EX-99.77E LEGAL

SUB-ITEM 77E:  LEGAL PROCEEDINGS
Like many other mutual fund companies, in September
2003, Federated Investors, Inc., the parent company
of the Federated funds' advisers and distributor
(collectively, "Federated"), received detailed
requests for information on shareholder trading
activities in the Federated funds ("Funds") from
the Securities and Exchange Commission, the New York
State Attorney General, and the National Association
of Securities Dealers.  Since that time, Federated
has received additional inquiries from regulatory
authorities on these and related matters, and more
such inquiries may be received in the future.
As a result of these inquiries, Federated and the
Funds have conducted an internal investigation of
the matters raised, which revealed instances in
which a few investors were granted exceptions to
Federated's internal procedures for limiting frequent
transactions and that one of these investors made an
additional investment in another Federated fund.
The investigation has also identified inadequate
procedures which permitted a limited number of
investors (including several employees) to engage in
undetected frequent trading activities and/or the
placement and acceptance of orders to purchase shares
of fluctuating net asset value funds after the funds'
closing times.  Federated has issued a series of press
releases describing these matters in greater detail
and emphasizing that it is committed to compensating
the Funds for any detrimental impact these transactions
may have had on them.  In that regard, on February 3,
2004, Federated and the independent directors of the
Funds announced the establishment by Federated of a
restoration fund that is intended to cover any such
detrimental impact.  The press releases and related
communications are available in the "About Us" section
of Federated's website www.federatedinvestors.com,
and any future press releases on this subject will
also be posted there.
Shortly after Federated's first public announcement
concerning the foregoing matters, and notwithstanding
Federated's commitment to taking remedial actions,
Federated and various Funds were named as defendants
in several class action lawsuits now pending in the
United States District Court for the District of
Maryland seeking damages of unspecified amounts.
The lawsuits were purportedly filed on behalf of
people who purchased, owned and/or redeemed shares
of Federated-sponsored mutual funds during specified
periods beginning November 1, 1998.  The suits are
generally similar in alleging that Federated engaged
in illegal and improper trading practices including
market timing and late trading in concert with certain
institutional traders, which allegedly caused financial
injury to the mutual fund shareholders.
Federated and various Funds have also been named as
defendants in several additional lawsuits, the majority
of which are now pending in the United States District
Court for the Western District of Pennsylvania, alleging,
among other things, excessive advisory and rule 12b-1 fees,
and seeking damages of unspecified amounts.
The board of the Funds has retained the law firm of
Dickstein, Shapiro Morin & Oshinsky LLP to represent
the Funds in these lawsuits.  Federated and the Funds,
and their respective counsel, are reviewing the allegations
and will respond appropriately.  Additional lawsuits based
upon similar allegations may be filed in the future.
The potential impact of these recent lawsuits and future
potential similar suits is uncertain. Although we do not
believe that these lawsuits will have a material adverse
effect on the Funds, there can be no assurance that these
suits, the ongoing adverse publicity and/or other
developments resulting from the regulatory investigations
will not result in increased Fund redemptions, reduced
sales of Fund shares, or other adverse consequences for
the Funds.

EX-99.77M MERGERS

SUB-ITEM 77 M: MERGERS

Pursuant to the Securities Act of 1933, as amended,
and the General Rules and Regulations thereunder, a
Registration Statement on Form N-14, SEC File No. 333-122486,
was filed on February 2, 2005 and amended on February 3, 2005
and February 23, 2005. This filing relates to an Agreement and
Plan of Reorganization whereby Federated Municipal Securities
Fund, Inc. (Surviving Fund), acquired all of the assets of
North Track Tax Exempt Fund (Acquired Fund), a portfolio of
North Track Funds, Inc., in exchange for shares of the
Surviving Fund. Shares of the Surviving Fund were distributed
on a pro rata basis to the shareholders of the Acquired Fund
in complete liquidation and termination of the Acquired Fund.
As a result, effective April 29, 2005, each shareholder of the
Acquired Fund became the owner of Surviving Fund shares having
a total net asset value equal to the total net asset value of
his or her holdings in the Acquired Fund.

The Agreement and Plan of Reorganization providing for the
transfer of the assets of the Acquired Fund to the Surviving
Fund was approved by the Board of Directors at their Regular
Meeting held on August 20, 2004 and was also approved by
Acquired Fund shareholders at a Special Meeting held on April 28,
2005.

The Agreement and Plan of Reorganization for this merger is
hereby incorporated by reference from the definitive
Prospectus/Proxy Statement filed with the SEC on March 8, 2005.

EX-99.77Q1 OTHR EXHB

SUB-ITEM 77 Q1 (A)



AMENDMENT #17
TO THE BY-LAWS
OF
FEDERATED MUNICIPAL SECURITIES FUND, INC.
Effective August 18, 2005
Delete, ARTICLE IX, INDEMNIFICATION in its entirety
and replace with the following:
ARTICLE IX
INDEMNIFICATION

	Section 1.  INDEMNIFICATION OF DIRECTORS AND
OFFICERS.  The Corporation shall indemnify its directors
to the fullest extent that indemnification of directors
is permitted by the Maryland General Corporation Law.  The
Corporation shall indemnify its officers to the same extent
as its directors and to such further extent as is
consistent with law.  The Corporation shall indemnify
its directors and officers who while serving as directors
or officers also serve at the request of the Corporation
as a director, officer, partner, trustee, employee, agent
or fiduciary of another corporation, partnership joint
venture, trust, other enterprise or employee benefit plan
to the fullest extent consistent with law.  The
indemnification and other rights provided by this Article
shall continue as to a person who has ceased to be a
director or officer and shall inure to the benefit of the
heirs, executors and administrators of such a person.
This Article shall not protect any such person against
any liability to the Corporation or any Shareholder thereof
to which such person would otherwise be subject by reason of
(i) willful misfeasance, (ii) bad faith, (iii) gross
negligence or (iv) reckless disregard of the duties involved
in the conduct of his office ("disabling conduct").

	Section 2.  ACTION BY DIRECTOR AGAINST THE CORPORATION.
With respect to any action, suit or other proceeding
voluntarily prosecuted by any indemnitee as plaintiff,
indemnification shall be mandatory only if the prosecution
of such action, suit or other proceeding by such indemnitee
(i) was authorized by a majority of the Directors or
(ii) was instituted by the indemnitee to enforce his rights
to indemnification hereunder in a case in which the indemnitee
is found to be entitled to such indemnification.

	Section 3.  SURVIVAL.  The rights to indemnification
set forth herein shall continue as to a person who has ceased
to be a Director or officer of the Corporation and shall inure
to the benefit of his heirs, executors and personal and legal
representatives.

	Section 4.  AMENDMENTS. References in this Article are
to the Maryland General Corporation Law and to the Investment
Company Act of 1940, as from time to time amended.  No amendment
or restatement of these by-laws or repeal of any of its provisions
shall limit or eliminate any of the benefits provided to any
person who at any time is or was a Director or officer of the
Corporation or otherwise entitled to indemnification hereunder
in respect of any act or omission that occurred prior to such
amendment, restatement or repeal.

