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That each Reorganization has been structured with the intention that it qualify for Federal income tax purposes as a tax-free reorganization under the Code.

That Bremer Trust, the investment manager for the Bremer Funds, will bear all expenses of the Acquired Funds relating to the Reorganizations. The Bremer Board was informed that T. Rowe Price had agreed to pay Bremer Trust an amount equal to 42.5 basis points of the value of the aggregate net assets of the Acquired Funds transferred to the Price Funds on the Closing Date if the Reorganizations are consummated. Based on the net asset value of the Funds as of September 15, 2006, Bremer Trust would receive a payment of $638,137. The actual payment may be higher or lower, depending on the net asset value of the Funds on the Closing Date.

Alternatives available to the Acquired Funds, including liquidation or maintaining the Funds as is. The Bremer Board took into account Bremer Trust`s desire to refocus its investment management staff toward individual client portfolio management. The Bremer Board determined that the Reorganizations presented a more desirable option for Acquired Fund shareholders than liquidation or maintaining the Funds as is.

Increasing administrative, compliance and legal expenses resulting from a regulatory environment that is becoming more burdensome for small funds.

In approving the Reorganizations, the Bremer Board, including all of the Bremer Independent Directors, determined that each Reorganization is in the best interests of the respective Acquired Fund and its shareholders. The Bremer Board approved the Plan and directed that the Plan and Reorganizations be submitted to the shareholders of the Acquired Funds for approval.

The Board of Directors of Bremer Investment Funds, Inc. unanimously recommends that the shareholders of each Acquired Fund approve the Plan that relates to their Fund. Approval of a Plan by one Acquired Fund is not contingent upon the approval of a Plan by the other Acquired Fund.

The Price Boards have also approved the Plans on behalf of the Acquiring Funds.

Federal Income Tax Consequences of the Reorganizations

General

Each Reorganization has been structured with the intention that it qualify for Federal income tax purposes as a tax-free reorganization under Section 368(a) of the Code. This means that, in the opinion of counsel, no gain or loss will be recognized by a share holder of an Acquired Fund for Federal income tax purposes as a result of a Reorganization.

As a condition to the closing of each Reorganization, each of the Acquired Funds and Acquiring Funds will receive an opinion of Briggs and Morgan, Professional Association ("Briggs and Morgan"), counsel to the Acquired Funds, substantially to the effect that, among other things, for Federal income tax purposes, upon consummation of each Reorganization (i) no gain or loss will be recognized by an Acquired Fund or an Acquiring Fun d as a result of its respective Reorganization, (ii) no gain or loss will be recognized by a shareholder of an Acquired Fund upon his or her receipt of Corresponding Shares in the respective Reorganization solely in exchange for his or her shares of such Acquired Fund, (iii) an Acquired Fund and an Acquiring Fund each will be a "party to a reorganization" under Section 368(b) of the Code, (iv) the holding period of the assets of an Acquired Fund acquired by the respective Acquiring Fund will include the period during which such assets were held by such Acquired Fund, (v) the holding period for Corresponding Shares of an Acquiring Fund received by each shareholder of the respective Acquired Fund in exchange for his or her shares of such Acquired Fund will include the period during which such shareholder held shares of such Acquired Fund (provided such Acquired Fund shares were held as capital assets on the date of the exchange), (vi) immediately after a Reorganization, the tax basis of the Corresponding Shares received by

shareholders of the respective Acquired Fund in such Reorganization will be equal, in the aggregate, to the tax basis of the shares of such Acquired Fund surrendered in exchange therefore and (vii) the Acquiring Fund`s tax basis in the assets that the Acquiring Fund receives from the Acquired Fund should be the same as the Acquired Fund`s tax basis in such assets immediately prior to such exchange. Briggs and Morgan`s opinion will be based upon certain representations made by the parties to the Reorganizations.

An opinion of counsel does not have the effect of a private letter ruling from the Internal Revenue Service ("IRS") and is not binding on the IRS or any court. If a Reorganization is consummated but fails to qualify as a reorganization within the meaning of Section 368 of the Code, the Reorganization would be treated as a taxable sale of assets followed by a taxable liquidation of the respective Acquired Fund, and Acquired Fund shareholders would recognize a taxable gain or loss equal to the difference between their basis in the Acquired Fund s hares and the fair market value of the Corresponding Shares received.

To the extent an Acquiring Fund has unrealized capital gains at the time of the respective Reorganization, the respective Acquired Fund`s shareholders may incur taxable gains in the year that such Acquiring Fund realizes and distributes those gains. This will be true notwithstanding that the unrealized gains were reflected in the price of such Acquiring Fund`s shares at the time they were exchanged for assets of such Acquired Fund in the respective < /font>Reorganization. Conversely, shareholders of an Acquiring Fund would share in unrealized capital gains of the respective Acquired Fund after the respective Reorganization and bear a tax consequence on the subsequent realization of such gains.

To the extent that an Acquired Fund has loss carryforwards at the time of the respective Reorganization, Acquired Fund shareholders may not be able to benefit from such loss carryforwards after the Reorganizations.

Prior to the closing of the Reorganizations, each Acquired Fund will declare a distribution to shareholders that, together with all previous distributions, will have the effect of distributing to shareholders all of its investment company taxable income (computed without regard to the deduction for dividends paid) and net capital gains, including those realized on disposition of portfolio securities in connection with the Reorganization (after reduction by any available capital loss carryforwards), if any, through the closing of the Reorganization. Such distributions will be taxable to shareholders.

Certain portfolio securities currently held by the Acquired Funds will likely be sold prior to the Reorganizations in order to realign each Acquired Fund`s portfolio to correspond with the portfolio of the Acquiring Fund. It is possible that such sales could be significant to the Acquired Funds; however, the exact amount of any such sales and whether and to what extent they will affect loss carryforwards or result in taxable distributions to shareholders of an Acquired Fund will be influenced by a variety of factors and can not be determined at this time.

Shareholders should consult their tax advisers regarding the effect of the Reorganizations in light of their individual circumstances. As the foregoing relates only to Federal income tax consequences, shareholders also should consult their tax advisers as to the non-United States, state, local and other tax consequences of the Reorganizations.

Status as a Regulated Investment Company

All Funds have elected and qualified to be taxed as regulated investment companies under Sections 851-855 of the Code, and after the Reorganizations, the Acquiring Funds intend to continue to qualify as regulated investment companies. An Acquired Fund`s existence as a series of Bremer Investment Funds, Inc. will be terminated as soon as practicable following the consummation of the applicable Reorganization.

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Capitalization

The following table sets forth the capitalization of each Acquired Fund and each Acquiring Fund as of July 31, 2006, and the capitalization of each Combined Fund, on a pro forma basis, as if the Reorganizations had occurred on that date.

	Bremer Growth Stock Fund	Price Blue Chip Growth Fund	Adjustment to Shares Outstanding*	Pro Forma Price Blue Chip Growth Fund
Total Net Assets	$65,705,519	$7,863,311,898		$7,929,017,417
Shares Outstanding	4,513,901	246,447,761	(2,454,812)	248,506,850
Net Asset Value Per
Share	$14.56	$31.91		$31.91

	Bremer Bond Fund	Price New Income Fund	Adjustment to Shares Outstanding*	Pro forma Price New Income Fund
Total Net Assets	$81,480,576	$3,912,246,550		$3,993,727,126
Shares Outstanding	8,333,064	446,703,827	968,372	456,005,263
Net Asset Value Per
Share	$9.78	$8.76		$8.76

* This column shows the decrease or increase in the amount of total shares outstanding as a result of the change in net asset value per share between the Bremer Fund and the Price Fund.

The table set forth above should not be relied upon to reflec t the number of shares to be received in the Reorganizations; the actual number of shares to be received will depend upon the net asset value and number of shares outstanding of each Fund at the Valuation Time.

COMPARISON OF THE FUNDS

Investment Policies

The principal i nvestment objectives and investment strategies of each Fund are set forth above under "Summary." The Funds` investment strategies are further described below.

Bremer Growth Stock Fund

The Growth Stock Fund invests substantially all, but at least 80%, of its total assets in common stocks, convertible securities, and other equity securities of companies which typically have an equity market capitalization of at least $1.0 billion. Due to the exposure to equities, the Fund`s net asset value may be subject to greater fluctuations than a portfolio containing a majority of fixed income securities.

The Growth Stock Fund invests primarily in common stocks chosen on the basis of traditional research techniques, including the assessment of corporate growth prospects, as well as risk and volatility characteristics. The Growth Stock Fu nd may invest in common stocks, preferred stocks, warrants and put or call options on stocks.

The Growth Stock Fund may also invest in the securities of foreign companies which are traded on U.S. securities exchanges or on the OTC market in depository receipt form. Such foreign corporate securities may present greater risks in the form of nationalization, confiscation, domestic marketability or other national or international political events.

Price Blue Chip Growth Fund

The fund will normally invest in at least 80% of net assets in the common stocks of large and medium-sized blue chip growth companies. These are firms that, in the view of T. Rowe Price, are well established in their industries and have the potential for above average earnings growth. The fund focuses on companies with leading market position, seasoned management, and strong financial fundamentals. The fund`s investment approach reflects its belief that solid company fundamentals (with emphasis on strong growth in earnings per share or operating cash flow) combined with a positive industry outlook will ultimately reward investors with strong investment performance. Some of the companies the fund targets will have good prospects for dividend growth.

In pursuing its investment objective, the fund`s management has the discretion to purchase some securities that do not meet its normal invest ment criteria, as described above, when it perceives an unusual opportunity for gain. These special situations might arise when the fund`s management believes a security could increase in value for a variety of reasons, including a change in management, an extraordinary corporate event, or a temporary imbalance in the supply of or demand for the securities.

While the fund will invest most assets in U.S. common stocks, other securities may also be purchased, including foreign stocks, futures, and options, in keeping wi th fund objectives.

The fund may sell securities for a variety of reasons, such as to secure gains, limit losses, or redeploy assets into more promising opportunities.

Bremer Bond Fund

Under normal market conditions, The Bond Fund invests at least 80% of its total assets in investment grade debt securities, as rated at the time of purchase. If the rating of a security is reduced or discontinued after purchase, the Bond Fund is not obligated to sell the security, but may consider doing so. The Bond Fund will invest in obligations issued or guaranteed by the U.S. Government or its agencies; obligations issued or guaranteed by foreign governments and obligations of domestic or foreign corporations (rated Baa or better by Moody`s, BBB or better by S&P), or unrated if determined by the Investment Adviser to be of comparable quality); and mortgage-backed and other asset-backed securities. Mortgage-b acked securities in which the Bond Fund may invest include mortgage pass-through certificates and multiple class pass-through certificates, real estate mortgage investment conduit pass-through certificates and collateralized mortgage obligations.

The obligations in which the Bond Fund invests will have various maturities depending upon current and forecasted levels of interest rates and the shape of the yield curve. Under normal market conditions, the Bond Fund generally attempts to maintain a weighted average effecti ve maturity of one to six years and an average effective duration of one to five years. Duration is a measure of the expected life of a fixed income security having greater precision than the concept of "term to maturity." Duration incorporates a bond`s yield, coupon interest payments, final maturity and call features into one measure. The Bond Fund`s duration is generally shorter than its average maturity, which is only a measure of when final payment is due. Duration is one of the fundamental tools used by the Investment Adviser in selecting securities for the Bond Fund. Duration can be used to estimate the effect of interest rates on a bond fund`s share price by multiplying the fund`s duration by an expected change in interest rates. For example, the price of a bond fund with a duration of five years would be expected to fall approximately 5% if rates rose by one percentage point.

Price New Income Fund

In seeking income and capital pr eservation, the fund pursues a total return strategy. Active management of the portfolio can result in bonds being sold at gains or losses. However, over the long term, the fund seeks to achieve its objective by investing primarily in income-producing securities that possess what it believes are favorable total return (income plus changes in principal) characteristics.

The fund will invest at least 80% of the fund`s total assets in income-producing securities, which may include U.S. government and agency obligations, mortgage- and asset-backed securities, corporate bonds, foreign securities, collateralized mortgage obligations (CMOs), and others, including, on occasion, equities.

Eighty percent of the debt securities purchased by the fund will be rated investment grade (AAA, AA, A, BBB, or equivalent) by each of the major credit rating agencies ( Standard & Poor`s, Moody`s, and Fitch IBCA, Inc.) that have assigned a rating to the security. If the security is unrated, it must be deemed to be of investment-grade quality by T. Rowe Price. Up to 5% of total assets may be invested in "split-rated securities," or those rated investment grade by at least one rating agency but below investment grade by others. In addition, the fund may invest up to 5% of total assets in securities that have not received an investment grade rating by any major credit rating agency.

The fund has considerable flexibility in seeking high yields. There are no maturity restrictions, so the fund can purchase longer-term bonds, which tend to have higher yields than shorter-term issues. However, the portfolio`s weighted average maturity is expected to be between four and 15 years. In addition, when there is a large yield difference between the various quality levels, the fund may move down the credit scale and purchase lower-rated bonds with higher yields. When the difference is small or the outlook warrants, the fund may concentrate investments in higher-rated issues.

The fund may also invest in other securities, including futures, options, and swaps, in keeping with its objective.

Directors and Officers

The Price Funds are governed by the Price Boards. The Board of Directors of T. Rowe Price Blue Chip Growth Fund, Inc. currently consists of nine individuals, seven of whom are independent of T. Rowe Price ("Price Independent Directors"). The Board of Directors of T. Rowe Price New Income Fund, Inc. currently consists of nine individuals, seven of whom are Price Independent Directors.

The Price Boards are responsible for the overall supervision of the Price Funds and perform various duties imposed on directors of investment companies by the Investment Company Act. Directors and officers of the Price Funds are also directors/trustees and officers of some or all of the other investment companies managed, administered or advised by T. Rowe Price, and distributed by Price Investment Services and other affiliates. The Price Boards elect the Acquiring Funds` officers. For additional information regarding the Price Boards see "Management of the Funds" in the Acquiring Funds Statement.

Management and Administrative Arrangements

Overview

Bremer Trust, a national banking association organized under the laws of the United States, is located at 445 Minnesota Street, Suite 2000, Saint Paul, Minnesota 55101. T. Rowe Price, a Maryland corporation, is located at 100 East Pratt Street, Baltimore, Maryland 21202. Bremer Trust currently serves as the investment adviser for the Acquired Funds and T. Rowe Price currently serve as the investment adviser for the Acquiring Funds. After the Reorganization, T. Rowe Price will serve as the investment adviser to both of the Combined Funds.

T. Rowe Price

T. Rowe Price and its affiliates had over $293 billion in assets under management as of June 30, 2006.

Each of the Price Funds has an Investment Advisory Committee. The chairman of each Committee has day-to-day responsibility for managing the portfolio and works with the committee in developing and executing the Fund`s investment program.

