FIRST INVESTORS CASH MANAGEMENT FUND INC, 485BPOS, 1998-04-28

FIRST INVESTORS CASH MANAGEMENT FUND INC
485BPOS, 1998-04-28

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As filed with the Securities and Exchange Commission on April 28, 1998

Registration No. 2-62347
811-2860
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

Post-Effective Amendment No. 26 X
---

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940

Amendment No. 26 X
---

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FIRST INVESTORS CASH MANAGEMENT FUND, INC.
(Exact name of Registrant as specified in charter)

95 Wall Street 10005
New York, New York (Zip Code)
(Address of Principal Executive Offices)

212-858-8000
(Registrant's Telephone Number, Including Area Code)

Ms. Concetta Durso
Secretary and Vice President
First Investors Cash Management Fund, Inc.
95 Wall Street
New York, New York 10005
(Name and Address of Agent for Service)

Approximate Date of Proposed Public Offering: As soon as practicable after the
effective date of this Registration Statement

It is proposed that this filing will become effective on April 30, 1998 pursuant
to paragraph (b) of Rule 485.

<PAGE>

FIRST INVESTORS CASH MANAGEMENT FUND, INC.
CROSS-REFERENCE SHEET

<TABLE>
<CAPTION>
N-1A Item No.
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Location
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<S> <C> <C>
PART A: PROSPECTUS

1. Cover Page.................................................................. Cover Page
2. Synopsis.................................................................... Fee Table
3. Condensed Financial Information............................................. Financial Highlights
4. General Description of Registrant........................................... Investment Objectives and Policies;
General Information
5. Management of the Fund...................................................... Management
5A. Management's Discussion of
Fund Performance............................................................ Performance Information
6. Capital Stock and Other Securities.......................................... Description of Shares; Dividends;
Taxes; Determination of Net Asset Value
7. Purchase of Securities Being Offered........................................ How to Buy Shares
8. Redemption or Repurchase.................................................... How to Exchange Shares; How to Redeem
Shares; Telephone Transactions
9. Pending Legal Proceedings................................................... Not Applicable

PART B: STATEMENT OF ADDITIONAL INFORMATION

10. Cover Page.................................................................. Cover Page
11. Table of Contents........................................................... Table of Contents
12. General Information and History............................................. General Information
13. Investment Objectives and Policies.......................................... Investment Policies; Investment
Restrictions
14. Management of the Fund...................................................... Directors and Officers
15. Control Persons and Principal
Holders of Securities..................................................
16. Investment Advisory and Other Services...................................... Management
17. Brokerage Allocation........................................................ Allocation of Portfolio Transactions
18. Capital Stock and Other Securities.......................................... Determination of Net Asset Value; Daily
Dividends
19. Purchase, Redemption and Pricing
of Securities Being Offered............................................ Additional Exchange and Redemption
Information and Other Services;
Determination of Net Asset Value
20. Tax Status.................................................................. Taxes
21. Underwriters................................................................ Underwriter
22. Performance Data............................................................ Performance Information
23. Financial Statements........................................................ Financial Statements; Report of
Independent Accountants
</TABLE>

<PAGE>

PART C: OTHER INFORMATION

Information required to be included in Part C is set forth under the appropriate
item so numbered, in Part C hereof.

<PAGE>

First Investors Cash Management Fund, Inc.

First Investors Tax-Exempt Money Market Fund, Inc.

95 Wall Street, New York, New York 10005/1-800-423-4026

This is a Prospectus for First Investors Cash Management Fund, Inc. ("Cash
Management Fund") and First Investors Tax-Exempt Money Market Fund, Inc.
("Tax-Exempt Money Market Fund") (singularly, "Fund" and collectively, "Funds"),
each of which is an open-end diversified management investment company. Each
Fund sells two classes of shares. Investors may select Class A or Class B
shares. This Prospectus relates only to Class A shares. The Funds' Class B
Prospectus is available at no charge upon request to the Funds at the address or
telephone number listed above.

Cash Management Fund seeks to earn a high rate of current income consistent
with the preservation of capital and maintenance of liquidity. This Fund invests
primarily in high quality money market obligations, including securities issued
or guaranteed by the U.S. Government or its agencies and instrumentalities, bank
obligations and high-grade corporate instruments.

Tax-Exempt Money Market Fund seeks to earn a high rate of current income
that is exempt from Federal income tax and is not an item of tax preference for
purposes of the Federal alternative minimum tax ("Tax Preference Item"),
consistent with the preservation of capital and maintenance of liquidity. This
Fund invests primarily in high-grade, short-term tax-exempt obligations issued
by state and municipal governments and by public authorities.

Each Fund is a money market fund and seeks to maintain a stable net asset
value of $1.00 per share. However, there can be no assurance that either Fund
will be able to do so or to achieve its investment objective. An investment in
either Fund is neither insured nor guaranteed by the U.S. Government.

This Prospectus sets forth concisely the information about each of the
Funds that a prospective investor should know before investing and should be
retained for future reference. First Investors Management Company, Inc. ("FIMCO"
or "Adviser") serves as investment adviser to each Fund and First Investors
Corporation ("FIC" or "Underwriter") serves as distributor of each Fund's
shares. A Statement of Additional Information ("SAI"), dated April 30, 1998
(which is incorporated by reference herein), has been filed with the Securities
and Exchange Commission. The SAI is available at no charge upon request to the
Funds at the address or telephone number indicated above.

An investment in these securities is not a deposit or obligation of, or
guaranteed or endorsed by, any bank and is not federally insured or protected by
the Federal Deposit Insurance Corporation, the Federal Reserve Board or any
other government agency.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

The date of this Prospectus is April 30, 1998

<PAGE>

FEE TABLE

The following table is intended to assist investors in understanding the
expenses associated with investing in Class A shares of a Fund.

Shareholder Transaction Expenses

Maximum Sales Load Imposed on Purchases
(as a percentage of offering price)................................. None
Deferred Sales Load
(as a percentage of the lower of original purchase
price or redemption proceeds)....................................... None

Annual Fund Operating Expenses
(as a percentage of average net assets)

<TABLE>
<CAPTION>
Total Fund
Management 12b-1 Other Operating
Fees Fees Expenses(1)+ Expenses(2)+
---- ---- ------------ ------------

<S> <C> <C> <C> <C>
Cash Management Fund............................. 0.50% -0- 0.30% 0.80%
Tax-Exempt Money Market Fund..................... 0.50 -0- 0.30 0.80
</TABLE>

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+ Net of waiver and/or reimbursement.

(1) The Adviser will reimburse Other Expenses for each Fund in excess of 0.30%
for a minimum period ending December 31, 1998. For the fiscal year ended
December 31, 1997, the Adviser reimbursed the Funds for certain Other
Expenses. Absent such reimbursement, Other Expenses would have been 0.69%
for Cash Management Fund and 0.62% for Tax-Exempt Money Market Fund.

(2) If certain fees and expenses had not been waived or reimbursed, Total Fund
Operating Expenses would have been 1.19% for Cash Management Fund and 1.12%
for Tax-Exempt Money Market Fund. Each Fund has an expense offset
arrangement that may reduce the Fund's custodian fee based on the amount of
cash maintained by the Fund with its custodian. Any such fee reductions are
not reflected under Total Fund Operating Expenses.

For a more complete description of the various costs and expenses, see "How
to Exchange Shares," "How to Redeem Shares" and "Management."

The Example below is based on Class A expense data for each Fund's fiscal
year ended December 31, 1997, except that certain Operating Expenses have been
restated as noted above.

2
<PAGE>

EXAMPLE

You would pay the following expenses on a $1,000 investment, assuming (1)
5% annual return and (2) redemption at the end of each time period:

One Year Three Years Five Years Ten Years
-------- ----------- ---------- ---------

Cash Management Fund $ 8 $26 $44 $99
Tax-Exempt Money Market Fund 8 26 44 99

The expenses in the Example should not be considered a representation by
the Funds of past or future expenses. Actual expenses in future years may be
greater or less than those shown.

3
<PAGE>

FINANCIAL HIGHLIGHTS

The following table sets forth the per share operating performance data for
a share outstanding, total return, ratios to average net assets and other
supplemental data for each year indicated. Additional performance information is
contained in each Fund's Annual Report, which may be obtained without charge by
contacting either Fund at 1-800-423-4026. The table has been derived from
financial statements which have been audited by Tait, Weller & Baker,
independent certified public accountants, whose report thereon appears in the
SAI. This information should be read in conjunction with the Financial
Statements and Notes thereto, which also appear in the SAI, available at no
charge upon request to the Funds.

<TABLE>
<CAPTION>
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PER SHARE DATA
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Net Asset
Value Dividends
(unchanged Net from Net Total Net Assets, End
during each Investment Investment Return of Year
year) Income Income (%) (thousands)
- ------------------------------------- --------------- ------------- -------------- --------- -------------------

<S> <C> <C> <C> <C> <C>
FIRST INVESTORS CASH MANAGEMENT FUND, INC.
CLASS A
1988.............................. $ 1.00 $.068 $.068 7.03 $ 222,715
1989.............................. 1.00 .085 .085 8.80 335,678
1990.............................. 1.00 .074 .074 7.71 372,081
1991.............................. 1.00 .052 .052 5.35 217,150
1992.............................. 1.00 .030 .030 3.03 150,895
1993.............................. 1.00 .025 .025 2.57 127,178
1994.............................. 1.00 .036 .036 3.69 128,495
1995.............................. 1.00 .053 .053 5.42 128,635
1996.............................. 1.00 .048 .048 4.89 133,801
1997.............................. 1.00 .049 .049 4.98 139,562

FIRST INVESTORS TAX-EXEMPT MONEY MARKET FUND, INC.
CLASS A
1988.............................. $ 1.00 $.046 $.046 4.68 $ 39,467
1989.............................. 1.00 .055 .055 5.67 36,736
1990.............................. 1.00 .052 .052 5.31 40,745
1991.............................. 1.00 .038 .038 3.87 31,157
1992.............................. 1.00 .023 .023 2.36 25,399
1993.............................. 1.00 .018 .018 1.85 23,857
1994.............................. 1.00 .022 .022 2.24 26,424
1995.............................. 1.00 .032 .032 3.24 25,045
1996.............................. 1.00 .028 .028 2.85 22,888
1997.............................. 1.00 .030 .030 3.00 18,680
</TABLE>

+ Net of fees waived by the investment adviser and the transfer agent.

4
<PAGE>

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RATIOS / SUPPLEMENTAL DATA
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Ratio to Ratio to Average Net Assets
Average Net Assets+ Prior to Waiver of Fees
- ------------------------------- ---------------------------------

Net Net
Investment Investment
Expenses Income Expenses Income
(%) (%) (%) (%)
- -------------------------------------------------------------------------

.85 6.83 .95 6.73
.84 8.44 .96 8.32
.86 7.45 .96 7.35
.94 5.33 1.13 5.14
.87 3.02 1.16 2.72
.70 2.54 1.15 2.09
.70 3.72 1.15 3.26
.70 5.29 1.18 4.81
.70 4.78 1.19 4.29
.77 4.87 1.19 4.45

.75 4.59 N/A N/A
.81 5.52 N/A N/A
.80 5.19 N/A N/A
.94 3.83 1.02 3.74
.95 2.33 1.05 2.23
.70 1.83 .92 1.61
.70 2.24 1.02 1.92
.71 3.18 1.06 2.84
.71 2.81 1.08 2.44
.75 2.95 1.12 2.58

5
<PAGE>

INVESTMENT OBJECTIVES AND POLICIES

The investment objective of Cash Management Fund is to earn a high rate of
current income consistent with the preservation of capital and maintenance of
liquidity. The investment objective of Tax-Exempt Money Market Fund is to earn a
high rate of current income that is exempt from Federal income tax and is not a
Tax Preference Item, consistent with the preservation of capital and maintenance
of liquidity. The Funds generally can invest only in securities that mature or
are deemed to mature within 397 days from the date of purchase. In addition,
each Fund maintains a dollar-weighted average portfolio maturity of 90 days or
less. There is no assurance that either Fund will be able to achieve its
investment objective.

In managing each Fund's investment portfolio, the Adviser may employ
various professional money management techniques in order to respond to changing
economic and money market conditions and to shifts in fiscal and monetary
policy. These techniques include varying the composition and the
average-weighted maturity of each Fund's portfolio based upon the Adviser's
assessment of the relative values of various money market instruments and future
interest rate patterns. The Adviser also may seek to improve a Fund's yield by
purchasing or selling securities to take advantage of yield disparities among
money market instruments that regularly occur in the money market.

In periods of declining interest rates, each Fund's yield will tend to be
somewhat higher than prevailing market rates, and in periods of rising interest
rates the opposite will be true. Also, when interest rates are falling, net cash
inflows from the continuous sale of a Fund's shares likely will be invested in
portfolio instruments producing lower yields than the balance of the Fund's
portfolio, thereby reducing the Fund's yield. In periods of rising interest
rates, the opposite may be true.

Cash Management Fund

Cash Management Fund invests primarily in (1) high quality marketable
securities issued or guaranteed as to principal and interest by the U.S.
Government, its agencies or instrumentalities, (2) bank certificates of deposit,
bankers' acceptances, time deposits and other short-term obligations issued by
banks and (3) prime commercial paper and high quality, U.S. dollar denominated
short-term corporate bonds and notes. The U.S. Government securities in which
the Fund may invest include a variety of U.S. Treasury securities that differ in
their interest rates, maturities and dates of issue. Securities issued or
guaranteed by agencies or instrumentalities of the U.S. Government may be
supported by the full faith and credit of the United States or by the right of
the issuer to borrow from the U.S. Treasury. See the SAI for additional
information on U.S. Government securities. The Fund may invest in domestic bank
certificates of deposit (insured up to $100,000) and bankers' acceptances (not
insured) issued by domestic banks and savings institutions which are insured by
the Federal Deposit Insurance Corporation ("FDIC") and that have total assets
exceeding $500 million. The Fund also may invest in certificates of deposit
issued by London branches of domestic or foreign banks ("Eurodollar CDs"). The
Fund may invest in time deposits and other short-term obligations, including
uninsured, direct obligations bearing fixed, floating or variable interest
rates, issued by domestic banks, foreign branches of domestic banks, foreign
subsidiaries of domestic banks and domestic and foreign branches of foreign
banks. The Fund also may invest in repurchase agreements with banks that are
members of the Federal Reserve System or securities

6
<PAGE>

dealers that are members of a national securities exchange or are market makers
in U.S. Government securities, and, in either case, only where the debt
instrument subject to the repurchase agreement is a U.S. Treasury or agency
obligation. Repurchase agreements maturing in over 7 days are deemed illiquid
securities, and can constitute no more than 10% of the Fund's net assets. See
"Description of Certain Securities, Other Investment Policies and Risk Factors"
for additional information on repurchase agreements.

Cash Management Fund also may purchase high quality, U.S. dollar
denominated short-term bonds and notes, including variable rate and master
demand notes issued by domestic and foreign corporations (including banks). The
Fund may invest in floating and variable rate demand notes and bonds that permit
the Fund, as the holder, to demand payment of principal at any time, or at
specified intervals not exceeding 397 days, in each case upon not more than 30
days' notice. The Fund may borrow money for temporary or emergency purposes in
amounts not exceeding 5% of its total assets. When market conditions warrant,
the Fund may purchase short-term, high quality fixed and variable rate
instruments issued by state and municipal governments and by public authorities.
See "Description of Certain Securities, Other Investment Policies and Risk
Factors" for additional information concerning these securities.

Cash Management Fund may purchase only obligations that (1) the Adviser
determines present minimal credit risks based on procedures adopted by the
Fund's Board of Directors, and (2) are either (a) rated in one of the top two
rating categories by any two nationally recognized statistical rating
organizations ("NRSROs") (or one, if only one rated the security) or (b) unrated
securities that the Adviser determines are of comparable quality. Securities
qualify as being in the top rating category ("First Tier Securities") if at
least two NRSROs (or one, if only one rated the security) have given it the
highest rating, or unrated securities that the Adviser determines are of
comparable quality. The Fund's purchases of commercial paper are limited to
First Tier Securities. The Fund may not invest more than 5% of its total assets
in securities rated in the second highest rating category ("Second Tier
Securities"). Investments in Second Tier Securities of any one issuer are
limited to the greater of 1% of the Fund's total assets or $1 million. The Fund
generally may invest no more than 5% of its total assets in the securities of a
single issuer (other than securities issued by the U.S. Government, its agencies
or instrumentalities).

Tax-Exempt Money Market Fund

Tax-Exempt Money Market Fund invests primarily in Municipal Instruments, as
defined below. The Fund may purchase only Municipal Instruments that (1) the
Adviser determines present minimal credit risks based on procedures adopted by
the Fund's Board of Directors, and (2) are either (a) rated in one of the top
two rating categories by any two NRSROs (or one, if only one rated the security)
or (b) unrated securities that the Adviser determines are of comparable quality.
The Fund may not invest more than 5% of its total assets in securities that are
Second Tier Securities and issued by a state or territory of the U.S. or any
political subdivision or instrumentality thereof, but not backed by its taxing
authority or revenue or related to a public facility or project. Investments in
such securities of any one issuer are limited to the greater of 1% of the Fund's
total assets or $1 million. The Fund generally may invest no more than 5% of its
total assets in the securities of a single issuer (other than securities issued
by the U.S. Government, its agencies or instrumentalities). While the Fund seeks
to provide a high level of interest income that is exempt

7
<PAGE>

from Federal income tax, up to 20% of the Fund's total assets may be invested in
high quality fixed-income obligations, the interest on which is subject to
Federal income tax. See "Description of Certain Securities, Other Investment
Policies and Risk Factors--Municipal Instruments" for additional information
concerning these securities.

Tax-Exempt Money Market Fund may invest without limit in securities that
are related to each other in such a fashion that economic, political or business
changes or developments would affect more than one security in the Fund's
investment portfolio. Securities or instruments of issuers in the same state or
involved in the same business, or interest paid from similar sources of tax
revenues, are examples of the factors that might have an effect on more than one
instrument purchased by the Fund. The Fund may invest up to 5% of its net assets
in securities issued on a when-issued or delayed delivery basis, that is, for
delivery to the Fund later than the normal settlement date for most securities,
at a stated price and yield. See the SAI for more information concerning
when-issued and delayed delivery securities. The Fund may borrow money for
temporary or emergency purposes in amounts not exceeding 5% of its total assets.

General

Each Fund's investment objective and certain other investment policies set
forth in the SAI that are designated fundamental policies may not be changed
without shareholder approval. There can be no assurance that either Fund will
achieve its investment objective.

Description of Certain Securities, Other Investment Policies and Risk Factors

General Market Risk

In addition to the risks associated with particular types of securities,
which are discussed below, the Funds are subject to certain other risks.
Although money market funds are considered to be among the more conservative
investment vehicles available to the public, please bear in mind that money
market mutual funds are not insured by the FDIC and are not guaranteed by a bank
or other entity. There is the additional risk that each Fund will not be able to
maintain a stable $1.00 per share net asset value as a result of a decrease in
value of one or more of that Fund's portfolio securities.

Types of Securities and Their Risks

Bankers' Acceptances. Each Fund may invest in bankers' acceptances.
Bankers' acceptances are short-term credit instruments used to finance
commercial transactions. Generally, an acceptance is a time draft drawn on a
bank by an exporter or importer to obtain a stated amount of funds to pay for
specific merchandise. The draft is then "accepted" by a bank that, in effect,
unconditionally guarantees to pay the face value of the instrument on its
maturity date. The acceptance may then be held by the accepting bank as an asset
or it may be sold in the secondary market at the going rate of interest for a
specific maturity. Although maturities for acceptances can be as long as 270
days, most acceptances have maturities of six months or less.

8
<PAGE>

Certificates of Deposit. Each Fund may invest in bank certificates of
deposit ("CDs"). The FDIC is an agency of the U.S. Government which insures the
deposits of certain banks and savings and loan associations up to $100,000 per
deposit. The interest on such deposits may not be insured if this limit is
exceeded. Current Federal regulations also permit such institutions to issue
insured negotiable CDs in amounts of $100,000 or more, without regard to the
interest rate ceilings on other deposits. To remain fully insured, these
investments currently must be limited to $100,000 per insured bank or savings
and loan association.

Commercial Paper. Commercial paper is a promissory note issued by a
corporation to finance short-term credit needs which may either be unsecured or
backed by a letter of credit. Commercial paper includes notes, drafts or similar
instruments payable on demand or having a maturity at the time of issuance not
exceeding nine months, exclusive of days of grace or any renewal thereof. See
Appendix A to the SAI for a description of commercial paper ratings.

Eurodollar Certificates of Deposit. Each Fund may invest in Eurodollar CDs,
which are issued by London branches of domestic or foreign banks. Such
securities involve risks that differ from CDs issued by domestic branches of
U.S. banks. These risks include future political and economic developments, the
possible imposition of United Kingdom withholding taxes on interest income
payable on the securities, the possible establishment of exchange controls, the
possible seizure or nationalization of foreign deposits or the adoption of other
foreign governmental restrictions that might adversely affect the payment of
principal and interest on such securities.

Municipal Instruments. As used in this Prospectus and in the SAI, Municipal
Instruments include the following instruments and related participation
interests: (1) municipal bonds; (2) municipal commercial paper; (3) municipal
notes; (4) private activity bonds or industrial development bonds; (5) put
bonds; and (6) variable rate demand instruments. Some Municipal Instruments
issued by Federal instrumentalities are not backed by the full faith and credit
of the U.S. Government. However, each Fund deems any Municipal Instrument backed
directly, or indirectly through insurance or any other arrangement, or by the
full faith and credit of the U.S. Government, to be a high-grade Municipal
Instrument for the Fund's purposes. Where advisable, to ensure that each Fund's
investments are all high-grade, it will require Municipal Instruments to be
supported by a standby letter of credit or a similar obligation of a
creditworthy financial institution.

Municipal Bonds. Municipal bonds are debt obligations that generally are
issued to obtain funds for various public purposes and have a time to maturity,
at issuance, of more than one year. The two principal classifications of
municipal bonds are "general obligation" and "revenue" bonds. General obligation
bonds are secured by the issuer's pledge of its full faith and credit for the
payment of principal and interest. Revenue bonds generally are payable only from
revenues derived from a particular facility or class of facilities or, in some
cases, from the proceeds of a special tax or other specific revenue source.
There are variations in the security of municipal bonds, both within a
particular classification and between classifications, depending on numerous
factors. The yields on municipal bonds depend on, among other things, general
money market conditions, the condition of the municipal bond market, the size of
a particular offering, the maturity of the obligation and the rating of the
issuer. Generally, the value of municipal bonds varies inversely to changes in
interest rates. See Appendix B to the SAI for a description of municipal bond
ratings.

9
<PAGE>

Municipal Commercial Paper. Issues of municipal commercial paper are
short-term unsecured negotiable promissory notes. Municipal commercial paper is
issued usually to meet temporary capital needs of the issuer or to serve as a
source of temporary construction financing. These obligations are paid from
general revenues of the issuer or are refinanced with long-term debt. See
Appendix A to the SAI for a description of municipal commercial paper ratings.

Municipal Notes. Municipal notes are principally tax anticipation notes,
bond anticipation notes, revenue anticipation notes and project notes. These
obligations are sold by an issuer prior to the occurrence of another revenue
producing event to bridge a financial gap for such issuer. Municipal notes are
usually general obligations of the issuing municipality. Project notes are
issued by housing agencies, but are guaranteed by the U.S. Department of Housing
and Urban Development and are secured by the full faith and credit of the United
States. See Appendix C to the SAI for a description of municipal note ratings.

Private Activity Bonds or Industrial Development Bonds. Certain types of
revenue bonds, referred to as private activity bonds ("PABs") or industrial
development bonds ("IDBs") are issued by or on behalf of public authorities to
obtain funds to provide various privately operated facilities, such as airports
or mass transportation facilities. Most PABs and IDBs are pure revenue bonds and
are not backed by the taxing power of the issuing agency or authority. See
"Taxes" in the SAI for a discussion of special tax consequences to "substantial
users," or persons related thereto, of facilities financed by PABs or IDBs.

Put Bonds. A "put bond" is a municipal bond that gives the holder the
unconditional right to sell the bond back to the issuer at a specified price
with interest and exercise date, which is typically well in advance of the
bond's maturity date. Each Fund may invest in multi-modal put (or tender option)
bonds. A tender option bond generally allows the underwriter or issuer, at its
discretion over the life of the indenture, to convert the bond into one of
several enumerated types of securities or "modes" upon 30 days' notice to
holders. Within that 30 days, holders must either submit the existing security
to the paying agent to receive the new security, or put back the security and
receive principal and interest accrued up to that time. Tax-Exempt Money Market
Fund will only invest in put bonds as to which it can exercise the put feature
on not more than 7 days' notice if there is no liquid secondary market available
for these obligations.

