A registration statement under the 1933
Act, with respect to the Shares is effective. The
Corporation shall notify Sunstone if such registration
statement or any state securities registrations have
been terminated or a stop order has been entered with
respect to the Shares.
B. Covenants.
<PAGE>
1. The Corporation will file with Sunstone
copies of all material amendments to its Articles of
Incorporation and By-laws made after the date of this
Agreement. Each copy of the Articles of Incorporation
of the Corporation and copies of all amendments thereto
shall be certified by the Secretary of State (or other
appropriate official) of the state of organization, and
if such Articles of Incorporation and/or amendments are
required by law also to be filed with a county or other
officer or official body, a certificate of such filing
shall be filed with a certified copy submitted to
Sunstone. Each copy of the By-Laws and copies of all
amendments thereto, and copies of resolutions of the
Board of Directors of the Fund, shall be certified by
the Secretary of the Corporation.
2. The Corporation shall promptly deliver to
Sunstone written notice of any change in the Officers
authorized to sign Share certificates, if any,
notifications or requests, or provide oral
instructions, together with a specimen signature of
each new Officer. In the event any Officer who shall
have signed manually or whose facsimile signature shall
have been affixed to blank Share certificates shall
die, resign or be removed prior to issuance of such
Share certificates, Sunstone may issue such Share
certificates of the Corporation notwithstanding such
death, resignation or removal, and the Corporation
shall promptly deliver to Sunstone such approval,
adoption or ratification as may be required by law.
3. The Corporation shall deliver to Sunstone
the Funds' currently effective Prospectus and, for
purposes of this Agreement, Sunstone shall not be
deemed to have notice of any information contained in
such Prospectus until five (5) business days after it
is actually received by Sunstone.
4. All requisite steps will be taken by the
Corporation from time to time when and as necessary to
register the Corporation's shares for sale in all
states in which Corporation's shares shall at the time
be offered for sale and require registration. If at
any time the Corporation receives notice of any stop
order or other proceeding in any such state affecting
such registration or the sale of the Corporation's
shares, or of any stop order or other proceeding under
the federal securities laws affecting the sale of the
Corporation's shares, the Corporation will give prompt
notice thereof to Sunstone.
5. The Corporation will comply with all
applicable requirements of the 1933 Act, the Securities
Exchange Act of 1934, as amended (the "1934 Act"), the
1940 Act, and any laws, rules and regulations of
governmental authorities having jurisdiction over the
Corporation and its activities.
ARTICLE V
CONCERNING THE TRANSFER AGENT
A. Representations. Sunstone represents and
warrants to the Corporation that:
(a) It is a corporation duly organized and
existing under the laws of the State of Wisconsin.
<PAGE>
(b) It is empowered under applicable law and by
its Articles of Incorporation and By-Laws to enter into
and perform this Agreement.
(c) All requisite corporate proceedings have
been taken to authorize it to enter into and perform
this Agreement.
(d) It is duly registered as a transfer agent
under Section 17A of the 1934 Act.
B. Limitation of Liability.
1. Sunstone shall not be liable for any loss
or damage, including counsel fees, resulting from its
actions or omissions to act or otherwise, except for
any loss or damage arising out of its bad faith,
willful misfeasance, negligence or reckless disregard
of its duties under this Agreement.
2. Sunstone shall not be liable and shall be
indemnified in acting upon any oral instructions, or
any writing or document reasonably believed by it to be
genuine and to have been signed or made, by an Officer
or other person designated by the Corporation to act on
behalf of the Funds and shall not be held to have any
notice of any change of authority of any person until
receipt of written notice thereof from the Corporation
or such person. It shall also be protected in
processing Share certificates, if any, which bear the
proper countersignature of Sunstone and which it
reasonably believes to bear the proper manual or
facsimile signature of the Officers.
3. Sunstone shall not be liable to the
Corporation with respect to any redemption draft on
which the signature of the drawer is forged and which
the Corporation's custodian or cash management bank has
advised Sunstone to honor the redemption; nor shall
Sunstone be liable for any material alteration or
absence or forgery of any endorsement, it being
understood that Sunstone's sole responsibility with
respect to inspecting redemption drafts is to use
reasonable care to verify the drawer's signature
against signatures on file.
