SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-14
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
INTERMEDIATE MUNICIPAL TRUST
(Exact Name of Registrant as Specified in Charter)
(412) 288-1900
(Area Code and Telephone Number)
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
(Address of Principal Executive Offices)
JOHN W. MCGONIGLE, ESQUIRE
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
(Name and Address of Agent for Service)
Copy to:
Matthew G. Maloney, Esquire
Dickstein Shapiro Morin & Oshinsky LLP
2101 L Street, N.W.
Washington, D.C. 20037
It is proposed that this filing will become effective on August 28,
1996 pursuant to Rule 488. (Approximate Date of Proposed Public Offering)
An indefinite amount of the Registrant's securities has been registered
under the Securities Act of 1933 pursuant to Rule 24f-2 under The
Investment Company Act of 1940. In reliance upon such Rule, no filing fee
is being paid at this time. A Rule 24f-2 notice for the Registrant for the
year ended May 31, 1996 was filed on July 15, 1996.
CROSS REFERENCE SHEET
Pursuant to Item 1(a) of Form N-14 Showing Location in Prospectus of
Information Required by
Form N-14
Item of Part A of Form N-14 and Caption Caption or Location in Prospectus
1. Beginning of Registration Statement
and Outside Front Cover Page of
Prospectus ................ Cross Reference Sheet; Cover Page
2. Beginning and Outside
Back Cover Page of Prospectus Table of Contents
3. Fee Table, Synopsis Information
and Risk Factors .......... Summary; Risk Factors
4. Information About the
Transaction ............... Information About the Reorganization
5. Information About the Registrant Information About The
Starburst Funds, The Starburst Municipal
Income Fund, Intermediate Municipal
Trust, and Federated Intermediate
Municipal Trust
6. Information About the Company
Being Acquired ............ Information About The Starburst Funds,
The Starburst Municipal Income Fund,
Intermediate Municipal Trust, and
Federated Intermediate Municipal Trust
7. Voting Information ........ Voting Information
8. Interest of Certain Persons and Experts Not Applicable
9. Additional Information Required
for Reoffering by Persons Deemed
to be Underwriters ........ Not Applicable
September 3, 1996
RE: THE STARBURST MUNICIPAL INCOME FUND
Dear Valued Compass Brokerage, Inc. Customer,
Enclosed are very important materials relating to your investment in
The Starburst Municipal Income Fund. As described in these materials, the
Board of Trustees of The Starburst Funds has unanimously recommended a tax-
free exchange of shares of The Starburst Municipal Income Fund for shares
of Federated Intermediate Municipal Trust.
The enclosed materials include:
o A letter from an officer of The Starburst Funds describing the
reasons for the recommendation of the Board of Trustees,
including the identical investment objectives of the two Funds
and the economies of scale and potentially lower expense ratios
that are likely to be realized by the exchange of shares of
Funds.
o A Notice of a Special Meeting of the Shareholders of The
Starburst Municipal Income Fund to be held on October 22, 1996 to
consider the tax-free transfer of assets.
o A Prospectus/Proxy Statement that describes, among other things,
the proposed plan of reorganization of The Starburst Municipal
Income Fund and various fees and expenses, and compares various
important aspects of The Starburst Municipal Income Fund and
Federated Intermediate Municipal Trust including applicable fees,
charges and expenses and exchange privileges.
o The Prospectus for Federated Intermediate Municipal Trust, which
contains more complete information concerning the investment
objectives, management fees, risks and expenses associated with
Federated Intermediate Municipal Trust.
o A proxy voting card (with a postage-paid return envelope).
As a shareholder in The Starburst Municipal Income Fund you have the
right to vote on the proposed transfer of assets. You should read the
enclosed materials carefully before you vote. Your vote, and your prompt
action, are IMPORTANT.
Compass Brokerage, Inc. is an NASD member broker-dealer and an
affiliate of Compass Bank. Compass Brokerage's parent company, Compass
Bank, serves as the investment adviser and custodian of The Starburst
Municipal Income Fund. The investment adviser and custodian of Federated
Intermediate Municipal Trust are not affiliated with Compass Brokerage,
Inc. or Compass Bank. If the transfer of assets is consummated, Compass
Brokerage will receive periodic compensation from Federated Intermediate
Municipal Trust for various shareholder services with respect to accounts
of Compass Brokerage's customers invested in Federated Intermediate
Municipal Trust. Federated Intermediate Municipal Income Trust is
distributed by Federated Securities Corp. (a subsidiary of Federated
Investors), which also is the distributor of The Starburst Municipal Income
Fund. Neither Federated Securities Corp. nor Federated Investors is
affiliated with Compass Bank, Compass Brokerage, Inc. or Compass
Bancshares, Inc.
Compass Brokerage representatives will be pleased to answer your
questions and to assist you in understanding the voting process and how to
exercise your rights as a shareholder. Our representatives may be reached
at 1-800-239-1930 between the hours of 8:30 a.m. and 5:00 p.m., CDT.
Please do not hesitate to call.
Sincerely,
Randy Reynolds
President, Compass Brokerage, Inc.
Shares of The Starburst Funds and shares of Federated Intermediate
Municipal Trust are not deposits or obligations of, or guaranteed or
endorsed by Compass Brokerage, Compass Bank, Compass Bancshares, Inc. or
any other of their affiliates or any other bank or financial institution,
and are not insured by the Federal Deposit Insurance Corporation (FDIC),
the Federal Reserve Board, or any federal agency. In addition, shares of
The Starburst Funds and shares of Federated Intermediate Municipal Trust
involve risks, including the possible loss of the principal amount
invested.
THE STARBURST FUNDS
VERY IMPORTANT
ENCLOSED IS AN IMPORTANT PROXY STATEMENT AND PROXY VOTE CARD
WHICH REQUIRES YOUR SIGNATURE.
THEY RELATE TO THE TRANSFER OF ASSETS OF
THE STARBURST MUNICIPAL INCOME FUND
TO FEDERATED INTERMEDIATE MUNICIPAL TRUST.
PLEASE REVIEW AND CAST YOUR VOTE TODAY!
Dear Valued Shareholder,
We're writing you today to inform you of a recommended change which
affects The Starburst Municipal Income Fund. Namely, the Board of Trustees
has unanimously recommended a tax-free transfer of assets of The Starburst
Municipal Income Fund into Federated Intermediate Municipal Trust.
SIMILAR INVESTMENT OBJECTIVES
In recommending this transfer of assets, the Board of Trustees
considered the fact that Federated Intermediate Municipal Trust has the
same investment objective as that of The Starburst Municipal Income Fund.
Both Funds seek current income exempt from federal regular income tax.
POTENTIAL ECONOMIES OF SCALE AND LOWER EXPENSE RATIOS
The Board of Trustees has also concluded that economies of scale and
potentially lower expense ratios are likely to be realized by transferring
the assets of The Starburst Municipal Income Fund into Federated
Intermediate Municipal Trust.
Currently, the projected annual expenses of Federated Intermediate
Municipal Trust are at 0.57%, which is lower than the 0.92% currently
applicable to shares of The Starburst Municipal Income Fund.
NO TAXABLE CONSEQUENCES -- EXCHANGE PRIVILEGES
Because this transfer of assets is tax-free, there are no taxable
consequences for you. And you'll continue to enjoy exchanges among The
Starburst Funds.
PLEASE VOTE TODAY!
For all of the reasons cited in this letter, the Board of Trustees has
unanimously voted to recommend that you vote "FOR" this transfer of assets.
Because shareholder approval is required for this Fund reorganization,
your individual vote is of critical importance. This gives you an
important say in the management of your investment.
A voting card is enclosed. It is essential that you mark your card in
the appropriate space and return it in the postage-paid envelope provided.
Once shareholder approval has been received, the reorganization of The
Starburst Municipal Income Fund into Federated Intermediate Municipal Trust
is scheduled to occur on or about October 25, 1996.
If a majority of shareholders do not return their votes, additional
proxy statements must be sent out, costing money as well as valuable time.
So please, take a few moments now to fill out and return the enclosed proxy
voting card, while the material is at hand.
Before voting, please refer to the enclosed prospectus for Federated
Intermediate Municipal Trust for more complete details on its investment
objective, management fees, risks and expenses.
If you have any additional questions on the voting process, or on the
Fund, please call
1-800-239-1930. A friendly and experienced shareholders' services
representative will be standing by between 8:30 a.m. and 5:00 p.m., CDT.
Thank you for your prompt attention to this important matter.
Sincerely,
The Starburst Funds
J. Christopher Donahue
President
The Starburst Funds and Intermediate Municipal Trust are distributed by
Federated Securities Corp.
Shares of The Starburst Funds and shares of Intermediate Municipal Trust
are not deposits or obligations of, or guaranteed or endorsed by Compass
Bank, Compass Bancshares, Inc. or any of their affiliates, or any other
bank or financial institution, and are not insured by the Federal Deposit
Insurance Corporation ("FDIC"), the Federal Reserve Board or any federal
agency. In addition, shares of The Starburst Funds and shares of
Intermediate Municipal Trust involve risks, including possible loss of
principal invested.
FEDERATED INVESTORS
Federated Investors Tower
Pittsburgh, PA 15222-3779
Federated Securities Corp.
is a subsidiary of Federated Investors. Federated Securities
Corp. and Federated Investors are not affiliated with Compass
Bank or Compass Bancshares, Inc.
THE STARBURST FUNDS
FEDERATED INVESTORS TOWER
PITTSBURGH, PENNSYLVANIA 15222-3779
NOTICE OF A SPECIAL MEETING OF SHAREHOLDERS
TO SHAREHOLDERS OF THE STARBURST MUNICIPAL INCOME FUND:
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders of The
Starburst Municipal Income Fund ("Municipal Income Fund"), a portfolio of
The Starburst Funds ("Trust"), will be held at 2:00 p.m. on October 22,
1996 at Federated Investors Tower, 19th Floor, Pittsburgh, Pennsylvania
15222-3779 for the following purposes:
1. To approve or disapprove a proposed Agreement and Plan of
Reorganization between Municipal Income Fund and Federated
Intermediate Municipal Trust ("Federated Intermediate"), a
portfolio of Intermediate Municipal Trust, whereby Federated
Intermediate would acquire all of the assets of Municipal
Income Fund in exchange for Federated Intermediate shares to
be distributed pro rata by Municipal Income Fund to its
shareholders in complete liquidation and termination of
Municipal Income Fund; and
2. To transact such other business as may properly come before
the meeting or any adjournment thereof.
By Order of the Board of Trustees,
Dated: September 3, 1996 John W. McGonigle
Secretary
Shareholders of record at the close of business August 26, 1996 are
entitled to vote at the meeting. Whether or not you plan to attend the
meeting, please sign and return the enclosed proxy card. Your vote is
important.
PROSPECTUS/PROXY STATEMENT
SEPTEMBER 3, 1996
ACQUISITION OF THE ASSETS OF
THE STARBURST MUNICIPAL INCOME FUND,
(A Portfolio of THE STARBURST FUNDS)
BY AND IN EXCHANGE FOR SHARES OF
FEDERATED INTERMEDIATE MUNICIPAL TRUST,
(A Portfolio of INTERMEDIATE MUNICIPAL TRUST)
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
Telephone Number: 1-800-341-7400
Prospectus/Proxy Statement describes the proposed Agreement and Plan of
anization (the "Plan") whereby Federated Intermediate Municipal Trust
erated Intermediate"), a portfolio of Intermediate Municipal Trust would
re all of the assets of The Starburst Municipal Income Fund ("Municipal
e Fund"), a portfolio of The Starburst Funds in exchange for Federated
mediate shares to be distributed pro rata by Municipal Income Fund to its
TO SECURE THE LARGEST POSSIBLE REPRESENTATION AND TO SAVE THE EXPENSE OF
FURTHER MAILINGS, PLEASE MARK YOUR PROXY CARD, SIGN IT, AND RETURN IT IN
THE ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED
STATES. YOU MAY REVOKE YOUR PROXY AT ANY TIME AT OR BEFORE THE MEETING OR
VOTE IN PERSON IF YOU ATTEND THE MEETING.
holders in complete liquidation and dissolution of Municipal Income Fund.
result of the Plan, each shareholder of Municipal Income Fund will become
wner of Federated Intermediate shares having a total net asset value equal
e total net asset value of his or her holdings in Municipal Income Fund.
ipal Income Fund and Federated Intermediate are referred to, collectively,
e "Funds."
tarburst Funds is an open-end management investment company which currently
des four portfolios, each of which has a distinct investment objective. The
tment objective of Municipal Income Fund is to provide current income
t from federal regular income tax. Intermediate Municipal Trust is an open-
anagement investment company which currently includes three portfolios,
of which has a distinct investment objective. The investment objective of
ated Intermediate is to provide current income exempt from federal regular
e tax. For a comparison of the investment policies of the Funds, see
ary-Investment Objectives, Policies and Limitations".
Prospectus/Proxy Statement should be retained for future reference. It sets
concisely the information about Intermediate Municipal Trust and Federated
mediate that a prospective investor should know before investing in
ated Intermediate. This Prospectus/Proxy Statement is accompanied by the
ectus of Federated Intermediate dated July 31, 1996, which is incorporated
n by reference. The Prospectus of Municipal Income Fund dated December 31,
and the Statements of Additional Information for Federated Intermediate
unicipal Income Fund, dated July 31, 1996 and December 31, 1995,
ctively (relating to the Prospectuses of Federated Intermediate and
ipal Income Fund, respectively, of the same date) and the Statement of
ional Information dated September 3, 1996 (relating to this
ectus/Proxy Statement) containing additional information have been filed
the Securities and Exchange Commission and are incorporated herein by
ence. Copies of the Statements of Additional Information may be obtained
ut charge by calling the Funds at the telephone number shown above.
