FIRST INVESTORS TAX EXEMPT MONEY MARKET FUND INC, 485BPOS, 1996-04-24

FIRST INVESTORS TAX EXEMPT MONEY MARKET FUND INC
485BPOS, 1996-04-24

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As filed with the Securities and Exchange Commission on April 24, 1996

Registration No. 2-82572
811-3690

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

Post-Effective Amendment No. 16 X

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940

Amendment No. 16 X

FIRST INVESTORS TAX-EXEMPT MONEY MARKET FUND, INC.
(Exact name of Registrant as specified in charter)

Ms. Concetta Durso
Secretary and Vice President
First Investors Tax-Exempt Money Market Fund, Inc.
95 Wall Street
New York, New York 10005
(Name and Address of Agent for Service)

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

It is proposed that this filing will become effective on April 29, 1996 pursuant
to paragraph (b) of Rule 485.

Pursuant to Rule 24f-2 under the Investment Company Act of 1940, Registrant has
previously elected to register an indefinite number of shares of common stock,
par value $.01 per share, under the Securities Act of 1933. Registrant filed a
Rule 24f-2 Notice for its fiscal year ending December 31, 1995 on February 27,
1996.

<PAGE>

FIRST INVESTORS TAX-EXEMPT MONEY MARKET FUND, INC.

CROSS-REFERENCE SHEET

N-1A Item No. Location
<S> <C>

PART A: PROSPECTUS

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

PART B: STATEMENT OF ADDITIONAL INFORMATION

10. Cover Page.................................................................. Cover Page
11. Table of Contents........................................................... Table of Contents
12. General Information and History............................................. General Information
13. Investment Objectives and Policies.......................................... Investment Policies;
Investment Restrictions
14. Management of the Fund...................................................... Directors and Officers
15. Control Persons and Principal
Holders of Securities..................................................
16. Investment Advisory and Other Services...................................... Management
17. Brokerage Allocation........................................................ Allocation of Portfolio
Transactions
18. Capital Stock and Other Securities.......................................... Determination of Net
Asset Value; Daily
Dividends
19. Purchase, Redemption and Pricing
of Securities Being Offered............................................ Additional Exchange and
Redemption Information
and Other Services;
Determination of Net
Asset Value

<PAGE>

N-1A Item No. Location

20. Tax Status.................................................................. Taxes
21. Underwriters................................................................ Underwriter
22. Performance Data............................................................ Performance Information
23. Financial Statements........................................................ Financial Statements;
Report of Independent
Accountants

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PART C: OTHER INFORMATION

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

<PAGE>

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

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

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

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

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

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

This Prospectus sets forth concisely the information about each of the
Funds that a prospective investor should know before investing and should be
retained for future reference. First Investors Management Company, Inc. ("FIMCO"
or "Adviser") serves as investment adviser to each Fund and First Investors
Corporation ("FIC" or "Underwriter") serves as distributor of each Fund's
shares. A Statement of Additional Information ("SAI"), dated April 29, 1996
(which is incorporated by reference herein), has been filed with the Securities
and Exchange Commission. The SAI is available at no charge upon request to the
Funds at the address or telephone number indicated above.

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

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

The date of this Prospectus is April 29, 1996

<PAGE>

FEE TABLE

The following table is intended to assist investors in understanding the
expenses associated with investing in Class A shares of a Fund. Shares of either
Fund issued prior to January 12, 1995 have been designated as Class A shares.

Shareholder Transaction Expenses

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

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

Total Fund
Management 12b-1 Other Operating
Fees(1) Fees Expenses(2)+ Expenses(3)+

Cash Management Fund............... 0.50% -0- 0.20% 0.70%
Tax-Exempt Money Market Fund....... 0.50 -0- 0.20 0.70

+ Net of waiver and/or reimbursement.
(1) Management Fees have been restated to reflect current fees.
(2) For the fiscal year ended December 31, 1995, the Adviser reimbursed the
Funds for certain Other Expenses. Absent such reimbursement, Other
Expenses would have been 0.68% for Cash Management Fund and 0.56% for
Tax-Exempt Money Market Fund. The Adviser will reimburse Other Expenses
for each Fund in excess of 0.20% for a minimum period ending December 31,
1996.
(3) If certain fees and expenses had not been waived or reimbursed, Total Fund
Operating Expenses would have been 1.18% for Cash Management Fund and
1.06% for Tax-Exempt Money Market Fund.

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

The Example below is based on Class A expense data for each Fund's fiscal
year ended December 31, 1995, except that certain Operating Expenses have been
restated as noted above.

<PAGE>

EXAMPLE

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

One Year Three Years Five Years Ten Years

Cash Management Fund $ 7 $22 $39 $87
Tax-Exempt Money Market Fund 7 22 39 87

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

<PAGE>

FINANCIAL HIGHLIGHTS

The following table sets forth the per share operating performance data
for a share outstanding, total return, ratios to average net assets and other
supplemental data for each year indicated. The table has been derived from
financial statements which have been examined by Tait, Weller & Baker,
independent certified public accountants, whose report thereon appears in the
SAI. This information should be read in conjunction with the Financial
Statements and Notes thereto, which also appear in the SAI, available at no
charge upon request to the Funds.

Per Share Data Ratios/Supplemental Data
Ratio to Ratio to Average
Average Net Assets+ Net Assets
Prior to Waiver
of Fees
Net Asset
Value Dividends Net Assets, Net
(unchanged Net From Net Total End of Net Investment
during each Investment Investment Return Year Expenses Investment Expenses Income
year) Income Income (%) (thousands) (%) Income(%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>

FIRST INVESTORS CASH MANAGEMENT FUND, INC.
CLASS A
1986 $1.00 $.058 $.058 $5.92 $251,041 1.07 5.81 N/A N/A
1987 1.00 .058 .058 6.01 218,099 .98 5.84 1.02 5.80
1988 1.00 .068 .068 7.03 222,715 .85 6.83 .95 6.73
1989 1.00 .085 .085 8.80 335,678 .84 8.44 .96 8.32
1990 1.00 .074 .074 7.71 372,081 .86 7.45 .96 7.35
1991 1.00 .052 .052 5.35 217,150 .94 5.33 1.13 5.14
1992 1.00 .030 .030 3.03 150,895 .87 3.02 1.16 2.72
1993 1.00 .025 .025 2.57 127,178 .70 2.54 1.15 2.09
1994 1.00 .036 .036 3.69 128,495 .70 3.72 1.15 3.26
1995 1.00 .053 .053 5.42 128,635 .70 5.29 1.18 4.81
CLASS B
1995* 1.00 .044 .044 4.46 56 1.45(a) 4.54(a) 1.93(a) 4.06(a)
FIRST INVESTORS TAX-EXEMPT MONEY MARKET FUND, INC.
CLASS A
1986 $1.00 $.041 $.041 $4.15 $47,838 .77 4.02 N/A N/A
1987 1.00 .039 .039 4.01 40,106 .76 3.92 N/A N/A
1988 1.00 .046 .046 4.68 39,467 .75 4.59 N/A N/A
1989 1.00 .055 .055 5.67 36,736 .81 5.52 N/A N/A
1990 1.00 .052 .052 5.31 40,745 .80 5.19 N/A N/A
1991 1.00 .038 .038 3.87 31,157 .94 3.83 1.02 3.74
1992 1.00 .023 .023 2.36 25,399 .95 2.33 1.05 2.23
1993 1.00 .018 .018 1.85 23,857 .70 1.83 .92 1.61
1994 1.00 .022 .022 2.24 26,424 .70 2.24 1.02 1.92
1995 1.00 .032 .032 3.24 25,045 .71 3.18 1.06 2.84
CLASS B
1995* 1.00 .024 .024 2.40 .01 1.46(a) 2.43(a) 1.81(a) 2.09(a)

</TABLE>

+ Net of fees waived by the investment adviser and the transfer agent.
* For the period January 12, 1995 (date class B shares were first offered) to
December 31, 1995.
(a) Annualized.

<PAGE>

INVESTMENT OBJECTIVES AND POLICIES

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

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

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

Cash Management Fund

Cash Management Fund invests primarily in (1) high quality marketable
securities issued or guaranteed as to principal and interest by the U.S.
Government, its agencies or instrumentalities, (2) bank certificates of deposit,
bankers' acceptances, time deposits and other short-term obligations issued by
banks and (3) prime commercial paper and high quality, U.S. dollar denominated
short-term corporate bonds and notes. The U.S. Government securities in which
the Fund may invest include a variety of U.S. Treasury securities that differ in
their interest rates, maturities and dates of issue. Securities issued or
guaranteed by agencies or instrumentalities of the U.S. Government may be
supported by the full faith and credit of the United States or by the right of
the issuer to borrow from the U.S. Treasury. See the SAI for additional
information on U.S. Government securities. The Fund may invest in domestic bank
certificates of deposit (insured up to $100,000) and bankers' acceptances (not
insured) issued by domestic banks and savings institutions which are insured by
the Federal Deposit Insurance Corporation ("FDIC") and that have total assets
exceeding $500 million. The Fund also may invest in certificates of deposit
issued by London branches of domestic or foreign banks ("Eurodollar CDs"). The
Fund may invest in time deposits and other short-term obligations, including
uninsured, direct obligations bearing fixed, floating or variable interest
rates, issued by domestic banks, foreign branches of domestic banks, foreign
subsidiaries of domestic banks and domestic and foreign branches of foreign
banks. The Fund also may invest in repurchase agreements with banks that are
members of the Federal Reserve System or securities dealers that are members of
a national securities exchange or are market makers in U.S. Government
securities, and, in either case, only where the debt instrument subject to the
repurchase agreement is a U.S. Treasury or agency obligation. Repurchase
agreements maturing in over 7 days are deemed illiquid securities, and can
constitute no more than 10% of the Fund's net assets. See "Description of
Certain Securities, Other Investment Policies and Risk Factors" for additional
information on repurchase agreements.

<PAGE>

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

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

Tax-Exempt Money Market Fund

Tax-Exempt Money Market Fund invests primarily in Municipal Instruments,
as defined below. The Fund may purchase only Municipal Instruments that (1) the
Adviser determines present minimal credit risks based on procedures adopted by
the Fund's Board of Directors, and (2) are either (a) rated in one of the top
two rating categories by at least two NRSROs (or one, if only one rated the
security) or (b) unrated securities that the Adviser determines are of
comparable quality. While the Fund seeks to provide a high level of interest
income that is exempt from Federal income tax, up to 20% of the Fund's total
assets may be invested in high quality fixed-income obligations, the interest on
which is subject to Federal income tax. See "Description of Certain Securities,
Other Investment Policies and Risk Factors--Municipal Instruments" for
additional information concerning these securities.

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

<PAGE>

General.

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

Description of Certain Securities, Other Investment Policies and Risk Factors

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

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

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

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

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

Municipal Bonds. Municipal bonds are debt obligations that generally
are issued to obtain funds for various public purposes and have a time to
maturity, at issuance, of more than one year. The two principal classifications
of municipal bonds are "general obligation" and "revenue"

<PAGE>

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

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

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

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

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

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

<PAGE>

longer of the (a) demand period or (b) time remaining until the next adjustment
to the interest rate thereon, regardless of the stated maturity on the
instrument. Benefits of investing in VRDIs may include reduced risk of capital
depreciation and increased yield when market interest rates rise. However,
owners of such instruments forego the opportunity for capital appreciation when
market interest rates fall. See the SAI for more information concerning VRDIs.

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

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

Restricted and Illiquid Securities. Cash Management Fund may invest up to
10% of its net assets in illiquid securities, including (1) securities that are
illiquid due to the absence of a readily available market or due to legal or
contractual restrictions on resale or (2) repurchase agreements maturing in more
than seven days. However, illiquid securities for purposes of this limitation do
not include securities eligible for resale under Rule 144A of the Securities Act
of 1933, as amended, which the Fund's Board of Directors or Adviser has
determined are liquid under Board-approved guidelines. See the SAI for more
information regarding restricted and illiquid securities.

Standby Commitments. Each Fund may acquire standby commitments from banks
with respect to the Fund's simultaneous purchases of Municipal Instruments.
Under this arrangement, a bank agrees to buy a particular Municipal Instrument
from the Fund at a specified price at the Fund's option. A standby commitment
will be secured by the value of the underlying Municipal Instruments for which
the commitment is issued. Standby commitments are acquired solely to provide the
Fund with the requisite liquidity to meet large redemptions. Upon the exercise
of a standby commitment, the Fund tenders the Municipal Instrument to the issuer
of the commitment and normally the Fund receives in return the purchase price of
the Municipal Instrument, adjusted to reflect any amortized market premium or
original issue discount with the interest thereon. Because each Fund values its
portfolio at amortized cost, the amount payable by a bank under a standby
commitment is almost, if not precisely, equal to the Fund's value of such
Municipal Instrument. Standby commitments are subject to certain risks,
including the issuer's inability to pay for the Municipal Instruments when the
commitment is exercised, their lack of marketability, the variance between
maturities on the commitment and the Municipal Instrument for which it was
issued, and the lack of familiarity with standby commitments in the marketplace.
See the SAI for more information concerning standby commitments.

<PAGE>

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

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

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

HOW TO BUY SHARES

You may buy shares of a Fund through a First Investors registered
representative ("FIC Representative") or through a registered representative
("Dealer Representative") of an unaffiliated broker-dealer ("Dealer") which is
authorized to sell shares of a Fund. Your FIC Representative or Dealer
Representative (each, a "Representative") may help you complete and submit an
application to open an account with a Fund. Certain accounts may require
additional documentation. Shares of a Fund will be purchased for your account
only after the Fund has received federal funds for your purchase on any day the
New York Stock Exchange ("NYSE") and the Federal Reserve Bank are open for
trading ("Trading Day"). Checks, including bank checks, cashier's checks and
certified checks received by a Fund on a Trading Day prior to 4:00 p.m., New
York City time, are presently considered to be federal funds the morning of the
following Trading Day. Checks received after 4:00 p.m. will be considered to be
federal funds the morning of the second following Trading Day. Provided the
Transfer Agent has received telephone advice prior to 12:00 noon, New York City
time, advising the Fund that a wire transfer will be made to the Fund,
identifying your name, existing account number and amount, and a federal
reference number documenting such a transfer or such wire transfer is in fact
received by the Fund that day prior to 12:00 noon, such wire transfer will be
considered to be federal funds received that day. In the event federal funds are
wired to a Fund without informing the Fund as provided above, such federal funds
will be credited to the account the next Trading Day following receipt. Each
Fund reserves the right to reject any application or order for its shares for
any reason and to suspend the offering of its shares.

You also may invest in Class A shares of the Funds through the branch
offices of FIC. You may not wire transfer funds to the Funds or make any cash
deposits into a Fund through FIC branch

<PAGE>

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

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

Due to emergency conditions, such as snow storms, the Woodbridge offices
of FIC and the Transfer Agent may not be open for business on a Trading Day and,
therefore, would be unable to accept purchase orders. Should this occur,
purchase orders will be executed on the next Trading Day that these offices are
open for business.

Initial Investment in a Fund. You may open a Class A Fund account with as
little as $1,000 and make additional investments in any amount at any time.

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

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

Systematic Investing. You may arrange for automatic investments in a Fund
on a systematic basis through First Investors Money Line and through automatic
payroll investments. You may also elect to invest in Class A shares of a Fund at
net asset value all the cash distributions or Systematic Withdrawal Plan
payments from the same class of shares of an existing account in another
Eligible Fund. If you wish to participate in any of these systematic investment
plans, please call Shareholder Services at 1-800-423-4026 or see the SAI.

Electronic Funds Transfer. Shareholders who have an account with a U.S.
bank, or other financial institution that is an Automated Clearing House member,
may establish Electronic Funds Transfer. This permits shareholders to purchase
shares of a Fund through electronic funds transfer

<PAGE>

from a predesignated bank account. The minimum amount which may be
electronically transferred is $500 or $50 for systematic investment programs and
the maximum amount is $50,000. You may purchase shares of a Fund through
electronic funds transfer if the amount of the purchase, together with all other
purchases made by electronic funds transfer into the account during the prior
30-day period, does not exceed $100,000. Each Fund has the right, at its sole
discretion, to limit or terminate your ability to exercise the electronic funds
transfer privilege at any time. For additional information, see the SAI.
Applications to establish Electronic Funds Transfer are available from your FIC
Representative or by calling Shareholder Services at 1-800-423-4026.

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

Retirement Plans. You may invest in shares of a Fund through an IRA,
SEP, SARSEP or any other retirement plan.

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

HOW TO EXCHANGE SHARES

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

<PAGE>

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

Exchanges By Telephone. See "Telephone Transactions."

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

HOW TO REDEEM SHARES

You may redeem your Fund shares on any Trading Day directly through the
Transfer Agent. Your Representative may help you with this transaction. Shares
may be redeemed by mail or telephone or by wire to a pre-designated account at a
financial institution. Certain account registrations may require additional
legal documentation in order to redeem. Redemption requests received in "good
order" by the Transfer Agent before 12:00 noon, New York City time, on a Trading
Day will be processed on that Trading Day; redemption requests received after
that time will be processed on the following Trading Day. Payment of redemption
proceeds generally will be made within seven days. If the shares being redeemed
were recently purchased by check, payment may be delayed to verify that the
check has been honored, normally not more than fifteen days.

Due to emergency conditions, such as snow storms, the Woodbridge offices
of FIC and the Transfer Agent may not be open for business on a Trading Day and,
therefore, would be unable to accept redemption requests. Should this occur,
redemption requests will be executed on the next Trading Day that these offices
are open for business.

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

Signature Guarantees. In order to protect you, the Funds and their agents,
each Fund reserves the right to require signature guarantees in order to process
certain exchange or redemption requests. A notary public is not an acceptable
guarantor. See the SAI or call Shareholder Services at 1-800-423-4026 for
instances when signature guarantees are required.

<PAGE>

Redemptions By Telephone. See "Telephone Transactions."

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

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

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

Electronic Funds Transfer. Shareholders who have established Electronic
Funds Transfer may have redemption proceeds electronically transferred to a
predesignated bank account. The minimum amount which may be electronically
transferred is $500 and the maximum amount is $50,000. You may redeem shares of
a Fund through electronic funds transfer if the amount of the redemption,
together with all other redemptions made by electronic funds transfer from the
account during the prior 30-day period, does not exceed $100,000. Each Fund has
the right, at its sole discretion, to limit or terminate your ability to
exercise the electronic funds transfer privilege at any time. For additional
information, see the SAI. Applications to establish Electronic Funds Transfer
are available from your FIC Representative or by calling Shareholder Services at
1-800-423-4026.

Expedited Redemption Privilege. You may elect to have your redemption
proceeds transmitted by wire to the account specified on your application
provided that the redemption proceeds equal $5,000 or more. If the proceeds of
redeemed shares are less than $5,000, redemption proceeds will be mailed by
check. If you initiate more than six wire transfer redemptions in any month, a
$10 fee will be charged to you for each subsequent wire redemption in that
month. If you wish to use the Expedited Redemption Privilege, you must contact
the Transfer Agent. You may use the Expedited Redemption Privilege only if the
redemption proceeds are paid to the same financial institution and account
number as designated on the application. If the financial institution account is
not in the identical name(s) of the shareholder(s) as registered with the Fund,
a signature guarantee will be required. For accounts held by a corporation,
fiduciary or other holder not acting

<PAGE>

in an individual capacity, appropriate resolutions or other proof of authority
to act must be submitted with the application. Requests for Expedited
Redemptions can be made by calling the Transfer Agent at 1-800-423-4026.

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

Systematic Withdrawal Plan. If you own noncertificated Class A shares, you
may set up a plan for redemptions to be made automatically at regular intervals.
You may elect to have the payments automatically sent directly to you or, if
signature guarantees are obtained, to persons you designate. You may also elect
to have the payments (a) invested in Class A shares of any other Eligible Fund
or (b) paid to FIL for the purchase of a life insurance policy or variable
annuity. See the SAI for more information on the Systematic Withdrawal Plan. For
information regarding the Systematic Withdrawal Plan, call Shareholder Services
at 1-800-423-4026.

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

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

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

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

TELEPHONE TRANSACTIONS

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

<PAGE>

Telephone Exchanges. Exchange requests may be made by telephone (for
shares held on deposit only). Telephone exchanges to the Funds are not available
if your address of record has changed within 60 days prior to the exchange
request.

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

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

MANAGEMENT

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

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

As compensation for its services, the Adviser receives a fee from each of
the Funds, which is payable monthly. For the fiscal year ended December 31,
1995, Cash Management Fund's advisory fees were 0.21% of average daily net
assets, net of waiver, and Tax-Exempt Money Market Fund's advisory fees were
0.29% of average daily net assets, net of waiver.

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

DISTRIBUTION PLAN

<PAGE>

payments to Dealers. Such fees are paid out of the advisory fee or the
Underwriter's past profits or any other source available to the Underwriter or
the Adviser.

DETERMINATION OF NET ASSET VALUE

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

DIVIDENDS

Each Fund's net income is determined daily at 12:00 noon (New York City
time). Each daily determination of a Fund's net income takes into account
accrued interest and earned discount on its portfolio investments plus or minus
all realized and unrealized gains and losses on those portfolio investments less
accrued expenses of Class A shares of the Fund.

Generally, all of the net income of a Fund is declared on each Trading Day
as a dividend to shareholders of record at the time of each declaration. You
will be entitled to receive the dividend for the number of Class A shares you
own, each day, after adding shares purchased and subtracting shares redeemed
that day at 12:00 noon, New York City time. If you purchase shares of a Fund,
your shares will begin to earn dividends on the day federal funds are credited
to your Fund account. See "How To Buy Shares." Generally, each month's declared
dividends are paid on the first day of the following month in additional shares
of the distributing Fund. If you redeem all of your shares at any time during
the month, you are paid all dividends declared through the day prior to the date
of redemption, together with the proceeds of the redemption. The Fund's net
income for Saturdays, Sundays and holidays is declared as a dividend on the
evening of the last business day before such day or days.

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

A dividend by a Fund is paid in additional Class A Fund shares and not in
cash if any of the following events occurs: (1) the total amount of the dividend
to be paid is under $5; (2) the Fund has received notice of your death on an
individual account (until written alternate payment instructions and other
necessary documents are provided by your legal representative); or (3) a
dividend check is returned to the Transfer Agent, marked as being undeliverable,
by the U. S. Postal Service after two consecutive mailings.

TAXES

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

<PAGE>

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

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

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

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

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

PERFORMANCE INFORMATION

Each Fund may advertise current yield quotations for each class of shares
based on its daily dividends. For purposes of current yield quotations, the
dividends per share for a seven-day period are annualized (using a 365-day year
basis) and divided by a Fund's average net asset value per share for the
seven-day period.

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

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

GENERAL INFORMATION

<PAGE>

a par value per share of $0.01. Each Fund is authorized to issue shares of
common stock in such separate and distinct series and classes of series as the
particular Fund's Board of Directors shall from time to time establish. The
shares of common stock of each Fund are presently divided into two classes,
designated Class A shares and Class B shares. The Funds do not hold annual
shareholder meetings. If requested to do so by the holders of at least 10% of a
Fund's outstanding shares, such Fund's Board of Directors will call a special
meeting of shareholders for any purpose, including the removal of Directors.
Each share of each Fund has equal voting rights except as noted above.

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

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

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

Share Certificates. The Funds do not issue certificates for Class A shares
purchased under any retirement account. The Funds, however, will issue share
certificates for Class A shares at the shareholder's request. Ownership of
shares of each Fund is recorded on a stock register by the Transfer Agent and
shareholders have the same rights of ownership with respect to such shares as if
certificates had been issued.

Confirmations and Statements. You will receive confirmations of purchases
and redemptions of shares of a Fund. Statements of shares owned will be sent to
you following a transaction in the account, including payment of a dividend or
capital gain distribution in additional shares or cash. Confirmations of check
redemptions will be included in your regular monthly statement. Unitholders will
receive a quarterly statement showing distributions made during the period.

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

Annual and Semi-Annual Reports to Shareholders. It is each Fund's practice
to mail only one copy of its annual and semi-annual reports to any address at
which more than one shareholder with the same last name has indicated that mail
is to be delivered. Additional copies of the reports will be mailed if requested
in writing or by telephone by any shareholder. Each Fund will ensure that an
additional copy of such reports are sent to any shareholder who subsequently
changes his or her mailing address.

<PAGE>

TABLE OF CONTENTS

Fee Table....................................................... 2
Financial Highlights............................................ 4
Investment Objectives and Policies.............................. 5
How to Buy Shares............................................... 10
How to Exchange Shares.......................................... 12
How to Redeem Shares............................................ 13
Telephone Transactions.......................................... 15
Management...................................................... 16
Distribution Plan............................................... 16
Determination of Net Asset Value................................ 17
Dividends....................................................... 17
Taxes........................................................... 17
Performance Information......................................... 18
General Information............................................. 18

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

Legal Counsel Auditors
Kirkpatrick & Lockhart LLP Tait, Weller & Baker
1800 Massachusetts Avenue, N.W. Two Penn Center Plaza
Washington, D.C. 20036 Philadelphia, PA 19102-1707

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

<PAGE>

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

First Investors
Tax-Exempt Money
Market Fund, Inc.

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

Prospectus

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

April 29, 1996

First Investors Logo

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

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

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

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

The following language appears on the lefthand side:

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

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

<PAGE>

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

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

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

This Prospectus sets forth concisely the information about each of the
Funds that a prospective investor should know before investing and should be
retained for future reference. First Investors Management Company, Inc. ("FIMCO"
or "Adviser") serves as investment adviser to each Fund and First Investors
Corporation ("FIC" or "Underwriter") serves as distributor of each Fund's
shares. A Statement of Additional Information ("SAI"), dated Arpil 29, 1996
(which is incorporated by reference herein), has been filed with the Securities
and Exchange Commission. The SAI is available at no charge upon request to the
Funds at the address or telephone number indicated above.

The date of this Prospectus is April 29, 1996

<PAGE>

FEE TABLE

The following table is intended to assist investors in understanding the
expenses associated with investing in Class B shares of a Fund. Shares of either
Fund issued prior to January 12, 1995 have been designated as Class A shares.

Shareholder Transaction Expenses

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

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

Total Fund
Management 12b-1 Other Operating
Fees(1) Fees(2)+ Expenses(3)+ Expenses(4)+

Cash Management Fund............ 0.50% 0.75% 0.20% 1.45%
Tax-Exempt Money Market Fund.... 0.50 0.75 0.20 1.45

+ Net of waiver and/or reimbursement.
(1) Management Fees have been restated to reflect current fees.
(2) The Underwriter has agreed through December 31, 1996 to cap its right to
claim 12b-1 Fees at the annual rates listed above for the Funds. The
Fund's Class B Distribution Plans provide for a 12b-1 Fee in the total
amount of up to 1.00% on an annual basis.
(3) For the fiscal year ended December 31, 1995, the Adviser reimbursed the
Funds for certain Other Expenses. Absent such reimbursement, Other
Expenses would have been 0.68% for Cash Management Fund and 0.56% for
Tax-Exempt Money Market Fund. The Adviser will reimburse Other Expenses
for each Fund in excess of 0.20% for a minimum period ending December 31,
1996.
(4) If certain fees and expenses had not been waived or reimbursed, Total Fund
Operating Expenses would have been 2.18% for Cash Management Fund and
2.06% for Tax-Exempt Money Market Fund.

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

The Example below is based on Class B expense data for each Fund's fiscal
year ended December 31, 1995, except that certain Operating Expenses have been
restated as noted above.

<PAGE>

Expenses data for Class B shares of each Fund has been estimated because the
shares were not issued during this period.

EXAMPLE

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

One Year Three Years Five Years Ten Years*

Cash Management Fund $55 $76 $99 $153
Tax-Exempt Money Market Fund 55 76 99 153

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

One Year Three Years Five Years Ten Years*

Cash Management Fund $15 $46 $79 $153
Tax-Exempt Money Market Fund 55 46 79 153

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

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

<PAGE>

FINANCIAL HIGHLIGHTS

</TABLE>

+ Net of fees waived by the investment adviser and the transfer agent.
* For the period January 12, 1995 (date class B shares were first offered) to
December 31, 1995.
(a) Annualized.

<PAGE>

INVESTMENT OBJECTIVES AND POLICIES

Cash Management Fund

<PAGE>

Tax-Exempt Money Market Fund

<PAGE>

General.

Description of Certain Securities, Other Investment Policies and Risk Factors

<PAGE>

HOW TO INVEST

Class B shares of the Funds may be acquired only through an exchange of
Class B shares from another Eligible Fund, as defined below, or through the
payment of dividends on Class B shares. Direct purchases of Class B shares will
not be accepted. The minimum initial investment by exchange to establish a new
account in Class B shares is $1,000. There is no minimum on subsequent
investments. Class B shares of a Fund will be purchased for your account at the
net asset value on any day the New York Stock Exchange ("NYSE") and the Federal
Reserve Bank are open ("Trading Day"). Class B shares may be subject to a
contingent deferred sales charge ("CDSC") upon redemption. See "How to Sell
Shares." Orders received by the Fund's transfer agent, Administrative Data
Management Corp. ("Transfer Agent") on a Trading Day prior to 12:00 noon, New
York City time will be credited to your account on that Trading Day. Orders
received after that time will be credited to your account the morning of the
following Trading Day.

Retirement Plans. You may invest in shares of Cash Management Fund through
an IRA, SEP, SARSEP or any retirement plan.

<PAGE>

through an exchange from an Eligible Fund which imposes a maximum sales charge
of 6.25%, or (b) held for at least one year from their date of purchase.