Variable Rate Demand Instruments. Each Fund may invest in variable rate
demand instruments ("VRDIs"). VRDIs generally are revenue bonds, issued
primarily by or on behalf of public authorities, and are not backed by the
taxing power of the issuing authority. The interest on VRDIs is adjusted
periodically, and the holder of a VRDI can demand payment of all unpaid
principal plus accrued interest from the issuer on not more than seven calendar
days' notice. An unrated VRDI purchased by a Fund must be backed by a standby
letter of credit of a creditworthy financial institution or a similar obligation
of at least equal quality. Each Fund periodically reevaluates the credit risks
of such unrated instruments. There is a recognized after-market for VRDIs. VRDIs
may include instruments where adjustments to interest rates are limited either
by state law or the instruments themselves. As a result, these instruments may
experience greater changes in value than would otherwise be the case. The
maturity of VRDIs is deemed to be the longer of the (a) demand period or (b)
time remaining until the next adjustment to the interest rate thereon,
regardless of the stated maturity on the instrument. Benefits of investing in
VRDIs may

10
<PAGE>

include reduced risk of capital depreciation and increased yield when market
interest rates rise. However, owners of such instruments forego the opportunity
for capital appreciation when market interest rates fall. See the SAI for more
information concerning VRDIs.

Participation Interests. Each Fund may acquire any eligible Municipal
Instrument in the form of a participation interest. Under such an arrangement,
the Fund acquires as much as a 100% interest in a Municipal Instrument held by a
bank or other financial institution at a negotiated yield to the Fund. Banks or
other financial institutions may retain a fee, amounting to the excess of
interest paid on an instrument over the negotiated yield to the Fund, for
issuing participation interests to the Fund. Each Fund will acquire written
participation interests in Municipal Instruments only if they are issued by
banks or other financial institutions which, in the Adviser's opinion, present
minimal credit risk to the Fund. Participation interests may be accompanied by a
standby commitment by the bank or other financial institution to repurchase the
participations at the option of the Fund. Each Fund purchases such a
participation only if the issuer has a private letter ruling from the Internal
Revenue Service or an opinion of its counsel that interest on the participation
for which standby commitments have been issued is exempt from Federal income
taxation. Participations that are not accompanied by a standby commitment may
not be liquid assets. See "Restricted Securities and Illiquid Investments." Cash
Management Fund will only purchase participations accompanied by a standby
commitment.

Repurchase Agreements. Repurchase agreements are transactions in which a
Fund purchases securities from a bank or recognized securities dealer and
simultaneously commits to resell the securities to the bank or dealer at an
agreed-upon date and price reflecting a market rate of interest unrelated to the
coupon rate or maturity of the purchased securities. Each Fund's risk is limited
primarily to the ability of the seller to repurchase the securities at the
agreed-upon price upon the delivery date. See the SAI for more information
regarding repurchase agreements.

Restricted Securities and Illiquid Investments. Cash Management Fund may
invest up to 10% of its net assets in illiquid securities, including (1)
securities that are illiquid due to the absence of a readily available market or
due to legal or contractual restrictions on resale and (2) repurchase agreements
maturing in more than seven days. However, illiquid investments for purposes of
this limitation do not include securities eligible for resale under Rule 144A of
the Securities Act of 1933, as amended ("Rule 144A Securities"), which the
Fund's Board of Directors or Adviser has determined are liquid under
Board-approved guidelines. In addition, there is the risk of increasing
illiquidity during times when qualified institutional buyers are uninterested in
purchasing Rule 144A Securities. See the SAI for more information regarding
restricted securities and illiquid investments, including the risks involved in
their use.

Standby Commitments. Each Fund may acquire standby commitments from banks
with respect to the Fund's simultaneous purchases of Municipal Instruments.
Under this arrangement, a bank agrees to buy a particular Municipal Instrument
from the Fund at a specified price at the Fund's option. A standby commitment
will be secured by the value of the underlying Municipal Instruments for which
the commitment is issued. Standby commitments are acquired solely to provide the
Fund with the requisite liquidity to meet large redemptions. Upon the exercise
of a standby commitment, the Fund tenders the Municipal Instrument to the issuer
of the commitment and normally the Fund receives in return the purchase price of
the Municipal Instrument, adjusted

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<PAGE>

to reflect any amortized market premium or original issue discount with the
interest thereon. Because each Fund values its portfolio at amortized cost, the
amount payable by a bank under a standby commitment is almost, if not precisely,
equal to the Fund's value of such Municipal Instrument. Standby commitments are
subject to certain risks, including the issuer's inability to pay for the
Municipal Instruments when the commitment is exercised, their lack of
marketability, the variance between maturities on the commitment and the
Municipal Instrument for which it was issued, and the lack of familiarity with
standby commitments in the marketplace. See the SAI for more information
concerning standby commitments.

Time Deposits. Each Fund may invest in time deposits. Time deposits are
non-negotiable deposits maintained in a banking institution for a specified
period of time at a stated interest rate. For the most part, time deposits that
may be held by each Fund would not benefit from insurance from the Bank
Insurance Fund or the Savings Association Insurance Fund administered by the
FDIC.

Variable Rate and Floating Rate Notes. Each Fund may invest in derivative
variable rate and floating rate notes. Issuers of such notes include
corporations, banks, broker-dealers and finance companies. Variable rate notes
include master demand notes that are obligations permitting the holder to invest
fluctuating amounts, which may change daily without penalty, pursuant to direct
arrangements between the Fund, as lender, and the borrower. The interest rates
on these notes fluctuate from time to time. The issuer of such obligations
normally has a corresponding right, after a given period, to prepay in its
discretion the outstanding principal amount of the obligations plus accrued
interest upon a specified number of days' notice to the holders of such
obligations.

The interest rate on a floating rate obligation is based on a known lending
rate, such as a bank's prime rate, and is adjusted automatically each time such
rate is adjusted. The interest rate on a variable rate obligation is adjusted
automatically at specified intervals. Frequently, such obligations are secured
by letters of credit or other credit support arrangements provided by banks.
Because these obligations are direct lending arrangements between the lender and
borrower, it is not contemplated that such instruments generally will be traded,
and there is generally no established secondary market for these obligations,
although they are redeemable at face value. Accordingly, where these obligations
are not secured by letters of credit or other credit support arrangements, the
right of the Fund to redeem is dependent on the ability of the borrower to pay
principal and interest on demand. Such obligations frequently are not rated by
credit rating agencies. Each Fund will invest in obligations that are unrated
only if the Adviser determines that, at the time of investment, the obligations
are of comparable quality to the other obligations in which the Fund may invest.
The Adviser, on behalf of each Fund, will consider on an ongoing basis the
creditworthiness of the issuers of the floating and variable rate obligations in
the Fund's portfolio.

HOW TO BUY SHARES

You may buy shares of a Fund through a First Investors registered
representative ("FIC Representative") or through a registered representative
("Dealer Representative") of an unaffiliated broker-dealer ("Dealer") which is
authorized to sell shares of a Fund. Your FIC Representative or Dealer
Representative (each, a "Representative") may help you complete and submit an
application to open an account with a Fund. Certain accounts may require
additional documentation. Shares

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<PAGE>

of a Fund will be purchased for your account only after the Fund has received
federal funds for your purchase on any day the New York Stock Exchange ("NYSE")
is open for regular trading ("Trading Day"). Checks, including bank checks,
cashier's checks and certified checks received by a Fund on a Trading Day prior
to 4:00 p.m., New York City time, are presently considered to be federal funds
the morning of the following Trading Day. Checks received after 4:00 p.m. will
be considered to be federal funds the morning of the second following Trading
Day. Provided Administrative Data Management Corp. (the "Transfer Agent") has
received telephone advice prior to 12:00 noon, New York City time, advising the
Fund that a wire transfer will be made to the Fund, identifying your name,
existing account number and amount, and a federal reference number documenting
such a transfer or such wire transfer is in fact received by the Fund that day
prior to 12:00 noon, such wire transfer will be considered to be federal funds
received that day. In the event federal funds are wired to a Fund without
informing the Fund as provided above, such federal funds will be credited to the
account the next Trading Day following receipt. For a discussion of pricing
practices in the event the Funds must halt operations due to an emergency, see
the SAI. Each Fund reserves the right to reject any application or order for its
shares for any reason and to suspend the offering of its shares.

You also may invest in Class A shares of the Funds through the branch
offices of FIC. You may not wire transfer funds to the Funds or make any cash
deposits into the Funds through FIC branch offices. FIC branch offices generally
send customers' investment checks to the Funds no less frequently than once each
Trading Day. However, there may be delays in the Funds' receipt of your
investment check sent through an FIC branch office and your check will not be
invested in your account until federal funds are available to the Fund as
described above. You may, therefore, wish to send your check directly to the
Transfer Agent to ensure prompt investment of your monies.

While Dealers have the responsibility of transmitting all orders and checks
promptly, if you choose to invest in the Funds through a Dealer, you should be
aware that they are not agents of the Funds, and neither Fund assumes any
responsibility for their actions. Generally, Dealers send customers' investment
checks to the Transfer Agent no less frequently than once each Trading Day. If
you send your check through a Dealer, there may be delays in the Funds' receipt
of your check and your check will not be invested in your account until federal
funds are available to the Fund as described above. You may, therefore, wish to
send your check directly to the Transfer Agent to ensure prompt investment of
your monies. While it is not common, some Dealers may charge you a fee for
processing transactions in shares of the Funds. The Transfer Agent, or the
Custodian will respond to inquiries and act upon instructions received by them
from Dealers with respect to a client's account. Responsibility for any errors
in these instructions will be borne by the Dealer and the investors and not by
the Funds.

Minimum Investment. You may open a Fund account with as little as $1,000.
This account minimum is waived if you open an account for a particular class of
shares through a full exchange of shares of the same class of another "Eligible
Fund," as defined below. You may open a Cash Management Fund account with $500
for individual retirement accounts ("IRAs") or, at the Fund's discretion, a
lesser amount for Simplified Employee Pension Plans ("SEPs"), salary reduction
SEPs ("SARSEPs"), SIMPLE-IRAs and qualified or other retirement plans. Automatic
investment plans allow you to open an account with as little as $50, provided
you invest at least $600 a year. See "Systematic Investing."

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<PAGE>

Additional Purchases. After you make your first investment in Class A
shares of a Fund, you may purchase additional Class A shares of the Fund by
mailing or delivering (or arranging for the mailing or delivery by a Dealer)
directly to the Transfer Agent at 581 Main Street, Woodbridge, NJ 07095, a check
made payable to the appropriate Fund or by arranging for wiring of funds to the
Custodian. Include your account number on the face of the check. If more than
one check deposited to purchase Fund shares is returned for insufficient funds,
there will be a $15 charge for each such subsequent returned check.

Eligible Funds. With respect to certain shareholder privileges noted in
this Prospectus and the SAI, each fund in the First Investors family of funds,
except as noted below, is an "Eligible Fund" (collectively, "Eligible Funds").
First Investors Special Bond Fund, Inc., First Investors Life Series Fund and
First Investors U.S. Government Plus Fund are not Eligible Funds. The Funds,
unless otherwise noted, are not Eligible Funds. The funds of Executive Investors
Trust ("Executive Investors") are Eligible Funds provided the shares of any such
fund either have been (a) acquired through an exchange from an Eligible Fund
which imposes a maximum sales charge of 6.25%, or (b) held for at least one year
from their date of purchase.

Systematic Investing. Shareholders who have an account with a U.S. bank, or
other financial institution that is an Automated Clearing House member, may
arrange for automatic investments in a Fund on a systematic basis through First
Investors Money Line. Systematic investments may also be made through automatic
payroll investments. The systematic investment privilege is not available for
the purchase of Fund shares in an Education IRA account. You may also elect to
reinvest systematically in Class A shares of a Fund at net asset value the cash
distributions or Systematic Withdrawal Plan payments from the same class of
shares of an existing account in another Eligible Fund. If you wish to
participate in any of these systematic investment plans, please call Shareholder
Services at 1-800-423-4026 or see the SAI.

Super Checking Program. Class A shareholders may establish Super Checking.
Super Checking links your Fund account with a non-interest bearing checking
account at First Financial Savings Bank, S.L.A. ("FFS"), an affiliate of the
Funds. Each day, the Fund automatically "sweeps," or transfers, funds to your
FFS account to cover your withdrawals. For more information on the Super
Checking Program, call FFS at 1-800-304-7748 or see the SAI.

Unitholders. Holders of certain unit trusts ("Unitholders") who have
elected to invest the entire amount of cash distributions from either principal,
interest income or capital gains or any combination thereof ("Unit
Distributions") from the following trusts may invest such Unit Distributions in
Class A shares of a Fund. Unitholders of various series of New York Insured
Municipals-Income Trust sponsored by Van Kempen Merritt Inc. (the "New York
Trust"); Unitholders of various series of the Multistate Tax Exempt Trust
sponsored by Advest Inc.; Unitholders of various series of the Municipal Insured
National Trust, J.C. Bradford & Co. as agent; and Unitholders of various series
of tax-exempt trusts, other than the New York Trust, sponsored by Van Kempen
Merritt Inc. may purchase Class A shares of a Fund with Unit Distributions. Each
Fund's initial minimum investment requirement is waived for purchases of Class A
shares with Unit Distributions. Shares of a Fund purchased by Unitholders may
only be exchanged for Class A shares of the other Fund.

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<PAGE>

Retirement Plans. You may invest in shares of Cash Management Fund through
a traditional, Roth or Education IRA, SEP, SARSEP, SIMPLE-IRA or any other
retirement plan.

Transfer of Shares. Shareholders may transfer the ownership of their shares
in a Fund account to another party. Because the Funds do not offer their shares
other than through a broker or dealer, if the party to whom the shares are to be
transferred does not have a broker or dealer of record and does not wish to
complete the paperwork necessary to become a client of First Investors, the
Funds reserve the right to liquidate the shares and forward the proceeds to the
new accountholder rather than to make the transfer. For more information on how
to transfer your Fund shares, call your Representative or call Shareholder
Services at 1-800-423-4026.

HOW TO EXCHANGE SHARES

Should your investment needs change, Class A shares of the Funds may be
exchanged for Class A shares of any Eligible Fund at net asset value if such
Fund shares were either (a) acquired through an exchange of shares from an
Eligible Fund which imposes a maximum sales charge of 6.25%, or (b) held for at
least one year if acquired through an exchange of shares from Executive
Investors, commencing with the date the Executive Investors shares were
originally purchased. A sales charge will be imposed on all other exchanges of
Class A shares, including shares acquired as dividends on such shares. Exchanges
can only be made into accounts registered to identical owners. If your exchange
is into a new account, it must either be a full exchange or meet the minimum
investment and other requirements of the fund into which the exchange is being
made. Additionally, the fund must be available for sale in the state where you
reside. Exchanges will be deemed to take place on the Trading Day following the
day of the exchange. Before exchanging Fund shares for shares of another fund,
you should read the Prospectus of the fund into which the exchange is to be
made. You may obtain Prospectuses and information with respect to which funds
qualify for the exchange privilege free of charge by calling Shareholder
Services at 1-800-423-4026. Exchanges into or out of the Funds may only be made
on days on which both the Funds and the other Eligible Funds involved are open
for business. Exchange requests received in "good order," as defined below, by
the Transfer Agent by 12:00 noon, New York City time, on a Trading Day will be
processed on that Trading Day; exchange requests received after that time will
be processed the following Trading Day.

Exchanges By Mail. To exchange shares by mail, you should mail requests to
Administrative Data Management Corp., 581 Main Street, Woodbridge, NJ
07095-1198. Shares will be exchanged after the request is received in "good
order" by the Transfer Agent. "Good order" means that an exchange request must
include: (1) the names of the funds, account number(s), the dollar amount,
number of shares or percentage of the account you wish to exchange; (2) share
certificates, if issued; (3) the signature of all registered owners exactly as
the account is registered; and (4) signature guarantees, if required (see "How
to Redeem Shares-Signature Guarantees"). If the request is not in good order or
information is missing, the Transfer Agent will seek additional information from
you and process the exchange on the day it receives such information. Certain
account registrations may require additional legal documentation in order to
exchange. To review these requirements, please call Shareholder Services at
1-800-423-4026.

Exchanges By Telephone. See "Telephone Transactions," below.

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<PAGE>

Additional Exchange Information. Exchanges should be made for investment
purposes only. A pattern of frequent exchanges may be contrary to the best
interests of a Fund's other shareholders. Accordingly, each Fund has the right,
at its sole discretion, to limit the amount of an exchange, reject any exchange,
or, upon 60 days' notice, materially modify or discontinue the exchange
privilege. Each Fund will consider all relevant factors in determining whether a
particular frequency of exchanges is contrary to the best interests of the Fund
and/or a class of the Fund and its other shareholders. Any such restriction will
be made by a Fund on a prospective basis only, upon notice to the shareholder
not later than ten days following such shareholder's most recent exchange.

HOW TO REDEEM SHARES

You may redeem your Fund shares on any Trading Day directly through the
Transfer Agent. Your Representative may help you with this transaction. Shares
in a non-retirement account may be redeemed by mail or telephone or by wire to a
pre-designated account at a financial institution. Shares in a retirement
account may only be redeemed by mail. Certain account registrations may require
additional legal documentation in order to redeem. Redemption requests received
in "good order" by the Transfer Agent before 12:00 noon, New York City time, on
a Trading Day will be processed on that Trading Day; redemption requests
received after that time will be processed on the following Trading Day. Payment
of redemption proceeds generally will be made within seven days. If the shares
being redeemed were recently purchased by check, payment may be delayed to
verify that the check has been honored, which may take up to fifteen days from
date of purchase. Shareholders may not redeem shares by telephone, Electronic
Fund Transfer, check redemption or Expedited Redemption unless the shares being
redeemed have been owned for at least 15 days. Redemption checks returned to the
Transfer Agent, marked as being undeliverable, by the U.S. Postal Service after
two consecutive mailings will be held by the Transfer Agent in a non-interest
bearing account until the Transfer Agent is either provided with a current
address and any required supporting documentation or is required to escheat the
funds to the appropriate state treasury. For a discussion of pricing practices
in the event the Funds must halt operations due to an emergency, see the SAI.

Redemptions By Mail. Written redemption requests should be mailed to
Administrative Data Management Corp., 581 Main Street, Woodbridge, NJ
07095-1198. For your redemption request to be in good order, you must include:
(1) the name of the Fund; (2) your account number; (3) the dollar amount, number
of shares or percentage of the account you want redeemed; (4) share
certificates, if issued; (5) the original signatures of all registered owners
exactly as the account is registered; and (6) signature guarantees, if required.
If your redemption request is not in good order or information is missing, the
Transfer Agent will seek additional information and process the redemption on
the day it receives such information. To review these requirements, please call
Shareholder Services at 1-800-423-4026.

Signature Guarantees. In order to protect you, the Funds and their agents,
each Fund reserves the right to require signature guarantees in order to process
certain exchange or redemption requests. See the SAI or call Shareholder
Services at 1-800-423-4026 for instances when signature guarantees are required.

Redemptions By Telephone. See "Telephone Transactions," below.

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<PAGE>

Special Redemption Procedures. In addition to the regular redemption
procedure, each Fund offers a Check Redemption Privilege and an Expedited
Redemption Privilege.

Check Redemption Privilege. By an appropriate designation on the Fund
account application, by written request later sent to the Transfer Agent or by
telephone, provided your address of record has not changed in the past 60 days,
you may obtain checks for non-retirement accounts ("Redemption Checks") drawn on
each Fund's account at The Bank of New York, 48 Wall Street, New York, NY 10286.
Additional information will be required to obtain the Check Redemption Privilege
for certain types of accounts. Call Shareholder Services at 1-800-423-4026. Such
Redemption Checks may be made payable to the order of any person designated by
you in an amount of $500 or more. Dividends are earned on the shares until the
Redemption Check clears, and you are subject to the rules and regulations of the
Custodian covering checking accounts. Neither the Funds nor the Custodian
charges you for the use of such Redemption Checks. On presentation of a
Redemption Check to the Custodian for payment, the Fund determines that a
sufficient number of full and fractional shares are available in your account to
cover the amount of the Redemption Check. Shares are considered available after
a fifteen day clearing period. The Funds return all cancelled checks to you once
a month. Neither the Fund nor the Custodian can certify or directly cash
Redemption Checks. Any "stop payment" requests must be directed to the Transfer
Agent and not to the Custodian. However, there is no guarantee that a "stop
payment" request will stop the payment of a Redemption Check. You cannot use the
Check Redemption Privilege for the redemption of shares for which certificates
have been issued, for redemptions from retirement accounts or for redemptions of
shares which are subject to a contingent deferred sales charge ("CDSC"). A CDSC
may be imposed on the redemption of Fund shares acquired through an exchange of
Class A shares from another Eligible Fund which were originally purchased at net
asset value. Because each Fund accrues dividends on a daily basis, you may not
redeem your Fund account in its entirety by the use of the Check Redemption
Privilege. The Check Redemption Privilege is not available for Super Checking.

It is your responsibility to be certain that sufficient shares are in your
account and available to cover the amount of the Redemption Check since, if
there are insufficient shares, the Redemption Check will be returned through
banking channels marked "insufficient funds." It is also your responsibility to
ensure that such Redemption Checks are not made available to unauthorized
individuals and to promptly notify the Funds of any lost or stolen Redemption
Checks. Either the Funds or the Custodian may at any time amend or terminate the
Check Redemption Privilege. The Funds bear all expenses relating to this Check
Redemption Privilege.

Electronic Fund Transfer. Shareholders who have established Electronic Fund
Transfer may have redemption proceeds electronically transferred to a
predesignated bank account. Each Fund has the right, at its sole discretion, to
limit or terminate your ability to exercise the electronic fund transfer
privilege at any time. For additional information, see the SAI. Applications to
establish Electronic Fund Transfer are available from your FIC Representative or
by calling Shareholder Services at 1-800-423-4026.

Expedited Redemption Privilege. You may elect to have your redemption
proceeds transmitted by wire to the bank account specified on your application.
If the proceeds of your wire transfer redemption are less than $5,000, you will
be charged a $10 fee for each wire transfer

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<PAGE>

redemption. If the proceeds of your wire transfer redemption are at least
$5,000, there will be no fee charged for the first six such wire transfer
redemptions made in any month. If you initiate more than six wire transfer
redemptions of at least $5,000 in any month, a $10 fee will be charged to you
for each subsequent wire redemption in that month. If you wish to use the
Expedited Redemption Privilege, you must contact the Transfer Agent. You may use
the Expedited Redemption Privilege only if the redemption proceeds are paid to
the same financial institution and account number as designated on the
application. If the financial institution account is not in the identical
name(s) of the shareholder(s) as registered with the Fund, a signature guarantee
will be required. For accounts held by a corporation, fiduciary or other holder
not acting in an individual capacity, appropriate resolutions or other proof of
authority to act must be submitted with the application. Requests for Expedited
Redemptions can be made by calling the Transfer Agent at 1-800-423-4026.

Should you desire to change the name of the financial institution or the
designation or number of the account that would receive redemption proceeds, a
written request must be sent to the Transfer Agent at the address set forth
above. All registered owners of the account must sign the request in the
identical manner as the account is registered, and each signature must be
guaranteed. The Funds and the Transfer Agent are entitled to require such
further documentation as they may deem necessary.

Systematic Withdrawal Plan. If you own noncertificated shares, you may set
up a plan for redemptions to be made automatically at regular intervals. See the
SAI for more information on the Systematic Withdrawal Plan or call Shareholder
Services at 1-800-423-4026.

Reinvestment after Redemption. If you redeem Class A shares in your Fund
account which were acquired through an exchange from an Eligible Fund which
imposes a maximum sales charge of 6.25%, you can reinvest within six months from
the date of redemption all or any part of the proceeds in shares of the same
class of the same Fund or any other Eligible Fund, at net asset value, on the
date the Transfer Agent receives your purchase request. For more information on
the reinvestment privilege, please see the SAI or call Shareholder Services at
1-800-423-4026.

Repurchase through Underwriter. You may redeem Class A shares through a
Dealer. In this event, the Underwriter, acting as agent for each Fund, will
offer to repurchase or accept an offer to sell such shares at a price equal to
the net asset value next determined after the making of such offer, less any
applicable CDSC. The Dealer may charge you a fee for handling any redemption
transaction.

Redemption of Low Balance Accounts. Because each Fund incurs certain fixed
costs in maintaining shareholder accounts, each Fund may redeem without your
consent, on at least 60 days' prior written notice (which may appear on your
account statement), any Fund account of Class A shares which has a net asset
value of less than $500. To avoid such redemption, you may, during such 60-day
period, purchase additional Class A Fund shares so as to increase your account
balance to the required minimum. Accounts established under a Systematic
Investment Plan that have been discontinued prior to meeting the $1,000 minimum
are subject to this policy.

