<PAGE>
--------------------------------------------------------------------------------
TAX EXEMPT PROCEEDS FUND, INC.
STATEMENT OF NET ASSETS
JUNE 30, 2000
================================================================================
<TABLE>
<CAPTION>
Ratings (a)
-----------------
Face Maturity Value Standard
Amount Date Yield (Note 1) Moody's & Poor's
------ ---- ----- ------ ------- --------
Tax Exempt Investments (14.54%)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 2,000,000 Kentucky Interlocal School TRAN 06/29/01 4.34% $ 2,011,360 SP-1+
1,500,000 Michigan Municipal Bond Authority RB - Series 2000B-1 07/02/01 4.29 1,509,315 SP-1+
1,000,000 New Hampshire Health & Education Facility Authority RAN
(Little Hospital) - Series E
LOC LaSalle National Bank 05/17/01 4.74 1,005,811 SP-1+
2,000,000 Ohio School Districts Cash Flow TAN 06/29/01 4.41 2,012,800 MIG-1
2,500,000 State of Oregon Housing & Community Services Mortgage RB 06/21/01 4.50 2,500,000 MIG-1
5,000,000 State of Texas TRAN 08/31/00 3.64 5,006,231 MIG-1 SP-1+
3,000,000 State of Texas TRAN 08/31/00 3.84 3,002,473 MIG-1 SP-1+
2,900,000 University of Cincinnati General Receipts BAN - Series AE-2 10/05/00 3.93 2,903,626 MIG-1 SP-1+
1,100,000 University of Cincinnati General Receipts BAN - Series AK1 12/21/00 3.84 1,101,727 MIG-1 SP-1+
1,000,000 University of Cincinnati General Receipts BAN - Series AL 12/21/00 3.84 1,001,570 MIG-1 SP-1+
4,050,000 Whitman-Hanson Regional School, MA BAN 10/13/00 4.14 4,054,416 MIG-1
1,350,000 Wisconsin School Districts Cash Flow - Series A2 09/28/00 3.74 1,350,000 MIG-1
2,800,000 Wisconsin School Districts Cash Flow - Series B2 11/01/00 3.92 2,800,000 MIG-1
----------- ------------
30,200,000 Total Tax Exempt Investments 30,259,329
----------- ------------
<CAPTION>
Variable Rate Demand Instruments (b) (67.83%)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 3,500,000 Bartow County, GA Development Authroity PCRB
(Georgia Power Company Plant Bowen Project) 03/01/24 4.55% $ 3,500,000 VMIG-1 A1+
1,365,000 Bloomington, IL Normal Airport Authority - Series 1995A 01/01/13 4.80 1,365,000 VMIG-1
700,000 Burke County, GA Development Authority PCRB
(Georgia Power Company Vogtle 2nd - Series) 04/01/25 4.55 700,000 VMIG-1 A1
5,000,000 Burlington, KS Environmental Agency (Power and Light) 09/01/15 4.90 5,000,000 VMIG-1 A1
2,975,000 Capital Realty Investment MHRB COPS - Series 1996
LOC Swiss Bank 12/01/04 5.05 2,975,000 VMIG-1 A1+
3,650,000 City & County of Denver, CO Refunding MHRB
(Cottonwood Creek Project)
LOC General Electric Capital Corporation 04/15/14 5.00 3,650,000 A1+
2,000,000 Columbia, AL IDRB PCRB
(Alabama Power Company Project) - Series A 11/01/21 4.55 2,000,000 VMIG-1 A1+
5,700,000 Commonwealth of Puerto Rico 07/30/00 4.75 5,700,000 VMIG-1
2,800,000 Cuyahoga, OH HRB (Cleveland Clinic) - Series 1997C 01/01/16 4.80 2,800,000 VMIG-1 A1+
5,000,000 Dallas Area Rapid Transit (North Central Light)
LOC Dexia CLF 01/05/05 4.75 5,000,000 VMIG-1 A1+
400,000 DeKalb County, GA Development Authority IDRB (Pet Inc. Project)