General. From time to time, the Underwriter also will pay, through
additional reallowances or other sources, a bonus or other compensation to
unaffiliated broker-dealers ("Dealers") which employ a registered representative
("Dealer Representative") who sells a minimum dollar amount of the shares of the
Funds and/or certain other First Investors funds during a specific period of
time. Such bonus or other compensation may take the form of reimbursement of
certain seminar expenses, co-operative advertising, or payment for travel
expenses, including lodging incurred in connection with trips taken by
qualifying Dealer Representatives to the Underwriter's principal office in New
York City.

HOW TO EXCHANGE SHARES

Should your investment need change, Class B shares of the Funds may be
exchanged for Class B shares of any other Eligible Fund at net asset value.
Exchanges can only be made into accounts registered to identical owners. If your
exchange is into a new account, it must meet the minimum investment and other
requirements of the fund into which the exchange is being made. Additionally,
the fund must be available for sale in the state where you reside. Before
exchanging Fund shares for shares of another fund, you should read the
Prospectus of the fund into which the exchange is to be made. You may obtain
Prospectuses and information with respect to which funds qualify for the
exchange privilege free of charge by calling Shareholder Services at
1-800-423-4026. Exchange requests received in "good order," as defined below, by
the Transfer Agent by 12:00 noon, New York City time, on a Trading Day will be
processed on that Trading Day; exchange requests received after that time will
be processed the following Trading Day.

Exchanges By Telephone. See "Telephone Transactions."

HOW TO REDEEM SHARES

<PAGE>

received in "good order" by the Transfer Agent before 12:00 noon, New York City
time, on a Trading Day will be processed on that Trading Day; redemption
requests received after that time will be processed on the following Trading
Day. Payment of redemption proceeds generally will be made within seven days. If
the shares being redeemed were recently purchased by check, payment may be
delayed to verify that the check has been honored, normally not more than
fifteen days.

Due to emergency conditions, such as snow storms, the Woodbridge offices
of FIC and the Transfer Agent may not be open for business on a Trading Day and,
therefore, would be unable to accept redemption requests. Should this occur,
redemption requests will be executed on the next Trading Day that these offices
are open for business.

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

Contingent Deferred Sales Charge
Year Since Purchase as a Percentage of Dollars Invested
Payment Made or Redemption Proceeds

First............................. 4%
Second............................ 4
Third............................. 3
Fourth............................ 3
Fifth............................. 2
Sixth............................. 1
Seventh and thereafter............ 0

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

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

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

<PAGE>

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

Redemptions By Telephone. See "Telephone Transactions."

Systematic Withdrawal Plan. If you own noncertificated Class B shares, you
may set up a plan for redemptions to be made automatically at regular intervals.
You may elect to have the payments automatically sent directly to you or, if
signature guarantees are obtained, to persons you designate. You may also elect
to have the payments (a) invested in Class A shares of any other Eligible Fund
or (b) paid to FIL for the purchase of a life insurance policy or variable
annuity. See the SAI for more information on the Systematic Withdrawal Plan. For
information regarding the Systematic Withdrawal Plan, call Shareholder Services
at 1-800-423-4026.

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

<PAGE>

redemptions of Class B shares. To avoid such redemption, you may, during such
60-day period, purchase additional Class B Fund shares so as to increase your
account balance to the required minimum. Accounts established under a Systematic
Investment Plan that have been discontinued prior to meeting the $1,000 minimum
are subject to this policy.

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

TELEPHONE TRANSACTIONS

MANAGEMENT

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

<PAGE>

DISTRIBUTION PLAN

Tax-Exempt Money Market Fund has adopted a Class A distribution plan
pursuant to Rule 12b-1 under the 1940 Act, which permits the payment of fees to
Dealers for distribution services and administrative services. The Underwriter
or the Adviser, in their sole discretion, may make payments to Dealers. Such
fees are paid out of the advisory fee or the Underwriter's past profits or any
other source available to the Underwriter or the Adviser.

DETERMINATION OF NET ASSET VALUE

DIVIDENDS

<PAGE>

12:00 noon, notification of the fact that such purchase has been made and that
federal funds are being wired, and of proper account information. Generally,
each month's declared dividends are paid on the first day of the following month
in additional shares of the distributing Fund. If you redeem all of your shares
at any time during the month, you are paid all dividends declared through the
day prior to the date of redemption, together with the proceeds of the
redemption. The Fund's net income for Saturdays, Sundays and holidays is
declared as a dividend on the evening of the last business day before such day
or days.

TAXES

<PAGE>

PERFORMANCE INFORMATION

GENERAL INFORMATION

Organization. Cash Management Fund and Tax-Exempt Money Market Fund were
incorporated in the state of Maryland on July 17, 1978 and March 11, 1983,
respectively. Each Fund's authorized capital stock consists of 5 billion shares
of common stock, all of one series, with a par value per share of $0.01. Each
Fund is authorized to issue shares of common stock in such separate and distinct
series and classes of series as the particular Fund's Board of Directors shall
from time to time establish. The shares of common stock of each Fund are
presently divided into two classes, designated Class A shares and Class B
shares. The Funds do not hold annual shareholder meetings. If requested to do so
by the holders of at least 10% of a Fund's outstanding shares, such Fund's Board
of Directors will call a special meeting of shareholders for any purpose,
including the removal of Directors. Each share of each Fund has equal voting
rights except as noted above.

Class A Shares. Each of the Funds also offers Class A shares, which may be
purchased at net asset value. Class A shares may be exchanged for shares of the
same class of any other Eligible Fund. Class A shares offer investors certain
account privileges which are not available to Class B shareholders. Class A
shares are generally subject to lower overall expenses and are not subject to

<PAGE>

ongoing distribution expenses. The Funds' Class B Prospectus is available at no
charge upon request to your Representative.

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

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

<PAGE>

TABLE OF CONTENTS
- ------------------------------------------------------------

Fee Table.......................................... 2
Financial Highlights............................... 4
Investment Objectives and Policies................. 5
How to Invest...................................... 10
How to Exchange Shares............................. 11
How to Redeem Shares............................... 11
Telephone Transactions............................. 14
Management......................................... 14
Distribution Plans................................. 15
Determination of Net Asset Value................... 15
Dividends.......................................... 15
Taxes.............................................. 16
Performance Information............................ 17
General Information................................ 17

Legal Counsel Auditors
Kirkpatrick & Lockhart LLP Tait, Weller & Baker
1800 Massachusetts Avenue, Two Penn Center Plaza
N.W. Philadelphia, PA 19102-1707
Washington, D.C. 20036

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

The language below appears to the right of the above language

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

First Investors
Tax-Exempt Money
Market Fund, Inc.

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

Prospectus

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

April 29, 1996

First Investors Logo

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

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

<PAGE>

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

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

Statement of Additional Information
dated April 29, 1996

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

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

This SAI is not a prospectus. It should be read in conjunction with the
Funds' Prospectus dated April 29, 1996, which may be obtained free of cost from
the Funds at the address or telephone number noted above.

TABLE OF CONTENTS
Page

Investment Policies.............................................. 2
Investment Restrictions.......................................... 6
Directors and Officers........................................... 9
Management....................................................... 12
Underwriter...................................................... 13
Distribution Plans............................................... 13
Determination of Net Asset Value................................. 15
Allocation of Portfolio Transactions............................. 15
Additional Exchange and Redemption
Information and Other Services................................. 16
Taxes............................................................ 22
Performance Information.......................................... 23
General Information.............................................. 24
Appendix A....................................................... 26
Appendix B....................................................... 27
Appendix C....................................................... 28
Appendix D....................................................... 29
Financial Statements.............................................

<PAGE>

INVESTMENT POLICIES

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

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

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

Repurchase Agreements. A repurchase agreement essentially is a
short-term collateralized loan. The lender (a Fund) agrees to purchase a
security from a borrower (typically a broker-dealer) at a specified price. The
borrower simultaneously agrees to repurchase that same security at a higher
price on a future date (which typically is the next business day). The
difference between the purchase price and the repurchase price effectively
constitutes the payment of interest. In a standard repurchase agreement, the
securities which serve as collateral are transferred to a Fund's custodian bank.
In a "tri-party" repurchase agreement, these securities would be held by a
different bank for the benefit of the Fund as buyer and the broker-dealer as
seller. In a "quad-party" repurchase agreement, the Fund's custodian bank also
is made a party to the agreement. Each Fund may enter into repurchase agreements
with banks which are members of the Federal Reserve System or securities dealers
who are members of a national securities exchange or are market makers in
government securities. The period of these repurchase agreements will usually be
short, from overnight to one week, and at no time will a Fund invest in
repurchase agreements with more than one year in time to maturity. The
securities which are subject to repurchase agreements, however, may have
maturity dates in excess of one year from the effective date of the repurchase

<PAGE>

agreement. Each Fund will always receive, as collateral, securities whose market
value, including accrued interest, which will at all times be at least equal to
100% of the dollar amount invested by the Fund in each agreement, and the Fund
will make payment for such securities only upon physical delivery or evidence of
book entry transfer to the account of the custodian. If the seller defaults, a
Fund might incur a loss if the value of the collateral securing the repurchase
agreement declines, and might incur disposition costs in connection with
liquidating the collateral. In addition, if bankruptcy or similar proceedings
are commenced with respect to the seller of the security, realization upon the
collateral by a Fund may be delayed or limited. Neither Fund will enter into a
repurchase agreement with more than seven days to maturity if, as a result, more
than 10% of such Fund's net assets would be invested in such repurchase
agreements and other illiquid investments.

Restricted and Illiquid Securities. Cash Management Fund will not
purchase or otherwise acquire any security if, as a result more than 10% of its
net assets (taken at current value) would be invested in securities that are
illiquid by virtue of the absence of a readily available market or legal or
contractual restrictions on resale. This policy includes repurchase agreements
maturing in more than seven days. This policy does not include restricted
securities eligible for resale pursuant to Rule 144A under the Securities Act of
1933, as amended ("1933 Act"), which the Fund's Board of Directors or the
Adviser has determined under Board-approved guidelines are liquid.

Restricted securities which are illiquid may be sold only in privately
negotiated transactions or in public offerings with respect to which a
registration statement is in effect under the 1933 Act. Where registration is
required, the Fund may be obligated to pay all or part of the registration
expenses and a considerable period may elapse between the time of the decision
to sell and the time the Fund may be permitted to sell a security under an
effective registration statement. If, during such a period, adverse market
conditions were to develop, the Fund might obtain a less favorable price than
prevailed when it decided to sell.

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

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

Standby Commitments. Each Fund may acquire standby commitments from
banks with respect to simultaneous purchases of short-term, high quality, fixed
and variable rate instruments issued by state

<PAGE>

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

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

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

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

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

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

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

<PAGE>

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

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

VRDIs reduce the likelihood of changes in value in the obligations they
represent as is typical with fixed rate instruments. As interest rates change,
fixed rate instruments' values change as the market reevaluates the price of the
fixed rate of income in light of new market interest rates. If interest rates
rise, the value of an existing fixed rate instrument may fail to provide a new
purchaser with the effective market rate of income then prevailing. If interest
rates fall, the value of such an instrument may rise for similar reasons. If
interest rates change, the value of a VRDI should not change as much as a fixed
rate obligation, to the extent rate adjustments on the variable rate instrument
mirror the market. Therefore, the potential risk of capital depreciation is much
lower on a VRDI than on a fixed rate obligation, although the potential for
capital appreciation is also reduced. VRDIs are not comparable to long-term
fixed-rate securities, and the rates on these instruments may be higher or lower
than simultaneous market rates for fixed rate securities of similar quality and
time to maturity.

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

When-Issued Securities. When the Tax-Exempt Money Market Fund enters
into a commitment to purchase securities on a when-issued or delayed delivery
basis, delivery of, and payment for, the instruments occur up to 45 days after
the Fund agrees to purchase the instruments. The purchase price to be paid by
the Fund and the interest rate on the instruments to be purchased are both
selected when the Fund agrees to purchase the securities "when-issued." The Fund
is permitted to sell when-issued securities prior to issuance of such
securities, but will not purchase such securities with that purpose intended.
The Fund establishes a separate account with the Custodian consisting of cash or
liquid debt securities equal to the amount of the Fund's commitment and valued
at their fair market value. If on any day the market

<PAGE>

value of this segregated account falls below the value of the Fund's commitment,
the Fund must deposit additional cash or qualified securities into the account
until equal to the value of the Fund's commitment. When the securities to be
purchased are issued, the Fund will pay for the securities from available cash,
the sale of other Municipal Instruments, and, if necessary, from sale of the
when-issued securities themselves, although this is not ordinarily expected.

INVESTMENT RESTRICTIONS

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

Cash Management Fund. Cash Management Fund will not:

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

(2) Make loans, except by purchase of debt obligations and through
repurchase agreements referred to under "Investment Objective and Policies" in
the Prospectus, provided, however, that repurchase agreements maturing in more
than seven days will not exceed 10% of the Fund's net assets (taken at current
value).

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

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

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

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

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

<PAGE>

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

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

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

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

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

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

(14) Issue senior securities.

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

Cash Management Fund has also filed the following undertakings to
comply with requirements of certain states in which shares of the Fund are sold,
which may be changed without shareholder approval:

(1) In the event the original custodian or any successor custodian
resigns or for any reason cannot or will not continue to serve as custodian and
no successor custodian can be found, the Fund will submit to shareholders for
their approval or disapproval, the matter of possible liquidation of the Fund.

(2) Notwithstanding fundamental investment restriction (15) above, the
Fund will not invest in real estate limited partnership interests or in
interests in real estate investment trusts that are not readily marketable.

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

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

<PAGE>

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

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

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

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

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

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

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

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

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

(7) Make short sales of securities.

(8) Write or purchase any put or call options, except stand-by
commitments.
(9) Knowingly purchase a security which is subject to legal or
contractual restrictions on resale or for which there is no readily available
market.

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

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

<PAGE>

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

(14) Invest in companies for the purpose of exercising control or
management.
(15) Issue senior securities.

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

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

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

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

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

The Fund has also filed the following undertaking to comply with
requirements of certain states in which shares of the Fund are sold, which may
be changed without shareholder approval. In the event the original custodian or
any successor custodian resigns or for any reason cannot or will not continue to
serve as custodian and no successor custodian can be found, the Fund will submit
to shareholders for their approval or disapproval, the matter of possible
liquidation of the Fund.

DIRECTORS AND OFFICERS

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

Glenn O. Head*+ (70), President and Director. Chairman of the Board and
Director, Administrative Data Management Corp. ("ADM"), FIMCO, Executive
Investors Management Company, Inc. ("EIMCO"), First
9

<PAGE>

Investors Corporation ("FIC"), Executive Investors Corporation ("EIC") and First
Investors Consolidated Corporation ("FICC").

James J. Coy (82), Director, 90 Buell Lane, East Hampton, NY 11937. Retired;
formerly Senior Vice President, James Talcott, Inc. (financial institution).

Roger L. Grayson* (39), Director. Director, FIC and FICC; President and
Director, First Investors Resources, Inc.; Commodities Portfolio Manager.

Kathryn S. Head*+ (40), Director, 581 Main Street, Woodbridge, NJ 07095.
President, FICC, EIMCO, FIMCO and ADM; Vice President, Chief Financial Officer
and Director, FIC and EIC; President and Director, First Financial Savings Bank,
S.L.A.

Rex R. Reed (74), Director, 1381 Fairway Oaks, Kiawah Island, SC 29455. Retired;
formerly Senior Vice President, American Telephone & Telegraph Company.

Herbert Rubinstein (74), Director, 145 Elm Drive, Roslyn, NY 11576. Retired;
formerly President, Belvac International Industries, Ltd. and President, Central
Dental Supply.

James M. Srygley (63), Director, 33 Hampton Road, Chatham, NJ 07982. Principal,
Hampton Properties, Inc. (property investment company).

John T. Sullivan* (64), Director and Chairman of the Board; Director, FIMCO,
FIC, FICC and ADM; Of Counsel, Hawkins, Delafield & Wood, Attorneys.

Robert F. Wentworth (66), Director, RR1, Box 2554, Upland Downs Road, Manchester
Center, VT 05255. Retired; formerly financial and planning executive with
American Telephone & Telegraph Company.

Joseph I. Benedek (38), Treasurer, 581 Main Street, Woodbridge, NJ 07095.
Treasurer, FIC FIMCO, EIMCO and EIC; Comptroller and Treasurer, FICC.

Concetta Durso (61), Vice President and Secretary. Vice President, FIMCO, EIMCO
and ADM; Assistant Vice President and Assistant Secretary, FIC and EIC.

* These Directors may be deemed to be "interested persons," as defined in the
1940 Act.
+ Mr. Glenn O. Head and Ms. Kathryn S. Head are father and daughter.

All of the officers and Directors hold identical or similar positions
with 13 other registered investment companies in the First Investors Family of
Funds. Mr. Head is also an officer and/or Director of First Investors Asset
Management Company, Inc., First Investors Credit Funding Corporation, First
Investors Leverage Corporation, First Investors Realty Company, Inc., First
Investors Resources, Inc., N.A.K. Realty Corporation, Real Property Development
Corporation, Route 33 Realty Corporation, First Investors Life Insurance
Company, First Financial Savings Bank, S.L.A., First Investors Credit
Corporation and School Financial Management Services, Inc. Ms. Head is also an
officer and/or Director of First Investors Life Insurance Company, First
Investors Credit Corporation, School Financial Management

<PAGE>

Services, Inc., First Investors Credit Funding Corporation, N.A.K. Realty
Corporation, Real Property Development Corporation, First Investors Leverage
Corporation and Route 33 Realty Corporation.

The following table lists compensation paid to the Directors of Cash
Management Fund for the fiscal year ended December 31, 1995.

Total
Compensation
Pension or Estimated From First
Aggregate Retirement Benefits Annual Benefits Investors Family
Compensation Accrued as Part of Upon of Funds
Director From Fund* Fund Expenses Retirement Paid to Directors*
- -------- ------------ -------------------- ----------------- ------------------
<S> <C> <C> <C> <C>

James J. Coy $3,000 $-0- $-0- $37,200
Roger L. Grayson -0- -0- -0- -0-
Glenn O. Head -0- -0- -0- -0-
Kathryn S. Head -0- -0- -0- -0-
F. William Ortman, Jr.** 1,250 -0- -0- 15,500
Rex R. Reed 3,000 -0- -0- 37,200
Herbert Rubinstein 3,000 -0- -0- 37,200
James M. Srygley*** 3,000 -0- -0- 37,200
John T. Sullivan -0- -0- -0- -0-
Robert F. Wentworth 3,000 -0- -0- 37,200

</TABLE>

The following table lists compensation paid to the Directors of
Tax-Exempt Money Market Fund for the fiscal year ended December 31, 1995.

<TABLE>
<CAPTION>
Total
Compensation
Pension or Estimated From First
Aggregate Retirement Benefits Annual Benefits Investors Family
Compensation Accrued as Part of Upon of Funds
Director From Fund* Fund Expenses Retirement Paid to Directors*
- -------- ------------ -------------------- ----------------- ------------------
<S> <C> <C> <C> <C>

James J. Coy $600 $-0- $-0- $37,200
Roger L. Grayson -0- -0- -0- -0-
Glenn O. Head -0- -0- -0- -0-
Kathryn S. Head -0- -0- -0- -0-
F. William Ortman, Jr.** 250 -0- -0- 15,500
Rex R. Reed 600 -0- -0- 37,200
Herbert Rubinstein 600 -0- -0- 37,200
James M. Srygley*** 600 -0- -0- 37,200
John T. Sullivan -0- -0- -0- -0-
Robert F. Wentworth 600 -0- -0- 37,200
</TABLE>

* Compensation to officers and interested Directors of the Funds is paid by the
Adviser. In addition, compensation to non-interested Directors of the Funds is
currently voluntarily paid by the Adviser.
** For the period January 1, 1995 through September 21, 1995.
*** For the period January 19, 1995 through December 31, 1995.

<PAGE>

MANAGEMENT

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

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

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

Pursuant to certain state regulations, the Adviser has agreed to
reimburse a Fund if and to the extent that Fund's aggregate operating and
management expenses, including advisory fees but generally excluding interest,
taxes, brokerage commissions and extraordinary expenses, exceed any limitation
on expenses applicable to that Fund for any full fiscal year (unless a waiver of
such expense limitation is obtained). The amount of any such reimbursement is
limited to the amount of the advisory fees paid or accrued to the Adviser for
the fiscal year. For the fiscal year ended December 31, 1995, no reimbursement
to either Fund was required pursuant to these regulations.

For the fiscal years ended December 31, 1993, 1994 and 1995, Cash
Management Fund paid $671,107, $241,066 and $257,171, respectively, in advisory
fees. For those same periods, the Adviser voluntarily waived $268,443, $374,848
and $354,518, respectively, in advisory fees for that Fund. For the fiscal years
ended December 31, 1993, 1994 and 1995, Tax-Exempt Money Market Fund paid
$116,300, $74,963 and $71,483, respectively, in advisory fees. For those same
periods, the Adviser voluntarily waived $23,260, $74,963 and $52,464,
respectively, in advisory fees for that Fund.

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

<PAGE>

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

UNDERWRITER

Each Fund has entered into an Underwriting Agreement ("Underwriting
Agreement") with First Investors Corporation ("Underwriter" or "FIC") which
requires the Underwriter to use its best efforts to sell shares of the Funds.
Pursuant to each Underwriting Agreement, the Underwriter shall bear all fees and
expenses incident to the registration and qualification of the applicable Fund's
shares. In addition, the Underwriter shall bear all expenses of sales material
or literature, including prospectuses and proxy materials, to the extent such
materials are used in connection with the sale of the Fund's shares, unless the
Fund has agreed to bear such costs pursuant to a plan of distribution. See
"Distribution Plans." Each Underwriting Agreement was approved by the applicable
Fund's Board of Directors, including a majority of the Independent Directors.
Each Underwriting Agreement provides that it will continue in effect from year
to year only so long as such continuance is specifically approved at least
annually by the applicable Fund's Board of Directors or by a vote of a majority
of the outstanding voting securities of such Fund, and in either case by the
vote of a majority of such Fund's Independent Directors, voting in person at a
meeting called for the purpose of voting on such approval. Each Underwriting
Agreement will terminate automatically in the event of its assignment.

DISTRIBUTION PLANS

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

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

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

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

For the fiscal year ending December 31, 1995, Cash Management Fund paid
$58 in fees pursuant to the Class B Plan, all of which was paid as compensation
to the Underwriter as a distribution fee.

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

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

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

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

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

<PAGE>

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

DETERMINATION OF NET ASSET VALUE

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

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

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

ALLOCATION OF PORTFOLIO TRANSACTIONS

Purchases and sales of portfolio securities by a Fund generally are
principal transactions. In principal transactions, portfolio securities are
normally purchased directly from the issuer or from an underwriter or market
maker for the securities. There will usually be no brokerage commissions paid by
a Fund for such purchases. Purchases from underwriters will include the
underwriter's commission or concession and purchases from dealers serving as
market makers will include the spread between the bid

<PAGE>

and asked price. Certain money market instruments may be purchased by the Funds
directly from an issuer, in which no commissions or discounts are paid.

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

The Adviser may combine transaction orders placed on behalf of a Fund
and any other Fund in the First Investors Group of Funds, any series of
Executive Investors Trust and First Investors Life Insurance Company, affiliates
of the Funds, for the purpose of negotiating brokerage commissions or obtaining
a more favorable transaction price; and where appropriate, securities purchased
or sold may be allocated, in terms of price and amount, to a Fund according to
the proportion that the size of the transaction order actually placed by a Fund
bears to the aggregate size of the transaction orders simultaneously made by
other participants in the transaction.

ADDITIONAL EXCHANGE AND REDEMPTION
INFORMATION AND OTHER SERVICES

Systematic Investing

First Investors Money Line. This service allows you to invest in a Fund
through automatic deductions from your bank checking account. Scheduled
investments in the minimum amount of $50 may be made on a bi-weekly,
semi-monthly, monthly, quarterly, semi-annual or annual basis. Shares of the
Fund are purchased on the Trading Day your designated bank account is debited
and a confirmation will be sent to you after every transaction. You may change
the amount or discontinue this service at any time by calling Shareholder
Services or writing to Administrative Data Management Corp., 581 Main Street,
Woodbridge, NJ 07095-1198, Attn: Control Dept. Money Line application forms are
available from your Representative or by calling Shareholder Services at
1-800-423-4026.

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

Systematic Withdrawal Plan. Shareholders who own noncertificated shares
may establish a Systematic Withdrawal Plan ("Withdrawal Plan"). If you have a
Fund account with a value of at least $5,000, you may elect to receive monthly,
quarterly, semi-annual or annual checks for any designated

<PAGE>

amount (minimum $25). You may have the payments sent directly to you or persons
you designate. Regardless of the amount of your Class A Fund account, you may
also elect to the have the Systematic Plan payments automatically (i) invested
at the public offering price in Class A shares of any other Eligible Fund, or
(ii) paid to First Investors Life Insurance Company for the purchase of a life
insurance policy or a variable annuity. If your Systematic Plan payments are to
be invested in a new Eligible Fund account, you must invest a minimum of $600
per year. If you own Class B shares in a non-retirement account, your Plan
payments will be subject to the applicable contingent deferred sales charge
("CDSC"). Dividends and other distributions, if any, are reinvested in
additional shares of the same class of the Fund. Shareholders may add shares to
the Withdrawal Plan or terminate the Withdrawal Plan at any time. Withdrawal
Plan payments will be suspended when a distributing Fund has received notice of
a shareholder's death on an individual account. Payments may recommence upon
receipt of written alternate payment instructions and other necessary documents
from the deceased's legal representative. Withdrawal payments will also be
suspended when a payment check is returned to the Transfer Agent marked as
undeliverable by the U.S. Postal Service after two consecutive mailings.

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

The withdrawal payments derived from the redemption of sufficient
shares in the account to meet designated payments in excess of dividends may
deplete or possibly extinguish the initial investment. To establish a Withdrawal
Plan, call Shareholder Services at 1-800-423-4026.

Electronic Funds Transfer. Fund shares will be purchased on the day the
Fund receives the funds, which is normally two days after the electronic funds
transfer is initiated. The electronic transfer normally will be initiated on the
next bank business day after the redemption request is received and will
ordinarily be received by the predesignated bank account within two days after
transmission. However, once the funds are transmitted, the time of receipt and
the availability of the funds are not within the Funds' control. No dividends
are paid on the proceeds of redeemed shares awaiting electronic transmittal.

Conversion of Class B Shares. Class B Shares of a Fund will
automatically convert to Class A shares of that Fund, based on the relative net
asset values per share of the two classes, as of the close of business on the
first business day of the month in which the eighth anniversary of the initial
purchase of such Class B shares occurs. For these purposes, the date of initial
purchase shall mean (1) the first business day of the month in which such Class
B shares were issued, or (2) for Class B shares obtained

<PAGE>

through an exchange or a series of exchanges, the first business day of the
month in which the original Class B shares were issued. For conversion purposes,
Class B shares purchased through the reinvestment of dividends and other
distributions paid in respect of Class B shares will be held in a separate
sub-account. Each time any Class B shares in the shareholder's regular account
(other than those in the sub-account) convert to Class A shares, a pro rata
portion of the Class B shares in the sub-account also will convert to Class A
shares. The portion will be determined by the ratio that the shareholder's Class
B shares converting to Class A shares bears to the shareholder's total Class B
shares not acquired through dividends and other distributions.

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

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

Waivers of CDSC on Class B Shares. The CDSC imposed on Class B shares
does not apply to: (a) any redemption pursuant to the tax-free return of an
excess contribution to an individual retirement account ("IRA") or other
qualified retirement plan if the Fund is notified at the time of such request;
(b) any redemption of a lump-sum or other distribution from qualified retirement
plans or accounts provided the shareholder has attained the minimum age of 70
1/2 years and has held the Class B shares for a minimum period of three years;
(c) any redemption by advisory accounts managed by the Adviser or any of its
affiliates or for shares held by the Adviser or any of its affiliates; (d) any
redemption by a tax-exempt employee benefit plan if continuance of the
investment would be improper under applicable laws or regulations; and (e) any
redemption or transfer of ownership of Class B shares following the death or
disability, as defined in Section 72(m)(7) of the Code, of a shareholder if the
Fund is provided with proof of death or disability and with all documents
required by the Transfer Agent within one year after the death or disability.
For more information on what specific documents are required, call Shareholder
Services at 1-800-423-4026.

Signature Guarantees. The words "Signature Guaranteed" must appear in
direct association with the signature of the guarantor. Members of the STAMP
(Securities Transfer Agents Medallion Program), MSP (New York Stock Exchange
Medallion Signature Program), SEMP (Stock Exchanges Medallion Program) and FIC
are eligible signature guarantors. Although each Fund reserves the right to
require signature guarantees at any other time, signature guarantees are
required whenever: (1) the amount of the redemption is over $50,000, (2) an
exchange in the amount over $50,000 is made into the Funds, (3) a redemption
check is to be made payable to someone other than the registered accountholder,
other than major financial institutions, as determined solely by the Fund and
its agent, on behalf of the shareholder, (4) a redemption check is to be mailed
to an address other than the address of record, preauthorized bank account, or
to a major financial institution for the benefit of a shareholder, (5) an
account registration is being transferred to another owner, (6) a transaction
requires additional legal documentation; (7) the

<PAGE>

redemption request is for certificated shares; (8) your address of record has
changed within 60 days prior to a redemption request; (9) multiple owners have a
dispute or give inconsistent instructions; and (10) the authority of a
representative of a corporation, partnership, association or other entity has
not been established to the satisfaction of a Fund or its agents. ERISA Title I
403(b) Plans and 401(k) Plans are exempt from the signature guarantee
requirement except for exchanges or redemption in amounts greater than $50,000.