Additional information concerning how to redeem shares of a Fund is
available upon request to your Representative or Shareholder Services at
1-800-423-4026.

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<PAGE>

TELEPHONE TRANSACTIONS

Unless you specifically decline to have telephone privileges, you, or any
person who we reasonably believe is authorized to act on your behalf, may redeem
or exchange noncertificated shares of a Fund by calling the Special Services
Department at 1-800-342-6221 weekdays (except holidays) between 9:00 A.M. and
5:00 P.M. (New York City time). Certain accounts, however, are required to
complete additional documents in order to activate telephone privileges.
Exchange or redemption requests received before 12:00 noon, New York City time,
on a Trading Day will be processed on that Trading Day; requests received after
that time will be processed on the following Trading Day. For more information
on telephone privileges, please call Shareholder Services at 1-800-423-4026 or
see the SAI.

Telephone Exchanges. Exchange requests may be made by telephone (provided
no certificate has been issued for the shares).

Telephone Redemptions. The telephone redemption privilege may be used to
redeem shares from a non-retirement account provided: (1) the redemption
proceeds are being mailed to the address of record or to a predesignated bank
account; (2) your address of record has not changed within the past 60 days; (3)
the shares to be redeemed have not been issued in certificate form; (4) each
redemption does not exceed $50,000; (5) the proceeds of the redemption, together
with all redemptions made from the account during the prior 30-day period, do
not exceed $100,000; and (6) the shares being redeemed have been owned for at
least fifteen days. Telephone redemption instructions will be accepted from any
one owner or authorized individual.

Additional Information. The Funds, the Adviser, the Underwriter and their
officers, directors and employees will not be liable for any loss, damage, cost
or expense arising out of any instruction (or any interpretation of such
instruction) received by telephone which they reasonably believe to be
authentic. This policy places the entire risk of loss for unauthorized or
fraudulent transactions on the shareholder, except that if the above-referenced
parties do not follow reasonable procedures, some or all of them may be liable
for any such losses. For more information on telephone transactions see the SAI.
The Funds have the right, at their sole discretion, upon 60 days' notice, to
materially modify or discontinue the telephone exchange and redemption
privilege. During times of drastic economic or market changes, telephone
exchanges or redemptions may be difficult to implement. If you experience
difficulty in making a telephone exchange or redemption, your exchange or
redemption request may be made by regular or overnight mail, and it will be
implemented at the next determined net asset value, less any applicable CDSC,
following receipt by the Transfer Agent.

MANAGEMENT

Board of Directors. Each Fund's Board of Directors, as part of its overall
management responsibility, oversees various organizations responsible for that
Fund's day-to-day management.

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<PAGE>

The Adviser presently acts as investment adviser to 14 mutual funds. First
Investors Consolidated Corporation ("FICC") owns all of the voting common stock
of the Adviser and all of the outstanding stock of FIC and the Transfer Agent.
Mr. Glenn O. Head controls FICC and, therefore, controls the Adviser.

As compensation for its services, the Adviser receives a fee from each of
the Funds, which is payable monthly. For the fiscal year ended December 31,
1997, the advisory fees for Cash Management Fund and Tax-Exempt Money Market
Fund were 0.50% of each Fund's average daily net assets.

Underwriter. Each Fund has entered into an Underwriting Agreement with
First Investors Corporation, 95 Wall Street, New York, NY 10005, as Underwriter.
With respect to Tax-Exempt Money Market Fund, the Underwriter or Adviser may
make payments to Dealers in connection with a plan of distribution. See
"Distribution Plan."

DISTRIBUTION PLANS

Tax-Exempt Money Market Fund has adopted a Class A distribution plan which
permits the payment of fees to Dealers for distribution services and
administrative services. The Underwriter or the Adviser, in their sole
discretion, may make payments to Dealers. Such fees are paid out of the advisory
fee or the Underwriter's past profits or any other source available to the
Underwriter or the Adviser.

DETERMINATION OF NET ASSET VALUE

The net asset value of each Fund is determined at 12:00 noon (New York City
time) on each Trading Day, and at such other times as each Fund's Board of
Directors deems necessary, by dividing the value of the Fund's securities, plus
any cash and other assets, less all of its liabilities by the number of shares
outstanding. Expenses are allocated daily. At present, net asset value is not
calculated on the following holidays: New Year's Day, Dr. Martin Luther King,
Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving Day and Christmas Day. See the SAI for more information
concerning the determination of net asset value.

DIVIDENDS

Each Fund's net investment income is determined daily at 12:00 noon (New
York City time) on each Trading Day. Each daily determination of a Fund's net
investment income takes into account accrued interest and earned discount on its
portfolio investments plus or minus all realized short-term gains and losses on
the Fund's securities less accrued expenses.

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<PAGE>

begin to earn dividends on the day federal funds are credited to your Fund
account. See "How To Buy Shares." Shares acquired by an exchange will begin to
earn dividends on the Trading Day following the exchange. Generally, each
month's declared dividends are paid on the first day of the following month in
additional shares of the distributing Fund. If you redeem all of your shares at
any time during the month, you are paid all dividends declared through the day
prior to the date of redemption, together with the proceeds of the redemption.
The Fund's net income for Saturdays, Sundays and holidays is declared as a
dividend on the evening of the last business day before such day or days. The
Funds do not expect to realize net long-term capital gains and thus do not
anticipate paying any long-term capital gain distributions.

You may elect to receive dividends in cash by notifying the Transfer Agent
by telephone or in writing at least five days prior to the last business day of
the month. Your election remains in effect until you revoke it by notifying the
Transfer Agent.

A dividend paid by a Fund will be paid in additional shares of that class
and not in cash if either of the following events occurs: (1) the total amount
of the dividend is under $5 or (2) the Fund has received notice of your death on
an individual account (until written alternate payment instructions and other
necessary documents are provided by your legal representative). Dividend checks
returned to the Transfer Agent marked as being undeliverable by the U.S. Postal
Service after two consecutive mailings will be held by the Transfer Agent in a
non-interest bearing account until the Transfer Agent is either provided with a
current address and any required supporting documentation or is required to
escheat the funds to the appropriate state treasury. Any subsequent dividend
check returned in the same manner will be treated as a request by you to change
your dividend option to reinvest. The proceeds will be reinvested in additional
shares until the Fund receives new instructions.

TAXES

Each Fund intends to continue to qualify for treatment as a regulated
investment company under the Internal Revenue Code of 1986, as amended, so that
it will be relieved of Federal income tax on that part of its investment company
taxable income (consisting generally of taxable net investment income and net
short-term capital gain) that it distributes to its shareholders. In addition,
Tax-Exempt Money Market Fund intends to continue to qualify to pay
"exempt-interest dividends" (as defined below), which requires, among other
things, that at the close of each calendar quarter at least 50% of the value of
its total assets must consist of Municipal Instruments.

Distributions by Tax-Exempt Money Market Fund of the excess of interest
income from Municipal Instruments over certain amounts disallowed as deductions,
which are designated by the Fund as "exempt-interest dividends," generally may
be excluded by you from gross income. Distributions by a Fund of interest income
from taxable obligations are taxable to you as ordinary income to the extent of
the Fund's earnings and profits, whether received in cash or paid in additional
Fund shares. You will receive a statement following the end of each calendar
year describing the tax status of distributions paid by your Fund during that
year.

Interest on indebtedness incurred or continued to purchase or carry shares
of Tax-Exempt Money Market Fund will not be deductible for Federal income tax
purposes to the extent the

21
<PAGE>

Fund's distributions consist of exempt-interest dividends. The Fund does not
intend to invest in PABs or IDBs the interest on which is treated as a Tax
Preference Item.

Proposals have been, and in the future may be, introduced before Congress
for the purpose of restricting or eliminating the Federal income tax exemption
for interest on Municipal Instruments. If such a proposal were enacted, the
availability of Municipal Instruments for investment by Tax-Exempt Money Market
Fund and the value of its portfolio securities would be affected. In that event,
the Fund would reevaluate its investment objective and policies.

Each Fund is required to withhold 31% of all taxable dividends payable to
you (if you are an individual or certain other non-corporate shareholder) if the
Fund is not furnished with your correct taxpayer identification number and in
certain other circumstances.

The foregoing is only a summary of some of the important Federal income tax
considerations generally affecting each Fund and its shareholders; see the SAI
for a further discussion. There may be other Federal, state or local tax
considerations applicable to a particular investor. For example, Tax-Exempt
Money Market Fund's distributions may be wholly or partly taxable under state
and/or local laws. You therefore are urged to consult your own tax adviser.

PERFORMANCE INFORMATION

Each Fund may advertise current yield quotations for each class of shares
based on its daily dividends. The Funds may advertise yield for seven-day or
other periods. For purposes of current yield quotations, the dividends per share
for a seven-day period are annualized (using a 365-day year basis) and divided
by a Fund's average net asset value per share for the seven-day period. When
advertising yield for other than seven-day periods, the same formula will be
used, except that the base period will differ accordingly.

Tax-Exempt Money Market Fund may also advertise its tax-equivalent yield
and tax-equivalent effective yield for each class of shares. Tax-equivalent
yields show the taxable yields an investor would have to earn to equal the
Fund's tax-free yields. The tax-equivalent yield is calculated similarly to the
yield, except that the yield is increased using a stated income tax rate to
demonstrate the taxable yield necessary to produce an after-tax yield equivalent
to the Fund's tax-free yield.

Yield will fluctuate from time to time. Yield reflects past performance and
does not necessarily indicate future results. Each class of shares of a Fund has
different expenses which will affect its yield. Yield computations differ from
other accounting methods and therefore may differ from dividends actually paid
or reported net income.

GENERAL INFORMATION

Organization. Cash Management Fund and Tax-Exempt Money Market Fund were
incorporated in the state of Maryland on July 17, 1978 and March 11, 1983,
respectively. Each Fund's authorized capital stock consists of 5 billion shares
of common stock, all of one series, with a par value per share of $0.01. Each
Fund is authorized to issue shares of common stock in such

22
<PAGE>

separate and distinct series and classes of series as the particular Fund's
Board of Directors shall from time to time establish. The shares of common stock
of each Fund are presently divided into two classes, designated Class A shares
and Class B shares. The Funds do not hold annual shareholder meetings. If
requested to do so by the holders of at least 10% of a Fund's outstanding
shares, such Fund's Board of Directors will call a special meeting of
shareholders for any purpose, including the removal of Directors. Each share of
each Fund has equal voting rights except as noted above.

Class B Shares. Each of the Funds also offers Class B shares, which may be
acquired only through an exchange of Class B shares from another Eligible Fund
or as reinvested dividends from the same Fund paid in additional Class B shares.
Class B shares may be acquired without an initial sales charge, but are
generally subject to a contingent deferred sales charge which declines in steps
from 4% to 0% during a six-year period. Class B shares of a Fund will
automatically convert to Class A shares of the same Fund approximately eight
years after purchase. Class B shares may be exchanged for shares of the same
class of any other Eligible Fund. Each Fund has adopted a separate distribution
plan under Rule 12b-1 of the l940 Act which provides that the applicable Fund is
authorized to compensate the Underwriter for distribution and service activities
relating to Class B shares. The Funds' Class B Prospectus is available at no
charge upon request to your Representative.

Custodian. The Bank of New York, 48 Wall Street, New York, NY 10286, is
custodian of the securities and cash of each Fund.

Transfer Agent. Administrative Data Management Corp., 581 Main Street,
Woodbridge, NJ 07095-1198, an affiliate of FIMCO and FIC, acts as transfer and
dividend disbursing agent for each Fund and as redemption agent for regular
redemptions. The Transfer Agent's telephone number is 1-800-423-4026.

Share Certificates. The Funds do not issue certificates for their shares.
Ownership of shares of each Fund is recorded on a stock register by the Transfer
Agent and shareholders have the same rights of ownership with respect to such
shares as if certificates had been issued.

Confirmations and Statements. You will receive confirmations of purchases
and redemptions of shares of a Fund. Generally, confirmation statements will be
sent to you following a transaction in the account, including payment of a
dividend or capital gain distribution in additional shares or cash. However,
systematic investments made through First Investors Money Line or automatic
payroll deductions will only be confirmed in your monthly or quarterly
statement, showing all transactions occurring during the period.

Shareholder Inquiries. Shareholder inquiries can be made by calling
Shareholder Services at 1-800-423-4026.

23
<PAGE>

one copy of its Prospectus to any address at which more than one shareholder
with the same last name has indicated that mail is to be delivered. Additional
copies of the Prospectus will be mailed if requested in writing or by telephone
by any shareholder.

Year 2000. Like other mutual funds, the Funds could be adversely affected
if the computer and other information processing systems used by the Adviser,
Transfer Agent and other service providers are not properly programmed to
process date-related information on and after January 1, 2000. Such systems
typically have been programmed to use a two-digit number to represent the year
for any date. As a result, computer systems could incorrectly misidentify "00"
as 1900, rather than 2000, and make mistakes when performing operations. The
Adviser and Transfer Agent are taking steps that they believe are reasonably
designed to address the Year 2000 problem for computer and other systems used by
them and are obtaining assurances that comparable steps are being taken by the
Funds' other service providers. However, there can be no assurance that these
steps will be sufficient to avoid any adverse impact on the Funds. Nor can the
Funds estimate the extent of any impact.

<PAGE>

TABLE OF CONTENTS

================================================================================

Fee Table ................................................................. 2
Financial Highlights ...................................................... 4
Investment Objectives and Policies ........................................ 6
How to Buy Shares ......................................................... 12
How to Exchange Shares .................................................... 15
How to Redeem Shares ...................................................... 16
Telephone Transactions .................................................... 19
Management ................................................................ 19
Distribution Plans ........................................................ 20
Determination of Net Asset Value .......................................... 20
Dividends ................................................................. 20
Taxes ..................................................................... 21
Performance Information ................................................... 22
General Information ....................................................... 22

Investment Adviser Custodian
First Investors Management The Bank of New York
Company, Inc. 48 Wall Street
95 Wall Street New York, NY 10286
New York, NY 10005
Transfer Agent
Underwriter Administrative Data
First Investors Corporation Management Corp.
95 Wall Street 581 Main Street
New York, NY 10005 Woodbridge, NJ 07095-1198

Legal Counsel Auditors
Kirkpatrick & Lockhart LLP Tait, Weller & Baker
1800 Massachusetts Avenue, N.W. 8 Penn Center Plaza
Washington, D.C. 20036 Philadelphia, PA 19103

This Prospectus is intended to constitute an offer by either Fund only of the
securities of the other Fund of which it is the issuer and is not intended to
constitute an offer by either Fund of the securities of the other Fund whose
securities are also offered by this Prospectus. Neither Fund intends to make any
representation as to the accuracy or completeness of the disclosure relating to
the other Fund in this Prospectus relating to the other Fund. No dealer,
salesman or any other person has been authorized to give any information or to
make any representations other than those contained in this Prospectus or the
Statement of Additional Information, and if given or made, such information and
representation must not be relied upon as having been authorized by either Fund,
First Investors Corporation, or any affiliate thereof. This Prospectus does not
constitute an offer to sell or a solicitation of an offer to buy any of the
shares offered hereby in any state to any person to whom it is unlawful to make
such offer in such state.

<PAGE>

First Investors
Cash Management
Fund, Inc.
- ---------------------------

First Investors
Tax-Exempt Money
Market Fund, Inc.

- ---------------------------

Prospectus

- ----------------------------

April 30, 1998

First Investors Logo

Logo is described as follows: the arabic numeral one separated into seven
vertical segments followed by the words "First Investors."

Verticle line from top to bottom in center of page about 1/2 inch in thickness

The following language appears to the left of the above language in the printed
piece:

The words "BULK RATE U.S. POSTAGE PAID PERMIT NO. 7379" in a box to the right of
a circle containing the words "MAILED FROM ZIP CODE 11201" appears on the
righthand side.

The following language appears on the lefthand side:

FIRST INVESTORS CASH MANAGEMENT FUND, INC.
FIRST INVESTORS TAX-EXEMPT MONEY MARKET FUND, INC.
95 WALL STREET
NEW YORK, NY 10005

First Investors Logo (as described above)
A MEMBER OF THE
FIRST INVESTORS
FINANCIAL NETWORK

FIMM001A

<PAGE>

First Investors Cash Management Fund, Inc.

First Investors Tax-Exempt Money Market Fund, Inc.

95 Wall Street, New York, New York 10005/1-800-423-4026

This is a Prospectus for First Investors Cash Management Fund, Inc. ("Cash
Management Fund") and First Investors Tax-Exempt Money Market Fund, Inc.
("Tax-Exempt Money Market Fund") (singularly, "Fund" and collectively, "Funds"),
each of which is an open-end diversified management investment company. Each
Fund sells two classes of shares. Investors may select Class A or Class B
shares. This Prospectus relates only to Class B shares. The Funds' Class A
Prospectus is available at no charge upon request to the Funds at the address or
telephone number listed above.

The date of this Prospectus is April 30, 1998

<PAGE>

FEE TABLE

The following table is intended to assist investors in understanding the
expenses associated with investing in Class B shares of a Fund.

Shareholder Transaction Expenses

<TABLE>
<S> <C>
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price)...................... None
Deferred Sales Load
(as a percentage of the lower of original purchase
price or redemption proceeds)............................ 4% in the first year;
declining to 0% after
the sixth year
</TABLE>

Annual Fund Operating Expenses
(as a percentage of average net assets)

<TABLE>
<CAPTION>
Total Fund
Management 12b-1 Other Operating
Fees Fees(1)+ Expenses(2)+ Expenses(3)+
---------- -------- ------------ ------------
<S> <C> <C> <C> <C>
Cash Management Fund............................. 0.50% 0.75% 0.30% 1.55%
Tax-Exempt Money Market Fund..................... 0.50 0.75 0.30 1.55
</TABLE>
- ------------------

+ Net of waiver and/or reimbursement.

(1) The Underwriter has agreed through December 31, 1998 to cap its right to
claim 12b-1 Fees at the annual rates listed above for the Funds. The Fund's
Class B Distribution Plans provide for a 12b-1 Fee in the total amount of
up to 1.00% on an annual basis.

(2) The Adviser will reimburse Other Expenses for each Fund in excess of 0.30%
for a minimum period ending December 31, 1998. For the fiscal year ended
December 31, 1997, the Adviser reimbursed the Funds for certain Other
Expenses. Absent such reimbursement, Other Expenses would have been 0.69%
for Cash Management Fund and 0.62% for Tax-Exempt Money Market Fund.

(3) If certain fees and expenses had not been waived or reimbursed, Total Fund
Operating Expenses would have been 2.19% for Cash Management Fund and 2.12%
for Tax-Exempt Money Market Fund. Each Fund has an expense offset
arrangement that may reduce the Fund's custodian fee based on the amount of
cash maintained by the Fund with its custodian. Any such fee reductions are
not reflected under Total Fund Operating Expenses.

For a more complete description of the various costs and expenses, see "How
to Exchange Shares," "How to Redeem Shares" and "Management."

The Example below is based on Class B expense data for each Fund's fiscal
year ended December 31, 1997, except that certain Operating Expenses have been
restated as noted above.

2
<PAGE>

EXAMPLE

You would pay the following expenses on a $1,000 investment, assuming (1)
5% annual return and (2) redemption at the end of each time period:

<TABLE>
<CAPTION>
One Year Three Years Five Years Ten Years*
-------- ----------- ---------- ----------
<S> <C> <C> <C> <C>

Cash Management Fund $56 $79 $104 $164
Tax-Exempt Money Market Fund 56 79 104 164
</TABLE>

You would pay the following expenses on a $1,000 investment, assuming (1)
5% annual return and (2) no redemption at the end of each time period:

<TABLE>
<CAPTION>
One Year Three Years Five Years Ten Years*
-------- ----------- ---------- ----------
<S> <C> <C> <C> <C>
Cash Management Fund $16 $49 $84 $164
Tax-Exempt Money Market Fund 16 49 84 164
</TABLE>

* Assumes conversion to Class A shares eight years after purchase.

The expenses in the Example should not be considered a representation by
the Funds of past or future expenses. Actual expenses in future years may be
greater or less than those shown.

3
<PAGE>

FINANCIAL HIGHLIGHTS

- ----------------------------------------------------------------------------------------------------------------
PER SHARE DATA
--------------------------------------------------------------------------

Net Asset
Value Dividends
(unchanged Net from Net Total Net Assets, End
during each Investment Investment Return of Year
year) Income Income (%) (thousands)
- ----------------------------------------------------------------------------------------------------------------

<S> <C> <C> <C> <C> <C>
FIRST INVESTORS CASH MANAGEMENT FUND, INC.

CLASS B
1995*............................. $1.00 $.044 $.044 4.46 $ 56
1996.............................. 1.00 .040 .040 4.11 107
1997.............................. 1.00 .041 .041 4.20 267

FIRST INVESTORS TAX-EXEMPT MONEY MARKET FUND, INC.

CLASS B
1995*............................. $1.00 $.024 $.024 2.40 $ .01
1996.............................. 1.00 .020 .020 2.04 80
1997.............................. 1.00 .022 .022 2.20 13
</TABLE>

+ Net of fees waived or assumed
* For the period January 12, 1995 (date Class B shares were first offered) to
December 31, 1995
(a) Annualized

4
<PAGE>

- -------------------------------------------------------------------------
RATIOS / SUPPLEMENTAL DATA
- -------------------------------------------------------------------------

Ratio to Ratio to Average Net Assets
Average Net Assets+ Prior to Waiver of Fees
- ------------------------------- ---------------------------------
Net Net
Investment Investment
Expenses Income Expenses Income
(%) (%) (%) (%)
- -------------------------------------------------------------------------

1.45(a) 4.54(a) 1.93(a) 4.06(a)
1.45 4.04 1.94 3.54
1.52 4.12 1.94 3.70

1.46(a) 2.43(a) 1.81(a) 2.09(a)
1.46 2.06 1.83 1.69
1.50 2.20 1.87 1.83

5
<PAGE>

INVESTMENT OBJECTIVES AND POLICIES

Cash Management Fund

6
<PAGE>

agreements with banks that are members of the Federal Reserve System or
securities dealers that are members of a national securities exchange or are
market makers in U.S. Government securities, and, in either case, only where the
debt instrument subject to the repurchase agreement is a U.S. Treasury or agency
obligation. Repurchase agreements maturing in over 7 days are deemed illiquid
securities, and can constitute no more than 10% of the Fund's net assets. See
"Description of Certain Securities, Other Investment Policies and Risk Factors"
for additional information on repurchase agreements.

Tax-Exempt Money Market Fund

7
<PAGE>

interest income that is exempt from Federal income tax, up to 20% of the Fund's
total assets may be invested in high quality fixed-income obligations, the
interest on which is subject to Federal income tax. See "Description of Certain
Securities, Other Investment Policies and Risk Factors--Municipal Instruments"
for additional information concerning these securities.

General

Description of Certain Securities, Other Investment Policies and Risk Factors

General Market Risk

Types of Securities and Their Risks

Certificates of Deposit. Each Fund may invest in bank certificates of
deposit ("CDs"). The FDIC is an agency of the U.S. Government which insures the
deposits of certain banks and

8
<PAGE>

savings and loan associations up to $100,000 per deposit. The interest on such
deposits may not be insured if this limit is exceeded. Current Federal
regulations also permit such institutions to issue insured negotiable CDs in
amounts of $100,000 or more, without regard to the interest rate ceilings on
other deposits. To remain fully insured, these investments currently must be
limited to $100,000 per insured bank or savings and loan association.

9
<PAGE>

10
<PAGE>

rise. However, owners of such instruments forego the opportunity for capital
appreciation when market interest rates fall. See the SAI for more information
concerning VRDIs.

11
<PAGE>

amount payable by a bank under a standby commitment is almost, if not precisely,
equal to the Fund's value of such Municipal Instrument. Standby commitments are
subject to certain risks, including the issuer's inability to pay for the
Municipal Instruments when the commitment is exercised, their lack of
marketability, the variance between maturities on the commitment and the
Municipal Instrument for which it was issued, and the lack of familiarity with
standby commitments in the marketplace. See the SAI for more information
concerning standby commitments.

