SEI TAX EXEMPT TRUST, 485APOS, 2000-10-13

SEI TAX EXEMPT TRUST
485APOS, 2000-10-13

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<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 13, 2000
FILE NO. 2-76990
FILE NO. 811-3447
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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

FORM N-1A

REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933 / /
POST-EFFECTIVE AMENDMENT NO. 46 /X/
AND
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 / /
AMENDMENT NO. 48 /X/

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

SEI TAX EXEMPT TRUST
(Exact Name of Registrant as Specified in Charter)

C/O CT CORPORATION
101 Federal Street
Boston, Massachusetts 02110
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code (800) 342-5734

EDWARD D. LOUGHLIN
c/o SEI Investments Company
Oaks, Pennsylvania 19456
(Name and Address of Agent for Service)

COPIES TO:

Richard W. Grant, Esquire John H. Grady, Jr., Esquire
Morgan, Lewis & Bockius LLP Morgan, Lewis & Bockius LLP
1701 Market Street 1701 Market Street
Philadelphia, Pennsylvania 19103 Philadelphia, Pennsylvania 19103

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

Title of Securities Being Registered...Units of Beneficial Interest

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

It is proposed that the filing will become effective (check appropriate box)

<TABLE>
<C> <S>
/ / Immediately upon filing pursuant to paragraph (b), or
/ / On [date], pursuant to paragraph (b), or
/X/ 75 days after filing pursuant to paragraph (a)(2), or
/ / On [date] pursuant to paragraph (a) of Rule 485
</TABLE>

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<PAGE>

SEI TAX EXEMPT TRUST

CLASS A SHARES

PROSPECTUS

DECEMBER 31, 2000

MASSACHUSETTS TAX FREE MONEY MARKET FUND

ADVISER:
SEI INVESTMENTS MANAGEMENT CORPORATION

SUB-ADVISER

[ ]
----

THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.

Page 1 of 12
<PAGE>

ABOUT THIS PROSPECTUS

SEI Tax Exempt Trust is a mutual fund family that offers different classes of
shares in separate investment portfolios (Funds). This prospectus gives you
important information about Class A Shares of the Massachusetts Tax Free Money
Market Fund that you should know before investing. Please read this prospectus
and keep it for future reference.

THIS PROSPECTUS HAS BEEN ARRANGED INTO DIFFERENT SECTIONS SO THAT YOU CAN EASILY
REVIEW THIS IMPORTANT INFORMATION. ON THE NEXT PAGE, THERE IS SOME GENERAL
INFORMATION YOU SHOULD KNOW ABOUT RISK AND RETURN. FOR MORE DETAILED INFORMATION
ABOUT THE FUND, PLEASE SEE:

<TABLE>
<CAPTION>
PAGE
<S> <C>
PRINCIPAL INVESTMENT STRATEGIES AND RISKS,
PERFORMANCE INFORMATION AND EXPENSES..........................................XXX
MORE INFORMATION ABOUT FUND INVESTMENTS............................................XXX
THE INVESTMENT ADVISER AND SUB-ADVISER.............................................XXX
PURCHASING AND SELLING FUND SHARES.................................................XXX
DIVIDENDS AND DISTRIBUTIONS........................................................XXX
TAXES..............................................................................XXX
HOW TO OBTAIN MORE INFORMATION ABOUT
SEI TAX EXEMPT TRUST...........................................................Back Cover
</TABLE>

MUNICIPAL SECURITIES

The Fund invests primarily in municipal securities. Municipal securities are
bonds and other fixed income securities issued by state and local governments
and their agencies (such as housing or hospital authorities) to finance capital
expenditures and operations. The obligation to pay principal and interest on
municipal securities may be a general obligation of the state or local
government, but may be supported only by an agency or a particular source of
revenues. Therefore, municipal securities vary in credit quality.

Generally, the income from municipal securities is exempt from Federal income
tax, and also may be exempt from certain state or local tax depending on an
investor's state of residence. Even so, income from certain obligations may be
subject to Federal alternative minimum tax.

Page 2 of 12
<PAGE>

RISK/RETURN INFORMATION

The Massachusetts Tax Free Money Market Fund is a mutual fund. A mutual fund
pools shareholders' money and, using professional investment managers, invests
it in securities.

The Fund has an investment goal and strategies for reaching that goal. The
Fund's assets are managed under the direction of SEI Investments Management
Corporation (SIMC) and one or more Sub-Advisers who manage portions of the
Fund's assets in a way that they believe will help the Fund achieve its goal.
No matter how good a job SIMC and the Sub-Advisers do, you could lose money
on your investment in the Fund, just as you could with other investments. A
Fund share is not a bank deposit, and it is not insured or guaranteed by the
FDIC or any government agency.

ALTHOUGH THE FUND IS MANAGED TO MAINTAIN A CONSTANT PRICE PER SHARE OF
$1.00, IT IS POSSIBLE TO LOSE MONEY BY INVESTING IN THE FUND.

Page 3 of 12
<PAGE>

MASSACHUSETTS TAX FREE MONEY MARKET FUND

INVESTMENT SUMMARY

INVESTMENT GOAL Preserving principal and maintaining
liquidity while providing current income
exempt from Federal and Massachusetts
personal income taxes

SHARE PRICE VOLATILITY Very low

PRINCIPAL INVESTMENT STRATEGY Utilizing an adviser experienced in
selecting municipal securities, the Fund
invests in high quality, short-term
Massachusetts municipal money market
securities

INVESTMENT STRATEGY

The Massachusetts Tax Free Money Market Fund invests substantially all (at least
80%) of its assets in municipal money market securities that pay interest that
is exempt from Federal and Massachusetts income taxes. The principal issuers of
these securities are state and local governments and agencies located in
Massachusetts, as well as Puerto Rico and other U.S. territories and
possessions.

The Adviser purchases liquid securities with appropriate maturities that offer
competitive yields, and that are issued by financially sound issuers. The
Adviser also considers sector allocation and relative valuations in selecting
securities for the Fund.

The Fund invests in high quality, short-term debt securities, commonly known as
money market instruments. These include municipal bonds, notes and tax exempt
commercial paper, as well as certain taxable securities and repurchase
agreements. The Fund may, to a limited extent, invest in securities subject to
the alternative minimum tax or in taxable municipal securities. The Fund follows
strict Securities and Exchange Commission ("SEC") rules about the credit risk,
maturity and diversification of its investments.

WHAT ARE THE RISKS OF INVESTING IN THE FUND?

An investment in the Fund is subject to income risk, which is the possibility
that the Fund's yield will decline due to falling interest rates. Municipal
securities, like other fixed income securities, rise and fall in value in
response to economic and market factors, primarily changes in interest rates,
and actual or perceived credit quality. Rising interest rates will generally
cause municipal securities to decline in value. A strategy to invest in
investment grade securities reduces but does not eliminate this risk.

State and local governments rely on taxes and, to some extent, revenues from
private projects financed by municipal securities to pay interest and principal
on municipal debt. There may be economic or political changes that impact the
ability of issuers of Massachusetts municipal securities to repay principal and
to make interest payments on securities owned by the Fund. Changes to the
financial condition of Massachusetts municipal issuers also may adversely affect
the value of the Fund's securities. For example, financial difficulties of the
State, its counties, municipalities and school districts that hinder efforts to
borrow and lower credit ratings are factors which may affect the Fund. In
addition, actual or perceived erosion of the credit-worthiness of Massachusetts
municipal issuers may reduce the value of the Fund's holdings. As a result, the
Fund will be more susceptible to factors which adversely affect issuers of

Page 4 of 12
<PAGE>

Massachusetts obligations than a mutual fund which does not have as great a
concentration in Massachusetts municipal obligations.

Since the Fund often purchases securities supported by credit enhancements from
banks and other financial institutions, changes in the credit quality of these
institutions could cause losses to the Fund and affect its share price.

A Fund share is not a bank deposit and is not insured or guaranteed by the
FDIC or any government agency. In addition, although a money market fund
seeks to keep a constant price per share of $1.00, you may lose money by
investing in the Fund.

PERFORMANCE INFORMATION

As of December 31, 2000, the Fund had not commenced operations, and did not
have a performance history.

FUND FEES AND EXPENSES

THIS TABLE DESCRIBES THE FEES AND EXPENSES THAT YOU MAY PAY IF YOU BUY AND HOLD
FUND SHARES.

ANNUAL FUND OPERATING EXPENSES (EXPENSES DEDUCTED FROM FUND ASSETS)

<TABLE>
<CAPTION>
CLASS A SHARES
---------------------------------------------------------------------
<S> <C>
Investment Advisory Fees X.XX%
Distribution (12b-1) Fees None
Other Expenses X.XX%*
-------
Total Annual Fund Operating Expenses X.XX%**
</TABLE>
--------------------------------------------------------------------------------
* Other expenses are based on estimated amounts for the current fiscal year.
** The Fund's total actual annual fund operating expenses for the current
fiscal year are expected to be less than the amount shown above because the
Administrator and Distributor are each voluntarily waiving a portion of
their fees in order to keep total operating expenses at a specified level.
The Administrator and/or Distributor may discontinue all or part of these
waivers at any time. With these fee waivers, the Fund's actual total
operating expenses are expected to be X.XX%.

For more information about these fees, see "Investment Adviser and Sub-Adviser"
and "Distribution of Fund Shares."

Page 5 of 12
<PAGE>

EXAMPLE

This Example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds. The Example assumes that you
invest $10,000 in the Fund for the time periods indicated and that you sell your
shares at the end of the period. The Example also assumes that each year your
investment has a 5% return, Fund operating expenses remain the same and you
reinvest all dividends and distributions. Although your actual costs and returns
might be different, your approximate costs of investing $10,000 in the Fund
would be:

1 YEAR 3 YEARS
$XXX $XXX

Page 6 of 12
<PAGE>

MORE INFORMATION ABOUT FUND INVESTMENTS

This prospectus describes the Fund's primary investment strategies. The Fund may
invest in other securities, use other strategies and engage in other investment
practices, which are described in detail in the Fund's Statement of Additional
Information (SAI).

The investments and strategies described in this prospectus are those that the
Fund uses under normal conditions. During unusual economic or market conditions,
or for temporary defensive or liquidity purposes, the Fund may invest up to 100%
of its assets in cash or cash equivalents that would not ordinarily be
consistent with the Fund's objective. Of course, there is no guarantee that the
Fund will achieve its investment goal.

INVESTMENT ADVISER AND SUB-ADVISER

The Investment Adviser makes investment decisions for the Fund and continuously
reviews, supervises and administers the Fund's investment program. The Board of
Trustees supervises the Adviser and establishes policies that the Adviser must
follow in its management activities.

The Investment Adviser oversees the Sub-Advisers to ensure compliance with the
Fund's investment policies and guidelines, and monitors each Sub-Advisers
adherence to its investment style. The Adviser pays the Sub-Advisers out of the
Investment Advisory fees it receives (described below).

SEI Investments Management Corporation (SIMC) acts as the manager of managers of
the Fund, and is responsible for the investment performance of the Fund since it
allocates the Fund's assets to one or more Sub-Advisers and recommends hiring or
changing Sub-Advisers to the Board of Trustees.

Each Sub-Adviser makes investment decisions for the assets they manage and
continuously review, supervise and administer their investment program. SIMC
oversees the Sub-Advisers to ensure compliance with the Fund's investment
policies and guidelines, and monitors each Sub-Advisers adherence to its
investment style. The Board of Trustees supervises SIMC and the Sub-Advisers;
establishes policies that they must follow in their management activities; and
oversees the hiring and termination of the Sub-Advisers recommended by SIMC.
SIMC pays the Sub-Advisers out of the investment advisory fees it receives.

SIMC, an SEC-registered adviser, serves as the Adviser to the Fund. As of ___,
2000, SIMC had approximately $___billion in assets under management. It is
expected that SIMC will receive investment advisory fees [after fee waivers] of
X.XX% of the average daily net assets of the Massachusetts Tax Free Money Market
Fund.

SUB-ADVISER

[________] manages the Massachusetts Tax Free Money Market Fund on a day-to-day
basis. [_________] selects, buys and sells securities for the Massachusetts Tax
Free Money Market Fund under the supervision of the Adviser and the Board of
Trustees.

Page 7 of 12
<PAGE>

PURCHASING AND SELLING FUND SHARES

This section tells you how to purchase or sell (sometimes called "redeem")
shares of the Fund. The Fund offers Class A Shares only to financial
institutions or intermediaries for their own or their customers' accounts. For
information on how to open an account and set up procedures for placing
transactions, please call 1-800-DIAL-SEI.

HOW TO PURCHASE FUND SHARES

You may purchase shares on any day that the New York Stock Exchange (NYSE) is
open for business (a Business Day). However, Fund shares cannot be purchased by
Federal Reserve wire on federal holidays on which wire transfers are restricted.

Financial institutions and intermediaries may purchase Class A Shares by placing
orders with the Fund's Transfer Agent (or its authorized agent). Institutions
and intermediaries that use certain SEI proprietary systems may place orders
electronically through those systems. Cash investments must be transmitted or
delivered in federal funds to the Fund's wire agent by the close of business on
the same day the order is placed.

When you purchase or sell Fund shares through certain financial institutions
(rather than directly from the Fund), you may have to transmit your purchase and
sale requests to your financial institution at an earlier time for your
transaction to become effective that day. This allows your financial institution
time to process your requests and transmit them to the Fund.

Certain other intermediaries, including certain broker-dealers and shareholder
organizations, are authorized to accept purchase and redemption requests for
Fund shares. These requests are normally executed at the net asset value per
share (NAV) next determined after the intermediary receives the request. These
authorized intermediaries are responsible for transmitting requests and
delivering funds on a timely basis.

If you deal directly with a financial institution or financial intermediary, you
will have to follow the institution's or intermediary's procedures for
transacting with the Fund. For more information about how to purchase or sell
Fund shares through your financial institution, you should contact your
financial institution directly. You may be charged a fee for purchase and/or
redemption transactions effectuated through certain broker-dealers or other
financial intermediaries.

The Fund calculates its NAV once each Business Day at 2:00 p.m., Eastern time.
So, for you to be eligible to receive dividends declared on the day you submit
your purchase order, the Fund generally must receive your purchase order in
proper form before 2:00 p.m., Eastern time and federal funds (readily available
funds) before 2:00 p.m., Eastern time.

HOW THE FUND CALCULATES NAV

NAV for one Fund share is the value of that share's portion of all of the net
assets in the Fund.

In calculating NAV for the Massachusetts Tax Free Money Market Fund, the Fund
values the Fund's investment Fund using the amortized cost valuation method,
which is described in detail in the SAI. If this method is determined to be
unreliable

Page 8 of 12
<PAGE>

during certain market conditions or for other reasons, a Fund may value its Fund
at market price or fair value prices may be determined in good faith using
methods approved by the Board of Trustees.

HOW TO SELL YOUR FUND SHARES

If you hold Class A Shares, you may sell your shares on any Business Day by
following procedures established when you opened your account or accounts. If
you have questions, call 1-800-DIAL-SEI. If you own shares through an account
with a broker or other institution, contact that broker or institution to sell
your shares. Your financial institution or intermediary may charge a fee for its
services. The sale price of each share will be the next NAV determined after the
Fund or its authorized intermediary receives your request.

RECEIVING YOUR MONEY

Normally, the Fund will make payment on your sale as promptly as possible after
it receives your request, but it may take up to three Business Days. Your
proceeds will be wired to your bank account.

REDEMPTIONS IN KIND

The Fund generally pays sale (redemption) proceeds in cash. However, under
unusual conditions that make the payment of cash unwise (and for the protection
of the Fund's remaining shareholders) the Fund might pay all or part of your
redemption proceeds in liquid securities with a market value equal to the
redemption price (redemption in kind). Although it is highly unlikely that your
shares would ever be redeemed in kind, you would probably have to pay brokerage
costs to sell the securities distributed to you, as well as taxes on any capital
gains from the sale as with any redemption.

SUSPENSION OF YOUR RIGHT TO SELL YOUR SHARES

The Fund may suspend your right to sell your shares if the NYSE restricts
trading, the SEC declares an emergency or for other reasons. More information
about this is in the SAI.

TELEPHONE TRANSACTIONS

Purchasing and selling Fund shares over the telephone is extremely convenient,
but not without risk. Although the Fund has certain safeguards and procedures to
confirm the identity of callers and the authenticity of instructions, the Fund
is not responsible for any losses or costs incurred by following telephone
instructions the Fund reasonably believes to be genuine. If you or your
financial institution transact with the Fund over the telephone, you will
generally bear the risk of any loss.

DISTRIBUTION OF FUND SHARES

SEI Investments Distribution Co. (SIDCo.) is the distributor of the shares of
the Fund. SIDCo. receives no compensation for distributing the Fund's Class A
Shares.

For Class A Shares, shareholder servicing fees, as a percentage of average daily
net assets, may be up to 0.25%. The Distributor has voluntarily agreed to waive
the shareholder servicing fees

Page 9 of 12
<PAGE>

applicable to Class A Shares of the Fund. The Distributor has no current
intention to discontinue this voluntary waiver.

DIVIDENDS AND DISTRIBUTIONS

The Fund declares dividends daily and distributes its income monthly. The Fund
makes distributions of capital gains, if any, at least annually.

You will receive dividends and distributions in the form of cash unless
otherwise stated.

TAXES

PLEASE CONSULT YOUR TAX ADVISOR REGARDING YOUR SPECIFIC QUESTIONS ABOUT FEDERAL,
STATE AND LOCAL INCOME TAXES. Below, the Fund has summarized some important tax
issues that affect the Fund and its shareholders. This summary is based on
current tax laws, which may change.

The Fund will distribute substantially all of its income and capital gains, if
any. The dividends and distributions you receive may be subject to federal,
state and local taxation, depending upon your tax situation. If so, they are
taxable whether or not you reinvest them. Income distributions are generally
taxable at ordinary interest rates. Capital gains distributions are generally
taxable at the rates applicable to long-term capital gains. EACH SALE OF FUND
SHARES IS A TAXABLE EVENT.

The Fund intends to distribute federally tax-exempt income. The Fund also
intends to distribute income that is exempt from Massachusetts state income
taxes. The Fund may invest a portion of its assets in securities that generate
income that is subject to Federal or state income taxes. Income exempt from
Federal tax may be subject to state and local taxes. Any capital gains
distributed by the Fund may be taxable.

The Fund is not liable for any income or franchise taxes in the Commonwealth of
Massachusetts as long as it qualifies as a regulated investment company under
Federal tax law.

MORE INFORMATION ABOUT TAXES IS IN THE FUND'S SAI.

Page 10 of 12
<PAGE>

SEI TAX EXEMPT TRUST

INVESTMENT ADVISER

SEI Investments Management Corporation
One Freedom Valley Drive
Oaks, PA 19456

SUB-ADVISER
[ ]
-------

DISTRIBUTOR

SEI Investments Distribution Co.
One Freedom Valley Drive
Oaks, PA 19456

LEGAL COUNSEL

Morgan, Lewis & Bockius LLP

More information about the Fund is available without charge through the
following:

STATEMENT OF ADDITIONAL INFORMATION (SAI)

The SAI dated December 31, 2000, includes detailed information about SEI Tax
Exempt Trust. The SAI is on file with the SEC and is incorporated by
reference into this prospectus. This means that the SAI, for legal purposes,
is a part of this prospectus.

ANNUAL AND SEMI-ANNUAL REPORTS

These reports list the Fund's holdings and contain information from the Fund's
managers about fund strategies, and market conditions and trends and their
impact on Fund performance. The reports also contain detailed financial
information about the Fund.

TO OBTAIN AN SAI, ANNUAL OR SEMI-ANNUAL REPORT, OR MORE INFORMATION:

BY TELEPHONE: Call 1-800-DIAL-SEI

BY MAIL: Write to the Fund at:

One Freedom Valley Drive
Oaks, PA 19456

BY INTERNET: http://www.seic.com

Page 11 of 12
<PAGE>

FROM THE SEC: You can also obtain the SAI or the Annual and Semi-Annual Reports,
as well as other information about SEI Tax Exempt Trust, from the EDGAR Database
on the SEC's website ("http://www.sec.gov"). You may review and copy documents
at the SEC Public Reference Room in Washington, DC (for information on the
operation of the Public Reference Room, call 1-202-942-8090). You may request
documents by mail from the SEC, upon payment of a duplicating fee, by writing
to: Securities and Exchange Commission, Public Reference Section, Washington, DC
20549-0102. You may also obtain this information, upon payment of a duplicating
fee, by e-mailing the SEC at the following address: [email protected].

The Trust's Investment Company Act registration number is 811-3447.

Page 12 of 12

<PAGE>

SEI TAX EXEMPT TRUST

CLASS B SHARES

PROSPECTUS

DECEMBER 31, 2000

MASSACHUSETTS TAX FREE MONEY MARKET FUND

ADVISER:
SEI INVESTMENTS MANAGEMENT CORPORATION

SUB-ADVISER
[ ---- ]

THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.

Page 1 of 12
<PAGE>

ABOUT THIS PROSPECTUS

SEI Tax Exempt Trust is a mutual fund family that offers different classes of
shares in separate investment portfolios (Funds). This prospectus gives you
important information about Class B Shares of the Massachusetts Tax Free Money
Market Fund that you should know before investing. Please read this prospectus
and keep it for future reference.

<TABLE>

PAGE
<S> <C>
PRINCIPAL INVESTMENT STRATEGIES AND RISKS,
PERFORMANCE INFORMATION AND EXPENSES.................................XXX
MORE INFORMATION ABOUT FUND INVESTMENTS...................................XXX
THE INVESTMENT ADVISER AND SUB-ADVISER....................................XXX
PURCHASING AND SELLING FUND SHARES........................................XXX
DIVIDENDS AND DISTRIBUTIONS...............................................XXX
TAXES.....................................................................XXX
HOW TO OBTAIN MORE INFORMATION ABOUT
SEI TAX EXEMPT TRUST................................................Back Cover
</TABLE>

MUNICIPAL SECURITIES

Page 2 of 12
<PAGE>

RISK/RETURN INFORMATION

The Massachusetts Tax Free Money Market Fund is a mutual fund. A mutual fund
pools shareholders' money and, using professional investment managers, invests
it in securities.

ALTHOUGH THE FUND IS MANAGED TO MAINTAIN A CONSTANT PRICE PER SHARE OF $1.00,
IT IS POSSIBLE TO LOSE MONEY BY INVESTING IN THE FUND.

Page 3 of 12
<PAGE>

MASSACHUSETTS TAX FREE MONEY MARKET FUND

INVESTMENT SUMMARY

<TABLE>
<S> <C>
INVESTMENT GOAL Preserving principal and maintaining liquidity while
providing current income exempt from Federal and
Massachusetts personal income taxes

SHARE PRICE VOLATILITY Very low

PRINCIPAL INVESTMENT STRATEGY Utilizing an adviser experienced in selecting
municipal securities, the Fund invests in high
quality, short-term Massachusetts municipal money
market securities
</TABLE>

INVESTMENT STRATEGY

WHAT ARE THE RISKS OF INVESTING IN THE FUND?

Page 4 of 12
<PAGE>

Massachusetts obligations than a mutual fund which does not have as great a
concentration in Massachusetts municipal obligations.

PERFORMANCE INFORMATION

As of December 31, 2000, the Fund had not commenced operations, and did not have
a performance history.

FUND FEES AND EXPENSES

THIS TABLE DESCRIBES THE FEES AND EXPENSES THAT YOU MAY PAY IF YOU BUY AND HOLD
FUND SHARES.

ANNUAL FUND OPERATING EXPENSES (EXPENSES DEDUCTED FROM FUND ASSETS)

CLASS B SHARES
---------------------------------------------------------------------
Investment Advisory Fees X.XX%
Distribution (12b-1) Fees None
Other Expenses X.XX%*
Total Annual Fund Operating Expenses X.XX%**
-------------------------------------------------------------------------------
* Other expenses are based on estimated amounts for the current fiscal year.
** The Fund's total actual annual fund operating expenses for the most
recent fiscal year are expected to be less than the amount shown above
because the Administrator and Distributor are each voluntarily waiving a
portion of their fees in order to keep total operating expenses at a
specified level. The Administrator and/or Distributor may discontinue all
or part of these waivers at any time. With these fee waivers, the Fund's
actual total operating expenses are expected to be X.XX%.

For more information about these fees, see "Investment Adviser and Sub-Adviser"
and "Distribution of Fund Shares."

Page 5 of 12
<PAGE>

EXAMPLE

1 YEAR 3 YEARS
$XXX $XXX

Page 6 of 12
<PAGE>

MORE INFORMATION ABOUT FUND INVESTMENTS

INVESTMENT ADVISER AND SUB-ADVISER

SUB-ADVISER

Page 7 of 12
<PAGE>

PURCHASING AND SELLING FUND SHARES

This section tells you how to purchase or sell (sometimes called "redeem")
shares of the Fund. The Fund offers Class B Shares only to financial
institutions or intermediaries for their own or their customers' accounts. For
information on how to open an account and set up procedures for placing
transactions, please call 1-800-DIAL-SEI.

HOW TO PURCHASE FUND SHARES

HOW THE FUND CALCULATES NAV

NAV for one Fund share is the value of that share's portion of all of the net
assets in the Fund.

Page 8 of 12
<PAGE>

during certain market conditions or for other reasons, a Fund may value its Fund
at market price or fair value prices may be determined in good faith using
methods approved by the Board of Trustees.

HOW TO SELL YOUR FUND SHARES

RECEIVING YOUR MONEY

Normally, the Fund will make payment on your sale as promptly as possible after
it receives your request, but it may take up to three Business Days. Your
proceeds will be wired to your bank account.

REDEMPTIONS IN KIND

SUSPENSION OF YOUR RIGHT TO SELL YOUR SHARES

The Fund may suspend your right to sell your shares if the NYSE restricts
trading, the SEC declares an emergency or for other reasons. More information
about this is in the SAI.

TELEPHONE TRANSACTIONS

DISTRIBUTION OF FUND SHARES

SEI Investments Distribution Co. (SIDCo.) is the distributor of the shares of
the Fund.

For Class B Shares, shareholder servicing fees and administrative service fees,
as a percentage of average daily net assets, may be up to 0.25% and 0.05%,
respectively.

Page 9 of 12
<PAGE>

DIVIDENDS AND DISTRIBUTIONS

The Fund declares dividends daily and distributes its income monthly. The Fund
makes distributions of capital gains, if any, at least annually.

You will receive dividends and distributions in the form of cash unless
otherwise stated.

TAXES

The Fund is not liable for any income or franchise taxes in the Commonwealth of
Massachusetts as long as it qualifies as a regulated investment company under
Federal tax law.

MORE INFORMATION ABOUT TAXES IS IN THE FUND'S SAI.

Page 10 of 12
<PAGE>

SEI TAX EXEMPT TRUST

INVESTMENT ADVISER

SEI Investments Management Corporation
One Freedom Valley Drive
Oaks, PA 19456

SUB-ADVISER
[ ------- ]

DISTRIBUTOR

SEI Investments Distribution Co.
One Freedom Valley Drive
Oaks, PA 19456

LEGAL COUNSEL

Morgan, Lewis & Bockius LLP

More information about the Fund is available without charge through the
following:

STATEMENT OF ADDITIONAL INFORMATION (SAI)

ANNUAL AND SEMI-ANNUAL REPORTS

TO OBTAIN AN SAI, ANNUAL OR SEMI-ANNUAL REPORT, OR MORE INFORMATION:

BY TELEPHONE: Call 1-800-DIAL-SEI

BY MAIL: Write to the Fund at:

One Freedom Valley Drive
Oaks, PA 19456

BY INTERNET: http://www.seic.com

Page 11 of 12
<PAGE>

The Trust's Investment Company Act registration number is 811-3447.

Page 12 of 12

<PAGE>

SEI TAX EXEMPT TRUST

CLASS C SHARES

PROSPECTUS

DECEMBER 31, 2000

MASSACHUSETTS TAX FREE MONEY MARKET FUND

ADVISER:
SEI INVESTMENTS MANAGEMENT CORPORATION

SUB-ADVISER
[ ---- ]

THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.

Page 1 of 12
<PAGE>

ABOUT THIS PROSPECTUS

SEI Tax Exempt Trust is a mutual fund family that offers different classes of
shares in separate investment portfolios (Funds). This prospectus gives you
important information about Class C Shares of the Massachusetts Tax Free Money
Market Fund that you should know before investing. Please read this prospectus
and keep it for future reference.

<TABLE>

PAGE
<S> <C>
PRINCIPAL INVESTMENT STRATEGIES AND RISKS,
PERFORMANCE INFORMATION AND EXPENSES..................................XXX
MORE INFORMATION ABOUT FUND INVESTMENTS....................................XXX
THE INVESTMENT ADVISER AND SUB-ADVISER.....................................XXX
PURCHASING AND SELLING FUND SHARES.........................................XXX
DIVIDENDS AND DISTRIBUTIONS................................................XXX
TAXES......................................................................XXX
HOW TO OBTAIN MORE INFORMATION ABOUT
SEI TAX EXEMPT TRUST.................................................Back Cover
</TABLE>

MUNICIPAL SECURITIES

Page 2 of 12
<PAGE>

RISK/RETURN INFORMATION

The Massachusetts Tax Free Money Market Fund is a mutual fund. A mutual fund
pools shareholders' money and, using professional investment managers, invests
it in securities.

ALTHOUGH THE FUND IS MANAGED TO MAINTAIN A CONSTANT PRICE PER SHARE OF $1.00,
IT IS POSSIBLE TO LOSE MONEY BY INVESTING IN THE FUND.

Page 3 of 12
<PAGE>

MASSACHUSETTS TAX FREE MONEY MARKET FUND

INVESTMENT SUMMARY

<TABLE>
<S> <C>
INVESTMENT GOAL Preserving principal and maintaining liquidity while
providing current income exempt from Federal and
Massachusetts personal income taxes

SHARE PRICE VOLATILITY Very low

PRINCIPAL INVESTMENT STRATEGY Utilizing an adviser experienced in selecting
municipal securities, the Fund invests in high
quality, short-term Massachusetts municipal money
market securities
</TABLE>

INVESTMENT STRATEGY

WHAT ARE THE RISKS OF INVESTING IN THE FUND?

Page 4 of 12
<PAGE>

Massachusetts obligations than a mutual fund which does not have as great a
concentration in Massachusetts municipal obligations.

PERFORMANCE INFORMATION

As of December 31, 2000, the Fund had not commenced operations, and did not have
a performance history.

FUND FEES AND EXPENSES

THIS TABLE DESCRIBES THE FEES AND EXPENSES THAT YOU MAY PAY IF YOU BUY AND HOLD
FUND SHARES.

ANNUAL FUND OPERATING EXPENSES (EXPENSES DEDUCTED FROM FUND ASSETS)

CLASS C SHARES
---------------------------------------------------------------------
Investment Advisory Fees X.XX%
Distribution (12b-1) Fees None
Other Expenses X.XX%*
----
Total Annual Fund Operating Expenses X.XX%**
-------------------------------------------------------------------------------
* Other expenses are based on estimated amounts for the current fiscal year.
** The Fund's total actual annual fund operating expenses for the most
recent fiscal year are expected to be less than the amount shown above
because the Administrator and Distributor are each voluntarily waiving a
portion of their fees in order to keep total operating expenses at a
specified level. The Administrator and/or Distributor may discontinue all
or part of these waivers at any time. With these fee waivers, the Fund's
actual total operating expenses are expected to be X.XX%.

For more information about these fees, see "Investment Adviser and Sub-Adviser"
and "Distribution of Fund Shares."

Page 5 of 12
<PAGE>

EXAMPLE

1 YEAR 3 YEARS
$XXX $XXX

Page 6 of 12
<PAGE>

MORE INFORMATION ABOUT FUND INVESTMENTS

INVESTMENT ADVISER AND SUB-ADVISER

SUB-ADVISER

Page 7 of 12
<PAGE>

PURCHASING AND SELLING FUND SHARES

This section tells you how to purchase or sell (sometimes called "redeem")
shares of the Fund. The Fund offers Class C Shares only to financial
institutions or intermediaries for their own or their customers' accounts. For
information on how to open an account and set up procedures for placing
transactions, please call 1-800-DIAL-SEI.