Reinvestment after Redemption. If you redeem Class A or Class B shares
in your Fund account, you can reinvest within six months from the date of
redemption all or any part of the proceeds in shares of the same class of the
same Fund or any other Eligible Fund. Class A shares will be reinvested in Class
A shares of the other fund at the public offering price of such fund on the date
the Transfer Agent receives your purchase request. Class B shares will be
reinvested in Class B shares of the other fund at the net asset value of such
fund on the date the Transfer Agent receives your purchase order. If you
reinvest the entire proceeds of a redemption of Class B shares for which a CDSC
has been paid, you will be credited for the amount of the CDSC. If you reinvest
less than the entire proceeds, you will be credited with a pro rata portion of
the CDSC. All credits will be paid in Class B shares of the fund into which the
reinvestment is being made. The period you owned the original Class B shares
prior to redemption will be added to the period of time you own Class B shares
acquired through reinvestment for purposes of determining (a) the applicable
CDSC upon a subsequent redemption and (b) the date on which Class B shares
automatically convert to class A shares. If your reinvestment is into a new
account, other than the Funds, it must meet the minimum investment and other
requirements of the fund into which the reinvestment is being made. If you
reinvest into a new Fund account within one year from the date of redemption,
the minimum investment is $500. To take advantage of this option, send your
reinvestment check along with a written request to the Transfer Agent within six
months from the date of your redemption. Include your account number and a
statement that you are taking advantage of the "Reinvestment Privilege."

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

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

Telephone Transactions. Fund shares not held in certificate form may be
exchanged or redeemed by telephone provided you have not declined telephone
privileges. For corporations, partnerships, trusts and certain other accounts,
additional documents are required to activate telephone privileges. Telephone
exchanges are available between nonretirement accounts and between IRA and
403(b) accounts of the same class of shares registered in the same name.
Telephone exchanges are also available from an individually registered
nonretirement account to an IRA account of the same class of shares in the same
name (provided an IRA application is on file). Telephone exchanges are not
available for exchanges of Fund shares for plan units.

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

<PAGE>

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

Retirement Plans

Profit-Sharing/Money Purchase Pension/401(k) Plans. FIC offers
prototype Profit-Sharing, Money Purchase Pension and Code section 401(k)
Retirement Plans ("Retirement Plans") approved by the IRS for corporations, sole
proprietorships and partnerships. The Custodial Agreement for such a Money
Purchase Pension and Profit-Sharing Retirement Plan provides that First
Financial Savings Bank, S.L.A. ("First Financial Savings"), an affiliate of FIC,
will furnish all required custodial services.

FIC offers additional versions of prototype qualified retirement plans
for eligible employers, including 401(k), money purchase, profit-sharing and
target benefit plans.

Currently, there are no annual service fees chargeable to participants
in connection with a Retirement Plan account. Participants are, however, charged
$5.00 for opening a Retirement Plan account, other than a 401(k) Retirement Plan
account. Each Fund currently pays the annual $10.00 custodian fee for each
Retirement Plan account, if applicable, maintained with such Fund. This policy
may be changed at any time by a Fund on 45 days' written notice. First Financial
Savings has reserved the right to waive its fees at any time or to change the
fees on 45 days' prior written notice.

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

Individual Retirement Accounts. A qualified individual may purchase
shares of a Fund through an IRA or, as an employee of a qualified employer,
through a simplified employee pension-IRA ("SEP-IRA") or a salary reduction
simplified employee pension-IRA ("SARSEP-IRA") furnished by FIC. Under the
related Custodial Agreements, First Financial Savings acts as custodian of each
of these retirement plans.

The Funds offer IRA accounts with specific provisions tailored to meet
the needs of certain groups of investors. The custodian fees are disclosed in
the IRA documents provided to investors in such accounts.

A taxpayer generally may make an annual IRA contribution no greater
than the lesser of (a) 100% of his or her compensation or (b) $2,000 (or $2,250
when also contributing to a spousal IRA). However, contributions are deductible
only under certain conditions. The requirements as to SEP-IRAs and SARSEP-IRAs
are described in IRS Forms 5305-SEP and 5305A-SEP, respectively, which are
provided to employers. Employers are required to provide copies of these forms
to their eligible employees. A disclosure statement setting forth complete
details of the IRA should be given to each participant before the contribution
is invested.

Currently, there are no annual service fees chargeable to a participant
in connection with an IRA, SEP-IRA or SARSEP-IRA. Each Fund currently pays the
annual $10.00 custodian fee for each IRA account maintained with such Fund. This
policy may be changed at any time by a Fund on 45 days'

<PAGE>

written notice to the holder of any IRA, SEP-IRA or SARSEP-IRA. First Financial
Savings has reserved the right to waive its fees at any time or to change the
fees on 45 days' prior written notice to the holder of any IRA.

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

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

Contributions may be made to a Custodial Account under the Optional
Retirement Program for Employees of Texas Institutions of Higher Education
("ORP"), either by salary reduction agreement or otherwise, in accordance with
the terms and conditions of the ORP, and under the Texas Deferred Compensation
Plan Program for eligible state employees by salary reduction agreement.

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

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

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

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

<PAGE>

TAXES

Each Fund is treated as a separate corporation for Federal income tax
purposes. In order to continue to qualify for treatment as a regulated
investment company ("RIC") under the Code, a Fund must distribute to its
shareholders for each taxable year at least 90% of the sum of its investment
company taxable income (consisting generally of taxable net investment income
plus net short-term capital gain, if any) plus, in the case of Tax-Exempt Money
Market Fund, its net interest income excludable from gross income under section
103 of the Code, and must meet several additional requirements. For each Fund,
these requirements include the following: (1) the Fund must derive at least 90%
of its gross income each taxable year from dividends, interest, payments with
respect to securities loans and gains from the sale or other disposition of
securities, or certain other income derived with respect to its business of
investing in securities; (2) the Fund must derive less than 30% of its gross
income each taxable year from the sale or other disposition of securities that
were held for less than three months; (3) at the close of each quarter of the
Fund's taxable year, at least 50% of the value of its total assets must be
represented by cash and cash items, U.S. Government securities, securities of
other RICs and other securities, with those other securities limited, in respect
of any one issuer, to an amount that does not exceed 5% of the value of the
Fund's total assets; and (4) at the close of each quarter of the Fund's taxable
year, not more than 25% of the value of its total assets may be invested in
securities (other than U.S. Government securities or the securities of other
RICs) of any one issuer.

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

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

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

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

<PAGE>

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

PERFORMANCE INFORMATION

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

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

In addition to providing current yield quotations, each Fund provides
effective yield quotations for a base period return of seven days. An effective
yield quotation is determined by a formula that requires the compounding of the
unannualized base period return. Compounding is computed by adding 1 to the
annualized base period return, raising the sum to a power equal to 365 divided
by 7 and subtracting 1 from the result.

The following is an example, for purposes of illustration only, of the
current and effective yield (and for Tax-Exempt Money Market Fund, the
tax-equivalent yield) calculation for Class A and Class B shares for the seven
day period ended December 31, 1995.

<TABLE>
<CAPTION>
Tax-Exempt Money
Cash Management Fund Market Fund
Class A Class B Class A Class B
Shares Shares Shares Shares
<S> <C> <C> <C> <C>

Dividends per share from net investment
income (seven calendar days ended
December 31, 1994)
(Base Period) $.0009781735 $.000833884 $.000679834 $.000535998
Annualized (365 day basis)* $.051004761 $.043481092 $.035448486 $.027948466
Average net asset value per share of
the seven calendar days ended
December 31, 1995 $1.00 $1.00 $1.00 $1.00

</TABLE>

<PAGE>

Tax-Exempt Money
Cash Management Fund Market Fund
Class A Class B Class A Class B
Shares Shares Shares Shares
<S> <C> <C> <C> <C>

Annualized historical yield per
share for the seven calendar days
ended December 31, 1995 5.10% 4.35% 3.54% 2.79%
Effective Yield** 5.22% 4.44% 3.60% 2.83%
Tax Equivalent Yield*** N/A N/A 5.53% 4.36%
Weighted average life to maturity
of the portfolio on December 31, 1995
was 64 days for Cash Management Fund and
59 days for Tax-Exempt Money Market Fund
</TABLE>

* This represents the average of annualized net investment income per
share for the seven calendar days ended December 31, 1995.
** Effective Yield = [(Base Period Return+1)365/7] - 1
*** Tax Equivalent Yield = (Effective Yield/(1-Tax Rate). For the purpose
of this illustration, the tax rate was assumed to be 36%. The maximum
Federal tax rate during this period was 39.6%.

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

From time to time, in reports and promotional literature, each Fund may
compare its performance to, or cite the historical performance of the relevant
Donoghue's Money Fund Average, a published statistic indicating the performance
of money market mutual funds, and the Bank Rate Monitor Index, a published
statistic indicating a composite interest rate available through banks on their
money market deposit accounts. Additionally, performance rankings and ratings
reported periodically in national financial publications such as MONEY, FORBES,
BUSINESS WEEK, BARRON'S, FINANCIAL TIMES, CHANGING TIMES, FORTUNE, etc., may
also be used. Quotations from articles appearing in daily newspaper publications
such as THE NEW YORK TIMES, THE WALL STREET JOURNAL and THE NEW YORK DAILY NEWS
may be cited.

GENERAL INFORMATION

Audits And Reports. The accounts of each Fund are audited twice a year
by Tait, Weller & Baker, independent certified public accountants, Two Penn
Center Plaza, Philadelphia, PA 19102-1707. Shareholders of each Fund receive
semi-annual and annual reports, including audited financial statements, and a
list of securities owned.

<PAGE>

Transfer Agent. Administrative Data Management Corp., 95 Wall Street,
New York, NY 10005, an affiliate of FIMCO and FIC, acts as transfer agent
("Transfer Agent") for each Fund and as redemption agent for regular
redemptions. The fees charged to a Fund by the Transfer Agent are $2.00 per
account per month, $1.00 per account per report required by any government
authority and $5.00 for each exchange of shares into a Fund. Additional fees
charged to the Funds by the Transfer Agent are assumed by the Underwriter. The
Transfer Agent reserves the right to change the fees on prior notice to the
Funds. Upon request from shareholders, the Transfer Agent will provide an
account history. For account histories covering the most recent three year
period, there is no charge. The Transfer Agent charges a $5.00 administrative
fee for each account history covering the period 1983 through 1990 and $10.00
per year for each account history covering the period 1974 through 1982. Account
histories prior to 1974 will not be provided. In addition, the Transfer Agent
charges shareholders a $15.00 fee for each duplicate copy of a draft check. If
any communication from the Transfer Agent to a shareholder is returned from the
U.S. Postal Service marked as "Undeliverable" two consecutive times, the
Transfer Agent will cease sending any further materials to the shareholder until
the Transfer Agent is provided with a correct address. Furthermore, if there is
no known address for a shareholder for at least one year, the Transfer Agent
will charge such shareholder's account $40 to cover the Transfer Agent's
expenses in trying to locate the shareholder's correct address. For the fiscal
year ended December 31, 1995, Cash Management Fund accrued $602,851 in transfer
agency fees and expenses, of which $230,095 was voluntarily waived by the
Transfer Agent. For the fiscal year ended December 31, 1995, Tax-Exempt Money
Market Fund accrued $86,600 in transfer agency fees and expenses, of which
$32,277 was voluntarily waived by the Transfer Agent. The Transfer Agent's
telephone number is 1-800-423-4026.

5% Shareholders. As of April 1, 1996, School Financial Management
Services, Inc., 95 Wall Street, New York, New York 10005, beneficially owned
8.6% of the outstanding Class A shares of Cash Management Fund. As of the same
date, Sam Siegel, 40 East 78th Street, New York, NY 10021, beneficially owned
6.7% of the outstanding Class A shares of Tax-Exempt Money Market Fund.

As of April 1, 1996, the following beneficially owned more than 5% of
the outstanding Class B shares of the Fund listed below:

Fund % of Shares Shareholder

Tax-Exempt Money Market Fund 10.5% Jerry J. Caro
2336 Bayou Blue Road
Houma, LA 70364-4301

Cash Management Fund 15.0% John Michael McCauley
251 N. 68th Avenue
Hollywood, FL 33024

10.9% Michele E. McCauley
251 N. 68th Avenue
Hollywood, FL 33024

6.7% Brian K. Holloway
9 Hartman Drive
Hamilton Square, NJ 08690

Trading by Portfolio Managers and Other Access Persons. Pursuant to
Section 17(j) of the 1940 Act and Rule 17j-1 thereunder, each Fund and the
Adviser have adopted Codes of Ethics restricting

<PAGE>

personal securities trading by portfolio managers and other access persons of
the Funds. Among other things, such persons: (a) must have all non-exempt trades
pre-cleared by the Adviser; (b) are restricted from short-term trading; (c) must
have duplicate statements and transactions confirmations reviewed by a
compliance officer; and (d) are prohibited from purchasing securities of initial
public offerings.

APPENDIX A
DESCRIPTION OF CORPORATE AND MUNICIPAL COMMERCIAL PAPER RATINGS

STANDARD & POOR'S RATINGS GROUP

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

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

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

MOODY'S INVESTORS SERVICE, INC.

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

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

- Leading market positions in well-established industries.
- High rates of return on funds employed.
- Conservative capitalization structure with moderate reliance on debt and
ample asset protection.
- Broad margins in earnings coverage of fixed financial charges and high
internal cash generation.
- Well-established access to a range of financial markets and assured
sources of alternate liquidity.

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

<PAGE>

APPENDIX B
DESCRIPTION OF CORPORATE AND MUNICIPAL BOND RATINGS

STANDARD & POOR'S RATINGS GROUP

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

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

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

2. Nature of and provisions of the obligation;

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

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

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

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

MOODY'S INVESTORS SERVICE, INC.

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

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

Moody's applies numerical modifiers, 1, 2 and 3 in each generic rating
classification from Aa through B in its corporate bond rating system. The
modifier 1 indicates that the security ranks in the

<PAGE>

higher end of its generic rating category; the modifier 2 indicates a mid-range
ranking; and the modifier 3 indicates that the issue ranks in the lower end of
its generic rating category.

APPENDIX C
DESCRIPTION OF MUNICIPAL NOTE RATINGS

STANDARD & POOR'S RATINGS GROUP

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

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

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

Note rating symbols are as follows:

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

SP-2 Satisfactory capacity to pay principal and interest.

MOODY'S INVESTORS SERVICE, INC.

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

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

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

<PAGE>

APPENDIX D

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

The following graphs and chart illustrate hypothetical returns:

INCREASE RETURNS

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

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

INCREASE INVESTMENT

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

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

<PAGE>

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

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

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

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

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

<PAGE>

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

The following chart illustrates the historical performance of the Dow Jones
Industrial Average from 1928 through 1995.

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

<PAGE>

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

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

THE EFFECTS OF INFLATION OVER TIME

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

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

Inflation erodes your buying power. $100 in 1966, could purchase the same amount
of goods and service as $21 in 1995.* Projecting inflation at 3%, goods and
services costing $100 today will cost $243 in the year 2025.

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

<PAGE>

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

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

1926 through 1995(1)

Total Number of Percentage of
Number of Positive Positive
Periods Periods Periods
------- ------- -------
1-Year Periods 70 50 71%
5-Year Periods 66 59 89%
10-Year Periods 61 59 97%
15-Year Periods 56 56 100%
20-Year Periods 51 51 100%

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

Compound Annual Return from 1981 -- 1995(1)

Inflation ..................... 3.93
U.S. Treasury Bills ........... 7.11
Large Company Stocks .......... 14.80

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

Compound Annual Return from 1981 -- 1995(1)

Inflation ..................... 3.93
U.S. Treasury Bills ........... 7.11
Long-Term Corp. bonds ......... 13.46

(1) Sources: Stocks, Bonds, Bill and Inflation 1996 Yearbook, Ibbotson
Associates, Chicago.

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

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

Your Taxable Equivalent Yield

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

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

<PAGE>

Financial Statements

as of December 31, 1995

<PAGE>

PORTFOLIO OF INVESTMENTS
FIRST INVESTORS CASH MANAGEMENT FUND, INC.
December 31, 1995

<TABLE>
<CAPTION>
AMOUNT
INVESTED
FOR EACH
PRINCIPAL INTEREST $10,000 OF
AMOUNT SECURITY RATE* VALUE NET ASSETS
- ---------- ------------------------------------------------------- ----- ------------ -----------
<S> <C> <C> <C> <C>
CORPORATE NOTES--90.3%
$6,000M Ameritech Capital Funding Corporation, 2/27/96 5.50% $ 5,947,750 $ 462
3,000M Appalachian Power, Inc., 1/4/96 6.10 2,998,475 233
5,000M BellSouth Telecommunications, Inc., 2/9/96 5.63 4,969,504 386
4,000M Chevron Oil Finance Company, 2/9/96 5.65 3,975,517 309
5,000M Colgate-Palmolive Company, 2/15/96 5.64 4,964,750 386
5,800M CPC International, Inc., 3/11/96 5.58 5,737,070 445
3,300M Dresser Industries, Inc., 1/31/96 5.73 3,284,256 255
4,000M Du Pont (E.I.) de Nemours & Company, 1/19/96 5.65 3,988,700 310
6,000M General Electric Capital Corporation, 1/31/96 5.65 5,971,750 464
3,000M GTE South, Inc., 2/7/96 5.73 2,982,333 232
3,300M Heinz (H.J.) Company, 2/12/96 5.57 3,278,556 255
5,000M Hewlett-Packard Company, 1/25/96 5.67 4,981,100 387
4,300M Idaho Power Company, 1/12/96 5.85 4,292,314 334
2,800M Lubrizol Corporation, 1/29/96 5.73 2,787,521 217
2,000M McGraw-Hill, Inc., 2/2/96 5.67 1,989,920 155
3,000M McGraw-Hill, Inc., 4/2/96 5.50 2,957,834 230
4,350M Merck & Company, Inc., 8/14/96 5.59 4,459,797 347
4,200M National Rural Utilities Coop. Fin. Corporation, 2/9/96 5.62 4,174,429 324
450M National Rural Utilities Coop. Fin. Corporation, 5/6/96 5.70 476,499 37
3,000M Panasonic Finance, Inc., 2/5/96 5.65 2,983,521 232
3,000M PepsiCo, Inc., 1/30/96 5.68 2,986,273 232
2,800M PepsiCo, Inc., 1/30/96 5.86 2,888,012 224
5,000M Pitney Bowes Credit, Inc., 1/5/96 5.72 4,996,822 387
6,000M Rockwell International Corporation, 1/17/96 5.70 5,984,800 465
5,000M Sandoz Corporation, 3/19/96 5.58 4,939,550 384
2,500M Schering-Plough Corporation, 1/16/96 5.67 2,494,094 194
5,000M The Stanley Works, 3/6/96 5.60 4,949,444 385
4,000M U.S. Borax & Chemical Corporation, 1/23/96 5.68 3,986,116 310
2,300M Waste Management, Inc., 4/14/96 5.84 2,314,200 180
2,500M Winn Dixie Stores, Inc., 2/8/96 5.66 2,485,064 193
1,000M Winn Dixie Stores, Inc., 2/23/96 5.63 991,711 77

Total Value of Corporate Notes (cost $116,217,682) 116,217,682 9,031
</TABLE>

<PAGE>

<PAGE>

AMOUNT
INVESTED
FOR EACH
PRINCIPAL INTEREST $10,000 OF
AMOUNT SECURITY RATE* VALUE NET ASSETS
- --------- -------- ------- ----- ----------
<S> <C> <C> <C> <C>
U.S. GOVERNMENT AGENCIES--9.6%
$6,000M Federal Home Loan Bank, 12/27/96 5.55% $ 6,004,548 $467
250M Federal Home Loan Mortgage Corporation, 6/3/96 5.52 249,811 19
2,200M Federal National Mortgage Association, 1/25/96 5.59 2,191,801 170
3,900M Tennessee Valley Authority, 9/9/96 5.51 3,927,763 305
TOTAL VALUE OF U.S. GOVERNMENT AGENCIES (cost $12,373,923) 12,373,923 961

TOTAL VALUE OF INVESTMENTS
(cost $128,591,605)+ 99.9% 128,591,605 9,992
OTHER ASSETS, LESS LIABILITIES .1 98,692 8
NET ASSETS 100.0% $128,690,297 $10,000

</TABLE>
*The interest rates shown for the corporate and U.S. Government agency notes are
the effective rates at the time of purchase by the Fund.
+Aggregate cost for federal income tax purposes is the same.

See notes to financial statements

<PAGE>

PORTFOLIO OF INVESTMENTS
FIRST INVESTORS TAX-EXEMPT MONEY MARKET FUND, INC.
December 31, 1995

<TABLE>
<CAPTION>
AMOUNT
INVESTED
FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
--------- -------- ----- ----------
<S> <C> <C> <C>
MUNICIPAL NOTES AND VARIABLE RATE SECURITIES--96.9%
ALABAMA--4.0%
$1,000M Birmingham General Obligation Wts., VR, 5.2%
(LOC; First Alabama Bank) $ 1,003,606 $ 401

ARIZONA--4.0%
1,000M Maricopa County, Poll. Control Rev. Bond, VR, 5.0%
(Pub. Svc. New Mexico) (LOC; Canadian Imperial Bank) 1,003,647 401

CALIFORNIA--4.8%
1,200M California Poll. Control Rev. Bonds, VR, 5.4% (So. Cal. Edison) 1,204,355 481

<PAGE>

COLORADO--.3%
70M Clear Creek County, Fin. Pool Prog. Rev. Antic. Notes, VR, 5.15%
(LOC; National Westminster Bank) 70,229 28

DELAWARE--2.2%
500M Delaware State General Obligation Bonds, 7.5%, 7/1/2005
(Prerefunded 7/1/96) 538,016 215

FLORIDA--11.5%
1,000M Jacksonville Florida Electric Rev. Bonds, 3.4%, CP, 3/8/96
(Jacksonville Elec.) (SPA; Morgan Guaranty Trust Co.) 1,002,329 400
535M Pinellas County Health Facs. Auth. Rev. Bonds, VR, 4.9%
(Bayfront Medical Center Project) (SPA; Barnett Bank South Florida) 536,652 215
1,000M Sunshine State Gov. Fin. Comm. Rev. Bonds, CP, 3.5%, 2/8/96
(LOC; Union Bank of Switzerland, National Westminster Bank
Morgan Guaranty Trust Co.) 1,002,397 400
340M Volusia County, Health Fac. Auth. Rev. Bonds, VR, 5.0%
(FGIC Insured) (SPA; Banque Paribas) 341,247 136
2,882,625 1,151
GEORGIA--4.4%
600M Cobb County, Multi-Family Hsg. Auth. Rev. Bonds, VR, 5.15%
(LOC; Mellon Bank, Pittsburgh) 602,242 241
500M Monroe County, Dev. Auth. Poll. Control Rev. Bonds, VR, 5.5%
(Gulf Power Co.) 501,843 200
1,104,085 441
</TABLE>

<PAGE>

AMOUNT
INVESTED
FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- ----------- --------------------------------------------------------------- ---------- ----------
<S> <C> <C> <C>
ILLINOIS--2.0%
$500M State of Illinois Rev. Antic. Certs., 4.5%, 5/10/96 $ 510,164 $204

LOUISIANA--2.8%
700M De Soto Parish Poll. Control Rev. Bonds, VR, 5.05%
(Central LA Electric) (LOC; Swiss Bank) 702,136 280

MARYLAND--4.0%
1,000M Baltimore County, Poll. Control Rev. Bonds, CP, 3.4%, 3/12/96
(Baltimore Gas & Electric Co.) 1,002,422 400

MICHIGAN--2.0%
500M Detroit City School Dist. School Aid Notes, 4.5%, 5/1/96 510,424 204

MISSISSIPPI--1.6%
400M Claiborne County, Poll. Control Rev. Bonds, CP, 3.55%, 2/9/96

<PAGE>

(National Rural Utilities Coop. Fin. Corp.) 400,973 160

MISSOURI--6.2%
530M Missouri State Env. Imp. & Energy Res. Auth. Poll. Control Rev.
Bonds, VR, 4.65% (National Rural Utilities Coop. Fin. Corp.) 531,427 212
1,000M Saint Louis City, Tax & Rev. Antic. Notes, 4.5%, 6/20/96 1,025,533 410
1,556,960 622
NEW JERSEY--7.3%
800M New Jersey State Turnpike Auth. Rev. Bonds, VR, 4.8%
(FGIC Insured) (LOC; Societe Generale) 813,989 325
1,000M State of New Jersey Tax & Rev. Antic. Notes, CP, 3.3%, 2/16/96
(Advance Agreement; Union Bank of Switzerland) 1,002,441 400
1,816,430 725
</TABLE>

PORTFOLIO OF INVESTMENTS
FIRST INVESTORS TAX-EXEMPT MONEY MARKET FUND, INC.
December 31, 1995

AMOUNT
INVESTED
FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- ---------- -------- ---------- ----------
<S> <C> <C> <C>
NEW YORK--4.1%
$1,000M New York City Tax Antic. Notes, 4.5%, 2/15/96 $1,019,577 $407

RHODE ISLAND--4.1%
1,000M Rhode Island Tax Antic. Notes, 4.5%, 6/28/96 1,026,794 410

SOUTH CAROLINA--5.6%
1,000M Charleston County, Hosp. Facs. Rev. Bonds, VR, 5.3%
(Brown Schools) (LOC; Bankers Trust) 1,003,626 401
400M South Carolina Ed. Facs. Rev. Bonds, VR, 5.3%
(Presbyterian Coll. Proj.) (LOC; South Carolina National Bank) 401,469 160
1,405,095 561
TEXAS--17.2%
500M Capital Indust. Dev. Corp., Ind. Dev. Rev. Bonds, VR, 5.15%
(Capital Industries) (LOC; Wachovia Bank) 501,837 200
250M Dallas County General Obligation Bonds, 4.75%, 8/15/96 259,539 104
1,000M Fort Worth Texas Water Sewer System Rev. Bonds, CP, 3.75%, 3/7/96
(Liquidity Agreement; Swiss Bank Corp.) 1,001,849 400
500M Gulf Coast Waste Disp. Auth. Poll. Control Rev. Bonds, VR, 5.9%
(Amoco Oil Co.) 501,862 200
1,000M Lubbock Health Facs. Dev. Corp. Rev. Bonds, VR, 5.3%
(Charter Medical) (LOC; Bankers Trust) 1,010,194 403
1,000M State of Texas Rev. Antic. Notes, 4.75%, 8/30/96 1,021,582 409
4,296,863 1,716
VIRGINIA--2.0%

<PAGE>

500M Lynchburg Ind. Dev. Auth., Hosp. Facs. Dev. Bonds, VR, 5.0%
(Ambac Insured) (LOC; Mellon Bank) 501,750 200
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
AMOUNT
INVESTED
FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- ---------- -------- -------- ----------
<S> <C> <C> <C> <C>
WASHINGTON--4.0%
$1,000M Port of Kalama, Pub. Corp. Rev. Bonds, VR, 4.85%
(Conagra Corp.) (LOC; Morgan Guaranty Trust Co.) $ 1,002,995 $ 400

WEST VIRGINIA--.8%
200M West Virginia Hosp. Fin. Auth. Hosp. Rev. Bonds, VR, 5.2%
(St. Joseph's Hosp. Proj.) (LOC; Bank One) 200,742 80

WISCONSIN--2.0%
500M Milwaukee Wisconsin General Obligation Bonds, 6.25%, 6/15/96 507,171 203
TOTAL VALUE OF INVESTMENTS (cost $24,267,059)+ 96.9% 24,267,059 9,690
OTHER ASSETS, LESS LIABILITIES 3.1 777,502 310

NET ASSETS 100.0% $25,044,561 $10,000
</TABLE>
The interest rates shown for municipal notes are the effective rates at the
time of purchase by the Fund. The interest rates on variable rate
securities are adjusted periodically; the rates shown are the rates that
were in effect at December 31, 1995. The variable rate securities are
subject to optional tenders (which are exercised through put options) or
mandatory redemptions. The put options are exercisable on a daily, weekly,
monthly or semi-annual basis at a price equal to the principal amount plus
accrued interest.

+Aggregate cost for federal income tax purposes is the same.