HARES OFFERED BY THIS PROSPECTUS/PROXY STATEMENT ARE NOT DEPOSITS OR
ATIONS OF COMPASS BANK, COMPASS BANCSHARES, INC. OR ANY OF ITS AFFILIATES,
ANY BANK, ARE NOT ENDORSED OR GUARANTEED BY COMPASS BANK, COMPASS
HARES, INC., OR ANY OF ITS AFFILIATES, OR BY ANY BANK AND ARE NOT INSURED
E FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY
GOVERNMENT AGENCY. INVESTMENT IN THESE SHARES INVOLVES INVESTMENT RISKS,
DING THE POSSIBLE LOSS OF PRINCIPAL.
SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
NGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
XCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
NAL OFFENSE.
TABLE OF CONTENTS
SUMMARY................................................. 1
RISK FACTORS............................................ 6
INFORMATION ABOUT THE REORGANIZATION.................... 6
INFORMATION ABOUT THE STARBURST FUNDS, INTERMEDIATE, MUNICIPAL TRUST,
FEDERATED INTERMEDIATE, AND MUNICIPAL INCOME FUND....... 9
VOTING INFORMATION...................................... 9
AGREEMENT AND PLAN OF REORGANIZATION EXHIBIT A
SUMMARY
ABOUT THE PROPOSED REORGANIZATION
The Board of Trustees of The Starburst Funds has voted to recommend to
shareholders of Municipal Income Fund the approval of a Plan whereby
Federated Intermediate would acquire all of the assets of Municipal Income
Fund in exchange for shares of Federated Intermediate to be distributed pro
rata by Municipal Income Fund to its shareholders in complete liquidation
and termination of Municipal Income Fund (the "Reorganization"). As a
result of the Reorganization, each shareholder of Municipal Income Fund
will become the owner of Federated Intermediate shares having a total net
asset value equal to the total net asset value of his or her holdings in
Municipal Income Fund on the date of the Reorganization, i.e., the Closing
Date.
As a condition to the Reorganization transactions, Intermediate Municipal
Trust and The Starburst Funds will receive an opinion of counsel that the
Reorganization will be considered a tax-free "reorganization" under
applicable provisions of the Internal Revenue Code so that no gain or loss
will be recognized by either the Federated Intermediate or Municipal Income
Fund or their shareholders. The opinion of counsel also will state that the
tax basis of the Federated Intermediate shares received by Municipal Income
Fund shareholders will be the same as the tax basis of their shares in
Municipal Income Fund.
In recommending the Reorganization, the Boards of Trustees of The Starburst
Funds and Intermediate Municipal Trust considered the cost structure,
market presence and performance of Municipal Income Fund and have concluded
that economies of scale, and potentially lower expense ratios, could be
realized by transferring the assets of Municipal Income Fund into
Intermediate Municipal Trust.
The following discussion compares certain key aspects of the Funds.
SUMMARY OF PORTFOLIO EXPENSES
SHAREHOLDER TRANSACTION EXPENSES
Combined
Municipal Federated
Municipal/
Income Intermediate Federated
Fund
-------
Intermediate Fund
Maximum Sales Charge Imposed on Purchases (as a percentage of offering
price) ...................... 2.50% None None
Maximum Sales Charge Imposed on Reinvested Dividends (as a percentage of
offering price) ............. None None None
Contingent Deferred Sales Charge (as a percentage of original purchase
price or redemption proceeds, as applicable) None None None
Redemption Fees (as a percentage of amount redeemed, if applicable)
............................None None None
Exchange Fee.................. None None None
ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
Combined
Municipal Federated Municipal/
Income Intermediate
Federated
Fund
Intermediate Fund
Management Fee (after waiver)(1) 0.00% 0.36% 0.36%
12b-1 Fee (after waiver)(2)... 0.06% None None
Total Other Expenses (after waiver)(3) 0.86% 0.21% 0.21%
Shareholder Service Fee (after waiver)(4) None 0.06% 0.06%
Total Fund Operating Expenses (5) 0.92% 0.57% 0.57%
(1)The management fee has been reduced to reflect the voluntary waiver of
the management fee. The adviser can terminate this voluntary waiver at
any time at its sole discretion. The maximum management fee for
Municipal Income is 0.75% and for Federated Intermediate is 0.40%.
(2)Under the Municipal Income Fund's rule 12b-1 Distribution Plan, the
Municipal Income Fund can pay the distributor up to 0.25% as a 12b-1
fee. The 12b-1 fee has been reduced to reflect the voluntary waiver of
compensation by the distributor. The distributor can terminate this
voluntary waiver at any time at its sole discretion.
(3)Total Other Expenses for the Municipal Income Fund would have been 0.99
% absent the voluntary waiver by the administrator and custodian. The
administrator and custodian can terminate these voluntary waivers at
any time at their sole discretion.
(4)The maximum shareholder services fee is 0.25%.
(5)Total Fund Operating Expenses for the Municipal Income Fund, Federated
Intermediate, and Combined Municipal/Federated Intermediate would have
been 2.00%, 0.81% and 0.81%, respectively, absent the voluntary waivers
described in notes (1), (2), (3) and (4) above.
THE PURPOSE OF THIS TABLE IS TO ASSIST AN INVESTOR IN UNDERSTANDING
THE VARIOUS COSTS AND EXPENSES THAT A SHAREHOLDER OF THE FUNDS WILL BEAR,
EITHER DIRECTLY OR INDIRECTLY. WIRE-TRANSFERRED REDEMPTIONS OF LESS THAN
$5,000 MAY BE SUBJECT TO ADDITIONAL FEES.
Combined
Municipal Federated Municipal/
Income Intermediate
Federated
EXAMPLE Fund Intermediate Fund
You would pay the following expenses on a $1,000 investment assuming (1) 5%
annual return and (2) redemption at the end of each time period.
1 Year........................ $34 $6 $6
3 Years....................... $54 $18 $18
5 Years....................... $75 $32 $32
10 Years...................... $135 $71 $71
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
INVESTMENT OBJECTIVES, POLICIES, AND LIMITATIONS
The investment objective of both Federated Intermediate and Municipal
Income Fund is current income exempt from federal regular income tax.
Each Fund pursues its respective investment objective by investing at least
80% of its net assets in a diversified portfolio of municipal securities.
Federated Intermediate pursues its investment objective by investing at
least 80% of its net assets in a diversified portfolio of municipal
securities with a dollar-weighted average portfolio maturity of not less
than three or more than ten years. Municipal Income Fund attempts to
achieve its investment objective by investing at least 80% of its net
assets in a diversified portfolio of municipal securities whose average
weighted maturity is fifteen years or less. The municipal securities in
which the Funds invest are (i) debt obligations, including industrial
development bonds, issued by or on behalf of any state, territory, or
possession of the United States, including the District of Columbia, or any
political subdivision of any of these; and (ii) participation interests in
any of the obligations listed in (i). The municipal securities in which the
Funds invest are:
rated within the three highest ratings for municipal securities by
Moody's Investors Service, Inc. ("Moody's") or by Standard & Poor's
Ratings Group ("S&P");
guaranteed at the time of purchase by the U.S. government as to the
payment of principal and interest;
fully collateralized by an escrow of U.S. government securities or, in
the case of Federated Intermediate, other securities acceptable to its
adviser;
in the case of Federated Intermediate, rated at the time of purchase
within Moody's highest short-term municipal obligation rating
(MIG1/VMIG1) or Moody's highest municipal commercial paper rating
(PRIME-1) or S&P's highest municipal commercial paper rating (SP-1);
in the case of Federated Intermediate, unrated if, at the time of
purchase, other municipal securities of that issuer are rated A or
better by Moody's or S&P; or
unrated if determined to be of equivalent quality to one of the
foregoing rating categories by the Fund's investment adviser.
Both Funds may enter into repurchase agreements and may purchase securities
on a when-issued or delayed delivery basis. Both Funds may purchase put
options on municipal securities in an amount up to 5% of the value of total
assets in the case of Municipal Income Fund and up to 10% of the value of
total assets in the case of Federated Intermediate.
Federated Intermediate and Municipal Income Fund are subject to certain
investment limitations. The investment limitations of the two Funds are
substantially identical. These limitations include provisions that, in
effect, prohibit either fund from: selling any securities short or
purchasing any securities on margin; issuing senior securities, except that
each Fund may borrow up to one-third of the value of its total assets;
mortgaging, pledging, or hypothecating any assets except to secure
permitted borrowings; and lending any of their respective assets, except,
in the case of Municipal Income Fund, portfolio securities up to one-third
of the value of its total assets; or investing more than 15% of the value
of their respective net assets in illiquid securities.
Reference is hereby made to the Prospectus and the Statement of Additional
Information of Federated Intermediate dated July 31, 1996, and the
Prospectus and Statement of Additional Information of Municipal Income
Fund, dated December 31, 1995, which set forth in full the investment
objectives, policies and investment limitations of both funds and which are
incorporated by reference herein.
DISTRIBUTION ARRANGEMENTS
Federated Securities Corp. is the principal distributor for shares of
Intermediate Municipal Trust and The Starburst Funds. Under a distribution
plan adopted in accordance with Investment Company Act Rule 12b-1 (the
"12b-1 Plan"), Municipal Income Fund may pay to Federated Securities Corp.
an amount computed at an annual rate of 0.25 of 1% of its average daily net
assets to finance any activity which is principally intended to result in
the sale of shares subject to the 12b-1 Plan. Federated Intermediate has no
12b-1 Plan and will not, as a result of the Reorganization, assume any
liabilities or make any voluntary reimbursements on account of Municipal
Income Fund's 12b-1 Plan.
ADVISORY AND OTHER FEES
Federated Management, a Delaware business trust and a subsidiary of
Federated Investors, serves as investment adviser to Federated
Intermediate. Federated Management receives an annual investment advisory
fee equal to .40 of 1% of Federated Intermediate's average daily net
assets. Under the investment advisory contract, Federated Management will
reimburse Federated Intermediate the amount, limited to the amount of the
advisory fee, by which Federated Intermediate's aggregate annual operating
expenses, including its investment advisory fee, but excluding interest,
taxes, brokerage commissions, insurance premiums, expenses of registering
and qualifying Federated Intermediate and its shares under federal and
state laws and regulations, expenses of withholding taxes, and
extraordinary expenses, exceed .45 of 1% of its average daily net assets.
This does not include reimbursement to Federated Intermediate of any
expenses incurred by shareholders who use the transfer agent's
subaccounting facilities. Because of this undertaking, Federated
Management receives less than its calculated gross investment advisory fee.
Federated Management has also undertaken to reimburse Federated
Intermediate for operating expenses in excess of limitations established by
certain states.
Compass Bank, an Alabama banking corporation and a wholly-owned subsidiary
of Compass Bancshares, Inc., a Delaware corporation ("Bancshares"), is the
investment adviser (the "Municipal Income Fund Adviser") to Municipal
Income Fund. The Municipal Income Fund Adviser is entitled to receive an
annual investment advisory fee equal to 0.75 of 1% of Municipal Income
Fund's average daily net assets. The advisory fee agreed to be paid by
Municipal Income Fund, while higher than the advisory fee paid by other
mutual funds in general, is comparable to the fee paid by many mutual funds
with similar objectives and policies. See also the "Summary of Portfolio
Expenses." The Municipal Income Fund Adviser has undertaken to reimburse
Municipal Income Fund, up to the amount of its advisory fee, for operating
expenses in excess of limitations established by certain states. The
Municipal Income Fund Adviser may further voluntarily choose to reimburse a
portion of its fee and certain expenses of Municipal Income Fund. Any
voluntary agreement to reimburse expenses may be terminated by the
Municipal Income Fund Adviser at any time in its discretion. to date the
Municipal Income Fund Adviser has waived 100% of the investment advisory
fee in light of the low level of assets of the Municipal Income Fund and to
reduce the impact on investors in the Municipal Income Fund of the other
expenses of the Municipal Income Fund. However, the Municipal Income Fund
Adviser may terminate this voluntary waiver at any time. Compass Bank also
serves as the Municipal Income Fund's custodian, but to date Compass Bank
has also waived 100% of its fees as custodian. The waiver of the
custodian's fees also may be terminated at any time.
Federated Administrative Services, a subsidiary of Federated Investors,
provides the Funds with certain administrative personnel and services
necessary to operate the Funds. The rate charged to Federated Intermediate
for such administrative services is 0.15 of 1% of the first $250 million of
average aggregate daily net assets of all funds advised by subsidiaries of
Federated Investors, 0.125 of 1% on the next $250 million, 0.10 of 1% on
the next $250 million and 0.075 of 1% of assets in excess of $750 million.