	Section 5.  PROCEDURE.  Notwithstanding the foregoing,
no indemnification shall be made hereunder unless there has been
a determination (i) by a final decision on the merits by a court
or other body of competent jurisdiction before whom the issue of
entitlement to indemnification hereunder was brought that such
indemnitee is entitled to indemnification hereunder or, (ii) in
the absence of such a decision, by (1) a majority vote of a quorum
of those Directors who are neither "interested persons" of the
Corporation (as defined in Section 2(a)(19) of the 1940 Act) nor
parties to the proceeding ("Disinterested Non-Party Directors"),
that the indemnitee is entitled to indemnification hereunder, or
(2) if such quorum is not obtainable (or even if obtainable, if
such majority so directs) independent legal counsel in a written
opinion concludes, based on a review of readily available facts
(as opposed to a full trial-type inquiry) that the indemnitee
should be entitled to indemnification hereunder.  All
determinations to make advance payments in connection with the
expense of defending any proceeding shall be authorized and made
in accordance with the immediately succeeding paragraph (f) below.

	Section 6.  ADVANCES.  Any current or former director or
officer of the Corporation seeking indemnification within the
scope of this Article shall be entitled to advances from the
Corporation for payment of the reasonable expenses incurred by
him in connection with the matter as to which he is seeking
indemnification in the manner and to fullest extent permissible
under the Maryland General Corporation Law.  The person seeking
indemnification shall provide to the Corporation a written
affirmation of his good faith belief that the standard of
conduct necessary for indemnification by the Corporation has
been met and a written undertaking to repay any such advance
if it should ultimately be determined that the standard of
conduct has not been met.  In addition, at least one of the
following additional conditions shall be met:  (a) the person
seeking indemnification shall provide a security in form and
amount acceptable to the Corporation for his undertaking;
(b) the Corporation is insured against losses arising by reason
of the advance, or (c) a majority of a quorum of Disinterested
Non-Party Directors, or independent legal counsel, in a written
opinion, shall be determined, based on a review of facts readily
available to the Corporation at the time the advance is proposed
to be made, that there is reason to believe that the person
seeking indemnification will ultimately be found to be entitled
to indemnification.

Section 7.  OTHER RIGHTS.  The rights accruing to any indemnitee
under these provisions shall not exclude any other right which
any person may have or hereafter acquire under the Articles of
Incorporation or the by-laws of the Corporation, by contract or
otherwise under law, by a vote of stockholders or Directors who
are "disinterested persons" (as defined in Section 2(a)(19)
of the 1940 Act) or any other right to which he may be lawfully
entitled.
Section 8.  INDEMNIFICATION OF EMPLOYEES AND AGENTS.  Subject
to any limitations provided by the Investment Company Act of
1940 Act or otherwise under the Articles of Incorporation or
the by-laws of the Corporation, contract or otherwise under law,
the Corporation shall have the power and authority to indemnify
and provide for the advance payment of expenses to employees,
agents and other persons providing services to the Corporation
or serving in any capacity at the request of the Corporation to
the full extent permitted by applicable law, provided that such
indemnification has been approved by a majority of the Directors.

