SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-14
REGISTRATION STATEMENT, UNDER THE SECURITIES ACT OF 1933 X
Pre-Effective Amendment No. .....................................
Post-Effective Amendment No. .....................................
MUNICIPAL SECURITIES INCOME TRUST
(Exact Name of Registrant as Specified in Charter)
FEDERATED INVESTORS FUNDS
5800 CORPORATE DRIVE
PITTSBURGH, PENNSYLVANIA 15237-7000
(Address of Principal Executive Offices)
(412) 288-1900
(Registrant's Telephone Number)
JOHN W. MCGONIGLE, ESQUIRE
FEDERATED INVESTORS TOWER,
PITTSBURGH, PENNSYLVANIA 15222-3779
(Name and Address of Agent for Service)
It is proposed that this filing will become effective on January 22, 1998, or as
soon thereafter as is practicable, pursuant to Rule 488.
Copies to:
MATTHEW G. MALONEY, ESQUIRE
DICKSTEIN, SHAPIRO, MORIN AND OSHINSKY LLP
2101 L STREET, N.W.
WASHINGTON, D.C. 20037
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CROSS-REFERENCE SHEET
...... Prospectus Heading
PART A. Information Required in a Prospectus Rule 481(a) Cross-Reference
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Item 1. Beginning of Registration
Statement and Outside Front
Cover Page of Prospectus...... Cross-Reference Sheet; Cover
Page
Item 2. Beginning and Outside Back
Cover Page of Prospectus...... Cover Page; Table of Contents
Item 3. Fee Table, Synopsis
Information, and Risk Factors. Summary; Comparison of
Investment Policies and Risk
Factors
Item 4. Information About the Information About the
Transaction................... Reorganization
Item 5. Information About the Information About the Portfolio
Registrant.................... and the Fund
Item 6. Information About the Company
Being Acquired................ Information About the Portfolio
and the Fund
Item 7. Voting Information............ Voting Information
Item 8. Interest of Certain Persons
and Experts................... Not Applicable
Item 9. Additional Information
Required for Reoffering by
Persons Deemed to be Not Applicable
Underwriters..................
PART B. Information Required in a Statement of Additional Information
Item 10. Cover Page.................... Cover Page
Item 11. Table of Contents............. Table of Contents
Item 12. Additional Information About
the Registrant................ Information Incorporated by
Reference
Item 13. Additional Information About
the Company Being Acquired.... Information Incorporated by
Reference
Item 14. Financial Statements.......... Information Incorporated by
Reference
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INTERMEDIATE MUNICIPAL TRUST
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, Pennsylvania 15237-7000
Dear Shareholder:
The Board of Trustees and Management of Intermediate Municipal Trust, on
behalf of its portfolio, Federated Pennsylvania Intermediate Municipal Trust
(the "Portfolio") are pleased to submit for your vote a proposal to sell all of
the Portfolio's assets to Federated Pennsylvania Municipal Income Fund, a
portfolio of Municipal Securities Income Trust. As described in the enclosed
Prospectus/Proxy Statement, Federated Pennsylvania Municipal Income Fund has an
investment objective and policy similar to the Portfolio. Both seek to provide
current income exempt from federal regular income tax and the personal income
taxes imposed by the Commonwealth of Pennsylvania.
We believe that the sale of the Portfolio's assets in this transaction
will present an excellent investment opportunity for our shareholders. Your vote
on the transaction is critical to its success. The sale will be effected only if
approved by the holders of a majority of the Portfolio's outstanding shares on
the record date. We hope you share our enthusiasm and will participate by
casting your vote in person or by proxy if you are unable to attend the meeting.
Please read the enclosed Prospectus/Proxy Statement carefully before you vote.
If you have any questions, please feel free to call us at 1 (800) 341-7400.
Thank you for your prompt attention and participation.
...... SINCERELY,
...... JOHN F. DONAHUE
...... CHAIRMAN OF THE BOARD
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INTERMEDIATE MUNICIPAL TRUST
FEDERATED INVESTORS FUNDS
5800 CORPORATE DRIVE
PITTSBURGH, PENNSYLVANIA 15237-7000
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO SHAREHOLDERS OF FEDERATED PENNSYLVANIA INTERMEDIATE MUNICIPAL TRUST, A
PORTFOLIO OF INTERMEDIATE MUNICIPAL TRUST: A Special Meeting of Shareholders of
Federated Pennsylvania Intermediate Municipal Trust (the "Fund") will be held at
2:00 p.m. on March 2, 1998, at Federated Investors Tower, 19th Floor, 1001
Liberty Avenue, Pittsburgh, Pennsylvania 15222-3779 for the following purposes:
To approve or disapprove a proposed Agreement and Plan of
Reorganization between Intermediate Municipal Trust, on behalf of
the Fund, and Municipal Securities Income Trust (the "Trust"), on
behalf of its portfolio, Federated Pennsylvania Municipal Income
Fund (the "Portfolio"), whereby the Trust would acquire all of the
assets of the Fund in exchange for Class A Shares of the Portfolio
to be distributed PRO RATA by the Fund to holders of shares of the
Fund, in complete liquidation of the Fund; and
To transact such other business as may properly come before the meeting or
any adjournment thereof.
By Order of the Board of Trustees
John W. McGonigle
SECRETARY
Dated: January ____, 1998
SHAREHOLDERS OF RECORD AT THE CLOSE OF BUSINESS ON JANUARY 7, 1998 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.
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.
1
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PROSPECTUS/PROXY STATEMENT
January ____, 1998
ACQUISITION OF THE ASSETS OF
FEDERATED PENNSYLVANIA INTERMEDIATE MUNICIPAL TRUST,
A PORTFOLIO OF INTERMEDIATE MUNICIPAL TRUST
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, Pennsylvania 15237-7000
Telephone Number: 1-800-341-7400
BY AND IN EXCHANGE FOR CLASS A SHARES OF
FEDERATED PENNSYLVANIA MUNICIPAL INCOME FUND,
A PORTFOLIO OF MUNICIPAL SECURITIES INCOME TRUST
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, Pennsylvania 15237-7000
Telephone Number: 1-800-341-7400
This Prospectus/Proxy Statement describes the proposed Agreement and Plan
of Reorganization (the "Plan") whereby Municipal Securities Income Trust, a
Massachusetts business trust (the "Trust"), on behalf of its portfolio,
Federated Pennsylvania Municipal Income Fund (the "Portfolio"), would acquire
all of the assets of Federated Pennsylvania Intermediate Municipal Trust (the
"Fund"), a portfolio of Intermediate Municipal Trust, in exchange for Class A
Shares of the Portfolio to be distributed PRO RATA by the Fund to its
shareholders in complete liquidation of the Fund. As a result of the Plan, each
shareholder of the Fund will become the owner of Class A Shares of the Portfolio
having a total net asset value equal to the total net asset value of his or her
holdings in the Fund.
The Trust is among over 100 funds managed by subsidiaries of Federated
Investors. Federated Investors is one of the largest institutional service
providers in the United States. It has been providing advisory services for over
41 years.
The Trust is an open-end, non-diversified management investment company
which currently includes five portfolios: Federated California Municipal Income
Fund, Federated Michigan Intermediate Municipal Trust, Federated New York
Municipal Income Fund, Federated Ohio Municipal Income Fund, and the Portfolio.
The investment objectives of both the Portfolio and the Fund are to provide
current income exempt from federal regular income tax and the personal income
taxes imposed by the Commonwealth of Pennsylvania. The Portfolio pursues its
investment objective by investing its assets so that at least 80% of its annual
interest income is exempt from federal regular income tax and the personal
income taxes imposed by the Commonwealth of Pennsylvania. The Fund pursues its
investment objective by investing at least 80% of its net assets in a portfolio
of Pennsylvania municipal securities. Both the Portfolio and the Fund are
non-diversified series of investment companies. Shares in the Portfolio and the
Fund are not insured or guaranteed by the U.S. government or any agency thereof.
For a comparison of the investment policies of the Portfolio and the Fund, see
"Comparison of Investment Policies and Risk Factors."
The Portfolio is currently offered with two classes of shares: Class A
Shares and Class B Shares. Holders of Shares of the Fund will receive Class A
Shares of the Portfolio if the Reorganization is approved by shareholders.
Information concerning Class A Shares of the Portfolio, as compared to Shares of
the Fund, is included in this Prospectus/Proxy Statement in the sections
entitled "SUMMARY - Comparative Fee Tables" and "INFORMATION ABOUT THE
REORGANIZATION - Description of the Plan of Reorganization."
This Prospectus/Proxy Statement should be retained for future reference.
It sets forth concisely the information about the Trust and the Portfolio that a
prospective investor should know before investing. This Prospectus/Proxy
Statement is accompanied by the Prospectus of the Portfolio dated October 31,
1997, which is incorporated herein by reference. A Prospectus and a Statement of
Additional Information for the Portfolio dated October 31, 1997 as well as a
Statement of Additional Information dated January ____, 1998 (relating to this
Prospectus/Proxy Statement) containing additional information have been filed by
the Trust with the Securities and Exchange Commission and are incorporated
herein by reference. Copies of these materials, Annual Reports and other
information about the Portfolio may be obtained without charge by writing or by
calling the Trust at the address and telephone number shown above.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS/PROXY STATEMENT. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS/PROXY STATEMENT
AND IN THE MATERIALS EXPRESSLY INCORPORATED HEREIN BY REFERENCE AND, IF GIVEN OR
MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE FUND OR THE PORTFOLIO.
SHARES OF THE PORTFOLIO ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
OR ENDORSED BY, ANY BANK. SHARES OF THE PORTFOLIO ARE NOT FEDERALLY INSURED BY,
GUARANTEED BY, OBLIGATIONS OF OR OTHERWISE SUPPORTED BY THE U.S. GOVERNMENT, THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER
GOVERNMENTAL AGENCY. AN INVESTMENT IN THE PORTFOLIO INVOLVES INVESTMENT RISKS,
INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.