The Investment Advisory Committee for the T. Rowe Price Blue Chip Growth Fund has the following members: Larry J. Puglia, Chairman, P. Robert Bartolo, Peter J. Bates, D. Kyle Cerminara, Donald J. Easley, Henry M. Ellenbogen, Thomas J. Huber, Kris H. Jenner, Jason Nogueira, Timothy E. Parker, Robert W. Sharps, Robert W. Smith, and Joshua K. Spencer. Mr. Puglia has been chairman of the fund`s committee since 1996. He joined
T. Rowe Price in 1990 and has been managing investments since 1993. The Statement of Additional Information provides additional information about the portfolio manager`s compensation, other accounts managed by the portfolio manager, and the portfolio manager`s ownership of securities in the fund.

The Investment Advisory Committee for the T. Rowe Price New Income Fund has the following members: Daniel O. Shackelford, Chairman, Connice A. Bavely, Brian J. Brennan, Patrick S. Cassidy, Alan D. Levenson, Mary J. Miller, Edmund M. Notzon III, Vernon A. Reid, Jr., and David A. Tiberii. Mr. Shackelford became chairman of the fund`s committee in 2002. He joined T. Rowe Price in 1999 and has been managing investments since that time. The Statement of Additional Information provides additional information about the portfolio manager`s < /font>compensation, other accounts managed by the portfolio manager, and the portfolio manager`s ownership of securities in the fund.

After the Reorganizations, these portfolio managers will continue to manage the Combined Funds.

Comparison of the Investment Management Agreements

The Bremer Investment Management Agreement and the T. Rowe Price Investment Management Agreements are similar, except for certain matters, including the advisory fees and the identity of the adviser.

The advisory fees payable by the Acquired Funds to Bremer Trust are set out above under "Fee Tables and Examples." The advisory fees payable by the Acquiring Funds to T. Rowe Price are set out above under "Fee Tables and Examples."

The advisory fees payable by each of the Price Funds are at a lower annual rate than the advisory fees paid by the Bremer Funds. The Bremer Funds and the Price Funds each pay a separate fee for administrative services. See "Administrative Arrangements" below for more information on the Funds` administrative arrangements.

If shareholders approve the Reorganizations, following consummation of the Reorganizations, the portfolios of the Acquired Funds will be managed by T. Rowe Price as part of the Combined Funds. The advisory fee rate payable by each Combined Fund after consummation of the Reorganizations will be the same as the advisory fee rates payable by the Acquiring Funds.

Administrative Arrangements

T. Rowe Price Associates provides accounting services to the T. Rowe Price funds. T. Rowe Price Services, Inc. acts as the transfer and dividend disbursing agent and provides shareholder and administrative services to the funds. T. Rowe Price Retirement Plan Services, Inc. provides recordkeeping, sub-transfer agency, and administrative services for certain types of retirement plans investing in the funds. These companies receive compensation from the funds for their services. The funds may also pay third-party intermediaries for performing shareholder and administrative services for underlying shareholders in omnibus accounts. All such fees are included in the fees and expenses table under Other expenses and the fund`s financial statements.

Distribution and Shareholder Servicing Arrangements

Distributor

Rafferty Capital Markets, LLC ("Rafferty") acts as the principal distributor of the shares of the Acquired Funds. Rafferty is not affiliated with Bremer Trust. Price Investment Services, an affiliate of T. Rowe Price, acts as the distributor of the shares of the Acquiring Funds. All of the Funds are no-load and their shares ar e sold and redeemed at net asset value without the imposition of any sales charges. The address of Rafferty is 59 Hilton Avenue, Suite 101, Garden City, New York 11530. The address of Price Investment Services is 100 East Pratt Street, Baltimore, Maryland 21202. After consummation of the Reorganizations, Price Investment Services will continue to provide distribution services to each Combined Fund.

Plan of Distribution

The Acquired Funds have adopted a written plan of distribution under Rule 12b-1. The distribution fees paid by an Acquired Fund may not exceed an annual rate of 0.25% of the Acquired Fund`s average daily net assets. For the 12-month period ending February 28, 2007, the Bremer Board approved distribution fees of 0.02% for each Acquired Fund. The Acquiring Funds do not have a plan of distribution under Rule 12b-1.

Other Service Agreements with Affiliates

Price Services, a wholly owned subsidiary of T. Rowe Price, acts as the Acquiring Funds transfer and dividend disbursing agent and provides shareholder and administrative services. The address for Price Services is 100 East Pratt Street, Baltimore, Maryland 21202.

Purchase, Exchange and Redemption of Shares

The following chart highlights the purchase, redemption and exchange features of the Acquired Funds as compared to such features of the Acquiring Funds.

Purchase, Redemption and Exchange Features	Acquired Funds	Acquiring Funds

Minimum initial investment	non-retirement accounts: $2,000	non-retirement accounts: $2,500
	retirement accounts: $500	retirement accounts: $1,000
	automatic investment plan: $100 per month or quarter	gifts or transfers to minors: $1,000

Minimum subsequent investments	$100	non-retirement account: $100
		retirement account: $50
		gifts or transfers to minors: $50

Purchases	By ACH Transfer, mail (check), wire, or through automatic investment plan	By ACH Transfer, mail (check), wire, or through Automatic Asset Builder

Purchase, Redemption and Exchange Features	Acquired Funds	Acquiring Funds

Redemption	By mail or telephone	By mail or telephone

Exchanges	Shares of an Acquired Fund may be exchange d for shares of any other Acquired Fund, subject to a minimum transfer of $2,000	Shares of an Acquiring Fund may be exchanged for shares of any other Acquiring Fund or other T. Rowe Price mutual fund.

Redemption Fees	$15 for wire redemptions	$5 for wire redemptions less than $5,000

Dividend Distribution and Account Policies

The following is a summary of the dividend distribution and account policies of each of the Funds and is qualified in its entirety by the more complete informat ion contained in the Acquired Funds Prospectus, Acquiring Funds Prospectus, Acquired Funds Statement and Acquiring Funds Statement.

Valuation of Fund Shares. The net asset value per share for each Fund and class is determined once daily as of the close of regular trading on the New York Stock Exchange (generally 4 p.m. Eastern Time) by dividing the net assets (the value of all assets less liabilities) of each class by the number of its shares outstanding. See "Price of

Shares" in the Acquired Funds Prospectus and "Pricing Shares and Receiving Sale Proceeds" in the Acquiring Funds Statement.

Buy and Sell Prices. When you buy shares of a Fund, you pay the net asset value. When you sell shares of a Fund, you receive the net asset value minus any applicable redemption fees.

Dividends. The Bremer Growth Stock Fund and the Price Blue Ship Growth Fund both declare and pay dividends, if any, annually, generally in December. The Bremer Bond Fund and the Price New Income Fund both declare dividends, if any, daily and pay monthly. Each of the Funds distributes capital gains, if any, at least annually. See "Dividends, Distributions and Tax Consequences" in the Acquired Funds Prospectus and "Dividends and Other Distributions" and "Capital Gain Payments" in the Acquiring Funds Prospectus.

Dividend Reinvestments. The policy relating to dividend reinvestments is substantially the same for all Funds. Unless cash payment is requested all dividends and distributions, if any, will be reinvested. See "Dividends, Distributions and Tax Consequences" in the Acquired Funds Prospectus and "Dividends and Other Distributions" in the Acquiring Funds Prospectus.

Payment Following Redemption. Each Fund will normally send the proceeds from a redemption on the next business day, but may delay payment for up to seven days. Payment also may be delayed if the shares to be redeemed were purchased by a check that has not cleared. See "Redeeming Shares" in the Acquired Funds Prospectus and "Pricing Shares and Receiving Sale Proceeds" in the Acquiring Funds Prospectus.

Performance

General

The following tables provide performance information for shares of the Funds for the periods indicated. Past performance is not indicative of future performance.

Average annual total return is determined in accordance with a formula specified by the Commission . Average annual total return is computed by finding the average annual compounded rates of return for the 1-, 3-, 5-, and 10-year periods or for the lesser included periods of effectiveness. The calculation assumes that:

(a)All dividends and distributions are reinvested at net asset value; and

(b)Complete redemption occurs at the end of the 1-, 3-, 5-, or 10-year periods or fractional portion thereof with all nonrecurring charges deducted accordingly.

Average Annual Total Returns for the Periods Ended December 31, 2005

Bremer Growth Stock Fund	Year to Date (6/30/06)	1 Year	5 Years	10 Years	Since Inception (1/27/97)
Return Before Taxes	0.55%	2.93%	- 2.53%	N/A	4.97%
Return After Taxes on Distributions	N/A	2.86%	-2.58%	N/A	4.81%
Return After Taxes on Distributions and Sale of Fund Shares	N/A	1.99%	-2.14%	N/A	4.29%
S&P 500 Index (reflects no deduction for fees, expenses or taxes)	2.70%	4.91%	0.54%	N/A	7.30%

Bremer Bond Fund	Year to Date (6/30/06)	1 Year	< b>5 Years	10 Years	Since Inception (1/27/97)
Return Before Taxes	0.16%	1.28%	4.51%	N/A	5.04%
Return After Taxes on Distributions	N/A	-0.04%	2.79%	N/A	3.06%
Return After Taxes on Distributions and Sale of Fund Shares	N/A	0.83%	2.83%	N/A	3.08%
Lehman Brothers Intermediate Aggregate Bond Index (reflects no deduction for fees, expenses or taxes)	-0.13%	2.05%	N/A	5.50%	6.20%

8.01%

< b>Price Blue Chip Growth Fund	Year to Date (6/30/06)	1 Year	5 Years	10 Years
Return Before Taxes	-1.16%	5.95%	-0.53%	9.11%
Return After Taxes on Distributions	N/A	5.91%	-0.55%	8.86%
Return After Taxes on Distributions and Sale of Fund Shares	N/A	3.92%	-0.45%
S&P 500 Index (reflects no deduction for fees, expenses or taxes)	2.70%	4. 91%	0.54%	9.07%
Lipper Large-Cap Growth Funds Index (reflects no deduction for fees, expenses or taxes)	-2.93%	7.58%	-4.29%	6.21%

Price New Income Fund	Year to Date (6/30/06)	1 Year	5 Years< /font>	10 Years
Return Before Taxes	-1.11%	4.60%	7.37%	6.93%
Return After Taxes on Distributions	N/A	3.21%	< font style="font-size:10.0pt;" face="Times New Roman" color="Black">5.40%	4.56%
Return After Taxes on Distributions and Sale of Fund Shares	N/A	2.97%	5.09%	4.45%
Lehman Brothers U.S. Aggregate Index (reflects no deduction for fees, expenses or taxes)	-0.72%	4.34%	7.71%	7.72%
Lipper Corporate Debt Funds A-Rated Average (reflects no deduction for fees, expenses or taxes)	-0.95%	4.09%	6.99%	7.14%

Financial Highlights

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	Year ended December 31
Price Blue Chip Growth Fund	2001	2002	2003	2004	2005b

Net asset value,beginning of period	$33.85	$28.97	$21.95	$28.45	$30.92
Income From Investment Operations
Net investment income	(0.02)	—	0.16	0.09
Net gains or losses on securities (both realized and unrealized)	(4.86)	(7.02)	6.51	2.47	1.75
Total from investment operations	(4.88)	(7.02)	6.53	2.63	1.84
Less Distributions
Dividends (from net investment income)	—	—	(0.03)	(0.16)	(0.08)
Distributions (fromcapital gains)	—	—	—	—	—
Returns of capital	—	—	—	—	—
Total distributions	—	—	(0.03)	< /font>(0.16)	(0.08)
Net asset value,end of period	$28.97	$21.95	$28.45	$30.92	$32.68
Total return	(14.42)%	(24.23)%	29.75%	9.25%	5.95%
Ratios/Supplemental Data
Net assets, end of period (in millions)	$6,242	$4,482	$6,300	$7,236	$7,943
Ratio of expenses to average net assets	0.96%	0.96%	0.95%	0.88%	0.85%
Ratio of net income to average net assets	(0.06)%	0.00%	0.10%	< /font>0.56%a	0.28%
Portfolio turnover rate	48.3%	46.2%	32.6%	31.9%	43.9%

a Includes the effect of a one-time special dividend (0.38% of average net assets) that is not expected to recur.

b Per share amounts calculated using average shares outstanding method.

	Year ended May 31
Price New Income Fund	2002	2003	2004	2005 a	2006 a

Net asset value,beginning of period	$8.53	$8.70	$9.21	$8.87	$9.14
Income From Investment Operations
Net investment income	0.47	0.37	< font style="font-size:10.0pt;" face="Times New Roman">0.32	0.35	0.38
Net gains or losses on securities (both realized and unrealized)	0.17	0.52	(0.34)	0.29	(0.42)
Total from investment operations	0.64	0.89	(0.02)	0.64	(0.04)
Less Distributions
Dividends (from net investment income)	(0.47)	(0.38)	(0.32)	(0.36)	(0.39< /font>)
Distributions (fromcapital gains)	—	—	—	(0.01)	(0.02)
Returns of capital	—	—	—	—	—
Total distributions	(0.47 )	(0.38)	(0.32)	(0.37)	(0.41)
Net asset value,end of period	$8.70	$9.21	$8.87	$9.14	$8.69
Total return	7.68%	10.52%	(0.26)%	7 .27%	(0.49)%
Ratios/Supplemental Data
Net assets, end of period (in millions)	$1,863	$ 2,266	$2,512	$3,246	$3, 865
Ratio of expenses to average net assets	0.72%	0.74%	0.71%	0.69%	0.67%
Ratio of net income to average net assets	5.38%	4.23%	3.56%	3.85%	4.23%
Portfolio turnover rateb	222.0%	221.2%	219.0%	135.9%	111.1%

aPer share amounts calculated using average shares outstanding method.

bThe portfolio turnover rate calculation includes purchases and sales from mortgage dollar roll transactions had these transactions been excluded from the calculation, the portfolio turnover for the years ended May 31, 2006, May 31, 2005, May 31, 2004, May 31, 2003, and May 31, 2002 would have been 104.7%, 108.5%, 123.1%, 113.1%, and 167.9%, respectively.

Shareholder Rights

Shareholder rights are substantially the same in all of the Funds. Each full share and fractional share of a Fund entitles the shareholder to receive a proportional interest in the respective Fund`s capital gain distributions and to cast one vote per share, with fractional shares voting proportionally, on certain Fund matters, including the election of directors or trustees, changes in fundamental policies, or approval of changes in the Fund`s investment advisory agreement. Corresponding Shares issued in the Reorganizations will be fully p aid and nonassessable and will have no preemptive rights. In the event of the liquidation of a Fund, shareholders of such Fund are entitled to share pro rata in the net assets of such Fund available for distribution to shareholders.

The Funds are not required to hold annual meetings and do not intend to do so unless the Investment Company Act requires an election of directors by shareholders. Under the Bremer Investment Funds, Inc.`s Bylaws, shareholders representing at least 10% of the outstanding shares entitled to v ote may order a special meeting if they wish on any matter on which they are entitled to vote. Under each Price Corporation`s By-Laws, special meetings of shareholders may be ordered on the written request of shareholders entitled to cast (i) in the case of a meeting for the purpose of removing a director, at least 10% and (ii) in the case of a meeting for any other purpose, at least 25%, in each case of all the votes entitled to be cast at such a meeting.