4. There shall be excluded from the
consideration of whether Sunstone has been negligent or
has breached this Agreement, any period of time, and
only such period of time, during which Sunstone's
performance is materially affected, by reason of
circumstances beyond its reasonable control
(collectively, "Causes"), including, without limitation
(except as provided below), (a) any interruption, loss,
malfunction or breakdowns of equipment (including any
alternative power supply, the System and other
operating systems hardware or software) provided,
however, that Sunstone shall use reasonable efforts to
mitigate the adverse effects of any of the foregoing
and shall use reasonable efforts to recommence services
as promptly as possible; and (b) flood or catastrophe,
acts of God or public enemy, failures of
transportation, communication or power supply, strikes,
inability to obtain labor, material, equipment or
transportation, delay in mails, government or exchange
action, statute, ordinance, rulings, regulations or
direction, war, riot, emergency, civil disturbance,
vandalism, explosions, labor disputes, freezes, fires,
tornados, lockouts, work stoppages or other similar
circumstances.
<PAGE>
5. IN NO EVENT AND UNDER NO CIRCUMSTANCES
SHALL EITHER PARTY TO THIS AGREEMENT BE LIABLE TO
ANYONE, INCLUDING, WITHOUT LIMITATION TO THE OTHER
PARTY, FOR CONSEQUENTIAL OR PUNITIVE DAMAGES FOR ANY
ACT OR FAILURE TO ACT UNDER ANY PROVISION OF THIS
AGREEMENT EVEN IF ADVISED OF THE POSSIBILITY THEREOF.
C. Indemnification.
1. The Corporation shall indemnify and
exonerate, save and hold harmless Sunstone from and
against any and all claims (whether with or without
basis in fact or law), demands, expenses (including
reasonable attorney's fees) and liabilities of any and
every nature which the Indemnified Party (as defined
below) may sustain or incur or which may be asserted
against the Indemnified Party by any person by reason
of or as a result of any action taken or omitted to be
taken by any prior transfer agent of the Corporation or
as a result of any action taken or omitted to be taken
by the Indemnified Party in good faith and without
negligence or willful misconduct or in reliance upon
(i) any provision of this Agreement; (ii) the
Prospectus; (iii) any instrument, order or Share
certificate reasonably believed by it to be genuine and
to be signed, countersigned or executed by any Officer;
(iv) any Certificate or other instructions of an
Officer; or (v) any opinion of legal counsel for the
Corporation or, if approved by the Corporation, for the
Indemnified Party. The Corporation shall indemnify and
exonerate, save and hold the Indemnified Party harmless
from and against any and all claims (whether with or
without basis in fact or law), demands, expenses
(including reasonable attorney's fees) and liabilities
of any and every nature which the Indemnified Party may
sustain or incur or which may be asserted against the
Indemnified Party by any person by reason of or as a
result of any action taken or omitted to be taken by
the Indemnified Party in good faith in connection with
its appointment or in reliance upon any law, act,
regulation or any interpretation of the same even
though such law, act or regulation may thereafter have
been altered, changed, amended or repealed.
2. Sunstone shall indemnify and hold the
Corporation harmless from and against any and all
losses, damages, costs, charges, counsel fees,
payments, expenses and liability arising out of or
attributable to any action or failure or omission to
act by Sunstone as a result of the Sunstone's lack of
good faith, negligence or willful misconduct.