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i
TABLE OF CONTENTS
PAGE
PROPOSAL 1. REORGANIZATION................................................. 1
SUMMARY.............................................................. 1
COMPARISON OF INVESTMENT POLICIES AND RISK FACTORS................... 5
INFORMATION ABOUT THE REORGANIZATION................................. 8
INFORMATION ABOUT THE PORTFOLIO AND THE FUND......................... 11
VOTING INFORMATION......................................................... 12
OTHER MATTERS.............................................................. 14
AGREEMENT AND PLAN OF REORGANIZATION.................................Exhibit A
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32
32
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SUMMARY
ABOUT THE PROPOSED REORGANIZATION
The Board of Trustees of Intermediate Municipal Trust, including its
members who are not "interested persons" within the meaning of the Investment
Company Act of 1940, as amended (the "1940 Act"), on behalf of one of its
portfolios, Federated Pennsylvania Intermediate Municipal Trust (the "Fund"),
has voted to recommend to shareholders of the Fund the approval of an Agreement
and Plan of Reorganization (the "Plan"), whereby Municipal Securities Income
Trust, a Massachusetts business trust (the "Trust"), on behalf of its portfolio,
Federated Pennsylvania Municipal Income Fund (the "Portfolio"), would acquire
all of the assets of the Fund in exchange for Class A Shares of the Portfolio to
be distributed PRO RATA by the Fund to its shareholders in complete liquidation
and dissolution of the Fund (the "Reorganization"). As a result of the
Reorganization, each shareholder of shares of the Fund will become the owner of
Class A Shares of the Portfolio having a total net asset value equal to the
total net asset value of his or her holdings in the Fund on the date of the
Reorganization (the "Closing Date").
As a condition to the Reorganization transactions, the Trust and the Fund
will receive an opinion of counsel that the Reorganization will be considered a
tax-free "reorganization" under applicable provisions of the Internal Revenue
Code of 1986, as amended, so that no gain or loss will be recognized by either
the Trust or the Fund or their respective shareholders. The tax cost-basis of
the Class A Shares of the Portfolio received by Fund shareholders will be the
same as the tax cost-basis of their shares in the Fund.
After the acquisition is completed, the Fund will no longer be available
as an investment portfolio of Intermediate Municipal Trust.
INVESTMENT OBJECTIVE AND POLICIES
The investment objectives of both the Portfolio and the Fund are to
provide current income exempt from federal regular income tax and the personal
income taxes imposed by the Commonwealth of Pennsylvania. Both the Portfolio and
the Fund pursue their respective investment objectives by investing in a
portfolio consisting primarily of obligations issued by or on behalf of states,
territories, and possessions of the United States, and their respective
political subdivisions or financing authorities, which pay income exempt from
federal regular income tax and Pennsylvania personal income taxes. The Portfolio
pursues its investment objective by investing its assets so that at least 80% of
its annual interest income is exempt from federal regular income tax and the
personal income taxes imposed by the Commonwealth of Pennsylvania. The Fund
pursues its investment objective by investing at least 80% of its net assets in
a portfolio of Pennsylvania municipal securities. Both the Portfolio and the
Fund are non-diversified series of investment companies. Since the Portfolio and
the Fund invest in similar securities, an investment in the Portfolio presents
similar investment risks as investing in the Fund.
ADVISORY FEES AND EXPENSE RATIOS
The maximum annual investment advisory fee for the Portfolio is 0.40% of
average daily net assets. The maximum annual investment advisory fee for the
Fund is 0.50% of average daily net assets.
For its fiscal year ended August 31, 1997, the Portfolio's ratio of
expenses to average daily net assets was 0.75% for Class A Shares. During this
period the Portfolio's investment adviser, Federated Advisers ("Federated
Advisers"), voluntarily waived a portion of its management fees and reimbursed
the Portfolio for certain operating expenses. Absent such waiver and
reimbursement, the ratio of expenses to average daily net assets would have been
0.97% for Class A Shares of the Portfolio. This undertaking to waive management
fees and/or reimburse operating expenses may be terminated by Federated Advisers
at any time in its discretion.
For its fiscal year ended May 31, 1997, the Fund's ratio of expenses to
average daily net assets was 0.45%. During this period the Fund's investment
adviser, Federated Management ("Federated Management"), voluntarily waived a
portion of its management fees and reimbursed the Fund for certain operating
expenses. Absent such waiver and reimbursement, the ratio of expenses to average
daily net assets would have been 2.54%. This undertaking to waive management
fees and/or reimburse operating expenses may be terminated by Federated
Management at any time in its discretion.
PURCHASE AND REDEMPTION PROCEDURES
Procedures for the purchase and redemption of Portfolio shares are
similar, but not identical, to procedures applicable to the purchase and
redemption of Fund shares. In anticipation that the Reorganization will be
consummated, shareholders of the Fund will receive information with respect to
the various services provided by the Portfolio, as well as a detailed
explanation of the options available to shareholders for effecting purchases and
redemptions of Portfolio shares. Any questions about such procedures may be
directed to, and assistance in effecting purchases or redemptions of Portfolio
shares may be obtained by calling the Portfolio at 1-800-341-7400.
Reference is made to the Prospectus of the Portfolio dated October 31,
1997, and the Prospectus of the Fund for a complete description of the purchase
and redemption procedures applicable to purchases and redemptions of Portfolio
and Fund shares, respectively, each of which is incorporated herein by reference
thereto. Set forth below is a brief listing of the more significant differences
between the purchase and redemption procedures of the Portfolio as compared to
the Fund.
Shares of the Portfolio are subject to a maximum sales charge on purchases
of 4.50% of the offering price. Purchases of the Portfolio through certain
financial intermediaries, "wrap accounts" or similar programs, as well as
purchases by certain Federated Life Members are exempt from the sales charge.
Shares of the Fund are available for purchase without the imposition of any
sales charge on purchases or any contingent deferred sales charge. Shareholders
of the Fund will not pay a sales charge on shares of the Portfolio received in
the Reorganization, if approved by shareholders. The minimum initial investment
in the Portfolio is $500.00. The minimum initial investment in the Fund is
$25,000.00. To meet the minimum investment requirements, purchases of shares of
the Fund may be aggregated over a period of 90 days.
The Fund's and the Portfolio's net asset values are calculated at the
close of each day on which each computes its net asset value. Purchase orders
received by the Portfolio by wire before 3:00 p.m. (Eastern time) begin earning
dividends that day. Purchase orders received by the Fund by wire begin earning
dividends on the business day after the order is received. Purchase orders
received by check by either the Portfolio or the Fund begin earning dividends
the day after such check is converted into federal funds, which ordinarily
occurs one day after receipt by State Street Bank and Trust Company, the Fund's
and the Portfolio's custodian. Shares of the Portfolio may also be purchased at
a given day's price if an order is placed through a registered broker/dealer by
4:00 p.m. (Eastern time) and transmitted to the Portfolio by 5:00 p.m. (Eastern
time) or transmitted to the Portfolio through a financial intermediary other
than a broker/dealer by 4:00 p.m. (Eastern time).
Shares of both the Portfolio and the Fund may be redeemed by mail or by
telephone. Shares of the Portfolio may also be redeemed through financial
intermediaries which maintain shareholder accounts. Shares of the Fund are
redeemed at the net asset value per share next determined after receiving the
redemption order.
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EXCHANGES
Class A Shares of the Portfolio may be exchanged at net asset value
without the imposition of a sales charge for Class A Shares of certain other
Federated Funds. Upon receipt of proper instructions and required supporting
documents, the Trust will redeem Class A Shares of the Portfolio and invest the
proceeds in Class A Shares of the other fund. This exchange privilege may be
modified or terminated at any time.
As a no-load fund, the Fund does not provide a formal exchange privilege.
DIVIDENDS
The Fund's dividends are declared daily and paid monthly. In contrast, the
Portfolio's dividends are declared and paid monthly to all shareholders invested
in the Portfolio on the record date. Dividends paid by both the Fund and the
Portfolio are automatically reinvested in additional shares unless shareholders
request cash payment. Dividends reinvested in Portfolio shares are purchased at
net asset value without a sales charge.
SERVICES PROVIDERS TO THE TRUST AND PORTFOLIO
Administrative services to the Trust and Portfolio are provided by
Federated Services Company ("Federated Services"). Federated Services is a
wholly-owned subsidiary of Federated Investors. For its services to the
Portfolio, Federated Services receives a fee at an annual rate which relates to
the average aggregate daily net assets of all funds administered by Federated
Services in the Federated Investors complex, determined as follows: 0.15% on the
first $250 million in assets; 0.125% on the next $250 million in assets; 0.10%
on the next $250 million in assets; and 0.075% on assets in excess of $750
million. The minimum annual administrative fee for the Portfolio is $125,000
plus $30,000 per each additional class of shares. For the fiscal year ended
August 31, 1997, Federated Services received administrative fees at the
effective rate of 0.12% of the average daily net assets of the Portfolio.
Federated Services also serves as the Portfolio's transfer agent and
dividend disbursing agent. Federated Services also provides certain accounting
and recordkeeping services with respect to the portfolio investments of the
Portfolio.
Federated Securities Corp. ("FSC"), a wholly-owned subsidiary of Federated
Investors, is the principal distributor of the Trust and Portfolio. Under a
distribution agreement, FSC acts as the Trust's agent in connection with the
offering of shares of the Portfolio.
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COMPARATIVE FEE TABLES
Set forth in the tables below is information regarding the fees and
expenses incurred by the Fund and Class A Shares of the Portfolio as of May 31,
1997, and August 31, 1997, respectively, and PRO FORMA fees for the Portfolio
after giving effect to the Reorganization.
PENNSYLVANIPENNSYLVANIA PENNSYLVANIA
INTERMEDIATEMUNICIPAL MUNICIPAL
MUNICIPAL INCOME FUND INCOME
TRUST CLASS A FUND
(THE (THE PROFORMA
"FUND") "PORTFOLIO") CLASS A
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Maximum Sales Charge Imposed on Purchases (as a
percentage of offering None 4.50% 4.50%
price)
Maximum Sales Charge Imposed on Reinvested
Dividends (as a percentage of offering None None None
price)....................................................................
Contingent Deferred Sales Charge (as a
percentage of original purchase price or None None None
redemption proceeds, as
applicable)............................
Redemption Fee (as a percentage of amount None None None
redeemed, if applicable)....
Exchange Fee None None None
ANNUAL OPERATING EXPENSES
(As a percentage of average net assets)
Management Fee (after waiver) 0.00% 0.20% 0.31%
(1)..........................................................