Bremer Investment Funds, Inc. and each of the Price Corporation s is a Maryland corporation. A shareholder of a corporation generally has no personal liability for the acts or obligations of a corporation.

A shareholder vote is required by Maryland law to amend the charter of a Maryland corporation, or to dissolve a Maryland corporation or to dissolve a Maryland corporation.

Tax Information

The tax consequences associated with an investment in shares of an Acquired Fund are substantially the same as the tax consequences associated with an investment in shares of the respective Acquiring Fund. See "Dividends, Distributions and Tax Consequences" in the Acquired Funds Prospectuses and "Useful Information on Distributions and Taxes" in the Acquiring Funds Prospectus.

Portfolio Transactions

The procedures for engaging in portfolio transactions are generally the same for the Acquired Funds and the Acquiring Funds. Bremer Trust and T. Rowe Price may each consider the nature and extent of research services provided when brokers are selected and may cause a Fund to pay such broker-dealer commissions that exceed those that other broker-dealers may have charged, if in their view the commissions are reasonable in relation to the value of the brokerage or research services provided. For further discussion of these procedures, see in the Acquired Funds Statement and "Portfolio Transactions" in the Acquiring Funds Statement.

Additional Information

Independent Registered Public Accounting Firms

Currently Ernst & Young LLP serves as the independent registered public accounting firm of the Acquired Funds and PricewaterhouseCoopers LLP serves as the independent registered public accounting firm of the Acquiring Funds. If the Reorganizations are completed, it is currently anticipated that PricewaterhouseCoopers LLP will serve as the independent registered public accounting firm of the Combined Funds. The principal business address of PricewaterhouseCoopers LLP is 250 West Pratt Street, 21st Floor, Baltimore, Maryland 21201. The principal business address of Ernst & Young LLP is 220 South Sixth Street, Minneapolis, Minnesota 55402.

Custodian

U.S. Bank, N.A. acts as the custodian of the assets of the Acquired Funds. State Street Bank and Trust Company ("State Street") acts as the custodian of the Acquiring Funds. If the Reorganizations are completed, it is currently anticipated that State Street will continue to serve as the custodians of the Combined Funds. The principal business address of State Street is 225 Franklin Street, Boston, Massachusetts 02110.

Transfer Agent

U.S. Bancorp Fund Services, LLC, 615 East Michigan Stree t, 3rd Floor, Milwaukee, Wisconsin 53202, serves as the transfer agent with respect to each Acquired Fund. Price Services, 100 East Pratt Street, Baltimore, Maryland 21202, serves as the transfer agent with respect to each Acquiring Fund. Each transfer agent is responsible for the issuance, transfer and redemption of shares and the opening, maintenance and servicing of shareholder accounts for the respective Fund. If the Reorganizations are completed, it is currently anticipated that Price Services will continue to serve as the transfer agent of the Combined Funds.

Capital Stock

The Acquired Funds are authorized to issue up to 500 million shares of Common Stock, $.0001 par value per share. Of these shares, 100 million have been authorized for each of the Bremer Growth Stock Fund and the Bremer Bond Fund. The T. Rowe Price Blue Chip Growth Fund is authorized to issue up to one billion shares of Common Stock, $.0001 par value per share. The T. Rowe Price New Income Fund is authorized to issue up to one billion shares of Common Stock, $1.00 par value per share. See "Fund History" in the Acquired Funds Statement and "Capital Stock (Maryland Corporations)" in the Acquiring Funds Statement for further discussion of the rights and preferences attributable to shares of each Acquired Fund and each Acquiring Fund, respectively.

Shareholder Inquiries

Shareholder inquiries with respect to the Acquired Funds may be addressed to Bremer Investment Funds, Inc., Suite 2000, 445 Minnesota Street, Saint Paul, MN 55101, or by calling toll free 1-888-370-0010. Shareholder inquiries with respect to the Acquiring Funds may be addressed to T. Rowe Price Associates, Inc., 100 East Pratt Street, Baltimore, Maryland 21202 or by calling toll free 1-800-638-5660.

GENERAL

INFORMATION CONCERNING THE MEETING

Date, Time and Place of Meeting

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The Meeting will be held on November 3, 2006, at 10:00 a.m. Central Time, at the Bremer Service Center, 8555 Eagle Point Boulevard, Lake Elmo, Minnesota 55042.

Solicitation, Revocation and Use of Proxies

A shareholder e xecuting and returning a proxy has the power to revoke it at any time prior to its exercise by executing a superseding proxy (i.e., later-dated and signed), by submitting a notice of revocation to the Secretary of Bremer Funds or by subsequently registering his or her vote by telephone or via the Internet. In addition, although mere attendance at the Meeting will not revoke a proxy, a shareholder present at the Meeting may withdraw his or her proxy and vote in person.

All shares represented by properly executed proxies received at or prior to the Meeting, unless such proxies previously have been revoked, will be voted at the Meeting in accordance with the directions on the proxies; if no direction is indicated on a properly executed proxy, such shares will be voted "FOR" approval of the Plan.

It is not anticipated that any matters other than the approval of the Plan will be brought before the Meeting. If, however, any other business properly is brought before the Meeting, proxies will be voted in accordance with the judgment of the persons designated on such proxies.

Record Date and Outstanding Shares

Only holders of record of shares of the Acquired Funds at the close of business on September 15, 2006 (the "Record Date") are entitled to vote at the Meeting or any adjournment thereof. The following chart sets forth the shares of each of the A cquired Funds that are issued and outstanding and entitled to vote at the close of business on the Record Date.

Acquired Fund	Outstanding Shares
Bremer Growth Stock Fund	4,492,030
Bremer Bond Fund	8,319,006

Se curity Ownership of Certain Beneficial Owners and Management of the Funds

As of September 15, 2006 the following persons owned of record or, to the knowledge of the Bremer Funds, beneficially, 5% or more of the outstanding shares of the Bremer Growth Stock Fund or the Bremer Bond Fund.

Name of Fund	Name and Address of Shareholder	Percentage of Shares Held of Record	Percentage of Shares Held Beneficially
Bremer Growth Stock Fund	JAS & Co. c/o Bremer Trust Suite 2000 445 Minnesota Street St. Paul, MN 55101	95.2	-0-
	Bremer Trust, National Association Suite 2000445 Minnesota Street St. Paul, MN 55101	-0-	(1)
Bremer Bond Fund	JAS & Co. c/o Bremer Trust Suite 2000 445 Minnesota Street St. Paul, MN 55101	99.2%	-0-
	Bremer Trust, National Association Suite 2000 445 Minnesota Street St. Paul, MN 55101	-0-	(1)

(1)Bremer Trust exercises voting or dispositive power over Bremer Fund shares owned by clients with discretionary accounts. These accounts represent substantially all of the Bremer Funds` shares held of record by JAS & Co. Bremer Trust disclaims beneficial ownership of such shares. Under applicable SEC definitions, a person beneficially owning more than 25% of the voting securities of a fund is deemed to control the fund.

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To the knowledge of the Price Funds, as of July 31, 2006, the following shareholders owned beneficially or of record more than 5% of the outstanding voting securities of the Price Funds:

Name of Fund	Name and Address of Shareholder	Percentage of Shares Owned	Percentage of Class of Shares of Combined Fund After the Reorganization on a Pro Forma Basis
Price Blue Chip Growth Fund	Fidelity Investments Institutional Operations Comp any FIIOC as Agent for Merck & Co. Inc. 100 Magellan Way (KW1C) Covington, Kentucky 41015	4.25%	5.21%
	Pirateline & Co. T. Rowe Price Associates	6.76%	6.71%
	T. Rowe Price Retirement Plan Services < font style="font-size:10.0pt;" face="Times New Roman" color="Black">Blue Chip Growth Fund Attn.: Asset Reconciliations P.O. Box 17215 Baltimore, Maryland 21297-1215	30.65%(a)	30.42%
Price New Income Fund	Retirement Portfolio 2010 T. Rowe Price Associates	10.88%	10.59%
	Retirement Portfolio 2015 T. Rowe Price Associates	5.66%	5.51%
	Retirement Portfolio 2020 T. Rowe Price Associates	8.65%	8.42%
	T. Rowe Price Trust Company Attn.: TRPS Institutional Control Department	7.50%	7.30%
	Yachtcrew & Co. T. Rowe Price Associates	22.65%	22.05%

____________________

*Assuming that the value of the shareholder`s interest in the Fund on the date of the consummation of the applicable Reorganization was the same as on March 31, 2006.

(a)T. Rowe Price Retirement Plan Services, Inc., is a wholly owned subsidiary of T. Rowe Price Associates, Inc., which is a wholly owned subsidiary of T. Rowe Price Group, Inc., each a Maryland corporation. T. Rowe Price Retirement Plan Services is not the beneficial owner of these shares. Such shares are held of record by T. Rowe Price Retirement Plan Services and are normally voted by various retirement plans and retirement plan participants.

At September 15, 2006, the directors and officers of the Bremer Funds as a group (11 persons) owned an aggregate of less than 1% of the outstanding shares of each Acquired Fund and owned an aggregate of less than 1% of the outstanding shares of Bremer Investment Funds, Inc..

At July 31, 2006, the Directors and Executive Officers of the Price Funds as a group (10 persons) owned an aggregate of less than 1% of the outstanding shares of ea ch Acquiring Fund.

Voting Rights and Required Vote

Each share of an Acquired Fund is entitled to one vote, with fractional shares voting proportionally. Shareholders of each Acquired Fund vote separately on whether to approve the Plan. Approval of the Plan with respect to one Acquired Fund is not dependent on approval of the Plan with respect to the other Acquired Fund. Approval of a Plan by an Acquired Fund requires a Majority Shar eholder Vote.

Broker-dealer firms holding shares of any of the Acquired Funds in "street name" for the benefit of their customers and clients will request the instructions of such customers and clients on how to vote their shares before the Meeting. Broker-dealer firms will not be permitted to grant voting authority without instructions with respect to the approval of the Plans. Properly executed proxies that are returned but that are marked "abstain" or with respect to which a broker-dealer has declined to vote on an y proposal ("broker non-votes") will be counted as present for the purposes of determining a quorum at the Meeting. Assuming the presence required by a Majority Shareholder Vote, abstentions and broker non-votes will have the same effect as a vote against approval of the applicable Plan.

If, by the time scheduled for the Meeting, sufficient votes in favor of approval of a Plan are not received from the shareholders of an Acquired Fund, the persons named as proxies may propose one or more adjournments of such Meeting to permit further solicitation of proxies from shareholders. An affirmative vote of a majority of the shares of the applicable Acquired Fund present in person or by proxy and entitled to vote at the Meeting will suffice for any such adjournment. Shares voting against the proposed reorganization will be voted against any proposed adjournment. The persons named as proxies will vote in favor of any such adjournment if they determine that adjournment and additional solicitation are reasonable and in the interests of the shareholders of such Acquired Fund.

The votes of shareholders of the Acquiring Funds are not being solicited by this Proxy Statement and Prospectus and are not required to carry out the respective Reorganizations.

ADDITIONAL INFORMATION

The expenses of preparation, printing and mailing of the enclosed form of proxy, the accompanying Notice and this Proxy Statement and Prospectus ("proxy expenses") will be borne by Bremer Trust or an affiliate thereof.

Bremer Trust or an affiliate thereof will reimburse banks, brokers and others for their reasonable expenses in forwarding proxy solicitation materials to beneficial owners of the Acquired Funds and will reimburse certain officers or employees that it may employ for their reasonable expenses in assisting in the solicitation of proxies from such beneficial owners.

In order to obtain the necessary quorums at the Meetings, supplementary solicitation may be made by mail, telephone, telegraph or personal interview by officers of the Acquired Funds. The cost of soliciting proxies will be borne by Bremer Trust or an affiliate thereof.

This Proxy Statement and Prospectus does not contain all of the information set forth in the registration statements and the exhibits relating thereto which Bremer Funds and Price Funds have filed on their behalf with the Commission under the Securities Act and the Investment Company Act, to which reference is hereby made.

The Funds are subject to the informational requirements of the Securities Exchange Act of 1934, as amended, and the Investment Company Act, and in accordance therewith file reports and other information with the Commission. Proxy material, reports and other information filed by the Funds (or by Bremer Investment Funds, Inc. on behalf of the Acquired Funds or the applicable Price Corporation on behalf of the Acquiring Funds) ca n be inspected and copied at the public reference facilities maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. Copies of such materials also can be obtained by mail from the Public Reference Branch, Office of Consumer Affairs and Information Services, Securities and Exchange Commission, Washington, D.C. 20549, at prescribed rates. The Commission maintains a web site (http://www.sec.gov) that contains the Statements

of Additional Information and Prospectuses of the Acquired Funds and Acquiring Funds, as well as other material incorporated by reference and other information regarding the Funds.

LEGAL PROCEEDINGS

There are no material legal proceedings to which any of the Funds is a party.

LEGAL OPINIONS

Certain legal matters in connection with the issuance of Corresponding Shares have been passed upon for the Acquiring Funds by Henry H. Hopkins, Esquire. Certain tax matters in connection with the Reorganizations will be passed upon for the Acquired Funds by Briggs and Morgan, Professional Association, 2200 IDS Center, 80 South Eighth Street, Minneapolis, Minnesota 55402, counsel for the Acquired Funds.

SHAREHOLDER PROPOSALS

A shareholder proposal intended to be presented at any subsequent meeting of shareholders of an Acquired Fund must be received by such Acquired Fund in a reasonable time before the solicitation by the Bremer Board relating to such meeting is to be made in order to be considered in such Acquired Fund`s proxy statement and form of proxy relating to the meeting. If Proposals No. 1 and 2 are approved at the Meeting, there will likely not be an y future shareholder meetings of the Acquired Funds.

By Order of the Board of Directors

/s/Timothy Murphy
Timothy Murphy
Secretary, Bremer Investment Funds, Inc.

