<PAGE 1>
File No. 811-08957
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-2
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940 [X]
Amendment No. 2 [X]
Stein Roe Floating Rate Limited Liability Company
(Exact Name of Registrant as Specified in Charter)
One South Wacker Drive
Chicago, IL 60606
(Address of Principal Executive Offices)
(800) 338-0593
(Registrant's Telephone Number, Including Area Code)
Heidi J. Walter Cameron S. Avery
Vice-President and Secretary Bell, Boyd & Lloyd
Stein Roe Floating Rate Limited Three First National Plaza
Liability Company 70 W. Madison Street, Suite 3300
One South Wacker Drive Chicago, Illinois 60602
Chicago, Illinois 60606
(Name and Address of Agents for Service)
<PAGE 2>
EXPLANATORY NOTE
Throughout this Registration Statement, information concerning
Stein Roe Floating Rate Limited Liability Company (the
"Portfolio") is incorporated by reference from the Registration
Statement on Form N-2 of Liberty-Stein Roe Advisor Floating Rate
Fund (File No. 333-61751 and 333-87177 under the Securities Act of
1933 (the "1933 Act")) (the "Filing") (CIK No. 0001068200). The
Filing contains the prospectus and statement of additional
information (the "SAI") for Liberty-Stein Roe Advisor Floating
Rate Fund (the "Feeder Fund"), which invests substantially all of
its assets in the Portfolio.
This Registration Statement has been filed by the Registrant
pursuant to Section 8(b) of the Investment Company Act of 1940
(the "1940 Act"). However, interests in the Portfolio are not
being filed under the 1933 Act because interests in the Portfolio
are issued solely in private placement transactions that do not
involve any "public offering" within the meaning of Section 4(2)
of the 1933 Act. Investments in the Portfolio may be made only by
investment companies, insurance company separate accounts, common
or commingled trust funds, or similar organizations or entities
that are "accredited investors" within the meaning of Regulation D
under the 1933 Act. This Registration Statement does not
constitute an offer to sell, or the solicitation of an offer to
buy, any "security" of the Portfolio within the meaning of the
1933 Act.
<PAGE A-1>
PART A
Responses to Items 1, 2, 3.2, 4, 5, 6, and 7 of Part A have been
omitted pursuant to Paragraph 3 of Instruction G of the General
Instructions to Form N-2.
ITEM 3. FEE TABLE AND SYNOPSIS
Not applicable.
ITEM 8. GENERAL DESCRIPTION OF THE REGISTRANT
1) The Portfolio is a closed-end, non-diversified management
investment company which was organized as a limited liability
company under the laws of the State of Delaware on August 14,
1998. Interests in the Portfolio are issued solely in private
placement transactions that do not involve any "public offering"
within the meaning of Section 4(2) of the 1933 Act. Investments
in the Portfolio may be made only by investment companies,
insurance company separate accounts, common or commingled trust
funds, or similar organizations or entities that are "accredited
investors" within the meaning of Regulation D under the 1933 Act.
This Registration Statement does not constitute an offer to sell,
or the solicitation of an offer to buy, any "security" of the
Portfolio within the meaning of the 1933 Act.
(2)-(4) Registrant incorporates by reference information
concerning the Portfolio's investment objective and investment
practices and risk factors associated with investments in the
Portfolio in the section entitled "Investment Objectives and
Policies," "How the Portfolio Invests," "Principal Risks" and
"Other Investment Practices" in the Feeder Fund prospectus.
(5) Investments in the Portfolio may not be transferred.
However, the Portfolio will, pursuant to Rule 23c-3 under the 1940
Act, make offers to repurchase at net asset value a portion of its
interests. See "Periodic Repurchase Offers" in the Feeder Fund
prospectus and "Investment Restrictions" and "Repurchase Offer
Fundamental Policy" in the Feeder Fund SAI. Subject to the
Portfolio's investment restriction with respect to borrowings, the
Portfolio may borrow money or issue debt obligations to finance
its repurchase obligations. See "Investment Restrictions" in the
Feeder Fund SAI.
(6) Not applicable.
ITEM 9. MANAGEMENT
1(a) Board of Managers. The Board of Managers of the Portfolio
has overall management responsibility for the Portfolio.
Registrant incorporates by reference information concerning the
Portfolio's management from "Management of the Fund" and
"Organization and Description of Shares" in the Feeder Fund
prospectus.
1(b) - (c) Registrant incorporates by reference information
concerning the Portfolio's management from "Management of the
Fund" and "Organization and Description of Shares" in the Feeder
Fund prospectus.
<PAGE A-2>
1(d) Transfer Agent. SteinRoe Services Inc. ("SSI"), P.O. Box
1722, Boston, MA 02105, a wholly owned subsidiary of Liberty
Financial Companies, Inc., acts as agent of the Portfolio for the
transfer of shares, disbursement of dividends and maintenance of
shareholder accounting records. Under a separate agreement, SSI
also provides certain investors accounting services to the
Portfolio.
1(e) Custodian. State Street Bank and Trust Company, 225
Franklin Street, Boston, Massachusetts 02101, is the custodian of
the Portfolio and has custody of the securities and cash of the
Portfolio. The custodian, among other things, attends to the
collection of principal and income and payment for and collection
of proceeds of securities bought and sold by the Portfolio.
1(f) Expenses. The Portfolio is responsible for all of its
expenses not expressly stated to be payable by the other party
under the Portfolio Management Agreement, Accounting and
Bookkeeping Agreement, and Investor Services Agreement.
1(g) Not applicable.
(2) Not applicable.
(3) Control Persons. The Registrant does not consider that it is
directly or indirectly controlling, controlled by or under common
control with other persons within the meaning of this Item.
ITEM 10. CAPITAL STOCK, LONG-TERM DEBT AND OTHER SECURITIES
1(a)-(f) Registrant incorporates by reference information
concerning interests in the Portfolio from "Organization and
Description of Shares" and "Master/Feeder Funds: Structure and
Risk Factors" in the Feeder Fund prospectus. An interest in the
Portfolio has no preemptive or conversion rights and is fully paid
and non-assessable, except as set forth below. The Portfolio is
not required to hold annual meetings of investors, and has no
current intention to do so, but the Portfolio will hold special
meetings of investors when, in the judgment of the Board, it is
necessary or desirable to submit matters for an investor vote.
Changes in fundamental policies will be submitted to investors for
approval. An investors' meeting will be held upon the written,
specific request to the Board of investors holding in the
aggregate not less than 10% of the units in the Portfolio.
Investors have under certain circumstances (e.g., upon application
and submission of certain specified documents to the Board by a
specified number of shareholders) the right to communicate with
other investors in connection with requesting a meeting of
investors for the purpose of removing one or more Board members.
Investors also have the right to remove one or more Board members
without a meeting by a declaration in writing by a specified
number of investors. Upon liquidation of the Portfolio, investors
would be entitled to share pro rata in the net assets available
for distribution to investors (unless another sharing method is
required for federal income tax reasons, in accordance with the
sharing method adopted by the Board).
<PAGE A-3>
The Portfolio is organized as a limited liability company under
the laws of the State of Delaware. Under the Agreement, the
Portfolio is authorized to issue units. Each investor is entitled
to vote in proportion to the amount of its investment in the
Portfolio. Investments in the Portfolio may not be transferred.