12b-1 None 0.00% (2) 0.00% (2)
Fee....................................................................
Total Other 0.45% 0.55% 0.44%
Expenses...............................................................................
Shareholder Services Fee (after 0.11% 0.23% 0.23%
waiver) (3)............................
Total Operating Expenses 0.45% 0.75% 0.75%
(4)...................................................................
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(1) The management fee has been reduced to reflect the voluntary waiver of the
management fee for the Pennsylvania Intermediate Municipal Trust and the
voluntary waiver of a portion of the management fee for the Pennsylvania
Municipal Income Fund. The adviser can terminate this voluntary waiver at any
time at its sole discretion. The maximum management fee is 0.50% and 0.40%
respectively.
(2) The Pennsylvania Municipal Income Fund has no present intention of paying or
accruing the 12b-1 fee during the fiscal year ending August 31, 1998. If the
Portfolio were paying or accruing the 12b-1 fee, the Portfolio would be able to
pay up to 0.40% of its average daily net assets for the 12b-1 fee. For more
information, see "Information about the Portfolio and the Fund."
(3) The shareholder services fees for both funds has been reduced to reflect the
voluntary waiver of a portion of the shareholders services fee. The shareholder
service provider can terminate this voluntary waiver at any time at its sole
discretion. The maximum shareholder services fee is 0.25%.
(4) The total operating expenses for the Pennsylvania Intermediate Municipal
Trust and the Pennsylvania Municipal Income Fund and the Pennsylvania Municipal
Income Fund ProForma would have been 2.54%, 0.97% and 0.86% respectively, absent
the voluntary waivers described in notes 1 and 3 above and the voluntary
reimbursement of certain other operating expenses for the Pennsylvania
Intermediate Municipal Trust.
The purpose of this table is to assist an investor in understanding the
various costs and expenses that a shareholder of the Fund will bear, either
directly or indirectly. For more complete descriptions of the various costs and
expenses, see "Information about the Portfolio and the Fund." Wire-transferred
redemptions of less than $5,000 may be subject to additional fees.
LONG-TERM SHAREHOLDERS MAY PAY MORE THAN THE ECONOMIC EQUIVALENT OF THE MAXIMUM
FRONT-END SALES CHARGES PERMITTED UNDER THE RULES OF THE NATIONAL ASSOCIATION OF
SECURITIES DEALERS, INC.
PENNSYLVANIA
PENNSYLVANIAPENNSYLVANIAMUNICIPAL
INTERMEDIATE MUNICIPAL INCOME
MUNICIPAL INCOME FUND
EXAMPLE TRUST FUND CLASS PROFORMA
A CLASS A
You would pay the following expenses on a $1,000 investment, assuming (1) 5%
annual return, (2) redemption at the end of each time period, and (3) payment of
the maximum sales charge.
1 Year $5 $52 $52
3 Year $14 $68 $68
5 Year $25 $85 $85
10 Year $57 $134 $134
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
COMPARISON OF INVESTMENT POLICIES AND RISK FACTORS
INVESTMENT OBJECTIVES AND POLICIES
The Portfolio and the Fund have the same investment objective: to provide
current income exempt from federal regular income tax and the personal income
taxes imposed by the Commonwealth of Pennsylvania.
The Portfolio invests its assets so that at least 80% of its annual
interest income is exempt from federal regular income tax and the personal
income taxes imposed by the Commonwealth of Pennsylvania. The Fund pursues its
investment objective by investing at least 80% of its net assets in a
non-diversified portfolio of Pennsylvania municipal securities. In addition, the
Fund maintains a dollar-weighted average maturity of not less than three nor
more than ten years. The Portfolio has no such maturity limitation.
Both the Portfolio and the Fund invests in municipal securities which pay
interest that is, in the opinion of bond counsel for the issuers or in the
opinion of officers of the investment adviser of the Portfolio or the Fund,
respectively, exempt from both federal regular income tax and the personal
income taxes imposed by the Commonwealth of Pennsylvania (the "Municipal
Securities"). The Municipal Securities in which the Portfolio and the Fund
invest are: (1) obligations issued by or on behalf of the Commonwealth of
Pennsylvania, its political subdivisions, or agencies; (2) debt obligations of
any state, territory, or possession of the United States, including the District
of Columbia, or any political subdivision of any of these; and (3) participation
interests in any of the foregoing obligations.
The Municipal Securities in which the Portfolio may invest must be
"investment grade." Thus, the Portfolio's Municipal Securities must be rated
Aaa, Aa, A, or Baa, by Moody's Investors Service, Inc. ("Moody's"), or AAA, AA,
A, or BBB by Standard & Poor's Ratings Group ("S&P") or Fitch Investors Service,
L.P. ("Fitch"). The Municipal Securities in which the Fund may invest must be
rated within three highest ratings for municipal securities by Moody's, S&P, or
Fitch. In addition to the foregoing, both the Portfolio and the Fund may invest
in unrated Municipal Securities if, at the time of purchase, the investment
adviser determines that such security is of equivalent quality to securities
with the applicable ratings. In addition, the Fund may invest in Municipal
Securities which are: (1) guaranteed at the time of purchase by the U.S.
government as to the payment of principal and interest; (2) fully collateralized
by an escrow of U.S. government securities or other securities acceptable to the
investment adviser; (3) rated at the time of purchase within Moody's highest
short-term municipal obligation rating (MIG 1/VMIG 1) or Moody's highest
municipal commercial paper rating (PRIME-1) or S&P's highest municipal
commercial paper rating (SP-1); or (4) unrated if, at the time of purchase,
other municipal securities of that issuer are rated A or better by Moody's, S&P,
or Fitch. Finally, both the Portfolio and the Fund may retain a Municipal
Security that is downgraded if the investment adviser determines that such
security continues to be an acceptable investment.
Both the Portfolio and the Fund may purchase participation interests from
financial institutions such as commercial banks, savings associations, and
insurance companies. Participation interests give the Portfolio and the Fund
undivided interests in Pennsylvania Municipal Securities. The financial
institutions from which the Portfolio or the Fund may purchase participation
interests frequently provide or secure irrevocable letters of credit or
guarantees to assure that the participation interests are of high quality.
Both the Portfolio and the Fund may also invest in variable rate Municipal
Securities which meet applicable quality standards. The variable interest rates
of the Municipal Securities are ordinarily stated as a percentage of a published
interest rate, interest rate index, or a similar standard, such as the 91-day
U.S. Treasury bill rate. Many of the variable rate Municipal Securities are
subject to payment of principal on demand by the Portfolio or the Fund in not
more than seven days.
Both the Portfolio and Fund may also invest in municipal leases. Municipal
leases are obligations issued by state and local governments or authorities to
finance the acquisition of equipment and facilities and may be considered
illiquid. If the issuing entity does not appropriate funds for future lease
payments, the entity cannot be compelled to make such payments. Certain lease
obligations contain "non-appropriation" clauses which provide that the
municipality has no obligation to make lease or installment purchase payments in
future years unless money is appropriated for such purpose on a yearly basis.
The Fund restricts the ability to invest in "non-appropriation" leases to not
more than 10% of its total assets. The Portfolio does not include this
limitation.
Both the Portfolio and the Fund may also purchase Municipal Securities on
a when-issued or delayed delivery basis. In these transactions, the Portfolio or
the Fund may purchase securities with payment and delivery scheduled for a
future time. A seller's failure to complete these transactions may cause the
Portfolio or the Fund to miss a price or yield considered to be advantageous.
Finally, both the Portfolio and the Fund may invest in temporary
investments, which may include short-term non-Pennsylvania municipal tax-exempt
obligations or taxable temporary investments. Both the Portfolio and the Fund
invest in temporary investments when the investment adviser determines the
market conditions call for a temporary defensive posture. The temporary
investments include: (1) notes issued by or on behalf of municipal or corporate
issuers; (2) obligations issued or guaranteed by the U.S. government, its
agencies, or instrumentalities; (3) other debt securities; (4) commercial paper;
(5) certificates of deposit of banks; and (6) repurchase agreements. Neither the
Portfolio nor the Fund has any rating requirements applicable to temporary
investments. The Portfolio's investment adviser, however, will limit temporary
investments (if rated) to those rated within the investment grade categories
applicable to municipal securities, or (if unrated) to those which the
investment adviser judges to have the same characteristics as such investment
grade securities. The Fund's investment adviser will limit temporary investments
to those it considers to be of comparable quality to the acceptable investments
of the Fund.
In addition to the investments which are permissible for both the
Portfolio and the Fund, the Portfolio may invest in securities known as "inverse
floaters" which represent interests in Municipal Securities. These obligations
pay interest rates that vary inversely with changes in the interest rates of
specified short-term Municipal Securities or an index of short-term Municipal
Securities. The interest rates on inverse floaters will typically decline as
short-term market interest rates increase and increase as short-term market
rates decline. Inverse floaters will generally respond to changes in market
interest rates more rapidly than fixed-rate long-term securities (typically
twice as fast). As a result, the market values of inverse floaters will
generally be more volatile than the market values of fixed-rate Municipal
Securities. The Fund does not invest in inverse floaters.
The Portfolio may also purchase and sell interest rate and index financial
futures contracts. These financial futures contracts may be used to hedge all or
a portion of its portfolio against changes in the market value of portfolio
securities and interest rates, to provide additional liquidity, and to
accomplish its current strategies in a more expeditious fashion. Financial
futures contracts call for the delivery of particular debt instruments at a
certain time in the future. The seller of the contract agrees to make delivery
of the type of instrument called for in the contract and the buyer agrees to
take delivery of the instrument at the specified future time. When the Portfolio
uses financial futures, there is a risk that the prices of the securities
subject to the futures contracts may not correlate perfectly with the prices of
the securities in the Portfolio, thus causing the futures contract to react
differently to market changes than the securities held in the Portfolio. In
addition, the Portfolio's investment adviser could be incorrect in its
expectations about the direction or extent of market factors such as interest
rate movements. In these events, the Portfolio may loose money on the futures
contract. As a matter of investment policy, which may be changed without
shareholder approval, the Portfolio may not purchase or sell futures contracts
if immediately thereafter the sum of the amount of margin deposits on the
Portfolio's existing futures positions would exceed 5% of the market value of
the Portfolio's total assets. The Fund does not purchase and sell interest rate
and index financial futures.