3. The party seeking indemnification under
this Section (C) (the "Indemnified Party") shall not
settle any claim, demand, expense or liability to which
it may seek indemnity (each, an "Indemnifiable Claim")
without the express written consent of the party
against which indemnification is sought (the
"Indemnifying Party"). The Indemnified Party shall
notify the Indemnifying Party promptly after receipt of
notification of an Indemnifiable Claim, provided that
the failure to furnish such notification shall not
impair the Indemnified Party's right to seek
indemnification unless the Indemnifying Party is unable
to adequately defend the Indemnifiable Claim as a
result of such failure, and further provided, that if
as a result of the failure to provide timely notice of
the institution of litigation a judgment by default is
entered, prior to seeking indemnification, the
Indemnified Party, at its own cost and expense, shall
open such judgment. The Indemnifying Party shall have
the right to defend any Indemnifiable Claim at its own
expense, provided that such defense shall be
<PAGE>
conducted
by counsel selected by the Indemnifying Party and
reasonably acceptable to the Indemnified Party. The
Indemnified Party may join in such defense at its own
expense, but to the extent that it shall so desire the
Indemnifying Party shall direct such defense. The
Indemnifying Party shall not settle any Indemnifiable
Claim without the express written consent of the
Indemnified Party if the Indemnified Party determines
that such settlement would have an adverse effect on
the Indemnified Party beyond the scope of this
Agreement. In such event, each of the Indemnifying
Party and the Indemnified Party shall be responsible
for their own defense at their own cost and expense,
and such claim shall not be deemed an Indemnifiable
Claim hereunder. If the Indemnifying Party shall fail
or refuse to defend an Indemnifiable Claim, the
Indemnified Party may provide its own defense at the
cost and expense of the Indemnifying Party. Anything
in this Agreement to the contrary notwithstanding, the
Indemnifying Party shall not indemnify the Indemnified
Party against any liability or expense arising out of
the Indemnified Party's willful misfeasance, bad faith,
negligence or reckless disregard of its duties and
obligations under this Agreement.
4. The indemnity and defense provisions
provided hereunder shall indefinitely survive the
termination of this Agreement.
D. Records.
1. Sunstone shall keep such records as are
specified in Exhibit D hereto in the form and manner,
and for such period, as it may deem advisable and is
agreeable to the Corporation but not inconsistent with
the rules and regulations of appropriate government
authorities, in particular Rules 31a-2 and 31a-3 under
the 1940 Act. Sunstone acknowledges that such records
are the property of the Corporation. Sunstone may
deliver to the Corporation from time to time at its
discretion, for safekeeping or disposition by the
Corporation in accordance with law, such records,
papers, and documents accumulated in the execution of
its duties as transfer agent and dividend disbursing
agent, as Sunstone may deem expedient, other than those
which Sunstone is itself required to maintain pursuant
to applicable laws and regulations. The Corporation
shall assume all responsibility for any failure
thereafter to produce any record, paper, cancelled
Share certificate, or other document so returned, if
and when required. The records specified in Exhibit D
hereto maintained by Sunstone, which have not been
previously delivered to the Corporation pursuant to the
foregoing provisions of this paragraph, shall be
considered to be the property of the Corporation, shall
be made available upon request for inspection by the
officers, employees, and auditors of the Corporation,
and records shall be delivered to the Corporation
promptly upon request and in any event upon the date of
termination of this Agreement in the form and manner
kept by Sunstone on such date of termination or such
earlier date as may be requested by the Corporation.
2. In case of any requests or demands for the
inspection of the shareholder records of the
Corporation, Sunstone will endeavor to notify the
Corporation promptly and to secure instructions from an
Officer as to such inspection. Sunstone reserves the
right, however, to exhibit the shareholder records to
any person whenever it receives advice from its counsel
that there is a reasonable likelihood that Sunstone
will be held liable for the failure to exhibit the
shareholder records to such person; provided, however,
that in
<PAGE>
connection with any such disclosure Sunstone
shall promptly notify the Corporation that such
disclosure is to be made.
3. Sunstone shall only be responsible for the
safekeeping and maintenance of transfer agency records,
cancelled certificates, if any, and correspondence of
the Corporation created or produced prior to the time
of conversion which are under its control and
acknowledged in a writing to the Corporation to be in
its possession. Any expenses or liabilities incurred
by Sunstone as a result of shareholder inquiries,
regulatory compliance or audits related to such records
and not caused as a result of Sunstone's bad faith,
willful misfeasance or negligence shall be the
responsibility of the Corporation.