EXHIBIT I

FORM OF

AGREEMENT AND PLAN OF REORGANIZATION

DATED AS OF SEPTEMBER 20, 2006

TABLE OF CONTENTS

1.	Defined Terms: Section and Exhibits; Miscellaneous Terms	46
	a. Definitions	46
	b. Use of Defined Terms	49
	c. Sections and Exhibits	49
	d. Miscellaneous Terms	49

2.	The Reorganizations	49
	a. Transfer of Assets	49
	b. Issuance and Valuation of Shares in the Reorganization	50
	c. Distribution of Shares to the Acquired Fund Shareholders	50
	d. Interest; Proceeds	50
	e. Valuation Time	51
	f. Evidence of Transfer	51
	g. Termination	51
	h. Separate Agree ments; Reorganizations Not Conditioned on One Another	51

3.	Representations and Warranties of the Acquired Fund	51
	a. Formation and Qualification	51
	b. Licenses	52
	c. Authority	52
	d. Audited Financial Statements	52
	e. Unaudited Financial Statements	52
	f. Prospectus and Statement of Additional Information	53
	g. Litigation	53
	h. Material Contracts	53
	i. No Conflict	53
	j. Undisclosed Liabilities	54
	k. Taxes	54
	1. Assets	54
	m. Consents	54
	n. N-14 Registration Statement	54
	o. Capitalization	55
	p. Books and Records	55

4.	Representations and Warranties of the Acquiring Fund	55
	a. Formation and Qualification	55
	b. Licenses	55
	c. Authority	56
	d. Audited Financial Statements	56
	e. Unaudited Financial Statements	56
	f. Prospectus and Statement of Additional Information	56
	g. Litigation	57
	h. Material Contracts	57
	i. No Conflict	57
	j. Undisclosed Liabilities	57
	k. Taxes	57
	1. Consents	58
	m. N-14 Registration Statement	58
	n. Capitalization	58
	o. Shares	58

5.	Covenants of the Acquired Fund and the Acquiring Fund	59
	a. Special Shareholders` Meeting	59
	b. Unaudited Financial Statements	59
	c. Share Ledger Records of the Acquiring Fund	59
	d. Conduct of Business	59
	e. Termination of the Acquired Fund	60
	f. Filing of N-14 Registration Statement	60
	g. Shares	60
	h. Tax Returns	61
	i. Combined Proxy Statement and Prospectus Mailing	61
	j. Confirmation of Tax Basis	61
	k. Shareholder List	61

6.	Closing Date	61

7.	Conditions of the Acquired Fund	62
	a. Representations and Warranties	62
	b. Performance	62
	c. Shareholder Approval	62
	d. Approval of Board of Directors	62
	e. Deliveries by the Acquiring Fund	62
	f. No Material Adverse Change	63
	g. Absence of Litigation	63
	h. Proceedings and Documents	63
	i. N-14 Registration Statement	63
	j. Compliance with Laws; No Adverse Action or Decision	63
	k. Tax Opinion	64

8.	Conditions of the Acquiring Fund	64
	a. Representations and Warranties	64
	b. Performance	65
	c. Shareholder Approval	65
	d. Approval of Board of Directors	65
	e. Deliveries by the Acquired Fund	65
	f. No Material Adverse Change	65
	g. Absence of Litigation	66
	h. Proceedings and Documents	66
	i. N-14 Registration Statement	66
	j. Compliance with Laws; No Adverse Action or Decision k. Dividends	66
	k. Dividends	66

9.	Termination, Postponement and Waivers	67
	a. Termination of Agreement	67
	b. Commission Order	67
	c. Effect of Termination	68
	d. Waivers; Non-Material Changes	68

10.	Survival of Representations and Warranties	68

11.	Other Matters	68
	a. Further Assurances	68
	b. Notices	68
	c. Entire Agreement	69
	d. Amendment	69
	e. Governing Law	69
	f. Assignment	69
	g. Costs of the Reorganization	70
	h. Severability	70
	i. Headings	70
	j. Counterparts	70

AGREEMENT AND PLANS OF REORGANIZATION

THIS AGREEMENT AND PLANS OF REORGANIZATION (this "Agreement") is made as of the 20TH day of September, 2006, by and between, Bremer Investment Funds, Inc. ("Bremer Funds"), a Maryland corporation, on behalf of each Acquired Fund (as defined herein), each a separate series and investment portfolio of Bremer Funds, and (i) T. ROWE PRICE BLUE CHIP GROWTH FUND, INC., a Maryland corporation, on behalf of its series the T. Rowe Price Blue Chip Growth Fund, and (ii) T. ROWE PRICE NEW INCOME FUND, INC., a Maryland corporation, (together with T. Rowe Price Blue Chip Growth Fund, Inc. the "Price Corporations" and each, a "Price Corporation").

PLANS OF REORGANIZATION

WHEREAS, this Agreement constitutes a separate agreement and plan of reorganization between Bremer Funds on behalf of each of its separate series and investment portfolios referenced below (each an "Acquired Fund," and collectively, the "Acquired Funds") and the respective Price Corporations (each an "Acquiring Fund" and collectively, the "Acquiring Funds") as set forth below:

Acquired Fund: Acquiring Fund

Bremer Growth Stock Fund	T. Rowe Price Blue Chip Growth Fund (the "Price Blue Chip Growth Fund")
Bremer Bond Fund	T. Rowe Price New Income Fund (the "Price New Income Fund")

WHEREAS, each Acquired Fund owns securities that generally are assets of the character in which the respective Acquiring Fund is permitted to invest;

WHEREAS, each reorganization will consist of (i) the acquisition of an Acquired Fund's Assets (as defined herein), by the respective Acquiring Fund solely in exchange for an aggregate value of newly issued shares of common stock, par value $.0001 (in the case of the Price Blue Chip Growth Fund) or $1.00 per share (in the case of the Price New Income Fund) per share, of such Acquiring Fund (the "Shares"), equal to the net asset value of such Acquired Fund's Assets determined in accordance with Section 2(b) hereof, and (ii) the subsequent distribution by that Acquired Fund of the Shares to its shareholders in liquidation of the Acquired Fund, all upon and subject to the terms h ereinafter set forth (each a "Reorganization" and collectively the "Reorganizations") ;

WHEREAS, the aggregate net asset value of the Shares to be received by each shareholder of an Acquired Fund will equal the aggregate net asset value of the respective Acquired Fund shares owned by such shareholder as of the Valuation Time (as defined herein);

WHEREAS, it is intended that each Reorganization described herein shall be a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the "Code"), and any

successor provision and the parties intend, by executing this Agreement, to adopt a plan of reorganization within the meaning of Section 368(a) of the Code; and

WHEREAS, the consummation of one Reorganization is not conditioned upon the consummation of any other Reorganization.

AGREEMENT

NOW, THEREFORE, in order to consummate each Reorganization and in consideration of the premises and the covenants and agreements hereinafter set forth, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, and intending to be legally bound, each Acquired Fund and Acquiring Fund hereby agree as fo llows:

1. Defined Terms; Sections and Exhibits; Miscellaneous Terms

a.Definitions

As used herein the following terms have the following respective meanings:

"Acquired Fund" has the meaning ascribed thereto under the heading "Plans of Reorganization." For purposes of this Agreement, the term "Acquired Fund" shall refer to the Bremer Growth Stock Fund in respect of the Growth Fund Reorganization and the Bremer Bond Fund in respect of the Bond Fund Reorganization.

"Acquired Funds Prospectus" shall mean the prospectus relating to the Acquired Funds dated January 28, 2006, as amended or supplemented.

"Acquired Funds Statement of Additional Information" shall mean the statement of additional information relating to the Acquired Funds, dated January 28, 2006, as amended or supplemented.

"Acquiring Fund" has the meaning ascribed thereto under the heading "Plans of Reorganization." For purposes of this Agreement, the term "Acquiring Fund" shall refer to the Price Blue Chip Growth Fund in respect of the Growth Fund Reorganization and the Price New Income Fund in respect of the Bond Fund Reorganization.

"Acquiring Funds Prospectus" shall mean the prospectus relating to the Acquiring Funds, dated May 1, 2006 in the case of the Price Blue Chip Growth Fund and October 1, 2005 in the case of the Price New Income Fund, in each case as amended or supplemented.

"Acquiring Funds Statements of Additional Information" shall mean the statement of additional information relating to the Acquiring Funds, dated May 1, 2006, as amended or supplemented.

"Agreement" has the meaning ascribed thereto in the introduction hereof.

"Assets" has the meaning ascribed thereto in Section 2(a) hereof. For purposes of this Agreement, the term "Assets" shall refer to Assets of (i) the Bremer Growth Stock Fund in the case of the Growth Fund Reorganization, and (ii) the Bremer Bond Fund in the case of the Bond Fund Reorganization.

"Bond Fund Reorganization" consists of (i) the acquisition of the Bremer Bond Fund's Assets by the Price New Income Fund solely in exchange for an aggregate value of Shares of the Price New Income Fund, equal to the net asset value of the Bremer Bond Fund's Assets determined in accordance with Section 2(b) hereof, and (ii) the subsequent distribution by the Bremer Bond Fund of such Shares to its shareholders in proportion to such shareholders' interest in the Bremer Bond Fund in liquidation of the Bremer Bond Fund.

"Bremer Bond Fund" has the meaning ascribed thereto under the heading "Plans of Reorganization."

"Bremer Funds Articles of Incorporation" shall mean the articles of incorporation of the Bremer Funds dated August 26, 1996, as amended or supplemented from time to time.

"Bremer Growth Stock Fund" has the meaning ascribed thereto under the heading "Plans of Reorganization."

"Briggs and Morgan" shall mean Briggs and Morgan, Professional Association, counsel to Bremer Funds

"Closing Date" has the meaning ascribed thereto in Section 6 hereof.

"Code" has the meaning ascribed thereto under the heading "Plans of Reorganization."

"Commission" shall mean the Securities and Exchange Commission.

"Governmental Authority" shall mean any governmental or quasi-governmental authority, including, without limitation, any Federal, state, territorial, county, municipal or other governmental or quasi-governmental agency, board, branch, bureau, commission, court, arbitral body, department or other instrumentality or political unit or subdivision, whether domestic or foreign.

"Growth Fund Reorganization" consists of (i) the acquisition of the Bremer Growth Stock Fund's Assets by the Price Blue Chip Growth Fund solely in exchange for an aggregate value of Shares of the Price Blue Chip Growth Fund, equal to the net asset value of the Bremer Growth Stock Fund's Assets, determined in accordance with Section 2(b) hereof, and (ii) the subsequent distribution by the Bremer Growth Stock Fund of such Shares to its shareholders in proportion to such shareholders' interest in the Bremer Growth Stock Fund, in liquidation of the Bremer Growth Stock Fund.

"Investment Company Act" shall mean the Investment Company Act of 1940, as amended.

"Investments" shall mean, with respect to any Person, (i) the investments of such Person shown on the schedule of its investments as of the date set forth therein, with such additions thereto and deletions therefrom as may have arisen in the course of such Person's business up to such date; and (ii) all other assets owned by such Person or liabilities incurred as of such date.

"Licenses" has the meaning ascribed thereto in Section 3(b) hereof.

"Lien" shall mean any security agreement, financing statement (whether or not filed), mortgage, lien (statutory or otherwise), charge, pledge, hypothecation, conditional sales agreement, adverse claim, title retention agreement or other security interest, encumbrance, restriction, deed of trust, indenture, option, limitation, exception to or other title defect in or on any interest or title of any vendor, lessor, lender or other secured party to or of such Person under any conditional sale, lease, consignment or bailment given for security purposes, trust receipt or other title retention agreement with respect to any property or asset of such Person, whether direct, indirect, accrued or contingent.

"Majority Shareholder Vote" shall mean more than 50% of the outstanding shares of the respective Acquired Fund.

"Material Adverse Effect" shall mean, with respect to any Person, any event, circumstance or condition that, individually or when aggregated with all other similar events, circumstances or conditions could reasonably be expected to have, or has had, a material adverse effect on: (i) the business, property, operations, condition (financial or otherwise), results of operations or prospects of such Person or (ii) the ability of such Person to consummate the transactions contemplated hereunder in the manner contemplated hereby, other than, in each case, any change relating to the economy or securities markets in general.

"N-14 Registration Statement< font style="font-size:11.0pt;" face="Times New Roman" color="Black">" has the meaning ascribed thereto in Section 3(n) hereof.

"Permitted Liens" shall mean, with respect to any Person, any Lien arising by reason of (i) taxes, assessments, governmental charges or claims that are either not yet delinquent, or being contested in good faith for which adequate reserves have been recorded, (ii) the Federal or state securities laws, and (iii) imperfections of title or encumbrances as do not materially detract from the value or use of the Assets or materially affect title thereto.

"Person" shall mean any individual, corporation, limited liability company, limited or general partnership, joint venture, association, joint stock company, trust, unincorporated organization, or government or any agency or political subdivision thereof.

"Price Blue Chip Growth Fund" has the meaning ascribed thereto under the heading "Plans of Reorganization."

"Price Corporation" has the meaning ascribed thereto in the preamble.

"Price Corporation Articles of Incorporation" shall mean the respective Articles of Incorporation of T. Rowe Price Blue Chip Growth Fund, Inc., dated as of April 21, 1993, and T. Rowe Price New Income Fund, Inc., dated as of August 14, 1973, each as amended or supplemented from time to time.

"Price New Income Fund" has the meaning ascribed thereto under the heading "Plans of Reorganization."

"Reorganization" has the meaning ascribed thereto in the second paragraph under the heading "Plans of Reorganization" hereof. For purposes of this Agreement, the term "Reorganization" shall refer to the Growth Fund Reorganization or the Bond Fund Reorganization, as the context requires.

"RICs" has the meaning ascribed thereto in Section 3(b) hereof.

"Securities Act" shall mean the Securities Act of 1933, as amended.

"Shares" has the meaning ascribed thereto under the heading "Plans of Reorganization." For purposes of this Agreement, the term "Shares" shall refer to the Shares of (i) the Price Blue Chip Growth Fund in the case of the Growth Fund Reorganization and (ii) the Price New Income Fund in the case of the Bond Fund Reorganization.

"Valuation Time" has the meaning ascribed thereto in Section 2(e) hereof.

"Willkie" shall mean Willkie Farr & Gallagher LLP, counsel to the Acquiring Funds.

b.Use of Defined Terms

Any defined term used in the plural shall refer to all members of the relevant class, and any defined term used in the singular shall refer to anyone or more of the members of the relevant class. The use of any gender shall be applicable to all genders.

c.Sections and Exhibits

References in this Agreement to Sections, Exhibits and Schedules are to Sections, Exhibits and Schedules of and to this Agreement. The Exhibits and Schedules to this Agreement are hereby incorporated herein by this reference as if fully set forth herein.

d. Miscellaneous Terms

The term "or" shall not be exclusive. The terms "herein," "hereof," "hereto," "hereunder" and other terms similar to such terms shall refer to this Agreement as a whole and not merely to the specific article, section, paragraph or clause where such terms may appear. The term "including" shall mean "including, but not limited to."