INVESTMENT RESTRICTIONS
The investment restrictions of the Portfolio and the Fund are similar. The
significant differences are as follows. Although neither the Portfolio nor the
Fund intend to invest more than 10% of its assets in securities that may be
illiquid because of legal contractual restrictions on resale ("restricted
securities") or securities for which there are no readily available market
quotations, only the Portfolio requires majority shareholder approval in order
to change the limitation relating to restricted securities. In addition, in
order to pass through to investors the tax-free income from the Fund for
purposes of Pennsylvania state personal income taxes, the Fund maintains a
policy, which may be changed without shareholder approval, to invest in
securities for income earnings rather than trading for profit. The Fund will not
vary its investments, except to: (i) eliminate unsafe investments and
investments not consistent with the preservation of capital or the tax status of
the investments of the Fund; (ii) honor redemption orders, meet anticipated
redemption requirements, and negate gains from discount purchases; (iii)
reinvest the earnings from securities in like securities; or (iv) defray normal
administrative expenses. Finally, although neither the Portfolio nor the Fund
intends to invest in puts, calls, straddles, spreads, or any combination of
these securities, only the Portfolio requires majority shareholder approval in
order to permit investments in these securities.
RISK FACTORS
The risks associated with an investment in the Portfolio and the Fund are
similar. The nature of the Municipal Securities included in each of the
Portfolio's and Fund's investments are generally subject to the same factors,
including: the general conditions of the municipal bond market; the size of the
particular offering; the maturity of the obligations; and the rating of the
issue. Further, adverse economic conditions or developments affecting the
Commonwealth of Pennsylvania or its municipalities could impact the Portfolio's
or the Fund's investments. In both cases, any Pennsylvania constitutional
amendments, legislative measures, executive orders, administrative regulations,
or voter initiatives could result in adverse consequences affecting Municipal
Securities. Because the Portfolio may invest in Municipal Securities that are
rated in the FOUR highest rating categories by Moody's, S&P, or Fitch, an
investment in the Portfolio may be subject to additional investment risk as
compared to the Fund, which limits its purchase of Municipal Securities to those
rated in the THREE highest categories.
INFORMATION ABOUT THE REORGANIZATION
BACKGROUND AND REASONS FOR THE PROPOSED ACQUISITION
The Fund commenced operations on December 5, 1993, in order to provide
financial institutions serving in a fiduciary capacity with an investment
vehicle which provided current income exempt from federal regular income tax and
the personal income taxes imposed by the Commonwealth of Pennsylvania. Federated
Securities Corp. ("FSC"), the distributor of shares of both the Fund and the
Portfolio, has proposed that the Fund consider a sale of all of the Fund's
assets to the Trust, acting on behalf of the Portfolio.
In considering the proposed Reorganization, the Board of Trustees of
Intermediate Municipal Trust took into consideration a number of factors,
including: (1) the comparatively larger size of the Portfolio, (2) the
capabilities and resources of Federated Advisers, (3) expense ratios and
published information regarding the fees and expenses of the Portfolio in
relation to similar funds, (4) the fact that Federated Management had advised
the Board that, if the Reorganization is not completed, it will consider
discontinuing the waiver of its investment advisory fee and its reimbursement of
certain Fund operating expenses; (5) the comparative investment performance of
the Portfolio and the Fund as well as the performance of similar funds, (6) the
terms and conditions of the Reorganization and whether the Reorganization would
result in the dilution of shareholder interests, (7) the tax consequences of the
Reorganization, and (8) the compatibility of the Portfolio's and the Fund's
investment objectives, policies, restrictions and portfolios, as well as service
features available to shareholders in the respective funds.
The Board concluded to recommend that the shareholders of the Fund vote to
approve the Reorganization. Pursuant to Rule 17a-8 under the 1940 Act, the Board
of Trustees of Intermediate Municipal Trust, including a majority of the
Trustees who were not interested persons of either Intermediate Municipal Trust
or the Trust, determined that participation in the transaction was in the best
interests of the Fund's shareholders and that the interests of existing Fund
shareholders would not be diluted as a result of effecting the transaction. This
conclusion was based on a number of factors, including the following:
1. The Reorganization would permit the shareholders of the Fund to
pursue substantially the same investment goals in a larger fund. A
larger fund should enhance the ability of portfolio managers to
effect their portfolio transactions on more favorable terms and give
portfolio managers greater investment flexibility and the ability to
select a larger number of portfolio securities, with the attendant
ability to spread investment risks over a larger number of portfolio
issues.
2. The 30-day yield of the Portfolio for the period ended August 31,
1997, was 4.22%. The 30-day yield of the Fund for the period ended
May 31, 1997, was 4.70%. Over other periods the performance of the
Portfolio and the Fund in relation to each other have varied, in
part due to differing expense waivers by the respective investment
advisers.
3. The current waiver of investment advisory fees charged to the Fund
by Federated Management as well as Federated Management's
reimbursement of certain Fund operating expenses, might be
discontinued.
The Board of Trustees of Municipal Securities Income Trust likewise
considered the Reorganization and approved the Plan on behalf of the Portfolio.
Pursuant to Rule 17a-8 under the 1940 Act, the Board of Trustees of Municipal
Securities Income Trust, including a majority of the Trustees who were not
interested persons of either Intermediate Municipal Trust or the Trust,
determined that participation in the transaction was in the best interests of
the Portfolio's shareholders and that the interests of existing Portfolio
shareholders would not be diluted as a result of effecting the transaction.
DESCRIPTION OF THE PLAN OF REORGANIZATION
The Plan provides that the Trust, on behalf of the Portfolio, will acquire
all of the assets of the Fund in exchange for Class A Shares of the Portfolio to
be distributed PRO RATA by the Fund to the holders of Fund shares in complete
liquidation of the Fund on or about ____________, 1998. Fund shareholders will
receive a number of shares in the Portfolio equal to the same total net asset
value as the Fund shares they held immediately prior to the Closing.
Shareholders of the Fund will become shareholders of the Portfolio as of 5:00
p.m. (Eastern time) on the Closing Date. Shareholders of the Fund will earn
their last dividend from the Fund on the day preceding the Closing Date, which
Closing Date is expected to be ____________, 1998.
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, on behalf of the Fund, and the Trust, on behalf
of the Portfolio, 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 the Fund prior
to the Closing Date by either party if it believes that consummation of the
Reorganization would not be in the best interests of its shareholders.
Federated Advisers is responsible for the payment of all expenses of the
Reorganization, 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 the Fund's
shareholders and the costs of holding the Special Meeting of Shareholders.
The foregoing description of the Plan entered into between the Trust, on
behalf of the Portfolio, and Intermediate Municipal Trust, on behalf of the
Fund, 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 PORTFOLIO SHARES
Class A Shares of the Portfolio to be issued to shareholders of the Fund
under the Plan will be fully paid and nonassessable when issued, transferable
without restrictions and will have no preemptive or conversion rights. Reference
is hereby made to the Prospectus of the Portfolio provided herewith for
additional information about Class A Shares of the Portfolio.
FEDERAL INCOME TAX CONSEQUENCES
As a condition to the Reorganization transactions, the Trust, on behalf of
the Portfolio, and Intermediate Municipal Trust, on behalf of the Fund, will
receive an opinion from Howard & Howard Attorneys, P.C., 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 the Portfolio upon its receipt
of the Fund's assets in exchange for Portfolio shares; (3) the holding period
and basis for the Fund's assets acquired by the Portfolio will be the same as
the holding period and the basis to the Fund immediately prior to the
Reorganization; (4) no gain or loss will be recognized by the Fund upon transfer
of its assets to the Portfolio in exchange for Portfolio shares or upon the
distribution of the Portfolio shares to the Fund's shareholders in exchange of
their Fund shares; (5) no gain or loss will be recognized by shareholders of the
Fund upon exchange of their Fund shares for Portfolio shares; (6) the holding
period of Portfolio shares received by shareholders of the Fund pursuant to the
Plan will be the same as the holding period of Fund shares held immediately
prior to the Reorganization, provided the Fund shares were held as capital
assets on the date of the Reorganization; and (7) the basis of Portfolio shares
received by shareholders of the Fund pursuant to the Plan will be the same as
the basis of Fund shares held immediately prior to the Reorganization.
COMPARATIVE INFORMATION ON SHAREHOLDER RIGHTS AND OBLIGATIONS
The Trust is organized as a Massachusetts business trust pursuant to a
Declaration of Trust dated August 6, 1990, under the laws of the Commonwealth of
Massachusetts. Intermediate Municipal Trust is also organized as a Massachusetts
business trust under a Declaration of Trust dated May 31, 1985. The rights of
shareholders of the Trust and of Intermediate Municipal Trust are identical. Set
forth below is a brief summary of the more significant similarities between
rights of shareholders of the Fund and the Portfolio.
Special meetings of both the Fund's and the Portfolio's shareholders may
be called for any purpose on the written request of shareholders entitled to
cast at least 10% of all votes entitled to be cast at the meeting. Special
meetings of the Fund's and the Portfolio's shareholders may also be called by
the Trustees or the Chief Executive Officer of the Trust. Shareholders of the
Fund and the Portfolio are entitled to at least 15 days' notice of any meeting.
The Declaration of Trust of both Intermediate Municipal Trust and the
Trust provide that shareholders shall have the following voting powers: (i) to
vote for the election of Trustees; (ii) to vote with respect to any investment
advisory or sub-advisory contract entered into on behalf of any series; (iii) to
vote to the same extent as shareholders of a Massachusetts business corporation
as to whether or not a court action, proceeding, or claim should or should not
be brought derivatively or as a class action on behalf of the trust, any series,
or the shareholders; (iv) to vote for the removal of Trustees; (v) to vote on
amendments or supplements to the Declaration of Trust; and (vi) to vote on such
additional matters as required by the Declaration of Trust, the By-laws, the
registration statement, or the Securities and Exchange Commission.
Under certain circumstances, shareholders of the Fund or the Portfolio may
be held personally liable as partners under Massachusetts law for acts or
obligations of Intermediate Municipal Trust or the Trust, respectively. To
protect shareholders of the Fund and the Portfolio, the Declarations of Trust
expressly disclaim the liability of shareholders for acts or obligations of the
Fund and the Portfolio. The Declarations of Trust provide that a notice of the
disclaimer of liability may be included in each agreement, obligation, or
instrument that either Intermediate Municipal Trust or the Trust may enter into.