EX-99.77Q1 OTHR EXHB

SUB-ITEM 77 Q1 (G)
NORTH TRACK TAX-EXEMPT FUND
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION ("Agreement")
is made as of February 2, 2005, between NORTH TRACK FUNDS,
INC., a Maryland corporation ("North Track"), on behalf
of NORTH TRACK TAX-EXEMPT FUND ("Acquired Fund"), and
FEDERATED MUNICIPAL SECURITIES FUND, INC. a Maryland
corporation ("Federated" or "Acquiring Fund").
(Acquired Fund and Acquiring Fund are sometimes referred
to herein individually as a "Fund" and collectively as
the "Funds," and North Track and Federated are sometimes
referred to herein individually as an "Investment Company"
and collectively as the "Investment Companies.")
The Investment Companies wish to effect a reorganization
described in Section 368(a)(1)(C) of the Internal Revenue
Code of 1986, as amended ("Code"), and intend this
Agreement to be, and adopt it as, a "plan of reorganization"
within the meaning of the regulations under the Code
("Regulations").  The reorganization will consist of
(1) the transfer of the assets (net of cash sufficient to
satisfy those liabilities described in Section 1.2 hereof)
of the Acquired Fund to the Acquiring Fund in exchange
solely for the Acquiring Fund's issuance to the Acquired
Fund of "Class A" shares of common stock of the Acquiring
Fund, (2) the distribution of those shares to the Acquired
Fund's shareholders in liquidation of the Acquired Fund, and
(3) the termination of the Acquired Fund, all on the terms
and conditions hereinafter set forth in this Agreement.
(All such transactions are referred to herein as the
"Reorganization.")
All agreements, representations, actions, obligations, and
covenants described herein made or to be taken or undertaken
by the Funds are made and shall be taken or undertaken by
North Track on Acquired Fund's behalf and by Federated on
Acquiring Fund's behalf.
Acquired Fund's shares have only one Class of shares,
designated "Class A" shares ("Acquired Fund Shares").
Acquiring Fund's shares are divided into three classes,
designated "Class A," "Class B" and "Class C" shares.  Under
the terms of this Reorganization the Acquired Fund Shares
will be exchanged for Class A shares of the Acquiring Fund
("Acquiring Fund Shares").
In consideration of the mutual promises contained herein,
the parties agree as follows:
1.	PLAN OF REORGANIZATION AND TERMINATION
1.1.	Acquired Fund agrees to assign, sell, convey,
transfer, and deliver all of its assets described in paragraph
1.2 ("Assets") to Acquiring Fund.  Acquiring Fund agrees in
exchange therefor, to issue and deliver to Acquired Fund the
number of full and fractional (rounded to the third decimal
place) Acquiring Fund Shares determined by dividing Acquired
Fund's net value (computed as set forth in paragraph 2.1)
("Acquired Fund Value") by the net asset value ("NAV") of an
Acquiring Fund Share (computed as set forth in paragraph 2.2).
Such transactions shall take place at the Closing (as defined
in paragraph 3.1).
1.2.	The Assets shall include all cash, cash equivalents,
securities, receivables (including interest and dividends
receivable), claims and rights of action, rights to register
shares under applicable securities laws, books and records,
deferred and prepaid expenses shown as assets on Acquired Fund's
books, and other property Acquired Fund owns at the Effective
Time (as defined in paragraph 3.1), less any cash sufficient to
satisfy any Liabilities (as defined in Section 1.3 hereof) that
have not been paid by the Effective Time as shown on a balance
sheet as of the Effective Time.
1.3.	Acquired Fund agrees to use all reasonable efforts to
discharge all its Liabilities before the Effective Time and
shall, in any event, discharge them promptly following the
Effective Time.  The "Liabilities" shall include all of Acquired
Fund's liabilities, debts, obligations, and duties of whatever
kind or nature, whether absolute, accrued, contingent, or
otherwise, whether or not arising in the ordinary course of
business, whether or not determinable at the Effective Time,
and whether or not specifically referred to in this Agreement.
Acquiring Fund shall not assume any of the Liabilities.
1.4.	At or immediately before the Effective Time, Acquired
Fund shall declare and pay to its shareholders a dividend and/or
other distribution in an amount large enough so that it will
have distributed substantially all (and in any event not less
than 90%) of its investment company taxable income (as defined
in Section 852(b)(2) of the Code, computed without regard to
any deduction for dividends paid) and substantially all of its
realized net capital gain (as defined in Section 1222(11)), if
any, for the current taxable year through the Effective Time.
1.5.	At the Effective Time (or as soon thereafter as is
reasonably practicable), Acquired Fund shall distribute the
Acquiring Fund Shares it receives pursuant to paragraph 1.1 to
its shareholders of record, determined as of the Effective Time
(each a "Shareholder" and collectively "Shareholders"), in
constructive exchange for their Acquired Fund Shares.  Such
distribution shall be accomplished by Federated's transfer
agent's opening accounts on Acquiring Fund's share transfer
books in the Shareholders' names and transferring such Acquiring
Fund Shares thereto.  Each Shareholder's account shall be
credited with the respective pro rata number of full and
fractional (rounded to the third decimal place) Acquiring Fund
Shares due that Shareholder, based on the value of the Acquired
Fund Shares owned by that Shareholder immediately prior to the
Effective Time.  All outstanding Acquired Fund Shares, including
any represented by certificates, shall simultaneously be
canceled on Acquired Fund's share transfer books.  Acquiring
Fund shall not issue certificates representing the Acquiring
Fund Shares issued in connection with the Reorganization.
1.6.	As soon as reasonably practicable after distribution of
the Acquiring Fund Shares pursuant to paragraph 1.5, but in all
events within six months after the Effective Time, Acquired Fund
shall be terminated as a series of North Track and any further
actions shall be taken in connection therewith as required by
applicable law.
1.7.	Any reporting responsibility of Acquired Fund to a public
authority is and shall remain its responsibility up to and
including the date on which it is terminated.
1.8.	Any transfer taxes payable on issuance of Acquiring Fund
Shares in a name other than that of the registered holder on
Acquired Fund's share transfer books of the Acquired Fund Shares
constructively exchanged therefor shall be paid by the person to
whom such Acquiring Fund Shares are to be issued, as a condition
of such transfer.
2.	VALUATION
2.1.	For purposes of paragraph 1.1, Acquired Fund's net value
shall be the value of the Assets computed as of the close of
regular trading on the New York Stock Exchange ("NYSE") on the
date of the Closing ("Valuation Time"), using the valuation
procedures set forth in its then current prospectus and statement
of additional information ("SAI").
2.2.	For purposes of paragraph 1.1, the NAV per share of the
Acquiring Fund Shares shall be computed as of the Valuation Time,
using the valuation procedures set forth in Acquiring Fund's
then-current prospectus and SAI.
2.3.	All computations pursuant to paragraphs 2.1 and 2.2 shall
be made by or under the direction of the custodians and transfer
agents of the Funds.
3.	CLOSING AND EFFECTIVE TIME
3.1.	The Reorganization, together with related acts necessary
to consummate it ("Closing"), shall occur at the Investment
Companies' principal offices on or about April 29, 2005, or at
such other place and/or on such other date as to which they may
agree.  All acts taking place at the Closing shall be deemed to
take place simultaneously as of the close of business on the date
thereof or at such other time as to which the Investment Companies
may agree ("Effective Time").  If, immediately before the
Valuation Time, (a) the NYSE is closed to trading or trading
thereon is restricted or (b) trading or the reporting of trading
on the NYSE or elsewhere is disrupted, so that accurate appraisal
of Acquired Fund's net value and/or the NAV of the Acquiring Fund
Share of any Class is impracticable, the Effective Time shall be
postponed until the first business day after the day when such
trading has been fully resumed and such reporting has been restored.
3.2.	North Track shall deliver at the Closing a certificate of
its Chief Financial Officer verifying that the information
(including adjusted basis and holding period, by lot) concerning
the Assets, including all portfolio securities, transferred by
Acquired Fund to Acquiring Fund, as reflected on Acquiring Fund's
books immediately after the Closing, does or will conform to such
information on Acquired Fund's books immediately before the
Closing.  North Track's custodian shall deliver at the Closing a
certificate of an authorized officer stating that (a) the Assets
it holds will be transferred to Acquiring Fund at the Effective
Time and (b) all necessary taxes in conjunction with the delivery
of the Assets, including all applicable federal and state stock
transfer stamps, if any, have been paid or provision for payment
has been made.