2.The Reorganizations

a.Transfer of Assets

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Subject to receiving the requisite approval of the shareholders of the Acquired Fund, and to the other terms and conditions contained herein and on the basis of the representations and warranties contained herein, on the Closing Date, the Acquired Fund shall convey, transfer and deliver to the Acquiring Fund, and the Acquiring Fund shall purchase, acquire and accept from the Acquired Fund, free and clear of all Liens

(other than Permitted Liens), in such form and condition as to constitute good delivery, all of the property and assets (including cash, securities, and dividends, any interest accrued on debt instruments, in each case as of the Valuation Time) owned by the Acquired Fund, (as to each Acquired Fund, such assets are collectively referred to herein as the "Assets"). There shall be excluded from the Assets transferred the following items: (i) any asset that was not purchased in accordance with the Acquired Fund's Prospectus and Acquired Fund's Statement of Additional Information; (ii) accrued operating expenses; (iii) cash in an amount sufficient to pay all liabilities relating to Fund operating expenses; (iv) commodities, interests in futures, forwards and options and (v) any other Asset that in the Acquiring Fund's sole discretion it elects not to approve for transfer, provided that such approval shall not be unreasonably withheld.

b.Issuance and Valuation of Shares in the Reorganization

Full Shares, and to the extent necessary, a fractional Share, of an aggregate net asset value equal to the net asset value of the Assets acquired by the Acquiring Fund hereunder, determined as hereinafter provided shall be issued by the Acquiring Fund to the Acquired Fund in exchange for such Asse ts. The net asset value of the Acquired Fund and the Acquiring Fund shall be determined in accordance with the procedures described in the Acquiring Funds Prospectus and the Acquiring Funds Statements of Additional Information as of the Valuation Time and in accordance with the Acquiring Fund's valuation procedures. Such valuation and determination shall be made by the Acquiring Fund in cooperation with the Acquired Fund.

c.Distribution of Shares to the Acquired Fund Shareholders

Pursuant to this Agreement, as soon as practicable after the Valuation Time, the Acquired Fund will distribute all Shares received by it from the Acquiring Fund in connection with the Reorganization to its shareholders in proportion to such shareholders' interest in the Acquired Fund. Such distribution shall be accomplished by the opening of shareholder accounts on the share ledger records of the Acquiring Fund (or of a designated agent of the Acquiring Fund) in the amounts due the shareholders of the Acquired Fund based on their respective holdings in the Acquired Fund as of the Valuation Time. The Acquiring Fund shall have no obligation to inquire as to the validity or correctness of the holdings of shareholders in the Acquired Fund and may rely exclusively on information provided by the Acquired Fund. The st ock transfer books of the Acquired Fund will be permanently closed as of the Valuation Time and only requests for the redemption of shares of the Acquired Fund received in proper form prior to the Valuation Time shall be accepted by the Acquired Fund. Redemption requests thereafter received by the Acquired Fund shall be deemed to be redemption requests for Shares of the Acquiring Fund that will have acquired substantially all of the Assets of the Acquired Fund's portfolio to which such redemption request relates (assuming that the Reorganizations contemplated b y the Agreement have been consummated) to be distributed to shareholders of the Acquired Fund under this Agreement.

d.Interest; Proceeds

The Acquired Fund will pay or cause to be paid to the Acquiring Fund any interest, dividends or proceeds it receives on or after the Closing Date with respect to its Assets.

e.Valuation Time

i.The Valuation Time shall be the close of the New York Stock Exchange (generally 4:00 P.M., New York time) on November 10, 2006 or such earlier or later day and time as may be mutually agreed upon in writing between the parties hereto (the "Valuation Time").

ii.In the event that on the day of the Valuation Time ( a) the New York Stock Exchange or another primary trading market for portfolio securities of the Acquiring Fund or the Acquired Fund shall be closed to trading or trading thereon shall be restricted; or (b) trading or the reporting of trading on said Exchange or elsewhere shall be disrupted so that accurate appraisal of the value of the net assets of the Acquiring Fund or the Acquired Fund is impracticable, the Valuation Time shall be postponed until the close of the New York Stock Exchange on the first business day after the day when trading shall have been fully resumed and reporting shall have been restored; provided that the closing of a primary non-U.S. trading market on which portfolio securities of the Acquired Fund or Acquiring Fund trade at the Valuation Time shall not generally be a grounds for postponing the Valuation Time.

f.Evidence of Transfer

The Acquiring Fund and the Acquired Fund will jointly file any instrument as may be required by the State of Maryland to effect the transfer of the Assets to the Acquiring Fund.

g.Termination

The Acquired Fund's existence as a separate investment portfolio of the Bremer Funds will be terminated as soon as practicable following the consummation of the applicable Reorganization by making any required filings with the State of Maryland, as provided in Section 5(e) hereof.

h.Separate Agreements; Reorganizations Not Conditioned on One Another

Each of the respective parties hereto hereby agrees that this Agreement shall constitute a separate agreement and plan of reorganization as to each of (i) the Bond Fund Reorganization and (ii) the Growth Fund Reorganization. The parties further agree that the consummation of one Reorganization shall not be conditioned on the consummation of any other Reorganization.

3. Representations and Warranties of the Acquired Fund

Bremer Funds represents and warrants on behalf of itself and the Acquired Fund to the respective Acquiring Fund as follows:

a.Formation and Qualification

The Acquired Fund is a separate investment portfolio of Bremer Funds, a corporation duly organized, validly existing and in good standing under the laws of the State of Maryland, and the Acquired Fund has all requisite power and authority to own all of its properties or assets and carry on its business as

presently conducted. Bremer Funds is duly qualified, registered or licensed to do business and is in good standing in each jurisdiction in which the ownership of its properties or assets or the character of its present operations makes such qualification, registration or licensing necessary, except where the failure to so qualify or be in good standing would not have a Material Adverse Effect on the Acquired Fund.

b.Licenses

The Acquired Fund (or Bremer Funds on behalf of the Acquired Fund) holds all permits, consents, registrations, certificates , authorizations and other approvals (collectively, "Licenses") required for the conduct of its business as now being conducted; all such Licenses are in full force and effect and no suspension or cancellation of any of them is pending or threatened; and none of such Licenses will be affected by the consummation of the transactions contemplated by this Agreement in a manner that would have a Material Adverse Effect on the Acquired Fund. Bremer Funds is duly registered under the Investment Company Act as an open-end management investment company (File No. 811-7919), and such registration has not been suspended, revoked or rescinded and is in full force and effect. The Acquired Fund has elected and qualified for the special tax treatment afforded regulated investment companies ("RICs") under Sections 851-855 of the Code at all times since its inception and intends to continue to so qualify for its current taxable year.

c.Authority

Bremer Funds, on behalf of the Acquired Fund, has full power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized by all necessary action on the part of the Acquired Fund and no other proceedings on the part of Bremer Funds or the Acquired Fund are necessary to authorize this Agreement or the consummation of the transactions contemplated hereby, except for the approval of the Acquired Fund shareholders as provided in Section 7(c) hereof. This Agreement has been duly and validly executed by Bremer Funds, on behalf of the Acquired Fund, and, subject to receipt of the requisite shareholder approval, and assuming due authorization, execution and delivery of this Agreement by the Price Corporation on behalf of the Acquiring Fund, this Agreement constitutes a legal, valid and binding obligation of the Acquired Fund enforceable against the Acquired Fund in accordance with its terms, subject to the effects of bankruptcy, insolvency, moratorium, fraudulent conveyance and similar laws relating to or affecting creditors' rights generally and court decisions with respect thereto and the remedy of specific performance and injunctive and other forms of equitable relief.

d.Audited Financial Statements

The Acquiring Fund has been furnished with an accurate, correct and complete statement of assets and liabilities and a schedule of Investments of the Acquired Fund, each as of September 30, 2005, said financial statements having been audited by Ernst & Young, an independent registered public accounting firm. Such audited financial statements fairly present in all material respects the financial position of the Acquired Fund as of the dates and for the periods referred to therein and in conformity with U.S. generally accepted accounting principles applied on a consistent basis.

e.Unaudited Financial Statements

Prior to the Closing Date, the Acquiring Fund will be furnished with unaudited fina ncial statements of the Acquired Fund in accordance with Section 5(b)(i) hereof. Such unaudited financial statements will fairly present in all material respects the financial position of the Acquired Fund as of the dates and for the periods referred to therein and in conformity with generally accepted accounting principles applied on a consistent basis. In addition, the Chief Financial Officer of the Acquired Fund shall certify the accuracy of such unaudited financial statements.

f.Prospectus and Statement of Additional Information

The Acquiring Fund has been furnished with the Acquired Funds Prospectus and the Acquired Funds Statement of Additional Information, and insofar as they relate to the Acquired Fund, said Prospectus and Statement of Additional Information do not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

g.Litigation

There are no claims, actions, suits or legal, administrative or other proceedings pending or, to the knowledge of Bremer Funds on behalf of the Acquired Fund, threatened against the Acquired Fund that could reasonably be expected to have a Material Adverse Effect on the Acquired Fund. The Acquired Fund is not charged with or, to the knowledge of Bremer Funds, threatene d with any violation, or investigation of any possible violation, of any provisions of any Federal, state or local law or regulation or administrative ruling relating to any aspect of its business that could reasonably be expected to have a Material Adverse Effect on the Acquired Fund.

h.Material Contracts

There are no material contracts outstanding to which Bremer Funds on behalf of the Acquired Fund is a party that have not been disclosed in the N-14 Registration Statement, the Acquired Funds Prospectus or the Acquired Funds Statement of Additional Information.

i.No Conflict

The execution and delivery of this Agreement by Bremer Funds on behalf of the Acquired Fund and the consummation of the transactions contemplated hereby will not contravene or constitute a default under or violation of (i) the Bremer Funds` Articles of Incorporation or by-laws, each as amended, supplemented and in effect as of the date hereof, (ii) any agreement or contract (or require the consent of any Person under any agreement or contract that has not been obtained) to which Bremer Funds on behalf of the Acquired Fund is a party or to which its assets or properties are subject, or (iii) any judgment, injunction, order or decree, or other instrument binding upon the Acquired Fund or any of its assets or properties, except where such contravention, default or violation would not have a Material Adverse Effe ct on the Acquired Fund.

j.Undisclosed Liabilities

The Acquired Fund has no material liabilities, contingent or otherwise, other than those s hown on its statements of assets and liabilities referred to herein, those incurred in the ordinary course of its business since September 30, 2005, and those incurred in connection with the Reorganization.

k.Taxes

The Acquired Fund has filed (or caused to be filed) all Federal, state and local tax returns which are required to be filed by it, and has paid (or caused to be paid) or has obtained extensions to pay, all taxes shown on said returns to be due and owing and all assessments received by it, up to and including the taxable year in which the Closing Date occurs. All tax liabilities of the Acquired Fund have been adequately provided for on its books, and no tax deficiency or liability of the Acquired Fund has been asserted and no question with respect thereto has been raised by the Internal Revenue Service or by any state or local tax authority for taxes in excess of those already paid, up to and including the taxable year in which the Closing Date occurs. The Acquired Fund has no non-RIC undistributed earnings and profits within the meaning of section 852(a)(2)(B) of the Code.

l.Assets

The Acquired Fund has good and marketable title to the Assets, free and clear of all Liens, except for Permitted Liens. The Acquired Fund is the direct sole and exclusive owner of the Assets. At the Closing Date, upon consummation of the transactions contemplated hereby, the Acquiring Fund will have good and marketable title to the Assets, free and clear of all Liens, except for Permitted Liens.

m.Consents

No filing or registration with, or consent, approval, authorization or order of, any Person is required for the consummation by the Acquired Fund of the Reorganization, except for (i) such as may be required under the Securities Act, the Exchange Act, the Investment Company Act or state securities laws (which term as used herein shall include the laws of the District of Columbia and Puerto Rico) and (ii) a Majority Shareholder Vote.

n.N-14 Registration Statement

The registration statement filed, or to be filed, by the Price Corporations on Form N-14 relating to the Shares to be issued pursuant to this Agreement, which includes the proxy statement of the Acquired Fund and the prospectus of the Acquiring Fund with respect to the transactions contemplated hereby, and any supplement or amendment thereto or to the documents therein (as amended and supplemented, the "N-14 Registration Statement"), on the effective date of the N-14 Registration Statement, at the time of the shareholders' meeting referred to in Section 5(a) hereof and on the Closing Date, insofar as it describes the Acquired Fund with information provided by the Acquired Fund (i) complied, or will comply, as the case may be, in all material respects, with the applicable provisions of the Securities Act, the Exchange Act and the Investment Company Act and the rules and regulations promulgated thereunder, and (ii) did not, or will

not, as the case may be, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

o.Capitalization

Under the Bremer Funds Articles of Incorporation, the Acquired Fund is authorized to issue 500 million full and fractional shares of common stock with a par value $.0001. All issued and outstanding shares of the Acquired Fund are duly authorized, validly issued, fully paid and non-assessable and free of p reemptive rights. Except in connection with any automatic dividend reinvestment plan available to the Acquired Fund shareholders, there are no options, warrants, subscriptions, calls or other rights, agreements or commitments obligating the Acquired Fund to issue any of its shares or securities convertible into its shares.

p.Books and Records

The books and records of the Acquired Fund made available to the Acquiring Fund and/or its counsel are substantially true and correct and contain no material misstatements or omissions with respect to the operations of the Acquired Fund.

4.Representations and Warranties of the Acquiring Fund

The Price Corporation represents and warrants on behalf of itself and the Acquiring Fund to the respective Acquired Fund as follows:

a.Formation and Qualification

The Acquiring Fund is a separate investment portfolio of the applicable Price Corporation, each a corporation duly organized, validly existing and in good standing unde r the laws of the State of Maryland, and the Acquiring Fund has all requisite power and authority to own all of its properties or assets and carry on its business as presently conducted. The Price Corporation is duly qualified, registered or licensed as a foreign corporation to do business and is in good standing in each jurisdiction in which the ownership of its properties or assets or the character of its present operations makes such qualification, registration or licensing necessary, except where the failure to so qualify or be in good standing would not have a Material Adverse Effect on the Acquiring Fund.

b.Licenses

The Acquiring Fund (or the Price Corporation on behalf of the Acquiring Fund) holds all Licenses required for the conduct of its business as now being conducted; all such Licenses are in full force and effect and no suspension or cancellation of any of them is pending or threatened; and none of such Licenses will be affected by the consummation of the transactions contemplated by this Agreement in a manner that would have a Material Adverse Effect on the Acquiring Fund. The Price Blue Chip Growth Fund and Price New Income Fund are each duly registered under the Investment Company Act as an open-end management investment company (File Nos. 811-7059 and 811-2396, respe ctively), and such registration has not been

revoked or rescinded and is in full force and effect. The Acquiring Fund has elected and qualified for the special tax treatment afforded to RICs under Sections 851-855 of the Code at all times since its inception and intends to continue to so qualify both until consummation of the Reorganization and thereafter.

c.< font style="font-size:11.0pt;" face="Times New Roman" color="Black">Authority

The Price Corporation, on behalf of the Acquiring Fund, has full power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized by all necessary action on the part of the Acquiring Fund and no other proceedings on the part of the Acquiring Fund are necessary to authorize this Agreement or the consummation of the transactions contemplated hereby. This Agreement has been duly and validly executed by the Price Corporation, on behalf of the Acquiring Fund, and assuming due authorization, execution and delivery of this Agreement by Bremer Funds on behalf of the Acquired Fund, this Agreement constitutes a legal, valid and binding obligation of the Acquiring Fund enforceable against the Acquiring Fun d in accordance with its terms, subject to the effects of bankruptcy, insolvency, moratorium, fraudulent conveyance and similar laws relating to or affecting creditors' rights generally and court decisions with respect thereto and the remedy of specific performance and injunctive and other forms of equitable relief.

d.Audited Financial Statements

The Acquired Fund has been furnished with an accurate, correct and complete statement of assets and liabilities and a schedule of Investments of the Acquiring Fund, as of December 31,2005 in the case of the Price Blue Chip Growth Fund, and October 31, 2005 in the case of the Price New Income Fund, said financial statements having been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm. Such audited financial statements fairly present in all material respects the financial position of the Acquiring Fund as of the dates and for the periods referred to therein and in conformity with U.S. generally accepted accounting principles applied on a consistent basis.