The administrative fee received from Intermediate Municipal Trust during
any fiscal year shall be at least $125,000 per portfolio and $30,000 per
each additional class of shares. The rate charged to The Starburst Funds
for such administrative services is 0.15 of 1% of the first $250 million of
average aggregate daily net assets of The Starburst Funds, 0.125 of 1% on
the next $250 million, 0.10 of 1% on the next $250 million and 0.075 of 1%
of average aggregate daily net assets of The Starburst Funds in excess of
$750 million. The administrative fee received from The Starburst Funds
during any fiscal year shall be at least $50,000 per fund. The
administrative fee expense for Federated Intermediate's most recent fiscal
year was .075 of 1% of its average aggregate daily net assets. Federated
Intermediate estimates that its administrative fee expense for the current
fiscal year will be .075 of 1% of its average aggregate daily net assets.
The administrative fee expense for Municipal Income Fund's most recent
fiscal year was .16 of 1% of its average aggregate daily net assets and
would have been .23 of 1% of average daily net assets absent the voluntary
waiver by the administrator. Municipal Income Fund estimates that its
administrative fee expense for the current fiscal year will be .00 of 1% of
its average aggregate daily net assets and would be .34 of 1% of average
daily net assets absent the voluntary waiver by the administrator.
Federated Intermediate has entered into a Shareholder Services Agreement
with Federated Shareholder Services, a subsidiary of Federated Investors,
under which Federated Intermediate may make payments up to 0.25 of 1% of
the average daily net asset value of Federated Intermediate to obtain
certain personal services for shareholders and for the maintenance of
shareholder accounts ("shareholder services"). Under the Shareholder
Services Agreement, Federated Shareholder Services will either perform
shareholder services directly or will select financial institutions to
perform shareholder services. Financial institutions will receive fees
based upon shares owned by their clients or customers. The schedules of
such fees and the basis upon which such fees will be paid will be
determined, from time to time, by Federated Intermediate and Federated
Shareholder Services. It is anticipated that Compass Brokerage, Inc. will
receive such shareholder services fees in connection with accounts invested
in Federated Intermediate.
The total annual operating expenses for Federated Intermediate are expected
to be .57% of average daily net assets and would be .81% of average daily
net assets absent the voluntary waiver of the advisory fee. The total
annual operating expenses for Municipal Income Fund are expected to be .99
of 1% of average daily net assets and would be 2.35% of average daily net
assets absent the voluntary waivers of the 12b-1 fee by the distributor,
the advisory fee, the administrative fee, and the custodial fee.
PURCHASE AND REDEMPTION PROCEDURES
Procedures for the purchase and redemption of shares of Federated
Intermediate are similar to procedures applicable to the purchase and
redemption of Municipal Income Fund shares. For a complete description of
the purchase and redemption procedures applicable to purchases and
redemptions of shares, refer to the Prospectus of Federated Intermediate
dated July 31, 1996, and the Prospectus of Municipal Income Fund dated
December 31, 1995, which are incorporated herein by reference. Any
questions about such procedures may be directed to, and assistance in
effecting purchases or redemptions of shares of Federated Intermediate may
be obtained by calling 1-800-341-7400.
Shares of Federated Intermediate are sold on all business days except on
days on which the New York Stock Exchange is closed and federal holidays
restricting wire transfers. Shares of Federated Intermediate are sold at
their net asset value next determined after an order is received. The net
asset value is calculated at 4:00 p.m. (Eastern time) on days shares are
sold. Purchases of shares of Federated Intermediate may be made by wire or
by check. Orders are considered received after payment is converted into
federal funds. The minimum initial investment in Federated Intermediate is
$25,000 over a 90-day period. The minimum investment in Municipal Income
Fund is $1,000 for initial investments and $100 for subsequent investments.
Federated Intermediate's minimum initial investment requirement will be
waived for shareholders who receive their shares as a result of the
contemplated Reorganization.
Redemption requests cannot be executed on days which the New York Stock
Exchange is closed and federal holidays restricting wire transfers. Shares
are redeemed at their net asset value next determined after the redemption
request is received. Proceeds will be distributed by wire or check.
Requests for redemption can be made by telephone or by mail as more
particularly described in the above-referenced Prospectuses.
EXCHANGE PRIVILEGES
Subject to certain restrictions described in the prospectus for Municipal
Income Fund, shareholders of the Municipal Income Fund may exchange shares
of Municipal Income Fund for shares in The Starburst Government Income
Fund, The Starburst Government Money Market Fund, The Starburst Money
Market Fund, and any other portfolio of The Starburst Funds. Subject to
certain restrictions described in the prospectus for Municipal Income Fund,
shares of Starburst Funds with a sales load may be exchanged at net asset
value for shares of other Starburst Funds with an equal sales load or no
sales load. Shares of Starburst Funds with no sales load acquired by direct
purchase or reinvestment of dividends on such shares may be exchanged for
shares of funds with a sales load at net asset value, plus the applicable
sales load imposed by the fund shares being purchased. Shareholders who
exercise this exchange privilege must exchange shares having a net asset
value of at least $1,000. Following the Reorganization, shareholders who
receive shares of Federated Intermediate as a result of the Reorganization
will continue to enjoy the exchange privilege with other Starburst Funds.
Except as described above, Federated Intermediate does not offer exchange
privileges. As a result, following the consummation of the contemplated
Reorganization, shareholders who purchase shares of Federated Intermediate
through Compass Brokerage, Inc. after the Reorganization will not have
exchange privileges with any other funds, including the remaining Starburst
Funds. Such shareholders of Federated Intermediate who redeem shares of
Federated Intermediate after the consummation of the contemplated
Reorganization would be required to pay any applicable sales charge or load
imposed by any fund into which redemption proceeds are invested.
TAX CONSEQUENCES
As a condition to the Reorganization transactions, Intermediate Municipal
Trust and The Starburst Funds will receive an opinion of counsel that the
Reorganization will be considered a tax-free "reorganization" under
applicable provisions of the Internal Revenue Code so that no gain or loss
will be recognized by either Federated Intermediate or Municipal Income
Fund or their respective shareholders. The opinion of counsel will also
state that the tax basis of Federated Intermediate shares received by
Municipal Income Fund shareholders will be the same as the tax basis of
their shares in Municipal Income Fund.
RISK FACTORS
Because of the similarities in the investment objectives, policies and
portfolio composition of Federated Intermediate and Municipal Income Fund,
the relative risks involved in investing in Federated Intermediate, as
outlined in the section entitled "Investment Objectives, Policies and
Limitations," can be considered similar to those associated with Municipal
Income Fund.
In addition to the risks described above, there are certain risks and
considerations affecting municipal securities which an investor should take
into account when investing in these securities. Briefly, these risks
include, but are not limited to, fluctuation of the value of shares of
Federated Intermediate and the continuing ability of the issuers of
municipal securities and participation interests, or the guarantors of
either, to meet their obligations for the payment of principal and interest
when due. Additional risk factors of municipal securities are described in
Federated Intermediate's Prospectus dated July 31, 1996 and Municipal
Income Fund's Prospectus dated December 31, 1995, each of which is
incorporated by reference into this Prospectus/Proxy Statement.
INFORMATION ABOUT THE REORGANIZATION
BACKGROUND AND REASONS FOR THE PROPOSED REORGANIZATION
Municipal Income Fund was organized in 1991 in order to provide an
investment vehicle that pursues current income exempt from federal regular
income tax. Although the Board of Trustees of The Starburst Funds is
satisfied with Municipal Income Fund's performance, both the Board of
Trustees of The Starburst Funds and the Municipal Income Fund Adviser are
concerned about the relatively small amount of total assets invested in
Municipal Income Fund and the relatively high level of operating expenses
sustained by Municipal Income Fund. In this setting, the Municipal Income
Fund Adviser and the distributor proposed to representatives of Municipal
Income Fund that the Board consider a sale of all of the Municipal Income
Fund's assets to Federated Intermediate. In connection with this proposal,
the Municipal Income Fund Adviser and the distributor emphasized that the
comparatively larger asset projections of Federated Intermediate, combined
with Municipal Income Fund, would enable shareholders of Municipal Income
Fund to benefit from increased diversification of investments and other
economies of scale. The Board of Trustees of The Starburst Funds has
concluded that economies of scale and potentially lower expense ratios
could be realized by transferring the assets of Municipal Income Fund into
Federated Intermediate; however, there is no assurance that these results
will be achieved.
The Trustees of Intermediate Municipal Trust, including the independent
Trustees, have unanimously concluded that consummation of the
Reorganization is in the best interests of Intermediate Municipal Trust and
the shareholders of Federated Intermediate and that the interests of
Federated Intermediate shareholders would not be diluted as a result of
effecting the Reorganization and have unanimously approved the Plan.
Likewise, the Trustees of The Starburst Funds, including the independent
Trustees have unanimously concluded that consummation of the Reorganization
is in the best interests of The Starburst Funds and the shareholders of
Municipal Income Fund and that the interests of Municipal Income Fund
shareholders would not be diluted as a result of effecting the
Reorganization and have unanimously approved the Plan.
DESCRIPTION OF THE PLAN OF REORGANIZATION
The Plan provides that on or about October 25, 1996 (the "Closing Date")
Federated Intermediate will acquire all of the assets of Municipal Income
Fund in exchange for Federated Intermediate shares to be distributed pro
rata by Municipal Income Fund to its shareholders in complete liquidation
and termination of Municipal Income Fund. Shareholders of Municipal Income
Fund will become shareholders of Federated Intermediate as of 4:00 p.m.
(Eastern time) on the Closing Date and will begin accruing dividends from
Federated Intermediate on the next day. Shareholders of Municipal Income
Fund will earn their last dividend from Municipal Income Fund on the
Closing Date.
Consummation of the Reorganization is subject to the conditions set forth
in the Plan, including receipt of an opinion in form and substance
satisfactory to Intermediate Municipal Trust and The Starburst Funds, as
described under the caption "Federal Income Tax Consequences" below. The
Plan may be terminated and the Reorganization may be abandoned at any time
before or after approval by shareholders of Municipal Income Fund prior to
the Closing Date by either The Starburst Funds or Intermediate Municipal
Trust if either believes that consummation of the Reorganization would not
be in the best interests of its shareholders.
Federated Management is responsible for the payment of all expenses of the
Reorganization incurred by either Fund, whether or not the Reorganization
is consummated. Such expenses include, but are not limited to, legal fees,
registration fees, transfer taxes (if any), the fees of banks and transfer
agents and the costs of preparing, printing, copying and mailing proxy
solicitation materials to shareholders of Municipal Income Fund and the
costs of holding the Special Meeting of Shareholders.
The foregoing brief summary of the Plan entered into between Municipal
Income Fund and Federated Intermediate is qualified in its entirety by the
terms and provisions of the Plan, a copy of which is attached hereto as
Exhibit A and incorporated herein by reference.
DESCRIPTION OF FEDERATED INTERMEDIATE SHARES
Shares of Federated Intermediate to be issued to shareholders of Municipal
Income Fund under the Plan will be fully paid and nonassessable when issued
and transferable without restriction and will have no preemptive or
conversion rights. Reference is hereby made to the Prospectus of Federated
Intermediate dated July 31, 1996 provided herewith for additional
information about Federated Intermediate shares.
FEDERAL INCOME TAX CONSEQUENCES
As a condition to the Reorganization, Intermediate Municipal Trust and The
Starburst Funds will receive an opinion from Dickstein Shapiro Morin &
Oshinsky LLP, counsel to Intermediate Municipal Trust and The Starburst
Funds, to the effect that, on the basis of the existing provisions of the
Internal Revenue Code of 1986, as amended (the "Code"), current
administrative rules and court decisions, for federal income tax purposes:
(1) the Reorganization as set forth in the Plan will constitute a tax-free
reorganization under section 368(a)(1)(C) of the Code; (2) no gain or loss
will be recognized by Federated Intermediate upon its receipt of Municipal
Income Fund's assets solely in exchange for Federated Intermediate shares;
(3) no gain or loss will be recognized by Municipal Income Fund upon the
transfer of its assets to Federated Intermediate in exchange for Federated
Intermediate shares or upon the distribution (whether actual or
constructive) of Federated Intermediate shares to Municipal Income Fund
shareholders in exchange for their shares of Municipal Income Fund; (4) no
gain or loss will be recognized by shareholders of Municipal Income Fund
upon the exchange of their Municipal Income Fund shares for Federated
Intermediate shares; (5) the tax basis of Municipal Income Fund's assets
acquired by Federated Intermediate will be the same as the tax basis of
such assets to Municipal Income Fund immediately prior to the
Reorganization; (6) the tax basis of Federated Intermediate shares received
by each shareholder of Municipal Income Fund pursuant to the Plan will be
the same as the tax basis of Municipal Income Fund shares held by such
shareholder immediately prior to the Reorganization; (7) the holding period
of the assets of Municipal Income Fund in the hands of Federated
Intermediate will include the period during which those assets were held by
Municipal Income Fund; and (8) the holding period of Federated Intermediate
shares received by each shareholder of Municipal Income Fund pursuant to
the Plan will include the period during which the Municipal Income Fund
shares exchanged therefor were held by such shareholder, provided the
Municipal Income Fund shares were held as capital assets on the date of the
Reorganization.
COMPARATIVE INFORMATION ON SHAREHOLDER RIGHTS AND OBLIGATIONS
Intermediate Municipal Trust and The Starburst Funds are organized as
business trusts pursuant to Declarations of Trust under the laws of the
Commonwealth of Massachusetts. The rights of shareholders of Federated
Intermediate and Municipal Income Fund as set forth in their respective
Declarations of Trust are substantially identical. Set forth below is a
brief summary of the significant rights of shareholders of Federated
Intermediate and Municipal Income Fund.
Neither Fund is required to hold annual meetings of shareholders.