In the unlikely event that a shareholder of either the Fund or the
Portfolio is held personally liable for obligations of the Fund or the
Portfolio, the Declarations of Trust provide that property of the Fund or the
Portfolio will be used to protect or compensate the shareholder. On request,
claims are defended and judgments against shareholders are paid that arise out
of any act or obligation of Intermediate Municipal Trust or the Trust on behalf
of the Fund or the Portfolio, respectively. Therefore, financial loss resulting
from liability as a shareholder will occur only if Intermediate Municipal Trust
or the Trust cannot meet its obligations to indemnify shareholders and pay
judgments against them from the assets of the Fund or the Portfolio,
respectively.
<PAGE>
CAPITALIZATION
The following table shows the capitalization of the Portfolio and the Fund
as of November 30, 1997, and on a PRO FORMA basis as of that
date:
Pro Forma
Portfolio Combined
(Class A Shares) Fund (Class A Shares)
Net Assets........ 215,026,923 18,814,976 233,841,899
Net Asset Value
Per Share........ 11.86 10.36 11.86
Shares Outstanding 18,133,837 1,816,321 19,720,558
INFORMATION ABOUT THE PORTFOLIO AND THE FUND
FEDERATED PENNSYLVANIA MUNICIPAL INCOME FUND, A PORTFOLIO OF MUNICIPAL
SECURITIES INCOME TRUST
Information about the Trust and the Portfolio is contained in the
Portfolio's current Prospectus. A copy of the Prospectus is included herewith
and incorporated by reference herein. Additional information about the Trust and
the Portfolio is included in the Portfolio's Statement of Additional Information
dated October 31, 1997, which is incorporated herein by reference. Copies of the
Statement of Additional Information, as well as the Statement of Additional
Information relating to this Prospectus/Proxy Statement dated January ____,
1998, both of which have been filed with the Securities and Exchange Commission,
may be obtained without charge by contacting the Trust at 1-800-341-7400 or by
writing to the Trust at Federated Investors Tower, Pittsburgh, Pennsylvania
15222-3779. The Trust, on behalf of the Portfolio, is subject to the
informational requirements of the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended, and the Investment Company Act of
1940, as amended, and in accordance therewith files reports and other
information with the Securities and Exchange Commission. Reports, proxy and
information statements, and other information filed by the Trust, on behalf of
the Portfolio, can be obtained by calling or writing the Trust and can also be
inspected and copied by the public at the public reference facilities maintained
by the Securities and Exchange Commission 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 Room 1204, Everett McKinley Dirksen Building, 219
South Dearborn Street, Chicago, Illinois 60604 and 14th Floor, 75 Park Place,
New York, NY 10007. Copies of such material can be obtained at prescribed rates
from the Public Reference Branch, Office of Consumer Affairs and Information
Services, Securities and Exchange Commission, Washington D.C. 20549, or obtained
electronically from the Securities and Exchange Commission's Internet Web site
(http://www.sec.gov).
This Prospectus/Proxy Statement, which constitutes part of a Registration
Statement filed by the Trust, on behalf of the Portfolio, with the Securities
and Exchange Commission under the Securities Act of 1933, as amended, omits
certain of the information contained in the Registration Statement. Reference is
hereby made to the Registration Statement and to the exhibits thereto for
further information with respect to the Trust, the Portfolio and the shares
offered hereby. 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 Securities and Exchange Commission.
<PAGE>
FEDERATED PENNSYLVANIA INTERMEDIATE MUNICIPAL TRUST, A PORTFOLIO OF
INTERMEDIATE MUNICIPAL TRUST
Information about the Fund may be found in the Fund's current Prospectuses
dated July 31, 1997, and its Statement of Additional Information dated July 31,
1997, which are incorporated herein by reference. Financial Statements for the
Fund for the year ended May 31, 1997, may be found in the Fund's prospectus.
Copies of the Fund's Prospectus and Statement of Additional Information may be
obtained without charge from the Fund by calling 1-800-341-7400 or by writing to
the Fund at Federated Investors Tower, Pittsburgh, Pennsylvania 15222-3779. A
copy of the Statement of Additional Information relating to this
Prospectus/Proxy Statement may be obtained without charge from Intermediate
Municipal Trust by calling 1-800-341-7400 or by writing to Intermediate
Municipal Trust at Federated Investors Tower, Pittsburgh, Pennsylvania
15222-3779. The Fund is subject to the information requirements of the
Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as
amended, and the Investment Company Act of 1940, as amended, and in accordance
therewith files reports and other information with the Securities and Exchange
Commission. Reports, proxy and information statements, and other information
filed by the Fund can be obtained by calling or writing the Fund and can also be
inspected at the public reference facilities maintained by the Securities and
Exchange Commission at the addresses listed in the previous section.
INTERESTS OF CERTAIN PERSONS
The Portfolio is managed by Federated Advisers and the Fund is managed by
Federated Management. Each of Federated Advisers and Federated Management is a
subsidiary of Federated Investors. All of the voting securities of Federated
Investors are owned by a trust, the trustees of which are John F. Donahue, his
wife and his son, J. Christopher Donahue. John F. Donahue and J. Christopher
Donahue currently serve as trustees to the Portfolio and the Fund.
VOTING INFORMATION
This Prospectus/Proxy Statement is furnished in connection with the
solicitation by the Board of Trustees of the Fund of proxies for use at the
Special Meeting of Shareholders (the "Meeting") to be held on March 2, 1998 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 Fund an instrument revoking the proxy, or 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 Advisers. In addition to solicitations
through the mails, proxies may be solicited by officers, employees, and agents
of the Fund at no additional costs to the Fund. Such solicitations may be by
telephone, telegraph, or otherwise. Federated Advisers 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
The Board of Trustees of the Fund has fixed the close of business on
January 7, 1998, 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 the Fund outstanding. Each Fund share is entitled to one vote and fractional
shares have proportionate voting rights. On the record date, the following
persons of record owned 5% or more of the Fund's outstanding shares:___________
On such date, no other person owned of record, or to the knowledge of the Fund,
beneficially owned, 5% or more of the Fund's outstanding shares. On the record
date, the Trustees and officers of the Fund as a group owned less than 1% of the
outstanding shares of the Fund.
On the record date the following persons of record owned 5% or more of the
Portfolio's outstanding shares:_______________ On the record date, the Trustees
and officers of the Trust as a group owned less than 1% of the outstanding
shares of the Portfolio.
VOTING REQUIREMENTS
The votes of shareholders of the Portfolio are not being solicited since
their approval is not required in order to effect the Reorganization.
The Reorganization must be approved by a majority of the votes cast and
entitled to vote by Fund shareholders on the matter. In tallying shareholder
votes, abstentions and broker non-votes (i.e., proxies sent in by brokers and
other nominees that cannot be voted on a proposal because instructions have been
received from the beneficial owners) will be counted for purposes of determining
whether or not a quorum is present for purposes of convening the meeting. On the
proposal, broker non-votes will be considered to be abstentions on the vote
regarding the proposal.
QUORUM
In the event that a quorum is not present at the Special Meeting, or in
the event that a quorum is present at the Special Meeting, but sufficient votes
to approve the Plan are not received, the persons named as proxies may propose
one or more adjournments of the Special Meeting to permit further solicitation
of proxies. Any such adjournment will require the affirmative vote of a majority
of shares that are represented at the Meeting in person or by proxy. If a quorum
is present, the persons named as proxies will vote those proxies which they are
entitled to vote FOR the Plan in favor of such adjournments, and will vote those
proxies required to be voted AGAINST such proposal against any adjournment. A
quorum is constituted with respect to the Fund by the presence in person or by
proxy of the holders of one-fourth of the total number of outstanding shares of
the Fund entitled to vote at the Meeting. Proxies properly executed and marked
with a negative vote or an abstention will be considered to be present at the
Meeting for purposes of determining the existence of a quorum for the
transaction of business.
NO DISSENTER'S RIGHT OF APPRAISAL
Shareholders of the Fund objecting to the Reorganization have no appraisal
rights under the Fund's Declaration of Trust or under the laws of the
Commonwealth of Massachusetts. Shareholders have the right, however, to redeem
their Fund shares at net asset value until the Closing Date, and thereafter
shareholders may redeem Class A Shares of the Portfolio acquired by them in the
Reorganization at net asset value.
<PAGE>
OTHER MATTERS
Management of the 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 the Trust.
Whether or not shareholders expect to attend the meeting, all shareholders
are urged to sign, fill in and return the enclosed proxy form promptly.
<PAGE>
EXHIBIT A
AGREEMENT AND PLAN OF REORGANIZATION dated December 22, 1997 (the
"Agreement"), by and between MUNICIPAL SECURITIES INCOME TRUST, a Massachusetts
business trust, on behalf of its portfolio, Federated Pennsylvania Municipal
Income Fund (hereinafter called the "Acquiring Fund"), FEDERATED ADVISERS, a
Delaware business trust ("Federated Advisers"), INTERMEDIATE MUNICIPAL TRUST, a
Massachusetts business trust, on behalf of its portfolio, Federated Pennsylvania
Intermediate Municipal Trust (hereinafter called the "Acquired Fund") and
FEDERATED MANAGEMENT, a Delaware business trust ("Federated Management").