e.Unaudited Financial Statements

Prior to the Closing Date, the Acquired Fund will be furnished with unaudited financial statements in accordance with Section 5(b)(ii) hereof. Such unaudited financial statements will fairly present in all material respects the financial position of the Acquiring Fund as of the dates and for the periods referred to therein and in conformity with generally accepted accounting principles applied on a consistent basis. In addition, the Treasurer of the Acquiring Fund shall certify the accuracy of such unaudited financial statements.

f.Prospectus and Statement of Additional Information

The Acquired Fund has been furnished with the Acquiring Funds Prospectus and the Acquiring Funds Statements of Additional Information, and insofar as they relate to the Acquiring Fund, said Prospectus and Statement of Additional Information do not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

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g.Litigation
There are no claims, actions, suits or legal, administrative or other proceedings pending or, to the kn owledge of the Price Corporation on behalf of the Acquiring Fund, threatened against the Acquiring Fund that could reasonably be expected to have a Material Adverse Effect on the Acquiring Fund. The Acquiring Fund is not charged with or, to the knowledge of the Price Corporation, threatened with any violation, or investigation of any possible violation, of any provisions of any Federal, state or local law or regulation or administrative ruling relating to any aspect of its business that could reasonably be expected to have a Material Adverse Effect on the Acquiring Fund.
h.Material Contracts
There are no material contracts outstanding to which the Price Corporation on behalf of the Acquiring Fund is a party that have not been disc losed in the N-14 Registration Statement, the Acquiring Funds Prospectus, or the Acquiring Funds Statement of Additional Information.
i.No Conflict
The execution and delivery of this Agreement by the Price Corporation on behalf of the Acquiring Fund and the consummation of the transactions contemplated hereby will not contravene or constitute a default under or violation of (i) the Price Corporation's Articles of Incorporation or by-laws, each as amended, supplemented and in effect as of the date hereof, (ii) any agreement or contract (or require the consent of any Person under any agreement or contract that has not been obtained) to which the Price Corpor ation on behalf of the Acquiring Fund is a party or to which its assets or properties are subject, or (iii) any judgment, injunction, order or decree, or other instrument binding upon the Acquiring Fund or any of its assets or properties, except where such contravention, default or violation would not have a Material Adverse Effect on the Acquiring Fund.
j.Undisclosed Liabilities
The Acquiring Fund has no material liabilities, contingent or otherwise, other than those shown on its statements of assets and liabilities referred to herein, those incurred in the ordinary course of its business as an investment company since December 31, 2005 in the case of the Price Blue Chip Growth Fund or October 31, 2005 in the case of the Price New Income Fund as the case may be, and those incurred in connection with the Reorganization.
k.Taxes
The Acquiring Fund has filed (or caused to be filed), or has obtained extensions to file, all Federal, state and local tax returns which are required to be filed by it, and has paid (or caused to be paid) or has obtained extensions to pay, all taxes shown on said returns to be due and owing, and all assessments received by it, up to and including the taxable year in which the Closing Date occurs. All tax liabilities of the Acquiring Fund have been adequately provided for on its books, and no tax deficiency or liability of the Acquiring Fund has been asserted and no question with respect thereto has been raised by the Internal Revenue
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Service or by any state or local tax authority for taxes in excess of those already paid, up to and including the taxable year in which the Closing Date occurs.
l.Consents
No filing or registration with, or consent, approval, authorization or order of, any Person is required for the consummation by the Acquiring Fund of the Reorganization, except for such as may be required under the Securities Act, the Exchange Act, the Investment Company Act, or state securities laws (which term as used herein shall include the laws of the District of Columbia and Puerto Rico).
m.N-14 Registration Statement
The N-14 Registration Statement, on its effective date, at the time of the shareholders' meeting referred to in Section 5(a) hereof and on the Closing Date, insofar as it describes the Acquiring Fund with information provided by the Acquiring Fund (i) complied, or will comply, as the case may be, in all material respects, with the applicable provisions of the Securities Act, the Exchange Act and the Investment Company Act and the rules and regulations promulgated thereunder, and (ii) did not, or will not, as the case may be, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.
n.Capitalization
Under the Price Corporation's Articles of Incorporation, the Price Corporation is authorized to issue a sufficient number of full and fractional shares of common stock of the Acquiring Fund to consummate the Reorganization.
All issued and outstanding shares of the Acquiring Fund are duly authorized, validly issued, fully paid and non-assessable and free of preemptive rights. Except in connection with any automatic dividend reinvestment plan available to the Acquiring F und shareholders, there are no options, warrants, subscriptions, calls or other rights, agreements or commitments obligating the Acquiring Fund to issue any of its shares or securities convertible into its shares.
o.Shares
i.The Shares to be issued by the Acquiring Fund to the Acquired Fund and subsequently distributed by the Acquired Fund to its shareholders as provided in this Agreement have been duly and validly authorized and, when issued and delivered pursuant to this Agreement, will be legally and val idly issued and will be fully paid and nonassessable and will have full voting rights, and no shareholder of the Acquiring Fund will have any preemptive right of subscription or purchase in respect thereof.
ii.At or prior to the Closing Date, the Shares to be issued by the Acquiring Fund to the Acquired Fund on the Closing Date will be duly qualified for offering to the public in all states of the United States in which the sale of shares of the Acquiring Fund presently are qualified, and

there are a sufficient number of such shares registered under the Securities Act, the Investment Company Act and with each pertinent state securities commission to permit the Reorganization to be consummated.
5. Covenants of the Acquired Fund and the Acquiring Fund
a.Special Shareholders` Meeting
Bremer Funds on behalf of the Acquired Fund agrees to call a special meeting of its shareholders to be held as soon as practicable after the effective date of the N-14 Registration Statement for the purpose of considering the Reorganization as described in this Agreement and to take all other action necessary to obtain shareholder approval of the transactions contemplated herein.
b.Unaudited Financial Statements
i.The Acquired Fund hereby agrees to furnish or cause its agents to furnish to the Acquiring Fund, at or prior to the Closing Date, for the purpose of determining the number of Shares to be issued by the Acquiring Fund to the Acquired Fund pursuant to Section 2(c) hereof, an accurate, correct and complete unaudite d statement of assets and liabilities of the Acquired Fund with values determined in accordance with Section 2(b) hereof and an unaudited schedule of Investments of the Acquired Fund (including the respective dates and costs of acquisition thereof), each as of the Valuation Time.
ii. The Acquiring Fund hereby agrees to furnish or cause its agents to furnish to the Acquired Fund, at or prior to the Closing Date, for the purpose of determining the number of Shares to be issued by the Acquiring Fund to the Acquired Fund pursuant to Section 2(c) hereof, an accurate, correct and complete unaudited statement of assets and liabilities of the Acquiring Fund with values determined in accordance with Section 2(b) hereof and an unaudited schedule of Investments of the Acquiring Fund (including the respective dates and costs of acquisition thereof), each as of the Valuation Time.
c.Share Ledger Records of the Acquiring Fund
The Acquiring Fund agrees, as soon as practicable after the Valuation Time, to open shareholder accounts on its share ledger records, or to cause its duly authorized agent to open such accounts, for the shareholders of the Acquired Fund in connection with the distribution of Shares by the Acquired Fund to such shareholders in accordance with Section 2(c) hereof.
< b>d.Conduct of Business
i.The Acquired Fund and the Acquiring Fund each covenants and agrees to operate its respective business in the ordinary course as presently conducte d between the date hereof and the Closing Date, it being understood that such ordinary course of business will include customary dividends and distributions. Notwithstanding the foregoing, it is understood that following receipt of shareholder approval of the Reorganization the Bremer Growth Stock Fund and Bremer Bond
59

Fund shall each engage in such portfolio transactions as shall be necessary to align the portfolio of the Acquired Fund with that of the Acquiring Fund, provided that in no event shall the Acquired Fund sell, or be required to sell, more than 50% of its Assets as measured from September 19, 2006. The Acquired Fund has no actual knowledge of an intention by its shareholders of redeeming or otherwise disposing of any of its shares or Shares received in the Reorganization other tha n in the ordinary course of business.
ii.It is expressly understood that the Acquired Fund may hereafter sell any securities owned by it in the ordinary course of its business as a series of a diversified, open-end, management investment company. In the event that the Acquiring Fund determines, solely at its own discretion that any securities owned by the Acquired Fund substantially all of the Assets of which the Acquiring Fund agrees hereunder to acquire, are securities that the Acquiring Fund does not desire to hold, the Acquiring Fund will so instruct the Acquired Fund at least ten (10) days prior to the Closing Date and the Acquired Fund will dispose of such securities prior to the Closing Date or advise the Acquiring Fund that it elects not to transfer such securities as otherwise provided herein; provided however that the Acquired Fu nd shall not be required to dispose of assets to the extent that such dispositions would, in the aggregate, cause fifty percent (50%) or more of the net asset value of the Acquired Fund on the Closing Date to consist of assets (including cash) acquired at the request of the Acquiring Fund.
e.Termination of the Acquired Fund
Bremer Funds agrees that as soon as practicable following the consummation of the Reorganization, it will terminate the existence of the Acquired Fund in accordance with the laws of the State of Maryland and any other applicable law.
f.Filing of N-14 Registration Statement
The Price Corporation will file or cause its agents to file the N-14 Registration Statement with the Commission and will use its best efforts to cause the N-14 R egistration Statement to become effective as promptly as practicable after the filing thereof. The Acquired Fund and the Acquiring Fund agree to cooperate fully with each other, and each will furnish to the other the information relating to itself to be set forth in the N-14 Registration Statement as required by the Securities Act, the Exchange Act, the Investment Company Act, and the rules and regulations thereunder and the state securities or blue sky laws (if applicable).
g.Shares
The Acquired Fund will not sell or otherwise dispose of any of the Shares to be received by it from the Acquiring Fund in connection with the Reorganization, except in distrib ution to the shareholders of the Acquired Fund in accordance with the terms hereof.

h.Tax Returns
The Acquired Fund and the Acquiring Fund each agrees that by the Closing Date all of its Federal and other tax returns and reports required to be filed on or before such date shall have been filed and all taxes shown as due on said returns either shall have been paid or adequate liability reserves shall have been provided for the payment of such taxes, provided that each Acquiring Fund may file extensions of its federal income and excise tax returns. In connection with this provision, the Acquiring Fund and the Acquired Fund agree to cooperate with each other in filing any tax return, amended return or claim for refund, determining a liability for taxes or a right to a refund of taxes or participating in or conducting any audit or other proceeding in respect of taxes.
i.Combined Proxy Statement and Prospectus Mailing
The Acquired Fund agrees to mail to its shareholders of record entitled to vote at the special meeting of shareholders at which action is to be considered regarding this Agreement, in sufficient time to comply with requirements as to notice thereof, a combined Proxy Statement and Prospectus which complies in all material respects (except as to information therein relating to the Acquiring Fund) with the applicable provisions of Section 14(a) of the Exchange Act and Section 20(a) of the Investment Company Act, and the rules and regulations promulgated thereunder.
j.Confirmation of Tax Basis
The Acquired Fund will deliver to the Acquiring Fund on the Closing Date confirmations or other adequate evidence, setting forth the tax basis of each of the Assets delivered to the Acquiring Fund hereunder computed in accordance with applicable sections of the Code and with respect to securities showing a breakdown by purchase lot.
k.Shareho lder List
As soon as practicable after the close of business on the Closing Date, the Acquired Fund shall deliver to the Acquiring Fund (or its duly authorized agent which may include National Investors Services Corp., in the event the Shares will be held in an omnibus account) a list of the names, addresses and TINs of all of the shareholders of record of the Acquired Fund on the Closing Date and the number of shares of the Acquired Fund owned by each such shareholder as of such date, certified to the best of its knowledge and belief by the transfer agent or by Bremer Funds on behalf of the Acquired Fund.
6.Closing Date
The closing of the transactions contemplated by this Agreement shall be at the offices of Bremer Funds on the business day next succeeding the Valuation Time, or at such other place, time and date agreed to by the Acquired Fund and the Acquiring Fund. The date and time upon which such closing is to take place shall be referred to herein as the "Closing Date." To the extent that any Assets, for any reason, are not transferable on the Closing Date, the Acquired Fund shall cause such Assets to be transferred to the Acquiring Fund's custody account with State Street Bank and Trust Company or JPMorgan Chase Bank, as the case may be, at the earliest practicable date thereafter.
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7.Conditions of the Acquired Fund
The obligations of the Acquired Fund hereunder shall be subject to the satisfaction, at or before the Closing Date (o r such other date specified herein), of the conditions set forth below. The benefit of these conditions is for the Acquired Fund only and, other than with respect to the condition set forth in Section 7(c) hereof, may be waived, in whole or in part, by the Acquired Fund at any time in its sole discretion.
a.Rep resentations and Warranties
The representations and warranties of the Price Corporation and Acquiring Fund made in this Agreement shall be true and correct in all material respects when made, as of the Valuation Time and as of the Closing Date all with the same effect as if made at and as of such dates, except that any representations and warranties that relate to a particular date or period shall be true and correct in all material respects as of such date or period.
b.Performance
The Acquiring Fund or Price Corporatio n, as the case may be, shall have performed, satisfied and complied with all covenants, agreements and conditions required to be performed, satisfied or complied with by it under this Agreement at or prior to the Closing Date.
c.Shareholder Approval
This Agreement shall have been adopted, and the Reorganization shall have been approved, by the Majority Shareholder Vote.
d.Approval of Board of Directors
This Agreement shall have been adopted and the Reorganization shall have been approved by the Board of Directors of the Price Corporation, on behalf of the Acquiring Fund.
e.Deliveries by the Acquiring Fund
At or prior to the Closing Date, the Acquiring Fund shall deliver to the Acquired Fund the following:
i.a certificate, in form and substance reasonably satisfactory to the Acquired Fund, executed by the President (or a Vice President) of the Price Corporation on behalf of the Acquiring Fund, dated as of the Closing Date, certifying that the conditions specified in Sections 7(a), (b), (d) and (f) have been fulfilled;
ii.the unaudited financial statements of the Acquiring Fund required by Section 5(b)(ii) hereof; and