Shareholder approval is necessary only for certain changes in operations or
the election of Trustees under certain circumstances. A special meeting of
shareholders of either Fund for any permissible purpose is required to be
called by the Trustees upon the written request of the holders of at least
10% of the outstanding shares of the relevant Fund.
Under certain circumstances, shareholders of Federated Intermediate or
Municipal Income Fund may be held personally liable as partners under
Massachusetts law for obligations of Intermediate Municipal Trust or The
Starburst Funds, as the case may be. To protect shareholders of all
portfolios of Intermediate Municipal Trust and The Starburst Funds,
Intermediate Municipal Trust and The Starburst Funds have filed legal
documents with the Commonwealth of Massachusetts that expressly disclaim
the liability of shareholders of portfolios of Intermediate Municipal Trust
and The Starburst Funds, respectively, for such acts or obligations of
Intermediate Municipal Trust and The Starburst Funds, respectively. These
documents require that notice of this disclaimer be given in each
agreement, obligation or instrument that Intermediate Municipal Trust and
The Starburst Funds or their Trustees enter into or sign on behalf of
Intermediate Municipal Trust and The Starburst Funds.
In the unlikely event a shareholder of a portfolio of Intermediate
Municipal Trust or The Starburst Funds is held personally liable for
obligations of Intermediate Municipal Trust or The Starburst Funds,
Intermediate Municipal Trust and The Starburst Funds are required to use
their property to protect or compensate the shareholder. On request,
Intermediate Municipal Trust and The Starburst Funds will defend any claims
made and pay any judgment against a shareholder of a portfolio of
Intermediate Municipal Trust and The Starburst Funds for any act or
obligation of Intermediate Municipal Trust and The Starburst Funds.
Therefore, financial loss resulting from liability as a shareholder of a
portfolio of Intermediate Municipal Trust and The Starburst Funds will
occur only if Intermediate Municipal Trust or The Starburst Funds cannot
meet their obligations to indemnify shareholders and pay judgments against
them from the assets of Intermediate Municipal Trust or The Starburst
Funds.
CAPITALIZATION
The following table sets forth the capitalization of Municipal Income Fund
and Federated Intermediate as of June 30, 1996, and on a pro forma basis as
of that date:
Federated
Municipal Income Intermediate Pro Forma*
Fund Combined
Net Assets 14,201,224 213,249,532 227,450,756
Shares Outstanding1,356,551 20,436,830 21,798,583
Price Per Share 10.47 10.43 10.43
*Adjustment to reflect share balance as a result of the combination based
on exchange ratio of 1.003835091 (the net asset value of $10.47 divided by
the net asset value of $10.43)
INFORMATION ABOUT THE INTERMEDIATE MUNICIPAL TRUST, THE STARBURST FUNDS,
FEDERATED INTERMEDIATE, AND MUNICIPAL INCOME FUND
Information about Intermediate Municipal Trust, The Starburst Funds,
Federated Intermediate and Municipal Income Fund is contained in their
respective Prospectuses dated (in the case of Intermediate Municipal Trust
and Federated Intermediate) July 31, 1996, and (in the case of The
Starburst Funds and Municipal Income Fund) December 31, 1995, which are
incorporated by reference herein. A copy of the Prospectus for Federated
Intermediate is included herewith. Additional information about The
Starburst Funds and Federated Intermediate is included in the Statement of
Additional Information of Federated Intermediate dated July 31, 1996
(relating to the Prospectus of Federated Intermediate of the same date),
and September 3, 1996 (relating to this Prospectus/Proxy Statement) which
are incorporated herein by reference. Additional information about The
Starburst Funds and Municipal Income Fund is included in the Statement of
Additional Information of Municipal Income Fund dated December 31, 1995,
and September 3, 1996 (relating to this Prospectus/Proxy Statement) which
are incorporated herein by reference. Copies of the Statements of
Additional Information, which have been filed with the Securities and
Exchange Commission (the "SEC"), may be obtained without charge by
contacting The Starburst Funds at 1-800-239-1930 or by writing to The
Starburst Funds at Federated Investors Tower, Pittsburgh, PA 15222-3779.
Intermediate Municipal Trust and The Starburst Funds, on behalf of the
respective Funds, are subject to the informational requirements of the
Securities Act of 1933 (the "1933 Act"), the Securities Exchange Act of
1934 (the "1934 Act") and the Investment Company Act of 1940 (the "1940
Act") and in accordance therewith file reports and other information with
the SEC. Reports, proxy and information statements and other information
filed by Intermediate Municipal Trust or The Starburst Funds, on behalf of
the respective Funds, can be obtained by calling or writing to Intermediate
Municipal Trust or The Starburst Funds and can also be inspected and copied
by the public at the public reference facilities maintained by the SEC in
Washington, D.C. located at Room 1024, 450 Fifth Street, N.W., Washington,
D.C. 20549 and at certain of its regional offices located at Suite 1400,
Northwestern Atrium Center, 500 West Madison Street, Chicago, IL 60621 and
13th Floor, Seven World Trade Center, New York, NY 10048. Copies of such
material also may be obtained at prescribed rates from the Public Reference
Branch, Office of Consumer Affairs and Information Services, SEC, 450 Fifth
Street, N.W., Washington, D.C. 20549.
This Prospectus/Proxy Statement and the related Statement of Additional
Information do not contain all of the information set forth in the
registration statement that Intermediate Municipal Trust has filed with the
SEC under the 1933 Act to which reference is hereby made. Statements
contained herein concerning the provisions of documents are necessarily
summaries of such documents, and each such statement is qualified in its
entirety by reference to the copy of the applicable documents filed with
the SEC. The SEC file number for Intermediate Municipal Trust's
prospectuses and related Statements of Additional Information which are
incorporated by reference herein is Registration No. 33-298237. The SEC
file number for Prospectuses and related Statements of Additional
Information for The Starburst Funds which are incorporated by reference
herein is Registration No. 33-30950.
VOTING INFORMATION
This Prospectus/Proxy Statement is furnished in connection with the
solicitation by the Board of Trustees of Municipal Income Fund of proxies
for use at the Special Meeting of Shareholders (the "Meeting") to be held
on October 22, 1996 and at any adjournment thereof. The proxy confers
discretionary authority on the persons designated therein to vote on other
business not currently contemplated which may properly come before the
Meeting. A proxy, if properly executed, duly returned and not revoked, will
be voted in accordance with the specifications thereon; if no instructions
are given, such proxy will be voted in favor of the Plan. A shareholder may
revoke a proxy at any time prior to use by filing with the Secretary of The
Starburst Funds an instrument revoking the proxy, by submitting a proxy
bearing a later date or by attending and voting at the Meeting.
The cost of the solicitation, including the printing and mailing of proxy
materials, will be borne by Federated Management. In addition to
solicitations through the mails, proxies may be solicited by officers,
employees and agents of The Starburst Funds and Federated Management at no
additional cost to The Starburst Funds. Such solicitations may be made by
telephone. Federated Management will reimburse custodians, nominees and
fiduciaries for the reasonable costs incurred by them in connection with
forwarding solicitation materials to the beneficial owners of shares held
of record by such persons.
OUTSTANDING SHARES AND VOTING REQUIREMENTS
The Board of Trustees has fixed the close of business on August 26, 1996 as
the record date for the determination of shareholders entitled to notice
of, and to vote at, the Special Meeting of Shareholders and any adjournment
thereof. As of the record date, there were shares of
---------------
Municipal Income Fund outstanding. Each Municipal Income Fund share is
entitled to one vote and fractional shares have proportionate voting
rights. On the record date,
-----------------------------------
, was the owner of record of
- ------------------------------------------
shares, or % of Municipal Income Fund's outstanding
- ------------ -------
shares, and therefore, may, for certain purposes, be deemed to control the
Fund and be able to affect the outcome of certain matters presented for a
vote of shareholders. On such date, no other person owned of record, or to
the knowledge of the Municipal Income Fund Adviser, beneficially owned, 5%
or more of Municipal Income Fund's outstanding shares. On the record date,
the trustees and officers of The Starburst Funds as a group owned less than
1% of the outstanding shares of Municipal Income Fund.
The votes of the shareholders of Federated Intermediate are not being
solicited, since their approval or consent is not necessary for approval of
the Reorganization. As of the record date, there were
---------------
shares of Federated Intermediate outstanding. On the record date,
owned of record
- ---------------------------------------------------
shares, or % of Federated Intermediate's outstanding
- ---------- -------
shares. On such date, no other person owned of record, or to the knowledge
of Federated Management, beneficially owned, 5% or more of Federated
Intermediate's outstanding shares. On the record date, the trustees and
officers of Intermediate Municipal Trust as a group owned less than 1% of
the outstanding shares of Federated Intermediate.
Approval of the Plan requires the affirmative vote of the majority of the
votes entitled to be cast by Municipal Income Fund's shareholders. The
votes of shareholders of Federated Intermediate are not being solicited
since their approval is not required in order to effect the Reorganization.
A majority of the outstanding shares of Municipal Income Fund, represented
in person or by proxy, will be required to constitute a quorum at the
Special Meeting for the purpose of voting on the proposed Reorganization.
For purposes of determining the presence of a quorum, shares represented by
abstentions and "broker non-votes" will be counted as present, but not as
votes cast, at the Special Meeting. Under the Declaration of Trust, the
approval of any action submitted to shareholders is determined on the basis
of a majority of votes entitled to be cast at the Special Meeting.
If at the time any session of the Special Meeting is called to order, a
quorum is not present in person or by proxy, the persons named as proxies
may vote those proxies which have been received to adjourn the Special
Meeting to a later date. In the event that a quorum is present but
sufficient votes in favor of one or more of the proposals have not been
received, the persons named as proxies may propose one or more adjournments
of the Special Meeting to permit further solicitation of proxies with
respect to any such proposal. All such adjournments will require the
affirmative vote of a majority of the shares present in person or by proxy
at the session of the Special Meeting to be adjourned. The persons named as
proxies will vote those proxies which they are entitled to vote in favor of
the proposal, in favor of such an adjournment, and will vote those proxies
required to be voted against the proposal, against any such adjournment. A
vote may be taken on one or more of the proposals in this proxy statement
prior to any such adjournment if sufficient votes for its approval have
been received and it is otherwise appropriate. In the event the requisite
vote in favor of the Reorganization is not received after such
adjournments, if any, the Board of Trustees of The Starburst Funds would
consider other options, which may include liquidation of Municipal Income
Fund.
DISSENTER'S RIGHT OF APPRAISAL
Shareholders of Municipal Income Fund objecting to the Reorganization have
no appraisal or dissenter's rights under the Declaration of Trust or
Massachusetts law. Under the Plan, if approved by Municipal Income Fund
shareholders, each Municipal Income Fund shareholder will become the owner
of Federated Intermediate shares having a total net asset value equal to
the total net asset value of his or her holdings in Municipal Income Fund
at the Closing Date.
OTHER MATTERS
Management of Municipal Income Fund knows of no other matters that may
properly be, or which are likely to be, brought before the meeting.
However, if any other business shall properly come before the meeting, the
persons named in the proxy intend to vote thereon in accordance with their
best judgment.
So far as management is presently informed, there is no litigation pending
or threatened against Intermediate Municipal Trust or The Starburst Funds.
Whether or not shareholders expect to attend the meeting, all shareholders
are urged to sign, fill in and return the enclosed proxy form promptly.
EXHIBIT A
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION dated July 26, 1996 (the "Agreement"),
between INTERMEDIATE MUNICIPAL TRUST, a Massachusetts business trust
("Intermediate"), on behalf of its portfolio, Federated Intermediate
Municipal Trust (hereinafter called the "Acquiring Fund"), and THE
STARBURST FUNDS, a Massachusetts business trust ("Starburst"), on behalf of
its portfolio, The Starburst Municipal Income Fund (hereinafter called the
"Acquired Fund").
This Agreement is intended to be and is adopted as a plan of
reorganization and liquidation within the meaning of Section 368(a)(1)(C)
of the United States Internal Revenue Code of 1986, as amended (the
"Code"). The reorganization (the "Reorganization") will consist of the
transfer of all of the assets of the Acquired Fund in exchange solely for
shares of the Acquiring Fund (the "Acquiring Fund Shares") and the
distribution, after the Closing Date hereinafter referred to, of the
Acquiring Fund Shares to the shareholders of the Acquired Fund in
liquidation of the Acquired Fund as provided herein, all upon the terms and
conditions hereinafter set forth in this Agreement.
WHEREAS, Intermediate and Starburst are registered open-end management
investment companies and the Acquired Fund owns securities in which the
Acquiring Fund is permitted to invest;
WHEREAS, both the Acquired Fund and the Acquiring Fund are authorized
to issue their shares of beneficial interest;
WHEREAS, the Board of Trustees, including a majority of the Trustees
who are not "interested persons" (as defined under the Investment Company
Act of 1940, as amended (the "1940 Act")), of Intermediate has determined
that the exchange of all of the assets of the Acquired Fund for Acquiring
Fund Shares is in the best interests of the Acquiring Fund shareholders and
that the interests of the existing shareholders of the Acquiring Fund would
not be diluted as a result of this transaction; and
WHEREAS, the Board of Trustees, including a majority of the Trustees
who are not "interested persons" (as defined under the 1940 Act), of
Starburst has determined that the exchange of all of the assets of the
Acquired Fund for Acquiring Fund Shares is in the best interests of the
Acquired Fund shareholders and that the interests of the existing
shareholders of the Acquired Fund would not be diluted as a result of this
transaction;
NOW THEREFORE, in consideration of the premises and of the covenants
and agreements hereinafter set forth, the parties agree as follows:
1. TRANSFER OF ASSETS OF THE ACQUIRED FUND IN EXCHANGE FOR THE
ACQUIRING FUND SHARES AND LIQUIDATION OF THE ACQUIRED FUND.