LOC Credit Suisse First Boston 02/01/02 4.85 400,000 P1
</TABLE>
--------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
--------------------------------------------------------------------------------
================================================================================
<TABLE>
<CAPTION>
Ratings (a)
------------------
Face Maturity Value Standard
Amount Date Yield (Note 1) Moody's & Poor's
------ ---- ----- ------ ------- --------
Variable Rate Demand Instruments (Continued)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 600,000 DeKalb County, GA Development Authority IDRB (Pet Inc. Project)
LOC Credit Suisse First Boston 02/01/04 4.85% $ 600,000 P1
7,150,000 DeKalb County, GA Housing Authority
LOC Bank of Montreal 12/01/07 4.90 7,150,000 A1+
1,700,000 Delaware County, PA IDA PCRB (Philadelphia Electric Company)
LOC Toronto Dominion Bank 08/01/16 4.55 1,700,000 P1 A1+
700,000 Delaware Valley, PA Regional Finance Authority Local Government RB
LOC Credit Suisse First Boston 12/01/18 4.75 700,000 VMIG-1 A1+
10,000,000 Emmaus, PA General Authority Local Government
(Pool Project) - Series C16
LOC KBC Bank 03/01/24 4.90 10,000,000 A1
2,200,000 Greystone RB Certificate
(Variable Senior Certificates of Beneficial Ownership)
LOC Credit Suisse First Boston 05/01/28 4.93 2,200,000 VMIG-1 A1+
3,200,000 Harris County, TX Industrial Development Corporation RB
(Baytank Houston Inc. Project)
LOC Rabobank Nederland 02/01/20 4.75 3,200,000 A1+
4,000,000 Harris County, TX Health Facilities (Methodist Hospital) 12/01/25 4.55 4,000,000 A1+
6,000,000 Harris County, TX Health Faciltiies Development Corporation
(Memorial Hospital Systems) 12/01/26 4.55 6,000,000 VMIG-1 A1+
5,000,000 Harris County, TX Health Facilities Development Authority
(Texas Children's Hospital)
Insured by MBIA Insurance Corp. 10/01/29 4.90 5,000,000 VMIG-1 A1+
3,600,000 Illinois Development Finance Authority RB (Glenwood School for Boys)
LOC Harris Trust 02/01/33 4.70 3,600,000 A1+
3,300,000 Illinois Educational Facilities Authority
(Chicago Children's Museum) - Series 1994
LOC National Bank of Detroit 02/01/28 4.75 3,300,000 VMIG-1 A1+
3,000,000 Illinois HEFA RB (Rush-Presbyterian St. Luke's)
LOC Northern Trust Bank 11/15/06 4.80 3,000,000 VMIG-1 A1+
2,400,000 Indiana HEFA (Rehabilitation Hospital of Indiana)
LOC National Bank of Detroit 11/01/20 4.70 2,400,000 VMIG-1
1,500,000 Irvine, CA Improvement Bond Act (Assesment District # 97-16)
LOC Societe General 09/02/22 4.15 1,500,000 VMIG-1 A1+
3,200,000 Jackson County, MS Port Facility RB (Chevron USA Inc. Project) 06/01/23 4.55 3,200,000 P1
1,100,000 Jacksonville, FL Electric Authority RB (Electric System) - Series A 10/01/10 4.55 1,100,000 VMIG-1 A1+
2,200,000 Jacksonville, FL Electric Authority (Electric System) - Series C 10/01/10 4.55 2,200,000 VMIG-1 A1+
</TABLE>
--------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
--------------------------------------------------------------------------------
TAX EXEMPT PROCEEDS FUND, INC.