iii.a written opinion of Henry H. Hopkins, Esq., counsel to the Acquiring Fund, in form and substance, reasonably satisfactory to the Acquired Fund.
f.No Material Adverse Change
There shall have occurred no material adverse change in the financial position of the Acquiring Fund since December 31, 2005 in the case of the Price Blue Chip Growth Fund or October 31, 2005 in the case of the Price New Income Fund, other than chang es in its portfolio securities since that date, changes in the market value of its portfolio securities or changes in connection with the payment of the Acquiring Fund's customary operating expenses, each in the ordinary course of business.
g.Absence of Litigation
There shall not be pending before any Governmental Authority any material litigation with respect to the matters contemplated by this Agreement.
h.Proceedings and Documents
All proceedings contemplated by this Agreement, the Reorganization, and all of the other documents incident thereto, shall be reasonably satisfactory to the Acquired Fund and its counsel, and the Acquired Fund and its counsel shall have received all such counterpart originals or certified or other copies of such documents as the Acquired Fund or its counsel may reasonably request.
i.N-14 Registration Statement
The N- 14 Registration Statement shall have become effective under the Securities Act, and no stop order suspending such effectiveness shall have been instituted or, to the knowledge of the Acquiring Fund or the Acquired Fund, contemplated by the Commission.
j.Compliance with Laws; No Adverse Action or Decision
Since the date hereof, (i) no law, statute, ordinance, code, rule or regulation shall have been promulgated, enacted or entered that restrains, enjoins, prevents, materially delays, prohibits or otherwise makes illegal the performance of this Agreement, the Reorganization or the consummation of any of the transactions contemplated hereby and thereby; (ii) the Commission shall not have issued an unfavorable advi sory report under Section 25(b) of the Investment Company Act, nor instituted or threatened to institute any proceeding seeking to enjoin consummation of the Reorganization under Section 25(c) of the Investment Company Act; and (iii) no other legal, administrative or other proceeding shall be instituted or threatened by any Governmental Authority which would materially affect the financial condition of the Acquiring Fund or that seeks to restrain, enjoin, prevent, materially delay, prohibit or otherwise make illegal the performance of this Agreement, the Reorganization or the consummation of any of the transactions contemplated hereby or thereby.
63

k.Tax Opinion
Briggs and Morgan, shall deliver an opinion to the Acquired Fund, in form and substance reasonably satisfactory to the Acquired Fund, substantially to the effect that, for Federal incom e tax purposes, (i) the transfer of the Assets to the Acquiring Fund in return solely for the Shares as provided for in the Agreement will constitute a reorganization within the meaning of Section 368(a) of the Code, and assuming that such transfer, issuance and assumption qualifies as a reorganization within the meaning of Section 368(a) of the Code, the Acquired Fund and the Acquiring Fund will each be deemed to be a "party to the reorganization" within the meaning of Section 368(b) of the Code; (ii) in accordance with Sections 357 and 361 of the Code, no gai n or loss will be recognized by the Acquired Fund as a result of the Asset transfer solely in return for the Shares or on the distribution (whether actual or constructive) of the Shares to the Acquired Fund shareholders as provided for in the Agreement; (iii) under Section 1032 of the Code, no gain or loss will be recognized by the Acquiring Fund upon the receipt of the Assets in return for the Shares as provided for in the Agreement; (iv) in accordance with Section 354(a)(1) of the Code, no gain or loss will be recognized by the shareholders of the Acquired Fund on the receipt (whether actual or constructive) of Shares in return for their shares of the Acquired Fund; (v) in accordance with Section 362(b) of the Code, the tax basis of the Assets in the hands of the Acquiring Fund will be the same as the tax basis of such Assets in the hands of the Acquired Fund immediately prior to the consummation of the Reorganization; (vi) in accordance with Section 358 of the Code, immediately after the Reorganization, the tax basis of the Shares received (whether actually or constructively) by the shareholders of the Acquired Fund in the Reorganization will be equal, in the aggregate, to the tax basis o f the shares of the Acquired Fund surrendered in return therefor; (vii) in accordance with Section 1223 of the Code, a shareholder's holding period for the Corresponding Shares will be determined by including the period for which such shareholder held the shares of the Acquired Fund exchanged therefor, provided, that the Acquired Fund shares were held as a capital asset at the time of the exchange; (viii) in accordance with Section 1223 of the Code, the Acquiring Fund's holding period with respect to the Assets acquired by it will include the period for which s uch Assets were held by the Acquired Fund; and (ix) in accordance with Section 381(a) of the Code and regulations thereunder, the Acquiring Fund will succeed to and take into account, subject to certain limitations, certain tax attributes of the Acquired Fund, such as earnings and profits, capital loss carryovers and method of accounting;
8.Conditions of the Acquiring Fund
The obligations of the Acquiring Fund hereunder shall be subject to the satisfaction, at or before the Closing Date (or such other date specified herein), of the conditions set forth below. The benefit of these conditions is for the Acquiring Fund only and, other than with respect to the condition set forth in Section 8(c ) hereof, may be waived, in whole or in part, by the Acquiring Fund at any time in its sole discretion.
a.Representations and Warranties
The representations and warranties of the Acquired Fund made in this Agreement shall be true and correct in all material respects when made, as of the Valuation Time and as of the Closing Date all with the same effect as if made at and as of such dates, except that any representations and warranties that relate to a particular date or period shall be true and correct in all material respects as of such date or period.

b.Performance
The Acquired Fund shall have performed, satisfied and complied with all covenants, agreements < font style="font-size:11.0pt;" face="Times New Roman" color="Black">and conditions required to be performed, satisfied or complied with by it under this Agreement at or prior to the Closing Date.
c.Shareholder Approval
This Agreement shall have been adopted, and the Reorganization shall have been approved, by a Majority Shareholder Vote.
d.Approval of Board of Directors
This Agreement shall have been adopted and the Reorganization and related matters shall have been approved by the Board of Directors of Bremer Funds, on behalf of the Acquired Fund.
e.Deliveries by the Acquired Fund
At or prior to the Closing Date, the Acquired Fund shall deliver to the Acquiring Fund the following:
i.a certificate, in form and substance reasonably satisfactory to the Acquiring Fund, executed by the President (or a Vice President) of Bremer Funds on behalf of the Acquired Fund, dated as of the Closing Date, certifying that the conditions specified in Sections 8(a), (b), (c), (d) and (t) have been fulfilled;
ii.the unaudited financial statements of the Acquired Fund required by Section 5(b)(i) hereof;
iii.an opinion of Briggs and Morgan, in form and substance reasonably satisfactory to the Acquiring Fund, with respect to the matters specified in Section 7(k) hereof; and
iv.a written opinion of Briggs and Morgan, counsel to the Acquired Fund, (incl uding opinions as to certain federal income tax matters), in form and substance, reasonably satisfactory to the Acquiring Fund; provided that any opinions as to matters of Maryland law shall be provided by Maryland counsel.
f.No Materia l Adverse Change
There shall have occurred no material adverse change in the financial position of the Acquired Fund since September 30, 2005 other than changes in its portfolio securities since that date (including changes permitted or required by Section 5(d) hereof), changes in the market value of its portfolio securities or changes in connection with the payment of the Acquired Fund's customary operating expenses, each in the ordinary course of business. The Acquired Fund reserves the right to sell any of its
65

portfolio securities in the ordinary course of business, but will not, without the prior written consent of the Acquiring Fund, acquire any additional securities other than securities of the type in which the Acquiring Fund is permitted to invest, subject to Section 5(d) hereof.
g.Absence of Litigation
There shall not be pending before any Governmental Authority any materia1litigation with respect to the matters contemplated by this Agreement.

< i>h.Proceedings and Documents

All proceedings contemplated by this Agreement, the Reorganization, and all of the other documents incident thereto, shall be reasonably satisfactory to the Acquiring Fund and its counsel, and the Acqu iring Fund and its counsel shall have received all such counterpart originals or certified or other copies of such documents as the Acquiring Fund or its counsel may reasonably request.

i.N-14 Registration Statement

The N-14 Registration Statement shall have become effective under the Securities Act, and no stop order suspending such effectiveness shall have been instituted or, to the knowledge of the Acquired Fund or the Acquiring Fund, contemplated by the Commission.

j.Compliance with Laws; No Adverse Action or Decision

Since the date hereof, (i) no law, statute, ordinance, code, rule or regulation shall have been promulgated, enacted or entered that restrains, enjoins, prevents, materially delays, prohibits or otherwise makes illegal the performance of this Agreement, the Reorganization or the consummation of any of the transactions contemplated hereby and thereby; (ii) the Commission shall not have issued an unfavorable advisory report under Section 25(b) of the Investment Company Act, nor instituted or threatened to institute any proceeding seeking to enjoin consummation of the Reorganization under Section 25(c) of the Investment Company Act; and (iii) no other legal, administrative or other proceeding shall be instituted or threatened by any Governmental Authority which would materially affect the financial condition of the Acquired Fund or that seeks to restrain, enjoin, pre vent, materially delay, prohibit or otherwise make illegal the performance of this Agreement, the Reorganization or the consummation of any of the transactions contemplated hereby or thereby.

k.Dividends

Prior to the Closing Date, the Acquired Fund shall have declared a dividend or dividends which, together with all such previous dividends, shall have the effect of distributing to its shareholders all of its investment company taxable income as of the Closing Date, if any (computed without regard to any deduction for dividends paid), and all of its net capital gain, if any, and all of its non-RIC earnings and profits as set forth in section 852(a)(2)(B) of the Code, if any, realized as of the Closing Date.

9.Termination, Postponement and Waivers

a.Termination of Agreement

Notwithstanding anything contained in this Agreement to the contrary, subject to Section 10 hereof, this Agreement may be terminated and the Reorganization abandoned at any time (whether before or after approval thereof by the shareholders of the Acquired Fund) prior to the Closing Date, or the Closing Date may be postponed, by notice in writing prior to the Closing Date:

< p>

i.by the Acquired Fund or the Acquiring Fund if:

(1)the Board of Directors of Bremer Funds and the Board of Directors of the Price Corporation so mutually agree in writing;

(2)any Governmental Authority of competent jurisdiction shall have issued any judgment, injunction, order, ruling or decree or taken any other action restraining, enjoining or otherwise prohibiting this Agreement, the Reorganization or the consummation of any of the transactions contemplated hereby or thereby and such judgment, injunction, order, ruling, decree or other action becomes final and non-appealable; provided that the party seeking to terminate this Agreement pursuant to this Section 9(a)(i)(2) shall have used its reasonable best efforts to have such judgment, injunction, order, ruling, decree or other action lifted, vacated or denied; or

(3)the Reorganization shall not have occurred on or before February 10, 2007.

ii.by the Acquired Fund if any condition of the Acquired Fund's obligations set forth in Section 7 of this Agreement has not been fulfilled or waived by it; or

iii.by the Acquiring Fund if any condition of the Acquiring Fund's obligations set forth in Section 8 of this Agreement has not been fulfilled or waived by it.

b.Commission Order

If any order or orders of the Commission with respect to this Agreement, the Reorganization or any of the transactions contemplated hereby or thereby shall be issued prior to the Closing Date and shall impose any terms or conditions which are determined by action of the Board of Directors of Bremer Funds and the Board of Directors of the Price Corporation to be acceptable, such terms and conditions shall be binding as if a part of this Agreement without further vote or approval of the shareholders of the Acquired Fund, unless such terms and conditions shall result in a change in the method of computing the number of Shares to be issued by the Acquiring Fund to the Acquired Fund in which event, unless such terms and conditions shall have been included in the proxy solicitation materials furnished to the shareholders of the Acquired Fund prior to the meeting at which the Reorganization shall have been approved, this Agreement shall not be consummated and shall terminate unless the Acquired Fund promptly shall call a special meeting of shareholders at which such conditions so imposed shall be submitted for approval and the requisite approval of such conditions shall be obtained.

c.Effect of Termination

In the event of termination of this Agreement pursuant to the provisions hereof, the same sh all become null and void and have no further force or effect, and there shall not be any liability on the part of either the Acquired Fund or the Acquiring Fund, Bremer Funds or the Price Corporations, or Persons who are their directors, officers, agents or shareholders in respect of this Agreement.

d.Waivers; Non-Material Changes

At any time prior to the Closing Date, any of the terms or conditions of this Agreement may be waived by the party that is entitled to the benefit thereof if such action or waiver will not have a material adverse effect on the benefits intended under this Agreement to the shareholders of such party on behalf of which such action is taken. In addition, each party has delegated to its investment adviser the ability to make non-material changes to this Agreement if such investment adviser deems it to be in the best interests of the Acquired Fund or Acquiring Fund for which it serves as investment adviser to do so.

10.Survival of Representations and Warranties

The respective representations and warranties contained in Sections 3 and 4 hereof shall expire with, and be terminated by, the consummation of the Reorganization, and none of Bremer Funds, the Acquired Fund, the Price Corporation, the Acquiring Fund, or any of their officers, directors, agents or shareholders shall have any liability with respect to such representations or warranties after the Closing Date. This provision shall not pro tect any officer, trustee, director or agent of the Acquired Fund or the Acquiring Fund, or of Bremer Funds or the Price Corporations, against any liability to the entity for which such Person serves in such capacity, or to its shareholders, to which such Person would be subject by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties in the conduct of such office.

11.Other Matters

a.Further Assurances

Each party hereto covenants and agrees to provide the other party hereto and its agents and counsel with any and all documentation, information, assistance and cooperation that may become necessary from time to time with respect to the transactions contemplated by this Agreement.

b.Notices

Any notice, report or other communication hereunder shall be in writing and shall be given to the Person entitled thereto by hand delivery, prepaid certified mail or overnight service, addressed to the Acquired Fund or the Acquiring Fund, as applicable, at the address set forth below. If the notice is sent by certified mail, it shall be deemed to have been given to the Person entitled thereto upon receipt and if the notice is sent by overnight service, it shall be deemed to have been given to the Person entitled thereto one (1)

business day after it was deposited with the courier service for delivery to that Person. Notice of any change in any address listed below also shall be given in the manner set forth above. Whenever the giving of notice is required, the giving of such notice may be waived by the party entitled to receive such notice.

If to the Acquired Fund, to:Bremer Funds

445 Minnesota Street

Suite 2000

St. Paul, Minnesota 55101

Attention: Joel W. Reimers

If to the Acquiring Fund, to:T. Rowe Price Associates, Inc.