Summary of Abbreviations:
LOC Letter of Credit
SPA Security Purchase Agreement
VR Variable Rate Notes
CP Municipal Commercial Paper

See notes to financial statements

<PAGE>

STATEMENT OF ASSETS AND LIABILITIES
December 31, 1995

<TABLE>

<PAGE>

<CAPTION>
- ---------------------------------------------------------------------------------------------------------
FIRST INVESTORS FIRST INVESTORS
CASH MANAGEMENT TAX-EXEMPT MONEY
FUND, INC. MARKET FUND, INC.
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS

Investments in securities (Note 1A):
At amortized cost............................................... $128,591,605 $24,267,059
============ ===========
At value........................................................ $128,591,605 $24,267,059
Cash 364,923 841,419
Other assets......................................................... 24,200 4,891
------------ -----------
Total Assets......................................................... 128,980,728 25,113,369
------------ -----------

LIABILITIES

Payables:
Capital shares redeemed......................................... 222,818 35,859
Dividend disbursing agent....................................... 13,195 22,006
Accrued expenses..................................................... 34,111 5,919
Accrued advisory fee................................................. 20,307 5,024
------------ -----------
Total Liabilities.................................................... 290,431 68,808
------------ -----------

NET ASSETS........................................................... $128,690,297 $25,044,561
============ ===========

CAPITAL SHARES OUTSTANDING (Note 2):
Class A......................................................... 128,634,770 25,044,551
Class B......................................................... 55,527 10
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER SHARE --
CLASS A AND CLASS B (Net assets divided by shares outstanding).. $1.00 $1.00
============ ===========

</TABLE>
See notes to financial statements

8
<PAGE>

STATEMENT OF OPERATIONS
Year Ended December 31, 1995

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
FIRST INVESTORS FIRST INVESTORS
CASH MANAGEMENT TAX-EXEMPT MONEY
FUND, INC. MARKET FUND, INC.
- -------------------------------------------------------------------------------------------------

<PAGE>

<S> <C> <C>
INVESTMENT INCOME

Interest income............................................. $7,331,050 $966,073
---------- --------

Expenses (Note 3):
Advisory fee.............................................. 611,689 123,947
Shareholder servicing costs............................... 627,244 86,600
Reports and notices to shareholders....................... 77,121 6,902
Custodian fees............................................ 56,132 15,445
Professional fees......................................... 30,634 18,775
Other expenses............................................ 39,952 10,146
---------- --------

Total expenses.............................................. 1,442,772 261,815
Less: Portion of expenses waived............................ (584,612) (84,742)
Custodian fees paid indirectly............................. (1,312) (3,563)
---------- --------

Net expenses 856,848 173,510
---------- --------

Net investment income....................................... 6,474,202 792,563
Net realized gain (loss) on investments..................... 6,967 (742)
---------- --------

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........ $6,481,169 $791,821
========== ========

</TABLE>
See notes to financial statements
<PAGE>

STATEMENT OF CHANGES IN NET ASSETS

FIRST INVESTORS FIRST INVESTORS
CASH MANAGEMENT TAX-EXEMPT MONEY
FUND, INC. FUND, INC.
----------------------------- -----------------------------------
Year Ended December 31 1995 1994 1995 1994
- ----------------------------------------- -------------- -------------- ---------------- -----------------
<S> <C> <C> <C> <C>

OPERATIONS
Net investment income.................... $ 6,474,202 $ 4,480,477 $ 792,563 $ 561,501

Net realized (gain) loss on investments.. 6,967 (2,388) (742) --
------------- ------------- ------------ ------------

Net increase in net assets resulting
from operations and declared as
distributions to shareholders

<PAGE>

(Note 1C) $ 6,481,169 $ 4,478,089 $ 791,821 $ 561,501
------------- ------------- ------------ ------------

CAPITAL SHARE TRANSACTIONS (NOTE 2)
Class A:
Proceeds from shares sold................ $ 270,334,802 $ 281,311,936 $ 34,618,262 $ 37,386,855
Value of distributions reinvested........ 6,848,793 3,812,783 772,244 544,099
Cost of shares redeemed.................. (277,043,961) (283,807,863) (36,769,598) (35,364,302)
------------- ------------- ------------ ------------

139,634 1,316,856 (1,379,088) 2,566,652
------------- ------------- ------------ ------------

Class B:
Proceeds from shares sold................ 90,178 -- 10 --
Value of distributions reinvested........ 349 -- -- --
Cost of shares redeemed.................. (35,000) -- -- --
------------- ------------- ------------ ------------

55,527 -- 10 --
------------- ------------- ------------ ------------

Total increase (decrease) in net assets.. 195,161 1,316,856 (1,379,078) 2,566,652

NET ASSETS
Beginning of year........................ 128,495,136 127,178,280 26,423,639 23,856,987
------------- -------------- ------------ ------------
End of year.............................. $ 128,690,297 $ 128,495,136 $ 25,044,561 $ 26,423,639
============= ============= ============ ============
</TABLE>

See notes to financial statements

<PAGE>

NOTES TO FINANCIAL STATEMENTS
FIRST INVESTORS CASH MANAGEMENT FUND, INC.
FIRST INVESTORS TAX-EXEMPT MONEY MARKET FUND, INC.

1. SIGNIFICANT ACCOUNTING POLICIES--First Investors Cash Management Fund, Inc.
(the "Cash Management Fund") and First Investors Tax-Exempt Money Market Fund,
Inc. (the "Tax-Exempt Money Market Fund") (collectively, the "Funds") are
registered under the Investment Company Act of 1940 (the "1940 Act") as
diversified, open-end management investment companies. The objective of each
Fund is as follows:

CASH MANAGEMENT FUND seeks to earn a high rate of current income consistent with
the preservation of capital and maintenance of liquidity.

TAX-EXEMPT MONEY MARKET FUND seeks to earn a high rate of current income exempt
from federal income tax and, for non-corporate shareholders, the federal
alternative minimum tax.

<PAGE>

A. Security Valuation--The Funds value all of their portfolio securities using
the amortized cost method, which excludes unrealized gains or losses from the
computation of portfolio value. This is accomplished by valuing a security at
cost plus amortized discount or accrued interest. While this method of valuation
tends to produce stable valuation of securities held to their maturity, the
actual market value of the security, if sold prior to maturity, may vary from
the security's value to the Funds while in the Funds' portfolios.

B. Federal Income Taxes--It is the policy of the Funds to continue to comply
with the special provisions of the Internal Revenue Code applicable to
investment companies and to make sufficient distributions of income and capital
gains to relieve the Funds from all, or substantially all, federal income taxes.

C. Distributions--The Funds declare distributions daily and pay distributions
monthly. Distributions are declared from the total of net investment income and
net realized gains or losses on investments. Distributions paid by the
Tax-Exempt Money Market Fund from net investment income are considered
exempt-interest dividends and as such should not be subject to federal income
taxes.

D. Other--Security transactions are accounted for on the date the securities are
purchased or sold. Cost is determined, and gains and losses are based, on the
amortized cost basis for both financial statement and federal income tax
purposes. Interest income and estimated expenses are accrued daily. The
Custodian of Cash Management Fund and Tax-Exempt Money Market Fund has provided
credits in the amount of $1,312 and $3,563, respectively, against custodian
charges based on the uninvested cash balances of the Funds.

2. CAPITAL STOCK--At December 31, 1995, paid-in capital amounted to $128,690,297
for the Cash Management Fund and $25,044,561 for the Tax-Exempt Money Market
Fund. The numbers of shares transacted during the period are the same as the
amounts included in the Statement of Changes in Net Assets since shares are
recorded at $1.00 per share.

The Funds sell two classes of shares, Class A and Class B. The Class B shares
are subject to a 1% 12b-1 fee and may only be acquired through an exchange from
another First Investors eligible Fund. For the year 1995, the underwriter waived
.25% of the 12b-1 fee paid by the Class B shares. As of December 31, 1995, there
have been no transactions in the Class B shares for the Tax-Exempt Money Market
Fund other than the sale of 10 shares to First Investors Management Company,
Inc. ("FIMCO").

3. ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES--Certain officers and
directors of the Funds are officers and directors of the investment adviser,
FIMCO, the underwriter, First Investors Corporation ("FIC"), the transfer agent,
Administrative Data Management Corp. ("ADM") and/or First Financial Savings
Bank, S.L.A. ("FFS"), custodian of the Cash Management Fund's Individual
Retirement Accounts.

<PAGE>

NOTES TO FINANCIAL STATEMENTS
FIRST INVESTORS CASH MANAGEMENT FUND, INC.
FIRST INVESTORS TAX-EXEMPT MONEY MARKET FUND, INC.

Officers and directors of the Funds received no remuneration from the Funds for
serving in such capacities. Their remuneration (together with certain other

<PAGE>

expenses of the Funds) is paid by FIMCO or FIC.

The Investment Advisory Agreements provide as compensation to FIMCO an annual
fee, payable monthly, at the rate of 1/2 of 1% of each Fund's average daily net
assets. For the year ended December 31, 1995, the investment adviser voluntarily
reduced this fee by $354,517 for the Cash Management Fund and by $52,465 for the
Tax-Exempt Money Market Fund.

Pursuant to certain state regulations, FIMCO has agreed to reimburse each Fund
if and to the extent that the Fund's aggregate operating expenses, including the
advisory fee but generally excluding interest, taxes, brokerage commissions and
extraordinary expenses, exceed any limitation on expenses applicable to the Fund
in those states (unless waivers of such limitations have been obtained). The
amount of any such reimbursement is limited to the yearly advisory fee. For the
year ended December 31, 1995, no reimbursement was required pursuant to these
provisions.

For the year ended December 31, 1995, shareholder servicing costs of the Cash
Management Fund included transfer agent fees and out of pocket expenses accrued
to ADM of $372,756 (net of $230,095 waived) and $24,393 in custodian fees paid
to FFS. The Tax-Exempt Money Market Fund's shareholder servicing costs included
transfer agent fees and out of pocket expenses accrued to ADM in the amount of
$54,323 (net of $32,277 waived).

The Tax-Exempt Money Market Fund has adopted a Distribution Plan under Rule 12b-
1 of the 1940 Act, under which fees may be paid to Administrators for
distribution and administrative services. Payments are made by the underwriter
in its sole discretion, and no Administrator will receive more than .25% of the
funds represented by shares owned by its clients.

<PAGE>

INDEPENDENT AUDITOR'S REPORT

To the Shareholders and Board of Directors of
First Investors Cash Management Fund, Inc. and
First Investors Tax-Exempt Money Market Fund, Inc.

We have audited the accompanying statement of assets and liabilities of First
Investors Cash Management Fund, Inc. and First Investors Tax-Exempt Money Market
Fund, Inc. including the portfolios of investments, as of December 31, 1995, and
the related statement of operations for the year then ended, the statement of
changes in net assets for each of the two years in the period then ended and
financial highlights for each of the periods presented. These financial
statements and financial highlights are the responsibility of the Funds'
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1995, by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by

<PAGE>

management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of First
Investors Cash Management Fund, Inc. and First Investors Tax-Exempt Money Market
Fund, Inc. at December 31, 1995, and the results of their operations, changes in
their net assets and financial highlights for each of the respective periods
presented, in conformity with generally accepted accounting principles.

TAIT, WELLER & BAKER
Philadelphia, Pennsylvania
January 31, 1996

<PAGE>

PART C

OTHER INFORMATION

Item 24. Financial Statements and Exhibits

(a) Financial Statements:

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

(b) Exhibits:

(1)a. Articles of Restatement

b. Articles Supplementary

c. Certificate of Correction

(2) Amended and Restated By-laws

(3) Not Applicable

(4)1 Specimen Certificate

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

(6) Underwriting Agreement between Registrant and
First Investors Corporation

(7) Not Applicable

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

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

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

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

(10)3 Opinion of Counsel

<PAGE>

(11)a. Consent of independent accountants

b. Powers of Attorney

(12) Not Applicable

(13)2 Undertaking of the Co-Underwriters

(14) Not Applicable

(15)a. Amended and Restated Class A Distribution Plan

b. Class B Distribution Plan

(16) Not Applicable

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

(18) 18f-3 Plan

- --------------------
1 Incorporated by reference from Registrant's Registration Statement
(File No. 2-82572)
2 Incorporated by reference from Pre-Effective Amendment No. 1 to
Registrant's Registration Statement (File No. 2-82572)
3 Incorporated by reference from Registrant's Rule 24f-2 Notice for
its fiscal year ending December 31, 1995 filed on February 27,
1996.

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

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

Item 26. Number of Holders of Securities

Number of
Record Holders as of
Title of Class February 8, 1996

Class A Shares 2,836
Class B Shares 1

Item 27. Indemnification

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

<PAGE>

follows:

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

The Registrant's Investment Advisory Agreement provides as
follows:

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

<PAGE>

in any business of the Company, to be rendering such services to or acting
solely for the Company and not as an officer, partner, employee, or agent or one
under the control or direction of the Manager even though paid by it.

The Registrant's Underwriting Agreement provides as follows:

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

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

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

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

Item 28. Business and Other Connections of Investment Adviser

<PAGE>

First Investors Management Company, Inc., the Registrant's
Investment Adviser, also serves as Investment Adviser to:
First Investors Cash Management Fund, Inc.
First Investors Series Fund
First Investors Fund For Income, Inc.
First Investors Government Fund, Inc.
First Investors High Yield Fund, Inc.
First Investors Global Fund, Inc.
First Investors Life Series Fund
First Investors Multi-State Insured Tax Free Fund
First Investors New York Insured Tax Free Fund, Inc.
First Investors Special Bond Fund, Inc.
First Investors Insured Tax Exempt Fund, Inc.
First Investors U.S. Government Plus Fund
First Investors Series Fund II, Inc.

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

Item 29. Principal Underwriters

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

First Investors Cash Management Fund, Inc.
First Investors Series Fund
First Investors Fund For Income, Inc.
First Investors Government Fund, Inc.
First Investors High Yield Fund, Inc.
First Investors Global Fund, Inc.
First Investors Multi-State Insured Tax Free Fund
First Investors New York Insured Tax Free Fund, Inc.
First Investors Insured Tax Exempt Fund, Inc.
First Investors U.S. Government Plus Fund
First Investors Series Fund II, Inc.

(b) The following persons are the officers and directors of the
Underwriter:
<TABLE>
<CAPTION>

Position and Position and
Name and Principal Office with First Office with
Business Address Investors Corporation Registrant
<S> <C> <C>

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

<PAGE>

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

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

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

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

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

Robert Murphy Comptroller None
581 Main Street
Woodbridge, NJ 07095

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

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

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

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

Howard M. Factor Vice President None
95 Wall Street
New York, NY 10005

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

<PAGE>

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

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

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

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

Jane W. Kruzan Director None
15 Norwood Avenue
Summit, NJ 07901

</TABLE>

Item 30. Location of Accounts and Records

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

Item 31. Management Services

Inapplicable

Item 32. Undertakings

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

Insofar as indemnification for liability arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the provisions under

<PAGE>

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

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

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant represents that this Amendment
meets all the requirements for effectiveness pursuant to Rule 485(b) under the
Securities Act of 1933, and has duly caused this Post-Effective Amendment to
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York, State of New York, on the
17th day of April, 1996.

FIRST INVESTORS TAX-EXEMPT MONEY
MARKET FUND, INC.
(Registrant)

By:/s/Glenn O. Head
Glenn O. Head
President and Director

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

/s/Glenn O. Head Principal Executive April 17, 1996
- --------------------- Officer and Director
Glenn O. Head

/s/Joseph I. Benedek Principal Financial April 17, 1996
- --------------------- and Accounting Officer
Joseph I. Benedek

* Director April 17, 1996
- ---------------------
Kathryn S. Head

* Director April 17, 1996
- ---------------------
James J. Coy

* Director April 17, 1996
- ---------------------
Roger L. Grayson

<PAGE>

* Director April 17, 1996
- ----------------------
Herbert Rubinstein

* Director April 17, 1996
- ---------------------
James M. Srygley

* Director April 17, 1996
- ---------------------
John T. Sullivan

* Director April 17, 1996
- ---------------------
Rex R. Reed

* Director April 17, 1996
- ---------------------
Robert F. Wentworth

</TABLE>

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

<PAGE>

INDEX TO EXHIBITS

Exhibit
Number Description

99.B1.1 Articles of Restatement
99.B1.2 Articles Supplementary
99.B1.3 Certificate of Correction
99.B2 Amended and Restated By-laws
99.B5 Advisory Agreement
99.B6 Underwriting Agreement
99.B8.1 Custodian Agreement
99.B8.2 Supplement to Custodian Agreement
99.B8.3 Payment and Redemption Agency Agreement
99.B9 Administration Agreement
99.B11.1 Consent of accountants
99.B11.2 Powers of Attorney
99.B15.1 Class A Distribution Plan
99.B15.2 Class B Distribution Plan
99.B18 18f-3 Plan
27.001 FDS-Class A Shares
27.002 FDS-Class B Shares

<PAGE>

ARTICLES OF RESTATEMENT

FIRST INVESTORS TAX-EXEMPT MONEY MARKET FUND, INC.

To the State Department
of Assessments and Taxation
State of Maryland

Pursuant to the provisions of Section 2-608 of the Maryland General
Corporation Law, First Investors Tax-Exempt Money Market Fund, Inc. (the
"corporation"), a Maryland corporation having its principal office in Baltimore
City, hereby certifies that:
FIRST: The corporation desires to restate its charter as currently
in effect.
SECOND: The provisions hereinafter set forth in the Articles of
Restatement are all the provisions of the charter of the corporation as
currently in effect.
THIRD: The restatement of the charter of the corporation has been
approved by a majority of the entire Board of Directors of the
corporation.
FOURTH: The charter of the corporation is not amended by these
Articles of Restatement.
FIFTH: The current address of the principal office of the
corporation in the State of Maryland is c/o The Prentice-Hall
Corporation System, Maryland, 11 East Chase Street, Baltimore, Maryland
21202.

<PAGE>

SIXTH: The name and the address of the current resident agent of
the corporation in the State of Maryland are The Prentice-Hall
Corporation System, Maryland, 11 East Chase Street, Baltimore, Maryland
21202.
SEVENTH: The number of directors of the corporation is nine, and
the names of the directors of the corporation currently in office are
Glenn O. Head, James J. Coy, Roger L. Grayson, Kathryn S. Head,
F. William Ortman, Jr., Rex R. Reed, Herbert Rubinstein, John T.
Sullivan and Robert F. Wentworth.

ARTICLES OF RESTATEMENT

FIRST INVESTORS TAX-EXEMPT MONEY MARKET FUND, INC.

SECOND: The name of the corporation is
FIRST INVESTORS TAX-EXEMPT
MONEY MARKET FUND, INC.
(hereinafter called the "Corporation").

THIRD: The purposes for which the Corporation is formed and the
business to be carried on and promoted by it are as follows:

To engage generally in the business of an incorporated
investment company of the management type, investing and reinvesting its assets
in all forms of securities and other personal and real property, of every kind
and description, all as more specifically set forth herein, subject to the
provisions of these Articles of Incorporation and the By-Laws of the
Corporation; to consolidate or merge with, to acquire and take over the assets
of, and to assume the liabilities of, any other corporation or trust with
similar powers, to make contracts, and, generally, to do any or all acts and
things necessary or desirable in furtherance of any of the corporate purposes or
designed to protect, preserve, or enhance the value of the corporate assets, or
to the extent permitted to business corporations authorized under the laws of
the State of Maryland as now or may in the future be enforced; and to do any or
all of the things in furtherance of the above purposes as natural persons might
do.

To subscribe for, receive, purchase and otherwise acquire,
own, hold, sell, exchange, transfer, mortgage, pledge, hypothecate and otherwise
dispose of, and generally deal in and with all or any of the following
(hereinafter sometimes referred to collectively as

<PAGE>

"securities" or individually as "security") namely: All kinds of shares, stocks,
bonds, debtentures, mortgages, trust receipts, certificates of deposit, bankers
acceptances, commercial paper, notes and other securities, obligations,
contracts, certificates of interest, debentures, choses in action and evidences
of indebtedness generally of any corporation, association, partnership,
syndicate, entity, person, or governmental, municipal or public authority,
domestic or foreign, and evidence of any interest therein or in respect thereto,
subject to such restrictions as may be set forth from time to time in the
By-Laws of the Corporation; to acquire or become interested in any such
securities by original subscription, underwriting, participation in syndicates
or otherwise and while the owner or holder of any such securities to exercise
all the rights, powers and privileges of ownership or interest in respect
thereof.

To purchase, acquire, hold, exchange, sell, deal in and
dispose of, alone or in syndicates or otherwise in conjunction with others,
commodities and other personal property of every kind, character and description
whatsoever and wheresoever situated, and any interest therein.

To conduct researches, investigations, enterprises, and
otherwise transactions in all kinds of business relating to the gathering,
publishing and distribution of financial and investment information and
statistics or such business as may be carried on in connection therewith
throughout the world.

To enter into, make and perform contracts of every lawful
kind, without limitation as to amount, except as expressly provided to the
contrary in the By-Laws, with any person, firm, association, partnership,
corporation or entity including but not by way of limitation, agreements for the
disposition or acquisition of the corporate stock of the Corporation, agreements
for the management, supervision and overseeing of its assets or activities, and
the rendering of services with reference thereto, agreements for the holding or
custody of its assets, the acquisition and disposition of its securities,
agreements for the conduct of administrative, accounting or other activities,
and agreements relating to borrowing or repayment of money.

The foregoing statements of objects and purposes except as
otherwise expressly provided shall not be held to limit or restrict in any
manner the powers of the Corporation, and are in furtherance of, and in addition
to, and not in limitation of, the general powers conferred upon the Corporation
by the laws of the State of Maryland or otherwise.

FOURTH: The post office address of the principal office of the
Corporation in this State is c/o The Prentice-Hall Corporation System, Maryland,
11 East Chase Street, Baltimore, Maryland 21202. The name of the resident agent
of the Corporation in this State is The Prentice-Hall Corporation System,
Maryland, a corporation of the State of Maryland, and the post office address of
the resident agent is 11 East Chase Street, Baltimore, Maryland 21202.

<PAGE>

FIFTH: Section 5.1. The total number of shares of all classes
of stock which the Corporation shall have authority to issue is one billion
(1,000,000,000) shares of capital stock of the par value of one cent ($0.01)
each, having an aggregate par value of $10,000,000. The Shares may be issued by
the Board of Directors in such separate and distinct series ("Series") and
classes of series ("Classes") as the Board of Directors shall from time to time
create and establish. The Board of Directors shall have full power and
authority, in its sole discretion, to create and establish Shares of said Series
and Classes having such preferences, rights, voting power, restrictions,
limitations as to dividends, qualifications, and terms and conditions of
redemption as shall be fixed and determined from time to time by resolution or
resolutions providing for the issuance of such Shares adopted by the Board of
Directors. In the event of establishment of Classes, each Class of a Series
shall represent interests in the assets of that Series and have identical
voting, dividend, liquidation and other rights and the same terms and conditions
as any other Class of that Series, except as provided in these Articles of
Incorporation, and except that expenses allocated to the Class of a Series may
be borne solely by such Class as shall be determined by the Board of Directors
and a Class of a Series may have exclusive voting rights with respect to matters
affecting only that Class. Expenses related to the distribution of, and other
identified expenses that should properly be allocated to, the Shares of a
particular Class or Series may be charged to and borne solely by such Class or
Series and the bearing of expenses solely by a Class or Series may be
appropriately reflected (in a manner determined by the Board of Directors) and
cause differences in the net asset value attributable to, and the dividend,
redemption and liquidation rights of, the Shares of each Class or Series. In
addition, the Board of Directors is hereby expressly granted authority to
increase or decrease the number of Shares of any Series or Class, but the number
of Shares of any Series or Class shall not be decreased by the Board of
Directors below the number of Shares thereof then outstanding.

The Board of Directors is authorized, from time to time, to classify or
to reclassify, as the case may be, any unissued Shares of the Corporation in
separate Series or Classes. The Shares of said Series and Classes of stock shall
have such preferences, rights, voting powers, restrictions, limitations as to
dividends, qualifications and terms and conditions of redemption as shall be
fixed and determined from time to time by the Board of Directors. The
Corporation may hold as treasury shares, reissue for such consideration and on
such terms as the Board of Directors may determine, or cancel, at its discretion
from time to time, any Shares reacquired by the Corporation. No holder of any of
the Shares shall be entitled as of right to subscribe for, purchase, or
otherwise acquire any Shares of the Corporation that the Corporation proposes to
issue or reissue.

The Corporation shall have authority to issue any additional shares
hereafter authorized and any Shares redeemed or repurchased by the Corporation.
All Shares of any Series or Class when properly issued in accordance with these
Articles of Incorporation shall be fully paid and nonassessable.

<PAGE>

Section 5.2. The establishment of any Series or Class, in addition to
those established in Section 5.1 hereof, shall be effective upon the adoption of
a resolution by a majority of the then Directors setting forth such
establishment and designation and the relative rights and preferences of the
Shares of such Series or Class. At any time that there are no Shares outstanding
of any particular Series or Class previously established and designated, the
Directors may by a majority vote abolish that Series or Class and the
establishment and designation thereof.

Section 5.3. Dividends and distributions on Shares with respect to each
Series or Class may be declared and paid with such frequency, in such form and
in such amount as the Board of Directors may from time to time determine.
Dividends may be declared daily or otherwise pursuant to a standing resolution
or resolutions adopted only once or with such frequency as the Board of
Directors may determine.

All dividends and distributions on Shares of each Series shall be
distributed pro rata to the holders of that Series in proportion to the number
of Shares of that Series held by such holders at the date and time of record
established for the payment of such dividends or distributions, except that such
dividends and distributions shall appropriately reflect expenses allocated to a
particular Class of such Series.

The Board of Directors shall have the power, in its sole discretion, to
distribute in any fiscal year as dividends (including dividends designated in
whole or in part as capital gain distributions) amounts sufficient, in the
opinion of the Board of Directors, to enable the Corporation, or where
applicable each Series of the Corporation, to qualify as a regulated investment
company under the Internal Revenue Code of 1986, as amended, or any successor or
comparable statute thereto, and regulations promulgated thereunder, and to avoid
liability of income tax in respect of that year. However, nothing in the
foregoing shall limit the authority of the Board of Directors to make
distributions greater than or less than the amount necessary to qualify as a
regulated investment company and to avoid liability of the Corporation, or any
Series of the Corporation, for such tax.

Dividends and distributions may be paid in cash, property or Shares, or
a combination thereof, as determined by the Board of Directors or pursuant to
any program that the Board of Directors may have in effect at the time. Any such
dividend or distribution paid in Shares will be paid at the current net asset
value thereof as defined in Section 5.7.

Section 5.4. All consideration received by the Corporation for the
issue or sale of Shares of a particular Series, together with all assets in
which such consideration is invested or reinvested, all income, earnings,
profits, and proceeds thereof, including any proceeds derived from the sale,
exchange or liquidation of such assets, and any funds or payments derived from
any reinvestment of such proceeds in whatever form the same may be, shall be
referred to as "assets belonging to" that Series. In addition, any assets,
income, earnings, profits,

<PAGE>

and proceeds thereof, funds, or payments or any general liabilities, expenses,
costs, charges or reserves which are not readily identifiable as belonging to or
chargeable to any particular Series, shall be allocated by the Board of
Directors between and among any one or more of the Series in such manner as the
Board of Directors, in its sole discretion, deems fair and equitable. Each such
allocation shall be conclusive and binding upon the stockholders of all Series
for all purposes, and shall be referred to as assets belonging to that Series.
The assets belonging to a particular Series shall be so recorded upon the books
of the Corporation.

Section 5.5. On each matter submitted to a vote of the stockholders,
each holder of a Share shall be entitled to one vote for each Share and
fractional votes for fractional Shares standing in his name on the books of the
Corporation; provided, however, that when required by the Investment Company Act
of 1940, as amended ("1940 Act"), or rules thereunder or when the Board of
Directors has determined that the matter affects only the interests of one
Series or Class, matters may be submitted to a vote of the stockholders of a
particular Series or Class, and each holder of Shares thereof shall be entitled
to votes equal to the number of full and fractional Shares of the Series or
Class standing in his name on the books of the Corporation. The presence in
person or by proxy of the holders of one-third of the Shares of capital stock of
the Corporation outstanding and entitled to vote thereat shall constitute a
quorum for the transaction of business at a stockholders' meeting, except that
where any provision of law or of these Articles of Incorporation permit or
require that holders of any Series or Class shall vote as a Series or Class,
then one-third of the aggregate number of Shares of capital stock of that Series
or Class outstanding and entitled to vote shall constitute a quorum for the
transaction of business by that Series or Class.

Section 5.6. Each holder of Shares shall have the right at such times
as may be permitted by the Corporation to require the Corporation to redeem all
or any part of his Shares at a redemption price per Share equal to the net asset
value per Share as of such time as the Board of Directors shall have prescribed
by resolution. In the absence of such resolution, the redemption price per Share
shall be the net asset value next determined (in accordance with Section 5.7)
after receipt by the Corporation of a request for redemption in proper form less
such charges as are determined by the Board of Directors and described in the
Corporation's registration statement under the Securities Act of 1933, as
amended. The Board of Directors may specify conditions, prices, and places of
redemption, and may specify binding requirements for the proper form or forms of
requests for redemption. Payment of the redemption price may be wholly or partly
in securities or other assets at the value of such securities or assets used in
such determination of net asset value, or may be in cash. Notwithstanding the
foregoing, the Board of Directors may postpone payment of the redemption price
and may suspend the rights of the holders of Shares to require the Corporation
to redeem Shares during any period or at any time when and to the extent
permissible under the 1940 Act. The Corporation reserves the right, upon 60
days' notice, to reduce the redemption price in certain circumstances by an
amount not in excess of 1% of net asset value of the

<PAGE>

shares to be redeemed.

Section 5.7. The net asset value of each Share of the Corporation, or
each Series or Class, shall be the quotient obtained by dividing the value of
the net assets of the Corporation, or if applicable of the Series (being the
value of the assets of the Corporation or of the particular Series less its
actual and accrued liabilities exclusive of capital stock and surplus), by the
total number of Shares of the Corporation, or of the Series. Such determination
may be made on a Series-by-Series basis or made or adjusted on a Class-by- Class
basis, as appropriate, and shall include any expenses allocated to a specific
Series or Class thereof. The Board of Directors shall have the power and duty to
determine the net asset value per Share at such times and by such methods as it
shall determine subject to any restrictions or requirements under the 1940 Act
and the rules, regulations and interpretations thereof promulgated or issued by
the Securities and Exchange Commission applicable to the Corporation. The Board
of Directors may delegate such power and duty to any one or more of the
directors and officers of the Corporation, to the Corporation's investment
adviser, to the custodian or depository of the Corporation's assets, or to
another agent of the Corporation.