3.3.	North Track shall deliver to Federated at the Closing a
list of the names and addresses of the Shareholders and the number
of outstanding Acquired Fund Shares owned by each Shareholder, all
as of the Effective Time, certified by North Track's Secretary.
Federated's transfer agent shall deliver at the Closing a
certificate as to the opening of accounts in the Shareholders'
names on Acquiring Fund's share transfer books.  Federated shall
issue and deliver a confirmation to North Track evidencing the
Acquiring Fund Shares to be credited to Acquired Fund and
subsequently to the Shareholders at the Effective Time or
provide evidence satisfactory to North Track that such Acquiring
Fund Shares have been credited to Acquired Fund's account and
subsequently to the Shareholders' accounts on Acquiring Fund's
share transfer books.  At the Closing, each party shall deliver
to the other bills of sale, checks, assignments, stock
certificates, receipts, or other documents the other party or
its counsel reasonably requests.
3.4.	Each Investment Company shall deliver to the other at the
Closing a certificate executed in its name by its President or a
Vice President in form and substance satisfactory to the recipient
and dated the Effective Time, to the effect that the
representations and warranties it made in this Agreement are true
and correct at the Effective Time except as they may be affected
by the transactions contemplated by this Agreement.
4.	REPRESENTATIONS AND WARRANTIES
4.1.	North Track, on behalf of the Acquired Fund, represents
and warrants to Federated as follows:
4.1.1.	North Track is a corporation that is duly organized,
validly existing, and in good standing under the laws of the State
of Maryland; and its Articles of Incorporation, as amended and
supplemented ("Articles"), are on file with that state's Department
of Assessments and Taxation;
4.1.2.	North Track is duly registered as an open-end management
investment company under the Investment Company Act of 1940, as
amended ("1940 Act"), and such registration is in full force and
effect;
4.1.3.	Acquired Fund is a duly established and designated series
of North Track;
4.1.4.	At the Closing, Acquired Fund will have good and marketable
title to the Assets and full right, power, and authority to sell,
assign, transfer, and deliver the Assets free of any liens or other
encumbrances (except securities that are subject to "securities
loans" as referred to in Section 851(b)(2) of the Code and except
securities with contractual or legal restrictions on transfer);
and on delivery and payment for the Assets, Acquiring Fund will
acquire good and marketable title thereto;
4.1.5.	Acquired Fund's current prospectus and SAI conform in all
material respects to the applicable requirements of the Securities
Act of 1933, as amended ("1933 Act"), and the 1940 Act and the rules
and regulations 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;
4.1.6.	Acquired Fund is not in violation of, and the execution
and delivery of this Agreement and consummation of the transactions
contemplated hereby will not conflict with or violate, Maryland law
or any provision of its Articles or North Track's By-Laws or of any
agreement, instrument, lease, or other undertaking to which North
Track (with respect to Acquired Fund) is a party or by which it (with
respect to Acquired Fund) is bound or result in the acceleration of
any obligation, or the imposition of any penalty, under any agreement,
judgment, or decree to which North Track (with respect to Acquired
Fund) is a party or by which it (with respect to Acquired Fund) is
bound, except as otherwise disclosed in writing to and accepted by
Federated;
4.1.7.	Except as otherwise disclosed in writing to and accepted by
Federated, all material contracts and other commitments of or
applicable to Acquired Fund (other than this Agreement and investment
contracts, including options, futures, and forward contracts included
on the Acquired Fund's books) will be terminated in accordance with
the provisions of Section 1.3 at or before the Effective Time,
without either Fund's incurring any liability or penalty with respect
thereto;
4.1.8.	Except as otherwise disclosed in writing to and accepted by
Federated, (a) no litigation, administrative proceeding, or
investigation of or before any court or governmental body is presently
pending or (to North Track's knowledge) threatened against North
Track (with respect to Acquired Fund) or any of its properties or
assets attributable or allocable to Acquired Fund that, if adversely
determined, would materially and adversely affect Acquired Fund's
financial condition or the conduct of its business and (b) North
Track knows of no facts that might form a reasonable basis for the
institution of any such litigation, proceeding, or investigation and
is not a party to or subject to the provisions of any order, decree,
or judgment of any court or governmental body that materially or
adversely affects its business or its ability to consummate the
transactions contemplated hereby;
4.1.9.	The execution, delivery, and performance of this Agreement
have been duly authorized as of the date hereof by all necessary
action on the part of North Track's board of directors.  Subject to
the approval of the shareholders of Acquired Fund, and assuming the
due authorization, execution and delivery of this Agreement by
Federated, this Agreement will constitute the valid and legally
binding obligation of North Track (with respect to Acquired Fund),
enforceable in accordance with its terms, except as the same may be
limited by bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium, and similar laws relating to or affecting
creditors' rights and by general principles of equity and the
discretion of the court (regardless of whether the enforceability is
considered in a proceeding in equity or at law);
4.1.10.  No governmental consents, approvals, authorizations, or
filings are required under the 1933 Act, the Securities Exchange Act
of 1934, as amended, or the 1940 Act (collectively, "Federal
Securities Laws") for North Track's execution or performance of this
Agreement, except for (a) the filing with the Securities and Exchange
Commission ("SEC") of a registration statement by Federated on Form
N-14 relating to the Acquiring Fund Shares issuable hereunder, and
any supplement or amendment thereto ("Registration Statement"),
including therein a prospectus and proxy statement and any supplements
or amendments thereto ("Prospectus/Statement"), (b) the filing of
one or more supplements to the then-current prospectus or SAI of
Acquired Fund, and (c) such consents, approvals, authorizations, and
filings as have been made or received or as may be required subsequent
to the Effective Time;
4.1.11.  On the effective date of the Registration Statement, the
date of the special meeting of Acquired Fund shareholders to approve
this Agreement and the Reorganization, and at the Effective Time, the
Registration Statement, including the Prospectus/Statement, only
insofar as it related to North Track or Acquired Fund, will (a) comply
in all material respects with the applicable provisions of the Federal
Securities Laws and the regulations thereunder and (b) 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; provided that the foregoing shall not apply
to statements in or omissions from the Registration Statement or the
Prospectus/Statement made in reliance on and in conformity with
information furnished by Federated for use therein;
4.1.12.  Acquired Fund incurred the Liabilities in the ordinary course
of its business; and there are no Liabilities other than Liabilities
disclosed or provided for in the Acquired Fund's financial statements
referred to in paragraph 4.1.18 and Liabilities incurred by Acquired
Fund in the ordinary course of business subsequent to October 31, 2004,
or otherwise disclosed to Federated, none of which has been materially
adverse to the business, assets or results of Acquired Fund's
operations;
4.1.13.  Acquired Fund is a "fund" as defined in Section 851(g)(2) of
the Code; it qualified for treatment as a regulated investment company
under Subchapter M of the Code ("RIC") for each past taxable year
since it commenced operations and will continue to meet all the
requirements for such qualification for its current taxable year;
the Assets will be invested at all times through the Effective Time
in a manner that ensures compliance with the foregoing; and Acquired
Fund has no earnings and profits accumulated in any taxable year in
which the provisions of Subchapter M did not apply to it;
4.1.14.  Acquired Fund is not under the jurisdiction of a court in a
"title 11 or similar case" (as defined in Section 368(a)(3)(A) of the
Code);
4.1.15.  Not more than 25% of the value of Acquired Fund's total assets
(excluding cash, cash items, and U.S. government securities) is
invested in the stock and securities of any one issuer, and not more
than 50% of the value of such assets is invested in the stock and
securities of five or fewer issuers;
4.1.16.  During the five-year period ending at the Effective Time,
(a) neither Acquired Fund nor any person "related" (as defined in
Section 1.368-1(e)(3) of the Regulations) to it will have acquired
Acquired Fund Shares, either directly or through any transaction,
agreement, or arrangement with any other person, with consideration
other than the Acquiring Fund Shares or Acquired Fund Shares, except
for shares redeemed in the ordinary course of Acquired Fund's
business as a series of an open-end investment company as required by
Section 22(e) of the 1940 Act, and (b) no distributions will have been
made with respect to Acquired Fund Shares, other than normal, regular
dividend distributions made pursuant to Acquired Fund's historic
dividend-paying practice and other distributions that qualify for the
deduction for dividends paid (within the meaning of Section 561 of the
Code) referred to in sections 852(a)(1) and 4982(c)(1)(A) of the Code;
4.1.17.  Acquired Fund's federal income tax returns, and all applicable
state and local tax returns, for all taxable years through and