100 East Pratt Street Baltimore, MD 21202

Attention: Forrest R. Foss

c.Entire Agreement

This Agreement contains the entire agreement between the parties hereto with respect to the matters contemplated herein and supersedes all previous agreements or understandings between the parties related to such matters.

d.Amendment

Except as set forth in Section 9(d) hereof, this Agreement may be amended, modified, superseded, canceled, renewed or extended, and the terms or covenants hereof may be waived, only by a written instrument executed by the parties hereto or, in the case of a waiver, by the party waiving compliance; provided that only the consent of the parties to a specific Reorganization shall be required to amend, modify, supersede, cancel, renew, extend or waive any provisions relating solely to such Reorganization; provided further that, following the meeting of shareholders of the Acquired Fund pursuant to Section 5(a) hereof, no such amendment may have the effect of changing the provisions for determining the number of Shares to be iss ued to the Acquired Fund shareholders under this Agreement to the detriment of such shareholders without their further approval. Except as otherwise specifically provided in this Agreement, no waiver by either party hereto of any breach by the other party hereto of any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of a similar or dissimilar provision or condition at the same or at any prior or subsequent time.

e.Governing Law

This Agreement shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the laws of the State of Maryland applicable to agreements made and to be performed in said state, without giving effect to the principles of conflict of laws thereof.

f.Assignment

This Agreement shall not be assigned by any of the parties hereto, in whole or in part, whether by operation of law or otherwise, without the prior written consent of the other party hereto. Any purported assignment contrary to the terms hereof shall be null, void and of no effect. Nothing herein expressed or

implied is intended or shall be construed to confer upon or give any person, firm, or corporation, other than the parties hereto and their respective successors and assigns, any rights or remedies under or by reason of this Agreement.

g.< /i>Costs of the Reorganization

All costs of the Reorganization incurred by the Bremer Funds or an Acquired Fund shall be borne by Bremer Trust, National Association, or an affiliate thereof ("Bremer") pursuant to the Transfer Agreement by and between
T. Rowe Price Associates, Inc. and Bremer (the "Transfer Agreement"), regardless of whether the Reorganization is consummated. All costs of the Reorganization incurred by the Price Corporation or the Acquiring Fund shall be borne by such party unless assumed by its investment adviser or an affiliate pursuant to the Transfer Agreement, regardless of whether the Reorganization is consummated.

h.Severability

Any term or provision of this Agreement which is invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Agreement or affecting the validity or enforceability of any of the terms and provisions of this Agreement in any other jurisdiction.

i.Headings

Headings to sections in this Agreement are intended solely for convenience and no provision of this Agreement is to be construed by reference to the heading of any section.

j.Counterparts

This Agreement may be executed in any number of counterparts, each of which, when executed and delivered, shall be deemed to be an original but all such counterparts together shall constitute but one instrument.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first set forth above.
ATTEST:

/s/David J. Erickson
Name: David J. Erickson
Title: Vice President
BREMER INVESTMENT FUNDS, INC.
ON BEHALF OF
BREMER GROWTH STOCK FUND
BREMER BOND FUND

/s/Joel W. Reimers
Name: Joel W. Reimers
Title: President

ATTEST:

/s/Patricia B. Lippert
Name: Patricia B. Lippert
Title: Secretary
T. ROWE PRICE BLUE CHIP GROWTH FUND, INC.

T. ROWE PRICE NEW INCOME FUND, INC.

/s/Henry H. Hopkins
Name: Henry H. Hopkins
Title: Vice President
71

T. ROWE PRICE BLUE CHIP GROWTH FUND, INC.
T. ROWE PRICE NEW INCOME FUND, INC.
FORM N-14
PAR T B
STATEMENT OF ADDITIONAL INFORMATION
October 4, 2006
This Statement of Additional Information (the "SAI") relates to the proposed reorganization (each a "Reorganization") of each of the T. Rowe Price Blue Chip Growth Fund, Inc. and the T. Rowe Price New Income Fund, Inc. (the "Acquiring Funds).
This SAI contains information which may be of interest to shareholders relating to each Reorganization, but which is not included in the Combined Proxy Statement/Prospectus dated October 4, 2006 (the "Combined Proxy Statement/Prospectus") of the funds. As described in the Combined Proxy Statement/Prospectus, a Reorganization would involve the transfer of substantially all the assets of the Acquired Funds in exchange for shares of the respective Acquiring Fund. Each Acquired Fund would distribute the Acquiring Fund shares it receives to its shareholders in complete liquidation of the Acquired Fund.
This SAI is not a pr ospectus, and should be read in conjunction with the Combined Proxy Statement/Prospectus. This SAI and the Combined Proxy Statement/Prospectus have been filed with the Securities and Exchange Commission. Copies of the Combined Proxy Statement/Prospectus are available upon request and without charge by writing to the Acquiring Fund at 100 East Pratt Street, Baltimore, Maryland 21202, or by calling 1-800-225-5132.
The Securities and Exchange Commission maintains a website (http://www.sec.gov) that contains the prospectuses and statement of additional information of the Acquiring Fund, other material incorporated by reference and other information regarding the Acquiring Fund.

ADDITIONAL INFORMATION ABOUT THE ACQUIRING FUNDS
FOR THE ACQUIRING FUNDS: The Statement of Additional Information for the Acquiring Funds dated October 4, 2006, as supplemented, as filed with the Securities and Exchange Commission, is incorporated by reference.
< td style="text-indent:0.0";">

To vote by Internet

PROXY TABULATOR

1)Read the Proxy Statement and have the proxy card below at hand.

PO BOX 9112

2)Go to website www.proxyvote.com

FARMINGDALE, NY 11735

3)Follow the instructions provided on the website.

To vote by Telephone

1)Read the Proxy Statement and have the proxy card below at hand.

2)Call 1-800-690-6903

3)Follow the instructions.

To vote by Mail

1)Read the Proxy Statement.

2)Check the appropriate boxes on the proxy card below.

3)Sign and date the proxy card.

4)Return the proxy card in the envelope provided.

BREMER BOND FUND

TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: T

KEEP THIS PORTION FOR YOUR RECORDS

DETACH AND RETURN THIS PORTION ONLY

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.

BREMER BOND FUND

This proxy, if properly executed, will be voted in the manner directed by the undersigned shareholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR APPROVAL OF THE AGREEMENT AND PLAN OF REORGANIZATION FOR THE BREMER BOND FUND. Please refer to the Combined Proxy Statement and Prospectus for a discussion of the proposal.

Vote on Proposal

For
Against

Abstain
1. APPROVAL OF THE AGREEMENT AND PLAN OF REORGANIZATION FOR THE BREMER BOND FUND (PROPOSAL TWO).

®
®

®
Note: Please sign exactly as name appears on the label affixed to this proxy. When shares are held by joint tenants, both should sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. If a corporation, please sign in full corporate name by president or other authorized officer. If a partnership, please sign in partnership name by authorized person.

Signature [PLEASE SIGN WITHIN BOX]
Date

Signature (Joint Owners)

Date

73

PROXY

BREMER INVESTMENT FUNDS, INC.

BREMER BOND FUND

PROXY SOLICITED BY THE BOARD OF DIRECTORS

The undersigned holder of shares of Common Stock of the Bremer Bond Fund (the "Fund"), a series of Bremer Investment Funds, Inc., a Maryland corporation, hereby appoints Joel W. Reimers and Timothy Murphy, or either of them, as attorneys-in-fact and proxies for the undersigned, with full power of substitution and revocation, to represent the undersigned and to vote on behalf of the undersigned all shares of Common Stock of the Fund which the undersigned is entitled to vote at the Joint Special M eeting of Shareholders of the Fund to be held on November 3, 2006 on 10:00 a.m., Central Time, at the Bremer Service Center, 8555 Eagle Point Boulevard, Lake Elmo, Minnesota 55042, and any adjournment or adjournments thereof. The undersigned hereby acknowledges receipt of the Notice of Joint Special Meeting of Shareholders and the Combined Proxy Statement and Prospectus, each dated October 4, 2006, and hereby instructs said attorneys and proxies to vote said shares as indicated hereon. In their discretion, the proxies are authorized to vote upon such other business as may proper ly come before the Meeting. The undersigned hereby revokes any proxy previously given.

SEE REVERSE SIDE
CONTINUED AND TO BE SIGNED ON REVERSE SIDE

SEE REVERSE SIDE

75

To vote by Internet

PROXY TABULATOR

1)Read the Proxy Statement and have the proxy card below at hand.

PO BOX 9112

2)Go to website www.proxyvote.com

FARMINGDALE, NY 11735

3)Follow the instructions provided on the website.

To vote by Telephone

1)Read the Proxy Statement and have the proxy card below at hand.

2)Call 1-800-690-6903

3)Follow the instructions.

To vote by Mail

1)Read the Proxy Statement.

2)Check the appropriate boxes on the proxy card below.

3)Sign and date the proxy card.< /font>

4)Return the proxy card in the envelope provided.

BREMER GROWTH STOCK FUND

TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: T

KEEP TH IS PORTION FOR YOUR RECORDS

DETACH AND RETURN THIS PORTION ONLY

T HIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.

BREMER GROWTH STOCK FUND

This proxy, if properly executed, will be voted in the manner directed by the undersigned shareholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTE D FOR APPROVAL OF THE AGREEMENT AND PLAN OF REORGANIZATION FOR THE BREMER GROWTH STOCK FUND. Please refer to the Combined Proxy Statement and Prospectus for a discussion of the proposal.

Vote on Proposal

For
Against

Abstain
1.APPROVAL OF THE AGREEMENT AND PLAN OF REORGANIZATION FOR THE BREMER GROWTH STOCK FUND (PROPOSAL ONE).

®
®

®
Note: Please sign exactly as name appears on the label affixed to this proxy. When shares are held by joint tenants, both should sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. If a corporation, please sign in full corporate name by president or other authorized officer. If a partnership, please sign in partnership name by authorized person.

S ignature [PLEASE SIGN WITHIN BOX]
Date

Signature (Joint Owners)

Date

77
-----END PRIVACY-ENHANCED MESSAGE-----

If they relate to Bremer Funds:		If they relate to Price Funds:
Bremer Investment Funds, Inc. c/o U.S. Bancorp Fund Services, LLC P.O. Box 701 Milwaukee, Wisconsin 53201-0701 1-800-595-5552		T. Rowe Price Associates, Inc. 100 East Pratt Street Baltimore, Maryland 21202 1-800-225-5132

	Actual			Pro Forma
	Bremer Growth Stock Fund	T. Rowe Price Blue Chip Growth Fund	T. Rowe Price Blue Chip Growth Fund
Shareholder Fees (fees paid directly from your investment):
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price)	None	None	None
Maximum Deferred Sales Charge (Load ) (as a percentage of original purchase price or redemption price, whichever is lower)	None	None	None
Maximum Sales Charge (Load) Imposed on Reinvested Dividends	None	None	None
Redemption Fee (1)	None	None	None
Account Maintenance Fee (2)	None	$10	$10
Annual Fund Operating Expenses (as a percentage of average net assets) (expenses that are deducted from Fund assets):
Management Fees	0.70%	0.61%	0.61%
Distribution and/or Service (12b-1) Fees (3)	0.25%	None	None
Other Expenses	0.30%	0.24%	0.24%
Total Annual Fund Operating Expenses Before Fee Waiver	1.25%	0.85%	0.85%
Fee Waiver (3)	(0.23%)	---	---
Net Expenses	1.02%	0.85%	0.85%

	Cumulative Expenses Paid for the Period of:
	1 Year	3 Years		5 Years		10 Years
Expenses if you redeem your shares at the end of the period:
Bremer Growth Stock Fund	$104	$374	$664		$1,491
T. Rowe Price Blue Chip Growth Fund	87	271		471		1,049
Pro Forma T. Rowe Price Blue Chip Growth Fund	87	271		471		1,049

	Actual			Pro Forma
	Bremer Bond Fund	T. Rowe Price New Income Fund	T. Rowe Price New Income Fund
Shareholder Fees (fees paid directly from your investment):
Maximum Sales Charge (Load) Imp osed on Purchases (as a percentage of offering price)	None	None	None
Maximum Deferred Sales Charge (Load) (as a percentage of original purchase price or redemption price, whichever is lower)	None	None	None
Maximum Sales Charge (Load) Imposed on Reinvested Dividends	None	None	None
Redemption Fee (1)	None	None	None
Account Maintenance Fee (2)< /font>	None	$ 10	$ 10
Annual Fund Operating Expenses(as a percentage of average net assets) (expenses that are deducted from Fund assets):
Management Fees	0.70%	0.46%	0.46%
Distribution and/or Service (12b-1) Fees (3)	0.25%	None	None
Other Expenses	0.27%	0.21%	0.21%
Total Annual Fund Operating Expenses Before Fee Waiver
Reimbursement	1.22%	0.67%	0.67%
Fee Waiver (3)	(0.23%)	---	---
Net Expenses	0.99%	0.67%	0.67%

	Cumulative Expenses Paid for the Period of:
	1 Year	3 Years	5 Years	10 Years
Expenses if you redeem your shares at the end of the period:
Bremer Bond Fund	$101	$364	$648	$1,457
T. Rowe Price New Income Fund	68	214	373	835
Pro Forma T. Rowe Price New Income Fund	68	214	373	835

Bremer Fund:	Price Fund:
Bremer Growth Stock Fund	T. Rowe Price Blue Chip Growth Fund
Bremer Bond Fund	T. Rowe Price New Income Fund

Your Fund ("Bremer Funds")		T. Rowe Price Fund ("Price Funds")
Bremer Growth Stock Fund		T. Rowe Price Blue Chip Growth Fund
Bremer Bond Fund		T. Rowe Price New Income Fund

	Page
INTRODUCTION	10
SUMMARY	11
THE REORGANIZATIONS	11
What Shareholders of an Acquired Fund Will Receive in a Reorganization	11
Reasons for the Reorganizations	11
FEE TABLES AND EXAMPLES	12
THE FUNDS	15
Business of the Acquired Funds	15
Business of the Acquiring Funds	15
Comparison of the Funds	15
PRINCIPAL RISK FACTORS AND SPECIAL CONSIDERATIONS	19
All Funds	19
Bond Funds	19
PROPOSALS NO. 1 AND NO. 2: APPROVAL OF THE PLAN	20
THE REORGANIZATIONS	20
General	20
Terms of the Plan	20
Bremer Board Considerations:Potential Benefits to Shareholders as a Result of the Reorganizations	22
Federal Income Tax Consequences of the Reorganizations	23
Capitalization	25
COMPARISON OF THE FUNDS	25
Investment Policies	25
Directors and Officers	27
Management and Administrative Arrangements	27
Distribution and Shareholder Servicing Arrangements	28
Other Service Agreements with Affiliates	29
Purchase, Exchange and Redemption of Shares	29
Performance	30
Financial Highlights	32
Shareholder Rights	33
Tax Information	34
Portfolio Transactions	34
Additional Information	34
GENERAL	35
INFORMATION CONCERNING THE MEETING	35
Date, Time and Place of Meeting	35
Solicitation, Revocation and Use of Proxies	35
Record Date and Outstanding Shares	35
Security Ownership of Certain Beneficial Owners and Management of the Funds	35
Voting Rights and Required Vote	38
ADDITIONAL INFORMATION	38
LEGAL PROCEEDINGS	39
LEGAL OPINIONS	39
SHAREHOLDER PROPOSALS	39

Proposal		Fund
1.Approval of Agreement and Plan of Reorganization relating to the Bremer Growth Stock Fund		Bremer Growth Stock Fund
2.Approval of Agreement and Plan of Reorganization relat ing to the Bremer Bond Fund		Bremer Bond Fund

Fund:	Advisory Fee Rate:
Bremer Growth Stock Fund	0.70%
Price Blue Chip Growth Fund	0.61%
Bremer Bond Fund	0.70%
Price New Income Fund	0.46%

Combined Fund:	Pro Forma Effective Advisory Fee Rate:
Equity Combined Fund	0.61%
Bond Combined Fund	0.46%

ATTEST: /s/David J. Erickson Name: David J. Erickson Title: Vice President	BREMER INVESTMENT FUNDS, INC. ON BEHALF OF BREMER GROWTH STOCK FUND BREMER BOND FUND /s/Joel W. Reimers Name: Joel W. Reimers Title: President

ATTEST: /s/Patricia B. Lippert Name: Patricia B. Lippert Title: Secretary	T. ROWE PRICE BLUE CHIP GROWTH FUND, INC. T. ROWE PRICE NEW INCOME FUND, INC. /s/Henry H. Hopkins Name: Henry H. Hopkins Title: Vice President