However, the Portfolio will, pursuant to Rule 23c-3 under the 1940
Act, make offers to repurchase at net asset value a portion of its
interests. See "Periodic Repurchase Offers" in the Feeder Fund
prospectus and "Investment Restrictions" and "Repurchase Offer
Fundamental Policy" in the Feeder Fund SAI. Subject to the
Portfolio's investment restriction with respect to borrowings, the
Portfolio may borrow money or issue debt obligations to finance
its repurchase obligations. See "Investment Restrictions" in the
Feeder Fund SAI.
The net income of the Portfolio shall consist of (i) all income
accrued less the amortization of any premium on the assets of the
Portfolio, less (ii) all actual and any accrued expenses of the
Portfolio determined in accordance with generally accepted
accounting principles. Income includes discount earned (including
both original issue, and by election, market discount) on discount
paper accrued ratably to the date of maturity and any net realized
gains or losses on the assets of the Portfolio. All of the net
income of the Portfolio is allocated among the investors in
accordance with their interests (unless another sharing method is
required for federal income tax reasons, in accordance with the
sharing method adopted by the Board).
(2) - (3) Not applicable.
(4) It is intended that the assets, income and distributions of
the Portfolio will be managed in such a way that an investor in
the Portfolio will be able to satisfy the requirements of
Subchapter M of the Internal Revenue Code of 1986, as amended (the
"Code") for qualification as a regulated investment company
("RIC"), assuming the investor invested all of its assets in the
Portfolio.
Under the anticipated method of the operation of the Portfolio,
the Portfolio will not be subject to any federal income tax.
However, each investor in the Portfolio will be taxed on its share
(as determined in accordance with the governing instruments of the
Portfolio) of the ordinary income and capital gain in determining
its income tax liability. The determination of such share will be
made in accordance with an allocation method designed to satisfy
the Internal Revenue Code of 1986, as amended (the "Code"), and
the regulations promulgated thereunder. Distributions of net
income and capital gain are to be made pro rata to investors in
accordance with their investment in the Portfolio. For federal
income tax purposes, however, income, gain, or loss may be
allocated in a manner other than pro rata, if necessary to reflect
gains or losses properly allocable to fewer than all investors as
a result of contributions of securities or redemptions of portions
of an investor's unrealized gain or loss in assets.
(5) Not applicable.
(6) Not applicable.
<PAGE A-4>
ITEM 11. DEFAULTS AND ARREARS ON SENIOR SECURITIES
Not applicable.
ITEM 12. LEGAL PROCEEDINGS
Not applicable.
ITEM 13. TABLE OF CONTENTS OF STATEMENT OF ADDITIONAL INFORMATION
General Information and History...............................B-1
Investment Objective and Policies.............................B-1
Management....................................................B-1
Control Persons and Principal Holders of Securities...........B-1
Investment Advisory and Other Services .......................B-2
Brokerage Allocation and Other Practices......................B-2
Tax Status....................................................B-2
Financial Statements..........................................B-4
<PAGE B-1>
PART B
.........Stein Roe Floating Rate Limited Liability Company
.....Statement of Additional Information Dated November 8, 1999
ITEM 14. COVER PAGE
Not applicable.
ITEM 15. TABLE OF CONTENTS
General Information and History...............................B-1
Investment Objective and Policies.............................B-1
Management....................................................B-1
Control Persons and Principal Holders of Securities...........B-1
Investment Advisory and Other Services .......................B-2
Brokerage Allocation and Other Practices......................B-2
Tax Status....................................................B-2
Financial Statements..........................................B-4
ITEM 16. GENERAL INFORMATION AND HISTORY
Not applicable.
ITEM 17. INVESTMENT OBJECTIVE AND POLICIES
Part A, Item 8 contains additional information about the
investment objective and policies of the Portfolio. This Part B
should be read in conjunction with Part A. Capitalized terms in
this Part B and not otherwise defined have the meanings given to
them in Part A.
(1)-(3) Registrant incorporates by reference additional
information concerning the investment policies of the Portfolio as
well as information concerning the investment restrictions of the
Portfolio from "Investment Policies," "Portfolio Investments and
Strategies" and "Investment Restrictions" in the Feeder Fund SAI.
(4) Not applicable.
ITEM 18. MANAGEMENT
The Portfolio is organized as a Delaware limited liability
company; therefore, it is required to have a board of managers
rather than a board of trustees. The managers of the Portfolio
are the same persons as the trustees of the Feeder Fund.
Registrant incorporates by reference additional information
concerning the management of the Portfolio from "Management" in
the Feeder Fund SAI.
The following table sets forth compensation paid to the managers
during the year ended Aug. 31, 1999:
<PAGE B-2>
Compensation from the
Stein Roe Fund Complex*
-----------------------
Aggregate Compensation Total Average
Name of Trustee from the Trust Compensation Per Series
- ------------------- -------------------- ------------ ----------
Thomas W. Butch* -0- -0- -0-
Lindsay Cook -0- -0- -0-
John A. Bacon, Jr. $1,350 $114,600 $2,491
William W. Boyd 1,350 116,300 2,528
Douglas A. Hacker 1,350 101,150 2,199
Janet Langford Kelly 1,350 110,150 2,395
Charles R. Nelson 1,350 115,550 2,512
Thomas C. Theobald 1,350 110,650 2,405
____________
*As of Aug. 31, 1999, the Stein Roe Fund Complex consisted of the
Registrant, Liberty-Stein Roe Advisor Floating Rate Fund,
Liberty-Stein Roe Institutional Floating Rate Income Fund, and
the following open-end mutual funds: four series of Liberty-
Stein Roe Funds Income Trust, four series of Liberty-Stein Roe
Funds Municipal Trust, 12 series of Liberty-Stein Roe Funds
Investment Trust, five series of Liberty-Stein Roe Advisor
Trust, one series of Liberty-Stein Roe Funds Trust, 12
portfolios of SR&F Base Trust, and five series of SteinRoe
Variable Investment Trust.
**Mr. Butch was a manager through October 29, 1999.
ITEM 19. CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
As of November 5, 1999, the only person known to own of record or
"beneficially" 5% or more of the outstanding interests of the
Portfolio within the definition of that term as contained in Rule
13d-3 under the Securities Exchange Act of 1934 was Liberty-Stein
Roe Institutional Floating Rate Income Fund, which held 99.3% of
the outstanding interests. The address of Liberty-Stein Roe
Institutional Floating Rate Income Fund is One South Wacker Drive,
Chicago, Illinois 60606.
ITEM 20. INVESTMENT ADVISORY AND OTHER SERVICES
Registrant incorporates by reference information concerning
investment advisory and other services provided to the Portfolio
and the Feeder Fund from "Investment Advisory and Other Services,"
"Distributor," "Transfer Agent," "Custodian" and "Independent
Accountants" in the Feeder Fund SAI.
Bookkeeping and Accounting Agreement
Pursuant to a separate agreement with Registrant, Stein Roe &
Farnham Incorporated receives a fee for performing certain
bookkeeping and accounting services. For these services, Stein
Roe receives an annual fee of $25,000 plus .0025 of 1% of average
net assets over $50 million. During the fiscal year ended August
31, 1999, Stein Roe received fees of $18,131 from Registrant for
performing these services.
ITEM 21. BROKERAGE ALLOCATION AND OTHER PRACTICES
Registrant incorporates by reference information concerning the
brokerage practices of the Portfolio from "Portfolio Transactions"
in the Feeder Fund SAI.
<PAGE B-3>
ITEM 22. TAX STATUS
The Portfolio is organized as a limited liability company under
the laws of the State of Delaware. Under the anticipated method
of the operation of the Portfolio, the Portfolio will not be
subject to any federal income tax nor is it expected to have any
Delaware income tax liability. However, each investor in the
Portfolio will be taxed on its share (as determined in accordance
with the governing instruments of the Portfolio) of the ordinary
income and capital gain in determining its income tax liability.