including the taxable year ended October 31, 2003, have been timely
filed and all taxes payable pursuant to those returns have been
timely paid, and Acquired Fund has been granted an extension until
September 15, 2005 with respect to the filing of its federal and state
income tax returns for the taxable year ended October 31, 2004; and
4.1.18.  North Track's audited financial statements for the year ended
October 31, 2004 fairly represent Acquired Fund's financial position
as of such date and the results of its operations and changes in its
net assets for the period then ended.
4.2.	Federated, on behalf of Acquiring Fund, represents and warrants
to North Track as follows:
4.2.1.	Federated is a corporation that is duly organized, validly
existing, and in good standing under the laws of the State of Maryland;
and its Articles are on file with that state's Department of Assessments
and Taxation;
4.2.2.	Federated is duly registered as an open-end management
investment company under the 1940 Act, and such registration is in full
force and effect;
4.2.3.	Acquiring Fund is a duly established and designated series of
Federated, and Federated currently has no other series;
4.2.4.	No consideration other than the Acquiring Fund Shares will be
issued to Acquired Fund shareholders in exchange for the Assets in the
Reorganization;
4.2.5.	The Acquiring Fund Shares to be issued and delivered to Acquired
Fund hereunder will, at the Effective Time, have been duly authorized
and, when issued and delivered as provided herein (including the receipt
of consideration in exchange therefor exceeding their par value), will
be duly and validly issued and outstanding shares of Acquiring Fund,
fully paid and non-assessable by Federated;
4.2.6.	Acquiring Fund's current prospectus and SAI conform in all
material respects to the applicable requirements of the 1933 Act and
the 1940 Act and the rules and regulations 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;
4.2.7.	Acquiring Fund is not in violation of, and the execution and
delivery of this Agreement and consummation of the transactions
contemplated hereby will not conflict with or violate, Maryland law or
any provision of any provision of its Articles or Federated's By-Laws
or of any agreement, instrument, lease, or other undertaking to which
Federated (with respect to Acquiring Fund) is a party or by which it
(with respect to Acquiring Fund) is bound or result in the acceleration
of any obligation, or the imposition of any penalty, under any agreement,
judgment, or decree to which Federated (with respect to Acquiring Fund)
is a party or by which it (with respect to Acquiring Fund) is bound,
except as otherwise disclosed in writing to and accepted by North Track;
4.2.8.	Except as otherwise disclosed in writing to and accepted by
North Track, (a) no litigation, administrative proceeding, or
investigation of or before any court or governmental body is presently
pending or (to Federated's knowledge) threatened against Federated
(with respect to Acquiring Fund) or any of its properties or assets
North Track (with respect to Acquired Fund) or any of its properties
or assets attributable or allocable to Acquired Fund  that, if
adversely determined, would materially and adversely affect Acquiring
Fund's financial condition or the conduct of its business and (b)
Federated knows of no facts that might form a reasonable basis for the
institution of any such litigation, proceeding, or investigation and
is not a party to or subject to the provisions of any order, decree, or
judgment of any court or governmental body that materially or adversely
affects its business or its ability to consummate the transactions
contemplated hereby;
4.2.9.	The execution, delivery, and performance of this Agreement have
been duly authorized as of the date hereof by all necessary action on
the part of Federated's board of directors (together with North Track's
board of directors, "Boards").  Subject to approval of the shareholders
of Acquired Fund, and assuming the due authorization, execution and
delivery of this Agreement by North Track, this Agreement constitutes
the valid and legally binding obligation of Federated (with respect to
Acquiring Fund), enforceable in accordance with its terms, except as
the same may be limited by bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium, and similar laws relating to or affecting
creditors' rights and by general principles of equity and the discretion
of the court (regardless of whether the enforceability is considered in
a proceeding in equity or at law);
4.2.10.  No governmental consents, approvals, authorizations, or filings
are required under the Federal Securities Laws for Federated's execution
or performance of this Agreement, except for (a) the filing with the SEC
of the Registration Statement, (b) the filing of one or more supplements
to the then-current prospectus or SAI of Acquiring Fund as may be
required, and (c) such consents, approvals, authorizations, and filings
as have been made or received or as may be required subsequent to the
Effective Time;
4.2.11.  On the effective date of the Registration Statement, the date
of the special meeting of Acquired Fund shareholders to approve this
Agreement and the Reorganization, and at the Effective Time, the
Registration Statement, including the Prospectus/Statement, only insofar
as it relates to Federated or Acquiring Fund, will (a) comply in all
material respects with the applicable provisions of the Federal
Securities Laws and the regulations thereunder and (b) 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; provided that the foregoing shall not
apply to statements in or omissions from the Registration Statement or
the Prospectus/Statement made in reliance on and in conformity with
information furnished by North Track for use therein;
4.2.12.  Acquiring Fund is a "fund" as defined in Section 851(g)(2) of
the Code; it qualified for treatment as a RIC for each past taxable
year since it commenced operations and will continue to meet all the
requirements for such qualification for its current taxable year; it
intends to continue to meet all such requirements for the next taxable
year; and it has no earnings and profits accumulated in any taxable
year in which the provisions of Subchapter M of the Code did not apply
to it;
4.2.13.  Following the Reorganization, Acquiring Fund (a) will continue
Acquired Fund's "historic business" (within the meaning of Section
1.368-1(d)(2) of the Regulations) and (b) will use a significant portion
of Acquired Fund's "historic business assets" (within the meaning of
Section 1.368-1(d)(3) of the Regulations) in a business; moreover,
Acquiring Fund (c) has no plan or intention to sell or otherwise
dispose of any of the Assets, except for dispositions made in the
ordinary course of that business and dispositions necessary to maintain
its status as a RIC, and (d) expects to retain substantially all the
Assets in the same form as it receives them in the Reorganization,
unless and until subsequent investment circumstances suggest the
desirability of change or it becomes necessary to make dispositions
thereof to maintain such status;
4.2.14.  There is no plan or intention for Acquiring Fund to be
dissolved or merged into another business or statutory trust or North
Track or any "fund" thereof (as defined in Section 851(g)(2) of the
Code) following the Reorganization, and Acquiring Fund is not under
the jurisdiction of a court in a "title 11 or similar case" (as
defined in Section 368(a)(3)(A) of the Code);
4.2.15.  Immediately after the Reorganization, (a) not more than 25%
of the value of Acquiring Fund's total assets (excluding cash, cash
items, and U.S. government securities) will be invested in the stock
and securities of any one issuer and (b) not more than 50% of the
value of such assets will be invested in the stock and securities of
five or fewer issuers;
4.2.16.  Acquiring Fund does not directly or indirectly own, nor at
the Effective Time will it directly or indirectly own, nor has it
directly or indirectly owned at any time during the past five years,
any Acquired Fund Shares;
4.2.17.  Acquiring Fund has no plan or intention to issue additional
Acquiring Fund Shares following the Reorganization except for
shares issued in the ordinary course of its business as a series of
an open-end investment company; nor does Acquiring Fund, or any
person "related" (within the meaning of Section 1.368-1(e)(3) of the
Regulations) to it, have any plan or intention to acquire    during
the five-year period beginning at the Effective Time, either
directly or through any transaction, agreement, or arrangement with
any other person    with consideration other than the Acquiring
Fund Shares, any Acquiring Fund Shares issued to the Shareholders
pursuant to the Reorganization, except for redemptions in the
ordinary course of such business as required by Section 22(e) of
the 1940 Act;
4.2.18.  During the five-year period ending at the Effective Time,
neither Acquiring Fund nor any person "related" (as defined in
Section 1.368-1(e)(3) of the Regulations) to it will have acquired
any Acquired Fund Shares with consideration other than the Acquiring
Fund Shares;
4.2.19.  Acquiring Fund's federal income tax returns, and all
applicable state and local tax returns, for all taxable years
through and including the most recent taxable year ended March 31,
2004, have been timely filed and all taxes payable pursuant to such
returns have been timely paid;
4.2.20.	  Federated's audited financial statements for the year
ended March 31, 2004, and unaudited financial statements for the
six months ended September 30, 2004, fairly represent Acquiring
Fund's financial position as of each such date and the results of
its operations and changes in its net assets for the periods then
ended; and
4.2.21.  If the Reorganization is consummated, Acquiring Fund will
treat each Shareholder that receives Acquiring Fund Shares in
connection with the Reorganization as having made a minimum initial
purchase of such shares for the purpose of making additional