E. Procedures.
1. At any time Sunstone may apply to an
Officer of the Corporation for written instructions
with respect to any matter arising in connection with
Sunstone's duties and obligations under this Agreement,
and Sunstone shall not be liable for any action taken
or permitted by it in good faith in accordance with
such written instructions. Such application by
Sunstone for written instructions from an Officer of
the Corporation may set forth in writing any action
proposed to be taken or omitted by Sunstone with
respect to its duties or obligations under this
Agreement and the date on and/or after which such
action shall be taken. Sunstone shall not be liable
for any action taken or omitted in accordance with a
proposal included in any such application on or after
the date specified therein unless, prior to taking or
omitting any such action, Sunstone has received written
instructions in response to such application specifying
the action to be taken or omitted. Sunstone may
consult counsel of the Corporation, or upon notice and
approval from the Corporation, its own counsel, at the
expense of the Corporation and shall be fully protected
with respect to anything done or omitted by it in good
faith in accordance with the advice or opinion of
counsel to the Corporation or its own counsel.
2. In the event the Corporation issues Share
certificates, Sunstone may issue new Share certificates
in place of certificates represented to have been lost,
stolen, or destroyed upon receiving written
instructions from the shareholder accompanied by proof
of an indemnity or surety bond issued by a recognized
insurance institution specified by the Corporation or
Sunstone. If Sunstone receives written notification
from the shareholder or broker dealer that the
certificate issued was never received, and such
notification is made within 30 days of the date of
issuance, Sunstone may reissue the certificate without
requiring a surety bond. Sunstone may also reissue
certificates which are represented as lost, stolen, or
destroyed without requiring a surety bond provided that
the notification is in writing and accompanied by an
indemnification signed on behalf of a member firm of
the New York Stock Exchange and signed by an officer of
said firm with the signature guaranteed.
Notwithstanding the foregoing, Sunstone will reissue a
certificate upon written authorization from an Officer
of the Corporation.
3. At the request of an Officer of the
Corporation Sunstone will address and mail such
appropriate notices to shareholders as the Corporation
may direct and provide.
<PAGE>
4. Notwithstanding any of the foregoing
provisions of this Agreement, Sunstone shall be under
no duty or obligation under this Agreement to inquire
into, and shall not be liable for:
(a) The legality of the issue or sale of
any Shares, the sufficiency of the amount to be
received therefor, or the authority of the Corporation,
as the case may be, to request such sale or issuance;
(b) The legality of a transfer of Shares,
or of a redemption of any Shares, the propriety of the
amount to be paid therefor, or the authority of the
Corporation, as the case may be, to request such
transfer or redemption;
(c) The legality of the declaration of any
dividend by the Corporation, on behalf of a Fund or
Funds, or the legality of the issue of any Shares in
payment of any stock dividend; or
(d) The legality of any recapitalization or
readjustment of Shares.
ARTICLE V
TERMINATION
1. This Agreement shall remain in full force
and effect for a period of one year from the date
hereof, the initial term, and thereafter shall
automatically extend for additional, successive twelve
(12) month terms unless earlier terminated as provided
below. Each party, in addition to any other rights and
remedies, shall have the right to terminate this
Agreement at any time upon the material breach of this
Agreement by the other party. In the event of a
material breach, the non-breaching party shall notify
the breaching party in writing of such breach and upon
receipt of, such notice, the breaching party shall have
45 days to remedy the breach or the non-breaching party
may forthwith terminate this Agreement upon the
expiration of said period.
2. Either of the parties hereto may terminate
this Agreement only after the initial term, except as
noted in paragraph 1 above, by giving to the other
party a notice in writing specifying the date of such
termination, which shall be not less than 60 days after
the date of receipt of such notice. In the event such
notice is given by the Corporation, it shall be
accompanied by a copy of a resolution of the Board of
Directors of the Corporation, certified by the
Secretary or any Assistant Secretary, electing to
terminate this Agreement and designating the successor
transfer agent or transfer agents. In the event such
notice is given by Sunstone, the Corporation shall on
or before the termination date, deliver to Sunstone a
copy of a resolution of its Board of Directors
certified by the Secretary or any Assistant Secretary
designating a successor transfer agent or transfer
agents. In the absence of such designation by the
Corporation, the Corporation shall upon the date
specified in the notice of termination of this
Agreement and delivery of the records maintained
hereunder, be deemed to be its own transfer agent and
Sunstone shall thereby be relieved of all duties and
<PAGE>
responsibilities pursuant to this Agreement. In the
event of termination, the Corporation will promptly pay
Sunstone all amounts due to Sunstone hereunder.