STATEMENT OF NET ASSETS (CONTINUED)
JUNE 30, 2000
================================================================================
<TABLE>
<CAPTION>
Ratings (a)
-----------------
Face Maturity Value Standard
Amount Date Yield (Note 1) Moody's & Poor's
------ ---- ----- ------ ------- --------
Variable Rate Demand Instruments (Continued)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 2,945,000 Kansas State Development Authority (Village Shalom Obligation)
LOC LaSalle National Bank 11/15/28 4.60% $ 2,945,000 A1+
2,000,000 Kentucky EDFA (Pooled Hospital Loan Program)
Insured by Capital Reinsurance 08/01/18 4.95 2,000,000 A1+
695,000 Lancaster, PA Higher Education Authority College RB
(Franklin & Marshall College)
LOC Chase Manhattan Bank, N.A. 04/15/27 4.87 695,000 VMIG-1 A1
6,680,000 Lisle, IL MHRB
Collateralized by Federal National Mortgage Association 09/15/26 4.90 6,680,000 A1+
2,500,000 Maryland State IDA RB (Johnson Control Inc.) 12/01/03 5.05 2,500,000 VMIG-1
3,700,000 Michigan Strategic Fund Limited Obligation RB
(Detroit Edison Company) - Series CC
LOC Barclays Bank PLC 09/01/30 4.60 3,700,000 P1 A1+
2,760,000 Missouri HEFA (Washington University) 09/01/10 4.75 2,760,000 VMIG-1 A1+
4,420,000 Montgomery County, MD Housing Opportunities Commission MHRB
(Oakwood-Gainesburg)
Guaranteed by Federal Home Loan Mortgage Corporation 11/01/07 4.90 4,420,000 A1+
1,000,000 M-S-R Public Power Agency, CA (San Juan Project Lein) - Series F
Insured by MBIA Insurance Corp. 07/01/22 4.15 1,000,000 VMIG-1 A1+
3,000,000 North Carolina Medical Care Community Health Care Facilities RB
(The Givens Estates Inc. Project)
LOC First Union National Bank 12/01/26 4.60 3,000,000 VMIG-1
1,800,000 Pennsylvania State Turnpike Commission 06/01/28 4.50 1,800,000 VMIG-1 A1+
1,200,000 Philadelphia, PA Water & Waste Water RB - Series B
Insured by AMBAC Indemnity Corp. 08/01/27 4.70 1,200,000 VMIG-1 A1+
2,350,000 Pitkin County,CO IDRB (Aspen Skiing Company Project)
LOC Bank One Capital Market 04/01/16 4.60 2,350,000 A1+
900,000 Reading, PA (York County General Authority)
Insured by AMBAC Indemnity Corp. 09/01/26 4.75 900,000 A1+
1,000,000 Roanoke, VA IDA HRB (Raonoke Memorial Hospital) 07/01/19 4.55 1,000,000 VMIG-1 A1
1,700,000 Roanoke, VA IDA HRB (Carilion Health Systems) 07/01/27 4.60 1,700,000 VMIG-1 A1+
400,000 Royal Oak, MI HFA RB (William Beaumont Hospital) 01/01/27 4.50 400,000 VMIG-1 A1+
5,220,000 San Bernardino County, CA MFHRB (Parkview Place) - Series A
Guaranteed by Federal Home Loan Bank 03/01/27 4.25 5,220,000 A1+
3,000,000 Town of Hurley, NM PCRB (Kennecott Santa Fe - British Petroleum) 12/01/15 4.55 3,000,000 P1 A1+
------------ ------------
141,210,000 Total Variable Rate Demand Instruments 141,210,000
------------ ------------
</TABLE>
--------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
--------------------------------------------------------------------------------
TAX EXEMPT PROCEEDS FUND, INC.