HOW TO INVEST

Class B shares of the Funds may be acquired only through an exchange of
Class B shares from another Eligible Fund, as defined below, or through the
payment of dividends on Class B shares. Direct purchases of Class B shares will
not be accepted. The minimum initial investment by exchange to establish a new
account in Class B shares is $1,000. You may open a Cash Management Fund account
with $500 for individual retirement accounts ("IRAs") or, at

12
<PAGE>

the Fund's discretion, a lesser amount for Simplified Employee Pension Plans
("SEPS"), salary reduction SEPs ("SARSEPS"), SIMPLE-IRAs and qualified or other
retirement plans. If you are opening a Fund account by reinvesting redemption
proceeds within a certain time, the minimum initial investment is $500 (see
"Reinvestment after Redemption"). There is no minimum on subsequent investments.
Class B shares of a Fund will be purchased for your account at the net asset
value on any day the New York Stock Exchange ("NYSE") is open for regular
trading ("Trading Day"). Class B shares may be subject to a contingent deferred
sales charge ("CDSC") upon redemption. See "How to Sell Shares." Orders received
by the Fund's transfer agent, Administrative Data Management Corp. ("Transfer
Agent") on a Trading Day prior to 12:00 noon, New York City time will be
credited to your account on that Trading Day. Orders received after that time
will be credited to your account the morning of the following Trading Day. For a
discussion of pricing practices in the event the Funds must halt operations due
to an emergency, see the SAI. Each Fund reserves the right to reject any order
for its shares for any reason and to suspend the offering of its shares.

Retirement Plans. You may invest in shares of Cash Management Fund through
a traditional, Roth or Education IRA, SEP, SARSEP, SIMPLE-IRA or any retirement
plan.

General. From time to time, the Underwriter also will pay, through
additional reallowances or other sources, a bonus or other compensation to
dealers which employ a dealer representative who sells a minimum dollar amount
of the shares of the Funds and/or certain other First Investors funds during a
specific period of time. Such bonus or other compensation may take the form of
reimbursement of certain seminar expenses, co-operative advertising, or payment
for travel expenses, including lodging incurred in connection with trips taken
by qualifying dealer representatives to the Underwriter's principle office in
New York City. FIC Representatives generally are more highly compensated for
sales of First Investors mutual funds than for sales of other mutual funds.

HOW TO EXCHANGE SHARES

Should your investment needs change, Class B shares of the Funds may be
exchanged for Class B shares of any Eligible Fund at net asset value. Exchanges
can only be made into accounts registered to identical owners. If your exchange
is into a new account, it must either be a full

13
<PAGE>

exchange or meet the minimum investment and other requirements of the fund into
which the exchange is being made. Additionally, the fund must be available for
sale in the state where you reside. Exchanges will be deemed to take place on
the Trading Day following the day of the exchange. Before exchanging Fund shares
for shares of another fund, you should read the Prospectus of the fund into
which the exchange is to be made. You may obtain Prospectuses and information
with respect to which funds qualify for the exchange privilege free of charge by
calling Shareholder Services at 1-800-423-4026. Exchange requests received in
"good order," as defined below, by the Transfer Agent by 12:00 noon, New York
City time, on a Trading Day will be processed on that Trading Day; exchange
requests received after that time will be processed the following Trading Day.

Exchanges By Telephone. See "Telephone Transactions," below.

HOW TO REDEEM SHARES

14
<PAGE>

Fund Transfer unless the shares being redeemed have been owned for at least 15
days. Redemption checks returned to the Transfer Agent, marked as being
undeliverable, by the U.S. Postal Service after two consecutive mailings will be
held by the Transfer Agent in a non-interest bearing account until the Transfer
Agent is either provided with a current address and any required supporting
documentation or is required to escheat the funds to the appropriate state
treasury. For a discussion of pricing practices in the event the Funds must halt
operations due to an emergency, see the SAI.

A CDSC is imposed upon most redemptions of Class B shares at the rates set
forth below:

<TABLE>
<CAPTION>
Contingent Deferred Sales Charge
Year Since Purchase as a Percentage of Dollars Invested
Payment Made or Redemption Proceeds
------------------- -----------------------------------
<S> <C>
First............................... 4%
Second.............................. 4
Third............................... 3
Fourth.............................. 3
Fifth............................... 2
Sixth............................... 1
Seventh and thereafter.............. 0
</TABLE>

The CDSC will not be imposed on (1) the redemption of Class B shares
acquired as dividends or (2) any increase in the net asset value of redeemed
shares above their initial purchase price (in other words, the CDSC will be
imposed on the lower of net asset value or purchase price). In determining
whether a CDSC is payable on any redemption, it will be assumed that the
redemption is made first of any Class B shares acquired as dividends, second of
Class B shares that have been held for a sufficient period of time such that the
CDSC no longer is applicable to such shares and finally of Class B shares held
longest during the period of time that a CDSC is applicable to such shares. This
will result in your paying the lowest possible CDSC.

For purposes of determining the CDSC on Class B shares, all purchases made
during a calendar month will be deemed to have been made on the first business
day of that month at the average cost of all purchases made during that month.
The holding period of Class B shares acquired through an exchange with another
Eligible Fund will be calculated from the first business day of the month that
the Class B shares were initially acquired in the other Eligible Fund. The
amount of any CDSC will be paid to FIC. The CDSC imposed on the purchase of
Class B shares will be waived under certain circumstances. See "Waivers of CDSC
on Class B Shares" in the SAI.

Conversion of Class B Shares. A shareholder's Class B shares will
automatically convert to Class A shares approximately eight years after the date
of purchase, together with a pro rata portion of all Class B shares representing
dividends paid in additional Class B shares. The Class B shares so converted
will no longer be subject to the higher expenses borne by Class B shares. The
conversion will be effected at the relative net asset values per share of the
two classes on the first business day of the month following the month in which
the eighth anniversary of the purchase of the Class B shares occurs. If a
shareholder effects one or more exchanges between

15
<PAGE>

Class B shares of the Eligible Funds during the eight-year period, the holding
period for the shares so exchanged will commence upon the date of the purchase
of the original shares.

Redemptions By Telephone. See "Telephone Transactions," below.

Electronic Fund Transfer. Shareholders who have established Electronic Fund
Transfer may have redemption proceeds electronically transferred to a
predesignated bank account. Each Fund has the right, at its sole discretion, to
limit or terminate your ability to exercise the Electronic Fund Transfer
privilege at any time. For additional information, see the SAI. Applications to
establish Electronic Fund Transfer are available from your FIC Representative or
by calling Shareholder Services at 1-800-423-4026.

Reinvestment after Redemption. If you redeem Class B shares in your Fund
account, you can reinvest within six months from the date of redemption all or
any part of the proceeds in shares of the same class of the same Fund or any
other Eligible Fund, at net asset value, on the date the Transfer Agent receives
your purchase request. For more information on the reinvestment privilege,
please see the SAI or call Shareholder Services at 1-800-423-4026.

Repurchase through Underwriter. You may redeem Class B shares through a
dealer. In this event, the Underwriter, acting as agent for each Fund, will
offer to repurchase or accept an offer to sell such shares at a price equal to
the net asset value, less any applicable CDSC, next

16
<PAGE>

determined after the making of such offer. The dealer may charge you a fee for
handling any redemption transaction.

Redemption of Low Balance Accounts. Because each Fund incurs certain fixed
costs in maintaining shareholder accounts, each Fund may redeem without your
consent, on at least 60 days' prior written notice (which may appear on your
account statement), any Fund account of Class B shares which has a net asset
value of less than $500. To avoid such redemption, you may, during such 60-day
period, acquire additional Fund shares of the same class through an exchange of
Class B shares from another Eligible Fund so as to increase your account balance
to the required minimum. There will be no CDSC imposed on such redemptions of
Class B shares. A Fund will not redeem accounts that fall below $500 solely as a
result of a reduction in net asset value.

Additional information concerning how to redeem shares of a Fund is
available upon request to your Representative or Shareholder Services at
1-800-423-4026.

TELEPHONE TRANSACTIONS

Telephone Exchanges. Exchange requests may be made by telephone (provided
no certificate has been issued for the shares).

17
<PAGE>

information on telephone transactions see the SAI. The Funds have the right, at
their sole discretion, upon 60 days' notice, to materially modify or discontinue
the telephone exchange and redemption privilege. During times of drastic
economic or market changes, telephone exchanges or redemptions may be difficult
to implement. If you experience difficulty in making a telephone exchange or
redemption, your exchange or redemption request may be made by regular or
overnight mail, and it will be implemented at the next determined net asset
value, less any applicable CDSC, following receipt by the Transfer Agent.

MANAGEMENT

Board of Directors. Each Fund's Board of Directors, as part of its overall
management responsibility, oversees various organizations responsible for that
Fund's day-to-day management.

Adviser. First Investors Management Company, Inc. supervises and manages
each Fund's investments, supervises all aspects of each Fund's operations and
determines each Fund's portfolio transactions. The Adviser is a New York
corporation located at 95 Wall Street, New York, NY 10005. The Adviser presently
acts as investment adviser to 14 mutual funds. First Investors Consolidated
Corporation ("FICC") owns all of the voting common stock of the Adviser and all
of the outstanding stock of FIC and the Transfer Agent. Mr. Glenn O. Head
controls FICC and, therefore, controls the Adviser.

Underwriter. Each Fund has entered into an Underwriting Agreement with
First Investors Corporation, 95 Wall Street, New York, NY 10005, as Underwriter.
The Underwriter receives all CDSCs in connection with each Fund's Class B shares
and may receive other payments under a plan of distribution. See "How to Buy
Shares" and "Distribution Plans."

DISTRIBUTION PLANS

Pursuant to separate distribution plans pertaining to each Fund's Class B
shares ("Class B Plans"), each Fund is authorized to compensate the Underwriter
for certain expenses incurred in the distribution of that Fund's shares
("distribution fees") and the servicing or maintenance of existing Fund
shareholder accounts ("service fees"). Pursuant to the Class B Plans,
distribution fees are paid for activities relating to the distribution of Fund
shares, including costs of printing and dissemination of sales material or
literature, prospectuses and reports used in connection with the sale of Class B
shares of a Fund. Service fees are paid for the ongoing maintenance and
servicing of existing shareholder accounts, including payments to
Representatives who provide shareholder liaison services to their customers who
are holders of that Fund, provided they meet certain criteria.

Pursuant to each Class B Plan, each Fund is authorized to pay the
Underwriter a distribution fee at the annual rate of 0.75% of that Fund's
average daily net assets attributable to

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<PAGE>

Class B shares and a service fee of 0.25% of the Fund's average daily net assets
attributable to Class B shares. Payments made to the Underwriter under each
Class B Plan will represent compensation for distribution and service
activities, not reimbursement for specific expenses incurred.

Although Class B shares are sold without an initial sales charge, the
Underwriter pays from its own resources a sales commission to FIC
Representatives and a concession equal to 3.5% of the amount invested to Dealers
who sell Class B shares. In addition, the Underwriter will make quarterly
payments of service fees to Representatives commencing after the thirteenth
month following the initial sale of Class B shares. The Underwriter will make
such payments at an annual rate of up to 0.25% of the average net asset value of
Class B shares which are attributable to shareholders for whom the
Representatives are designated as dealer of record.

The Funds may suspend or modify payments under the Plans at any time, and
payments are subject to the continuation of each Plan, the terms of any dealer
agreements between Dealers and the Underwriter and any applicable limits imposed
by the National Association of Securities Dealers, Inc. Each Fund will not carry
over any fees under the Plans to the next fiscal year. See "Distribution Plans"
in the SAI for a full discussion of the various Plans.

DETERMINATION OF NET ASSET VALUE

The net asset value of each Fund is determined at 12:00 noon (New York City
time) on each Trading Day, and at such other times as each Fund's Board of
Directors deems necessary, by dividing the value of the Fund's securities, plus
any cash and other assets, less all of its liabilities by the number of shares
outstanding. Expenses (other than 12b-1 fees and certain other class expenses)
are allocated daily. At present, net asset value is not calculated on the
following holidays: New Year's Day, Dr. Martin Luther King, Jr. Day, Presidents'
Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day
and Christmas Day. See the SAI for more information concerning the determination
of net asset value.

DIVIDENDS

Generally, all of the net income of a Fund is declared on each Trading Day
as a dividend to shareholders of record at the time of the declaration. You will
be entitled to receive the dividend for the number of Class B shares you own,
each day, after adding shares purchased and subtracting shares redeemed that day
at 12:00 noon, New York City time, provided the Fund has received, by 12:00
noon, notification of the fact that such purchase has been made and that federal
funds are being wired, and of proper account information. If you purchase shares
of a Fund, your shares will begin to earn dividends on the day federal funds are
credited to your Fund account. See "How To Buy Shares." Shares acquired by an
exchange will begin to earn dividends on the Trading Day following the exchange.
Generally, each month's declared dividends are paid on the first day of the
following month in additional shares of the distributing Fund. If you

19
<PAGE>

redeem all of your shares at any time during the month, you are paid all
dividends declared through the day prior to the date of redemption, together
with the proceeds of the redemption. The Fund's net income for Saturdays,
Sundays and holidays is declared as a dividend on the evening of the last
business day before such day or days. The Funds do not expect to realize net
long-term capital gains and thus do not anticipate paying any long-term capital
gain distributions.

TAXES

Interest on indebtedness incurred or continued to purchase or carry shares
of Tax-Exempt Money Market Fund will not be deductible for Federal income tax
purposes to the extent the Fund's distributions consist of exempt-interest
dividends. The Fund does not intend to invest in PABs or IDBs the interest on
which is treated as a Tax Preference Item.

20
<PAGE>

No gain or loss will be recognized to a shareholder as a result of a
conversion of Class B shares to Class A shares.

PERFORMANCE INFORMATION

GENERAL INFORMATION

21
<PAGE>

from time to time establish. The shares of common stock of each Fund are
presently divided into two classes, designated Class A shares and Class B
shares. The Funds do not hold annual shareholder meetings. If requested to do so
by the holders of at least 10% of a Fund's outstanding shares, such Fund's Board
of Directors will call a special meeting of shareholders for any purpose,
including the removal of Directors. Each share of each Fund has equal voting
rights except as noted above.

Class A Shares. Each of the Funds also offers Class A shares, which may be
purchased at net asset value. Class A shares may be exchanged for shares of the
same class of any other Eligible Fund. Exchanges of Class A shares of a Fund may
be subject to a sales charge. Class A shares offer investors certain account
privileges which are not available to Class B shareholders. Class A shares are
generally subject to lower overall expenses and are not subject to ongoing
distribution expenses. The Funds' Class A Prospectus is available at no charge
upon request to your Representative.

Custodian. The Bank of New York, 48 Wall Street, New York, NY 10286, is
custodian of the securities and cash of each Fund.

Shareholder Inquiries. Shareholder inquiries can be made by calling
Shareholder Services at 1-800-423-4026.

Annual and Semi-Annual Reports and Prospectuses to Shareholders. It is each
Fund's practice to mail only one copy of its annual and semi-annual reports to
any address at which more than one shareholder with the same last name has
indicated that mail is to be delivered. Additional copies of the reports will be
mailed if requested in writing or by telephone by any shareholder. In addition,
if the SEC adopts a currently pending proposed rule, it is the Funds' intention
to mail only one copy of its Prospectus to any address at which more than one
shareholder with the same last name has indicated that mail is to be delivered.
Additional copies of the Prospectus will be mailed if requested in writing or by
telephone by any shareholder.

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<PAGE>

1, 2000. Such systems typically have been programmed to use a two-digit number
to represent the year for any date. As a result, computer systems could
incorrectly misidentify "00" as 1900, rather than 2000, and make mistakes when
performing operations. The Adviser and Transfer Agent are taking steps that they
believe are reasonably designed to address the Year 2000 problem for computer
and other systems used by them and are obtaining assurances that comparable
steps are being taken by the Funds' other service providers. However, there can
be no assurance that these steps will be sufficient to avoid any adverse impact
on the Funds. Nor can the Funds estimate the extent of any impact.

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<PAGE>

TABLE OF CONTENTS
================================================================================
Fee Table ................................................................. 2
Financial Highlights ...................................................... 4
Investment Objectives and Policies ........................................ 6
How to Invest ............................................................. 12
How to Exchange Shares .................................................... 13
How to Redeem Shares ...................................................... 14
Telephone Transactions .................................................... 17
Management ................................................................ 18
Distribution Plans ........................................................ 18
Determination of Net Asset Value .......................................... 19
Dividends ................................................................. 19
Taxes ..................................................................... 20
Performance Information ................................................... 21
General Information ....................................................... 21

Legal Counsel Auditors
Kirkpatrick & Lockhart LLP Tait, Weller & Baker
1800 Massachusetts Avenue, N.W. 8 Penn Center Plaza
Washington, D.C. 20036 Philadelphia, PA 19103

24
<PAGE>

First Investors
Cash Management
Fund, Inc.
- ---------------------------

First Investors
Tax-Exempt Money
Market Fund, Inc.
- ---------------------------

Prospectus
- ---------------------------

April 30, 1998

First Investors Logo

Logo is described as follows: the arabic numeral one separated into seven
vertical segments followed by the words "First Investors."

Verticle line from top to bottom in center of page about 1/2 inch in thickness

FIMM001B

<PAGE>

FIRST INVESTORS CASH MANAGEMENT FUND, INC.
FIRST INVESTORS TAX-EXEMPT MONEY MARKET FUND, INC.

95 Wall Street 1-800-423-4026
New York, New York 10005

Statement of Additional Information
dated April 30, 1998

This is a Statement of Additional Information ("SAI") for First Investors
Cash Management Fund, Inc. ("Cash Management Fund") and First Investors
Tax-Exempt Money Market Fund, Inc. ("Tax-Exempt Money Market Fund"), each of
which is an open-end diversified management investment company. Cash Management
Fund and Tax-Exempt Money Market Fund are referred to herein as "Funds."

The investment objective of Cash Management Fund is to earn a high rate of
current income consistent with the preservation of capital and maintenance of
liquidity. The investment objective of Tax-Exempt Money Market Fund is to earn a
high rate of current income exempt from Federal income tax and is not an item of
tax preference for purposes of the Federal alternative minimum tax ("Tax
Preference Item"), as is consistent with the preservation of capital and
maintenance of liquidity. There can be no assurance that the objective of either
Fund will be realized.

This SAI is not a prospectus. It should be read in conjunction with the
Funds' Prospectuses dated April, 30 1998, which may be obtained free of cost
from the Funds at the address or telephone number noted above.

TABLE OF CONTENTS

Page
----
Investment Policies ..................................................... 2
Investment Restrictions ................................................. 6
Directors and Officers .................................................. 10
Management .............................................................. 12
Underwriter ............................................................. 13
Distribution Plans ...................................................... 13
Determination of Net Asset Value ........................................ 16
Allocation of Portfolio Transactions .................................... 16
Additional Exchange and Redemption Information and Other Services ....... 17
Taxes ................................................................... 25
Performance Information ................................................. 26
General Information ..................................................... 29
Appendix A .............................................................. 30
Appendix B .............................................................. 31
Appendix C .............................................................. 33
Appendix D .............................................................. 34
Financial Statements .................................................... 40

<PAGE>

INVESTMENT POLICIES

Municipal Bonds. Most private activity bonds ("PABs") and industrial
development bonds ("IDBs") are pure revenue bonds and are not backed by the
taxing power of the issuing authority or agency. Consequently, the payment of
principal and interest on PABs and IDBs usually depends entirely on the ability
of the owner of the project financed to meet its financial obligation to repay
the bonds. In many instances these financial obligations of private parties are
secured by liens or pledges upon real and personal property or are backed up by
a standby letter of credit issued by a commercial bank, which letter of credit
effectively guarantees payment of principal and interest on behalf of the party
obligated to pay. Banks which issue standby letters of credit to support the
payment of principal and/or interest on PABs and IDBs are restricted as to the
form the letter of credit may take, the total amount committed by standby
letters of credit that may be issued on behalf of one person or affiliates
thereof and will usually only have to fulfill their obligation when there is
little chance of recovery against the defaulting account party. If, with respect
to any security purchased by Tax-Exempt Money Market Fund, there is a guarantee
or letter of credit supporting that security, the guarantee or letter of credit
shall not be deemed to be a security issued by the guarantor; provided that the
value of all securities issued or guaranteed by the guarantor, and owned by the
Fund, does not exceed 10% of the total assets of the Fund.

Put Bonds. Each Fund may invest in put bonds that have a fixed rate of
interest and a final maturity beyond the date on which the put may be exercised.
If the put is a "one time only" put, the Fund ordinarily will either sell the
bond or put the bond, depending upon the more favorable price. If the bond has a
series of puts after the first put, the bond will be held as long as, in the
judgment of the Fund's adviser, First Investors Management Company, Inc.
("Adviser" or "FIMCO"), it is in the best interest of the Fund to do so. There
is no assurance that an issuer of a put bond acquired by the Fund will be able
to repurchase the bond on the exercise date, if the Fund chooses to exercise its
right to put the bond back to the issuer.

Rating Changes. Following acquisition by a Fund, an instrument may no
longer be rated or may have its rating changed to one that is unacceptable to
the Fund. Either of these events will not necessarily cause the Fund to sell
such instrument. Rather, the Adviser or the applicable Fund's Board of
Directors, as appropriate, will consider the change or deletion of a rating in
assessing whether or not the Fund should continue to hold such instrument.
Unrated instruments purchased by a Fund will be periodically re-evaluated.

Repurchase Agreements. A repurchase agreement essentially is a short-term
collateralized loan. The lender (a Fund) agrees to purchase a security from a
borrower (typically a broker-dealer) at a specified price. The borrower
simultaneously agrees to repurchase that same security at a higher price on a
future date (which typically is the next business day). The difference between
the purchase price and the repurchase price effectively constitutes the payment
of interest. In a standard repurchase agreement, the securities which serve as
collateral are transferred to a Fund's custodian bank. In a "tri-party"
repurchase agreement, these securities would be held by a different bank for the
benefit of the Fund as buyer and the broker-dealer as seller. In a "quad-party"
repurchase agreement, the Fund's custodian bank also is made a party to the
agreement. Each Fund may enter into repurchase agreements with banks which are
members of the Federal Reserve System or securities dealers who are

2
<PAGE>

members of a national securities exchange or are market makers in government
securities. The period of these repurchase agreements will usually be short,
from overnight to one week, and at no time will a Fund invest in repurchase
agreements with more than one year in time to maturity. The securities which are
subject to repurchase agreements, however, may have maturity dates in excess of
one year from the effective date of the repurchase agreement. Each Fund will
always receive, as collateral, securities whose market value, including accrued
interest, which will at all times be at least equal to 100% of the dollar amount
invested by the Fund in each agreement, and the Fund will make payment for such
securities only upon physical delivery or evidence of book entry transfer to the
account of the custodian. If the seller defaults, a Fund might incur a loss if
the value of the collateral securing the repurchase agreement declines, and
might incur disposition costs in connection with liquidating the collateral. In
addition, if bankruptcy or similar proceedings are commenced with respect to the
seller of the security, realization upon the collateral by a Fund may be delayed
or limited. Neither Fund will enter into a repurchase agreement with more than
seven days to maturity if, as a result, more than 10% of such Fund's net assets
would be invested in such repurchase agreements and other illiquid investments.

Restricted Securities and Illiquid Investments. Neither Fund will purchase
or otherwise acquire any security if, as a result, more than 10% of its net
assets (taken at current value) would be invested in securities that are
illiquid by virtue of the absence of a readily available market or legal or
contractual restrictions on resale. This policy includes foreign issuers'
unlisted securities with a limited trading market and repurchase agreements
maturing in more than seven days. This policy does not include restricted
securities eligible for resale pursuant to Rule 144A under the Securities Act of
1933, as amended ("1933 Act"), which the applicable Fund's Board of Directors or
the Adviser has determined under Board-approved guidelines are liquid.

Restricted securities which are illiquid may be sold only in privately
negotiated transactions or in public offerings with respect to which a
registration statement is in effect under the 1933 Act. Such securities include
those that are subject to restrictions contained in the securities laws of other
countries. Securities that are freely marketable in the country where they are
principally traded, but would not be freely marketable in the United States,
will not be subject to this 10% limit. Where registration is required, a Fund
may be obligated to pay all or part of the registration expenses and a
considerable period may elapse between the time of the decision to sell and the
time the Fund may be permitted to sell a security under an effective
registration statement. If, during such a period, adverse market conditions were
to develop, a Fund might obtain a less favorable price than prevailed when it
decided to sell.

In recent years, a large institutional market has developed for certain
securities that are not registered under the 1933 Act, including private
placements, repurchase agreements, commercial paper, foreign securities and
corporate bonds and notes. These instruments are often restricted securities
because the securities are either themselves exempt from registration or sold in
transactions not requiring registration. Institutional investors generally will
not seek to sell these instruments to the general public, but instead will often
depend on an efficient institutional market in which such unregistered
securities can be readily resold or on an issuer's ability to honor a demand for
repayment. Therefore, the fact that there are contractual or legal restrictions
on resale to the general public or certain institutions is not dispositive of
the liquidity of such investments.