investments therein, regardless of the value of the shares so
received and as having paid the maximum sales charge applicable to
purchases of Class A shares of Acquiring Fund.
4.3.	Each Investment Company represents and warrants to the
other Investment Company (and (1)to Reed Smith LLP for purposes of
the opinion described in Section 6.4 and to (2)Quarles & Brady LLP
for purposes of the opinion described in Section 6.6 hereof) as
follows:
4.3.1.	The fair market value of the Acquiring Fund Shares each
Shareholder receives will be approximately equal to the fair market
value of its Acquired Fund Shares it constructively surrenders in
exchange therefor;
4.3.2.	Its management (a) is unaware of any plan or intention of
Shareholders to redeem, sell, or otherwise dispose of (1) any
portion of their Acquired Fund Shares before the Reorganization to
any person "related" (within the meaning of Section 1.368-1(e)(3)
of the Regulations) to either Fund or (2) any portion of the
Acquiring Fund Shares they receive in the Reorganization to any
person "related" (within such meaning) to Acquiring Fund, (b) does
not anticipate dispositions of those Acquiring Fund Shares at the
time of or soon after the Reorganization to exceed the usual rate
and frequency of dispositions of shares of Acquired Fund as a
series of an open-end investment company, (c) expects that the
percentage of Shareholder interests, if any, that will be disposed
of as a result of or at the time of the Reorganization will be
de minimis, and (d) does not anticipate that there will be
extraordinary redemptions of Acquiring Fund Shares immediately
following the Reorganization;
4.3.3.	The Shareholders will pay their own expenses, if any,
incurred in connection with the Reorganization;
4.3.4.	There is no intercompany indebtedness between the Funds
that was issued or acquired, or will be settled, at a discount;
4.3.5.	Pursuant to the Reorganization, Acquired Fund will transfer
to Acquiring Fund, and Acquiring Fund will acquire, at least 90%
of the fair market value of the net assets, and at least 70% of
the fair market value of the gross assets, Acquired Fund held
immediately before the Reorganization.  For the purposes of this
representation, any amounts Acquired Fund uses to pay its
Reorganization expenses and to make redemptions and distributions
immediately before the Reorganization (except (a) redemptions in
the ordinary course of its business required by Section 22(e) of
the 1940 Act and (b) regular, normal dividend distributions made
to conform to its policy of distributing all or substantially all
of its income and gains to avoid the obligation to pay federal
income tax and/or the excise tax under Section 4982 of the Code)
will be included as assets it held immediately before the
Reorganization;
4.3.6.	None of the compensation received by any Shareholder who
is an employee of or service provider to Acquired Fund will be
separate consideration for, or allocable to, any of the Acquired
Fund Shares such Shareholder held; none of the Acquiring Fund
Shares any such Shareholder receives will be separate consideration
for, or allocable to, any employment agreement, investment
advisory agreement, or other service agreement; and the
compensation paid to any such Shareholder will be for services
actually rendered and will be commensurate with amounts paid to
third parties bargaining at arm's-length for similar services;
4.3.7.	Immediately after the Reorganization, the Shareholders
will not own shares constituting "control" (as defined in Section
304(c) of the Code) of Acquiring Fund;
4.3.8.	Neither Fund will be reimbursed for any expenses incurred
by it or on its behalf in connection with the Reorganization
unless those expenses are solely and directly related to the
Reorganization (determined in accordance with the guidelines set
forth in Rev. Rul. 73-54, 1973-1 C.B. 187) ("Reorganization
Expenses"); and
4.3.9.  The aggregate value of the acquisitions, redemptions, and
distributions limited by paragraphs 4.1.16, 4.2.17, and 4.2.18
will not exceed 50% of the value (without giving effect to such
acquisitions, redemptions, and distributions) of the proprietary
interest in Acquired Fund at the Effective Time.
5.	COVENANTS
5.1.	Each Investment Company covenants to operate its respective
Fund's business in the ordinary course between the date hereof
and the Closing, it being understood that:
(a)  such ordinary course will include declaring and paying
customary dividends and other distributions and such changes in
operations as are contemplated by each Fund's normal business
activities and
(b)  each Fund will retain exclusive control of the composition
of its portfolio until the Closing; provided that Acquired Fund
shall not dispose of more than an insignificant portion of its
historic business assets (as defined above) during such period,
other than dispositions in the ordinary course of business,
without Acquiring Fund's prior consent; and, subject to their
fiduciary duties to their respective shareholders and the Funds'
respective investment objectives, strategies, policies and
limitations, the Investment Companies shall coordinate the Funds'
respective portfolios so that the transfer of the Assets to
Acquiring Fund will not cause it to fail to be in compliance
with all of its investment policies and restrictions immediately
after the Closing.
5.2.	North Track covenants that the Acquiring Fund Shares to
be delivered hereunder are not being acquired for the purpose
of making any distribution thereof, other than in accordance with
the terms hereof.
5.3.	North Track covenants that it will assist Federated in
seeking to obtain information Federated reasonably requests
concerning the beneficial ownership of Acquired Fund Shares.
5.4.	North Track covenants that its books and records
(including all books and records required to be maintained under
the 1940 Act and the rules and regulations thereunder) regarding
Acquired Fund will be turned over to Federated at the Closing.
5.5.	Each Investment Company covenants to cooperate in
preparing the Registration Statement and the Prospectus/Statement
in compliance with applicable Federal Securities Laws.
5.6.	Each Investment Company covenants that it will, from
time to time, as and when requested by the other Investment
Company, execute and deliver or cause to be executed and delivered
all assignments and other instruments, and will take or cause to
be taken all further action, the other Investment Company may deem
necessary or desirable in order to vest in, and confirm to,
(a) Federated, on Acquiring Fund's behalf, title to and possession
of all the Assets, and (b) North Track, on Acquired Fund's behalf,
title to and possession of the Acquiring Fund Shares to be
delivered hereunder, and otherwise to carry out the intent and
purpose hereof.
5.7.	Federated covenants to use all reasonable efforts to
obtain the approvals and authorizations required by the 1933 Act,
the 1940 Act, and such state securities laws it may deem
appropriate in order to continue Acquiring Fund's operations
after the Effective Time.
5.8.	Subject to this Agreement, each Investment Company
covenants to take or cause to be taken all actions, and to do
or cause to be done all things, reasonably necessary, proper, or
advisable to consummate and effectuate the transactions
contemplated hereby.
6.	CONDITIONS PRECEDENT
Each Investment Company's obligations hereunder shall be subject
to (a) performance by the other Investment Company of all its
obligations to be performed hereunder at or before the Effective
Time, (b) all representations and warranties of the other
Investment Company contained herein being true and correct in all
material respects as of the date hereof and, except as they may
be affected by the transactions contemplated hereby, as of the
Effective Time, with the same force and effect as if made at and
as of the Effective Time, and (c) the following further
conditions that, at or before the Effective Time:
6.1.	This Agreement and the transactions contemplated hereby
shall have been duly adopted and approved by both Boards, and
by the shareholders of Acquired Fund.
6.2.	All necessary filings shall have been made with the SEC
and state securities authorities, and no order or directive
shall have been received that any other or further action is
required to permit the parties to carry out the transactions
contemplated hereby.  The Registration Statement shall have become
effective under the 1933 Act, no stop orders suspending the
effectiveness thereof shall have been issued, and the SEC shall
not have issued an unfavorable report with respect to the
Reorganization under Section 25(b) of the 1940 Act nor instituted
any proceedings seeking to enjoin consummation of the
transactions contemplated hereby under Section 25(c) of the
1940 Act.  All consents, orders, and permits of federal, state,
and local regulatory authorities (including the SEC and state
securities authorities) either Investment Company deems necessary
to permit consummation, in all material respects, of the
transactions contemplated hereby shall have been obtained, except
where failure to obtain same would not involve a risk of a
material adverse effect on the assets or properties of either
Fund, provided that either Investment Company may for itself waive
any of such conditions.
6.3.	At the Effective Time, 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 to obtain damages
or other relief in connection with, the transactions contemplated
hereby.
6.4.	North Track shall have received an opinion of Reed Smith
LLP substantially to the effect that:
6.4.1.	Acquiring Fund is a duly established series of Federated,
a Maryland corporation duly organized and validly existing under
the laws of the State of Maryland with power under its  Articles
and Bylaws to own all its properties and assets and to carry on
its business as presently conducted;
6.4.2.	This Agreement (a) has been duly authorized, executed, and
delivered by Federated on Acquiring Fund's behalf and (b) assuming
due authorization, execution, and delivery of this Agreement by