STATEMENT OF NET ASSETS (CONCLUDED)
JUNE 30, 2000
================================================================================
<TABLE>
<CAPTION>
Ratings (a)
-----------------
Face Maturity Value Standard
Amount Date Yield (Note 1) Moody's & Poor's
------ ---- ----- ------ ------- --------
Put Bonds (c) (13.00%)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 2,000,000 Chicago GO Tender Notes
LOC Landesbank Hessen 12/07/00 3.90% $ 2,000,000 VMIG-1 SP1+
7,500,000 Connecticut State Special Assessment Unemployment Compensation
Advance Fund RB - Series 1993C
Insured by FGIC 07/01/00 3.38 7,500,000 VMIG-1 A1+
8,000,000 Connecticut State Special Assessment Unemployment Compensation
Advance Fund RB - Series 1993C
Insured by FGIC 07/01/01 4.35 8,000,000 VMIG-1 A1+
6,885,000 Vermont Educational & Health Building Finance Agency
(Middlebury College) 11/01/00 3.85 6,885,000 A1+
2,680,000 Vermont Educational & Health Building Finance Agency
(Middlebury College) 05/01/01 4.35 2,680,000 A1+
----------- ------------
27,065,000 Total Put Bonds 27,065,000
----------- ------------
<CAPTION>
Revenue Bond (0.96%)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 2,000,000 State of Oregon Housing and Community
Services Single Family Housing
Collaterized by U.S. Government Agencies 11/02/00 3.85% $ 2,000,000 MIG-1
----------- ------------
2,000,000 Total Revenue Bond 2,000,000
----------- ------------
<CAPTION>
Tax Exempt Commercial Paper (9.66%)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 5,000,000 Hospital Board of Lee County (Lee Memorial Hospital Project) 10/16/00 4.40% $ 5,000,000 VMIG-1 A1+
5,000,000 Houston, TX - Series C 07/11/00 4.75 5,000,000 P1 A1+
3,100,000 Maricopa County, AZ PCRB
(Southern California Edison Company) 08/08/00 4.25 3,100,000 P1 A1
3,000,000 State of Wisconsin GO 07/12/00 4.20 3,000,000 P1 A1+
4,000,000 State of Wisconsin GO 08/08/00 4.20 4,000,000 P1 A1+
----------- ------------
20,100,000 Total Tax Exempt Commercial Paper 20,100,000
----------- ------------
Total Investments (105.99%) (Cost $220,634,329+) 220,634,329
Liabilities in Excess of Net Cash and Others Assets (-5.99%) ( 12,463,791)
------------
Net Assets (100.00%), 208,191,148 Shares Outstanding (Note 3) $ 208,170,538
============
Net Asset Value, offering and redemption price per share $ 1.00
============
</TABLE>
+ Aggregate cost for Federal income tax purposes is identical.
--------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
--------------------------------------------------------------------------------
================================================================================
FOOTNOTES:
(a) Unless the variable rate demand instruments are assigned their own ratings,
the ratings are those of the holding company of the bank whose letter of
credit guarantees the issue or the insurance company who insures the issue.
All letters of credit and insurance are irrevocable and direct pay covering
both principal and interest. Certain issuers have either a line of credit,
a liquidity facility, a standby purchase agreement or some other financing
mechanism to ensure the remarketing of the securities. This is not a
guarantee and does not serve to insure or collateralize the issue. Ratings
have not been audited by Deloitte & Touche LLP.
(b) Securities payable on demand at par including accrued interest (usually
with seven days notice) and where indicated are unconditionally secured as
to principal and interest by a bank letter of credit. The interest rates
are adjustable and are based on bank prime rates or other interest rate
adjustment indices. The rate shown is the rate in effect at the date of
this statement.
(c) Maturity date indicated is the next put date.
<TABLE>
<CAPTION>
KEY:
<S> <C> <C> <C> <C> <C>
BAN = Bond Anticipation Note IDRB = Industrial Development Revenue Bond
COPS = Certificates of Participation LOC = Letter of Credit
EDFA = Economic Development Finance Authority MHRB = Multifamily Housing Revenue Bond
FGIC = Financial Guarantee Insurance Company PCRB = Pollution Control Revenue Bond
GO = General Obligations RAN = Revenue Anticipation Note
HFA = Housing Finance Authority RB = Revenue Bond
HEFA = Health and Education Facilities Authority TAN = Tax Anticipation Note
HRB = Hospital Revenue Bond TRAN = Tax and Revenue Anticipation Note
IDA = Industrial Development Authority
</TABLE>
--------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
--------------------------------------------------------------------------------
TAX EXEMPT PROCEEDS FUND, INC.