1.1 Subject to the terms and conditions contained herein, the
Acquired Fund agrees to assign, transfer and convey to the Acquiring
Fund all of the assets of the Acquired Fund, including all securities
and cash other than cash in an amount necessary to pay any unpaid
dividends and distributions as provided in paragraph 1.5, and the
Acquiring Fund agrees in exchange therefor (i) to deliver to the
Acquired Fund the number of Acquiring Fund Shares, including
fractional Acquiring Fund Shares, determined as set forth in
paragraph 2.3. Such transaction shall take place at the closing (the
"Closing") on the closing date (the "Closing Date") provided for in
paragraph 3.1. In lieu of delivering certificates for the Acquiring
Fund Shares, the Acquiring Fund shall credit the Acquiring Fund
Shares to the Acquired Fund's account on the stock record books of
the Acquiring Fund and shall deliver a confirmation thereof to the
Acquired Fund.
1.2 The Acquired Fund will discharge all of its liabilities and
obligations prior to the Closing Date.
1.3 Delivery of the assets of the Acquired Fund to be transferred
shall be made on the Closing Date and shall be delivered to State
Street Bank and Trust Company, Boston, Massachusetts, the Acquiring
Fund's custodian (the "Custodian"), for the account of the Acquiring
Fund, together with proper instructions and all necessary documents to
transfer to the account of the Acquiring Fund, free and clear of all
liens, encumbrances, rights, restrictions and claims. All cash
delivered shall be in the form of currency and immediately available
funds payable to the order of the Custodian for the account of the
Acquiring Fund.
1.4 The Acquired Fund will pay or cause to be paid to the
Acquiring Fund any dividends or interest received on or after the
Closing Date with respect to assets transferred to the Acquiring Fund
hereunder. The Acquired Fund will transfer to the Acquiring Fund any
distributions, rights or other assets received by the Acquired Fund
after the Closing Date as distributions on or with respect to the
securities transferred. Such assets shall be deemed included in assets
transferred to the Acquiring Fund on the Closing Date and shall not be
separately valued.
1.5 As soon after the Closing Date as is conveniently practicable
(the "Liquidation Date"), the Acquired Fund will liquidate and
distribute pro rata to the Acquired Fund's shareholders of record,
determined as of the close of business on the Closing Date (the
"Acquired Fund Shareholders"), the Acquiring Fund Shares received by
the Acquired Fund pursuant to paragraph 1.1. In addition, each
shareholder of record of the Acquired Fund shall have the right to
receive any unpaid dividends or other distributions which were
declared before the Valuation Date with respect to the shares of the
Acquired Fund that are held by the shareholder on the Valuation Date.
Such liquidation and distribution will be accomplished by the transfer
of the Acquiring Fund Shares then credited to the account of the
Acquired Fund on the books of the Acquiring Fund to open accounts on
the share record books of the Acquiring Fund in the names of the
Acquired Fund Shareholders and representing the respective pro rata
number of the Acquiring Fund Shares due such shareholders. All issued
and outstanding shares of the Acquired Fund will simultaneously be
canceled on the books of the Acquired Fund. Share certificates
representing interests in the Acquired Fund will represent a number
of Acquiring Fund Shares after the Closing Date as determined in
accordance with Section 2.3. The Acquiring Fund shall not issue
certificates representing the Acquiring Fund Shares in connection with
such exchange.
1.6 Ownership of Acquiring Fund Shares will be shown on the books
of the Acquiring Fund's transfer agent. Shares of the Acquiring Fund
will be issued in the manner described in the Acquiring Fund's current
prospectus and statement of additional information.
1.7 Any transfer taxes payable upon issuance of the Acquiring
Fund Shares in a name other than the registered holder of the
Acquired Fund shares on the books of the Acquired Fund as of that time
shall, as a condition of such issuance and transfer, be paid by the
person to whom such Acquiring Fund Shares are to be issued and
transferred.
1.8 Any reporting responsibility of the Acquired Fund is and
shall remain the responsibility of the Acquired Fund up to and
including the Closing Date and such later dates, with respect to
liquidation and termination of the Acquired Fund, on which the
Acquired Fund is liquidated and terminated.
2. VALUATION.
2.1 The value of the Acquired Fund's net assets to be acquired by
the Acquiring Fund hereunder shall be the value of such assets
computed as of the close of the New York Stock Exchange (normally 4:00
p.m., Eastern time) on the Closing Date (such time and date being
hereinafter called the "Valuation Date"), using the valuation
procedures set forth in the Acquiring Fund's then-current prospectus
or statement of additional information.
2.2 The net asset value of an Acquiring Fund Share shall be the
net asset value per share computed as of the close of the New York
Stock Exchange (normally 4:00 p.m., Eastern time) on the Valuation
Date, using the valuation procedures set forth in the Acquiring Fund's
then-current prospectus or statement of additional information.
2.3 The number of the Acquiring Fund Shares to be issued
(including fractional shares, if any) in exchange for the Acquired
Fund's net assets shall be determined by dividing the value of the net
assets of the Acquired Fund determined using the same valuation
procedures referred to in paragraph 2.1 by the net asset value of one
Acquiring Fund Share determined in accordance with paragraph 2.2.
2.4 All computations of value shall be made in accordance with
the regular practices of the Acquiring Fund.
3. CLOSING AND CLOSING DATE.
3.1 The Closing Date shall be October 25, 1996 or such later date
as the parties may mutually agree. All acts taking place at the
Closing Date shall be deemed to take place simultaneously as of the
close of business on the Closing Date unless otherwise provided. The
Closing shall be held at 4:00 p.m. (Eastern time) at the offices of
the Acquiring Fund, Federated Investors Tower, Pittsburgh, PA 15222-
3779, or such other time and/or place as the parties may mutually
agree.
3.2 If on the Valuation Date (a) the primary trading market for
portfolio securities of the Acquiring Fund or the Acquired Fund shall
be closed to trading or trading thereon shall be restricted; or (b)
trading or the reporting of trading shall be disrupted so that
accurate appraisal of the value of the net assets of the Acquiring
Fund or the Acquired Fund is impracticable, the Closing Date shall be
postponed until the first business day after the day when trading
shall have been fully resumed and reporting shall have been restored.
3.3 Federated Shareholder Services Company of Boston, as transfer
agent for the Acquired Fund, shall deliver at the Closing a
certificate of an authorized officer stating that its records contain
the names and addresses of the Acquired Fund Shareholders and the
number and percentage ownership of outstanding shares owned by each
such shareholder immediately prior to the Closing. The Acquiring Fund
shall issue and deliver a confirmation evidencing the Acquiring Fund
Shares to be credited on the Closing Date to the Secretary of the
Acquired Fund, or provide evidence satisfactory to the Acquired Fund
that such Acquiring Fund Shares have been credited to the Acquired
Fund's account on the books of the Acquiring Fund. At the Closing,
each party shall deliver to the other such bills of sale, checks,
assignments, assumption agreements, share certificates, if any,
receipts or other documents as such other party or its counsel may
reasonably request.
4. REPRESENTATIONS AND WARRANTIES.
4.1 Starburst represents and warrants to Intermediate as follows:
(a) Starburst is a business trust duly organized, validly
existing and in good standing under the laws of the Commonwealth
of Massachusetts and has power to own all of its properties and
assets and to carry out this Agreement.
(b) Starburst is registered under the 1940 Act, as an open-
end, management investment company, and such registration has not
been revoked or rescinded and is in full force and effect.
(c) Starburst is not, and the execution, delivery and
performance of this Agreement will not result, in material
violation of its Declaration of Trust or By-Laws or of any
agreement, indenture, instrument, contract, lease or other
undertaking to which the Acquired Fund is a party or by which it
is bound.
(d) The Acquired Fund has no material contracts or other
commitments outstanding (other than this Agreement) which will
result in liability to it after the Closing Date.
(e) No litigation or administrative proceeding or
investigation of or before any court or governmental body is
currently pending or to its knowledge threatened against the
Acquired Fund or any of its properties or assets which, if
adversely determined, would materially and adversely affect its
financial condition or the conduct of its business. The Acquired
Fund knows of no facts which might form the basis for the
institution of such proceedings, and is not a party to or subject
to the provisions of any order, decree or judgment of any court
or governmental body which materially and adversely affects its
business or its ability to consummate the transactions herein
contemplated.
(f) The current prospectus and statement of additional
information of the Acquired Fund conform in all material respects
to the applicable requirements of the Securities Act of 1933, as
amended (the "1933 Act"), and the 1940 Act and the rules and
regulations of the Securities and Exchange Commission (the
"Commission") thereunder and do not include any untrue statement
of a material fact or omit to state any material fact required to
be stated therein as necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading.
(g) The Statement of Assets and Liabilities of the Acquired
Fund at October 31, 1995 and October 31, 1994 have been audited
by Deloitte & Touche LLP, independent auditors, and have been
prepared in accordance with generally accepted accounting
principles, consistently applied, and such statements (copies of
which have been furnished to the Acquiring Fund) fairly reflect
the financial condition of the Acquired Fund as of such dates,
and there are no known material contingent liabilities of the
Acquired Fund as of such dates not disclosed therein.
(h) The unaudited Statements of Assets and Liabilities of
the Acquired Fund at April 30, 1996 and April 30, 1995 have been
prepared in accordance with generally accepted accounting
principles, consistently applied, and such statements (copies of
which have been supplied to the Acquiring Fund) fairly reflect
the financial condition of the Acquired Fund as of such dates.
(i) Since April 30, 1996, there has not been any material
adverse change in the Acquired Fund's financial condition,
assets, liabilities or business other than changes occurring in
the ordinary course of business, or any incurrence by the
Acquired Fund of indebtedness maturing more than one year from
the date such indebtedness was incurred, except as otherwise
disclosed to and accepted by the Acquiring Fund.
(j) At the Closing Date, all Federal and other tax returns
and reports of the Acquired Fund required by law to have been
filed by such date shall have been filed, and all Federal and
other taxes shall have been paid so far as due, or provision
shall have been made for the payment thereof, and to the best of
the Acquired Fund's knowledge no such return is currently under
audit and no assessment has been asserted with respect to such
returns.
(k) For each fiscal year of its operation, the Acquired Fund
has met the requirements of Subchapter M of the Code for
qualification and treatment as a regulated investment company.
(l) All issued and outstanding shares of the Acquired Fund
are, and at the Closing Date will be, duly and validly issued and
outstanding, fully paid and non-assessable. All of the issued and
outstanding shares of the Acquired Fund will, at the time of the
Closing, be held by the persons and in the amounts set forth in
the records of the transfer agent as provided in paragraph 3.3.
The Acquired Fund does not have outstanding any options, warrants
or other rights to subscribe for or purchase any of the Acquired
Fund shares, nor is there outstanding any security convertible
into any of the Acquired Fund shares.
(m) On the Closing Date, the Acquired Fund will have full
right, power and authority to sell, assign, transfer and deliver
the assets to be transferred by it hereunder.
(n) The execution, delivery and performance of this
Agreement have been duly authorized by all necessary action on
the part of Starburst's Trustees and, subject to the approval of
the Acquired Fund Shareholders, this Agreement constitutes the
valid and legally binding obligation of the Acquired Fund
enforceable in accordance with its terms, subject to the effect
of bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance and other similar laws relating to or affecting
creditors' rights generally and court decisions with respect
thereto, and to general principles of equity and the discretion
of the court (regardless of whether the enforceability is
considered in a proceeding in equity or at law).
(o) The prospectus/proxy statement of the Acquired Fund (the
"Prospectus/Proxy Statement") to be included in the Registration
Statement referred to in paragraph 5.5 (other than information
therein that relates to the Acquiring Fund) will, on the
effective date of the Registration Statement and on the Closing
Date, not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which such statements were made, not
misleading.
(p) The Acquired Fund has entered into an agreement under
which Federated Management will assume the expenses of the
reorganization including accountants' fees, legal fees,
registration fees, transfer taxes (if any), the fees of banks and
transfer agents and the costs of preparing, printing, copying and
mailing proxy solicitation materials to the Acquired Fund's
shareholders and the costs of holding the Special Meeting of
Shareholders.
4.2 Intermediate represents and warrants to Starburst as follows:
(a) Intermediate is a business trust duly organized,
validly existing and in good standing under the laws of the
Commonwealth of Massachusetts and has the power to carry on its
business as it is now being conducted and to carry out this
Agreement.
(b) Intermediate is registered under the 1940 Act as an
open-end, management investment company, and such registration
has not been revoked or rescinded and is in full force and
effect.
(c) The current prospectus and statement of additional
information of the Acquiring Fund conform in all material
respects to the applicable requirements of the 1933 Act and the
1940 Act and the rules and regulations of the Commission
thereunder and do not include any untrue statement of a material
fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.
(d) Intermediate is not, and the execution, delivery and
performance of this Agreement will not result, in material
violation of its Declaration of Trust or By-Laws or of any
agreement, indenture, instrument, contract, lease or other
undertaking to which the Acquiring Fund is a party or by which it
is bound.