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 Class A Shares of beneficial
interest of the Acquiring Fund (collectively, the "Acquiring Fund Shares") and
the distribution, after the Closing Date as hereinafter defined, of Class A
Shares of the Acquiring Fund 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, the Acquired Fund and the Acquiring Fund are registered open-end,
non-diversified, management investment companies and the Acquired Fund owns
securities which generally are assets of the character in which the Acquiring
Fund is permitted to invest;
WHEREAS, the Acquiring Fund is authorized to issue the Acquiring Fund
Shares and the Acquired Fund is authorized to issue its shares of beneficial
interest;
WHEREAS, Federated Advisers, an investment adviser registered as such
under the Investment Advisers Act of 1940, as amended, serves as investment
adviser to the Acquiring Fund;
WHEREAS, Federated Management, an investment adviser registered as such
under the Investment Advisers Act of 1940, as amended, serves as investment
adviser to the Acquired Fund;
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 the Acquiring Fund has determined that the
transfer 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 the Acquired
Fund 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, that the interests of the shareholders of the Acquired Fund would
not be diluted as a result of this transaction and determined that subsequent to
the consummation of the transaction contemplated by this Agreement, the Acquired
Fund will cease operations;
NOW THEREFORE, for and in consideration of the mutual 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 at the time of the Closing (defined
below), including without limitation all securities and cash, and the
Acquiring Fund agrees in exchange therefor to deliver to the Acquired Fund
the number of Acquiring Fund Shares, including fractional Acquiring Fund
Shares, representing Class A Shares, determined as set forth in paragraph
2.3 of this Agreement. Such transactions shall take place at the closing
(the "Closing") on the closing date (the "Closing Date"), as provided in
paragraph 3.1 of this Agreement. 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's transfer agent 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 (hereinafter referred to as "State Street"),
Boston, Massachusetts, the Acquiring Fund's custodian (the "Custodian"),
for the account of the Acquiring Fund, together with proper instructions
and all documents necessary to transfer such assets to the account of the
Acquiring Fund, free and clear of all liens, encumbrances, rights,
restrictions and claims, except as may be indicated in a schedule
delivered by the Acquired Fund to the Acquiring Fund immediately prior to
the Closing. All cash delivered shall be in the form of currency or
immediately available funds payable to the order of Custodian for 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 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. Such liquidation and distribution will be accomplished by
the transfer (by the Acquiring Fund or its transfer agent) of the
Acquiring Fund Shares to an account for each shareholder on the books of
the Acquiring Fund's transfer agent in the name of each Acquired Fund
Shareholder and representing the pro rata number of the Acquiring Fund
Shares due each Acquired Fund Shareholder. 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 paragraph 2.3. The Acquiring
Fund will issue certificates representing the Acquiring Fund Shares in
connection with such exchange only for, and upon receipt of, certificated
shares of the Acquired Fund.
1.6 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 the Closing Date 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.
1.7 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 discontinuation of the
Acquired Fund as a series of Intermediate Municipal Trust with federal and
state authorities.
2. VALUATION.
2.1 The value of the Acquired Fund's assets to be acquired by the
Acquiring Fund hereunder shall be the net asset value of such assets
computed as of the close of business 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 business 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 assets
shall be determined by dividing the value of the assets attributable to
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. Class A Shares of the
Acquiring Fund shall be issued for shares of the Acquired Fund.
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 March __, 1998, 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 the close of business at the offices of the Acquired Fund, Federated
Investors Tower, Pittsburgh, Pennsylvania 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 The Acquired Fund shall instruct Federated Services Company, as
transfer agent for the Acquired Fund, to deliver to the Acquiring Fund 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 of outstanding shares owned by each such shareholder
immediately prior to the Closing. The Acquiring Fund shall issue and
deliver a confirmation evidencing the Class A Shares of the Acquiring Fund
to be credited on the Closing Date to the Secretary of the Acquired Fund
or provide evidence satisfactory to the Acquired Fund that such Class A
Shares of the Acquiring Fund have been credited to the respective accounts
of the Acquired Fund Shareholders on the books of the Acquiring Fund. At
the Closing, each party shall deliver to the other such bills of sale,
checks, assignments, share certificates, if any, receipts or other
documents as such other party or its counsel may reasonably request.
4. REPRESENTATIONS AND WARRANTIES.
4.1 Each of the Acquired Fund and Federated Management represents
and warrants to the Acquiring Fund as follows:
(a) Intermediate Municipal Trust is a business trust
organized, validly existing, and in good standing under the laws of
the Commonwealth of Massachusetts and has power to carry on its
business as it is now being conducted.
(b) Intermediate Municipal Trust is registered under the 1940
Act, as an open-end, non-diversified, management investment company,
and such registration has not been revoked or rescinded and is in
full force and effect.
(c) Intermediate Municipal Trust is not, and the execution,
delivery, and performance of this Agreement will not result, in a
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) No material 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 the Acquired Fund's properties or assets
which, if adversely determined, would materially and adversely
affect its financial condition or the conduct of its business.
Neither Federated Management nor the Acquired Fund knows of any
facts which might form the basis for the institution of such
proceedings, and the Acquired Fund 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.
(e) The Statement of Assets and Liabilities of the Acquired
Fund at May 31, 1997, has been audited by Arthur Andersen LLP,
independent public accountants, and has been prepared in accordance
with generally accepted accounting principles, consistently applied,
and such statement (copies of which have been furnished to the
Acquiring Fund) fairly reflect the financial condition of the
Acquired Fund as of such date, and there are no liabilities of the
Acquired Fund, known to the Acquired Fund or to Federated
Management, contingent or otherwise, as of such date not disclosed
therein.
(f) The unaudited Statement of Assets and Liabilities of the
Acquired Fund at November 30, 1997, has been prepared in accordance
with generally accepted accounting principles, consistently applied,
and on a basis consistent with the Statement of Assets and
Liabilities of the Acquired Fund at May 31, 1997, which has been
audited by Arthur Andersen LLP, and such statement (copies of which
have been furnished to the Acquiring Fund) fairly reflects the
financial condition of the Acquired Fund as of such date, and there
are no liabilities of the Acquired Fund known to the Acquired Fund
or to Federated Management, contingent or otherwise, as of such date
not disclosed therein.
(g) Since May 31, 1997, 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 any indebtedness for borrowed money.
(h) At the Closing Date, all federal and other tax returns and
reports of the Acquired Fund required by law (or permitted
extensions thereto) to have been filed shall have been filed, and to
the best of the Acquired Fund's knowledge 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.
(i) For each fiscal year (or part thereof) 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.
(j) 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 of this
Agreement. The Acquired Fund does not have outstanding options,
warrants or other rights to subscribe for or purchase any of the
Acquired Fund shares, nor is there outstanding any security
convertible into Acquired Fund shares.
(k) On the Closing Date, all issued and outstanding shares of
the Acquired Fund will have been duly registered under the
Securities Act of 1933, as amended (the "1933 Act"), and registered,
or exempt from registration, to the extent required thereby under
each state securities or "blue sky" law of every state in which the
Acquired Fund has offered or sold its shares.
(l) 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.
(m) The execution, delivery, and performance of this Agreement
has been duly authorized by all necessary action on the part of the
Acquired Fund's Board of 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 before which a
proceeding is brought (regardless of whether the enforceability is
considered in a proceeding in equity or at law).
(n) The Prospectus/Proxy Statement to be included in the
Registration Statement (only insofar as it relates to the Acquired
Fund) will, on the effective date of the Registration Statement and
on the Closing Date be true and correct in all material respects.
Further, on the effective date of the Registration Statement and on
the Closing Date, the Prospectus/Proxy Statement (only insofar as it
relates to the Acquired Fund) will 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.
(o) The Acquired Fund will provide the Acquiring Fund with
information reasonably necessary for the preparation of the
Prospectus/Proxy Statement.
4.2 Each of the Acquiring Fund and Federated Advisers represents and
warrants to the Acquired Fund as follows:
(a) Municipal Securities Income Trust 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) Municipal Securities Income Trust is registered under the
1940 Act as an open-end, non-diversified, 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 regulation of the SEC 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) At the Closing Date, the Acquiring Fund will have good and
marketable title to its assets.
(e) Municipal Securities Income Trust is not, and the
execution, delivery, and performance of this Agreement will not
result in a 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.
(f) No material 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 the Acquiring Fund's properties or assets
which, if adversely determined, would affect the Acquiring Fund's
financial condition or the conduct of its business. Neither
Federated Advisers nor the Acquiring Fund knows of any facts which
might form the basis for the institution of such proceedings, and
the Acquiring Fund 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.
(g) The Statement of Assets and Liabilities of the Acquiring
Fund at August 31, 1997, has been audited by Deloitte & Touche LLP,
independent auditors, and has 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 liabilities of the Acquiring Fund,
known to the Acquiring Fund or to Federated Advisers, contingent or
otherwise, as of such date not disclosed therein.
(h) Since August 31, 1997, there has not been any 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 for borrowed money.
(i) At the Closing Date, all federal and other tax returns and
reports of the Acquiring Fund required by law (or permitted
extensions thereto) to have been filed shall have been filed, and to
the best of the Acquiring Fund's knowledge 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 Acquiring
Fund's knowledge no such return is currently under audit and no
assessment has been asserted with respect to such returns.
(j) For each fiscal year (or part thereof) 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.
(k) All issued and outstanding shares of the Acquiring Fund
are, and including the Acquiring Fund Shares issued to the Acquired
Fund Shareholders pursuant hereto, 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 rights to subscribe for or purchase any of the Acquiring
Fund Shares, nor is there outstanding any security convertible into
any Acquiring Fund Shares.
(l) All issued and outstanding shares of each class of the
Acquiring Fund are, and at the Closing Date will be, duly registered
under the 1933 Act and registered, or exempt from registration, to
the extent required thereby under each state securities or "blue
sky" law of every state in which the Acquiring Fund has offered or
sold its shares.
(m) The execution, delivery, and performance of this Agreement
will have been duly authorized prior to the Closing Date by all
necessary action on the part of the Acquiring Fund's Board of
Trustees, and this Agreement constitutes the valid and legally
binding obligation of Municipal Securities Income Trust 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 before which a
proceeding is brought (regardless of whether the enforceability is
considered in a proceeding in equity or at law).
(n) 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 be true and correct in all material respects.
Further, on the effective date of the Registration Statement and on
the Closing Date, the Prospectus/Proxy Statement (only insofar as it
relates to the Acquiring Fund) will 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.
(o) The Acquiring Fund has entered into an agreement under
which Federated Advisers will assume the expenses of the
Reorganization, including legal fees of the Acquiring Fund,
registration fees, transfer tax (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.
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 and appropriate 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 or its Treasurer.
5.5 Municipal Securities Income Trust shall have filed with the SEC
a Registration Statement Form N-14 complying in all material respects with
the requirements of the 1933 Act, the Securities Exchange Act of 1934, as
amended, the 1940 Act, and applicable rules and regulations thereunder,
relating to a meeting of the shareholders of the Acquired Fund to be
called to consider and act upon the transactions contemplated herein, and
such Registration Statement shall have been declared effective by the SEC.