3
<PAGE>

Rule 144A under the 1933 Act establishes a "safe harbor" from the
registration requirements of the 1933 Act for resales of certain securities to
qualified institutional buyers. Institutional markets for restricted securities
that might develop as a result of Rule 144A could provide both readily
ascertainable values for restricted securities and the ability to liquidate an
investment in order to satisfy share redemption orders. An insufficient number
of qualified institutional buyers interested in purchasing Rule 144A-eligible
securities held by a Fund, however, could affect adversely the marketability of
such portfolio securities and a Fund might be unable to dispose of such
securities promptly or at reasonable prices.

Standby Commitments. Each Fund may acquire standby commitments from banks
with respect to simultaneous purchases of short-term, high quality, fixed and
variable rate instruments issued by state and municipal governments and by
public authorities ("Municipal Instruments") for the Fund's portfolio. See
"Investment Objectives and Policies" in the Prospectus. Under this arrangement,
a bank agrees to buy a particular Municipal Instrument from a Fund at a
specified price at the Fund's option. A standby commitment is similar to a put
option for a particular Municipal Instrument in a Fund's portfolio. Standby
commitments acquired by a Fund are not added to the computation of that Fund's
net asset value. Standby commitments are subject to certain risk, including the
issuer's ability to pay for the Municipal Instruments when a Fund decides to
sell the Municipal Instrument for which it is issued and the lack of familiarity
with standby commitments in the marketplace.

The Funds' ability to exercise their rights under a standby commitment is
unconditional, without any limitation whatsoever, and non-transferable. The
Funds, however, are permitted to sell a Municipal Instrument covered by a
standby commitment at any time and to any person.

The Funds may pay a consideration to a bank for the issuance of a standby
commitment if necessary and advisable. Such a consideration may take the form of
either a payment in cash, or the payment of a higher price for Municipal
Instruments covered by such a commitment. The effect of the payment of such
consideration is to reduce the yield to maturity for the Municipal Instruments
so covered. The total amount a Fund may pay as consideration in either manner,
on an annual basis, of the issuance of standby commitments may not exceed 0.50%
of that Fund's total assets.

Standby commitments acquired by a Fund are not added to the computation of
that Fund's net asset value and are valued at zero. When a Fund pays a
consideration for the issuance of a standby commitment, the cost is treated as
unrealized depreciation for the time it is held by the Fund. The dollar weighted
average maturity calculation for the Fund is not affected by standby
commitments.

In the absence of either a favorable ruling of the Internal Revenue Service
("IRS"), or opinion from the bond issuer's counsel, that the Interest on
Municipal Instruments for which standby commitments have been issued is exempt
from Federal income taxation, the Funds will not acquire standby commitments.

U.S. Government Securities. The Funds may invest in obligations issued or
guaranteed by the U.S. Government, its agencies or instrumentalities. These
obligations, including those which are guaranteed by Federal agencies or
instrumentalities, may or may not be backed by the "full faith and credit" of
the United States or by the right of the issuer to borrow from the U.S.
Treasury. In the case

4
<PAGE>

of securities not backed by full faith and credit of the United States, a Fund
must look principally to the agency issuing or guaranteeing the obligation for
ultimate repayment and may not be able to assert a claim against the United
States itself in the event the agency or instrumentality does not meet its
commitments. Securities in which a Fund may invest that are not backed by the
full faith and credit of the U.S. Government include, but are not limited to,
obligations of the Tennessee Valley Authority, the Federal National Mortgage
Association and the U.S. Postal Service, each of which has the right to borrow
from the U.S. Treasury to meet its obligations, and obligations of the Federal
Farm Credit System and the Federal Home Loan Banks, both of whose obligations
may be satisfied only by the individual credits of each issuing agency.

Securities which are backed by the full faith and credit of the U.S.
Government include Treasury bills, Treasury notes, Treasury bonds, and
obligations of the Government National Mortgage Association, the Farmers Home
Administration, and the Export-Import Bank. Treasury bills have maturities of
one year or less; Treasury notes have maturities of one to ten years; Treasury
bonds generally have maturities of greater than five years.

Variable Rate Demand Instruments. Each Fund may invest in Variable Rate
Demand Instruments ("VRDIs"). The interest on these instruments is adjusted at
various intervals ranging from one day to six months, and the adjustments are
based on market conditions. These instruments allow the holder to demand payment
of all unpaid principal plus accrued interest from the issuer. The Funds will
invest only in VRDIs that have a demand notice period of not more than seven
calendar days in length. Usually, the Funds may also demand payment from a
redemption agent. In either instance, the obligation to pay the holder upon
demand is usually backed by a standby letter of credit issued by a commercial
bank to support the obligation of the party which has the duty to pay upon
demand. Issuers of VRDIs may have the right to prepay the outstanding principal
and interest upon the instrument in their discretion with a notice period to the
holder for prepayment by the issuer usually equal to that for the demand
feature.

Banks issuing standby letters of credit to support VRDIs receive a fee from
or on behalf of the issuer to establish the credit and may charge other fees if
the standby letter of credit is drawn upon. Such banks also enter into a
reimbursement agreement whereby the issuer or the redemption agent agrees to
reimburse the bank for any draw under the standby letter of credit. Such
reimbursement agreement, however, in no way affects the obligation of the bank
issuing the standby letter of credit, and payment of the Funds under a demand
feature backed by a standby letter of credit is not conditioned upon the bank's
likelihood of recovery under the reimbursement agreement. Consequently, the
Adviser will monitor the quality of the bank issuing any standby letter of
credit which supports the demand feature of any VRDI purchased by the Funds.

VRDIs reduce the likelihood of changes in value in the obligations they
represent as is typical with fixed rate instruments. As interest rates change,
fixed rate instruments' values change as the market re-evaluates the price of
the fixed rate of income in light of new market interest rates. If interest
rates rise, the value of an existing fixed rate instrument may fail to provide a
new purchaser with the effective market rate of income then prevailing. If
interest rates fall, the value of such an instrument may rise for similar
reasons. If interest rates change, the value of a VRDI should not change as much
as a fixed rate obligation, to the extent rate adjustments on the variable rate
instrument mirror the

5
<PAGE>

market. Therefore, the potential risk of capital depreciation is much lower on a
VRDI than on a fixed rate obligation, although the potential for capital
appreciation is also reduced. VRDIs are not comparable to long-term fixed-rate
securities, and the rates on these instruments may be higher or lower than
simultaneous market rates for fixed rate securities of similar quality and time
to maturity.

To determine time to maturity of VRDIs for the purpose of either the
397-day maturity maximum for all of the Funds' investments or for computing the
Funds' dollar weighted average portfolio maturity, the maturity of the
instrument is deemed to be the greater of (1) the notice period required before
the Funds may receive payment under the demand feature of the instrument, or (2)
the time remaining until the next interest rate adjustment on the instrument.

When-Issued Securities. When the Tax-Exempt Money Market Fund enters into a
commitment to purchase securities on a when-issued or delayed delivery basis,
delivery of, and payment for, the instruments occur up to 45 days after the Fund
agrees to purchase the instruments. The purchase price to be paid by the Fund
and the interest rate on the instruments to be purchased are both selected when
the Fund agrees to purchase the securities "when-issued." The Fund is permitted
to sell when-issued securities prior to issuance of such securities, but will
not purchase such securities with that purpose intended. The Fund establishes a
separate account on its books and records or with the Custodian consisting of
cash or liquid debt securities equal to the amount of the Fund's commitment and
valued at their fair market value. If on any day the market value of this
segregated account falls below the value of the Fund's commitment, the Fund must
deposit additional cash or qualified securities into the account until equal to
the value of the Fund's commitment. When the securities to be purchased are
issued, the Fund will pay for the securities from available cash, the sale of
other Municipal Instruments, and, if necessary, from sale of the when-issued
securities themselves, although this is not ordinarily expected.

INVESTMENT RESTRICTIONS

The investment restrictions set forth below have been adopted by the
respective Fund and, unless identified as non-fundamental policies, may not be
changed without the affirmative vote of a majority of the outstanding voting
securities of that Fund. As provided in the Investment Company Act of 1940, as
amended ("1940 Act"), a "vote of a majority of the outstanding voting securities
of the Fund" means the affirmative vote of the lesser of (i) more than 50% of
the outstanding shares of the Fund or (ii) 67% or more of the shares present at
a meeting if more than 50% of the outstanding shares are represented at the
meeting in person or by proxy. Except with respect to borrowing, changes in
values of a particular Fund's assets will not cause a violation of the following
investment restrictions so long as percentage restrictions are observed by such
Fund at the time it purchases any security.

Cash Management Fund. Cash Management Fund will not:

(1) Pledge assets, except that the Fund may pledge not more than one-third
of its total assets (taken at current value) to secure borrowings.

(2) Make loans, except by purchase of debt obligations and through
repurchase agreements referred to under "Investment Objective and Policies" in
the Prospectuses, provided, however, that

6
<PAGE>

repurchase agreements maturing in more than seven days will not exceed 10% of
the Fund's net assets (taken at current value).

(3) Purchase the securities of any issuer (other than obligations issued or
guaranteed as to principal and interest by the Government of the United States
or any agency or instrumentality thereof) if, as a result thereof more than 25%
of the Fund's total assets (taken at current value) would be invested in the
obligations of one or more issuers having their principal business activities in
the same industry; provided, however, that the Fund may invest more than 25% of
its total assets in the obligations of banks.

(4) With respect to 75% of the Fund's total assets, purchase the securities
of any issuer (other than securities issued or guaranteed by the U.S.
Government, its agencies or instrumentalities) if, as a result, (a) more than 5%
of the Fund's total assets would be invested in the securities of that issuer,
or (b) the Fund would hold more than 10% of the outstanding voting securities of
that issuer.

(5) Purchase securities on margin (but the Fund may obtain such credits as
may be necessary for the clearance of purchases and sales of securities).

(6) Make short sales of securities unless at all times while a short
position is open the Fund maintains a long position in the same security in an
amount at least equal thereto.

(7) Write or purchase any put or call options.

(8) Borrow money, except as a temporary or emergency measure (not for
leveraging or investment) in an amount not to exceed 5% of the value of its
assets.

(9) Purchase the securities of a company if such purchase, at the time
thereof, would cause more than 5% of the value of the Fund's total assets to be
invested in securities of companies, which, including predecessors, have a
record of less than three years' continuous operation.

(10) Purchase the securities of other investment companies or investment
trusts.

(11) Purchase or retain any securities of another issuer if persons
affiliated with the Fund or its Adviser owning individually more than one-half
of one percent of said issuer's outstanding stock own, in the aggregate, more
than five percent of said issuer's outstanding stock.

(12) Underwrite securities issued by other persons except to the extent
that, in connection with the disposition of its portfolio investments, it may be
deemed to be an underwriter under federal securities laws.

(13) Invest in companies for the purpose of exercising control or
management.

(14) Issue senior securities.

7
<PAGE>

(15) Buy or sell real estate, commodities, or commodity contracts (unless
acquired as a result of ownership of securities) or interests in oil, gas or
mineral exploration.

The Fund has adopted the following non-fundamental investment restrictions
which may be changed without shareholder approval:

(1) The Fund will not purchase any security if, as a result, more than 10%
of its net assets would be invested in illiquid securities, including repurchase
agreements not entitling the holder to payment of principal and interest within
seven days and any securities that are illiquid by virtue of legal or
contractual restrictions on resale or the absence of a readily available market.
The Directors, or the Fund's investment adviser acting pursuant to authority
delegated by the Directors, may determine that a readily available market exists
for securities eligible for resale pursuant to Rule 144A under the 1933, Act or
any other applicable rule, and therefore that such securities are not subject to
the foregoing limitation.

(2) Notwithstanding fundamental investment restriction (1) above, the Fund
will not pledge its assets in excess of an amount equal to 10% of its net
assets.

(3) Notwithstanding fundamental investment restriction (4) above, with
respect to 100% of its total assets, the Fund will not purchase the securities
of any issuer (other than securities issued or guaranteed by the U.S.
Government, its agencies or instrumentalities) if, as a result, more than 5% of
the Funds total assets would be invested in the securities of that issuer.

Tax-Exempt Money Market Fund. Tax-Exempt Money Market Fund will not:

(1) Borrow money, except as a temporary or emergency measure (not for
leveraging or investment) in an amount to exceed 5% of the value of its assets.

(2) Pledge assets, except that the Fund may pledge not more than one-third
of its total assets (taken at current value) to secure borrowings made in
accordance with paragraph (1) above.

(3) Make loans, except by purchase of debt obligations and through
repurchase agreements provided.

(4) With respect to 75% of the Fund's total assets, purchase the securities
of any issuer (other than obligations issued or guaranteed as to principal and
interest by the Government of the United States or any agency or instrumentality
thereof) if, as a result thereof, (a) more than 5% of the Fund's total assets
would be invested in the securities of that issuer, or (b) the Fund would hold
more than 10% of the voting securities of that issuer. The Fund will not invest
in securities such that any one bank's letters of credit support more than 10%
of the Fund's total assets.

(5) Invest more than 25% of the Fund's total assets (taken at current
value) in the obligations of one or more issuers having their principal business
activities in the same industry.

8
<PAGE>

(6) Purchase securities on margin (but the Fund may obtain such credits as
may be necessary for the clearance of purchases and sales of securities).

(7) Make short sales of securities.

(8) Write or purchase any put or call options, except stand-by commitments.

(9) Knowingly purchase a security which is subject to legal or contractual
restrictions on resale or for which there is no readily available market.

(10) Purchase the securities of other investment companies or investment
trusts, except as they may be acquired as part of a merger, consolidation or
acquisition of assets.

(11) Purchase the securities of a company if such purchase, at the time
thereof, would cause more than 5% of the value of the Fund's total assets to be
invested in securities of companies which, including predecessors, have a record
of less than three years' continuous operation.

(13) Purchase or retain any securities of another issuer if persons
affiliated with the Fund or its Adviser or management owning, individually, more
than one-half of one percent of said issuer's outstanding stock (or securities
convertible into stock) own, in the aggregate, more than 5% of said issuer's
outstanding stock (or securities convertible into stock).

(14) Invest in companies for the purpose of exercising control or
management.

(15) Issue senior securities.

(16) Buy or sell real estate, commodities or commodity contracts (unless
acquired as a result of ownership of securities) or interest in oil, gas or
mineral explorations, provided, however, the Fund may invest in Municipal
Instruments secured by real estate or interests in real estate.

The Fund has adopted the following non-fundamental restrictions which may
be changed without shareholder approval:

(1) Notwithstanding fundamental investment restriction (2) above, the Fund
will not pledge its assets in excess of an amount equal to 10% of its net
assets.

(2) Notwithstanding fundamental investment restriction (4) above, with
respect to 100% of its total assets, the Fund will not purchase the securities
of any issuer (other than securities issued or guaranteed by the U.S.
Government, its agencies or instrumentalities) if, as a result, more than 5% of
the Funds total assets would be invested in the securities of that issuer.

9
<PAGE>

(3) Notwithstanding fundamental investment restriction (16) above, the Fund
will not invest in real estate limited partnership interests or in interests in
real estate investment trusts that are not readily marketable.

DIRECTORS AND OFFICERS

The following table lists the Directors and executive officers of the
Funds, their business address and principal occupations during the past five
years. Unless otherwise noted, an individual's business address is 95 Wall
Street, New York, New York 10005.

Glenn O. Head*+ (72), President and Director. Chairman of the Board and
Director, Administrative Data Management Corp. ("ADM"), FIMCO, Executive
Investors Management Company, Inc. ("EIMCO"), First Investors Corporation
("FIC"), Executive Investors Corporation ("EIC") and First Investors
Consolidated Corporation ("FICC").

James J. Coy (84), Emeritus Director, 90 Buell Lane, East Hampton, NY 11937.
Retired; formerly Senior Vice President, James Talcott, Inc. (financial
institution).

Roger L. Grayson* (41), Director, FIC and FICC; President and Director, First
Investors Resources, Inc.; Commodities Portfolio Manager.

Kathryn S. Head*+ (42), Director, 581 Main Street, Woodbridge, NJ 07095.
President and Director, FICC, ADM and FIMCO; Vice President and Director, FIC
and EIC; President EIMCO; Chairman, President and Director, First Financial
Savings Bank, S.L.A.

Rex R. Reed (76), Director, 259 Governors Drive, Kiawah Island, SC 29455.
Retired; formerly Senior Vice President, American Telephone & Telegraph Company.

Herbert Rubinstein (76), Director, 695 Charolais Circle, Edwards, CO 81632-1136.
Retired; formerly President, Belvac International Industries, Ltd. and
President, Central Dental Supply.

Nancy Schaenen (66), Director, 56 Midwood Terrace, Madison, NJ 07940. Trustee,
Drew University and DePauw University.

James M. Srygley (65), Director, 33 Hampton Road, Chatham, NJ 07982. Principal,
Hampton Properties, Inc. (property investment company).

John T. Sullivan* (66), Director and Chairman of the Board; Director, FIMCO,
FIC, FICC and ADM; Of Counsel, Hawkins, Delafield & Wood, Attorneys.

Robert F. Wentworth (68), Director, RR1, Box 2554, Upland Downs Road, Manchester
Center, VT 05255. Retired; formerly financial and planning executive with
American Telephone & Telegraph Company.

10
<PAGE>

Joseph I. Benedek (40), Treasurer and Chief Financial Officer, 581 Main Street,
Woodbridge, NJ 07095. Treasurer, FIC, FIMCO, EIMCO and EIC; Comptroller and
Treasurer, FICC.

Concetta Durso (63), Vice President and Secretary. Vice President, FIMCO, EIMCO
and ADM; Assistant Vice President and Assistant Secretary, FIC and EIC.

Michael J. O'Keefe (32), Vice President. Portfolio Manager from December 1995;
Assistant Portfolio Manager from 1985-1995.

- ------------------------

* These Directors may be deemed to be "interested persons," as defined in the
1940 Act.

+ Mr. Glenn O. Head and Ms. Kathryn S. Head are father and daughter.

The Directors and officers, as a group, owned less than 1% of the shares of
any Fund.

All of the officers and Directors, except for Mr. O'Keefe, hold identical
or similar positions with 14 other registered investment companies in the First
Investors Family of Funds. Mr. Head is also an officer and/or Director of First
Investors Asset Management Company, Inc., First Investors Credit Funding
Corporation, First Investors Leverage Corporation, First Investors Realty
Company, Inc., First Investors Resources, Inc., N.A.K. Realty Corporation, Real
Property Development Corporation, Route 33 Realty Corporation, First Investors
Life Insurance Company, First Financial Savings Bank, S.L.A., First Investors
Credit Corporation and School Financial Management Services, Inc. Ms. Head is
also an officer and/or Director of First Investors Life Insurance Company, First
Investors Credit Corporation, School Financial Management Services, Inc., First
Investors Credit Funding Corporation, N.A.K. Realty Corporation, Real Property
Development Corporation, First Investors Leverage Corporation and Route 33
Realty Corporation.

The following table lists compensation paid to the Directors of Cash
Management Fund for the fiscal year ended December 31, 1997.

Pension or Total Compensation
Retirement From First
Aggregate Benefits Accrued Estimated Annual Investors Family
Compensation as Part of Fund Benefits Upon of Funds Paid to
Director From Fund* Expenses Retirement Director*
- -------- ---------- ---------------- ---------------- ------------------
<S> <C> <C> <C> <C>
James J. Coy** $1,172.28 $-0- $-0- $15,500.00
Roger L. Grayson -0- -0- -0- -0-
Glenn O. Head -0- -0- -0- -0-
Kathryn S. Head -0- -0- -0- -0-
Rex R. Reed 2,813.47 -0- -0- 37,200.00
Herbert Rubinstein 2,813.47 -0- -0- 37,200.00
James M. Srygley 2,813.47 -0- -0- 37,200.00
</TABLE>

11
<PAGE>

<TABLE>

<S> <C> <C> <C> <C>
John T. Sullivan -0- -0- -0- -0-
Robert F. Wentworth 2,813.47 -0- -0- 37,200.00
Nancy Schaenen 2,110.10 -0- -0- 27,900.00
</TABLE>

The following table lists compensation paid to the Directors of Tax-Exempt
Money Market Fund for the fiscal year ended December 31, 1997.

<TABLE>
<CAPTION>
Pension or Total Compensation
Retirement From First
Aggregate Benefits Accrued Estimated Annual Investors Family
Compensation as Part of Fund Benefits Upon of Funds Paid to
Director From Fund* Expenses Retirement Director*
- -------- ------------ ---------------- ---------------- ------------------
<S> <C> <C> <C> <C>
James J. Coy** $250.00 $-0- $-0- $15,500.00
Roger L. Grayson -0- -0- -0- -0-
Glenn O. Head -0- -0- -0- -0-
Kathryn S. Head -0- -0- -0- -0-
Rex R. Reed 600.00 -0- -0- 37,200.00
Herbert Rubinstein 600.00 -0- -0- 37,200.00
James M. Srygley 600.00 -0- -0- 37,200.00
John T. Sullivan -0- -0- -0- -0-
Robert F. Wentworth 600.00 -0- -0- 37,200.00
Nancy Schaenen 450.00 -0- -0- 27,900.00
</TABLE>

* Compensation to officers and interested Directors of the Funds is paid by the
Adviser. In addition, prior to December 31, 1997, compensation to non-interested
Directors of the Funds was voluntarily paid by the Adviser. Commencing January
1, 1998, compensation to non-interested Directors of the Funds is being paid by
each Fund.

** On March 27, 1997, Mr. Coy resigned as a Director of the Funds. Mr. Coy did
not resign due to a disagreement on any matters relating to the Funds'
operations, policies or practices. Mr. Coy currently serves as an emeritus
Director.

MANAGEMENT

Investment advisory services to each Fund are provided by First Investors
Management Company, Inc. pursuant to separate Investment Advisory Agreements
(each, an "Advisory Agreement") dated June 13, 1994. Each Advisory Agreement was
approved by the Board of Directors of the applicable Fund, including a majority
of the Directors who are not parties to such Fund's Advisory Agreement or
"interested persons" (as defined in the 1940 Act) of any such party
("Independent Directors"), in person at a meeting called for such purpose and by
a majority of the public shareholders of the applicable Fund.

Pursuant to each Advisory Agreement, FIMCO shall supervise and manage each
Fund's investments, determine each Fund's portfolio transactions and supervise
all aspects of each Fund's

12
<PAGE>

operations, subject to review by the applicable Fund's Directors. Each Advisory
Agreement also provides that FIMCO shall provide the applicable Fund with
certain executive, administrative and clerical personnel, office facilities and
supplies, conduct the business and details of the operation of such Fund and
assume certain expenses thereof, other than obligations or liabilities of such
Fund. Each Advisory Agreement may be terminated at any time without penalty by
the applicable Fund's Directors or by a majority of the outstanding voting
securities of such Fund, or by FIMCO, in each instance on not less than 60 days'
written notice, and shall automatically terminate in the event of its assignment
(as defined in the 1940 Act). Each Advisory Agreement also provides that it will
continue in effect, with respect to the applicable Fund, for a period of more
than two years only if such continuance is approved annually either by such
Fund's Directors or by a majority of the outstanding voting securities of such
Fund, and, in either case, by a vote of a majority of such Fund's Independent
Directors voting in person at a meeting called for the purpose of voting on such
approval.

Under each Advisory Agreement, each Fund pays the Adviser an annual fee,
payable monthly, of 0.50% of its average daily net assets.

For the fiscal years ended December 31, 1995, 1996 and 1997, Cash
Management Fund paid $257,171, $625,485 and $669,184, respectively, in advisory
fees. For the fiscal year ended December 31, 1995, the Adviser voluntarily
waived $354,518 in advisory fees for that Fund. For the fiscal years ended
December 31, 1995, 1996 and 1997, Tax-Exempt Money Market Fund paid $71,483,
$123,037 and $105,807, respectively, in advisory fees. For the fiscal year ended
December 31, 1995, the Adviser voluntarily waived $52,464 in advisory fees for
that Fund. For the fiscal year ended December 31, 1997, the Adviser voluntarily
assumed expenses for Cash Management Fund and Tax-Exempt Money Market Fund in
the amounts of $379,265 and $57,762, respectively.

Each Fund bears all expenses of its operations other than those incurred by
the Adviser or the Underwriter under the terms of its advisory or underwriting
agreements. Fund expenses include, but are not limited to: the advisory fee;
shareholder servicing fees and expenses; custodian fees and expenses; legal and
auditing fees; expenses of preparing and printing prospectuses and shareholder
reports; and proxy and shareholder meeting expenses.

The Adviser has an Investment Committee composed of George V. Ganter,
Margaret Haggerty, Glenn O. Head, Nancy W. Jones, Patricia D. Poitra, Michael
O'Keefe, Clark D. Wagner and Richard Guinnessey. The Committee usually meets
weekly to discuss the composition of the portfolio of each Fund and to review
additions to and deletions from the portfolios.