HOW TO PURCHASE FUND SHARES

Financial institutions and intermediaries may purchase Class C Shares by placing
orders with the Fund's Transfer Agent (or its authorized agent). Institutions
and intermediaries that use certain SEI proprietary systems may place orders
electronically through those systems. Cash investments must be transmitted or
delivered in federal funds to the Fund's wire agent by the close of business on
the same day the order is placed.

HOW THE FUND CALCULATES NAV

NAV for one Fund share is the value of that share's portion of all of the net
assets in the Fund.

Page 8 of 12
<PAGE>

during certain market conditions or for other reasons, a Fund may value its Fund
at market price or fair value prices may be determined in good faith using
methods approved by the Board of Trustees.

HOW TO SELL YOUR FUND SHARES

RECEIVING YOUR MONEY

Normally, the Fund will make payment on your sale as promptly as possible after
it receives your request, but it may take up to three Business Days. Your
proceeds will be wired to your bank account.

REDEMPTIONS IN KIND

SUSPENSION OF YOUR RIGHT TO SELL YOUR SHARES

The Fund may suspend your right to sell your shares if the NYSE restricts
trading, the SEC declares an emergency or for other reasons. More information
about this is in the SAI.

TELEPHONE TRANSACTIONS

DISTRIBUTION OF FUND SHARES

SEI Investments Distribution Co. (SIDCo.) is the distributor of the shares of
the Fund.

For Class C Shares, shareholder servicing fees and administrative service fees,
as a percentage of average daily net assets, may be up to 0.25% and 0.25%,
respectively.

Page 9 of 12
<PAGE>

DIVIDENDS AND DISTRIBUTIONS

The Fund declares dividends daily and distributes its income monthly. The Fund
makes distributions of capital gains, if any, at least annually.

You will receive dividends and distributions in the form of cash unless
otherwise stated.

TAXES

The Fund is not liable for any income or franchise taxes in the Commonwealth of
Massachusetts as long as it qualifies as a regulated investment company under
Federal tax law.

MORE INFORMATION ABOUT TAXES IS IN THE FUND'S SAI.

Page 10 of 12
<PAGE>

SEI TAX EXEMPT TRUST

INVESTMENT ADVISER

SEI Investments Management Corporation
One Freedom Valley Drive
Oaks, PA 19456

SUB-ADVISER
[ ------- ]

DISTRIBUTOR

SEI Investments Distribution Co.
One Freedom Valley Drive
Oaks, PA 19456

LEGAL COUNSEL

Morgan, Lewis & Bockius LLP

More information about the Fund is available without charge through the
following:

STATEMENT OF ADDITIONAL INFORMATION (SAI)

ANNUAL AND SEMI-ANNUAL REPORTS

TO OBTAIN AN SAI, ANNUAL OR SEMI-ANNUAL REPORT, OR MORE INFORMATION:

BY TELEPHONE: Call 1-800-DIAL-SEI

BY MAIL: Write to the Fund at:

One Freedom Valley Drive
Oaks, PA 19456

BY INTERNET: http://www.seic.com

Page 11 of 12
<PAGE>

The Trust's Investment Company Act registration number is 811-3447.

Page 12 of 12

<PAGE>

SEI TAX EXEMPT TRUST

CLASS B SHARES

PROSPECTUS

DECEMBER 31, 2000

PENNSYLVANIA MUNICIPAL BOND FUND

ADVISER:
SEI INVESTMENTS MANAGEMENT CORPORATION

SUB-ADVISER
DEUTSCHE ASSET MANAGEMENT INC.

THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED
THESE SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

Page 1 of 14
<PAGE>

ABOUT THIS PROSPECTUS

SEI Tax Exempt Trust is a mutual fund that offers different classes of shares in
separate investment portfolios (Funds). This prospectus gives you important
information about the Class B Shares of the Pennsylvania Municipal Bond Fund
that you should know before investing. Please read this prospectus and keep it
for future reference.

<TABLE>
PAGE
<S><C> <C> <C>
PRINCIPAL INVESTMENT STRATEGIES AND RISKS,
PERFORMANCE INFORMATION AND EXPENSES..........................................XXX
MORE INFORMATION ABOUT FUND INVESTMENTS............................................XXX
THE INVESTMENT ADVISER AND SUB-ADVISER.............................................XXX
PURCHASING AND SELLING FUND SHARES.................................................XXX
DIVIDENDS AND DISTRIBUTIONS........................................................XXX
TAXES..............................................................................XXX
FINANCIAL HIGHLIGHTS...............................................................XXX
HOW TO OBTAIN MORE INFORMATION ABOUT
SEI TAX EXEMPT TRUST...........................................................Back Cover
</TABLE>

MUNICIPAL SECURITIES

Page 2 of 14
<PAGE>

RISK/RETURN INFORMATION

The Fund is a mutual fund. A mutual fund pools shareholders' money and, using
professional investment managers, invests it in securities.

The Fund has its own investment goal and strategies for reaching that goal.
The Fund's assets are managed under the direction of SEI Investments
Management Corporation (SIMC) and one or more Sub-Advisers who manage
portions of the Fund's assets in a way that they believe will help the Fund
achieve its goal. No matter how good a job SIMC and the Sub-Advisers do, you
could lose money on your investment in the Fund, just as you could with other
investments. A Fund share is not a bank deposit and it is not insured or
guaranteed by the FDIC or any other government agency.

The value of your investment in the Fund is based on the market prices of the
securities the Fund holds. These prices change daily due to economic and other
events that affect particular companies and other issuers. These price
movements, sometimes called volatility, may be greater or lesser depending on
the types of securities the Fund owns and the markets in which they trade. The
estimated level of volatility for the Fund is set forth in the Fund Summary that
follows. The effect on the Fund of a change in the value of a single security
will depend on how widely the Fund diversifies its holdings.

Page 3 of 14
<PAGE>

PENNSYLVANIA MUNICIPAL BOND FUND

INVESTMENT SUMMARY

INVESTMENT GOAL Current income exempt from Federal and
Pennsylvania income taxes consistent with
the preservation of capital

SHARE PRICE VOLATILITY Medium

PRINCIPAL INVESTMENT STRATEGY Utilizing an adviser experienced in
selecting Pennsylvania municipal
securities, the Fund invests in investment
grade municipal securities

INVESTMENT STRATEGY

The Pennsylvania Municipal Bond Fund invests substantially all (at least 80%) of
its assets in investment grade municipal securities that generate income exempt
from Federal and Pennsylvania State income taxes. The principal issuers of these
securities are state and local governments and agencies located in Pennsylvania,
as well as Puerto Rico and other U.S. territories and possessions.

The Sub-Adviser selects securities based on its view on the future direction of
interest rates and the shape of the yield curve, as well as its views on credit
quality and sector allocation issues. Where possible, the Sub-Adviser will
attempt to acquire securities that are underpriced relative to other eligible
securities. The Sub-Adviser will strive to maintain an average weighted
portfolio maturity of seven years or less. The Fund may, to a limited extent,
invest in securities subject to the alternative minimum tax or in taxable
municipal securities.

WHAT ARE THE RISKS OF INVESTING IN THE FUND?

The prices of fixed income securities respond to economic developments,
particularly interest rate changes, as well as to perceptions about the
creditworthiness of individual issuers, including governments. Generally, fixed
income securities will decrease in value if interest rates rise and vice versa,
and the volatility of lower-rated securities is even greater than that of
higher-rated securities. Also, longer-term securities are generally more
volatile, so the average maturity or duration of these securities affects risk.
In addition, the Fund is also subject to the risk that its market segment,
Pennsylvania tax-exempt fixed income securities, may underperform other fixed
income market segments or the fixed income markets as a whole.

Municipal securities, like other fixed income securities, rise and fall in
value in response to economic and market factors, primarily changes in
interest rates, and actual or perceived credit quality. Rising interest rates
will generally cause municipal securities to decline in value. Longer-term
securities respond more sharply to interest rate changes than do shorter-term
securities. A municipal security will also lose value if, due to rating
downgrades or other factors, there are concerns about the issuer's current or
future ability to make principal or interest payments. A strategy to invest
in investment grade securities reduces but does not eliminate this risk.

State and local governments rely on taxes and, to some extent, revenues from
private projects financed by municipal securities, to pay interest and
principal on municipal debt. Poor statewide or local economic results or
changing political sentiments may reduce tax revenues and increase the
expenses of Pennsylvania municipal issuers, making it more difficult for them
to meet their obligations. Actual or perceived erosion of the
credit-worthiness of Pennsylvania municipal issuers may reduce the value of
the Fund's holdings. As a result, the Fund will be more susceptible to
factors which adversely affect issuers of Pennsylvania obligations than a
mutual fund which does not have as great a concentration in Pennsylvania
municipal obligations.

Page 4 of 14
<PAGE>

Also, there may be economic or political changes that impact the ability of
issuers of municipal securities to repay principal and to make interest payments
on securities owned by the Fund. Any changes in the financial condition of
municipal issuers also may adversely affect the value of the Fund's securities.

PERFORMANCE INFORMATION

The bar chart and the performance table below illustrate the risks and
volatility of an investment in the Fund. Of course, the Fund's past performance
does not necessarily indicate how the Fund will perform in the future.

This bar chart shows changes in the performance of the Fund's Class B Shares
from year to year for ten years.*

1990 6.08%
1991 10.41%
1992 7.06%
1993 8.49%
1994 -1.97%
1995 11.22%
1996 4.33%
1997 8.02%
1998 5.61%
1999 X.XX%

BEST QUARTER WORST QUARTER
XX XX
XX XX

</TABLE>

* THE PERFORMANCE INFORMATION SHOW ABOVE IS BASED ON A CALENDAR YEAR. THE FUND'S
TOTAL RETURN FROM JANUARY 1, 2000, TO SEPTEMBER 30, 2000, WAS___%.

THIS TABLE COMPARES THE FUND'S AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS
ENDED DECEMBER 31, 1999, TO THOSE OF THE LEHMAN BROTHERS 5-YEAR G.O. INDEX.

<TABLE>
<CAPTION>
1 YEAR 5 YEARS SINCE INCEPTION
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
PENNSYLVANIA MUNICIPAL BOND FUND - CLASS B SHARES XX XX XX*
LEHMAN BROTHERS 5-YEAR G.O. INDEX XX XX XX**
</TABLE>

* Since August 14, 1989
** Since August 31, 1989

Page 5 of 14
<PAGE>

WHAT IS AN INDEX?

An index measures the market prices of a specific group of securities in a
particular market or securities in a market sector. You cannot invest directly
in an index. Unlike a mutual fund, an index does not have an investment adviser
and does not pay any commissions or expenses. If an index had expenses, its
performance would be lower. The Lehman Brothers 5-Year G.O. Index is a widely
recognized index consisting of general obligations bonds with maturities between
4 and 6 years.

FUND FEES AND EXPENSES

THIS TABLE DESCRIBES THE FEES AND EXPENSES THAT YOU MAY PAY IF YOU BUY AND HOLD
FUND SHARES.

ANNUAL FUND OPERATING EXPENSES (EXPENSES DEDUCTED FROM FUND ASSETS)

<TABLE>
<CAPTION>
CLASS B SHARES
-------------------------------------------------------------------
<S> <C>
Investment Advisory Fees 0.35%
Distribution (12b-1) Fees None
Other Expenses 0.XX%
------
Total Annual Fund Operating Expenses 0.XX%*
</TABLE>

--------------------------------------------------------------------------------
* The Fund's total actual annual fund operating expenses for the most recent
fiscal year were less than the amount shown above because the Administrator and
Distributor are each voluntarily waiving a portion of their fees in order to
keep total operating expenses at a specified level. These fee waivers remain in
place as of the date of this prospectus, but the Administrator and/or
Distributor may discontinue all or part of these waivers at any time. With these
fee waivers, the Fund's actual total operating expenses are expected to be as
follows:

Pennsylvania Municipal Bond Fund -- Class B Shares 0.XX%

For more information about these fees, see "Investment Adviser" and
"Distribution of Fund Shares."

EXAMPLE

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
PENNSYLVANIA MUNICIPAL BOND FUND -- CLASS B SHARES $XX $XX $XX $XX
</TABLE>

Page 6 of 14
<PAGE>

MORE INFORMATION ABOUT FUND INVESTMENTS

This prospectus describes the Fund's primary investment strategies. The Fund
also may invest in other securities, use other strategies and engage in other
investment practices, also which are described in detail in the Fund's Statement
of Additional Information (SAI).

The investments and strategies described in this prospectus are those that the
Fund uses under normal conditions. During unusual economic or market conditions,
or for temporary defensive or liquidity purposes, the Fund may invest up to 100%
of its assets in investments that would not ordinarily be consistent with the
Fund's objective. Of course, there is no guarantee that the Fund will achieve
its investment goal.

INVESTMENT ADVISER AND SUB-ADVISER

SIMC, an SEC-registered adviser, serves as the Adviser to the Fund. As of ___,
2000, SIMC had approximately $___billion in assets under management. It is
expected that SIMC will receive investment advisory fees of 0.35% of the average
daily net assets of the Fund.

SUB-ADVISER AND PORTFOLIO MANAGER

Deutsche Asset Management, Inc.: David Baldt has served as Director and
Executive President of Deutsche Asset Management, Inc. ("DeAM") since [1989]. He
has managed the Pennsylvania Municipal Bond Fund since July of 1995. He has more
than 29 years of investment experience. Prior to joining DeAM, Mr. Baldt served
as [ ].

Page 7 of 14
<PAGE>

PURCHASING AND SELLING FUND SHARES

This section tells you how to purchase or sell (sometimes called "redeem")
shares of the Fund. The Fund offers Class B Shares only to financial
institutions or intermediaries for its own or its customers' accounts. For
information on how to open an account and set up procedures for placing
transactions, please call 1-800-DIAL-SEI.

HOW TO PURCHASE FUND SHARES

You may purchase shares on any day that the New York Stock Exchange is open for
business (a Business Day).

Financial institutions and intermediaries may purchase Class B Shares by placing
orders with the Fund's Transfer Agent (or its authorized agent). Institutions
and intermediaries that use certain SEI proprietary systems may place orders
electronically through those systems. Cash investments must be transmitted or
delivered in federal funds to the Fund's wire agent by the close of business on
the same day the order is placed. The Fund reserves the right to refuse any
purchase requests, particularly those that would not be in the best interests of
the Fund or its shareholders and could adversely affect the Fund or its
operations. This includes those from any individual or group who, in the Fund's
view, are likely to engage in excessive trading (usually defined as more than
four transactions out of the Fund within a calendar year).

When you purchase or sell Fund shares through certain financial institutions
(rather than directly from the Fund), you may have to transmit your purchase and
sale requests to these financial institutions at an earlier time for your
transaction to become effective that day. This allows these financial
institutions time to process your requests and transmit them to the Fund.

Certain other intermediaries, including certain broker-dealers and shareholder
organizations, are authorized to accept purchase, redemption and exchange
requests for Fund shares. These requests are normally executed at the net asset
value per share (NAV) next determined after the intermediary receives the
request. These authorized intermediaries are responsible for transmitting
requests and delivering funds on a timely basis.

If you deal directly with a financial institution or financial intermediary, you
will have to follow the institution's or intermediary's procedures for
transacting with the Fund. For more information about how to purchase or sell
Fund shares through your financial institution, you should contact your
financial institution directly. Investors may be charged a fee for purchase
and/or redemption transactions effectuated through certain broker-dealers or
other financial intermediaries.

The Fund calculates its NAV once each Business Day at the regularly-scheduled
close of normal trading on the NYSE (normally, 4:00 p.m. Eastern time). So, for
you to receive the current Business Day's NAV, generally the Fund must receive
your purchase order in proper form before 4:00 p.m. Eastern time. The Fund will
not accept orders that request a particular day or price for the transaction or
any other special conditions.

Page 8 of 14
<PAGE>

HOW THE FUND CALCULATES NAV

NAV for one Fund share is the value of that share's portion of all of the assets
in the Fund.

In calculating NAV, the Fund generally values its investment Fund at market
price. If market prices are unavailable or the Fund thinks that they are
unreliable, fair value prices may be determined in good faith using methods
approved by the Board of Trustees.

HOW TO SELL YOUR FUND SHARES

If you hold Class B Shares, you may sell your shares on any Business Day by
following the procedures established when you opened your account or accounts.
If you have questions, call 1-800-DIAL-SEI. If you own shares through an account
with a broker or other institution, contact that broker or institution to sell
your shares. You may also sell your shares by contacting your financial
institution or financial intermediary by telephone. Your financial institution
or intermediary may charge you a fee for its services. The sale price of each
share will be the next NAV determined after the Fund (or its authorized
intermediary) receives your request.

RECEIVING YOUR MONEY

Normally, the Fund will make payment on your sale on the Business Day following
the day on which it receives your request, but it may take up to seven days.
Your proceeds will be wired to your bank account.

REDEMPTIONS IN KIND

SUSPENSION OF YOUR RIGHT TO SELL YOUR SHARES

The Fund may suspend your right to sell your shares if the NYSE restricts
trading, the SEC declares an emergency or for other reasons. More information
about this is in the SAI.

TELEPHONE TRANSACTIONS

Page 9 of 14
<PAGE>

DISTRIBUTION OF FUND SHARES

SEI Investments Distribution Co. (SIDCo.) is the distributor of the shares of
the Fund. SIDCo. receives no compensation for distributing the Fund's Class B
Shares.

For Class B Shares, shareholder servicing fees and administrative service fees,
as a percentage of average daily net assets, may be up to 0.25% and 0.05%,
respectively.

DIVIDENDS AND DISTRIBUTIONS

The Fund distributes its income monthly. The Fund makes distributions of capital
gains, if any, at least annually.

You will receive dividends and distributions in the form of cash unless
otherwise stated.

TAXES

The Fund will distribute substantially all of its income and capital gains, if
any. The dividends and distributions you receive may be subject to Federal,
state and local taxation, depending upon your tax situation. If so, they are
taxable whether or not you reinvest them. Income distributions are generally
taxable at ordinary interest rates. Capital gains distributions are generally
taxable at the rates applicable to long-term capital gains. EACH SALE OF FUND
SHARES IS A TAXABLE EVENT.

The Fund intends to distribute federally tax-exempt income. The Fund also
intends to distribute income that is exempt from state (and in some cases,
local) income taxes. The Fund may invest a portion of its assets in securities
that generate income that is subject to Federal or state income taxes. Income
exempt from Federal tax may be subject to state and local taxes. Any capital
gains distributed by the Fund may be taxable.

The Fund is not liable for any income or franchise taxes in the Commonwealth of
Massachusetts as long as it qualifies as a regulated investment company under
Federal tax law.

MORE INFORMATION ABOUT TAXES IS IN THE FUND'S SAI.

Page 10 of 14
<PAGE>

FINANCIAL HIGHLIGHTS

The tables that follow present performance information about Class B Shares of
the Fund. This information is intended to help you understand the Fund's
financial performance for the past five years, or, if shorter, the period of the
Fund's operations. Some of this information reflects financial information for a
single Fund share. The total returns in the tables represent the rate that you
would have earned (or lost) on an investment in the Fund, assuming you
reinvested all of your dividends and distributions. This information has been
audited by [ ], independent public accountants. Their report,
along with the Fund's financial statements, appears in the annual report that
accompanies the Fund's SAI. You can obtain the annual report, which contains
more performance information, at no charge by calling 1-800-DIAL-SEI.

Page 11 of 14
<PAGE>

FINANCIAL HIGHLIGHTS
SEI TAX EXEMPT TRUST
FOR A SHARE OUTSTANDING THROUGHOUT THE YEAR

Net Realized
and
Net Investment Unrealized
Asset Activities Distributions Gain (Loss) on Net
Value, Net Net Net Investments Asset Value,
Beginning Investment Investment Realized Total and Capital End Total
of Period Income Income Gain Distribution Transactions of Period Return

PENNSYLVANIA MUNICIPAL BOND FUND
CLASS B
<S> <C> <C> <C> <C> <C> <C> <C> <C>
2000
1999 $10.76 $0.49 $(0.49) $(0.05) $(0.54) $(0.42) $10.29 0.68%
1998 10.58 0.52 (0.52) (0.04) (0.56) 0.22 10.76 7.24
1997 10.48 0.53 (0.53) (0.19) (0.72) 0.29 10.58 8.08
1996 10.66 0.55 (0.59) -- (0.59) (0.14) 10.48 3.96
1995 10.52 0.55 (0.55) -- (0.55) 0.14 10.66 6.81

<CAPTION>
Ratio of
Net
Ratio Investment
of Expenses Ratio of Income to
to Average Net Average
Net Ratio of Net Assets Investment Net Assets
Assets, End Expenses Excluding Income to Excluding Portfolio
of Period to Average Fee Average Fee Turnover
(000) Net Assets Waivers Net Assets Waivers Rate
<S> <C> <C> <C> <C> <C> <C>
2000
1999 $104,869 0.48% 0.87% 4.61% 4.22% 16.64%
1998 101,029 0.48 0.86 4.87 4.49 26.85
1997 98,079 0.48 0.86 5.08 4.70 34.48
1996 97,228 0.48 0.65 5.15 4.98 65.75
1995 104,094 0.48 0.72 5.21 4.97 22.62

</TABLE>

AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.

Page 12 of 14
<PAGE>

SEI TAX EXEMPT TRUST

INVESTMENT ADVISER

SEI Investments Management Corporation
One Freedom Valley Drive
Oaks, PA 19456

DISTRIBUTOR

SEI Investments Distribution Co.
One Freedom Valley Drive
Oaks, PA 19456

LEGAL COUNSEL

Morgan, Lewis & Bockius LLP

More information about the Fund is available without charge through the
following:

STATEMENT OF ADDITIONAL INFORMATION (SAI)

The SAI dated December 31, 2000, includes more detailed information about SEI
Tax Exempt Trust. The SAI is on file with the SEC and is incorporated by
reference into this prospectus. This means that the SAI, for legal purposes, is
a part of this prospectus.

ANNUAL AND SEMI-ANNUAL REPORTS

These reports list the Fund's holdings and contain information from the Fund's
managers about fund strategies, market conditions and trends and their impact on
performance. The reports also contain detailed financial information about the
Fund.

TO OBTAIN AN SAI, ANNUAL OR SEMI-ANNUAL REPORT, OR MORE INFORMATION:

BY TELEPHONE: Call 1-800-DIAL-SEI

BY MAIL: Write to the Fund at:
One Freedom Valley Drive
Oaks, PA 19456

BY INTERNET: http://www.seic.com

Page 13 of 14
<PAGE>

FROM THE SEC: You can also obtain the SAI or the Annual and Semi-Annual reports,
as well as other information about SEI Tax Exempt Trust, from the EDGAR Database
on the SEC's website ("http://www.sec.gov"). You may review and copy documents
at the SEC Public Reference Room in Washington, DC (for information on the
operation of the Public Reference Room, call 1-202-942-8090). You may request
documents by mail from the SEC, upon payment of a duplicating fee, by writing
to: Securities and Exchange Commission, Public Reference Section, Washington, DC
20549-0102. You may also obtain this information, upon payment of a duplicating
fee, by e-mailing the SEC at the following address: [email protected].

The Trust's Investment Company Act registration number is 811-3447.

Page 14 of 14
<PAGE>
SEI TAX EXEMPT TRUST

Administrator:

SEI Investments Fund Management

Distributor:

SEI Investments Distribution Co.

Investment Advisers and Sub-Advisers:

SEI Investments Management Corporation

Deutsche Asset Management Inc.

Standish, Ayer & Wood, Inc.

Van Kampen Management Inc.

Weiss, Peck & Greer L.L.C.

This STATEMENT OF ADDITIONAL INFORMATION is not a Prospectus. It is intended
to provide additional information regarding the activities and operations of SEI
Tax Exempt Trust (the "Trust") and should be read in conjunction with the
Trust's Prospectuses dated December 31, 2000. Prospectuses may be obtained by
writing the Trust's distributor, SEI Investments Distribution Co., Oaks,
Pennsylvania 19456, or by calling 1-800-342-5734.

TABLE OF CONTENTS

<TABLE>
<S> <C>
The Trust................................................... S-2
Investment Objectives and Policies.......................... S-2
Investment Policies Applicable to Money Market Funds........ S-9
Description of Permitted Investments and Risk Factors....... S-9
Description of Ratings...................................... S-14
Investment Limitations...................................... S-15
State Specific Disclosure................................... S-20
The Administrator........................................... S-22
The Advisers and Sub-Advisers............................... S-23
Distribution and Shareholder Servicing...................... S-25
Trustees and Officers of the Trust.......................... S-27
Performance................................................. S-30
Determination of Net Asset Value............................ S-33
Purchase and Redemption of Shares........................... S-34
Shareholder Services........................................ S-34
Taxes....................................................... S-35
Portfolio Transactions...................................... S-39
Description of Shares....................................... S-41
Limitation of Trustees' Liability........................... S-41
Code of Ethics.............................................. S-41
Voting...................................................... S-41
Shareholder Liability....................................... S-42
5% Shareholders............................................. S-42
Custodian................................................... S-47
Experts..................................................... S-47
Legal Counsel............................................... S-47
Financial Statements........................................ S-47
</TABLE>

December 31, 2000
<PAGE>
THE TRUST

SEI Tax Exempt Trust (the "Trust") is an open-end management investment
company established as a Massachusetts business trust pursuant to a Declaration
of Trust dated March 15, 1982. The Declaration of Trust permits the Trust to
offer separate series ("funds") of units of beneficial interest ("shares") and
separate classes of shares. This Statement of Additional Information relates to
the following funds: Intermediate-Term Municipal, California Municipal Bond,
Massachusetts Municipal Bond, New Jersey Municipal Bond, New York Municipal
Bond, Pennsylvania Municipal Bond, Massachusetts Tax Free Money Market,
Institutional Tax Free, Tax Free, California Tax Exempt, Ohio Tax Free, and
Pennsylvania Tax Free Funds (each a "Fund," and collectively, the "Funds"),
including any different classes of the Funds. Except for differences between the
Class A, Class B, Class C, Class D and CNI Class shares of any Fund pertaining
to sales loads, shareholder servicing and administrative services plans,
distribution plans, transfer agency costs, or other related class expenses, and
voting rights and/or dividends, each share of each Fund represents an equal
proportionate interest in that Fund with each other share of that Fund.

INVESTMENT OBJECTIVES AND POLICIES

INTERMEDIATE-TERM MUNICIPAL FUND--The Fund's investment objective is to seek
the highest level of income exempt from federal income taxes that can be
obtained, consistent with the preservation of capital, from a diversified
portfolio of investment grade municipal securities. There can be no assurance
that the Fund will achieve its investment objective.

The Fund invests at least 80% of its net assets in municipal securities the
interest of which is exempt from federal income taxes based on opinions from
bond counsel for the issuers. This investment policy is a fundamental policy of
the Fund. The issuers of these securities can be located in all fifty states,
the District of Columbia, Puerto Rico, and other U.S. territories and
possessions. Under normal conditions, the Fund will invest at least 80% of its
net assets in securities the interest on which is not a preference item for
purposes of the federal alternative minimum tax. Although the advisers have no
present intention of doing so, up to 20% of all assets in the Fund can be
invested in taxable debt securities for defensive purposes or when sufficient
tax exempt securities considered appropriate by the advisers are not available
for purchase.

The Fund may purchase the following types of municipal obligations, but only
if such securities, at the time of purchase, either have the requisite rating,
or if not rated are of comparable quality as determined by the advisers: (i)
municipal bonds rated A or better by Standard and Poor's Rating Group ("S&P") or
by Moody's Investors Service, Inc. ("Moody's"), and the Fund may invest up to
10% of its total assets in municipal bonds rated BBB or S&P or Baa by Moody's:
(ii) municipal notes rated at least SP-1 by S&P or MIG-1 or VMIG-1 by Moody's:
and (iii) tax-exempt commercial paper rated at least A-1 by S&P or Prime-1 by
Moody's. Bonds rate BBB by S&P or Baa by Moody's have speculative
characteristics. Municipal obligations owned by the Fund which become less than
the prescribed investment quality shall be sold at a time when, in the judgment
of the advisers, it does not substantially impact the market value of the Fund.

Not more than 25% of Fund assets will be invested in (a) municipal
securities whose issuers are located in the same state and, (b) municipal
securities the interest on which is derived from revenues of similar type
projects. This restriction does not apply to municipal securities in any of the
following categories: public housing authorities; general obligations of states
and localities; state and local housing finance authorities, or municipal
utilities systems.

There could be economic, business, or political developments which might
affect all municipal securities of a similar type. To the extent that a
significant portion of the Fund's assets are invested in municipal securities
payable from revenues on similar projects, the Fund will be subject to the
peculiar risks presented by such projects to a greater extent than it would be
if the Fund's assets where not so invested.

S-2
<PAGE>
The Fund will typically maintain a dollar-weighted average portfolio
maturity of three to ten years. However, when the advisers determine that market
conditions so warrant, the Fund can maintain an average weighted maturity of
less than three years.

CALIFORNIA MUNICIPAL BOND FUND--The Fund's investment objective is to seek
as high a level of current income exempt from both federal and California income
taxes as is consistent with the preservation of capital, from a diversified
portfolio of investment grade municipal securities. There can be no assurance
that the Fund will achieve its investment objective.

The Fund has a fundamental policy, under normal conditions, to be fully
invested in obligations which produce interest that is exempt from both federal
and California state income tax. Under normal circumstances, the Fund will
invest at least 80% of its net assets in securities the interest on which is not
a preference item for purposes of the federal alternative minimum tax. The Fund
will invest at least 65% of its total assets in municipal obligations the
interest on which is exempt from California personal income tax ("California
Securities"). California Securities constitute municipal obligations of the
State of California and its political subdivisions or municipal authorities, as
well as municipal obligations issued by territories or possessions of the United
States, such as Puerto Rico. In addition, for temporary defensive purposes when,
in the opinion of its investment adviser, such securities are not readily
available or of sufficient quality, the Fund can invest up to 100% of its assets
in securities which pay interest which is exempt only from federal income taxes
or in taxable securities as described below.

The Fund may purchase the following types of municipal obligations, but only
if such securities, at the time of purchase, either have the requisite rating
or, if not rated, are of comparable quality as determined by Van Kampen
Management Inc., the Fund's investment sub-adviser ("Van Kampen"): (i) municipal
bonds rated BBB or better by S&P or Baa or better by Moody's: (ii) municipal
notes rated at least SP-1 by S&P or MIG-1 or VMIG-1 by Moody's: and (iii)
tax-exempt commercial paper rated at least A-1 by S&P or Prime-1 by Moody's.
Bonds rated BBB by S&P or Baa by Moody's have speculative characteristics.
Municipal obligations owned by the Fund which become less than the prescribed
investment quality will be sold at a time when, in the judgment of Van Kampen,
it does not substantially impact the market value of the Fund.

The Fund will typically maintain a dollar-weighted average portfolio
maturity of three to ten years. However, when the advisers determine that market
conditions so warrants, the Fund can maintain an average weighted maturity of
less than three years.

MASSACHUSETTS MUNICIPAL BOND FUND--The Fund's investment objective is to
seek as high a level of income exempt from federal and Massachusetts income
taxes that can be obtained, as is consistent with the preservation of capital,
from a diversified portfolio of investment grade municipal securities. There can
be no assurance that the Fund will achieve its investment objective.

The Fund has a fundamental policy, under normal conditions, to be fully
invested in obligations which produce interest that is exempt from both federal
and Massachusetts state income tax. Under normal circumstances, the Fund will
invest at least 80% of its net assets in securities the interest on which is not
a preference item for purposes of the federal alternative minimum tax. The Fund
will invest at least 65% of its total assets in municipal obligations the
interest on which is exempt from Massachusetts personal income tax
("Massachusetts Securities"). Massachusetts Securities constitute municipal
obligations of the Commonwealth of Massachusetts and its political subdivisions
or municipal authorities, as well as municipal obligations issued by territories
or possessions of the United States, such as Puerto Rico. In addition, for
temporary defensive purposes when, in the opinion of its investment adviser,
such securities are not readily available or of sufficient quality, the Fund can
invest up to 100% of its assets in securities which pay interest which is exempt
only from federal income taxes or in taxable securities as described below.