The Acquired Fund agrees to provide the Acquiring Fund with information
relating to the Acquired Fund required under such Acts, rules and
regulations for inclusion in the Registration Statement Form N-14.
5.6 The Acquiring Fund agrees to use all best 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.
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 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 Federated Management and
the Acquired Fund 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 The Acquired Fund 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 or the Assistant Treasurer of the
Acquired Fund.
6.3 The Acquired Fund and Federated Management shall have delivered
to the Acquiring Fund on the Closing Date a certificate executed in their
names by their respective Presidents or Vice Presidents and their
Treasurers or Assistant Treasurers, in form and substance reasonably
satisfactory to the Acquiring Fund, to the effect that the representations
and warranties of the Acquired Fund and Federated Management 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 for herein shall be subject 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 the Acquiring Fund and
Federated Advisers 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 and Federated Advisers shall have delivered
to the Acquired Fund on the Closing Date a certificate executed in their
names by their respective Presidents or Vice Presidents and their
Treasurers or Assistant Treasurers, in form and substance reasonably
satisfactory to the Acquired Fund, to the effect that the representations
and warranties of the Acquiring Fund and Federated Advisers 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 beneficial
interest of the Acquired Fund in accordance with the laws of the
Commonwealth of Massachusetts and the Acquired Fund's Declaration of Trust
and By-Laws.
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 parties hereto and all other consents, orders,
permits, and exemptions of federal, state, and local regulatory
authorities (including those of the Securities and Exchange 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 Form N-14 shall have become effective under the 1933 Act by
the SEC 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 The Acquiring Fund and the Acquired Fund shall have received an
opinion of Howard & Howard Attorneys, P.C., substantially to the effect
that, on the basis of the existing provisions of the Code, current
administrative rules, and court decisions, for federal income tax
purposes:
(a) The transfer of all or substantially all of the Acquired
Fund assets in exchange for the Acquiring Fund Shares and the
distribution of the Acquiring Fund Shares to the shareholders of the
Acquired Fund 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).
<PAGE>
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
Intermediate Municipal Trust or the Board of Trustees of Municipal
Securities Income Trust, at any time prior to the Closing Date without
liability on the part of either party hereto, if circumstances should
develop that, in the opinion of the Board of Trustees of either party
hereto, determines that proceeding with the Agreement is not in the best
interests of that party's shareholders.
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 (other than the agreement of Federated
Advisers to assume the expenses of the Reorganization) or the trustees,
directors, officers or shareholders of the Acquiring Fund or of the
Acquired Fund, in respect of this Agreement.
10. WAIVER.
At any time prior to the Closing Date, any of the foregoing conditions
(other than that set forth in Section 8.5) may be waived by the Board of
Trustees of Municipal Securities Income Trust or the Board of Trustees of
Intermediate Municipal Trust 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. AMENDMENT.
This Agreement and Plan of Reorganization may be amended at any time by
the mutual agreement of the Acquired Fund and the Acquiring Fund, authorized by
their respective Boards of Trustees and notwithstanding approval thereof by the
Acquired Fund Shareholders; provided, that if so approved by the Acquired Fund
Shareholders, no amendment shall be made which substantially changes the terms
hereof.
12. NO BROKER'S OR FINDER'S FEE.
The Acquired Fund and the Acquiring Fund each represents
that there is no person with whom it has dealt who by
reason of such dealings is entitled to any broker's or
finder's or other similar fee or commission arising out
of the transactions contemplated by this Agreement and
Plan of Reorganization.
<PAGE>
13. MISCELLANEOUS.
13.1 The representations and warranties included or provided for
herein shall not survive consummation of the transactions contemplated
hereby.
13.2 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.
13.3 This Agreement shall be governed and construed in accordance
with the internal laws of the Commonwealth of Pennsylvania, without giving
effect to such jurisdiction's conflicts of laws principles.
13.4 This Agreement may be executed in any number of counterparts,
each of which, when executed and delivered, shall be deemed to be an
original.
13.5 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 or 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.
13.6 Intermediate Municipal Trust is hereby expressly put on notice
of the limitation of liability as set forth in the Declaration of Trust of
Municipal Securities Income Trust 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 obligation from the shareholders of the
Acquiring Fund, the Trustees, officers, employees, or agents of Municipal
Securities Income Trust or any of them.
13.7 Municipal Securities Income Trust is hereby expressly put on
notice of the limitation of liability as set forth in the Declaration of
Trust of Intermediate Municipal Trust 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
Intermediate Municipal Trust or any of them.
<PAGE>
IN WITNESS WHEREOF, each of the Acquired Fund, Federated Management, the
Acquiring Fund, and Federated Advisers 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:
Attest: INTERMEDIATE MUNICIPAL TRUST, ON BEHALF OF
ITS PORTFOLIO, FEDERATED PENNSYLVANIA
INTERMEDIATE MUNICIPAL TRUST
By:
Secretary
Name:
Title:
Attest: FEDERATED MANAGEMENT
By:
Secretary
Name:
Title:
Acquiring Fund:
MUNICIPAL SECURITIES INCOME TRUST, ON BEHALF
Attest: OF ITS PORTFOLIO, FEDERATED PENNSYLVANIA
MUNICIPAL INCOME FUND
By:
Secretary
FEDERATED ADVISERS
Attest:
By:
Name:
Secretary
Title:
STATEMENT OF ADDITIONAL INFORMATION
January ___, 1998
ACQUISITION OF THE ASSETS OF
FEDERATED PENNSYLVANIA INTERMEDIATE MUNICIPAL TRUST,
A PORTFOLIO OF INTERMEDIATE MUNICIPAL TRUST
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, Pennsylvania 15237-7000
Telephone No: 1-800-245-5000
BY AND IN EXCHANGE FOR CLASS A SHARES OF
FEDERATED PENNSYLVANIA MUNICIPAL INCOME FUND,
A PORTFOLIO OF MUNICIPAL SECURITIES INCOME TRUST
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, Pennsylvania 15237-7000
Telephone No. 1-800-245-5000
This Statement of Additional Information dated January ____, 1998 is not a
prospectus. A Prospectus/Proxy Statement dated January ____, 1998, related to
the above-referenced matter may be obtained from Municipal Securities Income
Trust, on behalf of its portfolio, Federated Pennsylvania Municipal Income Fund,
Federated Investors Tower, Pittsburgh, Pennsylvania 15222-3779. This Statement
of Additional Information should be read in conjunction with such
Prospectus/Proxy Statement.
<PAGE>
TABLE OF CONTENTS
Statement of Additional Information of Federated Pennsylvania Municipal Income
Fund, a portfolio of Municipal Securities Income Trust, dated October 31,
1997.
Statement of Additional Information of Federated Pennsylvania Intermediate
Municipal Trust, a portfolio of Intermediate Municipal Trust, dated July
31, 1997.
Financial Statements of Federated Pennsylvania Municipal Income Fund, a
portfolio of Municipal Securities Income Trust, dated August 31, 1997.
Financial Statements of Federated Pennsylvania Intermediate Municipal Trust, a
portfolio of Intermediate Municipal Trust, dated May 31, 1997.
Unaudited Financial Statements of Federated Pennsylvania Intermediate Municipal
Trust, a portfolio of Intermediate Municipal Trust, dated November 30,
1997.
<PAGE>
INFORMATION INCORPORATED BY REFERENCE
The Statement of Additional Information of Federated Pennsylvania
Municipal Income Fund (the "Portfolio"), a portfolio of Municipal Securities
Income Trust (the "Trust"), is incorporated by reference to the Trust's
Post-Effective Amendment No. 25 to its Registration Statement on Form N-1A (File
No. 33-36729) which was filed with the Securities and Exchange Commission on or
about October 31, 1997.
The Statement of Additional Information of Federated Pennsylvania
Intermediate Municipal Trust (the "Fund"), a portfolio of Intermediate Municipal
Trust, is incorporated by reference to Intermediate Municipal Trust's
Post-Effective Amendment No. 28 to its Registration Statement on Form N-1A (File
No. 2-98237) which was filed with the Securities and Exchange Commission on or
about July 22, 1997. A copy may be obtained from the Trust at Federated
Investors Tower, Pittsburgh, Pennsylvania 15222-3779. Telephone Number:
1-800-341-7400.
The audited financial statements of the Portfolio dated August 31, 1997,
are incorporated by reference to the Portfolio's Prospectus filed with
Post-Effective Amendment No. 25 to the Trust's Registration Statement on Form
N-1A (File No. 33-36729) which was filed with the Securities and Exchange
Commission on or about October 31, 1997.
The audited financial statements of the Fund dated May 31, 1997, are
incorporated by reference to the Fund's Prospectus filed with Post-Effective
Amendment No. 28 to Intermediate Municipal Trust's Registration Statement on
Form N-1A (File No. 2-98237) which was filed with the Securities and Exchange
Commission on or about July 22, 1997.
The unaudited financial statements of the Fund dated November 30, 1997,
are incorporated by reference to the Semi-Annual Report to Shareholders of the
Fund which was filed with the Securities and Exchange Commission pursuant to
Section 30(b) of the Investment Company Act of 1940, as amended, on or about
February 3, 1997.
FEDERATED INTERMEDIATE MUNICIPAL TRUST
SHAREHOLDER FEDERATED PENNSYLVANIA INTERMEDIATE MUNICIPAL
SERVICES COMPANY TRUST SPECIAL MEETING OF SHAREHOLDERS
P.O. BOX 8600 MARCH 2, 1998
BOSTON, MASSACHUSETTS
02266-8600 KNOW ALL PERSONS BY THESE PRESENTS that
the undersigned Shareholder of FEDERATED
PENNSYLVANIA INTERMEDIATE MUNICIPAL TRUST,
a portfolio of Intermediate Municipal
Trust, hereby appoints Susan Jones,
Suzanne W. Land, Catherine C. Ryan,
Patricia F. Conner and J. Crilley Kelly or
any of them, true and lawful attorneys,
with power of substitution of each, to
vote all shares of FEDERATED PENNSYLVANIA
INTERMEDIATE MUNICIPAL TRUST, a portfolio
of Intermediate Municipal Trust, which the
undersigned is entitled to vote, at the
Special Meeting of Shareholders to be held
on March 2, 1998, at Federated Investors
Tower, 1001 Liberty Avenue, Nineteenth
Floor, Pittsburgh, Pennsylvania
15222-3779, at 2:00 p.m., and at any
adjournment thereof.