UNDERWRITER

Each Fund has entered into an Underwriting Agreement ("Underwriting
Agreement") with First Investors Corporation ("Underwriter" or "FIC") which
requires the Underwriter to use its best efforts to sell shares of the Funds.
Pursuant to each Underwriting Agreement, the Underwriter shall bear all fees and
expenses incident to the registration and qualification of the applicable Fund's
shares. In addition, the Underwriter shall bear all expenses of sales material
or literature, including prospectuses and proxy materials, to the extent such
materials are used in connection with the sale of the Fund's shares, unless the
Fund has agreed to bear such costs pursuant to a plan of distribution. See

13
<PAGE>

"Distribution Plans." Each Underwriting Agreement was approved by the applicable
Fund's Board of Directors, including a majority of the Independent Directors.
Each Underwriting Agreement provides that it will continue in effect from year
to year only so long as such continuance is specifically approved at least
annually by the applicable Fund's Board of Directors or by a vote of a majority
of the outstanding voting securities of such Fund, and in either case by the
vote of a majority of such Fund's Independent Directors, voting in person at a
meeting called for the purpose of voting on such approval. Each Underwriting
Agreement will terminate automatically in the event of its assignment.

DISTRIBUTION PLANS

As stated in the Funds' Prospectuses, pursuant to a separate plan of
distribution for Class B shares adopted by each Fund pursuant to Rule 12b-1
under the 1940 Act ("Class B Plan"), each Fund may compensate the Underwriter
for certain expenses incurred in the distribution of that Fund's Class B shares
and the servicing or maintenance of existing Fund Class B shareholder accounts.

Each Class B Plan was approved by the applicable Fund's Board of Directors,
including a majority of the Independent Directors, and by a majority of the
outstanding Class B voting securities of such Fund. Each Class B Plan will
continue in effect from year to year as long as its continuance is approved
annually by either the applicable Fund's Board of Directors or by a vote of a
majority of the outstanding Class B voting securities of such Fund. In either
case, to continue, each Class B Plan must be approved by the vote of a majority
of the Independent Directors of the applicable Fund. Each Fund's Board reviews
quarterly and annually a written report provided by the Treasurer of the amounts
expended under the each Class B Plan and the purposes for which such
expenditures were made. While each Class B Plan is in effect, the selection and
nomination of the applicable Fund's Independent Directors will be committed to
the discretion of such Independent Directors then in office.

In adopting each Class B Plan, the Board of Directors of each Fund
considered all relevant information and determined that there is a reasonable
likelihood that each Class B Plan will benefit each Fund and their Class B
shareholders. The Board of Directors of each Fund believes that amounts spent
pursuant to each Class B Plan have assisted each Fund in providing ongoing
servicing to shareholders, in competing with other providers of financial
services and in promoting sales, thereby increasing the net assets of each Fund.

Each Class B Plan can be terminated at any time by a vote of a majority of
the applicable Fund's Independent Directors or by a vote of a majority of the
outstanding Class B voting securities of such Fund. Any change to the Class B
Plan that would materially increase the costs to that class of shares of a Fund
may not be instituted without the approval of the outstanding Class B voting
securities of such Fund. Such changes also require approval by a majority of the
applicable Fund's Independent Directors.

In reporting amounts expended under the Class B Plans to the Directors,
FIMCO will allocate expenses attributable to the sale of each class of a Fund's
shares to such class based on the ratio of sales of such class to the sales of
both classes of shares. The fees paid by a Fund's Class B shares will not be
used to subsidize the sale of any other class of the Fund's shares.

14
<PAGE>

For the fiscal year ending December 31, 1997, Cash Management Fund and
Tax-Exempt Money Market Fund paid $1,694 and $338, respectively, in fees
pursuant to their respective Class B Plan, all of which was paid as compensation
to sales personnel as distribution fees.

Tax-Exempt Money Market Fund has adopted a plan of distribution for Class A
shares pursuant to Rule 12b-1 under the 1940 Act ("Class A Plan"). The Class A
Plan is designed to encourage Dealers, as that term is defined in the Prospectus
for Class A shares, to provide distribution services and to provide
administrative support services to the Fund and its Class A shareholders. These
services may include, but shall not be limited to, providing office space,
equipment, telephone facilities and various personnel including clerical,
supervisory and possibly computer, as is necessary or beneficial to establish
and maintain Class A shareholder accounts and records, process purchase and
redemption transactions, process automatic investments of client account cash
balances, answer routine client inquiries regarding the Fund, assist clients in
changing dividend options, account designations and addresses and providing such
other services as the Fund may reasonably request. Dealers will receive
compensation from the Underwriter or FIMCO with respect to Class A shares owned
from time to time by their clients. The schedules of fees and the basis upon
which such fees will be paid is determined from time to time by the Underwriter.

The Underwriter has the right to select, in its sole discretion, Dealers to
participate in the Class A Plan and has the right to terminate with or without
cause and in its sole discretion any agreement with a Dealer. Any agreement may
be terminated, without penalty, at any time, by a vote of a majority of the
Independent Directors upon not more than 60 days' written notice to any Dealer,
or by vote of a majority of the outstanding Class A voting securities of
Tax-Exempt Money Market Fund, or upon notice by the Underwriter.

The Class A Plan was adopted by Tax-Exempt Money Market Fund's Directors,
including a majority of the Independent Directors. In adopting the Class A Plan,
the Fund's Board considered all relevant information and determined that there
is a reasonable likelihood that the Class A Plan will benefit Tax-Exempt Money
Market Fund and its shareholders.

The Class A Plan will continue in effect from year to year as long as its
continuance is approved annually by either Tax-Exempt Money Market Fund's Board
of Directors or by a vote of a majority of the outstanding Class A voting
securities of the Fund. In either case, to continue, the Class A Plan must be
approved by the vote of a majority of the Independent Directors. The Board
reviews promptly after the end of each fiscal quarter and fiscal year, a written
report provided by the Treasurer of the amounts expended under the Class A Plan
and the purposes for which such expenditures were made. While the Class A Plan
is in effect, the selection and nomination of the Independent Directors of
Tax-Exempt Money Market Fund will be committed to the discretion of such
Independent Directors then in office.

The Class A Plan can be terminated at any time by a vote of a majority of
the Independent Directors or by a vote of a majority of the outstanding Class A
voting securities of the Fund. Any material change to the Class A Plan or any
change that would materially increase the costs to the Class A shareholders of
the Fund may not be instituted without the approval of the outstanding Class A

15
<PAGE>

voting securities of the Fund. Such changes also require approval by a majority
of the Fund's Independent Directors.

DETERMINATION OF NET ASSET VALUE

Each Fund values its portfolio securities in accordance with the amortized
cost method of valuation under Rule 2a-7 under the 1940 Act. To use amortized
cost to value its portfolio securities, a Fund must adhere to certain conditions
under that Rule relating to the Fund's investments, some of which are discussed
in the Prospectuses. Amortized cost is an approximation of market value of an
instrument, whereby the difference between its acquisition cost and value at
maturity is amortized on a straight-line basis over the remaining life of the
instrument. The effect of changes in the market value of a security as a result
of fluctuating interest rates is not taken into account and thus the amortized
cost method of valuation may result in the value of a security being higher or
lower than its actual market value. In the event that a large number of
redemptions take place at a time when interest rates have increased, a Fund
might have to sell portfolio securities prior to maturity and at a price that
might not be desirable.

The Board of Directors of each Fund has established procedures for the
purpose of maintaining a constant net asset value of $1.00 per share, which
include a review of the extent of any deviation of net asset value per share,
based on available market quotations, from the $1.00 amortized cost per share.
Should that deviation exceed 1/2 of 1% for any Fund, the Board of Directors will
promptly consider whether any action should be initiated to eliminate or reduce
material dilution or other unfair results to shareholders. Such action may
include selling portfolio securities prior to maturity, reducing or withholding
dividends and utilizing a net asset value per share as determined by using
available market quotations. Each Fund maintains a dollar weighted average
portfolio maturity of 90 days or less and does not purchase any instrument with
a remaining maturity greater than 13 months, limits portfolio investments,
including repurchase agreements, to those U.S. dollar-denominated instruments
that are of high quality and that the Directors determine present minimal credit
risks as advised by the Adviser, and complies with certain reporting and
recordkeeping procedures. There is no assurance that a constant net asset value
per share will be maintained. In the event amortized cost ceases to represent
fair value per share, the Board will take appropriate action.

Each Fund's Board of Directors may suspend the determination of the
applicable Fund's net asset value for the whole or any part of any period (1)
during which trading on the New York Stock Exchange ("NYSE") is restricted as
determined by the Securities and Exchange Commission ("SEC") or the NYSE is
closed for other than weekend and holiday closings, (2) when an emergency
exists, as defined by the SEC, that makes it not reasonably practicable for such
Fund to dispose of securities owned by it or fairly to determine the value of
its net assets, or (3) for such other period as the SEC has by order permitted.

ALLOCATION OF PORTFOLIO TRANSACTIONS

Purchases and sales of portfolio securities by a Fund generally are
principal transactions. In principal transactions, portfolio securities are
normally purchased directly from the issuer or from an underwriter or market
maker for the securities. There will usually be no brokerage commissions paid

16
<PAGE>

by a Fund for such purchases. Purchases from underwriters will include the
underwriter's commission or concession and purchases from dealers serving as
market makers will include the spread between the bid and asked price. Certain
money market instruments may be purchased by the Funds directly from an issuer,
in which no commissions or discounts are paid. Tax-Exempt Money Market Fund may
purchase fixed income securities on a "net" basis with dealers acting as
principal for their own accounts without a stated commission, although the price
of the security usually includes a profit to the dealer.

If any transactions are effected on an agency basis, the Adviser will seek
best execution of trades either (1) at the most favorable and competitive rate
of commission charged by any broker or member of an exchange, or (2) with
respect to agency transactions, at a higher rate of commission if reasonable in
relation to brokerage and research services provided to a Fund or the Adviser by
such member or broker. In addition, upon the instruction of each Fund's Board of
Directors, the Adviser may use dealer concessions available in fixed price
underwritings to pay for such research services. Such services may include, but
are not limited to, any one or more of the following: information as to the
availability of securities for purchase or sale and statistical or factual
information or opinions pertaining to investments. The Adviser may use research
and services provided to it by brokers in servicing all the funds in the First
Investors Group of Funds; however, not all such services may be used by the
Adviser in connection with a Fund. No portfolio orders are placed with an
affiliated broker, nor does any affiliated broker-dealer participate in these
commissions.

The Adviser may combine transaction orders placed on behalf of a Fund and
any other Fund in the First Investors Group of Funds, any series of Executive
Investors Trust and First Investors Life Insurance Company, affiliates of the
Funds, for the purpose of negotiating brokerage commissions or obtaining a more
favorable transaction price; and where appropriate, securities purchased or sold
may be allocated in accordance with written procedures approved by each Fund's
Board of Directors.

ADDITIONAL EXCHANGE AND REDEMPTION
INFORMATION AND OTHER SERVICES

Systematic Investing

First Investors Money Line. This service allows you to invest in Class A
shares of a Fund through automatic deductions from your bank checking account,
provided you have Electronic Fund Transfers privileges. See "Electronic Fund
Transfers," below. Scheduled investments in the minimum amount of $50 per month
or $600 per year may be made. The frequency of investments may be bi-weekly,
semi-monthly, monthly, quarterly, semi-annually or annually. In order to invest
$2,500 or more through First Investors Money Line, a Medallion signature
guarantee is required. See "Signature Guarantees." The maximum amount which may
be invested through First Investors Money Line is $10,000 a month. Shares of the
Fund are purchased on the investment date you select provided it is a Trading
Day and the amount of the purchase is available funds in your designated bank
account two business days prior to the investment date selected. You may change
the amount or discontinue this service at any time by calling Shareholder
Services or writing to Administrative Data Management Corp., 581 Main Street,
Woodbridge, NJ 07095-1198, Attn: Control Dept. It takes between three and five
business days to process most changes you request be made to your Money Line
service. Money

17
<PAGE>

Line application forms are available from your Representative or by calling
Shareholder Services at 1-800-423-4026.

Automatic Payroll Investment. You also may arrange for automatic
investments in Class A shares in the minimum amount of $50 into a Fund on a
systematic basis through salary deductions, provided your employer has direct
deposit capabilities. Shares of the Fund are purchased on the Trading Day the
electronic fund transfer is received by the Fund. You may change the amount or
discontinue the service by contacting your employer. An application is available
from your Representative or by calling Shareholder Services at 1-800-423-4026.
Arrangements must also be made with your employer's payroll department.

Cross-Investment of Cash Distributions. You may elect to invest in Class A
or Class B shares of a Fund at net asset value all the cash distributions from
the same class of shares of another Eligible Fund. The investment will be made
at the net asset value per share of the Fund, generally determined as of the
close of business, on the business day immediately following the record date of
any such distribution. You may also elect to invest cash distributions of a
Fund's Class A or Class B shares into the same class of another Eligible Fund.
The investment will be made at the net asset value per share of the other fund,
generally determined as of the close of business, on the business day
immediately following the record date of any such distribution. Cash
distributions from a Fund's Class B shares may only be invested into an existing
Class B share account. If your distributions are to be invested in Class A
shares in a new account, you must invest a minimum of $50 per month. To arrange
for cross-investing, call Shareholder Services at 1-800-423-4026.

Systematic Withdrawal Plan. Shareholders who own noncertificated Class A or
Class B shares may establish a Systematic Withdrawal Plan ("Withdrawal Plan").
If you have a Fund account with a value of at least $5,000 and you have
dividends reinvested, you may elect to receive monthly, quarterly, semi-annual
or annual checks for any designated amount (minimum $25). You may have the
payments sent directly to you or persons you designate. The $5,000 minimum
account balance is currently being waived for required minimum distributions on
retirement plan accounts. Additionally, regardless of the amount of your Class A
or Class B Fund account, you may also elect to have the Systematic Plan payments
automatically (i) invested at net asset value in the same class of shares of any
other Eligible Fund or (ii) paid to First Investors Life Insurance Company for
the purchase of a life insurance policy or a variable annuity. If your
Systematic Plan payments are to be invested in a new Class A Eligible Fund
account, you must invest a minimum of $600 per year. Systematic Plan payments
from a Class B account must be invested in an existing Class B Eligible Fund
account. Dividends and other distributions, if any, are reinvested in additional
shares of the same class of the Fund. Shareholders may add shares to the
Withdrawal Plan or terminate the Withdrawal Plan at any time. Withdrawal Plan
payments will be suspended when a distributing Fund has received notice of a
shareholder's death on an individual account. Payments may recommence upon
receipt of written alternate payment instructions and other necessary documents
from the deceased's legal representative. Withdrawal payments will also be
suspended when a payment check is returned to the Transfer Agent marked as
undeliverable by the U.S. Postal Service after two consecutive mailings.

Shareholders who own Class B shares may establish a Withdrawal Plan and
elect to receive up to 8% of the value of their account (calculated as set forth
below) each year without incurring any CDSC.

18
<PAGE>

Shares not subject to a CDSC (such as shares representing reinvestment of
distributions) will be redeemed first and will count toward the 8% limitation.
If the shares not subject to a CDSC are insufficient for this purpose, then
shares subject to the lowest CDSC will be redeemed next until the 8% limit is
reached. The 8% figure is calculated on a pro rata basis at the time of the
first payment made pursuant to the Plan and recalculated thereafter on a pro
rata basis at the time of each Plan payment. Therefore, shareholders who have
chosen the Plan based on a percentage of the value of their account of up to 8%
will be able to receive Plan payments without incurring a CDSC. However,
shareholders who have chosen a specific dollar amount (for example, $100 per
month) for their periodic Plan payment should be aware that the amount of that
payment not subject to a CDSC may vary over time depending on the value of their
account. For example, if the value of the account is $15,000 at the time of
payment, the shareholder will receive $100 free of the CDSC (8% of $15,000
divided by 12 monthly payments). However, if at the time of a payment the value
of the account has fallen to $14,000, the shareholder will receive $93.33 free
of any CDSC (8% of $14,000 divided by 12 monthly payments) and $6.67 subject to
the lowest applicable CDSC. This privilege may be revised or terminated at any
time.

The withdrawal payments derived from the redemption of sufficient shares in
the account to meet designated payments in excess of dividends and other
distributions may deplete or possibly extinguish the initial investment,
particularly in the event of a market decline, and may result in a capital gain
or loss depending on the shareholder's cost. Purchases of additional shares of a
Fund concurrent with withdrawals are ordinarily disadvantageous to shareholders
because of tax liabilities and sales charges. To establish a Withdrawal Plan,
call Shareholder Services at 1-800-423-4026.

Electronic Fund Transfer. Shareholders may apply for the privilege of
making Electronic Fund Transfers ("EFT") between Fund accounts and a
predesignated bank account by completing an application and having all
shareholders' signatures guaranteed. If the bank account registration is not
identical to the Fund account, a signature guarantee of every bank account
holder who is not an owner of the Fund account is required. Shareholders may
choose EFT privileges for Money Line purchases, redemptions, dividend
distributions and Systematic Withdrawal Plan payments. The minimum EFT
redemption amount is $500 and the maximum is $50,000. Each Fund has the right,
at its sole discretion, to limit or terminate your ability to exercise the EFT
privileges at any time. Shareholders may not use EFT to redeem shares unless
they have been owned for at least 15 days.

Conversion of Class B Shares. Class B Shares of a Fund will automatically
convert to Class A shares of that Fund, based on the relative net asset values
per share of the two classes, as of the close of business on the first business
day of the month in which the eighth anniversary of the initial purchase of such
Class B shares occurs. For these purposes, the date of initial purchase shall
mean (1) the first business day of the month in which such Class B shares were
issued, or (2) for Class B shares obtained through an exchange or a series of
exchanges, the first business day of the month in which the original Class B
shares were issued. For conversion purposes, Class B shares purchased through
the reinvestment of dividends paid in respect of Class B shares will be held in
a separate sub-account. Each time any Class B shares in the shareholder's
regular account (other than those in the sub-account) convert to Class A shares,
a pro rata portion of the Class B shares in the sub-account also will convert to
Class A shares. The portion will be determined by the ratio that the
shareholder's Class B shares converting to Class A shares bears to the
shareholder's total Class B shares not acquired through dividends.

19
<PAGE>

The availability of the conversion feature is subject to the continuing
applicability of a ruling of the IRS, or the availability of an opinion of
counsel, that: (1) the dividends paid on Class A and Class B shares will not
result in "preferential dividends" under the Internal Revenue Code of 1986, as
amended (the "Code"); and (2) the conversion of shares does not constitute a
taxable event. If the conversion feature ceased to be available, the Class B
shares of the Fund would not be converted and would continue to be subject to
the higher ongoing expenses of the Class B shares beyond eight years from the
date of purchase. FIMCO has no reason to believe that these conditions for the
availability of the conversion feature will not continue to be met.

If Tax-Exempt Money Market Fund implements any amendments to its Class A
Plan that would increase materially the costs that may be borne under such Plan
by Class A shareholders, a new target class into which Class B shares will
convert will be established, unless a majority of Class B shareholders, voting
separately as a class, approve the proposal.

Waivers of CDSC on Class B Shares. The CDSC imposed on Class B shares does
not apply to: (a) any redemption pursuant to the tax-free return of an excess
contribution to an individual retirement account ("IRA") or other qualified
retirement plan if the Fund is notified at the time of such request; (b) any
redemption of a lump-sum or other distribution from qualified retirement plans
or accounts provided the shareholder has attained the minimum age of 70 1/2
years and has held the Class B shares for a minimum period of three years; (c)
any redemption by advisory accounts managed by the Adviser or any of its
affiliates or for shares held by the Adviser or any of its affiliates; (d) any
redemption by a tax-exempt employee benefit plan if continuance of the
investment would be improper under applicable laws or regulations; (e) any
redemption or transfer of ownership of Class B shares following the death or
disability, as defined in Section 72(m)(7) of the Code, of a shareholder if the
Fund is provided with proof of death or disability and with all documents
required by the Transfer Agent within one year after the death or disability;
(f) any redemption of shares purchased during the period April 29, 1996 through
June 30, 1996 with the proceeds from a redemption of shares of a fund in another
fund group for which no sales charge was paid, other than a money market fund or
shares held in a retirement plan account; and (g) certain redemptions pursuant
to a Withdrawal Plan (see "Systematic Withdrawal Plan"). For more information on
what specific documents are required, call Shareholder Services at
1-800-423-4026.

Signature Guarantees. The words "Signature Guaranteed" must appear in
direct association with the signature of the guarantor. Members of the STAMP
(Securities Transfer Agents Medallion Program), MSP (New York Stock Exchange
Medallion Signature Program), SEMP (Stock Exchanges Medallion Program) and FIC
are eligible signature guarantors. A notary public is not an acceptable
guarantor. Although each Fund reserves the right to require signature guarantees
at any other time, signature guarantees are required whenever: (1) the amount of
the redemption is over $50,000, (2) a redemption check is to be made payable to
someone other than the registered accountholder, other than major financial
institutions, as determined solely by the Fund and its agent, on behalf of the
shareholder, (3) a redemption check is to be mailed to an address other than the
address of record, preauthorized bank account, or to a major financial
institution for the benefit of a shareholder, (4) an account registration is
being transferred to another owner, (5) a transaction requires additional legal
documentation; (6) the redemption request is for certificated shares; (7) your
address of record has changed within 60 days prior to a redemption request; (8)
multiple owners have a dispute or give

20
<PAGE>

inconsistent instructions; (9) the authority of a representative of a
corporation, partnership, association or other entity has not been established
to the satisfaction of a Fund or its agents; and (10) you elect EFT privileges.

Reinvestment after Redemption. If you redeem Class A shares which were
originally acquired through an exchange from an Eligible Fund which imposes a
maximum sales charge of 6.25% or Class B shares in your Fund account, you can
reinvest within six months from the date of redemption all or any part of the
proceeds in shares of the same class of the same Fund or any other Eligible
Fund, at net asset value, on the date the Transfer Agent receives your purchase
request. If you reinvest the entire proceeds of a redemption of Class B shares
for which a CDSC has been paid, you will be credited for the amount of the CDSC.
If you reinvest less than the entire proceeds, you will be credited with a pro
rata portion of the CDSC. All credits will be paid in Class B shares of the fund
into which the reinvestment is being made. The period you owned the original
Class B shares prior to redemption will be added to the period of time you own
Class B shares acquired through reinvestment for purposes of determining (a) the
applicable CDSC upon a subsequent redemption and (b) the date on which Class B
shares automatically convert to Class A shares. If your reinvestment is into a
new account, other than the Money Market Funds, it must meet the minimum
investment and other requirements of the fund into which the reinvestment is
being made. To take advantage of this option, send your reinvestment check along
with a written request to the Transfer Agent within six months from the date of
your redemption. Include your account number and a statement that you are taking
advantage of the "Reinvestment Privilege."

Super Checking Program Class A shareholders may establish Super Checking.
Super Checking links your Fund account with a non-interest bearing checking
account at First Financial Savings Bank, S.L.A. ("FFS"), an affiliate of the
Funds. Each day, the Fund automatically "sweeps", or transfers, funds to your
FFS account to cover your withdrawals, in increments of $100 ($1000 for Business
Super Checking) to maintain a balance of $1,000 ($3,000 for Business Super
Checking). FFS will accept deposits into the FFS account only by an electronic
direct deposit, a federal funds wire transfer or by "sweep" from your Fund
account. You will receive a consolidated monthly reconciliation statement
summarizing all transactions. The Federal Deposit Insurance Corporation ("FDIC")
insures your funds in your FFS account up to $100,000. Shares of your Fund are
not insured by the FDIC, are not obligations of or guaranteed by FFS, and are
subject to risk of loss of principal. For more information, see the Super
Checking Account and Sweep Agreement.

Telephone Transactions. Fund shares not held in certificate form may be
exchanged or redeemed by telephone provided you have not declined telephone
privileges. Telephone exchanges are also available between participant directed
401(k) accounts where FFS acts as Custodian, IRA accounts or 403(b) accounts of
the same class of shares registered in the same name. Telephone exchanges are
also available from an individually registered non-retirement account to an IRA
account of the same class of shares in the same name (provided an IRA
application is on file).

As stated in the Funds' Prospectus, the Funds, the Adviser, the Underwriter
and their officers, directors, and employees will not be liable for any loss,
damage, cost or expense arising out of any instruction (or any interpretation of
such instruction) received by telephone which they reasonably believe to be
authentic. In acting upon telephone instructions, these parties use procedures
which are

21
<PAGE>

reasonably designed to ensure that such instructions are genuine, such as (1)
obtaining some or all of the following information: account number, address,
social security number and such other information as may be deemed necessary;
(2) recording all telephone instructions; and (3) sending written confirmation
of each transaction to the shareholder's address of record.