3. In the event this Agreement is terminated
as provided herein, Sunstone, upon the written request
of the Corporation, shall deliver the records of the
Corporation on electromagnetic media to the Corporation
or its successor transfer agent. The Corporation shall
be responsible to Sunstone for all out-of-pocket
expenses and for the reasonable costs and expenses
associated with the preparation and delivery of such
media, including: (a) any custom programming requested
by the Corporation in connection with the preparation
of such media; (b) transportation of forms and other
Corporation materials used in connection with the
processing of transactions by Sunstone on behalf of the
Corporation; and (c) transportation of the
Corporation's records and files in the possession of
Sunstone. Sunstone shall not reduce the level of
service provided to the Corporation following notice of
termination by the Corporation.
ARTICLE VI
MISCELLANEOUS
A. Notices.
1. Any notice or other instrument in writing,
authorized or required by this Agreement to be given to
the Corporation shall be sufficiently given if
addressed to the Corporation and mailed or delivered to
the President at 225 West Wacker Drive, Suite 2400,
Chicago, Illinois, 60606, or at such other place as the
Corporation may from time to time designate in writing.
Any notice or other instrument in writing, authorized
or required by this Agreement to be given to Sunstone
shall be sufficiently given if addressed to Sunstone
and mailed or delivered to the President at 207 East
Buffalo Street, Suite 400, Milwaukee, Wisconsin, 53202,
or at such other place as Sunstone may from time to
time designate in writing.
2. The Corporation agrees that prior to
effecting any change in the prospectus which would
increase or alter the duties and obligations of
Sunstone hereunder, it shall advise Sunstone of such
proposed change at least 30 days prior to the intended
date of the same, and shall proceed with such change
only if it shall have received the written consent of
Sunstone thereto, which shall not be unreasonably
withheld.
B. Amendments/Assignments.
1. This Agreement may not be amended or
modified in any manner except by a written agreement
executed by both parties with the formality of this
Agreement.
2. This Agreement shall extend to and shall be
binding upon the parties hereto, and their respective
successors and assigns. This Agreement shall not be
assignable by either party without the written consent
of the other party except that Sunstone may assign this
Agreement to an affiliate with advance written notice
to the Corporation; provided,
<PAGE>
however, that the
personnel of the affiliate have the same or better
qualifications and experience as Sunstone.
C. Wisconsin Law. This Agreement shall be
governed by and construed in accordance with the laws
of the State of Wisconsin. If any part, term or
provision of this Agreement is determined by the courts
or any regulatory authority having jurisdiction over
the issue to be illegal, in conflict with any law or
otherwise invalid, the remaining portion or portions
shall be considered severable and not be affected, and
the rights and obligations of the parties shall be
construed and enforced as if the Agreement did not
contain the particular part, term or provision held to
be illegal or invalid.
D. Counterparts. This Agreement may be executed
in any number of counterparts each of which shall be
deemed to be an original; but such counterparts shall,
together, constitute only one instrument.
E. Back-up Facility. During the terms of this
Agreement, Sunstone shall provide a facility capable of
safeguarding the transfer agency and dividend
disbursing records of the Corporation in case of damage
to the primary facility providing those services (the
"Back-Up Facility"). Transfer of the transfer agency
and dividend records of the Corporation to the Back-Up
Facility shall commence promptly after damage to the
primary facility results in an inability to provide the
transfer agency and dividend disbursing services, and
shall be completed within 72 hours of commencement.
After the primary facility has recovered, Sunstone
shall again utilize it to provide the transfer agency
and dividend disbursing services to the Corporation.
Sunstone shall use reasonable efforts to provide the
services described in this Agreement from the Back-Up
Facility.