S-3
<PAGE>
The Fund may purchase the following types of municipal obligations, but only
if such securities, at the time of purchase, either have the requisite rating
or, if not rated, are of comparable quality as determined by Standish, Ayer &
Wood, Inc., the Fund's investment sub-adviser ("SAW"): (i) municipal bonds rated
BBB or better by S&P or Baa or better by Moody's: (ii) municipal notes rated at
least SP-1 by S&P or MIG-1 or VMIG-1 by Moody's: and (iii) tax-exempt commercial
paper rated at least A-1 by S&P or Prime-1 by Moody's. Bonds rated BBB by S&P or
Baa by Moody's have speculative characteristics. Municipal obligations owned by
the Fund which become less than the prescribed investment quality will be sold
at a time when, in the judgment of SAW, it does not substantially impact the
market value of the Fund.

NEW JERSEY MUNICIPAL BOND FUND--The Fund's investment objective is to seek
as high a level of income exempt from federal and New Jersey income taxes that
can be obtained, as is consistent with the preservation of capital, from a
diversified portfolio of investment grade municipal securities. There can be no
assurance that the Fund will achieve its investment objective.

The Fund has a fundamental policy, under normal conditions, to be fully
invested in obligations which produce interest that is exempt from both federal
and New Jersey state income tax. Under normal circumstances, the Fund will
invest at least 80% of its net assets in securities the interest on which is not
a preference item or purposes of the federal alternative minimum tax. The Fund
will invest at least 65% of its total assets in municipal obligations the
interest on which is exempt form New Jersey personal income tax ("New Jersey
Securities"). New Jersey Securities constitute municipal obligations of the
State of New Jersey and its political subdivisions or municipal authorities, as
well as municipal obligations issued by territories or possessions of the United
States, such as Puerto Rico. In addition, for temporary defensive purposes when,
in the opinion of its advisers, such securities are not readily available or of
sufficient quality, the Fund can invest up to 100% of its assets in securities
which pay interest which is exempt only from federal income taxes or in taxable
securities as described below.

The Fund may purchase the following types of municipal obligations, but only
if such securities, at the time of purchase, either have the requisite rating
or, if not rated, are of comparable quality as determined by Van Kampen, the
Fund's investment sub-adviser ("Van Kampen"): (i) municipal bonds rated BBB or
better by S&P or Baa or better by Moody's: (ii) municipal notes rated at least
SP-1 by S&P or MIG-1 or VMIG-1 by Moody's: and (iii) tax-exempt commercial paper
rated at least A-1 by S&P or Prime-1 by Moody's. Bonds rated BBB by S&P or Baa
by Moody's have speculative characteristics. Municipal obligations owned by the
Fund which become less than the prescribed investment quality will be sold at a
time when, in the judgment of Van Kampen, it does not substantially impact the
market value of the Fund.

NEW YORK MUNICIPAL BOND FUND--The investment objective of the Fund is as
high a level of current income, exempt from both federal and New York state and
city personal income taxes, as is consistent with the preservation of principal.
There can be no assurance that the Fund will achieve its investment objective.

The Fund has a fundamental policy, under normal conditions, to be fully
invested in obligations which produce interest that is exempt from both federal
and New York state and city income tax. Under normal circumstances, the Fund
will invest at least 80% of its net assets in securities the interest on which
is not a preference item for purposes of the federal alternative minimum tax.
The Fund will invest at least 65% of its total assets in municipal obligations
the interest on which is exempt from New York and New York City personal income
tax ("New York Securities"). New York Securities constitute municipal
obligations of the

S-4
<PAGE>
State of New York and its political subdivisions or municipal authorities, as
well as municipal obligations issued by territories or possessions of the United
States, such as Puerto Rico. In addition, for temporary defensive purposes when,
in the opinion of its investment adviser, such securities are not readily
available or of sufficient quality, the Fund can invest up to 100% of its assets
in securities which pay interest which is exempt only from federal income taxes
or in taxable securities as described below.

The Fund may purchase the following types of municipal obligations, but only
if such securities, at the time of purchase, either have the requisite rating
or, if not rated, are of comparable quality as determined by SAW, the Fund's
investment sub-adviser: (i) municipal bonds rated BBB or better by S&P or Baa or
better by Moody's: (ii) municipal notes rated at least SP-1 by S&P or MIG-1 or
VMIG-1 by Moody's: and (iii) tax-exempt commercial paper rated at least A-1 by
S&P or Prime-1 by Moody's. Bonds rated BBB by S&P or Baa by Moody's have
speculative characteristics. Municipal obligations owned by the Fund which
become less than the prescribed investment quality will be sold at a time when,
in the judgment of SAW, it does not substantially impact the market value of the
Fund.

PENNSYLVANIA MUNICIPAL BOND FUND--The Fund's investment objective is to
provide current income exempt from both federal and Pennsylvania state income
taxes while preserving capital by investing primarily in municipal securities
within the guidelines presented below.

The Fund has a fundamental policy, under normal conditions, to be fully
invested in obligations which produce interest that is exempt from both federal
and Pennsylvania state income tax (state tax-free obligations). Under normal
circumstances, the Fund will invest at least 90% (and intends to invest 100%) of
its net assets in securities the interest on which is not a preference item for
purposes of the federal alternative minimum tax. In addition, for temporary
defensive purposes when, in the opinion of its investment adviser, such
securities are not readily available or of sufficient quality, the Fund can
invest up to 100% of its assets in securities which pay interest which is exempt
only from federal income taxes or in taxable securities as described below.

The Fund may purchase the following types of municipal obligations, but only
if such securities, at the time of purchase, either have the requisite rating
or, if not rated, are of comparable quality as determined by Deutsche Asset
Management, Inc., the Fund's investment sub-adviser ("DeAM"): (i) municipal
bonds rated BBB or better by S&P or Baa or better by Moody's: (ii) municipal
notes rated at least SP-1 by S&P or MIG-1 or VMIG-1 by Moody's: and (iii)
tax-exempt commercial paper rated at least A-1 by S&P or Prime-1 by Moody's.
Bonds rated BBB by S&P or Baa by Moody's have speculative characteristics.
Municipal obligations owned by the Fund which become less than the prescribed
investment quality will be sold at a time when, in the judgment of DeAM, it does
not substantially impact the market value of the Fund.

The Fund will typically maintain a dollar-weighted average portfolio
maturity of seven years or less. Each security purchased will typically have an
average maturity of no longer than fifteen years.

MASSACHUSETTS TAX FREE MONEY MARKET FUND--The Fund's investment objective is
to preserve principal value and maintain a high degree of liquidity while
providing current income exempt from federal and, to the extent possible,
Massachusetts state personal income taxes. There can be no assurance that the
Fund will achieve its investment objective.

S-5
<PAGE>
invested in municipal obligations the interest on which is exempt from
Massachusetts state personal income tax. These constitute municipal obligations
of the state of Massachusetts and its political subdivisions of municipal
authorities and municipal obligations issued by territories or possessions of
the United States. The Fund may invest, under normal conditions, up to 20% of
its net assets in (1) municipal securities the interest on which is a preference
item for purposes of the federal alternative minimum tax (although the Fund has
no present intention of investing in such securities) and (2) taxable
investments. In addition, for temporary defensive purposes when the Fund's
investment sub-adviser (the "Sub-Adviser"), determines that market conditions
warrant, the Fund may invest up to 100% of its assets in municipal obligations
of states other than Massachusetts or taxable money market securities.

The Sub-Adviser will not invest more than 25% of the Fund's assets in
municipal securities the interest on which is derived from revenues of similar
type projects. This restriction does not apply to municipal securities in any of
the following categories: public housing authorities; general obligations of
states and localities; state and local housing finance authorities or municipal
utilities systems.

There can be no assurance that the Fund will be able to achieve its
investment objective, or that the Fund will be able to maintain a constant $1.00
net asset value per share.

INSTITUTIONAL TAX FREE FUND--The Fund's investment objective is to preserve
principal value and maintain a high degree of liquidity while providing current
income exempt from federal income taxes. There can be no assurance that the Fund
will meet its investment objective.

The Fund invests in U.S. dollar denominated municipal securities of issuers
located in all fifty states, the District of Columbia, Puerto Rico and other
U.S. territories and possessions. It is a fundamental policy of the Fund to
invest at least 80% of its net assets in securities the interest on which is
exempt for federal income taxes, based on opinions from bond counsel for the
issuers, and the Fund will invest, under normal conditions, at least 80% of its
net assets in securities the interest on which is not a preference item for
purposes of the federal alternative minimum tax.

The Fund may purchase municipal bonds, municipal notes and tax-exempt
commercial paper, but only if such securities, at the time of purchase, meet the
quality, maturity and diversification requirements imposed by Rule 2a-7.

The Adviser will not invest more than 25% of Fund assets in municipal
securities (a) whose issuers are located in the same state or (b) the interest
on which is derived from revenues of similar type projects. This restriction
does not apply to municipal securities in any of the following categories:
public housing authorities; general obligations of states and localities; state
and local housing finance authorities or municipal utilities systems.

There could be economic, business, or political developments which might
affect all municipal securities of a similar type. To the extent that a
significant portion of the Fund's assets are invested in municipal securities
payable from a revenues on similar projects, the Fund will be subject to the
peculiar risks presented by such projects to a greater extent than it would be
if the Fund's assets were not so invested. Moreover, in seeking to attain its
investment objective, the Fund may invest all of any part of its assets in
municipal securities that are industrial development bonds.

There can be no assurance that the Fund will be able to achieve its
investment objective, or that the Fund will be able to maintain a constant $1.00
net asset value per share.

TAX FREE FUND--The Fund's investment objective is to preserve principal
value and maintain a high degree of liquidity while providing current income
exempt from federal income taxes. There can be no assurance that the Fund will
meet its investment objective.

S-6
<PAGE>
opinions from bond counsel for the issuers. The investment policy is a
fundamental policy of the Fund. Under normal conditions, the Fund will invest at
least 80% of its net assets in securities the interest on which is not a
preference item for purposes of the federal alternative minimum tax.

The Adviser will not invest more than 25% of the Fund's assets in municipal
securities (a) whose issuers are located in the same state or (b) the interest
on which is derived from revenues of similar type projects. This restriction
does not apply to municipal securities in any of the following categories:
public housing authorities; general obligations of states and localities; state
and local housing finance authorities or municipal utilities systems.

There could be economic, business, or political developments which might
affect all municipal securities of a similar type. To the extent that a
significant portion of the Fund's assets are invested in municipal securities
payable from a revenues on similar projects, the Fund will be subject to the
peculiar risks presented by such projects to a greater extent than it would be
if the Fund's assets were not so invested. Moreover, in seeking to attain its
investment objective, the Fund may invest all of any part of its assets in
municipal securities that are industrial development bonds.

There can be no assurance that the Fund will be able to achieve its
investment objective, or that the Fund will be able to maintain a constant $1.00
net asset value per share.

CALIFORNIA TAX EXEMPT FUND--The Fund's investment objective is to preserve
principal value and maintain a high degree of liquidity while providing current
income exempt from federal and, to the extent possible, California state
personal income taxes. There can be no assurance that the Fund will achieve its
investment objective.

It is a fundamental policy of the Fund to invest, under normal conditions,
at least 80% of its net assets in municipal securities that produce interest
that, in the opinion of bond counsel, is exempt from federal income tax, and the
Fund will invest, under normal conditions, at least 80% of its net assets in
securities the interest on which is not a preference item for purposes of the
federal alternative minimum tax. Under normal conditions, at least 65% of the
Fund's assets will be invested in municipal obligations the interest on which is
exempt from California state personal income tax. These constitute municipal
obligations of the state of California and its political subdivisions of
municipal authorities and municipal obligations issued by territories or
possessions of the United States. The Fund may invest, under normal conditions,
up to 20% of its net assets in (1) municipal securities the interest on which is
a preference item for purposes of the federal alternative minimum tax (although
the Fund has no present intention of investing in such securities) and (2)
taxable investments. In addition, for temporary defensive purposes when Weiss,
Peck & Greer, L.L.C., the Fund's investment adviser (the "Adviser" or "WPG"),
determines that market conditions warrant, the Fund may invest up to 100% of its
assets in municipal obligations of states other than California or taxable money
market securities.

The Adviser will not invest more than 25% of the Fund's assets in municipal
securities the interest on which is derived from revenues of similar type
projects. This restriction does not apply to municipal securities in any of the
following categories: public housing authorities; general obligations of states
and localities; state and local housing finance authorities or municipal
utilities systems.

There can be no assurance that the Fund will be able to achieve its
investment objective, or that the Fund will be able to maintain a constant $1.00
net asset value per share.

OHIO TAX FREE FUND--The Fund's investment objective is a high level of
current income, free from federal income tax and, to the extent possible, Ohio
income taxes, consistent with preservation of capital. The Fund will also
attempt to maintain a constant net asset value of $1.00 per share.

S-7
<PAGE>
It is a fundamental policy of the Fund to invest, under normal conditions,
at least 80% of its net assets in municipal securities the interest on which, in
the opinion of bond counsel for the issuer, is exempt from federal income tax
(collectively, "Municipal Securities"). This Fund will, under normal conditions,
invest at least 80% of its net assets in securities the interest on which is not
a preference item for purposes of the federal alternative minimum tax and invest
at least 65% of its total assets in municipal obligations the interest on which
is exempt from Ohio income tax ("Ohio Securities"). Ohio Securities constitute
municipal obligations of the State of Ohio and its political subdivisions or
municipal authorities, as well as municipal obligations issued by territories or
possessions of the United States, such as Puerto Rico. This Fund may invest,
under normal conditions, up to 20% of its net assets in (1) Municipal Securities
the interest on which is a preference item for purposes of the federal
alternative minimum tax (although the Fund has no present intention of investing
in such securities), and (2) taxable securities, including shares of other
mutual funds to the extent permitted by regulations of the SEC. In addition, for
temporary defensive purposes when its investment adviser determines that market
conditions warrant, the Fund may invest up to 100% of its assets in municipal
obligations of states other than Ohio or taxable money market instruments.

There can be no assurance that the Fund will be able to achieve its
investment objective, or that the Fund will be able to maintain a constant $1.00
net asset value per share.

PENNSYLVANIA TAX FREE FUND--The Fund's investment objective is a high level
of current income, free from federal income tax and, to the extent possible,
Pennsylvania personal income taxes, consistent with preservation of capital. The
Fund will also attempt to maintain a constant net asset value of $1.00 per
share.

It is a fundamental policy of the Fund to invest, under normal conditions,
at least 80% of its net assets in municipal securities the interest on which, in
the opinion of bond counsel for the issuer, is exempt from federal income tax.
This Fund will under normal conditions, invest at least 80% of its net assets in
securities the interest on which is not a preference item for purposes of the
federal alternative minimum tax and invest at least 65% of its total assets in
municipal obligations the interest on which is exempt from Pennsylvania personal
income tax ("Pennsylvania Securities"). Pennsylvania Securities constitute
municipal obligations of the Commonwealth of Pennsylvania and its political
subdivisions or municipal authorities, as will as municipal obligations issued
by territories or possessions of the United States, such as Puerto Rico. This
Fund may invest, under normal conditions, up to 20% of its net assets in (1)
municipal securities the interest on which is a preference item for purposes of
the federal alternative minimum tax (although the Fund has no present intention
of investing in such securities), and (2) taxable securities, including shares
of other mutual funds to the extent permitted by regulations of the SEC. In
addition, for temporary defensive purposes when its investment adviser
determines that market conditions warrant, the Fund may invest up to 100% of its
assets in municipal obligations of states other than Pennsylvania or taxable
money market instruments.

There can be no assurance that the Fund will be able to achieve its
investment objective or that the Fund will be able to maintain a constant $1.00
net asset value per share.

S-8
<PAGE>
INVESTMENT POLICIES APPLICABLE TO MONEY MARKET FUNDS

The Money Market Funds comply with the requirements of Rule 2a-7 under the
Investment Company Act of 1940 (the "1940 Act"), as that Rule may be amended
from time to time. These requirements currently provide that the Funds must
limit their investments to securities with remaining maturities of 397 days or
less, and must maintain a dollar-weighted average maturity of 90 days or less.
In addition, the Funds may only invest in eligible securities. In general, this
means securities rated in one of the two highest categories for short-term
securities by at least two nationally recognized statistical rating
organizations ("NRSROs") (or by one NRSRO if only one NRSRO has rated the
security), or, if unrated, determined by Weiss, Peck & Greer, L.L.C. (the
"Adviser") to be of equivalent quality. Since the Funds often purchase
securities supported by credit enhancements from banks and other financial
institutions, changes in the credit quality of these institutions could cause
losses to the Funds and affect their share price.

Securities rated in the highest rating category (e.g., A-1 by S&P) by at
least two NRSROs (or, if unrated, determined to be of comparable quality) are
"first tier" securities. Non-first tier securities rated in the second highest
rating category (e.g., A-2 by S&P) (or, if unrated, determined to be of
comparable quality) are considered to be "second tier" securities. A Money
Market Fund that is not a single state Fund is generally limited to investing
only up to 5% of its total assets in any particular issuer, while a single state
Money Market Fund's investments in a single issuer are also limited, but only
with respect to 75% of its total assets. In addition, total investments by a
single state Money Market Fund in second tier conduit securities will be limited
to 5% of the single state Money Market Fund's assets and, for each obligor
thereon, will be limited to the greater of 1% of the Fund's assets or one
million dollars. Conduit securities are securities issued by municipalities to
finance non-governmental private projects, such as housing developments and
retirement homes, and for which the ultimate obligor is not the municipal or
governmental issuer.

The Money Market Funds may purchase securities on a "when-issued" basis, may
purchase variable and floating rate obligations and reserves the right to engage
in transactions involving standby commitments. While the Funds generally intend
to be fully invested in federally tax-exempt securities, the Money Market Funds
may invest up to 20% of their net assets in taxable money market instruments
(including repurchase agreements) and securities the interest on which is a
preference item for purposes of the federal alternative minimum tax. The Money
Market Funds will not invest more than 10% of their total assets in securities
which are considered to be illiquid.

DESCRIPTION OF PERMITTED INVESTMENTS AND RISK FACTORS

BANKERS' ACCEPTANCES--Bankers' acceptances are bills of exchange or time
drafts drawn on and accepted by a commercial bank. Bankers' acceptances are
issued by corporations to finance the shipment and storage of goods. Maturities
are generally six months or less.

CERTIFICATES OF DEPOSIT--Certificates of deposit is an interest-bearing
instrument with a specific maturity. They are issued by banks and savings and
loan institutions in exchange for the deposit of funds and normally can be
traded in the secondary market prior to maturity. Certificates of deposit with
penalties for early withdrawal will be considered illiquid.

COMMERCIAL PAPER--Commercial paper is a term used to describe unsecured
short-term promissory notes issued by banks, municipalities, corporations and
other entities. Maturities on these issues vary from one to 270 days.

FIXED INCOME SECURITIES--Fixed income securities are debt obligations issued
by corporations, municipalities and other borrowers. The market value of a
Fund's fixed income investments will change in response to interest rate changes
and other factors. During periods of falling interest rates, the values of
outstanding fixed income securities generally rise. Conversely, during periods
of rising interest rates, the values of such securities generally decline.
Changes by recognized rating agencies in the rating of any fixed

S-9
<PAGE>
income security and in the ability of an issuer to make payments of interest and
principal also affect the value of these investments. Changes in the value of
portfolio securities will not necessarily affect cash income derived from these
securities, but will affect a Fund's net asset value.

FUTURES AND OPTIONS ON FUTURES--Futures contracts provide for the future
sale by one party and purchase by another party of a specified amount of a
specific security at a specified future time and at a specified price. An option
on a futures contract give the purchaser the right, in exchange for a premium,
to assume a position in a futures contract at a specified exercise price during
the term of the option. A Fund may use futures contracts and related options for
BONA FIDE hedging purposes, to offset changes in the value of securities held or
expected to be acquired or be disposed of, to minimize fluctuations in foreign
currencies, or to gain exposure to a particular market or instrument. A Fund
will minimize the risk that it will be unable to close out a futures contract by
only entering into futures contracts that are traded on national futures
exchanges.

An index futures contract is a bilateral agreement pursuant to which two
parties agree to take or make delivery of an amount of cash equal to a specified
dollar amount times the difference between the bond index value at the close of
trading of the contract and the price at which the futures contract is
originally struck. No physical delivery of the bonds comprising the index is
made: generally contracts are closed out prior to the expiration date of the
contract.

In order to avoid leveraging and related risks, when a Fund invests in
futures contracts, it will cover its position by depositing an amount of cash or
liquid securities equal to the market value of the futures positions held, less
margin deposits, in a segregated account and that amount will be marked to
market on a daily basis.

A Fund may enter into futures contracts and options on futures contracts
traded on an exchange regulated by the Commodities Futures Trading Commission
("CFTC"), so long as, to the extent that such transactions are not for "BONA
FIDE hedging purposes," the aggregate initial margin and premiums on such
positions (excluding the amount by which such options are in the money) do not
exceed 5% of the Fund's net assets.

There are risks associated with these activities, including the following:
(1) the success of a hedging strategy may depend on an ability to predict
movements in the prices of individual securities, fluctuations in markets and
movements in interest rates, (2) there may be an imperfect or no correlation
between the changes in market value of the securities held by the Fund and the
prices of futures and options on futures, (3) there may not be a liquid
secondary market for a futures contract or option, (4) trading restrictions or
limitations may be imposed by an exchange and (5) government regulations may
restrict trading in futures contracts and options on futures.

A Fund may buy and sell futures contracts and related options to manage its
exposure to changing interest rates and securities prices. Some strategies
reduce a Fund's exposure to price fluctuations, while others tend to increase
its market exposure. Futures and options on futures can be volatile instruments
and involve certain risks that could negatively impact a Fund's return. No price
is paid upon entering into futures contracts. Instead, a Fund would be required
to deposit an amount of cash or U.S. Treasury securities known as "initial
margin." Subsequent payments, called "variation margin," to and from the broker,
would be made on a daily basis as the value of the future position varies (a
process known as "market to market"). The margin is in the nature of performance
bond or good-faith deposit on a futures contract.

INVESTMENT COMPANY SHARES--Each Fund may invest in shares of other
investment companies, to the extent permitted by applicable law and subject to
certain restrictions set forth in this Statement of Additional Information.
These investment companies typically incur fees that are separate from those
fees incurred directly by a Fund. A Fund's purchase of such investment company
securities results in the layering of expenses, such that shareholders would
indirectly bear a proportionate share of the operating

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<PAGE>
expenses of such investment companies, including advisory fees, in addition to
paying Fund expenses. Under applicable regulations, a Fund is prohibited from
acquiring the securities of another investment company if, as a result of such
acquisition: (1) the Fund owns more than 3% of the total voting stock of the
other company; (2) securities issued by any one investment company represent
more than 5% of the Fund's total assets; or (3) securities (other than treasury
stock) issued by all investment companies represent more than 10% of the total
assets of the Fund.

MUNICIPAL SECURITIES--Municipal Securities consist of (i) debt obligations
issued by or on behalf of public authorities to obtain funds to be used for
various public facilities, for refunding outstanding obligations, for general
operating expenses and for lending such funds to other public institutions and
facilities, and (ii) certain private activity and industrial development bonds
issued by or on behalf of public authorities to obtain funds to provide for the
construction, equipment, repair or improvement of privately operated facilities.

General obligation bonds are backed by the taxing power of the issuing
municipality. Revenue bonds are backed by there venues of a project or facility,
tolls from a toll bridge, for example. Certificates of participation represent
an interest in an underlying obligation or commitment such as an obligation
issued in connection with a leasing arrangement. The payment of principal and
interest on private activity and industrial development bonds generally is
dependent solely on the ability of the facility's user to meet its financial
obligations and the pledge, if any, of real and personal property so financed as
security for such payment.

Municipal notes include general obligation notes, tax anticipation notes,
revenue anticipation notes, bond anticipation notes, certificates of
indebtedness, demand notes and construction loan notes and participation
interests in municipal notes. Municipal bonds include general obligation bonds,
revenue or special obligation bonds, private activity and industrial development
bonds and participation interests in municipal bonds.

MUNICIPAL LEASES--Each Fund may invest in instruments, or participations in
instruments, issued in connection with lease obligations or installment purchase
contract obligations of municipalities ("municipal lease obligations"). Although
municipal lease obligations do not constitute general obligations of the issuing
municipality, a lease obligation is ordinarily backed by the municipality's
covenant to budget for, appropriate funds for, and make the payments due under
the lease obligation. However, certain lease obligations contain
"non-appropriation" clauses, which provide that the municipality has no
obligation to make lease or installment purchase payments in future years unless
money is appropriated for such purpose in the relevant years. Municipal lease
obligations are a relatively new form of financing, and the market for such
obligations is still developing. Municipal leases will be treated as liquid only
if they satisfy criteria set forth in guidelines established by the Board of
Trustees, and there can be no assurance that a market will exist or continue to
exist for any municipal lease obligation.

MUNICIPAL NOTES--Municipal notes consist of general obligation notes, tax
anticipation notes (notes sold to finance working capital needs of the issuer in
anticipation of receiving taxes on a future date), revenue anticipation notes
(notes sold to provide needed cash prior receipt of expected non-tax revenues
from a specific source), bond anticipation notes, tax and revenue anticipation
notes, certificates of indebtedness, demand notes, and construction loan notes.
The maturities of the instruments at the time of issue will generally range from
three months to one year.

MUNICIPAL BONDS--Municipal bonds are debt obligations issued to obtain funds
for various public purposes. A Fund may purchase private activity or industrial
development bonds if the interest paid is exempt from federal income tax. These
bonds are issued by or on behalf of public authorities to raise money to finance
various privately-owned or -operated facilities for business and manufacturing,
housing, sports, and pollution control. These bonds are also used to finance
public facilities such as airports, mass transit systems, ports, parking or
sewage or solid waste disposal facilities, as well as certain other

S-11
<PAGE>
categories. The payment of the principal and interest on such bonds is dependent
solely on the ability of the facility's user to meet its financial obligations
and the pledge, if any, of real and personal property so financed as security
for such payment.

NON-DIVERSIFICATION--The California Municipal Bond, Massachusetts Municipal
Bond, New Jersey Municipal Bond, New York Municipal Bond, Ohio Tax Free, and
Pennsylvania Tax Free Funds are non-diversified investment companies, as defined
in the Investment Company Act of 1940, as amended (the "1940 Act"), which means
that a relatively high percentage of assets of the Funds may be invested in the
obligations of a limited number of issuers. Although the advisers generally do
not intend to invest more than 5% of each Fund's assets in any single issuer
(with the exception of securities which are issued or guaranteed by a national
government), the value of shares of the Funds may be more susceptible to any
single economic, political or regulatory occurrence than the shares of a
diversified investment company would be. The Funds intend to satisfy the
diversification requirements necessary to qualify as a regulated investment
company under the Internal Revenue Code of 1986, as amended (the "Code"), which
requires that the Funds be diversified (I.E., not invest more than 5% of their
assets in the securities in any one issuer) as to 50% of their assets.

REPURCHASE AGREEMENTS--Repurchase agreements are agreements under which
securities are acquired from a securities dealer or bank subject to resale on an
agreed upon date and at an agreed upon price which includes principal and
interest. Each Fund or its agent will have actual or constructive possession of
the securities held as collateral for the repurchase agreement. Each Fund bears
a risk of loss in the event the other party defaults on its obligations and the
Fund is delayed or prevented from exercising its right to dispose of the
collateral securities, or if the Fund realizes a loss on the sale of the
collateral securities. The Advisers or Sub-Advisers will enter into repurchase
agreements on behalf of a Fund only with financial institutions deemed to
present minimal risk of bankruptcy during the term of the agreement based on
guidelines established and periodically reviewed by the Board of Trustees. These
guidelines currently permit the Funds to enter into repurchase agreements only
with approved banks and primary securities dealers, as recognized by the Federal
Reserve Bank of New York, which have minimum net capital of $100 million, or
with a member bank of the Federal Reserve System. Repurchase agreements are
considered to be loans collateralized by the underlying security. Repurchase
agreements entered into by the Funds will provide that the underlying security
at all times shall have a value at least equal to 102% of the price stated in
the agreement. This underlying security will be marked to market daily. The
Advisers or Sub-Adviser will monitor compliance with this requirement. Under all
repurchase agreements entered into by the Funds, the Custodian or its agent must
take possession of the underlying collateral. However, if the seller defaults,
the Funds could realize a loss on the sale of the underlying security to the
extent the proceeds of the sale are less than the resale price. In addition,
even though the Bankruptcy Code provides protection for most repurchase
agreements, if the seller should be involved in bankruptcy or insolvency
proceedings, the Funds may incur delays and costs in selling the security and
may suffer a loss of principal and interest if the Funds are treated as
unsecured creditors.

STANDBY COMMITMENTS AND PUT TRANSACTIONS--The Funds reserve the right to
engage in put transactions. The Advisers and Sub-Advisers have the authority to
purchase securities at a price which would result in a yield to maturity lower
than that generally offered by the seller at the time of purchase when the Funds
can simultaneously acquire the right to sell the securities back to the seller,
the issuer, or a third party (the "writer") at an agreed-upon price at any time
during a stated period or on a certain date. Such a right is generally denoted
as a "standby commitment" or a "put." The purpose of engaging in transactions
involving puts is to maintain flexibility and liquidity to permit the Funds to
meet redemptions and remain as fully invested as possible in municipal
securities. The right to put the securities depends on the writer's ability to
pay for the securities at the time the put is exercised. The Funds would limit
their put transactions to institutions which the Adviser or Sub-Adviser believes
present minimum credit risks, and the Adviser or Sub-Adviser would use its best
efforts to initially determine and continue to monitor the financial strength of
the sellers of the options by evaluating their financial statements and such
other

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<PAGE>
information as is available in the marketplace. It may, however, be difficult to
monitor the financial strength of the writers because adequate current financial
information may not be available. In the event that any writer is unable to
honor a put for financial reasons, a Fund would be a general creditor (I.E., on
a parity with all other unsecured creditors) of the writer. Furthermore,
particular provisions of the contract between a Fund and the writer may excuse
the writer from repurchasing the securities; for example, a change in the
published rating of the underlying securities or any similar event that has an
adverse effect on the issuer's credit or a provision in the contract that the
put will not be exercised except in certain special cases, for example, to
maintain portfolio liquidity. A Fund could, however, at any time sell the
underlying portfolio security in the open market or wait until the portfolio
security matures, at which time it should realize the full par value of the
security.

The securities purchased subject to a put, may be sold to third persons at
any time, even though the put is outstanding, but the put itself, unless it is
an integral part of the security as originally issued, may not be marketable or
otherwise assignable. Therefore, the put would have value only to the Fund. Sale
of the securities to third parties or lapse of time with the put unexercised may
terminate the right to put the securities. Prior to the expiration of any put
option, a Fund could seek to negotiate terms for the extension of such an
option. If such a renewal cannot be negotiated on terms satisfactory to the
Fund, the Fund could, of course, sell the security. The maturity of the
underlying security will generally be different from that of the put. The
Intermediate-Term Municipal and Pennsylvania Municipal Bond Funds will consider
the "maturity" of a security subject to a put to be the first date on which it
has the right to demand payment from the writer of the put although the final
maturity of the security is later than such date.

The Trust has received a private letter ruling from the Internal Revenue
Service that, to the extent it purchases securities subject to the right to put
them back to the seller in order to maintain liquidity to meet redemption
requirements, it will be treated as the owner of those securities for federal
income tax purposes. No assurance can be given that legislative, judicial or
administrative changes may not be forthcoming which could modify the Trust's
private letter ruling.

TIME DEPOSITS--Time deposits are non-negotiable receipts issued by a bank in
exchange for the deposit of funds. Like a certificate of deposit, it earns a
specified rate of interest over a definite period of time; however, it cannot be
traded in the secondary market. Time deposits with a withdrawal penalty are
considered to be illiquid securities.

U.S. GOVERNMENT OBLIGATIONS--Obligations issued by the U.S. Treasury or
issued or guaranteed by agencies of the U.S. Government, and obligations issued
or guaranteed by instrumentalities of the U.S. Government. Some of these
securities are supported by the full faith and credit of the U.S. Treasury
(E.G., Government National Mortgage Association securities), others are
supported by the right of the issuer to borrow from the Treasury (E.G., Federal
Farm Credit Bank securities), while still others are supported only by the
credit of the instrumentality (E.G., Fannie Mae securities).