STATEMENT OF OPERATIONS
YEAR ENDED JUNE 30, 2000
================================================================================
<TABLE>
<CAPTION>
INVESTMENT INCOME
<S> <C>
Interest income............................................................................. $ 7,647,078
Expenses (Note 2)........................................................................... ( 833,233)
------------
Net investment income....................................................................... 6,813,845
<CAPTION>
REALIZED GAIN (LOSS) ON INVESTMENTS
<S> <C>
Net realized gain (loss) on investments..................................................... ( 15,960)
------------
Net increase in net assets from operations.................................................. $ 6,797,885
=============
</TABLE>
--------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
--------------------------------------------------------------------------------
TAX EXEMPT PROCEEDS FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED JUNE 30, 2000 AND 1999
================================================================================
<TABLE>
<CAPTION>
Year Year
Ended Ended
June 30, 2000 June 30, 1999
------------- -------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income............................................ $ 6,813,845 $ 5,589,202
Net realized gain (loss) on investments.......................... ( 15,960) 49
-------------- ---------------
Net increase in net assets from operations....................... 6,797,885 5,589,251
Dividends to shareholders from net investment income................ ( 6,813,845) ( 5,589,202)
Net increase (decrease) from capital share transactions (Note 3).... 18,650,674 ( 2,480,032)
-------------- --------------
Total increase (decrease) in net assets...................... 18,634,714 ( 2,479,983)
Net assets:
Beginning of year................................................ 189,535,824 192,015,807
--------------- ---------------
End of year...................................................... $ 208,170,538 $ 189,535,824
=============== ===============
</TABLE>
--------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
--------------------------------------------------------------------------------
TAX EXEMPT PROCEEDS FUND, INC.
NOTES TO FINANCIAL STATEMENTS
================================================================================
1. Summary of Accounting Policies
Tax Exempt Proceeds Fund, Inc. is a no-load, diversified, open-end management
investment company registered under the Investment Company Act of 1940. This
Fund is a short term, tax exempt money market fund. Its financial statements are
prepared in accordance with accounting principles generally accepted in the
United States of America for investment companies as follows:
a) Valuation of Securities -
Investments are valued at amortized cost. Under this valuation method, a
portfolio instrument is valued at cost and any discount or premium is
amortized on a constant basis to the maturity of the instrument. The
maturity of variable rate demand instruments is deemed to be the longer of
the period required before the Fund is entitled to receive payment of the
principal amount or the period remaining until the next interest rate
adjustment.
b) Federal Income Taxes -
It is the Fund's policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute
all of its tax exempt and taxable income, if any, to its shareholders.
Therefore, no provision for federal income tax is required.
c) Dividends and Distributions -
Dividends from investment income (excluding capital gains and losses, if
any, and amortization of market discount) are declared daily and paid
monthly. Distributions of net capital gains, if any, realized on sales of
investments are made after the close of the Fund's fiscal year, as declared
by the Fund's Board of Directors.
d) Use of Estimates -
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that effect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported
amounts of increases and decreases in net assets from operations during the
reporting period. Actual results could differ from those estimates.
e) General -
Securities transactions are recorded on a trade date basis. Interest income
is accrued as earned. Realized gains and losses from securities
transactions are recorded on the identified cost basis.
2. Investment Management Fees and Other Transactions with Affiliates
Under the Investment Management Contract, the Fund pays an investment management
fee to Reich & Tang Asset Management, L.P. (the "Manager") at the annual rate of
.40 of 1% per annum of the Fund's average daily net assets up to $250 million;
.35 of 1% per annum of the average daily net assets between $250 million and
$500 million; and .30 of 1% per annum of the average daily net assets over $500
million. The Management Contract also provides that the Manager will bear the
cost of all other expenses of the Fund. Therefore, the fee payable under the
Management Contract will be the only expense of the Fund.
--------------------------------------------------------------------------------
<PAGE>
--------------------------------------------------------------------------------
================================================================================
2. Investment Management Fees and Other Transactions with Affiliates (Continued)
Pursuant to a Distribution Plan adopted under Securities and Exchange Commission
Rule 12b-1, the Fund and the Manager have entered into a Distribution Agreement.
The Fund's Board of Directors has adopted the plan in case certain expenses of
the Fund are deemed to constitute indirect payments by the Fund for distribution
expenses.