Section 5.8. The Board of Directors may cause the Corporation to redeem
at current net asset value all Shares owned or held by any one stockholder
having an aggregate current net asset value of such amount as set by the Board
of Directors in accordance with applicable state laws. No such redemption shall
be effected unless the Corporation has given the stockholder at least sixty (60)
days' notice of its intention to redeem the Shares and an opportunity to
purchase a sufficient number of additional Shares to bring the aggregate current
net asset value of his Shares to such amount as set by the Board of Directors.
Upon redemption of Shares pursuant to this Section, the Corporation shall
promptly cause payment of the full redemption price, in any permissible form, to
be made to the holder of Shares so redeemed. The Board of Directors may by a
majority vote establish from time to time amounts less than the current amount
at which the Corporation will redeem Shares pursuant to this Section.

SIXTH: The number of directors of the Corporation shall be
nine (9), which number may be increased or decreased as may be provided by the
By-Laws, but in no case shall the number be less than three (3) or more than
fifteen (15). The names of the directors who shall act until their successors
are duly chosen and qualified are:

Herbert Rubinstein
James J. Coy
Roger L. Grayson
Glenn O. Head
F. William Ortman, Jr.
John T. Sullivan
Robert F. Wentworth
Kathryn S. Head
Rex R. Reed

<PAGE>

SEVENTH: In furtherance and not in limitation of the powers conferred
by statute, the Board of Directors is expressly authorized:

To make, alter or repeal the By-Laws of the Corporation,
except as therein provided.

To set apart out of any of the funds of the Corporation
available for dividends a reserve or reserves for any proper purpose and to
abolish any such reserves in the manner in which it was created. Such reserve or
reserves may be invested and reinvested by the Board of Directors in the same
way and subject to the same restrictions as are provided for the investment and
reinvestment of the capital of the Corporation. When and only when the Board of
Directors shall decide that it is advisable or necessary to pay dividends out of
the reserve, shall such funds be subject to the payment of dividends.

To specify by the By-Laws the number of directors constituting
the whole Board of Directors, which number shall not be less than three (3) and
which may be increased or decreased as provided in the By-Laws and if there be a
vacancy on the Board of Directors by reason of death, resignation or otherwise
to fill such vacancy for the unexpired term by a majority vote of the remaining
directors; and to fill a vacancy created by an increase in the number of
directors by a majority vote of the entire Board of Directors. A director
elected by the Board of Directors to fill a vacancy shall be elected to hold
office until the next annual meeting of stockholders or until his successor is
elected and qualifies. Notwithstanding the foregoing, any such election by the
Board of Directors is subject to the restrictions relating thereto set forth in
the By-Laws.

To designate one or more committees, each committee to consist
of two or more of the directors of the Corporation, which to the extent provided
in the Resolution or Resolutions of the Board of Directors or in the By-Laws of
the Corporation, shall have and may exercise the powers of the Board of
Directors in the management of the business and affairs of the Corporation,
except the power to declare dividends, to issue stock or to recommend to
stockholders any action requiring stockholder's approval, and have the power to
authorize the seal of the Corporation to be affixed to all papers which may
require it.

Subject to all applicable provisions of the By-Laws, and of
the 1940 Act and the rules and regulations thereunder, to authorize the
Corporation to enter into a written agreement with any person, firm or
corporation to act as manager, investment adviser, underwriter, distributor,
fiscal agent, transfer agent, dividend disbursing agent, depository or custodian
of the Corporation.

From time to time to offer for subscription or otherwise issue
or sell, for such consideration as the Board of Directors may determine and
which may be permitted by law at any time of such subscription, any or all of
the authorized stock of the Corporation not then issued and reacquired by the
Corporation and any or all of any increased stock that may hereafter be
authorized.

<PAGE>

When and as authorized by the affirmative vote of the holders
of a majority of the stock issued and outstanding given at a stockholders'
meeting duly called for that purpose or when authorized by the written consent
of the holders of a majority of the stock issued and outstanding, to sell, lease
or exchange all of the property and assets of the Corporation including its
goodwill and its corporate franchise upon such terms and conditions and for such
consideration which may be in whole or in part shares of stock in and/or other
securities of any other corporations, as the Board of Directors shall deem
expedient and for the best interest of the Corporation.

EIGHTH: The holders of the capital stock of this Corporation
shall have no preemptive or preferential rights to subscribe for, purchase or
receive any part of any new or additional issues of any stock or any bonds or
other obligations of the Corporation convertible into stock whether now or
hereafter authorized. The Board of Directors of the Corporation may in its
discretion from time to time grant rights to stockholders to subscribe to or
purchase additional shares or bonds of the Corporation. Stockholders shall have
no right to cumulative voting.

NINTH: The Corporation is to have perpetual existence.

TENTH: The Corporation reserves the right to amend, alter,
change or repeal any provisions contained in these Articles of Incorporation
when and as authorized by the affirmative vote of the holders of a majority of
the stock issued and outstanding given at a stockeholders' meeting duly called
for that purpose or when authorized by the written consent of the holders of a
majority of the stock issued and outstanding and otherwise in the manner now or
hereafter prescribed by statute and all rights conferred upon stockholders
herein are granted subject to this reservation.

IN WITNESS WHEREOF, First Investors Tax-Exempt Money Market Fund, Inc.,
has caused these presents to be signed in its name and on its behalf by its Vice
President and attested by its Assistant Secretary on September 14, 1994.

FIRST INVESTORS TAX-EXEMPT
MONEY MARKET FUND, INC.

ATTEST:
/s/C. Durso
Concetta Durso, Vice President

/s/Carol R. Lerner
Carol R. Lerner,
Assistant Secretary

<PAGE>

STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )

I HEREBY CERTIFY that on the 14th day of September, 1994,
before me the subscriber, a Notary Public of the State of New York, personally
appeared CONCETTA DURSO, Vice President of First Investors Tax-Exempt Money
Market Fund, Inc., a Maryland corporation, and in the name and on behalf of said
corporation acknowledged the foregoing Articles of Restatement to be the
corporate act of said corporation and further made oath in due form of law that
the matters and facts set forth in the said Articles of Restatement with respect
to the approval thereof are true to the best of his knowledge, information and
belief.

WITNESS, my hand and notarial seal, the day and year above written.

/s/Dale Kaplan
Notary Public

(SEAL) Dale Kaplan
Notary Public, State of New York
No. 31-4504204
Qualified in New York County
Commission Expires August 31, 1995

<PAGE>

ARTICLES SUPPLEMENTARY
TO
ARTICLES OF INCORPORATION
OF
FIRST INVESTORS TAX-EXEMPT MONEY MARKET FUND, INC.

First Investors Tax-Exempt Money Market Fund, Inc.
("Company"), a Maryland corporation, having its principal office in Baltimore,
Maryland, organized on March 11, 1983 hereby certifies to the State Department
of Assessments and Taxation of Maryland that:

FIRST: The Company is authorized to issue five billion
(5,000,000,000) shares of capital stock in such separate and distinct classes or
series of shares as shall be determined from time to time by the Board of
Directors of the Company. The Company presently offers one series of shares.

SECOND: By action of the Board of Directors of the Company in
accordance with the Company's charter, two billion five hundred million
(2,500,000,000) shares of capital stock of the Company, including all currently
issued and outstanding shares of capital stock of the Company, are hereby
classified as Class A capital stock of the Company.

SECOND: By action of the Board of Directors of the Company in
accordance with the Company's charter, two billion five hundred million
(2,500,000,000) shares of capital stock that the Company is authorized to issue
are hereby classified as Class B capital stock of the Company.

THIRD: The Class A capital stock and Class B capital stock of
the Company represents interests in the same investment portfolio of the
Company. All shares of each particular class of the Company shall represent an
equal proportionate interest in that class and each share of any particular
class of the Company shall be equal to each other share of that class. Class A
shares and Class B shares of the Company shall be subject to all provisions of
Article V in the Company's Articles of Incorporation relating to stock of the
Company generally and shall have the same preferences, conversion and other
rights, voting powers, restrictions, limitations as to dividends,
qualifications, and terms and conditions of redemption, except as follows:

(1) The Class B capital stock of the Company may convert into
Class A capital stock of the Company in the manner as determined by the Board of
Directors;

- 1 -

<PAGE>

(2) Each class of the Company shall have separate exchange
privileges as determined by the Board of Directors from time to time;

(3) The Class B capital stock of the Company shall be subject
to a contingent deferred sales charge and a Rule 12b-1 service and distribution
fee as determined by the Board of Directors from time to time; and

(4) Unless otherwise expressly provided in the Articles of
Incorporation, including any Articles Supplementary creating any class or series
of capital stock, on each matter submitted to a vote of stockholders of the
Company, each holder of a share of capital stock of the Company shall be
entitled to one vote for each share standing in such holders's name on the books
of the Company, irrespective of the class or series thereof, and all shares of
all classes and series shall vote together as a single class; provided, however,
that

(a) as to any matter with respect to which a separate vote of
any class or series is required by the Investment Company Act of 1940, as
amended ("1940 Act"), or any rules, regulations or orders issued thereunder, or
by the Maryland General Corporation Law, such requirement as to a separate vote
by that class or series shall apply in lieu of a general vote of all classes and
series as described above; and

(b) as to any matter which in the judgment of the Board of
Directors (which shall be conclusive) does not affect the interest of a
particular class or series, such class or series shall not be entitled to any
vote and only the holders of shares of the one or more affected classes and
series shall be entitled to vote.

FIFTH: The Company is registered with the Securities and
Exchange Commission as an open-end investment company under the 1940 Act.

-2-

<PAGE>

IN WITNESS WHEREOF, First Investors Tax-Exempt Money Market
Fund, Inc., has caused these presents to be signed in its name and on its behalf
by its Vice President and attested by its Assistant Secretary on October 20,
1994.

FIRST INVESTORS TAX-EXEMPT
MONEY MARKET FUND, INC.

ATTEST:
/s/C. Durso
Concetta Durso, Vice President

/s/Carol R. Lerner
Carol R. Lerner,
Assistant Secretary

STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )

I HEREBY CERTIFY that on the 20th day of October, 1994, before
me the subscriber, a Notary Public of the State of New York, personally appeared
CONCETTA DURSO, Vice President of First Investors Tax-Exempt Money Market Fund,
Inc., a Maryland corporation, and in the name and on behalf of said corporation
acknowledged the foregoing Articles Supplementary to be the corporate act of
said corporation and further made oath in due form of law that the matters and
facts set forth in the said Articles Supplementary with respect to the approval
thereof are true to the best of his knowledge, information and belief.

WITNESS, my hand and notarial seal, the day and year above written.

/s/Dale Kaplan
Notary Public
(SEAL) Dale Kaplan,
Notary Public, State of New York
No. 31-4504204
Qualified in New York County
Commission Expires August 31, 1995

- 3 -

<PAGE>

FIRST INVESTORS TAX-EXEMPT MONEY MARKET FUND, INC.

CERTIFICATE OF CORRECTION

ARTICLES SUPPLEMENTARY

First Investors Tax-Exempt Money Market Fund, Inc., a Maryland
corporation having its principal office in Baltimore, Maryland (hereinafter
called the "corporation"), hereby certifies to the State Department of
Assessments and Taxation of Maryland that:

FIRST: On October 21, 1994, the corporation filed Articles
Supplementary to its charter ("Articles Supplementary") with the Maryland
Department of Assessments and Taxation.

SECOND: The first sentence of Paragraph SECOND of the Articles
Supplementary reads as follows:

"The Company is authorized to issue five billion
(5,000,000,000) shares of capital stock in such separate and distinct classes or
series of shares as shall be determined from time to time by the Board of
Directors of the Company."

THIRD: Paragraph SECOND of the Articles Supplementary is
hereby corrected by striking out the first sentence of said Paragraph SECOND and
inserting in lieu thereof the following:

"The Company is authorized to issue one billion
(1,000,000,000) shares of capital stock in such separate and distinct classes or
series of shares as shall be determined from time to time by the Board of
Directors of the Company."

- 1 -

<PAGE>

FOURTH: Paragraph SECOND of the Articles Supplementary reads
as follows:

"SECOND: By action of the Board of Directors of the Company in
accordance with the Company's charter, two billion five hundred million
(2,500,000,000) shares of capital stock of the Company, including all currently
issued and outstanding shares of capital stock of the Company, are hereby
classified as Class A capital stock of the Company."

FIFTH: Paragraph SECOND of the Articles Supplementary is
hereby corrected by striking out said Paragraph SECOND in its entirety and
inserting in lieu thereof the following:

"SECOND: By action of the Board of Directors of the Company in
accordance with the Company's charter, five hundred million (500,000,000) shares
of capital stock of the Company, including all currently issued and outstanding
shares of capital stock of the Company, are hereby classified as Class A capital
stock of the Company."

SIXTH: The second Paragraph SECOND of the Articles
Supplementary reads as follows:

"SECOND: By action of the Board of Directors of the Company in
accordance with the Company's charter, two billion five hundred million
(2,500,000,000) shares of capital stock that the Company is authorized to issue
are hereby classified as Class B capital stock of the Company."

- 2 -

<PAGE>

SEVENTH: The second Paragraph SECOND of the Articles
Supplementary is hereby corrected by striking out said Paragraph SECOND in it
entirety and inserting in lieu thereof the following:

"THIRD: By action of the Board of Directors of the Company in
accordance with the Company's charter, five hundred million (500,000,000) shares
of capital stock that the Company is authorized to issue are hereby classified
as Class B capital stock of the Company."

EIGHTH: Paragraph THIRD of the Articles Supplementary is
hereby corrected by striking out "THIRD:" and inserting in lieu thereof
"FOURTH:"

IN WITNESS WHEREOF, First Investors Tax-Exempt Money Market
Fund, Inc. has caused these presents to be signed in its name and on its behalf
by its Vice President and attested by its Assistant Secretary on November 15,
1994.

FIRST INVESTORS TAX-EXEMPT MONEY
MARKET FUND, INC.

ATTEST:
/s/C. Durso
Concetta Durso, Vice President

/s/Carol R. Lerner
Carol R. Lerner,
Assistant Secretary

- 3 -

<PAGE>

STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )

I HEREBY CERTIFY that on the 15th day of November, 1994,
before me the subscriber, a Notary Public of the State of New York, personally
appeared CONCETTA DURSO, Vice President of First Investors Tax-Exempt Money
Market Fund, Inc., a Maryland corporation, and in the name and on behalf of said
corporation acknowledged the foregoing Certificate of Correction to Articles
Supplementary to be the corporate act of said corporation and further made oath
in due form of law that the matters and facts set forth in the said Articles
Supplementary with respect to the approval thereof are true to the best of his
knowledge, information and belief.

WITNESS, my hand and notarial seal, the day and year above written.

/s/Dale Kaplan
Notary Public

(SEAL)

- 4 -

<PAGE>

AMENDED AND RESTATED BY-LAWS

FIRST INVESTORS TAX-EXEMPT MONEY MARKET FUND, INC.

*******

ARTICLE I

OFFICES

SECTION 1. The principal office of the Corporation shall be in the
City of Baltimore, State of Maryland. The Corporation may also have offices at
such other places both within and without the State of Maryland as the Board of
Directors may from time to time determine or the business of the Corporation may
require.
ARTICLE II
STOCKHOLDERS

SECTION 1. The annual meeting of stockholders shall be held on
such day during the month of April or on such other date and at such time and
place within or without the State of Maryland as may be fixed by the Board of
Directors for the purpose of electing directors and of transacting such other
business as may properly be brought before the meeting; provided, however, that
an annual meeting of stockholders shall not be required to be held in any year
in which none of the following is required, under the Investment Company Act

- 1 -

<PAGE>

of 1940, to be acted on by the stockholders: election of directors; approval of
the investment advisory agreement; ratification of independent public
accountants or approval of a distribution agreement.

SECTION 2. Special meetings of the stockholders for any purpose or
purposes may be called by the Board of Directors or by the President, and must
be called at the written request of stockholders owning not less than
twenty-five percent of the stock then outstanding and entitled to vote. Special
meetings of the stockholders for the purpose of voting on the removal of one or
more directors must be called at the written request of stockholders owning not
less than ten percent of the stock then outstanding and entitled to vote. Any
such meeting shall be held at such time and such place within or without the
State of Maryland as may be stated in the call and notice.

SECTION 3. Written or printed notice of every annual or
special meeting of stockholders, stating the time and place thereof and the
general nature of the business proposed to be transacted at any such meeting,
shall be delivered personally or mailed at least ten days previous thereto to
each stockholder of record entitled to vote at the meeting at his address as the
same appears on the books of the Corporation. Such further notice shall be given
as may be

- 2 -

<PAGE>

required by law. Meetings may be held without notice if all of the stockholders
entitled to vote are present or represented at the meeting, or if notice is
waived in writing, either before or after the meeting, by those not present or
represented at the meeting. No notice of an adjourned meeting of stockholders
other than an announcement of the time and place thereof at the preceding
meeting shall be required.

SECTION 4. At every meeting of stockholders the holders of record
of a majority of the outstanding shares of the stock of the Corporation entitled
to vote at the meeting, whether present in person or represented by proxy,
shall, except as otherwise provided by law, constitute a quorum. If at any
meeting there shall be no quorum, the holders of record, entitled to vote at the
meeting, of a majority of such shares so present or represented may adjourn the
meeting from time to time, without notice other than announcement at the
meeting, until a quorum shall have been obtained when any business may be
transacted which might have been transacted at the meeting as first convened had
there been a quorum.

SECTION 5. Each stockholder entitled to vote at any meeting
shall (except as otherwise provided in the Articles of Incorporation) have one
vote in person or by proxy for each share of stock held by him. No share shall
be entitled

- 3 -

<PAGE>

to vote if any installment payable thereon is overdue and unpaid. All elections
of directors shall be held and all questions, except as otherwise provided by
law or by the Articles of Incorporation or by these By-Laws shall be decided by
a majority of the votes cast by stockholders present or represented and entitled
to vote thereat in person or by proxy.

SECTION 6. Meetings of the stockholders shall be presided over by
the Chairman of the Board, if he is not present, by the President or a Vice
President or in their absence, by a Chairman to be chosen at the meeting. The
Secretary of the Corporation, or, if he is not present, an Assistant Secretary
of the Corporation or, if neither is present, a secretary to be chosen at the
meeting shall act as secretary of the meeting.

SECTION 7. The vote on the election of directors, and other
questions properly brought before any meeting, need not be by ballot except when
so demanded by a majority vote of the shares present in person or by proxy and
entitled to vote thereon, or when so ordered by the Chairman of such meeting.
The Chairman of each meeting at which directors are to be elected by ballot or
at which any question is to be voted on shall, at the request of any stockholder
present or represented by proxy at the meeting and entitled to vote at

- 4 -

<PAGE>

such election or on such question, appoint two inspectors of election. No
director or candidate for the office of director shall be appointed as such
inspector. Inspectors shall first take and subscribe an oath or affirmation
faithfully to execute the duties of inspector at such meeting with strict
impartiality and according to the best of their ability, and shall take charge
of the polls and after the balloting shall make a certificate of the result of
the vote taken.

SECTION 8. The Board of Directors may close the stock transfer
books of the Corporation for a period not exceeding twenty days preceding the
date of any meeting of stockholders, or the date for the payment of any dividend
or the date for the allotment of rights, or the date when any change or
conversion or exchange of stock shall go into effect; or in lieu of closing the
stock transfer books, the Board of Directors may fix in advance a date, not
exceeding ninety days and not less than ten days preceding the date of any
meeting of stockholders, and not exceeding forty days preceding the date for the
payment of any dividend or the date for the allotment of rights, or the date
when any change or conversion or exchange of stock shall go into effect, or a
date in connection with the obtaining of any consent, as a record date, for the
determination of the stockholders entitled to notice of, and to vote at

- 5 -

<PAGE>

any such meeting and at any adjournments thereof, or entitled to receive payment
of any such dividend, or to any such allotment of rights, or to exercise the
rights in respect of any such change, conversion or exchange of stock, or to
give consent and in such case such stockholders, and only such stockholders, as
shall be stockholders of record on the date so fixed, shall be entitled to such
notice of, and to vote at, such meeting and any adjournment thereof, or to
receive payment of such dividend, or to receive such allotment of rights, or to
exercise such rights, or to give such consent as the case may be,
notwithstanding any transfer of any stock on the books of the corporation after
any such record date fixed as aforesaid.

ARTICLE III
BOARD OF DIRECTORS

SECTION 1. The Board of Directors of the Corporation shall
consist of not less than three nor more than fifteen persons. The number of
directors (within the above limits) shall be determined by the Board of
Directors from time to time as it sees fit, by vote of a majority of the whole
Board. Each director shall hold office until such time as less than a majority
of the directors then holding office have been elected by the stockholders or
upon the occurrence of any of the conditions described under Section 16 of the

- 6 -

<PAGE>

Investment Company Act of 1940, as amended. At such time, a meeting of the
stockholders shall be called for the purpose of electing the Board of Directors
and the terms of office of the directors then in office shall terminate upon the
election and qualification of such Board of Directors. Directors need not be
stockholders. A majority of the whole Board, but in no event less than three,
shall constitute a quorum for the transaction of business, but if at any meeting
of the Board there shall be less than a quorum present, a majority of the
directors present may adjourn the meeting from time to time, until a quorum
shall have been obtained where any business may be transacted which might have
been transacted at the meeting as first convened had there been a quorum. No
notice of an adjourned meeting of the directors other than an announcement of
the time and place thereof at the preceding meeting shall be required. The acts
of the majority of the directors present at any meeting at which there is a
quorum, shall, except as otherwise provided by law, by the Articles of
Incorporation or by the By-Laws, be the acts of the Board.

SECTION 2. The Board of Directors, by a vote of a majority of the
whole Board, may elect directors to fill vacancies in the Board resulting from
an increase in the number of Directors or from any other cause. A director so
chosen shall hold office until the next meeting of

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<PAGE>

stockholders or their respective successors are elected and qualify, unless
sooner displaced pursuant to law or these By-Laws. The stockholders, at any
meeting called for the purpose, may, with or without cause, remove any director
by the affirmative vote of the holders of a majority of the votes entitled to be
cast and at any meeting called for that purpose, fill the vacancy in the Board
thus caused.

SECTION 3. Meetings of the Board of Directors shall be held at
such place, within or without the State of Maryland, as may from time to time be
fixed by resolution of the Board as may be specified in the call of any meeting.
Regular meetings of the Board of Directors shall be held at such times as may
from time to time be fixed by resolution of the Board, and special meetings may
be held at any time upon the call of a majority of the persons constituting the
Board of Directors or by the President or the Secretary, by oral, telephonic,
telegraphic or written notice, duly served on or sent or mailed to each director
at least twenty-four hours before the meeting. The notice of any special meeting
shall specify the purposes thereof. Notice need not be given of regular meetings
of the Board held at times fixed by resolution of the Board. Meetings may be
held at any time without notice if all of the directors are present or if notice
is waived in writing, either before or after the meeting of those not present.

- 8 -

<PAGE>

SECTION 4. Meetings of the Board of Directors shall be presided
over by the Chairman of the Board or the President, or if neither of the above
is present, by a Chairman to be chosen at the meeting; and the Secretary or, if
he is not present, an Assistant Secretary, or if neither is present, a Secretary
to be chosen at the meeting shall act as Secretary of the Meeting.

SECTION 5. Except as otherwise provided by law or in the Articles
of Incorporation, a director of the Corporation shall, not in the absence of
fraud, be disqualified by his office from dealing or contracting with the
Corporation either as a vendor, purchaser or otherwise, nor in the absence of
fraud shall any transaction or contract of the Corporation be void or voidable
or affected by reason of the fact that any director, or any firm of which any
director is a member, or any corporation of which any director is an officer,
director or stockholder, is in any way interested in such transaction or
contract; provided that at the meeting of the Board of Directors, authorizing or
confirming said contract or transaction, the existence of an interest of such
director, firm or corporation is disclosed or made known and there shall be
present a quorum of the Board of Directors, and such contract or transaction
shall be approved by a majority of such quorum, which majority shall consist of
directors not so interested or connected. Nor shall any

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<PAGE>

director be liable to account to the Corporation for any profit realized by him
or through any such transaction or contract of the Corporation ratified or
approved as aforesaid, by reason of the fact that he or any firm of which he is
a member, or any corporation of which he is an officer, director or stockholder,
was interested in such transaction or contract. Directors so interested may be
counted when present at meetings of the Board of Directors for purposes of
determining the existence of a quorum. Any contract, transaction or act of the
Corporation or of the Board of Directors (whether or not approved or ratified as
hereinabove provided) which shall be ratified by a majority in interest of a
quorum of the stockholders having voting power at any annual meeting or any
special meeting called for such purpose or approved in writing by a majority in
interest of the stockholders having voting power without a meeting shall, except
as otherwise provided by law, be valid and as binding as though ratified by
every stockholder of the Corporation.

SECTION 6. The Board of Directors may, by resolution or
resolutions, passed by a majority of the whole Board, designate one or more of
the directors of the Corporation, which, to the extent permitted by law and
provided in said resolution or resolutions, shall have and may exercise the
powers of the Board over the business and affairs of the Corporation and may
have power to authorize the seal of the

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<PAGE>

Corporation to be affixed to all papers which may require it. Such committee or
committees shall have such name or names as may be determined from time to time
by resolution adopted by the Board of Directors. A majority of the members of
such committee may determine its action and fix the time and place of its
meetings unless the Board of Directors shall otherwise provide. The Board of
Directors shall have the power at any time to change the membership of, or to
fill vacancies in, or to dissolve any such committees.

SECTION 7. The Board may, from time to time, elect one or more
persons to the position of Director Emeritus, which election need not be
submitted for stockholder approval. Such person(s) shall be non-voting honorary
directors who shall not be considered in determining whether a quorum exists,
shall have no right to vote and shall not be responsible for the actions of the
Board.

ARTICLE IV
OFFICERS

SECTION 1. The Board of Directors shall appoint a President of
the Corporation and a Secretary and a Treasurer, and may appoint one or more
Vice Presidents, Assistant Secretaries and Assistant Treasurers and, from time
to time, any other officers and agents as it may deem proper. The

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<PAGE>

President shall be selected from among the Directors. Any two of the
above-mentioned offices, except those of President and a Vice President, may be
held by the same person, but no officer shall execute, acknowledge or verify any
instrument in more than one capacity if such instrument be required by law or by
these By-Laws to be executed, acknowledged or verified by any two or more
officers.

SECTION 2. The term of office of all officers shall be one year
until their respective successors are chosen; but any officer or agent chosen or
appointed by the Board of Directors may be removed, with or without cause, at
any time, by the affirmative vote of a majority of the members of the Board then
in office.

SECTION 3. Subject to such limitations as the Board of Directors
may from time to time prescribe, the officers of the Corporation shall each have
such powers and duties as generally appertain to their respective offices, as
well as such powers and duties as from time to time may be conferred by the
Board of Directors. Any officer, agent, or employee of the Corporation may be
required by the Board of Directors to give bond for the faithful discharge of
his duties, in such sum and of such character as the Board may from time to time
prescribe.

- 12 -

ARTICLE V
CERTIFICATES OF STOCK

SECTION 1. The Board of Directors of the Corporation may authorize
the issuance of some or all of the shares of any or all of its classes or series
without certificates. In the event a certificate shall be issued, such
certificate shall present the number of shares of stock of such class or series
of the Corporation owned by the stockholder, which certificate or certificates
shall be in such form as the Board of Directors may from time to time prescribe
by a recording of each stockholder's interest on the records of the
Corporation's Transfer Agent. The certificates for shares of stock of the
Corporation shall bear the signature, either manual or facsimile, of the
President or a Vice President and the Treasurer or an Assistant Treasurer or the
Secretary or an Assistant Secretary, and shall be sealed with the seal of the
Corporation or bear a facsimile of such seal. The validity of any stock
certificate shall not be affected if any officer whose signature appears thereon
ceases to be an officer of the Corporation before such certificate is issued.

SECTION 2. The shares of stock of the Corporation shall be
transferable on the books of the Corporation by the holder thereof in person or
by a duly authorized attorney,

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<PAGE>

upon surrender for cancellation of a certificate or certificates for a like
number of shares, with a duly executed assignment and power of transfer endorsed
thereon or attached thereto, and with such proof of the authenticity of the
signatures as the Corporation or its agent may reasonably require.

SECTION 3. No certificate for shares of stock of the Corporation
shall be issued in place of any certificate alleged to have been lost, stolen,
mutilated or destroyed, except upon production of such evidence of the loss,
theft, mutilation or destruction, and upon indemnification of the Corporation
and its agents to such extent and in such manner as the Board of Directors may
from time to time prescribe.

ARTICLE VI
CORPORATE BOOKS

SECTION 1. The books of the Corporation, except the original or a
duplicate stock ledger, may be kept outside the State of Maryland at such place
or places as the Board of Directors may from time to time determine.

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<PAGE>

ARTICLE VII
SIGNATURES

SECTION 1. Except as otherwise provided in these By-Laws or as the
Board of Directors may generally or in particular cases authorize the execution
thereof in some other manner, all deeds, leases, transfers, contracts, bonds,
notes, checks, drafts and other obligations made, accepted or endorsed by the
Corporation and all endorsements, assignments, transfers, stock powers or other
instruments of transfer of securities owned by or standing in the name of the
Corporation shall be signed or executed by two officers of the Corporation who
shall be the President or a Vice President and a Vice President, the Secretary
or the Treasurer.