VARIABLE AND FLOATING RATE INSTRUMENTS--Certain of the obligations purchased
by the Fund may carry variable or floating rates of interest and may involve a
conditional or unconditional demand feature. Such obligations may include
variable amount master demand notes. Such instruments bear interest at rates
which are not fixed, but which vary with changes in specified market rates or
indices. The interest rates on these securities may be reset daily, weekly,
quarterly or at some other interval, and may have a floor or ceiling on interest
rate changes. There is a risk that the current interest rate on such obligations
may not accurately reflect existing market interest rates. A demand instrument
with a demand notice period exceeding seven days may be considered illiquid if
there is no secondary market for such security.

WHEN-ISSUED SECURITIES--These securities involve the purchase of debt
obligations on a when-issued basis, in which case delivery and payment normally
take place within 45 days after the date of commitment to purchase. These
securities are subject to market fluctuation due to changes in market

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<PAGE>
interest rates, and it is possible that the market value at the time of
settlement could be higher or lower than the purchase price if the general level
of interest rates has changed. Delivery of and payment for these securities may
occur a month or more after the date of the purchase commitment. The Fund will
maintain with the custodian a separate account with liquid securities or cash in
an amount at least equal to these commitments. The interest rate realized on
these securities is fixed as of the purchase date, and no interest accrues to
the Fund before settlement. Although a Fund generally purchases securities on a
when-issued or forward commitment basis with the intention of actually acquiring
securities for its portfolio, a Fund may dispose of a when-issued security or
forward commitment prior to settlement if the Adviser deems it appropriate to do
so.

The Funds will only make commitments to purchase obligations on a
when-issued basis with the intention of actually acquiring the securities, but
may sell them before the settlement date. The when-issued securities are subject
to market fluctuation, and no interest accrues to the purchaser during this
period. The payment obligation and the interest rate that will be received on
the securities are each fixed at the time the purchaser enters into the
commitment. Purchasing obligations on a when-issued basis is a form of
leveraging and can involve a risk that the yields available in the market when
the delivery takes place may actually be higher than those obtained in the
transaction itself. In that case there could be an unrealized loss at the time
of delivery.

The Funds will establish segregated accounts with the Custodian and will
maintain liquid assets in an amount at least equal in value to the Funds'
commitments to purchase when-issued securities.

DESCRIPTION OF RATINGS

MUNICIPAL NOTE RATINGS. An S&P 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 highest rating for state and municipal and other short-term notes is
MIG-1 and VMIG-1. Short-term municipal securities rated MIG-1 or VMIG-1 are of
the best quality. They have 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. Municipal obligations rated MIG-2 and VMIG-2 are
high quality. Margins of protection are ample although not so large as in the
preceding group.

MUNICIPAL AND CORPORATE BOND RATINGS. Bonds rated AAA have the highest
rating S&P assigns to a debt obligation. Such a rating indicates an extremely
strong capacity to pay principal and interest. Bonds rated AA also qualify as
high-quality debt obligations. Capacity to pay principal and interest is very
strong, and in the majority of instances they differ from AAA issues only in
small degrees.

Bonds rated A by S&P have a strong capacity to pay interest and repay
principal although it is somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions

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<PAGE>
than debt in higher rated categories. Debt rated BBB is regarded as having an
adequate capacity to pay interest and repay principal. Whereas it normally
exhibits adequate protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay interest and
repay principal for debt in this category than in higher rated categories.

Bonds which are rated Aaa by Moody's are judged to be of the best quality.
They carry the smallest degree of investment risk and are generally referred to
as "gilt edge." Interest payments are protected by a large, or an 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. Bonds rated Aa by
Moody's are judged by Moody's to be of high quality by all standards. Together
with bonds rated Aaa, they comprise what are generally known as high-grade
bonds. They are rated lower than the best bonds because margins or protection
may not be as large as in Aaa-rated securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long-term risks appear somewhat larger than in Aaa-rated
securities.

Bonds which are rated A by Moody's possess many favorable investment
attributes and are to be considered as upper-medium grade obligations. Factors
giving security to principal and interest are considered adequate, but elements
may be present which suggest a susceptibility to impairment sometime in the
future.

Bonds which are rated Baa by Moody's are considered as medium-grade
obligations (I.E., they are neither highly protected nor poorly secured).
Interest payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well.

COMMERCIAL PAPER RATINGS. Commercial paper rated A by S&P is regarded by
S&P as having the greatest capacity for timely payment. Issues rated A are
further refined by use of the numbers 1+, 1, 2 and 3 to indicate the relative
degree of safety, issues rated A-1+ are those with an "overwhelming degree" of
credit protection. Those rated A-1 reflect a "very strong" degree of safety
regarding timely payment. Those rated A-2 reflect a "satisfactory" degree of
safety regarding timely payment.

Commercial paper issuers rated Prime-1 or Prime-2 by Moody's are judged by
Moody's to be of "superior" quality and "strong" quality, respectively, on the
basis of relative repayment capacity.

INVESTMENT LIMITATIONS

The following investment limitations apply to the Tax Free, Institutional Tax
Free, California Tax Exempt, Intermediate-Term Municipal, Pennsylvania Municipal
Bond, and Pennsylvania Tax Free Funds.

No Fund may:

1. Purchase securities of any issuer (except securities issued or guaranteed by
the United States Government, its agencies or instrumentalities) if, as a
result, more than 5% of the total assets of the Fund (based on current
market value at the time of investment) would be invested in the securities
of such issuer: provided, however, that each Fund (except the
Intermediate-Term Municipal and Pennsylvania Municipal Bond Funds) may
invest up to 25% of its total assets without regard to this restriction of,
and as permitted by, Rule 2a-7.

2. Purchase any securities which would cause more than 25% of the total assets
of the Fund, based on current value at the time of such purchase, to be
invested in the securities of one or more issuers conducting their principal
business activities in the same industry, provided that this limitation does
not apply to investments in obligations issued or guaranteed by the U.S.
Government or its agencies and instrumentalities.

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<PAGE>
3. Borrow money except for temporary or emergency purposes and then only in an
amount not exceeding 10% of the value of total assets. The California Tax
Exempt Fund has a fundamental policy that to the extent such borrowing
exceeds 5% of the value of the Fund's total assets, borrowing will be done
from a bank and in accordance with the requirements of the 1940 Act. This
borrowing provision is included solely to facilitate the orderly sale of
portfolio securities to accommodate heavy redemption requests if they should
occur and is not for investment purposes. All borrowings of the Funds, in
excess of 5% of its total assets, will be repaid before making additional
investments and any interest paid on such borrowings will reduce income.

4. Purchase securities of other investment companies, except that the
Intermediate-Term Municipal, Pennsylvania Municipal Bond and Pennsylvania
Tax Free Funds may only purchase securities of money market funds, as
permitted by the 1940 Act and the rules and regulations thereunder.

5. Make loans, except that each Fund may purchase or hold debt instruments in
accordance with its investment objective and policies and may enter into
repurchase agreements, provided that repurchase agreements maturing in more
than seven days, restricted securities and other illiquid securities are not
to exceed, in the aggregate, 10% of the Fund's net assets, except for the
Intermediate-Term Municipal Fund, for which it cannot exceed 15% of the
Fund's net assets.

6. Pledge, mortgage or hypothecate assets except to secure temporary borrowings
permitted by (1) above in aggregate amounts not to exceed 10% of the net
assets of such Fund taken at current value at the time of the incurrence of
such loan.

7. Invest in companies for the purpose of exercising control.

8. Acquire more than 10% of the voting securities of any one issuer.

9. Purchase or sell real estate, real estate limited partnership interests,
commodities or commodities contracts including futures contracts. However,
subject to its permitted investments, any Fund may invest in municipal
securities or other obligations secured by real estate or other interests
therein.

10. Make short sales of securities, maintain a short position or purchase
securities on margin, except that the Fund may obtain short-term credits as
necessary for the clearance of security transactions.

11. Act as an underwriter of securities of other issuers except as it may be
deemed an underwriter in selling a portfolio security.

12. Issue senior securities (as defined in the 1940 Act) except in connection
with permitted borrowings as described in this Statement of Additional
Information or as permitted by rule, regulation or order of the SEC.

13. Purchase or retain securities of an issuer if, to the knowledge of the
Trust, an officer, trustee, partner or director of the Trust or any
investment adviser of the Trust owns beneficially more than 1/2 of 1% of the
shares or securities of such issuer and all such officers, trustees,
partners and directors owning more than 1/2 of 1% of such shares or
securities together own more than 5% of such shares or securities.

14. Purchase securities of any company which has (with predecessors) a record of
less than three years continuing operations (except (i) obligations issued
or guaranteed by the United States Government, its agencies or
instrumentalities, or (ii) municipal securities which are rated by at least
two nationally recognized municipal bond rating services or determined by
the Adviser or Sub-Adviser to be of "high quality") if, as a result, more
than 5% of the total assets (taken at current value) would be invested in
such securities.

15. Purchase warrants, calls, straddles, spreads or combinations thereof, except
as permitted by this Statement of Additional Information.

16. Invest in interests in oil, gas or other mineral exploration or development
programs. The Institutional Tax Free Fund and the California Tax Exempt Fund
may not invest in oil, gas or mineral leases.

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<PAGE>
17. Invest more than 25% of total assets in issues within the same state or
similar type projects (except in specified categories). This investment
limitation applies to the Intermediate-Term Municipal Fund, Tax Free Fund,
Institutional Tax Free Fund, and Pennsylvania Municipal Bond Fund. For the
Pennsylvania Municipal Bond Fund, this limitation does not apply to the
extent stated in its investment objective and policies.

The foregoing percentages (except the limitation on borrowing) will apply at
the time of the purchase of a security. These investment limitations and the
investment limitations in each Prospectus are fundamental policies of the Trust
and may not be changed without shareholder approval. It is a fundamental policy
of the Intermediate-Term Municipal and Pennsylvania Municipal Bond Funds to
abide by the maturity restrictions and to invest solely in the permitted
investments described in this Statement of Additional Information and in their
respective Prospectuses.

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

The following investment limitations and non-fundamental policies apply to
the California Municipal Bond, Massachusetts Municipal Bond, New Jersey
Municipal Bond, Ohio Tax Free and New York Municipal Bond Funds.

INVESTMENT LIMITATIONS

No Fund may:

1. Purchase any securities which would cause more than 25% of the total assets
of the Fund, based on current value at the time of such purchase, to be
invested in the securities of one or more issuers conducting their principal
business activities in the same industry, provided that this limitation does
not apply to investments in obligations issued or guaranteed by the U.S.
Government or its agencies and instrumentalities or to investments in
tax-exempt securities issued by governments or political subdivisions of
governments; provided, however, that the Ohio Tax Free Fund may invest up to
25% of its total assets without regards to this restriction of, and as
permitted by, Rule 2a-7.

2. Borrow money in an amount exceeding 33 1/3% of the value of its total
assets, provided that for purposes of this limitation, investment strategies
which either obligate the Fund to purchase securities or require the Fund to
segregate assets are not considered to be borrowings. To the extent that its
borrowings exceed 5% of its assets (i) all borrowings will be repaid before
making additional investments and any interest paid on such borrowings will
reduce income; and (ii) asset coverage of at least 300% is required.

3. Make loans if, as a result, more than 33 1/3% of its total assets would be
lent to other parties, except that each Portfolio may (i) purchase or hold
debt instruments in accordance with its investment objective and policies;
(ii) enter into repurchase agreements; and (iii) lend its securities.

4. Purchase or sell real estate, physical commodities, or commodities
contracts, except that each Portfolio may purchase (i) marketable securities
issued by companies which own or invest in real estate (including real
estate investment trusts), commodities, or commodities contracts, and
(ii) commodities contracts relating to financial instruments, such as
financial futures contracts and options on such contracts.

5. Act as an underwriter of securities of other issuers except as it may be
deemed an underwriter in selling a portfolio security.

6. Issue senior securities (as defined in the Investment Company Act of 1940,
as amended (the "1940 Act"), except as permitted by rule, regulation or
order of the SEC.

7. Invest in interests in oil, gas or other mineral exploration or development
programs and oil, gas or mineral leases.

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NON-FUNDAMENTAL POLICIES

The following investment limitations are non-fundamental policies and may be
changed without shareholder approval.

1. Pledge, mortgage or hypothecate assets except to secure borrowings permitted
by the Portfolio's fundamental limitation on borrowing.

2. Invest in companies for the purpose of exercising control.

3. Purchase securities on margin or effect short sales, except that each Fund
may (i) obtain short-term credits as necessary for the clearance of security
transactions, (ii) provide initial and variation margin payments in
connection with transactions involving futures contracts and options on such
contracts, and (iii) make short sales "against the box" or in compliance
with the SEC's position regarding the asset segregation requirements of
Section 18 of the 1940 Act.

4. Purchase securities which are not readily marketable if, in the aggregate,
more than 15% (10% for the Ohio Tax Free Fund) of its total assets would be
invested in such securities.

5. Purchase or hold illiquid securities, I.E., securities that cannot be
disposed of for their approximate carrying value in seven days or less
(which term includes repurchase agreements and time deposits maturing in
more than seven days) if, in the aggregate, more than 15% of its total
assets would be invested in illiquid securities.

6. Invest its assets in securities of any investment company, except as
permitted by the 1940 Act.

The foregoing percentages will apply at the time of the purchase of a
security and shall not be violated unless an excess or deficiency occurs,
immediately after or as a result of a purchase of such security.

The following investment limitations apply to the Massachusetts Tax Free
Money Market Fund. These investment limitations are fundamental policies of the
Fund and may not be changed without shareholder approval.

The Fund may not:

1. Purchase any securities which would cause more than 25% of the total assets
of the Fund, based on current value at the time of such purchase, to be
invested in the securities of one or more issuers conducting their principal
business activities in the same industry, provided that this limitation does
not apply to investments in (a) obligations issued or guaranteed by the U.S.
Government or its agencies and instrumentalities, or (b) obligations of
state or municipal governments and their political subdivisions.

2. Borrow, except that the Fund may (a) borrow from banks for temporary or
emergency purposes, including the meeting of redemption requests which might
otherwise require the untimely disposition of securities, and (b) to the
extent consistent with the Fund's investment objective and policies, enter
into reverse repurchase agreement, forward roll transactions and similar
investment techniques and strategies. To the extent it engages in
transactions described in (a) and (b), the Fund will be limited so that no
more than 33 1/3% of its total assets (including the amount borrowed), less
liabilities (not including the amount borrowed) valued at the time the
borrowing is made, is derived from such transactions.

3. Make loans, except that the Fund may (a) purchase or hold debt instruments
in accordance with its investment objective and policies, (b) enter into
repurchase agreements, and (c) loan its portfolio securities, to the fullest
extent permitted under the 1940 Act, and any rules, regulation or order
thereunder.

4. Purchase or sell real estate, real estate limited partnership interests,
commodities or commodities contracts including futures contracts. However,
subject to its permitted investments, the Fund may

S-18
<PAGE>
(a) invest in securities of issuers engaged in the real estate business or
the business of investing in real estate (including interests in limited
partnerships owning or otherwise engaging in the real estate business or the
business of investing in real estate) and securities which are secured by
real estate or interests therein; (b) hold or sell real estate received in
connection with securities it holds or held; or (c) trade in futures
contracts and options on futures contracts (including options on currencies)
to the extent consistent with the Fund's investment objective and policies.

5. Act as an underwriter of securities of other issuers except as it may be
deemed an underwriter in selling a portfolio security.

6. Issue senior securities (as defined in the 1940 Act) except in connection
with permitted borrowings as described in this Statement of Additional
Information or as permitted by the 1940 Act, and any rule, regulation or
order of the SEC thereunder.

The foregoing percentages (except the limitation on borrowing) will apply at
the time of the purchase of a security.

NON-FUNDAMENTAL POLICIES

The following are non-fundamental policies and may be changed by the Board
of Trustees without shareholder approval. The Fund may not:

1. With respect to 75% of its total assets, purchase securities of any issuer
(other than U.S. government securities or securities subject to a guarantee
issued by a person not controlled by the issuer) if, as a result, more than
5% of total assets would be invested in the securities of such issuer;
provided that the Fund may not invest more than 5% of its total assets in
securities of a single issuer unless such securities are first tier
securities. In determining compliance with this restriction, the provisions
of Rule 2a-7 under the 1940 shall apply.

2. Purchase second tier conduit securities of any issuer (other than securities
subject to a guarantee issued by a person not controlled by the issuer) if,
as a result, more than the greater of 1% of its total assets or $1 million
would be invested in second tier conduit securities of such issuer. In
determining compliance with this restriction, the provisions of Rule 2a-7
under the 1940 shall apply.

3. Invest in companies for the purpose of exercising control.

4. Purchase illiquid securities, I.E., securities that cannot be disposed at
approximately the amount at which the fund has valued them in seven days or
less (which term includes repurchase agreements and time deposits maturing
in more than seven days) if, in the aggregate, more than 10% of its total
assets would be invested in illiquid securities.

5. Purchase securities of other investment companies, except that the Fund may
purchase securities of money market funds, as permitted by the 1940 Act and
any rule, regulation and order thereunder, including Rule 2a-7.

6. Sell securities short unless it owns the security or the right to obtain the
security or equivalent securities (transactions in futures contracts and
options are not considered selling securities short).

7. Purchase securities on margin, except that the Fund may obtain short-term
credits that are necessary for the clearance of transactions, and provided
that margin payments in connection with futures contracts and options on
futures contracts shall not constitute purchasing securities on margin.

S-19
<PAGE>
STATE SPECIFIC DISCLOSURE

The following information constitutes only a brief summary, and is not
intended as a complete description.

SPECIAL CONSIDERATIONS RELATING TO CALIFORNIA MUNICIPAL SECURITIES

The ability of issuers to pay interest on, and repay principal of,
California municipal securities ("California Municipal Securities") may be
affected by (1) amendments to the California Constitution and related statutes
that limit the taxing and spending authority of California government entities,
and related civil actions, (2) a wide variety of California laws and
regulations, and (3) the general financial condition of the State of California.

There could be economic, business or political developments which might
affect all Municipal Securities of a similar type. To the extent that a
significant portion of the Fund's assets are invested in Municipal Securities
payable from revenues on similar projects, the Fund will be subject to the risks
presented by such projects to a greater extent than it would be if the Fund's
assets were not so invested. Moreover, in seeking to attain its investment
objective the Fund may invest all or any part of its assets in Municipal
Securities that are industrial development bonds.

CALIFORNIA RISK FACTORS. Under normal conditions, the Fund will be fully
invested in obligations which produce income exempt from federal income tax and
California state income tax. Accordingly, the Fund will have considerable
investments in California municipal obligations. As a result, the Fund will be
more susceptible to factors which adversely affect issuers of California
obligations than a mutual fund which does not have as great a concentration in
California municipal obligations.

An investment in the Fund will be affected by the many factors that affect
the financial condition of the State of California. For example, financial
difficulties of the State, its counties, municipalities and school districts
that hinder efforts to borrow and credit ratings are factors which may affect
the Fund.

ADDITIONAL CONSIDERATIONS. With respect to Municipal Securities issued by
the State of California and its political subdivisions, as well as certain other
governmental issuers such as the Commonwealth of Puerto Rico, the Trust cannot
predict what legislation, if any, may be proposed in the California State
Legislature as regards the California State personal income tax status of
interest on such obligations, or which proposals, if any, might be enacted. Such
proposals, if enacted, might materially adversely affect the availability of
California Municipal Securities for investment by the Portfolios and the value
of the Portfolios' investments.

SPECIAL CONSIDERATIONS RELATING TO MASSACHUSETTS MUNICIPAL SECURITIES

MASSACHUSETTS RISK FACTORS. Under normal conditions, the Fund will be fully
invested in obligations which produce income exempt from federal income tax and
Massachusetts state tax. Accordingly, the Fund will have considerable
investments in Massachusetts municipal obligations. As a result, the Fund will
be more susceptible to factors which adversely affect issuers of Massachusetts
obligations than a mutual fund which does not have as great a concentration in
Massachusetts municipal obligations.

An investment in the Fund will be affected by the many factors that affect
the financial condition of the Commonwealth of Massachusetts. For example,
financial difficulties of the Commonwealth, its counties, municipalities and
school districts that hinder efforts to borrow and credit ratings are factors
which may affect the Fund.

SPECIAL CONSIDERATIONS RELATING TO NEW JERSEY MUNICIPAL SECURITIES

NEW JERSEY RISK FACTORS. Under normal conditions, the Fund will be fully
invested in obligations which produce income exempt from federal income tax and
New Jersey state tax. Accordingly, the Fund will have considerable investments
in New Jersey municipal obligations. As a result, the Fund will be more

S-20
<PAGE>
susceptible to factors which adversely affect issuers of New Jersey obligations
than a mutual fund which does not have a great concentration in New Jersey
municipal obligations.

An investment in the Fund will be affected by the many factors that affect
the financial condition of the State of New Jersey. For example, financial
difficulties of the State, its counties, municipalities and school districts,
that hinder efforts to borrow and credit ratings are factors which may affect
the Fund.

SPECIAL CONSIDERATIONS RELATING TO NEW YORK MUNICIPAL SECURITIES

REVENUES AND EXPENDITURES. New York's Governmental Funds receive a majority
of their revenues from taxes levied by the State. Investment income, fees and
assessments, abandoned property collections, and other varied sources supply the
balance of the receipts for these Funds. New York's major expenditures are
grants to local governments.

NEW YORK RISK FACTORS. The Fund's concentration in investments in New York
Municipal Securities involves greater risk than if their investments were more
diversified. These risks result from (1) amendments to the New York Constitution
and other statutes that limit the taxing and spending authority of New York
government entities; (2) the general financial condition of the State of New
York, and (3) a variety of New York laws and regulations that may affect,
directly or indirectly, New York municipal securities. The ability of issuers of
Municipal Securities to pay interest on, or repay principal of, Municipal
Securities may be impaired as a result. The Fund's yield and share price are
sensitive to political and economic developments within the State of New York,
and to the financial condition of the State, its public authorities, and
political subdivisions, particularly the City of New York. In the recent past,
both the State and the City experienced financial difficulties related to the
poor economic performance and recurring deficits. The State's credit standing
has been reduced, and its ability to provide assistance to its public
authorities and political subdivisions could be impaired.

NEW YORK CITY. The fiscal health of the State is closely related to the
fiscal health of its localities, particularly the City, which has required
significant financial assistance from the State in the past.

SPECIAL CONSIDERATIONS RELATING TO PENNSYLVANIA MUNICIPAL SECURITIES

REVENUES AND EXPENDITURES. The Constitution of Pennsylvania provides that
operating budget appropriations may not exceed the estimated revenues and
available surplus in the fiscal year for which funds are appropriated. Annual
budgets are enacted for the General Fund and for certain special revenue funds
which represent the majority of expenditures of the Commonwealth. Pennsylvania's
Governmental Funds receive a majority of their revenues from taxes levied by the
Commonwealth. Interest earnings, licenses and fees, lottery ticket sales, liquor
store profits, miscellaneous revenues, augmentations and federal government
grants supply the balance of the receipts of these funds.

PENNSYLVANIA RISK FACTORS. Under normal conditions the Fund will be fully
invested in obligations which produce interest income from federal income tax
and Pennsylvania state income tax. Accordingly, the Fund will have considerable
investments in Pennsylvania municipal obligations. As a result, the Fund will be
more susceptible to factors which adversely affect issuers of Pennsylvania
obligations than a mutual fund which does not have as great a concentration in
Pennsylvania municipal obligations.

An investment in the Fund will be affected by the many factors that affect
the financial condition of the Commonwealth of Pennsylvania. For example,
financial difficulties of the Commonwealth, its counties, municipalities and
school districts that hinder efforts to borrow and lower credit ratings are
factors which may affect the Fund.

LOCAL GOVERNMENT DEBT. Local government in Pennsylvania consists of
numerous individual units. Each unit is distinct and independent of other local
units, although they may overlap geographically. There is extensive general
legislation applying to local government. Municipalities may also issue revenue

S-21
<PAGE>
obligations without limit and without affecting their general obligation
borrowing capacity if the obligations are projected to be paid solely from
project revenues. Municipal authorities and industrial development authorities
are also widespread in Pennsylvania.

THE ADMINISTRATOR

The Trust and SEI Investments Fund Management ("SEI Management" or the
"Administrator") have entered into a Administration Agreement (the
"Administration Agreement"). The Administration Agreement provides that the
Administrator shall not be liable for any error of judgement or mistake of law
or for any loss suffered by the Trust in connection with the matters to which
the Administration Agreement relates, except a loss resulting from willful
misfeasance, bad faith or gross negligence on the part of the Administrator in
the performance of its duties or from reckless disregard of its duties and
obligations thereunder.

The continuance of the Administration Agreement must be specifically
approved at least annually (i) by the vote of a majority of the Trustees or by
the vote of a majority of the outstanding voting securities of the Fund, and
(ii) by the vote of a majority of the Trustees of the Trust who are not parties
to the Administration Agreement or an "interested person" (as that term is
defined in the 1940 Act) of any party thereto, cast in person at a meeting
called for the purpose of voting on such approval. The Administration Agreement
is terminable at any time as to any Fund without penalty by the Trustees of the
Trust, by a vote of a majority of the outstanding shares of the Fund or by the
Administrator on not less than 30 days' nor more than 60 days' written notice.

The Administrator, a Delaware business trust, has its principal business
offices at Oaks, Pennsylvania 19456. SEI Investments Management Corporation, a
wholly-owned subsidiary of SEI Investments Company ("SEI Investments"), is the
owner of all beneficial interest in the Administrator. SEI Investments and its
subsidiaries and affiliates, including the Administrator, are leading providers
of funds evaluation services, trust accounting systems, and brokerage and
information services to financial institutions, institutional investors, and
money managers. The Administrator and its affiliates also serve as administrator
or sub-administrator to the following other mutual funds including, but without
limitation to: The Achievement Funds Trust, The Advisors' Inner Circle Fund,
Alpha Select Funds, Amerindo Funds, Inc., The Arbor Fund, ARK Funds, Armada
Funds, The Armada Advantage Fund, Bishop Street Funds, CNI Charter Funds,
CUFUND, The Expedition Funds, First American Funds, Inc., First American
Investment Funds, Inc., First American Strategy Funds, Inc., Friends Ivory
Funds, HighMark Funds, Huntington Funds, Huntington VA Funds, The Nevis Fund,
Inc., Oak Associates Funds, The PBHG Funds, Inc., PBHG Insurance Series Fund,
Inc., The Pillar Funds, SEI Asset Allocation Trust, SEI Daily Income Trust, SEI
Index Funds, SEI Institutional International Trust, SEI Institutional
Investments Trust, SEI Institutional Managed Trust, SEI Insurance Products
Trust, SEI Liquid Asset Trust, SEI Tax Exempt Trust, STI Classic Funds, STI
Classic Variable Trust, TIP Funds, UAM Funds Trust, UAM Funds, Inc., and UAM
Funds, Inc. II.

S-22
<PAGE>
For the fiscal years ended August 31, 1998, 1999, and 2000, the Funds paid
management fees, after waivers and/or reimbursements as follows:

<TABLE>
<CAPTION>
FEES WAIVED OR
FEES PAID (000) REIMBURSED (000)
------------------------------ ------------------------------
FUND 1998 1999 2000 1998 1999 2000
---- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Intermediate-Term Municipal Fund.............. $ 793 $1,259 $ $ 95 $ 110 $
California Municipal Bond Fund................ $ .081 $ 58 $ $ .007 $ 16 $
Massachusetts Municipal Bond Fund............. $ .045 $ 16 $ $ .003 $ 7 $
New Jersey Municipal Bond Fund................ $ .054 $ 24 $ $ .005 $ 7 $
New York Municipal Bond Fund.................. $ .058 $ 20 $ $ .005 $ 8 $
Pennsylvania Municipal Bond Fund.............. $ 221 $ 291 $ $ 124 $ 101 $
Institutional Tax Free Fund................... $2,706 $2,627 $ $1,032 $ 972 $
Tax Free Fund................................. $1,852 $2,198 $ $ 0 $ 0 $
California Tax Exempt Fund.................... $1,085 $ 958 $ $ 101 $ 100 $
Ohio Tax Free Bond Fund....................... * * * * * *
Pennsylvania Tax Free Fund.................... $ 112 $ 130 $ $ 34 $ 40 $
Massachusetts Tax Free Money Market Fund...... * * * * * *
</TABLE>

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

* Not in operation during the period.

THE ADVISERS AND SUB-ADVISERS

SEI Investments Management Corporation ("SIMC" or the "Adviser") serves as
investment adviser to the Fund. SIMC is a wholly-owned subsidiary of SEI
Investments, a financial services company. The principal business address of
SIMC and SEI Investments is Oaks, Pennsylvania 19456. SEI Investments was
founded in 1968 and is a leading provider of investment solutions to banks,
institutional investors, investment advisers and insurance companies. Affiliates
of SIMC have provided consulting advice to institutional investors for more than
20 years, including advice regarding the selection and evaluation of investment
advisers. SIMC currently serves as adviser to more than 46 investment companies,
including more than [ ] funds, with more than $[ ] billion in assets as of
October 31, 2000.

SIMC acts as the investment adviser to the Massachusetts Municipal Bond, New
York Municipal Bond, California Municipal Bond, New Jersey Municipal Bond,
Pennsylvania Municipal Bond Fund, Massachusetts Tax Free Money Market Fund, and
Intermediate-Term Municipal Funds and operates as a "manager of managers." SIMC
and the Trust have obtained an exemptive order from the Securities and Exchange
Commission ("SEC") that permits SIMC, with the approval of the Trust's Board of
Trustees, to hire, retain or terminate sub-advisers unaffiliated with SIMC for
the Funds without submitting the sub-advisory agreements to a vote of the Funds'
shareholders. The exemptive relief permits the disclosure of only the aggregate
amount payable by SIMC under all such sub-advisory agreements. The Funds will
notify shareholders in the event of any additional or change in the identity of
their sub-advisers.

As Adviser, SIMC oversees the investment advisory services provided to such
Funds and manages the cash portion of the Funds' assets. Pursuant to separate
sub-advisory agreements with SIMC, and under the supervision of the Adviser and
the Board of Trustees, the sub-advisers to such funds are responsible for the
day-to-day investment management of all or a discrete portion of the assets of
the Funds. Sub-advisers are selected based primarily upon the research and
recommendations of SIMC, which evaluates quantitatively and qualitatively the
sub-advisers' skills and investment results in managing assets for specific
asset classes, investment styles and strategies.

Subject to Board review, SIMC allocates and, when appropriate, reallocates
the Funds' assets to the sub-advisers, monitors and evaluates the sub-advisers'
performance, and oversees sub-adviser compliance with the Funds' investment
objectives, policies and restrictions. SIMC HAS THE ULTIMATE RESPONSIBILITY FOR

S-23
<PAGE>
THE INVESTMENT PERFORMANCE OF THE INTERMEDIATE TERM MUNICIPAL, CALIFORNIA
MUNICIPAL BOND, MASSACHUSETTS MUNICIPAL BOND, NEW JERSEY MUNICIPAL BOND,
PENNSYLVANIA MUNICIPAL BOND FUND, MASSACHUSETTS TAX FREE MONEY MARKET FUND, AND
NEW YORK MUNICIPAL BOND FUNDS DUE TO ITS RESPONSIBILITY TO OVERSEE SUB-ADVISERS
AND RECOMMEND THEIR HIRING, TERMINATION AND REPLACEMENT.

For its advisory services, SIMC is entitled to a fee, which is calculated
daily and paid monthly, at an annual rate of 0.33% of the average daily net
assets of the Intermediate Term Municipal, California Municipal Bond,
Massachusetts Municipal Bond, New Jersey Municipal Bond, and New York Municipal
Bond Funds, 0.35% of the average daily net assets of the Pennsylvania Municipal
Bond Fund and [ ]% of the average daily net assets of the Massachusetts Tax
Free Money Market Fund. SIMC pays the sub-advisers out its investment advisory
fees.

Each Advisory Agreement or Sub-Advisory Agreement provides that each Adviser
or Sub-Adviser shall not be protected against any liability to the Trust or its
shareholders by reason of willful misfeasance, bad faith or gross negligence on
its part in the performance of its duties or from reckless disregard of its
obligations or duties thereunder.

