Supplement No. 2 dated January 3, 1996
(Supplanting Supplement No. 1 dated July 17, 1995)
to
Prospectus dated May 1, 1995
for
STATE STREET RESEARCH TAX-EXEMPT FUND
a series of State Street Research Tax-Exempt Trust
Other Programs
Immediately after the first sentence of the first paragraph under the
caption "Purchase of Shares--Class A Shares--Initial Sales Charges--Other
Programs" at page 13 of the Prospectus, the following is added:
"Sales without a sales charge, or with a reduced sales charge, may also be
made through brokers, financial planners, institutions, and others, under
managed fee-based programs (e.g., "wrap fee" or similar programs) which
meet certain requirements established from time to time by the Distributor,
in the event the Distributor determines to implement such arrangements."
Additional Information
Under the caption "Redemption of Shares--Additional Information" at page
18 of the Prospectus, the first paragraph is revised in its entirety as follows:
"Because of the relatively high cost of maintaining small shareholder
accounts, the Fund reserves the right to involuntarily redeem at its option
any shareholder account which remains below $1,500 for a period of 60 days
after notice is mailed to the applicable shareholder, or to impose a
maintenance fee on such account after 60 days' notice. Such involuntary
redemptions will be subject to applicable sales charges, if any. The Fund
may increase such minimum account value above such amount in the future
after notice to affected shareholders. Involuntarily redeemed shares will
be priced at the net asset value on the date fixed for redemption by the
Fund, and the proceeds of the redemption will be mailed to the affected
shareholder at the address of record. Currently, the maintenance fee is $18
annually, which is paid to the Transfer Agent. The fee does not apply to
certain retirement accounts or if the shareholder has more than an
aggregate $50,000 invested in the Fund and other Eligible Funds combined.
Imposition of a maintenance fee on a small account could, over time,
exhaust the assets of such account."
Management of the Fund
Under the caption "Management of the Fund" at page 23 of the Prospectus,
the seventh paragraph is revised in its entirety as follows:
"The Fund is managed by Paul J. Clifford, Jr. Mr. Clifford has managed the
Fund since January 1996. Mr. Clifford's principal occupation currently is
Vice President of State Street Research & Management Company. During the
past five years he has also served as a securities analyst for State Street
Research & Management Company."
CONTROL NUMBER: 2891-960103(0297)SSR-LD TE-399E-196IBS