SECTION 2. The President of the Corporation or, in his absence or
disability or at his request, a Vice President of the Corporation may authorize
from time to time the signature and issuance of proxies to vote upon shares of
stock of other corporations owned by the Corporation unless otherwise provided
by the Board of Directors. All proxies for shares held in the name of the
Corporation shall be signed in the name of the Corporation by two officers of
the Corporation, who shall be the President or a Vice President and a Vice
President, the Secretary or the Treasurer.

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<PAGE>

ARTICLE VIII
FISCAL YEAR

SECTION 1. The fiscal year of the Corporation shall be the
calendar year or such other period as may be prescribed by the Board of
Directors.

ARTICLE IX
CORPORATE SEAL

SECTION 1. The corporate seal of the Corporation shall consist of
a flat faced circular die with the word "Maryland" together with the name of the
Corporation, the year of its organization and such other appropriate legend as
the Board of Directors may from time to time determine, cut or engraved thereon.
In lieu of the corporate seal when so authorized by the Board of Directors or a
duly empowered committee thereof, a facsimile thereof may be impressed or
affixed or reproduced.

ARTICLE X
INDEMNIFICATION OF OFFICERS AND DIRECTORS

SECTION 1. Every person who is or was a director or officer of
this Corporation (and his heirs, executors and administrators) shall be
indemnified by the Corporation against reasonable costs and expenses incurred by
him in

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<PAGE>

connection with any action, suit or proceeding to which he may be made a party
to by reason of his being or having been a director or officer of the
Corporation, except in relation to any action, suit or proceeding in which he
has been adjudged liable because of negligence or misconduct, which shall be
deemed to include willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his office. In the absence of
any adjudication which expressly absolves the director or officer of liability
to the Corporation or its stockholders for negligence or misconduct, within the
meaning thereof as used herein, or in the event of a settlement, each director
and officer (his heirs, executors and administrators) shall be indemnified by
the Corporation against payments made, including reasonable costs and expenses,
provided that such indemnity shall be conditioned upon the prior determination
by a resolution of two-thirds of those members of the Board of Directors of the
Corporation who are not involved in the action, suit or proceeding that the
director or officer has no liability by reason of negligence or misconduct,
within the meaning thereof as used herein, and provided further that if a
majority of the members of the Board of Directors of the Corporation are
involved in the action, suit or proceeding, such determination shall have been
made by a written opinion of independent counsel. Amounts paid in settlement
shall not exceed the costs, fees and expenses which would have been

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<PAGE>

incurred had such action, suit or proceeding been litigated to a conclusion.
Such a determination by the Board of Directors or by independent counsel, and
the payments of amounts by the Corporation on the basis thereof shall not
prevent a stockholder from challenging such indemnification by appropriate legal
proceedings on the grounds that the person indemnified was liable to the
Corporation or its security holders by reason of negligence or misconduct,
within the meaning thereof as used herein. The foregoing right and
indemnification shall not be exclusive of any other rights to which any officer
or director (or his heirs, executors and administrators) may be entitled
according to law.

ARTICLE XI
INVESTMENT RESTRICTIONS

SECTION 1. Notwithstanding any of the foregoing provisions, the power of
the Corporation to invest and reinvest its assets and to hold, sell, exchange,
pledge, mortgage hypothecate or other wise dispose of or turn to account or
realize upon and generally deal in securities and investments of every kind or
description or in and with its own credit, shall be expressly limited as
follows.
(a) The Corporation shall not borrow money, except as a temporary or
emergency measure (not for leveraging or investment) in an amount not to exceed
5% of the value of its assets taken at cost or value whichever is the lesser.

- 18 -
<PAGE>

(b) The Corporation shall not pledge assets, except that the Fund may
pledge not more that one-third of its total assets (taken at current value) to
secure borrowings made in accordance with paragraph (a) above. (As a matter of
operating policy in order to comply with certain state statutes, the Fund will
not pledge its assets in excess of an amount equal to 10% of its net assets.).

(c) The Corporation shall not purchase securities on margin (but the Fund
may obtain such credits as may be necessary for the clearance of purchases and
sales of securities).

(d) The Corporation shall not make short sales of securities.

(e) The Corporation shall not write or purchase any put or call options,
except stand-by commitments.

(f) The Corporation shall not make loans, except by purchase of debt
obligations and through repurchase agreements provided, however, that the
repurchase agreements maturing in more than seven (7) days, along with all
illiquid assets, will not exceed 10% of the Fund's total assets (taken at
current value).

(g) The Corporation shall not purchase the securities of any issuer (other
that obligations issued or guaranteed as to principal and interest by the
government of the United States or any agency or instrumentality thereof) if, as
a result thereof, more than 25% of the Fund's total assets (taken at current
value) would be invested in obligations of one or more issuers having their
principal business activities in the same industry.

(h) With respect to 75% of the Corporation's total assets, the Corporation
shall not purchase the securities of any issuer (other than obligations issued
or guaranteed by the U.S. Government, its agencies or instrumentalities) if, as
a result, (1) more than 5% of the Corporation's total assets would be invested
in the securities of that issuer, or (2) the Corporation would hold more than
10% of the outstanding voting securities of that issuer.

(i) The Corporation shall not knowingly purchase a security which is
subject to legal or contractual restrictions on resale or for which there is no
readily available market.

(j) The Corporation shall not purchase the securities of other investment
companies or investment trust, except as

- 19 -

<PAGE>

they may be acquired as part of a merger, consolidation or acquisition of
assets.

(k) The Corporation shall not purchase the securities of a company if such
purchase, at the time thereof, would cause more than 5% of the value of the
Fund's total assets to be invested in securities of companies, which, including
predecessors, have a record of less than three years' continuous operation.

(l) The Corporation shall not purchase or retain any securities of another
issuer if persons affiliated with the Corporation or its Investment Advisor or
management owning, individually, more than 1/2 of 1% of said issuer's
outstanding stock (or securities convertible into stock) own, in the aggregate,
more than 5% of said issuer's outstanding stock (or securities convertible into
stock).

(m) The Corporation shall not underwrite securities issued by other persons
except to the extent that, in connection with the disposition of its portfolio
investments, it may by deemed to be an underwriter under federal securities
laws.

(n) The Corporation shall not invest in companies for the purpose of
exercising control or management.

(o) The Corporation shall not buy or sell real estate, commodities or
commodities contracts (unless acquired as a result of ownership of securities)
or interest in oil, gas or mineral explorations, provided, however, the
Corporation may invest in Municipal Instruments secured by real estate or
interests in real estate.

SECTION 2. The Corporation shall not purchase or sell any
securities (other then the capital stock of the Corporation) from or to any of
the following acting as principals, and shall not make any loan to (i) officers
or directors of the Corporation, (ii) any partnership of which any officer or
director of the Corporation is a member, (iii) any corporation or association of
which any officer or director of the Corporation is an officer, director or
trustee, except as permitted by applicable law or regulation;

- 20 -

(iv) any person or organization furnishing advisory or supervisory services to
the Corporation, (v) any officer, director, partner or trustee of, or person
owning of record 10% or more of the stock of, any person or organization
furnishing such advisory or supervisory services, (vi) any partnership of which
any officer, director, partner or trustee of, or person owning of record 10% or
more of the stock of, any person or organization furnishing such advisory or
supervisory services, is a member, or (vii) any corporation or association of
which any officer, director, partner or trustee of or person owning of record
10% or more of the stock of, any person or organization furnishing such advisory
or supervisory services, is an officer or director or trustee; provided,
however, that nothing contained in (iii) or (vii) shall prevent the purchase of
additional securities from any corporation or association referred to in such
clauses upon the exercise of rights issued to the Corporation as a part of a
general offering to the holders of securities of such corporation or
association.

SECTION 3. The Corporation may enter into advisory or
supervisory contracts and other contracts with, and may otherwise do business
with, First Investors Management Company, Inc. and First Investors Corporation,
notwithstanding that the Board of Directors of the Corporation may be composed
in part of directors, officers or

- 21 -

employees of said corporations and officers of the Corporation may have been or
may be or become directors, officers or employees of said corporations, and
notwithstanding that First Investors Management Company, Inc. may act as
investment advisor to other investment companies investing in securities similar
or identical with those owned by the Corporation and may at or about the same
time recommend, purchase or sell the same securities to the Corporation and such
other investment companies, and in the absence of fraud the Corporation and said
corporations may deal freely with each other, and neither such advisory or
supervisory contract nor any other contract or transaction between the
Corporation and said corporations shall be invalidated or in any manner affected
thereby, nor shall any director or officer of the Corporation be liable to the
Corporation or any stockholder or creditor thereof or to any other person for
any loss incurred by it or him by reason of any such contract or transaction;
provided that nothing herein shall protect any director or officer of the
Corporation against any liability he would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office; and provided always that such
contracts or transactions shall have been on terms that were not unfair at the
time at which it was entered into.

- 22 -

<PAGE>

ARTICLE XII
ADDITIONAL PROVISIONS

SECTION 1. The books of account of the Corporation shall be
examined by an independent firm of public accountants, selected as required by
law, at the close of each fiscal year of the Corporation and at such other
times, if any, as may be directed by the Board of Directors of the Corporation.
A report to the shareholders based upon each such examination shall be mailed to
each shareholder of the Corporation, of record on such date with respect to each
report as may be determined by the Board of Directors, at his address as the
same appears on the books of the Corporation. Each such report shall show the
assets and liabilities of the Corporation as of the close of the period covered
by the report, its income and expenses, the net asset value of its outstanding
shares, the securities in which the funds of the Corporation were invested and
such other matters as the Board of Directors shall determine.

ARTICLE XIII
AMENDMENTS

SECTION 1. The By-Laws of the Corporation may be amended,
added to, rescinded or repealed at any meeting of the shareholders, or by a
majority vote of the directors then in office at any meeting of the Board of
Directors, provided

- 23 -

notice of the substance of the proposed change is contained in the notice of the
meeting or any waiver thereof; except that after the initial issue of any shares
of capital stock of the Corporation, the provisions of Section 1 of Article XI
hereof and this Article XIII, may be altered, amended or repealed only upon the
affirmative vote of the lesser of (i) more than fifty percent (50%) of the
outstanding shares of the capital stock of the Corporation, or (ii) sixty-seven
percent (67%) or more of the shares of capital stock present at a meeting if
more than fifty percent (50%) of the outstanding shares of capital stock of the
Corporation are represented at the meeting in person or by proxy.

- 24 -

<PAGE>

FIRST INVESTORS TAX-EXEMPT MONEY MARKET FUND, INC.
INVESTMENT ADVISORY AGREEMENT

This Agreement is made as of June 13, 1994, by and between FIRST INVESTORS
TAX-EXEMPT MONEY MARKET FUND, INC., a Maryland corporation ("Company"), and
FIRST INVESTORS MANAGEMENT COMPANY INC., a New York corporation ("Manager").

WHEREAS, the Company is registered under the Investment Company Act of
1940, as amended ("1940 Act"), as an open-end, diversified management investment
company consisting of one or more separate series of shares ("Series"), each
having its own assets and investment policies; and

WHEREAS, the Manager is an investment adviser under the
Investment Advisers Act of 1940, as amended; and

WHEREAS, the Company desires to retain the Manager as investment adviser
to furnish investment advisory and portfolio management services to each Series
of the Company as now exists and to each such other Series of the Company
hereinafter established as agreed to from time to time by the parties hereto
(hereinafter, "Series" shall refer to each Series of the Company which is
subject to this Agreement), and the Manager is willing to furnish such services.

NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:

1. Appointment. The Company hereby appoints the Manager as investment
adviser of the Company and each Series listed on Schedule A of this Agreement
(as such Schedule may be amended from time to time) for the period and on the
terms set forth in this Agreement. The Manager accepts such appointment and
agrees to render the services herein set forth for compensation as set forth on
Schedule A. In the performance of its duties, the Manager will act in the best
interests of the Company and the Series and will comply with (a) applicable laws
and regulations, including, but not limited to, the 1940 Act, (b) the terms of
this Agreement, (c) the Company's Articles of Incorporation, By-Laws and
currently effective registration statement under the Securities Act of 1933, as
amended, and the 1940 Act, and any amendments thereto, (d) relevant undertakings
to state securities regulators which also have been provided to the Manager, (e)
the stated investment objective(s), policies and restrictions of each applicable
Series, and (f) such other guidelines as the Company's Board of Directors
("Board") reasonably may establish.

2. Duties of the Manager.

(a) Investment Program. Subject to supervision by the Board, the
Manager will provide a continuous investment program for each Series and shall
determine what securities and other investments will be purchased, retained or
sold by each Series.

<PAGE>

The Manager will exercise full discretion and act for each Series in the same
manner and with the same force and effect as such Series itself might or could
do with respect to purchases, sales, or other transactions, as well as with
respect to all other things necessary or incidental to the furtherance or
conduct of such purchases, sales or other transactions.

(b) Other Management Services. The Manager agrees to conduct the
business and details of the operation of the Series as shall be agreed to from
time to time by the parties hereto; provided, however, that the Manager shall
not act as custodian for Series assets. The Manager also agrees, at its own
cost, to provide the Series with certain executive, administrative and clerical
personnel and to provide the Series with office facilities and supplies.

(c) Execution of Transactions. The Manager will place orders pursuant
to its investment determinations for each Series either directly with the issuer
or through any brokers or dealers. In the selection of brokers or dealers and
the placement of orders for the purchase and sale of portfolio investments for
each Series, the Manager shall use its best efforts to obtain for each Series
the most favorable price and execution available, except to the extent that it
may be permitted to pay higher brokerage commissions for brokerage or research
services as described below. In using its best efforts to obtain the most
favorable price and execution available, the Manager, bearing in mind each
Series' best interests at all times, shall consider all factors it deems
relevant, including by way of illustration, price, the size of the transaction,
the nature of the market for the security, the amount of the commission, the
timing of the transaction taking into account market prices and trends, the
reputation, experience and financial stability of the broker or dealer involved
and the quality of service rendered by the broker or dealer in other
transactions. Subject to such policies as the Board may determine, the Manager
shall not be deemed to have acted unlawfully or to have breached any duty
created by this Agreement or otherwise solely by reason of its having caused a
Series to pay a broker that provides brokerage or research services to the
Manager an amount of commission for effecting a portfolio investment transaction
in excess of the amount of commission another broker would have charged for
effecting that transaction if the Manager determines in good faith that such
amount of commission is reasonable in relation to the value of the brokerage or
research services provided by such broker or dealer, viewed in terms of either
that particular transaction or the Manager's overall responsibilities with
respect to such Series and to other clients of the Manager as to which the
Manager exercises investment discretion.

(d) Reports to the Board. Upon request, the Manager will provide the
Board with economic and investment analyses and reports and make available to
the Board any economic, statistical and investment services normally available
to institutional or other customers of the Manager.

<PAGE>

(e) Delegation of Authority. Any of the foregoing duties specified in
this paragraph 2 with respect to one or more Series may be delegated by the
Manager, at the Manager's expense, to an appropriate party, subject to such
approval by the Board and shareholders of the applicable Series as may be
required by the 1940 Act. The Manager shall oversee the performance of delegated
duties by any such other party and shall furnish the Board with periodic reports
concerning the performance of delegated responsibilities by such party.

3. Services Not Exclusive. The services furnished by the Manager hereunder
are not to be deemed exclusive and the Manager shall be free to furnish similar
services to others so long as its services under this Agreement are not impaired
thereby. Nothing in this Agreement shall limit or restrict the right of any
director, officer or employee of the Manager, who may also be a Director,
officer or employee of the Company, to engage in any other business or to devote
his or her time and attention in part to the management or other aspects of any
other business, whether of a similar nature or a dissimilar nature.

4. Books and Records. In compliance with the requirements of Rule 31a-3
under the 1940 Act, the Manager hereby agrees that all records which it
maintains for the Company are the property of the Company and further agrees to
surrender promptly to the Company any of such records upon the Company's
request. The Manager further agrees to preserve for the periods prescribed by
Rule 31a-2 under the 1940 Act the records required to be maintained by Rule
31a-1 under the 1940 Act.

5. Expenses.

(a) Expenses of the Company. During the term of this Agreement, each
Series will bear all expenses not specifically assumed by the Manager incurred
in its operations and the offering of its shares. Expenses borne by each Series
will include, but not be limited to, the following (or each Series'
proportionate share of the following): brokerage commissions relating to
securities purchased or sold by the Series or any losses incurred in connection
therewith; fees payable to and expenses incurred on behalf of the Series by the
Manager; expenses of organizing the Series; filing fees and expenses relating to
the registration and qualification of the Series' shares under federal or state
securities laws and maintaining such registrations and qualifications;
distribution fees; fees and salaries payable to the members of the Board and
officers who are not officers or employees of the Manager; taxes (including any
income or franchise taxes) and governmental fees; costs of any liability,
uncollectible items of deposit and other insurance or fidelity bonds; any costs,
expenses or losses arising out of any liability of or claim for damage or other
relief asserted against the Company or Series for violation of any law; legal,
accounting and auditing expenses, including legal fees of special counsel for
the independent directors; charges of custodians, transfer agents and other
agents; costs of

<PAGE>

preparing share certificates; expenses of setting in type and printing
prospectuses and supplements thereto for existing shareholders, reports and
statements to shareholders and proxy materials; any extraordinary expenses
(including fees and disbursements of counsel) incurred by the Company or Series;
and fees and other expenses incurred in connection with membership in investment
company organizations.

(b) Fee Waivers and Reimbursements. If the expenses borne by a Series
in any fiscal year exceed the applicable expense limitations imposed by the
securities regulations of any state in which shares are registered or qualified
for sale to the public, the Manager will waive its fee or reimburse such Series
for any excess up to the amount of the fee payable to it during that fiscal year
pursuant to paragraph 6 hereof.

6. Compensation. For the services provided and the expenses assumed
pursuant to this Agreement with respect to each Series, the Company will pay the
Manager, effective from the date of this Agreement, a fee which is computed
daily and paid monthly from each Series' assets at the annual rates as
percentages of that Series' average daily net assets as set forth in the
attached Schedule A, which Schedule can be modified from time to time to reflect
changes in annual rates or the addition or deletion of a Series from the terms
of this Agreement, subject to appropriate approvals required by the 1940 Act. If
this Agreement becomes effective or terminates with respect to any Series before
the end of any month, the fee for the period from the effective date to the end
of the month or from the beginning of such month to the date of termination, as
the case may be, shall be prorated according to the proportion that such period
bears to the full month in which such effectiveness or termination occurs.

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

8. Duration and Termination.

(a) Effectiveness. This Agreement shall become effective upon the
date hereinabove written, provided that, with respect to a Series, this
Agreement shall not take effect unless it has first been approved (i) by a vote
of a majority of those members of the

<PAGE>

Board who are not parties to this Agreement or interested persons of any such
party ("Independent Board Members") cast in person at a meeting called for the
purpose of voting on such approval, and (ii) by an affirmative vote of a
majority of the outstanding voting securities of such Series.

(b) Renewal. Unless sooner terminated as provided herein, this
Agreement shall continue in effect for two years from the above written date.
Thereafter, if not terminated, this Agreement shall continue automatically for
successive periods of twelve months each, provided that such continuance is
specifically approved at least annually (i) by a vote of a majority of the
Independent Board Members cast in person at a meeting called for the purpose of
voting on such approval, and (ii) by the Board or, with respect to any given
Series, by an affirmative vote of a majority of the outstanding voting
securities of such Series.

(c) Termination. Notwithstanding the foregoing, with respect to any
Series, this Agreement may be terminated at any time by vote of the Board or by
vote of a majority of the outstanding voting securities of such Series on 60
days' written notice delivered or mailed by registered mail, postage prepaid, to
the Manager. The Manager may at any time terminate this Agreement on 60 days'
written notice delivered or mailed by registered mail, postage prepaid, to the
Company. This Agreement automatically and immediately will terminate in the
event of its assignment. Termination of this Agreement pursuant to this
paragraph 8 shall be without the payment of any penalty. Termination of this
Agreement with respect to a given Series shall not affect the continued validity
of this Agreement or the performance thereunder with respect to any other
Series.

9. Amendment of This Agreement. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought, and no material amendment of this Agreement
as to a given Series shall be effective until approved by vote of the holders of
a majority of the outstanding voting securities of such Series.

10. Name of Company. The Company or any Series may use the name "First
Investors" only for so long as this Agreement or any extension, renewal or
amendment hereof remains in effect, including any similar agreement with any
organization which shall have succeeded to the business of the Manager. At such
time as such an agreement shall no longer be in effect, the Company and each
Series will (to the extent that it lawfully can) cease to use any name derived
from First Investors Management Company, Inc. or any successor organization.

11. Governing Law. This Agreement shall be construed in accordance with
the laws of the State of New York, without giving effect to the conflicts of
laws principles thereof, and in accordance with the 1940 Act. To the extent that
the applicable

<PAGE>

laws of the State of New York conflict with the applicable provisions of the
1940 Act, the latter shall control.

12. Definitions. As used in this Agreement, the terms "majority of the
outstanding voting securities," "interested person," and "assignment" shall have
the same meanings as such terms have in the 1940 Act.

13. Severability. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their respective
successors.

14. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect.

IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.

FIRST INVESTORS TAX-EXEMPT MONEY
Attest: MARKET FUND, INC.

By: /s/C. Durso By: /s/Glenn O. Head
C. Durso, Secretary Glenn O. Head, President

FIRST INVESTORS MANAGEMENT
Attest: COMPANY, INC.

By: /s/Carol R. Lerner By: /s/Kathryn S. Head
Carol R. Lerner, Kathryn S. Head, President
Secretary

<PAGE>

FIRST INVESTORS TAX-EXEMPT MONEY MARKET FUND, INC.
INVESTMENT ADVISORY AGREEMENT

SCHEDULE A

Compensation pursuant to Paragraph 6 of this First Investors Tax-Exempt
Money Market Fund, Inc. Investment Advisory Agreement shall be calculated in
accordance with the following schedule:

Advisory Fee as %
Average Daily of Average Daily
Net Assets Net Assets
All Assets 0.50%

Dated: June 13, 1994

<PAGE>

UNDERWRITING AGREEMENT

BETWEEN

FIRST INVESTORS TAX-EXEMPT MONEY MARKET FUND, INC.

AND

FIRST INVESTORS CORPORATION

This AGREEMENT entered into the 17th day of March, 1994, by and between
FIRST INVESTORS TAX-EXEMPT MONEY MARKET FUND, INC., a Maryland corporation, with
an office located at 95 Wall Street, New York, New York 10005 (the "Fund"), and
FIRST INVESTORS CORPORATION, a New York corporation with its principal office
located at 95 Wall Street, New York, New York 10005 (the "Underwriter").

In consideration of the mutual covenants and agreements of the parties
hereto, the parties mutually covenant and agree with each other as follows:

1. Appointment. The Fund hereby appoints the Underwriter as agent of
the Fund to effect the sale and public distribution of shares of each series and
each class of common stock of the Fund as now exists or is hereafter established
("Shares"). This appointment is made by the Fund and accepted by the Underwriter
upon the understanding that (a) upon the request of the Underwriter, the Fund
will prepare, execute and file such applications for registration and
qualification of the Shares as are required by federal and state law in such
amounts as the Underwriter reasonably may determine, (b) the distribution of the
Shares to the public be effected by the Underwriter or through various
securities dealers, and (c) the distribution of the Shares shall be done in such
manner that the Fund shall be under no responsibility or liability to any person
whatsoever on account of the acts and statements of any such person or their
agents or employees. The Underwriter shall have the sole right to select the
security dealers to whom the Shares will be offered by it and, subject to
express provisions of this Agreement, the Articles of Incorporation, By-Laws and
the Fund's then current Registration Statement to determine the terms and prices
in any contract for the sale of Shares to any dealer made by it as such agent
for the Fund.

2. Underwriter as Exclusive Agent. The Underwriter shall be the
exclusive agent for the Fund for the sale of the Shares and the Fund agrees that
it will not sell any Shares to any person except to fill orders for the Shares
received through the Underwriter, provided, however, that the foregoing
exclusive right shall not apply to: (a) Shares issued or sold in connection with
the merger or consolidation of any other investment company with the Fund or the
acquisition by purchase or otherwise of all or substantially all the outstanding
shares of any such company by the Fund, (b) Shares which may be offered by the
Fund to its shareholders for reinvestment of cash distributed from capital gains
or net investment income of the Fund, or such gains or income paid in the

<PAGE>

form of Shares, or (c) Shares which may be issued to shareholders of other
investment companies who exercise the exchange privilege set forth in the Fund's
then current Registration Statement.

3. Sales to Dealers. The Underwriter shall have the right to sell the
Shares to dealers, as needed (making reasonable allowance for clerical errors
and errors of transmission), but not more than the Shares needed to fill
unconditional orders for Shares placed with the Underwriter by dealers. In every
case the Fund shall receive the net asset value for the Shares sold, determined
as provided in Paragraph 4 hereof. The Underwriter shall notify the Fund at the
close of each business day of the number of Shares sold during each day.

4. Determination of Net Asset Value. The net asset value of each series
or class of Shares shall be determined by the Fund or the Fund's custodian, or
such officer or officers or other persons as the Board of Directors of the Fund
may designate. The determinations shall be made once a day on each day that the
New York Stock Exchange is open for a full business day and in accordance with
the method set forth in the Fund's then current Registration Statement.

5. Public Offering Price. The Fund shall seek to maintain a net asset
value for each series or class of Shares of $1.00, which will constitute the
public offering price.

6. Repurchase and Redemption of Shares.

(a) The Fund appoints and designates the Underwriter as agent of the
Fund, and the Underwriter accepts such appointment as such agent, to redeem or
repurchase for retirement the Shares in accordance with the provisions of the
Articles of Incorporation and By-Laws of the Fund.

(b) In connection with such redemptions or repurchases the Fund
authorizes and designates the Underwriter to take any action and to make any
arrangements for the payment of the redemption or repurchase price authorized or
permitted to be taken or made as set forth in the By-Laws and the Fund's then
current Registration Statement.

(c) The authority of the Underwriter under this Paragraph 6 may, with
the consent of the Fund, be re-delegated in whole or in part to another person
or firm.

(d) To the extent permitted by law and applicable regulations, The
authority granted in this Paragraph 6 may be suspended by the Fund at any time
or from time to time until further notice to the Underwriter.

7. Allocation of Expenses. The Underwriter (or one of its
non-investment company affiliates) shall bear all fees and expenses incident to
the registration and qualification of the Shares, the

- 2 -

<PAGE>

cost of preparing and disseminating sales material or literature, as well as the
costs of preparing and disseminating prospectuses, proxy material and
shareholder reports used in connection with the sale of the Shares except, as
discussed below, to the extent that such materials are being sent to existing
shareholders or the Fund has agreed to bear the cost of such expenses under a
Plan (as defined in Paragraph 8 hereof). The Fund shall bear all expenses
related to communications with its existing shareholders, including the costs of
preparing, printing and mailing prospectuses, statements of additional
information, proxy materials and other materials sent to such shareholders.

8. Compensation. The Underwriter shall receive no compensation from the
Fund for providing services under this Agreement, provided that the Underwriter
may receive from the Fund a distribution fee at the rate and under the terms and
conditions of a plan or plans of distribution (collectively and singularly,
"Plan") presently existing or hereafter adopted by the Fund with respect to any
series or class of Shares, as such Plan is in effect from time to time, and
subject to any further limitations on such fee as the Board of Directors may
impose. The Underwriter may, from time to time, enter into Selected
Administrative Agreements with security dealers and other qualified entities
selected by it and may make assistance payments to such dealers in such amounts
as it deems appropriate provided that such payments are permitted by a Plan.

9. Effectiveness of Agreement. This Agreement shall become effective
upon the date hereabove written, provided that, with respect to any series or
class of Shares created after the date of this Agreement, this Agreement shall
not take effect unless such action has first been approved by vote of a majority
of the Board of Directors and by vote of a majority of those directors of the
Fund who are not interested persons of the Fund and have no direct or indirect
financial interest in the operation of a Plan or in any agreements related
thereto (all such directors collectively being referred to herein as the
"Independent Directors"), cast in person at a meeting called for the purpose of
voting on such action.

10. Termination of Agreement. This Agreement shall continue in effect
for a period of more than one year from its effective date only as long as such
continuance is approved, at least annually, by the Board of Directors of the
Fund, including a majority of the Independent Directors, voting in person at a
meeting called for the purpose of voting on such approval. This Agreement may be
terminated by either party hereto upon thirty (30) days' written notice to the
other party. This Agreement shall automatically terminate in the event of its
assignment by the Underwriter unless the Securities and Exchange Commission
("SEC") has issued an order exempting the Fund and the Underwriter from the
provisions of the Investment Company Act of 1940, as amended (the "1940 Act"),
which would otherwise have effected the termination of this Agreement.

- 3 -

<PAGE>

11. Amendments. No amendment to this Agreement shall be executed or
become effective unless its terms have been approved: (a) by a majority of the
directors of the Fund, or (b) by the vote of a majority of the outstanding
voting securities of the Fund and, in either case, by a vote of a majority of
the Independent Directors.

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

13. Definitions. The terms "assignment," "interested person," and
"majority of the outstanding voting securities" shall have the meanings given to
them by Section 2(a) of the 1940 Act, subject to such exemptions as may be
granted by the SEC by any rule, regulation or order. Additionally, the term
"Registration Statement" shall mean the registration statement most recently
filed by the Fund with the SEC and effective under the 1940 Act and 1933 Act, as
such Registration Statement is amended from time to time, and the terms
"Prospectus" and "Statement of Additional Information" shall mean, respectively,
the form of prospectus(es) and statement(s) of additional information with
respect to the Fund filed by it as part of the Registration Statement.