The continuance of each Advisory or Sub-Advisory Agreement after the first
two (2) years must be specifically approved at least annually (i) by the vote of
a majority of the outstanding shares of that Fund or by the Trustees, and
(ii) by the vote of a majority of the Trustees who are not parties to such
Advisory or Sub-Advisory Agreement or "interested persons" of any party thereto,
cast in person at a meeting called for the purpose of voting on such approval.
Each Advisory or Sub-Advisory Agreement will terminate automatically in the
event of its assignment, and is terminable at any time without penalty by the
Trustees of the Trust or, with respect to a Fund, by a majority of the
outstanding shares of that Fund, on not less than 30 days' nor more than 60
days' written notice to the Adviser or Sub-Adviser, or by the Adviser or
Sub-Adviser on 90 days' written notice to the Trust.

Deutsche Asset Management Inc. ("DeAM"), acts as investment sub-adviser to
the Pennsylvania Municipal Bond Fund. Prior to August 29, 2000, DeAM acted as
the investment adviser to the Fund. DeAM is a wholly-owned, U.S. based
subsidiary of Deutsche Asset Management Holdings, BV, and was organized in 1985.
As of October 31, 2000, total assets under management by DeAM were approximately
$[ ] billion.

Weiss, Peck & Greer, L.L.C., ("WPG"), a wholly owned subsidiary of Robeco
Group, serves as investment adviser to the California Tax Exempt, Pennsylvania
Tax Free, Institutional Tax Free and Tax Free Funds. The WPG invests the assets
of each such Fund, and continuously reviews, supervises and administers the
investment program of the Funds. WPG is a limited liability company founded as a
limited partnership in 1970, and engages in investment management, venture
capital management and management buyouts. WPG has been active since its
founding in managing portfolios of tax exempt securities. As of October 31,
2000, total assets under management were approximately $[ ] billion. For its
advisory services, WPG is entitled to a fee, which is calculated daily and paid
monthly, at an annual rate of [ ]% of the average daily net assets of the
California Tax Exempt, Pennsylvania Tax Free, Institutional Tax Free, and Tax
Free Funds.

Standish, Ayer & Wood, Inc. ("SAW"), serves as investment sub-adviser to the
Massachusetts Municipal Bond, New York Municipal Bond and Intermediate-Term
Municipal Funds. SAW has been providing investment management services to
institutions and managing municipal securities since 1934. As of October 31,
2000, total assets under management were $[ ] billion.

Van Kampen Management, Inc. ("Van Kampen"), serves as investment sub-adviser
to the New Jersey Municipal Bond and California Municipal Bond Funds. Van Kampen
is an indirect, wholly-owned subsidiary of Morgan Stanley Dean Witter & Co., and
was founded in 1974. As of October 31, 2000, assets under management were
approximately $[ ] billion.

S-24
<PAGE>
For the fiscal years ended August 31, 1998, 1999, and 2000, the Funds paid
advisory fees, after waivers and/or reimbursements as follows:

<TABLE>
<CAPTION>
FEES WAIVED OR
FEES PAID (000) REIMBURSED (000)
------------------------------ ------------------------------
FUND 1998 1999 2000 1998 1999 2000
---- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Intermediate-Term Municipal Fund+.................. $1,221 $1,883 $ $0 $0 $
California Municipal Bond Fund..................... $ .055 $ 101 $ $0 $0 $
Massachusetts Municipal Bond Fund.................. $ .030 $ 32 $ $0 $0 $
New Jersey Municipal Bond Fund..................... $ .037 $ 43 $ $0 $0 $
New York Municipal Bond Fund....................... $ .039 $ 39 $ $0 $0 $
Pennsylvania Municipal Bond Fund................... $ 198 $ 224 $ $0 $0 $
Institutional Tax Free Fund........................ $ 404 $ 371 $ $0 $0 $
Tax Free Fund...................................... $ 200 $ 226 $ $0 $0 $
California Tax Exempt Fund......................... $ 201 $ 170 $ $0 $0 $
Ohio Tax Free Bond Fund............................ * * * * * *
Pennsylvania Tax Free Fund......................... $ 16 $ 17 $ $0 $0 $
Massachusetts Tax Free Money Market Fund........... * * * * * *
</TABLE>

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

* Not in operation during the period.

For the fiscal year ended August 31, 1999 and 2000, SIMC paid the
Sub-Advisers as follows:

<TABLE>
<CAPTION>
FEES PAID FEES WAIVED
(000) (000)
------------------- -------------------
1999 2000 1999 2000
---- ---- ---- ----
<S> <C> <C> <C> <C>
Intermediate-Term Municipal Fund............................ $989 $ $ 0 $
California Municipal Bond Fund.............................. $ 46 $ $ 0 $
Massachusetts Municipal Bond Fund........................... $ 17 $ $ 0 $
New Jersey Municipal Bond Fund.............................. $ 19 $ $ 0 $
New York Municipal Bond Fund................................ $ 21 $ $ 0 $
Pennsylvania Municipal Bond Fund............................ $ $ $ $
Massachusetts Tax Free Money Market Fund.................... * * * *
</TABLE>

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

* Not in operation during the period.

DISTRIBUTION AND SHAREHOLDER SERVICING

The Trust has adopted Distribution Plans for Class D and CNI Class shares of
the Funds (the "Plans") in accordance with the provisions of Rule 12b-1 under
the 1940 Act, which regulates circumstances under which an investment company
may directly or indirectly bear expenses relating to the distribution of its
shares. In this regard, the Board of Trustees has determined that the Plans and
the Distribution Agreement are in the best interests of the shareholders.
Continuance of the Plans must be approved annually by a majority of the Trustees
of the Trust and by a majority of the trustees who are not "interested persons"
of the Trust as that term is defined in the 1940 Act and who have no direct or
indirect financial interest in the operation of a Distribution Plan or in any
agreements related thereto ("Qualified Trustees"). The Plans require that
quarterly written reports of amounts spent under the Plans and the purposes of
such expenditures be furnished to and reviewed by the Trustees. The Plans may
not be amended to increase materially the amount which may be spent thereunder
without approval by a majority of the outstanding

S-25
<PAGE>
shares of the Fund or class affected. All material amendments of the Plans will
require approval by a majority of the Trustees of the Trust and of the Qualified
Trustees.

The Plans provide that the Trust will pay the Distributor a fee on the
Class D and CNI Class shares of the Fund. The Distributor may use this fee for:
(i) compensation for its services in connection with distribution assistance or
provision of shareholder services or (ii) payments to financial institutions and
intermediaries such as banks, savings and loan associations, insurance companies
and investment counselors, broker-dealers and the Distributor's affiliates and
subsidiaries as compensation for services or reimbursement of expenses incurred
in connection with distribution assistance or provision of shareholder services.

The Funds have also adopted shareholder servicing plans for their Class A,
Class B, Class C and CNI Class shares (the "Service Plans"), and Administrative
Services Plans for their Class B and Class C shares. Under these Service and
Administrative Services Plans, the Distributor may perform, or may compensate
other service providers for performing, the following shareholder and
administrative services: maintaining client accounts; arranging for bank wires;
responding to client inquiries concerning services provided on investments;
assisting clients in changing dividend options, account designations and
addresses; sub-accounting; providing information on share positions to clients;
forwarding shareholder communications to clients; processing purchase, exchange
and redemption orders; and processing dividend payments. Under the Service and
Administrative Services Plans, the Distributor may retain as a profit any
difference between the fee it receives and the amount it pays to third parties.

For the fiscal year ended August 31, 1999, the Funds paid the following
amounts pursuant to the Distribution Plans:

<TABLE>
<CAPTION>
AMOUNT PAID
TO THIRD
PARTIES BY
DISTRIBUTOR OF PROSPECTUS
DISTRIBUTION- PRINTING & COSTS
TOTAL BASIS RELATED SALES MAILING ASSOCIATED WITH
FUND/CLASS AMOUNT POINTS SERVICES EXPENSES COSTS REGISTRATION
---------- ---------- -------- -------------- -------- ----------- ---------------
<S> <C> <C> <C> <C> <C> <C>
California Tax Exempt Fund -- CNI
Class+(1)........................ $2,047,025 .50% $0 $0 $0 $0
Tax Free Fund -- Class D(2)........ $ 2 .25% $0 $0 $0 $0
</TABLE>

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

+ Formerly the Class C shares; converted to Class G shares on March 18, 1996,
and were renamed CNI Class shares effective on December 31, 1997.

(1) As of June 21, 1999, CNI Class shares of the Fund closed to investors.

(2) As of March 1, 1999, Class D shares of the Fund closed to investors.

Except to the extent that the Manager or Advisers benefitted through
increased fees from an increase in the net assets of the Trust which may have
resulted in part from the expenditures, no interested person of the Trust nor
any Trustee of the Trust who is not an interested person of the Trust had a
direct or indirect financial interest in the operation of the Distribution Plans
or related agreements.

For the fiscal years ended August 31, 1998, 1999 and 2000, the aggregate
sales charges payable to the Distributor with respect to the Class D shares of
the Tax Free Fund were as follows:

<TABLE>
<CAPTION>
AGGREGATE SALES CHARGE AMOUNT RETAINED
YEAR PAYABLE TO DISTRIBUTOR BY DISTRIBUTOR
---- ---------------------- ---------------
<S> <C> <C>
1998 $0 $0
1999 $0 $0
2000 $0 $0
</TABLE>

S-26
<PAGE>
TRUSTEES AND OFFICERS OF THE TRUST

The management and affairs of the Trust are supervised by the Trustees under
the laws of the Commonwealth of Massachusetts. The Trustees have approved
contracts under which, as described above, certain companies provide essential
management services to the Trust.

The Trustees and Executive Officers of the Trust, their respective dates of
birth, and their principal occupations for the last five years are set forth
below. Each may have held other positions with the named companies during that
period. Unless otherwise noted, the business address of each Trustee and each
Executive Officer is SEI Investments Company, Oaks, Pennsylvania 19456. Certain
officers of the Trust also serve as officers of some or all of the following:
The Achievement Funds Trust, The Advisors' Inner Circle Fund, Alpha Select
Funds, The Arbor Fund, ARK Funds, Armada Funds, The Armada Advantage Fund,
Bishop Street Funds, CNI Charter Funds, CUFUND, The Expedition Funds, First
American Funds, Inc., First American Investment Funds, Inc., First American
Strategy Funds, Inc., Friends Ivory Funds, HighMark Funds, Huntington Funds,
Huntington VA Funds, The Nevis Fund, Inc., Oak Associates Funds, The PBHG Funds,
Inc., PBHG Insurance Series Fund, Inc., The Pillar Funds, SEI Asset Allocation
Trust, SEI Daily Income Trust, SEI Index Funds, SEI Institutional International
Trust, SEI Institutional Investments Trust, SEI Institutional Managed Trust, SEI
Insurance Products Trust, SEI Liquid Asset Trust, STI Classic Funds, STI Classic
Variable Trust, TIP Funds, UAM Funds Trust, UAM Funds, Inc. and UAM Funds,
Inc. II, each of which is an open-end management investment company managed by
SEI Investments Fund Management or its affiliates and distributed by SEI
Investments Distribution Co. ("the Distributor").

ROBERT A. NESHER (DOB 08/17/46)--Chairman of the Board of
Trustees*--Currently performs various services on behalf of SEI Investments for
which Mr. Nesher is compensated. Executive Vice President of SEI Investments,
1986-1994. Director and Executive Vice President of SIMC, the Administrator and
the Distributor, 1981-1994. Trustee of The Advisors' Inner Circle Fund, The
Arbor Fund, Bishop Street Funds, The Expedition Funds, Pillar Funds, SEI Asset
Allocation Trust, SEI Daily Income Trust, SEI Index Funds, SEI Institutional
International Trust, SEI Insurance Products Trust, SEI Institutional Investments
Trust, SEI Institutional Managed Trust, SEI Liquid Asset Trust, and SEI Tax
Exempt Trust.

WILLIAM M. DORAN (DOB 05/26/40)--Trustee*--1701 Market Street, Philadelphia,
PA 19103. Partner, Morgan, Lewis & Bockius LLP (law firm), counsel to the Trust,
SEI Investments, SIMC, the Administrator, and the Distributor. Director of SEI
Investments since 1974; Secretary of SEI Investments since 1978. Trustee of The
Advisors' Inner Circle Fund, The Arbor Fund, The Expedition Funds, SEI Asset
Allocation Trust, SEI Daily Income Trust, SEI Index Funds, SEI Institutional
International Trust, SEI Insurance Products Trust, SEI Institutional Investments
Trust, SEI Institutional Managed Trust, SEI Liquid Asset Trust, and SEI Tax
Exempt Trust.

F. WENDELL GOOCH (DOB 12/03/32)--Trustee**--President, Orange County
Publishing Co., Inc.; Publisher, Paoli News and Paoli Republican; and Editor,
Paoli Republican, October 1981-January 1997. President, H&W Distribution, Inc.,
since July 1984. Executive Vice President, Trust Department, Harris Trust and
Savings Bank and Chairman of the Board of Directors of The Harris Trust Company
of Arizona before January 1981. Trustee of SEI Asset Allocation Trust, SEI Daily
Income Trust, SEI Index Funds, SEI Institutional International Trust, SEI
Insurance Products Trust, SEI Institutional Investments Trust, SEI Institutional
Managed Trust, SEI Liquid Asset Trust, SEI Tax Exempt Trust, STI Classic Funds,
and STI Classic Variable Trust.

JAMES M. STOREY (DOB 04/12/31)--Trustee**--Partner, Dechert Price & Rhoads,
September 1987-December 1993. Trustee of The Advisors' Inner Circle Fund, The
Arbor Fund, The Expedition Funds, SEI Asset Allocation Trust, SEI Daily Income
Trust, SEI Index Funds, SEI Institutional International Trust, SEI Insurance
Products Trust, SEI Institutional Investments Trust, SEI Institutional Managed
Trust, SEI Liquid Asset Trust, and SEI Tax Exempt Trust.

S-27
<PAGE>
GEORGE J. SULLIVAN, JR. (DOB 11/13/42)--Trustee**--Chief Executive Officer,
Newfound Consultants Inc. since April 1997. General Partner, Teton Partners,
L.P., June 1991- December 1996; Chief Financial Officer, Noble Partners, L.P.,
March 1991-December 1996; Treasurer and Clerk, Peak Asset Management, Inc.,
since 1991; Trustee, Navigator Securities Lending Trust, since 1995. Trustee of
The Advisors' Inner Circle Fund, The Arbor Fund, The Expedition Funds, SEI Asset
Allocation Trust, SEI Daily Income Trust, SEI Index Funds, SEI Institutional
International Trust, SEI Insurance Products Trust, SEI Institutional Investments
Trust, SEI Institutional Managed Trust, SEI Liquid Asset Trust, and SEI Tax
Exempt Trust.

ROSEMARIE B. GRECO (DOB 03/31/46)--Trustee**--Principal, Grecoventures
(consulting firm) since August 1997. President, Corestates Financial Corp.,
1991-1997; Chief Executive Officer and President, Corestates Bank, N.A.,
1991-1997; Director, Sonoco, Inc.; Director, PECO Energy; Director, Radian,
Inc.; Trustee, Pennsylvania Real Estate Investment Trust; Director, Cardone
Industries, Inc.; Director, Genuardi Markets, Inc.; Director, PRWT Comserve,
Inc. Trustee of SEI Asset Allocation Trust, SEI Daily Income Trust, SEI Index
Funds, SEI Institutional International Trust, SEI Institutional Investments
Trust, SEI Institutional Managed Trust, SEI Insurance Products Trust, SEI Liquid
Asset Trust and SEI Tax Exempt Trust.

EDWARD D. LOUGHLIN (DOB 03/07/51)--President and Chief Executive
Officer--Executive Vice President and President--Asset Management Division of
SEI Investments since 1993. Executive Vice President of SIMC and the
Administrator since 1994. Senior Vice President of the Distributor, 1986-1991;
Vice President of the Distributor, 1981-1986.

TIMOTHY D. BARTO (DOB 03/28/68)--Vice President and Assistant
Secretary--Employed by SEI Investments since October 1999. Vice President and
Assistant Secretary of SEI Investments Management Corporation, the Administrator
and Distributor since December 1999. Associate at Dechert Price & Rhoads
(1997-1999). Associate at Richter, Miller & Finn (1994-1997).

TODD B. CIPPERMAN (DOB 02/14/66)--Vice President and Assistant
Secretary--Senior Vice President and General Counsel of SEI Investments. Senior
Vice President, General Counsel and Secretary of the Adviser, the Administrator
and the Distributor since 2000, Vice President and Assistant Secretary of SEI
Investments, the Adviser, the Administrator and the Distributor, 1995-2000.
Associate, Dewey Ballantine (law firm), 1994-1995. Associate, Winston & Strawn
(law firm), 1991-1994.

JAMES R. FOGGO (DOB 06/30/64)--Vice President and Assistant Secretary--Vice
President and Assistant Secretary of SEI Investments since January 1998. Vice
President of the SIMC, Administrator and Distributor since May 1999. Associate,
Paul Weiss, Rifkind, Wharton & Garrison (law firm), 1998. Associate, Baker &
McKenzie (law firm), 1995-1998. Associate, Battle Fowler L.L.P. (law firm),
1993-1995. Operations Manager, The Shareholder Services Group, Inc., 1986-1990.

LYDIA A. GAVALIS (DOB 06/05/64)--Vice President and Assistant
Secretary--Vice President and Assistant Secretary of SEI Investments, SIMC, the
Administrator and the Distributor since 1998. Assistant General Counsel and
Director of Arbitration, Philadelphia Stock Exchange, 1989-1998.

KATHY HEILIG (DOB 12/21/58)--Vice President and Assistant
Secretary--Treasurer of SEI Investments since 1997; Vice President of SEI
Investments since 1991. Vice President and Treasurer of the Adviser and the
Administrator since 1997. Assistant Controller of SEI Investments and Vice
President of the Distributor since 1995. Director of Taxes of SEI Investments,
1987-1991. Tax Manager, Arthur Andersen LLP prior to 1987.

ROBERT S. LUDWIG (DOB 3/12/50)--Vice President and Assistant
Secretary--Employed by SEI Investments since 1985. Senior Vice President and
Chief Investment Officer of SEI Asset Management Group since 1995. Chairman of
SEI Investment Policy Committee since 1995. Manager of Product Development for
SEI's institutional mutual funds and repurchase trading desk from 1985 to 1995.
Held

S-28
<PAGE>
various product management and development positions at Chase Econometrics and
Interactive Data Corporation from 1974 to 1985.

CHRISTINE M. MCCULLOUGH (DOB 12/05/60)--Vice President and Assistant
Secretary--Employed by SEI Investments since November 1, 1999. Vice President
and Assistant Secretary of SEI Investments Management Corporation, the
Administrator and Distributor since December 1999. Associate at White and
Williams LLP, 1991-1999. Associate at Montgomery, McCracken, Walker and Rhoads,
1990-1991.

CYNTHIA M. PARRISH (DOB 10/23/59)--Vice President and Assistant
Secretary--Vice President and Assistant Secretary of the SEI Investments, SIMC,
the Administrator and the Distributor since August 1997. Branch Chief, Division
of Enforcement, U.S. Securities and Exchange Commission,
January 1995--August 1997. Senior Counsel--Division of Enforcement, U.S.
Securities and Exchange Commission, September 1992--January 1995. Staff
Attorney--Division of Enforcement, U.S. Securities and Exchange Commission,
January 1990--August 1992.

RICHARD W. GRANT (DOB 10/25/45)--Secretary--1701 Market Street,
Philadelphia, PA 19103. Partner, Morgan, Lewis & Bockius LLP (law firm), counsel
to the Trust, SEI Investments, SIMC, the Administrator, and the Distributor.

MARK E. NAGLE (DOB 10/20/59)--Controller and Chief Financial
Officer--President of the Administrator and Senior Vice President of SEI
Investments Mutual Funds Services Operations Group since 1998. Vice President of
the Administrator and Vice President of Fund Accounting and Administration of
SEI Investments Mutual Funds Services, 1996-1998. Vice President of the
Distributor since December 1997. Senior Vice President, Fund Administration,
BISYS Fund Services, September 1995--November 1996. Senior Vice President and
Site Manager, Fidelity Investments 1981--September 1995.

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

* Messrs. Nesher and Doran are Trustees who may be deemed to be "interested
persons" of the Trust as the term is defined in the 1940 Act.

** Messrs. Gooch, Storey, Sullivan and Greco serve as members of the Audit
Committee of the Trust.

The Trustees and officers of the Trust own less than 1% of the outstanding
shares of the Trust. The Trust pays the fees for unaffiliated Trustees.
Compensation of officers and affiliated Trustees of the Trust is paid by the
Manager.

S-29
<PAGE>
The following table sets forth information about the compensation paid to
the Trustees for the fiscal year ended August 31, 1999:

<TABLE>
<CAPTION>
PENSION OR TOTAL COMPENSATION
AGGREGATE RETIREMENT ESTIMATED FROM REGISTRANT
COMPENSATION BENEFITS ACCRUED ANNUAL AND FUND COMPLEX
FROM REGISTRANT AS PART OF BENEFITS UPON PAID TO TRUSTEES
NAME OF PERSON AND POSITION FOR FYE 8/31/00 FUND EXPENSES RETIREMENT FOR FYE 8/31/99
--------------------------- ---------------- ---------------- ------------- ---------------------
<S> <C> <C> <C> <C>
Robert A. Nesher, Trustee...... $ 0 N/A N/A $0
William M. Doran, Trustee...... $ 0 N/A N/A $0
F. Wendell Gooch, Trustee...... $ [] N/A N/A $[ ] for
services on
9 boards
James M. Storey, Trustee....... $ [] N/A N/A $[ ] for
services on
9 boards
George J. Sullivan, Trustee.... $ [] N/A N/A $[ ] for
services on 9
boards
Rosemarie B. Greco............. $ [] $ $ $[ ] for
services on 9
boards
</TABLE>

Mr. Edward W. Binshadler is a Trustee Emeritus of the Trust. Mr. Binshadler
serves as a consultant to the Audit Committee and receives as compensation,
$5,000 per Audit Committee meeting attended.

PERFORMANCE

From time to time, the Funds may advertise yield and/or total return. These
figures will be based on historical earnings and are not intended to indicate
future performance.

The current yield of the Funds that are money market funds is calculated
daily based upon the 7 days ending on the date of calculation ("base period").
The yield is computed by determining the net change (exclusive of capital
changes) in the value of a hypothetical pre-existing shareholder account having
a balance of one share at the beginning of the period, subtracting a
hypothetical charge reflecting deductions from shareholder accounts and dividing
such net change by the value of the account at the beginning of the same period
to obtain the base period return and multiplying the result by (365/7). Realized
and unrealized gains and losses are not included in the calculation of the
yield.

The Funds compute their effective compound yield by determining the net
changes, exclusive of capital changes, in the value of a hypothetical
pre-existing account having a balance of one share at the beginning of the
period, subtracting a hypothetical charge reflecting deductions from shareholder
accounts, and dividing the difference by the value of the account at the
beginning of the base period to obtain the base period return, and then
compounding the base period return by adding 1, raising the sum to a power equal
to 365 divided by 7, and subtracting 1 from the result, according to the
following formula: Effective Yield = {(Base Period Return + 1)TO THE POWER OF
365/7} - 1. The current and the effective yields reflect the reinvestment of net
income earned daily on fund assets.

From time to time, the Intermediate-Term Municipal, Pennsylvania Municipal
Bond, California Municipal Bond, Massachusetts Municipal Bond, New Jersey
Municipal Bond, and New York Municipal Bond Funds may advertise yield. These
figures will be based on historical earnings and are not intended to indicate
future performance. The yield of these Funds refers to the annualized income
generated by an investment in the Funds over a specified 30-day period. The
yield is calculated by assuming that the income

S-30
<PAGE>
generated by the investment during that period generated each period over one
year and is shown as a percentage of the investment. In particular, yield will
be calculated according to the following formula:

Yield = 2([(a-b)/(cd) + 1)]TO THE POWER OF 6 - 1) where a = dividends and
interest earned during the period; b = expenses accrued for the period (net of
reimbursement); c = the current daily number of shares outstanding during the
period that were entitled to receive dividends; and d = the maximum offering
price per share on the last day of the period.

Actual yields will depend on such variables as asset quality, average asset
maturity, the type of instruments a Fund invests in, changes in interest rates
on money market instruments, changes in the expenses of the Funds and other
factors.

Yields are one basis upon which investors may compare the Funds with other
money market funds; however, yields of other money market mutual funds and other
investment vehicles may not be comparable because of the factors set forth above
and differences in the methods used in valuing portfolio instruments.

For the 7-day period ended August 31, 2000, the end of the Trust's most
recent fiscal year, the money market Funds' current effective and tax-equivalent
yields were as follows:

<TABLE>
<CAPTION>
7-DAY 7-DAY
7-DAY TAX-EQUIVALENT TAX-EQUIVALENT
FUND CLASS 7-DAY YIELD EFFECTIVE YIELD YIELD EFFECTIVE YIELD
---- ------------------ ----------- --------------- -------------- ---------------
<S> <C> <C> <C> <C> <C>
Tax Free Fund................ Class A [ ]% [ ]% [ ]% [ ]%
Class D(1) [ ]% [ ]% [ ]% [ ]%

Institutional Tax Free
Fund....................... Class A [ ]% [ ]% [ ]% [ ]%
Class B [ ]% [ ]% [ ]% [ ]%
Class C [ ]% [ ]% [ ]% [ ]%

California Tax Exempt Fund... Class A [ ]% [ ]% [ ]% [ ]%
Class B [ ]% [ ]% [ ]% [ ]%
Class C * * * *
CNI Class+(2) [ ]% [ ]% [ ]% [ ]%

Pennsylvania Tax Free Fund... Class A [ ]% [ ]% [ ]% [ ]%

Ohio Tax Free Fund........... Class A * * * *

Massachusetts Tax Free Money
Market Fund................ Class A * * * *
Class B * * * *
Class C * * * *
</TABLE>

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

* Not in operation during the period

+ Formerly the Class C shares; converted to Class G shares on March 18, 1996,
and renamed CNI Class shares effective on December 31, 1997.

(1) As of March 1, 1999, Class D Shares of the Fund closed to investors.

(2) As of June 21, 1999, CNI Class Shares of the Fund closed to investors.

S-31
<PAGE>
For the 30-day period ended August 31, 2000, yields on the Funds other than
the money market Funds were as follows:

<TABLE>
<CAPTION>
YIELD
-------------------------
30-DAY
FUND CLASS 30-DAY TAX EQUIVALENT
---- -------- -------- --------------
<S> <C> <C> <C>
Intermediate-Term Municipal Fund...................... Class A [ ]% [ ]%
California Municipal Bond Fund........................ Class A [ ]% [ ]%
Massachusetts Municipal Bond Fund..................... Class A [ ]% [ ]%
New Jersey Municipal Bond Fund........................ Class A [ ]% [ ]%
New York Municipal Bond Fund.......................... Class A [ ]% [ ]%
Pennsylvania Municipal Bond Fund...................... Class A [ ]% [ ]%
Pennsylvania Municipal Bond Fund...................... Class B [ ]% [ ]%
</TABLE>

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

* Not in operation for a sufficient time during the period.

From time to time, the Intermediate-Term Municipal, Pennsylvania Municipal
Bond, California Municipal Bond, Massachusetts Municipal Bond, New Jersey
Municipal Bond, and New York Municipal Bond Fund may advertise total return. The
total return of a Fund refers to the average compounded rate of return to a
hypothetical investment for designated time periods (including, but not limited
to, the period from which the Fund commenced operations through the specified
date), assuming that the entire investment is redeemed at the end of each
period. In particular, total return will be calculated according to the
following formula: P(1 + T)n = ERV, where P = a hypothetical initial payment of
$1,000; T = average annual total return; n = number of years; and ERV = ending
redeemable value of a hypothetical $1,000 payment made at the beginning of the
designated time period as of the end of such period.

Based on the foregoing, the average annual total returns for the Funds from
inception through August 31, 2000, and for the one-, five- and ten-year periods
ended August 31, 2000, were as follows:

<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
-------------------------------------------
SINCE
FUND CLASS ONE YEAR FIVE YEAR TEN YEAR INCEPTION
---- ----- -------- --------- -------- ---------
<S> <C> <C> <C> <C> <C>
Intermediate-Term Municipal Fund................... Class A(1) [ ]% [ ]% * [ ]%
California Municipal Bond Fund..................... Class A(2) [ ]% * * [ ]%
Massachusetts Municipal Bond Fund.................. Class A(2) [ ]% * * [ ]%
New Jersey Municipal Bond Fund..................... Class A(3) [ ]% * * [ ]%
New York Municipal Bond Fund....................... Class A(3) [ ]% * * [ ]%
Pennsylvania Municipal Bond Fund................... Class A(4) [ ]% * * [ ]%
Class B(5) [ ]% [ ]% [ ]%* [ ]%
Institutional Tax Free Fund........................ Class A(6) [ ]% [ ]% [ ]% [ ]%
Class B(7) [ ]% [ ]% % [ ]%
Class C(8) [ ]% * * [ ]%
Tax Free Fund...................................... Class A(9) [ ]% [ ]% [ ]% [ ]%
Class D(10) [ ]% * * [ ]%
California Tax Exempt Fund......................... Class A(11) [ ]% [ ]% * [ ]%
Class B(12) [ ]% * * [ ]%
CNI Class(13) [ ]% [ ]% * [ ]%
Ohio Tax Free Fund................................. Class A(14) * * * [ ]%
Pennsylvania Tax Free Fund......................... Class A(15) [ ]% [ ]% [ ]% [ ]%
Massachusetts Tax Free Money Market Fund........... Class A(16) * * * *
Class B(16) * * * *
Class C(16) * * * *
</TABLE>

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

* Not in operation during the period.

+ Formerly the Class C shares; converted to Class G shares on March 18, 1996,
and were renamed CNI Class shares effective on December 31, 1997.

(1) Commenced operations 9/5/89

(2) Commenced operations 8/19/98

(3) Commenced operations 8/18/98

(4) Commenced operations 8/25/98

(5) Commenced operations 8/14/89

(6) Commenced operations 11/03/82

(7) Commenced operations 10/15/90

(8) Commenced operations 9/11/95

S-32
<PAGE>
(9) Commenced operations 11/12/82

(10) As of March 1, 1999, Class D shares of the Fund closed to investors.

(11) Commenced operations 5/14/90

(12) Commenced operations 1/27/99

(13) As of June 21, 1999, CNI Class Shares of the Fund closed to investors.

(14) As of December 31, 1999, the Fund had not yet commenced operations.

(15) Commenced operations 1/21/94

(16) As of December 31, 2000, the Fund had not yet commenced operations.

Each Fund may, from time to time, compare its performance to other mutual
funds tracked by mutual fund rating services, to broad groups of comparable
mutual funds or to unmanaged indices which may assume investment of dividends
but generally do not reflect deductions for sales charges, administrative and
management costs.

DETERMINATION OF NET ASSET VALUE

Securities of the Tax Free, Institutional Tax Free, California Tax Exempt,
Pennsylvania Tax Free, Massachusetts Tax Free Money Market and Ohio Tax Free
Funds will be valued by the amortized cost method which involves valuing a
security at its cost on the date of purchase and thereafter (absent unusual
circumstances) assuming a constant amortization to maturity of any discount or
premium, regardless of the impact of fluctuations in general market rates of
interest on the value of the instrument. While this method provides certainty in
valuation, it may result in periods during which value, as determined by this
method is higher or lower than the price the Trust would receive if it sold the
instrument. During periods of declining interest rates, the daily yield of a
Fund may tend to be higher than a like computation made by a company with
identical investments utilizing a method of valuation based upon market prices
and estimates of market prices for all of its portfolio securities. Thus, if the
use of amortized cost by a Fund resulted in a lower aggregate portfolio value on
a particular day, a prospective investor in a Fund would be able to obtain a
somewhat higher yield than would result from investment in a company utilizing
solely market values, and existing shareholders in the Fund would experience a
lower yield. The converse would apply in a period of rising interest rates.