North Track on Acquired Fund's behalf, is a valid and legally
binding obligation of Federated with respect to Acquiring Fund,
enforceable in accordance with its terms, except as the same may
be limited by bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium, and similar laws relating to or
affecting creditors' rights and by general principles of equity
and the discretion of the court (regardless of whether the
enforceability is considered in a proceeding in equity or at law);
6.4.3.	The Acquiring Fund Shares to be issued and distributed to
the Shareholders under this Agreement, assuming their due delivery
as contemplated by this Agreement and the receipt of consideration
in exchange therefor exceeding their par value, will be duly
authorized and validly issued and outstanding and fully paid and
non-assessable by Federated;
6.4.4.	The execution and delivery of this Agreement did not, and
the consummation of the transactions contemplated hereby will not,
materially violate any provision of Federated's Articles or By-Laws
or of any agreement (known to Reed Smith LLP, without any
independent inquiry or investigation) to which Federated (with
respect to Acquiring Fund) is a party or by which it (with respect
to Acquiring Fund) is bound or (to Reed Smith LLP knowledge, without
any independent inquiry or investigation) result in the acceleration
of any obligation, or the imposition of any penalty, under any
agreement, judgment, or decree to which Federated (with respect to
Acquiring Fund) is a party or by which it (with respect to Acquiring
Fund) is bound, except as set forth in such opinion or as otherwise
disclosed in writing to and accepted by North Track;
6.4.5.	To Reed Smith LLP's knowledge (without any independent
inquiry or investigation), no consent, approval, authorization, or
order of any court or governmental authority is required for the
consummation by Federated on Acquiring Fund's behalf of the
transactions contemplated herein, except such as have been obtained
under the Federal Securities Laws and such as may be required under
state securities laws;
6.4.6.	Federated is registered with the SEC as an investment
company, and to Reed Smith LLP's knowledge no order has been issued
or proceeding instituted to suspend such registration; and
6.4.7.	To Reed Smith LLP's knowledge (without any independent
inquiry or investigation), (a) no litigation, administrative
proceeding, or investigation of or before any court or governmental
body is pending or threatened as to Federated (with respect to
Acquiring Fund) or any of its properties or assets attributable or
allocable to Acquiring Fund and (b) Federated (with respect to
Acquiring Fund) is not a party to or subject to the provisions of
any order, decree, or judgment of any court or governmental body
that materially and adversely affects or is reasonably likely to
materially and adversely affect Acquiring Fund's business, except
as set forth in such opinion or as otherwise disclosed in writing
to and accepted by North Track.
In rendering such opinion, Reed Smith LLP may (1) rely, as to
matters governed by the laws of the State of Maryland, on an
opinion of competent Maryland counsel, and assume for purposes
of the enforceability opinion that the laws of Maryland are
identical to the laws of Pennsylvania, (1) make assumptions
regarding the authenticity, genuineness, and/or conformity of
documents and copies thereof without independent verification
thereof, (2) limit such opinion to applicable federal and state
law, and (3) define the word "knowledge" and related terms to mean
the knowledge of attorneys then with Reed Smith LLP who have
devoted substantive attention to matters directly related to this
Agreement and the Reorganization.
6.5.	Federated shall have received an opinion of Quarles & Brady
LLP substantially to the effect that:
6.5.1.	Acquired Fund is a duly established series of North Track,
a corporation that is duly organized, validly existing, and in good
standing under the laws of the State of Maryland with power under
the Articles to own all its properties and assets and, to Quarles
& Brady LLP's knowledge, to carry on its business as presently
conducted;
6.5.2.	This Agreement (a) has been duly authorized, executed, and
delivered by North Track on Acquired Fund's behalf and
(b) assuming due authorization, execution, and delivery of this
Agreement by Federated on Acquiring Fund's behalf, is a valid and
legally binding obligation of North Track with respect to Acquired
Fund, enforceable in accordance with its terms, except as the same
may be limited by bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium, and similar laws relating to or
affecting creditors' rights and by general principles of equity
and the discretion of the court (regardless of whether the
enforceability is considered in a proceeding in equity or at law);
6.5.3.	The execution and delivery of this Agreement did not,
and the consummation of the transactions contemplated hereby
will not, materially violate any provision of North Track's
Articles or By-Laws or of any agreement (known to Quarles & Brady
LLP, without any independent inquiry or investigation) to which
North Track (with respect to Acquired Fund) is a party or by which
it (with respect to Acquired Fund) is bound or (to Quarles & Brady
LLP's knowledge, without any independent inquiry or investigation)
result in the acceleration of any obligation, or the imposition of
any penalty, under any agreement, judgment, or decree to which
North Track (with respect to Acquired Fund) is a party or by which
it (with respect to Acquired Fund) is bound, except as set forth
in such opinion or as otherwise disclosed in writing to and
accepted by Federated;
6.5.4.	To Quarles & Brady LLP's knowledge (without any independent
inquiry or investigation), no consent, approval, authorization, or
order of any court or governmental authority is required for the
consummation by North Track on Acquired Fund's behalf of the
transactions contemplated herein, except such as have been obtained
under the Federal Securities Laws and such as may be required
under state securities laws;
6.5.5.	North Track is registered with the SEC as an investment
company, and to Quarles & Brady LLP's knowledge no order has been
issued or proceeding instituted to suspend such registration; and
6.5.6.	To Quarles & Brady LLP's knowledge (without any independent
inquiry or investigation), (a) no litigation, administrative
proceeding, or investigation of or before any court or governmental
body is pending or threatened as to North Track (with respect to
Acquired Fund) or any of its properties or assets attributable or
allocable to Acquired Fund and (b) North Track (with respect to
Acquired Fund) is not a party to or subject to the provisions of
any order, decree, or judgment of any court or governmental body
that materially and adversely affects or is reasonably likely to
materially and adversely affect Acquired Fund's business, except
as set forth in such opinion or as otherwise disclosed in writing
to and accepted by Federated.
In rendering such opinion, Quarles & Brady LLP may (1) rely, as to
matters governed by the laws of the State of Maryland, on an
opinion of competent Maryland counsel, and assume for purposes of
the enforceability opinion that the laws of Maryland are identical
to the laws of Wisconsin, (2) make assumptions regarding the
authenticity, genuineness, and/or conformity of documents and
copies thereof without independent verification thereof,
(3) limit such opinion to applicable federal and state law,
and (4) define the word "knowledge" and related terms to mean
the knowledge of attorneys then with Quarles & Brady LLP who
have devoted substantive attention to matters directly related
to this Agreement and the Reorganization.
6.6.	Each Investment Company shall have received an opinion
of Quarles & Brady LLP, addressed to and in form and substance
reasonably satisfactory to it, as to the federal income tax
consequences mentioned below ("Tax Opinion").  In rendering the
Tax Opinion, Quarles & Brady LLP may rely as to factual matters,
exclusively and without independent verification, on the
representations and warranties made in this Agreement, which
Quarles & Brady LLP may treat as representations and warranties
made to it, and in separate letters addressed to Quarles & Brady
LLP and the certificates delivered pursuant to paragraph 3.4.
The Tax Opinion shall be substantially to the effect that, based
on the facts and assumptions stated therein and conditioned on
consummation of the Reorganization in accordance with this
Agreement, for federal income tax purposes:
6.6.1.	Acquiring Fund's acquisition of the Assets in exchange
solely for Acquiring Fund Shares, followed by Acquired Fund's
distribution of those shares pro rata to the Shareholders
constructively in exchange for their Acquired Fund Shares, will
qualify as a "reorganization" (as defined in Section
368(a)(1)(C) of the Code), and each Fund will be "a party to a
reorganization" within the meaning of Section 368(b) of the Code;
6.6.2.	Acquired Fund will recognize no gain or loss on the transfer
of the Assets to Acquiring Fund in exchange solely for Acquiring
Fund Shares or on the subsequent distribution of those shares to the
Shareholders in constructive exchange for their Acquired Fund Shares
in liquidation of Acquired Fund pursuant to the Reorganization;
6.6.3.	Acquiring Fund will recognize no gain or loss on its receipt
of the Assets in exchange solely for Acquiring Fund Shares pursuant
to the Reorganization;
6.6.4.	The tax basis of each Asset acquired by Acquiring Fund
pursuant to the Reorganization's basis in each Asset will be the
same as the tax basis of such Assets to Acquired Fund immediately
prior to the Reorganization, and the holding period of each Asset
in the hands of Acquiring Fund will include the period during
which such Asset was held by Acquired Fund;
6.6.5.	The Shareholders will recognize no gain or loss on the
constructive exchange of their Acquired Fund Shares for Acquiring
Fund Shares pursuant to the Reorganization; and