14. Governing Law. This Agreement shall be construed in accordance with
the laws of the State of New York, without giving effect to the conflicts of
laws principles thereof, and in accordance with the 1940 Act. To the extent that
the applicable laws of the State of New York conflict with the applicable
provisions of the 1940 Act, the latter shall control.

15. Severability. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors.

16. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or

- 4 -

<PAGE>

delimit any of the provisions hereof or otherwise affect their
construction or effect.

IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed by their officers designated below as of the day and
year first above written.

FIRST INVESTORS TAX-EXEMPT MONEY
MARKET FUND, INC.

By: /s/Glenn O. Head
Glenn O. Head
President

ATTEST:

/s/C. Durso
Concetta Durso
Secretary

FIRST INVESTORS CORPORATION

By: /s/Michael S. Miller
Michael S. Miller
Chief Executive Officer
ATTEST:

/s/Carol R. Lerner
Carol R. Lerner
Assistant Secretary

- 5 -

<PAGE>

CUSTODIAN AGREEMENT
BETWEEN
IRVING TRUST COMPANY
AND
FIRST INVESTORS TAX EXEMPT MONEY MARKET FUND, INC.

CUSTODIAN AGREEMENT, made this 24th day of May 1983, between FIRST
INVESTORS TAX EXEMPT MONEY MARKET FUND, INC., a corporation organized and
existing under the laws of the State of Maryland, having its office and place of
business at 120 Wall Street, New York, New York 10005 (hereinafter called the
"Fund") and Irving Trust Company, a banking corporation organized and existing
under the laws of the State of New York, having its principal office and place
of business at One Wall Street, New York, New York 10015 (hereinafter called the
"Custodian").

WITNESSETH:

That for and in consideration of the mutual promises hereinafter set
forth the Fund and the Custodian agree as follows:

APPOINTMENT OF CUSTODIAN

1. The Fund hereby constitutes and appoints the Custodian as custodian
of all the securities and monies at any time owned by the Fund during the period
of this Agreement.

2. The Custodian hereby accepts appointment as such custodian and
agrees to perform the duties thereof as hereinafter set forth.

CUSTODY OF CASH AND SECURITIES

1. The Fund will deliver or cause to be delivered to the Custodian all
securities and all monies owned by it, including cash received for the issuance
of its shares, at any time during the period of this Agreement. The Custodian
will not be responsible for such securities and such monies until actually
received by it.

2. The Custodian shall credit to a separate account in the name of the
Fund all monies received by it for the account of the Fund, and shall disburse
the same only:

(a) In payment for securities purchased, as provided in
Article III hereof;

(b) In payment of dividends or distributions as provided
in Article V hereof;

<PAGE>

(d) In payment for capital stock of the Fund redeemed by
it, as provided in Article VI hereof;

(e) Pursuant to an officers certificate, or with respect to
money market securities, as defined in Article IX, the oral instructions of an
authorized person, as defined in Article IX, setting forth the name and address
of the person to whom payment is to be made, the amount to be paid, and the
corporate purpose for which payment is to be made; and

(f) In payment of the fees and in reimbursement of the
expenses and liabilities of the Custodian, as provided in Article VII hereof.

3. The Custodian shall provide the Fund promptly after the close of
business on each day with a statement summarizing all transactions and entries
for the account of the Fund during said day, and it shall, at least monthly and
from time to time, at the reasonable request of the Fund, render a detailed
statement of the securities and monies held for the Fund under this Agreement.

4. All securities held for the Fund, which are issued or issuable only
in bearer form, shall be held by the Custodian in that form; all other
securities held for the Fund may be registered in the name of the Fund or in the
name of any duly appointed and registered nominee of the Custodian, as the
Custodian may from time to time determine. The Fund agrees to furnish to the
Custodian appropriate instruments to enable the Custodian to hold or deliver in
proper form for transfer, or to register in the name of its registered nominee,
any securities which it may held for the account of the Fund and which may from
time to time be registered in the name of the Fund. The Custodian shall hold all
securities in a separate account in the name of the Fund physically segregated
at all times from those of any person or persons. Notwithstanding the foregoing,
to the extent authorized by the Board of Directors of the Fund, the Custodian
may deposit securities in a clearing agency or the book entry system of the
Federal Reserve Banks, as provided in Rule 17f-4 of the Investment Company Act
of 1940, as amended, and securities deposited in such agency may be registered
in the name of such agency or its nominee.

5. Unless otherwise instructed to the contrary by an officers
certificate, the Custodian shall, with respect to all securities held for the
Fund:

(a) Collect all income due or payable;

<PAGE>

(b) Present for payment and collect the amount payable upon
all securities which may mature or be called, redeemed, or retired, or otherwise
become payable;

(d) Execute, as custodian, any necessary declarations or
certificates of ownership under the Federal Income Tax laws or the laws or
regulations of any other taxing authority now or hereafter in effect; and

(e) Hold for the account of the Fund all stock dividends,
rights and similar securities issued with respect to any securities held by it
hereunder.

6. Upon receipt of an officers certificate and not otherwise,
the Custodian shall:

(a) Execute and deliver to such persons as may be designated
in such officers certificate, proxies, consents, authorizations, and any other
instruments whereby the authority of the Fund as owner of any securities may be
exercised;

(b) Deliver any securities held for the Fund in exchange for
other securities or cash issued or paid in connection with the liquidation,
reorganization, refinancing, merger, consolidation or recapitalization of any
corporation or the exercise of any conversion privilege;

(c) Deliver any securities held for the Fund to any protective
committee, reorganization committee or other person in connection with the
reorganization, refinancing, merger, consolidation, recapitalization or sale of
assets of any corporation, and receive and hold under the terms of this
Agreement, such certificates of deposit, interim receipts or other instruments
or documents as may be issued to it to evidence such delivery;

(d) Make such transfers or exchanges of the assets of the
Fund, and take such other steps, as shall be stated in said an officers
certificate to be for the purpose of effectuating any duly authorized plan of
liquidation, reorganization, merger, consolidation or recapitalization of the
Fund; and

(e) Take such other action as may be authorized in such
officers certificate.

<PAGE>

III

PURCHASE AND SALE OF INVESTMENTS OF THE FUND

1. Promptly after each purchase of securities by the Fund, the Fund
shall deliver to the Custodian (i) with respect to each purchase of securities
which are not money market securities an officers certificate and (ii) with
respect to each purchase of money market securities such an officers certificate
or oral instructions from an authorized person, specifying with respect to each
such purchase: (a) the name of the issuer and the title of the securities, (b)
the number of shares or the principal amount purchased, and accrued interest, if
any, (c) the date of purchase and settlement, (d) the purchase price per unit,
(e) the total amount payable upon such purchase, (f) the name of the person from
whom or the broker through whom the purchase was made and (g) such other
information as shall be necessary for the issuance by the Custodian or a
depository of escrow receipts relating to options purchased by the Fund, if the
issuance of escrow receipts is requested by the officers certificate. The
Custodian shall receive all securities purchased by or for the Fund from the
persons through or from whom the same were purchased, and shall pay out the
monies held for the account of the Fund, the total amount payable upon such
purchase as set forth in such officers certificate or such oral instruments, as
the case may be, provided that the same conforms to the total amount payable as
set forth on such officers certificate or in such oral instructions. The
Custodian may make payment in such forms as shall be satisfactory to it and may
accept securities in accordance with the customs prevailing among dealers.

2. Promptly after each sale of securities by the Fund, the Fund shall
deliver to the Custodian, (i) with respect to each sale of securities which are
not money market securities an officers certificate and (ii) with respect to
each sale of money market securities such an officers certificate or oral
instructions from an authorized person specifying with respect to each such
sale: (a) the name of the issuer and the title of the securities, (b) the number
of shares or principal amount sold, and accrued interest, if any, (c) the date
of sale, (d) the sale price per unit, (e) the total amount payable to the Fund
upon such sale and (f) the name of the broker through whom or the person to whom
the sale was made. The Custodian shall deliver the securities thus designated to
the broker or other person named in such officers certificate upon receipt of
the total amount payable to the Fund as set forth in such officers certificate
or such oral instructions as the case may be, with respect to such sale. The
Custodian may accept payment in such form as shall be satisfactory to it, and
may deliver securities and arrange for payment in accordance with the customs
prevailing among dealers in securities.

<PAGE>

LOAN OF PORTFOLIO SECURITIES OF THE FUND

1. Where the Fund is permitted to lend its portfolio securities and
wishes to lend its portfolio securities, the Fund shall deliver to the Custodian
an officers certificate specifying with respect to each such loan: (a) the name
of the issuer and the title of the securities, (b) the number of shares or the
principal amount loaned, (c) the date of the loan and delivery, (d) the total
amount to be delivered to the Custodian against the loan of the securities
including the amount of cash collateral and the premium, if any, separately
identified and (e) the name of the broker to whom the loan was made. The
Custodian shall deliver the securities thus designated to the broker to whom the
loan was made upon receipt of the total amount designated as to be delivered
against the loan of securities. The Custodian may accept payment only in the
form of immediately available funds or a certified or bank cashier's check
payable to the order of the Fund or the Custodian drawn on New York Clearing
House funds and may deliver securities in accordance with the customs prevailing
among dealers in securities.

2. Promptly after each termination of the loan of securities by the
Fund, the Fund shall deliver to the Custodian an officers certificate specifying
with respect to each such loan termination and return of securities: (a) the
name of the issuer and the title of the securities to be returned, (b) the
number of shares or the principal amount to be returned, (c) the date of
termination, (d) the total amount to be delivered by the Custodian (including
the cash collateral for such securities minus any offsetting credits as
described in said officers certificate) and (e) the name of the broker from whom
the securities will be returned. The Custodian shall receive all securities
returned from the broker to whom such securities were loaned and upon receipt
thereof shall pay, out of the monies held for the account of the Fund, the total
amount payable upon such return of securities as set forth in the officers
certificate.

PAYMENT OF DIVIDENDS OR DISTRIBUTIONS

1. The Fund shall furnish to the Custodian a copy of any resolution of
its Board of Directors, authorizing the declaration of dividends on a monthly,
quarterly, semi-annual, annual or other basis, and authorizing the Custodian to
rely on the oral instructions from an authorized officer of the Fund, setting
forth the date of the declaration of such dividend or distribution, the date of
payment thereof, the record date as of which stockholders entitled to payment
shall be determined, and the amount payable per share to the stockholders of
record as of that date and the total amount payable to the Dividend Agent on the
payment date.

<PAGE>

2. Upon the payment date specified in such officers certificate or oral
instructions, the Custodian shall pay out of the monies held for the account of
the Fund the total amount payable to the Dividend Agent for the Fund.

SALE AND REDEMPTION OF CAPITAL STOCK OF THE FUND

1. Whenever the Fund shall sell any shares of its capital stock, it
shall cause to be delivered to the Custodian an officers certificate duly
specifying:

(a) The number of shares sold, trade date, and price;
and

(b) The amount of money to be received by the Custodian
for the sale of such shares.

2. Upon receipt of such money the Custodian shall credit such
money into the account of the Fund.

3. Upon the issuance of any of the capital stock of the Fund in
accordance with the foregoing provisions of this Article, the Custodian shall
pay, out of the money held for the account of the Fund, all original issue or
other taxes required to be paid by the Fund in connection with such issuance
upon the receipt of an officers certificate specifying the amount to be paid.

4. Except as provided hereinafter, whenever the Fund shall hereafter
redeem any shares of its capital stock, it shall furnish to the Custodian an
officers certificate specifying:

(a) The number of shares of capital stock redeemed; and

(b) The amount to be paid for the shares redeemed.

5. Upon receipt from the Transfer Agent of an advice setting forth the
number of shares received by the Transfer Agent for redemption and that such
shares are valid and in good form for redemption, the Custodian shall make
payment to the Transfer Agent out of the monies held for the account of the
Fund, of the total amount specified in the officers certificate issued pursuant
to the foregoing paragraph 4 of this Article.

6. Notwithstanding the above provisions regarding the redemption of any
shares of the capital stock of the Fund, whenever shares of the capital stock of
the Fund are redeemed by a Fund shareholder pursuant to the check redemption
privilege offered by the Fund, the provisions of the Payment and Redemption
Agency

<PAGE>

Agreement dated May 24, 1983 between the Custodian and the Fund shall apply.

VII

CONCERNING THE CUSTODIAN

1. Neither the Custodian nor its nominee shall be liable for any loss
or damage including counsel fees, resulting from its action or omission to act
or otherwise, except for any such loss or damage arising out of its own
negligence or willful misconduct. The Custodian may, with respect to questions
of law, apply for and obtain the advice and opinion of counsel to the Fund or of
its own counsel, at the expense of the Fund, and shall be fully protected with
respect to anything done or omitted by it in good faith in conformity with such
advice or opinion.

2. Without limiting the generality of the foregoing, the Custodian
shall be under no duty or obligation to inquire into, and shall not be liable
for:

(a) The validity of the issue of any securities
purchased by or for the Fund, the legality of the purchase thereof,
or the propriety of the amount paid therefor;

(b) The legality of the sale of any securities by or for
the Fund or the propriety of the amount for which the same are
sold;

(c) The legality of the issue or sale of any shares of
the capital stock of the Fund, or the sufficiency of the amount to
be received therefor;

(d) The legality of the redemption of any shares of the
capital stock of the Fund, or the propriety of the amount to be
paid therefor;

(e) The legality of the declaration of any dividend by the
Fund or the legality of the issue of any shares of the Fund's capital stock in
payment of any stock dividend;

(f) The legality of any loan of portfolio securities pursuant
to Article IV of this Agreement, nor shall the Custodian be under any duty or
obligation to see to it that any cash collateral delivered to it by a brokerage
firm or held by it at any time as a result of such loan of the portfolio
securities of the Fund is adequate collateral for the Fund against any loss it
might sustain as a result of such loan. The Custodian specifically, but not by
way of limitation, shall not be under any duty or obligation to periodically
check or notify the Fund that the amount of such cash collateral held by it for
the Fund is sufficient collateral

<PAGE>

for the Fund, but such duty or obligation shall be the sole responsibility of
the Fund. In addition, the Custodian shall be under no duty or obligation to see
that any brokerage firm to whom portfolio securities of the Fund are lent
pursuant to Article IV of this Agreement makes payment to it of any dividends or
interest which are payable to or for the account of the Fund during the period
of such loan or at the termination of such loan, provided however, that the
Custodian shall promptly notify the Fund in the event that such dividends or
interest are not paid and received when due;

(g) The legality of a payment made pursuant to an officers
certificate or, in the case of money market securities, pursuant to oral
instructions of any authorized person.

3. The Custodian shall not be liable for, or considered to be the
Custodian of, any money represented by any check, draft, or other instrument for
the payment of money received by it on behalf of the Fund, until the Custodian
actually receives such money.

4. The Custodian shall not be under any duty or obligation to take
action to effect collection of any amount due to the Fund from the Transfer
Agent of the Fund nor to take any action to effect payment or distribution by
the Transfer Agent of the Fund of any amount paid by the Custodian to the
Transfer Agent of the Fund in accordance with this Agreement.

5. The Custodian shall not be under any duty or obligation to take
action to effect collection of any amount, if the securities upon which such
amount is payable are in default or if payment is refused after due demand or
presentation, unless and until (i) it shall be directed to take such action by
an officers certificate and (ii) it shall be assured to its satisfaction of
reimbursement of its costs and expenses in connection with any such action.

6. The Custodian may appoint one or more banking institutions,
including, but not limited to, banking institutions located in foreign
countries, as Depository or Depositories or as a Sub-Custodian of securities and
monies at any time owned by the Fund, upon terms and conditions approved in
written instructions from two officers of the Fund.

7. The Custodian shall not be under any duty or obligation to ascertain
whether any securities at any time delivered to or held by it for the account of
the Fund are such as may properly be held by the Fund under the provisions of
its Articles of Incorporation.

8. The Custodian shall be entitled to receive and the Fund agrees to
pay to the Custodian, such compensation as may be agreed upon from time to time
between the Custodian and the Fund. The Custodian may charge such compensation
and any expenses incurred by the Custodian in the performance of its duties
pursuant to such

<PAGE>

agreement against any money held by it for the account of the Fund. The
Custodian shall also be entitled to charge against any money held by it for the
account of the Fund the amount of any loss, damage, liability or expense,
including counsel fees, for which it shall be entitled to reimbursement under
the provisions of this Agreement. The expenses which the Custodian may charge
against the account of the Fund include, but are not limited to, the expenses of
Sub-Custodians and foreign branches of the Custodian incurred in settling
transactions involving the purchase and sale of securities of the Fund.

9. The Custodian shall be entitled to rely upon any officers
certificate, notice or other instrument in writing received by the Custodian and
believed by the Custodian to be genuine and to be signed by two officers of the
Fund as defined in Article IX. The Custodian shall be entitled to rely upon any
oral instructions received by the Custodian pursuant to Article III or V hereof
and believed by the Custodian to be genuine and to be given by an authorized
person. The Fund agrees to forward to the Custodian written instructions from an
authorized person confirming such oral instructions in such manner so that such
written instructions are received by the Custodian, whether by hand delivery,
telex or otherwise, by the close of business of the same day that such oral
instructions are given to the Custodian. The Custodian's understanding of any
oral instructions on which it has acted shall be binding on the Fund
notwithstanding receipt by the Custodian of written confirmation of such oral
instructions which is inconsistent with the Custodian's understanding thereof.
The Fund agrees that the fact that such confirming written instructions are not
received by the Custodian shall in no way affect the validity of transactions or
enforceability of the transactions hereby authorized by the Fund. The Fund
agrees that the Custodian shall incur no liability to the Fund in acting upon
oral instructions given to the Custodian hereunder concerning such transactions
provided such instructions reasonably appear to have been received from a duly
authorized person.

VIII

TERMINATION

1. Either of the parties hereto may terminate this Agreement by giving
to the other party a notice in writing specifying the date of such termination,
which shall be no less than 60 days after the date of the giving of such notice.
In the event such notice is given by the Fund, it shall be accompanied by a copy
of a resolution of the Board of Directors of the Fund, certified by the
Secretary or any Assistant Secretary, electing to terminate this Agreement and
designating a successor custodian or custodians, each of which shall be a bank
or trust company having not less than $2,000,000 aggregate capital, surplus and
undivided profits. In the event such notice is given by the Custodian, the Fund
shall, on

<PAGE>

or before the termination date, deliver to the Custodian a copy of resolution of
its Board of Directors, certified by the Secretary or any Assistant Secretary,
designating a successor custodian or custodians. In the absence of such
designation by the Fund, the Custodian may apply to any court of competent
jurisdiction for the appointment of a successor custodian which shall be a bank
or a trust company having not less than $2,000,000 aggregate capital, surplus
and undivided profits. If the Fund fails to designate a successor custodian, the
Fund shall, upon the date specified in the notice of termination of this
Agreement and upon the delivery by the Custodian of all securities and monies
then owned by the Fund be deemed to be its own custodian and the Custodian shall
thereby be relieved of all duties and responsibilities pursuant to this
Agreement.

2. Upon the date set forth in such notice, this Agreement shall
terminate and the Custodian shall, upon receipt of a notice of acceptance by the
successor custodian, on that date deliver directly to the successor custodian
all securities and monies then owned by the Fund and held by it as Custodian,
after deducting all fees, expenses and other amounts for the payment or
reimbursement of which it shall be entitled.

MISCELLANEOUS

1. The term "officers certificate" shall mean any notice, instructions
or other instrument in writing, authorized or required by this Agreement to be
given to the Custodian signed by two officers on behalf of the Fund.

2. The term "Officers" shall be deemed to include the President,
Vice-President, the Secretary, the Treasurer, any Assistant Secretary, any
Assistant Treasurer, or any other person or persons duly authorized by the Board
of Directors to execute any certificate, instruction, notice or other instrument
on behalf of the Fund. The term "securities" shall include, but shall not be
limited to, stocks, bonds, debentures, notices, bankers' acceptances,
certificates of deposit, options, securities covered by options, and money
market instruments.

3. Annexed hereto as Appendix A, is a certificate signed by two of the
present officers of the Fund under its corporate seal, setting forth the names
and the signatures of the present officers of the Fund. The Fund agrees to
notify the Custodian promptly if any such present officer ceases to be an
officer of the Fund, and to furnish the Custodian a new certificate in similar
form in the event other or additional officers as defined in Article IX are
elected or appointed. Until such new certificate shall be received, the
Custodian shall be fully protected in acting under the provisions of this
Agreement upon the signatures of the present

<PAGE>

officers as set forth in said annexed certificate or upon the signatures of the
present officers as set forth in subsequently issued certificates.

4. The term "authorized person" shall be deemed to include the
Treasurer, the Secretary or any other persons, whether or not any such person is
an officer or employee of the Fund, duly authorized by the Board of Directors to
execute any certificate, instruction, notice or other instrument or to deliver
oral instructions on behalf of the Fund.

5. Annexed hereto as Appendix B is a certificate signed by two of the
present officers of the Fund under its corporate seal, setting forth the names
and signatures of the present authorized persons. The Fund agrees to notify the
Custodian promptly if any such present authorized person ceases to be an
authorized person and to furnish to the Custodian a new certificate in similar
form in the event that other or additional authorized persons are elected or
appointed. Until such new certificate shall be received, the Custodian shall be
fully protected in acting under the provisions of this Agreement upon oral
instructions or signatures of the present authorized persons as set forth in
said annexed certificate or upon oral instructions or the signatures of the
present authorized persons as set forth in a subsequently issued certificate.

6. Any notice or other instrument in writing, authorized or required by
this Agreement to be given to the Custodian shall be sufficiently given if
addressed to the Custodian and mailed or delivered to it at its offices at One
Wall Street, New York, New York 10015, Attn: Institutional Custody
Administration Department or at such other place as the Custodian may from time
to time designate in writing.

7. Any notice or other instrument in writing, authorized or required by
this Agreement to be given to the Fund shall be sufficiently given if addressed
to the Fund and mailed or delivered to it at its office, at 120 Wall Street, New
York, New York 10005, or at such other place as the Fund may from time to time
designate in writing.

8. This Agreement may not be amended or modified in any manner except
by a written agreement executed by both parties with the same formality as this
Agreement, and authorized and approved by a resolution of the Board of Directors
of the Fund.

9. The term "money market security" shall be deemed to include, but not
be limited to, debt obligations issued or guaranteed as to interest and
principal by the Government of the United States or agencies or
instrumentalities thereof, bank deposits, certificates of deposit, commercial
paper and bankers' acceptances, where the purchase or sale of such securities
normally

<PAGE>

requires settlement in federal funds on the same day as such
purchase or sale.

10. This Agreement shall extend to and shall be binding upon the
parties hereto, and their respective successors and assigns; provided, however,
that this Agreement shall not be assignable by the Fund without the written
consent of the Custodian and shall not be assignable by the Custodian without
the written consent of the Fund, authorized or approved by a resolution of its
Board of Directors.

11. This Agreement shall be construed in accordance with the
laws of the State of New York.

12. This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original but such counterparts shall,
together, constitute only one instrument.

13. The term "written instructions" shall mean written communications
by telex or any other such system whereby the receiver of such communications is
able to verify by codes or otherwise with a reasonable degree of certainty the
authenticity of the sender of such communications.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective corporate officers, thereunder duly authorized and
their respective corporate seals to be hereunto affixed as of the day and year
first above written.

FIRST INVESTORS TAX EXEMPT MONEY
MARKET FUND, INC.

By: /s/ Joseph M. O'Brien
Joseph M. O'Brien, President
ATTEST:

/s/ Andrew J. Donohue
Andrew J. Donohue, Secretary

IRVING TRUST COMPANY

By:/s/ Michael A. Mertz
Michael A. Mertz
Vice President
ATTEST:

/s/ Signature Illegible
Vice President

<PAGE>

APPENDIX A

I, Joseph M. O'Brien, President and I, Andrew J. Donohue, Secretary of
First Investors Tax Exempt Money Market Fund, Inc. a Maryland Corporation (the
"Fund"), do hereby certify that:

The following individuals serve in the following positions with the
Fund and each individual has been duly elected to each such position and
qualified therefor in conformity with the Fund's Articles of Incorporation and
By-Laws and the signatures set forth opposite their respective names are true
and correct signatures:

<TABLE>
<CAPTION>
NAME POSITION SIGNATURE

<S> <C> <C>
Joseph M. O'Brien President /s/Joseph M. O'Brien

David D. Grayson Vice President /s/ David D. Grayson

Glenn O Head. Vice President /s/ Glenn O. Head

Andrew J. Donohue Secretary /s/ Andrew J. Donohue

Nicholas Orros Treasurer /s/Nicholas Orros

Joseph P. Abbamont Assistant Treasurer /s/Joseph P. Abbamont

Sonja Weitzberg Assistant Secretary /s/Sonja Weitzberg

Max Gartner Authorized Signer /s/Max Gartner
</TABLE>

I, Joseph M. O'Brien, in my official capacity as President of First Investors
Tax Exempt Money Market Fund, Inc. hereby certify that Andrew J. Donohue is
currently the duly elected and appointed Secretary of First Investors Tax Exempt
Money Market Fund, Inc., that the above named individuals have been duly elected
and appointed to each such position and that the signatures appearing opposite
their names are true and correct signatures.

/s/ Joseph M. O'Brien

I, Andrew J. Donohue, Secretary of First Investors Tax Exempt Money Market Fund,
Inc. hereby certify that the above named individuals have been duly elected and
appointed to each such position and that the signatures appearing opposite their
names are their true and correct signatures.

/s/ Andrew J. Donohue

<PAGE>

APPENDIX B

I, Joseph M. O'Brien, President, and I, Andrew J. Donohue, Secretary of
First Investors Tax Exempt Money Market Fund, Inc. (the "Fund"), do hereby
certify that:

The following individuals have been duly authorized in conformity with
the Fund's Articles of Incorporation and By-Laws to execute any certificate,
instruction, notice or other instrument or to give oral instructions on behalf
of the Fund, and the signatures set forth opposite their respective names are
their true and correct signatures:

NAME SIGNATURE

Joseph M. O'Brien /s/Joseph M. O'Brien

David D. Grayson /s/ David D. Grayson

Glenn O. Head /s/ Glenn O. Head

Andrew J. Donohue /s/ Andrew J. Donohue

Nicholas Orros /s/Nicholas Orros

Joseph P. Abbamont /s/ Joseph P. Abbamont

Sonja Weitzberg /s/Sonja Weitzberg

Max Gartner /s/Max Gartner

Joseph M. O'Brien, in my official capacity as President of First Investors Tax
Exempt Money Market Fund, Inc. hereby certify that Andrew Donohue is currently
the duly elected and appointed Secretary of First Investors Tax Exempt Money
Market Fund, Inc., that the above named individuals have been duly authorized to
execute any certificate of, instruction, notice or other instrument or to give
oral instructions on behalf of the Fund and the signatures set forth opposite
their names are true and correct signatures.

/s/ Joseph M. O'Brien

I, Andrew J. Donohue, Secretary of First Investors Tax Exempt Money market Fund,
Inc. hereby certify that the above named individuals have been duly authorized
to execute any certificate, instruction, notice, or other instrument or to give
oral instructions on behalf of the Fund and the signatures set forth opposite
their names are their true and correct signatures.

/s/Andrew J. Donohue

<PAGE>

SUPPLEMENT
TO
CUSTODIAN AGREEMENT

This Supplement is added to and forms a part of the Custodian Agreement
between First Investors Tax-Exempt Money Market Fund, Inc. (the "Fund") and The
Bank of New York, as successor-in-interest to Irving Trust Company (the
"Custodian") dated July 7, 1986 (the "Agreement"). All defined terms used herein
shall have the meanings ascribed to them in the Agreement.

1. If the Custodian in its sole discretion advances Funds on behalf of
the Fund or any series thereof which results in an overdraft because the moneys
held by the Custodian in the separate account for the Fund or such series shall
be insufficient to pay the total amount payable upon a purchase of securities
specifically allocated to the Fund or such series, as set forth in an officer's
certificate, oral instructions or written instructions, or which results in an
overdraft in the separate account of the Fund or such series for some other
reason, or if the Fund or such series is indebted to The Bank of New York as the
issuer of any letter of credit on behalf of the Fund or such series, such
overdraft or indebtedness shall be deemed to be a loan made by the Custodian to
the Fund (allocated to the appropriate series, if any) payable on demand and
shall bear interest from the date incurred at a rate per annum (based on a
360-day year for the actual number of days involved) equal to the Federal Funds
Rate in effect from time to time plus 1%, such rate to be adjusted on the
effective date of any change in the Federal Funds Rate, but in no event to be
less than 6% per annum. Promptly upon the occurrence of any overdraft, the
Custodian will notify the Fund of the amount of such overdraft and the series to
which it relates. In addition, the Fund hereby agrees that the Custodian shall
have a continuing lien and security interest in and to any property of the Fund
or specifically allocated the Fund's series (if applicable) at any time held by
it for the benefit of the Fund or such series or in which the Fund may have an
interest which is then in the Custodian's possession or control or in possession
or control of any third party acting in the Custodian's behalf. If, one business
day after the Custodian has demanded repayment of any overdraft or indebtedness,
the Fund fails to pay the same in full, the Custodian shall be entitled, in its
sole discretion, at any time to charge any outstanding overdraft or indebtedness
together with interest due thereon against any balance of account standing to
the Fund's or the appropriate series' credit on the Custodian's books.