F. Prior Transfer Agent(s). Sunstone will
endeavor to assist in resolving shareholder inquiries
and errors relating to the period during which prior
transfer agents acted as such for the Corporation. Any
such inquiries or errors which cannot be expediently
resolved by Sunstone will be referred to the
Corporation.
G. Captions. The captions in the Agreement are
included for convenience of reference only, and in no
way define or delimit any of the provisions hereof or
otherwise affect their construction or effect.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be executed by their respective
corporate officer, thereunto duly authorized and their
respective corporate seals to be hereunto affixed, as
the day and year first above written.
SUNSTONE FINANCIAL GROUP, INC. ICAP FUNDS, INC.
By: /s/ Miriam M. Allison By: /s/ Pamela H. Conroy
--------------------- --------------------
(Signature) (Signature)
<PAGE>
Miriam M. Allison Pamela H. Conroy
----------------- ----------------
(Name) (Name)
President Vice President
------------------ -----------------
(Title) (Title)
10-24-95 10-20-95
------------------ ------------------
(Date Signed) (Date Signed)
<PAGE>
EXHIBIT A
ICAP Equity Fund
ICAP Discretionary Equity Fund
<PAGE>
EXHIBIT B
SERVICES
Maintenance of shareholder accounts
Maintain records for each shareholder account;
Scan account documents for electronic storage;
Issue customer statements;
Record changes to shareholder account
information;
Maintain account documentation files for each
shareholder; and
Establish and maintain IRA accounts.
Shareholder servicing and shareholder transactions
Respond to written and telephone (recorded
line) inquiries from shareholders for
information about their accounts;
Process shareholder purchase and redemption
orders, including those of automatic investment
and systematic withdrawal plans;
Set up account information, including address,
dividend options, taxpayer identification
numbers and wire instructions;
Issue transaction confirmations;
Process transfers and exchanges; and
Process dividend and capital gain distributions
by check, wire or ACH or purchase new shares
through dividend reinvestment.
Tax Reporting
Compliance reporting and proxy processing
Provide required reports to the Securities and
Exchange Commission, the National Association
of Securities Dealers and the states in which
each fund is registered;
Prepare and distribute required Internal
Revenue Service forms relating to earned income
and capital gains to fund and shareholders;
<PAGE>
Issue tax withholding reports to the Internal
Revenue Service; and
Dealer/load processing (if applicable)
Provide dealer access through NSCC's FundSERV;
Provide reports for tracking Rights of
Accumulation and purchases made under Letters
of Intent;
Account for separation of shareholder
investments from transaction sale charges for
purchases of fund shares;
Calculate fees due under 12b-1 plans for
distribution and marketing expenses; and
Track sales and commissions by dealer and
provide for payment of commissions on direct
shareholder purchases in load funds.
Telephone service representatives on-line access
Respond to shareholder or dealer inquiries
related to:
Account registration;
Share balances;
Account options;
Dividend and capital gain distribution
status;
Withholding status;
Transaction dates and types;
Shares traded;
Social security number/tax ID number;
External account number;
Address;
Customer or account type;
Dealer, branch and rep information;
Dollars available/not available in the account;
<PAGE>
Shares purchased/redeemed today;
Dividend accrual, current dividend period;
and
Market value of shares.
Standard reports
Shareholder base analysis (monthly)
New account listing (weekly)
Purchases, redemptions, exchanges (monthly)
Servicing summary (monthly)
Commission and 12b-1 reports for load funds
(monthly)
Specialized needs
Front-end load calculations*
Back-end load calculations*
12b-1 fee calculations*
LOI/ROA processing*
Asset allocation and re-allocation processing
in real time*
Multiple account look-up options
Cross-fund account queries
Cross-account queries
On-line transaction list
Comprehensive reporting by various criteria*
Consolidated statements
Duplicate statements to third parties
Multiple address option
<PAGE>
Labels to all shareholders or selected groups*
Mail, process and tabulate proxies*
Broker-dealer reporting
Remote system access*
Cross-fund dividend reinvestment
User-defined transaction descriptions
User-defined transaction rules
Fund-level processing options
Systematic withdrawals
Automatic periodic purchases and automatic
investment plans
Correspondence system capabilities
*available at additional cost
<PAGE>
EXHIBIT C
FEE SCHEDULE
Base fees for equity funds
Shareholder account fee: $12.00 open accounts
2.50 closed accounts
Minimum annual fee per fund:
$650 per month for six months
$750 per month for next six months
$14,000 per year after one year
The base fee assumes a single class of shares; no
load or 12b-1 plan; availability of automatic
investment plans and systematic withdrawal plans
(using Sunstone's regular processing date);
transaction confirmations; quarterly dividend
distributions; annual capital gain distributions;
telephone privileges and all standard reports.