6.6.6.	The aggregate tax basis of the Acquiring Fund Shares
received by each Shareholder in the Reorganization will be the
same as the aggregate tax basis of the Acquired Fund Shares held
by such Shareholder immediately prior to the Reorganization, and
the holding period of the Acquiring Fund Shares to be received by
each such Shareholder will include the period during which the
Acquired Fund Shares exchanged therefore were held by such
Shareholder (provided the Acquired Fund Shares were held as capital
assets at the Effective Time).
Notwithstanding subparagraphs 6.6.2 and 6.6.4, the Tax Opinion may
state that no opinion is expressed as to the effect of the
Reorganization on the Funds or any Shareholder with respect to any
Asset as to which any unrealized gain or loss is required to be
recognized for federal income tax purposes at the end of a taxable
year (or on the termination or transfer thereof) under a
mark-to-market system of accounting.
At any time before the Closing, either Investment Company may waive
any of the foregoing conditions (except that set forth in paragraph
6.1) if, in the judgment of its Board, such waiver will not have a
material adverse effect on its Fund's shareholders' interests.
7.	BROKERAGE FEES AND EXPENSES
7.1.	Each Investment Company represents and warrants to the
other that there are no brokers or finders entitled to receive
any payments in connection with the transactions provided for
herein.
7.2.	Federated Investors, Inc., the parent of the investment
adviser to Acquiring Fund, and B.C. Ziegler and Company, the
investment adviser to Acquired Fund, or their respective affiliates
will bear the total Reorganization Expenses in accordance with a
separate Agreement among B.C. Ziegler and Company, The Ziegler
Companies, Inc. and Federated Investors, Inc. dated as of
February 2, 2005.
8.	ENTIRE AGREEMENT; NO SURVIVAL
Neither Investment Company has made any representation, warranty,
or covenant not set forth herein, and this Agreement constitutes
the entire agreement between the parties.  The representations,
warranties, and covenants contained herein or in any document
delivered pursuant hereto or in connection herewith shall not
survive the Closing.
9.	TERMINATION OF AGREEMENT
This Agreement may be terminated at any time at or before the
Effective Time:
9.1.	By either Investment Company (a) in the event of the other
Investment Company's material breach of any representation,
warranty, or covenant contained herein to be performed at or prior
to the Effective Time, (b) if a condition to its obligations has
not been met and it reasonably appears that such condition will not
or cannot be met, or (c) if the Closing has not occurred on or
before May 30, 2005; or
9.2.	By the Investment Companies' mutual agreement.
In the event of termination under paragraphs 9.1(c) or 9.2, there
shall be no liability for damages on the part of either Investment
Company, or the directors or officers thereof, to the other Investment
Company.
10.	AMENDMENT
This Agreement may be amended, modified, or supplemented at any time
in any manner mutually agreed on in writing by the Investment
Companies; provided that no such amendment, modification, or
supplement shall have a material adverse effect on the Shareholders'
interests.
11.	MISCELLANEOUS
11.1.	This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Maryland; provided
that, in the case of any conflict between such laws and the federal
securities laws, the latter shall govern.
11.2.	Nothing expressed or implied herein is intended or shall
be construed to confer on or give any person, firm, trust, or
North Track other than the parties and their respective successors
and assigns any rights or remedies under or by reason of this
Agreement.
11.3	The parties acknowledge that each Investment Company is a
Maryland corporation.  Notice is hereby given that this instrument
is executed by each Investment Company's officer's and directors
solely in their capacities as officers and directors, and not
individually, and solely on behalf of its respective Fund, and
that neither Investment Company's obligations under this
instrument is binding on or enforceable against any of its
respective officers, directors or shareholders or any series of
such Investment Company other than Acquiring Fund in the case of
Federated and Acquired Fund in the case of North Track but are
only binding on and enforceable against the property of its
respective Fund.  Each Investment Company agrees that, in
asserting any rights or claims under this Agreement, it shall
look only to the property of the respective Fund of the other
Investment Company in settlement of such rights or claims and
not to the other Investment Company's directors, officers, or
shareholders.
11.4.	This Agreement may be executed in one or more counterparts,
all of which shall be considered one and the same agreement, and
shall become effective when one or more counterparts have been
executed by each Investment Company and delivered to the other
Investment Company.  The headings contained in this Agreement are
for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
IN WITNESS WHEREOF, each party has caused this Agreement to be
executed and delivered by its duly authorized officers as of the
date first written above.
NORTH TRACK FUNDS, INC.
By:/s/ David G. Stoeffel
Name:  David G. Stoeffel
Title:     President
FEDERATED MUNICIPAL SECURITIES FUND, INC.
By: /s/ John W. McGonigle
Name:  John W. McGonigle
Title:   Executive Vice President and Secretary