2. The Fund will cause to be delivered to the Custodian by any bank
(including, if the borrowing is pursuant to a separate agreement, the Custodian)
for which it borrows money for investment or for temporary or emergency purposes
using securities held by the Custodian hereunder as collateral for such
borrowings, a notice or undertaking in the form currently employed by any such
bank setting forth the amount which such bank will loan to the Fund against
delivery of a stated amount of collateral. The Fund shall promptly deliver to
the Custodian an officer's certificate specifying with respect to each such
borrowing:

- 1 -

<PAGE>

(a) the series to which such borrowing relates (if applicable); (b) the name of
the bank, (c) the amount and terms of the borrowing, which may be set forth by
incorporating by reference an attached promissory not, duly endorsed by the
Fund, or other loan agreement, (d) the time and date, if known, on which the
loan is to be entered into, (e) the date on which the loan becomes due and
payable, (f) the total amount payable to the Fund on the borrowing date, (g) the
market value of securities to be delivered as collateral for such loan,
including the name of the issuer, the title and the number of shares or the
principal amount of any particular securities, and (h) a statement specifying
whether such loan is for investment purposes or for temporary or emergency
purposes and that such loan is in conformance with the Investment Company Act of
1940 and the Fund's prospectus. The Custodian shall deliver on the borrowing
date specified in an officer's certificate the specified collateral and the
executed promissory note, if any, against delivery by the lending bank of the
total amount of the loan payable, provided that the same conforms to the total
amount payable as set forth in the officer's certificate. The Custodian may, at
the option of the lending bank, keep such collateral in its possession, but such
collateral shall be subject to all rights therein given the lending bank by
virtue of any promissory note or loan agreement. The Custodian shall deliver
such securities as additional collateral as may be specified in an officer's
certificate to collateralize further any transaction described in this
paragraph. If the Custodian keeps the collateral in its possession, it shall
release such collateral as may be specified in a notice or undertaking in the
form currently used by the lending bank, provided that the same conforms to the
total amount set forth in an officer's certificate. The Fund shall cause all
securities released from collateral status to be returned directly to the
Custodian, and the Custodian shall receive from time to time such return of
collateral as may be tendered to it. In the event that the Fund fails to specify
in an officer's certificate the series (if applicable), the name of the issuer,
the title and number of shares or the principal amount of any particular
securities to be delivered as collateral by the Custodian, the Custodian shall
not be under any obligation to deliver any securities.

3. This Supplement shall be effective as of the date hereof upon
execution by the parties hereto, and any reference to the Agreement shall be a
reference to the Agreement as supplemented hereby.

4. In the event of any conflict between the provisions of the
Agreement and the provisions of this Supplement, the provisions of this
Supplement shall control.

5. With respect to any obligations of the Fund on behalf of a series
arising out of this agreement, including, without limitation, the obligations
arising under this Supplement, the Custodian shall look for payment or
satisfaction of any obligation solely to the assets and property of the series
to which such obligation relates as though the Fund had separately contracted
with the Custodian by separate written instrument with respect to each series.

6. Notwithstanding the provisions of any applicable law, including
without limitation the Uniform Commercial Code, the remedy set

- 2 -

<PAGE>

forth in this Section 1 shall be the only right or remedy to which the Custodian
is entitled with respect to the lien and security interest granted pursuant to
this Section 1. Without limiting the foregoing, the Custodian hereby waives and
relinquishes all contractual and common law rights of set off to which it may
now or hereafter be or become entitled with respect to any obligations of the
Fund to the Custodian arising under the Supplement.

IN WITNESS WHEREOF, the parties hereto have executed this SUPPLEMENT as
of the date first above written.

First Investors Tax-Exempt Money
Market Fund, Inc.

By:/s/C. Durso
Title: Vice President & Secretary

ATTEST:

/s/Susan I. Grant

THE BANK OF NEW YORK

By: /s/S. Grunston

Title: Vice President

ATTEST:

/s/Octavio Cabrero

- 3 -

<PAGE>

PAYMENT AND REDEMPTION AGENCY AGREEMENT

AGREEMENT made this 24th day of May, 1983 between FIRST INVESTORS
TAX-EXEMPT MONEY MARKET FUND, INC., a corporation organized and existing under
the laws of the State of Maryland, having its principal office and place of
business at 120 Wall Street, New York, New York 10005 (the "Fund") and Irving
Trust Company, a banking corporation organized and existing under the laws of
the State of New York, having its principal office and place of business at One
Wall Street, New York, New York 10015 (the "Bank").

WITNESSETH:

WHEREAS, the Fund is a diversified open-ended management type
investment company;

WHEREAS, the Fund may enter into agreements with Administrators for the
sale and redemption of shares of beneficial interests of the Fund (the
"Shares");

WHEREAS, the Fund intends to permit shareholders of the Fund
to redeem Shares by several methods; and

WHEREAS, the Fund wishes to appoint the Bank as its payment and
redemption agent in connection with the performance of certain functions related
to the redemption of Shares, and the Bank is willing to act in such capacity and
to perform the respective duties and functions thereof in the manner and on the
conditions hereinafter set forth:

NOW, THEREFORE, for and in consideration of the mutual promises
hereinafter set forth the Fund and the Bank agree as follows:

APPOINTMENT OF AGENT

1. The Fund hereby constitutes and appoints the Bank as its payment and
redemption agent to perform the duties hereinafter set forth as such during the
period of this Agreement as the same shall from time to time be constituted.

2. The Bank accepts appointment as such agent and agrees to
perform the duties thereof as hereinafter set forth.

NEW ACCOUNTS AND SUBSEQUENT INVESTMENTS

1. The Bank may receive applications for new investments,
stubs for subsequent purchases and accompanying checks. The Bank
shall accept direct wire orders from such Administrators, as the

<PAGE>

Fund shall designate to the Bank from time to time, and the Fund may represent
to the public and to Administrators that orders will be accepted by the Bank
from such Administrators.

2. The Bank shall promptly process for collection all checks for new or
subsequent investments. All funds shall be credited to the Fund's Custody
Account maintained by the Bank on the next banking day. In the case of funds
wired to the Bank through the Federal Reserve System, the funds shall be so
credited upon receipt of such instructions.

3. The Bank shall promptly forward all applications, wires
and stubs for subsequent purchases to the Fund.

4. In the case of a check which is not finally collected for whatever
reason the Bank shall charge the amount of the check against the Custodian
Account of the Fund and promptly advise the Fund of the check, the amount
involved, and such other information as the Fund may require to properly
identify such check and the investor's account to which it was credited.

III

REDEMPTION OF SHARES

1. In the case of a redemption request directed to the Fund, the Bank,
in accordance with the written instructions from the Fund in the form of an
officer's certificate (as defined in the Custodian Agreement between the Bank
and the Fund, dated May 24, 1983) will deduct the amount so stated in such
instructions from the Fund's Custodian Account and either wire that amount to
Administrative Data Management Corp.'s Redemption Account at First Pennsylvania
Bank N.A. or wire such amount to the shareholder's account or Administrators
account at another bank. The Bank will take no action on redemption requests
directed to the Bank, except to forward such request to the Fund or its transfer
agent.

2. In the case of checks drawn by shareholders of the Fund for the
redemption of shares of the Fund where the checks are presented to the Bank
other than through the Federal Reserve System, the procedure in Section III.3.
shall apply. If such a check is to be dishonored, the Fund shall so notify the
shareholder.

3. In the case of checks drawn by shareholders of the Fund for the
redemption of shares of the Fund where the checks are received by the Bank
through the Federal Reserve System, the following procedures shall apply:

(a) The Bank shall charge the Fund's Custodian Account for the
amount of the check on the same day that the New York Federal Reserve Bank
charges the account of the Bank and shall notify the Fund on or before 12:00
noon of the amount of such charges.

(b) Checks received by the Bank on any day before 5:00

<PAGE>

p.m. shall be forwarded to the Fund each business day at or before 5:00 p.m.
Checks received by the Bank on any day after 5:00 p.m. will be forwarded to the
Fund on the following business day at or before 10:45 a.m. Before 3:00 p.m. on
such following business day, the Fund shall return to the Bank all checks from
such 5:00 p.m. and 10:45 a.m. deliveries which are to be dishonored for any
reason requiring non-payment, with written instructions to return such checks.

(c) Pursuant to such instructions, the Bank shall return such
dishonored checks through the Federal Reserve System, and credit the Fund's
Custodian Account with the amount of the checks on the day on which the Bank's
account with the Federal Reserve Bank is so credited.

4. The Fund will indemnify and hold the Bank harmless from and against
any and all liabilities (including counsel fees) incurred by or assessed against
the Bank arising out of the processing of redemption checks in accordance with
the terms of this Agreement, including, without limitation, those arising out of
late returns, missing or altered signatures, forged endorsements, counterfeit
instruments, increased amount or other alterations in the face of the
instrument, and the Bank may charge the Fund's Custodian Account for all such
amounts and shall notify the Fund before 12:00 noon of the amount of any such
charges.

5. The Bank shall forward to the Fund all instructions from
shareholders and Administrators concerning the wiring of the proceeds of
redemptions, and shall only act upon written instructions from the Fund.

CONCERNING THE BANK

1. The Bank shall not be liable for any action taken or omitted to be
taken in good faith in accordance with the terms of this Agreement or upon any
written instruction, order or direction believed by it to be genuine and to be
given by any duly authorized person. The Bank shall be entitled to rely upon the
advice or opinion of counsel of the Fund or counsel to the Bank and shall not be
liable for any action taken or omitted to be taken in good faith and reliance
upon such advice or opinion. The Fund agrees to indemnify and hold the Bank
harmless from all claims and liabilities (including counsel fees) incurred or
assessed against the Bank in connection with the performance of this Agreement
except such as may arise from the Bank's own negligence or willful misconduct.

2. Except as may otherwise be agreed to in writing by the Bank and the
Fund, the Bank shall be paid as compensation for its services pursuant to this
Agreement such fee as may be mutually agreed upon by the Bank and the Fund.

3. The Bank shall not act upon any instructions or requests received
from shareholders or Administrators, except to forward

<PAGE>

such instructions or requests to the Fund, or inform the shareholder or the
Administrator to do so, whichever the Bank deems appropriate.

4. The Bank shall be under no duty to inquire as to the reasonableness
or accuracy of any instructions received by the Bank from the Fund.

5. The Bank shall be under no duty to perform any functions other than
those stated in this Agreement.

TERMINATION

1. Neither this Agreement nor any provision thereof may be changed,
waived, discharged or terminated orally. Only an instrument in writing which
shall make specific reference to this Agreement and which shall be signed by the
parties against which enforcement of the change, waiver, discharge or
termination is sought shall be effective to amend or modify this Agreement.

2. This Agreement may be terminated by sixty (60) days written notice
from one party to the other. On the termination thereof the Fund shall pay to
the Bank such compensation as may be due to the Bank as of the date of such
termination. In the event that in connection with the termination a successor to
any of the Bank's duties or responsibilities hereunder is designated by the Fund
by written notice to the Bank, the Bank shall promptly upon such termination and
at the expense of the Fund, transfer to such successor any records maintained by
the Bank under this Agreement.

MISCELLANEOUS

1. Notwithstanding any of the foregoing provisions of this Agreement
the Bank shall be under no duty or obligation to inquire into, and shall not be
liable for:

(a) The legality of the issue or sale of any Shares of
the Fund or the sufficiency of the amount to be received therefore;

(b) The legality of the redemption of any Shares of the
Fund or the propriety of the amount to be paid therefore; or

2. This Agreement shall extend to and be binding upon the parties and
their respective successor and assigns, provided, however, that this Agreement
shall not be assignable by the Fund or the Bank without the written consent of
the other.

3. This Agreement shall be governed by and construed in

<PAGE>

accordance with the laws of the State of New York.

4. This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original, but such counterparts shall,
together, constitute only one instrument.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective corporate officers, thereunder duly authorized and
their respective corporate seals to be hereunto duly affixed, as of the date and
year first above written.

FIRST INVESTORS TAX EXEMPT
MONEY MARKET FUND, INC.

By /s/Joseph M. O'Brien
Joseph M. O'Brien, President
ATTEST:

/s/Andrew J. Donohue
Andrew J. Donohue
Secretary
IRVING TRUST COMPANY

By /s/Michael A. Mertz
Michael A. Mertz
Vice President
ATTEST:

/s/Mary O'Sullivan
Vice President

<PAGE>

ADMINISTRATION AGREEMENT

This Agreement, dated as of the 17th of March, 1983, made by and
between FIRST INVESTORS TAX EXEMPT MONEY MARKET FUND, INC. (the Fund), a
corporation duly organized and existing under the laws of the State of Maryland;
FIRST INVESTORS MANAGEMENT COMPANY, INC. (FIMCO), a corporation duly organized
and existing under the laws of the State of New York; FIRST INVESTORS
CORPORATION (FIC), a corporation duly organized and existing under the laws of
the State of New York; ADMINISTRATIVE DATA MANAGEMENT CORP. (ADM), a corporation
duly organized and existing under the laws of the State of New York.

WITNESSETH THAT:

WHEREAS, FIMCO and FIC are the national distributors of the shares of
the Fund; and

WHEREAS, ADM has agreed to act as transfer agent of the Fund, as its
dividend disbursing agent, and as administrator of the Dividend Reinvestment,
Share Accumulation and Systematic Withdrawal Accounts of the Fund, and ADM also
agreed to act for the Fund in other respects as hereinafter stated; and

WHEREAS, the parties hereto desire to set forth certain terms relating
to the activities of ADM under this Agreement.

NOW THEREFORE, in consideration of the premises and mutual covenants
contained herein, the parties hereto, intending to be legally bound, do hereby
agree as follows:

THE TRANSFER AGENCY

Section 1. The Fund hereby appoints ADM as its transfer agent, and ADM
accepts such appointment and agrees to act in such capacity upon the terms set
forth in this Agreement.

Section 2. ADM will maintain stock registry records in the usual form
in which it will note the issuance and redemption of Shares and the issuance and
transfer of Share Certificates, and is also authorized to maintain an account
entitled Unissued Share Certificate Account in which it will record the Shares
and fractions issued and outstanding from time to time for which issuance of
Share Certificates is deferred. ADM is also authorized to keep records, which
will be part of the stock transfer records, as well as its records of the Plans,
in which it will note the names and registered addresses of Planholders, and the
number of shares and fractions from time to time owned by them for which no
Share Certificates are outstanding. Each Shareholder or Planholder whether he
holds one or more Share Certificates or owns Shares held

-1-

<PAGE>

under one or more Plans, or whether he holds or owns Shares by both methods,
will be assigned a single account number.

Section 3. Whenever Shares are purchased for Planholders, the Fund
authorizes ADM to dispense with the issuance and countersignature of Share
Certificates. In such case ADM, as transfer agent, shall merely note on its
stock registry records the issuance of the Shares and fractions, (if any), shall
credit the Unissued Share Certificate Account with the Shares and fractions to
the respective Planholders. Likewise, whenever ADM has occasion to surrender for
redemption Shares and fractions owned by Planholders, it shall be unnecessary to
issue Share Certificates for redemption purposes. The Fund authorizes ADM in
such cases to process the transactions by appropriate entries in its stock
transfer records, and debiting of the Unissued Share Certificate Account and the
record of issued Shares outstanding. Whenever Planholders are entitled to the
issuance of Share Certificates for Shares held under Plans, the Fund authorizes
ADM as transfer agent, to countersign Share Certificates for issuance and
delivery, and to debit the Unissued Certificate Account.

Section 4. ADM in its capacity as transfer agent will, in addition to
the duties and functions above-mentioned, perform the usual duties and functions
of a stock transfer agent for a corporation. It will countersign for issuance or
reissuance of Share Certificates representing original issue or reissued
treasury Shares as directed by the Written Instructions of the Fund, and will
transfer Share Certificates registered in the name of Shareholders from one
Shareholder to another in the usual manner. ADM may rely conclusively and act
without further investigation upon any list, instruction, certification,
authorization, Share Certificate or other instrument or paper believed by it in
good faith to be genuine and unaltered, and to have been signed, countersigned,
or executed by a duly authorized person or persons, or upon the instructions of
any Officer of the Fund, or upon the advice of counsel for the Fund or for ADM.
ADM may record any transfer of Share Certificates which is believed by it in
good faith to have been duly authorized or may refuse to record any transfer of
Share Certificates if in good faith ADM in its capacity as transfer agent deems
such refusal necessary in order to avoid any liability either to the Fund or
ADM. The Fund agrees to indemnify and hold harmless ADM from and against any and
all losses, costs, claims and liability which it may suffer or incur by reason
of so relying or acting or refusing to act in good faith.

THE DIVIDEND DISBURSEMENT AGENCY

Section 5. Upon declaration of each dividend and each

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<PAGE>

capital gains distribution by the Board of Directors of the Fund, the Fund shall
notify ADM of the date of such declaration, the amount payable per share, the
record date for determining the Shareholders entitled to payment, the payment
date, and the reinvestment date, the price for which is to be used to purchase
Shares for reinvestment.

Section 6. On or before each payment date, the Fund will transfer, or
cause the Custodian to transfer, to ADM in its capacity as dividend disbursing
agent, the total amount of the dividend or distribution currently payable and
ADM in such capacity will on the designated payment date mail distribution
checks to the Shareholders for the proper amounts payable to them except as
follows:

(a) Dividends and capital gains distributions directed to be reinvested
under Plans will be transferred to ADM in its capacity as administrator for
application as provided in Section 11.

ADMINISTRATION OF THE PLANS

Section 7. The Fund, FIMCO and FIC hereby appoint ADM as administrator
of the Plans, and ADM accepts such appointment and agrees to act in such
capacity upon the terms set forth in this Agreement. As provided Section 2, ADM
will maintain records, which will be part of the stock registry records as well
as its records of the administration of the Plans, in which it will note the
transactions effected for the respective Planholders and the number of Shares
and fractions from time to time owned by them for which no Share Certificates
are outstanding.

Section 8. FIMCO, FIC and the Fund will from time to time keep ADM
fully informed of the names of all Planholders who are entitled to purchase
Shares at reduced offering prices and of the respective prices which are
applicable to each of such Planholders. ADM may conclusively rely on such
information in placing orders for Shares on behalf of Planholders.

Section 9. It will be the practice of ADM to process payments by
planholders received by its mutual funds department in acceptable form until the
time of the closing of the New York Stock Exchange on each day on which said
exchange is open since the same time on the prior business day in which said
exchange was open, and to obtain from FIMCO, FIC or the Fund a quotation (on
which it may conclusively rely) as of the close of the said exchange. ADM will
proceed to calculate the amount available for investment in Shares at the public
offering price so quoted, (and, if applicable), the amounts to be invested as
between commissions of dealers, shares of FIMCO, or FIC and net asset value to
be deposited with the Custodian. ADM while the public offering price so quoted
is still in effect, will, as agent for sundry Planholders, place an order

-3-

<PAGE>

with FIMCO or FIC for the proper number of Shares and fractions, will advise
FIMCO or FIC of the breakdown of the total purchase price as between discount of
dealers, shares of FIMCO or FIC and net asset value and will confirm said
figures to FIMCO or FIC in writing.

Section 10. ADM will thereupon set aside the commissions of dealers,
and share of FIMCO and FIC and will pay over the balance available (net asset
value) to the custodian and will furnish said custodian with the Statements
required by the Custodian Agreement. Said Custodian will deposit the net asset
value in the Principal Account under the Custodian Agreement. ADM will credit
the Bank's account of FIMCO or FIC for its share. The proper number of Shares
and fractions will then be issued and credited to the Unissued Certificate
Account, and the Shares and fractions purchased for each Planholder will be
credited to his separate account. ADM will thereupon mail to each Planholder a
confirmation of the purchase, with copies to the Fund and the proper dealers, if
the Fund so requests. Such confirmation will show the prior and new share
balance, the Shares held under the Plans and Shares (if any) for which Stock
Certificates are outstanding, the amount invested, the price paid and other
data.

ADM will remit commissions to the proper dealers weekly or at other
convenient intervals, as agreed upon between the Fund and ADM.

Section 11. As and when the Fund declares dividends or capital gains
distributions, it will promptly quote to ADM the net asset value per share at
the close of business in the reinvestment date, whereupon as soon as it can
calculate the total of such dividend or distributions it will receive for
reinvestment, ADM will advise the Fund of the amount which will be available for
reinvestment on the payment date and the number of Shares and fractions to be
issued. Upon receipt of the amount of the dividends or distributions to be
reinvested under Plans, ADM will pay over such amount to the Custodian for
deposit in the Principal Account under the Custodian Agreement, whereupon the
Shares and fractions purchased for the Plans will be issued pursuant to a
Statement of ADM and will be credited to the Unissued Certificate Account. ADM
will credit the Shares and fractions so purchased to the separate accounts
maintained for the respective Planholders, and will promptly mail to each
Planholder a confirmation of the purchase, with a copy to the Fund, showing the
prior and new share balance.

Section 12. Whenever a Shareholder shall deposit Shares represented by
Share Certificates in an investment plan or systematic withdrawal plan or other
plan permitting deposit of Shares thereunder, ADM as transfer agent is
authorized upon receipt

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<PAGE>

of Share Certificates registered in the name of the Shareholder, or if not so
registered in due form for transfer, to cancel such Share Certificates, to debit
the individual stock accounts and to credit the Shares to the Unissued
Certificate Account. ADM as plan administrator will credit the Shares to be
deposited to the proper plan accounts. In the event that a Planholder shall
desire to deposit under a systematic withdrawal plan Shares held in an
investment plan or other like plan, ADM will accomplish such deposit by proper
debiting and crediting of plan accounts.

Section 13. ADM will administer the systematic withdrawal plans for the
Planholders. ADM will note in such accounts the share balances from time to
time, the additional Shares purchased with the reinvested dividends and
distributions, and the Shares redeemed to provide the withdrawal payments.
Confirmations will be mailed to the Planholders reflecting each transaction,
with copies to the Fund.

Section 14. Whenever ADM shall have received requests from Planholders
to redeem Shares and remit proceeds, or whenever ADM is required to redeem
Shares to make withdrawal payments under systematic withdrawal plans or the
like, ADM will advise the Fund that it has Shares for redemption, stating the
number of Shares and fractions to be redeemed. The Fund will then quote to ADM
the applicable net asset value of redemption price, whereupon ADM will furnish
the Fund with an appropriate confirmation of the redemption and will process the
redemption by filing with the Custodian an appropriate statement of ADM as may
be required by the Custodian Agreement. The Custodian shall be authorized to pay
over to ADM as administrator, the total redemption price stated in the Statement
of ADM for proper distribution and application. The stock registry books
recording outstanding Shares, the Unissued Certificate Account and the
individual accounts of the Shareholders shall be properly debited.

Section 15. The practices and procedures of ADM and the Fund above
outlined in Sections 7 to 14, inclusive, may be altered or modified from time to
time as may be mutually agreed by the parties to this Agreement, so long as the
intent and purposes of the Plans, as stated from time to time in the prospectus
of the Fund, are observed. For special cases, the parties hereto may adopt such
procedures as may be appropriate or practical under the circumstances and ADM
may conclusively assume that any special procedure which has been approved by
the Fund, does not conflict with or violate any requirements of its Articles of
Incorporation, By-Laws or prospectus, or any rule, regulation or requirement of
any regulatory body.

Section 16. ADM in acting for Planholders, or in any other capacity set
forth in this Agreement, shall incur no liability for any actions taken or
omitted in good faith, nor shall ADM be

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<PAGE>

personally liable for any taxes, assessments or governmental charges which may
be levied or assessed on any basis whatsoever in connection with the
administration of the Plans, excepting only for taxes assessed against it in its
corporate capacity out of its compensation hereunder.

MISCELLANEOUS

Section 17. In addition to the services as transfer agent, dividend
disbursing agent and administrator as above set forth, ADM will perform other
services for the Fund as agreed from time to time, including but not limited to
preparation of Federal 1099 forms, mailing of quarterly and semi-annual reports
of the Fund, preparation of one annual list of Shareholders, and preparing
notices of Shareholders meeting, proxies and proxy statements.

Section 18. The Fund, FIMCO and FIC agree to pay ADM compensation for
its services and to reimburse it for expenses, as set forth in Schedule A
attached hereto, or as shall be set forth in amendments to such schedule
approved by the Fund, FIMCO FIC and ADM. Said payments and reimbursements shall
be allocated between the Fund, FIMCO and FIC as they may agree.

Section 19. ADM may from time to time in its sole discretion delegate
some or all of its duties hereunto to any affiliate(s) which shall perform such
functions as the agent of ADM. To the extent of such delegation, the term "ADM"
in this Agreement shall be deemed to refer to both ADM and such affiliate(s) or
either of them, as the context may indicate.

Section 20. Nothing contained in this Agreement is intended to or shall
require ADM, in any capacity hereunder to perform any functions or duties on any
holiday or other day of special observance on which ADM is closed. Functions or
duties normally scheduled to be performed on such days shall be performed on,
and as of, the next business day on which both the New York Stock Exchange and
the Bank are open.

Section 21. All terms used herein, which are defined in the Custodian
Agreement, shall have the same meanings as set forth therein. In addition, the
following terms as used in this Agreement shall have the meaning set forth below
unless the context otherwise requires:

Plan: The term Plan shall include such Dividend Reinvestment Accounts,
Share Accumulation Accounts, Systematic Withdrawal Plans and other types of
plans or accounts in form acceptable to ADM, which the Fund may from time to
time adopt and make available to its Shareholders, including plans or accounts
adopted for pension and profit sharing plans established by self-

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<PAGE>

employed individuals, partnerships, individuals, corporations and not for profit
organizations.

Planholder: The term Planholder shall mean a Shareholder who at the
time of reference is participating in a Plan.

Section 22. This Agreement may be terminated by any party to this
Agreement by giving at least sixty (60) days advance written notice stating when
thereafter such termination shall be effective. Such termination shall only be
effective with respect to the rights, obligations and duties as between the non-
terminating parties. In case such notice of termination is given by either ADM
or the Fund, the Board of Directors of the Fund shall, by resolution duly
adopted, promptly appoint a successor to ADM, to serve upon the terms set forth
in this Agreement as then amended and supplemented. Unless and until a successor
to ADM has been appointed as above, provided ADM shall continue to perform
according to the terms of this Agreement and shall be entitled to receive all
the payments and reimbursement to which it is entitled under this Agreement.

Section 23. This Agreement may be executed in two or more counterparts,
each of which when so executed shall be deemed to be an original, but such
counterparts shall together constitute but one and the same instrument.

Section 24. This Agreement shall extend to and shall be binding upon
the parties hereto and their respective successors and assigns; provided however
that this Agreement shall not be assignable by the Fund without the written
consent of the Fund, authorized or approved by a resolution of its Board of
Directors.

Section 25. This Agreement shall be governed by the laws of the State
of New York.

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<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their duly authorized officers and their corporate seals hereunto duly
affixed and attested, as of the day and the year first above written.

<TABLE>
<S> <C>
ATTEST: FIRST INVESTORS TAX EXEMPT MONEY
MARKET FUND, INC.

/s/ Andrew J. Donohue BY: /s/Joseph M. O'Brien
Andrew J. Donohue, Secretary Joseph M. O'Brien, President
[Seal]

ATTEST: FIRST INVESTORS MANAGEMENT COMPANY,
INC.

/s/ Andrew J. Donohue BY: /s/ Joseph M. O'Brien
Andrew J. Donohue, Secretary Joseph M. O'Brien, President
[Seal]

ATTEST: FIRST INVESTORS CORPORATION

/s/ Andrew J. Donohue BY:/s/ Glenn O. Head
Andrew J. Donohue, Secretary Glenn O. Head, Chairman
[Seal]

ATTEST: ADMINISTRATIVE DATA MANAGEMENT CORP.

/s/ Andrew J. Donohue BY:/s/ Glenn O. Head
Andrew J. Donohue, Secretary Glenn O. Head, Chairman
[Seal]

</TABLE>

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<PAGE>

ADMINISTRATION AGREEMENT
SCHEDULE A

Compensation and charges of Administrative Data Management Corp.
for services as Transfer Agent, Dividend Disbursing Agent and Plan
Administration, and for other services under the Administration
Agreement.

General Account Maintenance $2.00 per account per month

Reports Required by
Governmental Authorities $1.00 for each account

Exchange Fee $5.00 for each
exchange of shares
into the Fund.

OUT-OF-POCKET EXPENSES: In addition to the above charges, the Fund, First
Investors Management Company, Inc. or First Investors Corporation shall
reimburse Administrative Data Management Corp. for all out-of-pocket costs
including but not limited to postage, insurance, forms relating to shareholders
of the Fund, envelopes and other similar items, and will also reimburse
Administrative Data Management Corp. for counsel fees, including fees for the
preparation of the Administration Agreement and review of prospectus and
application forms.

THE ABOVE FEES AND OUT-OF-POCKET EXPENSES APPLY TO THE FOLLOWING
FUNDS:

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

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<PAGE>

Consent of Independent Certified Public Accountants

First Investors Tax-Exempt Money Market Fund, Inc.
95 Wall Street
New York, New York 10005

We consent to the use in Post-Effective Amendment No. 16 to the
Registration Statement on Form N-1A (File No. 2-82572) of our report dated
January 31, 1996 relating to the December 31, 1995 financial statements of First
Investors Tax-Exempt Money Market Fund, Inc., which are included in said
Registration Statement.

/s/Tait, Weller & Baker

TAIT, WELLER & BAKER

Philadelphia, Pennsylvania
April 16, 1996

<PAGE>