A Fund's use of amortized cost valuation and the maintenance of the Fund's
net asset value at $1.00 are permitted by Rule 2a-7 under the 1940 Act, provided
that certain conditions are met, as described under "Investment Policies
Applicable to the Money Market Funds." The Advisers or Sub-Advisers will
determine that an obligation presents minimal credit risk, or that unrated
instruments are of comparable quality to rated securities in accordance with
guidelines established by the Trustees.

In the event a first tier security of the Tax Free Fund, Institutional Tax
Free Fund, California Tax Exempt Fund, Pennsylvania Tax Free Fund, Massachusetts
Tax Free Money Market Fund or the Ohio Tax Free Fund is downgraded below first
tier security status after purchase, or the Adviser of any such Fund becomes
aware that an unrated or second tier security has received any rating below the
second highest rating category after purchase, the Fund's Adviser will either
dispose of the security within five business days or the Board of Trustees will
reassess whether the security continues to present minimal credit risks. The
Board may also delegate this responsibility to the Fund's Adviser with respect
to the downgrade of a first tier security. The regulations also require the
Trustees to establish procedures which are reasonably designed to stabilize the
net asset value per unit at $1.00 for each Fund. However, there is no assurance
that the Trust will be able to meet this objective. The Trust's procedures
include the determination of the extent of deviation, if any, of each Fund's
current net asset value per shares calculated using available market quotations
from each Fund's amortized cost price per unit at such intervals as the Trustees
deem appropriate and reasonable in light of market conditions and periodic
reviews of the amount of the deviation and the methods used to calculate such
deviation. In the event that such deviation exceeds 1/2 of 1%, the Trustees are
required to consider promptly what action, if any, should be initiated; and, if
the Trustees believe that the extent of any deviation may result in material
dilution or other unfair results to shareholders, the Trustees are required to
take such corrective action as they deem appropriate to eliminate or reduce such
dilution or unfair results to the extent reasonably practicable. In addition, if
any

S-33
<PAGE>
Fund incurs a significant loss or liability, the Trustees have the authority to
reduce pro rata the number of shares of that Fund in each shareholder's account
and to offset each shareholder's pro rata portion of such loss or liability from
the shareholder's accrued but unpaid dividends or from future dividends.

Securities of the Intermediate-Term Municipal, Pennsylvania Municipal Bond,
California Municipal Bond, Massachusetts Municipal Bond, New Jersey Municipal
Bond, and New York Municipal Bond Funds may be valued by the Manager pursuant to
valuations provided by an independent pricing service. The pricing service
relies primarily on prices of actual market transactions as well as trader
quotations. However, the service may also use a matrix system to determine
valuations, which system considers such factors as security prices, yields,
maturities, call features, ratings and developments relating to specific
securities in arriving at valuations. The procedures of the pricing service and
its valuations are reviewed by the officers of the Trust under the general
supervision of the Trustees.

PURCHASE AND REDEMPTION OF SHARES

The Trust reserves the right to suspend the right of redemption and/or to
postpone the date of payment upon redemption for any period during which trading
on the New York Stock Exchange is restricted, or during the existence of an
emergency (as determined by the SEC by rule or regulation) as a result of which
disposal or evaluation of the portfolio securities is not reasonably
practicable, or for such other periods as the SEC may be order permit. The Trust
also reserves the right to suspend sales of shares of a Fund for any period
during which the New York Stock Exchange, the Manager, a Fund's Adviser, the
Distributor and/or the Custodian are not open for business. Currently, the
following holidays are observed by the Trust: New Year's Day, Martin Luther
King, Jr. Day, President's Day, Good Friday, Memorial Day, Independence Day,
Labor Day, Thanksgiving Day and Christmas Day.

In calculating the sales charge rates applicable to current purchases of
Class D shares, members of the following affinity groups and clients of the
following broker-dealers, each of which has entered into an agreement with the
Distributor, are entitled to the following percentage-based discounts from the
otherwise applicable sales charge:

<TABLE>
<CAPTION>
PERCENTAGE DATE OFFER
NAME OF GROUP DISCOUNT STARTS
------------- ---------- -------------
<S> <C> <C>
Countrywide Funding Corp.................................... 100% July 27, 1994
</TABLE>

Those members or clients who take advantage of a percentage-based reduction
in the sales charge during the offering period noted above may continue to
purchase shares at the reduced sales charge rate after the offering period
relating to each such purchaser's affinity group or broker-dealer relationship
has terminated.

Please contact the Distributor at 1-800-437-6016.

SHAREHOLDER SERVICES--CLASS D SHARES

STOP-PAYMENT REQUESTS (MONEY MARKET FUNDS ONLY): Investors may request a
stop payment on checks by providing the Trust with a written authorization to do
so. Oral requests will be accepted provided that the Trust promptly receives a
written authorization. Such requests will remain in effect for six months unless
renewed or canceled. The Trust will use its best efforts to effect stop-payment
instructions, but does not promise or guarantee that such instructions will be
effective. Shareholders requesting stop payment will be charged a $20 service
fee per check which will be deducted from their accounts.

EXCHANGE PRIVILEGE: A shareholder may exchange the shares of the Tax Free
Fund for which good payment has been received, in his account at any time,
regardless of how long he has held his shares.

Each Exchange Request must be in proper form (I.E., if in writing, signed by
the record owner(s) exactly as the shares are registered; if by telephone,
proper account identification is given by the dealer or

S-34
<PAGE>
shareholder of record), and each exchange must involve either shares having an
aggregate value of at least $1,000 or all the shares in the account. Each
exchange involves the redemption of the shares of a Fund (the "Old Fund") to be
exchanged and the purchase at net asset value of the shares of the other
portfolios (the "New Funds") plus in certain cases, as disclosed in each
Prospectus, any applicable sales charge. Any gain or loss on the redemption of
the shares exchanged is reportable on the shareholder's federal income tax
return, unless such shares were held in a tax-deferred retirement plan or other
tax-exempt account. If the Exchange Request is received by the Distributor in
writing or by telephone on any business day prior to the redemption cut-off time
specified in each Prospectus, the exchange usually will occur on that day if all
the restrictions set forth above have been complied with at that time. However,
payment of the redemption proceeds by the Old Fund, and thus the purchase of
shares of the New Funds, may be delayed for up to seven days if the Funds
determine that such delay would be in the best interest of all of its
shareholders. Investment dealers which have satisfied criteria established by
the Funds may also communicate a shareholder's Exchange Request to the Funds
subject to the restrictions set forth above. No more than five exchange requests
may be made in any one telephone Exchange Request.

TAXES

FEDERAL INCOME TAX

The following discussion of federal income tax consequences is based on the
Internal Revenue Code of 1986, as amended (the "Code") and the regulations
issued thereunder as in effect on the date of this Statement of Additional
Information. New legislation, as well as administrative changes or court
decisions, may significantly change the conclusions expressed herein, and may
have a retroactive effect with respect to the transactions contemplated herein.

Each Fund will decide whether to distribute or retain all or part of any net
capital gains (the excess of net long-term capital gains over net short-term
capital losses) in any year for reinvestment. If any such gains are retained,
the Fund will pay federal income tax thereon, and, if the Fund makes an
election, the shareholders will include such undistributed gains in their income
and shareholders subject to tax will be able to claim their share of the tax
paid by the Fund as a credit against their federal income tax liability.

A gain or loss realized by a shareholder on the sale or exchange of shares
of a Fund held as a capital asset will be capital gain or loss, and such gain or
loss will be long-term if the holding period for the shares exceeds one year,
and otherwise will be short-term. Any loss realized on a sale or exchange will
be disallowed to the extent the shares disposed of are replaced within the
61-day period beginning 30 days before and ending 30 days after the shares are
disposed of. Any loss realized by a shareholder on the disposition of shares
held 6 months or less is treated as a long-term capital loss to the extent of
any distributions of net long-term capital gains received by the shareholder
with respect to such shares or any inclusion of undistributed capital gain with
respect to such shares.

Each Fund will generally be subject to a nondeductible 4% federal excise tax
to the extent it fails to distribute by the end of any calendar year at least
98% of its ordinary income and 98% of its capital gain net income (the excess of
short- and long-term capital gains over short- and long-term capital losses) for
the one-year period ending on October 31 of that year, plus certain other
amounts.

Each Fund is required by federal law to withhold 31% of reportable payments
(which may include dividends, capital gains distributions, and redemptions) paid
to individual or non-corporate shareholders who have not certified on the
Account Registration Form, or on a separate form supplied by the Fund, that the
Social Security or Taxpayer Identification Number provided is correct and that
the shareholder is exempt from backup withholding or is not currently subject to
backup withholding.

Each Fund within the Trust is generally treated as a separate corporation
for federal income tax purposes, and thus the provisions of the Code generally
will be applied to each Fund separately, rather than to the Trust as a whole.
Net long-term and short-term capital gains, net income, and operating expenses
therefore will be determined separately for each Fund.

S-35
<PAGE>
If a Fund fails to qualify as a regulated investment company ("RIC") for any
year, all of its income will be subject to tax at corporate rates, and its
distributions (including capital gains distributions), to the extent of its
current and accumulated earnings and profits, will be taxable as ordinary income
dividends to its shareholders, subject to the corporate dividends received
deduction for corporate shareholders. No dividends of any Fund are expected to
qualify for that deduction.

Exempt-interest dividends are excludable from a shareholder's gross income
for regular federal income tax purposes. Exempt-interest dividends may
nevertheless be subject to the alternative minimum tax (the "Alternative Minimum
Tax") imposed by Section 55 of the Code. The Alternative Minimum Tax is imposed
at the rate of 26% to 28% in the case of non-corporate taxpayers and at the rate
of 20% in the case of corporate taxpayers, to the extent it exceeds the
taxpayer's regular tax liability. The Alternative Minimum Tax may be imposed in
two circumstances. First, exempt-interest dividends derived from certain
"private activity bonds" issued after August 7, 1986, will generally be an item
of tax preference and therefore potentially subject to the Alternative Minimum
Tax for both corporate and non-corporate taxpayers. The Funds intend, when
possible, to avoid investing in private activity bonds. Second, in the case of
exempt-interest dividends received by corporate shareholders, all
exempt-interest dividends, regardless of when the bonds from which they are
derived were issued or whether they are derived from private activity bonds,
will be included in the corporation's "adjusted current earnings," as defined in
Section 56(g) of the Code, in calculating the corporation's alternative minimum
taxable income for purposes of determining the Alternative Minimum Tax.

The percentage of income that constitutes "exempt-interest dividends" will
be determined for each year for the Funds and will be applied uniformly to all
dividends declared with respect to the Funds during that year. This percentage
may differ from the actual percentage for any particular day.

Interest on indebtedness incurred by shareholders to purchase or carry
shares of the Funds will not be deductible for federal income tax purposes to
the extent that the Funds distribute exempt-interest dividends during the
taxable year. The deduction otherwise allowable to property and casualty
insurance companies for "losses incurred" will be reduced by an amount equal to
a portion of exempt-interest dividends received or accrued during any taxable
year. Certain foreign corporations engaged in a trade or business in the United
States will be subject to a "branch profits tax" on their "dividend equivalent
amount" for the taxable year, which will include exempt-interest dividends.
Certain Subchapter S corporations may also be subject to taxes on their "passive
investment income," which could include exempt-interest dividends. Up to 85% of
the Social Security benefits or railroad retirement benefits received by an
individual during any taxable year will be included in the gross income of such
individual if the individual's "modified adjusted gross income" (which includes
exempt-interest dividends) plus one-half of the Social Security benefits or
railroad retirement benefits received by such individual during that taxable
year exceeds the base amount described in Section 86 of the Code.

Entities or persons who are "substantial users" (or persons related to
"substantial users") of facilities financed by industrial development bonds or
private activity bonds should consult their tax advisors before purchasing
shares of the Funds. "Substantial user" is defined generally as including a
"non-exempt person" who regularly uses in a trade or business a part of a
facility financed from the proceeds of industrial development bonds or private
activity bonds.

Issuers of bonds purchased by the Funds (or the beneficiary of such bonds)
may have made certain representations or covenants in connection with the
issuance of such bonds to satisfy certain requirements of the Code that must be
satisfied subsequent to the issuance of such bonds. Investors should be aware
that exempt-interest dividends derived from such bonds may become subject to
federal income taxation retroactively to the date of issuance of the bonds to
which such dividends are attributable if such representations are determined to
have been inaccurate or if the issuer of such bonds (or the beneficiary of such
bonds) fails to comply with such covenants.

S-36
<PAGE>
STATE TAXES

A Fund is not liable for any income or franchise tax in Massachusetts if it
qualifies as a RIC for federal income tax purposes. Depending upon applicable
state and local law, shareholders of a Fund may be exempt from state and local
taxes on distributions of tax-exempt interest income derived from obligations of
the state and/or municipalities in which they reside, but shareholders may be
subject to tax on income derived from obligations of other jurisdictions. Each
Fund will make periodic reports to shareholders of the source of distributions
on a state-by-state basis.

MASSACHUSETTS INCOME TAXES. Under current law, as long as the Fund
qualifies as a regulated investment company under the Code, distributions from
the Fund which qualify as exempt-interest dividends for federal income tax
purposes are exempt from Massachusetts personal income taxation, to the extent
that the distributions are derived from interest on certain Massachusetts
obligations and are properly designated as such in a written notice mailed to
the Fund's shareholders not later than sixty days after the close of the Fund's
tax year. In addition, as long as the Fund qualifies as a regulated investment
company under the Code, distributions which qualify as capital gain dividends
for federal income tax purposes also are exempt from Massachusetts personal
income taxation, to the extent that the distributions are attributable to gains
from the sale or exchange of certain Massachusetts obligations, and are properly
designated as such in a written notice mailed to the Fund's shareholders not
later than sixty days after the close of the Fund's tax year.

State and local tax consequences in other states may differ from the federal
income tax consequences and Massachusetts tax consequences described above.
Shareholders should consult their own tax advisors regarding the particular tax
consequences of an investment in the Fund.

CALIFORNIA INCOME TAXES. The Fund intends to qualify to pay dividends to
shareholders that are exempt from California personal income tax ("California
exempt-interest dividends"). The Fund will qualify to pay California
exempt-interest dividends if (1) at the close of each quarter of the Fund's
taxable year, at least 50 percent of the value of the Fund's total assets
consists of obligations the interest on which would be exempt from California
personal income tax if the obligations were held by an individual ("California
Tax Exempt Obligations") and (2) the Fund continues to qualify as a regulated
investment company.

If the Fund qualifies to pay California exempt-interest dividends, dividends
distributed to shareholders will be considered California exempt-interest
dividends if they meet certain requirements. The Fund will notify its
shareholders of the amount of exempt-interest dividends each year.

Corporations subject to California franchise tax that invest in the Fund are
not entitled to exclude California exempt-interest dividends from income.

Dividend distributions that do not qualify for treatment as California
exempt-interest dividends (including those dividend distributions to
shareholders taxable as long-term capital gains for federal income tax purposes)
will be taxable to shareholders at ordinary income tax rates for California
personal income tax purposes to the extent of the Fund's earnings and profits.

Interest on indebtedness incurred or continued by a shareholder in
connection with the purchase of shares of the Fund will not be deductible for
California personal income tax purposes if the Fund distributes California
exempt-interest dividends.

The foregoing is a general, abbreviated summary of certain of the provisions
of the California Revenue and Taxation Code presently in effect as they directly
govern the taxation of Shareholders subject to California personal income tax.
These provisions are subject to change by legislative or administrative action,
and any such change may be retroactive with respect to Fund transactions.
Shareholders are advised to consult with their own tax advisers for more
detailed information concerning California tax matters.

S-37
<PAGE>
If a Fund qualifies to pay dividends to shareholders that are exempt from
California personal income tax ("California exempt-interest dividends"),
dividends distributed to shareholders will be considered California
exempt-interest dividends (1) if they are designated as exempt-interest
dividends by the Fund in a written notice to shareholders mailed within 60 days
of the close of the Fund's taxable year and (2) to the extent the interest
received by the Fund during the year on California Tax Exempt Obligations
exceeds expenses of the Fund that would be disallowed under California personal
income tax law as allocable to tax exempt interest if the Fund were an
individual. If the aggregate dividends so designated exceed the amount that may
be treated as California exempt-interest dividends, only that percentage of each
dividend distribution equal to the ratio of aggregate California exempt-interest
dividends to aggregate dividends so designated will be treated as a California
exempt-interest dividend.

PENNSYLVANIA TAXES. The following is a general, abbreviated summary of
certain of the provisions of the Pennsylvania tax code presently in effect as
they directly govern the taxation of shareholders subject to Pennsylvania
personal income tax. These provisions are subject to change by legislative or
administration action, and any such change may be retroactive.

Distributions paid by the Fund to shareholders will not be subject to the
Pennsylvania personal income tax or the Philadelphia School District investment
net income tax to the extent that the distributions are attributable to interest
received by the Fund from its investments in (i) obligations issued by the
Commonwealth of Pennsylvania, any public authority, commission, board of agency
created by the Commonwealth of Pennsylvania or any public authority created by
such political subdivision; and (ii) obligations of the United States, the
interest and gains from which are statutorily free from state taxation in the
Commonwealth. Distributions by the Fund to a Pennsylvania resident that are
attributable to most other sources will not be exempt from the Pennsylvania
personal income tax or (for residents of Philadelphia) the Philadelphia School
District investment net income tax. Distributions paid by the Fund which are
excludable as exempt income for federal tax purposes are not subject to the
Pennsylvania corporate net income tax.

The Fund intends to invest primarily in obligations that produce interest
exempt from federal and Pennsylvania taxes. If the Fund invests in obligations
that pay interest that is not exempt for Pennsylvania purposes but is exempt for
federal purposes, a portion of the Fund's distributions will be subject to
Pennsylvania personal income tax.

NEW YORK STATE AND LOCAL TAXES. The following is a general, abbreviated
summary of certain of the provisions of the New York tax code presently in
effect as they directly govern the taxation of shareholders subject to New York
personal income tax. These provisions are subject to change by legislative or
administrative action, and any such change may be retroactive.

Dividends paid by the Fund that are derived from interest on Municipal
Securities issued by New York State and political subdivisions or any agency or
instrumentality thereof which interest would be exempt from New York State tax
if held by an individual, will be exempt from New York State and new York City
personal income taxes, but not corporate franchise taxes. Other dividends and
distributions from other Municipal Securities, U.S. Government obligations,
taxable income and capital gains will not be exempt from New York State and New
York City taxes. In addition, interest or indebtedness incurred by a shareholder
to purchase or carry shares of the Fund is not deductible for New York personal
income tax purposes to the extent that it relates to New York exempt-interest
dividends distributed to a shareholder during the taxable year.

NEW JERSEY INCOME TAXES. The following is a general, abbreviated summary of
certain of the provisions of the New Jersey tax code presently in effect as they
directly govern the taxation of shareholders subject to New Jersey tax. These
provisions are subject to change by legislative or administrative action, and
any such change may be retroactive.

S-38
<PAGE>
For purposes of this discussion of New Jersey taxation, it is assumed that
the Fund will continue to qualify as a regulated investment company for federal
tax purposes. Distributions paid by the Fund will not be subject to the New
Jersey Gross Income Tax to the extent they are derived from interest income (and
net gain, if any, from the disposition of New Jersey Securities) attributable to
New Jersey Securities or direct obligations of the United States, its
territories and certain of its agencies and instrumentalities ("Federal
Securities") held by the Fund, either when received by the Fund or when credited
or distributed to the investors, provided that the Fund meets the New Jersey
requirements for a qualified investment fund by: 1) maintaining its registration
as a registered investment company; 2) investing at least 80% of the aggregate
principal amount of the Fund's investments, excluding cash and certain specified
items, in New Jersey Securities or Federal Securities; and 3) investing 100% of
its assets in interest bearing obligations, discount obligations, financial
options, futures, forward contracts or similar financial instruments, and cash,
including receivables. Gain on the disposition of Shares of the Fund is not
subject to New Jersey Gross Income Tax, provided that the Fund meets the
requirements for a qualified investment fund set forth above.

For New Jersey Gross Investment Tax purposes, net income or gains and
distributions derived from investments in other than New Jersey Securities and
Federal Securities, and distributions from net realized capital gains in respect
of such investments, would be taxable. Thus, while the Fund intends to invest
primarily in obligations that produce interest exempt from the Fund intends to
invest primarily in obligations that produce interest exempt from federal and
New Jersey taxes, if the Fund invests in obligations that pay interest that is
not exempt for New Jersey purposes but is exempt for federal purposes, a portion
of the Fund's distributions would be subject to New Jersey tax.

Shareholders should consult their tax advisors concerning the state and
local tax consequences of investments in the Trust, which may differ from the
federal income tax consequences described above.

PORTFOLIO TRANSACTIONS

The Trust has no obligation to deal with any dealer or group of dealers in
the execution of transactions in fund securities. Subject to policies
established by the Trustees, the Advisers and Sub-Adviser are responsible for
placing orders to execute portfolio transactions. In placing orders, it is the
Trust's policy to seek to obtain the best net results taking into account such
factors as price (including the applicable dealer spread), size, type and
difficulty of the transaction involved, the firm's general execution and
operational facilities, and the firm's risk in positioning the securities
involved. While the Advisers and Sub-Adviser generally seek reasonably
competitive spreads or commissions, the Trust will not necessarily be paying the
lowest spread or commission available. The Trust's policy of investing in
securities with short maturities will result in high portfolio turnover. The
Trust will not purchase portfolio securities from any affiliated person acting
as principal except in conformity with the regulations of the SEC.

It is expected that certain of the Funds may execute brokerage or other
agency transactions through the Distributor, a registered broker-dealer, for a
commission, in conformity with the 1940 Act, the Securities Exchange Act of
1934, as amended, and rules of the SEC. Under these provisions, the Distributor
is permitted to receive and retain compensation for effecting portfolio
transactions for a Fund on an exchange if a written contract is in effect
between the Distributor and the Trust expressly permitting the Distributor to
receive and retain such compensation. These provisions further require that
commissions paid to the Distributor by the Trust for exchange transactions not
exceed "usual and customary" brokerage commissions. The rules define "usual and
customary" commissions to include amounts which are "reasonable and fair
compared to the commission, fee or other remuneration received or to be received
by other brokers in connection with comparable transactions involving similar
securities being purchased or sold on a securities exchange during a comparable
period of time." In addition, the Funds may direct commission business to one or
more designated broker-dealers, including the Distributor, in connection with
payment of certain of the Funds' expenses by such broker-dealers. The Trustees,
including

S-39
<PAGE>
those who are not "interested persons" of the Trust, have adopted procedures for
evaluating the reasonableness of commissions paid to the Distributor and will
review these procedures periodically.

For the fiscal years ended August 31, 1998, 1999, and 2000, the Funds paid
no brokerage commissions.

The money market securities in which certain of the Funds invest are traded
primarily in the over-the-counter market. Bonds and debentures are usually
traded over-the-counter, but may be traded on an exchange. Where possible, a
Fund's Adviser or Sub-Adviser will deal directly with the dealers who make a
market in the securities involved except in those circumstances where better
prices and execution are available elsewhere. Such dealers usually are acting as
principal for their own account. On occasion, securities may be purchased
directly from the issuer. Money market securities are generally traded on a net
basis, and do not normally involve either brokerage commissions or transfer
taxes. The cost of executing portfolio securities transactions of the Fund will
primarily consist of dealer spreads and underwriting commissions.

It is expected that the portfolio turnover rate will normally not exceed
100% for any Fund. A portfolio turnover rate would exceed 100% if all of its
securities, exclusive of U.S. Government securities and other securities whose
maturities at the time of acquisition are one year or less, are replaced in the
period of one year. Turnover rates may vary from year to year and may be
affected by cash requirements for redemptions and by requirements which enable a
Fund to receive favorable tax treatment.

For each of the fiscal years ending August 31, 1999 and 2000, the portfolio
turnover rate for each of the following Funds was:

<TABLE>
<CAPTION>
TURNOVER RATE
-------------------
FUND 1999 2000
---- -------- --------
<S> <C> <C>
Intermediate-Term Municipal Fund............................ 30.25% %
California Municipal Bond Fund.............................. 105.21% %
Massachusetts Municipal Bond Fund........................... 13.76% %
New Jersey Municipal Bond Fund.............................. 25.41% %
New York Municipal Bond Fund................................ 17.85% %
Pennsylvania Municipal Bond Fund............................ 16.64% %
</TABLE>

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

* Not in operation during the period.

** Annualized

Since the Trust does not market its shares through intermediary brokers or
dealers, it is not the Trust's practice to allocate brokerage or principal
business on the basis of sales of its shares which may be made through such
firms. However, the Advisers and Sub-Adviser may place portfolio orders with
qualified broker-dealers who recommend the Trust to clients, and may, when a
number of brokers and dealers can provide best price and execution on a
particular transaction, consider such recommendations by a broker or dealer in
selecting among broker-dealers.

The Advisers and Sub-Adviser may, consistent with the interests of the
Funds, select brokers on the basis of the research services they provide to the
Adviser or Sub-Adviser. Such services may include analysis of the business or
prospects of a company, industry or economic sector or statistical and pricing
services. Information so received by the Advisers or Sub-Adviser will be in
addition to and not in lieu of the services required to be performed by an
Adviser or Sub-Adviser under the Advisory or Sub-Advisory Agreements. If in the
judgement of an Adviser or Sub-Adviser the Funds, or other accounts managed by
the Adviser or Sub-Adviser, will be benefitted by supplemental research
services, the Adviser or Sub-Adviser is authorized to pay brokerage commissions
to a broker furnishing such services which are in excess of commissions which
another broker may have charged for effecting the same transaction. The expenses
of an Adviser or Sub-Adviser will not necessarily be reduced as a result of the
receipt of such supplemental information.

S-40
<PAGE>
The Trust does not expect to use one particular dealer, but, subject to the
Trust's policy of seeking the best net results, dealers who provide supplemental
investment research to the Advisers and Sub-Adviser may receive orders for
transactions by the Trust. Information so received will be in addition to and
not in lieu of the services required to be performed by the Advisers or
Sub-Adviser under the Advisory or Sub-Advisory Agreements, and the expenses of
the Advisers and Sub-Adviser will not necessarily be reduced as a result of the
receipt of such supplemental information.

DESCRIPTION OF SHARES

The Declaration of Trust authorizes the issuance of an unlimited number of
shares of each Fund, each of which represents an equal proportionate interest in
that Fund. Each share upon liquidation entitles a shareholder to a pro rata
share in the net assets of that Fund, after taking into account the Class D and
CNI Class distribution expenses. Shareholders have no preemptive rights. The
Declaration of Trust provides that the Trustees of the Trust may create
additional portfolios of shares or classes of portfolios. Share certificates
representing the shares will not be issued.

LIMITATION OF TRUSTEES' LIABILITY

The Declaration of Trust provides that a Trustee shall be liable only for
his own willful defaults and, if reasonable care has been exercised in the
selection of officers, agents, employees or administrators, shall not be liable
for any neglect or wrongdoing of any such person. The Declaration of Trust also
provides that the Trust will indemnify its Trustees and officers against
liabilities and expenses incurred in connection with actual or threatened
litigation in which they may be involved because of their offices with the Trust
unless it is determined in the manner provided in the Declaration of Trust that
they have not acted in good faith in the reasonable belief that their actions
were in the best interests of the Trust. However, nothing in the Declaration of
Trust shall protect or indemnify a Trustee against any liability for his wilful
misfeasance, bad faith, gross negligence or reckless disregard of his duties.

CODE OF ETHICS

The Board of Trustees of the Trust has adopted a Code of Ethics pursuant to
Rule 17j-1 under the 1940 Act. In addition, the Investment Advisers,
Sub-Advisers and Distributor have adopted Codes of Ethics pursuant to Rule
17j-1. These Codes of Ethics apply to the personal investing activities of
trustees, officers and certain employees ("access persons"). Rule 17j-1 and the
Codes are designed to prevent unlawful practices in connection with the purchase
or sale of securities by access persons. Under each Code of Ethics, access
persons are permitted to engage in personal securities transactions, but are
required to report their personal securities transactions for monitoring
purposes. In addition, certain access persons are required to obtain approval
before investing in initial public offerings or private placements. Copies of
these Codes of Ethics are on file with the SEC and are available to the public.

VOTING

Each share held entitles the shareholder of record to one vote. The
shareholders of each portfolio or class will vote separately on matters relating
solely to that portfolio or class, such as any distribution plan. As a
Massachusetts business trust, the Trust is not required to hold annual meetings
of shareholders, but approval will be sought for certain changes in the
operation of the Trust and for the election of Trustees under certain
circumstances. In addition, a Trustee may be removed by the remaining Trustees
or by shareholders at a special meeting called upon written request of
shareholders owning at least 10% of the outstanding shares of the Trust. In the
event that such a meeting is requested, the Trust will provide appropriate
assistance and information to the shareholders requesting the meeting.

Where the Prospectuses for the Funds or Statement of Additional Information
state that an investment limitation or a fundamental policy may not be changed
without shareholder approval, such approval means the vote of: (i) 67% or more
of a Fund's shares present at a meeting if the holders of more than

S-41
<PAGE>
50% of the outstanding shares of the Fund are present or represented by proxy;
or (ii) more than 50% of a Fund's outstanding shares, whichever is less.

SHAREHOLDER LIABILITY

The Trust is an entity of the type commonly known as a "Massachusetts
business trust." Under Massachusetts law, shareholders of such a Trust could,
under certain circumstances, be held personally liable as partners for the
obligations of the Trust. Even if, however, the Trust were held to be a
partnership, the possibility of the shareholders' incurring financial loss for
that reason appears remote because the Trust's Declaration of Trust contains an
express disclaimer of shareholder liability for obligations of the Trust and
requires that notice of such disclaimer be given in each agreement, obligation
or instrument entered into or executed by or on behalf of the Trust or the
Trustees, and because, the Declaration of Trust provides for indemnification out
of the Trust property for any shareholders held personally liable for the
obligations of the Trust.

5% SHAREHOLDERS

As of December 2, 2000, the following persons were the only persons who were
record owners (or to the knowledge of the Trust, beneficial owners) of 5% or
more of the shares of the Funds. The Trust believes that most of the shares
referred to below were held by the persons indicated in accounts for their
fiduciary, agency, or custodial customers.