The determination of such share will be made in accordance with an
allocation method designed to satisfy the Code, and the
regulations promulgated thereunder.
The Portfolio's taxable year end is August 31. Although, as
described above, the Portfolio will not be subject to federal
income tax, it will file appropriate income tax returns.
It is intended that the Portfolio's assets, income and
distributions will be managed in such a way that an investor in
the Portfolio will be able to satisfy the requirements of
Subchapter M of the Code for qualification as a RIC, assuming that
the investor invests all of its assets in the Portfolio.
In order for an investment company investing in the Portfolio to
qualify for federal income tax treatment as a regulated investment
company, at least 90% of its gross income for a taxable year must
be derived from qualifying income; i.e., dividends, interest,
income derived from loans of securities, gains from the sale of
stock or securities or foreign currencies, or other income
(including but not limited to gains from options, futures, or
forward contracts) derived with respect to its business of
investing in stock, securities, or currencies. Any investment
company investing in the Portfolio also will be required to
distribute each year at least 90% of its investment company
taxable income (in order to escape federal income tax on
distributed amounts) and to meet certain tax diversification
requirements. Because an investment company investing in the
Portfolio may invest all of its assets in the Portfolio, the
Portfolio must satisfy all of these tax requirements in order for
such other investment companies to satisfy them.
The Portfolio will allocate at least annually to its shareholders
its distributive share of any net investment income and net
capital gains which have been recognized for federal income tax
purposes (including unrealized gains at the end of the Portfolio's
taxable year on certain options and futures transactions that are
required to be marked-to-market).
The Portfolio intends to distribute substantially all of its
income including any net realized capital gains, and thereby be
relieved of any federal income tax liability to the extent of such
distributions. Because capital gain distributions reduce net
asset value, if a shareholder purchases shares shortly before a
record date he will, in effect, receive a return of a portion of
his investment in such distribution. The distribution would
nonetheless be taxable to him, even if the net asset value of
shares were reduced below his cost. However, for federal income
tax purposes, the shareholder's original cost would continue as
his tax basis.
<PAGE B-4>
Interest on indebtedness incurred or continued by shareholders to
purchase or carry shares of the Portfolio is not deductible for
federal income tax purposes. Under rules applied by the Internal
Revenue Service to determine whether borrowed funds are used for
the purpose of purchasing or carrying particular assets, the
purchase of shares may, depending upon the circumstances, be
considered to have been made with borrowed funds even though the
borrowed funds are not directly traceable to the purchase of
shares.
The Portfolio expects that less than 100% of dividends will
qualify for the deduction for dividends received by corporate
shareholders.
To the extent the Portfolio invests in foreign securities, it may
be subject to withholding and other taxes imposed by foreign
countries. Tax treaties between certain countries and the United
States may reduce or eliminate such taxes. Investors may be
entitled to claim U.S. foreign tax credits with respect to such
taxes, subject to certain provisions and limitations contained in
the Code. Specifically, if more than 50% of the Portfolio's total
assets at the close of any fiscal year consist of stock or
securities of foreign corporations, the Portfolio may file an
election with the Internal Revenue Service pursuant to which
shareholders of a Portfolio will be required to (1) include in
ordinary gross income (in addition to taxable dividends actually
received) their pro rata shares of foreign income taxes paid by
the Portfolio even though not actually received, (2) treat such
respective pro rata shares as foreign income taxes paid by them,
and (3) deduct such pro rata shares in computing their taxable
incomes, or, alternatively, use them as foreign tax credits,
subject to applicable limitations, against their United States
income taxes. Shareholders who do not itemize deductions for
federal income tax purposes will not, however, be able to deduct
their pro rata portion of foreign taxes paid by the Portfolio,
although such shareholders will be required to include their share
of such taxes in gross income. Shareholders who claim a foreign
tax credit may be required to treat a portion of dividends
received from the Portfolio as separate category income for
purposes of computing the limitations on the foreign tax credit
available to such shareholders. Tax-exempt shareholders will not
ordinarily benefit from this election relating to foreign taxes.
Each year, the Portfolio will notify shareholders of the amount of
(1) each shareholder's pro rata share of foreign income taxes paid
by the Portfolio and (2) the portion of dividends which represents
income from each foreign country, if the Portfolio qualifies to
pass along such credit.
The foregoing discussion does not address the special tax rules
applicable to certain classes of investors, such as tax-exempt
entities, insurance companies and financial institutions.
Investors should consult their own tax advisors with respect to
special tax rules that may apply in their particular situations as
well as the state, local, or foreign tax consequences of investing
in the Portfolio.
ITEM 23. FINANCIAL STATEMENTS
Please refer to the audited Financial Statements (investments as
of August 31, 1999, statements of assets and liabilities as of
August 31, 1999, statements of operations and statements of
changes in net assets for the period ended August 31, 1999, and
notes thereto) and reports of independent accountants, which are
contained in the August 31, 1999 annual report of the
<PAGE B-5>
Feeder Fund. The Financial Statements (but no other material from
the report) are incorporated herein by reference. The report may
be obtained at no charge by telephoning 800-338-0593.
<PAGE C-1>
PART C
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(1) Financial Statements. The financial statements called for by
this item are incorporated by reference in Part B and listed in
Item 23 hereof.
(2) Exhibits. [Note: As used herein, the term "Registration
Statement" refers to the Registration Statement of the Registrant
on Form N-2 filed under the 1940 Act, File No. 811-08957.]
(a)(1) Certificate of Formation of Registrant. (Exhibit
(a)(1) to Amendment No. 1 to Registration
Statement.)*
(2) Limited Liability Company Agreement of Registrant.
(Exhibit (a)(2) to Amendment No. 1 to Registration
Statement.)*
(b) By-Laws of Registrant. (Exhibit (b) of Amendment No. 1
to Registration Statement.)*
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
(g) Portfolio Management Agreement between the Registrant
and Stein Roe & Farnham Incorporated dated Nov. 20,
1998 as amended through August 3,1999.
(h) Not applicable.
(i) Not applicable.
(j) Form of Custodian Agreement between Registrant and State
Street Bank and Trust Company. (Exhibit (j) of Amendment
No. 1 to Registration Statement.)*
(k)(1) Investor Service Agreement between Registrant and
SteinRoe Services Inc. dated Nov. 20, 1998. (Exhibit
(k) of Amendment No. 1 to Registration Statement.)*
(2) Bookkeeping and Accounting Agreement between
Registrant and Stein Roe & Farnham Incorporated dated
August 3, 1999.
(l) Not applicable
(m) Not applicable
(n) Not applicable
(o) Not applicable
(p) Not applicable
(q) Not applicable
________
*Incorporated by reference.
ITEM 25. MARKETING ARRANGEMENTS
Not applicable.
ITEM 26. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Not applicable.
ITEM 27. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH
REGISTRANT.
<PAGE C-2>
Registrant does not consider that it is directly or indirectly
controlled by or under common control with other persons within
the meaning of this item.
ITEM 28. NUMBER OF HOLDERS OF SECURITIES
Title of Class Number of Record Holders
Stein Roe Floating Rate
Limited Liability Company 2
ITEM 29. INDEMNIFICATION
Reference is made to Article XIV of the Registrant's Limited
Liability Company Agreement (Exhibit (a)(2)) with respect to
indemnification of the managers and officers of Registrant against
liabilities which may be incurred by them in such capacities.