Check Redemption Privilege. Confirmation of redemptions effected through
the Check Redemption Privilege and the actual checks may be provided to Class A
shareholders on a monthly basis rather than a daily basis.

Reduced Sales Charges. Class B shares of the Funds are eligible for the
purchase of Class A shares of any Eligible Fund, as defined in the Prospectus,
at a reduced sales charge through a Letter of Intent or the Cumulative Purchase
Privilege.

Cancelled Checks. Copies of cancelled purchase, liquidation or dividend
checks will be provided to shareholders upon request. Shareholders will be
charged $10.00 per check.

Retirement Plans - Cash Management Fund

Profit-Sharing/Money Purchase Pension/401(k) Plans. FIC offers prototype
401(k) Retirement Plans approved by the IRS for corporations, sole
proprietorships and partnerships and Profit-Sharing and Money Purchase Pension
Plans for owner-only sole proprietorships and owner-only partnerships
("Retirement Plans"). Keogh Plans are available only to sole proprietors or
partnerships. Custodial Agreements can be utilized for such Retirement Plans
that provide that FFS, an affiliate of FIC, will furnish all required custodial
services, except for the 401(k) flexible.

Currently, there are no annual service fees chargeable to participants in
connection with a Retirement Plan account. Cash Management Fund currently pays
the annual $10.00 custodian fee for each Retirement Plan account, if applicable,
maintained with the Fund. This policy may be changed at any time by the Fund on
45 days' written notice. FFS has reserved the right to waive its fees at any
time or to change the fees on 45 days' prior written notice.

The Retirement Plan documents contain further specific information about
the Retirement Plans and may be obtained from your Representative. Prior to
establishing a Retirement Plan, you are advised to consult with your legal and
tax advisers.

Individual Retirement Accounts. A qualified individual may purchase shares
of Cash Management Fund through a traditional, Roth or Education IRA or, as an
employee of a qualified employer, through a simplified employee pension-IRA
("SEP-IRA"), a salary reduction simplified employee pension-IRA ("SARSEP-IRA")
or a Savings Incentive Match Plan for Employees ("SIMPLE-IRAs") furnished by
FIC. Under the related Custodial Agreements, FFS acts as custodian of each of
these retirement plans. The custodian fees are disclosed in the IRA documents.

A taxpayer generally may make an annual individual IRA contribution no
greater than the lesser of (a) 100% of his or her compensation or (b) $2,000 (or
$4,000 when also contributing to a spousal IRA). However, contributions are
deductible only under certain conditions. The requirements as to SEP-

22
<PAGE>

IRAs, SARSEP-IRAs and SIMPLE-IRAs are described in IRS Forms 5305-SEP, 5305A-SEP
and 5305-SIMPLE, respectively, which are provided to employers. Employers are
required to provide copies of these forms to their eligible employees. A
disclosure statement setting forth complete details of the IRA should be given
to each participant before the contribution is invested.

As of January 1, 1997, no new employer-sponsored SARSEP-IRAs may be
established. Newly eligible participants in a SARSEP-IRA established prior to
that date, however, may open a new account. Additionally, participants in an
established SARSEP-IRA may continue to make contributions thereto.

Currently, there are no annual service fees chargeable to a participant in
connection with an IRA, SEP-IRA, SARSEP-IRA or SIMPLE-IRA. Cash Management Fund
currently pays the annual $10.00 custodian fee for each IRA account maintained
with the Fund. This policy may be changed at any time by the Fund on 45 days'
written notice to the holder of any IRA, SEP-IRA, SARSEP-IRA or SIMPLE-IRA. FFS
has reserved the right to waive its fees at any time or to change the fees on 45
days' prior written notice to the holder of any IRA.

An application and other documents necessary to establish an IRA, SEP-IRA
or SIMPLE-IRA are available from your Representative. Prior to establishing an
IRA, SEP-IRA or SIMPLE-IRA, you are advised to consult with your legal and tax
advisers.

Retirement Benefit Plans for Employees of Eligible Organizations. FIC makes
available model custodial accounts under Section 403(b)(7) of the Code
("Custodial Accounts") to provide retirement benefits for employees of certain
eligible public educational institutions and other eligible non-profit
charitable, religious and humane organizations. The Custodial Accounts are
designed to permit contributions (up to a "maximum exclusion allowance") by
employees through salary reduction. FFS acts as custodian of these accounts.

Contributions may be made to a Custodial Account under the Optional
Retirement Program for Employees of Texas Institutions of Higher Education
("ORP"), either by salary reduction agreement or otherwise, in accordance with
the terms and conditions of the ORP, and under the Texas Deferred Compensation
Plan Program for eligible state employees by salary reduction agreement. In
addition, contributions may also be made to other deferred compensation plans
maintained by state or local governments, or their agencies, commonly referred
to as Section 457 plans.

Currently, there are no annual service fees chargeable to participants in
connection with a Custodial Account. Cash Management currently pays the annual
$10.00 custodian fee for each Custodial Account maintained with the Fund. This
policy may be changed at any time by the Fund on 45 days' written notice to a
Custodial Account participant. FFS has reserved the right to waive its fees at
any time or to change the fees on 45 days' prior written notice to a Custodial
Account participant.

An application and other documents necessary to establish a Custodial
Account are available from your Representative. Persons desiring to create a
Custodial Account are advised to confer with their legal and tax advisers
concerning the specifics of this type of retirement benefit plan.

23
<PAGE>

Mandatory income tax withholding, at the rate of 20%, may be required on
"eligible rollover" distributions made from any of the foregoing retirement
plans (other than IRAs, including SEP-IRAs, SARSEP-IRAs and SIMPLE-IRAs). If the
recipient elects to directly transfer an eligible rollover distribution to an
"eligible retirement plan" that permits acceptance of such distributions, no
withholding will apply. For distributions that are not "eligible rollover"
distributions, the recipient can elect, in writing, not to require any
withholding. This election must be submitted immediately before, or must
accompany, the distribution request. The amount, if any, of any such optional
withholding depends on the amount and type of the distribution. Appropriate
election forms are available from the Custodian or Shareholder Services. Other
types of withholding nonetheless may apply.

Distribution Fees. A participant/shareholder's account under any of the
foregoing retirement plans (including IRAs) may be charged a distribution fee
(at the time of withdrawal) of $7.00 for a single distribution of the entire
account and $1.00 for each periodic distribution therefrom.

Emergency Pricing Procedures. In the event that the Funds must halt
operations during any day that they would normally be required to price under
Rule 22c-1 under the 1940 Act due to an emergency ("Emergency Closed Day"), the
Funds will apply the following procedures:

1. The Funds will make every reasonable effort to segregate orders received
on the Emergency Closed Day and give them the price that they would have
received but for the closing. The Emergency Closed Day price will be calculated
as soon as practicable after operations have resumed and will be applied equally
to sales, redemptions and repurchases that were in fact received in the mail or
otherwise on the Emergency Closed Day.

2. For purposes of paragraph 1, an order will be deemed to have been
received by the Funds on an Emergency Closed Day, even if neither the Funds nor
the Transfer Agent is able to perform the mechanical processing of pricing on
that day, under the following circumstances:

(a) In the case of a mail order the order will be considered received by a
Fund when the postal service has delivered it to FIC's offices in Woodbridge,
New Jersey prior to the close of regular trading on the NYSE, or at such other
time as may be prescribed in its prospectus; and

(b) In the case of a wire order, including a Fund/SERV order, the order
will be considered received when it is received in good form by a FIC branch
office or an authorized dealer prior to the close of regular trading on the
NYSE, or such other time as may be prescribed in its prospectus.

3. If the Funds are unable to segregate orders received on the Emergency
Closed Day from those received on the next day the Funds are open for business,
the Funds may give all orders the next price calculated after operations resume.

4. Notwithstanding the foregoing, on business days in which the NYSE is not
open for regular trading, the Funds may determine not to price their portfolio
securities if such prices would lead to a distortion of the net asset value for
the Funds and their shareholders.

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<PAGE>

TAXES

General

In order to continue to qualify for treatment as a regulated investment
company ("RIC") under the Code, a Fund must distribute to its shareholders for
each taxable year at least 90% of the sum of its investment company taxable
income (consisting generally of taxable net investment income and net short-term
capital gain, if any) plus, in the case of Tax-Exempt Money Market Fund, its net
interest income excludable from gross income under section 103(a) of the Code
("Distribution Requirement"), and must meet several additional requirements. For
each Fund, these requirements include the following: (1) the Fund must derive at
least 90% of its gross income each taxable year from dividends, interest,
payments with respect to securities loans and gains from the sale or other
disposition of securities, or certain other income derived with respect to its
business of investing in securities ("Income Requirement"); (2) at the close of
each quarter of the Fund's taxable year, at least 50% of the value of its total
assets must be represented by cash and cash items, U.S. Government securities,
securities of other RICs and other securities, with those other securities
limited, in respect of any one issuer, to an amount that does not exceed 5% of
the value of the Fund's total assets; and (3) at the close of each quarter of
the Fund's taxable year, not more than 25% of the value of its total assets may
be invested in securities (other than U.S. Government securities or the
securities of other RICs) of any one issuer.

Each Fund will be subject to a nondeductible 4% excise tax ("Excise Tax")
to the extent it fails to distribute by the end of any calendar year
substantially all of its ordinary (taxable) income for that year and capital
gain net income for the one-year period ending on October 31 of that year, plus
certain other amounts.

Dividends declared by a Fund in December of any year and payable to
shareholders of record on a date in that month are deemed to have been paid by
the Fund and received by the shareholders on December 31 if the dividends are
paid by the Fund during the following January. Accordingly, those dividends will
be reported to shareholders of Tax-Exempt Money Market Fund and taxed to
shareholders of Cash Management Fund for the year in which that December 31
falls.

Tax-Exempt Money Market Fund

Dividends paid by Tax-Exempt Money Market Fund will qualify as
"exempt-interest dividends" as defined in the Prospectuses, and thus will be
excludable from gross income by its shareholders, if the Fund satisfies the
additional requirement that, at the close of each quarter of its taxable year,
at least 50% of the value of its total assets consists of securities the
interest on which is excludable from gross income under section 103(a). The Fund
intends to continue to satisfy this requirement. The aggregate dividends
excludable from the Fund's shareholders' gross income may not exceed its net
tax-exempt income. Shareholders' treatment of dividends from the Fund under
local and state income tax laws may differ from the treatment thereof under the
Code. Investors should consult their tax adviser concerning this matter.

25
<PAGE>

Tax-exempt interest attributable to certain PABs (including, to the extent
Tax-Exempt Money Market Fund receives interest on those bonds, a proportionate
part of the exempt-interest dividends it pays) is a Tax Preference Item.
Exempt-interest dividends received by a corporate shareholder also may be
indirectly subject to the Federal alternative minimum tax without regard to
whether the Fund's tax-exempt interest is attributable to those bonds. Entities
or other persons who are "substantial users" (or persons related to "substantial
users") of facilities financed by PABs or IDBs should consult their tax advisers
before purchasing shares of the Fund because, for users of certain of these
facilities, the interest on those bonds is not exempt from Federal income tax.
For these purposes, the term "substantial user" is defined generally to include
a "non-exempt person" who regularly uses in trade or business a part of a
facility financed from the proceeds of PABs or IDBs.

Up to 85% of social security and railroad retirement benefits may be
included in taxable income for recipients whose modified adjusted gross income
(including income from tax-exempt sources such as the Tax-Exempt Money Market
Fund) plus 50% of their benefits exceeds certain base amounts. Exempt-interest
dividends from the Fund still are tax-exempt to the extent described in the
Prospectus; they are only included in the calculation of whether a recipient's
income exceeds the established amounts.

If Tax-Exempt Money Market Fund invests in any instruments that generate
taxable income, under the circumstances described in the Prospectuses,
distributions of the interest earned thereon will be taxable to the Fund's
shareholders as ordinary income to the extent of its earnings and profits.
Moreover, if the Fund realizes capital gain as a result of market transactions,
any distribution of that gain will be taxable to its shareholders. There also
may be collateral Federal income tax consequences regarding the receipt of
tax-exempt dividends by shareholders such as S corporations, financial
institutions and property and casualty insurance companies. A shareholder
falling into any such category should consult his or her tax adviser concerning
its investment in shares of the Fund.

PERFORMANCE INFORMATION

The Funds provide current yield quotations based on their daily dividends.
Each Fund declares dividends daily and pays dividends monthly from net
investment income.

For purposes of current yield quotations, dividends per share for a
seven-day period are annualized (using a 365-day year basis) and divided by the
Fund's average net asset value per share for the seven-day period. The current
yield quoted will be for a recent seven day period. Current yields will
fluctuate from time to time and are not necessarily representative of future
results. You should remember that yield is a function of the type and quality of
the instruments in the portfolio, portfolio maturity and operating expenses.
Current yield information is useful in reviewing a Fund's performance but,
because current yield will fluctuate, such information may not provide a basis
for comparison with bank deposits or other investments which may pay a fixed
yield for a stated period of time, or other investment companies, which may use
a different method of calculating yield.

In addition to providing current yield quotations, each Fund provides
effective yield quotations for a base period return of seven days. The Funds may
also advertise yield for periods other than seven days, such as thirty days or
twelve months. In such cases, the formula for calculating seven-day

26
<PAGE>

effective yield will be used, except that the base period will be thirty days or
365 days rather than seven days. An effective yield quotation is determined by a
formula that requires the compounding of the unannualized base period return.
Compounding is computed by adding 1 to the annualized base period return,
raising the sum to a power equal to 365 divided by 7 and subtracting 1 from the
result.

The following is an example, for purposes of illustration only, of the
current and effective yield (and for Tax-Exempt Money Market Fund, the
tax-equivalent yield) calculation for Class A and Class B shares for the seven
day period ended December 31, 1997.

27
<PAGE>

Tax-Exempt Money
Cash Management Fund Market Fund
-------------------- ----------------
Class A Class B Class A Class B
Shares Shares Shares Shares
------ ------ ------ ------
<S> <C> <C> <C> <C>
Dividends per share from net investment $.0009737300 $.0008298575 $.000628792 $.000484988
income (seven calendar days ended December
31, 1997) (Base Period)
Annualized (365 day basis)* $.0498007910 $.0419867588 $.0299820232 $.0223552787
Average net asset value per share of the $1.00 $1.00 $1.00 $1.00
seven calendar days ended December 31, 1997
Annualized historical yield per share for 5.08% 4.33% 3.28% 2.53%
the seven calendar days ended December 31,
1997
Effective Yield** 5.20% 4.42% 3.33% 2.56%
Tax Equivalent Yield*** N/A N/A 4.63% 3.56%
Weighted average life to maturity of
the portfolio on December 31, 1997
was 47 days for Cash
Management Fund and 50 days
for Tax-Exempt Money Market
Fund
</TABLE>
- ------------

* This represents the average of annualized net investment income per share
for the seven calendar days ended December 31, 1997.
** Effective Yield = [(Base Period Return+1)365/7] - 1
*** Tax Equivalent Yield = (Effective Yield/(1-Tax Rate). For the purpose of
this illustration, the tax rate was assumed to be 28%. The maximum Federal
tax rate during this period was 39.6%.

The Funds may include in advertisements and sales literature information,
examples and statistics to illustrate the effect of compounding income at a
fixed rate of return to demonstrate the growth of an investment over a stated
period of time resulting from the payment of dividends in additional Fund
shares. Examples for the Cash Management Fund may also include hypothetical
returns comparing taxable versus tax-deferred growth which would pertain to an
IRA, Code section 403(b) or other qualified retirement program. The examples
used are for illustrative purposes only and are not representations by a Fund of
past or future yield or return. Examples of typical graphs and charts depicting
such historical performances, compounding and hypothetical returns are included
in Appendix D.

From time to time, in reports and promotional literature, each Fund may
compare its performance to, or cite the historical performance of the relevant
Donoghue's Money Fund Average, a published statistic indicating the performance
of money market mutual funds, and the Bank Rate Monitor Index,

28
<PAGE>

a published statistic indicating a composite interest rate available through
banks on their money market deposit accounts. Additionally, performance rankings
and ratings reported periodically in national financial publications such as
MONEY, FORBES, BUSINESS WEEK, BARRON'S, FINANCIAL TIMES, CHANGING TIMES,
FORTUNE, etc., may also be used. Quotations from articles appearing in daily
newspaper publications such as THE NEW YORK TIMES, THE WALL STREET JOURNAL and
THE NEW YORK DAILY NEWS may be cited.

GENERAL INFORMATION

Audits And Reports. The accounts of each Fund are audited twice a year by
Tait, Weller & Baker, independent certified public accountants, 8 Penn Center
Plaza, Philadelphia, PA 19103. Shareholders of each Fund receive semi-annual and
annual reports, including audited financial statements, and a list of securities
owned.

Transfer Agent. Administrative Data Management Corp., 581 Main Street,
Woodbridge, NJ 07095-1198, an affiliate of FIMCO and FIC, acts as transfer agent
for the Funds and as redemption agent for regular redemptions. The fees charged
to each Fund by the Transfer Agent are $5.00 to open an account; $3.00 for each
certificate issued; $.75 per account per month; $10.00 for each legal transfer
of shares; $.45 per account per dividend declared; $5.00 for each exchange of
shares into a Fund; $5.00 for each partial withdrawal or complete liquidation;
$1.00 for each Systematic Withdrawal Plan check; $4.00 for each shareholder
services call; $20.00 for each item of correspondence; and $1.00 per account per
report required by any governmental authority. Additional fees charged to the
Funds by the Transfer Agent are assumed by the Underwriter. The Transfer Agent
reserves the right to change the fees on prior notice to the Funds. Upon request
from shareholders, the Transfer Agent will provide an account history. For
account histories covering the most recent three year period, there is no
charge. The Transfer Agent charges a $5.00 administrative fee for each account
history covering the period 1983 through 1994 and $10.00 per year for each
account history covering the period 1974 through 1982. Account histories prior
to 1974 will not be provided. If any communication from the Transfer Agent to a
shareholder is returned from the U.S. Postal Service marked as "Undeliverable"
two consecutive times, the Transfer Agent will cease sending any further
materials to the shareholder until the Transfer Agent is provided with a correct
address. Efforts to locate a shareholder will be conducted in accordance with
SEC rules and regulations prior to escheatment of funds to the appropriate state
treasury. The Transfer Agent may deduct the costs of its efforts to locate a
shareholder from the shareholder's account. These costs may include a percentage
of the account if a search company charges such a fee in exchange for its
location services. The Transfer Agent is not responsible for any fees that
states and/or their representatives may charge for processing the return of
funds to investors whose funds have been escheated. For the fiscal year ended
December 31, 1997, Cash Management Fund paid $384,547 in transfer agency fees
and expenses. For the same period, an additional $180,595 in transfer agency
fees and expenses was voluntarily waived by the Transfer Agent. For the fiscal
year ended December 31, 1997, Tax-Exempt Money Market Fund paid $63,432 in
transfer agency fees. For the same period, an additional $21,134 in transfer
agency fees. and expenses was voluntarily waived by the Transfer Agent. The
Transfer Agent's telephone number is 1-800-423-4026.

5% Shareholders. As of April 1, 1998, the following owned of record or
beneficially 5% or more of the outstanding Class B shares of the Cash Management
Fund:

29
<PAGE>

Name % of Shares
- ---- -----------

David R. Dupuis 17.7
11449 Nellie Oaks Bnd
Clermont, FL 34711-7800

Dudley A. Harrison 8.2
95 North Street
North Branford, CT 06471-1419

Patricia M. Coyle 5.4
1045 Ott Lane
No. Merrick, NY 11566

McKinnon B. Huggins 23.1
32 E. 92nd Street
Brooklyn, NY 11212-1531

Terry Lynn Peacock 5.8
114 Sanches Creek Ct.
Weatherford, TX 76088

Trading by Portfolio Managers and Other Access Persons. Pursuant to Section
17(j) of the 1940 Act and Rule 17j-1 thereunder, the Funds and the Adviser have
adopted Codes of Ethics restricting personal securities trading by portfolio
managers and other access persons of the Funds. Among other things, such
persons, except the Directors: (a) must have all non-exempt trades pre-cleared;
(b) are restricted from short-term trading; (c) must provide duplicate
statements and transactions confirmations to a compliance officer; and (d) are
prohibited from purchasing securities of initial public offerings.

APPENDIX A
DESCRIPTION OF CORPORATE AND MUNICIPAL COMMERCIAL PAPER
RATINGS

STANDARD & POOR'S RATINGS GROUP

S&P's commercial paper rating is a current assessment of the likelihood of
timely payment of debt considered short-term in the relevant market. Ratings are
graded into several categories, ranging from "A-1" for the highest quality
obligations to "D" for the lowest.

A-1 This highest category indicates that the degree of safety regarding
timely payment is strong. Those issues determined to possess extremely strong
safety characteristics are denoted with a plus (+) designation.

30
<PAGE>

A-2 Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high as for
issues designated "A-1."

MOODY'S INVESTORS SERVICE, INC.

Moody's short-term debt ratings are opinions of the ability of issuers to
repay punctually senior debt obligations which have an original maturity not
exceeding one year. Obligations relying upon support mechanisms such as
letters-of-credit and bonds of indemnity are excluded unless explicitly rated.

Prime-1 Issuers (or supporting institutions) rated Prime-1 (P-1) have a
superior ability for repayment of senior short-term debt obligations. P-1
repayment ability will often be evidenced by many of the following
characteristics:

- Leading market positions in well-established industries.

- High rates of return on funds employed.

- Conservative capitalization structure with moderate reliance on debt and
ample asset protection.

- Broad margins in earnings coverage of fixed financial charges and high
internal cash generation.

- Well-established access to a range of financial markets and assured
sources of alternate liquidity.

Prime-2 Issuers (or supporting institutions) rated Prime-2 (P-2) have a
strong ability for repayment of senior short-term obligations. This will
normally be evidenced by many of the characteristics cited above, but to a
lesser degree. Earnings trends and coverage ratios, while sound, may be more
subject to variation. Capitalization characteristics, while still appropriate,
may be more affected by external conditions. Ample alternate liquidity is
maintained.

APPENDIX B

DESCRIPTION OF CORPORATE AND MUNICIPAL BOND RATINGS

STANDARD & POOR'S RATINGS GROUP

The ratings are based on current information furnished by the issuer or
obtained by S&P from other sources it considers reliable. S&P does not perform
any audit in connection with any rating and may, on occasion, rely on unaudited
financial information. The ratings may be changed, suspended, or withdrawn as a
result of changes in, or unavailability of, such information, or based on other
circumstances.

31
<PAGE>

The ratings are based, in varying degrees, on the following considerations:

1. Likelihood of default-capacity and willingness of the obligor as to the
timely payment of interest and repayment of principal in accordance with the
terms of the obligation;

2. Nature of and provisions of the obligation;

3. Protection afforded by, and relative position of, the obligation in the
event of bankruptcy, reorganization, or other arrangement under the laws of
bankruptcy and other laws affecting creditors' rights.

AAA Debt rated "AAA" has the highest rating assigned by S&P. Capacity to
pay interest and repay principal is extremely strong.

AA Debt rated "AA" has a very strong capacity to pay interest and repay
principal and differs from the higher rated issues only in small degree.

Plus (+) or Minus (-): The ratings from "AA" to "CCC" may be modified by
the addition of a plus or minus sign to show relative standing within the major
categories.

MOODY'S INVESTORS SERVICE, INC.

Aaa Bonds which are rated "Aaa" are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edged." Interest payments are protected by a large or exceptionally stable
margin and principal is secure. While the various protective elements are likely
to change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.

Aa Bonds which are rated "Aa" are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high-grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities, fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long-term risk appear somewhat greater than the Aaa securities.

Moody's applies numerical modifiers, 1, 2 and 3 in each generic rating
classification from Aa through B in its corporate bond rating system. The
modifier 1 indicates that the security ranks in the higher end of its generic
rating category; the modifier 2 indicates a mid-range ranking; and the modifier
3 indicates that the issue ranks in the lower end of its generic rating
category.

32
<PAGE>

APPENDIX C

DESCRIPTION OF MUNICIPAL NOTE RATINGS

STANDARD & POOR'S RATINGS GROUP

S&P's note rating reflects the liquidity concerns and market access risks
unique to notes. Notes due in 3 years or less will likely receive a note rating.
Notes maturing beyond 3 years will most likely receive a long-term debt rating.
The following criteria will be used in making that assessment.

- Amortization schedule (the larger the final maturity relative to other
maturities the more likely it will be treated as a note).

- Source of Payment (the more dependent the issue is on the market for its
refinancing, the more likely it will be treated as a note).

Note rating symbols are as follows:

SP-1 Very strong or strong capacity to pay principal and interest. Those
issues determined to possess overwhelming safety characteristics will be given a
plus (+) designation.

SP-2 Satisfactory capacity to pay principal and interest.