(e) No litigation or administrative proceeding or
investigation of or before any court or governmental body is
currently pending or to its knowledge threatened against the
Acquiring Fund or any of its properties or assets which, if
adversely determined, would materially and adversely affect its
financial condition or the conduct of its business. The Acquiring
Fund knows of no facts which might form the basis for the
institution of such proceedings, and is not a party to or subject
to the provisions of any order, decree or judgment of any court
or governmental body which materially and adversely affects its
business or its ability to consummate the transactions
contemplated herein.
(f) The Statement of Assets and Liabilities of the Acquiring
Fund at May 31, 1996, has been audited by Arthur Andersen LLP,
independent public accountants, and have been prepared in
accordance with generally accepted accounting principles,
consistently applied, and such statement (copies of which have
been furnished to the Acquired Fund) fairly reflects the
financial condition of the Acquiring Fund as of such date, and
there are no known material contingent liabilities of Acquiring
Fund as of such date not disclosed therein.
(g) Since May 31, 1996, there has not been any material
adverse change in the Acquiring Fund's financial condition,
assets, liabilities or business other than changes occurring in
the ordinary course of business, or any incurrence by the
Acquiring Fund of any indebtedness, except as otherwise disclosed
to and accepted by the Acquired Fund.
(h) At the Closing Date, all Federal and other tax returns
and reports of the Acquiring Fund required by law then to be
filed shall have been filed, and all Federal and other taxes
shown as due on said returns and reports shall have been paid or
provision shall have been made for the payment thereof.
(i) For each fiscal year of its operation, the Acquiring
Fund has met the requirements of Subchapter M of the Code for
qualification and treatment as a regulated investment company.
(j) All issued and outstanding shares of the Acquiring Fund
are, and at the Closing Date will be, duly and validly issued and
outstanding, fully paid and non-assessable. The Acquiring Fund
does not have outstanding any options, warrants or other right to
subscribe for or purchase any of the Acquiring Fund Shares, nor
is there outstanding any security convertible into any Acquiring
Fund Shares.
(k) The execution, delivery and performance of this
Agreement have been duly authorized by all necessary action, if
any, on the part of Intermediate's Trustees, and this Agreement
constitutes the valid and legally binding obligation of the
Acquiring Fund enforceable in accordance with its terms, subject
to the effect of bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance and other similar laws relating
to or affecting creditors' rights generally and court decisions
with respect thereto, and to general principles of equity and the
discretion of the court (regardless of whether the enforceability
is considered in a proceeding in equity or at law).
(l) The Prospectus/Proxy Statement to be included in the
Registration Statement (only insofar as it relates to the
Acquiring Fund) will, on the effective date of the Registration
Statement and on the Closing Date, not contain any untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which such
statements were made, not misleading.
(m) The Acquiring Fund has entered into an agreement under
which Federated Management will assume the expenses of the
reorganization including accountants' fees, legal fees,
registration fees, transfer taxes (if any), the fees of banks and
transfer agents and the costs of preparing, printing, copying and
mailing proxy solicitation materials to the Acquired Fund's
shareholders and the costs of holding the Special Meeting of
Shareholders.
5. COVENANTS OF THE ACQUIRING FUND AND THE ACQUIRED FUND.
5.1 The Acquiring Fund and the Acquired Fund each will operate
its business in the ordinary course between the date hereof and the
Closing Date, it being understood that such ordinary course of
business will include customary dividends and distributions.
5.2 The Acquired Fund will call a meeting of the Acquired Fund
Shareholders to consider and act upon this Agreement and to take all
other action necessary to obtain approval of the transactions
contemplated herein.
5.3 Subject to the provisions of this Agreement, the Acquiring
Fund and the Acquired Fund will each take, or cause to be taken, all
action, and do or cause to be done, all things reasonably necessary,
proper or advisable to consummate and make effective the transactions
contemplated by this Agreement.
5.4 As promptly as practicable, but in any case within sixty days
after the Closing Date, the Acquired Fund shall furnish the Acquiring
Fund, in such form as is reasonably satisfactory to the Acquiring
Fund, a statement of the earnings and profits of the Acquired Fund for
Federal income tax purposes which will be carried over to the
Acquiring Fund as a result of Section 381 of the Code and which will
be certified by the Acquired Fund's President and its Treasurer.
5.5 The Acquired Fund will provide the Acquiring Fund with
information reasonably necessary for the preparation of a prospectus
(the "Prospectus") which will include the Proxy Statement, referred to
in paragraph 4.1(n), all to be included in a Registration Statement on
Form N-14 of the Acquiring Fund (the "Registration Statement"), in
compliance with the 1933 Act, the Securities Exchange Act of 1934, as
amended, and the 1940 Act in connection with the meeting of the
Acquired Fund Shareholders to consider approval of this Agreement and
the transactions contemplated herein.
5.6 The Acquiring Fund agrees to use all reasonable efforts to
obtain the approvals and authorizations required by the 1933 Act, the
1940 Act and such of the state Blue Sky or securities laws as it may
deem appropriate in order to continue its operations after the Closing
Date.
5.7 Prior to the Valuation Date, the Acquired Fund shall have
declared a dividend or dividends, with a record date and ex-dividend
date prior to the Valuation Date, which, together with all previous
dividends, shall have the effect of distributing to its shareholders
all of its investment company taxable income, if any, plus the excess
of its interest income, if any, excludable from gross income under
Code section 103(a) over its deductions disallowed under Code sections
265 and 171(a)(2) for the taxable periods or years ended on or before
October 31, 1995 and for the period from said date to and including
the Closing Date (computed without regard to any deduction for
dividends paid), and all of its net capital gain, if any, realized in
taxable periods or years ended on or before October 31, 1995 and in
the period from said date to and including the Closing Date.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND.
The obligations of the Acquiring Fund to complete the
transactions provided for herein shall be subject, at its election, to
the performance by the Acquired Fund of all the obligations to be
performed by it hereunder on or before the Closing Date and, in
addition thereto, the following conditions:
6.1 All representations and warranties of Starburst contained in
this Agreement shall be true and correct in all material respects as
of the date hereof and, except as they may be affected by the
transactions contemplated by this Agreement, as of the Closing Date
with the same force and effect as if made on and as of the Closing
Date.
6.2 Starburst shall have delivered to the Acquiring Fund a
statement of the Acquired Fund's assets, together with a list of the
Acquired Fund's portfolio securities showing the tax costs of such
securities by lot and the holding periods of such securities, as of
the Closing Date, certified by the Treasurer of Starburst.
6.3 The Acquired Fund shall have delivered to the Acquiring Fund
on the Closing Date a certificate executed in its name by Starburst's
President or Vice President and Starburst's Treasurer or Assistant
Treasurer, in form and substance satisfactory to Starburst, to the
effect that the representations and warranties of Starburst made in
this Agreement are true and correct at and as of the Closing Date,
except as they may be affected by the transactions contemplated by
this Agreement, and as to such other matters as the Acquiring Fund
shall reasonably request.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUND.
The obligations of the Acquired Fund to consummate the
transactions provided herein shall be subject, at its election, to the
performance by the Acquiring Fund of all the obligations to be
performed by it hereunder on or before the Closing Date and, in
addition thereto, the following conditions:
7.1 All representations and warranties of Intermediate contained
in this Agreement shall be true and correct in all material respects
as of the date hereof and, except as they may be affected by the
transactions contemplated by this Agreement, as of the Closing Date
with the same force and effect as if made on and as of the Closing
Date.
7.2 The Acquiring Fund shall have delivered to the Acquired Fund
on the Closing Date a certificate executed in its name by
Intermediate's President or Vice President and Intermediate's
Treasurer or Assistant Treasurer, in form and substance reasonably
satisfactory to the Acquired Fund, to the effect that the
representations and warranties of Intermediate made in this Agreement
are true and correct at and as of the Closing Date, except as they may
be affected by the transactions contemplated by this Agreement, and as
to such other matters as the Acquired Fund shall reasonably request.
8. FURTHER CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE ACQUIRING
FUND AND THE ACQUIRED FUND.
If any of the conditions set forth below do not exist on or
before the Closing Date with respect to the Acquired Fund or the
Acquiring Fund, the other party to this Agreement shall, at its
option, not be required to consummate the transactions contemplated by
this Agreement.
8.1 The Agreement and the transactions contemplated herein shall
have been approved by the requisite vote of the holders of the
outstanding shares of the Acquired Fund in accordance with the
provisions of the Acquired Fund's Declaration of Trust.
8.2 On the Closing Date no action, suit or other proceeding shall
be pending before any court or governmental agency in which it is
sought to restrain or prohibit, or obtain damages or other relief in
connection with, this Agreement or the transactions contemplated
herein.
8.3 All consents of other parties and all other consents, orders
and permits of Federal, state and local regulatory authorities
(including those of the Commission and of state Blue Sky and
securities authorities) deemed necessary by the Acquiring Fund or the
Acquired Fund to permit consummation, in all material respects, of the
transactions contemplated hereby shall have been obtained, except
where failure to obtain any such consent, order or permit would not
involve a risk of a material adverse effect on the assets or
properties of the Acquiring Fund or the Acquired Fund, provided that
either party hereto may for itself waive any of such conditions.
8.4 The Registration Statement shall have become effective under
the 1933 Act and no stop orders suspending the effectiveness thereof
shall have been issued and, to the best knowledge of the parties
hereto, no investigation or proceeding for that purpose shall have
been instituted or be pending, threatened or contemplated under the
1933 Act.
8.5 Starburst and Intermediate shall have received an opinion of
Dickstein Shapiro Morin & Oshinsky LLP substantially to the effect
that for Federal income tax purposes:
(a) The transfer of all of the Acquired Fund assets in
exchange for the Acquiring Fund Shares and the distribution of
the Acquiring Fund Shares to the Acquired Fund Shareholders in
liquidation of the Acquired Fund will constitute a
"reorganization" within the meaning of Section 368(a)(1)(C) of
the Code; (b) No gain or loss will be recognized by the Acquiring
Fund upon the receipt of the assets of the Acquired Fund solely
in exchange for the Acquiring Fund Shares; (c) No gain or loss
will be recognized by the Acquired Fund upon the transfer of the
Acquired Fund assets to the Acquiring Fund in exchange for the
Acquiring Fund Shares or upon the distribution (whether actual or
constructive) of the Acquiring Fund Shares to Acquired Fund
Shareholders in exchange for their shares of the Acquired Fund;
(d) No gain or loss will be recognized by the Acquired Fund
Shareholders upon the exchange of their Acquired Fund shares for
the Acquiring Fund Shares; (e) The tax basis of the Acquired Fund
assets acquired by the Acquiring Fund will be the same as the tax
basis of such assets to the Acquired Fund immediately prior to
the Reorganization; (f) The tax basis of the Acquiring Fund
Shares received by each of the Acquired Fund Shareholders
pursuant to the Reorganization will be the same as the tax basis
of the Acquired Fund shares held by such shareholder immediately
prior to the Reorganization; (g) The holding period of the assets
of the Acquired Fund in the hands of the Acquiring Fund will
include the period during which those assets were held by the
Acquired Fund; and (h) The holding period of the Acquiring Fund
Shares to be received by each Acquired Fund Shareholder will
include the period during which the Acquired Fund shares
exchanged therefor were held by such shareholder (provided the
Acquired Fund shares were held as capital assets on the date of
the Reorganization).
9. TERMINATION OF AGREEMENT.
9.1 This Agreement and the transactions contemplated hereby may
be terminated and abandoned by resolution of the Board of Trustees of
Starburst or the Board of Trustees of Intermediate at any time prior
to the Closing Date (and notwithstanding any vote of the Board of
Trustees of Starburst) if circumstances should develop that, in the
opinion of either of the parties' Board of Trustees, make proceeding
with the Agreement inadvisable.
9.2 If this Agreement is terminated and the exchange contemplated
hereby is abandoned pursuant to the provisions of this Section 9, this
Agreement shall become void and have no effect, without any liability
on the part of any party hereto or the trustees, officers or
shareholders of Intermediate or of Starburst, in respect of this
Agreement.
10. WAIVER.
At any time prior to the Closing Date, any of the foregoing
conditions may be waived by the Board of Trustees of Intermediate or
the Board of Trustees of Starburst, if, in the judgment of either,
such waiver will not have a material adverse effect on the benefits
intended under this Agreement to the shareholders of the Acquiring
Fund or of the Acquired Fund, as the case may be.
11. MISCELLANEOUS.
11.1 None of the representations and warranties included or
provided for herein shall survive consummation of the transactions
contemplated hereby.
11.2 This Agreement contains the entire agreement and
understanding between the parties hereto with respect to the subject
matter hereof, and merges and supersedes all prior discussions,
agreements, and understandings of every kind and nature between them
relating to the subject matter hereof. Neither party shall be bound by
any condition, definition, warranty or representation, other than as
set forth or provided in this Agreement or as may be set forth in a
later writing signed by the party to be bound thereby.
11.3 This Agreement shall be governed and construed in accordance
with the internal laws of the Commonwealth of Massachusetts, without
giving effect to principles of conflict of laws.
11.4 This Agreement may be executed in any number of
counterparts, each of which, when executed and delivered, shall be
deemed to be an original.