Additional fees to be added to base fee
Type of Service of Annual Shareholder Minimum Annual
Fund Function Account Fee Fee Per Fund
Front-end load $1.50 $2,000
CDSC or back-end load 2.00 3,000
12b-1 plan 1.00 1,000
Monthly dividends 2.00 2,000
Check writing privilege 2.00 2,000
Asset allocation program 1.00 2,000
Remote access user charge 150 per month (first
password); $100 per month
(each additional password)
One-time set-up fees
Conversion from SSC's transfer agent system $3,000 per fund
NSCC FundSERV set-up 2,500 per fund group
NSCC networking 2,500 per fund group
Asset allocation program (optional) 5,000
Remote access set-up 500
<PAGE>
Account maintenance and processing fees
Shareholder account set-up 2.00
AIP/SWP account set-up 2.50
AIP/SWP processing .50
AIP/SWP processing alternate date 1.50
Check writing signature verification .25 to .75
Omnibus account transaction 2.50
Certificate issuance 4.00
Locating lost shareholders - per name 8.00
Taxpayer ID number solicitation 1.25
Additional fees which may be charged the
shareholders
Outgoing wire fee per bank
Telephone exchange fee $ 5.00
Check writing - per transaction
stop payments 12.50
non-sufficient funds 25.00
check copy 2.50
Asset allocation transactions
(purchases, redemptions, rebalancing) 1.00
Account transcripts older than 2 years 5.00 per year
Returned check NSF per bank
IRA/SEP processing
annual maintenance or custodial
fee per account 15.00
transfer or rollover out 15.00
Out-of-pocket expenses, including but not limited
to the following:
Check processing (dividend, capital gain,
redemption) $ .25 each
Statement and confirm processing .25 each
Tax form processing .15 each
Printing of labels for proxy or
marketing purposes .05 per label
Production of ad hoc reports 10.00
Bulk mailings
Bank account service fees and any other bank
charges
Check stock
Statement paper
Envelopes
<PAGE>
Tax forms
Postage and express delivery charges
Telephone and long distance charges
Fax charges
P.O. box rental
800-phone number
Inventory and record storage
FundSERV transaction charges
Programming
Additional fees may apply for special programming
to meet your servicing requirements or to create
custom reports.
<PAGE>
EXHIBIT D
RECORDS MAINTAINED BY SUNSTONE
Account applications
Cancelled certificates plus stock powers and supporting
documents
Checks including check registers, reconciliation
records, any adjustment records and tax withholding
documentation
Indemnity bonds for replacement of lost or missing
stock certificates and checks
Liquidation, redemption, withdrawal and transfer
requests including stock powers, signature guarantees
and any supporting documentation
Shareholder correspondence
Exhibit 9.2(b)
AMENDMENT TO THE
ADMINISTRATION AND FUND ACCOUNTING AGREEMENT
BY AND BETWEEN
ICAP FUNDS, INC.
AND
SUNSTONE FINANCIAL GROUP, INC.
This Amendment, dated as of January 1, 1996, is
entered into between ICAP FUNDS, INC. (the
"Corporation"), a Maryland corporation, and Sunstone
Financial Group, Inc., a Wisconsin corporation
("Administrator").