<TABLE>
<CAPTION>
NAME AND ADDRESS OF SHAREHOLDER PERCENTAGE OF FUND
------------------------------- ------------------
<S> <C>
INTERMEDIATE TERM MUNICIPAL FUND, CLASS A
SEI Trust Company ........................................ [ ]%
Attn: Jacqueline Esposito
One Freedom Valley Drive
Oaks, PA 19456

CALIFORNIA MUNICIPAL BOND FUND, CLASS A
SEI Trust Company ........................................ [ ]%
Attn: Jacqueline Esposito
One Freedom Valley Drive
Oaks, PA 19456

MASSACHUSETTS MUNICIPAL BOND FUND, CLASS A
SEI Trust Company ........................................ [ ]%
Attn: Jacqueline Esposito
One Freedom Valley Drive
Oaks, PA 19456

NEW JERSEY MUNICIPAL BOND FUND, CLASS A
SEI Trust Company ........................................ [ ]%
Attn: Jacqueline Esposito
One Freedom Valley Drive
Oaks, PA 19456

NEW YORK MUNICIPAL BOND FUND, CLASS A
SEI Trust Company ........................................ [ ]%
Attn: Jacqueline Esposito
One Freedom Valley Drive
Oaks, PA 19456
</TABLE>

S-42
<PAGE>

<TABLE>
<CAPTION>
NAME AND ADDRESS OF SHAREHOLDER PERCENTAGE OF FUND
------------------------------- ------------------
<S> <C>
PENNSYLVANIA MUNICIPAL BOND FUND, CLASS A
SEI Trust Company ........................................ [ ]%
Attn: Jacqueline Esposito
One Freedom Valley Drive
Oaks, PA 19456

PENNSYLVANIA MUNICIPAL BOND FUND, CLASS B
Sheldon & Co. ............................................ [ ]%
c/o National City Bank
P.O. Box 94984
Cleveland, OH 44101-4984

SEI Trust Company ........................................ [ ]%
Attn: Jacqueline Esposito
One Freedom Valley Drive
Oaks, PA 19456

Meg And Co. .............................................. [ ]%
c/o United States National Bank
Attn: Debbie Moraca
P.O. Box 520
Johnstown, PA 15907-0520

INSTITUTIONAL TAX FREE FUND, CLASS A
General Accounting Department ............................ [ ]%
3COM Corporation
5400 Bayfront Plaza
MS3311
Santa Clara, CA 95054-3600

SEI Investments Inc. ..................................... [ ]%
Attn: Eileen Bonaduce
P.O. Box 1100
Oaks, PA 19456-1100

Bank of America NA ....................................... [ ]%
Attn: Tony Farrer--Funds Accounting
1401 Elm Street, 11th Floor
Dallas, TX 75202-2958

Fifth Third Bank ......................................... [ ]%
Attn: Jennifer Burrell
38 Fountain Square
Cincinnati, OH 45263-0001

Muir & Co. ............................................... [ ]%
c/o Frost National Bank
P.O. Box 2479
San Antonio, TX 78298-2479

Kanaly Trust Company ..................................... [ ]%
Attn: Meghan Arnold
4550 Post Oak Place, Suite 139
Houston, TX 77027-3163
</TABLE>

S-43
<PAGE>

<TABLE>
<CAPTION>
NAME AND ADDRESS OF SHAREHOLDER PERCENTAGE OF FUND
------------------------------- ------------------
<S> <C>
INSTITUTIONAL TAX FREE FUND, CLASS B
SEI Trust Company ........................................ [ ]%
Attn: Jacqueline Esposito
One Freedom Valley Drive
Oaks, PA 19456

Muir & Co. ............................................... [ ]%
c/o Frost National Bank
P.O. Box 2479
San Antonio, TX 78298-2479

Oltrust & Co. ............................................ [ ]%
c/o Old National Bank of Evansville
Attn: David Crow
P.O. Box 207
Evansville, IN 47702-0207

CENCO .................................................... [ ]%
c/o Compass Bank
Attn: Bobby Morris
P.O. Box 10566
Birmingham, AL 35296-0001

INSTITUTIONAL TAX FREE FUND, CLASS C
First Victoria National Bank ............................. [ ]%
Attn: Grace Pantel
P.O. Box 1338
Victoria, TX 77902-1338

Progress Bank ............................................ [ ]%
Attn: Marge McAleer
4 Sentry Parkway
P.O. Box 3036
Blue Bell, PA 19422-0764

First Security Bank of Utah NA ........................... [ ]%
Cash Management (Cash Sweep Account)
Attn: Bill Wilcox
61 South Main Street
Salt Lake City, UT 84111-1909

TAX FREE FUND, CLASS A
Naidot & Co. ............................................. [ ]%
c/o Bessemer Trust Company
Attn: Peter Scully
630 Fifth Avenue, 38th Floor
New York, New York 10111-0100

SEI Trust Company ........................................ [ ]%
Attn: Jacqueline Esposito
One Freedom Valley Drive
Oaks, PA 19456
</TABLE>

S-44
<PAGE>

<TABLE>
<CAPTION>
NAME AND ADDRESS OF SHAREHOLDER PERCENTAGE OF FUND
------------------------------- ------------------
<S> <C>
EAMCO .................................................... [ ]%
c/o Riggs Bank N.A.
Attn: Pat Murrell
5700 Rivertech Court R5300
Riverdale, MD20737-1250

Smith & Co. .............................................. [ ]%
c/o First Security Bank of Utah
Attention: Rick Parr
P.O. Box 30007
Salt Lake City, UT 84130-0007

CALIFORNIA TAX EXEMPT FUND, CLASS A
SAFECO ................................................... [ ]%
California Tax Free Inc Fund
1776 Heritage Drive
North Quincy, MA 02171-02119

Bank of America NA ....................................... 44.89%
Attn: Tony Farrer--Funds Accounting
1401 Elm Street, 11th Floor
Dallas, TX 75202-2958

SEI Trust Company ........................................ [ ]%
Attn: Jacqueline Esposito
One Freedom Valley Drive
Oaks, PA 19456

CALIFORNIA TAX EXEMPT FUND, CLASS B
Modesto Commerce Bank .................................... [ ]%
1623 J Street
Modesto, CA 95354-1126

PENNSYLVANIA TAX FREE FUND, CLASS A
Commonwealth of Pennsylvania ............................. [ ]%
J. Robert Hawkins
Finance Building
Room 126
Harrisburg, PA 17120

The Farmers Company ...................................... [ ]%
c/o Farmers First Bank--Lititz
Attn: Wendy Basehoar
P.O. Box 1000
Lititz, PA 17543-7000

The Fulton Company ....................................... [ ]%
c/o Fulton Bank Trust Dept.
Attn: Dennis Patrick
One Penn Square
Lancaster, PA 17602-2853
</TABLE>

S-45
<PAGE>
CUSTODIAN

First Union National Bank, Broad and Chestnut Streets, P.O. Box 7618,
Philadelphia, Pennsylvania 19101, serves as Custodian of the Trust's assets and
acts as wire agent of the Trust. The Custodian holds cash, securities and other
assets of the Trust as required by the 1940 Act.

EXPERTS

The financial statements incorporated by reference into this Statement of
Additional Information have been audited by Arthur Andersen LLP, independent
accountants, as indicated in their report dated October 8, 1999, and are
included herein in reliance upon the authority of said firm as experts in
accounting and auditing and in giving said report.

LEGAL COUNSEL

Morgan, Lewis & Bockius LLP serves as counsel to the Trust.

FINANCIAL STATEMENTS

The Trust's financial statements for the fiscal year ended August 31, 2000,
including notes thereto and the report of the Arthur Andersen LLP thereon, are
herein incorporated by reference from the Trust's 2000 Annual Report. A copy of
the 2000 Annual Report must accompany the delivery of this Statement of
Additional Information.

S-46
<PAGE>
PART C. OTHER INFORMATION

ITEM 23. EXHIBITS:

<TABLE>
<S> <C>
(a)(1) Registrant's Declaration of Trust is incorporated herein by
reference to Exhibit 1(a) of Post Effective Amendment
No. 41 to Registrant's Registration Statement on Form N-1A
(File No. 2-76990) filed with the Securities and Exchange
Commission on December 18, 1997.
(a)(2) Amendment to the Registrant's Declaration of Trust, dated
July 30, 1982, is incorporated herein by reference to
Exhibit 1(b) of Post Effective Amendment No. 41 to
Registrant's Registration Statement on Form N-1A (File
No. 2-76990) filed with the Securities and Exchange
Commission on December 18, 1997.
(a)(3) Amendment to the Registrant's Declaration of Trust, dated
May 23, 1986, is incorporated herein by reference to
Exhibit 1(c) of Post Effective Amendment No. 41 to
Registrant's Registration Statement on Form N-1A (File
No. 2-76990) filed with the Securities and Exchange
Commission on December 18, 1997.
(a)(4) Amendment to the Registrant's Declaration of Trust, dated
April 8, 1987, is incorporated herein by reference to
Exhibit 1(d) of Post Effective Amendment No. 41 to
Registrant's Registration Statement on Form N-1A (File
No. 2-76990) filed with the Securities and Exchange
Commission on December 18, 1997.
(a)(5) Amendment to the Registrant's Declaration of Trust, dated
December 23, 1988, is incorporated herein by reference to
Exhibit 1(e) of Post Effective Amendment No. 41 to
Registrant's Registration Statement on Form N-1A (File
No. 2-76990) filed with the Securities and Exchange
Commission on December 18, 1997.
(a)(6) Amendment to the Registrant's Declaration of Trust, dated
June 16, 1989, is incorporated herein by reference to
Exhibit 1(f) of Post Effective Amendment No. 41 to
Registrant's Registration Statement on Form N-1A (File
No. 2-76990) filed with the Securities and Exchange
Commission on December 18, 1997.
(a)(7) Amendment to the Registrant's Declaration of Trust, dated
July 5, 1989, is incorporated herein by reference to
Exhibit 1(g) of Post Effective Amendment No. 41 to
Registrant's Registration Statement on Form N-1A (File
No. 2-76990) filed with the Securities and Exchange
Commission on December 18, 1997.
(a)(8) Amendment to the Registrant's Declaration of Trust, dated
November 15, 1989, is incorporated herein by reference to
Exhibit 1(h) of Post Effective Amendment No. 41 to
Registrant's Registration Statement on Form N-1A (File
No. 2-76990) filed with the Securities and Exchange
Commission on December 18, 1997.
(b)(1) Registrant's By-Laws are incorporated herein by reference to
Exhibit 2(a) of Post Effective Amendment No. 41 to
Registrant's Registration Statement on Form N-1A (File
No. 2-76990) filed with the Securities and Exchange
Commission on December 18, 1997.
(b)(2) Amended By-Laws are incorporated herein by reference to
Exhibit 2(b) of Post Effective Amendment No. 41 to
Registrant's Registration Statement on Form N-1A (File
No. 2-76990) filed with the Securities and Exchange
Commission on December 18, 1997.
(c) Not Applicable.
(d)(1) Investment Advisory Agreement with Weiss, Peck and Greer
Advisers, Inc. is incorporated herein by reference to
Exhibit 5(a) of Post Effective Amendment No. 41 to
Registrant's Registration Statement on Form N-1A (File
No. 2-76990) filed with the Securities and Exchange
Commission on December 18, 1997.
</TABLE>

C-1
<PAGE>
<TABLE>
<S> <C>
(d)(2) Investment Advisory Agreement with Bessemer Trust Company is
incorporated by reference to Exhibit 5(b) as filed with
Post Effective Amendment No. 19 to Registrant's
Registration Statement on Form N-1A (File No. 2-76990) as
previously filed with the Securities and Exchange
Commission.
(d)(3) Investment Advisory Agreement with First National Bank in
Wichita (now INTRUST Bank, NA in Wichita) is incorporated
by reference to Exhibit 5(c) as filed with Post Effective
Amendment No. 29 to Registrant's Registration Statement on
Form N-1A (File No. 2-76990) filed with the Securities and
Exchange Commission on December 28, 1990.
(d)(4) Investment Advisory Agreement with Woodbridge Capital
Management, Inc. is incorporated by reference to Exhibit
5(d) as filed with Post Effective Amendment No. 35 to
Registrant's Registration on Form N-1A (File No. 2-76990)
as previously filed with the Securities and Exchange
Commission.
(d)(5) Investment Advisory Agreement with State Street Bank and
Trust Company is incorporated by reference to Exhibit 5(e)
as filed with Post Effective Amendment No. 35 to
Registrant's Registration Statement on Form N-1A (File
No. 2-76990) as previously filed with the Securities and
Exchange Commission.
(d)(6) Schedule E dated August 5, 1992 to Investment Advisory
Agreement with Weiss, Peck & Greer Advisers, Inc. is
incorporated by reference to Exhibit 5(f) as filed with
Post Effective Amendment No. 32 to Registrant's
Registration Statement on Form N-1A (File No. 2-76990)
filed with the Securities and Exchange Commission on
August 17, 1992 (adding Bainbridge Tax Exempt Portfolio).
(d)(7) Schedule G, dated December 10, 1993, to Investment Advisory
Agreement with Weiss, Peck & Greer Advisers, Inc. (adding
Intermediate-Term Municipal, California Intermediate-Term
Municipal, and New York Intermediate-Term Municipal
Portfolios) is incorporated herein by reference to Exhibit
5(g) of Post Effective Amendment No. 41 to Registrant's
Registration Statement on Form N-1A (File No. 2-76990)
filed with the Securities and Exchange Commission on
December 18, 1997.
(d)(8) Schedule H, dated March 8, 1994, to Investment Advisory
Agreement with Weiss, Peck & Greer Advisers, Inc. (adding
Institutional Tax Free, Pennsylvania Tax Free, California
Tax Exempt, Bainbridge and Tax Free Portfolios) is
incorporated herein by reference to Exhibit 5(h) of Post
Effective Amendment No. 41 to Registrant's Registration
Statement on Form N-1A (File No. 2-76990) filed with the
Securities and Exchange Commission on December 18, 1997.
(d)(9) Investment Advisory Agreement with Morgan Grenfell Capital
Management, Inc., is incorporated herein by reference to
Exhibit 5(i) of Post Effective Amendment No. 41 to
Registrant's Registration Statement on Form N-1A (File
No. 2-76990) filed with the Securities and Exchange
Commission on December 18, 1997.
(d)(10) Investment Advisory Agreement with SEI Financial Management
Corporation, is incorporated herein by reference to
Exhibit 5(j) of Post Effective Amendment No. 41 to
Registrant's Registration Statement on Form N-1A (File
No. 2-76990) filed with the Securities and Exchange
Commission on December 18, 1997.
(d)(11) Investment Sub-Advisory Agreement with Standish, Ayer &
Wood, Inc., is incorporated herein by reference to Exhibit
5(k) of Post Effective Amendment No. 41 to Registrant's
Registration Statement on Form N-1A (File No. 2-76990)
filed with the Securities and Exchange Commission on
December 18, 1997.
(d)(12) Investment Sub-Advisory Agreement with Deutsche Asset
Management Inc. is filed herewith.
(d)(13) Form of Investment Advisory Agreement with SEI Investments
Management Corporation is filed herewith.
</TABLE>

C-2
<PAGE>
<TABLE>
<S> <C>
(e) Distribution Agreement is incorporated herein by reference
to Exhibit 6 of Post Effective Amendment No. 41 to
Registrant's Registration Statement on Form N-1A (File
No. 2-76990) filed with the Securities and Exchange
Commission on December 18, 1997.
(f) Not Applicable.
(g) Custodian Agreement is incorporated herein by reference to
Exhibit 8 of Post Effective Amendment No. 41 to
Registrant's Registration Statement on Form N-1A (File
No. 2-76990) filed with the Securities and Exchange
Commission on December 18, 1997.
(h)(1) Management Agreement is incorporated herein by reference to
Exhibit 9(a) of Post Effective Amendment No. 41 to
Registrant's Registration Statement on Form N-1A (File
No. 2-76990) filed with the Securities and Exchange
Commission on December 18, 1997.
(h)(2) Schedule E dated August 5, 1992 to Management Agreement is
incorporated by reference to Exhibit 9(b) as filed with
Post Effective Amendment No. 32 to Registrant's
Registration Statement on Form N-1A (File No. 2-76990)
filed with the Securities and Exchange Commission on
August 17, 1992 (adding Massachusetts Intermediate-Term
Municipal Portfolio).
(h)(3) Schedule F dated August 5, 1992 to Management Agreement is
incorporated by reference to Exhibit 9(c) as filed with
Post Effective Amendment No. 32 to Registrant's
Registration Statement on Form N-1A (File No. 2-76990)
filed with the Securities and Exchange Commission on
August 17, 1992 (adding Bainbridge Tax Exempt Portfolio).
(h)(4) Schedule G, dated October 29, 1993, to Management Agreement
(adding Pennsylvania Tax Free Portfolio) is incorporated
herein by reference to Exhibit 9(d) of Post Effective
Amendment No. 41 to Registrant's Registration Statement on
Form N-1A (File No. 2-76990) filed with the Securities and
Exchange Commission on December 18, 1997.
(h)(5) Schedule H, dated October 29, 1993, to Management Agreement
(adding New York Intermediate-Term Municipal Portfolio) is
incorporated herein by reference to Exhibit 9(e) of Post
Effective Amendment No. 41 to Registrant's Registration
Statement on Form N-1A (File No. 2-76990) filed with the
Securities and Exchange Commission on December 18, 1997.
(h)(6) Schedule I, dated October 29, 1993, to Management Agreement
(adding California Intermediate-Term Municipal Portfolio)
is incorporated herein by reference to Exhibit 9(f) of
Post Effective Amendment No. 41 to Registrant's
Registration Statement on Form N-1A (File No. 2-76990)
filed with the Securities and Exchange Commission on
December 18, 1997.
(h)(7) Consent to Assignment and Assumption of the Administration
Agreement between the Trust and SEI Financial Management
Corporation to SEI Fund Resources, is incorporated herein
by reference to Exhibit 9(g) of Post Effective Amendment
No. 41 to Registrant's Registration Statement on Form N-1A
(File No. 2-76990) filed with the Securities and Exchange
Commission on December 18, 1997.
(i) Opinion and Consent of Counsel is filed herewith.
(j) Not Applicable.
(k) Not Applicable.
(l) Not Applicable.
(m)(1) Distribution Plan is incorporated herein by reference to
Exhibit 15(a) of Post Effective Amendment No. 41 to
Registrant's Registration Statement on Form N-1A (File
No. 2-76990) filed with the Securities and Exchange
Commission on December 18, 1997.
</TABLE>

C-3
<PAGE>
<TABLE>
<S> <C>
(m)(2) Distribution Plan for Kansas Tax Free Income Portfolio
Class B is incorporated by reference to Exhibit 15(b) as
filed with Post Effective Amendment No. 28 to Registrant's
Registration Statement on Form N-1A (File No. 2-76990)
filed with the Securities and Exchange Commission on
October 9, 1990.
(m)(3) Distribution Plan for Class D shares (formerly, ProVantage
Funds) is incorporated herein by reference to Exhibit
15(c) of Post Effective Amendment No. 41 to Registrant's
Registration Statement on Form N-1A (File No. 2-76990)
filed with the Securities and Exchange Commission on
December 18, 1997.
(m)(4) Distribution Plan for Class C shares of California Tax
Exempt Portfolio and Institutional Tax Free Portfolio is
incorporated herein by reference to Exhibit 15(d) of Post
Effective Amendment No. 41 to Registrant's Registration
Statement on Form N-1A (File No. 2-76990) filed with the
Securities and Exchange Commission on December 18, 1997.
(m)(5) Amended and Restated Class D Distribution Plan is
incorporated herein by reference to Exhibit 15(e) of Post
Effective Amendment No. 40 to Registrant's Registration
Statement on Form N-1A (File No. 2-76990) filed with the
Securities and Exchange Commission on December 23, 1996.
(m)(6) Class G Distribution Plan incorporated herein by reference
to Exhibit 15(f) of Post Effective Amendment No. 40 to
Registrant's Registration Statement on Form N-1A
(File No. 2-76990) filed with the Securities and Exchange
Commission on December 23, 1996.
(n) Not Applicable.
(o)(1) Rule 18f-3 Plan is incorporated herein by reference to
Exhibit 18(a) of Post Effective Amendment No. 38 to
Registrant's Registration Statement on Form N-1A (File
No. 2-76990) filed with the Securities and Exchange
Commission on October 30, 1995.
(o)(2) Amendment No. 1 to Rule 18f-3 Plan relating to Class A, B,
C, D and G shares is incorporated herein by reference to
Exhibit 18(b) of Post Effective Amendment No. 40 to
Registrant's Registration Statement on Form N-1A (File No.
2-76990) filed with the Securities and Exchange Commission
on December 23, 1996.
(p)(1) Code of Ethics for SEI Tax Exempt Trust dated March 20, 2000
is incorporated by reference to Exhibit (p)(2) of
Post-Effective Amendment No. 33 of SEI Institutional
Managed Trust's Registration Statement on Form N-1A (File
Nos. 33-09504 and 811-04878), filed with the SEC on
June 30, 2000.
(p)(2) Code of Ethics for SEI Investments Company dated April ,
2000 is incorporated by reference to Exhibit (p)(4) of
Post-Effective Amendment No. 42 of SEI Daily Income
Trust's Registration Statement on Form N-1A (File
Nos. 2-77068 and 811-3451), filed with the SEC on May 30,
2000.
(p)(3) Code of Ethics for Deutsche Asset Management Inc. dated
April, 2000 is filed herewith.
(p)(4) Code of Ethics for Weiss, Peck & Greer L.L.C. dated April
2000 is filed herewith.
(p)(5) Code of Ethics for Standish, Ayer & Wood, Inc. dated June
2000 is filed herewith.
(p)(6) Code of Ethics for Van Kampen Management Inc. dated
September 2000 is filed herewith.
(q) Powers of Attorney for Robert A. Nesher, Mark E. Nagle,
William M. Doran, F. Wendell Gooch, James M. Storey,
Edward D. Loughlin, George J. Sullivan, Jr., and
Rosemarie B. Greco are filed herewith.
</TABLE>

ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT:

None.

C-4
<PAGE>
ITEM 25. INDEMNIFICATION:

Article VIII of the Agreement and Declaration of Trust filed as Exhibit 1 to
the Registration Statement is incorporated by reference. Insofar as
indemnification for liabilities arising under the Securities Act of 1933 may be
permitted to trustees, directors, officers and controlling persons of the
Registrant by the Registrant pursuant to the Declaration of Trust or otherwise,
the Registrant is aware that in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in the
Act and, therefore, is unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by trustees, directors, officers or
controlling persons of the Registrant in connection with the successful defense
of any act, suit or proceeding) is asserted by such trustees, directors,
officers or controlling persons in connection with the shares being registered,
the Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issues.

ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISERS:

SEI INVESTMENTS MANAGEMENT CORPORATION

The principal address of SEI Investment Management Corporation ("SIMC") is
Oaks, PA 19456. SIMC is an investment adviser registered under the Advisers Act.

<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
------------------------- ------------------------------- -------------------------------
<S> <C> <C>
Alfred P. West, Jr. SEI Investments Company Chairman, CEO
Chairman, CEO, Director
SEI Investments Distribution Director, Chairman of the Board
Co. of Directors

SEI Inc. (Canada) Director

SEI Ventures, Inc. Director, Chairman, President

SEI Funds, Inc. CEO, Chairman of the Board of
Directors

Rembrandt Financial Services Chairman of the Board of
Company Directors

SEI Global Investment Corp. Director, CEO, Chairman

SEI Investments Global Chairman, CEO
Management (Cayman), Limited

SEI Capital AG Director, Chairman of the Board

SEI Global Capital Director, CEO, Chairman
Investments, Inc.

CR Financial Services Company Director, Chairman of the Board

CR Capital Resources, Inc. Director, Chairman of the Board

SEI Investments Mutual Fund Chairman, CEO
Services

SEI Investments Fund Management Chairman, CEO
</TABLE>

C-5
<PAGE>

SEI Investments De Mexico Director

SEI Asset Korea Director

Carmen V. Romeo SEI Investments Company Director, Executive Vice
Executive Vice President,
President, Director President-Investment Advisory
Group
SEI Investments Distribution Director
Co.

SEI Trust Company Director

SEI Investments, Inc. Director, President

SEI Investments Director, President
Developments, Inc.

SEI Funds, Inc. Director, Executive Vice
President

Rembrandt Financial Services Director, Executive Vice
Company President

SEI Global Capital Executive Vice President
Investments, Inc.

SEI Primus Holding Corp. Director, President

CR Financial Services Company Director

CR Capital Resources, Inc. Director

SEI Investments Mutual Fund Executive Vice President
Services

SEI Investments Fund Management Executive Vice President

Richard B. Lieb SEI Investments Company Director, Executive Vice
Director, Executive President,
Vice President President-Investment
Systems & Services Division
SEI Investments Distribution Director, Executive Vice
Co. President

SEI Trust Company Director, Chairman of the Board

SEI Investments-Global Fund Director
Services Limited

CR Capital Resources, Inc. Director

SEI Investments Mutual Fund Executive Vice President
Services

SEI Investments Fund Management Executive Vice President

Edward Loughlin SEI Investments Company Executive Vice President,
Executive Vice President-Asset Management
President Division
SEI Trust Company Director

SEI Insurance Group, Inc. Director, President, Secretary

SEI Funds, Inc. Executive Vice President
</TABLE>

C-6
<PAGE>

SEI Investments Mutual Fund Executive Vice President
Services

SEI Investments Fund Management Executive Vice President

Primus Capital Advisors Company Director

Dennis J. McGonigle SEI Investments Company Executive Vice President
Executive Vice
President
SEI Investments Distribution Executive Vice President
Co.

SEI Investments Mutual Fund Senior Vice President
Services

SEI Investments Fund Management Senior Vice President

Michael Arizin -- --
Senior Vice President,
Managing Director

Ed Daly -- --
Senior Vice President,
Managing Director

Leo J. Dolan, Jr. SEI Distribution Co. Senior Vice President
Senior Vice President
Rembrandt Financial Services Senior Vice President
Company

SEI Investments Mutual Fund Senior Vice President
Services

SEI Investments Fund Management Senior Vice President

Mick Duncan SEI Investments Mutual Fund Vice President, Team Leader
Senior Vice President, Services
Managing Director
SEI Investments Fund Management Vice President, Team Leader

Carl A. Guarino SEI Investments Company Senior Vice President
Senior Vice President
SEI Investments Distribution Senior Vice President
Company

Rembrandt Financial Services Director, Vice President
Company

SEI Global Investments Corp. Senior Vice President

SEI Global Investments (Cayman) Director
Limited

SEI Investments Global, Limited Director
</TABLE>

C-7
<PAGE>

SEI Investments Argentina S.A. Director

SEI Investments De Mexico Director

SEI Investments (Europe) Ltd. Director

Larry Hutchison SEI Investments Distribution Senior Vice President
Senior Vice President Co.

Robert S. Ludwig SEI Funds, Inc. Vice President
Senior Vice President,
CIO
SEI Investments Mutual Fund Vice President, Team Leader
Services

SEI Investments Fund Management Vice President, Team Leader

Jack May SEI Investments Distribution Senior Vice President
Senior Vice President Co.

James V. Morris -- --
Senior Vice President,
Managing Director

Steve Onofrio -- --
Senior Vice President,
Managing Director

Kevin P. Robins SEI Investments Company Senior Vice President, General
Senior Vice President Counsel, Assistant Secretary

SEI Investments Distribution Senior Vice President, General
Co. Counsel, Secretary

SEI Inc. (Canada) Senior Vice President, General
Counsel, Secretary

SEI Trust Company Director, Senior Vice
President, General Counsel,
Assistant Secretary

SEI Investments, Inc. Senior Vice President, General
Counsel, Secretary

SEI Ventures, Inc. Senior Vice President, General
Counsel, Secretary

SEI Investments Senior Vice President, General
Developments, Inc. Counsel, Secretary

SEI Insurance Group, Inc. Senior Vice President, General
Counsel

SEI Funds, Inc. Senior Vice President, General
Counsel, Secretary

Rembrandt Financial Services Vice President, Assistant
Company Secretary
</TABLE>

C-8
<PAGE>

<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
------------------------- ------------------------------- -------------------------------
<S> <C> <C>
SEI Global Investments Corp. Senior Vice President, General
Counsel, Secretary

SEI Advanced Capital Senior Vice President, General
Management, Inc. Counsel, Secretary

SEI Global Capital Investments Senior Vice President, General
Inc. Counsel, Secretary

SEI Primus Holding Corp. Senior Vice President, General
Counsel, Secretary

CR Financial Services Company Senior Vice President, General
Counsel, Secretary

CR Capital Resources, Inc. Senior Vice President

SEI Investments Mutual Fund Senior Vice President, General
Services Counsel, Secretary

SEI Investments Fund Management Senior Vice President, General
Counsel, Secretary

SEI Global Holdings (Cayman) Director, General Counsel,
Inc. Secretary

Kenneth Zimmer -- --
Senior Vice President,
Managing Director

Robert Aller SEI Investments Distribution Vice President
Vice President Company

Timothy D. Barto SEI Investments Company Vice President, Assistant
Vice President, Secretary
Assistant Secretary
SEI Investments Distribution Vice President, Assistant
Company Secretary

SEI Investments, Inc. Vice President, Assistant
Secretary

SEI Ventures, Inc. Vice President, Assistant
Secretary

SEI Investments Vice President, Assistant
Developments, Inc. Secretary

SEI Funds, Inc. Vice President, Assistant
Secretary

SEI Global Investments Corp. Vice President, Assistant
Secretary

SEI Advanced Capital Vice President, Assistant
Management, Inc. Secretary

SEI Global Capital Vice President, Assistant
Investments, Inc. Secretary

SEI Primus Holding Corp. Vice President, Assistant
Secretary

SEI Investments Mutual Fund Vice President, Assistant
Services Secretary

SEI Investments Fund Management Vice President, Assistant
Secretary
</TABLE>

C-9
<PAGE>

Todd Cipperman SEI Investments Company Vice President, Assistant
Vice President, General Secretary
Counsel, Assistant
Secretary
SEI Investments Distribution Vice President, Assistant
Co. Secretary

SEI Trust Company Vice President, Assistant
Secretary

SEI Investments, Inc. Vice President, Assistant
Secretary

SEI Ventures, Inc. Vice President, Assistant
Secretary

SEI Developments, Inc. Vice President, Assistant
Secretary

SEI Funds, Inc. Vice President, Assistant
Secretary

Rembrandt Financial Services Vice President, Assistant
Company Secretary

SEI Global Investments Corp. Vice President, Assistant
Secretary

SEI Advanced Capital Director, Vice President,
Management, Inc. Assistant Secretary

SEI Investments Global Director, Vice President,
(Cayman), Limited Assistant Secretary

SEI Global Capital Vice President, Assistant
Investments, Inc. Secretary

SEI Investments Global, Limited Director

SEI Primus Holding Corp. Vice President, Assistant
Secretary

SEI Investments Mutual Fund Vice President, Assistant
Services Secretary

SEI Investments Fund Management Vice President, Assistant
Secretary

SEI Global Holdings (Cayman) Director, Vice President,
Inc. Assistant Secretary

SEI Investments (Europe) Ltd. Director

S. Courtney E. Collier SEI Investments Distribution Vice President, Assistant
Vice President, Co. Secretary
Assistant Secretary
SEI Trust Company Vice President, Assistant
Secretary

SEI Investments, Inc. Vice President, Assistant
Secretary

SEI Ventures, Inc. Vice President, Assistant
Secretary

SEI Investments Vice President, Assistant
Developments, Inc. Secretary

SEI Funds, Inc. Vice President, Assistant
Secretary

SEI Global Investments Corp. Vice President, Assistant
Secretary
</TABLE>

C-10
<PAGE>

<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
------------------------- ------------------------------- -------------------------------
<S> <C> <C>
SEI Advanced Capital Vice President, Assistant
Management, Inc. Secretary

SEI Global Capital Vice President, Assistant
Investments, Inc. Secretary

SEI Primus Holding Corp. Vice President, Assistant
Secretary

SEI Investments Mutual Fund Vice President, Assistant
Services Secretary

SEI Investments Fund Management Vice President, Assistant
Secretary

Robert Crudup SEI Investments Distribution Vice President, Managing
Vice President, Company Director
Managing Director
SEI Investments Mutual Fund Vice President, Managing
Services Director

SEI Investments Fund Management Vice President, Managing
Director

Richard A. Deak SEI Investments Company Vice President, Assistant
Vice President, Secretary
Assistant Secretary
SEI Investments Distribution Vice President, Assistant
Company Secretary

SEI Trust Company Vice President, Assistant
Secretary

SEI Investments, Inc. Vice President, Assistant
Secretary

SEI Ventures, Inc. Vice President, Assistant
Secretary

SEI Investments Vice President, Assistant
Developments, Inc. Secretary

SEI Funds, Inc. Vice President, Assistant
Secretary

SEI Global Investments Corp. Vice President, Assistant
Secretary

SEI Advanced Capital Vice President, Assistant
Management, Inc. Secretary

SEI Global Capital Vice President, Assistant
Investments, Inc. Secretary

SEI Primus Holding Corp. Vice President, Assistant
Secretary

SEI Investments Mutual Fund Vice President, Assistant
Services Secretary

SEI Investments Fund Management Vice President, Assistant
Secretary

Melissa Doran Rayer -- --
Vice President

Michael Farrell -- --
Vice President
</TABLE>

C-11
<PAGE>

<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
------------------------- ------------------------------- -------------------------------
<S> <C> <C>
James R. Foggo SEI Investments Company Vice President, Assistant
Vice President, Secretary
Assistant Secretary
SEI Investments Distribution Vice President, Assistant
Company Secretary

SEI Trust Company Vice President, Assistant
Secretary

SEI Investments, Inc. Vice President, Assistant
Secretary

SEI Ventures, Inc. Vice President, Assistant
Secretary

SEI Investments Vice President, Assistant
Developments, Inc. Secretary

SEI Funds, Inc. Vice President, Assistant
Secretary

SEI Global Investments Corp. Vice President, Assistant
Secretary

SEI Advanced Capital Management Vice President, Assistant
Inc. Secretary

SEI Global Capital Vice President, Assistant
Investments, Inc. Secretary

SEI Primus Holding Corp. Vice President, Assistant
Secretary

SEI Investments Mutual Fund Vice President, Assistant
Services Secretary

SEI Investments Fund Management Vice President, Assistant
Secretary

Vic Galef SEI Investments Distribution Vice President, Managing
Vice President, Company Director
Managing Director
SEI Investments Mutual Fund Vice President, Managing
Services Director

SEI Investments Fund Management Vice President, Managing
Director

Lydia A. Gavalis SEI Investments Company Vice President, Assistant
Vice President, Secretary
Assistant Secretary
SEI Investments Distribution Vice President, Assistant
Company Secretary

SEI Trust Company Vice President, Assistant
Secretary

SEI Investments, Inc. Vice President, Assistant
Secretary

SEI Ventures, Inc. Vice President, Assistant
Secretary

SEI Investments Vice President, Assistant
Developments, Inc. Secretary

SEI Funds, Inc. Vice President, Assistant
Secretary

SEI Global Investments Corp. Vice President, Assistant
Secretary

SEI Advanced Capital Vice President, Assistant
Management, Inc. Secretary
</TABLE>

C-12
<PAGE>

<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
------------------------- ------------------------------- -------------------------------
<S> <C> <C>
SEI Global Capital Vice President, Assistant
Investments, Inc. Secretary

SEI Primus Holding Corp. Vice President, Assistant
Secretary

SEI Investments Mutual Fund Vice President, Assistant
Services Secretary

SEI Investments Fund Management Vice President, Assistant
Secretary

Greg Gettinger SEI Investments Company Vice President
Vice President
SEI Investments Distribution Vice President
Company

SEI Trust Company Vice President

SEI Investments, Inc. Vice President

SEI Ventures, Inc. Vice President

SEI Investments Vice President
Developments, Inc.