11.5 This Agreement shall bind and inure to the benefit of the
parties hereto and their respective successors and assigns, but no
assignment or transfer hereof of any rights or obligations hereunder
shall be made by any party without the written consent of the other
party. Nothing herein expressed or implied is intended or shall be
construed to confer upon or give any person, firm or corporation,
other than the parties hereto and their respective successors and
assigns, any rights or remedies under or by reason of this Agreement.
11.6 The Acquiring Fund is hereby expressly put on notice of the
limitation of liability as set forth in Article XI of the Declaration
of Trust of the Acquired Fund and agrees that the obligations assumed
by the Acquired Fund pursuant to this Agreement shall be limited in
any case to the Acquired Fund and its assets and the Acquiring Fund
shall not seek satisfaction of any such obligation from the
shareholders of the Acquired Fund, the trustees, officers, employees
or agents of the Acquired Fund or any of them.
11.7 The Acquired Fund is hereby expressly put on notice of the
limitation of liability as set forth in Article XI of the Declaration
of Trust of the Acquiring Fund and agrees that the obligations assumed
by the Acquiring Fund pursuant to this Agreement shall be limited in
any case to the Acquiring Fund and its assets and the Acquired Fund
shall not seek satisfaction of any such obligations from the
shareholders of the Acquiring Fund, the trustees, officers, employees
or agents of the Acquiring Fund or any of them.
IN WITNESS WHEREOF, the Acquired Fund and the Acquiring Fund have
caused this Agreement and Plan of Reorganization to be executed and
attested on its behalf by its duly authorized representatives as of the
date first above written.
Acquired Fund:
THE STARBURST FUNDS,
on behalf of its Portfolio, THE
STARBURST MUNICIPAL
INCOME FUND
Attest:
/s/ C. Grant Anderson By: /s/ Jeffrey W. Sterling
Assistant Secretary
Name: Jeffrey W. Sterling
Title: Vice President
Acquiring Fund:
INTERMEDIATE MUNICIPAL TRUST
on behalf of its Portfolio,
FEDERATED INTERMEDIATE
MUNICIPAL FUND
Attest:
/s/S. Elliott Cohan By: /s/ J. Christopher Donahue
Assistant Secretary
Name: J. Christoper Donahue
Title: Executive Vice President
Cusip 09321501G01479-03 (12/95)
ACQUISITION OF THE ASSETS OF
THE STARBURST MUNICIPAL INCOME FUND
FEDERATED INVESTORS TOWER
PITTSBURGH, PENNSYLVANIA 15222-3779
TELEPHONE NUMBER: 1-800-245-5000
BY AND IN EXCHANGE FOR SHARES OF
FEDERATED INTERMEDIATE MUNICIPAL TRUST
FEDERATED INVESTORS TOWER
PITTSBURGH, PENNSYLVANIA 15222-3779
TELEPHONE NUMBER: 1-800-245-5000
STATEMENT OF ADDITIONAL INFORMATION
This Statement of Additional Information dated September 3, 1996 is not
a prospectus. A Prospectus/Proxy Statement dated September 3, 1996
related to the above-referenced matter may be obtained from
Intermediate Municipal Trust on behalf of its portfolio Federated
Intermediate Municipal Trust, Federated Investors Tower, Pittsburgh,
Pennsylvania 15222-3779. This Statement of Additional Information
should be read in conjunction with such Prospectus/Proxy Statement.
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
Statement dated September 3, 1996
Federated Securities Corp.
Distributor
A subsidiary of Federated Investors
TABLE OF CONTENTS
1. Statement of Additional Information of Federated Intermediate
Municipal Trust, dated
July 31, 1996
2. Statement of Additional Information of The Starburst Municipal Income
Fund, dated December 31, 1995
3. Financial Statements of Federated Intermediate Municipal Trust, dated
May 31, 1996
4. Financial Statements of The Starburst Municipal Income Fund dated
October 31, 1995
The Statement of Additional Information of Federated Intermediate Municipal
Trust dated July 31, 1996, is incorporated herein by reference to Post-
Effective Amendment No. 26 to Intermediate Municipal Trust's Registration
Statement on Form N-1A (File No. 33-298237) which was filed with the
Securities and Exchange Commission on or about July 25, 1996.
The Statement of Additional Information of The Starburst Municipal Income
Fund dated December 31, 1995, is incorporated herein by reference to Post-
Effective Amendment No. 22 to the Registration Statement of The Starburst
Funds on Form N-1A (File No. 33-30950) which was filed with the Securities
and Exchange Commission on or about December 28, 1995. A copy may be
obtained from The Starburst Funds at Federated Investors Tower, Pittsburgh,
PA 15222-3779. Telephone Number: 1-800-239-1930.
The audited financial statements of Federated Intermediate Municipal Trust
dated May 31, 1996 and The Starburst Municipal Income Fund dated October
31, 1995 are incorporated herein by reference to their respective
Prospectuses dated July 31, 1996 and December 31, 1995, and filed with the
Securities and Exchange Commission on or about July 25, 1996 and
December 28, 1995, respectively.
The pro forma financial statements required by Item 14 of Form N-14 need
not be prepared because the net asset value of The Starburst Municipal
Income Fund does not exceed ten percent of Federated Intermediate Municipal
Trust's net asset value, measured as of a date within thirty days prior to
the date of filing of this registration statement.
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
THE STARBURST MUNICIPAL INCOME FUND
SPECIAL MEETING OF SHAREHOLDERS
OCTOBER 22, 1996
KNOW ALL PERSONS BY THESE PRESENTS that the
undersigned shareholders of The Starburst
Municipal Income Fund hereby appoint C.
Grant Anderson, Karen M. Brownlee, Patricia
F. Conner, Suzanne W. Land, and Tonya
Kredell or any one of them, true and lawful
attorneys, with the power of substitution
of each, to vote all shares of The
Starburst Municipal Income Fund which the
undersigned is entitled to vote at the
Special Meeting of Shareholders to be held
on October 22, 1996, at Federated Investors
Tower, Pittsburgh, Pennsylvania, at 2:00
p.m., (Eastern time), and at any
adjournment thereof.
Discretionary authority is hereby conferred
as to all other matters as may properly
come before the Special Meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES. THE ATTORNEYS
NAMED WILL VOTE THE SHARES REPRESENTED BY THIS PROXY IN ACCORDANCE WITH THE
CHOICES MADE ON THIS BALLOT. IF NO CHOICE IS INDICATED AS TO ANY ITEM,
THIS PROXY WILL BE VOTED AFFIRMATIVELY ON THAT MATTER.
PLEASE RETURN BOTTOM PORTION WITH YOUR VOTE IN THE ENCLOSED ENVELOPE AND
RETAIN THE TOP PORTION.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: x
KEEP THIS PORTION FOR YOUR RECORDS
The
Starburst Municipal Income Fund DETACH AND RETURN
THIS PORTION ONLY
VOTE ON PROPOSAL
FOR AGN ABS
1. TO APPROVE OR DISAPPROVE AN AGREEMENT AND PLAN OF
REORGANIZATION WHEREBY FEDERATED INTERMEDIATE
MUNICIPAL TRUST WOULD ACQUIRE ALL OF THE ASSETS OF
THE STARBURST MUNICIPAL INCOME FUND IN EXCHANGE FOR
SHARES OF FEDERATED INTERMEDIATE MUNICIPAL TRUST.
PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR ABOVE. WHEN SIGNING AS
ATTORNEY, EXECUTOR, ADMINISTRATOR, GUARDIAN, TRUSTEE, CUSTODIAN, ETC.,
PLEASE GIVE YOUR FULL TITLE AS SUCH. IF A CORPORATION OR PARTNERSHIP,
PLEASE SIGN THE FULL NAME BY AN AUTHORIZED OFFICER OR PARTNER. IF STOCK IS
OWNED JOINTLY, ALL PARTIES SHOULD SIGN.
SIGNATURE SIGNATURE (JOINT OWNERS) DATE
PART C - OTHER INFORMATION
ITEM 15.INDEMNIFICATION
Indemnification is provided to officers and trustees of the Registrant
pursuant to the Registrant's Declaration of Trust, except where such
indemnification is not permitted by law. However, the Declaration of Trust
does not protect the trustees from liabilities based on willful
misfeasance, bad faith, gross negligence, or reckless disregard of the
duties involved in the conduct of their office.
Trustees and officers of the Registrant are insured against certain
liabilities, including liabilities arising under the Securities Act of 1933
(the "Act").
Insofar as indemnification for liabilities arising under the Act may
be permitted to trustees, officers, and controlling persons of the
Registrant by the Registrant pursuant to the Declaration of Trust or
otherwise, the Registrant has been advised that, in the opinion of the
Securities and Exchange Commission, such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by the Registrant of expenses incurred or paid by trustees,
officers, or controlling persons of the Registrant in connection with the
successful defense of any act, suit, or proceeding) is asserted by such
trustees, officers, or controlling persons in connection with the shares
being registered, the Registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
Insofar as indemnification for liabilities may be permitted pursuant
to Section 17 of the Investment Company Act of 1940 for trustees, officers,
and controlling persons of the Registrant by the Registrant pursuant to the
Declaration of Trust or otherwise, the Registrant is aware of the position
of the Securities and Exchange Commission as set forth in Investment
Company Act Release No. IC-11330. Therefore, the Registrant undertakes
that in addition to complying with the applicable provisions of the
Declaration of Trust or otherwise, in the absence of a final decision on
the merits by a court or other body before which the proceeding was
brought, that an indemnification payment will not be made unless in the
absence of such a decision, a reasonable determination based upon factual
review has been made: (i) by a majority vote of a quorum of non-party
trustees who are not interested persons of the Registrant; or (ii) by
independent legal counsel in a written opinion that the indemnitee was not
liable for an act of willful misfeasance, bad faith, gross negligence, or
reckless disregard of duties. The Registrant further undertakes that
advancement of expenses incurred in the defense of a proceeding (upon
undertaking for repayment unless it is ultimately determined that
indemnification is appropriate) against an officer, trustee, or controlling
person of the Registrant will not be made absent the fulfillment of at
least one of the following conditions: (i) the indemnitee provides
security for his undertaking; (ii) the Registrant is insured against losses
arising by reason of any lawful advances; or (iii) a majority of a quorum
of disinterested non-party trustees or independent legal counsel in a
written opinion makes a factual determination that there is reason to
believe the indemnitee will be entitled to indemnification.
ITEM 16.EXHIBITS
1.1 Conformed copy of Declaration of Trust of the Registrant (1)
1.2 Conformed copies of Amendment Nos. 5, 6 and 7 to the Declaration of
Trust of Registrant (2)
2.1 Copy of Bylaws of the Registrant (3)
2.2 Copy of Amendment to By-Laws of Registrant (4)
3. Not Applicable
4. Agreement and Plan of Reorganization is included as Appendix A to the
Combined Proxy Statement and Prospectus of this Registration Statement
*
5. Not Applicable
6.1 Copy of Investment Advisory Contract of the Registrant (5)
6.2 Conformed copy of Exhibit A to the Investment Advisory Contract of the
Registrant to add Pennsylvania Intermediate Municipal Trust and Ohio
Intermediate Municipal Trust to the present Investment Advisory
Contract (5)
7. Conformed Copy of Distributor's Contract of the Registrant, including
Exhibits A, B, C and D thereto (3)
8. Not Applicable
9.1 Conformed Copy of Custodian Contract of the Registrant (5)
9.2 Copy of new Exhibit 1 to Custodian Contract (2)
9.3 Conformed Copy of Fund Accounting, Shareholder Recordkeeping and
Custody Services Procurement Agreement of the Registrant (5)
* Filed electronically.
(1) Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 17 to its Registration Statement on Form N-1A filed
February 17, 1994. (File Nos. 2-98237 and 811-4314).
(2) Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 23 to its Registration Statement on Form N-1A filed July
28, 1995. (File Nos. 2-98237 and 811-4314).
(3) Response is incorporated by reference to Registrant's Initial
Registration Statement on Form N-1A filed June 4, 1985. (File Nos. 2-
98237 and 811-4314).
(4) Response is incorporated by reference to Post-Effective Amendment No.
4 to its Registration Statement on Form N-1A filed July 26, 1988.
(File Nos. 2-98237 and 811-4314).
(5) Response is incorporated by reference to Post-Effective Amendment No.
20 to its Registration Statement on Form N-1A filed July 27, 1994.
(File Nos. 2-98237 and 811-4314).
10. Conformed Copy of the Specimen Mutual Funds Sales and Service
Agreement; Mutual Funds Service Agreement; and Plan Trustee/Mutual
Funds Service Agreement (6)
11. Opinion regarding legality of shares being issued *
12. Opinion regarding tax consequences of Reorganization (to be filed by
Amendment)
13.1 Conformed Copy of Administrative Services Agreement of the Registrant
(5)
13.2 Conformed Copy of Shareholder Services Agreement of the Registrant (5)
13.3 Conformed Copy of the Shareholder Services Sub-Contract between
Fidelity and Federated Shareholder Services (7)
14.1 Conformed Copy of Consent of Arthur Andersen LLP *
14.2 Conformed Copy of Consent of Deliotte & Touche LLP *
15. Not Applicable
16. Conformed Copy of Power of Attorney (2)
17.1 Copy of Declaration under Rule 24f-2 *
17.2 Form of Proxy *
* Filed electronically.
(1) Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 17 to its Registration Statement on Form N-1A filed
February 17, 1994. (File Nos. 2-98237 and 811-4314).
(2) Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 23 to its Registration Statement on Form N-1A filed July
28, 1995. (File Nos. 2-98237 and 811-4314).