MOODY'S INVESTORS SERVICE, INC.

Moody's ratings for state and municipal notes and other short-term loans
are designated Moody's Investment Grade (MIG). This distinction is in
recognition of the difference between short-term credit risk and long-term risk.

MIG-1. Loans bearing this designation are of the best quality, enjoying
strong protection from established cash flows of funds for their servicing or
from established and broad-based access to the market for refinancing, or both.

MIG-2. Loans bearing this designation are of high quality, with margins of
protection ample although not as large as the preceding group.

33
<PAGE>

APPENDIX D

[The following tables are represented as graphs in the printed document.]

The following graphs and chart illustrate hypothetical returns:

INCREASE RETURNS

This graph shows over a period of time even a small increase in returns can make
a significant difference.

Years 10% 8% 6% 4%
----- ------- ------ ------ ------
5 16,453 14,898 13,489 12,210
10 27,070 22,196 18,194 14,908
15 44,539 33,069 24,541 18,203
20 73,281 49,268 33,102 22,226
25 120,569 73,402 44,650 27,138

INCREASE INVESTMENT

This graph shows the more you invest on a regular basis over time, the more you
can accumulate.

Years $100 $250 $500 $1,000
----- ------ ------- ------- -------
5 7,348 18,369 36,738 73,476
10 18,295 43,736 91,473 182,946
15 34,604 86,509 173,019 346,038
20 58,902 147,255 294,510 589,020
25 95,103 237,757 475,513 951,026

<PAGE>

[The following table is represented as graph in the printed document.]

This chart illustrates the time value of money based upon the following
assumptions:

If you invested $2,000 each year for 20 years, starting at 25, assuming a 9%
investment return, you would accumulate $573,443 by the time you reach age 65.
However, had you invested the same $2,000 each year for 20 years, at that rate,
but waited until age 35, you would accumulate only $242,228 - a diference of
$331,215.

25 years old .............. 533,443
35 years old .............. 202,228
45 years old .............. 62,320

For each of the above graphs and chart it should be noted that systematic
investment plans do not assume a profit or protect against loss in declining
markets. Investors should consider their financial ability to continue purchases
through periods of both high and low price levels. Figures are hypothetical and
for illustrative purposes only and do not represent any actual investment or
performance. The value of a shareholder's investment and return may vary.

<PAGE>

[The following table is represented as chart in the printed document.]

The following chart illustrates the historical performance of the Dow Jones
Industrial Average from 1928 through 1996.

1928 .................. 300.00
1929 .................. 248.48
1930 .................. 164.58
1931 .................. 77.90
1932 .................. 59.93
1933 .................. 99.90
1934 .................. 104.04
1935 .................. 144.13
1936 .................. 179.90
1937 .................. 120.85
1938 .................. 154.76
1939 .................. 150.24
1940 .................. 131.13
1941 .................. 110.96
1942 .................. 119.40
1943 .................. 136.20
1944 .................. 152.32
1945 .................. 192.91
1946 .................. 177.20
1947 .................. 181.16
1948 .................. 177.30
1949 .................. 200.10
1950 .................. 235.40
1951 .................. 269.22
1952 .................. 291.89
1953 .................. 280.89
1954 .................. 404.38
1955 .................. 488.39
1956 .................. 499.46
1957 .................. 435.68
1958 .................. 583.64
1959 .................. 679.35
1960 .................. 615.88
1961 .................. 731.13
1962 .................. 652.10
1963 .................. 762.94
1964 .................. 874.12
1965 .................. 969.25
1966 .................. 785.68
1967 .................. 905.10
1968 .................. 943.75
1969 .................. 800.35
1970 .................. 838.91
1971 .................. 890.19
1972 .................. 1,020.01
1973 .................. 850.85
1974 .................. 616.24
1975 .................. 858.71
1976 .................. 1,004.65
1977 .................. 831.17
1978 .................. 805.01
1979 .................. 838.74
1980 .................. 963.98
1981 .................. 875.00
1982 .................. 1,046.55
1983 .................. 1,258.64
1984 .................. 1,211.56
1985 .................. 1,546.67
1986 .................. 1,895.95
1987 .................. 1,938.80
1988 .................. 2,168.60
1989 .................. 2,753.20
1990 .................. 2,633.66
1991 .................. 3,168.83
1992 .................. 3,301.11
1993 .................. 3,754.09
1994 .................. 3,834.44
1995 .................. 5,000.00
1996 .................. 6,000.00

<PAGE>

[The following table is represented as a chart in the printed document.]

The following chart shows that inflation is constantly eroding the value of your
money.

THE EFFECTS OF INFLATION OVER TIME

1966 ....................... 96.61836
1967 ....................... 93.80423
1968 ....................... 89.59334
1969 ....................... 84.36285
1970 ....................... 79.88906
1971 ....................... 77.33694
1972 ....................... 74.79395
1973 ....................... 68.80768
1974 ....................... 61.27131
1975 ....................... 57.31647
1976 ....................... 54.63915
1977 ....................... 51.20820
1978 ....................... 46.98000
1979 ....................... 41.46514
1980 ....................... 36.85790
1981 ....................... 33.84564
1982 ....................... 32.60659
1983 ....................... 31.41290
1984 ....................... 30.23378
1985 ....................... 29.12696
1986 ....................... 28.81005
1987 ....................... 27.59583
1988 ....................... 26.43279
1989 ....................... 25.27035
1990 ....................... 23.81748
1991 ....................... 23.10134
1992 ....................... 22.45028
1993 ....................... 21.86006
1994 ....................... 21.28536
1995 ....................... 20.76620
1996 ....................... 20.39000

1995........................ 1.00
1996........................ 1.03
1997........................ 1.06
1998 ....................... 1.09
1999 ....................... 1.13
2000 ....................... 1.16
2001 ....................... 1.19
2002 ....................... 1.23
2003 ....................... 1.27
2004 ....................... 1.30
2005 ....................... 1.34
2006 ....................... 1.38
2007 ....................... 1.43
2008 ....................... 1.47
2009 ....................... 1.51
2010 ....................... 1.56
2011 ....................... 1.60
2012 ....................... 1.65
2013 ....................... 1.70
2014 ....................... 1.75
2015 ....................... 1.81
2016 ....................... 1.86
2017 ....................... 1.92
2018 ....................... 1.97
2019 ....................... 2.03
2020 ....................... 2.09
2021 ....................... 2.16
2022 ....................... 2.22
2023 ....................... 2.29
2024 ....................... 2.36
2025 ....................... 2.43
2026 ....................... 2.43

Inflation erodes your buying power. $100 in 1966, could purchase five times the
goods and services as it could in 1996 ($100 vs. $20).* Projecting inflation at
3%, goods and services costing $100 today will cost $243 in the year 2026.

* Source: Consumer Price Index, U.S. Bureau of Labor Statistics.

<PAGE>

[The following tables are represented as graphs in the printed document.]

This chart illustrates that historically, the longer you hold onto stocks, the
greater chance that you will have a positive return.

1926 through 1996(1)

Total Number of Percentage of
Number of Positive Positive
Periods Periods Periods
------- ------- -------
1-Year Periods 71 51 72%
5-Year Periods 67 60 90%
10-Year Periods 62 60 97%
15-Year Periods 57 57 100%
20-Year Periods 52 52 100%

The following chart shows the compounded annual return of large company stocks
compared to U.S. Treasury Bills and inflation over the most recent 15 year
period. (2)

Compound Annual Return from 1982 -- 1996(1)

Inflation ..................... 3.55
U.S. Treasury Bills ........... 6.50
Large Company Stocks .......... 13.66

The following chart illustrates for the period shown that long-term corporate
bonds have outpaced U.S. Treasury Bills and inflation.

Compound Annual Return from 1982 -- 1996(1)

Inflation ..................... 3.55
U.S. Treasury Bills ........... 6.50
Long-Term Corp. bonds ......... 16.79

(2) Please note that U.S. Treasury bills are guaranteed as to principal and
interest payments (although the funds that invest in them are not), while
stocks will fluctuate in share price. Although past performance cannot
guarantee future results, reeturns of U.S. Treasury bills historically have
not outpaced inflation by as great a margin as stocks.

The accompanying table illustrates that if you are in the 36% tax bracket, a
tax-free yield of 3% is actually equivalent to a taxable investment earning
4.69%.

Your Taxable Equivalent Yield

Your Federal TAx Bracket
---------------------------------------------
your tax-free yield 31.0% 36.0% 39.6%
------------------- ----- ----- -----
3.00% 4.35% 4.69% 4.97%
3.50% 5.07% 5.47% 5.79%
4.00% 5.80% 6.25% 6.62%
4.50% 6.52% 7.03% 7.45%
5.00% 7.25% 7.81% 8.25%
5.50% 7.97% 8.59% 9.11%

This information is general in nature and should not be construed as tax advice.
Please consult a tax or financial adviser as to how this information affects
your particular circumstances.

<PAGE>

Financial Statements
as of December 31, 1997

<PAGE>

Financial Statements
as of December 31, 1997

First Investors Cash Management Fund, Inc. (2-62347) incorporates by reference
the financial statements and report of independent auditors contained in the
Annual Report to shareholders for the fiscal year ended December 31, 1997
electronically filed with the Commission on February 25, 1998 (Accession Number:
0000928816-98-000053).

First Investors Tax-Exempt Money Market Fund, Inc. (2-82572) incorporates by
reference the financial statements and report of independent auditors contained
in the Annual Report to shareholders for the fiscal year ended December 31, 1997
electronically filed with the Commission on February 25, 1998 (Accession Number:
0000928816-98-000054).

35
<PAGE>

PART C

OTHER INFORMATION

Item 24. Financial Statements and Exhibits

(a) Financial Statements:

Financial Statements are set forth in Part B, Statement of Additional
Information.

(b) Exhibits:

(1)a./1/ Articles of Restatement

b./1/ Articles Supplementary

(2)/1/ Amended and Restated By-Laws

(3) Not Applicable

(4) Shareholders' rights are contained in (a) Articles FIFTH and
EIGHTH of Registrant's Articles of Restatement dated September
14, 1994, previously filed as Exhibit 99.B1.1 to Registrant's
Registration Statement; (b) Article FOURTH of Registrant's
Articles Supplementary to Articles of Incorporation dated
October 20, 1994, previously filed as Exhibit 99.B1.2 to
Registrant's Registration Statement and (c) Article II of
Registrant's Amended and Restated By-laws, previously filed as
Exhibit 99.B2 to Registrant's Registration Statement.

(5)/1/ Investment Advisory Agreement between Registrant and First
Investors Management Company, Inc.

(6)/1/ Underwriting Agreement between Registrant and First Investors
Corporation.

(7) Not Applicable

(8)a./1/ Custodian Agreement between Registrant and Irving Trust
Company

b/1/ Supplement to Custodian Agreement between Registrant and The
Bank of New York

c./1/ Payment and Redemption Agency Agreement between Registrant and
Irving Trust Company

<PAGE>

(9)a./1/ Administration Agreement between Registrant, First Investors
Management Company, Inc., First Investors Corporation and
Administrative Data Management Corp.

b./2/ Schedule A to Administration Agreement

(10) Opinion of Counsel

(11)a. Consent of independent accountants

b./1/Powers of Attorney

(12) Not Applicable

(13) No undertaking in effect

(14)a./2/First Investors Profit Sharing/Money Purchase Pension
Retirement Plan for Sole Proprietor ships, Partnerships and
Corporations

b./2/First Investors Individual Retirement Account

c./2/First Investors 403(b) Custodial Account

d./2/First Investors SEP-IRA and SARSEP-IRA

(15/1/ Class B Distribution Plan

(16) Not Applicable

(17) Financial Data Schedule (filed as Exhibit 27 for electronic
filing purposes)

(18)/1/ 18f-3 Plan

- ----------

/1/ Incorporated by reference from Post-Effective Amendment No. 23 to
Registrant's Registration Statement (File No. 2-62347 filed on April
24, 1996.

/2/ Incorporated by reference from Post-Effective Amendment No. 25 to
Registrant's Registrant Statement (File No. 2-62347) filed on May 15,
1997.

Item 25. Persons Controlled by or under common control with Registrant

There are no persons controlled by or under common control with the
Registrant.

<PAGE>

Item 26. Number of Holders of Securities

Number of Record
Holders as of
Title of Class February 2, 1998
-------------- ----------------

Class A Shares 23,198
Class B Shares 34

Item 27. Indemnification

Article X, Section 1 of the By-Laws of Registrant provides as follows:

Section 1. Every person who is or was an officer or director of the
Corporation (and his heirs, executors and administrators) shall be indemnified
by the Corporation against reasonable costs and expenses incurred by him in
connection with any action, suit or proceeding to which he may be made a party
by reason of his being or having been a director or officer of the Corporation,
except in relation to any action, suit or proceeding in which he has been
adjudged liable because of negligence or misconduct, which shall be deemed to
include willful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of his office. In the absence of an
adjudication which expressly absolves the director or officer of liability to
the Corporation or its stockholders for negligence or misconduct, within the
meaning thereof as used herein, or in the event of a settlement, each director
or officer (and his heirs, executors and administrators) shall be indemnified by
the Corporation against payments made, including reasonable costs and expenses,
provided that such indemnity shall be conditioned upon the prior determination
by a resolution of two-thirds of the Board of Directors, who are not involved in
the action, suit or proceeding that the director or officer has no liability by
reason of negligence or misconduct within the meaning thereof as used herein,
and provided further that if a majority of the members of the Board of Directors
of the Corporation are involved in the action, suit or proceeding, such
determination shall have been made by a written opinion of independent counsel.
Amounts paid in settlement shall not exceed costs, fees and expenses which would
have been reasonably incurred if the action, suit or proceeding had been
litigated to a conclusion. Such a determination by the Board of Directors or by
independent counsel, and the payment of amounts by the Corporation on the basis
thereof, shall not prevent a stockholder from challenging such indemnification
by appropriate legal proceedings on the grounds that the person indemnified was
liable to the Corporation or its security holders by reason of negligence or
misconduct within the meaning thereof as used herein. The foregoing rights and
indemnification shall not be exclusive of any other rights to which any officer
or director (or his heirs, executors and

<PAGE>

administrators) may be entitled to according to law.

The Registrant's Investment Advisory Agreement provides as follows:

The Manager shall not be liable for any error of judgment or mistake of law
or for any loss suffered by the Company or any Series in connection with the
matters to which this Agreement relate except a loss resulting from the willful
misfeasance, bad faith or gross negligence on its part in the performance of its
duties or from reckless disregard by it of its obligations and duties under this
Agreement. Any person, even though also an officer, partner, employee, or agent
of the Manager, who may be or become an officer, Board member, employee or agent
of the Company shall be deemed, when rendering services to the Company or acting
in any business of the Company, to be rendering such services to or acting
solely for the Company and not as an officer, partner, employee, or agent or one
under the control or direction of the Manager even though paid by it.

The Registrant's Underwriting Agreement provides as follows:

The Underwriter agrees to use its best efforts in effecting the sale and
public distribution of the shares of the Fund through dealers and to perform its
duties in redeeming and repurchasing the shares of the Fund, but nothing
contained in this Agreement shall make the Underwriter or any of its officers
and directors or shareholders liable for any loss sustained by the Fund or any
of its officers, directors, or shareholders, or by any other person on account
of any act done or omitted to be done by the Underwriter under this Agreement
provided that nothing herein contained shall protect the Underwriter against any
liability to the Fund or to any of its shareholders to which the Underwriter
would otherwise be subject by reason of willful misfeasance, bad faith, or gross
negligence in the performance of its duties as Underwriter or by reason of its
reckless disregard of its obligations or duties as Underwriter under this
Agreement. Nothing in this Agreement shall protect the Underwriter from any
liabilities which they may have under the Securities Act of 1933 or the
Investment Company Act of 1940.

Reference is hereby made to the Maryland Corporations and Associations
Annotated Code, Sections 2-417, 2-418 (1986).

The general effect of this Indemnification will be to indemnify the
officers and directors of the Registrant from costs and expenses arising from
any action, suit or proceeding to which they may be made a party by reason of
their being or having been a director or officer of the Registrant, except where
such action is determined to have arisen out of the willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of the director's or officer's office.

<PAGE>

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers or persons controlling the
Registrant pursuant to the foregoing provisions, the Registrant has been
informed that, in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Act and is
therefore unenforceable. See Item 32 herein.

Item 28. Business and Other Connections of Investment Adviser

First Investors Management Company, Inc., the Registrant's Investment
Adviser, also serves as Investment Adviser to:

First Investors Government Fund, Inc.
First Investors Series Fund
First Investors Fund For Income, Inc.
First Investors Global Fund, Inc.
First Investors High Yield Fund, Inc.
First Investors Insured Tax Exempt Fund, Inc.
First Investors Life Series Fund
First Investors Multi-State Insured Tax Free Fund
First Investors New York Insured Tax Free Fund, Inc.
First Investors Special Bond Fund, Inc.
First Investors Tax-Exempt Money Market Fund, Inc.
First Investors U.S. Government Plus Fund
First Investors Series Fund II, Inc.

Affiliations of the officers and directors of the Investment Adviser are
set forth in Part B, Statement of Additional Information, under "Directors and
Officers."

Item 29. Principal Underwriters

(a) First Investors Corporation, Underwriter of the Registrant, is also
underwriter for:

First Investors Government Fund, Inc.
First Investors Series Fund
First Investors Fund For Income, Inc.
First Investors Global Fund, Inc.
First Investors High Yield Fund, Inc.
First Investors Insured Tax Exempt Fund, Inc.
First Investors Multi-State Insured Tax Free Fund
First Investors New York Insured Tax Free Fund, Inc.
First Investors Tax-Exempt Money Market Fund, Inc.
First Investors U.S. Government Plus Fund
First Investors Series Fund II, Inc.
First Investors Life Variable Annuity Fund A

<PAGE>

First Investors Life Variable Annuity Fund C
First Investors Life Variable Annuity Fund D
First Investors Life Level Premium Variable Life
Insurance (Separate Account B)

(b) The following persons are the officers and directors of the
Underwriter:

Position and Position and
Name and Principal Office with First Office with
Business Address Investors Corporation Registrant
- ---------------- --------------------- ----------

Glenn O. Head Chairman President
95 Wall Street and Director and Director
New York, NY 10005

Marvin M. Hecker President None
95 Wall Street
New York, NY 10005

John T. Sullivan Director Chairman of the
95 Wall Street Board of
New York, NY 10005 Directors

Roger L. Grayson Director Director
95 Wall Street
New York, NY 10005

Joseph I. Benedek Treasurer Treasurer
581 Main Street
Woodbridge, NJ 07095

Lawrence A. Fauci Senior Vice President None
95 Wall Street and Director
New York, NY 10005

Kathryn S. Head Vice President Director
581 Main Street and Director
Woodbridge, NJ 07095

Louis Rinaldi Senior Vice None
581 Main Street President
Woodbridge, NJ 07095

Frederick Miller Senior Vice President None
581 Main Street
Woodbridge, NJ 07095

<PAGE>

Jane W. Kruzan Director None
232 Adair Street
Decatur, GA 30030

Larry R. Lavoie Secretary and None
95 Wall Street General Counsel
New York, NY 10005

Matthew Smith Vice President None
581 Main Street
Woodbridge, NJ 07095

Jeremiah J. Lyons Director None
56 Weston Avenue
Chatham, NJ 07928

Anne Condon Vice President None
581 Main Street
Woodbridge, NJ 07095

Elizabeth Reilly Vice President None
581 Main Street
Woodbridge, NJ 07095

Robert Flanagan Vice President- None
95 Wall Street Sales Administration
New York, NY 10005

William M. Lipkus Chief Financial Officer None
581 Main Street
Woodbridge, NJ 07095

Item 30. Location of Accounts and Records

Physical possession of the books, accounts and records of the Registrant
are held by First Investors Management Company, Inc. and its affiliated
companies, First Investors Corporation and Administrative Data Management Corp.,
at their corporate headquarters, 95 Wall Street, New York, NY 10005 and
administrative offices, 581 Main Street, Woodbridge, NJ 07095, except for those
maintained by the Registrant's Custodian, The Bank of New York, 48 Wall Street,
New York, NY 10286.

Item 31. Management Services

Inapplicable

Item 32. Undertakings

<PAGE>

The Registrant undertakes to carry out all indemnification provisions of
its Articles of Incorporation, Advisory Agreement and Underwriting Agreement in
accordance with Investment Company Act Release No. 11330 (September 4, 1980) and
successor releases.

Insofar as indemnification for liability arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions under Item 27 herein, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.

The Registrant hereby undertakes to furnish a copy of its latest annual
report to shareholders, upon request and without charge, to each person to whom
a prospectus is delivered.

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant represents that this Amendment
meets all the requirements for effectiveness pursuant to Rule 485(b) under the
Securities Act of 1933, and has duly caused this Post-Effective Amendment to
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York, State of New York, on the
15th day of April, 1998.

FIRST INVESTORS CASH
MANAGEMENT FUND, INC.
(Registrant)

By: /a/Glenn O. Head
--------------------------
Glenn O. Head
President and Director

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, this Amendment to this Registration Statement
has been signed below by the following persons in the capacities and on the
dates indicated.

/s/Glenn O. Head Principal Executive April 15, 1998
- ----------------------------- Officer and Director
Glenn O. Head

/s/Joseph I. Benedek Principal Financial April 15, 1998
- ----------------------------- and Accounting Officer
Joseph I. Benedek

* Director April 15, 1998
- -----------------------------
Kathryn S. Head

* Director April 15, 1998
- -----------------------------
Roger L. Grayson

* Director April 15, 1998
- -----------------------------
Herbert Rubinstein

* Director April 15, 1998
- -----------------------------
Nancy Schaenen

<PAGE>

* Director April 15, 1998
- -----------------------------
James M. Srygley

* Director April 15, 1998
- -----------------------------
John T. Sullivan

* Director April 15, 1998
- -----------------------------
Rex R. Reed

* Director April 15, 1998
- -----------------------------
Robert F. Wentworth

*By: /s/Larry R. Lavoie
-----------------------
Larry R. Lavoie
Attorney-in-fact

<PAGE>

INDEX TO EXHIBITS

Exhibit
Number Description
------ -----------

99.B10 Opinion of counsel
99.B11 Consent of accountants
27.001 FDS-Class A Shares
27.002 FDS-Class B Shares

KIRKPATRICK & LOCKHART LLP
1800 Massachusetts Avenue, N.W.
Washington, D.C. 20036-1800
Telephone 202-778-9000

April 23, 1998

First Investors Cash Management Fund, Inc.
95 Wall Street
New York, NY 10005

Ladies and Gentlemen:

You have requested our opinion, as counsel to First Investors Cash
Management Fund, Inc. ("Company"), as to certain matters regarding the issuance
of Shares of the Company. As used in this letter, the term "Shares" means the
Class A and Class B shares of common stock of the Company, during the time that
Post-Effective Amendment No. 26 to the Company's Registration Statement on Form
N-1A ("PEA") is effective and has not been superseded by another post-effective
amendment.

As such counsel, we have examined certified or other copies, believed by us
to be genuine, of the Company's Articles of Incorporation and By-laws and such
resolutions and minutes of the meetings of Company's Board of Directors as we
have deemed relevant to our opinion, as set forth herein. Our opinion is limited
to the laws and facts in existence on the date hereof, and it is further limited
to the laws (other than the conflict of law rules) in the State of Maryland that
in our experience are normally applicable to the issuance of shares by
corporations and to the Securities Act of 1933 ("1933 Act"), the Investment
Company Act of 1940 ("1940 Act") and the regulations of the Securities and
Exchange Commission ("SEC") thereunder.

Based on the foregoing, we are of the opinion that the issuance of the
Shares has been duly authorized by the Company and that, when sold in accordance
with the terms contemplated by the PEA, including receipt by the Company of full
payment for the Shares and compliance with the 1933 Act and the 1940 Act, the
Shares will have been validly issued, fully paid and non-assessable.

We hereby consent to this opinion accompanying the PEA when it is filed
with the SEC and to the reference to our

<PAGE>

firm in the prospectus that is being filed as part of the PEA.

Very truly yours,

KIRKPATRICK & LOCKHART LLP

By: /s/ Robert J. Zutz
----------------------
Robert J. Zutz

Consent of Independent Certified Public Accountants

First Investors Cash Management Fund, Inc.
95 Wall Street
New York, New York 10005

We consent to the use in Post-Effective Amendment No. 26 to the
Registration Statement on Form N-1A (File No. 2-62347) of our report dated
January 30, 1998 relating to the December 31, 1997 financial statements of First
Investors Cash Management Fund, Inc., which are included in said Registration
Statement.

/s/Tait Weller & Baker
----------------------

TAIT, WELLER & BAKER

Philadelphia, Pennsylvania
April 20, 1998

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