SEI Funds, Inc. Vice President

SEI Global Investments Corp. Vice President

SEI Advanced Capital Vice President
Management, Inc.

SEI Global Capital Vice President
Investments, Inc.

SEI Primus Holding Corp. Vice President

SEI Investments Mutual Fund Vice President
Services

SEI Investments Fund Management Vice President

Susan R. Hartley -- --
Vice President

Kathy Heilig SEI Inc. (Canada) Vice President, Treasurer
Vice President,
Treasurer
SEI Investments Company Vice President, Treasurer,
Chief Accounting Officer

SEI Investments Distribution Vice President
Company

SEI Trust Company Vice President, Treasurer

SEI Ventures, Inc Vice President, Treasurer

SEI Insurance Group, Inc. Vice President, Treasurer

SEI Realty Capital Corporation Vice President, Treasurer

Rembrandt Financial Services Vice President, Treasurer
Company
</TABLE>

C-13
<PAGE>

<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
------------------------- ------------------------------- -------------------------------
<S> <C> <C>
SEI Global Investments Corp. Director, Vice President,
Treasurer

SEI Advanced Capital Director, Vice President,
Management, Inc. Treasurer

SEI Investments Global Vice President, Treasurer
(Cayman), Limited

CR Capital Resources, Inc. Vice President, Treasurer

SEI Investments Mutual Fund Vice President, Treasurer
Services

SEI Investments Fund Management Vice President, Treasurer

SEI Global Holdings (Cayman) Vice President, Treasurer
Inc.

Kim Kirk SEI Investments Distribution Vice President, Managing
Vice President, Company Director
Managing Director
SEI Investments-Global Fund Director
Services Limited

SEI Investments Mutual Fund Vice President, Managing
Services Director

SEI Investments Fund Management Vice President, Managing
Director

John Krzeminski SEI Investments Distribution Vice President, Managing
Vice President, Company Director
Managing Director
SEI Investments Mutual Fund Vice President, Managing
Services Director

SEI Investments Fund Management Vice President, Managing
Director

Vicki Malloy SEI Investments Mutual Fund Vice President, Team Leader
Vice President, Services
Managing Director
SEI Investments Fund Management Vice President, Team Leader

Christine M. McCullough SEI Investments Company Vice President, Assistant
Vice President, Secretary
Assistant Secretary
SEI Investments Distribution Vice President, Assistant
Company Secretary

SEI Investments, Inc. Vice President, Assistant
Secretary

SEI Ventures, Inc. Vice President, Assistant
Secretary

SEI Investments Vice President, Assistant
Developments, Inc. Secretary

SEI Funds, Inc. Vice President, Assistant
Secretary
</TABLE>

C-14
<PAGE>

<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
------------------------- ------------------------------- -------------------------------
<S> <C> <C>
SEI Global Investments Corp. Vice President, Assistant
Secretary

SEI Advanced Capital Vice President, Assistant
Management, Inc. Secretary

SEI Global Capital Vice President, Assistant
Investments, Inc. Secretary

SEI Primus Holding Corp. Vice President, Assistant
Secretary

SEI Investments Mutual Fund Vice President, Assistant
Services Secretary

SEI Investments Fund Management Vice President, Assistant
Secretary

Carolyn McLaurin SEI Investments Distribution Vice President, Managing
Vice President, Company Director
Managing Director
SEI Investments Mutual Fund Vice President, Managing
Services Director

SEI Investments Fund Management Vice President, Managing
Director

Mary Jean Melair -- --
Vice President

Roger Messina -- --
Vice President

Cynthia M. Parish SEI Investments Company Vice President, Assistant
Vice President, Secretary
Assistant Secretary
SEI Investments Distribution Vice President, Assistant
Company Secretary

SEI Trust Company Vice President, Assistant
Secretary

SEI Investments, Inc. Vice President, Assistant
Secretary

SEI Ventures, Inc. Vice President, Assistant
Secretary

SEI Investments Vice President, Assistant
Developments, Inc. Secretary

SEI Funds, Inc. Vice President, Assistant
Secretary

Rembrandt Financial Services Vice President, Assistant
Company Secretary

SEI Global Investments Corp. Vice President, Assistant
Secretary

SEI Advanced Capital Vice President, Assistant
Management, Inc. Secretary

SEI Global Capital Vice President, Assistant
Investments, Inc. Secretary

SEI Primus Holding Corp. Vice President, Assistant
Secretary

SEI Investments Mutual Fund Vice President, Assistant
Services Secretary
</TABLE>

C-15
<PAGE>

<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
------------------------- ------------------------------- -------------------------------
<S> <C> <C>
SEI Investments Fund Management Vice President, Assistant
Secretary

SEI Global Holdings (Cayman) Vice President, Assistant
Inc. Secretary

SEI Investments (Europe) Ltd. Director

Robert Prucnal -- --
Vice President

Daniel Spaventa SEI Investments Distribution Vice President
Vice President Company

Kathryn L. Stanton SEI Investments Company Vice President
Vice President
SEI Investments Distribution Vice President
Co.

CR Financial Services Company Secretary, Treasurer

CR Capital Resource, Inc. Secretary

SEI Investments Mutual Fund Vice President
Services

SEI Investments Fund Management Vice President

Lynda J. Striegel SEI Investments Company Vice President, Assistant
Vice President, Secretary
Assistant Secretary
SEI Investments Distribution Vice President, Assistant
Company Secretary

SEI Investments, Inc. Vice President, Assistant
Secretary

SEI Trust Company Vice President, Assistant
Secretary

SEI Ventures, Inc. Vice President, Assistant
Secretary

SEI Investments Vice President, Assistant
Developments, Inc. Secretary

SEI Funds, Inc. Vice President, Assistant
Secretary

SEI Global Investments Corp. Vice President, Assistant
Secretary

SEI Advanced Capital Vice President, Assistant
Management, Inc. Secretary

SEI Global Capital Vice President, Assistant
Investments, Inc. Secretary

SEI Primus Holding Corp. Vice President, Assistant
Secretary

SEI Investments Mutual Fund Vice President, Assistant
Services Secretary

SEI Investments Fund Management Vice President, Assistant
Secretary

Mary Vogan -- --
Vice President
</TABLE>

C-16
<PAGE>

Susan R. West -- --
Vice President,
Managing Director

Lori L. White SEI Investments Distribution Vice President, Assistant
Vice President, Co. Secretary
Assistant Secretary
SEI Trust Company Vice President, Assistant
Secretary

SEI Investments, Inc. Vice President, Assistant
Secretary

SEI Ventures, Inc. Vice President, Assistant
Secretary

SEI Investments Vice President, Assistant
Developments, Inc. Secretary

SEI Funds, Inc. Vice President, Assistant
Secretary

SEI Global Investments Corp. Vice President, Assistant
Secretary

SEI Advanced Capital Vice President, Assistant
Management, Inc. Secretary

SEI Global Capital Vice President, Assistant
Investments, Inc. Secretary

SEI Primus Holding Corp. Vice President, Assistant
Secretary

SEI Investments Mutual Fund Vice President, Assistant
Services Secretary

SEI Investments Fund Management Vice President, Assistant
Secretary

Mark S. Wilson -- --
Vice President

Wayne M. Withrow SEI Investments Distribution Vice President, Managing
Vice President, Co. Director
Managing Director
SEI Investments Mutual Fund Vice President, Managing
Services Director

SEI Investments Fund Management Vice President, Managing
Director
</TABLE>

DEUTSCHE ASSET MANAGEMENT INC.

The principal address of Deutsche Asset Management Inc. ("DeAM") is 885
Third Avenue, 32nd Floor, New York, NY 10022. DeAM is an investment adviser
registered under the Advisers Act.

<TABLE>
<CAPTION>
NAME AND POSITION
WITH INVESTMENT ADVISER NAME OF OTHER COMPANY CONNECTION WITH OTHER COMPANY
------------------------- ------------------------------- -------------------------------
<S> <C> <C>
David Westover Baldt Morgan Grenfell Asset Director
Director, Exec. Vice Management Limited
President
</TABLE>

C-17
<PAGE>

Michael Bullock Morgan Grenfell Investment Chairman, Chief Investment
Chairman Services Officer

Morgan Grenfell Asset Director
Management and Subsidiaries

Morgan Grenfell Small Cap Fund, Chairman, Director
Inc.

Deutsche Bank, AG -- --
Indirect Owner

Deutsche Morgan Grenfell -- --
Group
Indirect Owner

Audrey Mary Theresa Jones -- --
Director, Executive
Vice President

James Edward Minnick Morgan Grenfell Asset Director
President, Director Management

Morgan Grenfell Investment President, Trustee
Trust

The Morgan Grenfell SMALL Cap President, Director
Fund, Inc.

SEI Investments Distribution Registered Representative
Corp.

Morgan Grenfell Asset -- --
Management Holdings, BV
Owner

Morgan Grenfell Asset -- --
Management Limited
Indirect Owner
</TABLE>

ITEM 27. PRINCIPAL UNDERWRITERS:

(a) Furnish the name of each investment company (other than the Registrant)
for which each principal underwriter currently distributing the securities of
the Registrant also acts as a principal underwriter, distributor or investment
adviser.

C-18
<PAGE>
Registrant's distributor, SEI Investments Distribution Co., acts as
distributor for:

<TABLE>
<S> <C>
SEI Daily Income Trust July 15, 1982
SEI Liquid Asset Trust November 29, 1982
SEI Index Funds July 10, 1985
SEI Institutional Managed Trust January 22, 1987
SEI Institutional International Trust August 30, 1988
The Advisors' Inner Circle Fund November 14, 1991
The Pillar Funds February 28, 1992
CUFUND May 1, 1992
STI Classic Funds May 29, 1992
First American Funds, Inc. November 1, 1992
First American Investment Funds, Inc. November 1, 1992
The Arbor Fund January 28, 1993
The PBHG Funds, Inc. July 16, 1993
The Achievement Funds Trust December 27, 1994
Bishop Street Funds January 27, 1995
CrestFunds, Inc. March 1, 1995
STI Classic Variable Trust August 18, 1995
ARK Funds November 1, 1995
Huntington Funds January 11, 1996
SEI Asset Allocation Trust April 1, 1996
TIP Funds April 30, 1996
SEI Institutional Investments Trust June 14, 1996
First American Strategy Funds, Inc. October 1, 1996
HighMark Funds February 15, 1997
Armada Funds March 8, 1997
PBHG Insurance Series Fund, Inc. April 1, 1997
The Expedition Funds June 9, 1997
Alpha Select Funds January 1, 1998
Oak Associates Funds February 27, 1998
The Nevis Fund, Inc. June 29, 1998
CNI Charter Funds April 1, 1999
The Armada Advantage Fund May 1, 1999
Huntington VA Funds October 15, 1999
Friends Ivory Funds December 16, 1999
SEI Insurance Products Trust March 29, 2000
Pitcairn Funds August 1, 2000
</TABLE>

The Distributor provides numerous financial services to investment managers,
pension plan sponsors, and bank trust departments. These services include
portfolio evaluation, performance measurement and consulting services
("Funds Evaluation") and automated execution, clearing and settlement of
securities transactions ("MarketLink").

(b) Furnish the Information required by the following table with respect to
each director, officer or partner of each principal underwriter named in the
answer to Item 21 of Part B. Unless otherwise noted, the business address of
each director or officer is Oaks, PA 19456.

<TABLE>
<CAPTION>
POSITION AND OFFICE POSITIONS AND OFFICES
NAME WITH UNDERWRITER WITH REGISTRANT
------------------------- ------------------------------------------- ---------------------
<S> <C> <C>
Alfred P. West, Jr. Director, Chairman & Chief Executive --
Officer

Carmen V. Romeo Director --
</TABLE>

C-19
<PAGE>

<TABLE>
<CAPTION>
POSITION AND OFFICE POSITIONS AND OFFICES
NAME WITH UNDERWRITER WITH REGISTRANT
------------------------- ------------------------------------------- ---------------------
<S> <C> <C>
Mark J. Held President & Chief Operating Officer --

Gilbert L. Beebower Executive Vice President --

Richard B. Lieb Director, Executive Vice President --

Dennis J. McGonigle Executive Vice President --

Robert M. Silvestri Chief Financial Officer & Treasurer --

Leo J. Dolan, Jr. Senior Vice President --

Carl A. Guarino Senior Vice President --

Jack May Senior Vice President --

Hartland J. McKeown Senior Vice President --

Kevin P. Robins Senior Vice President --

Patrick K. Walsh Senior Vice President --

Robert Aller Vice President --

Timothy D. Barto Vice President & Assistant Secretary Vice President and
Assistant Secretary

Todd Cipperman Vice President & Assistant Secretary Vice President and
Assistant Secretary

S. Courtney E. Collier Vice President & Assistant Secretary --

Robert Crudup Vice President & Managing Director --

Richard A. Deak Vice President & Assistant Secretary --

Barbara Doyne Vice President --

Jeff Drennen Vice President --

James R. Foggo Vice President & Assistant Secretary Vice President &
Assistant Secretary

Vic Galef Vice President & Managing Director --

Lydia A. Gavalis Vice President & Assistant Secretary Vice President &
Assistant Secretary

Greg Gettinger Vice President & Assistant Secretary --

Kathy Heilig Vice President Vice President &
Assistant Secretary

Jeff Jacobs Vice President --

Samuel King Vice President --

John Kirk Vice President & Managing Director --

Kim Kirk Vice President & Managing Director --

John Krzeminski Vice President & Managing Director --

Paul Lonergan Vice President & Managing Director --

Carolyn McLaurin Vice President & Managing Director --

Mark Nagle Vice President Controller and Chief
Financial Officer

Joanne Nelson Vice President --
</TABLE>

C-20
<PAGE>

<TABLE>
<CAPTION>
POSITION AND OFFICE POSITIONS AND OFFICES
NAME WITH UNDERWRITER WITH REGISTRANT
------------------------- ------------------------------------------- ---------------------
<S> <C> <C>
Cynthia M. Parrish Vice President & Assistant Secretary Vice President and
Assistant Secretary

Kim Rainey Vice President --

Rob Redican Vice President --

Maria Rinehart Vice President --

Steve Smith Vice President --

Daniel Spaventa Vice President --

Kathryn L. Stanton Vice President --

Lori L. White Vice President & Assistant Secretary --

Wayne M. Withrow Vice President & Managing Director --
</TABLE>

ITEM 28. LOCATION OF ACCOUNTS AND RECORDS:

Books or other documents required to be maintained by Section 31(a) of the
Investment Company Act of 1940, as amended ("1940 Act"), and the rules
promulgated thereunder, are maintained as follows:

(a) With respect to Rules 31a-1(a); 31a-1(b)(1); (2)(a) and (b); (3);
(6); (8); (12); and 31a-1(d), the required books and records are maintained
at the offices of Registrant's Custodians:

First Union National Bank
Broad and Chestnut Street
P.O. Box 7618
Philadelphia, PA 19101

(b)/(c) With respect to Rules 31a-1(a); 31a-1(b)(1); 31a-1(b)(4); (2)(C)
and (D); (4); (5); (6); (8); (9); (10); (11); and 31a-1(f), the required
books and records are maintained at the offices of Registrant's Manager:

SEI Investments Fund Management
Oaks, PA 19456

(c) With respect to Rules 31a-1(b)(5), (6), (9) and (10) and 31a-1(f),
the required books and records are maintained at the principal offices of
the Registrant's Adviser:

SEI Investments Management Corporation
Oaks, PA 19456

ITEM 29. MANAGEMENT SERVICES:

None

ITEM 30. UNDERTAKINGS:

None

C-21
<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, and
the Investment Company Act of 1940, as amended, the Registrant certifies that it
has duly caused this Post-Effective Amendment No. 46 to Registration Statement
No. 2-76990 to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Oaks, Commonwealth of Pennsylvania on the 13th day of
October, 2000.

SEI TAX EXEMPT TRUST

By: /s/ EDWARD D. LOUGHLIN
-----------------------------------------
Edward D. Loughlin
PRESIDENT & CHIEF EXECUTIVE OFFICER

Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement has been signed below by the following persons in
the capacity on the date(s) indicated.

*
------------------------------ Trustee October 13, 2000
Rosemarie B. Greco

*
------------------------------ Trustee October 13, 2000
William M. Doran

*
------------------------------ Trustee October 13, 2000
F. Wendell Gooch

*
------------------------------ Trustee October 13, 2000
George J. Sullivan, Jr.

*
------------------------------ Trustee October 13, 2000
James M. Storey

*
------------------------------ Trustee October 13, 2000
Robert A. Nesher

------------------------------ President & Chief October 13, 2000
Edward D. Loughlin Executive Officer

/s/ MARK E. NAGLE
------------------------------ Controller & Chief October 13, 2000
Mark E. Nagle Financial Officer

*By: /s/ EDWARD D. LOUGHLIN
-------------------------
Edward D. Loughlin,
ATTORNEY-IN-FACT
<PAGE>
EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT
-------------
<S> <C>
Registrant's Declaration of Trust is incorporated herein by
reference to Exhibit 1(a) of Post Effective Amendment
No. 41 to Registrant's Registration Statement on Form N-1A
(File No. 2-76990) filed with the Securities and Exchange
Commission on December 18, 1997.
Amendment to the Registrant's Declaration of Trust, dated
July 30, 1982, is incorporated herein by reference to
Exhibit 1(b) of Post Effective Amendment No. 41 to
Registrant's Registration Statement on Form N-1A (File
No. 2-76990) filed with the Securities and Exchange
Commission on December 18, 1997.
Amendment to the Registrant's Declaration of Trust, dated
May 23, 1986, is incorporated herein by reference to
Exhibit 1(c) of Post Effective Amendment No. 41 to
Registrant's Registration Statement on Form N-1A (File
No. 2-76990) filed with the Securities and Exchange
Commission on December 18, 1997.
Amendment to the Registrant's Declaration of Trust, dated
April 8, 1987, is incorporated herein by reference to
Exhibit 1(d) of Post Effective Amendment No. 41 to
Registrant's Registration Statement on Form N-1A (File
No. 2-76990) filed with the Securities and Exchange
Commission on December 18, 1997.
Amendment to the Registrant's Declaration of Trust, dated
December 23, 1988, is incorporated herein by reference to
Exhibit 1(e) of Post Effective Amendment No. 41 to
Registrant's Registration Statement on Form N-1A (File
No. 2-76990) filed with the Securities and Exchange
Commission on December 18, 1997.
Amendment to the Registrant's Declaration of Trust, dated
June 16, 1989, is incorporated herein by reference to
Exhibit 1(f) of Post Effective Amendment No. 41 to
Registrant's Registration Statement on Form N-1A (File
No. 2-76990) filed with the Securities and Exchange
Commission on December 18, 1997.
Amendment to the Registrant's Declaration of Trust, dated
July 5, 1989, is incorporated herein by reference to
Exhibit 1(g) of Post Effective Amendment No. 41 to
Registrant's Registration Statement on Form N-1A (File
No. 2-76990) filed with the Securities and Exchange
Commission on December 18, 1997.
Amendment to the Registrant's Declaration of Trust, dated
November 15, 1989, is incorporated herein by reference to
Exhibit 1(h) of Post Effective Amendment No. 41 to
Registrant's Registration Statement on Form N-1A (File
No. 2-76990) filed with the Securities and Exchange
Commission on December 18, 1997.
Registrant's By-Laws are incorporated herein by reference to
Exhibit 2(a) of Post Effective Amendment No. 41 to
Registrant's Registration Statement on Form N-1A (File
No. 2-76990) filed with the Securities and Exchange
Commission on December 18, 1997.
Amended By-Laws are incorporated herein by reference to
Exhibit 2(b) of Post Effective Amendment No. 41 to
Registrant's Registration Statement on Form N-1A (File
No. 2-76990) filed with the Securities and Exchange
Commission on December 18, 1997.
Not Applicable.
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
EXHIBIT
-------------
<S> <C>
Investment Advisory Agreement with Weiss, Peck and Greer
Advisers, Inc. is incorporated herein by reference to
Exhibit 5(a) of Post Effective Amendment No. 41 to
Registrant's Registration Statement on Form N-1A (File
No. 2-76990) filed with the Securities and Exchange
Commission on December 18, 1997.
Investment Advisory Agreement with Bessemer Trust Company is
incorporated by reference to Exhibit 5(b) as filed with
Post Effective Amendment No. 19 to Registrant's
Registration Statement on Form N-1A (File No. 2-76990) as
previously filed with the Securities and Exchange
Commission.
Investment Advisory Agreement with First National Bank in
Wichita (now INTRUST Bank, NA in Wichita) is incorporated
by reference to Exhibit 5(c) as filed with Post Effective
Amendment No. 29 to Registrant's Registration Statement on
Form N-1A (File No. 2-76990) filed with the Securities and
Exchange Commission on December 28, 1990.
Investment Advisory Agreement with Woodbridge Capital
Management, Inc. is incorporated by reference to Exhibit
5(d) as filed with Post Effective Amendment No. 35 to
Registrant's Registration on Form N-1A (File No. 2-76990)
as previously filed with the Securities and Exchange
Commission.
Investment Advisory Agreement with State Street Bank and
Trust Company is incorporated by reference to Exhibit 5(e)
as filed with Post Effective Amendment No. 35 to
Registrant's Registration Statement on Form N-1A (File
No. 2-76990) as previously filed with the Securities and
Exchange Commission.
Schedule E dated August 5, 1992 to Investment Advisory
Agreement with Weiss, Peck & Greer Advisers, Inc. is
incorporated by reference to Exhibit 5(f) as filed with
Post Effective Amendment No. 32 to Registrant's
Registration Statement on Form N-1A (File No. 2-76990)
filed with the Securities and Exchange Commission on
August 17, 1992 (adding Bainbridge Tax Exempt Portfolio).
Schedule G, dated December 10, 1993, to Investment Advisory
Agreement with Weiss, Peck & Greer Advisers, Inc. (adding
Intermediate-Term Municipal, California Intermediate-Term
Municipal, and New York Intermediate-Term Municipal
Portfolios) is incorporated herein by reference to Exhibit
5(g) of Post Effective Amendment No. 41 to Registrant's
Registration Statement on Form N-1A (File No. 2-76990)
filed with the Securities and Exchange Commission on
December 18, 1997.
Schedule H, dated March 8, 1994, to Investment Advisory
Agreement with Weiss, Peck & Greer Advisers, Inc. (adding
Institutional Tax Free, Pennsylvania Tax Free, California
Tax Exempt, Bainbridge and Tax Free Portfolios) is
incorporated herein by reference to Exhibit 5(h) of Post
Effective Amendment No. 41 to Registrant's Registration
Statement on Form N-1A (File No. 2-76990) filed with the
Securities and Exchange Commission on December 18, 1997.
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
EXHIBIT
-------------
<S> <C>
Investment Advisory Agreement with Morgan Grenfell Capital
Management, Inc., is incorporated herein by reference to
Exhibit 5(i) of Post Effective Amendment No. 41 to
Registrant's Registration Statement on Form N-1A (File
No. 2-76990) filed with the Securities and Exchange
Commission on December 18, 1997.
Investment Advisory Agreement with SEI Financial Management
Corporation, is incorporated herein by reference to
Exhibit 5(j) of Post Effective Amendment No. 41 to
Registrant's Registration Statement on Form N-1A (File
No. 2-76990) filed with the Securities and Exchange
Commission on December 18, 1997.
Investment Sub-Advisory Agreement with Standish, Ayer &
Wood, Inc, is incorporated herein by reference to Exhibit
5(k) of Post Effective Amendment No. 41 to Registrant's
Registration Statement on Form N-1A (File No. 2-76990)
filed with the Securities and Exchange Commission on
December 18, 1997.
EX-99.Bd12 Investment Sub-Advisory Agreement with Deutsche Asset
Management Inc. is filed herewith.
EX-99.Bd13 Form of Investment Advisory Agreement with SEI Investments
Management Corporation is filed herewith.
Distribution Agreement is incorporated herein by reference
to Exhibit 6 of Post Effective Amendment No. 41 to
Registrant's Registration Statement on Form N-1A (File
No. 2-76990) filed with the Securities and Exchange
Commission on December 18, 1997.
Not Applicable.
Custodian Agreement is incorporated herein by reference to
Exhibit 8 of Post Effective Amendment No. 41 to
Registrant's Registration Statement on Form N-1A (File
No. 2-76990) filed with the Securities and Exchange
Commission on December 18, 1997.
Management Agreement is incorporated herein by reference to
Exhibit 9(a) of Post Effective Amendment No. 41 to
Registrant's Registration Statement on Form N-1A (File
No. 2-76990) filed with the Securities and Exchange
Commission on December 18, 1997.
Schedule E dated August 5, 1992 to Management Agreement is
incorporated by reference to Exhibit 9(b) as filed with
Post Effective Amendment No. 32 to Registrant's
Registration Statement on Form N-1A (File No. 2-76990)
filed with the Securities and Exchange Commission on
August 17, 1992 (adding Massachusetts Intermediate-Term
Municipal Portfolio).
Schedule F dated August 5, 1992 to Management Agreement is
incorporated by reference to Exhibit 9(c) as filed with
Post Effective Amendment No. 32 to Registrant's
Registration Statement on Form N-1A (File No. 2-76990)
filed with the Securities and Exchange Commission on
August 17, 1992 (adding Bainbridge Tax Exempt Portfolio).
Schedule G, dated October 29, 1993, to Management Agreement
(adding Pennsylvania Tax Free Portfolio) is incorporated
herein by reference to Exhibit 9(d) of Post Effective
Amendment No. 41 to Registrant's Registration Statement on
Form N-1A (File No. 2-76990) filed with the Securities and
Exchange Commission on December 18, 1997.
Schedule H, dated October 29, 1993, to Management Agreement
(adding New York Intermediate-Term Municipal Portfolio) is
incorporated herein by reference to Exhibit 9(e) of Post
Effective Amendment No. 41 to Registrant's Registration
Statement on Form N-1A (File No. 2-76990) filed with the
Securities and Exchange Commission on December 18, 1997.
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
EXHIBIT
-------------
<S> <C>
Schedule I, dated October 29, 1993, to Management Agreement
(adding California Intermediate-Term Municipal Portfolio)
is incorporated herein by reference to Exhibit 9(f) of
Post Effective Amendment No. 41 to Registrant's
Registration Statement on Form N-1A (File No. 2-76990)
filed with the Securities and Exchange Commission on
December 18, 1997.
Consent to Assignment and Assumption of the Administration
Agreement between the Trust and SEI Financial Management
Corporation to SEI Fund Resources, is incorporated herein
by reference to Exhibit 9(g) of Post Effective Amendment
No. 41 to Registrant's Registration Statement on Form N-1A
(File No. 2-76990) filed with the Securities and Exchange
Commission on December 18, 1997.
EX-99.Bi Opinion and Consent of Counsel is filed herewith.
Not Applicable.
Not Applicable.
Not Applicable.
Distribution Plan is incorporated herein by reference to
Exhibit 15(a) of Post Effective Amendment No. 41 to
Registrant's Registration Statement on Form N-1A (File
No. 2-76990) filed with the Securities and Exchange
Commission on December 18, 1997.
Distribution Plan for Kansas Tax Free Income Portfolio
Class B is incorporated by reference to Exhibit 15(b) of
as filed with Post Effective Amendment No. 28 to
Registrant's Registration Statement on Form N-1A (File
No. 2-76990) filed with the Securities and Exchange
Commission on October 9, 1990.
Distribution Plan for Class D shares (formerly ProVantage
Funds), is incorporated herein by reference to Exhibit
15(c) of Post Effective Amendment No. 41 to Registrant's
Registration Statement on Form N-1A (File No. 2-76990)
filed with the Securities and Exchange Commission on
December 18, 1997.
Distribution Plan for Class C shares of California Tax
Exempt Portfolio and Institutional Tax Free Portfolio is
incorporated herein by reference to Exhibit 15(d) of Post
Effective Amendment No. 41 to Registrant's Registration
Statement on Form N-1A (File No. 2-76990) filed with the
Securities and Exchange Commission on December 18, 1997.
Amended and Restated Class D Distribution Plan is
incorporated herein by reference to Exhibit 15(e) of
Post-Effective Amendment No. 40 to Registrant's
Registration Statement on Form N-1A (File No. 2-76990)
filed with the Securities and Exchange Commission on
December 23, 1996.
Class G Distribution Plan is incorporated herein by
reference to Exhibit 15(f) of Post-Effective Amendment
No. 40 to Registrant's Registration Statement on
Form N-1A (File No. 2-76990) filed with the Securities and
Exchange Commission on December 23, 1996.
Not Applicable.
Rule 18f-3 Plan is incorporated herein by reference to
Exhibit 18(a) of Post Effective Amendment No. 38 to
Registrant's Registration Statement on Form N-1A
(File No. 2-76990) filed with the Securities and Exchange
Commission on October 30, 1995.
Amendment No. 1 to Rule 18f-3 Plan relating to Class A, B,
C, D and G shares is incorporated herein by reference to
Exhibit 18(b) of Post-Effective Amendment No. 40 to
Registrant's Registration Statement on Form N-1A (File
No. 2-76990) filed with the Securities and Exchange
Commission on December 23, 1996.
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
EXHIBIT
-------------
<S> <C>
Code of Ethics for SEI Tax Exempt Trust dated March 20, 2000
is incorporated by reference to Exhibit (p)(2) of
Post-Effective Amendment No. 33 of SEI Institutional
Managed Trust's Registration Statement on Form N-1A (File
Nos. 33-09504 and 811-04878), filed with the SEC on
June 30, 2000.
Code of Ethics for SEI Investments Company dated April ,
2000 is incorporated by reference to Exhibit (p)(4) of
Post-Effective Amendment No. 42 of SEI Daily Income
Trust's Registration Statement on Form N-1A (File
Nos. 2-77068 and 811-3451), filed with the SEC on May 30,
2000.
EX-99.Bp3 Code of Ethics for Deutsche Asset Management Inc. dated
April, 2000 is filed herewith.
EX-99.Bp4 Code of Ethics for Weiss, Peck & Greer L.L.C. dated April
2000 is filed herewith.
EX-99.Bp5 Code of Ethics for Standish, Ayer & Wood, Inc. dated June
2000 is filed herewith.
EX-99.Bp6 Code of Ethics for Van Kampen Management Inc. dated
September 2000 is filed herewith.
EX-99.Bq Powers of Attorney for Robert A. Nesher, Mark E. Nagle,
William M. Doran, F. Wendell Gooch, James M. Storey,
Edward D. Loughlin, George J. Sullivan, Jr. and Rosemarie
B. Greco are filed herewith.
</TABLE>