(3) Response is incorporated by reference to Registrant's Initial
Registration Statement on Form N-1A filed June 4, 1985. (File Nos. 2-
98237 and 811-4314).
(4) Response is incorporated by reference to Post-Effective Amendment No.
4 to its Registration Statement on Form N-1A filed July 26, 1988.
(File Nos. 2-98237 and 811-4314).
(5) Response is incorporated by reference to Post-Effective Amendment No.
20 to its Registration Statement on Form N-1A filed July 27, 1994.
(File Nos. 2-98237 and 811-4314).
(6) Response is incorporated by reference to Cash Trust Series II's Post-
Effective Amendment No. 6 to its Registration Statement on Form N-1A
filed July 24, 1995. (File Nos.33-38550 and 811-7141).
(7) Response is incorporated by reference to Federated GNMA Trust's Post
Effective Amendment No. 29 to its Registration Statement on Form N-1A
filed March 26, 1996. (File Nos. 2-75670 and 811-3375)
ITEM 17.UNDERTAKINGS
(1) The undersigned Registrant agrees that prior to any public
reoffering of the securities registered through the use of a prospectus
which is a part of this Registration Statement by any person or party who
is deemed to be an underwriter within the meaning of Rule 145(c) of the
Securities Act of 1933, the reoffering prospectus will contain the
information called for by the applicable registration form for reofferings
by persons who may be deemed underwriters, in addition to the information
called for by the other items of the applicable form.
(2) The undersigned Registrant agrees that every prospectus that is
filed under paragraph (1) above will be filed as part of an amendment to
the Registration Statement and will not be used until the amendment is
effective, and that, in determining any liability under the Securities Act
of 1933, each post-effective amendment shall be deemed to be a new
Registration Statement for the securities offered therein, and the offering
of the securities at that time shall be deemed to be the initial bona fide
offering of them.
(3) The undersigned Registrant agrees that the opinion of Dickstein,
Shapiro & Morin, L.L.P. with respect to the federal income tax
consequences of the reorganization will be filed by Post-Effective
Amendment to this Registration Statement.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant, INTERMEDIATE MUNICIPAL
TRUST, certifies that it meets all of the requirements for effectiveness of
this Amendment to its Registration Statement pursuant to Rule 485(b) under
the Securities Act of 1933 and has duly caused this Amendment to its
Registration Statement to be signed on its behalf by the undersigned,
thereto duly authorized, in the City of Pittsburgh and Commonwealth of
Pennsylvania, on the 29th day of July, 1996.
INTERMEDIATE MUNICIPAL TRUST
BY: /s/ S. Elliott Cohan
S. Elliott Cohan, Assistant Secretary
Attorney in Fact for John F. Donahue
July 29, 1996
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to its Registration Statement has been signed below by the
following person in the capacity and on the date indicated:
NAME TITLE DATE
By:/s/S. Elliott Cohan
S. Elliott Cohan Attorney In Fact July 29, 1996
ASSISTANT SECRETARY For the Persons
Listed Below
NAME TITLE
John F. Donahue* Chairman and Trustee
(Chief Executive Officer)
Glen R. Johnson* President and Trustee
Edward C. Gonzales* Executive Vice President
John W. McGonigle* Executive Vice President, Treasurer
and Secretary
(Principal Financial and
Accounting Officer)
Thomas G. Bigley* Trustee
John T. Conroy, Jr.* Trustee
William J. Copeland* Trustee
James E. Dowd* Trustee
Lawrence D. Ellis, M.D.* Trustee
Edward L. Flaherty, Jr.* Trustee
Peter E. Madden* Trustee
Gregor F. Meyer* Trustee
John E. Murray, Jr.* Trustee
Wesley W. Posvar* Trustee
Marjorie P. Smuts* Trustee
*By Power of Attorney
Exhibit 11
FEDERATED SERVICES COMPANY
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
July 29, 1996
The Trustees of
Intermediate Municipal Trust
Federated Investors Tower
Pittsburgh, PA 15222-3779
Gentlemen:
Intermediate Municipal Trust, a Massachusetts business trust
("Trust"), proposes to issue shares of beneficial interest representing
interests in a separate portfolio of securities known as Federated
Intermediate Municipal Trust (such shares of beneficial interest being
herein referred to as "Shares") in connection with the acquisition of the
assets of the Starburst Municipal Income Fund, pursuant to the Agreement
and Plan of Reorganization dated July 26, 1996 ("Agreement"), filed as an
exhibit to the registration statement of the Trust filed on Form N-14
(Securities Act of 1933 Number to be assigned) under the Securities Act of
1933 as amended ("N-14 Registration").
As counsel, I have participated in the organization of the Trust, its
registration under the Investment Company Act of 1940, the registration of
its securities on Form N-1A under the Securities Act of 1933 and its N-14
Registration. I have examined and am familiar with the written Declaration
of Trust dated May 31, 1985 ("Declaration of Trust"), the Bylaws of the
Trust, the Agreement and such other documents and records deemed relevant.
I have also reviewed questions of law and consulted with counsel thereon as
deemed necessary or appropriate for the purposes of this opinion.
Based upon the foregoing, it is my opinion that:
1. The Trust is duly organized an validly existing pursuant to the
Declaration of Trust.
2. The Shares which are currently being registered by the N-14
Registration may be legally and validly issued in accordance with the
provisions of the Agreement and the Declaration of Trust upon receipt of
consideration sufficient to comply with the provisions of Article III,
Section 3, of the Declaration of Trust and subject to compliance with the
Investment Company Act of 1940, as amended, and applicable state laws
regulating the sale of securities. Such Shares, when so issued, will be
fully paid and non-assessable.
I consent to your filing this opinion as an exhibit to the N-14
Registration referred to above and to any application or registration
statement filed under the securities laws of any of the states of the
United States.
Very truly yours,
FEDERATED SERVICES COMPANY
BY: /s/ Jeannette Fisher-Garber
- -------
TITLE: Assistant Secretary
Exhibit 14.1
ARTHUR ANDERSEN LLP
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this registration statement on Form N-14 of Intermediate
Municipal Trust of our report dated July 12, 1996, included in the
Federated Intermediate Municipal Trust Prospectus and to all references to
our Firm included in this registration statement.
Pittsburgh, Pennsylvania /s/ Arthur Andersen LLP
July 26, 1996 ARTHUR ANDERSEN LLP
Exhibit 14.2
INDEPENDENT AUDITORS' CONSENT
To the Board of Trustees and Shareholders of
THE STARBURST MUNICIPAL INCOME FUND:
We consent to the incorporation by reference in this Registration Statement
on Form N-14 of Federated Intermediate Municipal Trust of our report dated
December 15, 1995 on the financial statements of The Starburst Municipal
Income Fund for the year ended October 31, 1995 appearing in the Prospectus
of The Starburst Municipal Income Fund dated December 31, 1995 and
incorporated by reference in the Statement of Additional Information dated
December 31, 1995.
/s/ Deloitte & Touche LLP
Pittsburgh, Pennsylvania
July 26, 1996
Exhibit 17.1
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 24F-2
ANNUAL NOTICE OF SECURITIES SOLD
PURSUANT TO RULE 24F-2
Read instructions at end of Form before preparing Form.
Please print or type.
1. Name and address of issuer:
Intermediate Municipal Trust
Federated Investors
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
2. Name of each series or class of funds for which this
notice is filed:
Federated Intermediate Municipal Trust
Federated Pennsylvania Intermediate Municipal Trust
Federated Ohio Intermediate Municipal Trust
3. Investment Company Act File Number:
811-4314
Securities Act File Number:
2-98237
4. Last day of fiscal year for which this notice is filed:
May 31, 1996
5. Check box if this notice is being filed more than 180
days after the close of the issuer's fiscal year for
purposes of reporting securities sold after the close
of the fiscal year but before termination of the
issuer's 24f-2 declaration:
[ ]
6. Date of termination of issuer's declaration under rule
24f-2(a)(1), if applicable:
7. Number and amount of securities of the same class or
series which had been registered under the Securities
Act of 1933 other than pursuant to rule 24f-2 in a
prior fiscal year, but which remained unsold at the
beginning of the fiscal year:
0; $0
8. Number and amount of securities registered during the
fiscal year other than pursuant to rule 24f-2:
6,588,385; $69,046,275
9. Number and aggregate sale price of securities sold
during the fiscal year (includes DRIP shares):
9,984,015; $104,147,061
10. Number and aggregate sale price of securities sold
during the fiscal year in reliance upon registration
pursuant to rule 24f-2:
3,395,630; $35,100,786
11. Number and aggregate sale price of securities issued
during the fiscal year in connection with dividend
reinvestment plans, if applicable:
12. Calculation of registration fees:
(i) Aggregate sale price of securities sold during the
fiscal
year in reliance on rule 24f-2 (from Item 10):
$35,100,786
(ii) Aggregate price of shares issued in connection
with
dividend reimbursement plans
(from Item 11, if applicable) +
(iii) Aggregate
price of shares redeemed or repurchased
during the fiscal year (if applicable)- 35,100,786
(iv) Aggregate price of shares redeemed or repurchased
and previously applied as a reduction to filing
fees
pursuant to rule 24e-2 (if applicable) + 0
(v) Net aggregate price of securities sold and issued
during
the fiscal year in reliance on rule 24f-2 [line
(i), plus
line (ii), less line (iii), plus line (iv)] (if
applicable): 0
(vi) Multiplier prescribed by Section 6(b) of the
Securities
Act of 1933 or other applicable law or regulation
(see Instruction C.6): x 1/2900
(vii) Fee due [line
(i) or line (v) multiplied by line (vi)]: $
Instruction: Issuers
should complete lines (ii), (iii), (iv), and (v)
only if the form in being filed within 60 days
after the close of the issuer's fiscal year. See
Instruction C.3.
13. Check box if fees are being remitted to the
Commission's lockbox depository as described in section
3a of the Commission's Rules of Informal and Other
Procedures
(17 CFR 202.3a).
[ ]
Date of mailing or wire transfer of filing fees to the
Commission's lockbox depository:
July 15, 1996
SIGNATURES
This report has been signed below by the following persons
on behalf of the issuer and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/S. Elliott Cohan
S. Elliott Cohan
Assistant Secretary
Date: July 15, 1996
FEDERATED ADMINISTRATIVE
SERVICES
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
412-288-1900
July 15, 1996
Intermediate Municipal Trust
Federated Investors Tower
Pittsburgh, PA 15222-3779
Gentlemen:
You have requested my opinion for use in conjunction with a Rule 24f-2
Notice for Intermediate Municipal Trust ("Trust") to be filed in respect of
shares of the Trust ("Shares") sold for the fiscal year ended May 31, 1996,
pursuant to the Trust's registration statement filed with the Securities
and
Exchange Commission (the "SEC") under the Securities Act of 1933 (File No.
2-
98237 ("Registration Statement").
In its Registration Statement, the Trust elected to register an
indefinite
number of shares pursuant to the provisions of Investment Company Act Rule
24f-
2.
As counsel, I have participated in the preparation and filing of the
Trust's amended Registration Statement under the Securities Act of 1933.
Further, I have examined and am familiar with the provisions of the
Declaration
of Trust dated May 31, 1985, ("Declaration of Trust"), the Bylaws of the
Trust
and such other documents and records deemed relevant. I have also reviewed
questions of law and consulted with counsel thereon as deemed necessary or
appropriate by me for the purposes of this opinion.
On the basis of the foregoing, it is my opinion the Shares sold for
the
fiscal year ended May 31, 1996, registration of which the Rule 24f-2 Notice
makes definite in number, were legally issued, fully paid and non-
assessable by
the Trust.
I hereby consent to the filing of this opinion as an exhibit to the
Rule
24f-2 Notice referred to above, the Registration Statement of the Trust and
to
any application or registration statement filed under the securities laws
of any
of the States of the United States.
The foregoing opinion is limited to the Federal laws of the United
States
and the laws of the Commonwealth of Massachusetts, and I am expressing no
opinion as to the effect of the laws of any other jurisdiction.
Very truly yours,
/s/S. Elliott Cohan
S. Elliott Cohan
Assistant Secretary
INTERMEDIATE MUNICIPAL TRUST
Federated Investors
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
July 15, 1996
EDGAR Operations Branch
Securities and Exchange Commission
Division of Investment Management
450 Fifth Street, Northwest
Washington, DC 20549
RE: Form 24f-2 Notice for INTERMEDIATE MUNICIPAL TRUST
1933 Act File No. 2-98237
1940 Act File No. 811-4314
Dear Sir or Madam:
Pursuant to the provisions of Rule 24f-2 of the Investment Company Act
of
1940, I enclose the Form 24f-2 for Intermediate Municipal Trust.
This filing has been filed electronically via EDGAR.
Since the aggregate redemption proceeds of redeemed securities
exceeded the
aggregate sales price of securities sold during the period for which the
Form
24f-2 is filed, an additional filing fee pursuant to Rule 24f-2(c) has not
been
filed.
As required by Rule 24f-2(b), a conformed opinion of counsel has been
electronically filed herewith which indicates whether the securities, the
registration of which this form makes definite in number, were legally
issued,
fully paid and non-assessable.
Very truly yours,
/s/ S. Elliott Cohan
S. Elliott Cohan
Assistant Secretary
Enclosures
cc: Charles H. Morin, Esquire
Matthew G. Maloney, Esquire
Linda L. Banas