3. Capital Stock
At June 30, 2000, 20,000,000,000 shares of $.001 par value stock were authorized
and paid in capital amounted to $208,191,148. Transactions in capital stock, all
at $1.00 per share, were as follows:
<TABLE>
<CAPTION>
Year Ended Year Ended
June 30, 2000 June 30, 1999
------------- -------------
<S> <C> <C>
Sold...................................... 695,818,387 550,776,547
Issued on reinvestment of dividends....... 1,772,803 1,686,931
Redeemed.................................. ( 678,940,516) ( 554,943,510)
------------- -------------
Net increase (decrease)................... 18,650,674 ( 2,480,032)
============= =============
<CAPTION>
4. Liabilities
At June 30, 2000, the Fund had the following liabilities:
<S> <C>
Payables for securities purchases......... $ 13,535,408
Accrued management fee.................... 6,802
Dividends payable......................... 526,736
--------------
Total liabilities...................... $ 14,068,946
==============
</TABLE>
5. Sales of Securities
Accumulated undistributed realized losses at June 30, 2000 amounted to $20,610.
This amount represents tax basis capital losses which may be carried forward to
offset future gains. Such losses expire through June 30, 2007.
--------------------------------------------------------------------------------
<PAGE>
--------------------------------------------------------------------------------
TAX EXEMPT PROCEEDS FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
================================================================================
6. Financial Highlights
<TABLE>
<CAPTION>
Year Ended June 30,
-----------------------------------------------------------------------
2000 1999 1998 1997 1996
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:
(for a share outstanding throughout the year)
Net asset value, beginning of year......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- --------- --------- --------- ---------
Income from investment operations:
Net investment income.................... 0.033 0.029 0.033 0.032 0.033
Less distributions:
Dividends from net investment income..... ( 0.033) ( 0.029) ( 0.033) ( 0.032) ( 0.033)
------- ------- ------- ------- -------
Net asset value, end of year............... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
Total Return............................... 3.30% 2.92% 3.31% 3.23% 3.31%
Ratios/Supplemental Data
Net assets, end of year (000).............. $ 208,171 $ 189,536 $ 192,016 $ 199,050 $ 254,251
Ratios to average net assets:
Expenses................................. 0.40% 0.40% 0.40% 0.40% 0.40%
Net investment income.................... 3.29% 2.89% 3.26% 3.18% 3.26%
</TABLE>
--------------------------------------------------------------------------------
<PAGE>
--------------------------------------------------------------------------------
TAX EXEMPT PROCEEDS FUND, INC.
REPORT OF INDEPENDENT ACCOUNTANTS
================================================================================
To the Board of Directors and Shareholders of
Tax Exempt Proceeds Fund, Inc.
We have audited the accompanying statement of net assets of Tax Exempt Proceeds
Fund, Inc. (the "Fund") as of June 30, 2000 and the related statements of
operations and changes in net assets, and the financial highlights for the year
then ended. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is the express an
opinion on these financial statements and financial highlights based on our
audit. The statement of changes in net assets for the year ended June 30, 1999
and the financial highlights for each of the four years in the period then ended
were audited by other auditors whose report, dated July 23, 1999, expressed an
unqualified opinion on those statements and financial highlights.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. 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 June 30, 2000, by correspondence with the custodian. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Tax Exempt Proceeds
Fund, Inc. as of June 30, 2000, the results of its operations, changes in its
net assets, and its financial highlights for the year then ended in conformity
with accounting principles generally accepted in the United States of America.
Deloitte & Touche LLP
New York, New York
July 28, 2000
--------------------------------------------------------------------------------
<PAGE>
--------------------------------------------------------------------------------
-------------------------------------------------------
This report is submitted for the general information
of the shareholders of the Fund. It is not authorized
for distribution to prospective investors in the Fund
unless preceded or accompanied by an effective
prospectus, which includes information regarding the
Fund's objectives and policies, experience of its
management, marketability of shares, and other
information.
-------------------------------------------------------
Tax Exempt Proceeds Fund, Inc.
600 Fifth Avenue
New York, New York 10020
Manager
Reich & Tang Asset Management, L.P.
600 Fifth Avenue
New York, New York 10020
Custodian
State Street Kansas City
801 Pennsylvania
Kansas City, Missouri 64105
Transfer Agent &
Dividend Disbursing Agent
Reich & Tang Services, Inc.
600 Fifth Avenue
New York, New York 10020
TEP6/00A
--------------------------------------------------------------------------------
<PAGE>
--------------------------------------------------------------------------------
TAX EXEMPT
PROCEEDS
FUND, INC.
Annual Report
June 30, 2000
--------------------------------------------------------------------------------
<PAGE>