Registrant, its managers and officers, its investment adviser, the
other investment companies advised by Stein Roe & Farnham
Incorporated, and persons affiliated with them are insured against
certain expenses in connection with the defense of actions, suits,
or proceedings and certain liabilities that might be imposed as a
result of such actions, suits or proceedings. Registrant will not
pay any portion of the premiums for coverage under such insurance
that would (1) protect any manager or officer against any
liability to Registrant or its shareholders to which he would
otherwise be subject by reason of willful misfeasance, bad faith,
gross negligence, or reckless disregard of the duties involved in
the conduct of his office or (2) protect its investment adviser or
principal underwriter, if any, against any liability to Registrant
or its shareholders to which such person would otherwise be
subject by reason of willful misfeasance, bad faith, or gross
negligence, in the performance of its duties, or by reason of its
reckless disregard of its duties and obligations under its
contract or agreement with the Registrant; for this purpose the
Registrant will rely on an allocation of premiums determined by
the insurance company.
Registrant expects that each of Liberty-Stein Roe Advisor Floating
Rate Fund and Liberty-Stein Roe Institutional Floating Rate Income
Fund will invest substantially all of its assets in the Portfolio.
In that connection, managers and officers of Registrant have
signed the registration statement of each of those entities on
behalf of the Portfolio insofar as those registration statements
relate to the Portfolio, and those entities have agreed to
indemnify Registrant and its managers and officers against certain
liabilities which may be incurred by them.
ITEM 30. BUSINESS AND OTHER CONNECTIONS OF THE INVESTMENT ADVISER
Stein Roe & Farnham Incorporated is a wholly owned subsidiary of
SteinRoe Services Inc. ("SSI"), which in turn is a wholly owned
subsidiary of Liberty Financial Companies, Inc., which is a
majority owned subsidiary of Liberty Corporation Holdings, Inc.,
which in turn is a subsidiary of LFC Holdings, Inc., which in turn
is a subsidiary of Liberty Mutual Equity Corporation, which in
turn is a subsidiary of Liberty Mutual Insurance Company.
<PAGE C-3>
Stein Roe & Farnham Incorporated acts as investment adviser to
individuals, trustees, pension and profit-sharing plans,
charitable organizations, and other investors. In addition to
Registrant, it also acts as investment adviser to other investment
companies having different investment policies.
For a two-year business history of officers and directors of Stein
Roe & Farnham Incorporated, please refer to its Form ADV and to
the section of the Statement of Additional Information (Part B)
entitled "Investment Advisory and Other Services. "
Certain directors and officers of Stein Roe also serve and have
during the past two years served in various capacities as
officers, directors, or trustees of SSI, of Colonial Management
Associates, Inc. (which is a subsidiary of Liberty Financial
Companies, Inc.), and of the Registrant and other investment
companies managed by SteinRoe. (The listed entities are located
at One South Wacker Drive, Chicago, Illinois 60606, except for
Colonial Management Associates, Inc., which is located at One
Financial Center, Boston, MA 02111, and SteinRoe Variable
Investment Trust and Liberty Variable Investment Trust, which
are located at Federal Reserve Plaza, Boston, MA 02210.) A
list of such capacities is given below.
POSITION FORMERLY
HELD WITHIN
CURRENT POSITION PAST TWO YEARS
------------------- --------------
STEINROE SERVICES INC.
Gary A. Anetsberger Vice President
Kevin M. Carome Assistant Clerk
Kenneth J. Kozanda Vice President; Treasurer
Kenneth R. Leibler Director
Karl J. Maurer Comptroller
C. Allen Merritt, Jr. Director; Vice President
Heidi J. Walter Vice President; Secretary
COLONIAL MANAGEMENT ASSOCIATES, INC.
Ophelia L. Barsketis Senior Vice President
Kevin M. Carome Senior Vice President
William M. Garrison Vice President
Stephen E. Gibson President
Loren A. Hansen Senior Vice President
Clare M. Hounsell Vice President
James P. Haynie Senior Vice President
Timothy J. Jacoby Senior Vice President
Deborah A. Jansen Senior Vice President
North T. Jersild Vice President
Yvonne T. Shields Vice President
SR&F BASE TRUST
William D. Andrews Executive Vice-President
Gary A. Anetsberger Sr. V-P; Treasurer;
Controller
David P. Brady Vice-President
Daniel K. Cantor Vice-President
Kevin M. Carome Executive VP; Asst. Secy. VP
<PAGE C-4>
Stephen E. Gibson President
Erik P. Gustafson Vice-President
Loren A. Hansen Executive Vice-President
James P. Haynie Vice-President
Harvey B. Hirschhorn Vice-President
Michael T. Kennedy Vice-President
Stephen F. Lockman Vice-President
Jane M. Naeseth Vice-President
Maureen G. Newman Vice-President
Michael E. Rega Vice-President
Veronica M. Wallace Vice-President
Heidi J. Walter Vice-President; Secretary
LIBERTY-STEIN ROE FUNDS INCOME TRUST; LIBERTY-STEIN ROE FUNDS
INSTITUTIONAL TRUST; AND LIBERTY-STEIN ROE FUNDS TRUST
William D. Andrews Executive Vice-President
Gary A. Anetsberger Sr. V-P; Treasurer;
Controller
Kevin M. Carome Executive VP; Asst. Secy. VP
Stephen E. Gibson President
Loren A. Hansen Executive Vice-President
Michael T. Kennedy Vice-President
Stephen F. Lockman Vice-President
Lynn C. Maddox Vice-President
Jane M. Naeseth Vice-President
Heidi J. Walter Vice-President; Secretary
LIBERTY-STEIN ROE FUNDS INVESTMENT TRUST
William D. Andrews Executive Vice-President
Gary A. Anetsberger Sr. V-P; Treasurer;
Controller
David P. Brady Vice-President
Daniel K. Cantor Vice-President
Kevin M. Carome Executive VP; Asst. Secy. VP
William M. Garrison Vice-President
Stephen E. Gibson President
Erik P. Gustafson Vice-President
Loren A. Hansen Executive Vice-President
James P. Haynie Vice-President
Harvey B. Hirschhorn Vice-President
Lynn C. Maddox Vice-President
Arthur J. McQueen Vice-President
Michael E. Rega Vice-President
Heidi J. Walter Vice-President; Secretary
LIBERTY-STEIN ROE ADVISOR TRUST
William D. Andrews Executive Vice-President
Gary A. Anetsberger Sr. V-P; Treasurer;
Controller
David P. Brady Vice-President
Daniel K. Cantor Vice-President
Kevin M. Carome Executive VP; Asst. Secy. VP
Stephen E. Gibson President
Erik P. Gustafson Vice-President
Loren A. Hansen Executive Vice-President
James P. Haynie Vice-President
Harvey B. Hirschhorn Vice-President
<PAGE C-5>
Michael T. Kennedy Vice-President
Stephen F. Lockman Vice-President
Lynn C. Maddox Vice-President
Arthur J. McQueen Vice-President
Maureen G. Newman Vice-President
Michael E. Rega Vice-President
Heidi J. Walter Vice-President; Secretary
LIBERTY-STEIN ROE FUNDS MUNICIPAL TRUST
William D. Andrews Executive Vice-President
Gary A. Anetsberger Sr. V-P; Treasurer;
Controller
Kevin M. Carome Executive VP; Asst. Secy. VP
Joanne T. Costopoulos Vice-President
Stephen E. Gibson President
Loren A. Hansen Executive Vice-President
Brian M. Hartford Vice-President
William C. Loring Vice-President
Lynn C. Maddox Vice-President
Maureen G. Newman Vice-President
Veronica M. Wallace Vice-President
Heidi J. Walter Vice-President; Secretary
STEINROE VARIABLE INVESTMENT TRUST
William D. Andrews Executive Vice-President
Gary A. Anetsberger Sr. V-P; Treasurer;
Controller
Kevin M. Carome Executive VP; Asst. Secy. VP
William M. Garrison Vice President
Stephen E. Gibson President
Erik P. Gustafson Vice President
Loren A. Hansen Executive Vice-President
Harvey B. Hirschhorn Vice President
Michael T. Kennedy Vice President
Jane M. Naeseth Vice President
William M. Wadden IV Vice President
Heidi J. Walter Vice President
LIBERTY-STEIN ROE ADVISOR FLOATING RATE FUND; LIBERTY-STEIN ROE
INSTITUTIONAL FLOATING RATE INCOME FUND, STEIN ROE FLOATING RATE
LIMITED LIABILITY COMPANY
William D. Andrews Executive Vice-President
Gary A. Anetsberger Sr. V-P; Treasurer;
Controller
Kevin M. Carome Executive VP; Asst. Secy. VP
Stephen E. Gibson President
Brian W. Good Vice-President
James R. Fellows Vice-President
Loren A. Hansen Executive Vice-President
Heidi J. Walter Vice-President; Secretary
LIBERTY VARIABLE INVESTMENT TRUST
Ophelia L. Barsketis Vice President
Deborah A. Jansen Vice President
Kevin M. Carome Vice President
<PAGE C-6>
ITEM 31. LOCATION OF ACCOUNTS AND RECORDS
Heidi J. Walter, Secretary
Stein Roe Floating Rate Limited Liability Company
One South Wacker Drive
Chicago, Illinois 60606
ITEM 32. MANAGEMENT SERVICES
Not applicable
ITEM 33. UNDERTAKINGS
Not applicable
<PAGE>
SIGNATURES
Pursuant to the requirements of the Investment Company Act of
1940, the Registrant has duly caused this Registration Statement
to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Chicago and State of Illinois on the
8th day of November, 1999.