WHEREAS, the Corporation and Administrator have
entered into an Administration and Fund Accounting
Agreement dated December 30, 1994 (the "Agreement")
pursuant to which the Corporation appointed
Administrator to act as administrator and fund
accountant for the Equity Portfolio and the
Discretionary Equity Portfolio (the "Funds"); and
WHEREAS, the Corporation on behalf of each of the
Funds and Administrator desire to amend the fees
payable under the Agreement as provided herein.
NOW, THEREFORE, the parties hereto, intending to
be legally bound, hereby agree as follows:
1. Revised Fee Schedule.
The first sentence in the first paragraph of
Section 3 of the Agreement is hereby replaced in its
entirety by the following sentence:
In consideration of the services rendered pursuant
to this Agreement, the Corporation will pay the
Administrator fees, computed daily and payable
monthly, at the annual rates specified on Schedule
B attached hereto, plus out-of-pocket expenses.
In addition, a new Schedule B is hereby added to the
Agreement to read as attached hereto.
2. Miscellaneous.
Except to the extent amended hereby, the Agreement
shall remain unchanged and in full force and effect,
and it is hereby ratified and confirmed in all respects
as amended hereby. This Amendment shall be effective
as of the day and year first above written.
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed
this Amendment as of the day and year first above
written.
ICAP FUNDS, INC. SUNSTONE
FINANCIAL GROUP, INC.
("Corporation")
("Administrator")
By: /s/ Pamela H. Conroy By:/s/ Miriam M. Allison
Schedule B
to the
Administration and Fund Accounting Agreement
by and between
ICAP FUNDS, INC.
and
Sunstone Financial Group, Inc.
Name of Fund Annual Fees
Equity Portfolio Up to $50 Million 17.5
basis points
$50 Million to $100 Million
10.0 basis points
Over $100 Million 5.0
basis points
Discretionary Equity Portfolio Up to
$50 Million 17.5 basis points
$50 Million to $ 100 Million
10.0 basis points
Over $100 Million 5.0
basis points
Fees shall be applied separately to each of the Funds
as indicated. The Corporation shall also pay/reimburse
the Administrator's out-of-pocket expenses as described
in the Agreement. Fees for additional funds or classes
of funds shall be separately established and agreed
upon by the parties.
Dated: November 8, 1996.
ICAP FUNDS, INC. SUNSTONE
FINANCIAL GROUP, INC.
By: /s/ Pamela H. Conroy By:
Miriam M. Allison
Miriam M.
Allison
President
10211F21
4/22/96
3<PAGE>
Exhibit 11
CONSENT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of the ICAP Funds, Inc.
We consent to the inclusion in Post-Effective
Amendment No. 4 to the Registration Statement on Form
N-1A of the ICAP Funds, Inc. of our report dated
January 19, 1996, on our audit of the financial
statements and financial highlights of the ICAP
Discretionary Equity Portfolio and the ICAP Equity
Portfolio, which constitute ICAP Funds, Inc., which
report is included in the Annual Report for the year
ended December 31, 1995 which is also included in the
Registration Statement. We also consent to the
reference to our Firm under the caption, "INDEPENDENT
ACCOUNTANTS" in the Statement of Additional
Information.
/s/ Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
Milwaukee, Wisconsin
April 24, 1996
10211F22
4/22/96 <PAGE>
Exhibit 16
ICAP FUNDS, INC.
SCHEDULE FOR COMPUTATION OF
PERFORMANCE QUOTATIONS
COMPOUNDED ANNUAL
TOTAL RETURN
A. Formula
_____
P(1 + T)n = ERV OR T = \n/ERV/P - 1
Where: P = a hypothetical initial payment of
$10,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a
hypothetical $10,000 payment made
at the beginning of the 1, 5 or 10
year periods at the end of the 1, 5
or 10 year periods (or fractional
portion thereof)
B. Calculation
_____
T = \n/ERV/P - 1
Discretionary Equity Portfolio
One-year period 12-31-94 through 12-31-95
_____________________
35.21% = 1\1/13,521.17 - 10,000.00 - 1
Equity Portfolio
One-year period 12-31-94 through 12-31-95
_____________________
38.85% = 1\1/13,885.30 - 10,000.00 - 1
