EX-99 3 exh.txt 77C Matters submitted to a vote of security holders Colonial Intermediate High Income Fund (a) On September 26, 2001, a Special Meeting of Shareholders of Colonial Intermediate High Income Fund (Fund) was held to approve the following item, as described in the Proxy Statement for the Meeting. On July 16, 2001, the record date for the Meeting, the Fund had 18,786,450.37 outstanding shares of beneficial interest. The vote cast at the Meeting was as follows: (b)1. Election of eleven Board of Trustees: For Withheld Douglas A. Hacker 18,421,998.00 364,452.36 Janet Langford Kelly 18,421,998.00 364,452.36 Richard W. Lowry 18,421,998.00 364,452.36 Salvatore Macera 18,409,902.00 376,548.36 William E. Mayer 18,419,282.00 367,168.36 Charles R. Nelson 18,421,998.00 364,452.36 John J. Neuhauser 18,421,998.00 364,452.36 Joseph R. Palombo 18,419,282.00 367,168.36 Thomas E. Stitzel 18,426,570.00 359,880.36 Thomas C. Theobald 18,421,998.00 364,452.36 Anne-Lee Verville 18,421,998.00 364,452.36 (b) Not applicable (c)(1) To approve a new Investment Advisory Agreement For: 18,786,450.37 shares of beneficial interest being a majority of the shares represented at the Meeting Against: 264,656.19 shares of beneficial interest Abstain 245,127.86 shares of beneficial interest (d) not applicable (proxy statement incorporated herein by reference to Accession number 0000950135-01-502257) ITEM 77L Change in Accounting Principles and Practices As required, effective January 1, 2001, Colonial Intermediate High Income Fund, has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began amortizing and accreting all premiums and discounts on debt securities as required for adherence to generally accepted accounting principles. The financial statements and notes to financial statements have been adjusted accordingly for this fund, which was materially impacted by this change. 77Q1 - Exhibits - Management Agreement COLONIAL INTERMEDIATE HIGH INCOME FUND MANAGEMENT AGREEMENT AGREEMENT dated as of November 1, 2001, between COLONIAL INTERMEDIATE HIGH INCOME FUND, a Massachusetts business trust ("Fund"), and COLONIAL MANAGEMENT ASSOCIATES, INC., a Massachusetts corporation ("Advisor"). In consideration of the promises and covenants herein, the parties agree as follows: 1. The Advisor will manage the investment of the assets of the Fund in accordance with its investment policies and will perform the other services herein set forth, subject to the supervision of the Board of Trustees of the Fund. 2. In carrying out its investment management obligations, the Advisor shall: (a) evaluate such economic, statistical and financial information and undertake such investment research as it shall believe advisable; (b) purchase and sell securities and other investments for the Fund in accordance with the procedures approved by the Board of Trustees; and (c) report results to the Board of Trustees. 3. The Advisor shall furnish at its expense the following: (a) office space, supplies, facilities and equipment; (b) executive and other personnel for managing the affairs of the Fund (including preparing financial information of the Fund and reports and tax returns required to be filed with public authorities, but exclusive of those related to custodial, transfer, dividend and plan agency services, determination of net asset value and maintenance of records required by Section 31(a) of the Investment Company Act of 1940, as amended, and the rules thereunder (1940 Act)); and (c) compensation of Trustees who are directors, officers, partners or employees of the Advisor or its affiliated persons (other than a registered investment company). 4. The Advisor shall be free to render similar services to others so long as its services hereunder are not impaired thereby. 5. The Fund shall pay the Advisor monthly a fee at the annual rate of 0.65% of the average weekly net assets of the Fund. In addition, the Fund shall pay the Advisor monthly a fee equal to 20% of the Fund's Leverage Income; provided, however, if the Fund's Leverage Income is less than zero then the Advisor shall pay the Fund 20% of the Fund's Leverage Income. "Leverage Income" shall mean: (gross income of the (% of Fund's average (interest and other Fund for such daily total assets borrowing expenses month) x represented by -- associated with leverage as of the leverage for such last day of such month) month) 6. If the operating expenses of the Fund for any fiscal year exceed the most restrictive applicable expense limitation for any state in which shares are sold, the Advisor's fee shall be reduced by the excess but not to less than zero. 7. This Agreement shall become effective as of the date of its execution, and (a) unless otherwise terminated, shall continue until July 31, 2003 and from year to year thereafter so long as approved annually in accordance with the 1940 Act; (b) may be terminated without penalty on sixty days' written notice to the Advisor either by vote of the Board of Trustees of the Fund or by vote of a majority of the outstanding voting securities of the Fund; (c) shall automatically terminate in the event of its assignment; and (d) may be terminated without penalty by the Advisor on sixty days' written notice to the Fund. 8. This Agreement may be amended in accordance with the 1940 Act. 9. For the purpose of the Agreement, the terms "vote of a majority of the outstanding voting securities", "affiliated person" and "assignment" shall have their respective meanings defined in the 1940 Act and exemptions and interpretations issued by the Securities and Exchange Commission under the 1940 Act. 10. In the absence of willful misfeasance, bad faith or gross negligence on the part of the Advisor, or reckless disregard of its obligations and duties hereunder, the Advisor shall not be subject to any liability to the Fund, to any shareholder of the Fund or to any other person, firm or organization, for any act or omission in the course of, or connected with, rendering services hereunder. COLONIAL INTERMEDIATE HIGH INCOME FUND By: ____________________________________________ William J. Ballou Secretary COLONIAL MANAGEMENT ASSOCIATES, INC. By: ____________________________________________ William J. Ballou Senior Vice President A copy of the document establishing the Fund is filed with the Secretary of The Commonwealth of Massachusetts. This Agreement is executed by officers not as individuals and is not binding upon any of the Trustees, officers or shareholders of the Fund individually but only upon the assets of the Fund. 77Q- Exhibits - Accountants Report on Internal Control [PricewaterhouseCoopers logo] PricewaterhouseCoopers LLP 160 Federal Street Boston, MA 02110-9862 Report of Independent Accountants To the Board of Trustees and Shareholders of Colonial Intermediate High Income Fund In planning and performing our audits of the financial statements of Colonial Intermediate High Income Fund (the "Fund") for the year ended October 31, 2001, we considered its internal control, including control activities for safeguarding securities, in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and to comply with the requirements of Form N-SAR, and not to provide assurance on internal control. The management of the Fund is responsible for establishing and maintaining internal control. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of controls. Generally, controls that are relevant to an audit pertain to the entity's objective of preparing financial statements for external purposes that are fairly presented in conformity with generally accepted accounting principles. Those controls include the safeguarding of assets against unauthorized acquisition, use or disposition. Because of inherent limitations in internal control, errors or fraud may occur and not be detected. Also, projection of any evaluation of internal control to future periods is subject to the risk that it may become inadequate because of changes in conditions or that the effectiveness of the design and operation may deteriorate. Our consideration of internal control would not necessarily disclose all matters in internal control that might be material weaknesses under standards established by the American Institute of Certified Public Accountants. A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements caused by error or fraud in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. However, we noted no matters involving internal control and its operation, including controls for safeguarding securities, that we consider to be material weaknesses as defined above as of October 31, 2001. This report is intended solely for the information and use of the Board of Trustees, management and the Securities and Exchange Commission and is not intended to be and should not be used by anyone other than these specified parties. PricewaterhouseCoopers LLP December 10, 2001