STEIN ROE FLOATING RATE LIMITED
LIABILITY COMPANY
By: STEPHEN E. GIBSON
Stephen E. Gibson
President
<PAGE>
INDEX OF EXHIBITS FILED WITH THIS AMENDMENT
Exhibit
Number Exhibit
- ------------------------------------------------------------
(g) Portfolio Management Agreement
(k)(2) Accounting and Bookkeeping Agreement
<PAGE>
MANAGEMENT AGREEMENT
BETWEEN
STEIN ROE FLOATING RATE LIMITED LIABILITY
COMPANY AND
STEIN ROE & FARNHAM INCORPORATED
STEIN ROE FLOATING RATE LIMITED LIABILITY COMPANY, a Delaware
limited liability company under the Investment Company Act of 1940
("1940 Act") as a closed-end non-diversified management investment
company ("LLC"), hereby appoints STEIN ROE & FARNHAM INCORPORATED,
a Delaware corporation registered under the Investment Advisers
Act of 1940 as an investment adviser, of Chicago, Illinois
("Manager"), to furnish investment advisory and portfolio
management services with respect to its assets represented by the
shares of beneficial interest. LLC and Manager hereby agree that:
1. Investment Management Services. Manager shall manage the
investment operations of LLC, subject to the terms of this
Agreement and to the supervision and control of LLC's Board of
Managers ("Board"). Manager agrees to perform, or arrange for the
performance of, the following services for LLC:
(a) to obtain and evaluate such information relating to economies,
industries, businesses, securities and commodities markets,
and individual securities, commodities and indices as it may
deem necessary or useful in discharging its responsibilities
hereunder;
(b) to formulate and maintain a continuing investment program in a
manner consistent with and subject to (i) LLC's operating
agreement; (ii) LLC's investment objectives, policies, and
restrictions as set forth in written documents furnished by
the LLC to Manager; (iii) all securities, commodities, and tax
laws and regulations applicable to LLC; and (iv) any other
written limits or directions furnished by the Board to
Manager;
(c) unless otherwise directed by the Board, to determine from time
to time securities, commodities, interests or other
investments to be purchased, sold, retained or lent by LLC,
and to implement those decisions, including the selection of
entities with or through which such purchases, sales or loans
are to be effected;
(d) to use reasonable efforts to manage LLC so that it will
qualify as a regulated investment company under subchapter M
of the Internal Revenue Code of 1986, as amended;
(e) to make recommendations as to the manner in which voting
rights, rights to consent to LLC action, and any other rights
pertaining to LLC shall be exercised;
(f) to make available to LLC promptly upon request all of LLC's
records and ledgers and any reports or information reasonably
requested by LLC; and
(g) to the extent required by law, to furnish to regulatory
authorities any information or reports relating to the
services provided pursuant to this Agreement.
Except as otherwise instructed from time to time by the
Board, with respect to execution of transactions for LLC, Manager
shall place, or arrange for the placement of, all orders for
purchases, sales, or loans with issuers, brokers, dealers or other
counterparties or agents selected by Manager. In connection with
the selection of all such parties for the placement of all such
orders, Manager shall attempt to obtain most favorable execution
and price, but may nevertheless in its sole discretion as a
secondary factor, purchase and sell portfolio securities from and
to brokers and dealers who provide Manager with statistical,
research and other information, analysis, advice, and similar
services. In recognition of such services or brokerage services
provided by a broker or dealer, Manager is hereby authorized to
pay such broker or dealer a commission or spread in excess of that
which might be charged by another broker or dealer for the same
transaction if the Manager determines in good faith that the
commission or spread is reasonable in relation to the value of the
services so provided.
LLC hereby authorizes any entity or person associated with
Manager that is a member of a national securities exchange to
effect any transaction on the exchange for its account to the
extent permitted by and in accordance with Section 11(a) of the
Securities Exchange Act of 1934 and Rule 11a2-2(T) thereunder.
LLC hereby consents to the retention by such entity or person of
compensation for such transactions in accordance with Rule 11a-2-
2(T)(a)(iv).
Manager may, where it deems to be advisable, aggregate orders
for its other customers together with any securities of the same
type to be sold or purchased for LLC in order to obtain best
execution or lower brokerage commissions. In such event, Manager
shall allocate the shares so purchased or sold, as well as the
expenses incurred in the transaction, in a manner it considers to
be equitable and fair and consistent with its fiduciary
obligations to LLC and Manager's other customers.
Manager shall for all purposes be deemed to be an independent
contractor and not an agent of LLC and shall, unless otherwise
expressly provided or authorized, have no authority to act for or
represent LLC in any way.
2. Administrative Services. Manager shall supervise the
business and affairs of LLC and shall provide such services and
facilities as may be required for effective administration of LLC
as are not provided by employees or other agents engaged by LLC;
provided that Manager shall not have any obligation to provide
under this Agreement any such services which are the subject of a
separate agreement or arrangement between LLC and Manager, any
affiliate of Manager, or any third party administrator
("Administrative Agreements").
3. Use of Affiliated Companies and Subcontractors. In
connection with the services to be provided by Manager under this
Agreement, Manager may, to the extent it deems appropriate, and
subject to compliance with the requirements of applicable laws and
regulations and upon receipt of written approval of the Board,
make use of (i) its affiliated companies and their directors,
managers, trustees, officers, and employees and (ii)
subcontractors selected by Manager, provided that Manager shall
supervise and remain fully responsible for the services of all
such third parties in accordance with and to the extent provided
by this Agreement. All costs and expenses associated with
services provided by any such third parties shall be borne by
Manager or such parties.
