PRINCIPAL TAX-EXEMPT CASH MANAGEMENT FUND, INC.

                           Des Moines, Iowa 50392-0200
                                 (800) 247-4123
                                  ------------

                   PROXY FOR A SPECIAL MEETING OF SHAREHOLDERS
                                  April 7, 1999

         This  proxy is  solicited  on behalf of the Board of  Directors  of the
Fund. The undersigned  shareholder  appoints Arthur S. Filean,  Ernest H. Gillum
and  Michael  J.  Beer,  and each of them  separately,  Proxies,  with  power of
substitution,  and authorizes them to represent and to vote as designated on the
reverse side of this ballot,  at the meeting of  shareholders  of the Fund to be
held April 7, 1999 at 2:00 p.m.,  C.D.T., and at any adjournments  thereof,  all
the shares of the Fund that the  undersigned  shareholder  would be  entitled to
vote if personally present.

         Check the  appropriate  box on the  ballot,  date the  ballot  and sign
exactly as your name appears.  Your signature  acknowledges receipt of Notice of
the special Meeting of Shareholders and  Prospectus/Proxy  Statement dated March
8, 1999.  Shares will be voted as you  instruct.  If no direction  is made,  the
proxy  will be voted FOR the  proposal  listed  on the  reverse  side.  In their
discretion  the Proxies will also be  authorized to vote upon such other matters
that may properly come before the meeting.

NOTE:  PLEASE SIGN  EXACTLY AS YOUR NAME  APPEARS ON THIS  BALLOT.  PLEASE MARK,
       SIGN,  DATE AND MAIL  YOUR  PROXY  BALLOT  IN THE  ENCLOSED  POSTAGE-PAID
       ENVELOPE. If shares are held jointly,  either party may sign. If executed
       by  a   corporation,   an  authorized   officer  must  sign.   Executors,
       administrators and trustees should so indicate when signing.

         As an alternative  to mailing,  you may fax a copy of your proxy ballot
to 515-235-9235 (this is not a toll-free number) or you may call toll-free 
1-800-944-8454.



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Signature


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Signature (if held jointly)

                                          
Date                          , 1999









     The Board of Directors  recommends that shareholders vote FOR the following
proposal.  Please make your choice below in blue or black ink. Example: {X} Sign
the proxy ballot and return it as soon as possible in the enclosed envelope.

         1. Approval of the Agreement and Plan of  Acquisition  among  Principal
Tax-Exempt Cash Management Fund, Inc.,  Principal Cash Management Fund, Inc. and
Principal  Management  Corporation,  and the transaction  contemplated  thereby,
pursuant  to which the Cash  Management  Fund would  acquire  all the assets and
assume all the  liabilities of the Tax-Exempt  Fund and issue in exchange shares
of its Class A commmon stock,  and the Tax-Exempt  Fund would  distribute  those
shares to its shareholders and then dissolve.


FOR  [  ]               AGAINST  [  ]           ABSTAIN  [  ]