Discretionary authority is hereby conferred
as to all other manners 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 CHOICE
MADE ON THIS BALLOT. IF THIS PROXY IS RETURNED AND NO CHOICE IS INDICATED AS TO
ANY MATTER, THIS PROXY WILL BE VOTED AFFIRMATIVELY ON THE MATTER PRESENTED.
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
FEDERATED PENNSYLVANIADETACH AND RETURN THIS PORTION ONLY
INTERMEDIATE MUNICIPAL TRUST
- -------------------
VOTE ON PROPOSAL
- -------------------
FORAGAINSTABSTAIN
|_| |_| |_|
1. APPROVAL OF A PROPOSED AGREEMENT AND PLAN
OF REORGANIZATION BETWEEN INTERMEDIATE
MUNICIPAL TRUST, ON BEHALF OF FEDERATED
PENNSYLVANIA INTERMEDIATE MUNICIPAL TRUST
(THE "FUND"), AND MUNICIPAL SECURITIES
INCOME TRUST (THE "TRUST"), ON BEHALF OF
ITS PORTFOLIO, FEDERATED PENNSYLVANIA
MUNICIPAL INCOME FUND (THE "PORTFOLIO"),
WHEREBY THE TRUST WOULD ACQUIRE ALL OF
THE ASSETS OF THE FUND IN EXCHANGE FOR
CLASS A SHARES OF THE PORTFOLIO TO BE
DISTRIBUTED PRO RATA BY THE FUND TO
HOLDERS OF FUND SHARES IN COMPLETE
LIQUIDATION OF THE FUND.
PLEASE SIGN EXACTLY YOUR NAME(S) AS IT APPEARS BELOW. 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 SHARES
ARE OWNED JOINTLY, ALL PARTIES SHOULD SIGN.
SIGNATURE SIGNATURE (JOINT OWNERS) DATE
<PAGE>
PART C. Other Information
Item 15. Indemnification
Indemnification is provided to Officers and Trustees of the Registrant
pursuant to Section 4 of Article XI of Registrant's Declaration of Trust. The
Investment Advisory Contract between the Registrant and Federated Advisers (the
"Adviser") provides that, in the absence of willful misfeasance, bad faith,
gross negligence, or reckless disregard of the obligations or duties under the
Investment Advisory Contract on the part of the Adviser, the Adviser shall not
be liable to the Registrant or to any shareholder for any act or omission in the
course of or connected in any way with rendering services or for any losses that
may be sustained in the purchase, holding, or sale of any security. Registrant's
Trustees and Officers are covered by an Errors and Omissions Policy.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended (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 is aware that in the opinion
of the Securities and Exchange Commission, such indemnification is against
public policy as expressed in the Act and, therefore, is 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
issues.
Insofar as indemnification for liabilities may be permitted pursuant to
Section 17 of the Investment Company Act of 1940, as amended, 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 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 Paper Copy of Declaration of Trust of the Registrant dated
August 6, 1990. (1)
1.2 Paper Copy of Amendment No. 1 to the Declaration of Trust dated
August 26, 1991. (5)
1.3 Conformed Copy of Amendment No. 2 to Declaration of Trust. (6)
1.4 Conformed Copy of Amendment No. 3 to Declaration of Trust dated
August 31, 1992. (8)
1.5 Conformed Copy of Amendment No. 4 to Declaration of Trust dated
September 17, 1992. (8)
1.6 1.4 Conformed Copy of Amendment No. 5 to Declaration of Trust
dated February 4, 1993. (10)
1.7 1.4 Conformed Copy of Amendment No. 6 to Declaration of Trust
dated May 24, 1993. (13)
2. Copy of Bylaws of the Registrant. (1)
3. Not Applicable.
4. Agreement and Plan of Reorganization is included as Exhibit A to the
Combined Proxy Statement and Prospectus of this Registration
Statement. *
5. Copy of Specimen Certificate for Shares of Beneficial Interest of
the Registrant. (19)
6.1 Copy of new Investment Advisory Contract of the Registrant. (8)
6.2 Copy of Amendment to Investment Advisory Contract. (12)
6.3 Conformed Copies of Amendments to Investment Advisory Contract. (14)
7.1 Copy of Distributor's Contract of the Registrant. (8)
7.2 Copy of Amendment to Distributor's Contract of the Registrant. (12)
7.3 Copy of Amendment to Distributor's Contract of the Registrant. (14)
7.4 The Registrant incorporates the conformed copy of the specimen
Mutual Fund Sales and Service Agreement; Mutual Funds Service
Agreement; and Plan Trustee/Mutual Funds Service Agreement from Item
24(b)(6) of the Cash Trust Series II Registration Statement filed
with the Commission on July 24, 1995. (File Number 33-38550 and
811-6269).
8. Not Applicable.
9.1 Conformed Copy of Custodian Agreement of the Registrant. (18)
9.2 Conformed Copy of Agreement of Fund Accounting Services,
Administrative Services, Transfer Agency Services and Custody
Services Procurement. (19)
9.3 Conformed Copy of Shareholder Services Agreement. (17)
9.4 The response and exhibits described in Item 24(b)(6)(iii) are
hereby incorporated by reference.
10.1 Copy of Rule 12b-1 Agreement. (8)
10.2 Copy of Distribution Plan. (12)
10.3 Conformed Copy of Rule 18f-3 Plan. (19)
11. Conformed copy of Opinion and Consent of Counsel as to legality of
shares being registered. *
12. Conformed Copy Tax Opinion of Howard & Howard Attorneys, P.C. (To be
filed by amendment).*
13. Not applicable.
14.1 Conformed Copy of Consent of Deloitte & Touche LLP.*
14.2 Conformed Copy of Consent of Arthur Andersen LLP.*
15. Not Applicable.
16. Conformed Copy of Power of Attorney. (19)
17.1 Copy of Declaration under Rule 24f-2. (19)
17.2 Form of Proxy.*
*Filed electronically.
(1) Response is incorporated by reference to Registrant's Initial Registration
Statement on Form N-1A filed August 31, 1990. (File Nos. 33-36729 and
811-6165).
(5) Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 4 to its Registration Statement on Form N-1A filed October
28, 1991. (File Nos. 33-36729 and 811-6165).
(6) Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 5 to its Registration Statement on Form N-1A filed January
24, 1992. (File Nos. 33-36729 and 811-6165).
(8) Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 7 to its Registration Statement on Form N-1A filed September
25, 1992. (File Nos. 33-36729 and 811-6165).
(10) Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 10 to its Registration Statement on Form N-1A filed March 24,
1993. (File Nos. 33-36729 and 811-6165).
(12) Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 12 to its Registration Statement on Form N-1A filed May 17,
1993. (File Nos. 33-36729 and 811-6165).
(13) Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 13 to its Registration Statement on Form N-1A filed July 2,
1993. (File Nos. 33-36729 and 811-6165).
(14) Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 14 to its Registration Statement on Form N-1A filed October
28, 1993. (File Nos. 33-36729 and 811-6165).
(18) Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 19 to its Registration Statement on Form N-1A filed October
30, 1995. (File Nos. 33-36729 and 811-6165).
(19) Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 21 to its Registration Statement on Form N-1A filed October
23, 1996. (File Nos. 33-36729 and 811-6165).
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 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, as amended, the reoffering prospectus will contain the information
called for by the applicable registration form for the 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, as amended, 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.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant, MUNICIPAL SECURITIES INCOME TRUST, certifies that it meets all
of the requirements for effectiveness of this Registration Statement pursuant to
Form N-14 under the Securities Act of 1933 and has duly caused this 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
23rd day of December, 1997.
MUNICIPAL SECURITIES INCOME TRUST
BY: /s/ J. Crilley Kelly
J. Crilley Kelly, Assistant Secretary
Attorney in Fact for John F. Donahue
December 23, 1997
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following person in the
capacity and on the date indicated:
NAME TITLE DATE
By: /s/ J. Crilley Kelly Attorney In Fact For December 23, 1997
J. Crilley Kelly the Persons Listed
ASSISTANT SECRETARY Below
NAME TITLE
Chairman and Trustee
John F. Donahue* (Chief Executive
Officer)
Glen R. Johnson* President and Trustee
John W. McGonigle* Treasurer and
Executive
Vice President
(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, Pennsylvania 15222-3775
December 22, 1997
The Trustees of
Municipal Securities Income Trust
Federated Investors Tower
Pittsburgh, PA 15222-3779
Gentlemen:
Municipal Securities Income Trust, a Massachusetts business trust
("Trust"), proposes to issue shares of beneficial interest representing
interests in a separate portfolio of securities known as Federated Pennsylvania
Municipal Income Fund (such shares of beneficial interest being herein referred
to as "Shares") in connection with the acquisition of the assets of the
Federated Pennsylvania Intermediate Municipal Trust a portfolio of Intermediate
Municipal Trust, pursuant to the Agreement and Plan of Reorganization dated
December 22, 1997 ("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 August 6, 1990 ("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/ Thomas J. Ward_______________
TITLE: Secretary
Exhibit 14.2
ARTHUR ANDERSEN LLP
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated July 7, 1997,
included in the Federated Pennsylvania Intermediate Municipal Trust Prospectus
dated July 31, 1997, and to all references to our firm included in this
registration statement.
/s/ Authur Andersen LLP
ARTHUR ANDERSEN LLP
Pittsburgh, Pennsylvania
December 23, 1997
Exhibit 14.1
INDEPENDENT AUDITOR'S CONSENT
To the Board of Trustees of MUNICIPAL SECURITIES INCOME TRUST and Shareholders
of FEDERATED PENNSYLVANIA MUNICIPAL INCOME FUND:
We consent to the incorporation by reference in this Registration Statement on
Form N-14 of Federated Pennsylvania Municipal Income Fund (a portfolio of the
Municipal Securities Income Trust) of our report dated October 13, 1997,
included in the Prospectus of Federated Pennsylvania Municipal Income Fund for
the year ended August 31, 1997, dated October 31, 1997, and to the references to
us with in this Registration Statement.
Deloitte & Touche LLP
Pittsburgh, Pennsylvania
December 23, 1997