4. Expenses Borne by LLC. Except to the extent expressly
assumed by Manager herein or under a separate agreement between
LLC and Manager and except to the extent required by law to be
paid by Manager, Manager shall not be obligated to pay any costs
or expenses incidental to the organization, operations or business
of LLC. Without limitation, such costs and expenses shall include
but not be limited to:
(a) all charges of depositories, custodians and other agencies for
the safekeeping and servicing of its cash, securities, and
other property;
(b) all charges for equipment or services used for obtaining price
quotations or for communication between Manager or LLC and the
custodian, transfer agent or any other agent selected by LLC;
(c) all charges for administrative and accounting services
provided to LLC by Manager, or any other provider of such
services;
(d) all charges for services of LLC's independent auditors and for
services to LLC by legal counsel;
(e) all compensation of Board, other than those affiliated with
Manager, all expenses incurred in connection with their
services to LLC, and all expenses of meetings of the Board or
committees thereof;
(f) all expenses incidental to holding meetings of holders of
units of interest in the LLC ("Unitholders"), including
printing and of supplying each record-date Unitholder with
notice and proxy solicitation material, and all other proxy
solicitation expense;
(g) all expenses of printing of annual or more frequent revisions
of LLC prospectus(es) and of supplying each then-existing
Unitholder with a copy of a revised prospectus;
(h) all expenses related to preparing and transmitting
certificates representing LLC shares;
(i) all expenses of bond and insurance coverage required by law or
deemed advisable by the Board;
(j) all brokers' commissions and other normal charges incident to
the purchase, sale, or lending of portfolio securities;
(k) all taxes and governmental fees payable to federal, state or
other governmental agencies, domestic or foreign, including
all stamp or other transfer taxes;
(l) all expenses of registering and maintaining the registration
of LLC under the 1940 Act and, to the extent no exemption is
available, expenses of registering LLC's shares under the 1933
Act, of qualifying and maintaining qualification of LLC and
its shares for sale under securities laws of various states or
other jurisdictions and of registration and qualification of
LLC under all other laws applicable to LLC or its business
activities;
(m) all interest on indebtedness, if any, incurred by LLC; and
(n) all fees, dues and other expenses incurred by LLC in
connection with membership of LLC in any trade association or
other investment company organization.
5. Allocation of Expenses Borne by LLC. Any expenses borne
by LLC that are attributable solely to the organization, operation
or business of LLC shall be paid solely out LLC's assets.
6. Expenses Borne by Manager. Manager at its own expense
shall furnish all executive and other personnel, office space, and
office facilities required to render the investment management and
administrative services set forth in this Agreement. Manager
shall pay all expenses of establishing, maintaining, and servicing
the accounts of Unitholders However, Manager shall not be
required to pay or provide any credit for services provided by
LLC's custodian or other agents without additional cost to LLC.
In the event that Manager pays or assumes any expenses of LLC
not required to be paid or assumed by Manager under this
Agreement, Manager shall not be obligated hereby to pay or assume
the same or similar expense in the future; provided that nothing
contained herein shall be deemed to relieve Manager of any
obligation to LLC under any separate agreement or arrangement
between the parties.
7. Management Fee. For the services rendered, facilities
provided, and charges assumed and paid by Manager hereunder, LLC
shall pay to Manager an annual fee of 0.85% of the average net
assets of LLC. The management fee shall accrue on each calendar
day, and shall be payable monthly on the first business day of the
next succeeding calendar month. The daily fee accrual shall be
computed by multiplying the fraction of one divided by the number
of days in the calendar year by the applicable annual rate of fee,
and multiplying this product by the net assets of LLC, determined
in the manner established by the Board, as of the close of
business on the last preceding business day on which LLC's net
asset value was determined.
8. Retention of Sub-Adviser. Subject to obtaining the
initial and periodic approvals required under Section 15 of the
1940 Act, Manager may retain one or more sub-advisers at Manager's
own cost and expense for the purpose of furnishing one or more of
the services described in Section 1 hereof with respect to LLC.
Retention of a sub-adviser shall in no way reduce the
responsibilities or obligations of Manager under this Agreement,
and Manager shall be responsible to LLC for all acts or omissions
of any sub-adviser in connection with the performance of Manager's
duties hereunder.
9. Non-Exclusivity. The services of Manager to LLC
hereunder are not to be deemed exclusive and Manager shall be free
to render similar services to others.
10. Standard of Care. Neither Manager, nor any of its
directors, officers, stockholders, agents or employees shall be
liable to LLC or its Unitholders for any error of judgment,
mistake of law, loss arising out of any investment, or any other
act or omission in the performance by Manager of its duties under
this Agreement, except for loss or liability resulting from
willful misfeasance, bad faith or gross negligence on Manager's
part or from reckless disregard by Manager of its obligations and
duties under this Agreement.
11. Amendment. This Agreement may not be amended as to LLC
without the affirmative votes (a) of a majority of the Board,
including a majority of those Managers who are not "interested
persons" of LLC or of Manager, voting in person at a meeting
called for the purpose of voting on such approval, and (b) of a
"majority of the outstanding shares" of LLC. The terms
"interested persons" and "vote of a majority of the outstanding
shares" shall be construed in accordance with their respective
definitions in the 1940 Act and, with respect to the latter term,
in accordance with Rule 18f-2 under the 1940 Act.
12. Effective Date and Termination. This Agreement shall
become effective as of the date hereof. This Agreement may be
terminated at any time, without payment of any penalty, by the
Board of LLC, or by a vote of a majority of the outstanding
shares, upon at least sixty (60) days' written notice to Manager.
This Agreement may be terminated by Manager at any time upon at
least sixty (60) days' written notice to LLC. This Agreement
shall terminate automatically in the event of its "assignment" (as
defined in the 1940 Act). Unless terminated as hereinbefore
provided, this Agreement shall continue in effect until June 30,
2000, and thereafter from year to year only so long as such
continuance is specifically approved at least annually (a) by a
majority of those Managers who are not interested persons of Board
or of Manager, voting in person at a meeting called for the
purpose of voting on such approval, and (b) by either the Board of
LLC or by a "vote of a majority of the outstanding shares" of LLC.
13. Ownership of Records; Interparty Reporting. All records
required to be maintained and preserved by LLC pursuant to the
provisions of rules or regulations of the Securities and Exchange
Commission under Section 31(a) of the 1940 Act or other applicable
laws or regulations which are maintained and preserved by Manager
on behalf of LLC and any other records the parties mutually agree
shall be maintained by Manager on behalf of LLC are the property
of LLC and shall be surrendered by Manager promptly on request by
LLC; provided that Manager may at its own expense make and retain
copies of any such records.
LLC shall furnish or otherwise make available to Manager such
copies of the financial statements, proxy statements, reports, and
other information relating to the business and affairs of each
Unitholder in LLC as Manager may, at any time or from time to
time, reasonably require in order to discharge its obligations
under this Agreement.
Manager shall prepare and furnish to LLC statistical data and
other information in such form and at such intervals as LLC may
reasonably request.
14. Non-Liability of Board and Unitholders. Any obligation
of LLC hereunder shall be binding only upon the assets of LLC and
shall not be binding upon any Manager, officer, employee, agent or
Unitholder of LLC. Neither the authorization of any action by the
Board or Unitholders of LLC nor the execution of this Agreement on
behalf of LLC shall impose any liability upon any Manager or any
Unitholder.
15. Use of Manager's Name. LLC may use the name "Stein Roe
_______ LLC" or any other name derived from the name "Stein Roe &
Farnham" only for so long as this Agreement or any extension,
renewal, or amendment hereof remains in effect, including any
similar agreement with any organization which shall have succeeded
to the business of Manager as investment adviser. At such time as
this Agreement or any extension, renewal or amendment hereof, or
such other similar agreement shall no longer be in effect, LLC
will cease to use any name derived from the name "Stein Roe &
Farnham" or otherwise connected with Manager, or with any
organization which shall have succeeded to Manager's business as
investment adviser.
16. References and Headings. In this Agreement and in any
such amendment, references to this Agreement and all expressions
such as "herein," "hereof," and "hereunder" shall be deemed to
refer to this Agreement as amended or affected by any such
amendments. Headings are placed herein for convenience of
reference only and shall not be taken as a part hereof or control
or affect the meaning, construction or effect of this Agreement.
This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original.
Dated: November 20, 1998
STEIN ROE FLOATING RATE LIMITED
LIABILITY COMPANY
Attest: By: THOMAS W. BUTCH
Thomas W. Butch
NICOLETTE D. PARRISH President
Nicolette D. Parrish
Assistant Secretary
STEIN ROE & FARNHAM INCORPORATED
Attest: By: THOMAS W. BUTCH
Thomas W. Butch
President, Mutual Funds
NICOLETTE D. PARRISH division
Nicolette D. Parrish
Assistant Secretary
<PAGE>
AMENDMENT TO MANAGEMENT AGREEMENT BETWEEN
STEIN ROE FLOATING RATE LIMITED LIABILITY COMPANY AND
STEIN ROE & FARNHAM INCORPORATED
This Amendment dated as of August 3, 1999, amends the
Management Agreement dated November 20, 1998 (the "Agreement")
between Stein Roe Floating Rate Limited Liability Company and
Stein Roe & Farnham Incorporated. Paragraph 7 ("Management Fee")
of the Agreement is hereby amended to read as follows:
7. Management Fee. For the services rendered, facilities
provided, and charges assumed and paid by Manager hereunder, LLC
shall pay to Manager an annual fee of 0.45% of the average net
assets of LLC. The management fee shall accrue on each calendar
day, and shall be payable monthly on the first business day of the
next succeeding calendar month. The daily fee accrual shall be
computed by multiplying the fraction of one divided by the number
of days in the calendar year by the applicable annual rate of fee,
and multiplying this product by the net assets of LLC, determined
in the manner established by the Board, as of the close of
business on the last preceding business day on which LLC's net
asset value was determined.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed as of the date first written above.
STEIN ROE FLOATING RATE LIMITED
LIABILITY COMPANY
Attest: By: THOMAS W. BUTCH
Thomas W. Butch
NICOLETTE D. PARRISH President
Nicolette D. Parrish
Assistant Secretary
STEIN ROE & FARNHAM INCORPORATED
By: THOMAS W. BUTCH
Attest: Thomas W. Butch
President, Mutual Funds
NICOLETTE D. PARRISH Division
Nicolette D. Parrish
Assistant Secretary
<PAGE>
AMENDED AND RESTATED
ACCOUNTING AND BOOKKEEPING AGREEMENT
This Agreement is made this 3rd day of August, 1999, by and
between Stein Roe Floating Rate Limited Liability Company, a
Massachusetts business trust, (hereinafter referred to as the
"Fund") and Stein Roe & Farnham Incorporated ("Stein Roe"), a
Delaware corporation.
1. Appointment. The Fund hereby appoints Stein Roe to act as its
agent to perform the services described herein with respect to the
Fund. Stein Roe hereby accepts appointment as the Fund's agent
and agrees to perform the services described herein.
2. Accounting.
(a) Pricing. Stein Roe shall value all securities and other
assets of the Fund, and compute the net asset value per
share of the Fund, at such times and dates and in the
manner and by such methodology as is specified in the then
currently effective prospectus and statement of additional
information for the Fund, and pursuant to such other
written procedures or instructions furnished to Stein Roe
by the Fund. To the extent procedures or instructions
used to value securities or other assets of the Fund under
this Agreement are at any time inconsistent with any
applicable law or regulation, the Fund shall provide Stein
Roe with written instructions for valuing such securities
or assets in a manner which the Fund represents to be
consistent with applicable law and regulation.
(b) Net Income. Stein Roe shall calculate with such frequency
as the Fund shall direct, the net income of the Fund for
dividend purposes and on a per share basis. Such
calculation shall be at such times and dates and in such
manner as the Fund shall instruct Stein Roe in writing.
For purposes of such calculation, Stein Roe shall not be
responsible for determining whether any dividend or
interest accruable to the Fund is or will be actually
paid, but will accrue such dividend and interest unless
otherwise instructed by the Fund.
(c) Capital Gains and Losses. Stein Roe shall calculate gains
or losses of the Fund from the sale or other disposition
of assets as the Fund shall direct.
(d) Yields. At the request of the Fund, Stein Roe shall
compute yield for the Fund for such periods and using such
formula as shall be instructed by the Fund.
(e) Communication of Information. Stein Roe shall provide the
Fund, the Fund's transfer agent and such other parties as
directed by the Fund with the net asset value per share,
the net income per share and yields for the Fund at such
time and in such manner and format and with such frequency
as the parties mutually agree.
(f) Information Furnished by the Fund. The Fund shall furnish
Stein Roe with any and all instructions, explanations,
information, specifications and documentation deemed
necessary by Stein Roe in the performance of its duties
hereunder, including, without limitation, the amounts
and/or written formula for calculating the amounts, and
times of accrual of liabilities and expenses of the Fund.
The Fund shall also at any time and from time to time
furnish Stein Roe with bid, offer and/or market values of
securities owned by the Fund if the same are not available
to Stein Roe from a pricing or similar service designated
by the Fund for use by Stein Roe to value securities or
other assets. Stein Roe shall at no time be required to
commence or maintain any utilization of, or subscriptions
to, any such service which shall be the sole
responsibility and expense of the Fund.
3. Recordkeeping.
(a) Stein Roe shall, as agent for the Fund, maintain and keep
current and preserve the general ledger and other
accounts, books, and financial records of the Fund
relating to activities and obligations under this
Agreement in accordance with the applicable provisions of
Section 31(a) of the General Rules and Regulations under
the Investment Company Act of 1940, as amended (the
"Rules").
(b) All records maintained and preserved by Stein Roe pursuant
to this Agreement which the Fund is required to maintain
and preserve in accordance with the Rules shall be and
remain the property of the Fund and shall be surrendered
to the Fund promptly upon request in the form in which
such records have been maintained and preserved.
(c) Stein Roe shall make available on its premises during
regular business hours all records of the Fund for
reasonable audit, use and inspection by the Fund, its
agents and any regulatory agency having authority over the
Fund.
4. Instructions, Opinion of Counsel, and Signatures.
(a) At any time Stein Roe may apply to a duly authorized agent
of the Fund for instructions regarding the Fund, and may
consult counsel for the Fund or its own counsel, in
respect of any matter arising in connection with this
Agreement, and it shall not be liable for any action taken
or omitted by it in good faith in accordance with such
instructions or with the advice or opinion of such
counsel. Stein Roe shall be protected in acting upon any
such instruction, advice, or opinion and upon any other
paper or document delivered by the Fund or such counsel
believed by Stein Roe to be genuine and to have been
signed by the proper person or persons and shall not be
held to have notice of any change of authority of any
officer or agent of the Fund, until receipt of written
notice thereof from the Fund.
(b) Stein Roe may receive and accept a certified copy of a
vote of the Board of Trustees of the Fund as conclusive
evidence of (i) the authority of any person to act in
accordance with such vote or (ii) any determination or any
action by the Board of Trustees pursuant to its Agreement
and Declaration of Fund as described in such vote, and
such vote may be considered as in full force and effect
until receipt by Stein Roe of written notice to the
contrary.
5. Compensation. The Fund shall reimburse Stein Roe for any and
all out-of-pocket expenses and charges in performing services
under this Agreement. For the services provided under this
Agreement, the Fund shall pay Stein Roe an annual fee, calculated
and paid monthly, equal to $25,000 plus .0025 percent per annum of
the average daily net assets in excess of $50 million. Such fee
shall be paid within thirty days after receipt of monthly invoice.
Stein Roe shall invoice the Fund as soon as practicable after the
end of each calendar month, and the Fund shall promptly pay Stein
Roe the invoiced amount.
6. Confidentiality of Records. Stein Roe agrees not to disclose
any information received from the Fund to any other client of
Stein Roe or to any other person except its employees and agents,
and shall use its best efforts to maintain such information as
confidential. Upon termination of this Agreement, Stein Roe shall
return to the Fund all records in the possession and control of
Stein Roe related to the Fund's activities, other than Stein Roe's
own business records, it being also understood and agreed that any
programs and systems used by Stein Roe to provide the services
rendered hereunder will not be given to the Fund.
7. Liability and Indemnification.
(a) Stein Roe shall not be liable to the Fund for any action
taken or thing done by it or its employees or agents on
behalf of the Fund in carrying out the terms and
provisions of this Agreement if done in good faith and
without negligence or misconduct on the part of Stein Roe,
its employees or agents.
(b) The Fund shall indemnify and hold Stein Roe, and its
controlling persons, if any, harmless from any and all
claims, actions, suits, losses, costs, damages, and
expenses, including reasonable expenses for counsel,
incurred by it in connection with its acceptance of this
Agreement, in connection with any action or omission by it
or its employees or agents in the performance of its
duties hereunder to the Fund, or as a result of acting
upon instructions believed by it to have been executed by
a duly authorized agent of the Fund or as a result of
acting upon information provided by the Fund in form and
under policies agreed to by Stein Roe and the Fund,
provided that: (i) this indemnification shall not apply
to actions or omissions constituting negligence or
misconduct on the part of Stein Roe or its employees or
agents, including but not limited to willful misfeasance,
bad faith, or gross negligence in the performance of their
duties, or reckless disregard of their obligations and
duties under this Agreement; and (ii) Stein Roe shall give
the Fund prompt notice and reasonable opportunity to
defend against any such claim or action in its own name or
in the name of Stein Roe.
(c) Stein Roe shall indemnify and hold harmless the Fund from
and against any and all claims, demands, expenses and
liabilities which the Fund may sustain or incur arising
out of, or incurred because of, the negligence or
misconduct of Stein Roe or its agents or contractors, or
the breach by Stein Roe of its obligations under this
Agreement, provided that: (i) this indemnification shall
not apply to actions or omissions constituting negligence
or misconduct on the part of the Fund or its other agents
or contractors and (ii) the Fund shall give Stein Roe
prompt notice and reasonable opportunity to defend against
any such claim or action in its own name or in the name of
the Fund.
8. Further Assurances. Each party agrees to perform such further
acts and execute such further documents as are necessary to
effectuate the purposes hereof.
9. Dual Interests. It is understood and agreed that some person
or persons may be trustees, officers, or shareholders of both the
Fund and Stein Roe, and that the existence of any such dual
interest shall not affect the validity hereof or of any
transactions hereunder except as otherwise provided by specific
provision of applicable law.
10. Amendment and Termination. This Agreement may be modified or
amended from time to time, or terminated, by mutual agreement
between the parties hereto and may be terminated by at least one
hundred eighty (180) days' written notice given by one party to
the other. Upon termination hereof, the Fund shall pay to Stein
Roe such compensation as may be due from it as of the date of such
termination, and shall reimburse Stein Roe for its costs,
expenses, and disbursements payable under this Agreement to such
date. In the event that, in connection with termination, a
successor to any of the duties or responsibilities of Stein Roe
hereunder is designated by the Fund by written notice to Stein
Roe, Stein Roe shall promptly upon such termination and at the
expense of the Fund, deliver to such successor all relevant books,
records, and data established or maintained by Stein Roe under
this Agreement and shall cooperate in the transfer of such duties
and responsibilities, including provision, at the expense of the
Fund, for assistance from Stein Roe personnel in the establishment
of books, records, and other data by such successor.
11. Assignment. Any interest of Stein Roe under this Agreement
shall not be assigned or transferred either voluntarily or
involuntarily, by operation of law or otherwise, without prior
written notice to the Fund.
12. Use of Affiliated Companies and Subcontractors. In connection
with the services to be provided by Stein Roe under this
Agreement, Stein Roe may, to the extent it deems appropriate, and
subject to compliance with the requirements of applicable laws and
regulations and upon receipt of approval of the Trustees, make use
of (i) its affiliated companies and their directors, trustees,
officers, and employees and (ii) subcontractors selected by Stein
Roe, provided that Stein Roe shall supervise and remain fully
responsible for the services of all such third parties in
accordance with and to the extent provided by this Agreement. All
costs and expenses associated with services provided by any such
third parties shall be borne by Stein Roe or such parties.
13. Notice. Any notice under this Agreement shall be in writing,
addressed and delivered or sent by registered mail, postage
prepaid to the other party at such address as such other party may
designate for the receipt of such notices. Until further notice
to the other parties, it is agreed that the address of the Fund
and Stein Roe is One South Wacker Drive, Chicago, Illinois 60606,
Attention: Secretary.
14. Non-Liability of Trustees and Shareholders. Any obligation of
the Fund hereunder shall be binding only upon the assets of the
Fund, as provided in the Agreement and Declaration of Fund of the
Fund, and shall not be binding upon any trustee, officer,
employee, agent or shareholder of the Fund. Neither the
authorization of any action by the Trustees or the shareholders of
the Fund, nor the execution of this Agreement on behalf of the
Fund shall impose any liability upon any trustee or any
shareholder. Nothing in this Agreement shall protect any trustee
against any liability to which such trustee would otherwise be
subject by willful misfeasance, bad faith or gross negligence in
the performance of his duties, or reckless disregard of his
obligations and duties under this Agreement.
15. References and Headings. In this Agreement and in any such
amendment, references to this Agreement and all expressions such
as "herein," "hereof," and "hereunder," shall be deemed to refer
to this Agreement as amended or affected by any such amendments.
Headings are placed herein for convenience of reference only and
shall not be taken as part hereof or control or affect the
meaning, construction or effect of this Agreement. This Agreement
may be executed in any number of counterparts, each of which shall
be deemed an original.
16. Governing Law. This Agreement shall be governed by the laws
of the State of Illinois.
IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed as of the day and year first above written.
STEIN ROE FLOATING RATE LIMITED
LIABILITY COMPANY
Attest: By: THOMAS W. BUTCH
Thomas W. Butch
NICOLETTE D. PARRISH President
Nicolette D. Parrish
Assistant Secretary
STEIN ROE & FARNHAM INCORPORATED
By: THOMAS W. BUTCH
Attest: Thomas W. Butch
President, Mutual Funds
NICOLETTE D. PARRISH Division
Nicolette D. Parrish
Assistant Secretary
